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[2016] ZAWCHC 178
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Sterling v Myerson (15837/2016) [2016] ZAWCHC 178 (25 November 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
WESTERN CAPE DIVISION,
CAPE TOWN
REPORTABLE
CASE
NO: 15837/2016
In
the matter between:
INGRID
DIANE
STERLING
Plaintiff
and
BRIAN
ALAN
MYERSON
Defendant
JUDGMENT
DELIVERED ON 25 NOVEMBER 2016
GAMBLE,
J:
INTRODUCTION
[1]
The parties to these proceedings were once
married to each other. Upon their divorce in the United Kingdom in
March 2008, the Family
Division of the High Court of Justice in
London ordered the defendant to pay an amount of GBP 11 million to
the defendant. Over
the years he discharged payment of a substantial
part of his indebtedness to the plaintiff; in October 2013 the
outstanding balance
on the debt was the sum of GBP 618 000.
[2]
Upon
being pressed for payment of the outstanding balance by the
plaintiff’s husband
[1]
the
defendant acknowledged his liability in the aforesaid amount and on
22 October 2013 executed an acknowledgement of debt (“an
AOD”)
in favour of the plaintiff. At that time both of the parties were
resident in Cape Town and the AOD was drawn up by
a director of the
plaintiff’s attorneys of record. The AOD provided for payment
by the defendant of his outstanding debt
in various tranches, all of
this to occur by latest 4 November 2013. Certain payments were made
by the plaintiff subsequent to
the conclusion of the AOD but as of 1
September 2016 he was still indebted to the plaintiff in the sum of
GBP 396 525.
[3]
The defendant having ignored the
plaintiff’s demand for payment of that amount, on 2 September
2016 summons was issued for
payment of the outstanding balance
together with interest and costs on the scale as between attorney and
client. When the defendant
entered an appearance to defend the
plaintiff filed an application for summary judgment in the aforesaid
amount. The defendant
opposed the application and filed a fairly
comprehensive affidavit in reply thereto.
[4]
Flowing from that reply, it is apparent
that the extent of the defendant’s indebtedness to the
plaintiff is not in dispute.
What is in issue is whether the amount
is due and payable. At the hearing of that application on 22 November
2016 the plaintiff
was represented by Adv I.J.Muller SC and the
defendant by Adv P.S. van Zyl. The court is indebted to counsel for
their helpful
heads of argument and oral submissions.
THE
APPROACH TO ADJUDICATING DEFENCES IN SUMMARY JUDGMENT PROCEEDINGS
[5]
Counsel
were, generally,
ad
idem
as to how this court should approach the defences put up by the
defendant in this matter. The point of departure remains the seminal
judgment of Corbett JA in
Maharaj
[2]
,
while the more recent judgment of Navsa JA in
Joob
Joob
[3]
provides a useful contemporaneous setting of the applicability of the
summary judgment procedure in the constitutional era. Whereas
some
earlier judgements (including
Maharaj
)
had described summary judgment as a drastic remedy, urging caution in
the application thereof, Navsa JA
[4]
articulated the contemporary approach thus:
“
[31]
…(I)n South Africa, the summary judgement procedure was not
intended to ‘shut (a defendant) out from defending’,
unless it was very clear indeed that he had no case in the action. It
was intended to prevent sham defences from defeating the
rights of
parties by delay, and at the same time causing great loss to
plaintiffs who were endeavouring to enforce their rights.
[32] The rationale for
summary judgment proceedings is impeccable. The procedure is not
intended to deprive a defendant with a triable
issue or a sustainable
defence of her/his day in court. After almost a century of successful
application in our courts, summary
judgment proceedings can hardly
continue to be described as extraordinary. Our courts, both of first
instance and at appellate
level, have during that time rightly been
trusted to ensure that a defendant with a triable issue is not shut
out. In the
Maharaj
case at 425G - 426 E, Corbett JA was keen
to ensure, first, an examination of whether there has been sufficient
disclosure by a
defendant of the nature and grounds of his defence
and the facts upon which it is founded. The second consideration is
that the
defence so disclosed must be both bona fide and good in law.
A court which is satisfied that this threshold has been crossed is
then bound to refuse summary judgement. Corbett JA also warned
against requiring of a defendant the precision apposite to pleadings.
However, the learned judge was equally astute to ensure that
recalcitrant debtors pay what is due to a creditor.
[33] Having regard to
its purpose and its proper application, summary judgment proceedings
only hold terrors and are “drastic”
for a defendant who
has no defence. Perhaps the time has come to discard these labels and
to concentrate rather on the proper application
of the rule, as set
out with customary clarity and elegance by Corbett JA in the
Maharaj
case at 425G-40 6C.”
[6]
In
argument Ms van Zyl stressed , with particular reference to
Marsh
[5]
,
that
–
“
2.
At the summary judgment stage of the proceedings it is not for the
Court to decide any balance of probabilities or determine
the
likelihood of the deponent’s allegations being true or false.”
Counsel
pointed out that this approach closely follows the
dictum
in
Maharaj
[6]
.
[7]
Mr Muller SC found no fault with this
approach but went on to remind the court that in assessing whether
the defence was raised
bona fide
one
had to contextualise it against the entire factual matrix before the
court at the stage of summary judgment. Accordingly, although
at
first blush it may appear to be a consideration by the court of the
probabilities of the defendant’s version being put
up, in
finding that the defendant’s allegations do not sit comfortably
with the remainder of the case, including, for instance
documentation
relied upon, the court would essentially be assessing the defendant’s
bona fides
in
advancing such a defence.
THE
DEFENCES PUT UP
[8]
In the first place the defendant claims
that he is entitled to rectification of the AOD and says that he
wishes to file a counterclaim
if permitted to continue with the
proceedings in this matter. At its core the rectification defence
contemplates the introduction
of a paragraph in the AOD suggesting
that the defendant will only be liable to pay the agreed amounts on
the stipulated days in
the event that he is able to so pay. If he is
unable to pay, it is said that it was agreed that he would be excused
from paying
until he is able to.
[9]
The
second defence put up is reliance on a
pactum
de non petendo,
that
is to say an agreement which suspends the ability of the plaintiff to
enforce the AOD either for a specified period or until
the occurence
of some particular contingency.
[7]
RECTIFICATION
[10]
The
principles applicable to a claim for rectification are not in
dispute. Accordingly the defendant bears the onus of establishing
that the AOD does not express the terms which he and Mr Sterling
agreed upon when the document was drawn up by the plaintiff’s
attorney.
[8]
Accordingly, the
defendant must show the facts which entitle him to such relief “
in
the clearest and most satisfactory manner”.
And,
in assessing whether there is potential merit in such a defence, a
court will bear in mind that, ordinarily, parties are precluded
from
relying on an alleged agreement which is at odds with an agreement
which they have chosen to reduce to writing.
[9]
Usually a claim for rectification will contain an allegation to the
effect that “
at
all material times the parties were of the common continuing
intention that”
a
term not contained in the agreement was agreed upon but excluded in
error. What does the defendant say here?
[11]
In the affidavit opposing summary judgment
the defendant says that :
[11.1]
“
[The plaintiff] then requested me
to sign the acknowledgment of debt which had been prepared by her
attorney…I therefore
signed the acknowledgment of debt under
enormous pressure….”;
[11.2]
“
However, during that period, and
in particular before and after signature I reminded Mr Sterling that
I would only be able to pay
if and when in a financial position to do
so - if my ability to do so, concurred with the deadline set out in
the acknowledgement
of debt, then the document was in order. If,
however, I was unable to pay, then complying with the unduly strict
prescriptions
of the document - which allowed me less than two weeks
after signature to come up with a balance owing - would obviously be
impossible.”
[11.3]
“
Mr
Sterling indicated that he understood my position, but requested me
to sign the document nonetheless, in the hope that it would
all work
out for the best in the end. It was on that basis that I signed the
acknowledgement of debt. At that time, and in return
for the release
of the second mortgage over the immovable property by the
plaintiff
[10]
,
I was in a position to pay the sum of GBP 428 475.00 (as set out in
paragraphs 5 and 7 of the particulars of claim). I therefore
duly
made such payment. Unfortunately, I was not able to pay the balance
by 4 November 2013, as stipulated in the [AOD] document.
I have not,
since, been in a financial position to pay the plaintiff.”
[12]
These then are the facts upon which the
defendant relies to suggest that the AOD does not reflect the “
common
intention”
of the parties
.
I agree with Mr Muller SC that the
facts as alleged do not come close to making out a case for
rectification. Indeed, the defendant
provides no detail whatsoever as
to when, where and in what manner he and Mr Sterling came to such
agreement. Much like the appellant
in
Soil
Fumigation,
the defendant has done
no more than to record now (some 3 years later) his unilateral
understanding of what he describes as a term
of the agreement orally
expressed at the time. It is really no different to the position
pithily described by Brand JA in that
matter at 38 H - J :
“
..(O)n
a proper interpretation of the letter, it does not purport to be the
manifestation of an agreement or even the recording
of the terms of
the agreement. On the contrary, its stated purpose was to establish a
recordal of
[K’s]
unilateral
understanding of what he described as an oral agreement which was
(allegedly) entered into nine months before…(The)
letter…predated the credit agreement relied upon.. When this
objection to the written agreement argument became apparent,
the
defendant’s counsel changed direction by relying on the defence
of rectification. Though this deserves some credit for
ingenuity, it
is clear that the remedy of rectification is not one which easily
lends itself to a fallback position by way of afterthought.”
In
my considered view then the defendant has not satisfactorily
articulated the claim for rectification with the clarity which our
courts have come to require so as to enable him to avoid summary
judgment.
[11]
[13]
There
is, in any event, a serious
lacuna
in
the opposing affidavit which renders the rectification defence
similarly unsustainable. The defence now being advanced –
“
I
will pay you when I can”
–
is difficult to square with the extensive detail set out in the AOD
as to the envisaged terms of payment. Those terms contemplate
payment
of large amounts of money on specified dates in the very near future:
approxiamately 2 weeks hence. Yet the defendant offers
no explanation
for the manifest inconsistency in agreeing to pay a substantial sum
within just a fortnight, and at the same being
let off the hook by
the plaintiff in the event that he is unable to come up with that
amount. In
Hoosain
[12]
Seligson AJ observed, with reference to established authority
[13]
that “
an
unduly sparse or unclear exposition of facts which should be within
the defendant’s knowledge may raise serious doubts
as to his
bona
fides
.”
[14]
In the circumstances I am of the view that
the defendant’s affidavit does not pass muster in relation to
the rectification
point.
THE
PACTUM DE NON PETENDO DEFENCE
[15]
Mr
Muller SC complained at the outset that the second line of defence
was inconsistent with the first: how, if the parties had agreed
that
the defendant need not pay the agreed amounts if he was in not in a
position to do so, could he rely on an agreement not to
recover if he
was not in a position to pay what was due? Ms van Zyl pointed out,
correctly in my view, that it was entirely permissible
to plead
conflicting causes of action in the alternative.
[14]
The problem, however, for the defendant on this score is similarly
one of clarification: a failure to explain under oath how the
obvious
tension that these competing legal contentions throw up arose in the
circumstances.
[16]
In
Hoosain
[15]
Seligson
AJ confirmed the existence of the
pactum
de non petendo
defence
and Mr Muller SC did not baulk at the fact that such a defence may be
raised at this stage. But, as Seligson AJ pointed
out, when the
defence is taken it must be articulated with sufficient clarity and
particularity lest it be considered vague and
uncertain and therefore
unenforceable. In
Total
South Africa
[16]
Smalberger JA described the operation of the
pactum
thus:
“
an
undertaking not to sue Van Vuuren
[the
principal debtor]
conditional upon the
due and punctual performance by Fourie
[a
party who had subsequently agreed to discharge van Vuuren’s
obligation to the creditor]
of the
obligations inposed upon him.”
I
turn again to the opposing affidavit to asses whether the defendant
has established this defence which, it must be stressed, is
an
agreement to suspend the enforcement of the defendant’s
obligation to pay the plaintiff and not the discharge thereof.
[17]
The defendant articulates the
pactum
defence as follows:
“
13.
I respectfully submit that the plaintiff has, in any event, agreed to
suspend the enforcement of the acknowledgement of debt
until I was in
a position to pay. I have been advised that a so-called
pactum de non petendo
exists between us, and I intend to raise the existence of this
agreement as a defence in my plea.
14.
As mentioned above, I have met with Mr Sterling…on various
occasions to discuss the matter. On each of those occasions
the
conclusion reached between us was that I would use my best endeavours
to make payment to the plaintiff, and that I would do
so when I was
financially able to - and, in the meantime, the plaintiff would not
take formal steps against me to enforce payment.
The rationale for
this agreement was obvious: there would be little sense in litigating
against me if I was not in a financial
position to meet the claim. I
did not (and still do not) own any property that could be liquidated
to pay the claim, and a judgment
against me would be hollow.”
[18]
In this affidavit the defendant further
mentions 4 meetings with Mr Sterling (with dates and places
described) at which successive
pacta
were allegedly concluded. The outcome
of each of those conversations as recorded in para 14 of the opposing
affidavit to was that
“
the
conclusion
”
that was arrived at was that the
defendant would do his best to pay the plaintiff what was due to her,
while the plaintiff “
would not
take formal steps against..[him].. to enforce payment”.
(Emphasis
added) What the defendant does not say is that the parties reached an
agreement on specific terms. It is axiomatic that
such an agreement
is fundamental to the proof of a
pactum
and absent proof of an agreement,
concluded
animo contrahendi
that
the plaintiff would not take formal steps to enforce payment of that
which was due to her on expressly stipulated conditions,
the
pactum
defence does not get off the ground.
[19]
As with the rectification defence, the
factual matrix before the court suggests that the defendant is not
bona fide
in
raising this defence. In the first place one finds a letter written
to the defendant by the plaintiff’s attorneys on 24
May 2016
demanding payment within 10 days of capital amounts of SAR2m and GBP
257 000, legal costs incurred in relation to
the conclusion of
the AOD in the sum of SAR112 366 and interest. There is no sign
of any written response to this letter nor
does the defendant deal
with the demand in his affidavit. To be sure, there is no indignant
retort on record that nothing is due
and payable by virtue of the
(most recently concluded)
pactum de non
petendo
[20]
The defendant says in his affidavit that he
and Mr Sterling met in London on the morning of 15 June 2016 where,
he claims, Mr Sterling
agreed that there would be “
no
point in going the legal route”
.
Subsequent to this there is a letter from the defendant’s
attorneys to the plaintiff’s attorneys dated 20 June 2016
in
which reference is made to a more recent letter from the former dated
17 June 2016 - just a day after the aforesaid alleged
meeting in
London. The letter of his attorneys of 20 June 2016 is at
variance with the defendant’s reliance now on a
pactum
de non petendo
: it says no more than
that there was an agreement that the defendant would pay the
plaintiff “
such amounts when he
can”.
Importantly, the letter
does not assert the fundamental component of any
pactum
–
that the plaintiff undertook
not to enforce the AOD.
[21]
This correspondence, considered in the
context of the absence of any other contemporaneous documentary
recordal of an alleged
pactum
having
been concluded, suggests likewise that the defence of a
pactum
de non petendo
has not been raised
bona
fide
by the defendant. In all the
circumstances, I am driven to conclude that the
pactum
defence has not been established either with the requisite degree of
proof. It follows that summary judgment may be granted against
the
defendant.
[22]
There
is one final consideration that should be raised. In terms of
Joob
Joob
[17]
and
Jili
[18]
(the latter following,
inter
alia,
Breitenbach
)
a
court would still be entitled to refuse to grant summary judgment if
an injustice was likely to result. But where (as in this
case) a
defendant’s liability is not disputed, and where it is
similarly clear from the affidavit opposing summary judgment
that the
defendant has no reasonable prospect of succeeding at trial, the
position is clear: there is no room to exercise a residual
discretion
to refuse summary judgment. As far as costs are concerned, there was
no debate: the AOD provides for the payment of
all legal costs to be
made on the scale as between attorney and client.
ORDER
OF COURT
A.
Summary judgment is granted and the
defendant is ordered to pay to the plaintiff;
i.
The sum of GBP 396 525 (Three Hundred
and Ninety Six Thousand, Five Hundred and Twenty Five Pounds
Sterling);
ii.
Interest on the aforesaid sum of GBP
396 525 at the prescribed rate
a
tempore morae,
with effect from 2
September 2016 to date of payment in full.
B.
The defendant shall pay the plaintiff’s
costs of suit on the scale as between attorney and client.
__________________
GAMBLE
J
[1]
It is common cause in these proceedings that Mr Simon Sterling acted
as the plaintiff’s agent.
[2]
Maharaj
v Barclays National Bank Ltd
1976
(1) SA 418 (A)
[3]
Joob
Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture
2009(5)
SA 1 (SCA)
[4]
At
11G
[5]
Marsh
and Another v Standard Bank of South Africa Ltd
2000 (4) SA 947
(W) at 949 D
[6]
426B
[7]
Van der
Merwe
et
al
Contract
, General Principles (4
th
ed)
at 456.
[8]
Soil
Fumigation Services Lowveld CC v Chemfit Technical Products (Pty)
Ltd
2004
(6) SA 29
(SCA) at [21]
[9]
Affirmative
Portfolios CC v Transnet Ltd t/a Metrorail
2009(1)
SA 196 (SCA) at [13]
[10]
The AOD reflects that the Plantiff in fact held a fourth mortgage
bond over an immovable property owned by Golden Mask Properties
23
(Pty) Ltd and that in exchange for the provision to her of bank
guarantees totalling some R8,3m, she agreed to the
cancellation of the said fourth bond.
[11]
Bushby
v Guardian Assurance Co
1915
WLD 65
at 71;
Bardopoulos
and Macrides v Miltiadous
1947
(4) SA 860
(W) at 863 ;
Levin
v Zoutendijk
1079 (3) SA 1145
(W) at 1147H – 1148 A.
[12]
District
Bank Ltd v Hoosain and Others
1984
(4) SA 544
(C) at 548 B
[13]
Breitenbach
v Fiat SA (Edms) Bpk
1976
(2) SA 226
(T) and
Standard
Merchant Bank Ltd v Rowe and Others
1982
(4) SA 671 (W)
[14]
Cilliers
et
al
Herbstein
& Van Winsen’s The Civil Practice of the High Courts of
South Africa, Vol 1 at 594.
[15]
At
548 I – 549 B
[16]
Total
South Africa (Pty) Ltd v Bekker NO
[1991] ZASCA 183
;
1992
(1) SA 617
(A) at 626 E-G
[17]
At [24]
[18]
Jili v
Firstrand Bank Ltd t/a Wesbank
2015 (3) SA 586
(SCA) at [13] – [14]