Staff Reporter
A Free State businesswoman has been ordered to pay back over R40.4 million that her small loans business owes to the state-owned Small Enterprise Finance Agency (SEFA).
The entrepreneur, Margaretha Aletta Notley, was sued in her capacity as surety and co-principal debtor of Retmil Financial Services (Pty) Ltd, a registered company based in Bloemfontein that gives out loans to small, medium and macro enterprises (SMMEs).
SEFA, on the other hand, is in the business of lending loans to other on-lenders at a minimal interest rate who then in turn lend loans to SMME businesses and charge interest.
On September 18, 2012, SEFA concluded a written business loan agreement with Retmil in terms of which the state-owned company loaned and advanced to Retmil an initial amount of R30 million at two-percent interest rate which would be payable in 57 monthly instalments.
Notley, who was the sole director of Retmil, bound herself in her personal capacity as surety for Retmil through a written deed of surety in terms of which she would be a co-debtor in Retmil’s financial obligations towards SEFA.
However, Retmil later failed to comply with its financial obligations to SEFA, forcing SEFA during 2015 to approach the Free State High Court with an application to perfect its security in terms of a deed of pledge and cession.
This culminated in a deed of settlement in terms of which Retmil admitted its indebtedness towards SEFA in the amount of R45 million at two percent interest rate per annum.
The said amount would be repaid, firstly, in six monthly instalments of R500 000 and, thereafter, monthly instalments of R250 000 until the whole outstanding amount is paid in full.
The settlement agreement was subsequently made an order of court on July 28, 2016.
Retmil then fell into arrears towards repayments in terms of the deed of settlement, forcing SEFA to approach the High Court again over the breach of contract.
SEFA instituted an action for damages against Notley as surety for Retmil, suing for an amount of R40 451 989.90.
The state-owned lender argued that the respondent had no bona fide defence and that she was merely defending this matter for purposes of delay.
In her answering affidavit, Notley alleged that she had been released from her responsibility as surety because of the conduct of the applicant.
She claimed SEFA had acted in contravention of the conditions of their contract in that it opened an outlet in Bloemfontein and acted as a financier in direct competition with Retmil since December 2013.
Notley accused the applicant of interfering with Retmil’s existing clients and financing them.
The respondent also disputed the amount allegedly owed by her to SEFA.
The central issue for the court’s determination was whether Notley had a bona fide defence to the applicant’s claim and or whether she was defending the matter only for purposes of delay.
The matter was heard on October 21.
“Accordingly, I am satisfied on a balance of probabilities that the respondent has no bona fide defence to the applicant’s claim and that she is only defending this matter for purposes of delay,” Justice Matshaya said a judgment delivered on 4 November.
“Furthermore, it is evident from the above that the surety has not been released from her responsibility as surety and co-debtor to Retmil since there was never a notice to that effect as contemplated in Clause 10 of the Deed of Suretyship.
“Therefore, the application for summary judgment has to succeed with costs.”