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[2007] ZAWCHC 46
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Mogudi v Fezi (A67/07) [2007] ZAWCHC 46 (28 August 2007)
.IN THE HIGH
COURT OF SOUTH AFRICA
(CAPE OF GOOD HOPE PROVINCIAL DIVISION)
Case No A67/07
In the
matter between:
PATRICK
MOLEFE MOGUDI
Appellant
and
FIKISWA
FEZI
Respondent
JUDGMENT: 28 AUGUST 2007
VAN ZYL
J:
INTRODUCTION
[1] This is an appeal against the judgment of Le Grange AJ in terms
of which he dismissed the appellantâs action with costs. The
present proceedings are with the leave of the learned judge. Mr M A
Baynham appeared for the appellant and Mr E S Grobbelaar for
the
respondent. The court expresses its appreciation to them for their
respective presentations in this matter.
[2] The
action arose from an intimate relationship between the parties during
which the appellant undertook to take over the respondentâs
obligations relating to her purchase of a certain motor vehicle from
ABSA Bank, trading as Bankfin, the owner of the vehicle. In
accordance with such undertaking the respondent was to retain
possession and use of the vehicle. The relationship soured, however,
and the appellant, alleging that he was the owner of the vehicle,
instituted an action against the respondent for the delivery thereof,
alternatively for its fair and reasonable market value. In addition
he claimed the amount of R164 259,00 on the basis of a loan to
the
respondent relating to the purchase of the said vehicle. He also
claimed the amounts of R5 400,00 and R13 124,44 paid by him,
allegedly at the request of the respondent, for repairs and insurance
premiums in respect of such vehicle.
[3] In her
plea the respondent averred that the aforesaid bank remained the
owner of the vehicle until the full purchase price had
been paid. She
hence denied that the appellant at any stage acquired ownership of
the vehicle. In any event she was not in possession
of the vehicle.
She likewise denied that she had entered into any loan agreement with
the appellant and averred that he had made
a donation to her of the
amount claimed. For the rest she denied any liability to him for the
amounts claimed for repairs to and
insurance of the vehicle.
[4] At the
commencement of the hearing the parties agreed that the only issues
to be addressed were whether the appellant or the respondent
was the
owner of the vehicle at the relevant time and whether their agreement
was one of loan or donation. Only in the event of the
court holding
that the agreement was a loan, would the amounts claimed for repairs
to and insurance on the vehicle come into issue.
THE EVIDENCE
[5] The gist of the appellant's rather circuitous evidence was that,
at the time he met the respondent, he was estranged from his
wife, to
whom he was married in community of property. He was instantly
attracted to the respondent and within a short while developed
an
intimate relationship with her. When he realised that she was in
financial difficulties and unable to pay the instalments on her
vehicle, he offered to take over her obligations to the bank. The
bank was prepared to accept him as a surrogate debtor, provided
he
paid the arrears of some R27 000,00 and signed a deed of suretyship
in the amount of R50 000,00 for the balance. The appellant
complied
with these requirements after managing to persuade his wife to
counter-sign the deed of suretyship as required by the bank.
[6] On the
nature of his agreement with the respondent, the appellant was
extremely vague. According to him their understanding was
that the
respondent would reimburse him when she was financially able to do
so. If she should be unable to do so, he would become
the owner of
the vehicle. In this regard he placed strong reliance on a
hand-written note inserted by him and signed by the respondent
at the
foot of a letter from the bank to the respondent concerning her
outstanding obligations in respect of the vehicle. The note
read:
I, Fikiswa V. Fesi hereby transfer ownership of the above-mentioned
car - reg no CA 328833 to Patrick M. Mogudi with effect from
01
November 2001.
[7] The appellant regarded this note as "a short form" of
what they had "discussed verbally". He added that it
was
"virtually to cover" himself, because it "all of a
sudden dawned" on him that he did not have "even
one
document of commitment from Ms Fesi to repay" him. He
subsequently explained this as "something to cling on if
anything
goes wrong".
[8] In her evidence the respondent confirmed that she and the
appellant had developed an intimate relationship soon after meeting
each other. He had brought her under the impression that he planned
to divorce his estranged wife and then marry her (the respondent).
When he became aware of her financial difficulties and the
possibility that she might lose her vehicle, he undertook
spontaneously
to take over her obligations on the vehicle and, in
addition, to help settle her credit card debt. In return she slept
with him,
kept house and cooked for him, did his laundry and cared
for his two children. There was no suggestion that she would have to
repay
the amounts disbursed by him on her behalf. On the contrary, he
created the impression that he was a man of means who wished to
demonstrate
his generosity by such a noble gesture. His attitude was
that he would not allow her to struggle financially and that no woman
of
his would be without a car.
[9] The respondent made it clear that she would never have agreed to
borrow money from the appellant to comply with her obligations
to the
bank. Having had no income at that stage, she would have been quite
unable to repay a loan. In any event one Ronaldo Mazibuko
had already
indicated to her that he wished to acquire the vehicle for his wife.
The logical solution to her problem would have been
simply to sell
the vehicle to him. The appellant, however, had insisted on coming to
her assistance in salvaging the vehicle. As
she put it: "Ronaldo
definitely had the opportunity, but Lemmy [the appellant] jumped in
and sort of muscled Ronaldo out".
[10] The
respondent admitted that she had signed the hand-written note
aforesaid, but had done so at the appellant's request because
of his
estranged wife's lack of co-operation. He had wanted to give his wife
the impression that he was acquiring the vehicle for
her. The
respondent fully realised, however, that in signing the note she was
not transferring the vehicle to the appellant.
THE JUDGMENT OF THE COURT
A QUO
[11] In
his judgment Le Grange AJ dealt with the evidence on the basis that
he had two mutually destructive versions before him.
In comparing the
credibility of the parties he could not find that either of them was
an unreliable witness. There were, in his view,
no inherent
improbabilities or inconsistencies in their respective versions.
[12] With a view to resolving this
impasse
the learned judge
accepted that it was highly unlikely that a person would "squander
or gratuitously give away money, particularly
to a stranger". It
was, however, "a question of common sense that the closer the
relationship between the parties the more
likely is a donation."
It was in fact "hardly unlikely that two persons so intimately
connected will not make donations
to each other." On the
totality of the evidence and on the balance of probabilities the
learned judge hence held that he could
not find the respondent's
version to be less probable than that of the appellant. He was
accordingly not satisfied that the appellant
had discharged the
onus
resting upon him and dismissed the action with costs.
THE MAIN SUBMISSIONS ON BEHALF OF THE PARTIES
[13] In his argument on behalf of the appellant, Mr Baynham submitted
that the appellant had been an excellent witness, as opposed
to the
respondent, whose testimony he described as "appalling". In
addition he suggested that the probabilities favoured
the appellant,
more particularly inasmuch as it was common cause that he had
initially attempted to arrange that he substitute himself
as
purchaser in respect of the respondent's vehicle financing agreement
with the bank. Because there was insufficient time for him
to
complete the relevant administrative process for such substitution,
however, he had simply arranged with the bank that he would
comply
with the respondent's obligations in terms of her agreement with it.
In accordance with this arrangement he had then paid
the arrears of
R27 000,00 and furnished security in the amount of R50 000,00.
[14] Mr Baynham conceded that the hand-written note drafted by the
appellant and signed by the respondent did not constitute an
agreement,
or the written part of an agreement, between them. It was
simply relied on, Mr Baynham submitted, to refute the respondent's
version
that the payments made by the appellant on her behalf were in
the form of a donation.
[15] In
his argument on behalf of the respondent, Mr Grobbelaar submitted
that the appellant bore the
onus
to prove, firstly, that he
was the owner of the vehicle and, secondly, that he had concluded an
agreement of loan with the respondent.
He argued that, although it
might be accepted that people would not ordinarily part with their
property without expecting some or
other
quid pro quo
, there
was no presumption against donations in our law. The burden of proof
remained unaffected by a plea of donation, he submitted,
although it
might be expected that such plea would be carefully scrutinised.
[16] As for the hand-written note, Mr Grobbelaar rejected the
suggestion that it lent credence to the appellant's version. It was
significant, he submitted, that the note made absolutely no mention
of a loan or of the allegation that, on non-payment thereof,
ownership of the vehicle would be transferred to the appellant. On
the contrary, the note suggested that transfer of ownership of
the
vehicle had in fact already taken place on 1 November 2001. In this
regard, Mr Grobbelaar suggested, the appellantâs evidence
should be
rejected and that of the respondent, who had made a good impression
as a witness, should be accepted.
THE ISSUES
[17] At the outset it would appear that the issue relating to the
ownership of the vehicle was a non-issue in that it was abundantly
clear that, at all relevant times, the bank was the owner of the
vehicle and not the appellant or respondent. This may be the reason
why Le Grange AJA did not, in his judgment, deal with the question of
ownership of the vehicle or make any finding relating thereto.
Consequently the only issue requiring consideration was whether or
not the appellant made a loan or a donation to the respondent.
If it
was a loan, of course, the further question, which would inevitably
have to be considered, is what the terms of such loan were.
THE RELEVANT LEGAL PRINCIPLES
THE CONTRACT OF LOAN
[18] The contract of loan may occur in one of two forms, namely a
loan for consumption (
mutuum
or "verbruikleen") and
a loan for use (
commodatum
or "bruikleenâ). For present
purposes the former is relevant.
[19] A
contract of loan for consumption comes into existence when the
parties agree that the lender will deliver to the borrower
a quantity
of consumable or fungible things for consumption by use, subject
thereto that the borrower will return the same quantity
thereof at
some future time. See Van Leeuwen
Censura forensis
1.4.4.2;
idem
Het Roomsch-Hollandsch Recht
4.6.1; Voet
Commentarius
ad pandectas
12.1.1;
Moser v Meiring
1931 OPD 74
at 77;
Woodburn Mansions (Pty) Ltd v Dowell
1961 (3) SA 893
(D).
[20] In
the case of money the parties may also agree, expressly or tacitly,
that interest will be payable on the amount of the loan.
See Van
Leeuwen
Censura forensis
1.4.4.5; idem
Roomsch-Hollandsch
Recht
4.6.6; Voet
Commentarius ad pandectas
12.1.18; Van
der Keessel
Praelectiones juris hodierni ad Hugonis Grotii
Introductionem ad jurisprudentiam hollandicam
3.10.8;
Standard
Bank of South Africa Ltd v Lotze
1950 (2) SA 698
(C). See also
the general discussion in
LAWSA
volume 15 (first reissue 1999)
par 277-283 (p159-162).
THE CONTRACT OF DONATION
[21] As in the case of a loan, the contract of donation may occur in
two basic forms, namely the donation "among the living"
(
donatio inter vivos
) and the donation "with a view to
death" (
donatio mortis causa
). For present purposes only
the former, to which I shall refer simply as "a donation",
is relevant.
[22] A
donation may be defined as an agreement in terms of which one party
(the donor) undertakes, gratuitously and without obligation,
by
virtue of liberality, generosity or benevolence, to give something to
another (the donee) with the intention of enriching or otherwise
benefiting the donee. See
Digesta
39.5.1, where the Roman
jurist Julian observes that a gift made with the intention that it
should forthwith become the property of
the recipient and will not be
returned under any circumstances, is properly called a donation,
provided it is made out of liberality
(
liberalitas
) and
generosity (
munificentia
). See also De Groot (Grotius)
Inleidinge tot de hollandsche rechtsgeleerdheid
(2
nd
ed by Dovring, Fischer and Meijers 1965) 3.2 and Voet
Commentarius
ad pandectas
39.5.
[23] In
Avis v Verseput
1943 AD 331
at 348, Watermeyer ACJ briefly
summarised Von Savigny's approach to donation (in his
System des
heutigen römischen Rechts
par 142 sqq) in the following words:
He [Von Savigny] says ⦠that a donation is a transaction
inter
vivos
between donor and donee whereby the donee is enriched and
the donor correspondingly impoverished, such transaction being
accompanied
by an intention on the part of the donor at his expense
to enrich the donee. He points out that an essential element is a
disinterested
voluntas
on the part of the donor who must have
in mind only the
utilitas
or
commodum
of the donee and
not his own advantage.
See also the judgments of Tindall JA at 366-367 and Fischer AJA at
382-383.
[24] Reference may be made in this regard to
De Jager v Grunder
1964 (1) SA 446
(A) at 463D-G and 465A-D, and to the following
passage in the case of
Ovenstone v Secretary for Inland Revenue
1980 (2) SA 721
(A) at 763H-737A (
per
Trollip JA):
In a donation the donor disposes of the property gratuitously out of
liberality or generosity, the donee being thereby enriched and
the
donor correspondingly being impoverished, so much that, if the donee
gives any consideration at all therefor, it is not a donation.
See also
Commissioner for Inland Revenue v Estate Hulett
[1990] ZASCA 23
;
1990
(2) SA 786
(A) at 794I-J, where Friedman AJA observed that the word
"donation" in our law has acquired the meaning of "a
gratuitous
disposal of property prompted by motives of sheer
liberality or disinterested benevolence". This passage was cited
with approval
in
Estate Welch v Commissioner for SARS
[2004] 2
All SA 586
(SCA) par [26] at 592
g
.
[25] Inasmuch as donation constitutes an agreement
between the
donor and donee, it must, of course, comply with all legal
requirements for a valid contract. Apart from the essential
of
consensus
regarding the nature and ambit of the donation and
the contractual capacity of the parties, it is clear that the
donation must be
accepted, expressly or tacitly, by the donee.
Furthermore, in line with the authorities cited above, the donor
must, without the
expectation of any counter-performance or benefit
accruing to him in return, intend to enrich the donee by making him a
gift out
of his assets. Such assets will then be diminished in the
amount, or to the value, of the gift, leaving the donor
correspondingly
impoverished. See in general the useful discussion in
LAWSA
volume 8 part 1 (2
nd
edition 2005) par
305-309 (p372-379).
[26] An
early case addressing the question of
onus
where, as in the
present case, donation was raised as a defence, was that of
Timoney
and King v King
1920 AD 133
at 139. There Innes CJ stated that,
although the plaintiffs had to prove their claim, once they had
adduced evidence supporting such
claim, the
onus
of proof
shifted to the defendant. This occurred "by virtue of the
general legal principle that a donation is not presumed and
must be
proved by him who relies on it". In this regard the learned
Chief Justice relied on common law authorities such as Grotius
Inleidinge tot de hollandsche rechtsgeleerdheid
3.2.4 and Voet
Commentarius ad pandectas
39.5.5.
[27] The
same approach was followed in other cases such as
Avis v Verseput
(
supra
at 345 and 377),
Myers v Lesch
1954 (2) SA
487
(C) at 490A-C and De Jager v Grunder (
supra
) at 463A-C.
More recently, in
Estate Welch v Commissioner for SARS
(
supra
par [22] at 592
a
), it was simply stated that "there is a
presumption against donations in our law."
[28] A
qualification was introduced in
Smith's Trustee v Smith
1927
AD 482
at 486, where De Villiers JA distinguished cases of donations
between spouses:
It is true that there is a strong presumption in law against gifts
as nobody is presumed to throw away or squander his property.
But it
hardly applies to persons so intimately connected as husband and
wife, where donations are often made for the purpose of preventing
the property from leaving the family and falling into the hands of
creditors. Then there is the natural affection between husband
and
wife which also points in the direction of donation, and must be
taken into consideration in coming to a conclusion.
[29] Schreiner J went a step further in
Stern v Kuper
1941
WLD 223
at 228, where he questioned the justification for a
presumption against donations:
I do not think that the maxim [ie that donations are not presumed]
means that there is a legal presumption against donation, but
only
that the Courts should incline to the assumption that the parties do
not act from mere liberality.
[30] In
Thornycroft v Vas
1957 (3) SA 754
(FC) at 756A-757G
Clayden FJ considered these and other authorities before coming to
his conclusion (at 757B) that "the so-called
presumption is no
more than an expression of the inference which will normally be
drawn." The learned judge pointed out that,
in the passage from
Voet
Commentarius ad pandectas
39.5.5 relied on in the
Avis
v Verseput
case (
supra
), Voet simply stated:
In dubio
autem donatio non praesumitur, quamdiu alia conjectura capi potest
("In cases of doubt a donation is not presumed, as long as
another inference can be drawn"). With reference to
Smith's
Trustee v Smith
(
supra
at 487) where De Villiers JA
observed that there was "no shifting of
onus
in this
case", Clayden FJ stated (at 757F-G):
It is in this sense in my view that the passage from
Voet
applies. It does not create an artificial position in which, once
receipt of the money and goods is shown, there must be judgment
for
the plaintiff unless the defendant succeeds in proving that they were
received by way of donation. The application of the inference
against
donations, drawn from the fact that persons do not cast away their
possessions, would show a probability against a giving
of these
things and he would succeed if there was no more to the case.
[31] This approach was endorsed by Berman J in
Jordaan and Others
NNO v De Villiers
1991 (4) SA 396
(C) at 400F-G:
Moreover, whilst there is no presumption in our law against
donations, the Court is entitled to take into account that, human
nature
being what it is, people do not ordinarily part with their
property for nothing ⦠Thus, whilst the incidence of the burden of
proof
remains unaffected, the evidence of the party contending for a
donation in his favour calls for careful scrutiny.
[32] In
Barkhuizen v Forbes
1998 (1) SA 140
(E) at 150A-151H,
Liebenberg J accepted that there was no shifting of
onus
in a
case such as the present. He opined, however (at 151G), that "once
the plaintiff has discharged the
onus
upon him, then there is
a duty upon the defendant to discharge the
onus
upon him to
prove his defence." In his concurring, but distinguishing,
judgment, Froneman J stated (at 156B-D) that the presumption
against
donations was at most "a rebuttable presumption of fact"
which could affect only the evidentiary burden and never
place the
primary
onus
on the party against whom the presumption was
made. It was, he suggested, better to describe it merely as "an
inference that
may in certain circumstances be drawn, depending on
the facts of each particular case." A similar approach was
adopted by Leach
J in his judgment concurring with that of Liebenberg
J. He suggested (at 158A-D) that the so-called presumption against
donations
was founded upon the extremely unlikely event that a person
would "squander or give away his property gratuitously or out of
pure liberality." It was, indeed, no more than "an
inference of fact dependent upon ordinary reasoning and common sense"
and, as such, "a general rule of logic."
[33] I
must respectfully associate myself with the views expressed by Berman
J in the
Jordaan
matter (
supra
) and by Froneman and
Leach JJ in the
Barkhuizen
case (
supra
). When a
defendant raises a defence of donation against any claim, the burden
of proof remains throughout on the plaintiff. At most
the defendant
has a burden of rebuttal against a
prima facie
case
established by the plaintiff.
CONSIDERATION OF THE FACTS IN THE PRESENT MATTER
[34] When
these principles are applied to the facts in the present matter it is
quite clear that the appellant came nowhere near
establishing a
prima
facie
case that he made a loan to the respondent. His undertaking
to take upon himself the respondentâs obligations to the bank in
respect
of the vehicle (and, indeed, her credit card) clearly arose
from their intimate relationship. At no stage was there the slightest
suggestion that he was making a loan to her, which he would expect
her to repay at some indeterminate time in the future, with or
without interest. His conduct was, rather, indicative of an attempt
to impress her as a man of means who would not allow his wife
or
partner to suffer financial hardship. At best for him it reflected a
gratuitous act of generosity, liberality and benevolence.
This had
the effect of conferring on her a financial benefit in return for
which he expected, and received, a close physical relationship,
home
comforts and a willingness to care for his children.
[35] The hand-written note in terms of which the respondent
purportedly transferred ownership of the vehicle to the appellant,
was
no more than a ploy intended to mislead his estranged wife into
co-signing a deed of suretyship required by the bank. It certainly
could not have been intended to serve as proof of a loan by the
appellant to the respondent. His evidence in this regard was
contradictory,
nonsensical and anything but credible. It should, in
my respectful view, have been rejected outright by the trial court.
[36] From this it appears that the appellant never got beyond first
base. He was unable to produce a vestige of evidence that he
had made
a loan to the respondent in any amount. And even if he had managed,
by the skin of his teeth, to have produced sufficient
to establish a
prima facie
case (which he clearly failed to do), the
probabilities that he intended to donate it to the respondent are
overwhelming. Her evidence
was logical, credible and consistent with
the probabilities. It would have been an act of lunacy on her part if
she had borrowed
money from the appellant at a time when she was
totally unable to make any repayment to him and when she had a
purchaser of the vehicle
in the pipeline. At no time did she regard
the financial assistance of the appellant as anything but an act of
generosity and benevolence.
She clearly accepted his donation tacitly
and both she and the appellant, at all relevant times, had
contractual capacity to come
to such tacit agreement. It follows
that, if she had at any stage been faced with a burden of rebuttal in
regard to her defence
of a donation, she would have discharged it
without any difficulty.
[37] There
is hence no merit in the appeal and it should be dismissed with
costs.
D H VAN ZYL
Judge of the High Court
I agree.
P B FOURIE
Judge of the High Court
I agree.
P GOLIATH
Judge of the High Court