\c_,ju\ 1i. and. (:)_ /.:::i f/ 'X>l 0 DATE. Plaintiff. First Defendant/ Excipient ERROL DAVID ELSDON. Second Defendant CHRISTIAN SCHOEMAN JUDGMENT

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1 / / IN THE HIGH COURT OF SOUTH AFRICA (GAUTENG DIVISION, PRETORIA) DELETE WHICHEVER IS NOT APPLICABLE (1) REPORTABLE:~/ NO. (2) OF INTEREST TO OTIIER JUDGES: ~/NO. (3) REVISED. (:)_ /.:::i f/ 'X>l 0 DATE IN THE MATTER BETWEEN: GLOBAL DISTRESSED ALPHA CAPITAL I LIMITED (in its capacity as the general partner Of GLOBAL DISTRESSED ALPHA FUND IN LIMITED PARTNERSHIP) CASE NO: 15650/2017 DATE: l~/04'/~f~ \c_,ju\ 1i Plaintiff and ERROL DAVID ELSDON CHRISTIAN SCHOEMAN First Defendant/ Excipient Second Defendant JUDGMENT KOLLAPEN J:

2 1. 1 ne.namnn nas mst1tutect action agamst the ljetendants in which it seeks the payment of various sums of money based inter alia on misrepresentation, unjust enrichment and the repayment of a loan. All of the claims arise out of a written agreement, referred to hereinafter as the "Black Rock Agreement". There are in total, four claims. 2. The Black Rock Agreement was concluded in Pretoria on the 18th of July 2013 and provided in general for the financing of litigation. 3. The first Defendant has excepted to Claim A and Claim D as disclosing no cause of action. 4. The basis for advancing the exception in respect of Claim A is described in the following terms in the Notice of Exception: J. "Claim A is premised upon Global Distressed Alpha Fund III Limited Partnership ("GDAF"), of which the Plaintiff is allegedly the general partner and the proper person to bring a claim on behalf ofgdaf, having concluded the written agreement a copy of which is annexure "POC2 " to the Plaintiff's particulars of claim ("the Black Rock Agreement''), the conclusion of which agreement the Plaintiff (GDAF) alleges was induced by certain misrepresentations on the part of the First and I or Second Defendant. 2. The Plaintiff (GDAF) claims payment form the First and Second Defendant in respect of damages suffered by GDAF, being amounts paid by GDAF pursuant to the Black Rock Agreement, which agreement it is alleged GDAF would not have concluded, and which amounts GDAF would not have paid, if the alleged representations had not been made.

3 3 3. Ex facie the Black Rock Agreement:- 3.1 GDAF is not a party to the Black Rock Agreement Simba Capital VIII Sari ("Simba '') as principal, or Simba 's "assigns or nominee", is a party to the Black Rock Agreement. 4. The Plaintiff (GDAF) does not allege:- 4.1 that it is Simba 's assignee or nominee; or 4. 2 any other basis upon which GDAF can legally be regarded as a party to the Black Rock Agreement in the stead of Simba. 5. In particular, the allegations in paragraph 12 of the Plaintiff's particulars of claim do not establish any basis in law for GDAF being a party to the Black Rock Agreement in the stead of Simba. 5. The relevant paragraphs of the particulars of claim pertinent to this part of the exception read as follows: "12. Simba entered into the Black Rock Agreement on behalf of and under the authority of its principal, GDAF 14. The further material express, alternatively implied, alternatively tacit terms of the Black Rock Agreement were as follows: 14.1 Simba, acting for and on behalf of GDAF undertook to provide funding to Black Rock by paying: an amount of into trust with Hamilton Downing Quinn LLP ("HDQ ''), a firm of solicitors registered in

4 England and Wales as a limited liability partnership with registration number OC Such money would be held to the order of Sterne/a & Lubbe (clause 1 of the Black Rock Agreement); and an amount of to Black Rock, into an account nominated by the First Defendant (clause 2 of the Black Rock Agreement);" 6. The basis for advancing the exception in respect of Claim Dis as described in respect of Claim A and in addition the following is advanced in support of the exception: "CLAJMD 8. Claim D is premised upon the following clauses in the Black Rock Agreement: "3. All proceeds of the litigation will be paid to the Attorneys and they will account to all parties, for such proceeds. 4. Upon receipt of such proceeds and providing the financier has complied with its obligations set forth herein, the Attorneys are hereby irrevocably directed to pay to the financier and the Attorney hereby accepts such instructions: [a] an amount of 250, plus 5%... of the gross proceeds from the litigation. [b J for the purposes of this Agreement gross proceeds from the litigation shall mean all

5 6 conclusion of the Black Rock Agreement, being 18 July 2013, had to amount to less than 2 5 0, Upon a proper interpretation of the wording "in the event that the amount payable to the financiers pursuant to clause 4[a] above amounts to less than 250,000", an actual amount payable less than 250,000 is envisaged-what is envisaged is not no amount at all payable. 11. The Plaintiff does not allege either: that Makate 's claim was dismissed within one year of the date of conclusion of the Black Rock Agreement; or 11.2 that the amount payable (to the financier) pursuant to clause 4[a] of the Black Rock Agreement is less than 250,000 i.e. an actual amount payable less than 250,000. Instead, the Plaintiff alleges that by 18 July being one year after the Black Rock Agreement was concluded - no award had been made to Makate in respect of Makate 's claim." 7. The relevant allegations in the particulars of claim in support of Claim Dread as follows: "14.5 Repayment of the loan would otherwise become due: on the Vodacom Claim being dismissed; or within one year of the Black Rock Agreement being concluded in the event that no award, or an award amounting to less than 250,000, was made during

6 monies paid by the Defendants in the litigation referred to in recital A and paid to either the Plaintiff or the Attorneys in full and final settlement of the litigation inclusive of any payments with regard to damages, interest, costs and the like without deduction. SURETYSHIP AND INSTRUMENT OF DEBT The amount payable in terms of this instrument, by the financier, is regarded as a loan to Black Rock and the loan will only be regarded as redeemed, when payment is made in terms of paragraph 4 hereof In the event of Makate 's claim being dismissed or in the event that the amount payable to the financiers pursuant to clause 4{a] above amounts to less than 250,000 within one year from the date hereof Schoeman and Eidson, bind themselves, jointly and severally, the one paying, the other to be absolved as sureties and co-principal debtors in favour of the financier for the debt owing by Black Rock in terms of this instrument to the financier, for payment of an amount up to 2 50, " 9. In order for the First Defendant (and the Second Defendant) to become liable in terms of the suretyship provision of the Black Rock Agreement, either:- 9.1 Makate 's claim had to be dismissed within one year of the date of conclusion of the Black Rock Agreement, being 18 July 2013; or 9.2 the amount payable (to the financier) pursuant to clause 4[a} of the Black Rock Agreement within one year of the

7 mar ume (:suretysh1p and. instrument of Debt clause of the Black Rock Agreement)." The applicable legal principles 8. In H v FETAL ASSESSMENT CENTRE 2015 (2) SA 193 (CC) the Constitutional Court stated as follows (at 199B): "In the high court the matter was decided on exception. Exceptions provide a useful mechanism to 'weed out cases without legal merit', as Harms JA said in Telematrix. The test on exception is whether on all possible readings of the facts no cause of action may be made out. It is for the excipient to satisfy the court that the conclusion of law for which the plaintiff contends cannot be supported on every interpretation that can be put upon the facts." As stated inmckelveyv COWAN NO 1980 (4) SA 525 (Z) (at 526D-E): "It is a first principle in dealing with matters of exception that, if evidence can be led which can disclose a cause of action alleged in the pleading, that particular pleading is not excipiable. A pleading is only excipiable on the basis that no possible evidence led on the pleadings can disclose a cause of action." In PICBEL GROEP VOORSORGFONDS (IN LIQUIDATION) v SOMERVILLE, AND RELATED MATTERS 2013 (5) SA 496 (SCA) Plasket AJA stated as follows (at 509A-C): "It is necessary first to say something about the proper approach to issues such as these on exception. In Lewis v Oneanate (Pty) Ltd and Another Nicholas AJA stated that an excipient bears the burden of persuading the court that 'upon every interpretation which the particulars of claim ' and any agreement on which they rely 'can reasonably bear, no cause of action is disclosed'. And, in Sun Packaging

8 lrtyj Lta v vreu1111k, JVestaat JA co11jirmed that there is no hard and fast rule that the interpretation of agreements is to be avoided on exception. He said: 'As a rule, Courts are reluctant to decide upon exception questions concerning the interpretation of a contract. But this is where its meaning is uncertain....in casu, the position is different. Difficulty in interpreting a document does not necessarily imply that it is ambiguous... Contracts are not rendered uncertain because parties disagree as to their meaning."' Analysis Claim A 9. During argument the Plaintiff indicated that it did not rely on Simba assigning rights to it or acting as its nominee in respect of the Black Rock agreement insofar as the agreement made reference to Simba "or its assigns or nominee". Its view was that the Particulars of Claim made the unequivocal allegation that Simba entered into the Black Rock Agreement under the authority and on behalf of the Plaintiff. 10. As I understand it, the complaint of the excipient is that the Particulars of Claim nowhere indicate that Simba acted for an undisclosed principal, being the Plaintiff at the time of the conclusion of the written agreement. I can see no reason for the Particulars of Claim to go as far as this but even if there was some merit in that contention, at best for the first Defendant, its omission may lead to some uncertainty, which is hardly to be dealt with at the stage of exception.

9 .ll u1.n,.u u11., appiua~u tu cxlit:pnuns, 1 am not or the view that on every reasonable interpretation it can be said that the Particulars of Claim in respect of Claim A disclose no cause of action. Clearly, and while the Black Rock Agreement makes no reference to the Plaintiff, the Particulars of Claim seek to make the connection in para 12 and 14 thereof and to which I have already made reference. On that basis there is simply no merit in the exception and it falls to be dismissed. Claim D 12. The same reasons advanced in respect of Claim A, would apply to Claim D ( to the extent that the exception places reliance on the same issue). In addition, however, and when I have regard to the basis on which the exception is advanced, then it is highly technical and formalistic in nature and amounts to the interpretation of the Suretyship provisions of the Black Rock Agreement. 13. The stance of the first Defendant is that the suretyship contemplates some amount above 0, and less than , that is payable before the obligation to repay is activated, while the Plaintiffs stance is that the obligation is activated even in the event where no amount is payable. 14. Ultimately this will involve a matter of the interpretation of those provisions of the agreement, and I fully associate myself with the dicta in PICBEL that expresses the reluctance of the Court to decide at exception stage, matters of interpretation. In my view and at best for the Plaintiff, it may be contended that

10 u1c rnccuw1g 1s um;ercam ana mat womo narruy warrant a cteterrmnatlon at this stage. The trial Court would be best placed to make a determination of the proper meaning to be ascribed to the provisions, assuming of course that it could be said that there is uncertainty that attaches to it. 1s. It is for these reasons that the exceptions in respect of both claims A and D, fall to be dismissed. Order 16. I make the following order: The exception in respect of Claim A and Claim D of the Plaintiffs Particulars of Claim is dismissed with costs. NKOLLAPEN JUDGE OF THE HIGH COURT OF SOUTH AFRICA

11 J...IV...JV/kVl. / HEARD ON: 22 March 2018 FOR THE PLAINTIFF: Advocate HP Pretorius INSTRUCTED BY: Baker & McKenzie (ref.: W Steyn/ES/ ) FOR THE FIRST DEFENDANT: Advocate L Hollander INSTRUCTED BY: Fairbridges Wertheim Becker (ref.: A Kika/jn/STE191/0009)