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[2015] ZAGPPHC 171
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Britz and Others v Matloga and Others (21653/2011) [2015] ZAGPPHC 171 (25 March 2015)
REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG DIVISION:
PRETORIA
CASE NO:
21653/2011
DATE: 25
MARCH 2015
In the matter between:
W H
BRITZ
.................................................................................................................
1
st
APPLICANT
D T JANSE VAN
RENSBURG
.................................................................................
2
nd
APPLICANT
A V VAN
BUUREN
....................................................................................................
3
rd
APPLICANT
and
E T
MATLOGA
......................................................................................................
1
st
RESPONDENT
M M
MATLOGA
..................................................................................................
2
nd
RESPONDENT
THE REGISTRAR OF DEEDS,
PRETORIA
...................................................
3
rd
RESPONDENT
JUDGMENT
KHUMALO J
INTRODUCTION
[1] The 1
st
and 2
nd
Applicants who are practising attorneys and directors in a firm Britz
van Rensburg Incorporated together with the 3
rd
Applicant
litigating as businessmen, are in this Application seeking the
rescission or setting aside of an order entered against
them by
consent in favour of Mr E T Matloga and Mrs M M Matloga, (“the
1
st
and 2
nd
Respondents”) husband and
wife respectively, on 7 March 2014 by Honourable Mr Justice Tuchten.
[2] No order is
sought against the 3
rd
Respondent who is cited only as an interested party.
BACKGROUND FACTS
[3] The order to be rescinded was made
during the course of a trial in an action that Respondents as
Plaintiffs instituted against
the Applicants as Defendants,
effectively terminating the action. Applicants’ legal
representatives drafted and compiled
the order which was assented to
by the Respondents, whereafter with the consent of both the
Applicants and the Respondents duly
represented by their respective
legal representatives made an order of court by Tuchten J. The
Applicants were at the time represented
by Mr Myburgh as their
counsel instructed by E Y Stuart Attorneys. Both representatives’
instructions were thereafter terminated.
They are together
henceforward referred to as “Applicants’ erstwhile legal
representatives”. The Respondents
were represented by their
present counsel Mr Kruger instructed by Van der Merwe attorneys.
Applicants allege that Myburgh and Stuart
Attorneys had no mandate to
settle the action as set out in the order.
[4] The Respondents had claimed in the
action that the Applicants transfer an immovable property described
as Portion 44 of Erf
263 Phillip Nel Park also known as 19 Ernest
Bouresse Crescent, Phillip Nel Park, Pretoria (“the property”)
back into
their names. The Respondents owned the property and allege
that Applicants fraudulently transferred the property into their
names,
acting in collusion with one Nico Oosthuizen (“Nico”),
an agent representing a company called OBI. Nico is said to have
misrepresented to the Respondents that OBI was going to take over the
administration and restructuring of their debts and indebtedness
to
their creditors and in return made them sign an agreement of sale of
the property to an unknown purchaser and of lease of the
property
back from the said purchaser.
[5] The Respondents also alleged in the
action that subsequent to the signing of the agreement on 2 March
2009, Applicants fraudulently
caused the property to be registered in
Applicants’ names and thereafter purportedly let the property
to the Respondents.
A transaction they held was of no value to them.
Alternatively that the deed of sale in terms of which the property
was transferred
to the names of the Applicants was signed neither by
them or an agent acting on their written instructions, therefore
invalid (not
in compliance with
s 2
(1) of the
Alienation of Land Act
68 of 1981
. The trial was set down for three days, being 7, 10 and 11
March 2014.
[6] It is common cause that during the
trial on 7 March 2014, in the course of 1
st
Respondent’s
evidence in chief, it became apparent that the signatures in the deed
of sale and transfer documents were in
fact not those of the parties
thereto, specifically those of the Respondents. On such realisation
Tuchten J enquired if the manipulation
of the contracts was reported
to the South African Police Service (“SAPS”). Myburgh
responded by requesting a short
adjournment in order to discuss how
to proceed with the matter with his clients. He together with
Applicants’ attorneys then
consulted Van Rensburg for consent
or a mandate to settle the matter. Subsequent to obtaining the
consent the attorneys telephonically
advised Respondent’s legal
representatives that the Applicants had agreed to the relief sought
by the Respondents and to
pay the costs. Myburgh later returned to
court with a draft order that read as follows:
‘
Whereas
the 1
st
,
2
nd
and 3
rd
Defendants, during the proceedings on 7 March 2014 became aware of
the existence of documents prima facie indicating irregularities
pertaining to disputes in this action,
And whereas the 1
st
, 2
nd
and 3
rd
Defendants are desirous of resolving the dispute
with the Plaintiffs and of the property investigating the allegations
made during
the said proceedings,
Therefore the following order is made:
1. The 1
st
,
2
nd
and 3
rd
Defendants undertake and are
ordered to register the property, being 19 Ernest Bouress Crescent,
Phil Nel Park, Pretoria West,
into the names of the Plaintiffs, and
further undertake and are ordered to sign all documents and to take
all necessary steps necessary
to give effect hereto, which
registration must take place within 3 months of date of this order.
2. The 1
st
,
2
nd
and 3
rd
Defendants undertake and are
ordered to pay the costs of the action, jointly and severally, the
one to pay the other to be absolved.
3. It is noted that
the Plaintiffs undertake to assist the 1
st
, 2
nd
and 3
rd
Defendants in any further investigation into the
aforesaid irregularities, including any civil and or criminal
proceedings to be
instituted by the 1
st
, 2
nd
and 3
rd
Defendants against any other party involved on the
irregularities.
The Respondents agreed to the order and
therefore was by consent made an order of court.
APPLICATION
[7] The Applicants in this Application
are denying that they gave their erstwhile legal representatives
authority to settle the
matter as set out in the draft order
presented to court. In their Founding Affidavit supporting the
Application for rescission
of the order, 1
st
Applicant
(“Britz”) alleges that the settlement was reached without
his knowledge or input since he was not in court
that day as his
attorney advised him that his testimony was not going to be required.
He however confirms that he was aware that
their erstwhile legal
representatives contacted Van Rensburg telephonically during the
adjournment and consulted with him on the
matter.
[8] According to him his erstwhile
attorneys explained to him only on 12 March 2014 that the original
documents were tampered with
and that certain signatures were clearly
fraudulently inserted or at least manipulated and that it caused the
Judge during the
trial to stand down the matter as to address his
concern on the issue.
[9] Van Rensburg filed a confirmatory
affidavit stating that he also did not attend the trial on 7 March
2014 for the same reason
as Britz and confirmed that at 12h45 on that
day he received a call from their erstwhile legal representatives,
informing him of
the evidence of manipulation of the original
documents. They also told him about Tuchten J’s remarks on the
charge of fraud
and his recommendations that the matter be referred
to the public prosecutor’s office for immediate investigation.
[10] He alleged that their erstwhile
legal representatives strongly advised him that the matter be settled
with immediate effect
as it would severely prejudice him and Britz’s
standing as officers of the Court if it is found that they were
involved in
any fraudulent action which could have caused prejudice
to any other party in the proceedings. Also that it was due to their
erstwhile
legal representatives’ assurance that, the fraud was
clearly evident from the documents such that they did not see their
way open to proceed with the trial that he was left with no choice
but to ask them to resolve the matter in the best possible manner
and
to do whatever is necessary to limit his exposure.
[11] Notwithstanding Van Rensburg’s
confirmation to have been consulted as aforesaid, he all the same
proceeded to allege
in his affidavit that he would not have consented
to such settlement if the true facts were made known to him or if the
contents
of the draft order were discussed with him. He claimed that
the settlement agreement was made an order of court without him
knowing
the true facts.
[12] The 3
rd
Applicant (“Van
Buuren”), like Britz denies in his confirmatory affidavit that
he was contacted or gave an instruction
to the legal representatives
to settle the matter.
ANSWERING AFFIDAVIT
[13] The Respondents’ Answering
Affidavit was deposed to by Daniel J Basson, their attorney
(“Basson”). He confirmed
in it that the trial was indeed
stood down for Myburgh to get proper instructions from his clients.
According to Basson during
the adjournment Applicant’s legal
representatives telephonically advised him that they have obtained
Applicants’ instructions
to agree to the relief sought by the
Respondents and to pay the trial’s wasted costs. There were no
settlement negotiations
taking place at the time between the parties,
but, Myburgh was of the opinion that it was in the best interest of
the Applicants
to settle the matter in terms of the draft that was
made an order of court, considering that Applicants would have been
at a distinct
disadvantage as officers of the court to be subjected
to an investigation.
[14] He further, on behalf of the
Respondents denied that any of the Applicants was entitled to the
rescission of the order, for
the reason that the three of them are
together involved in business in a partnership known as WAD
Ondernemers that purportedly
bought the Respondents’ property
and in that sense Van Rensburg had authority either express,
alternatively implied, to bind
the three of them or the partnership
when he instructed their erstwhile legal representatives to resolve
the matter in the best
possible manner and do whatever is necessary
to limit the exposure, after the circumstances and the evidence of
the manipulation
of the deed of sale were communicated to him. They
reckon that Applicants cannot, in any way whatsoever complain that
their legal
representatives had settled the action without consulting
them.
[15] In addition, Basson pointed out
that in addition to Myburgh and E Y Stuart Attorneys, Applicants also
had another attorney
in court from “Britz van Rensburg”,
Applicants’ firm, with a watching brief who sat throughout the
trial and
with whom their erstwhile legal team conferred when the
order was made. The Respondents contend the erstwhile legal
representatives
nevertheless had authority to settle the action with
or without the instruction of the Applicants.
REPLYING AFFIDAVIT
[16] Applicants replied in a lengthy
Replying Affidavit that was +- 120 days out of time and filed +- 90
days from the date they
were furnished with further documents in
reply to
Rule 35
(2). The excuse they proffered was that the issue of
the manipulation of documents needed a thorough investigation. Britz
and van
Buuren averred in their papers that they became aware of the
nature of 1
st
Respondent’s testimony on 12 March
2014 in the meeting they held with their erstwhile attorneys. I deal
with that allegation
hereunder.
[17] However it is clear that the issue
persisted from the pleadings and was clearly articulated thereat.
Applicants were already
apprised of the issue when they launched
their Application as it was because of the realisation that the
manipulation was real
that prompted their erstwhile legal
representatives on 7 March 2014 to seek their consent to settle,
leading to the draft order
consenting to the Respondents’ claim
being made an order of court. Britz in the founding affidavit and
Reply to
Rule 35
(2) Notice also confirmed that their new attorneys
were in possession of the documents by 4 April 2014 as they formed
part of the
documentation they received from their erstwhile
attorneys. Therefore the delay to file the Answering Affidavit was
inexcusable
.
[18] It is noted that the Applicants
admit in their Replying Affidavit that Van Rensburg had the authority
to give their erstwhile
legal representatives instructions on behalf
of the partnership (the three Applicants) to resolve the matter in
the best possible
manner and do whatever was necessary to limit their
exposure. They also confirm that they do not criticise Myburgh’s
decision
to adjourn so that he can consult them on settling the
matter as well as agree that an associate from their office who held
a watching
brief was informed of the mandate received from Applicants
to settle the matter.
[19] They however maintain that the
subsequent settlement and order was made without their mandate and
end of by denying being responsible
for any manipulation made on the
deed of sale. They allege that the settlement creates an impression
that they had something to
hide and wanted to sweep it under the
carpet.
DEFECTS IN THE APPLICATION
[20] The Notice of Motion or Founding
Affidavit does not indicate the rule or the law in terms of which the
Applicants are bringing
their Application. The Applicants only make
the assertion in the Replying Affidavit that it is brought in terms
of
Rule 41
alternatively the common law, they must mean
Rule 42
as
submitted by Applicants’ counsel, Mr Els, since the Application
is said to be based on the fact that the order was erroneously
sought
or granted, in the absence of the party affected thereby.
[21] However for
Rule 42
to be
applicable, one of the jurisdictional facts in paragraphs (a) to (c)
must exist. In this instance the Applicants have alleged
that
Rule 42
(1) (a) is applicable, alleging that the order was erroneously sought
in their absence. But the Applicants’ representatives,
that is,
E Y Stuart Attorneys and Myburgh were present at the time when the
order was granted signifying Applicants’ presence.
It follows
that the court does not have the discretion to set aside the order
under that sub rule as the presence of the legal
representatives
signifies the presence of a party, as correctly argued by the
Respondent’s Counsel; see
Nthlabezo v MEC for Education,
Culture & Sport, Eastern Cape
2001 (2) SA 1073
(Tk) AT 1082
C-F. The order was made amidst a trial with Myburgh conducting the
defence on behalf of the Applicants, therefore
not made in the
absence of the Applicants. Counsel for Applicants submitted that in
Herbstein van Winsen:
The Civil Practice of the
High Courts and the
Supreme Court of Appeal of SA 5
th
edition,
page 943 its pointed out that the rule does
accommodate an incident where judgement was granted by consent but as
a result of an
error. However it is proper only if it was granted in
the absence of the party and legal representation.
[22] Furthermore, notwithstanding
Applicants making a serious allegation against Myburgh and E Y Stuart
Attorneys that they acted
without their authority, and relying
primarily on that allegation to be the cause for petitioning the
rescission or setting aside
of the order, the erstwhile legal
representatives were not notified of the Application or cited in the
proceedings to set aside
the order. Their interest in the matter is
very significant and fundamental to the veracity of Applicants’
Application as
their
conduct allegedly gave
rise to the Plaintiff's cause in the motion
. Also they might
be prejudiced by the court’s decision. Even after their
significance was pointed out, the Applicants persisted
with such
failure that is contrary to the provisions of
Rule 42
as well on the
basis of which they had also sought to seek their relief. In
subsection 3 it reads:
‘
The
court shall not make any order rescinding or varying any order or
judgment unless satisfied that all parties whose interest
may be
affected have notice of the order proposed.’
[23] The Applicants dealt with the
merits of the matter only in the Replying Affidavit, proceeding to
set out a version that is
not founded in their initial Affidavit that
is speculative and based on the opinions of Nico Oosthuizen and the
Conveyancing attorney,
instead of facts. As a result the contents of
paragraphs [28] and [29] of the replying affidavit specifically do
not warrant any
attention. I could not be persuaded otherwise.
The court also kept in mind that the case which the respondent is
called upon
to meet is in the Founding affidavit. The applicant must
stand or fall by it and the facts alleged therein: see
Director of
Hospital Services v Mistry
1979
(1) SA 626
(A) at 635 H. The
version also differs from their Plea in the action when the merits to
determine a good cause are supposedly instructed
by what is in the
pleadings.
ISSUE/S TO BE
DETERMINED
[24] What is to be considered is the
Applicant’s Application under common law that seeks to set
aside a judgment obtained
by fraud or
iustus error
. The ground
specified in the Founding Affidavit is that their erstwhile legal
representatives, although granted authority to settle
as per Van
Rensburg, were not authorised to tender a draft order with the terms
thereanent, which draft in essence consented to
the Respondent’s
claim. In that instance allege that there was an
iustus
error.
[25] A question to be answered by the
Plaintiff is whether the Applicant’s erstwhile representatives
had the authority to
compromise the Applicant’s defence and
settle the action as per the draft order that was made an order of
court?
APPLICABLE LAW
[26] In
Mudzingwa v Mudzingwa
1991
(4) SA 17
(ZS)
Gubbay JA (as he then was) stated that:
“
It
is firmly established that a judgement can only be rescinded under
the common law on one of the grounds upon which restitution
in
integrum
would be granted, such as
fraud or some other just A cause including Justus error …
certainly a litigant who himself was
negligent and the author of his
own misfortune will fail in the request for rescission.”
Therefore if there was an actual
iustus
error, there present a reasonable explanation of such error between
clients and the legal representatives, that was a sufficient
ground
for a rescission and setting aside of the consented order. The
grounds for rescission under common law are premised on
considerations of justice and fairness whereby the Applicants bore
the onus of showing the existence of a reasonable and satisfactory
explanation as to why and how then a judgment came to be entered
against him.
[27] Gubbay CJ in
Georgias v Standard
Bank Chartered Finance Zimbabwe Ltd
, 2000 (1) 126 (Z) at 132G
sets out the applicable principles in more detail, as follows:
“
The
adoption of those principles to an application to rescind a judgment
given by consent enjoins the court to have regard to:
(a)
The reasonableness of the explanation
proffered by the applicant of the circumstances in which consent
judgment was entered;
(b)
The bona fides of the application for
rescission;
(c)
The bona fides of the defence on the merits
of the case which prima facie carries some prospect of success; a
balance of probability
need not be established.
As
has been stated repeatedly too much emphasis should not be placed on
any of these factors. They must be viewed in conjunction
with each
other and with the application as a whole. An unsatisfactory
explanation may be strengthened by a very strong defence
on the
merits.
”
[28] Gubbay CJ continued the elucidation
by stating that:
“
Although
lack of consent is undoubtedly the predominant factor in the decision
of whether or not to set aside a judgment purported
to have been
given with the consent of the parties, regard must also be had, in
view, to the factors alluded to by Blackie J and
mentioned by Mr De
Bourbon.
I think that only where the
defence offered to the action is virtually unarguable or the delay in
bringing the application inordinate
unsatisfactorily explained,
should a court decline the relief of rescission. I agree with this.”
(
my emphasis
)
[29] In determining existence of consent
or lack thereof in these instances where an order is ostensibly by
consent, parties should
bear in mind that if a party elects to limit
the ambit of his case, the election is usually binding. As a result a
party is not
entitled to resile from an agreement deliberately
reached at a pre-trial conference or during the trial unless
special
circumstances are present;
see
Filta –Matix (Pty)
Ltd v Freudenberg & Others
[1997] ZASCA 110
;
[1998] (1) SA 606
(SCA) 614B-D.
Where, as in this case the agreement is confirmed by Counsel in open
court, and then made a judgment or order of
a court, the principle is
said to apply with even more force. See
MEC for Economic Affairs,
Environment & Tourism: Eastern Cape v Kruizenga and Others
2010 (4) SA 122
(SCA).
[30] Likewise in
Keothepile v
Keothepile and Another
2001 (1) BLR 34
(HC) where the judgment
was obtained by consent in the presence of both parties and
subsequently sought to be set aside on the
basis that the attorney
misunderstood what the client was agreeing to, the court held that:
“
If
a judgement made in open court on the strength of clear positions
from both parties stood to be rescinded, it would be impossible
to
imagine why anyone would trust or consider worthy any judgments of
the courts. The greatest power of a judgment of a court is
that it
would clarify a position where there was previously a conflict. A
third party ought to be able to act on the strength of
a judgement of
a court, confident that it would not be rescinded for such flimsy and
weak reasons as had been offered by the Applicant
in this case.”
[31] As the act of instructing an
attorney to institute or to defend an action and to brief Counsel in
a matter, sends a message
to the public that they are clothed with
the authority that goes with the conception of legal representation.
Persons who deal
with them would believe in their ability to
negotiate and settle the issues between the parties including the
claim or defence
in the action. Van Zyl J in
MEC for Economic
Affairs
held that:
“
by
instructing the State Attorney to defend the action and to brief
counsel to conduct his defence, the appellant represented to
the
outside world that his legal representatives had ‘the usual
authority that applies to their office’. And by not
informing
the respondents that their authority was limited, he ‘must
reasonably have expected that persons who dealt with
his agents would
believe that they had the authority to compromise the claims.”
So, the court concluded that, appellant
was estopped (prohibited) from denying the authority of his legal
representatives to agree
to the settlement.
[32] The court in
Alexander v Klitzke
1918 EDL 87
referred to in
MEC for Economic Affairs
did not
accept a Defendant’s allegation that the general authority to
his attorney did not authorize him to accept Plaintiff’s
tender
of settlement and held that:
“
the
authority of a power of attorney which is filed by the client, to
carry his case to final end and determination, does include
authority
to make
bona fide
compromise in the interests of his
client
, and at any rate, if a client
wishes to repudiate such a compromise made on his behalf, then I
certainly think that the repudiation
should be a timeous one.”
(
my emphasis
)
[33] However, as it was agreed by the
courts, an instruction to an attorney to sue or defend a claim may
include the implied authority
to make compromises/concessions
provided the attorney acts in good faith
. And the courts have
said that they will set aside a settlement or compromise
that does
not have the client’s authority where,
objectively viewed,
it appears that the agreement is unjust
and not in the client’s
best interest
. In
MEC for Economic Affairs
the court made
an example by referring to
Mfaswe v Miller
(1901) 18 SC 172
where an attorney’s clerk compromised a claim on the day of the
trial before the client had arrived at court. Thereafter
the client
sued his attorney for the full amount of the original claim. The
court said that the clerk had accepted the compromise
‘in the
exercise of the discretion vested in an attorney’ at p175. And
because he acted
in good faith
, and was
not negligent
,
the court held that the attorney was not liable to the client in
damages.
[34] The common feature in all these
authorities is the general principle that a party is bound by his
attorney’s actions
consequent upon the authority conferred by a
power of attorney. It is so, as long as the attorney exercises the
authority in good
faith and in the best interest of the client. To
ensure that it is in the client’s best interest, it has been an
accepted
practice that the attorney will make sure that it meets with
clients’ approval. In that instance there will be no doubt
whether
an attorney acted
bona fide
or in the best interest of
the client.
[35] As a result it has been settled law
that a client’s instruction to sue or defend a claim does not
include the authority
to settle or compromise a claim or defence
without the client’s approval;
see
Bikitsha v
Eastern Cape Development Board and Another
1988 (3)
SA 522.
In
some authorities it has been confirmed that ‘a general
mandate does not authorize an attorney to act in a manner
adverse to
his client’s interest’; see
De Vos v Calitz and De
Villiers
1916 CPD 465
;
Forget v Forget
1921 EDL 164.
In
Ras v Liquor Licensing Board Area no 11 Kimberley
1966 (2)
SA 232
© at 237E-238C it was held that for acts
of great
prejudice an attorney needs a special mandate
. It is instructive
that he thus has no authority to waive his client’s rights
unless specially authorized thereto. See also
Goosen v Van Zyl
1980 (1) SA706 (O) at 709 H.
ANALYSIS
[36] In this matter Els on behalf of
Applicants argued that where there is a prejudicial settlement
without a mandate, the setting
aside of the order or judgment would
be justified. He argued that Myburgh needed a special mandate to
agree to the terms set out
in the draft and he never requested for
it. Also that estoppel would not apply. He argued that Van Rensburg
was not told the whole
facts so as to be able to discern the type of
mandate required and make up his mind. So, therefore in essence
Myburgh did not have
a proper mandate.
[37] On the other hand, the Applicants
confirmed that they gave their erstwhile legal representatives the
mandate or authority to
settle the matter in the best way possible to
minimise any exposure to them. It is common cause that the said
authority/mandate
as alleged was given after the erstwhile legal
representatives specifically approached Van Rensburg when they were
confronted by
a situation they regarded to be potentially prejudicial
to their clients and felt that the matter needed to be resolved in a
specific
manner that required Applicants’ approval. Also
confirmed that Applicants through Van Rensburgh were informed of the
difficulties
in the matter, the need for immediate settlement and how
it could be resolved when such mandate obtained.
[38] As
per
Van Rensburg,
Applicants were informed of the evidence of the 1
st
Respondent, the presiding officer’s concern and the apparent
manipulation of the documents. Also of the erstwhile legal
representatives’ believe in such evidence, that they could
therefore not see their way continuing with the matter under those
circumstances and the risk and urgency of settling the matter. He was
therefore clearly apprised of all the facts that Applicants
needed to
know including an explanation on the implication of the evidence to
him and Britz as officers of the court, an approval
being sought to
settle the matter with immediate effect. It is also of importance to
appreciate that Van Rensburg is not a layman
but a practising
attorney who is under the circumstances expected to have a
better understanding of the implication described
and risk. In all
likelihood he would not have agreed to settle the matter without
understanding the terms to be proffered. He is
disingenuous that he
was not informed of the whole facts as much as it cannot be true that
he was not aware of the terms that were
to be put in the draft when
he agreed to settle the matter. That conclusion is supported by the
uncontested statement that Applicants’
legal representatives
called and informed the Respondents’ attorney, soon thereafter,
that the Applicants have consented
to an order in terms of the
Respondent’s prayers and to pay their wasted costs.
[39] Furthermore, Van Rensburg’s
assertion that he was left with
no choice
confirms that he
acknowledged that they were exposed in terms of risk and had to
settle. That is why he requested counsel to settle
in accordance with
what was suggested but to limit their exposure, instead of requesting
Counsel to avoid exposure. For the reason
that the manipulation of
the contract was apparent, Mr Kruger correctly argued that the deed
of sale was in fact null and void,
being in contravention of the
provisions of
s 2
(1) of the
Alienation of Land Act 68 of 1981
that
reads:
“
No
alienation of land after the commencement of this section shall,
subject to the provisions of
s 28
, be of any force or effect unless
it is contained in a deed of alienation signed by the parties thereto
or by their agents acting
on their written authority.
The contract was unenforceable and the
subsequent transfer invalid. He submitted that there are no prospects
of Applicants succeeding
in their defence. Hence their erstwhile
legal representatives’ was of the view that there was no point
in proceeding with
the trial and Van Rensburg’s acceptance that
he had no choice under the circumstances also comprehensible. That
validates
Myburgh’s conduct.
[40] Applicants tried
to argue that even though they agreed to settle the matter, the terms
that were consented to by their legal
representatives was prejudicial
to them. They allege that the attorney was therefore mistaken in
proffering the draft order. The
order itself made provision for an
undertaking by the Respondents to assist the Applicants in any
further investigation into the
aforesaid irregularities, including
any civil and or criminal proceedings to be instituted by the
Applicants against any other
party involved in the irregularities. It
was a well thought out order that intended to limit the exposure as
was required by the
Applicants. The Applicants allegation that the
settlement creates an impression that they had something to hide and
wanted to sweep
it under the carpet is therefore far from the truth.
[41] It should be kept in mind that as
indicated earlier the Applicants’ legal team already had an
implied authority to conclude
settlement agreements of the litigation
on behalf of their clients stemming from the power of attorney, but
when Myburgh recognised
what adverse effect the apparent
falsification of the signatures in the deed of sale might have to the
Applicants or the possible
prejudice they might suffer, he sought an
adjournment to get a special approval. Van Rensburg in turn
unequivocally furnished the
legal team with the mandate to settle,
and recognising the risk involved in settling, requested that Counsel
limit the risk. In
such instance, while recognising that there may be
cases in which even a compromise can be set aside for mistake Miller
JA nevertheless
said the following in
Gollard & Gomperts
(1967)
(Pty) Ltd v Universal Mills Produce Co (Pty) Ltd and
Others
1978 (1) SA 914
(A) at 923-D that:
“
Voluntary
acceptance by parties to a compromise of an element of risk that
their bargain might not be as advantageous to them as
litigation
might have been is inherent in the very concept of compromise. This
is a circumstance which the court must bear in mind
when it considers
a complaint by a dissatisfied party that, had he not laboured under
an erroneous belief or been ignorant of certain
fact, he would not
have entered into a settlement agreement.”
The order operates as
res judicata
;
see
Van Zyl v Niemann
1964 (4) SA 661
(A) at pages 669 and
670.
[42] The failure to procure an affidavit
from the erstwhile representatives, Myburgh, E Y Stuart attorneys and
the attorney from
the Applicants’ firm who was on a watching
brief on the date the order was made, also the failure to serve or
notify them
of the Application is telling of the truthfulness of the
Applicants allegations and exacerbates the doubts. What is of further
significance is that there is no confirmation in the Applicant’s
affidavit that they did not want to settle nor do they evince
the
manner in which they wanted their erstwhile legal representatives to
settle the matter.
[43] In
K R Sibanyoni Transport
Services CC and Others v Sheriff of the High Court TPD and Another in
Re: Mtsweni v Sibanyoni and
Another
(30639/030
[2005] ZAGPHC 118
(15 November 2005) agreeing with Gubbay CJ Van Rooyen AJ stated
that:
“
The
fact that there was no agreement would not entitle the applicant to
success. He has to show that he also acted bona fide and
reasonable
under the circumstances. If I find that the applicant has, on
the evidence before me agreed to the settlement
I need not consider
whether he also acted reasonably. The Application is of course to be
decided in accordance with Plascon Evans
Paints Ltd rule in so far as
the relief should only be granted if the facts as stated by the
Respondents together with the admitted
facts in the Applicant’s
affidavit justify such an order. There may be exceptions to the
general rule. For example, where
the allegations or denials of the
Respondent are so far-fetched or clearly untenable that the court is
justified in rejecting them
merely on papers.
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at
634 € to 635 C
In
Hlobo v Mutilateral Motor Vehicle
Accidents Fund
[2000] ZASCA 89
;
2001 (2) SA 59
(SCA) the
following is stated:-
“
[10]
The proper approach to the question, in my view, should have been as
follows. A compromise (or transacio) arrived at between
litigants is
a well-established measure. Our courts encourage parties to deal with
their disputes in this way and the rules decree
that compromises must
be sought. When concluded such a compromise disposes of the
proceedings.
[44] Applicants also referred to matters
of
Briston v Hill
1975 (2) SA 505
(N) and
De Wet v Western
Bank Ltd
1979 (2) SA 1031
, although in casu Myburgh and the legal
team have not been alleged or proven to have acted negligently, even
where there was a
likelihood of negligence, if the conduct was due to
a bona fide intent, and the outcome not unjust it would not cause the
setting
aside of the order as already illustrated in this matter. The
Applicants did not present a reasonable and convincing explanation
of
the alleged
iustus
error that measures up against what
is required for rescinding or setting aside an order made with the
consent of the legal representatives.
[45] The defence the Applicants
attempted to raise in the Answering affidavit lacked any bona fides
as well as they were not entitled
to reformulate their defence. They
are bound by their plea. In
Hamilton v van Zyl
1983 (4) SA 379
(E) Mullins J at 383H-384B stated that:
“
These
defences to the enforceability of the sale agreement attempt to rely
upon the motives which induced the Appellant to conclude
the
agreement, as well as the merits of the dispute which the parties
sought to compromise. They therefore cannot be sustained”.
A
defendant is not however entitled to rely on defences relating to the
motives which induced him to agree to the compromise, or
to the
merits of the dispute which it was the very purpose of the parties to
compromise.”
[46] Applicant’s erstwhile legal
representatives did seek from the Applicants a specific
mandate/approval to settle, which
was granted. They satisfactorily
complied with their clients’ mandate, exhibiting a flawless
conduct and very good intentions.
They accordingly discharged their
duties professionally in a standard beyond reproach. It cannot be
argued that they could have
been mistaken. They, as in accordance
with what is propagated in
Ras
all the time acted in the best
interest of the client.
[47] Having considered the matter, I
find that the Applicants denial of the authority of their erstwhile
legal representatives to
settle the matter is not only unreasonable
but disingenuous as well. There is no satisfactory explanation of the
alleged error
of what exactly the attorneys got wrong and how it was
committed explaining what exactly was supposed to be the agreed
settlement.
As a result the Applicants failed to make out a case that
the court order that was made on 7 March 2014 was as a result of
iustus
error by their legal representatives as alleged but by
consent between the parties.
[48] Under the circumstances I hereby
make the following order:-
[48.1] The
Application for Rescission of the court order made on 7 March 2014 by
Tuchten J is dismissed with costs.
_______________________
N V KHUMALO
JUDGE OF THE HIGH COURT
GAUTENG DIVISION-PRETORIA
Counsel for Applicants: A P J ELS
Instructed by: VAN DER MERWE &
ASSOCIATES
087
654 0209
Counsel for Respondents: T P KRUGER
Instructed by: BARES & BASSON
ATTORNEYS
012 324
4375