Kropman and Others NNO v Nysschen

• Judge: Macarthur J
• Judgment Date: 08 April 1998
• Docket Number: 18079/96
• Hearing Date: 02 February 1998
• Counsel: A Subel for the plaintiff P Ellis for the defendant
• Court: Transvaal Provincial Division

Macarthur J:

The three plaintiffs have brought this action in their capacities as trustees of the Rottanburg Trust ('the trust') against the defendant, in respect of certain moneys which it is alleged are due and payable to the trust.

Charles Rottanburg was a well-known and successful businessman in Klerksdorp who had many interests, including Leba Motors, where new J

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and secondhand cars were bought and sold. The defendant had worked for many years as the sales manager for Leba A Motors and when this business was sold in July 1985 Charles Rottanburg felt he would like to help defendant set up his own business in Orkney. This business became known as Harry's Motors and it traded in second-hand cars.

Charles Rottanburg lent the defendant R160 000 and in terms of a written agreement dated 6 September 1985 the B defendant acknowledged being indebted to Charles Rottanburg for this amount with effect from 1 September 1986. The loan was to be for a period of three years with effect from the effective date and it was to be interest free for the first year. Thereafter, and for the remaining two years, it would attract interest at a rate equivalent to three points or 3% C below the official prime rate charged by Barclays National Bank. A bond was registered over certain properties owned by the defendant to secure the loan and it was also provided in the written agreement that, notwithstanding the provisions relating to the three-year loan, if Charles Rottanburg were to have an untimely death the loan was to be automatically D payable within a period of six months from the date of the death of the deceased.

On 7 April 1986 Charles Rottanburg and the defendant entered into a further written agreement in terms of which the defendant acknowledged being indebted to Charles Rottanburg in an amount of R99 797 in respect of goods sold and delivered to the defendant. In terms of the second agreement, the effective date being 1 September 1985, the defendant E undertook to repay the capital at the rate of R20 000 per annum, the first payment to be made on 1 September 1986 and annually thereafter on the 1st day of September each and every subsequent year.

Interest on the indebtedness was to be at the rate equivalent to three points or 3% below the official prime bank rate charged by Barclays National Bank. It was to be payable monthly in advance with effect from 1 September 1986 and F thereafter on the 1st day of each and every subsequent and successive month. It was also provided, as in the first agreement, that in the event of the untimely death of Charles Rottanburg the loan and the interest would be automatically payable within six months of the date of the death. G

As security for this debt the defendant agreed that the security afforded by the bond registered over the defendant's properties in respect of the first agreement applied similarly to the second agreement.

On 17 August 1990 Charles Rottanburg died. The three plaintiffs were granted letters of executorship by the Master on 20 August 1990 and in due course the final liquidation and distribution account in the estate was approved by the Master H on 15 February 1991. As executors they were discharged in terms of s 56 of the Administration of Estates Act 66 of 1965 and assumed their new role as trustees of the Rottanburg Trust. Letters of authority to act in that capacity were granted to them by the Master on 26 April 1991.

It is common cause that in respect of the amount payable under the first agreement, this became repayable by 1 I September 1989 and insofar as the second agreement, that amount was repayable by 1 February 1991. The plaintiffs allege that apart from the payment of R25 000 on 19 November 1991 the defendant has paid nothing else. In the result and J

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keeping the interest charges at 3% below the official prime rate, the total amount due as at the date the summons was A issued is R507 299, which is the amount now claimed by the plaintiffs.

The defendant raised a number of defences, the first one being a special plea to the effect that the claim against the defendant had not been properly ceded to the trustees, consequently they were not the successors entitled to the claim B and they lacked the capacity to act.

There was also a conditional special plea based on prescription and the replication to this was that the defendant had, during the period 1991 to January 1994, from time to time acknowledged his indebtedness to the plaintiffs. C

Apart from these special defences the plea in general was a denial, but in para 7.2.3 and 7.2.4 of the plea the defendant contended that in January and January/February 1990 the defendant was owed certain moneys by Charles Rottanburg.

This arose out of an oral agreement between the two of them whereby the defendant acquired a 20% interest in Leba D Motors. Thereafter in February 1990 and by a further oral agreement all the existing debts between them were set off against each other resulting in all the debts being extinguished.

The evidence for the plaintiffs came firstly from two of the trustees, namely the first and second plaintiffs. Mr Kropman E is a practising attorney in Klerksdorp and had looked after the affairs of Charles Rottanburg since the 1970s. He had been responsible for preparing the two agreements where the defendant acknowledged his debt to Charles Rottanburg. He also described how he was appointed an executor of the deceased estate and had written to the defendant on 11 September 1990 reminding him of the money which he owed the estate. The defendant signed certificates on 26 and 27 F September 1990, acknowledging the amount outstanding.

In January 1991 Kropman met the defendant who asked him to give him time to repay the debt. There was no dispute about the amount. Again in March 1991 the defendant met Kropman and told him about the assets he had on his farm. G The defendant, who had a cubicle at Tattersalls in Klerksdorp, was also trying to sell it in order to repay the loans. Further letters were written to the defendant in April 1991, but nothing was forthcoming except promises.

Kropman said the main beneficiaries under the will, namely the children of the deceased, had known the defendant most H of their lives and had considered him to be a loyal servant of their father. Consequently they did not want to bring any kind of pressure on him because they considered there was also a bond over the property to give them the proper security. Despite this Kropman continued to write letters to the defendant and sought payment from him. I

In August 1991 Kropman, together with Mrs Eidelman, the second plaintiff, and the defendant visited the defendant's farm to ascertain the condition of the farm and to see whether the cattle and the assets were actually there. Again in September 1991 the husband of the second plaintiff bought the cubicle at Tattersalls from the defendant for R25 000. The cheque for this amount was made out in favour of the J

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defendant, who endorsed the back and made it payable to the...