The Western Cape High Court has ordered an FSP to pay an executor the balance due on a loan of R1 million, plus costs, after rejecting the company’s defence that its obligations in terms of the loan agreement had been validly delegated to a director.
The action was brought against Finhaus Financial Solutions (Pty) Ltd. However, at the time the loan agreement was concluded, the company was called Albarit Financial Services (Pty) Ltd, and it was referred to as such by the court.
One of the directors of AFS, Andre Thiart, and a friend and client, Ursula Kompf, concluded a written agreement in September 2010.
The agreement provided for Kompf to loan AFS R1m for five years, and for AFS to repay Kompf R27 000 a month from October 2010, of which R12 000 would be paid directly to Kompf in cash and R15 000 would be paid into an Old Mutual investment.
According to the judgment, from October 2010 to November 2011, monthly payments of R12 000 were made from a bank account in the name of AFS into Kompf’s bank account. In addition, monthly premiums of R15 000, increasing to R16 500 from October 2011, were paid in respect of the Max Investment Policy from the same bank account.
From December 2011 to December 2012, the monthly payments of R12 000 continued to be made into Kompf’s bank account, but from an account held by Thiart. From January 2012 to January 2013, monthly premiums of R16 500, reducing to R6 000 from August 2012 and increasing to R6 600 from October 2012, continued to be paid in respect of the policy, but from one of Thiart’s bank accounts.
After Kompf’s death in March 2013, Andre de Klerk, the executor of Kompf’s estate, cashed in the policy and received the proceeds of R371 314.18 from Old Mutual. He claimed the balance of the loan plus interest from the AFS.
Thiart resigned as a director of AFS in 2014, and he was sequestrated in 2015.
AFS submitted that it performed its obligations under the agreement to November 2011. The following month, Kompf, Thiart and AFS entered a written, alternatively oral, agreement, in terms of which AFS’s rights and obligations under its agreement with Kompf were delegated to Thiart, who was substituted as the debtor, and AFS was discharged from the agreement. AFS said it did not possess the written agreement.
After considering the evidence, Judge Judith Cloete found that AFS failed to prove that Thiart had the authority, whether expressly or implied, to conclude any delegation agreement on its behalf.
She ordered Finhaus to pay De Klerk R1m, plus interest at the rate of R12 000 a month from 1 October 2010, reducing to R8 180 a month from 14 May 2013, less the total of the monthly amounts of R12 000 paid into Kompf’s bank account from 1 October 2010 to 31 December 2012 and R371 314, applied in each instance first to interest and thereafter to capital.
Finhaus was also ordered to pay De Klerk’s costs.
