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[2019] ZAWCHC 99
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Daniels v Klaasen; Keith Sheldon Attorneys v Daniels (A306/2018) [2019] ZAWCHC 99 (14 August 2019)
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Reportable
CASE
NO: A306/2018
In
the matter between:
YVONNE
CHARLOTTE JUNITH DANIELS
Appellant
and
BARNITO
CHARLES KLAASEN
Respondent
A 307/2018
In
the matter between:
KEITH
SHELDON ATTORNEYS
Appellant
and
YVONNE
CHARLOTTE JUNITH DANIELS
Respondent
Judgment:
14 August 2019
DAVIS
J
[1]
This
case involves the possible liability of one or both of two attorneys
for damage caused to a claimant who lodged a claim with
the Road
Accident Fund as a result of the death of her husband which was
caused by a motor vehicle collision that occurred on 30
October
2003. Her claim prescribed in October 2008. The
consequent inability to successfully claim against the Road
Accident
Fund was attributable to the legal assistance which she received
during this period.
[2]
The
crisp question for determination is whether either of the attorneys
whose firms assisted her legally during the relevant period
are
liable for damages arising from this prescription of her claim. In
the hearing before this Court, there was an appeal and a
cross
appeal. I shall refer to the appellant as Sheldon and the
respondent as Daniels who is the appellant in the cross appeal
against Klaasen.
[3]
The
court
a
quo
was only required to deal with the question of liability as a
separation between the merits and the quantum had been agreed.
After a trial in the court
a
quo
Allie J held that, insofar as Klaasen was concerned, he had
unilaterally acted as the attorney for the respondent at a time when
the claim had not yet prescribed. By contrast, Sheldon had
failed to exercise a reasonable duty of care and adequate supervision
over the person who had dealt with appellant’s claim, one Mr
Richard Matthee who was not a qualified attorney but who had
dealt
with respondent’s claim under the auspices of Sheldon’s
practice. In particular, Allie J found that Sheldon had
failed to put
in place measures to prevent respondent’s claim (Daniels who is
the appellant in the cross appeal) from prescribing.
Accordingly, she
ordered Sheldon to pay Daniels such damages as may be proved in due
course. By contrast, Daniels’ claim
against Klaasen was
dismissed with costs. As a result of this order, Sheldon has appealed
against the order and Daniels has cross
appealed in respect of the
dismissal of her claim against Klaasen.
The factual background
[4]
Shortly
after the passing of her husband, Daniels approached a firm of
attorneys under the control of Mr David Nasson in order to
prosecute
her claim against the Road Accident Fund. On arrival at the offices
of attorney Nasson she met Mr Richard Matthee.
Mr Matthee was
not an attorney but it appears that he was employed by Mr Nasson as
general clerk. When Daniels arrived at Nasson’s
offices,
another employee, Mr Martin Green, introduced her to Matthee and
asked Matthee to complete the necessary third party forms
to
prosecute a MVA claim. Matthee duly informed Daniels that he would
institute the claim against the Road Accident Fund.
On 10 March
2004, Daniels signed a special power of attorney appointing Nasson to
represent her in her claim against the Road Accident
Fund. At this
time, Klaasen was employed by Nasson and he operated his Ceres
office.
[5]
During
2004 Nasson was suspended by the Law Society from continuing to
practice. Discussions then took place between the then
director
at the Law Society and Klaasen, as a result of which the latter was
requested to take over and attend to the files which
previously had
been dealt with by Nasson or others in his office. From the available
evidence there were some 120 files that were
taken over by Klaasen
who set up his own practice, one of which was the file involving the
matter concerning Daniels. Matthee
who now was employed
by Klaasen as a paralegal continued to attend to this file. In
evidence before the court
a
quo
Klaasen confirmed that Matthee attended to these files under his
supervision.
[6]
As an
illustration of this practice, during this period various letters
were generated on behalf of Daniels including one of 6 January
2003,
which was signed by Mr Klaasen in which the following appears:
‘
Ongeveer
13 Maart 2004 was ‘n derde party eis by die padongelukkfonds
ingedien.
Ons
verstaan en het begrip vir die feit dat die onderhoudsbeampte gemoeid
met die anngeleentheid tyd nodig sou hê met versameling
van
inligting om ‘n volledige dossier saam te stel.
Verskeie
korrespondensie was inderdaad gewissel tussen ons en die
stasiekantoor in Atlantis. Ons verwys u dan ook graag na ons
briefinhoud gedateer 24/10/05 (sien afskrif aangeheg), die inhoud was
vanselfsprekend.
…
Ons
kilent is baie ongelukkig en bekommerd van die ellelange tydsverloop
oor hantering van die dossier aangesien ons asgevolg daarvan
nie
vordering kan maak om ons werksaamheded af te handel nie.
Kliënt versoek dat u kantoor dringend optree en daadwerklik
stappe sal neem om die betrokke ondersoekbeampte aan te spreek ter
finalisering van hierdie aangeleentheid.’
[7]
Although
this correspondence was signed by Klaasen, it appears to be common
cause that Matthee dealt almost exclusively with the
Daniels matter.
In August 2006 Matthee left the employ of Klaasen and went to work
for Sheldon. Under cross examination,
Matthee testified that he
had taken certain files with him from Klaasen’s office but only
one of these had not been brought
to the attention of Sheldon, namely
the file in respect of Daniels’ claim. It is common cause
that prescription of
the claim took place while Matthee was in the
employ of Sheldon.
[8]
Upon
Matthee’s resignation, Klaasen had a conversation with Matthee
who insisted that the files which he obtained previously
from Mr
Green when he was employed by Nasson, involved matters with which he
had continuously dealt and that he intended to take
these files and
work with them while employed by Sheldon. Following this
request, Klaasen requested his secretary,
Ms Collins, to contact
Sheldon’s offices ‘to get some confirmation whether as
what Mr Matthee had said that he had
discussed it with Mr Sheldon and
then is it okay for Mr Matthee to take the files over with him to Mr
Sheldon’s.’ Accordingly
to Klaasen, Collins initiated the
conversation which took place in Klaasen’s presence as well as
in the presence of Matthee.
According to Klaasen, as a result
of this conversation ‘at that stage I was then satisfied that
I did not foresee any
problems because the files have been taken over
to another attorney who would then be able to address those files
with the necessary
skills’. Ms Collins testified that it
was Matthee who spoke to Sheldon and confirmed ‘
dat
ek die leers wel saam kan bring want Mnr Klaasen vereis dit
.’
[9]
Klaasen
testified that in 2007 he received a call from the Atlantis Advice
Office concerning Daniels’ claim during which it
was alleged
that the RAF had paid the claim but Klaasen had not made payment over
to respondent. Klaasen said that he had
then examined his
records, realised that this was a file that Matthee had taken with
him and called Sheldon’s office to determine
what had occurred
in respect of Daniels’ claim. He spoke with Matthee and
told the latter that there were ‘
people
who are accusing me that there was monies paid into my account and
then I enquired from them as to whether the money was
maybe paid into
their account
’
.
Klaasen informed Matthee that he should contact Daniels, Matthee
replied that he was still busy with the file but
that he would
contact Daniels. The next information that Klaasen received
concerning the Daniels claim was when he received
an email from Riaan
De Kock Attorneys with regard to the matter in 2012.
[10]
It
was also common cause that the mandate which respondent had signed
with David Nasson Attorneys on 10 March 2004 had not been
terminated. While respondent testified that she was unaware
that Matthee had left Klaasen’s employ, she tracked him
down to
the offices of Sheldon ‘want dus die enigste office wat ek toe
nou ken daar.’ When she arrived at Sheldon’s
office
she found Matthee. While there was a dispute as to how Daniels
learnt how Matthee had moved from Klaasen to Sheldon’s
office
there is no dispute that, from August 2006 Daniels knew that Matthee
was now working from Sheldon’s premises, and
that she ‘accepted
that he’s continuing with my matter’. When asked
whether it did not perturb her that
Matthee had moved from one
attorney to another, she said ‘it did not actually worry me
cause I just took it like it’s
for him to move from one
attorney to the other, it’s the way he works for maybe better
money or whatever I don’t know.’
The reasoning of the court
a quo
[11]
Allie
J found against Sheldon, on the basis that Daniels’ claim had
prescribed during the time that Matthee was employed by
Sheldon and
that Daniels had proved that Matthee at all relevant times had acted
in the course and scope of his employment with
Sheldon. By
contrast, the learned judge held that Klaasen was no longer the
supervising attorney for Daniels’ claim
in 2007, a year before
the claim had prescribed. Nonetheless he had spoken
with Matthee and informed him that
Matthee was obliged to report
progress to Daniels. Accordingly, she concluded: ‘
at
best it can be said that Klaasen, unilaterally acted as the attorney
for the plaintiff at the time when the claim had not yet
prescribed.
’
By
contrast, Sheldon had failed to exercise a reasonable duty of care
and adequate supervision over the work of Matthee who had
as
paralegal (or administrative assistant) dealt with the claim under
the auspices of Sheldon’s practice and further had
failed to
put in place measures to prevent the claim from prescribing.
The appeal
[12]
The
core of Sheldon’s argument on appeal turns on the submission
that he was unaware that Matthee, who was now employed by
him, was in
possession of Daniels’ file and thus responsible for the
prosecution of the claim against the Road Accident Fund.
The
core of this submission was based on the argument that for some
reason, unknown to Sheldon, Matthee had not disclosed that
he was in
possession of this particular file. Sheldon testified that he was
unable to enlighten the court about Matthee’s
motives and that
Matthee should be asked to answer this question. According to
Sheldon, when he was first summonsed about the matter
it was then for
the first time that he became aware of the existence of the file
which had been in Matthee’s possession.
He was unaware of the
existence of Daniels and her name had never appeared on any of the
diaries which were possessed by the firm.
Furthermore, he said:
‘
Op
geen stadium het Barnito Klaasen formeel met my gekomunikeer om te sê
dat Mnr Matthee moontlik leers na my kantoor toe
gaan bring ook nie.’
[13]
In
essence, Sheldon’s argument was one of a denial of any
knowledge of the existence of the Daniels file coupled to the
testimony
of Matthee, namely that this was the one file which he
(Matthee) had not disclosed to Sheldon. This evidence stands in stark
contrast
to that of Klaasen, confirmed by Ms Collins, concerning a
conversation between Matthee and Sheldon about the transfer of files.
It is also an explanation that defies a logical explanation, namely
the reason as to why of all the files taken over by Matthee,
this was
the only one which had not been disclosed. The better explanation is
that Matthee, who it was common cause was a friend
of Sheldon, sought
to protect his friend from liability by denying that Sheldon had any
knowledge of this particular file.
There is simply no plausible
basis by which to disturb the finding of the court
a
quo
in this connection.
[14]
The
further submission which was made was that Daniels had never
terminated her mandate with Nasson and therefore with the attorney
who had taken over Nasson’s files, being Klaasen. Accordingly,
it could not be said that Sheldon was liable in circumstances
where a
mandate existed between Klaasen and respondent.
[15]
In
other words if the mandate which had been granted to Nasson pursuant
to the signed power of attorney in March 2004, which
authority
was transferred to Klaasen had not been terminated, the question
arises as to whether Klaasen, as opposed to Sheldon,
was liable for
the claim prescribing and therefore the loss which had been incurred
by Daniels. This question however turns
on the examination on
the law of mandate.
The law of mandate
[16]
In
AN
and G Coal Mining v Stuart and others
1981 (3) 521 (WLD) at 528-529 Botha J (as he then was) said the
following:
‘
Assuming,
then, in the applicant’s favour, that authority to enter into a
particular contract can, in principle, survive an
attempt to enter
into the contract which is abortive because of an error on the part
of the grantee of the authority resulting
in the contract being
invalid, it seems to me that such a survival is subject to
limitations which, in the context of the facts
of the present case,
may be stated in different ways, all of which amount to much the same
thing. In my view the surviving
authority will lapse if there
is a material supervening change in the circumstances, of a kind of
that was not within the contemplation
of the grantor and the grantee
of the authority at the time when it was given, … or if the
supervening circumstances justify
an inference that the authority had
expired or had been revoked,… or if there is a change in the
circumstances from which
the grantee should reasonably infer that the
grantor would not consent to the re-exercise of the authority if he
know the facts.’
[17]
In
support of the proposition that a range of circumstances might
justify an inference regarding the termination of a mandate, Botha
J
referred to an earlier decision in
National
Board (Pretoria) (Pty) Ltd v Estate Swanepoel
1975 (3) SA 16
(A) at 27, where reference is made to both Story,
Commentaries
on the Law of Agency
(9
th
ed) and Pothier
Mandat
Chapter 4 para 119. Botha JA then said the following:
‘
Story
in his
Commentaries
on the Law of Agency
,
9
th
ed, para 480, p 592’ states that:
“
So,
if a person, about to depart on a voyage, should, by power of
attorney, appoint an agent to manage his affairs until his return
home, the authority would expire by its own limitation. Indeed,
Pothier contends that, if a power is given by a person, going
abroad,
to an agent to manage his affairs, without containing any words of
limitation as to its duration, it ought to be presumed
to be revoked
upon his return home, unless there are some circumstances in the case
to repel that presumption; such as allowing
the agent to act in the
agency, without objection, after his return home.”
The
reference to Pothier is to be found in
Mandat
, ch 4, para 119,
where the learned author says:
“
When
a person, who has to go on a long journey, has given a power of
attorney to someone to manage his affairs, whether the power
of
attorney is limited in any way as to time, it is nevertheless assumed
that he was given it only for the duration of his absence,
and his
return presumes the revocation of the power of attorney, unless this
presumption has been annulled by a contrary presumption,
such as that
which would result when the agent, on the return of the principal,
continues to manage is affairs to the full knowledge
of the principal
who has acquiesced therein”.
[18]
To
this Botha JA added at 27 that neither Story nor Pothier intended to
lay down any principle of law for
‘
they
merely state that the expiration or revocation of a power of attorney
may in certain circumstances be inferred as a fact from
other facts
.’
[19]
There
is authority that a mandatory can renounce a mandate subject to the
qualification that he or she forfeits any claim for expenses
incurred
prior to the renunciation. LAWSA Volume 17 at para 16 citing Grotius
3.12.12 and Voet 17.1.17 in support thereof.
In this connection
it is instructive that Voet 17.1.7 writes of another instance when
the mandate is taken as having been terminated
‘another
instance is when at different times one appoints two agents for the
same business, inasmuch as it appears as by
assigning the latter
agent to have taken away the management from the earlier (
The
Selective Voet: Commentary on the Pandects
(Translation by Percival Gane) (1956): Vol 3 at 271).
[20]
This
is analogous to the facts in this case. While there was
no express termination of the mandate in that the power
of attorney
signed granting authority to Nasson in 2004 was never formally
terminated, the evidence, as I have set it out, indicates
that,
insofar as Klaasen was concerned, the mandate had terminated when he
obtained confirmation from Sheldon via Matthee that
the various files
would be taken over by Sheldon’s practice. Further,
there is clear evidence that Daniels regarded
Matthee as her
representative, albeit that he was not legally qualified, and that
she had continued to approach him after he had
left the employ of
Klaasen and while he was employed by Sheldon. In other words,
insofar as Daniels was concerned, she
regarded the position as
one where she was represented by Matthee and she knew that he was
employed from 2006 by Sheldon, after
he had left Klaasen’s
employ. Accordingly, it is reasonable to infer that the
authority which had been bestowed
upon Klaasen by Daniels had
expired, once Matthee had taken the file and began his employment
with Sheldon.
[21]
It
follows that the mandate was with Sheldon and it was he who bore the
responsibility of insuring that his paralegal (or clerical
assistant;
the particular designation being of no import insofar as this dispute
is concerned) was adequately supervised in order
to properly
prosecute Daniels’ claim to fruition. That claim clearly
expired while Matthee was in the employ of Sheldon.
[22]
Once
the various tendentious explanations of Sheldon and Matthee insofar
as Sheldon’s knowledge of the Daniels file are rejected,
it
must follow that it was Sheldon who bore the legal responsibility of
the loss caused by the negligent prosecution of the claim
against the
RAF and the subsequent damages which were suffered by Daniels and
which still remain to be proved.
[23]
Given
the complexity of the law in this regard and Daniels’ clear
dependence upon attorneys and her possible confusion of
the role of
Matthee and the transfer of the relevant file from Nasson to Klaasen
and then to Sheldon, it appears to me that it
would not be just that
the costs order of the court
a
quo
against respondent in Klaasen’s case be upheld. In my
view, each party should pay their own costs in this connection.
[24]
For
these reasons therefore the following order is made:
1.
The
appeal by appellant Sheldon in case no A307/2018 is dismissed with
costs.
2.
The
cross appeal by appellant Daniels in case no A 306/2018 is dismissed.
3.
The
order of Allie J is altered to read as follows:
3.1 First defendant is ordered to pay
plaintiff such damages as may proved in due course;
3.2 First defendant is ordered to pay
party and party costs on the highest costs scale including the wasted
costs occasioned by
all previous postponements.
3.3 Plaintiff’s claim against
second defendant is dismissed; there is no order as to costs.
____________________
DAVIS
J
I
agree.
____________________
LE
GRANGE J
I
agree and it is so ordered.
____________________
CLOETE
J