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[2022] ZAECMKHC 14
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J.A.N v N.C.N (2283/2021) [2022] ZAECMKHC 14 (17 May 2022)
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IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE DIVISION, MAKHANDA)
Of
interest
Case
no: 2283/2021
In
the matter between:
J[....]
A[....] N[....]1
Applicant
and
N[....]
C[....] N[....]2
Respondent
JUDGMENT
Govindjee
J
Background
[1]
The parties were married out of community
of property with the inclusion of the accrual system during 1996.
They were divorced on
18 June 2019, having entered into a settlement
agreement which was made an order of court (‘the order’).
[2]
That agreement included a non-variation
clause, confirming, inter alia, that the agreement contained all the
terms and conditions
of the agreement between the parties, that
neither party would have any further claims against the other and
that both parties
waived and abandoned all and any such claims. The
parties further agreed to retain any and all movable property in
their respective
possession at the time, that the respondent would
retain sole ownership of a farm owned by him and that he would be
solely responsible
for the payment of the outstanding bond on the
property.
[3]
The
notice of motion prays, inter alia, for the following relief:
[1]
‘
That
the order of this Honourable Court in paragraph 2 … be
rescinded and set aside, alternatively that paragraphs 2, 3 and
4 of
the settlement agreement that was made an order in paragraph 2 of the
said judgment be expunged from the said agreement …’
[4]
The
applicant’s founding affidavit frames the relief
differently:
[2]
‘
This
is an application for variation of this order as contemplated in Rule
42(1)(
c)
of the Uniform Rules of Court, alternatively in terms of the common
law for the variation, alternatively the setting aside of certain
paragraphs of the settlement agreement that was made an order of
court.’
The
facts
[5]
It is common cause that the reason for the
breakdown of the marriage was that the applicant engaged in an
extramarital affair. The
parties jointly sought the advice of an
attorney (‘Marais’), chosen by the respondent. The
applicant indicates that
she was under the impression, both prior to
the consultation and at all relevant times thereafter, that she was
not entitled to
any part of the respondent’s estate, which she
estimated to be worth approximately R10 million at the time. This was
based
on her erroneous belief that the parties had been married out
of community of property.
[6]
There
is a dispute of fact as to what transpired at the single meeting held
between the parties and Marais. The applicant says that
she had
expressed her erroneous belief during that meeting. Marais failed to
correct her error and did not explain the accrual
system.
[3]
The
respondent, on the other hand, avers that Marais not only explained
how the accrual system worked, but he also enquired whether
he should
calculate the accrual. It was the applicant, he says, who made the
conscious decision not to claim anything. The applicant
also raises
the possibility that the respondent may have misunderstood the
marital regime, suggesting fraudulent conduct on his
part if he had
known the true position and had acted to prevent the applicant from
claiming what she was entitled to. The respondent
denies this.
[7]
The applicant indicates that the settlement
agreement was signed as a result of this mistake. As to the farm, she
knew that there
was no bond but believed that this reference in the
settlement agreement may have referred to an overdraft facility, and
did not
question the matter.
[8]
The particulars of claim to the divorce
summons reflected that ‘neither the estates of the defendant or
the plaintiff have
exhibited any accrual during the subsistence of
the marriage’. The applicant avers that she did not understand
this statement
when she read it, and that the statement was
completely incorrect in respect of the respondent’s estate.
[9]
The
applicant expected to receive R100 000 immediately, and R400 000
once an insurance claim had been paid, from the respondent,
in lieu
of maintenance. Those amounts were never paid. The respondent says
that the former amount had been paid in kind, and there
is a dispute
about the latter. The applicant first sought independent legal advice
during January 2020, initially hoping only to
receive payment of
R500 000. She contends that she became aware of a potential
accrual claim during September 2020, and that
it would be just and
equitable that the settlement agreement be set aside, or rectified to
include the implementation of the accrual
system, alternatively to
include reference to payment to the applicant of R500 000, but
without the divorce order itself being
rescinded.
[4]
[10]
The respondent raised various points in
limine in opposing the application, to which I will return. In
particular, it was argued
that the application had not been brought
within a reasonable period of time of the judgment coming to the
attention of the applicant.
On the merits, the respondent said that
‘it was the applicant’s desire that she wanted an
amicable divorce settlement
without any need to litigate … she
repeatedly advised me that she wanted “nothing” out of
the marriage as she
wished to get divorced as soon as possible and
wanted to move to Port Elizabeth.’ The respondent contended
that this was
the basis of the instructions issued to Marais. It was
the applicant who brought the ante-nuptial contract to that meeting
and
Marais ‘then explained to us how the accrual system worked
and that the one party may have to pay the other an accrual after
considering all the assets and liabilities of both parties. I then
advised him that it was the applicant’s wish not to claim
anything in terms of the accrual and that I would retain my assets
and she would retain hers. This included the fact that I would
retain
Grove Hill Farm, where we lived at the time, and where I presently
live.’ The applicant did not wish to be saddled
with the
respondent’s mortgage bond debt in respect of the farm and was
in a rush to join her lover in Gqeberha.
[11]
Marais’ handwritten notes from the
meeting were attached to the answering affidavit, together with a
confirmatory affidavit.
The respondent signed the settlement
agreement with some reluctance, and ten days after the applicant’s
signature. Three
months later, the divorce order, incorporating the
settlement agreement, was granted.
[12]
The respondent contended that the applicant
had taken a conscious decision not to claim anything, without any
pressure on his part.
The crux of his case is that there was no
mistake, or error, in the deed of settlement. The applicant was aware
of her rights and
any suggestion of fraud on his part, or that of
Marais, was denied.
Does
the
Plascon-Evans
rule apply?
[13]
The
so-called ‘
Plascon-Evans
’
rule applies to applications in which final relief is sought.
[5]
Where
there is a dispute as to the facts a final order should only be
granted in motion proceedings if the facts as stated by the
respondent together with the admitted facts in the applicant’s
affidavits justify such an order.
[6]
Counsel
for the parties disagree as to the application of the rule. Ms Crouse
SC submitted, mainly on the strength of
Gangat
,
that the rule was inapplicable in rescission applications.
[7]
This
was because the order to be made would not be ‘a final order on
the legal aspects’, as the patrimonial aspects
would still be
decided in future.
[8]
Mr
Brown argued, with support from
Jansen
van Rensburg
,
[9]
that
a different approach had to be adopted in cases where the envisaged
rescission would not have the result of allowing the parties
to
present their case before another court or to establish their case at
trial. In that instance the relief in the rescission application
would amount to ‘final relief’, so that the
Plascon-Evans
rule
should apply.
[14]
This
is the distinction to be drawn when considering rescission of default
judgment cases such as
Gangat
(based on Uniform Rule 31(2)
(b)
)
and the present matter. Rescinding the judgment in
Gangat
was not ‘final’ because the result would be the
(original) issues and the defence of the applicant for rescission
being considered and decided by another court during a trial.
[10]
This
is confirmed by
Storti
:
[11]
‘
If
the application involves a rescission of an order which should not
have been granted, an application for a rescission under the
common
law need only make out a prima facie case … The effect of the
order is interim only, and not final, and therefore
factual disputes
are ordinarily not a bar to success. If on the other hand the order
was correctly made, but is to be set aside
(permanently) because of,
for instance, a composition with creditors, the order of setting
aside is expected to have final effect
and factual disputes would
then become an obstacle to the applicant.’
[15]
Is the relief in the present application
final in nature? The applicant concludes as follows in her founding
affidavit:
‘
The
result of this common mistaken belief between the respondent and I,
alternatively as a result my unilateral mistake (which must
be
regarded as reasonable in the circumstances where I expressed the
view and the attorney and respondent had not corrected this
view) is
that after a marriage of 23 years I am without any assets, a fair
settlement and without any maintenance whatsoever …
It would
be just and equitable that the settlement agreement be set aside or
rectified.’
[16]
Read
with the notice of motion, the position is that the applicant seeks a
partial rescission and setting aside of the order, alternatively
a
variation of the settlement agreement that forms part of the order,
based mainly on common or unilateral mistake, or in the interests
of
justice. The essence of these proceedings is the determination of
whether the applicant’s mistake warrants this relief,
or
whether the relief should be granted for another reason. The answer
to these questions will be a final determination of whether
the
order
should remain unchanged, be partially rescinded and set aside, or
varied. Finding in favour of the applicant would be a final answer
to
the question whether the order and underlying agreement stand as the
basis for the division of the parties’ estates at
the time of
the divorce.
[12]
The
matter would then veer towards a different direction, to consider the
patrimonial consequences of the dissolution of the marriage
afresh
and without reference to the terms of the settlement agreement that
was incorporated into the order. The divorce proceedings
having been
unopposed and based on the terms of the settlement agreement, this
would effectively be a new dispute. The applicant
suggests that the
parties be given a month to reach agreement on the patrimonial
aspects of their marriage, as at the date of divorce,
failing which
the court will be approached for the appointment of a Receiver to
assist with implementation of the accrual system,
or the applicant
will issue summons for its implementation.
[17]
In
other words, this court is being asked to finally set aside an order
incorporating a settlement agreement as an order of court.
The effect
of that order will be to undo the pecuniary consequences of the
settlement agreement. The question whether the settlement
agreement
was concluded with proper understanding, or based on mistake, or some
other reason justifying it being set aside, will
not be reconsidered
and is to be finally determined. If the order is partially rescinded,
or varied as requested, the issue that
may return to court will have
nothing to do with the manner in which settlement was reached. It
will be concerned with the proper
application of the accrual system
as if settlement on the financial aspects of the divorce had never
been reached.
[13]
As
a result, the relief sought in the present rescission application
must be considered to be final relief, relating squarely to
the
settlement agreement and court order. These being motion proceedings,
the
Plascon-Evans
rule stands to be applied.
[18]
This
approach is fully supported by the judgment of the SCA in
Slabbert
.
[14]
In
that matter, a compromise agreement had been made an order of court.
An application to rescind that court order was brought,
relying on an
allegation of new evidence. The court a quo accepted that there was
new evidence that had only come to light after
the compromise
agreement had been concluded. The SCA, after summarising the limited
grounds for rescinding such agreements, held
that the court a quo had
erred. It should have applied the
Plascon-Evans
rule
and accepted the version of the respondent in so far as there was any
dispute of fact.
[15]
As
would be the case if rescission were to be ordered in the present
matter, the SCA concluded that the rescission of the compromise
agreement was final ‘in substance and effect’.
[16]
Application
of the
Plascon-Evans
rule
[19]
Applying the
Plascon-Evans
rule, the affidavits reveal the
following factual matrix. The marriage broke down as a result of an
adulterous relationship on the
part of the applicant. The parties
agreed to consult Marais. The applicant wanted ‘nothing’
out of the marriage and
wanted a speedy divorce. This was the basis
of the instructions given to Marais. He nevertheless explained how
the accrual system
worked, and that one party may have to pay the
other after consideration of all the assets and liabilities of both
parties. The
applicant understood this explanation and the
respondent’s advice to Marais that they would each retain their
assets and
that the applicant did not wish to claim anything in terms
of the accrual, or any maintenance. She wanted nothing to do with the
respondent’s estate at the time, and was concerned about the
possibility of being saddled with his debts. The applicant was
in a
rush to relocate to Gqeberha to join her new partner.
[20]
This version of events is supported by the
messages between the parties between 4 and 14 March 2019. On 5 March
2019 the applicant,
angered by alleged correspondence between the
respondent and her new partner’s ex-wife, messaged: ‘It
is over. Sign
the papers.’ On 14 March 2019, in response to the
respondent refusing permission for her to stay on the farm, she
messaged:
‘Are you serious. Your decision. I want you to sign
the papers if you are not going to I am going to change to the
plaintiff
and ask for what I should get.’ Copies of the
applicant’s direct correspondence to Marais also reflect her
eagerness
for the matter to be finalised. She sought an update on the
divorce proceedings on 24 April 2019 and followed up again on 29
April
2019, indicating that a month had passed and that she would
seek (independent) legal advice and continue the proceedings if a
response
was not forthcoming by the end of that week.
[21]
It
is supported by Marais’ confirmatory affidavit. The accrual
system was fully discussed and ‘the applicant took a
conscious
decision not to claim anything from the respondents’
estate’.
[17]
In
these circumstances, the respondent’s denials of the key facts
averred by the applicant raise real, genuine and bona fide
disputes.
These are not far-fetched or clearly untenable denials and averments
that must be rejected merely on the papers.
[18]
It
might be added that there was no application for referral of the
matter to oral evidence, and that it was argued on behalf of
the
applicant, in supplementary heads filed, that there is no dispute of
fact which needs to be referred to oral evidence.
[19]
Needless
to say, the respondent is in agreement with this view. In all the
circumstances, there is no need or basis for such a referral
in my
view.
The
legal position
[22]
The
inherent jurisdiction of the High Court does not include the right to
tamper with the principle of finality of judgments, other
than in
specific circumstances provided for in the rules or the common law.
This is because of the importance of litigation being
brought to
finality, and because a court becomes functus officio once it has
pronounced a final judgment.
[20]
[23]
There
are two basic requirements to be met when a court considers a request
to grant a judgment in accordance with the terms of
a settlement
agreement.
[21]
The
first, relevant for present purposes, is that the court must be
satisfied that the parties to the agreement have freely and
voluntarily concluded the agreement and that they are ad idem as to
its terms.
[22]
Once
a court has made a consent judgment, it is functus officio and the
matter becomes res judicata.
[23]
The
effect of this, in the context of divorce proceedings, has been
described as follows by Van Zyl DJP:
[24]
‘
This
means
inter alia
that as a general rule the court has no authority to correct, alter
or supplement its own order that has been accurately drawn
up.
Subject to what is said hereinunder, in divorce matters this is in
practice effectively only limited to those terms of the
order which
deal with the proprietary rights of the parties and the payment of
maintenance to one of the spouses where there is
a non-variation
clause. The reason for this is that the general rule is subject to a
number of exceptions, in terms of the Divorce
Act, the rules of court
and at common law … Save for the aforegoing, the effect of the
consent order is otherwise that it
renders the issues between the
parties in relation to their proprietary rights and the payment of
maintenance to a former spouse,
where the agreement includes a
non-variation clause,
res judicata
,
and thus effectively achieves a “clean break” as
envisaged by the scheme of the Divorce Act.’
[24]
Put
differently, the effect of a ‘settlement order’ or
‘consent order’ is to change the status of the rights
and
obligations between the parties:
[25]
‘
Save
for litigation that may be consequent upon the nature of the
particular order, the order brings finality to the
lis
between the parties; the
lis
becomes
res judicata
(literally, “a matter judged”). [The principle is that
generally parties may not again litigate on the same matter
once it
has been determined on the merits.] It changes the terms of a
settlement agreement to an enforceable court order.’
[25]
Litigation
after a consent order typically, therefore, relates to non-compliance
with the consent order itself, and not the underlying
dispute.
[26]
In
Moraitis
,
[27]
the
SCA held that in determining whether a consent order may be
rescinded, the correct starting point is the order itself rather
than
the underlying settlement agreement.
[28]
There
is, in general, no difference in law between an order granted in the
case of a default judgment, an order pursuant to a settlement
prior
to the conclusion of opposed proceedings (or in unopposed proceedings
where there is no default), or the order in a judgment
pronounced at
the end of a trial or opposed application.
[29]
A
judgment, once given, is not lightly set aside.
[26]
Considering
that the judgment was not taken by default, the test to be applied is
stringent, as elucidated in
Moraitis
:
[30]
‘
A
judgment can be rescinded at the instance of an innocent party if it
were induced by fraud on the part of the successful litigant,
or
fraud to which the successful litigant was party. As the cases show,
it is only where the fraud – usually in the form
of perjured
evidence or concealed documents – can be brought home to the
successful party that
restitutio in
integrum
is granted and the judgment is
set aside. The mere fact that a wrong judgment has been given on the
basis of perjured evidence
is not a sufficient basis for setting
aside the judgment. That is a clear indication that, once a judgment
has been given, it is
not lightly set aside, and De Villiers JA said
as much in
Schierhout
.
…
Apart from fraud the only
other basis recognised in our case law as empowering a court to set
aside its own order is justus error.
In
Childerley
, where this
was discussed in detail, De Villiers JP said that “non-fraudulent
misrepresentation is not a ground for setting
aside a judgment”
and that its only relevance might be to explain how an alleged error
came about. Although a non-fraudulent
misrepresentation, if material,
might provide a ground for avoiding a contract, it does not provide a
ground for rescission of
a judgment. The scope for error as a ground
for vitiating a contract is narrow and the position is the same in
regard to setting
aside a court order. Cases of justus error were
said to be “relatively rare and exceptional”.’
Analysis
[27]
This case is concerned with a consent
order, deriving its existence from a settlement agreement. That
agreement makes it clear that
the parties ‘have established
consensus in settlement … The Plaintiff undertakes to seek an
Order compatible with
the provisions of this agreement (and further
agrees that the said Court shall be asked to incorporate this
agreement in the Order
of Divorce, so that this agreement will
operate as an Order of Court).’ The agreement reached was
intended to be final and
not subject to any variation, both parties
waiving and abandoning any claims against the other.
[28]
There
is authority for treating property orders in divorce proceedings as
severable from the decree of divorce decrees itself, for
the purposes
of enabling a ‘part rescission’.
[31]
This
is important in cases where an irretrievable breakdown of the marital
relationship is admitted, where neither party wishes
the marriage to
resume and where it would be highly undesirable for this to
occur.
[32]
In
this case one of the parties has already remarried and it must,
therefore, be accepted that it is permissible for the court to
leave
the decree of divorce intact while rescinding, or varying, the order
(in terms of the settlement agreement) relating to the
division of
property.
[29]
Are
there grounds advanced by the applicant to justify this?
[33]
Applicants
must typically stand or fall by the alleged basis for their
applications.
[34]
The
main basis relied upon is rescission or variation in terms of rule
42(1)
(c)
.
[35]
To
succeed on this basis, it must be established that the order or
judgment was granted as a result of a mistake common to the
parties.
[36]
Both
parties must be mistaken as to the correctness of certain facts,
sharing the same mistake. A litigant who is herself mistaken
about
the relief to which she may be entitled, so that this is abandoned,
or who is mistaken due to the advice of a legal representative,
cannot succeed on the basis of ‘common mistake’ in terms
of this rule.
[37]
It
is readily apparent from the papers that no mistake common to both
parties resulted in the order that was obtained.
[38]
The
respondent knew he was married out of community of property with the
incorporation of the accrual system. The applicant ‘knew
that
the respondent’s assets far outweighed [a] small
overdraft’.
[39]
She
was not mistaken or misled as to the growth in the respondent’s
estate. In any event, that is not her case. Uniform Rule
42 being
inapplicable, the question remains whether there is common law basis
for the relief.
[30]
As
indicated in
Moraitis
,
a judgment may be set aside, at common law, on the grounds of fraud
and justus error. There is good reason for this. A judgment
procured
by the fraud of one of the parties,
[40]
whether
by forgery, perjury or in any other way such as fraudulently
withholding material documents, cannot be allowed to stand.
[41]
Childerley
,
despite being a 1924 decision, remains good authority regarding the
circumstances under which a court can grant
restitutio
in
integrum
against a judgment.
[42]
To
succeed on the ground of fraud, it is for the applicant to prove that
the respondent gave incorrect evidence during the initial
proceedings, that he did so fraudulently with the intention to
mislead the court and that this false evidence diverged from the
truth to such an extent that the court would have given a different
judgment had it been aware of the true position.
[43]
[31]
It
has been suggested that it is, as a general rule, practically
impossible to establish fraud using motion proceedings.
[44]
Leaving
that aside, the accepted requirements for rescission based on fraud
have not been established. It has not been alleged or
proved that the
respondent was privy to a fraud based on incorrect evidence presented
to the court. The statement that ‘neither
the estates of the
defendant or the plaintiff have exhibited any accrual during the
subsistence of the marriage’ was contained
only in the
particulars of claim. It has not been alleged, or proved, that this
statement was placed before the court fraudulently.
Applying
Plascon-Evans
,
both parties knew that the respondent’s estate had shown a
healthy accrual. The respondent as plaintiff, presumably acting
on
the advice of Marais, misrepresented the true position in the
particulars of claim, and the applicant, also presumably relying
on
Marais to finalise the matter as agreed, took no issue with this. The
applicant’s case is not based on this misrepresentation,
to
which she was a silent party. In fact this was a consequence of the
agreement reached between the parties to move towards a
swift divorce
and the applicant’s decision not to claim anything from the
respondent. It has also not been shown that the
court would have
granted a different order in the face of the clear terms of the
settlement agreement, had it known that there
was an accrual on the
part of the respondent’s estate.
[45]
[32]
Courts
have set an exceedingly high threshold before countenancing an
allegation of fraud. In
Schierhout
,
the court said:
[46]
‘
[B]aseless
charges of fraud are not encouraged by courts of law. Involving as
they do the honour and liberty of the person charged
they are in
their nature of the greatest gravity and should not be lightly made,
and when made should not only be made expressly
but should be
formulated with a precision and fulness which is demanded in a
criminal case. In the application now before the Court,
it is a
matter of the utmost difficulty to ascertain the exact charges of
fraud against the Minister.’
[33]
The
hint of fraud in this instance has been formulated in precisely the
manner deprecated by the court in
Schierhout
,
with lack of precision and fulness. The applicant framed it as
follows her founding affidavit: ‘It is my hope that the
respondent also held this wrong belief, as it would otherwise mean
that he was defrauding me from what I was legally entitled to.’
Fraud on the part of the respondent cannot be inferred on the
strength of this statement. The allegation has not been expressly
made and it lacks a factual foundation.
[47]
[34]
As
to the possibility of rescission based on justus error, the first
point to be made is that such a claim does not feature on the
papers.
[48]
Secondly,
it is clear in law that an application to set aside a judgment on the
ground of justus error on the part of the court
induced by
non-fraudulent misrepresentations made by the other party, cannot
succeed.
[49]
To
the extent that this is implicit in the papers, perhaps based on the
statement in the particulars of claim about the lack of
accrual, the
application must fail on the strength of
Childerley
.
Thirdly, there is a soft suggestion on the papers of an alternative
claim based on an alleged reasonable unilateral mistake on
the part
of the applicant in entering into the settlement agreement, but that
is a different matter, and not one that entitles
the applicant to
rescission or variation of the consent order.
[50]
Fourthly,
cases in which a judgment will be set aside because of justus error
are ‘relatively rare and exceptional’
and the applicant
has, in all the circumstances, not demonstrated an exceptional basis
for setting aside or varying the order on
this basis.
[51]
A
unilateral mistake, even if material, does not, on its own, amount to
a justus error sufficient to grant the relief sought. The
SCA has, in
the context of considering the setting aside of a compromise
agreement based on a unilateral mistake, held as follows:
[52]
‘
The
compromise agreement thus cannot be set aside on the basis of a
mutual error as there was no mutual error. The MEC cannot rely
on her
own mistake to avoid a contract which was in any event initiated by
her. This unilateral mistake accordingly did not amount
to a justus
error. As stated by Christie: “However material the mistake,
the mistaken party will not be able to escape from
the contract if
[their] mistake was due to [their] own fault. This principle will
apply whether [the] fault lies in not carrying
out the reasonably
necessary investigations before committing [themselves] to the
contract that is, failing to do [their] homework”;
[in not
bothering to read the contract before signing; in carelessly
misreading one of the terms … in misinterpreting a
clear and
unambiguous term, and in fact in any circumstances in which the
mistake is due to [their] own carelessness or inattention
…]’
(Footnotes omitted)
[35]
The
applicant’s negligence, flowing from her haste to finalise the
divorce, cannot be overlooked and she would be unable to
claim
rescission based on negligence, if any, on the part of Marais,
purporting to represent both her interests and that of the
respondent. This was confirmed in
Bakoven
[53]
where
Erasmus J, considering rescission in the context of a default
judgment, held:
‘
The
negligence of the applicant is relevant … the applicant who
was negligent and the author of [their] own problem will
not succeed
with an application to have the judgment set aside. I respectfully
agree, but do not see this to mean that the applicant
can hide behind
the fault of another. In
De Wet
(3) the applicants were refused relief where the default was brought
about by the inexcusable negligence and ineptitude of their
attorney,
but the applicants too could not be absolved from blame.’
[36]
Unfortunate
as this may appear, a litigant who, by mistake of herself or her
legal adviser, abandons relief to which she is, or
may be, entitled,
cannot easily succeed in claiming that relief. This strict approach
is confirmed by
Joseph
v Joseph
,
the court confirming that it had no jurisdiction or power to recall
or amend an order it had deliberately made consequent to a
mistake,
in the absence of fraud of the other party in the course of the
proceedings.
[54]
[37]
Counsel
for the applicant also referred to
Oppressed
ACSA Minority
,
[55]
which
deals briefly with the common law basis for setting aside a final
judgment. For the sake of completeness, it must be noted
that the
reference in that case to ‘justa causa’, as distinct from
‘justus error’, is directly linked to
Uniform Rule
31(2)
(b)
,
dealing with default judgments, and is accordingly inapplicable.
[56]
In
addition, that decision follows
Moraitis
,
which forms the basis for the approach adopted.
[57]
Its
focus is on a principle pertaining to lack of authority, again
distinguishing it from the present matter.
[38]
The
issue that remains is whether it is nevertheless in the ‘interests
of justice’ to grant the relief sought. The applicant
argued
that the settlement agreement made an order of court is ‘morally
reprehensible’ so that the court must come
to its assistance.
It was, so the argument goes, unconscionable for the respondent and
Marais not to have informed the applicant
of her right to claim in
terms of the accrual calculation.
De
Wet
,
referred to by Erasmus J in
Bakoven
,
is authority for the proposition that there may be other
circumstances, based on justice and fairness, that may justify
rescission.
[58]
As
I have said, that authority emerged in cases of a default judgement.
I am alive to the SCA decision in
ST
[59]
dealing
with the unenforceability of a waiver of maintenance, the majority
holding that the waiver clause in question offended legal
policy in
the form of
s 7
of the
Divorce Act, 1979
.
[60]
[39]
But
that is a different matter altogether, pertaining to a prenuptial
waiver of the right to maintenance upon dissolution of marriage.
[61]
More
pertinently, the SCA has expressed itself clearly on the limits of
rescission based on the ‘interests of justice’
in the
context of consent orders:
[62]
‘
Although
a High Court has inherent discretion, it can never exercise it
against recognised principles of substantive law. Our constitutional
dispensation does not afford courts a carte blanche to ignore
substantive law and grant orders couched as being in the “interests
of justice”. Moreover, certainty and finality are key elements
of justice. Parties to a compromise agreement accept an element
of
risk that their bargain might not be as advantageous to them as
litigation might have been. This element of risk is inherent
in the
very concept of compromise. It, however, does not afford parties the
right to go back on the bargain for unilateral mistakes.
Settlement
agreements have as their underlying foundation the benefit of orderly
and effective administration of justice. Courts
cannot allow for
consent orders to be set aside for reasons not sanctioned by
applicable legal principles.’
[40]
Similar
sentiments have been expressed in this division:
[63]
‘
I
do not believe that this is what the court intended to convey [that a
consent judgment may be set aside simply on a consideration
of
whether it is in the interests of justice to do so]. This proposition
is too widely stated and there is no authority for it.
Although the
remedy of
restitutio
is founded on considerations of equity, in that it comes to the
assistance of a party to a contract or other juristic act where
the
law does not provide for any appropriate remedy, it has retained its
character as an extraordinary remedy that is only available
on
limited grounds. A ground that is recognised in law to be relevant
(
iusta causa
)
is an essential element that must exist before
restitutio
is granted. Huber says, for example, that the fifth ground, the
so-called “general clause”, does not give the court
an
unlimited power to grant restitution for all kinds of reasons “so
that under the cloak of this general equity restitution
could be
granted for a reason which the laws exclude and hold insufficient”.
For this reason a display of “idle threats”
that may have
induced a compromise cannot establish a just cause for
restitutio
because it is “rejected by the laws”.’
[41]
Accordingly,
I am of the view that there is no basis for granting the relief
claimed ‘in the interests of justice’ in
this instance.
Even assuming that a consent order may be rescinded on this basis,
the facts of this matter do not warrant this
outcome. The alleged
unconscionable conduct on the part of the respondent and Marais fails
on the application of
Plascon-Evans
.
The meaning of the accrual system was explained to the applicant and
she knew that there were assets in the respondent’s
name. She
understood that she could obtain independent legal advice and, when
matters were stalling, indicated that she might do
so. She
nevertheless decided to proceed on the basis of an unopposed divorce,
sharing the same legal representative as her husband,
and based on a
settlement agreement that she signed freely and voluntarily. There is
nothing inherently repugnant about the arrangement
concluded and, on
my reading, it is not contrary to public policy. On the approach I
take to the matter, the various authorities
cited in support of
setting aside the settlement agreement based on unfairness or a
contravention of public policy take the matter
no further. This is
because, as confirmed by
Moraitis
,
unless and until the judgment has been set aside, there can be no
question of attacking the compromise agreement. As there are
no
grounds upon which to seek rescission (or variation) of the court
order on these facts, there can be no issue regarding the
rescission
of the settlement agreement.
[64]
Remaining
issues
[42]
The respondent admitted offering to pay the
applicant R100 000 by paying her expenses and debts. Applying
Plascon-Evans
,
the offer to pay the applicant R400 000 was tied to a possible
future sale of his farm, and not to receipt of an insurance
payment
for damages caused to a guesthouse on the farm. Accordingly, there is
no basis for granting the applicant the alternative
relief claimed.
[43]
As
regards the delay in bringing the application for rescission, it is
difficult to contemplate a scenario where the setting aside
of a
judgment on the grounds of fraud by the successful litigant would be
refused on the basis that the application was not brought
timeously.
However, following
Fraai
Uitzicht
,
in light of the conclusion that the judgment cannot be set aside
either on the grounds of fraud or justus error, no finding in
this
regard is necessary.
[65]
[44]
The respondent persisted, during argument,
only with selected aspects of an application to strike certain
portions of the replying
affidavit, alleging vexatious and irrelevant
statements pertaining to the respondent and Marais. Even interpreting
the word ‘case’
as used in Uniform
Rule 6(15)
widely, the
averments relating to Marais cannot prejudice the respondent in his
case. In my view, the factual disputes having been
resolved in favour
of the respondent applying
Plascon-Evans
,
there is also no prejudice in much of what remains if the application
is not granted. Other than the reference to ‘blatant’
lies and untruths, in paras 20.2 and 26.2 of the replying affidavit,
the application to strike must be refused.
[45]
The consequence of this judgment is that
the applicant fails to set aside, rescind or vary the order. Even
though she may have been
entitled to obtain a far better financial
outcome had she enforced her claim for accrual prior to the divorce,
the settlement agreement
reached and made an order of court cannot be
unravelled as claimed, for the reasons given. Unfortunate as this is
for the applicant,
the judgment should also serve as a salutary
reminder to legal practitioners of the possible dire consequences for
their clients
in cases where they choose or attempt to represent both
parties in proceedings where money or rights are involved. While
these
joint consultations may commence in a spirit of goodwill, or in
an attempt to expedite matters and save costs, once the shoe pinches,
it is inevitable that the legal practitioner, and by extension the
profession, lands in the crosshairs.
[46]
Finally, as to costs, there is no reason to
depart from the usual principle that costs should follow the result.
The applicant has
been unsuccessful and the application stands to be
dismissed with costs, the costs to exclude costs associated with the
application
to strike.
Order
[47]
The following order will issue:
1.
The application is dismissed with costs,
excluding the costs of the application to strike.
A.
GOVINDJEE
JUDGE
OF THE HIGH COURT
Heard:
24 March 2022
Delivered:
17 May 2022
Appearances:
Applicant’s
Counsel :
Adv
L. Crouse
Instructed
by
Cloete & Company
12A High street
Makhanda
Email:admin@cloeteandco.za
Respondent’s
Counsel:
Adv G.
Brown
Instructed
by :
Wheeldon Rushmere & Cole Inc.
Matthew Fosi
Chambers
119 High Street
Makhanda
Email:sandra@wheeldon.co.za
[1]
The
notice of motion also seeks the appointment of a receiver in the
event of the parties not reaching agreement on the patrimonial
aspects of their marriage, and, alternatively, that the settlement
be rectified to include payment of R500 000 to the applicant.
[2]
Para
5 of the founding affidavit. The notice of motion refers to
paragraph 2 of the order, dealing with the settlement agreement,
being ‘rescinded and set aside, alternatively that paragraphs
2, 3 and 4 of the settlement agreement that was made an order
in
paragraph 2 of the said judgment be expunged from the said
agreement’, together with additional relief.
[3]
It
appears to be common cause that Marais also never suggested to the
applicant that she should obtain independent legal advice.
It is
also suggested, on the papers that he failed to inform the applicant
of her right to have access to spousal / rehabilitative
maintenance
from the time of separation.
[4]
The
respondent has remarried since the divorce, and the applicant is
living as husband and wife with the person with whom she
had entered
into the extramarital relationship.
[5]
Plascon-Evans
Paints v Van Riebeeck Paints
[1984] ZASCA 51
;
1984
(3) SA 623
(AD) (‘
Plascon-Evans
’)
at 634E-G.
[6]
Stellenbosch
Farmers’ Winery Ltd v Stellenvale Winery (Pty) Ltd
1957
(4) SA 234
(C) at 235E-G. In
Plascon-Evans
,
the court added that in certain instances the denial by respondent
of a fact alleged by the applicant may not be such as to
raise a
real, genuine or bona fide dispute of fact:
Plascon-Evans
supra fn 5 at 634I-635A.
[7]
Gangat
v Akoon
[2021]
ZAGPJHC 828 (‘
Gangat
’).
[8]
Paras
12 and 16 of the applicant’s supplementary heads of argument.
[9]
Jansen
van Rensburg v Beynon
[2003]
JOL 10630
(SE) para 10.
[10]
This
is the reason that one of the requirements for rescission is
demonstration of a bona fide defence with prima facie prospects
of
success. This is a matter to established at the subsequent trial, so
that the rescission application itself is not a ‘final
judgment’.
[11]
Storti
v Nugent and Others
2001
(3) SA 783
(W) at 806G-J. It might be added that the suggestion that
the present circumstance is not equivalent to ‘the exception’
referred to in this passage loses sight of the illustrative nature
of the example cited. That example is considered in further
detail,
below. On whether or not there is any difference between default
orders and other orders, see
Moraitis
Investments (Pty) Ltd and Others v Montic Dairy (Pty) Ltd and Others
[2017] ZASCA 54
;
2017 (5) SA 508
(SCA) (‘
Moraitis
’)
at 517.
[12]
See
Storti
v Nugent and Others
supra fn 11 at 805H-806J. In the context of s 149(2) of the
Insolvency Act, 1936 (Act 24 of 1936), the court drew a distinction
between rescissions in cases where the order should not have been
granted, and where it was properly made but supervening factors
made
its rescission or variation necessary or desirable. It is in the
case of the former that a prima facie case for rescission
would
suffice and the effect of the order would be interim and not final.
As a result, ‘factual disputes are ordinarily
not a bar to
success’. But if supervening factors, such as an alleged
composition with creditors, had come to light, the
position was
different. The order had in fact been correctly made but was to be
set aside because of supervening factors, ‘the
order of
setting aside is expected to have final effect and factual disputes
would then become an obstacle to the applicant’.
See
Storti
v Nugent
and
Others
supra fn 11 at 806H-J.
[13]
See
S
A v J A and Others
[2020] ZAWCHC 155
para 16: the settlement agreement and the
resultant consent order disposes of the underlying dispute. Any
rescission, variation
or a suspension of the (maintenance) order
granted earlier becomes a new dispute between the parties where the
original order
granted may form the basis of any new contemplated
action.
[14]
Slabbert
v MEC for Health and Social Development, Gauteng
[2016]
ZASCA 157
(‘
Slabbert
’).
[15]
Slabbert
ibid
para 10.
[16]
Slabbert
ibid
para 19.
[17]
Marais
also confirms that he understood the reference to R100 000 to
relate to expenses the applicant would pay over a period
of time,
with R400 000 to be payable upon the sale of the farm, if the
respondent should decide to sell same.
[18]
Plascon-Evans
supra
fn 5 at 634H-635C.
[19]
On
the duty of the applicant to seek a referral to oral evidence if of
the reasonable opinion that a dispute of fact merited this,
see
Masetlha
v President of the Republic of South Africa and Another
[2007] ZACC 20
para 94. On the applicant’s risk in proceeding
by way of motion proceedings, see
Gounder
v Topspec Investments (Pty) Ltd
[2008] ZASCA 52
at para 10. Cf
Bakoven
Ltd v GJ Howes (Pty) Ltd
1992 (2) SA 466
(ECD) (‘
Bakoven
’)
at 475A-E.
[20]
Freedom
Stationery (Pty) Ltd and Others v Hassam and Others
2019
(4) SA 459
(SCA) para 16. Also see s 165(5) of the Constitution of
the Republic of South Africa, 1996.
[21]
See
s 7(1) of the Divorce Act, 1979 (Act 70 of 1979), confirming that a
court granting a decree of divorce may in accordance with
a written
agreement between the parties make an order with regard to the
division of the assets of the parties or the payment
of maintenance
by the one party to the other.
[22]
Ex
Parte Le Grange and Another In re: Le Grange v Le Grange
[2013]
ECGHC 75 (‘
Le
Grange
’),
also reported as
PL
v YL
2013 (6) SA 28
(ECG) para 15.
[23]
See
the judgment of Eksteen J in
Van
der Linde NO obo Robiyana v Road Accident Fund
(unreported) (Eastern Cape Local Division, Gqeberha) (case no.
1453/2021) para 11. Litigation after the consent order will
typically relate to non-compliance with the consent order and not
the underlying dispute:
Slabbert
supra fn 14 para 7.
[24]
Le
Grange
supra
fn 22 paras 45, 46.
[25]
Eke
v Parsons
[2015]
ZACC 30
para 31 (footnote included). For a detailed analysis of
settlement agreements in the context of divorce proceedings where
the
parties have agreed that the terms of their agreement be made an
order of court, see the judgment of Van Zyl DJP in
Le
Grange
supra fn 22. Also see
Slabbert
supra fn 14 para 7 on the purpose of a compromise and the effect
when a compromise is embodied in an order of court.
[26]
Slabbert
supra
fn 14 para 7.
[27]
Moraitis
supra fn 11
para
10.
[28]
The
judgment operates as res judicata and precludes a claim based on the
underlying agreement. Unless and until the judgment is
set aside the
compromise agreement remains intact:
Moraitis
supra fn 11 para 16. Cf
Slabbert
supra fn 14 para 17, seemingly linking the setting aside of a
consent order with the underlying agreement:
‘
A
court also does not have a discretion to set aside a consent order
where there are no grounds for setting aside the underlying
agreement of compromise pursuant to which the consent order was
made.’
[29]
See
Moraitis
supra fn 11 para 16. Once a settlement agreement is made an order of
court, it is an order like any other and will be interpreted
like
all court orders:
Eke
v Parsons
supra fn 25 paras 29, 30.
[30]
Moraitis
supra
fn 11 para 12. The reference to ‘
Schierhout
’
relates to
Schierhout
v Union Government
1927 AD 94
(‘
Schierhout
’).
The reference to ‘
Childerley
’
is to
Childerley
Estate Stores v Standard Bank
of SA Ltd
1924 OPD 163
(‘
Childerley
’)
Also see
De
Wet and Others v Western Bank Ltd
1979 (2) SA 1031
(AD) (‘
De
Wet
’)
at 1041B-E, which dealt with a wider discretion for rescission in
cases of procedural defaults and default judgments.
See the remarks
of Erasmus J in
Bakoven
supra
fn 19 at 473C-E.
De
Wet
referred specifically to the distinction between judgments granted
‘without going into the merits of the dispute between
the
parties, and the rescission of final and definitive judgments,
whether by default or not, after evidence had been adduced
on the
merits of the dispute. In the present case, the consent order would
have been granted after the respondent testified and
the documentary
evidence of the settlement agreement considered by the court. It
cannot be akin to a situation of ‘default’.
In the
context of rescission of a consent order taken by default, see
Oppressed
ACSA Minority 1 (Pty) Ltd and Another v Government of the Republic
of South Africa and Others
[2022] ZASCA 50
(‘
Oppressed
ACSA Minority
’)
para 24: ‘At common law a final judgment may be set aside for
fraud, justus error (in exceptional circumstances)
and justa causa.’
[31]
See
S.S
v H.P
[2019] ZAGPJHC 486 paras 67-71 and the authorities cited there. Cf
Faulkner
v Freeman
1985 (3) SA 555
(C) at 559A-D.
[32]
Ibid.
[33]
It
has been held that to be of little practical significance whether a
judgment is based on a compromise or an agreement to consent
to
judgment:
MEC
for Economic Affairs, Environment and Tourism v Kruisenga
(‘
Kruisenga
’)
2008 (6) SA 264
(CkHC) para 53.
[34]
See
Zwane
v Zwane
[2013] ZAGPPHC 339 para 9.
[35]
Para
5 of the founding affidavit, p 6 of the index.
[36]
The
court does not have a discretion to set aside an order in terms of
the subrule where one of the jurisdictional facts contained
in
paragraphs (a) to (c) of the subrule does not exist. Court have
typically not given a more extended application to the rule
to
include all kinds of mistakes or irregularities:
Colyn
v Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape)
2003 (6) SA 1
(SCA) at 7E.
[37]
See
DE van Loggerenberg
Erasmus:
Superior Court Practice
(RS 17) (2021) D1-576A and the authorities cited at fn 167. The
general rule is that if the court has given judgment on mistaken
facts, the judgment can be set aside only if the error was due to
fraudulent misrepresentation. If the court is in error because
of
innocent misrepresentation, the vanquished party is not entitled to
have the judgment rescinded even if the error was justus,
except in
rare and exceptional cases:
Childerley
supra fn 30 at 163. On unilateral mistake resulting in a contract
made an order of court, and confirming that this is not a basis
for
rescission in terms of Uniform Rule 42(1)
(c)
,
see
Botha
v Road Accident Fund
[2016] ZASCA 97
para 9.
[38]
See
para 51.8 of the answering affidavit. Also see
Tshivhase
Royal
Council and Another v Tshivhase and Another; Tshivhase and Another v
Tshivhase and Another
[1992] ZASCA 185
;
1992
(4) SA 852
(‘
Tshivhase’
)
at 863A-B.
[39]
Para 13.7 of the replying affidavit.
[40]
The
successful party must have been privy to the fraud:
Fraai
Uitzicht 1798 Farm (Pty) Ltd v McCullough and Others
[2020] ZASCA 60
para 17.
[41]
Schierhout
supra fn 30
at
98. Also see
Fraai
Uitzicht
ibid 16, confirming that
Childerley
supra fn 30 remains good authority regarding the circumstances under
which a court can grant restitutio in integrum against a
judgment.
In order to succeed on this ground in the context of a trial, the
plaintiff must prove: (1) the defendant gave incorrect
evidence at
the initial trial; (2) that the defendant did so fraudulently with
the intention to mislead the court; and (3) that
such false evidence
diverged from the true facts to such an extent that the court, had
it been aware thereof, would have given
a different judgment:
Childerley
supra fn 30 at 169 as cited in
Fraai
Uitzicht
supra fn 40 para 16. It has also been suggested that it must be
alleged and proved that, but for the fraud, the court would not
have
granted the judgment:
Robinson
v Kingswell
1915 AD 277
at 285.
[42]
See
Fraai
Uitzicht
supra fn 40 para 16.
[43]
Childerley
supra
fn 30 at 169.
[44]
See
Shomang
v Moamogoe and Others
[2021] ZAGPJHC 772 para 10. Cf
Santos
Ereq v Cheque Discounting Co (Pty) Ltd
1986 (4) SA 752 (W).
[45]
It
might be added that there is similarly no basis for setting aside
the settlement agreement itself based on fraud on the part
of the
respondent. On the accepted facts, the applicant knew that she was
married in terms of the accrual system. This had been
explained to
her by Marais. She further knew that the respondent owned immovable
property worth millions of rand: See para 18
of the founding
affidavit. The applicant’s case is that the concept of accrual
was not explained to her and not understood,
not that she was
unaware that the respondent’s assets exceeded his liabilities
so that his estate reflected ‘an accrual’
at the time of
the divorce.
[46]
Schierhout
supra
fn 30 at 98.
[47]
See
Gwayi
v MEC for Local Government and Traditional Affairs and Others
[2015]
ZAECBHC 37 para 31, citing
Gates
v Gates
1939 AD 150
at 155 and
Kelleher
v Minister of Defence
1983 (1) SA 71
(E) at 75D-E. Also see
Hulse-Reutter
and Others v Godde
[2001] ZASCA 102
para 14.
[48]
There
is reference to this, citing
De
Wet
supra fn 30, in applicant’s counsel’s heads of argument.
[49]
Childerley
supra
fn 30 at 169, read with 165.
[50]
As was the case in
Childerley
supra fn 30, the applicant does not seek to make out a case of
instrumentum noviter repertum, or suggest that a document had
been
discovered or had been fraudulently concealed from her, as the basis
for the application:
Childerley
supra fn 30 at 169.
[51]
Childerley
supra
fn 30 at 166. In cases of default, applicants may, for example, be
able to show a ‘supremely just cause of ignorance,
free from
all blame whatsoever’.
[52]
Slabbert
supra
fn 14 para 15;
Botha
v Road Accident Fund
supra fn 37, containing the complete quotation from GB Bradfield
Christie’s
The Law of Contract in South Africa
(2011) 6ed at 329-330.
[53]
Bakoven
supra
fn 19 at 474A-C.
[54]
Joseph
v Joseph
1951
(3) SA 776
(N) at 780.
[55]
Oppressed
ACSA Minority
supra
fn 30 para 24.
[56]
Ibid.
[57]
Ibid
paras 24, 27. It must be noted that the decision in
Moraitis
appears not to have considered the earlier decision of a differently
constituted SCA in
Slabbert
,
which appears to have adopted a slightly different approach to the
enquiry, focusing firstly on the
transactio
,
rather than the order:
Slabbert
supra fn 14 paras 8, 16 and 17.
[58]
De
Wet
supra
fn 30 at 1042H.
[59]
ST
v CT
[2018]
ZASCA 73
paras 170-182.
[60]
Act
70 of 1979.
[61]
The
court, in any event, relying on
Schutte
v Schutte
1986 (1) SA 872
(A), drew a distinction between waiver upon divorce
and a prenuptial waiver, noting that at the time of the divorce both
spouses
have full knowledge of their respective financial means and
needs:
ST
v CT
supra
fn 59 para 174. Also see
Claassens
v Claassens
1981
(1) SA 360
(N), holding that the waiver of a right to apply for an
increase in maintenance, contained in a divorce settlement, does not
offend public policy.
[62]
Slabbert
supra
fn 14 para 16.
[63]
Kruisenga
supra
fn 33 para 74 (references omitted).
[64]
Moraitis
supra
fn 11 para 16. It might be added, obiter, that consideration of the
underlying agreement, the reasonableness of the applicant’s
explanation of the circumstances that resulted in the consent
judgment, the bona fides of the application for rescission and
the
‘defence’ on the merits and prospects of success would
result in the same outcome. The applicant has failed to
convince
that any error vitiated true consent to the settlement agreement.
See
Ntlabezo
v MEC for Education, Culture and Sport, Eastern Cape
2001 (2) SA 1073
(Tk) at 1081B-E.
[65]
Fraai
Uitzicht
supra
fn 40 para 23.