Adam and Another v Moosa

The respondent lent R3.5 million to a company, Cream Magenta 101 (Pty) Ltd, to fund a property development. The appellants, who were involved in the development, signed an Acknowledgment of Debt (AOD) acknowledging the company's indebtedness. The AOD contained clauses using personal pronouns ('we'/'us') and provided for personal liability mechanisms. The second appellant was never a director of the company. The first appellant later paid half the capital amount from personal funds, describing it as 'my capital portion'. The respondent sought to enforce the AOD against the appellants personally. The company was wound up.

• Whether the Acknowledgment of Debt rendered the appellants personally liable for the debt of Cream Magenta.
• Whether the AOD constituted a contract of intercessio.
• Whether the National Credit Act 34 of 2005 applies to the agreement.

The appeal is dismissed with costs.

In interpreting an acknowledgment of debt, the clear meaning of the operative provisions prevails over a subordinate preamble. Where an individual who is not a director or officer of a company signs an acknowledgment of debt using personal pronouns and providing for personal liability mechanisms, they are personally liable. An acknowledgment of debt securing a loan to a juristic entity that is exempt from the NCA constitutes a credit guarantee under s8(5) of the NCA, not a standalone credit transaction under s8(4)(f), and is therefore not subject to the NCA's registration requirements.

The court noted that a company cannot acknowledge indebtedness in terms binding on its 'estates, administrators, heirs and successors in title'. The court also remarked that provisional sentence proceedings are incompetent against a company, reinforcing that such a clause indicates personal liability.

This case clarifies the interpretation of acknowledgments of debt and the distinction between signing in a representative versus personal capacity. It confirms that operative contractual provisions prevail over preambles, and that subsequent conduct can be considered in contractual interpretation. It also addresses the applicability of the NCA to credit guarantees flowing from exempt juristic loans.