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[2017] ZAGPPHC 80
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Ortone v Belmer (41851/2015) [2017] ZAGPPHC 80 (2 March 2017)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
2/3/2017
Case
No. 41851/2015
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
In
the matter between:
ESTHER
ORTONE
Plaintiff
and
KAREL
BELMER
Defendant
JUDGMENT
GCABASHEAJ
Introduction
[1]
This dispute concerns an outstanding payment, plus interest, that the
Plaintiff claims is due to her in terms of a conditional
bequest made
in a Will.
[2]
This Court wishes to point out at the outset that the parties' legal
representatives were requested to submit their heads of
argument on
or before 12 January 2017. Despite enquiry after that date, the legal
representative of the Defendant has failed to
submit heads of
argument. This judgment is thus premised on the transcription of
evidence that was requested by the court for the
benefit of all
parties, the record as filed, the notes made in court during the
hearing and the heads of argument filed by the
Plaintiffs legal
representative.
Background
[3]
The essential background facts are that the Plaintiff was the life
partner of one
KAREL BELMER,
who died at Pretoria on 29
October 2011 ("the deceased"). He was the father of the
Defendant, who was his eldest son.
It is common cause that the
deceased's Will was executed on 25 January 2011, that it records the
wishes of the deceased, and that
it has not been contested.
[4]
The salient part of the bequest, which is recorded in the Afrikaans
language, is found in clauses 1,1 and 1.2, and read as follows:
"Ek maak my bedoel
soos volg:
1.1 Aan my seun KAREL
SELMER, my aandele in SUNNY SHADES (Pty) Ltd, sowel as enige bedrae
aan my verskuldig deur gemelde maatskappy
onder leningsrekening.
1.2 Die bemarking in 1.1
is onderhewig aan betaling deur my seun KAREL SELMER van 'n jaargeld
van R5000 (Vyf Duisend Rand) per mand
uit die inkomste van sy erfenis
aan my lewensmaat ESTHER ORTONE (id ... ), vir 'n periode van 5 (Vyf)
jaar gereken vanaf datum
van my afsterwe.
1.3 …”
[5]
In addition to the above the Defendant also inherited 25% of the
member's interest in a close corporation, Vexma CC, and 20%
of the
proceeds of two life insurance policies in the amount of R440 000.
The Defendant also inherited a mint and stamp collection
from the
deceased. The Plaintiff too received specific bequests from the
deceased.
[6]
The Defendant accepted the bequests in the deceased's Will. The
shares in Sunny Shades 1991 (Pty) Ltd ("Sunny Shades")
were
transferred to the Defendant on 1 November 2011, and on 30 November
2011 he was appointed the only director of the company.
The
claim
[7]
The dispute regarding the outstanding money that the Plaintiff claims
is due to her arises from her interpretation of clause
1.1 and 1.2 of
the deceased's Will. The Plaintiffs primary claim is that the bequest
of the company to the Defendant was subject
to him paying to her an
amount of R5000 per month from the income from his entire
inheritance, and not only from the bequest made
under clause 1.1 and
1.2 of the Will.
[8]
Her secondary and alternative claim is that the deceased bequeathed
Sunny Shades to the Defendant subject to the latter paying
to her,
from the income of the company only, an amount of R5000 per month for
a period of 5 years. The date of payment in respect
of the main and
alternative claim was to be calculated from the deceased's date of
death. The total amount of that payment, had
it been made, would have
been R300 000.
[9]
On 4 June 2015 the Plaintiff issued Summons for the payment of R265
206.72 plus interest in respect of the monetary payment
arising from
the two bequests in clause 1.1. and 1.2 of the Will of the deceased.
The quantum of the claim is thus R265 206.72
plus interest,
irrespective of whether the Plaintiff succeeds on the main or
alternative claim.
The
Plaintiff's case
[10]
The main issue to be determined is whether it was the intention of
the deceased that the Defendant pay the sum of R5000 per
month to the
Plaintiff from the income generated by the operating profits of Sunny
Shades only, including any income generated
from the business,
assets, goodwill and/or personnel of the company.
[11]
In the alternative, the Plaintiffs claim was that once the Defendant
accepted the bequest of the shares in Sunny Shades, the
he became
liable to fulfil the obligation imposed from his entire inheritance
under the Will.
[12]
The company at the centre of this dispute, Sunny Shades, was
originally established in 1975. The deceased bought the company
in or
about 1990 and was its only shareholder and director. The Plaintiff
worked with the deceased. The company was located at
Plot 7 De Waal
Street, Pretoria. Its primary object was to manufacture awnings for,
inter alia,
windows, doors, and carports.
[13]
The Plaintiff lived with the deceased from 1986 to 2011. They never
married but lived together as husband and wife for approximately
25
years. It is common cause that the deceased regarded the Plaintiff as
his life partner. The Defendant was approximately 20 years
old when
the Plaintiff and the deceased started to live together.
[14]
The testimony of the Plaintiff was that the company manufactured all
types of awnings, including indoor roller blinds, folding
arms,
expandable awnings, carport covers, domes over doors and windows, PVC
and shade netting. In essence, it manufactured canvass
covers for any
structure that needed cover to block the sun.
[15]
The company's logo was
"We convert sun to shades".
It
had a distinct trademark which was registered in or about 1993. This
logo was used on all the company's documents and labels,
and it was
stitched onto all the products that were manufactured by the company.
The company regularly advertised its products
in a local publication
called "Die Huisvriend".
[16]
Though the Plaintiff worked with the deceased from 1990, she did not
earn a salary. She was principally responsible for the
administrative
and human resource functions of the company. These responsibilities
included placing orders, issuing invoices, and
doing book-keeping for
the company.
[17]
The Defendant started working for the company in or about 1992. In
the view of the Plaintiff, the deceased did not want the
Defendant to
get ownership of the company without paying for it, hence the
formulation of the conditional bequest as recorded in
clauses 1.1 and
1.2 of the Will.
[18]
At the time of the deceased's death in October 2011 the company had
approximately 15 employees. The Plaintiff continued to
work for the
company until December 2011. The business continued to operate under
the guidance of the Defendant, until about September
2012 when it
stopped trading and the Defendant applied for an order of
liquidation.
[19]
The reason advanced by the Defendant for the application to liquidate
the company was that it was insolvent as a consequence
of a debt owed
to the South African Revenue Service, which ranked as a preferred
creditor. A provisional order of liquidation was
granted on 6 June
2014 and on 22 August 2014 the provisional order was made final. In
the Plaintiff's view, the Defendant had applied
for and obtained the
liquidation of Sunny Shades in order to fraudulently avoid honouring
the terms of the deceased's Will with
respect to the R5000 per month
payment to her.
[20]
Even after the liquidation, the Defendant continued to operate the
business from the same premises and in the same manner that
it had
always operated from. Part of this dispute relates to the liquidation
of Sunny Shades and whether, despite the liquidation,
it in fact
continued to operate after the 22 August 2014, though under a new
name, and continued to generate income from the business,
assets,
goodwill and/or personnel of the company as established and operated
by the deceased.
[21]
The testimony of the Plaintiff was that at the time that the
Defendant took over the operations of the company, the latter
was
fully aware of the true financial position of the company, i.e. that
it was a going concern, and that provision had been made
for any
outstanding debts.
[22]
The Defendant made payment of R5000 per month to the Plaintiff for
approximately 5 ½ months. The total sum received
by the
Plaintiff from the Defendant was R34 793.28. The last payment made to
the Plaintiff by the Defendant was on 29 June 2012.
The Plaintiff
testified that she asked the Defendant on numerous occasions to
honour the terms of his father's Will. The Defendant
failed to
respond to her or to pay the outstanding balance of R265,206.72.
[23]
When asked about the company ceasing to do business in September
2012, the Plaintiff testified that this was not correct, as
she
continued to see the vehicle used to do the installation of awnings
on numerous occasions after September 2012. In addition,
up to about
April 2015 she was aware that the company continued to use the
trademark that the deceased had registered for Sunny
Shades. It also
continued to advertise its services using the factory and website
details that had originally been registered under
Sunny Shades.
Detailed evidence of these continuing activities by the company was
led in court.
[24]
The Plaintiff explained that the name of the company changed in or
about September 2015 to that of "Sun Cover System CC
-
Manufacturing division of Sunny Shades and Canobrella" ("Sun
Cover Systems CC"). The sole member of this new entity
was the
common law partner of the Defendant, one Ms. Charmain Lizelle
Venter ("Venter"), who, to the knowledge of
the Plaintiff,
was a nurse by training. However, the testimony of the Plaintiff was
that for all intents and purposes, this new
entity continued to be
the alter ego of Sunny Shades as it continued to rely on the
business, assets, goodwill and personnel of
Sunny Shades.
[25]
With respect to staff, the Plaintiff testified that some were asked
to leave the company in December 2014, but that to her
knowledge
about 7 or 8 staff members continued to work for the company.
[26]
With respect to what was communicated to the general public about the
operations of the company, the Plaintiff testified that
up to April
2015, advertisements placed in the local marketing publication "Die
Huisvriend" still used the original logo,
telephone number,
factory details, and website address of Sunny Shades. Her further
testimony was that in July 2015, other than
changing the telephone
numbers of the company, the advertisement placed by Sunny Shades in
this publication continued to use the
same reference details that had
been used by the company from inception.
[27]
The Plaintiff dismissed the reason advanced by the Defendant for not
paying her, i.e. that Sunny Shades was insolvent. She
told the court
that her view was that the Defendant was to pay her out of his entire
inheritance, and not only from the income
generated by Sunny Shades.
She also stated that if this Court found that the Defendant was to
make the payment out of the profits
generated by Sunny Shades, the
Defendant continued to advertise under the name Sunny Shades until
September 2015. It followed that
up to about September 2015 there
must have been income generated by Sunny Shades.
[28]
Under cross examination the Plaintiff persisted in her view that the
word "income" as used by the deceased in clause
1.2 of the
will did not only relate to the bequest made in clause 1.1, i.e. to
the company Sunny Shades. She was also adamant that
the inheritance
mentioned in the Will referred to the Defendant's entire inheritance
from the deceased.
[29]
A lengthy debate then ensued with respect to what the financial
condition of Sunny Shades was when the Defendant inherited
it. The
proposition that was put to the Plaintiff was that Sunny Shades was
in fact in debt. The Annual Financial Statements of
the company were
traversed. The extent of the outstanding VAT that was due was debated
as was the overdraft that the company had
to settle.
[30]
The Plaintiff disputed the propositions put to her regarding the
insolvency of Sunny Shades at the time that the Defendant
took
ownership of it. She pointed to the fact that there were insurance
policies that had specifically been taken by the deceased
to settle
the overdraft and the outstanding VAT payment of Sunny Shades, and
that she had asked that the insurance policy be paid
into the account
of Sunny Shades. As a consequence, an amount of R275 000 was paid
into the account of Sunny Shades in 2012 to
clear the overdraft of
R272 000.
[31]
When challenged under cross examination that she failed to inform the
Defendant of the outstanding VAT and overdraft amounts
when she left
the company in December 2011, the Plaintiff stated that she did not
have to inform the Defendant because she knew
how closely the
Defendant worked with his father. As a consequence, the Defendant was
aware of those outstanding amounts and knew
that his father had taken
out insurance policies to ensure that these would be settled.
[32]
She also stated that the Defendant knew about the outstanding VAT
claim for the same reason, i.e. his close working relationship
with
the deceased. She disputed the Defendant's allegation that Sunny
Shades could not take orders or continue to trade because
it did not
have a VAT certificate as a consequence of the outstanding VAT
payment.
[33]
She persisted in her view that the liquidation of the company had
been obtained fraudulently, explaining that the deceased
had run the
business for 20 years without the company experiencing any major
liquidity problems. She was resolute that there was
no bank overdraft
and that provision had been made for the outstanding VAT payment.
[34]
When re-examined and shown a statement on the account of Sunny
Shades, the Plaintiff read the contents thereof into the record.
This
statement recorded that Momentum Policy had paid an amount of R275
534.00 and another for R1 214.84 into the account of Sunny
Shades on
21 June 2012. This gave the account a credit balance of R16 929.00.
The Plaintiff confirmed that this amount cleared
the overdraft.
[35]
She also confirmed as correct the observation made in the Annual
Financial Statements of February 2013 that the company had
access to
adequate resources to continue in operational existence for the
foreseeable future.
Plaintiff's
witness
[36]
The next witness to be called ought to have been Ms Letta Kganyago
who worked for Sunny Shades as a stitcher for 15 years.
The Defendant
agreed to the admission of her evidence and she was excused.
[37]
Her evidence was placed on record, i.e. that she continued to work
for the company until December 2014. Her services were terminated
in
January 2015. It was further stated that she confirmed that during
the time she was employed by the Defendant, the company continued
to
use all the stationary and machinery that they had previously used in
Sunny Shades when the business was operated by the deceased.
[38]
After this statement was read into the record, the Plaintiff closed
her case.
The
Defendant's case
[39]
The Defendant confirmed that he was in a relationship with Ms.
Venter. He also confirmed that his current occupation was that
of
manufacturing and installing sun control products, mainly roller
blinds, and that he had been in this business since he started
working with his father in 1991 at Sunny Shades. At the time that he
worked at Sunny Shades, his job description was that of manufacturing
and overseeing the installation of awnings, and he did some marketing
for the company.
[40]
The Defendant confirmed that the Plaintiff worked at Sunny Shades
from 1990 when the business was acquired, and that she was
responsible for the administration and the accounts of the company.
[41]
On being questioned about what he had inherited from his father, the
Defendant stated that the had inherited the company Sunny
Shades, a
quarter of the shares of Vexma Properties, a plot on which was
located a small factory from which they manufactured,
20% of two life
policies, a coin and stamp collection.
[42]
The contents of the second liquidation and distribution accounts were
traversed with the Defendant, and the Defendant confirmed
that the
total recorded therein regarding what he inherited from his father
was the amount of R440 009.53. What he received, however
was R62 000
of which R47 000 was paid into his bank account. This was due to the
fact that the outstanding overdraft of Sunny Shades
of R140 000 was
deducted from what was due to him.
[43]
The Defendant's testimony was that when he took over running Sunny
Shades, the banks would not extend any overdraft to him
unless they
had the financial statements of the company. These he only obtained
in March and June 2012. When he presented these
to the bank he was
advised that the company was a "sinking ship" and that he
could not get an overdraft. It was then
that he decided to liquidate
the company. He also testified that it was largely due to the
outstanding South African Revenue Services
payment that the company
had to be liquidated, as this debt could not be paid.
[44]
In clarifying the position, the Defendant stated that the 2010
statements were received in March 2012, the 2011 statements
were
prepared in 28 June 2012, and the statements up to 29 February 2012
were prepared on 28 June 2012. In addition, he testified
that of his
total inheritance from his father, the only asset that could produce
an income, within the meaning of clause 1.1 of
the Will, was Sunny
Shades.
[45]
With respect to the outstanding VAT payment, the Defendant testified
that, contrary to what the Plaintiff had testified about
his
knowledge of the outstanding VAT payment, he only found out about the
outstanding payment in early 2012. The Auditors of the
business then
advised him that he could no longer trade as Sunny Shades or issue
VAT invoices. He stopped trading as Sunny Shades
in or about July
2012.
[46]
After consulting a lawyer, he was advised to liquidate the company.
He was also advised that if he did not accept the legacy
in 1.1 of
the Will, he would not be able to accept any of the other legacies in
the Will.
[47]
It was only on 24 February 2014 that he received the share
certificates for Sunny Shades stating that he was registered as
a
Director.
[48]
In disputing the evidence of the Plaintiff that he fraudulently
attempted to escape from his obligations under the Will, the
Defendant stated that the reason that he stopped paying the Plaintiff
R5000 per month was because he obtained legal advice that
as Sunny
Shades had been liquidated, he no longer had to pay this amount.
[49]
Under cross examination the Defendant confirmed that Ms Venter was a
nursing sister and that she joined him at Sunny Shades
in January
2012 to take care of the financial and administrative side of the
business. She had not been involved in Sunny Shades
until January
2012.
[50]
The reason that she was the only member of the newly registered Sun
Cover System CC that took over from Sunny Shades was that
he was told
that he could not operate under his name due to the outstanding VAT
payment due from Sunny Shades. When challenged
about the legal
cogency of this argument the Defendant insisted that this was what he
was told by the South African Revenue Service.
[51]
The Defendant's responsibilities at Sun Cover Systems CC included
manufacturing and installing the products they made. He stated
that
he was simply an employee at Sun Cover Systems CC, and did not earn a
fixed salary. He stated that after the Sunny Shades
account was
frozen he did not earn income with which to pay the Plaintiff R5000
per month.
[52]
When the Plaintiffs counsel took the Defendant through the financial
statements that had been traversed earlier during the
Defendant's
examination in chief, the Defendant stated that:
[52.1] he had no idea how
the value of Sunny Shades had been determined by the Auditors;
[52.2] he was aware that
in order to evaluate the business he had to look at the financial
statements;
[52.3] the value attached
to Sunny Shades in the liquidation and distribution account was
derived from the financial statements
of Sunny Shades;
[52.4] he had no idea on
whether the zero value of Sunny Shades was determined from the
financial statements of the company ending
31 October 2011;
[52.5] the accumulated
loss for 2011 was R61 916.00, and that the outstanding VAT was R335
778.00;
[52.6] he had no idea
whether the VAT amount of R335 778.00 had already been taken into
consideration in the calculation of the
assets and liabilities of the
company;
[52.7] the Auditors had
obtained the information on which the annual financial statements
were drawn from the company;
[39.8] he had no idea how
the recorded levies in the amount of R513 109.00 were quantified;
[52.9] he admitted that
the record showed that the levies for 2009 were in the amount of R7
000.00 and those for 2008 were R21 566.00,
and the 2010 levies were
R1 755.00, but that he did not know what these were levies for;
[52.10] he could not
explain why the levies for 2011 were in the amount of R513 000.00,
and agreed that the figure did not make
sense;
[52.11] had the R513
000.00 not been deducted from Sunny Shades the company would have had
a substantial profit and been able to
make the R335 778.00 VAT
payment and still make a profit;
[52.12] the financial
statements of October 2011 were wrong;
[52.13] he agreed that
the VAT calculation of R335 778.00 was an incorrect figure as it
could not possibly reflect 14% of the income
of Sunny Shades for the
year ending October 2011;
[52.14] the figures that
had been relied on could not be trusted or relied on by this Court,
even in relation to the calculation
of the assets and liabilities of
Sunny Shades;
[52.15] after his father
died he continued with the business under the name of Sunny Shades
until July 2012, and immediately thereafter
changed the name of the
business to Karel trading as Sunny Shades, making the same awnings,
until March 2013 when Sun Cover Systems
CC was started;
[52.16] until March 2013
he continued to utilise all the resources of Sunny Shades to run the
business;
[52.17] Sun Cover Systems
CC only started operating in May 2014, as recorded by the Registrar
of Companies, and as put to him by
the Plaintiff's counsel;
[52.18] in fact he
continued to use the logo, description of the company, telephone
numbers, and so forth of Sunny Shades until
April 2015 as evidenced
by the advertisements placed in the local trade publication;
[52.19] it was only in
September 2015 that Sun Cover Systems CC advertised in its own name;
[52.20] it was correct
that the two Momentum polices taken out by the deceased settled the
outstanding overdraft and left a credit
balance of R16 900.00;
[52.21] the total assets
he received according to the liquidation and distribution account was
R440 091.00;
[52.22] he received an
amount of R650 000 as part of his inheritance from the deceased.
[53]
Under re-examination the Defendant persisted with his version that
R140 000 had been deducted from his inheritance. On being
questioned
by the court, he agreed that in the face of the documentary evidence
traversed during cross examination, those funds
could not have been
used to settle the outstanding overdraft as the Momentum Polices had
settled the overdraft. The only other
explanation offered by the
Defendant at this point was that the funds were deducted for
operational purposes.
The
interpretation of the Will
[54]
The correct interpretation of clause 1.1 and 1.2 as well as the
proven facts and the credibility of the Plaintiff and the Defendant
play a central role in the analysis of the evidence tendered, its
weighting, and the findings and conclusions arrived at by this
Court.
Each aspect will be addressed below.
An interpretation
of clause 1.1 and 1.2 of the Will
[55]
The first observation is that it is clear that the intention of the
deceased was to bequeath something of value to his children.
The
Defendant got the bulk of his estate, including the largest asset in
that estate, the company Sunny Shades. This bequest was
made subject
to, or on condition that he pays to the Plaintiff the amount of R5000
per month for a period of 5 years. There is
no dispute in this
regard. In this instance, the Defendant testified that he accepted
the condition in the deceased's will, hence
the payment of R5000 for
approximately 6 months after his father's death. This acceptance by
the Defendant of the bequest is in
accordance with the principle that
a bequest cannot accrue unless the condition is met.
[56]
The real issue that arises in respect of the interpretation of the
deceased's bequest, is whether the intention of the deceased
was that
the Defendant was to make the payment of R5000 per month from the
income of Sunny Shades or from the total income the
Defendant derived
from all the assets inherited from his father, which assets went
beyond the bequest of Sunny Shades.
[57]
It is trite that where the intention of a testator is clear and
manifest, a court must give effect to it. Where there is some
ambiguity, the grammatical and ordinary sense of the words used, as
well as the weight of probability within the context of the
disposition made are relevant factors. What is critical is that the
interpretation accorded to a disposition in a Will should not
lead to
an absurdity, to repugnance or to any inconsistency with the
intention of the testator.
[58]
The context of the making of the Will of this testator is that he
bequeathed to his son a company that he had been operating
from about
1990, i.e. for over 20 years. When he started operating this company,
the Plaintiff was his life partner and worked
with him in the
business. The business was a going concern when he bequeathed it to
his son. Provision was made for any VAT and
overdraft obligations
that might become due.
[59]
In other words, from the context, this bequest was the most
significant in the deceased's estate. The expectation was that
the
company would continue to be operated as a going concern. The
evidence of the Plaintiff was that the deceased did not simply
want
to give the Defendant the company for nothing, but rather wanted him
to earn it.
[60]
The deceased must have been aware that the Defendant could elect to
dispose of the company by selling it or in any other manner
monetising the legacy his father had left him. Neither of these
options was intended to compromise the Defendant's ability to comply
with the condition that the Defendant pay to the Plaintiff the R5000
per month stipulated by the deceased.
[61]
Guidance in this regard can be found in the judgment of Wallis J in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[1]
where the
following point is made:
"[17]
Interpretation is the process of attributing meaning to the words
used in a document, be it legislation, some other statutory
instrument, or contract, having regard to the context provided by
reading the particular provision or provisions in the light of
the
document as a whole and the circumstances attendant upon its coming
into existence. Whatever the nature of the document, consideration
must be given to the language used in the light of the ordinary rules
of grammar and syntax; the context in which the provision
appears;
the apparent purpose to which it is directed and the material known
to those responsible for its production. Where more
than one meaning
is possible each possibility must be weighed in the light of all
these factors. The process is objective, not
subjective. A sensible
meaning is to be preferred to one that leads to insensible or
unbusinesslike results or undermines the apparent
purpose of the
document. Judges must be alert to, and guard against, the temptation
to substitute what they regard as reasonable,
sensible or
businesslike for the words actually used. To do so in regard to
a
statute or statutory instrument is to cross the divide between
interpretation and legislation; in a
contractual context it is
to make
a
contract for the parties other than the one they in
fact made. The 'inevitable point of departure is the language of the
provision
itself,' read in context and having regard to the purpose
of the provision and the background to the preparation and production
of the document.
[25] Which of the
interpretational factors I have mentioned will predominate in any
given situation varies. Sometimes the language
of the provision, when
read in its particular context, seems clear and admits of little if
any ambiguity. Courts
say
in such cases that they adhere to
the ordinary grammatical meaning of the words used. However, that too
is
a
misnomer. It is
a
product of
a
time when
language was viewed differently and regarded
as
likely to have
a
fixed and definite meaning;
a
view that the
experience of lawyers down the years,
as
well
as
the
study of linguistics, has shown to be mistaken. Most words can bear
several different meanings or shades of meaning and to try
to
ascertain their meaning in the abstract, divorced from the broad
context of their use, is an unhelpful exercise. The expression
can
mean no more than that, when the provision is read in context, that
is the appropriate meaning to give to the language used.
At the other
extreme, where the context makes it plain that adhering to the
meaning suggested by apparently plain language would
lead to glaring
absurdity, the court will ascribe
a
meaning to the language
that avoids the absurdity. This is said to involve
a
departure
from the plain meaning of the words used. More accurately it is
either
a
restriction or extension of the language used by the
adoption of
a
narrow or broad meaning of the words, the
selection of
a
less immediately apparent meaning or sometimes
the correction of an apparent error in the language in order to avoid
the identified
absurdity.
[26] In between these
two extremes, in most cases the court is faced with two or more
possible meanings that are to a greater or
lesser degree available on
the language used. Here it is usually said that the language is
ambiguous, although the only ambiguity
lies in selecting the proper
meaning (on which views may legitimately differ). In resolving the
problem, the apparent purpose of
the provision and the context in
which it occurs will be important guides to the correct
interpretation. An interpretation will
not be given that leads to
impractical, unbusinesslike or oppressive consequences or that will
stultify the broader operation of
the legislation or contract under
consideration."
[62]
The deceased did not say that the Defendant must pay the R5000 per
month
"from the income of Sunny Shades",
nor did he
use the words
"from the income of his legacy in paragraph
1.1".
This Court finds that in the context of formulation of
clause 1.1 and 1.2, it would be absurd to confine the use of the word
inheritance
to the company Sunny Shades.
[63]
Counsel submitted that the use of the word "inheritance" is
used in three clauses of the deceased's Will, i.e. paragraphs
1.2,
1.9 and 7, and that this use of the word clearly refers to the entire
inheritance, not a specific item or legacy. This Court
finds that
this proposition is consistent with an interpretation of the Will
that does not lead to absurdity. It is also consistent
with the
evidence tendered by the Plaintiff, which the Court accepts, that the
deceased wanted the Defendant to earn Sunny Shades.
[64]
In its interpretation of clauses 1.1 and 1.2, the Court has taken
into consideration the grammatical and ordinary sense of
the words
used, the structure of the Will, which places clause 1.1 and 1.2
within the same contextual interpretation, and the weight
of
probability.
Finding
[65]
The finding of this Court is that the payment of R300 000.00 by the
Defendant to the Plaintiff over a five-year period from
the date of
the deceased's death is not limited to the bequest made in clause
1.1, i.e. the income generated by Sunny Shades. The
Defendant is to
pay the amount of R5000 per month to the Plaintiff from the whole of
his inheritance. This finding is consistent
with the interpretation
of the Will in its totality.
[66]
If I am wrong in the above interpretation and analysis of the effect
of clause 1.1 and 1.2, I in any event find that the Defendant
could
and ought to have continued to pay the Plaintiff R5000 per month from
the income of Sunny Shades and/or Sun Cover Systems
CC. I say this
for the reasons set out below.
[67]
It became apparent under cross examination that when the Defendant
inherited Sunny Shades, the company was liquid, and operated
as a
going concern. There was no cause to apply for its liquidation. This
Court accepts that the Annual Financial Statements that
the Defendant
relied on in bringing the liquidation application were flawed in the
extreme. This Court is also of the view that
the Defendant was aware
of the true status of the company, but deliberately attempted to make
it appear to have insurmountable
debts so as to discontinue the
payments to the Plaintiff.
[68]
The fact that the Defendant appears to have deliberately set about
finding a way to avoid making the payment to the Plaintiff
cannot
remove the obligation that arises from the vesting of the inheritance
left to him by the deceased. In any event, the assertion
that the
company ceased trading does not tally with the establishment of Sun
Cover Systems CC.
[69]
It is clear from the evidence tendered that the establishment of Sun
Cover Systems CC was intended to be and in fact became
the alter ego
of Sunny Shades. As Sun Cover Systems CC the company continued to
generate an income for the Defendant. The Defendant
ought to have
continued to pay the Plaintiff R5000 per month from the income
generated from Sun Cover Systems CC because it was
the
alter ego
of Sunny Shades.
[70]
A further material aspect that was traversed in evidence was the
payment of the outstanding VAT that was due to the South African
Revenue Services. Under cross examination the Defendant conceded that
the VAT amount of R335 778.00 was an incorrect figure as
it could not
possibly represent 10% of the income of Sunny Shades for the year
ending October 2011. This Court finds that the quantification
of the
outstanding VAT for the period ending October 2011 was grossly
exaggerated.
[71]
The question of the amount for the payment of levies was disputed by
the Plaintiff. The Defendant conceded that he could not
explain why
the quantification of the levies for the period 2011 was in the
amount of R513 000.00 as opposed to, by way of example,
R21 566.00 in
2008, R7 000.00 in 2009, and R1 755.00 in 2010. The basis on which
the Defendant concluded that Sunny Shades was
insolvent and therefore
had to be liquidated, is highly suspect and flawed in material
respects. Had the amount of R513 000.00
not been deducted from the
books of Sunny Shades, the company would have had a substantial
profit and been able to comfortably
settle the company's outstanding
debts and pay the R5000 per month due to the Plaintiff.
[72]
It is an established fact that until March 2013 the Defendant
continued to use all the resources of Sunny Shades to operate
the
business. It is also an established fact that until April 2015 he
continued to use the logo, description of the business, telephone
numbers and related tools of trade of Sunny Shades to generate income
for the company. The fact Sunny Shades was liquidated on
22 August
2014 and that the Defendant continued to trade under different
company names, does not detract from the established facts
that those
entities, including Sun Cover Systems CC, were the
alter ego
of
Sunny Shades.
[73]
This Court is satisfied that the evidence of the Plaintiff with
respect to the intention of the deceased and the financial
health of
the company as at December 2011 is more credible than that of the
Defendant. The Defendant was a poor witness who evaded
answering
material questions put to him, often resorting to saying he acted on
advice. The probity of his evidence is suspect.
This Court has not
difficulty in rejecting his version in so far as it conflicts with
that of the Plaintiff.
[74]
In this regard, guidance is found in the analysis of the SCA in the
judgment in
SFW
Group Ltd & Another v Martell Et Cie & Others
[2]
:
"To come to
a
conclusion
on the disputed issues
a
court
must make findings on (a) the credibility of the various factual
witnesses; (b) their reliability; (c) the probabilities.
As (a), the
court's finding on the credibility of
a
particular
witness will depend on its impression about the veracity of the
witness. That is turn will depend on
a
variety
of subsidiary factors, not necessarily in order of importance, such
as
(i)
the witness' candour and demeanour in the witness-box, (ii) his bias,
latent and blatant, (iii) internal contradictions in his
evidence,
(iv) external contradictions with what was pleaded or put on his
behalf, or with established fact or with his own extracurial
statements or actions, (v) the probability or improbability of
particular aspects of his version, (vi) the calibre and cogency
of
his performance compared to that of other witnesses testifying about
the same incident or events. As to (b),
a
witness'
reliability will depend, apart from the factors mentioned under
(a)(ii), (iv) and (v) above, on (i) the opportunities he
had to
experience or observe the event in question and (ii) the quality,
integrity and independence of his recall thereof. As to
(c), this
necessitates an analysis and evaluation of the probability or
improbability of each party's version on each of the disputed
issues.
In the light of its assessment of (a), (b), and (c) the court will
then, as
a
final
step, determine whether the party burdened with the onus of proof has
succeeded in discharging it. The hard case, which will
doubtless be
the rare one, occurs when
a
court's
credibility findings compel it in one direction and its evaluation of
the general probabilities in another. The more convincing
the former,
the Jess convincing will be the latter. But when all factors are
equipoised probabilities prevail."
[3]
Conclusion
[75]
Had the Defendant honoured his father's condition he would have
continued to pay the R5000 per month to the Plaintiff from
the income
generated by Sunny Shades which later became Sun Cover Systems CC, as
this is what was intended by clause 1.1 and 1.2
of the Will.
[76]
In other words, the Defendant could not escape the condition that
gave rise to the obligation that the deceased placed on him
once he
accepted the bequest of Sunny Shades as part of his overall
inheritance.
[77]
In the premises I find that that the intention of the deceased was to
bequeath the company Sunny Shades to the Defendant subject
to him
paying to the Plaintiff an amount of R5000 per month from the income
from his entire inheritance. If this conclusion is
wrong, I find that
the Defendant deliberately avoided paying the Plaintiff money that he
was obliged to pay to her from the business,
assets, goodwill and/or
personnel of Sunny Shades. That Sunny Shades was converted into a new
entity called Sun Cover Systems CC
is irrelevant. The fact is that
the business itself continued to be that of Sunny Shades.
[78]
In the premises I grant judgment in favour of the Plaintiff as
claimed.
Order
[79]
I make the following order:
1.
the Defendant is directed to pay to the Plaintiff:
1.1 the sum of
R265,206.72;
1.2 interest at a rate of
9% per annum on every amount of R5000 which was payable to the
Plaintiff as of 29 June 2012, from the
date that it was payable to
the Plaintiff until date of final payment.
2.
Costs of the action
GCABASHE
AJ
ACTING
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
Counsel
for the Plaintiff: Adv. HM Barnardt
Instructed
by: Daan Beukes Attorneys, Pretoria
Attorney
for the Defendant: Mr. JP Krayshaar
Instructed
by: Witz & Wiltz Attorneys
Date
of Hearing: 24 - 25 November 2016
Date
of Judgment: 2 March 2017
[1]
2012 (4) SA 593 (SCA)
[2]
2003 (1) SA 11 (SCA)
[3]
Id at para [5]