Jepson NO v Lezar (6453/2007) [2009] ZAFSHC 49 (9 April 2009)

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[2009] ZAFSHC 49
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Jepson NO v Lezar (6453/2007) [2009] ZAFSHC 49 (9 April 2009)

IN
THE HIGH COURT OF SOUTH AFRICA
(ORANGE
FREE STATE PROVINCIAL DIVISION)
Case
No. :
6453/2007
In
the case between:-
LEIGH
DERRYL JEPSON N.O.
Plaintiff/Applicant
and
NEVILLE
DUDLEY LEZAR
Defendant/Respondent
_______________________________________________________
HEARD
ON:
23
JANUARY 2009
_______________________________________________________
JUDGMENT
BY:
RAMPAI,
J
_______________________________________________________
DELIVERED
ON:
9
APRIL 2009
______________________________________________________
[1]
The
matter came before this court by way of action proceedings. The
plaintiff instituted this action against the defendant for
the
payment of the capital amount of R300 000,00 and ancillary relief.
She acted in her representative capacity as the executrix
of the
deceased estate of the late Donald Keith Thomson. She contend that
the defendant was truly and lawfully indebted to the
deceased estate
in terms of the loan agreement concluded between the defendant and
Thomson, now deceased.
[2] The
defendant confessed that he received the money from Thomson but
emphatically denied that it was advanced and received as
a loan.
Contrary to the plaintiff’s material allegation, he specifically
averred that Thomson gave and not loaned the money
to him.
[3] That
in a nutshell was the conflicting stance of the parties according to
the pleadings. At the hearing, the version of the
plaintiff was
narrated by two witnesses, namely: Dr. Debra Anne Lees and Mr
Reginald Cyril Lezar. The version of the defendant
was narrated by
one witnesses only, Mr Neville Dudley Lezar, the defendant himself.
Besides the oral testimonies, documentary
evidence was also tendered.
I shall describe the four exhibits later in the course of this
judgment.
[4] On
the strength of the evidence as a whole Mr Pillay, counsel for the
plaintiff, urged met to reject the defendant’s version
and find in
favour of the plaintiff. However, Mr Greyling, counsel for the
defendant, disagreed. He urged me to reject the plaintiff’s

version and find in favour of the defendant.
[5] The
issue in the case is whether the transfer of the money from Thomson
to the defendant was intended and understood by the
transferor and
the transferee to be a gift and thus unrefundable or a loan and thus
repayable.
[6] The
undisputed factual matrix needs to be told. The late Donald Keith
Thomson was of British origin. He emigrated from England
in the late
1960’s and settled in this country. Here he met Patricia Colleen
Lezar. Later the couple married. Two children
were born of their
marriage, namely: Deborah Anne, a girl and Shaun Alan a boy. He
worked for Rainbow Chickens for many years.
[7] He
cared a great deal about the welfare of the children in general and
his in particular. He placed a high premium on the education
of
children. He educated his daughter. She studied medicine. She
qualified as a general practitioner. Dr D A Lees now practices

medicine at New Castle in the United Kingdom. She is a mother of
three dependent minor children: Patricia, Lees and Brown. Greg
Lees
is her husband.
[8] Thomson’s
son, Shaun did not enjoy good health from his early childhood. He
suffered from a severe mental disability. He
spent most of his life
from the age of 12 years as an inmate of St Luke’s Home of Healing
at Stanger. Eventually he died on
2 April 2004 at the age of 30. He
was survived by his father, mother and sister.
[9] Thomson’s
wife, Ms P C Thomson (ex Lezar) had siblings. Among them, two
sisters, Veronica Spindler and Elder Genis and two
brothers, namely
Neville Dudley Lezar, the defendant, and Reginald Cyril Lezar, the
plaintiff’s witness. The defendant was a
businessman at Bethlehem.
His business enterprise was known as Oos Vrystaat Skale BK. The
fortunes of this business enterprise
drastically changed for the
worse in 2006. He was in such desperate financial situation that he
could no longer afford to service
his home loan account. When his
first business enterprise went under he embarked upon a new business
enterprise called Agriway
CC. It was not easy for this new business
to take off from the ground. His wife, Trish, was seriously
suffering from cancer.
Her condition exacerbated the financial
crises. He also had four dependent minor children, Dominique,
Charnel, Nicole and Genevieve
also known as Punki. All of them
adored their uncle, Thomson.
[10] It
was against this background that Thomson step forward with a rescue
plan. He heard about the plight of his brother-in-law.
Concerned
about the hopelessness of the deepening crisis, he and his wife drove
from their residence at Pinetown to the defendant’s
residence at
Bethlehem. There he delivered plenty of groceries to the family in
crisis. Besides such a gesture of goodwill he
also had discussion
with the defendant about his financial dilemma. They made a deal
which was aimed at bailing the defendant
out, or shall I rather say,
alleviating the defendant’s contractual obligations concerning his
mortgage bond.
[11] Subsequent
to the Bethlehem meeting which appears to have been held on 22
October 2006, the Thomson’s returned to Pinetown.
From there the
funds were later transferred from Thomson’s bank account to
Lezar’s. To this effect three or so emails were
exchanged. In one
of those Lezar acknowledged receipt of the funds and the concept
agreement.
[12] The
two gentlemen met again at Bethlehem over the Easter Long Weekend
which started on Good Friday, the 6
th
April 2007 and ended on Easter Monday the 9
th
April 2007. The Thomson’s were invited over by the Lezar’s. It
was the first meeting between them since the transfer of the
money.
What really transpired between them during the discussion they had
about the money is a hotly contested issue. After the
long weekend
the Thomsons returned to Pinetown. Still during April 2007 Thomson
took ill. Shortly after their arrival back home,
his condition
apparently deteriorated very rapidly. He singed a will at Pinetown
on Monday 16 April 2007. See exhibit “D”.
On Monday the 30
April 2007 he was admitted to Westville Hospital. He apparently had
a cardiac condition. The Lezar’s drove
down from Bethlehem to
Pinetown to see him. However, he died before they arrived.
[13] The
defendant and his family attended
the
funeral service of the late Thomson. During May 2007 the defendant
and his wife visited his widowed sister, Patricia Colleen
Thomson, at
Pinetown. What the widow is alleged to have said to her brother
about the money is also in dispute.
[14] Soon
after her husband’s death, the widow decided to emigrate from the
country. Her aim was to settle in England where her
daughter lived.
In anticipation of the permanent move, she started alienating her
assets. But she was not a healthy woman. Seemingly
the death of her
husband aggravated her psychiatric condition. Her condition rapidly
worsened. Her plan to leave the country
was put on hold. Her
mission was never accomplished. She died on 1 July 2007, two months
after her husband had died.
[15] Her
only surviving child, Dr Lees, flew back into the country to bury her
mother. After the cremation of her mother, she and
her uncle,
Neville Dudley Lezar, had a private discussion, at Circus-Circus
Restaurant, Musgrave in Durban where they were having
lunch. The
discussion revolved around the repayment of the money she considered
to be a loan to her uncle by her late father.
[16] Before
returning to her place abroad, Dr Lees met Ms Leigh Derryl Jepson, an
associated attorney of the lawfirm, Knight Turner
in Durban who was
and still is the executrix and administrator of the deceased estate
of her father. Seeing that her mother had
also died, she stepped
into her shoes to deal with her father’s deceased estate. The
estate with two components, one RSA component
and another UK
component was worth over R3m. The overseas component has since been
finalised. The domestic component has not
yet been finalised on
account of this litigation.
[17] On
the 18 July 2007 the plaintiff addressed a letter to the defendant on
behalf of the Dr D A Lees in connection with the deceased
estate of
the late D K Thomson. The relevant paragraph 2 thereof reads:
“
We have been
informed that you are agreeable to registering a bond over your
immovable property in favour of Deborah Anne Lees to
secure the sum
of R300 000,00 loaned to you by the deceased.”
Vide p. 8 exhibit
“a”.
[1
8] The
defendant respondent to the aforegoing letter on 10 Augustus 2007
through his attorney, Mr H. Meades of the law firm Schroeder
&
Meades of Bethlehem. The relevant portion thereof reads:
“
It is our instructions that the
amount of R300 000,00 was a gift from Mr Thomson to Mr ND Lezar.
There was no
agreement towards a loan or the repayment of the amount given to Mr
Lezar.”
Vide p. 9 exhibit “a”.
[
19] It
was the aforegoing response by the defendant which triggered these
proceedings off. The plaintiff initiated these proceedings
on 28
November 2007 alleging that the money was a loan. The defendant
filed his plea on 29 February 2008 alleging that the money
was a gift
and not a loan.
[20] It
is our law and it has always being our law that a donation is never
presumed. On the contrary, there is a presumption against
donation.
MYERS
v LESCH
1954 (2) SA 487
(T).
[21] The only issue in
the case, as I have already pointed out, is whether the money was
advanced as a loan or a gift.
[2
2]
The onus of proving that a property belonging to one was transferred
to another as a donation rests on he or she who raises
donation as a
defence against the claim for the retransfer of the property in
question. In
TIMONEY
AND KING v KING
1920 AD 133
on p. 139 Innes CJ cited the following passage from the
authoritative legal work of Voet (39.5.5):
“’
In dubio
autem donatio non praesumitur quamdiu alia conjecture capi potest
adeoque qui eam allegat licet in exceptione probare debet,’
"
Also see Grotius
(3.2.4).
[2
3] Twenty
three years later the same principle was re-affirmed in
AVIS
v VERSEPUT
1943 AD 331
on p. 345 the court held per Watermeyer ACJ that the onus
always rests upon a person who alleges a donation to prove it. The
famous
authority, Voet (39.5.5) says:
“
In any case a donation is not
presumed as long as any other conjecture or interpretation is
possible and therefore he who alleges
a gift, even if it be by way of
an exception (when he is sued) ought to prove it because no-one is
likely believed to desire to
throw away his property. For to give is
nothing else than to throw away and to lose.“
[2
4] It
is incumbent upon a party alleging a contract to prove its terms, be
they explicit or tacit, of the agreement he or she seeks
to enforce.
McWILLIAMS
v FIRST CONSOLIDATED HOLDINGS (PTY) LTD
1982 (2) SA 1
(AD).
[2
5] In
AFRICA
SOLAR (PTY) LTD v DIVWATT (PTY) LTD
2002 (4) SA 681
(SCA) the court held that proving the terms of the
contract also entailed proof of the anterior question of whether both
parties
had the requisite animus contrahendi.
[26] In
a case where a disputed loan agreement is, through evidence, proved
to have indeed existed as the plaintiff has averred
it did, then, in
such a case, the defendant’s prior denial thereof constitutes a
repudiation of that agreement.
TUCKERS
LAND AND DEVELOPMENT CORPORATION (PTY) LTD v HOVIS
1980 (1) SA 645
(AD).
[27] Hearsay
evidence can only be received as admissible evidence in these civil
proceedings if, firstly, the party against whom
it is tendered
agrees; or secondly, the original source or declarent of the
information also testifies; or thirdly, the interest
of justice
dictates that such unconfirmed second-hand information be allowed
notwithstanding the absence of the positive agreement
by the affected
party as envisaged in the first scenario above and in the absence of
the first-hand testimony by the original declarent
– as envisaged
in the second scenario above. Section 3,
Law of Evidence Amendment
Act, No. 45 of 1988
. The purpose of this legislation is to broaden
and not to narrow the ambit for the admission of hearsay.
[28] The
legal writers, Zeffert and others in their work:
The
South African Law of Evidence
,
2003 edition deal with hearsay principles at length:
On p. 378 they deal with
the general shortcomings of hearsay;
On p. 373 the potential
dangers of hearsay; and on
On p.
373/4 the reliable safeguards for its admission.
[
29] Dr
Lees was an impressive witness. No serious critique could be
levelled against her evidence. She testified in a logical,

consistent, chronological and systematic manner. Her testimony was
not blemished by any contradictions. Besides certain hearsay
aspects
of her testimony, there was virtually no attack launched against her
credibility – not during the course of her cross-examination
or in
the defendant’s heads of argument. Nothing of unfavourable
significance was unearthed by her cross-examination. My belief
in
the witness remained unshaken even after her cross-examination. Or
two or so occasions during her stay in the witness box she
was so
emotionally hurt that tears started rolling down her cheeks. I had,
to adjourn the proceedings to enable her to calm down
and regain
control over her emotions. Apart from such emotional episodes which
were perfectly natural and understandable, her
demeanour in the
witness box was as comfortable and confident as that of a reasonably
relaxed and candid witness. Certainly I
did not get the impression
that she was actuated by any malice or greed to wrestle a genuine
gift away from her uncle now that
her casing father had departed from
this lower valley of tears. In the circumstances I have no
hesitation whatsoever in accepting
her testimony as an honest,
credible and reliable evidence.
[30] Her
younger uncle, Mr Reginald Cyril Lezar, also struck me as a good,
trustworthy and objective witness. There was no serious
attack on
his credibility or reliability. It was obliquely suggested that he
had an ulterior motive to testify for his niece,
Dr Lees, against his
brother, Mr Neville Dudley Lezar. However he denied the suggestion
that he had inherited anything from the
estate. The will of the late
Thomson verified that no legacy was bequeathed to him. He projected
himself well in the witness
box. His demeanour depicted him as a
comfortable, confident, frank and positive witness. His testimony as
a whole was consistent,
logical and trustworthy. No discrepancies
let alone contradictions surfaced in his testimony. On the whole no
meaningful critique
can be levelled against him. In brief he was
also an impressive witness who gave a credible and reliable account.
The cross-examination
of this witness didn’t take away anything
from his testimony.
[31] The
same cannot be said about the defendant. He failed to impress as a
witness. His testimony was suspect. His demeanour
portrayed him as
a pathetic soul deeply troubled and struggling to speak with
confidence. He made telling concessions. His testimony
fortified
the plaintiff’s case and watered down his. He admitted, contrary
to the letter from his lawyers and his plea, that
the money was
advanced as a loan but averred that six months later the original
loan transaction was, through novation, converted
by his generous
brother-in-law, now deceased, into a donation and subsequently
endorsed by his sister, also now deceased. In my
view this novation
version, which is also hearsay, is very incredible and unrealiable.
[32] Now
that I have evaluated the witnesses, I proceed to examine the
evidence. Perhaps, at this juncture I need to deal with
the hearsay
aspect relied upon. The hearsay provisionally adduced and allowed in
favour of the plaintiff’s case was attributed
to the late D K
Thomson. Such hearsay concerned communications verbal and written,
allegedly between Dr Lees and her father prior
and subsequent to the
transfer of the funds. Similarly the hearsay adduced and
provisionally allowed in favour of the defendant’s
case was
primarily attributed to the same declarent, the late D K Thomson and
to his widow as well.
[33] Before
the plaintiff’s case was closed, I was obliged to have given a
final ruling in respect of the hearsay provisionally
allowed in
favour of the plaintiff –
S
v NDHLOVU AND OTHERS
2002 (2) SACR 325
SCA Cameron JA. I failed to so. Similarly, and
this is implicit in the same decision, before the defendant’s case
was closed,
I was also supposed to have given a final ruling in
respect of the hearsay provisionally allowed in favour of the
defendant. Again
I did not. Instead I invited the two counsels to
address the hearsay issues in their respective written heads of
argument. Counsel
for the plaintiff presented his
ex
tempore
oral argument but reserved the right to beef it up with written heads
later. Procedurally the approach I adopted was flawed.
See
S
v NDHLOVU & OTHERS
,
supra
as to what makes it wrong.
[34] The
hearsay aspects of the plaintiff’s case formed part of Dr Lees’
testimony. She testifies that she had very close and
affectionate
family ties with her parents – especially her father. She
maintained regular contact with her parents – initially
by
telephone communications, I should imagine, and later by email
communications. During October 2006 and before the transfer
of the
funds she and her parents orally discussed the matter. Her parents
differed. Her father wanted to lend money to her older
uncle, the
defendant. Her mother was against the whole idea. She, Dr Lees,
adopted a
via
media.
She advised her father to be cautious about granting a loan to her
uncle. Her further evidence was that on the Friday before
her
father’s death, she spoke to him. On that occasion, Friday the 27
April 2008, he once again confirmed that he had lent the
money to her
uncle. These statements about the nature of the transactions were of
course, hearsay evidence, plain and simple,
since the original
declarent, the transferor and his wife did not testify. This then
was the first aspect of Dr Lees’ hearsay.
[35] The
second aspect of Dr Lees’ hearsay concerned email communications
she received from her father. Her testimony was that
after her
father had installed email, she regularly communicated with him by
email. In particular she referred to an email which,
as she
asserted, she received from her father dated Thursday the 26 October
2007 at 10:25am. The email purported to have come
from Don Thomson
and to have been sent to Debbie Lees. The relevant portion thereof
reads:
“
I have sent
Neville R300 000,00 to be used on paying off his mortgage bond and he
has signed an agreement that he pays me prime
less 4% every month.
That way he saves a couple of k’s and I get about the same as I
would if the money was in the bank.”
She explained that ever
since she received this email, it has remained in its original form
on her laptop which she proffered for
inspection then and there to
the defendant’s counsel. The offer was not taken up. Obviously,
this written communication was
also hearsay because the author of the
email did not testify.
[36] It
has to be mentioned that apart from the hearsay aspects of the
plaintiff’s case, she also relied in the first place, on
direct
oral communications her first witness, Dr Lees had with her uncle,
the defendant – vide paragraph 15,
supra
.
The crux of such discussion concerned the securing of the repayment
of the capital. She specifically stressed that the defendant
did not
deny the nature of the transaction as being a loan agreement. On
this point her testimony was corroborated by the defendant
himself.
[37] In
the second place the plaintiff’s case also depended on direct email
communication between her first witness, Dr Lees,
and her second
witness, Mr R C Lezar, the defendant’s brother. On 23 August 2007,
Mr R C Lezar emailed his niece, Dr Lees, in
connection with the
defendant’s reaction towards the lawyers claim that the money was a
gift – vide paragraph 19,
supra
.
[38] The
relevant portion of the email reads:
“
Hi Debs,
I had a chat to
Neville on Monday regarding your call on the weekend, and as
expected, he knew nothing about the lawyer’s letter.
When I
mentioned it to him he was totally dumbstruck. So he went home and
had it out with Trish, all hell broke loose and they
are not speaking
at the moment. Neville, says that after my call he has been so
stressed out he can hardly function properly.
I believe he knew
nothing of it, and has requested I chat to you to make it clear that
it was
(sic) not originated him and that Trish went behind his back and saw
a lawyer.”
[
39] From
the aforegoing passage extracted from the email, it is clear that the
defendant expressed shock at the letter supposedly
written on his
instructions. Put it differently, the defendant’s brother informed
his niece that the defendant distanced himself
from the claim that
the money was a gift – vide item 10, p. 17, exhibit “a”. Mr R
C Lezar confirmed the defendant’s reaction,
believed the
defendant’s attitude was that the money was indeed a loan and
conveyed the defendant’s specific apology to Dr
Lees. The
defendant did not dispute all this.
[40] About
two weeks later, on 5 September 2007 to be precise, the same brother
of the defendant once again emailed his niece, Dr
Lees. He wrote:
“
... he mentioned that the
discussion he had with you at your mom’s funeral never involved
taking out a new bond on his house to
repay the debt.”
Once
against the defendant acknowledged to his brothe
r
that the money was a repayable debt. He merely raised the above side
issue but not the real issue about the true nature of the

transaction.
[4
1] It
is crystally clear from those two emails that Mr R C Lezar, after the
discussions he had with his elder brother on those two
occasions, had
no illusions as to the true nature of the
causa
which
underlined the transfer of the funds. He was well aware that a loan
agreement had been concluded by the two gentlemen –
his elder
brother and his brother-in-law. He was also aware that the defendant
knew and acknowledges that he was obliged to repay
such debt. He put
it in this way:
“
I stand under correction, but I
thought that as long as the money is not lost when the house is sold
or tied into an estate, and
that the proceeds are still due to you,
...”
[4
2] In
the third place the plaintiff’s case also depended on direct
communications between the two Lezar brothers. The essence
of such
oral discussions was contained in the aforesaid two emails relayed to
Dr Lees. During such communications the defendant
failed to denied
the loan, hardly mentioned the conversion of such loan into a
donation; left his your brother with no other impression
save that
the money was transferred and received on the mutual understanding
that it was indeed a loan and that such debt was owing
and repayable
in due course.
According
to Mr R C Lezar, the defendant was not only alarmed but dismayed by
the letter written by his attorney to the executrix.
To the
defendant, the description of the money by his lawyer as a gift was
news. He was so amazed and shocked by such a patently
false claim
that he specifically asked his brother to inform his niece that such
a false claim did not originate from him.
[43] The
aforegoing analysis of the triangular forms of communications,
demonstrates quite clearly that the plaintiff’s case primarily

rests on direct evidence of discussions between Dr Lees and the
defendant, between Mr R C Lezar and the defendant and also between
Mr
R C Lezar and Mr N D Lezar, the defendant. All of these firsthand
evidence tends to give credence to the plaintiff’s case.
The crux
thereof is that the money was transferred as a loan.
[44] It
follows from the aforegoing that the hearsay evidence tendered in
favour of the plaintiff’s case by Dr Lees, was only
a secondary
anchor thereof. Herein lays the critical distinction between the
defendant’s hearsay and the plaintiff’s. Whereas
the defendant’s
hearsay was tendered as the primary foundation of his case the
plaintiff’s case was not. The primary foundation
of the
plaintiff’s case rest on three solid rocks already outlined.
[45] The
quality of such direct evidence increases the probative value of the
hearsay tendered as a secondary support for the plaintiff’s
case.
Moreover, there is a strong connective tissue between the plaintiff’s
direct evidence and indirect hearsay evidence.
This harmony is an
important factor which reduces the potential prejudice to the
defendant. The plaintiff’s hearsay is not hanging
in the air. It
draws its evidential value from the direct evidence which as shown,
was significantly strengthened by the deadly
omission. He hopelessly
neglected to timeously disclose the alleged novation or substitution
of a donation for a loan agreement
to the people who mattered the
most at the earliest possible opportunity. Such failure on the part
of the defendant not only diminishes
the hearsay evidence he so
entirely depends on – but also reduces the prejudice which might
flow from its exclusions.
[46] The
defendant like the plaintiff, also relied on email communications he
had with the late D K Thomson. There is no sound
reason why emails
from one and the same author should be allowed as admissible evidence
in favour of the one party but disallowed
as inadmissible evidence in
respect of the other. The defendant’s objection is clearly
unprincipled. It is a sword with double
edges. If emails of the
late D K Thomson to his daughter Dr Lees must be excluded on the
grounds that the original declarent who
allegedly authored such
emails did not testify – so must the emails from the same
declarent, the late D K Thomson, to the defendant
also be excluded on
precisely the same ground. As they say, you cannot eat your cake and
still have it. Therefore, I am inclined
to rule in favour of the
admission of emails from the late DK Thomson to his daughter, Dr
Lees, as admissible evidence. Similarly,
the emails between the late
DK Thomson and his brother-in-law are also finally allowed as
admissible evidence.
[47] The
defendant testified and put up the defence that the original loan
advanced on or about Wednesday, 25 October 2006 ceased
to be a loan
and became a donation on or about Good Friday 6 April 2007 – Easter
Monday 9 April 2007. According to him the subsequent
novation was
verbal and the original loan was written but unsigned. He did not
call anyone as a witness. This, despite the evidence
that his wife,
Ms Trish Lezar was present during the novation negotiations. Since
the alleged gift is an issue, one would have
expected the defendant
to have called the lady to corroborate his testimony. His failure to
call her was amazing and rather suspect,
particularly because she was
apparently in attendance at the hearing and no reason was advanced as
to why she was not called.
About the party’s failure to call a
witness, see
S
v TEIXEIRA
1980 (3) SA 755
(AD) at 764 A – B where Wessels JA said, among
others:
“
In my opinion, the failure by the
State to call Tshabalala to testify as a witness justifies the
inference that in counsel's opinion
his evidence might possibly give
rise to contradictions which could reflect adversely on Sarah's
credibility and reliability as
a witness.”
[4
8] To
some extent the version of the defendant was at odds with the
suggestions put by his counsel to the plaintiff’s witnesses.
He
confirmed that the loan was indeed concluded between himself and Mr
Thomson in October 2006. Despite his denial of a written
agreement
he confirmed that an agreement had been reached in terms of which
monies had been loaned to him and which loan had to
be repaid with
interest. Therefore his version shifted to either the allegation of
the cancellation of the loan agreement or the
allegation that the
loan agreement was varied to that of a
donatio.
In the circumstances the defendant thereby drew a direct onus to
show either the variation of the loan agreement or its cancellation

and substitution with a
donatio
.
In all respect he failed to demonstrate any evidence in support
thereof. His only evidence was in regard to a conversation which
he
claimed he had with D K Thomson not long before his demise during
which conversation DK Thomson is alleged to have changed his
mind and
gave the money to him by stating:
“
Don’t worry about the money.”
These
words, if D K Thomson ever uttered them at all, might as well have
meant that the defendant should not be troubled by his
failure to
remit R2 000 per month interest and not that he should
not
repay the capital or pay such interest when his situation had
improved.
[
49] The
aforegoing statement attributed to DK Thomson is inadmissible as
hearsay. Not merely because the declarent was not called
to testify
but because there is virtually nothing to support the hearsay
statement attributed to him. Not one piece of correspondence
or any
other document whatsoever exist in support thereof. Indeed an email
communication later proffered by the defendant and
in spite of the
defendant having disavowed any knowledge about written communications
to that end when requested to provide or
to discover in pre-trial
conference - clearly demonstrated that DK Thomson loaned the
defendant the money when he did not immediately
need such money for
any specific and personal use. In an email addressed to the
defendant, D K Thomson made it clear that he could
do without the
money for the time being. But instead of investing the funds in the
money market portfolio in accordance with his
original plan he
rechanneled such funds towards a compassionate course of helping his
brother-in-law.
[5
0]
When the defendant was asked as to why he did not mentioned the gift
to Dr Lees, he gave a rather flimsy excuse that he was
too
embarrassed to tell her about it. This explanation is wholly
untenable in the circumstance. What makes it particularly untenable

is that he could give virtually no explanation as why he had not
mentioned the gift to his brother, Mr R C Lezar, a person so close

and dear to him. Certainly there are some worrying and suspicious
aspects in the defendant’s case. But the general probabilities
are
in favour of the view that a loan agreement, nothing else, was
concluded. Indeed the defendant himself admitted that such
an
agreement was reached. There is no other independent and objective
evidence to support the defendant’s version. He, for
reasons best
known to him, decided not to call a witness who could possibly have
corroborated his version. It is not unfair to
draw an adverse
inference from his omission –
S
v TEIXEIRA
supra
.
[5
1] Among
the factors which strongly militate against the defendant’s hearsay
evidence that money was a gift, are the following.
Firstly, the late
DK Thomson led a very humble lifestyle although he was a millionaire.
The plaintiff’s two witnesses corroborated
each other and their
evidence was unrefuted that the millionaire was a frugal man not
given to acts of charity. His daughter made
an example of his simple
lifestyle by referring to three things. Firstly her parents used a
very old microwave for as long as
she could remember from her early
childhood. Secondly the carpet in the house was very old and
dilapidated but notwithstanding
her specific request her father did
not find it necessary to replace the carpet. Thirdly, although her
father could afford any
sleek and luxurious motor vehicle and
although he apparently liked the BMW he was not driving a 7 series or
5 series or even 3
series for that matter. He was driving a 1 series
sedan of the prestigious brand. Moreover, he loved his daughter,
educated her
until she became a doctor, but still demanded, as a
matter of principle and financial discipline, that she pay him back.
[52] The
late D K Thomson did not bequeath any legacy to any member of his
immediate family apart from his wife and yet the defendant
wants the
world to believe that such a thrifty millionaire benevolently gave
him a substantial amount of money, threefold the biggest
bequest he
made in his will, as a donation without any strings attached. Dr
Lees’s testimony was that her mother was dead against
the idea of
her husband lending money to her brother. Her uncle, Mr R C Lezar,
corroborated this version that after D K Thomson’s
death the widow
was deeply concerned about the repayment of the money by the
defendant. Such evidence of this very credible and
reliable witness
does not tally with that of the defendant’s at all. D K Thomson
made and signed his will at Pinetown on the
16 April 2007 about a
week or so after, he as the defendant alleged, gave him the money as
a gift. Yet, he did not include such
a gift as a bequest in his
will. It is not unthinkable to guess that if he indeed intended to
give the money to the defendant
as a gift, that was his last
opportunity to have it put beyond any doubt in the light that he had
not given the defendant any written
document to that effect.
The
most generous bequest according to exhibit “d” was R100 000,00
which he bequeathed to St Luke’s Home of Healing in memory
of his
late son. Besides his wife and possibly his daughter no other person
received a legacy of that magnitude.
[53] The
aforegoing factors clearly underline the improbabilities of the
defendant’s unconvincing version. His version, in my
view, is
highly improbable. It has no merits of being consistent with the
probabilities. Therefore it will not be in the interest
of justice
to admit the defendant’s hearsay evidence as admissible evidence in
these civil proceedings -
section 3(1)(c)
of Act No. 45 of 1988.
None of the various factors outlined in 35(1)(c) can singularly or
cumulatively considered justify its
admission.
[5
4] Counsel
for the defendant contended that the admission of the hearsay
attributed to the late D K Thomson in favour of the plaintiff

entailed great prejudice to the defendant because, as he argued, the
declarent of such hearsay was insincere and therefore unreliable.

Now, the insincerity on the part of the absent declarent or actor is
one of the recognised dangers of the hearsay evidence –
Zeffert,
supra
,
p. 373.
[55] Mr
Greyling, at paragraph 4.2(vi) of the defendant’s heads of argument
contended or insinuated that the danger of insincerity
in this case
was to be found in two contradictory statements made by the late D K
Thomson. This is how he articulated his argument:
“
(vi) The hearsay
declarent (the late Mr
Thomson
)
made two contradicting statements regarding the existence of signed
agreement between himself and the defendant, the one favouring
the
plaintiff’s case and the other favouring the defendant’s case.
To Dr
Lees
,
the forwarded an email indicating that a written agreement between
himself and the dead existed. In an email addressed to the

defendant, he however attached a concept agreement indicating that
such agreement will be finalised (and signed) during December
2006.”
[5
6] Mr
Greyling then went on to make the following submission based on the
perceived danger of contradiction or insincerity attributed
to D K
Thomson:
“
(vii) The only
possible witness to clarify abovementioned contradiction, would have
been the late Mr
Thomson.
To allow the hearsay evidence, would therefore be to tremendous
prejudice towards (sic) the defendant. If the late Mrs
Thomson
was able to testify, there would have been a possibility that the
court could have find in favour of the defendant regarding
abovementioned
contradicting versions which, of course, would have
influenced the outcome of this case dramatically.”
[57] The
first statement is contained in an email from D K Thomson to N D
Lezar – exhibit “c”. I shall revert to this email
shortly: I
want to go back a little to the defendant’s evidence.
[58] The
evidence was that the Thomson’s visited the Lezars at Bethlehem
about the third weekend in October 2006. The calendar
shows that the
last weekend before the email, exhibit “c” came into existence,
ended on Sunday 22 October 2006. It can be
accepted that it was over
this weekend that the Thomson’s were visiting the Lezars to
ascertain the real extent of the defendant’s
financial crisis and
how D K Thomson could help. After this visit and before Thursday 26
October 2006 the hearsay declarent obviously
sent a crucial email to
the defendant. That email encompassed a draft loan agreement – see
annexure b to the summons. Dr Lees’s
evidence was that she found
this draft loan agreement on her late father’s laptop.
[59] On
Thursday 26 October 2006 at 08:04am the defendant answered the first
email from D K Thomson after the weekend visit. He
acknowledged with
gratitude receipt of the email with the agreement. He said:
“
I received you
(sic) email with the agreement, thank you very much. We really
appreciate the help that you and Pat are offering to us. What
I
would like to suggest is that I take out an insurance policy for
cover of the full amount of the loan with a ceding to you and
or your
heirs and successors in the even of my death which I feel only fair
to you.
As with all my other personal
documentation I will have the agreement placed with my lawyer for
safekeeping.”
[60]
He
was so grateful that he volunteered to have the full capital loan of
R300 000,00 insured in order to safeguard the interest
of the helpful
lender. Moreover, he also saw it fit and prudent to have the loan
agreement entrusted to his lawyer for safekeeping.
As was the case
with all his personal documents, I would imagine that he also
intended delivering the proposed insurance policy
contract to his
trusted lawyer for safekeeping in order to protect the kind money
lender in the event of his death before repayment
of the capital
loan.
[
61] The
defendant said nothing, in exhibit “c” as to whether he had
signed the loan agreement or not. What is clear is that
he received
a draft agreement by email; that he unconditionally accepted its
terms and conditions in toto; that there were no further
negotiations
necessary about the terms or conditions thereof. Hardly three hours
later, on the same day, Thursday 26 October 2006
at 10:25am D K
Thomson emailed his daughter, Dr Lees. It is very probable he did
this after receiving the defendant’s earlier
email probably after a
telephone conversation as well. The email from father to daughter
reads:
““
I have sent
Neville R300 000,00 to be used on paying off his mortgage bond
and
he has signed an agreement
that he pays me prime less 4% every month. That way he saves a
couple of k’s and I get about the same as I would if the money
was
in the bank. I am not too sure if he will be able to repay the
capital but if he sells his house
he
has to repay the capital
.”
[6
2] The
very next day, on Friday 27 October 2006 D K Thomson emailed his
brother-in-law, the defendant, and stated:
“
I am glad we are
able to help you out until your situation improves. I will transfer
the funds to your Nedbank account on Monday.
This will help to
reduce your monthly payments. If you are unable to repay the monthly
interest, rather skip a payment rather
than not pay some or other
account. I had intended to put these funds into a money market
account for a rainy day, so we can survive
without them for the time
being. U feel you want to cover this agreement perhaps then that is
fine with me but whole life assurance
for this amount might be
expensive. If you are happy with the details of the agreement
perhaps
we
can complete all the signing over Christmas when you visit.”
[6
3] The
highlighted portions, it was contended, were contradictory
statements. I don’t think so. In exhibit “a” D K Thomson

informed his daughter that her uncle had signed the loan agreement.
It is important to realise that he emailed her about the signing
very
shortly after the defendant had emailed him. Although the
defendant’s email, exhibit “c” was silent on the point, it

seems quite probable judging by the defendant’s great relief and
excitement when he received the email with the agreement, that
he
could have telephonically informed D K Thomson that he, for his part,
had already signed the loan agreement. Apart from the
possible
telephone conversation, it is also very probable again judging by the
defendant’s obvious unconditional acceptance of
the draft
agreement, that he had instantly signed it.
[64] The
aforegoing opinion is further fortified by the declarent’s reply to
the defendant on 27 October 2006. His choice of
words is
significant. He said all the signing could be completed over the
Christmas summer holiday during which the defendant’s
family was
expected to spend at Pinetown. He said:
“
... we can
complete
all the signing...”
He did not say:
“...
we can do all the signing ...”
The
way he expressed himself clearly suggests that the loan agreement had
already been partially signed and that the unfinished
signing
business would be finalised later in December. Implicit in this
s
uggestion
was the suggestion or that as on Friday 27 October 2006 D K Thomson,
as the money-lender, and his witnesses still had
to sign the loan
agreement whereas the defendant and perhaps his witnesses had
probably already signed. The defendant’s failure
to discover the
email with the draft agreement suggest that there might well have
been something unfavourable to his case which
he sought to cover-up.
By his very own say-so he is a very meticulous businessman. All his
important documents are filed with
his lawyer. The late D K Thomson
was also a very meticulous man; he had a filing cabinet in his study
where he kept meticulous
records of his personal affairs, such as
loans to the defendant’s daughter, Dominique. As I see it, such
two very meticulous
men who had exchanged such substantial cash for a
specific
causa
would probably not have annulled the original
causa
by a simple word of mouth:
“
Don’t worry about the money.”
[6
5] In
my view an integrated reading of the two statements as set out in the
aforesaid emails reveals no irreconcilable contradictions
to justify
the rejection of the D K Thomson’s hearsay in favour of the plain
on the ground of the alleged insincerity on his
part.
[66] Mr.
Greyling also argued that there was no binding loan agreement, in its
final form, which was concluded between the defendant
and D K
Thomson, which was intended to be a binding contract and which still
existed at the time D K Thomson died. The answer
to all this must
undoubtedly be against the defendant. I am unable to uphold this
contention. The two gentlemen negotiated the
terms and conditions of
the loan agreement at Bethlehem on Saturday, 21 October 2006 because
it would appeared that on Sunday,
22 October 2006 D K Thomson spent
most of the morning playing with the two youngest children of the
defendant, namely Nicole and
Genevieve – vide item 12, p. 35,
exhibit “a”.
[67] On
or about Wednesday, 25 October 2006 D K Thomson emailed a loan
agreement to the defendant. The next day on Thursday, 26
October
2006 the defendant accepted the offer. On Friday, 27 October 2006 D
K Thomson replied. In his reply he suggested that
if the defendant
was happy with the details of the agreement perhaps the signing could
be completed later on in December 2006.
Nowhere in the email
communications or
viva
voce
evidence did it emerge that the defendant was unhappy with the
details of the exceptionally favourable terms and conditions of
the
draft loan agreement. There is no evidence whatsoever to support the
contention that there were any outstanding material terms
or
conditions which the defendant had reserved unto himself for further
negotiations at any later stage. It is clear that the
only
outstanding issue was signing so that the defendant could deliver the
loan agreement to his lawyer for safekeeping.
[68] I
get the impression that D K Thomson was in effect not saying that the
defendant was unhappy. It is abundantly clear that
the defendant was
extremely happy. In turn D K Thomson negatively acknowledged that
while he in effect meant that seeing the defendant
was happy with the
loan there was really no need to rush things by having the loan
contract mailed or couriered back to Pinetown
for him to sign. It is
as if I can hear him saying to the defendant:
“
Neville,
Don’t worry about
my signature now. We can attend to that later in December when you
come down for the summer holiday. But because
you need help now, I
will not delay the release of the funds pending my signing of the
loan agreement then. Today is Friday, 27
October 2006, right! I
will transfer the funds to your Nedbank account on Monday, 30 October
2006.”
It is not unthinkable
that D K Thomson thought along these lines.
[69] In
my view the defendant’s contention that the plaintiff had failed to
establish that a loan agreement in its final form
was concluded
between the two men and that the plaintiff had also failed to
established that a binding contract was subsequently
concluded and
that it was still in existent at the time of D K Thomson died on the
30 April 2007 – has no substance. A binding
contract of loan was
effectively concluded when the defendant accepted the offer as
evidenced by his email to D K Thomson on Thursday,
26 October 2006.
Pursuant to that contract D K Thomson performed his obligation four
days later, on Monaday, 30 October 2006.
However, the defendant
failed to pay monthly rent to D K Thomson in terms of that agreement.
It was never the contention of the
defendant that no binding
agreement would come into existence between the lender and the
borrower unless the written form thereof
was signed by both. The
agreement was reduced to writing and had to be signed by the parties
merely as proof of the oral agreement
and not as an act of validating
such agreement.
[70] The
defendant’s contention that the plaintiff relied on three different
agreements but failed to prove any is a hollow argument.
The
argument goes that in the particulars of claim the plaintiff referred
to a written but unsigned agreement, annexure b; that
in her
testimony Dr Lees referred to a written and signed agreement and that
in her testimony Dr Lees also referred to a verbal
agreement reached
between herself and her uncle.
[
71] The
evidence Dr Lees gave about what counsel for the defendant called the
second agreement was tendered on the strength of D
K Thomson’s
email to her on Thursday, 26 October 2006 wherein he specifically
advised her that the defendant had signed. She
then went on to say
how meticulous her father was. She believed that a signed loan
agreement existed although she never saw it
and that she suspected it
was somehow removed, with stealth, from the cabinet where it was
filed in the study. The defendant’s
family was accommodated in the
study when they were at Pinetown for her father’s funeral.
[72] There
is no evidence to support the conclusive finding as to whether a loan
agreement signed by both parties was in fact existent
or not.
However, the defendant’s failure to produce the draft loan
agreement strengthens the suspicion that such an agreement
did exist.
Right from the outset D K Thomson demonstrated his prudence by
seeking to have the transaction recorded in a written
form and by
keeping a copy of the draft loan agreement on his laptop. It does
seem unlikely that such a meticulous person would
simply have sat
back and relaxed for almost six months after the cancellation of the
meeting that was scheduled for December 25,
2006. We can speculate
about this point. However, one thing is certain, such evidence was
tendered to prove that there was a
loan agreement. That much the
defendant has admitted. Therefore whether it was eventually signed
or not is of no consequence.
It was not tendered to establish a new
course of action.
[73] The
evidence which Dr Lees gave about the direct discussions she and the
defendant had at Musgrave in July 2007 which counsel
for the
defendant called the third agreement, was adduced to refute the
defendant’s claim of a gift and not as a disingenuous
bid to rely
on an unpleaded new cause of action. It was, first and foremost, a
direct attack on or response to the defendant’s
plea. Of course,
in the second place, it was also indirectly tendered to bolster the
plaintiff’s case that the transaction was,
right from the outset, a
loan, and that it remained as such until the demise of the lender.
[74] On
the evidence as a whole I have come to the conclusion that the
plaintiff has established, on balance of probabilities, that
a
binding loan agreement was indeed concluded; that undoubtedly such an
agreement was mutually intended to be a binding contract
–
DILOKONG
CHROME MINES (EDMS) BPK v DIRECTOR-GENERAL, DEPARTMENT VAN HANDEL EN
NYWERHEDE
1992 (4) SA 1
AD,
GOVERNMENT
OF THE SELF-GOVERNING TERRITORY OF KWAZULU v MAHLANGU AND ANOTHER
1994 (1) SA 626
(T).
[75] In
his plea and prior to litigation the defendant denied that such an
agreement existed. Such denial constituted an outright
repudiation
of what turned out to be a genuine and valid contract.
TUCKER’S-
case
supra
.
The plaintiff, after fruitless efforts to prevail upon the defendant
to reconsider his stance, eventually notified the defendant’s

attorney that, as the executrix, she accepted the defendent’s
repudiation of the agreement; that she thereby terminated the
agreement and that she was proceeding to sue the defendant for the
recovery of the entire debt - see annexure “d” to the particulars

of claim.
[76] At
the stage he pleaded, the defendant specifically disavowed any loan
agreement. During the cross-examination of the plaintiff’s

witnesses suggestions consistent with such denial were put to the
opposite witnesses. When he later presented his version, he
still
maintained the same stance that no loan agreement was ever finally
concluded. His written plea, his counsel’s suggestions
to the
opposite witnesses as well as his oral testimony were proved to be
untrue during his brief but incisive cross-examination.
[77] In
the circumstances I have come to the conclusion that the version of
the defendant was incredible and unreliable. The fallacy
of his case
also lies in his self-destructive argument. The legal concept of
novation presupposes the prior existence of a perfectly
valid
contract. If there was no valid agreement, in its final form, as the
defendant contends, it follows that any talk of a novation
from a
legal vacuum is illogical and absurd. Therefore, the defendant
cannot, after repudiating a valid contract, which has since
been
cancelled on account of his repudiation, and which no longer exists,
be heard to say that the action is premature because
the loan is not
due and payable. He is now precluded from relying on the terms and
conditions of the original contract. That
contract, thanks to him,
is no more. That is one of the legal consequences flowing from his
explicit repudiation.
[78] This
is not the case where the onus of proving the terms of a disputed
agreement also entails proving the negative as the court
held in
KRIEGLER
v MINITZER AND ANOTHER
1949 (4) SA 821
(AD). There the parties agreed that there was an
agreement but disagreed on an additional term as alleged by the
defendant. In
the instant case the defendant denied that there was
ever any finality reached on the terms of the loan agreement.
Accordingly
no onus rested on the plan to proof anything negative.
[79] The
defendant admitted in the end that a loan agreement had indeed been
concluded between himself and D K Thomson and well
in October 2006.
Despite his persistent denial of the existence of a written loan
agreement he confirmed that in terms of an agreement
reached, the
money had been lent to him and that he was obliged to repay the
capital loan with interest. His version shifted from
a denial of a
loan agreement to either cancellation of such a loan agreement or
variation thereof, call it novation if you will
– to that of
donation. Mr Pillay’s submission that the defendant has failed to
demonstrate any evidence in support of either
the loan agreement or
its subsequent variation and substitution by that of
donatio
is one I do not hesitate to uphold. Therefore I am inclined to find
for the plaintiff.
[80] The
question of costs is an important consideration in this case
particularly in the light of the great expense of Dr Lees.
She had
to travel from New Castle in the United Kingdom to Durban and from
there together with her counsel, attorney and the witness,
Mr R C
Lezar to Bloemfontein. The conduct of the defendant in putting his
niece, whose father had on compassionate grounds helped
him, through
the emotional hardship of testifying against him, is a relevant
consideration. She did not have to travel so far
to reclaim the
money which her caring father had lent to her uncle. His conduct
deserves a punitive sanction. I have a feeling,
and it is a very
strong feeling, that the defendant was manipulated to adopt the
attitude he did. Because he apparently allowed
himself to be
manipulated, he brought all this upon himself.
[
81] Accordingly
I make the following order:
81.1 Judgment
is granted in favour of the plaintiff for the payment of the capital
amount of R300 000,00.
81.2 The
defendant is directed to pay interest thereon at the rate of 8% per
annum from the 30 October 2006 to the date of final
payment.
8
1.3 The
costs hereof shall be born and paid by the defendant on the scale as
between attorney and client.
8
1.4
The travelling expenses of the plaintiff’s witnesses, Dr D A Lees
and Mr R C Lezar from Durban to Bloemfontein and back shall
be
included in such costs.
81.5 The
travelling expenses of the plaintiff’s counsel, Adv. I Pillay and
the instructing lawyer, Attorney B Hansjee from Durban
to
Bloemfontein and back shall likewise be included in such costs.
81.6 The
travelling expense of Dr D A Lees shall, in addition, include her
expenses from New Castle in the UK to Durban in the RSA.
81.7 The
accommodation costs of plaintiff’s witnesses counsel and attorney
in Bloemfontein for the duration of this trial shall
also be born and
paid by the defendant.
______________
M.
H. RAMPAI, J
On
behalf of
plaintiff: Adv.
I. Pillay
Instructed
by:
Knight
Turner - Durban
Matsepes
BLOEMFONTEIN
On
behalf of
defendant: Adv.
P. D. Greyling
Instructed
by:
Schroder
& Meades – Bethlehem
Callis
Attorneys
BLOEMFONTEIN
/EM