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[2017] ZAFSHC 111
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Absa Bank Limited v Baugarten NO and Others (A116/2015) [2017] ZAFSHC 111 (29 June 2017)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Appeal
number: A116/2015
In
the matter between:
ABSA
BANK
LIMITED
Appellant
and
HEIN
BAUMGARTEN
N.O.
First
Respondent
MARELIZE
KOTZE N.O.
Second
Respondent
ANNELIZE
BLIGNAUT
N.O.
Third
Respondent
(In
their respective capacities as Trustees
Of
the Boom Tuin Family Trust IT1340/1999)
CORAM:
LEKALE, J
et
REINDERS,
J
et
HEFER,
AJ
HEARD
ON:
5
JUNE 2017
JUDGMENT
BY:
LEKALE,
J
DELIVERED ON:
29 JUNE 2017
SUMMARY: Loan
Agreement and Unjust Enrichment- Multi-party enrichment liability:
Appellant bank barking up the wrong tree with documentary
proof of
its claim for repayment of the loan amount effectively being against
a Trust other than the respondent Trust. Claim for
unjust enrichment
not available and competent until and unless loan agreement in
respect of which respondents were factual recipients
is set aside as
void. When such claim available same lies against legal recipient and
not factual recipients, in the position of
the respondents, where
payment was made to them on behalf or instructions of the former.
Respondents not unjustifiably enriched
at appellant’s
expense in the absence of a causal link between their alleged
enrichment and the appellant. Absent authority
on the part of a third
party to bind respondent Trust contractually, the latter not enriched
where the loan amount applied to settle
the debt owed by the third
party to the Trust. Appeal dismissed.
[1]
On 5 March 2015 Mbhele AJ, as she then was, sitting in this division
as the trial court, dismissed with costs appellant bank’s
claim
for payment of R358 078.81 or R200 000, as the alternative
claim, as well as its claim for an order declaring the property
known
as Erf 473 Bultfontein (the property) to be specially executable.
The appellant feels aggrieved by the whole of the
judgment so
delivered and now approaches us on appeal with leave of the trial
court.
[2]
The respondent is Boom Tuin Family Trust IT 1340/1999. On dismissing
the action the court below,
inter alia
, found that there
existed no legally binding contractual relationship between the
appellant and the respondent trust insofar as
the loan agreement was
between the appellant and Boom Tuin Family Trust IT11340/1999 as
opposed to Boom Tuin Family Trust IT1340/1999.
The trial court,
further, found that it was always the respondents’ case that
there existed no binding contractual relationship
between the
appellant and the trust and that such defence was not only raised
during the trial.
[3]
In the notice of appeal and argument before us the appellant, through
Mr Du Plessis, contends,
inter
alia
,
that the trial court erred in failing to pay any or sufficient
consideration to some undisputed evidence and concessions before
her
and, further, in allowing the respondents’ witnesses to present
testimony in respect of versions which were not contained
in the
respondents’ Plea and in circumstances where they did not raise
issue with the Trust’s
locus
standi
in the Plea. It is, further, effectively contended in the alternative
that the court below erred in dismissing the appellant’s
alternative claim for unjust enrichment when evidence clearly
indicates that the respondent Trust was unjustifiably enriched at
the
expense of the appellant bank which was, in turn, impoverished.
[4]
On their part the respondents support the impugned judgment and
submit, through Mr Rautenbach, both on the papers and before
us,
inter
alia,
that the judgment cannot be faulted and that the trial court
correctly found that there existed no contractual relationship
between
the parties. It is, further, contended for the Trust that the
trial court correctly admitted evidence on lack of
locus
standi
because the issue was fully canvassed by the parties before her. With
regard to unjust enrichment the respondents’ position
is,
inter
alia,
that
the Trust was not the recipient of the funds and was, as such, not
enriched
vis-
ă –vis
the
appellant.
[5]
In the light of the view I have taken of the matter, it is not
necessary to deal with all the grounds raised by the appellant
in its
challenge against the impugned judgment regard being had to salient
facts which were common cause between the parties.
LOAN
AGREEMENT
[6]
The parties were effectively in agreement before the trial court that
on 11 August 2015 the respondent trust, represented by
one Martin
Singleton Baumgarten, who has since passed away (the deceased), as
its sole trustee concluded a Deed of Sale for the
purchase of Erf 473
Bultfontein(the property) with its sellers. It was, further,
not in dispute that subsequent thereto and
on 27 September 2005
Francois Hattingh (Francois), in his capacity as the sole trustee of
Boom Tuin Family Trust IT11340/99 concluded
a loan agreement with the
appellant for an amount of R300 000 on condition that the said
Trust, as security, shall pass first
mortgage bond over Erf 473
Bultfontein.
[7]
It was, furthermore, effectively undisputed before the trial court
that in support of the loan application the said Francois
provided
the appellant with letters of authority dated 7 September 2005
appointing and authorising him to act as a trustee
for Boom Tuin
Family Trust IT11340/99 and, further, gave directions authorising the
appellant to effect payment of the loan amount
to various instances
inclusive of a law firm belonging to his brother, one
Juan Hattingh(Juan) as well as Oosthuizen
Attorneys in respect of the
balance of the purchase price for the property. It was, furthermore,
common cause between the parties
that in their defence the
respondents,
inter
alia
,
on letters of authority bearing the same date
viz.
7
September 2005 and appointing the deceased, Francois and Juan as the
trustees of the said trust.
[8]
It is clear,
ex
facie
the power of attorney authorising the passing of the bond over the
relevant property, that same was signed by Francois
in
his capacity as representing Boom Tuin Family Trust IT11340/1999.
It is, further, apparent from the mortgage bond in favour
of the
appellant that the same was authorised by the trustees for the time
being of Boom Tuin Family Trust IT11340/1999 and is,
as such,
registered against the same while the Deed of Transfer, on its part,
reflects the trustees for the time being of Boom
Tuin Family Trust
IT1340/1999 as the registered owners.
[9]
As pointed out above the appellant, in effect, contends that the
trial court allowed the respondents to raise a new defence
relating
to the
locus
standi
of the respondent trust, as the defendant, in
medias
res
and
erred in so doing. A perusal of the respondents’ Plea,
however, confirms the trial court’s findings insofar
as the
respondents specifically disputed that there existed a valid and
binding contract between the appellant and the respondent
trust. It
is, further, correct that the issue in question was fully canvassed
before the court
a
quo
insofar
as evidence was led with the parties subjecting witnesses to cross
examination on the issue. The appellant, thus, had a
fair opportunity
to deal with the issue. (See
Minister
of Safety and Security v Slabbert
[2010] 2 All SA 474(SCA)
par
[12]).
[10]
A look at the appellant’s case, as set out in the summons and
as presented to the trial court, shows that the appellant
was barking
up the wrong tree insofar as its case was, in fact, directed at a
trust other than the respondent trust regard being
had to differing
registration numbers. In law and practice Trusts are distinguishable
by their unique individual registration numbers
on the same basis as
motor vehicles are. It is, as such, possible to register two or more
trusts bearing the same name. The aforegoing
is evident from the fact
that at all times material to the conclusion of the loan agreement
Francois was acting in his capacity
as the sole trustee of the Boom
Tuin Family Trust IT11340/1999 as opposed to Boom Tuin Family Trust
IT1340/1999. There was, therefore,
no case against the respondent
trust, before the court below, as far as the loan agreement is
concerned for even if IT 11340/1999
were to be regarded as the same
as IT1340/1999 it was doubtful as to whether Francois had the sole
authority to act for the trust
insofar as it is not apparent from the
record which of the two letters of authority prevailed. In this
regard it is worth reiterating
and noting that they bear the same
date and they are both titled “
GEWYSIGDE
MAGTIGINGSBRIEF”
. The question is, therefore, which
letter between the two amended the other. There was, further, no Deed
of Trust before the trial
court to indicate if, in the case of more
than one trustee having been appointed, any one of the trustees was
authorised to act
alone in the circumstances of the instant matter.
The onus was always on the appellant, as the plaintiff, to prove its
case.
UNJUST
ENRICHMENT
[11]
It is generally accepted in our law that four requirements, at the
very least, must be met for enrichment liability to arise.
Firstly
the defendant must be enriched; secondly the plaintiff must be
impoverished; in the third place the defendant must be enriched
at
the expense of the plaintiff; and lastly, the defendant’s
enrichment must be unjustified or
sine
causa.
(See
Glenrand
MIB (Pty) Ltd & Others v Van den Heever & Others
[
2013]
1 All SA 511
(SCA)).
[12]
It is clear from the above requirements that a causal link between
the defendant’s enrichment and the plaintiff’s
impoverishment is a
sine qua non
for enrichment liability
insofar as
“
The ultimate
issue for the court to determine when considering the question of
causation or the ‘at the expense of’
requirement in the
multi-party situation is whether the defendant has been unjustifiably
enriched
vis-á-vis
the
claimant”
(See
Glenrand
MIB (Pty) Ltd
(
supra)
at
par
[18])
[13]
Assuming, in appellant’s favour and in spite of the evidence
accepted by the trial court, that the respondents were,
in fact,
enriched, it appears, in my view, that there exists no causal link
between the appellant and such enrichment insofar as
the source of
the same is the loan it, the appellant bank, advanced to a third
party
viz.
the Boom Tuin Family Trust IT11340/1999. The enrichment in question
was, as such, at the expense of such a third party which gave
the
appellant directives as to how payment was to be effected and
remains, on paper at least, liable to the appellant for repayment
of
the loan. The respondent trust was not the direct recipient of any
funds from the appellant bank. The appellant was, thus, not
the
proximate cause of such enrichment.
[14]
If the respondents be liable to anyone for unjust enrichment, it
would, in my judgment, possibly be only to the third party
in
question and only in the event of the loan agreement such third party
concluded with the appellant being found to be void. In
this regard
it shall be recalled that the possibility of such an eventuality
arising exists in the light of the two letters of
authority issued in
relation to the relevant trust. As of now the loan agreement in
question remains in place as between the appellant
and the said third
party and, as Mr Du Plessis correctly concedes, the latter
remains contractually liable to the appellant
until and unless the
agreement is set aside. In my view no enrichment liability can
validly arise in the face of such an agreement
insofar as enrichment
must be unjustified or without legal ground for that purpose.
[15]
The trial court accepted oral evidence to the effect that the
deceased had placed
Juan
Hattingh
in funds for investment purposes and had, further, instructed him to
utilise some of the funds to pay the purchase price
of the relevant
property in cash. There is nothing before us to demonstrate or show,
on adequate grounds, that the trial court
was wrong in accepting such
evidence. We can, as such, not interfere with her factual findings
and conclusions on the evidence
in question. (See
S
v Francis
1991 (1) SACR 198
(A)).
[16]
Payment of the loan amount was effected in accordance with the
instructions given by Francois in his capacity as
the trustee
for Boom Tuin Family Trust IT 11340/1999. The reason why such
instructions were given is not apparent
ex
facie
the
record and is, as such, unknown. It is, however, probable from the
evidence accepted by the trial court that part of the loan
amount
was, in effect, employed to replace the funds received from the
deceased insofar as part of the funds was used
to settle
the purchase price of the property at Francois’ instance. If
anything the respondent trust was, in my view, just
one of the
pockets designated and used by Francois, as representative of the
Boom Tuin Family Trust IT 11340/1999, for receiving
the loan amount.
In my judgment the preceding view prevails insofar as where the
credit grantor, in the position of the appellant,
has effected
payment of the loan amount to a party designated by the credit
receiver, in the position of Boom Tuin Family Trust
IT 11340/1999,
and it subsequently turns out that the loan agreement was void, the
condictio
indebiti
lies
against the legal recipient as “
the
person who is in law considered to have received the money”
and not against the
factual receiver insofar as payment was made on behalf of such credit
receiver. (See
Randcoal
Services Ltd v Randgold and Exploration Co. Ltd
[1998] ZASCA 45
;
1998 (4) SA 825
(SCA) at 843B-G).
[17]
On the evidence before the trial court it is possible, in the light
of the two letters of authority bearing the same date and one
of
which emanating from the respondents, that the registration number
was mistakenly given as IT 11340/1999 instead of IT 1340/1999
and
that there was, as such, no third party involved. It is, however,
equally possible, in my view, that the deceased had
registered a
second trust in the same name as the respondent trust regard being
had to the said second letter produced and relied
upon by the
respondents in their plea. Even if it were to be found on the
probabilities that there was no second trust involved
and that the
additional digit in the registration number of the respondent trust
was, in fact, a typographical error or the product
of the Hattingh
brothers’ fraudulent scheme, I am satisfied from the evidence
accepted by the trial court with regard to
funds advanced to Juan by
the deceased for the purchase price of the property that the
respondents were, in fact, not enriched
insofar as the loan was used
to replace the relevant funds that were misappropriated by Juan. In
such an eventuality Juan himself
was enriched to the extent that the
debt he owed to the respondent trust was extinguished. The
appellant, thus, did not prove
its case for unjust enrichment on
preponderance of probabilities.
ORDER
[18]
In the result the appeal is dismissed with costs.
_____________
L.J.
LEKALE, J
I
concur
______________
C.
REINDERS, J
I
concur
______________
J.J.F.
HEFER. AJ
On
behalf of appellant: Adv. JA Du Plessis
Instructed
by: Lovius Block
Bloemfontein
On
behalf of respondents: Adv.JS Rautenbach
Instructed
by: Stander and Partners
Bloemfontein