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[2016] ZAGPPHC 507
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Burden & Swart v Govender and Another (A877/2013) [2016] ZAGPPHC 507 (29 June 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION. PRETORIA
Case
number: A877/2013
29/6/2016
Reportable
Of
interest to other judges
Revised.
In
the matter between:
BURDEN
& SWART
ATTORNEYS Appellant
and
LENNY
GOVENDER First
Respondent
MICHELLE
GOVENDER Second
Respondent
Heard:
27 May 2015
Delivered:
29 June 2016
JUDGMENT
A.A.
LOUW J
Introduction
[1]
This is an appeal against a judgment handed down by Molefe J on 27
August 2013, in terms of which the appellant was ordered
to pay an
amount of R426 000 to the respondents. She granted leave to appeal.
[2]
The respondents were the plaintiffs in the trial court. The
respondents' case was that they had made a loan to the appellant
(the
defendant in the trial court) in the amount of R600 000 on 2
September 2008 and that an amount of R174 000 was repaid by the
appellant to them, leaving a balance of R426 000.
[3]
The appellant is a Pretoria firm of attorneys. The second respondent
("Mrs Govender") was employed there as a deeds
secretary.
She is married in community of property to the first respondent.
The
Pleadings
[4]
The cause of action is set out as follows in the respondents'
particulars of claim:
"On or about 2
September 2008, and at Pretoria, the Plaintiffs personally lent and
advanced to the Defendant, at the Defendant's
request and instance,
the sum of R600 000 in terms of
a
partly oral, partly written
agreement between them. At the time of the agreement the Defendant
was represented by Leonora Swart.
The letter from the Defendant to
confirm the terms of the agreement is attached hereto as annexure
"A"."
[5]
Annexure "A" to the respondents' particulars of claim,
allegedly written on behalf of the appellant, to the respondents
reads as follows:
"Aan: Lenny en
Michelle Govender
i/s: Mascador/Max
Return
Ons bevestig dat ons
die volgende voorskot verlang op boverrnelde transaksie:
1.
Die bedrag van R600
000-00;
2.
Voorgemelde
voorskot bedrag sat teen 'n administrasiefooi van
5%
per maand
(pro rata) van af voorskot tot datum van terugbetaling geskied;
3.
Gelde voorgeskiet
sat terugbetaalbaar wees op datum van registrasie van transport maar
nie later dan 'n periode van 4 maande vanaf
datum van die voorskot
nie, waarop die administrasiefooi vir die 4 (vier) maande ten voile
betaalbaar is;
4.
lndien toestemming
verleen word tot verlenging van die voorskot sat al toekomstige
administrasiefooie maandeliks betaalbaar wees.
5.
Ons gee u hiermee
ons firma-ondememing vir die terugbetaling van voormelde bedrag aan
u."
[6]
Accordingly, the respondents rely heavily on Annexure "A"
alleging that it confirms the terms of the alleged loan
by the
respondents to the appellant. Annexure "A" is unsigned.
[7]
The appellant in its plea denied that any loan agreement was entered
into with it, and denied the authenticity of Annexure "A",
for the following reasons:
7.1. The purported letter
was not
issued by
any partner and/or any authorized person on
behalf of the appellant;
7.2. The purported letter
was not
signed by
any partner and/or authorized person on
behalf of the appellant;
7.3. The purported letter
does not contain the true agreement entered into between the
respondents and Union Equity Trust;
7.4. The appellant's
plea, in essence, is that an oral loan agreement was entered into
between the respondent and Union Equity Trust.
The latter was
represented by Mr Robert Linkmeyer.
Common
cause issues
[8]
It is not in dispute that Ms Swart is a conveyancer and partner of
the appellant. In instances where the seller could not pay
the
outstanding rates or where bridging finance was needed for
conveyancing transactions, an outside financier was sourced to
advance the monies. The appellant never advanced any such monies
itself. This appears to be a general practice among conveyancing
attorneys. It is common cause that the risk of such a transaction was
very low because the guarantee/s had been given and the transfer
would take place soon. The loan was repayable on transfer but in any
event not later than four months after the advance had been
made. It
was not the appellant who borrowed the money, received it or even
paid the interest and capital so received to the lender.
The second
respondent, Mrs Govender, came to Ms Swart's office and asked if she
could make such a bridging finance advance transaction.
Approximately
88 transactions were made by the respondents over the relevant period
of time, and apart from the present transaction
in issue, those were
all transfer transactions.
[9]
All such bridging finance transactions had as its heading the
reference to a specific transfer of immovable properties. It
contained the names of the buyer and the seller as well as the
description of the property. Typical examples are the following:
"TRANSPORT:
HEINEN // STRYDOM & JANSEN VAN RENSBURG
ElENDOM:
ERF […] TILEBA"
"ONS
TRANSPORT:
ROBBERTZE
//
RAMALITSE
EIENDOMSBESKRYWING:
ERF 929 ROSSLYN EXT 18"
[1]
[10]
It is further common cause that these transfer matters are (except
for the heading and the amounts therein) exactly the same
as annexure
"A" to the particulars of claim herein.
[11]
The majority of the ordinary transfer transactions in which the
respondents provided finance were entered into after non-performance
in terms of annexure "A" i.e., after the appellant, which
is the alleged debtor in terms of annexure "A", failed
to
pay them. There are about 88 such transactions in the record.
Evidence
on behalf of the respondents
[12]
The only evidence led on behalf of the respondents was by Mrs
Govender. She denied any meeting with Mr Linkmeyer and that there
was
any agreement with him to lend money to him or any of his companies.
According to her version, she, as usual, only spoke to
Ms Swart and
the loan was of the usual kind as evidenced by annexure "A"
to the particulars of claim.
[13]
Although the respondents' further particulars state that the author
of annexure "A" was Ms Swart, alternatively Ms
Myburgh, on
behalf and on instructions of Ms Swart, Mrs Govender testified that
Ms Myburgh was the author of the document and also
typed it. That is
despite the main assertion in the further particulars that the author
was Ms Swart and that Ms Swart also typed
the document.
[2]
[14]
She also denied that she contacted Ms Myburgh after the latter had
left the employ of the appellant, to ask Ms Myburgh to sign
annexure
"A".
Evidence
for the appellant
Ms
Swart
[15]
She testified that her client, Mr Linkmeyer, came to see her on 3
September 2008. Linkmeyer was an investor involved in venture
capital
and a file in respect of his transactions was kept under the name
Mascodor.
Linkmeyer needed urgent finance for Union Equity
Trust, a subsidiary of Union Capital (Pty) Ltd. By that time the name
Mascodor
had undergone a company name change to Union Capital.
It may at this stage be mentioned that the office file
Mascodor
had not been changed to reflect the name change of the company,
but in my view nothing turns on that.
[16]
During that consultation she called in Mrs Govender and told her that
Mr Linkmeyer needed an amount of R600 000 on an urgent
basis. Mrs
Govender came into her office, stood leaning against the wall, whilst
both Mrs Swart and Mr Linkmeyer were seated at
the desk.
[17]
Mr Linkmeyer explained to Mrs Govender what he needed the funds for
and that it would be for a short period of time.
[18]
Mrs Govender left the office and stood outside whilst she
telephonically discussed this with her husband, the first respondent.
She came back into the office and said that "it is fine".
[19]
The loan was transferred into the appellant's trust account on the
same day. The payment was thereafter made on instructions
of Union
Equity Trust to Max Return Investments. The only involvement of the
appellant was to receive the money into its trust
account and pay it
out on behalf of and on instructions of the client, in this instance,
the respondents.
[20]
It was not the normal kind of transaction that the Govenders were
previously involved in and had nothing to do with the transfer
of a
property. Ms Swart testified that she would never have bound the
appellant for that amount of money, especially with no security.
She
had nothing to do with the drawing or issuing of annexure "A".
In fact it came as a shock to her when she first saw
it as an
annexure to the summons.
[21]
The summons was issued during July 2010, but Ms Swart and Ms
Riekert-Botha saw on Mrs Govender's desktop computer that a letter
of
undertaking to the respondents was issued during May 2010. That is
despite the fact that it was at that stage a "dead"
file
and was not worked on. They wanted to make a printout from the
computer screen but did not know how.
[22]
When the computer experts arrived a week or so later that document
had been deleted. Mrs Govender was at that stage still working
for
the appellant and had access to the computer.
[23]
The only benefit for the appellant relating to this whole transaction
was to receive 2% of the money coming in from overseas,
but nothing
regarding this specific loan transaction.
Mr
Linkmeyer
[24]
Linkmeyer testified and in all respects confirmed the oral agreement
of the loan that was entered into in the office of Ms
Swart. He
confirmed the presence of Mrs Govender. I find no contradiction
between his evidence and that of Ms Swart.
[25]
He further testified that when the loan was not repaid timeously, Mrs
Govender constantly phoned him about repayment.
[26]
Of course Mrs Govender denied any such phone calls.
[27]
He also testified on the name change from
Mascodor
to Union
Equity Trust. Nothing turns on this name change. As already remarked,
the name on the office file was not changed.
Ms
Myburgh
[28]
She was the senior deeds typist in the appellant's conveyancing
department during 2008 and had a good working relationship
with Mrs
Govender. They worked together in an open-plan office. Mrs Govender
had full access to the computer system and regularly
drafted letters
in the format of annexure "A" by using a template.
[29]
She recalled that she saw Mrs Govender entering Ms Swart's office
when Mr Linkmeyer was there. With regard to the drafting
of Annexure
"A" she denied being the author thereof. She testified that
on the date mentioned in the letter, 2 September
2008, she was on
leave as she had to take her father to a doctor.
[30]
She further testified that after she had resigned from the
appellant's employ, Mrs Govender contacted her to sign an undertaking
which was unsigned. During that telephone conversation Mrs Govender
explained her unhappiness regarding the monies owed to her.
Ms
Myburgh said that she did not want to be drawn into the matter. This
must be seen in the context of the evidence of Mrs Govender
that Ms
Myburgh drafted annexure "A". Ms Myburgh could not have
drafted annexure "A" as she was on leave on
that date. She
also would never have backdated such a letter, she testified.
[3]
[31]
On the last-mentioned issue, the cross-examination amounted to
nothing. The last part of the cross-examination reads as follows:
"In regard to
your version that Mrs Govender ever contacted you to sign
a
document.
---
Ja?
After you had already
left, she denied that. I just wanted to
place that on record.
As it pleases the
court, My Lady. I have no further questions for
this
witness''
[4]
Credibility
[32]
The approach of a trial court when called upon to resolve directly
conflicting factual issues is well set out in
Stellenbosch
Farmers' Winery Group Ltd and Other v Martell et Cie and Others:
[5]
"[5] On the
central issue, as to what the parties actually decided, there are two
irreconcilable versions.
So,
too, on
a
number
of peripheral areas of dispute which may have
a
bearing
on the probabilities. The technique generally employed by courts in
resolving factual disputes of this nature may conveniently
be
summarised as follows. 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; and (c) the
probabilities.
As to (a), the court's finding on the credibility of a particular
witness will depend on its impression about the
veracity of the
witness. That in turn will depend on
a
variety
of subsidiary factors, not necessarily in order of importance, such
as (ij 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 less convincing will be the latter. But when all factors are
equipoised probabilities prevail.
"
[6]
[33]
In that case, after having analysed the evidence the court remarked:
"But this
appraisal does not seem to have depended on an analysis of the
various factors enumerated in the previous paragraph
but largely on
the Court
a
quo's
estimation of the overall probabilities.
If
that estimation is shown to be suspect.
so
too
must be the Court
a
quo
's
conclusions
on credibility. It is therefore on that exercise, an evaluation of
the general probabilities. that the outcome of this
case ultimately
hinges.
"
[7]
(my emphasis)
[34]
If a trial court failed to make any express finding on
credibility
,
a court of appeal is called upon and bound to do so. In the present
matter, the trial court simply decided the mutually destructive
versions on general probabilities without making any finding that any
of the appellant's witnesses were dishonest or lying.
[8]
On a "strong probability" that Mrs Govender's version was
true, the trial court was satisfied that the respondents' version
was
more probable and that they had to succeed. No reference was made to
probabilities in favour of the applicant. This, with respect
to the
learned Judge, was a wrong approach.
[35]
There was no finding on any of the six factors which play a role in
deciding credibility.
[9]
On the
record I cannot find any reason for the rejection of the evidence of
Ms Swart, Mr Linkmeyer and Ms Myburgh as dishonest.
As already
mentioned, there is no express finding to this effect.
[36]
Once I find that there was no basis for the court not to rely on
their versions, the appeal is bound to succeed.
[37]
Certainly probabilities play a role in coming to a decision on
credibility, but that is not the point of entry. Counsel for
the
respondents, whilst also relying primarily on the
SFW
case,
correctly argued as follows:
"1.2. It is to be
noted that the appellant and the respondents gave mutually
destructive versions during their testimony at
the trial. The
credibility of the witnesses is in issue which entails elements such
as the appearance of the witnesses, their composure
and the personal
impression which the Honourable Court perceived during the trial
supplementary to the evidence which can be transcribed
and which form
part of the record."
The
problem, however, is that this exercise does not seem to have been
done by the trial court. There are no findings on impressions
and
veracity of the witnesses, including bias, internal and external
contradictions. The court did not point out any of the kind
of
contradictions referred to in the
SFW
case.
[38]
Counsel for the appellant correctly argued as follows:
"
25.
It is not merely open
for the court to pick between two mutually destructive versions. The
court will have to say that, after considering
the said factors, it
rejects the one party's version and favours the other. Logic dictates
that not both versions, being mutually
destructive can be accepted
i.e. it is the one or the other."
I
find that this is not the "hard case" referred to in
SFW
where credibility findings compel a court in one direction and
general probabilities in another. On the record I can find no basis
on which to doubt the veracity of the appellant's witnesses.
[39]
Thus, I can and do come to the conclusion that Mrs Govender was
blatantly lying. I do so on the following bases:
[a] She lied that the
appellant was the borrower. It is improbable that she was unsure
about the cardinal aspect of authorship of
annexure "A". In
the passage referred to in footnote 2 she stated that to some extent,
there may have been a misunderstanding
between her and her legal
representatives in drafting of the further particulars. It was put to
her that Ms Myburgh could not possibly
have typed the letter and
given it to her as on 2 September 2008 she, Ms Myburgh, was on leave.
Mrs Govender answered that she
remembered Ms Myburgh was there.
[b] She lied by denying
that she ever entered Ms Swart's office whilst Mr Linkmeyer was
present. The three witnesses of the appellant
are agreed on this and
I accept their evidence.
[c] It is impossible that
Ms Myburgh could have drafted annexure "A", as she was not
in the office on that day. I accept
her evidence that she, a senior
deeds typist with 15 years' experience, would never have backdated
such a letter.
[d] It is untrue that she
never phoned Mr Linkmeyer regarding repayment of the loan.
[e] I unhesitatingly
accept Ms Myburgh's evidence that, after she, had left the
appellant's employ during February 2009, Mrs Govender
phoned her,
complained about her predicament, and asked her to sign "an
undertaking". She was unshaken in cross
examination and
objective. Well before the summons was issued, she had already
resigned from the appellant.
[f] I find that Mrs
Govender falsified annexure "A" by issuing it on her
computer during approximately May 2010, shortly
before summons was
issued during July 2010. This was seen on the computer screen by Ms
Swart but she did not have the technical
know-how to print it from
the computer screen. This thus happened after Mrs Govender's many
phone calls to Mr Linkmeyer had come
to nought.
[40]
The claim should have been dismissed with costs. Thus I find that
credibility alone should have been conclusive but in any
event
proceed to consider probabilities.
Probabilities
[41]
Certainly the probabilities referred to by the trial court exist.
Most notably it is improbable that the Govenders would have
loaned
such a huge amount without any form of security. I also accept that
Mrs Govender could not have been aware of the risks
associated as
even Ms Swart did not know exactly when and by whom the "foreign
monies" would be repaid. Secondly, it
is also unlikely that an
experienced attorney like Ms Swart had no paper trail of this
transaction. I however find that nothing
turns under change of name
of Mascodor.
[10]
[42]
The answer to the first improbability is that Mrs Govender put her
absolute trust in Ms Swart. Maybe the respondents would
have had a
better case on a breach of such relationship - but, of course, but
that was never their case. The conclusion that I
have to come to is
that the Govenders simply became greedy after having made
considerable profits with the bridging finance transactions.
On the
lack of correspondence or e-mails to substantiate the appellant's
version, there seems to be no ready answer. The only document
of
significance is a contemporary note by Ms Swart dated 3 October 2008
wherein she noted an agreement with Mrs Govender that Mr
Marais had
to be repaid first.
[43]
The following objective probabilities favour the appellant's version:
[a] Ms Swart, as an
experienced attorney, would not have taken this huge risk without any
form of security. It is not disputed that
there was nothing in it for
the firm in obtaining these funds for Mr Linkmeyer's company. The
appellant would only have been entitled
to 2% commission on money
that would have come in from overseas.
[b] Exhibit "A"
has nothing to do with a transfer, yet the same standard template was
used.
[c] Although the loan was
not repaid by the appellant within the four months as stated in
annexure "A", the respondents
proceeded to engage in many
further bridging finance transactions, thus implicitly at that stage
not having blamed the appellant
at all.
[d] No demand was made
for repayment until approximately 18 months after the advance and
then only by the respondents' attorneys.
This was during
approximately February 2010 whilst Mrs Govender was still working for
the Appellant.
Costs
[44]
In written argument the appellant asked for a punitive costs order on
the basis that the respondents failed to properly engage
in an
exercise to drastically limit the extent of the appeal record. In
that regard there is an affidavit by the appellant's attorney.
[45]
However, during argument, counsel for the appellant did not persist
with this argument.
[46]
Costs of senior counsel are requested. Certainly this is a
complicated case of huge importance to both parties. I find that
request to be justified.
Order
[47]
It is ordered:
1. The appeal succeeds
with costs which includes the costs of senior counsel.
2. The order of the trial
court is set aside and replaced by the following:
"The
plaintiffs' claim is dismissed with costs."
__________________
A.A.
LOUW
Judge
of the High Court
I
agree
__________________
T.M.
MAKGOKA
Judge
of the High Court
I
agree
__________________
F.
KATHREE-SETILOANE
Judge
of the High Court
For
the Appellant
:
ADV. SJ
MARITZ SC
Instructed
by
: BURDEN
SWART & BOTHA ATTORNEYS
For
the Respondents
:
ADV.
A.A. BOTHA
Instructed
by
: HARDAM
& ASSOCIATES INC
[1]
Record pp 171 and 199
[2]
Record p 808 line 16 to p 812 line 8
[3]
Record p 989 line 23 to p 990 line 5
[4]
Record p 1014 lines 9-15
[5]
2003 (1) SA 11
(SCA)
[6]
Para 5
[7]
Para 6
[8]
See especially the court's findings from para 23 to the end of the
judgment
[9]
Points (i) –(vi) -para 5 of the SFW case
[10]
Para 24 of the judgment