Republic of South Africa
In The High Court of South Africa 
(Western Cape High Court, Cape Town)
In the matter between	Case Number: A413/12
ANDRE FRANCOIS PAULSEN	First Appellant
MARGARETHA ELIZABETH PAULSEN	Second Appellant
And
SLIP KNOT INVESTMENTS 777 (PTY) LIMITED	Respondent
Judgment delivered on 12 February 2013
LOUW J
[1] Blignault, J heard and decided three applications together in the court a quo as the parties and the issues were closely interrelated. This appeal is brought with the leave of the court a quo against the judgment and order granted by Blignault, J on 24 February 2012, in one of those applications. 
There is no appeal in the remaining two applications.

[2] The first and second appellants were ordered to pay, jointly and severally, the following amounts:
(a) The capital sum of R12m;
(b) Interest of the sum of R12 000 000, 00 at the rate of 3% per month, calculated from 21 July 2007 to 10 January 2010, such interest to be limited to a maximum amount of R12 000 000, 00.
(c) Interest on the sum of R12 000 000, 00 at the rate of 3 % per month, calculated from 11 January 2010 to the date of judgment.

(e) The sum of R17 000 000, 00.

[5] Slip Knot duly advanced and paid the capital amount of R12m to Winskor on 10 July 2006. The twelve month period of the loan expired on 9 July 2007. Winskor defaulted on its obligation to repay the loan and to pay any accrued interest.

[8] On appeal the dispute had narrowed down to two principal issues.
[9] First there is the Paulsens’ all-inclusive defence that the loan agreement is invalid by reason of the fact that Slip Knot has not been registered as a credit provider under the provisions of s 40 of the National Credit Act, 34 of 2005 (the NCA).

INVALIDITY OF THE LOAN AGREEMENT

[12] Mr Stockwell, who appeared with Mr Pretorius on behalf of Slip Knot, submitted that not having raised the point in the answering affidavits, the Paulsens were precluded from raising the defence based on the provisions of the NCA. In my view, there is no unfairness to Slip Knot in allowing the point, which is in essence a legal question, to be taken by the Paulsens, both in the court a quo and now on appeal.

[15] I have considered the arguments advanced on both sides in this regard. I agree with and adopt the reasoning of Blignault, J. In my view, for the reasons set out in the judgment of the learned Judge, the conclusion of the court a quo in regard to the issue of the validity of the loan agreement, is correct.
THE IMPORT OF CLAUSE 6 OF THE LOAN AGREEMENT

“

7.1. The Borrower shall pay the capital sum or any outstanding balance thereof in cash, without deduction or set-off of any nature, within twelve calendar months of the commencement date.
7.2. Notwithstanding the above, the Borrower will be liable for further interest payments as from the seventh month following the commencement date to date of final payment, which further interest shall be calculated daily and capitalized monthly in arrears at 3% per month on the outstanding capital sum.
7.3. The further interest referred to in 7.2. shall be paid on the same date that the capital sum becomes due and payable.

[16] The determining issue regarding the interpretation of clause 6 is whether the R17m is to be regarded as interest on the capital of R12m or whether it is some other agreed benefit to Slip Knot.

[24] Slip Knot did not proceed with its claim for rectification of clause 6 in the court a quo and the issue does not arise on appeal.

[32] It follows that the court a quo erred in granting judgment for interest on R12m after 10 January 2010.

The following orders are made:
1. The appeal succeeds with costs, such costs on appeal to include the costs of two counsel.

(a) The sum of R12 million,
(b) Interest on the sum of R12m in the amount of R12 million,
(c) Costs of suit on the party and party scale, such costs to include the costs of two counsel.

W.J. LOUW
Judge of the High Court

T. NDITA
Judge of the High Court

M.J. DOLAMO
Judge of the High Court