Jones N.O v ABSA Bank Limited (A64/2023) [2024] ZAWCHC 343 (1 November 2024)

IN THE HIGH COURT OF SOUTH AFRICA
WESTERN CAPE DIVISION, CAPE TOWN

REPORTABLE
CASE NO: A64/2023

In the matter between:

BRADLEY JONES N.O. Appellant
(In his capacity as the executor of the Estate Late
Clive Andrew Cook, Master Ref no: 015011/2020)

and

ABSA BANK LIMITED Respondent

Bench: P.A.L. Gamble, D.S. Kusevitsky and D.M. Thulare, JJ

Heard: 24 January 2024

Delivered: 1 November 2024

This judgment was handed down electronically by circulation to the parties'
representatives via email and release to SAFLII. The date and time for hand -down is
deemed to be Friday, 1 November 2024 at 12h30.



JUDGMENT
___________________________________________________________________
_

GAMBLE, J:

INTRODUCTION
1. In 2008 Mr. Clive Andrew Cook (the deceased) secured a contract to perform
certain earthworks for a property developer. To do so , he needed a front -end loader
(the loader) and so he set about procuring a secondhand machine. Through the
involvement of a certain Mr. I smail Solomon, a 2003 model Kawasaki Renoster
loader was located in KwaZulu Natal (KZN). The supplier was an auctioneering
company called Peter Maskell Auctioneers (Maskell) which had evidently obtained
the loader from a firm known as DJ Plant & Equipment, (DJ) also in KZN.

2. The deceased obtained finance for the loader from the respondent (ABSA)
and to this end he concluded an instalment agreement (the agreement) as defined
under the National Credit Act, 34 of 2005 (the NCA). The agreement recorded that
the cash price of the loader was R444 600.00 (VAT inclusive) payable through a
deposit of R44 000.00, 3 monthly instalments of R9867.17, 1 instalment of
R64 467.17 and a further 50 monthly instalments of R9887.17. The deposit was paid
to Maskell and th e total recoverable by ABSA under the agreement (inclusive of
finance charges) was R587 427.18.

3. The deceased signed ABSA’s pro forma “ Release Note ” in respect of the
loader on 3 March 2008 and pursuant thereto the loader was delivered at his
business premises at Philippi in Cape Town during the latter part of March 2008.

4. When the loader arrived for delivery aboard a large flat -bed trailer, it was
immediately apparent to Co ok that it had certain obvious patent defects. The
deceased immediately complained to the driver of the flat -bed that this was not the
loader he had bought and he was not inclined to take delivery thereof. The driver
would have nothing of it and insisted that the loader be taken off the trailer. This task
fell to the deceased’s son, Jacques Cook (Jacques) , who realised that the loader
had various latent mechanical defects as well. For example, the vehicle did not start
properly, it belched black smoke when it eventually did start and its hydraulic system
did not function properly when Jacques attempted to lift the bucket before reversing
it off the flat bed. In short, the deceased realized there and then that he had bought
the proverbial “lemon”.

5. In an endeavour to meet his pressing contractual obligations to the property
developer, the deceased set about effecting certain essential repairs to the loader.
By July 2008 the cost of further repairs was estimated at R242 664.96 and it was
considered to be uneconomical to do so. There was then a meeting in Cape Town
on 23 July 2008 at which certain of the partie s attempted to resolve the issues
arising from the defects in the loader, and to which I shall refer later.

6. In the meanwhile, the deceased fell into arrears under the ag reement and on
4 June 2009, after complying with the requisite prescripts of the NCA, ABSA issued
summons out of the Wynberg Magistrates’ Court against the deceased for payment
of the amount then allegedly due under the agreement – R575 228.03. Given that
the deceased alleged a counterclaim against ABSA which exceeded the jurisdiction
of that court, the matt er was transferred to this Division where the deceased
commenced proceedings by issuing summons against ABSA for cancellation of the
agreement, payment of damages in the sum of R3 220 376.82 and costs on the
punitive scale. The damages were allegedly for a loss of profits on the earthmoving
contract with the developer.

7. ABSA’s response to the deceased’s claim was multifaceted. Firstly, it raised a
special plea that the claim against it had been settled at the aforementioned meeting
of 23 July 2008 . Then, it set up various defences to the deceas ed’s claims on the
merits, and, lastly, it filed a claim in reconvention for the amount allegedly due to it
under the agreement.

8. The deceased died on 29 March 2020, after litis contestatio, but before the
commencement of the trial. In the result, the appellant (the executor of the
deceased’s estate) was substituted as the plaintiff in the mat ter. The demise of the
deceased deprived the executor of the evidence of the critical wi tness in order to
adequately advance his case. Notwithstanding the absence of a crucial witness to
advance the case, the executor resolved to persist with the claim. He thus had to do
the best he could with the other witnesses available to him and, further, was required
to rely on circumstantial evidence and inferential reasoning.

9. The case went to trial in November 2020 before Mantame J (the Trial Court).
The issues for determination were the merits of the claim in convention, the special
plea and the claim in reconvention. All issues relating to quantum were held in
abeyance. In a judgment del ivered on 19 March 2021, the Trial Court dismissed the
claims lodged on behalf of the deceased and upheld ABSA’s claim in reconvention.
In the result, the executor was ordered to pay ABSA the sum of R575 228.03,
together with costs on the party and party scale.

10. On 12 September 2022 the Trial Court dismissed the executor’s applicatio n
for leave to appeal. He is now before this Court with the leave of the Supreme Court
of Appeal, pursuant to an order granted on 13 December 2022. At the hearing of the
appeal the parties were represented as they were before the Trial Court - the
executor by Advs. M.A. Albertus SC and J.B. Engelbrecht and ABSA by Adv. M.
Greig. The court is indebted to counsel for their comprehensive heads of argument
and the bundle of authorities prepared for the hearing of the appeal.

THE DECEASED’S CASE AS PLEADED
11. In his heads of argument before this court, Mr. Albertus was constrained to
concede that the untimely demise of the deceased had constrained the executor to
persist with only three of the claims originally advanced in the pleadings. These
consisted of the main claim and two of the three alternative claims pleaded. Counsel
accepted that the second alternative claim, base d on the allegations made in para’s
8 to 12 of the particulars of claim relating to various alleged misrepresentations ,
could no longer be advanced in light of the unavailability of the deceased to testify.

12. For the purposes of background detail only, it is s ufficient to record that the
second alternative claim relied on allegations that the loader which was delivered to
the deceased was not the same vehicle as the loader which he had been led to
believe he was purchasing. In this regard it was said that the deceased had never
physically inspected the loader but had relied on a series of photographs sent to him
by Solomon and/or Mr. Sean Fortune acting in concert with each other. The
deceased specifically pleaded that Solomon and Fortune were both ABSA’s agents.

13. Finally by way of background, and as noted above, because the matter went
to trial on the merits only with the quantum standing over for later determination, the
allegations made in regard to the quantum in para’s 14 to 19 of the particulars of
claim and the response thereto in the plea will accordingly not be traversed in this
judgment.

The Main Claim
14. The main claim pleaded in the particulars of claim was set out in para’s 4 and
5 thereof . The agreement was annexed to the particulars of cl aim as Annexure A
and I shall refer to it as such.

“4. It was an express and material term of the agreement [annexure A] by virtue of
clause 121 thereof that the loader was in a good and roadworthy order and condition
and operable at the time of its purchase.

5. However, contrary to and in breach of the express term as aforesaid, the loader
delivered by Defendant to Plaintiff was not in a good and roadworthy order and
condition but in a mechanical state of disrepair and in operable.”

15. The first alternative claim was based on the allegations made in paras 6 and 7
of the particulars of claim.

“6. Alternatively to paragraphs 4 and 5 above, and only in the event of this Court
finding that it was not an express and material term of the agreement that the loader

1 It should be noted that, while reference is made in the particulars of claim to “clause 12”, it is really
only clause 12.1 of Annexure A which has any relevance to the allegations made in paras 4 and 5. It
reads as follows.
“12 THE GOODS
The Purchaser will –
12.1 keep the goods in his possession and control and maintain them in good and roadworthy
order and condition, not allow them to be used by another person or body nor allow any
unqualified or unlicensed driver or operator to use the goods and not remove the goods from
the Republic of South Africa without the prior written consent of the Bank.”

was in a good and roadworthy order and condition and operable, then and in that
event, Plaintiff pleads that by virtue of clause 12 thereof, it was an implied and
material term of the agreement that the loader was in a good and roadworthy order
and condition and operable at the time of its purchase.

7. However, contrary to and in breach of the said implied term as aforesaid, the
loader delivered by Defendant to Plaintiff was not in a good and roadworthy order
and condition but rather in a mechanical state of disrepair and inoperable.”

The first alternative claim was thus based on the actio redhibitoria
16. The third alternative claim was based on the allegations made in paras 13 and
13.1 – 13.5 of the particulars of claim.

“13. Alternatively to paragraphs 4 to 12 above, and only in the event of this Court
finding that the loader delivered by Defendant to Plaintiff was the one sold to him in
terms of the agreement (which is denied), that it was not an express, alternatively, an
implied term of the agreement that the loader was in a good and roadworthy order
and condition and operable and further, that no misrepresentations as aforesaid had
been made or if made, were not intentional or negligent (all of which is denied), then
and in that event, plaintiff pleads that:

13.1 plaintiff purchased the loader from Defendant for the purposes of loading
and offloading gravel, sand, dirt and such like at building and other sites;

13.2 at the time of the agreement and unbeknown to Plaintiff the loader was
latently defective in that it was in a state of mechanical disrepair and not
operable;

13.3 by reason of such defect the loader was substantially unfit for the
purpose of loading and offloading, gravel, sand, dirt and such like at building
and other sites and in fact inoperable;

13.4 Solomon and Fortune 2 were at all material times aware of the purpose
for which Plaintiff had purchased the loader;

13.5 had plaintiff known of the defects, he would not have purchased the
loader.”

The third alternative claim is thus based on the actio empti.

ABSA’S CASE AS PLEADED
Special plea
17. In the first instance ABSA put up a special plea of compromise. For the sake
of completeness, the pleading is recited in full.

“1. On or about 23 July 2008 and in Cape Town the Plaintiff (represented by
Roderique Marz), the Defendant (represented by Jasmina Gasnolar and/or Sean
Fortune), Ismail Solomon (personally) and Peter Maskell Auctions CC (represented
by AJS Grant of Venn, Nemeth and Hart Attorneys) entered into a partly written and
partly oral, alternatively purely oral settlement agreement in relation to the dispute
arising from the alleged defects in the loader referred to in the Plaintiff’s particulars of
claim (“the settlement agreement”).

2. The material express, alternatively, tacit terms of the settlement agreement were
as follows:

2.1 All disputes arising from the alleged defects in the loader referred to in the
Plaintiff’s particulars of claim were resolved and/or settled;

2.2 The plaintiff’s agent, Ismail Solomon, undertook to pay the plaintiff the
sum of R 25,000.00 by no later than 29 July 2008 in respect of the alleged
defects in the loader; and


2 This is a reference to the aforesaid Ismail Solomon and Sean Fortune, the alleged agents of ABSA.
2.3 Both the Defendant and Peter Maskell Auctions CC had “fallen out of the
picture”, and neither the Plaintiff nor Ismail Solomon would have any further
claims against the Defendant or Peter Maskell Auctions CC.

2.4 The Plaintiff would continue to pay the installments due upon, and
otherwise comply with, his obligations in terms of the agreement with the
Defendant of 3 March 2008 (annexure “A” to the particulars of claim).

3. A copy of the written portion of the settlement agreement/confirmation of the
settlement agreement is attached as annexure “X”.

4. To the extent that the above settlement agreement is held to be invalid or
unenforceable by virtue of clause 13.1 of annexure “A” to the particulars of claim, the
Defendant pleads that the operation of this non -variation clause in the prevailing
circumstances and on the facts of the case, at the time the court is or will be asked
to enforce the clause, is unreasonable and/ or offends public policy, and is
accordingly void and or voidable. The relevant facts and circumstances in this regard
are the following:

4.1 The settlement agreement was concluded where all the parties including
the Plaintiff were present in person;

4.2 The settlement agreement was concluded in circumstances where the
plaintiff was represented by an attorney, or by a party purporting to be an
attorney, namely, Roderique Marz;

4.3 The settlement agreement was confirmed in writing in terms of annexure
“X”, and no parties, including the Plaintiff or Roderique Marz, read any
objection to this confirmation or its terms;

4.4 The settlement agreement was the outcome of extensive negotiations
between the parties which identified Peter Maskell Auctions and/or Ismail
Solomon, the Plaintiff’s agent, as the party responsible for problems the
Plaintiff allegedly experienced with the loader;

4.5 The Plaintiff’s particulars of claim themselves rely on al legations of
express written clau ses in annexure “A” to the particulars of claim which do
not exist; and

4.6 The attempt by the Plaintiff to enforce clause 13.1 in the above
circumstances is accordingly not bona fide.

5. The effect of the settlement agreement is to bar proceedings on the cause of
action pleaded in the Plaintiff’s particulars of claim.”

ABSA’s Plea on the Merits
18. In its plea on the merits in respect of the main claim, ABSA admitted the
conclusion o f Annexure A but went on to allege that that the aforesaid pro forma
document entitled “ Release note and acknowledgement of delivery ” dated 3 March
2008 and signed by the deceased (which was annexed to the plea as “P1”) , formed
part of the agreement.

19. Then ABSA pleaded that clause 12 did not embrace the meaning attributed to
it by the deceas ed. It went on to refer to various clauses contained in annexure A
which it stressed were express material terms of the agreement. I shall not repeat
those clauses herein other than th e non-variation clause to which ABSA expressly
referred in its plea.

“13.1. No addition to, variation, novation or agreed cancellation of any provision of
this agreement shall be binding upon the parties unles s reduced to writing and
signed (or initialed in the case of modifications on this document ) by or on behalf of
the Bank by an authorized official and the Purchaser.”

20. ABSA further adverted to the following clauses in the release note.

“I have receive (sic) in good order and condition, to my entire satisfaction and
according to my specification/requirements, the article described above.

I have compared the chassis, engine and serial numbers indicated above with the
chassis, engine and serial numbers as indicated on the article.”

21. In regard to the first alternative claim ( the actio redhibitoria) set forth in para’s
6 and 7 of the particulars of claim , ABSA pleaded an estopppel in the following
terms:

“8. Save to state that the loader was delivered by Peter Maskell’s Auctions CC to the
Plaintiff who accepted delivery as the Defendant’s agent, the allegations in these
paragraphs are denied as if specifically traversed.

9. The Defendant further specifically pleads that annexure “P1” signed by the Plaintiff
on 3 March 2008 contains the following material term:

“I herewith warrant that;

I have receive (sic) in good order and condition, to my entire satisfaction and
according to my specification/requirements, the article described above [being a
‘Renoster Kawasaki Front End Loader 20031.1 (sic) have compared the chassis,
engine and serial numbers as indicated on the article.”

10. The Plaintiff further paid a deposit of R 44,000.00 to Peter Maskell’s Auctions CC
in respect of the loader.

11. The Defendant accordingly pleads that the Plaintiff-

11.1 Warranted that the loader was in good order and condition and to his entire
satisfaction according to his specifications or requirements, and that it was the loader
he had purchased; alternatively

11.2 He waived any right he may have had to allege or claim it was not; further
alternatively

11.3 He is estopped from alleging it was not that:

11.3.1 He represented to the Defendant that the loader was in fact in good order and
condition when he took delivery thereof and paid the deposit;

11.3.2 The Defendant acted on the strength of his representation by entering into the
agreement with the Plaintiff and releasing the balance of the purchase price to Peter
Maskell’s Auctioneers; and

11.3.3 In so doing the Defendant acted to its detriment in concluding or finalizing the
agreement and releasing the balance of the purchase price.”

22. ABSA pleaded a further estoppel in response to the allegations made in para
13 and 13.1 – 13.5 of the particulars of claim (the action empti). After denying the
contents of the paragraph and after repeating the allegation that the release note
constituted a warranty by the deceased, it alleged as follows.

“17. The Defendant accordingly pleads that the Plaintiff –
17.1 Warranted that the loader was in good order and condition and to his entire
satisfaction according to his specification or requirements, and that it was the loader
he had purchased; alternatively

17.2 Waived any right he may have had to claim or allege that it was not; further
alternatively

17.3 Is estopped from alleging it was not, on the basis that:

17.3.1 He represented to the Defendant that the loader was in fact in good order and
condition when he took delivery thereof;

17.3.2 The Defendant acted on the strength of this representation by entering into
and/or concluding the agreement with the Plaintiff and releasing the balance of the
purchase price to Peter Maskell’s Auctions CC; and

17.3.3 In so doing the Defendant acted to its detriment in concluding or finalizing the
agreement and releasing the balance of the purchase price.”

The deceased’s replication to ABSA’s special plea
23. In his replication to the special plea the deceased admitted conclusion of the
alleged agreement of settlement on the following basis.

“Ad paragraphs 1, 2 and 3
1. Save to deny that:
1.1. the plaintiff was represented by Roderique Marz;
1.2. the settlement agreement or any part thereof was in writing; and
1.3 Ismail Solomon was the plaintiff’s agent,
the plaintiff admits the allegations herein contained.”

24. It is, in my respectful view, of critical importance , when considering the import
of the deceased’s replication to the special plea, to have regard to the extent of the
admissions made in para 1 thereof. Save for the limited issue raised under para’s
1.1, 1.2 and 1 .3 of the replication , the remainder of the allegations contained in
para’s 1 to 3 of the special plea we re admitted by the deceased. This means that
the deceased admitted the content of para 2.1 of the special plea, which is to the
following effect-

“2.1 All disputes arising from the alleged defects in the loader referred to in the
Plaintiff’s particulars of claim were resolved and/or settled;”

25. The import of para 2.1 in the special plea is that the deceased orally agreed to
waive his right to seek redress against ABSA arising out of the defects (which were
by then common cause) in the loader. The admission by the deceased of the waiver
of this right was not limited or couched in terms suggesting that he was not informed
of the extent of the rights he was waiving, as My Colleague Thulare suggests in the
second judgment. Rather, the allegation by ABSA of the waiver is admitted by the
deceased.

26. This admission thu s removed waiver from the lis between the parties, ABSA
having properly pleaded the waiver in accordance with the established principles. 3
For that reason one sees no suggestion in the cross -examination of Grant that the
deceased was not aware of his rights when he concluded the settlement agreement
and waived reliance on the aedilitian remedies as against ABSA.

27. Importantly, in the replication the deceased attacked the legality and
enforceability of the settlement agreement on 4 discrete grounds. viz public policy,
undue influence, formal non-compliance and, ultimately, a resolutive condition. I shall
deal with each of these separately.

Contra bonos mores
28. The first contention was that the settlement agreement was contrary to public
policy.

“2. The plaintiff more especially pleads that the settlement agreement was void and
of no legal force and effect, alternatively, voidable, on account of the fact that it was
contrary to public policy, by virtue of the fact that its terms were and/or its
implementation was unfair and/or oppressive and/or draconian and/or
unconscionable and/or exploitative and/or immoral, for one or more of the following
reasons:

2.1 the parties were in unequal bargaining positions in that:

2.1.1. The plaintiff was the credit receiver, whilst the defendant,
the credit grantor, under the installment sale agreement;

2.1.2. The defendant was a large and powerful commercial bank
whilst the plaintiff was a naïve and unsophisticated businessman
with his highest educational qualification being Standard 8; and


3 See for example, Laws v Rutherford 1924 AD 261 at 263 and Feinstein v Niggli and another 1981
(2) SA 684 (A) at 698 F-G
2.1.3. The defendant (sic) was in arrears with his instalments on
the instal ment sale agreement and in no position to dictate
terms to the defendant on the way forward;

2.2. the defendant was aware that:

2.2.1 the plaintiff had purchased the front end loader to carry out
a contract and/or contracts with the view to generating an
income;

2.2.2 the front end loader from the time of its delivery to the
plaintiff was in a serious state of mechanical disrepair and as
such, was not fit for the purpose for which it was purchased; and

2.2.3. for as long as the front end loader remained unrepaired,
the plaintiff would not be able to carry out his contractual
obligations and hence not be able to earn an income;

2.3 despite the facts set forth in the aforegoing paragraphs, the defendant
persuaded and/or influenced and/or cajoled alternatively, was complicit
along with Ismail Solomon and attorney AJS Grant, representing Peter
Maskell Auctions CC in persuading and/or influencing and/or cajoling
the plaintiff to forgo his rights to judicial redress against defendant in
respect of the defects to the loader and to accept the sum of R 25,
000.00 from the said Ismail Solomon in full and final settlement of his
claims against the defendant, full well knowing that the said sum was
grossly inadequate to cover the costs of repairing the defects to the
loader.”

Undue influence
29. The second attack on the settlement agreement is that it was induced through
undue influence.

“3. ALTERNATIVELY, to paragraph 2 above, the plaintiff further pleads that the
settlement agreement is void and of no legal force and effect, alternatively, voidable,
inasmuch as it was procured by the defendant by way of undue influence on account
of the following facts:

3.1. the defendant occupied a position of influence over the plaintiff by virtue
of the fact that:

3.1.1. the parties were in unequal bargaining positions in that the
plaintiff was the credit receiver, whilst the defendant, the credit grantor,
under the instalment sale agreement; and

3.1.2. the defendant was a large and powerful commercial bank whilst
the plaintiff was a naïve and unsophisticated businessman with his
highest educational qualification being Standard 8;

3.1.3 The defendant (sic) was in arrears with his instalments on the
instalment sale agreement and in no position to dictate terms to the
defendant on the way forward;

3.2. the defendant’s influence weakened the plaintiff’s resistance and made
his will pliable;

3.3. the defendant used this influence in an unscrupulous manner and/or
unconscionably to prevail upon the plaintiff to enter into the settlement
agreement, more sepecially in that:

3.3.1. to the knowledge of the defendant:

3.3.1.1 the plaintiff was as a result of the loader being
inoperable, unable to earn an income from the use of the
loader (as intended) and as such lacked the necessary
financial means to pay the instalments claimed by the
defendant under the instalment sale agreement;

3.3.1.2. the plaintiff lacked the financial means to effect the
repairs required to make the loader operational;

3.3.1.3. the plaintiff faced financial ruin if the loader remained
inoperable;

3.3.1.4. the plaintiff lacked the financial means to instruct an
attorney to advise him regarding the remedies available
to him arising from the delivery of the defective loader;

3.3.1.5. the plaintiff was in the circumstances, vulnerable and
desperate enough to take any financial assistance which
would enable him to getting (sic) the loader operational
so that he could start earning an income;

3.3.2. at the meeting on 23 July 2008 , at which the settlement
agreement was concluded, the defendant, represented by Jasmina
Gasnolar, alternatively, Sean Fortune, represented to the plaintiff and
made him believe that irrespective of the condition of the loader
delivered to him, he was bound by the instalment sale agreement and
was still legally obliged to repay the balance of the purchase price
advised by the defendant to the plaintiff;

3.3.3. all the parties at the meeting, other than Roderique Marz, acted
in concert against the plaintiff; and

3.3.4. The defendant and the other parties at the meeting (excluding
Roderique Marz), represented to the plaintiff and made him believe that
he had no other remedies available to him, proposing in the process,
that the matter be settled on the basis of Ismail Solomon paying him R
25, 000.00 in full and final settlement of his claims against the
Defendant (sic);

3.4. the settlement agreement was prejudicial to the plaintiff’s rights and to his
detriment;

3.5. exercising a normal free will, the plaintiff would not have entered into the
settlement agreement;

3.6. The plaintiff tenders to repay Mr. Solomon the amount of R8 0000.00 (sic)
being the amount paid by Mr. Solomon to the plaintiff pursuant to the
settlement agreement.

Non-Compliance with Formalities
30. The third ground of attack related to an alleged failure to comply with the
formalities prescribed in the contract itself.

“4. ALTERNATIVELY, to paragraph 2 and 3 above, the plaintiff pleads that the
settlement agreement is invalid and unenforceable for non -compliance with the
formalities contained in clause 13 of the agreement.”

Suspensive / Resolutive Condition
31. The last basis for the attack o n the settlement agreement initially sought to
rely on the non-compliance with an alleged tacit suspensive or resolutive condition.

“5. ALTERNATIVELY, to paragraphs 2 to 4 above, the plaintiff further pleads:
5.1. The settlement agreement was subject to a tacit suspensive,
alternatively, tacit resolutive condition, that should Ismail Solomon not pay the
plaintiff the sum of R25,000.00 on or before 29 July 2008, the settlement
agreement would be void and of no force and effect and the plaintiff would be
entitled to all the remedies and/rights enjoyed by him prior to 23 July 2008 in
respect of the defects in the loader;

5.2. By 29 July 2008, and indeed to date, Ismail Solomon has failed to pay the
plaintiff the sum of R 25, 000.00, having only paid R8, 000.00;

5.3 As a result, the settlement agreement has been rendered void and is
regarded as if it had never existed.”

32. As already observed, in argument counsel abandoned any reliance on a
suspensive condition and addressed only the purported resolutive condition.

33. In addition to the special plea, ABSA also filed a plea on the merits , the terms
whereof need not be detailed at this stage. There was no rebuttal filed by ABSA to
the deceased’s replication and so all of the relevant allegations contained in the
replication are taken to be denied by ABSA.

MATERIAL FACTS
34. A complete and accurate narration of the relevant facts is not possible, given
the absence of testimony from the deceased and the dearth of other evidence from
the limited witnesses who testified. Nevertheless, i t appears from the record that the
events leading up to the purchase of the loader and the consequences after delivery
were the following.

35. The deceased needed the loader to execute his contract with th e property
developer. The deceased made contact with Mr. Solomon, a person who procured
second-hand earth moving equipment and machinery for interested buyers. Mr.
Solomon apparently had an on-going working relationship with Maskell for whom he
disposed of earthmoving equipment and was indeb ted to them by virtue of an
unrelated transaction. Solomon and Maskell agreed th at he would work off part of
that debt by procuring a loader for t he deceased: evidently there would be a
commission payable on the transaction by Maskell which Solomon could apply to his
credit.

36. Solomon procured a loader from DJ and supplied it to Maskell. Maskell then
on-sold the loader to ABSA which paid Maskell and financed the deal for the benefit
of the deceased. The deceased never physically inspected the loader but was shown
photographs thereof, probably courtesy of Solomon.

37. I pause to observe that j ust whose agen t Solomon was not conclusively
resolved on the evidence. In the special plea, ABSA alleges he was the deceased’s
agent while in the replication, the deceased says that he w as ABSA’s agent and, as
demonstrated above, accuses him of collusion with ABSA’s employees (Fortune and
Gasnolar) and Grant, all acting in concert to his (the deceased’s) detriment.

38. After the loader had been sourced, a certain Mr. Bennett, a sworn appraiser,
was asked by Solomon to provide a so-called “desk top” assessment of the value of
the loader. Bennett never persona lly inspected the vehicle but relied on the
registration documents of the loader sourced by Solomon to provide the deceased
with a fair valuation thereof based on information sou rced on the internet. In
evidence before the Trial Court Bennett said that he had been approached by
Solomon and DJ to provide the valuation. Evidently, he had no direct contact with the
deceased.

39. It is not in dispute that the loader which was delivered to the deceased in
Philippi in late March 2008 was not the same the loader that was depicted in the
photographs that had been shown to Bennett and emailed to the deceased (care of
his wife) on 27 February 2008. That much was apparent from the e xternal defects
depicted on the loader delivered to the deceased – these were not visible on the
photographs disseminated earlier by Solomon. The full extent of th e defects (both
latent and patent) are fully set out in the second judgment.

40. The financing of the vehicle was facilitated through ABSA’ s branch in
Claremont, Cape Town which is where , on 3 March 2008, the deceased signed
Annexure A and the other documentation necessary to secure delivery of the loader
to his premises in Philippi. ABSA’s agent at that meeting was Fortune.

41. The evidence establishes that, whatever external manifestations or patent
defects4 there may have been to the loader upon delivery , it was only when the
engine was started up by Jacques in order to drive it off the low -bed at the
deceased’s premises that its defective mechanical functioning became apparent.

4 It was said that there was, for example, damage to the door and the mirrors, that the tyres were in
poor condition and that the loading bucket was rusted.
Jacques testified that, Inter alia, the hydraulics were not fully functional to the extent
that the loading bucket could not lift properly , its gearbox was faulty and it belched
smoke.

42. Jacques said that t he deceased remonstrated with the driver of the low -bed
regarding the fact that the loader that was being delivered was not the loader he had
bought. The driver remained steadfast that he was only doing what he was instructed
to do – to effect delivery of the lo ader to the deceased. In the result, the deceased
did not refuse to take delivery of the loader. R ather he instructed Jacques to reverse
it off the low -bed and he would thus have been immediately aware of its latent
defects as his son struggled to get the behemoth to move.

43. In the result, the deceased kept the loader and attempted to effect certain
running repairs , seemingly in order to render it basically funct ional. To this end
certain mechanics who had worked on the loader over time testified in the Trial Court
as to its defects. This evidence was not seriously challenged.

44. The evidence did not reveal that the deceased took immediate steps vis-à-vis
ABSA to address the alleged latent defects in the loader. As already stated, during
2008 he took the loader to various mechanical firms for repair work. He paid for
some of that work but ultimately he was quoted the amount R242 664, 96 by a
company known as Shadan Hydraulics for the anticipated cost of further repairs. The
deceased did not authorize these repairs and simply abandoned the vehicle at
Shadan’s premises in Stikland.

45. Some years later Shadan gave up occupation of the Stikland premises and
the loader remained behind for lornly abandoned at the mercy of the elements .
During 2015 an agent for the manager of the Stikland premises , Ms. Cox Jones,
testified that she made contact with the deceased’s erstwhile attorneys enquiring
what should be done regarding the abandon loader. She was told to contact the
deceased. Ultimately, said Cox-Jones, the machine was cut up and sold for scrap.
The recipient of the proceeds was unknown to her.

46. In 2009 the deceased defaulted on his payments to ABSA, whereafter
summons was issued out of the Wynberg Magistrates Court for delivery of the loader
alternatively payment of the outstanding capital – the sum of R575 228.03 – together
with interest and costs on the attorney and client scale. The deceased lodged a
counterclaim in that court in excess of R3m, made up in the main of his
consequential losses for his inability to use the loader to discharge his contract w ith
the developer. Because the counter claim exceeded the jurisdiction of that court, the
parties agreed to transfer the matter to this Di vision where the deceased issued
summons on the basis set forth in his particulars of claim as set out above.

47. In the midst of the toing and froing in 2008 to have the loader repaired , the
parties met in Cape Town in an attempt to resolve their differences, hence the
agreement which forms the basis of ABSA’s special plea. The details hereof will
appear more fully hereunder.

IN SUMMARY
48. At the end of the day, the relevant facts may briefly be summarized as follows.
The deceased bought a loader which was financed by ABSA and which was its
property: in terms of Annexure A, the deceased was the purchaser of the loader and
ABSA was to retain ownership thereof until the deceased had settled his
indebtedness in full. In the event that the deceased elected to terminate the
agreement at any stage prior to the fulfillment of his contractual obligations, he was
obliged to return the loader to ABSA. The agreement contains no voetstoots clause
nor are there any express clauses relating to warranties given by the one party to the
other.

49. The loader which was delivered to the deceased was not the loader financed
under the agreement. In this regard both Annexure A and the Release Note made
provision for the recordal of the loader’s engine, chassis, registration and serial
numbers, yet neither document contained any such detail. Further, on Annexure A
the loader was described as a “Renoster Kawasaki Front End Loader” with the year
of first registration being recorded as 2003, while on the Release Note it was
described as a 2000 model.

50. There is no dispute that the loader contained latent defects which affected its
ability to function properly , or put differently, which rendered it unsuitable for its
designated purpose. This fact is borne out by the evidence of the mechanics who
either worked on the loader or were asked to quote on the anticipated cost of further
repairs. Furthermore, the evidence on record of Grant, who was ABSA’s only witness
before the Trial Court, established that the background to the meeting of 23 July
2008 at ABSA’s offices in Cape Town was the following.

“MR GRANT : What happened, was there was a Clive Cook, and there were a
number of other people involved as well in the series of transactions. So the issue
was, in relation to Cook and the others, is that the equipment which had been
purchased and delivered to them had certain defects, and they were unhappy with
the equipment that they had taken delivery on. And so the discussions were along
the lines of how do we resolve and how do we deal with those issues in relation to
the equipment.”

Mr. Grant went on to testify later that the deceased had bought the loader “blind” and
was not happy with it because of it poor condition.

51. Lastly, it is common cause that the deceased breached the agreement in
early 2009 and that he did not ret urn the loader to ABSA. On 6 May 2009 the
deceased’s attorneys wrote to ABSA’s attorneys and informed them that they were
instructed by the deceased that the loader could be collected at the premises of
Shadan Hydraulics and that the return thereof was tendered without prejudice to the
deceased’s rights. At no stage did the deceased purport to cancel the agreement in
terms: the particulars of claim allege that the letter of 6 May 2009 constituted the
cancellation of the agreement, alternatively that the service of the summons herein
(sometime after 11 November 2009) served as cancellation thereof.

THE JUDGMENT OF THE TRIAL COURT
52. The judgment of the Trial Court is unfortunately not a model of clarity and the
reasoning is sometimes difficult to follow. At the conclusion of the judgment, the Trial
Court adopted what might be termed an overarching approach to the various causes
of action pleaded by the deceased in non-suiting him.

“F. FINDING
[80] In the circumstances, this Court is not convinced that the plaintiff has presented
a proper case for the relief sought. At the same time, in the absence of a dispute to
the defendant’s arrear instalment claim in reconvention of an amount of R575 228.03
the claim succeeds.”

That notwithstanding , I consider that the following can be gleaned from the
judgment.

53. Firstly, without expressly saying so, the Trial Court appears to have
acknowledged the enforceability of the settlement agreement and upheld the special
plea.

“[70] It might be argued that the agreement was contrary to public policy, unfair,
oppressive and draconian and so on. Howev er, the plaintiff did not tender any
evidence supporting the suggestions that the circumstances leading to the
conclusion of the settlement agreement were unfair, unconscionable and oppressive.
These suggestions were only put to the witnesses to comment who were not party to
this contract and/or settlement agreement. Again, this court cannot make its own
assumptions on a settlement agreement that was concluded in the presence of Mr.
Cook. In this situation, it is not open for the plaintiff to argue legal principles without
which (sic) are not based on facts.

[71] Moreover, it was not clear whether Mr. Cook had disavowed the terms of the
settlement agreement that he would not have any claim against Absa nor Peter
Maskell Auctions CC when he received the part payment of the settlement
agreement and subsequently claimed damage s against Absa. In addition, there was
no suggestion as to what should be done with the benefit (R8000.00) acquired by the
plaintiff as a result of that settlement agreement. No authority was produced on
whether the plaintiff is entitled to receive a benefit under the se ttlement agreement
and under this claim. In my view, that is impermissible.”

54. Secondly, in relation to the interpretation of clause 12 of the agreement and
the allegation by the deceased in para 4 of the particulars of claim that that it was an
express term of the agreement that the loader was in good working order and
condition and fit for purpose, the Trial Court said the following.

“[64] The plaintiff, in its (sic) interpretation of Clause 12 seems to suggest that it was
only ABSA who stated that the loader was in good working order. This interpretation
sort of loses sight of the fact that there were two parties to this agreement. This was
an express and material term of the contract that the loader was in good order and
condition. The plaintiff in agreement with the defendant agreed and or warranted that
in deed (sic) the loader was indeed in good working order.”

55. After quo ting the well-known passage from Endumeni5 relating to the
interpretation of written agreements, the Trial Court continued –

“[65]…. Judging from the contract of sale and the release note that was signed by
the plaintiff subsequent thereto, there is no way that this court can doubt the fact that
the plaintiff was satisfied by (sic) the loader that he purchased even before having
sight of it. In D & H Piping System (supra)6, the SCA held that a delivery note
constituted a performance of a contract. This therefore means that the contract at
that stage was finalized and the deal was sealed. The Courts are cautioned not to be
tempted to substitute their own interpretation in the contract, other than the one that
was agreed to by the parties. If Mr. Cook did not intend to agree to those terms as
specified, he should have simply refused to sign the said documents.”

56. The Tria l Court appears to have considered that the clause in the Delivery
Note relating to the deceased’s satisfaction with the condition of the loader,
confirmed a contractual term that the deceased had accepted that the loader was in
good condition and working order . The passage in D & H Piping referred to by the
Trial Court reads as follows.


5 Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) at [18]
6 D & H Piping Systems (Pty) Ltd v Trans Hex Group Ltd and another 2006 (3) SA 593 (SCA) at [15] .
This para in that judgment was cited by the Trial Court in para [56] of the judgment herein.
“[15] Neither a delivery note nor an invoice is a contractual document i.e. the type of
document in which the recipient would expect to find terms and conditions intended
to form part of the contract between the sender of the document and the recipient.
Both the delivery notes and the invoices received by the appellant’s employees
reflected performance, or part performance, of a contract already concluded. Neither
constituted an offer to do business. They would therefore not have required the
attention of a person authorised by the appellant to negotiate and agree to the terms
of any contract with the respondent. The respondent could accordingly not
reasonably have expected that they would come to the attention of such a person, as
opposed to the person(s) who would acknowledge receipt of goods delivered or
process invoices for payment; and this is particularly so both because the
respondent must have known that the appellant is a large company, with different
employees authorised to perform different functions on its behalf and also because,
to the knowledge of the respondent, the terms of its contractual relationship with the
appellant had already been negotiated with Lombard. Once it is established that no
person authorised to bind the appellant to the respondent’s general terms and
conditions ever became aware of them, or could reasonably have been expected to
do so, it does not avail the respondent to point to the number of occasions on which
such documents were sent to the appellant or the period of time over which this was
done.”

57. As I read that dictum, it establishes that where the party acknowledging
satisfaction with the condition of the merx is someone other than the person who
concluded the agreement, unless the former is expressly authorized to acknowledge
the integrity of the merx on delivery, any such acknowledgement is legally irrelevant.

58. But that was not the position here. It was common cause that Annexure A and
the Delivery Note were both signed at ABSA’s offices in Claremont on 3 March 2008
by the deceased personally , yet it was also common cause that the loader was only
delivered to the deceased at his premises in Philippi during the second half of March
2008. The question that then arises is what is to be made of the acknowledgement
by the deceased in the Delivery Note regarding a non-existent state of affairs? In the
absence of testimony by the deceased under oath, an an swer to that question could
be said to amount to judicial speculation, but, that having been said, it is difficult to
avoid a conclusion that the deceased and ABSA were in agreement that the loader
described in Annexure A and to be delivered thereafter to the deceased was to be in
good working order and condition and fit for purpose.

59. In drawing that conclusion, I have regard to the mandated approach to
contractual interpretation that Annexure A must be interpreted contextually and
purposively so as to give it commercial efficacy. In Capitec7, the SCA restated the
approach as follows.

“[25] Our analysis must commence with the provisions of the subscription agreement
that have relevance for deciding whether Capitec Holdings’ consent was indeed
required. The much -cited passages from Natal Joint Municipal Pension Fund v
Endumeni Municipality (Endumeni)8 offer guidance as to how to approach the
interpretation of the words used in a document. It is the language used, understood
in the context in which it is used, and having regard to the purpose of the provision
that constitutes the unitary exercise of interpretation. I would only add that the triad
of text, context and purpose should not be used in a mechanical fashion. It is the
relationship between the words used, the concepts expressed by those words and
the place of the contested provision within the scheme of the agreement (or
instrument) as a whole that constitutes the enterprise by recourse to which a
coherent and salient interpretation is determined. As Endumeni emphasised, citing
well-known cases, ‘[t]he inevitable point of departure is the language of the provision
itself’.”

60. As counsel for the deceased argued, and in the absence of a voetstoots
clause in the agreement, one cannot reasonably undertake to keep a merx in good
working order and condition unless it has been delivered to one in that state. Had
there been a voetstoots clause the situation may have been otherwise and it might
have been open to ABSA to argue that, whatever the condition of the loader on
delivery, it was the deceased’s obligation to maintain it in good condition and working
order.

7 Capitec Bank Holdings Ltd and others v Coral Lagoon Investments 194 (Pty) ltd and others 2022 (1)
SA 100 (SCA)
8 2012 (4) SA 593 (SCA) at [18]

61. The judgment of the Trial Court deals with the test for the incorporation of tacit
and implied clauses into the agreement and aspects of the actio empti and actio
redhibitoria (the aedilitian remedies) but there are no conclusive findings as to the
applicability or not of these remedies. I accept that the aedilitian remedies were
available to the deceased in the event that th e loader was latently defective and I
agree with the exposition of the law relating to the aedilitian remedies as set forth in
the second judgment.

THE SPECIAL PLEA
62. Although a number of witnesses were called to testify in support of the
deceased’s case, no one dealt with the meeting held on 23 July 2008 and the
agreement, which it is common cause, was concluded there. The sole witness for
ABSA was Grant who testified in November 2020 about his recollection of event s
more than 12 years earlier. His me mory was understandably vague an d in the
witness-box he referred to his contemporary notes taken during the meeting to
refresh his memory and a letter dated 26 July 2008 to ABSA. His notes were limited
as the file in the matter had been destroyed by the firm with which he had practiced
at the time.

63. Grant told the court that he was an attorney with more than 15 years’
experience and represented Maskell , a long -standing client who ran an
auctioneering business in KZN. Present at the meeting were the deceased who was
accompanied by a certain Rodney Mars (also sometimes referred to as “Marz”), who
Grant understood to be a para-legal of some sort assisting the deceased. ABSA was
represented by Fortune and an employee later identified as Ms . Jasmina Gasnolar.
Solomon was there and was later described by Grant as “ the agent involved in the
transaction that was under scrutiny”.

64. Grant told the Trial Court of the purpose of the meeting.

“MR GRANT … So the issue was, in relation to Cook and the others, is that
equipment which had been purchased and delivered to them had certain defects,
and they were unhappy with the equipment that they had taken delivery of. And so
the discussions were along the lines of how do we resolve and how do we deal with
those issues in relation to the equipment.”

He went on to describe ABSA’s role in the meeting as “fairly passive.”

65. Grant explained that at the meeting Solomon produced the photographs of the
loader which had been shared earlier with the deceased and which was the subject
of the sale. He testified regarding the deceased’s dissatisfaction expressed at the
meeting with the quality of the loader which was delivered to him, according to Grant,
on 28 March 2008. He further testified that the deceased had des cribed how the
loader had functioned for a week or so and how, thereafter , various problems arose.
These were all described with reference to mechanical defects – not related to the
external appearance of the loader – which effectively rendered the machine
inoperable. He noted that on 21 July 2008 the deceased had obtained a quote for
R242 000 to repair the loader.

66. Grant further testified that Solomon, who stayed in the Western C ape, was
known to his client, Maskell, and that they had done business in the past. Solomon
evidently owed Maskell money from previous dealings and in order to settle that
debt, the following arrangement was put in place.

“MR GRANT: So the idea would be that Solomon would introduce to Maskell
equipment and the buyer; Maskell would purchase that equipment, and then he
would sell it on at a mark-up. So, for example, if he bought an item of equipment, say
for R100 000 that had been referred to him by Solomon, he would then sell the same
item of equipment, say for R120 000…. And then the profit, the R20 000 would b e
set off… [against]…the debt owed by Solomon to… Maskell.

The transaction with the deceased was said to be such a deal.

67. Grant testified that an agreement was concluded at the meeting involving the
deceased and Solomon. ABSA and Haskell were not parties thereto. The salient
terms of this agreement, which was concluded orally and to which I shall refer further
as the settlement agreement , were later recorded in a letter which Grant sent to
ABSA on 28 July 2008. It reads as follows:

“Dear Sir
CLIVE COOK – FRONT END LOADER
1. I refer to the meeting held at your offices on 23 July 2008 and confirm that we
represent Peter Maskell Auctions CC.

2. We confirm that the ‘dispute’ arising from the sale and financing of the front end
loader has been settled.

3. In terms of the settlement, the buyer ’s agent, Ismail Solomon, has undertaken to
pay to the buyer (Clive Cook) the sum of R 25 000, 00 by no later than 29 July 2008.
This payment is in respect of the alleged defects in the front end loader.

4. Both Absa and Peter Maskell Auctions CC have now ‘fallen out of the picture’ and
neither Solomon nor Clive Cook shall have any claims against ABSA or Peter
Marshall Auctions CC.

Yours faithfully “

68. The letter makes plain that Grant understood that Solomon was the
deceased’s agent and that the settlement was concluded on that basis - between the
deceased as principal and Solomon as his agent. Pursuant to that agreement, the
deceased would look to Solomon to make good for any amounts recoverable from
the seller under the aedilitian remedies while his obligation to ABSA under the
instalment agreement would remain in place.

69. It is significant to note that on the day after the meeting, 24 July 2008, the
deceased also wrote to ABSA as follows.

“To: Shaun
From: Clive Cook
According to our meeting with Mr. I. Solomon and myself, the agreement that we
reached is that we would fix only the main moving part.

We contacted the mechanic [Russell] which (sic) was introduced by Ismail. He
indicated that it would take approximately five weeks, to complete what was
discussed.

As for what was arrange (sic) in the meeting, and the mechanics report, we are
looking at the end of September/October with instalments.
Yours sincerely”

70. Grant concluded his evidence by explaining that the discussion at the
meeting, which he said was fairly cordial, concerned the complaints that the
deceased had about the condition of the loader. As he saw it, the problem was that
the deceased had “ bought the equipment blind ” and was unhappy with what he had
bought on account of its condition.

71. The cross -examination of Grant was protracted but revealed little that was
new. Mr. Albertus was understandably hamstrung in his questioning of this wi tness
by the absence of his deceased client whose instructions and evidence were central
to the various defences put up in the replication to the special plea. The thrust of the
cross-examination was nevertheless two-pronged.

72. Firstly, it was suggested that Grant’s assumption that Solomon was the agent
of the deceased was wrong and that he was in fact the agent of Maskell. This is in
conflict with the allegation made by the deceased in para 8.1 of his amended
particulars of claim, in which he claimed that Solomon was ABSA’s agent or
employee. In any event, Grant remained resolute that he had considered tha t
Solomon was the deceased’s agent and in the absence of any evidence to gainsay
that stance, I consider that there is no compelling reason to reject this view. At the
end of the day, however, the question of agency is not material to the issues before
this Court.

73. The secon d point in cross -examination related to the suggestion that the
contract was clearly oppressive and essentially foisted upon the deceased. Mr.
Albertus alluded to the fact that there was an allegation attributed to the deceased
that there was a quote for repairs to the loader in the sum of R242 000. In light
thereof, said counsel, the decision to agree to a settlem ent of R25 000 was probably
attributable to the deceased having been placed under undue pressure to settle.
Counsel did not identify the party (or representative) who was alleged to have
applied such undue pressure but it can only have been ABSA because that is the
party against who m the defence is raised. However, it was not suggested by Mr.
Albertus in cross-examination that Fortune had behaved improperly in concluding the
agreement on behalf of the bank; this notwithstanding the allegation in para 8.1 of
the amended particulars of claim that Fortune acted in concert with Solomon as
ABSA’s agent or employee.

74. I am not persuaded that there is any merit in the second point. Firstly, there
are no obvious conclusions that can readily be drawn from the objective facts which
point to undue influence or the bending of the will of the deceased. On this score, it
must be borne in mind that the deceased was accompanied to the meeting by Mars
who was considered by Grant to have some modicum of legal experience. Moreover,
there was no attempt to present the evidence of Mars to sustain the inference that
Mr. Albertus sought to draw, nor was there any evidence that Mars was unavailable
to testify on behalf of the deceased . Secondly, and importantly, in a defence of this
nature, evidence of the state of mind of the contracting party subjected to undue
influence will invariably be crucial. Once again the absence of the deceased as a
witness is a critical consideration in this regard.

75. Thirdly, there is the email sent by the deceased to Fortune on 24 June 2008 in
which he offers some insight into the reason for his agreement to settle on R25 000
against a quotation for R242 000 to fix the loader. The tenor of the email is that only
limited repairs were to be done - “to fix the main moving part” – in order to render the
loader functional to the extent that it would enable him to use it to perform under the
contract with the developer and, most importantly, to resume payment of the monthly
instalment under the agreement by September/October 2008. The email might be
interpreted to suggest that the cost of repairs in the sum of R242 00 was considered
to have covered more than just essential repairs.

76. In para 4 of the second judgment there is reference to a passage in Sasfin9. I
adopt that dictum which holds that the power to declare contracts to be contrary to
public policy is a power to “be exercised sparingly and only in the clearest of cases”.
That approach was confirmed as follows by the Supreme Court of Appeal in
Pridwin10.

“[27] The relationship between private contracts and their control by the courts
through the instrument of public policy, underpinned by the Constitution, is now
clearly established. It is unnecessary to rehash all the learning from our courts on
this topic. It suffices to set out the most important principles to be gleaned from them:

(i) Public policy demands that contracts freely and consciously entere d into must be
honoured;

(ii) A court will declare invalid a contract that is prima facie inimical to a constitutional
value or principle, or otherwise contrary to public policy;

(iii) Where a contract is not prima facie contrary to public policy, but its enforcement
in particular circumstances is, a court will not enforce it;

(iv) The party who attacks the contract or its enforcement bears the onus to establish
the facts;

(v) A court will use the power to invalidate a contract or not to enforce it, sparingly,
and only in the clearest of cases in which harm to the public is substantially
incontestable and does not depend on the idiosyncratic inferences of a few judicial
minds;


9 Sasfin (Pty) Ltd v Beukes 1989 (1) SA 1 (A) at 9B-E
10 AB and another v Pridwin Preparatory School and others 2019 (1) SA 327 (SCA) at [27]
(vi) A court will decline to use this power where a party relies directly on abstract
values of fairness and reasonableness to escape the consequences of a contract
because they are not substantive rules that may be used for this purpose.” (Internal
references omitted)

77. This dictum in Pridwin was endorsed by the Constitutional Court in Beadica11,
albeit with limited qualification in respect of the principle of restraint mentioned by the
Supreme Court of Appeal in subpar (v) above.

“[88] The second principle requiring elucidation is that of “perceptive restraint”, which
has been repeatedly espoused by the Supreme Court of Appeal. According to this
principle a court must exercise “perceptive restraint” when approaching the task of
invalidating, or refusing to enforce, contractual terms. It is encapsulated in the
phrase that a “court will use the power to invalidate a contract or not to enforce it,
sparingly, and only in the clearest of cases”.

[89] This principle follows from the notion that contracts, freely and voluntarily
entered into, should be honoured. This Court has recognised as sound the approach
adopted by the Supreme Court of Appeal that the power to invalidate, or refuse to
enforce, contractual terms should only be exercised in worthy cases.

[90] However, courts should not rely upon this principle of restraint to shrink from
their constitutional duty to infuse public policy with constitutional values. Nor may it
be used to shear public policy of the complexity of the value system created by the
Constitution. Courts should not be so recalcitrant in their application of public policy
considerations that they fail to give proper weight to the overarching mandate of the
Constitution. The degree of restraint to be exercised must be balanced against the
backdrop of our constitutional rights and values. Accordingly, the “perceptive
restraint” principle should not be blithely invoked as a protective shield for contracts
that undermine the very goals that our Constitution is designed to achieve.
Moreover, the notion that there must be substantial and incontestable “harm to the

11 Beadica 231 CC and others v Trustees, Oregon Trust and others 2020 95) SA 247 (CC) at [82]
public” before a court may decline to enforce a contract on public policy grounds is
alien to our law of contract.” (Internal references omitted)

78. The earlier Constitutional Court au thority referred to in Beadica at [89] is
Barkhuizen12 where the Court noted the following.

“[70] While it is necessary to recognise the doctrine of pacta sunt servanda, courts
should be able to decline the enforcement of a time limitation clause if it would result
in unfairness or would be unreasonable. This approach requires a person in the
applicant’s position to demonstrate that in the particular circumstances it would be
unfair to insist on compliance with the clause. It ensures that courts, as the Supreme
Court of Appeal put it,

“employ [the Constitution and] its values to achieve a balance that strikes
down the unacceptable excesses of ‘freedom of contract’, while seeking to
permit individuals the dignity and autonomy of regulating their own lives.”

And this entails, the Supreme Court of Appeal explained,

“that intruding on apparently voluntarily concluded arrangements is a step that
judges should countenance with care, particularly when it requires them to
impose their individual conceptions of fairness and justice on parties’
individual arrangements.”

[71] This is a sound approach.” (Internal references omitted)

79. The mandated approach is therefore that the party which seeks to advance
the contention that a contract is contrary to public policy bears the onus of
establishing the facts upon which it seeks to rely. In this case the deceased adduced
no such evidence and the reliance in the second judgment merely on the allegations
made in the replication is, with respect, misplaced. Pleadings are the articulation of a
party’s envisaged case, not the evidence. In my respectful view, w ithout any

12 Barkhuizen v Napier 2007 (5) SA 323 (CC) at [70] – [71]
evidential basis having been established on behalf of the deceased, this Court
cannot b egin to consider whether the settlement agreement is contrary to public
policy.

80. Similarly, despite the far -ranging allegations of impropriety and collusion
made in the replication, the appellant adduced no evidence to sustain the claims that
the deceased was subjected to undue influence in concluding the settlement
agreement. In the result, the first and second grounds of defence to the special plea
raised in para’s 2 and 3 of the replication must fail.

81. The third leg of the replication to the special plea is that the settlement
agreement is not enforceable for want of compliance with cl ause 13 of Annexure A .
The argument adva nced by Mr. Albertus was that the settlement agreement
constituted an “addition to”, “variation” or “agreed cancellation” of a provision of the
agreement, as contemplated in clause 13.1 of Annexure A. The argument proceeds
as follows.

82. Annexure A is an agreement of sale in which ABSA was the seller and the
deceased the purchaser. The agreement contains no voe tstoots clause and so it is
to be imputed that it was an implied term of the agreement that ABSA warranted that
the loader was free of latent defects and fit for purpose. In that event, so it was
argued, the a edilitian remedies (whe ther under the actio empti or the actio
redhibitoria) would have been available to the deceased in the event that the loader
was found to be suffer from latent defects . By concluding the settlement agreement,
and exonerating ABSA from any liability for the latent defects in the lo ader, it was
submitted that the deceased had effectively varied the agreement by consenting to
an alteration to the legal consequences of the contract – in effect waiving his
entitlement to rely on the aedilitian remedies.

83. Clause 13.1 is a non -variation clause of the sort contemplated in Shiffren13.
Such clau ses have traditionally been str ictly enforced by the courts and have

13 SA Sentrale Ko-op Graanmaatskappy Bpk v Shiffren 1964 (4) SA 760 (a)
survived constitutional scrutiny14. However, it has repeatedly been held that the rule
in Shiffren does not a pply in circumstances where one party waives its accrued
rights under a contract. 15 The decision in Academy of Learning 16 relied on by Mr.
Albertus is thus distinguishable on the facts. In that matter the non-variation clause
included the phrase “ and no interpretation, change, termination or waiver of the
provisions of this agreement…will be binding upon the parties unless in writing and
signed by [both parties] ”. T he learned judge, after citing Hillsage Investments and
Impala Distributors, was of the view that the clause in that matter was wide enough
to cover an oral waiver, which thus was required to be in writing.

84. In the present matter, the non -variation clause does not require a waiver of
rights accruing under the agreement to be reduced to writing and signed by both
parties. In Impala Distributors17 the Full Court stressed that a waiver of a right similar
to that exercised by the deceased in this matter was a unilateral act by exercised by
a party in respect whereof the consent of the other contracting party was not
required. It is a unilateral act which can exist alongside the contract and its non -
variation clause.

85. In the present matter, I have accepted that the aedilitian remedies were
available to the deceased at the time of the meeting of 22 July 2008 given that –

(i) it was not in dispute that the loader was latently defective;

(ii) that there was no voetstoots clause in Annexure A; and

(iii) that the effect of clause 12.1, read in the context of the Delivery
Note, constituted a warranty by ABSA that the loader was free of
latent defects and fit for purpose.


14 Brisley v Drotsky 2002 (4) SA 1 (SCA) at [6] – [10]
15 Hillsage Investments (Pty) Ltd v National Exposition (Pty) Ltd and others 1974 (3) SA 346 (W) at
354F; Impala Distributors v Taunus Chemical Manufacturing Co.(Pty) Ltd 1975 (3) SA 273 (T) at
278A-B; Van As v Du Preez 1981 (3) SA 760 (T) at 763H – 765A; Miller and another NNO v
Dannecker 2001 (1) SA 928 (C) at [15]
16 Academy of Learning (Pty) Ltd v Hancock and others 2001 (1) SA 941 (C) at [36]
17 At 277C -G
86. Notwithstanding the availability of those remedies, the deceased decided not
to avail himself thereof but settled rather for the payment of the sum of R25 000 by
Solomon, who was not a party to the agreement. And, importa ntly, that decision to
look to Mr. Solomon for payment in respect of the repairs to the loader was
conveyed to ABSA in writing by the deceased on 24 July 2008 and in more detail by
Grant on 26 July 2008. Further, the deceased embraced the settlement agreement
by accepting the part payment of R8000 made by Solomon towards the agreed sum
of R25 000.

87. In the circumstances, I conclude that the deceased is not entitled to rely on
the provisi ons of clause 13.1 to avoid the consequences of the common cause
settlement agreement.

88. Lastly, there is th e allegation in the replication that the settlement agreement
was subject to either a suspensive or a resoluti ve condition linked to the initial
payment by Solomon of the sum of R8 000. During the cross -examination of Grant,
Mr. Albertus abandoned any reliance on a suspensive condition , noting that the
operation of the settlement agreement had not been suspended: rather, counsel
accepted that it had been implemented when the deceased accepted the payment of
R8 000 from Solomon.

89. The cross -examination turned to the issue of whether the settlement
agreement contained a resolutive ag reement. It was argued that when Solomon
failed to pay the balance, the alleged condition was triggered and the settlement
agreement was voided and thus of no force and effect. The argument is based on
legal sophistry and not evidence. On a plain reading of the written recordal of the
oral agreement in Grant’s letter of 26 July 2008, there is no basis to conclude th at
the stipulation that Solomon would pay the full agreed amount by a fixed date was
anything other than a term of the settlement agreement relating to payment.

90. But the argument does not end there . In cross-examination Mr. Albertus, in
pressing for a resolutive condition, invited Grant to comment on his understanding of
the basis for payment. The witness conceded that he had a fair understanding of the
law of contract and was adamant, having witnessed the conclusion of the settlement
agreement and made contemporaneous notes thereof, that there was no room for an
interpretation that the settlement agreement embraced a resolutive condition.

“MR. GRANT: Well, I’m telling you that it – that payment term was not a resolutive
condition.”

AGENCY
91. In the third judgment, My Colleague Kusevitsky concurs in the second
judgment for the reasons contained therein and further raises, by way of an apparent
obiter dictum , the issue of the agency of Solomon as a potential bar to the
conclusion of the settlement agreement. In para 1 of the special plea , ABSA does
not seek to rely on the agency of Solomon for the conclusion of the agreement but
rather alleges in para 2.2 that Solomon (qua agent) undertook to pay his principal
(the deceased) the sum of R25 000.00 in respect of the latent defects in the loader.

92. As already pointed out, the allegations in para 2.2 are admitted by the
deceased, save that it is denied that Solomon was his agent. The deceased’s case
on the pleadings is that Solomon was ABSA’s agent, while later (as pointed out
earlier) during cross-examination counsel suggested to Grant that he was Maskell’s
agent. But whatever the correct position in law may be, the deceased admitted in the
replication that the agreement was that Solomon would pay the deceased and he
(the deceased) would no longer enjoy any claim against ABSA arising out of the
latent defects. It is for this reason that I contend that the question of agency is legally
irrelevant in this matter.

CONCLUSION
93. In the light of the aforegoing, I am persuaded that the special plea should be
upheld and that the deceased is bound by the settlement agreement as alleged.
Consequently, the deceased enjoys no claim against ABSA arising from the latent
defects in the loader and the appeal against the dismissal of the claim in convention
falls to be dismissed

94. As regards ABSA’s claim in reconvention, the Trial Court held that, “ in the
absence of a dispute to the defendant’s arrear instalment claim in reconvention of an
amount of R575 228.03 the claim succeeds ” and judgment was granted in favour of
ABSA in that amount.

95. During several pre -trial conferences, and at the commencement of
proceedings before the Trial Court, the parties agreed on a separation of issues.
These included determination of the special plea and the allegations made in para’s
1 to 13 and 15.1 of the particulars of claim and the defendant’s claim in
reconvention. It was expressly agreed that the quantum of the deceased’s claim
would stand over for later determination.

96. I do not understand the agreement regarding the holding in abeyance of the
quantum of the claim in convention to include the quantum of the claim in
reconvention. The notice of appeal does not seek to attack the finding of the
quantum ordered on the claim in reconvention – it is only the finding in respect of the
determination of the merits of that claim which is attacked. Furthermore, neither party
suggested in either the heads of argument or in oral argument before us that the
quantum of the claim in reconvention was incorrectly determined. In the result the
finding of the Trial Court on the claim in reconvention is correct and must stand.

97. Had this judgment held the majority, I would have ordered that the appeal be
dismissed with costs.
GAMBLE, J
THULARE J
98. I have read the judgment of Gamble J. The facts and the applicable law
appear from that judgment. In my view, the facts and the application of the law
thereto established the availability of the two aedilitian remedies, to wit, the action
empti and the actio redhibitoria, to the appellant. The loader delivered was not the
one identified on the photographs sent but rather another loader of the same vintage,
make and colour which was not in a good and roadworthy order and condition but
rather in a mechanical state of disrepair and inoperable and was substantially unfit
for the purpose for which it was sought. Had Cook known the defects he would not
have purchased that loader as he would not be able to discharge his contractual
obligations to third parties because of the inoperability of the loader and would as a
result suffer damages in the form of loss of profits.

99. I have my doubts that Solomon and Maskell could always be said to have
been the agents of Cook. Cook could not source from and deliver the loader to
himself. It is amongst others from this point of agency, and its importance in the
approach to the alleged compromise, that I am unable to agree with Gamble J. The
developments leading up to the 23 July meeting, which founded ABSA’s special
plea, formed the body of evidence that showed that both Solomon and Maskell acted
interchangeably by their own name, on behalf of Cook and on behalf of ABSA. It was
for that reason that it was necessary that the meeting was attended by the four, to
wit Cook, Solomon, Maskell and ABSA. Against this background, agency, both in
respect of the agreement and the settlement, was very central to the dispute.
Although Grant used the plural and created the impression that the others were also
unhappy, the only person at that meeting who was unhappy with the loader delivered
was Cook. At that meeting, it was Cook who expressed dissatisfaction with the
loader delivered, which he bought from ABSA.

100. The parties to the sale agreement, in which the agreement founded the
delivery of a loader that caused the displeasure of Cook, were Cook and ABSA. In
my view, the oppression in the making of that 23 July agreement emerged in that the
agreement absolved ABSA where its agents, Maskell and Solomon, delivered an
inoperable loader to Cook. The agreement was unconscionable in that two days
before that meeting, Cook had obtained a quote for R242 000 -00 to repair the
loader, and ABSA’s agent Solomon, at that meeting, had undertaken to pay him R25
000 in respect of the alleged defects, and the agreement was that ABSA and Maskell
fell out of the picture and neither Solomon nor Cook would have any claim against
them. The sum was grossly inadequate to cover the costs of repairing the defects to
the loader. Without any quote and evidential basis, the amount of R25 000 was
proposed to fix only the moving part. This amount is advanced by Solomon, who had
previously provided a ‘desk -top’ assessment of the value of the loade r by a sworn
appraiser who never inspected the loader but relied on information from the internet
and documents supplied by Solomon. Cook had described the manner in which the
loader was delivered in a mechanical state of disrepair and inoperable as including
that the motor turned but after having been started 3 times, the starter burnt out, the
motor started only in the first three occasions, the suspension did not work properly
as the bushes were badly worn, the electrical circuitry did not work properly as there
were no wires/cables leading to the lights and the loom which controls the electrical
circuitry was in a state of disrepair, the motor delivered power to the axles and power
was delivered from the axles to the wheels but there was resistance to free
movement, the hydraulic system did not work properly. There was initially no
hydraulic oil in the machine. When the machine was filled with 75 litres of hydraulic
oil and started, it spewed out oil. Cook was compelled to repair the hydraulic system
and after such repairs were effected, the system worked shortly whereafter it packed
up on account of there being metal sworf in the hydraulic lifters. The braking system
was extremely weak and in addition thereto, there was no functional handbrake. The
controls and accoutrements in the cab did not work properly on account of a faulty
loom. The gearbox and shifters did not work properly, the gearbox was leaking oil
and could not reach top gear. The tyres were smooth with holes and bubbles present
on the surface. The door on the driver’s side could not open and close and the
passenger door had no locking mechanism whatsoever. The cab seat was broken
and locked permanently in a fixed position and thus not amenable to any adjustment.
The air conditioner did not work. None of the lights on the loader worked. There were
no mirrors. There was no window in the passenger door whilst the window in the
driver’s door was cracked and hanging. The bucket was completely rotten with big
holes and in addition was wobbly. The radiator had no cover and was blocked due to
oil leaks from the engine and the hydraulic system. The steering was worn and
unstable. The cab was rusted and the wheel rims were rusted.

101. In Sasfin (Pty) Ltd v Beukes 1989 (1) SA 1 (A) at page 9B-E it was said:

“No court should therefore shrink from the duty of declaring a contract contrary to
public policy when the occasion so demands. The power to declare contracts
contrary to public policy should, however, be exercised sparingly and only in the
clearest of cases, lest uncertainty as to the validity of contracts result from an
arbitrary and indiscriminate use of the power. One must be careful not to conclude
that a contract is contrary to public policy merely because its terms (or some of
them) offend one's individual sense of propriety and fairness. In the words of Lord
Atkin in Fender v St John -Mildmay 1938 AC 1 (HL) at 12 ([1937] 3 All ER 402 at
407B - C),

'the doctrine should only be invoked in clear cases in which the harm to the public is
substantially incontestable, and does not depend upon the idiosyncratic inferences of
a few judicial minds'

D (see also Olsen v Standaloft 1983 (2) SA 668 (ZS) at 673G). Williston on
Contracts 3rd ed para 1630 expresses the position thus:

'Although the power of courts to invalidate bargains of parties on grounds of public
policy is unquestioned and is clearly necessary, the impropriety of the transaction
should be convincingly established in order to justify the exercise of the power.'

In grappling with this often difficult problem it must be borne in mind that public policy
generally favours the utmost freedom of contract, and requires that commercial
transactions should not be unduly trammelled by restrictions on that freedom.

'(P)ublic policy demands in general full freedom of contract; the right of men freely to
bind themselves in respect of all legitimate subject-matters'”

The absolution of ABSA, taking advantage of an obviously naïve, ordinary and
innocent member of the public, who engaged with ABSA clearly without effective
legal representation, resulted in harm to a member of the public, which is
substantially incontestable. ABSA delivered an inoperable loader to a member of the
public, and ABSA’s driver refused to return the loader back to ABSA when the
member of the public refused to receive it in its inoperable state. To enforce the
agreement under these circumstances is unduly harsh and oppressive. I am unable
to find how the letter of Cook the day after the meeting in any way helped ABSA, as
regards the attainment of simple justice between man and man, on the interests of
the community on economic expedience. Cook bought a loader to conduct business.
ABSA delivered a lemon, sought to be absolved and needs to be paid in full as if it
delivered a loader fit for purpose. This is a bargain that a court has a duty to
invalidate. It would be unreasonable and unfair to enforce the agreement. ABSA
cannot gain an advantage from an unacceptable excess of the freedom to contract.

102. In Phoenix Salt Industries (Pty) Ltd v The Lubavitch Foundation of Southern
Africa (330/2023) [2024] ZASCA 107 (3 July 2024) it was said at para 15 and 16:

[15] The issue, therefore, in this appeal is whether Phoenix Salt through the Krok
Brothers waived its right to claim the remaining loan amount from Lubavitch, if so,
whether such a waiver is competent in the face of the non -variation clause. A waiver
denotes a voluntary abandonment of a known existing right, benefit or privilege
which if it were not for such waiver the party would have enjoyed it. It should be a
deliberate abandonment either expressly or by conduct plainly inconsistent with an
intention to enforce such right [R H Christie Çhristie’s The Law of Contract in South
Africa 8 ed (2022) at 532. See also: Alfred McAlpine & Son (Pty) Ltd v Transvaal
Provincial Administration 1977 (4) SA 310 (T) at 323 -324]. The principle that a
person may denounce any right or privilege available to him provided such a waiver
is not prohibited by law or does not offend public policy, is well established in our law
[SA Eagle Insurance Co Ltd v Bavuma 1985 (3) SA 42 (A) 49G -H; Ritch and Bhyat v
Union Government (Minister of Justice) 1912 AD 719 at 734 -735 where the court
held:

‘The maxim of the Civil Law (C.2, 3, 29), that every man is able to renounce a right
conferred by law for his own benefit was fully recognised by the law of Holland. But it
was subject to certain exceptions, of which one was that no one could renounce a
right contrary to law, or a right introduced not only for his own benefit but in the
interests of the public as well. (Grot., 3, 24, 6; n. 16; Schorer, n. 423; Schrassert, 1,
c. 1, n. 3, etc.). And the English law on this point is precisely to the same effect.’]

The existence of a waiver can be traced from the conduct of the parties. Whether
there was a waiver or not is a matter of evidence.

103. This Court in SA Sentrale Ko -op Graanmaatskappy Bpk v Shifren en Andere
[SA Sentrale Ko -op Graanmaatskappy Bpk v Shifren en Andere 1964 4 All SA 520
(A); 1964 (4) SA 760 (A) at 765.] (Shifren) laid down a principle governing the non -
variation clauses in agreements. In terms of this principle, once parties to a written
agreement agree that an agreement cannot be altered unless certain conditions are
met, no amendment will be valid unless the prescribed condition has been met. The
principle was reaffirmed in Brisley v Drotsky, [Brisley v Drotsky 2002 (4) SA 1 (SCA)]
where this Court held that the purpose of non-variation clause was to curtail disputes
and protect both parties to the contract. The Shifren principle did not create a ‘strait
jacket’, which impact, courts should attempt to soften as a few cases demonstrated.
The principle in its simplest interpretation, simply reinforced the rights of individuals
to freely contract and be held to contracts they freely concluded. Importantly, for
purposes of this appeal, Shifren did not determine whether the non -variation clause
precludes a waiver.”

I am not persuaded that Cook was informed that the actio empti and the actio
redhibitoria were available to him as remedies in this case, against ABSA, where the
loader had latent defects. I am not persuaded that Cook, of his own free will,
informed of the available remedies against ABSA, voluntarily abandoned existing
rights which he knew about. In my view, Cook cannot be said to have abandoned his
rights consciously and intentionally after careful consideration and unhurried
engagement. Cook did not deliberately and seriously, after careful thought as an
informed and thus capable person having investigated and considered, with the
intention that ABSA’s obligations towards him as regards the loader would
immediately cease, waive his rights. I do not understand Cook’s pleadings, as a
whole, to be an unequivocal admission of a waiver in the manner that Gamble J
interpreted it.

104. For these reasons, I am not persuaded that Cook was bound by the
settlement agreement. In any event, the alleged settlement was between Cook and
Solomon, and not with ABSA as it should have been. I am persuaded that the
deceased had a claim against ABSA arising from the latent defects in the loader and
the appeal against the dismissal of the claim in convention should be upheld. It
follows that ABSA’s claim in reconvention as well as the special plea should f ail. I
would make an order upholding the appeal with costs, such costs to include the
ciosts of two counsel where so employed. In the result I concur in the order proposed
by Kusevitsky J in the third judgment.

THULARE, J

KUSEVITSKY, J
105. I have had the opportunity of perusing the judgments of Gamble J and
Thulare J and am in agreement with the conclusion reached by Thulare J. I do,
however, wish to add two observations thereto.

106. Absa put up a special plea of compromise. It averred inter alia that the
material express and/or tacit term of the settlement agreement relied upon was that
Plaintiff’s agent, Ismael Solomon, undertook to pay the Plaintiff the sum of
R 25 000.00 by no later than 29 July 2008 in respect of the alleged defects in the
loader.

107. In my view, in order for Absa to be successful in its special plea, it has to
show that the settlement agreement of compromise is valid and binding between the
parties in the main action. Only once this is established can the enquiry commence
as to whether or not the agreement so concluded offends public policy. That is not
to say however that the former is an absolute pre -requisite in establishing whether a
contract offends public policy. It is a trite principle that contracts should not be contra
bonos mores.

108. It is trite that agreements of compromise are generally made between the very
same parties to the dispute which is sought to be compromised. The effect of a
compromise is the same as res iudicata on a judgment given by consent. 18 It is an
absolute bar to an action on the cause of action compromised, but not on any claim
not included in the compromise. The practical effect of a settlement agreement of
compromise is that there is no longer any dispute or lis between the parties. 19
Furthermore, the general principles relating to compromise are applicable thereto. In
The Road Accident Fund v Taylor20 and other matters, the court stated the following
in this regard:

“The essence of a compromise (transactio) is the final settlement of disputed or
uncertain rights or obligations by agreement. Save to the extent that the compromise

18 Van Zyl v Niemann 1964 (4) SA 661 (A).
19 Legal Aid v Magidiwana 2015 (2) SA 568 at para 20.
20 1136-114/2021) [2023] ZASCA 64 (8 May 2023) at para 36.
provides otherwise, it extinguishes the disputed rights or obligations. The purpose of
a compromise is to prevent or put an end to litigation. Our courts have for more than
a century held that, irrespective of whether it is made an order of court, a
compromise has the effect of res iudicata (a compromise is not itself res iudicata
(literally ‘a matter judged’) but has that effect).”

109. In casu, the lis was between Mr Cook, who bought the loader and Absa, who
provided the finance thereto. Generally, a settlement agreement would be inter
partes the dispute, in this case between Absa and Mr Cook. In Legal Aid v
Magidiwana 2015 (2) SA 568 (SCA), the court held that once the parties have
disposed of all disputed issues by agreement inter se , it must logically follow that
nothing remains for a court to adjudicate upon and determine.21

110. If a settlement agreement is concluded by a person not a party to the lis, then
the onus is on the party relying on the settlement agreement to prove the authority of
the third party to enter into the settlement agreement in its stead or otherwise. In his
judgment, Gamble J opines that the question of agency does not arise. I respectfully
disagree. It is common cause that Cook needed the loader to fulfil his contractual
obligations and contacted Solomon who was a broker in earthmoving equipment. To
the extent that Solomon procured the defective loader, in my view, his mandate as
‘agent’ ended as soon as the goods were procured and delivered to the supplier.

111. When the settlement agreement was entered into, present was Cook and
Marz, representatives of Absa, Solomon and Grant, representing Maskell
Auctioneers. According to the special plea, the averment is made that Solomon was
Cook’s agent and in that capacity, undertook to pay Cook the sum of R 25 000.00, a
sum ostensibly to cover only the repairs of the ‘main moving part’. In my view, this
was a dispute between Cook and Solomon who ostensibly hoodwinked Cook by
providing via Maskell and Absa, a lemon of a product, which was financed by Absa.
Absa failed to do its due diligence.


21 at 579E.
112. Thus, the substance of the compromise as between Cook and Solomon was
for payment of monies by the latter to the former. The effect of this agreement was to
settle a dispute between Cook and a third party and the settlement, once concluded,
formed the basis of any rights and duties of the parties, and any earlier obligation or
liability inter se fell away. If there was a breach of the compromise, the aggrieved
party had recourse based on the agreement of compromise. In other words, as
between Cook and Solomon. The compromise between Cook and Solomon could
never have substituted Absa for Solomon as the seller of the merx. In casu, the main
action is between Cook and Absa and there can be no privity of contract qua
Solomon. The contract is binding as between Cook, the debtor purchaser and Absa,
the creditor. There also does not seem to be a cession of rights between Absa and
Solomon. Thus, any agreement to waive rights must specifically be between the
contracting parties in the main action.

113. Furthermore, Cooks right to restitution flows from the contract to which
Solomon was not a party. The object of obtaining restitution is, as far as possible, to
restore the position which existed prior to the conclusion of the contract. 22 Generally
a court will be slow to countenance a contract seemingly concluded in bad faith by a
third party to the main action, the effect of which would be the relinquishing of rights
by the debtor in favour of the creditor. There is therefore in my view, no basis in law
upon which Solomon, not a party to the main lis, could have been a party to the
settlement agreement of compromise, as a third party, without agency or novation,
thereby absolving Absa from any remedies that Cook would have had against it.

114. Finally, with regard to the Plaintiff’s claim regarding the merits, the court a quo
held that the ‘release note indicates that the plaintiff was required to confirm that he
was satisfied with the condition of the loader and that it was in accordance with his
entire satisfaction and according to his specification/requirements’ and that ‘in the
absence of evidence from the plaintiff to that effect, the plaintiff’s allegations are
simply untenable’. This finding too cannot stand. It is common cause that Absa
required the delivery note to be signed by Cook prior to them releasing the funds to
Maskell and weeks before the actual goods were delivered to Cook. It does not

22 See Van Zyl v Credit Corporation of SA Ltd 1960 (4) SA 582 (A).
behove Absa to rely on the delivery note to absolve it of its liability. As a
consequence, I am in agreement that the Aedilitian remedies are available to the
Appellant.

115. For the reasons advanced I too would uphold the appeal and make the
following order:

1. The appeal is upheld with costs of the proceedings to date, such costs
to include the costs of two counsel where employed.

2. The Respondent’s claim in reconvention is dismissed with costs, such
costs to include the cost of two counsel where employed.

3. The Appellant is entitled to such damages, including consequential
damages as he is able to prove at a later hearing.

KUSEVITSKY, J

GAMBLE, J:
ORDER OF COURT:
In the circumstances the following order is made:

1. The appeal is upheld with costs of the proceedings to date, such costs
to include the costs of two counsel where employed.

2. The Respondent’s claim in reconvention is dismissed with costs, such
costs to include the cost of two counsel where employed.

3. The Appellant is entitled to such damages, including consequential
damages as he is able to prove at a later hearing.

GAMBLE, J

APPEARANCES
For the appellant Advs. M.A.Albertus SC et J.B.Engelbrecht
Instructed by Jones Attorneys Inc.
Cape Town.

For the respondent Adv. M. Greig
Instructed by Webber Wentzel
Cape Town.