The ex-wife of a Durban North attorney has claimed in court papers that he defrauded a bridging finance company of more than R6 million and that she and their two adult children had signed surety on a repayment agreement so that he would not be prosecuted and go to jail for 15 years.
Angela Taylor, of Mhlanga, now wants a court to set aside the agreement that she, her daughter Marie Clare Evans, 32, and son Matthew Taylor, 29, signed five years ago, saying they personally never owed the money, had not signed it willingly and could not afford to pay anything anyway.
“Since my divorce I am destitute. My children are just starting out in life. They should not be burdened by this,” she said in her affidavit which came before Durban High Court Judge Piet Koen on Tuesday.
Her ex-husband, Graham Taylor, who said he would abide by any decision of the court, has denied any intention to commit fraud, but said there was risk that the company he owed, Paforma Pty Ltd, “could have construed what I had done as constituting fraud”.
“The prospect of my facing criminal charges was obviously not something that I relished,” he said in his affidavit filed with the court.
“The common-sense solution was to negotiate for time to repay the money and avoid criminal proceedings.”
Angela Taylor said she first learnt of her husband’s financial problems at the end of 2008, while they were still married. She said he admitted to “committing fraud” and owing about R6.5m.
“He said the company was a bridging finance company which advanced transactions through firms of conveyancers, including his.
“He said he had been fabricating fictitious property transactions and presenting applications for finance allegedly on behalf of his clients.”
She said a family meeting was held “and we were told that unless the issue was resolved, it was likely he would go to jail for 15 years or more.
“My children and I were flabbergasted. None of us were party to this. It was devastating news and a complete shock.”
She said the agreement, for the repayment of R6.9m, was negotiated with Nicolaas Muller, the chief executive of Paforma.
Neither she nor her children wanted to sign as surety “but understood that the alternative was imprisonment”.
The agreement, attached to the court papers, states that is it in full and final settlement of all and any civil or criminal actions which the company may be entitled to institute against Graham Taylor.
It reflects an immediate payment of R2.5m and then a deferment of payments until March 2011 when Taylor would pay over not less than 25 percent of his monthly income until the debt was settled.
Angela Taylor said she and her children should not be bound to this agreement “for as long as it takes him to repay the money which could be the rest of his life”. But all attempts to be released from the agreement had been rejected by Paforma.
Graham Taylor said he has honoured the agreement and intends to continue to do so.
“I am not opposing the application, but just want to record my version since it impacts on my reputation and standing.
“In broad terms I ran into financial difficulties which led to me receiving and withholding payments that were lawfully due to Paforma.
“It was always my intention to repay these amounts, but instead they were used for living expenses for myself and my dependants and eventually the amount involved became too large for me to afford to repay it in one lump sum and I needed an indulgence of time to do so.”
He said being charged criminally was also not in the interests of his family because he was the bread-winner. He said the suretyships were required “as a condition of settlement”.
Paforma is opposing the application, which was on Tuesday adjourned.