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[2022] ZAECPEHC 4
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Nienaaber N.O and Others v Nelson Attorneys and Another (2645/2011) [2022] ZAECPEHC 4 (18 January 2022)
THE HIGH
COURT OF SOUTH AFRICA
EASTERN CAPE
LOCAL DIVISION, PORT ELIZABETH
CASE
NO. 2645/2011
In the matter
between:
LINDA
NIENAABER
N.O.
First
Plaintiff
(in her
capacity as executrix of the
estate of the
late Leonie Logie Kelbrick)
ANTONIUS
GERHARDUS VAN DEN
BERG
Second
Plaintiff
MARGIE VAN
DEN
BERG
Third
Plaintiff
and
NELSON
ATTORNEYS
First
Defendant
PIERRE
KITCHING
ATTORNEYS
Second
Defendant
JUDGMENT
RUGUNANAN,
J
[1]
The
plaintiffs’ claim
,
which proceeds in delict, in essence alleges that the first defendant
(“the defendant”) owed them a duty of care and
acting
negligently and in breach thereof, plaintiffs have suffered damages.
The first plaintiff, Leonie Kelbrick, died post
litis
contestatio
and has been substituted by Linda Nienaaber N.O as the executrix of
her estate. The second defendant is not a party to these proceedings.
The second and third plaintiffs are married to each other and, where
convenient, will be referred to as the Van den Bergs. Liability
and
quantum are in issue.
[2]
The
background to the matter is evident from the pleadings and referenced
from various exhibits.
[1]
In the period September to November 2006, in Gqeberha (formerly Port
Elizabeth), a series of separate agreements were concluded
by the
plaintiffs with a developer known as Headline Trading 124 CC t/a
Status Homes (“Status”). The agreements were
for the sale
of abutting immovable properties (“the properties”)
registered as erven 679, 680 and 681. The driving
force in Status was
Alphonso Lamour, its sole member. Kelbrick concluded the sale in
respect of erf 681 on 4 September 2006. Simultaneously
on that date,
the
Van
den Bergs
jointly
concluded the sale in respect of erf 679. As for erf 680, one Jonker,
initially entered into an agreement during September
2005 but
subsequently concluded a new agreement with Status on 27 November
2006, which agreement was the
causa
for the transfer of his property to Status. Albeit that these facts
are common cause, Jonker does not feature in these proceedings.
[3]
The
agreements were prepared by the defendant, represented at all times
by Charles Nelson, a conveyancer. The defendant was also
the attorney
of Status.
[4]
In
terms of the agreements
[2]
each plaintiff would sell their property to Status for the amount of
R1. 4 million. The properties would be transferred to
Status and
thereafter consolidated for the construction of a new sectional title
development (“the development”) on
the consolidated
erven. Kelbrick, in lieu of payment of the purchase price, would
receive one new unit valued at R1 million
with the remaining
R400 000.00 to be paid to her by Status.
[5]
The
Van den Bergs would receive two newly constructed units against
payment of R300 000.00, being the difference between the
combined value of the two units, less the purchase price.
[6]
Status,
in addition, assumed liability for the costs of cancelling any
existing bonds over the properties.
[7]
Moreover,
in the event of the plaintiffs’ substitute units not being
constructed as soon as possible
[3]
,
Status undertook to pay the difference between rent payable by
Kelbrick for alternative accommodation and repayment of her previous
mortgage bond and rates. For the Van den Bergs, Status agreed to pay
the cost for their alternative accommodation.
[8]
In
the event that construction of the plaintiffs’ units did not
materialise at all, Status would be obliged to effect payment
of the
full purchase price to them.
[9]
For
payment of any amounts owing or any obligation of Status towards the
plaintiffs, Lamour bound himself as surety and co-principal
debtor
with Status. The exact date is unclear though it appears that this
occurred simultaneously with the signing of the sale
agreements.
[4]
For the proposed development, Status obtained financing from Standard
Bank Ltd (“the bank”) through registration, in
July 2007,
of a developer’s bond in the extent of R8 706 950
together with an additional R2 176 737.50.
In January and
in May 2007 (prior to the transfer of the properties), Lamour, bound
himself as surety for Status in favour of the
bank for amounts of
R10 883 687.50 and R2 125 000.00, respectively.
[10]
The
transaction was unusual, entailing a substantial risk in that it
involved the plaintiff’s homes being demolished to allow
for
the new development.
[11]
On
27 July 2007, the plaintiffs’ properties (including Jonker’s)
were registered and transferred to Status and simultaneously
consolidated into erf 2757. The transfer was handled by Nelson.
Status settled the plaintiffs’ existing bonds. At the time,
the
outstanding bond of the Van den Bergs was in the amount of
R207 343.20.
[12]
However,
prior to the transfer of the properties, the property market had
crashed. Status had also been involved in other projects,
which from
a financial point of view, impacted on the development.
[13]
In
January 2008, Nelson, on behalf of Status, launched an application
for the removal of title deed restrictions on the consolidated
erf.
In June 2008, while the application was pending, the plaintiffs’
homes were demolished and Status commenced excavation
on the building
site. A final order in the application was granted in August 2008. By
September 2008 the defendant had ceased representing
Status. In
October 2008, and although construction on the site was underway, the
plaintiffs instructed Attorneys Pierre Kitching
to institute action
to recover the purchase prices of R1.4 million plus other amounts for
arrear rental that arose from the failure
by Status and Lamour (as
surety) to comply with their agreed obligations.
[5]
[14]
In
the period December 2008 to February 2009 construction on the site
continued; but in February 2009 when Status put in a claim
with the
bank against the bond, the bank declined to pay because all the units
in the development had not been sold. The factor
here was that the
market crashed and stakeholders who elected to purchase,
cancelled.
[6]
Barring the amount of R1.4 million, the Van den Bergs only obtained a
judgment for R23 500.00 against Status and Lamour in
April 2009.
In July 2009, Status, as a result of being substantially indebted to
the bank, stopped making payments in reduction
of its indebtedness to
the bank. This set off an application by the bank for the provisional
liquidation of Status. A final order
issued in June 2010. The bank
was a major creditor and its claims against Status were secured and
ranked preferentially to any
claims by the plaintiffs. Lamour was
sequestrated but the plaintiffs were unable to recover any monies due
to them under the judgment
that they obtained.
[7]
The development imploded, it was never completed except for
foundations and a unit that achieved roof height; the plaintiffs lost
their homes and never received the purchase price of R1.4 million for
their properties.
[15]
At
the trial the plaintiffs called two witnesses. Daryl Burman a
conveyancing attorney was called as an expert witness. The second
plaintiff (Van den Berg) testified as second witness. The plaintiffs
closed their case and so did the defendant.
THE PLEADINGS AND THE ISSUES
[16]
In
the particulars of claim it is alleged that the defendant owed the
plaintiffs’ a duty of care which Nelson had negligently
breached.
[17]
The
duty of care is
pleaded
as follows
:
[8]
“
By
virtue of the defendant drafting the agreements Annexures LLK1
and LLK2 hereto and acting as conveyancer with instructions
to attend
to the transfer of the properties of the Plaintiffs to the close
corporation in terms of Annexures LLK1 and LLK2 hereto,
the
cancellation of the bonds of the property over the First Plaintiff’s
property and subsequent appointment to register
a development bond
over the property as consolidated with other immovable properties and
the defendant’s appointment as conveyancer
to attend to the
transfer of the completed units in the development to the respective
Plaintiffs, the defendant owed the Plaintiffs
a duty of care.”
[18]
The
grounds of negligence, pleaded as a combination of misrepresentations
and omissions, are longwinded and in several instances
tautologous.
[9]
These are not repeated herein, it suffices to say that the defendant
put the plaintiff to the proof thereof.
[19]
In
its plea the defendant has admitted that it owed the plaintiffs a
duty of care but denied negligence.
In
argument its counsel contended that the admission of the duty of care
was ring-fenced within the parameters of what was pleaded.
On the
merits, Nelson did not testify in his defence, but did so in the
course of the hearing of a special issue in which he pleaded
prescription. By way of a brief excursus, the special plea was upheld
but subsequently overturned by the Supreme Court of Appeal.
[20]
At
the commencement of the trial the transcript containing Nelson’s
testimony was placed before this court as evidence.
[10]
Nelson acknowledged that his duty of care was not limited to
transferring the plaintiffs’ properties to Status; it included
communicating with them and advising them of problems or events in
the completion of the development; it extended to transferring
the
completed units to them, and so too in the event that the likelihood
of transfer did not exist.
[11]
Although this acknowledgement seemed to have broadened the scope of
the duty beyond what the plaintiffs have pleaded, its effect
(as will
be seen from the enquiry into wrongfulness dealt with below), is
neutral where liability is concerned.
[21]
It
is fundamental to the judicial process that the material facts which
underlie an allegation in a pleading must be established
- see
Buchner
and Another v Johannesburg Consolidated Investment Co Ltd
1995 (1) SA
215
(T) at 216 I – J)
.
In this regard it is important to be mindful of the distinction
between
facta
probanda
or primary factual allegations which a plaintiff must make and the
facta
probantia
which
are secondary allegations or evidence upon which the plaintiff will
rely to prove the primary allegations. In this context,
a
duty of care
does not arise by responses to leading questions in cross-examination
– it arises from material facts that must
be pleaded.
[22]
Adverting
to the particulars of claim. A negligent omission as relied on by the
plaintiffs is not necessarily regarded as
prima
facie
wrongful, as opposed to a positive act that causes physical harm to a
person or property – see
Stedall
v Aspeling
2018 (2) SA 75
(SCA) at 80H. Conspicuously absent in the particulars
of claim is a bare allegation of wrongfulness on the part of the
defendant.
Seemingly incognisant that a necessary element of
delictual liability had not been mentioned in their pleading the
plaintiffs proceeded
to litigate on the footing that the averment of
a duty of care
[12]
rendered it implicit that the defendant’s alleged negligence
encompassed wrongfulness.
[23]
When
argument in the matter commenced, counsel for the plaintiffs
submitted that the admission of the duty of care renders an enquiry
into wrongfulness unnecessary and that negligence falls to be the
sole issue for determination. This approach is unsound; it conflates
the two elements and presumes that liability may be extant without
wrongfulness being considered at all.
[24]
The
duty of care does not encompass wrongfulness and negligence (
Stedall
supra
at 81B). Wrongfulness and negligence have different features that do
not coincide.
[13]
The touchstone for wrongfulness is that it is concerned with the
reasonableness of imposing liability on a defendant, the judicial
determination of which is dependent on considerations of public and
legal policy and is informed by constitutional norms –
see
Le
Roux and Others v Dey
2011 (3) SA 274
(CC) at paragraph [122]. It functions as ‘a
brake on liability’.
[14]
The duty as pleaded above is indicative of what Nelson was mandated
to do. It means no more than that a judicial determination
must be
made as to whether or not the conduct set out therein is tainted by
wrongfulness.
[25]
Negligence,
on the other hand, is essentially about the failure to guard and take
steps against the occurrence of harm where the
following preliminary
attributes are present:
[15]
a reasonable person would have foreseen harm; and a reasonable person
would have guarded against it (
Kruger
v Coetzee
1966
(2) SA 428
(A) at 430E-F
[16]
).
Conduct comprising of only those features is legally neutral and does
not occasion liability.
[17]
To attract liability the conduct must also be wrongful - see
Minister
of Law and Order v Kadir
[1994] ZASCA 138
;
1995
(1) SA 303
(A) at 320B-C quoted with approval in
Stedall
supra
at paragraph [13].
[26]
Wrongfulness
and negligence are discrete elements, neither one is capable of being
identified by reference to the attributes of
the other, and each
element must be established for delictual liability to ensue –
see
Stedall
supra
at 79C and the authorities cited therein.
[18]
Where the particulars of claim makes reference to foreseeability of
harm
[19]
,
it finds no place in the enquiry into wrongfulness - it is an element
of negligence (
Stedall
supra
at paragraph [14]).
[27]
Regard
being had to the above, the only practical course for doing justice
in the matter is to determine the issue of wrongfulness
in the light
of the facts of the case.
[20]
This commences with the evidence of
Van
den Berg
.
Before proceeding therewith it is acknowledged that no judgment can
ever be all embracing of the facts, hence this judgment will
not be
burdened by a repetition of gratuitous evidential material except to
the extent of underscoring aspects considered relevant
for
determining the issues attracting an
onus
.
At the outset
Van
den Berg,
in
argument, was correctly criticised as an unsatisfactory witness.
[28]
The
genesis of the agreement with Lamour was explained by Van den Berg
when he testified:
[21]
“
We
actually saw or walked through a small development in Westering, and
my wife and I thought it would be a good idea to get rid
of half of
our property if they could build something on it. We approached one
of the builders. He put us in touch with Mr [Lamour],
and so it went
on.”
[29]
Van
den Berg contacted Lamour.
[22]
They met and discussed the possibility of demolishing the Van den
Berg property and developing 8 or 9 units thereon. The whole
idea of
the development came from Van den Berg and his wife.
[23]
To make the development “
more
viable”
,
Lamour undertook to negotiate with Van den Berg’s neighbours,
Kelbrick and Jonker. The notion was to develop a 20 unit complex
and
Kelbrick and Jonker agreed to come on board.
[24]
[30]
At
that point everyone had a broad understanding of what the development
entailed.
[25]
Roundabout July 2006 there were plans in a consolidated diagram,
[26]
and according to Van den Berg, “
it
looked good”
.
[27]
Van den Berg knew that his house was going to be demolished, that his
property would be consolidated with that of his neighbours
[28]
;
but in exchange, Lamour would deliver to him two units worth R1.4
million each.
[29]
The exchange was specifically negotiated between him and Lamour, and
Van den Berg was confident that Lamour could perform and obtain
finance for the development.
[30]
Indeed, through Lamour, Status obtained development finance.
Objectively
considered this would not have been possible if the bank did not
undertake its own due diligence in assessing the viability
of the
development.
[31]
This
coincided with a boom in the local property market, which Van den
Berg refused to acknowledge, although he readily conceded
that he
would have gone the route of developing 8 units on his own property
if he could have financed it and if Lamour could have
built them.
[32]
[31]
The
evidence further indicates that Lamour was to commence building
operations immediately after the sale agreements were signed,
and
that within 4 months the agreed number of units would be delivered to
Van den Berg.
[33]
In cross-examination Van den Berg had no difficulty in acknowledging
(regard being had to his career experience), and being a prudent
businessman
[34]
that the concept of a contract is not anything foreign to him.
[35]
[32]
Van
den Berg conceded that the above events occurred before Nelson came
onto the scene.
[36]
In fact, he confirmed that the deal was initially put together
with Lamour (though it is apparent that the clauses in the
agreement
originated with Lamour
[37]
)
and Van den Berg was confident and happy to do so without independent
input from an attorney
[38]
mindful that his house was his most valuable asset. When Nelson
eventually drafted the agreements, Van den Berg conceded
that this
was done on the basis of instructions from himself and Lamour.
[39]
When he signed the agreement drafted by Nelson, Van den Berg knew
well what it entailed but denied being aware of any risk(s).
[40]
This is improbable considering his business acumen. He maintained
that it was Nelson’s duty to advise thereof and to prevent
him
from suffering any loss.
[41]
In this context he asserted that Nelson had a duty “
creating
financing and guarantees”
[42]
(sic).
[33]
Following
the execution of the agreement, the development proceeded very
slowly. Van den Berg was motivated to make a profit from
the units
that would be handed over to him, and never considered Nelson to be
responsible for the delay during the lengthy period
in which he
waited for the development to reach fruition. He stated:
[43]
“
The
complex proceeded at snail’s pace. At the end after a long,
long time there were foundations laid, there were units up
to roof
height and there was a unit with the roof on already. And we kept on
hoping and hoping and hoping that this whole project
would carry on.
And that was our big mistake. And even the builder was on site. I
mean he testified in this court, he also said
that the building was
still going on, and we accepted it, it is going, it is going, and
then it just collapsed. And that took a
long time.”
[34]
The
delay was at the instance of Lamour. Van den Berg was acutely aware
of this and was unable to comment on what was expected of
Nelson in
the light of Lamour’s assurances that the development was on
track despite delay(s).
[44]
The incentive to make a profit out of the development was the factor
that drove Van den Berg to “
carry
on”
.
He conceded that Nelson could not guarantee completion of the
development;
[45]
and on being probed about why an allegation to the contrary was made
in the particulars of claim, he avoided a direct answer to
the
question.
[46]
In addition his evidence indicates that nothing Nelson “
could
put on the table”
[47]
,
or “
what
he could do or could not do”
[48]
would have made a difference in the process. And upon the question
being pertinently put to him “
Was
the profit motive here so big that you lost all rationale,
understanding of the reality?”,
he responded, “
Could
be”
.
[49]
[35]
As
his testimony proceeded in cross-examination, Van den Berg
consistently retracted and attempted to avoid these concessions by
maintaining that he was unable to recall the details of events in
terms of a timeline as it was a long time ago.
[50]
In heads of argument defendant’s counsel correctly criticised
him as a recalcitrant witness who repeatedly sought to avoid
the
consequences of his earlier concessions by contending that he could
not remember events and by refusing to answer questions
and being
argumentative. Notably, when pressed in cross-examination with the
assertion that he signed an agreement and acceded
to proposals
conceptualised by Lamour, he exclaimed “
I
do not know, I am not listening”
.
[51]
The court’s own assessment of Van den Berg is that he was a
blatantly sarcastic and evasive witness.
[52]
[36]
Daryl
Burman, a conveyancer, testified as an expert witness on behalf of
the plaintiffs.
[53]
[37]
In
Rhoode
v City of Cape Town
[54]
,
and
quoting only where relevant, the duties of an expert witness were set
out as follows:
“
1.
Expert evidence presented to the court should be, and should be seen
to be, the independent
product of the expert uninfluenced as to form
or content by the exigencies of litigation.
2.
An expert witness should provide independent assistance to the court
by way of
objective, unbiased opinion in matters within his
expertise… An expert witness should never assume the role of
an advocate.
3.
An expert witness should state the facts or assumptions upon which
his opinion
is based. He should not omit to consider material facts
which could detract from his concluded opinion.
4.
An expert witness should make it clear when a particular question or
issue falls
outside his expertise.
5.
…”
[38]
A
court will accept the evidence of a witness if and when it is
satisfied that such opinion has a logical basis, in other words
that
the expert has considered comparative risks and benefits and has
reached a defensible conclusion. The precept is that, what
is
required in the evaluation of expert evidence is to determine whether
and to what extent an expert’s opinion is advanced
or founded
on logical reasoning - see
Michael
and Another v Linksfield Park Clinic (Pty) Ltd and Another.
[55]
[39]
Burman’s
professional qualifications and experience were not placed in issue.
It must immediately be stated that Burman testified
before Van den
Berg, and did not have regard to Van den Berg’s evidence and
the factual concessions made by him. In argument
it was correctly
submitted that Van den Berg’s evidence and the concessions made
by him would have had a material effect
on the conclusion / opinion
expressed by Burman. In the light of the court’s view of
Burman’s testimony, it is considered
unnecessary to
recapitulate his evidence in its entirety.
[40]
The
crux of Burman’s evidence is that:
[56]
“…
ex facie
the
[deed
of sale]
,
it was sadly lacking in providing proper security against transfer,
and the word of one individual was not proper security . …
I did not consult with the parties. I was given a document, two
documents, two deeds of sale, and some evidence given by my
colleague
[57]
at the end of the matter.… I know nothing about the background
to the transaction. All I know is, and I have said it over
and over
again … that agreement should have contained a clause that the
sellers should obtain independent
[advice]
.”
[41]
In
the context of the above, Burman expressed the opinion that Nelson
breached his duty of care in failing to ensure that the plaintiffs
had adequate security in their favour in the event of the development
not succeeding. He stated that the personal suretyship obtained
from
Lamour was inadequate
[58]
,
and that the sale agreement should have contained an advice clause.
The ‘dot-connection’ with this evidence does not
track
with the pleaded duty of care nor with Van den Berg’s
testimony.
[42]
In
the defendant’s heads of argument, Burman’s evidence was
trenchantly subjected to criticism in several respects.
These are
recapitulated as succinctly as circumstances permit. To begin with,
it emerged in evidence that Burman never consulted
with Van den Berg
before formulating his opinion. Burman was unaware that the idea of
the development sprouted from the Van den
Bergs, and that Nelson was
merely approached to formulate in writing what had already been
agreed between the parties and Lamour.
Burman did not know that Van
Den Berg’s role was integral to the agreement with Lamour, this
at a time when the property
market was buoyant and Van den Berg was
driven by a profit motive. Nor was Burman aware that the plaintiffs’
outstanding
bonds were settled by Status (a further motivating factor
to hold onto the agreement). Moreover, Burman’s assertion of
inadequate
security is vacuous considering that Van den Berg signed
the agreement and was satisfied with the suretyship offered by
Lamour.
Van den Berg himself acknowledged that once the properties
were consolidated a second bond in his favour would not have provided
a safety net
[59]
,
and even if such a bond was registered its value would have been
quenched by the bank’s secured interest in the development,
and
the implosion of the project would still have occurred.
[60]
[43]
In
short, and without appreciation of these facts, Burman’s
evidence is irreconcilable with the evidence of Van den Berg and
is
unreliable. While attributing esteem to his professional standing,
his opinion and the reasoning implicit therein offends the
strictures
in
Rhoode
.
It is not informed by the correct facts and a proper appraisal of the
circumstances. There is no logical basis underpinning it
(
Linksfield
),
and his explanations in defence thereof plainly suggests being
influenced by the exigencies of the litigation. Of these criticisms
against his evidence, no attempt was made to refute them.
[44]
During
argument plaintiffs’ counsel referred to
Coetzee
v Wilsenach Van Wyk Goosen & Bekker Inc.,
[61]
as authority for the proposition that a conveyancer has a duty to
point out risks. In that matter the cause of action was formulated
on
a misrepresentation by a conveyancer to a purchaser. The
misrepresentation was to the effect that a non-refundable deposit
could safely be paid directly into the bank account of the seller and
that the seller would be in a position to repay the amount
should the
sale transaction not proceed. Consequent to the seller’s
failure to settle arrear rates and taxes for which the
requisite
clearance certificate could not be obtained, the plaintiff cancelled
the agreement. Save for what was paid into the conveyancer’s
trust account, the plaintiff was unable to recover the initial
deposit from the seller and successfully sued the conveyancer. The
correctness of the decision, on the facts informing it, is not
doubted. But it is questionable if the proposition contended for
assumes a comfortable fit in the present factual context. In
Coetzee
,
expert input that bore relevance to the facts was placed before the
court. This is not the case in the present matter.
[45]
In
extension of the proposition in
Coetzee
,
counsel had recourse to the matter of
ABSA
Bank Ltd v Fouche,
[62]
and contended that a conveyancer has a duty to impart information
within his personal knowledge to parties who will only have him
as a
source of the information.
Fouche
dealt specifically with the relationship between a banker and a
client wherein a negligent misstatement pertaining to security
in the
bank induced the conclusion of a written agreement. Without undue
elaboration of the facts, the principle therein is not
second-guessed. The case dealt with the duty of pre-contractual
disclosure in a factual scenario distinguishable from the present.
Here we have the situation in which the agreement between Van den
Berg and Lamour had been worked out prior to the involvement
of
Nelson, who merely prepared the agreements to give effect to what had
already been agreed between the parties.
[46]
What
serves to be emphasised from the aforegoing, is that the duty
contended for the plaintiffs is not anything generic –
it is
not all-encompassing
[63]
,
it is fact specific; and the facts informing that duty must of
necessity be pleaded having regard to the exigencies of a particular
case.
[47]
Before
moving onto Nelson’s evidence, it is feasible to set out the
criterion by which the duties of a conveyancer are evaluated.
Margalit
v Standard Bank of South Africa Ltd
[64]
succinctly summarised the position as follows (footnotes omitted):
“
A
conveyancer is of course ‘an attorney who has specialised in
the preparation of deeds and documents which by law or custom
are
registrable in a deeds office and who is permitted to do so after
practical examination and admission…’ Like any
other
professional, a conveyancer may make mistakes. But not every mistake
is equated with negligence, and in a claim against a
conveyancer
based on negligence it must be shown that the conveyancer’s
mistake resulted from a failure to exercise that
degree of skill and
care that would have been exercised by a reasonable conveyancer in
the same position…”
[48]
Elsewhere
in
Margalit
[65]
it is articulated that conveyancers should be fastidious in their
work and take great care in the preparation of their documents
to
avoid causing harm.
[66]
[49]
Nelson
testified that in 2005 the local property market was buoyant with
lots of opportunities for development and money being made
through
the purchase and sale of property. It was roundabout that time that
he started acting for Lamour who had a good reputation
for building
good homes.
[67]
The agreements between the plaintiffs and Status were “
put
together”
.
Everybody understood that there was a risk involved, that the risk
was explained to them, that it was made clear that the plaintiffs’
homes would be demolished, and there would be a period when they
would not have a home while waiting for Status to build.
[68]
Prior to the signing of the agreements in September 2006 he proffered
advice, and once the agreements were signed, a contract had
come into
existence between the plaintiffs and Lamour.
[69]
[50]
As
for the suretyships, Nelson considered it prudent to protect the
plaintiff’s by having Lamour stand personal surety - he
had a
fair idea of the financial position of Status and was satisfied that
this was the best way that he could protect them. Objectively,
this
should be accepted considering that Status had secured a developer’s
bond from Standard Bank which would not have been
possible had the
Bank entertained doubt regarding the standing and reputation of
Status, or the viability of the development. As
for registration of a
bond over fixed property owned by Lamour, Nelson stated that he was,
as far as he knew, unaware of any other
unencumbered properties owned
by Lamour. This was Nelson’s testimony at the hearing of the
special plea. He did not testify
during the trial of the matter and
whatever emerged from his testimony could not be pursued with him in
cross-examination.
[51]
Unfortunately,
it happened at the time the plaintiffs’ properties were
transferred to Status, that the property market crashed
and Status
found itself in the difficult position that it was unable to sell all
the units in the development. This evidence must
be seen in
combination with the refusal by Standard Bank to release funds to
Status because the Bank insisted on the sale of all
units in the
development.
[70]
By way of a brief excursus, Van den Berg knew that Status had to sell
units to enable it to acquire financing from the bank but
refused to
concede that he knew of this before the involvement of Nelson.
[71]
Although Nelson attributes the plaintiff’s losses to the
failure of the property market, he maintained in the same
vein that
there was a significant financial gain for them if the development
“
went
through”
.
[72]
[52]
Turning
to Nelson’s duty of care, its specific terms were pleaded in
paragraph 23 of the particulars of claim, the composition
whereof
reflects the following:
(a)
Nelson was appointed as the conveyancing attorney;
(b)
He was duty-bound to:
(i)
pass transfer of the plaintiffs’ properties to status;
(ii)
cancel the bonds over the properties;
(iii)
register a development bond over the consolidated property; and
(iv)
transfer the completed units to the plaintiffs.
[53]
The
defendant’s admission of the pleaded duty covered all aspects
of its composition which Nelson duly fulfilled. The evidence
however
indicates that the market went down, the development imploded, Status
was liquidated, and hence transfer of completed units
to the
plaintiffs did not occur. Significantly, any indication that Nelson
failed to comply with the duty of care for want of diligence
in the
preparation of the relevant documents for the deeds office, is
absent. Relevant to that task entrusted to Nelson, the plaintiffs
failed to establish any negligent breach (
Margalit
supra
),
nor in any event, is that their case on the pleadings. To suggest
that there was an omniscient and all-encompassing duty that
was
breached (a theme in Van den Berg’s testimony) over and above
what was specifically pleaded, is a fallacy since no additional
facts
were pleaded to broaden the scope of that duty. From the terms of the
pleaded duty nothing emerges to suggest that Nelson
had a duty to
prevent the plaintiffs from losing money; that he piloted the
development, or that he could guarantee its completion.
And in so far
as Van den Berg contended that Nelson did not proffer proper advice
as to risks, the exact ambit thereof has not
been identified in his
pleadings.
[54]
All
things considered, there is merit in the submission by counsel for
the defendant that it is highly probable Van den Berg instituted
the
present action against Nelson as an afterthought after consulting
with his present attorney to see if there was “
anything
to be salvaged”-
and after becoming aware that the claim against Nelson instituted by
Jonker (and which is of no relevance to this matter) had become
settled.
[73]
From this perspective it is not improbable that the claim against
Nelson is manufactured.
[55]
Before
concluding the enquiry into the wrongfulness, it is convenient at
this point to deal with the Kelbrick claim, this in view
of the
opening statement by plaintiffs’ counsel that the claim is
pursued. Other than what was stated by Van den Berg, no
factual
evidence was tendered in support of the Kelbrick claim. The scope of
the evidence relevant to that claim is limited to
the testimony by
Van and Berg that Kelbrick was initially hesitant but agreed to go
along with the proposed development.
[74]
That is where the matter ends.
[56]
The
limitation in the particulars of claim overlooks the fact that it was
at all times the plaintiffs who bore the
onus
to allege and prove wrongfulness. An assessment of the evidence, on
the appropriate test, invites the conclusion that Nelson did
not
wrongfully breach the duty of care, as alleged. In these
circumstances the defendant could not be expected to establish a
‘defence’ to a claim based on wrongfulness that had not
been explicitly alleged against it. In all the circumstances
the
plaintiffs have failed to establish this element and that being so,
their claims must fail on this basis alone.
[57]
In
view of this conclusion it is unnecessary to consider the negligence
issue. Although it is not intended to dwell on this in any
detail it
should be mentioned that on this aspect as well, the plaintiffs have
failed to establish their claims. The test for negligence
essentially
encompasses elements of foreseeability, preventability, and a failure
to take steps (
Kruger
v Coetzee supra
).
It is only once foreseeability is established that the need arises to
consider whether a reasonable conveyancer in the position
of Nelson
would have guarded against any foreseeable occurrence and failed to
do so. The inquiry postulated in the first leg of
the test is wide
but the answer, inevitably, will only emerge from a consideration of
all the facts of each case and will ultimately
be the product of a
sensible judicial approach to the facts and circumstances that bear
on the matter at hand. Where the enquiry
proceeds to preventability
and a failure to take steps, an unduly rigid approach in borderline
cases could result in attributing
culpability to conduct which has
sometimes been called negligence “in the air”. Of note,
what is required to satisfy
the test for negligence is foresight of
the reasonable possibility of harm – foresight of a mere
possibility of harm will
not suffice.
[75]
[58]
At
the outset the pleaded grounds of negligence posited on Burman’s
opinion pertaining to: the protection of the plaintiffs’
interests which could have been done by delaying transfer of their
properties to Status; the incorporation of an advice clause
in the
agreement(s) of sale; the inadequacy of suretyships; and the alleged
failure to provide security such as bank guarantees,
bonds and the
like, are unsustainable due to the finding made in respect of his
evidence.
[76]
[59]
In
all other instances pertaining to the remaining grounds of
negligence
[77]
the plaintiffs have failed on the first leg of the test. There can be
no question that Van den Berg knew what he was getting into.
The
agreement with Lamour had already been conceived before Nelson’s
involvement; Van den Berg understood that the risk entailed
demolishing his home and he would have to wait for Status to build
the new units; he held on with no intention of backing out because
he
stood to benefit handsomely from the development. On these facts it
could not reasonably be expected of Nelson to have guaranteed
the
completion of the development nor could he have predicted the decline
in the market; a due diligence by him prior to the parties
signing
the agreements would in all probability not have made a difference.
These are some of the evidential indicators that detract
from the
foreseeability requirement in the negligence enquiry.
[60]
Except
for what has been put out above it is unnecessary to traverse the
negligence enquiry in greater detail. In the final analysis,
the
principle in delict that everyone has to bear the loss he or she
suffers (the Afrikaans aphorism is “
skade
rus waar dit val”
),
must apply in the circumstances of this matter.
[61]
In
the result it is ordered that the plaintiffs’ claims are
dismissed with costs, including the costs of two counsel.
______________________
S.
RUGUNANAN
JUDGE
OF THE HIGH COURT
Appearances:
For
the Plaintiffs:
O. Ronaasen
SC and A. Frost
Instructed by Roelofse Meyer
Inc.
Attorneys for Plaintiffs
Central Gqeberha
(Ref: L. Meyer)
Tel: 041-450 6300
Email:
lunen@meyer-inc.co.za
louise@meyer-inc.co.za
For
the First Defendant: P. Jooste
and T. Rossi
Instructed by Joubert Galpin and
Searle
Gqeberha
(Ref:
S. Munshi)
Tel: 041-396 9257
Email:
salmam@jgs.co.za
lenesdab@jgs.co.za
Date
heard: 26, 26, 27, 28 March 2019; and 23 August 2021
Date
Delivered: 18 January 2022
This
judgment was handed down electronically by circulation to the
abovementioned legal representatives by email. The date and time
for
hand-down is deemed to be 09h30 on 18 January 2022.
[1]
Exhibit A Plaintiffs’ Opening Address; Exhibit B Timeline of
Events; Exhibit C Transcript of proceedings on 15 November
2016
before Tshiki J; Exhibit D Timeline Conveyancing; Exhibit E,
Timeline of Events (updated); Exhibit F.
[2]
POC paragraphs 7 and 13
[3]
POC, Annexure LLK2, clause 4.5
[4]
Exhibit B
[5]
POC paragraphs 18, 19
[6]
Transcript, Exhibit C, 18
[7]
POC paragraph 22
[8]
Paragraph 23
[9]
POC paragraph 25
[10]
Transcript Exhibit C
[11]
Transcript Exhibit C 41, 45, 47
[12]
and its admission by the defendant
[13]
See R W Nugent “
Yes It Is A Bad Thing For The Law: A Reply
To Professor Neethling”
2006 SALJ at 557
[14]
Stedall v Aspeling
2018 (2) SA 75
(SCA) 75 at 79E
[15]
The test is truncated for convenience
[16]
At 430E-F. The test was reformulated in
Mukheiber v Raath
1999
(3) SA 1065
(SCA) at 1077E-F
[17]
Nugent,
op cit
at 559
[18]
Also Nugent
op cit
at 561
[19]
POC paragraph 25.4
[20]
Telematrix (Pty) Ltd v Advertising Standards Authority SA
2006 (1) SA 461
(SCA) at 469G; Stedall v Aspeling
2018 (2) SA 75
(SCA) at 82C
[21]
Transcript, 26 March 2019, 60:10-15
[22]
Transcript, 26 March 2019, 62:1-3
[23]
Transcript, 26 March 2019, 60-61
[24]
Transcript, 26 March 2019, 62-65
[25]
Transcript, 26 March 2019, 65
[26]
Exhibit B - timeline
[27]
Transcript, 26 March 2019, 72:10-11
[28]
Transcript, 26 March 2019, 63:1-9
[29]
Transcript, 26 March 2019, 66:14-67:9
[30]
Transcript, 26 March 2019, 70:13-20; 71:17-72:6
[31]
Transcript, 27 March 2019, 41
[32]
Transcript, 26 March 2019, 63:20-25
[33]
Transcript, 26 March 2019, 67:10-16
[34]
Transcript, 26 March 2019, 76:19-20
[35]
Transcript, 26 March 2019, 56-57
[36]
Transcript, 26 March 2019, 66:1-3
[37]
Transcript, 27 March 2019, 19-23
[38]
Transcript, 26 March 2019, 69:1-13
[39]
Transcript, 26 March 2019, 78
[40]
Transcript, 26 March 2019, 80:10-12
[41]
Transcript, 26 March 2019, 77
[42]
Transcript, 26 March 2019, 78
[43]
Transcript, 27 March 2019, 37:23-38:6
[44]
Transcript, 27 March 2019, 28
[45]
Transcript, 27 March 2019, 38:18-25
[46]
Transcript, 27 March 2019, 71:4-72:4
[47]
Transcript, 27 March 2019, 34:11-15
[48]
Transcript, 27 March 2019, 34:10-15
[49]
Transcript, 27 March 2019, 38:14-17
[50]
Transcript, 26 March 2019, 67:20-68:3
[51]
Transcript, 27 March 2019, 5:19-6:5
[52]
This is self-evident from a reading of the transcript of the trial
proceedings, a courtesy copy of which had been made available
to the
court by the defendant’s attorneys
[53]
Notification under rule 36(9)(a) and (b) was filed.
[54]
[2018] JOL 39716 (WCC)
[55]
2001 (3) SA 1188
(SCA) at paragraph [37]
[56]
Transcript, 26 March 2019, 28:9-19
[57]
Presumably, the transcript containing Nelson’s evidence
[58]
Transcript, 25 March 2019, 22:8-21; Notice, rule 36(9)(b), paragraph
[4]
[59]
Transcript, 27 March 2019, 60:8-15
[60]
Transcript, 27 March 2019, 44:15-24
[61]
2013 JDR 2849 (GNP)
[62]
2003 (1) SA 176 (SCA)
[63]
RAF v Shabangu and Another
[2004] ZASCA 23
at paragraph
[12]
[64]
2013 (2) SA 466
(SCA) at paragraph [23]
[65]
At paragraphs [25] and [26]
[66]
The gravity and “
likelihood”
of potential harm
will determine the steps which a reasonable person in the position
of the conveyancer should take to prevent
such harm occurring.
Moreover, the more “
likely”
the harm, the greater
is the obligation to take such steps. (The connotation of the words
“likely” and “likelihood”
is that of
“probability” – see
BTR Industries (Pty) Ltd
and Others v Metal and Allied Workers Union and Another
[1992] ZASCA 85
;
1992 (3)
SA 673
(AD) at 690E
[67]
Transcript, Exhibit C, 16
[68]
Transcript, Exhibit C, 17:14-19; 19:18-24
[69]
Transcript, Exhibit C, 20:5-16
[70]
Transcript, Exhibit C, 17:22-18:11
[71]
Transcript, 26 March 2019, 72-73
[72]
Transcript, Exhibit C, 19:5-6 and 40:1-6
[73]
Transcript, 27 March 2019, 55-57
[74]
Transcript, 26 March 2019, 65
[75]
See generally
Mkhatswa v Minister of Defence
[2000] 1 All SA
188
(A) at paragraphs [19]-[21]
[76]
POC paragraphs 25.1; 25.3
[77]
POC paragraphs 25.2; 25.4; 25.5; 25.6 and 25.7