Case Law[2025] ZAGPJHC 412South Africa
Industrial Corporation of South Africa v MARA Corporation and Others (2023/035089) [2025] ZAGPJHC 412 (3 April 2025)
High Court of South Africa (Gauteng Division, Johannesburg)
3 April 2025
Headnotes
the exception and dismissed the defendant’s plea on the merits, but granted the defendants leave to amend their plea, if they so wished. The present application is a sequel to the judgment upholding the exception.
Judgment
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## Industrial Corporation of South Africa v MARA Corporation and Others (2023/035089) [2025] ZAGPJHC 412 (3 April 2025)
Industrial Corporation of South Africa v MARA Corporation and Others (2023/035089) [2025] ZAGPJHC 412 (3 April 2025)
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, JOHANNESBURG)
Case
No: 2023/035089
REPORTABLE:
YES
OF
INTEREST TO OTHER JUDGES: YES
REVISED:
YES
3.04.2025
In
the matter between:
THE
INDUSTRIAL CORPORATION
Plaintiff
OF
SOUTH AFRICA
and
MARA
CORPORATION LIMITED
First Defendant
MARA
PHONE LIMITED
Second Defendant
MARA
PS
LIMITED
Third Defendant
ASHISH
JAGDISH THAKKAR
Fourth Defendant
AHUTI
CHUG
Fifth Defendant
JAGDISH
CHANDRA DULLABHJI
Sixth Defendant
THAKKAR
SARLA
JAGDISH THAKKAR
Seventh Defendant
JUDGMENT
SIWENDU
Introduction
[1] This is an
application seeking to amend a plea delivered by the defendants in an
action (the main action) instituted by
the plaintiff, Independent
Development Corporation (the IDC), against the defendants.
[2]
The
first three defendants are Mara
Corporation Limited, Mara Phones Limited, Mara PS Limited. They are
companies registered in Mauritius. The remaining four defendants
are
Ashish Jag Dish Thakkar, Ahuti Chug, Jagdish Dullabhji Thakkar and
Sarla Jagdishi Thakkar. Their chosen
domicilium citandi et
executandi
is Mara Phones South Africa (Pty) Limited (
Mara
Phones SA),
Lynnwood Bridge, 4 Daventry Street, Lynnwood
Manor, Pretoria.
I refer to them as the defendants
consistent with the reference to them in the main action.
[3]
The background to the application is that in
December 2018,
the IDC entered into a loan agreement (the loan) with Mara Phones SA,
(the borrower) and advanced an amount of R205
973 000.00 (Two Hundred
and Five Million, Nine Hundred and Seventy-Three Thousand Rands)
for the construction of a smart phone manufacturing facility
at the Dube Trade Port in KwaZulu Natal, South Africa. It is common
cause that Mara Phones SA defaulted and breached its payment
obligations on the loan.
[4]
The IDC alleges that at the time, the total amount owed by Mara
Phones SA was R 231 424 272.57 (Two Hundred and Thirty-One
Million,
Four Hundred and Twenty-Four Thousand, Two Hundred and Seventy-Two
Rands and Fifty-Seven cents). Consequently, the IDC
obtained a
judgment against
Mara Phones SA
on 7 June
2021 before the Local Division of the High Court, KwaZulu- Natal.
After the judgment, Mara Phones SA was placed in voluntary
business
rescue.
[5]
Although the defendants deny knowledge of payment, the IDC confirmed
that it received, an amount of R 1,983,491.12 (One
Million, Nine
Hundred and Eighty-Three Thousand, Four Hundred and Ninety-One Rands
and Twelve cents) from the business rescue practitioner
as a partial
settlement of its claim against Mara Phones SA. It alleged that its
rights to its security were not affected by the
conclusion of the
business rescue plan. That dispute would be for the trial court to
resolve to the extent persisted with.
[6]
In addition to the loan, o
n
22 July 2019,
the IDC and the defendants concluded
a Guarantee
Facility Agreement (the Guarantee)
as continuing covering
security
for
the borrower’s loan
obligations. The
IDC instituted the main action
against the defendants in their capacity as Guarantors, to
recover
the sum of (a) R 165 851 673.91; (b) R 40 934 688.68; and (c) R 8
096.33 b
ased on the Guarantee. Mara Phones SA is
not a party to the main action and this application.
[7]
T
he IDC alleges that the defendants
as
Guarantors
undertook that each time a guarantee claim notice
is delivered to the Guarantor, the Guarantor shall within 3 (three)
business days
after receipt thereof pay all sums claimed in such
guarantee claim notice. The Guarantee defined Guaranteed liabilities
covered
under it as:
" all present and
future money and liabilities (whether actual or contingent or whether
owed jointly or severally o in any
other capacity whatsoever), which
are now or which may hereafter become, owing by the Borrower to IDC
in terms of the Finance Documents
together with all damages and all
costs, charges and expenses incurred by IDC in connection with a
breach by the Borrower of its
obligations under the Finance documents
and which [the] IDC is entitled to recover from the Borrower in terms
of the winding-up,
absence of legal personality or incapacity of the
Borrower or any statute of limitation and reference to "Guaranteed
Liability"
shall be to any one or more of the "Guaranteed
Liabilities" as the context requires "
[8]
The defendants opposed the action. Amongst the defences raised was
one of an oral
misrepresentation made by “the
Presidency” of the Republic of South Africa. The defendants
alleged they had been induced
to conclude "the agreements",
including the Guarantee. Part of the term of the misrepresentation
relied on was that:
“
the
defendants would not be called upon to pay for any losses suffered by
the enterprise should such enterprise fail.”
[9]
The IDC excepted to the defendants’ plea. On
19 March
2024,
Loxton AJ (the exception court) upheld the
exception and
dismissed the defendant’s plea on the
merits, but granted the defendants leave to amend their plea, if they
so wished.
The present application is a sequel to
the judgment upholding the exception.
[10]
The defendants submit they seek “to
supplement
their
misrepresentation-based defence with a defence of rectification.”
As will be seen, they seek to introduce certain terms
to the written
Guarantee which they claim reflect the
“common intention of
the parties”
allegedly omitted on grounds of a
“common
error and bona fide mistake
.” [Emphasis added]
[11]
The IDC opposed the amendment on several grounds evident from (a) the
notice of objection and (b) the answering affidavit.
It
simultaneously delivered a Notice in terms of Rule 6(5)
(d) (iii)
,
which it attached as an annexure to the answering affidavit. The
approach was attacked by the defendants on the grounds it is
confusing, and the points raised in notice of objection and the
answering affidavit do not correlate with all the grounds of
objection.
The defendants complained that the objection does not
comply with Uniform Rule 28 (3) which requires an objector to clearly
and
concisely state the grounds upon which the objection is founded.
[12]
However, when read together the notice of objection and the answering
affidavit clearly sets out why:
i.
The
amendment does
not set out a viable defence and introduce
triable issues and is vague. Both explain several the grounds for
this complaint.
ii.It would render
the pleading excipiable and the affected contract unenforceable.
iii.The amendment
is
mala fide,
brought to overcome the criticism levelled at
the defendants at the exception hearing.
iv.The IDC would
be prejudiced if the amendments were allowed.
As I read it, the point
of law raised is linked with the excipiability complaint and is dealt
with in the answering affidavit. The
above complaints are clearly
discernible and stand with or without the Rule 6 (5) (d)
(iii)
Notice
. The defendants are not prejudiced in any way.
The
Amendment
[13]
The defendants seek the following amendments:
By
deleting paragraphs 30.1 to 30.7 of the Plea and inserting paragraphs
28A.1 to 28A.7 in place thereof.
28A. Prior to signature
of the Guarantee Agreement:
28A.1 In or about
September 2018 while attending a United Nations General Assembly
meeting in New York, the President of the Republic
of South Africa,
the Honourable Mr Matamela Cyril Ramaphosa and other members of the
office of the Presidency (together "the
Presidency"), met
with the fourth defendant.
28A.2 At all relevant
times, the fourth defendant represented the Mara Group, including the
defendants.
28A.3 The Presidency knew
that the fourth defendant was the CEO of the Mara Group, an
international group of companies (including
the first, second and
third defendants) whose business was the manufacturing of smart phone
devices in emerging markets, including
Rwanda.
28A.4 At the meeting in
New York in September 2018 and in subsequent telephone calls with the
Presidency in or about September and
October 2018, the Presidency and
the fourth defendant orally agreed that the Mara Group would
establish a Mara smart phone device
manufacturing facility in South
Africa ("the enterprise").
28A.5 The fourth
defendant was advised by the Presidency that in establishing the
enterprise the Mara Group would deal with and
co-fund the enterprise
with (at least) the plaintiff, a state-owned enterprise, whose
mandate was and is as described in paragraph
9 of the particulars.
28A.6 In meetings in
Johannesburg and in telephonic discussions in or about October,
November and December 2018, the fourth defendant
negotiated with Ms
Moseketsi Mpeta and her team on behalf of the plaintiff the terms of
the establishment of the enterprise.
28A.7 Such terms included
the oral representation by both the Presidency and the plaintiff in
meetings and telephonic discussions
with the fourth defendant as
aforesaid that the plaintiff and/or the South African government
would provide whatever support was
required to ensure that the
enterprise succeeded (including maintaining the employment of its
employees and revitalizing the Dube
Trade Port in KwaZulu-Natal,
where the enterprise was to be built) and that, accordingly, the
defendants would not be called upon
to pay for any losses suffered by
the enterprise should the enterprise fail by reason of the
plaintiff's failure to provide whatever
support was required to
ensure that the enterprise succeeded ("the representation").
28A.8 The defendants,
represented by the fourth defendant, accepted the representation with
the consequence that it fell to be recorded
in the agreements, and in
particular in the Guarantee Agreement.
28B. The Guarantee
Agreement does not correctly record the agreement between the parties
in that it fails to reflect the term of
the parties' agreement in
consequence of the defendants' acceptance of the representation in
that it:
28B.1 failed to qualify
the defined term "Guaranteed Liabilities" by including in
the sixth line, after the words "Finance
Documents," the
words "save in so far as such present and future liabilities may
now or may hereafter become owing in
consequence of the IDC's failure
to provide whatever support is required to ensure that the Borrower
succeeds in the conduct of
its business and the Project"; and
28B.2 failed to include
among the defined terms "Project" as "shall bear the
meaning ascribed to that term in the
Loan Agreement".
28C The incorrect
recordals set out in paragraph 28A above were occasioned by a common
error of the parties and the parties signed
the Guarantee Agreement
in the bona fide but mistaken belief that it recorded the true
agreement between the parties.
28D The defendants hereby
demand rectification of the Guarantee Agreement to confirm with the
common intention of the parties and
request the Court in any event to
adjudicate upon the basis of the Guarantee Agreement rectified as set
out above.
1. By deleting the
words 'aver’ that after the word 'defendants' in line two of
paragraph 30.
2. By inserting
after paragraph 30.8 the following new paragraph:
30.8A In consequence of
the representation the defendants were misled as to the terms of the
Guarantee Agreement. They did not reasonably
expect that the
Guarantee Agreement would impose obligations to meet losses suffered
by the enterprise, should the enterprise fail
by reason of the
plaintiff's failure to provide whatever support was required to
ensure that the enterprise succeeded.
3. By inserting the
following after the word 'concluded' in line three of paragraph
30.11:
in particular, the
defendants would not have concluded the Guarantee Agreement which
defined "Guaranteed Liabilities"
without qualification to
impose obligations to meet losses suffered by the enterprise should
it fail by reason of the plaintiff's
failure to provide the
enterprise with the necessary financial and other support it
required.
4. By
inserting the following new paragraph:
30.14 The circumstances
which now pertain and have given rise to the plaintiff's claim are a
consequence of the plaintiff's failure
to provide the enterprise with
the necessary financial and other support it required.
5. By inserting the
following after the word 'agreements' in line two of paragraph 31.1
and the following:
31.1 there was no
consensus between the parties in concluding the agreements,
particular the Guarantee Agreement which:
31.1.1 defined
"Guaranteed Liabilities" without qualification to impose
obligations to meet losses suffered by the enterprise
should it fail
by reason of the plaintiff's failure to provide the enterprise with
the necessary financial and other support it
required, and
31.1.2 failed to
qualify the defined term "Guaranteed Liabilities" by
including in the sixth line, after the words "Finance
Documents," the words "save in so far as such present and
future liabilities may now or may hereafter become owing in
consequence of the IDC's failure to provide whatever support is
required to ensure that the Borrower succeeds in the conduct of
its
business and the Project";
31.1.3 failed to include
among the defined terms "Project" as "shall bear the
meaning ascribed to that term in the
Loan Agreement".
6. By adding, a
subparagraph 31.2, which would begin with the word 'there' in the
original plea in line two of paragraph 31.
7. By inserting the
words 'the effect' after the words 'agreements and' in line two of
paragraph 31.2 mentioned above.
8. By inserting the
following after the words 'their terms' in line two of paragraph 31.2
mentioned above:
in particular the
Guarantee Agreement in the circumstances which now pertain
9. By inserting
the following after the word 'agreements' in paragraph 32:
and, in particular, the
Guarantee Agreement - which imposed obligations to meet losses
suffered by the enterprise should it fail
by reason of the
plaintiff's failure to provide the enterprise with the necessary
financial and other support it required,
10. By deleting the word
'which' after the word 'agreements ' in paragraph 32.
11. By inserting the
following before the words 'were therefore' in paragraph 32: with the
consequence that the agreements, and
in particular the Guarantee
Agreement
12. By deleting the
remainder of paragraph 33.1 after the word 'representation' herein.
13. By inserting
the word 'breach' after the word 'such' in paragraph 33.2.
14. By deleting the word
'failure' before the words 'in itself' in paragraph 33.2. 17. By
inserting the following after the word
'agreements' in paragraph
33.4: in particular the Guarantee Agreement.”
[14]
The parties rightly do not hotly contest how a court should approach
an amendment as the principles are well established.
Nevertheless,
the starting point is the purpose of an amendment, to assist clarify
a pleading which insufficiently or imperfectly
sets out the original
cause of action.
[1]
Ultimately,
an amendment must contribute to the determination of the real issues
between the parties and to their proper ventilation.
[15]
The defendants lean on the benevolent approach adopted by the Court
to amendments. That view was endorsed by the Constitutional
Court in
Affordable
Medicines Trust and Others v Minister of Health and Another
[2]
(Affordable
Medicines Trust).
It
is uncontested that latitude extends to instances where a new cause
of action is introduced. A court may also grant the amendment
in a
form different from what was applied for.
[3]
[16]
Nonetheless, the privilege to amend a pleading is not unqualified. It
will be disallowed if the application is
mala fide
or if it
will
cause
prejudice to the opposite
party which cannot be remedied. As the Constitutional Court stated in
Affordable Medicines Trust,
the discretion to grant an
amendment, which must be exercised judicially in the light of all the
facts and circumstances before
the court will be limited if, “…
the parties cannot be put back for the purposes of justice in the
same position as
they were when the pleading which it is sought to
amend was filed.”
[17]
In addition to prejudice, an amendment will not be allowed:
i. in respect of
an issue that has already been decided.
ii.if it will not
contribute to the determination of the real issues between the
parties, and where -
iii.the amended
pleading
will
(not
may) be excipiable
[4]
and cannot
be cured by further particulars.
[18]
Distilled to its essence, the amendment sought is in three
categories, comprising of: (a) pre-historical context (b)
the oral
misrepresentation and (c) the rectification claim. The balance of the
amendments are textual corrections and averments
consequential to the
acceptance of the three categories referred to above. I deal with
each category for ease of understanding
their import and the
objections raised.
Pre-historical
Context introduced in paragraphs 28A.1 to 28A.6
[19]
These amendments introduce background events and discussions about
the establishment of the smart phone enterprise at
Dube Trade Port in
KwaZulu Natal between the fourth defendant, the President of the
Republic of South Africa and staff members
of his office in New York
in September 2018. The staff members are identified under a blanket
rubric of “the Presidency.”
[20]
The second component involves introductory meetings between the
fourth defendant and Ms Moseketsi from the IDC’s.
It is alleged
the fourth defendant was advised that “Mara Group would deal
with and co-fund the enterprise with (at least)
the plaintiff, a
state owned enterprise.”
[21]
The discussions introduced precede the conclusion of the Guarantee on
which the action is based. As already alluded to,
the Guarantee was
entered into approximately six months after the conclusion of the
loan and related documents. When questioned
about this, Counsel for
the defendants was unable to point to facts eliciting whether Ms
Moseketsi from the IDC drafted and or
was a signatory to the
Guarantee. The third parties are not joined as parties in these
proceedings.
[22]
The parol evidence rule applies to the pre-contractual discussions.
As will be seen later, it has different permutations
for the
amendments proposed. During the hearing, Counsel for the defendants
agreed that on its proper interpretation, the present
Guarantee is an
“on demand guarantee” payable within 24 hours. The
concession brings the Guarantee into ambit of the
decision in
State
Bank of India and Another v Denel Soc Limited
and
Others.
[5]
The court held that, “Guarantees are ‘not unlike
irrevocable letters of credit’ which establish a contractual
obligation on the part of the guarantor to pay the beneficiary on the
occurrence of a specified event.’’
[6]
[23]
As the court in
Best
Drive Holdings (Pty) Limited and another v Lewis
[7]
observed, with reference to the decision in
Capitec
Bank Holdings Ltd and Another v Coral Lagoon Investments 194(Pty) Ltd
and Others,
[8]
the pre- contractual discussions may be relied on to elucidate the
text of the Guarantee if there was a dispute about its nature
or
meaning.
[9]
Since there is no
such dispute, the pre-historic averments would not constitute
admissible evidence and accordingly do not
raise a triable issue.
They are not about the interpretation of the terms or about and
nature of the Guarantee.
[10]
They do not contribute to the determination of the real issues
between the parties.
Oral
misrepresentation
introduced in paragraphs 28A.7 and 28A.8
[24]
The text of the oral misrepresentation bears restating, namely that
“the Presidency and the IDC” in discussions
with the
fourth defendant represented that:
“…
the
plaintiff and/or the South African government would provide whatever
support was required to ensure that the enterprise succeeded
(including maintaining the employment of its employees and
revitalizing the Dube Trade Port in KwaZulu-Natal, where the
enterprise
was to be built) and that, accordingly, the defendants
would not be called upon to pay for any losses suffered by the
enterprise
should the enterprise fail by reason of the plaintiff's
failure to provide whatever support was required to ensure that the
enterprise
succeeded ("the representation").
[25]
The defendants allege that the oral misrepresentation induced them to
invest in the enterprise and conclude the Guarantee.
The defendants
persisted with their stance that the oral misrepresentation “negated
consensus rendering the Guarantee void
ab initio.”
[26]
The first point of departure by the IDC was that as a matter of law,
it is a separate statutory entity with separate
obligations and
contractual dealings, from the people who allegedly made the
representation. The defendants incorrectly attributed
the IDC “and
the presidency and/or the South African government, as a single
entity."
[27]
I have no difficulty that it may well be that in certain
circumstances our law accepts that a representation made by
a third
party can induce another to enter into a binding contract. However,
under those circumstances, the capacity of the party
who makes the
representation and their authority to bind another into the
contractual relationship (for example whether as principal
or agent
or contractor or employee) must be disclosed and pleaded.
[11]
None is pleaded in the amendment.
[28]
Turning to the substance and text of the oral representation –
it is partly framed as 'whatever financial and other
support was
required for the principal debtor to succeed'. It is not possible to
ascertain the allegations of fact required to
distil its meaning or
parameters or what the South African government represented it would
do to support the enterprise of the
Mara Group and how this induced
the defendants to conclude the Guarantee on these vague terms. Such a
term is lacking in particularity
and vague.
[29]
Another feature is that it alters the specified event upon which
payment may be called from the Guarantors by inserting
the words,
“would not be called upon to pay for any losses suffered by the
enterprise should the enterprise fail by reason
of the plaintiff's
failure to provide whatever support was required to ensure that the
enterprise succeeded ("the representation")”.
The
effect is that trigger for the call on the Guarantee is not the
default by the borrower, (which was conceded is consistent
with “on
demand guarantee”) but is now subject to a condition and/ or
potential disputes about the reasons for the
failure of the borrower.
Without pleading what was in the contemplation of the parties by what
is meant by “reasons for the
failure” of the enterprise
with particularity, such a term is untenable in law and inconsistent
with the construction of
the Guarantee and lacks particularity
required to sustain it.
[30]
Assuming for the moment that the terms pleaded were feasible, which
as can be seen above are not, the defendants do not
allege whether
the misrepresentation was made innocently, negligently or
fraudulently. It does not follow as a matter of course
that
misrepresentations will
vitiate
a contract
ab
initio.
This distinction is material as each form of representation has
different consequences and remedies which may not be contractual
in
our law.
[12]
What is however
undisputed is that a fraudulent misrepresentation unravels a
contract.
[13]
The absence of
the pleaded facts distinguishing the nature of the misrepresentation
relied on is material. Coupled with this, the
defendants do not plead
how they were misled to conclude the Guaranteed months after the loan
documents, and whether a reasonable
person would have been misled by
the representation.
[14]
[31]
Absent the above facts and distinction, the amendment does not
clarify the pleaded case and lacks a material averment
required. It
cannot stand as currently drafted. It must be sufficiently particular
to enable the IDC to reply thereto.
[15]
[32]
Lastly, the debate about whether to permit the amendments is impacted
by Clauses 14 and 22 of the Guarantee on the plea
sought to be
introduced. Clauses 14 states that:
“
No
representations, promises or warranties have been made or given to
the Guarantor by the IDC or any other person in connection
with this
Agreement."
[33]
Clause 22.2 records that:
“
No Party shall be
bound by any express or implied term, representation, warranty,
promise or the like not recorded herein.”
[34]
The question whether the IDC is precluded from relying on
the
above clauses of the Guarantee, to resist the amendment part of which
ensued during the exception resurfaced. The exception
court
did
not depart from the principle that an oral agreement varying (at
least materially) the term of a contract is not permissible
especially where those terms are placed in issue.
[16]
I agree with the finding by the exception court.
[35]
The above clauses apply and remain extant, and that difficulty has
not been cured by the proposed amendment. The defendants
have not
appealed the exception decision which still stands. The amendment is
bad in law and is excipiable.
Rectification
Claim in paragraphs 28B, 28C, 28D and paragraphs 30.8A, 30.11, 30.14
and 31.1
[36]
As illustrated by the court in
Kathmer
Investments (Pty) Ltd v Woolworths,
[17]
rectification of a written contract generally presupposes the
existence of a term of the real agreement,
antecedent
to the written contract, which has not been properly recorded. It
corrects an inaccuracy. All that must be done is, upon proper
proof,
to correct the mistake, reproduce in writing the real agreement
between the parties.
[37]
The rectification claim involves amongst other terms, the inclusion
of the representation in paragraphs 28B and 28C that
the defendants:
“
would
not be called upon to pay for any losses suffered by the enterprise
should the enterprise fail by reason of the plaintiff's
failure to
provide whatever support was required to ensure that the enterprise
succeeded.”
[38]
The defendants contend that without the rectification, there was no
consensus between the parties, and the rectification
of the Guarantee
to the effect that the plaintiff may not look to the defendants to
recover its losses in the circumstances, is
necessary to give effect
to their common intention.
[39]
As indicated earlier in the judgment, whether
the
defendants are precluded
from leading evidence of a prior oral
agreement or common continuing intention in support of a claim for
rectification arises,
albeit from a different legal position. It will
be recalled that I found earlier that in so far as the interpretation
of the Guarantee
is concerned, evidence of the pre-historic context
would be hit by the parol evidence rule and thus be inadmissible.
[40]
In this instance, the introduction of that context would have been to
establish the common continuing intention to support
the
rectification claim. As will be seen, when the amendment and the plea
are considered as a whole, it is clear there was no common
continuing
intention.
[18]
A common
mistake can only occur where both the IDC and the defendants were of
one mind and share the same mistake - they were in
this regard,
ad
idem.
[19]
[41]
The defendants do not allege that if
both parties
had been
aware that the alleged representation was not included as a written
term of the Guarantee, both parties would not have
concluded the
Guarantee. Conceived differently, a question to be asked about the
common error
and
bona fide
mistake is whether the IDC
would have
agreed
to either replace or amend the existing Guarantee to meet
defendants’ concerns.
The answer must clearly be
no. The defendants acknowledged when they signed the Guarantee that
they had read it, understood and
accepted its contents. It should
have been apparent during the exception that there was no consensus,
and there would be no such
consensus about the newly crafted terms
introduced by the defendants. [Emphasis added]
[42]
Our Courts have also confirmed that as “
an
instrument”
that compel payment irrespective of the status of the underlying
debt, Guarantees are construed and require strict compliance with
their terms.
[20]
The
amendments and the prayer for rectification
qu
alifies
the Guarantee in a manner which undermines the defendants’
liability obligation and conflicts with its written terms.
It limits
its enforcement and subjects the call for payment on the Guarantee to
amorphous events, a recipe for further disputes
about those events.
In effect, the amendments are designed not merely to elucidate, but
to negate the essential content of the
guarantee. All these point to
prejudice and strike at the heart of the legal nature of the
Guarantee. It does not assist to clarify
the issues between the
parties.
[43]
What stands out is that the rectification is based on a
common
error
and
bona fide
mistake. That averment is anomalous
and inherently conflicts with the allegations of an oral
misrepresentation which vitiates the
Guarantee and consensus
ab
initio.
A conflicting pleading of the nature proposed is
impermissible and would prejudice the IDC from discerning the case it
must meet.
The IDC’s compliant that it is not clear from the
intended amendment whether the defendants' defence is based on a
common
mistake or misrepresentation, or rectification is not
unwarranted.
[44]
The terms sought to be introduced are disputed and could not
reasonably have been expected in the Guarantee. It would
be
prejudicial to the IDC to permit same by an amendment.
Conclusion
[45]
As the court held in
Ciba
-Geigy (Pty) Ltd v Lushof Farms (Ply) Ltd en 'n Ander
[21]
(Ciba-
Geigy),
the
defendants were required to explain the reason for the application
and show worthiness of consideration. They were required
to
show
prima
facie
that
there is something deserving of consideration, a triable issue, a
dispute which, if it is proved based on the evidence
foreshadowed by
the defendants, will be viable or relevant.
[46]
For the reasons stated under each of the categories of the
amendments, the threshold envisaged in
Ciba- Geigy
is not met
.
On the contrary, the application for amendment points to the
absence of one made
bona fides
but is designed to diminish the
effect of the Guarantee to prevent the call for payment and/or to
overcome the criticism by the
exception court. The IDC would be
prejudiced if the amendments were allowed.
[47]
In sum: I conclude as dealt with seriatim above that the amendments
respectively:
i.Do not raise a triable
issue,
ii.Lack the necessary
averments.
iii.Exhibit an inherent
legal conflict, bad in law and are excipiable.
iv. They are prejudicial
to the IDC.
[48]
The application for amendments proposed in paragraphs (a) 28 A1 to
28A.6; (b) 28A.7 to 28A.8, (c) 28B to2 8C, (d) 30.8A,
30.11, 30.14
and 31.1 (the main amendment) is refused. Since the remainder of the
amendments are consequential on the granting
of the main amendments,
the rest of the amendments must follow a similar fate.
[49]
There is no reason why costs should not follow the result. As is
apparent from the judgment, costs on a higher scale
are justified
because of the defendants’ approach.
[50]
Accordingly, the following order is made:
a. The defendants’
application to amend their plea, is dismissed with costs;
b. The costs above shall
be on Scale C limited to the costs of Senior Counsel and one Junior
Counsel.
NTY
SIWENDU
JUDGE
OF THE HIGH COURT
JOHANNESBURG
This
Judgment is handed down electronically by circulation to the
Plaintiff’s Legal Representative and the Defendants by email,
publication on Case Lines. The date for the handing down is deemed 3
April 2025
Date
of Appearance: 03 February 2025
Date
Judgment delivered: 03 April 2025
Appearances:
For
the Plaintiff:
Advocate I Pillay SC
With:
Advocate Broster (Junior)
And
Advocate S Mchunu (Junior)
Instructed
by:
Pather and
Pather Attorneys
For
the Defendants: Advocate R
Patrick SC
With:
Advocate C Quinn (Junior)
Instructed
by:
De Klerk and
Van Gend Inc
[1]
Trans-African
Insurance Co Ltd v Maluleka
1956
(2) SA 273
(A) at 279A–E.
[2]
[2005] ZACC 3
;
2005 (6) BCLR 529
(CC);
2006 (3) SA 247
(CC) at
[9]
.
See also
Moolman
v Estate Moolman and Another
1927
CPD 27
at 29.
[3]
National
Media Ltd and Others v Bogoshi
[1998] 4 All SA 347 (A), 1998 (4) SA 1196 (SCA).
[4]
See
Y.B
v S.B and Others
[2015] ZAWCHC 109
;
2016 (1) SA 47
(WCC) at
[11]
.
[5]
[2014]
ZASCA 212; [2015] 2 All SA 152 (SCA).
[6]
Id
at [7].
[7]
2024 JDR 3941 (GJ) The court aptly notes that
Capital
Bank Holdings Limited and Another v Coral Lagoon Investments 194
(Pty) Limited and Others,
2022 (1) SA 100
(SCA), at [38]
provides a reconciliation between the continued recognition of the
parol evidence rule and the statements of the Constitutional
Court
in
University
of Johannesburg v Auckland Park Theological Seminary and Another
.
[8]
[2021]
ZASCA 99
; 2022(1) SA 100 (SCA).
[9]
Id
at [51].
[10]
Principles in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[2012] 2 All SA 262
(SCA);
2012 (4) SA 593
(SCA) which require the
court to have regard to the context.
[11]
See
Makate
v Vodacom (Pty) Ltd
[2016] ZACC 13
;
2016 (6) BCLR 709
(CC);
2016 (4) SA 121
(CC) at
[42]
.
12
See
Minister
of Finance and Others v Gore NO
2007 (1) SA 111 (SCA);
[2006]
ZASCA 98
; [2007] 1 All SA 309 (SCA).
[13]
See also
SPF
and Another v LBCCT/A LB and Another
[2016] ZAGPPHC 378 at [14].
[14]
See
Curtis
v Dowdle
[2023] ZAGPJHC 3 at [42] - [45].
[15]
See
Everfresh
Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd
2012
(3)
[2011] ZACC 30
; BCLR 219 (CC),
2012 (1) SA 256
(CC) at [52].
[16]
Neethling
v Klopper en Andere
1967 (4) SA 459
(A) points out that there was no objection to
relying on proof of an oral agreement relating to the cancellation
of the contract
where unlike the present case its terms are not
placed in issue.
[17]
1970 (2) SA 498
(A) p 503B.
[18]
See
Rand
Reitfontein Estates v Cohn
1937
AD 317
at 327.
[19]
See
Tshivhase
Royal Council and Another v Thsivhase and Another
[1992] ZASCA 185
;
1992
(4) SA 852
(A)
at 863A – 863C; referring to
Christie
Law
of Contract in South Africa
2nd
ed at 382 and 397-8.
[20]
Compass
Insurance Company Ltd v Hospitality Hotel Developments (Pty) Ltd
[2011] ZASCA 149; 2012 (2) SA 537 (SCA).
[21]
2002 (2) SA 447
(SCA) at [34].
sino noindex
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