SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
in compliance with the law and SAFLII Policy
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
APPEAL CASE NO: A127/2024
GP CASE NO: 42362/2021
(1) REPORTABLE: YES/ NO
(2) OF INTEREST TO OTHER JUDGES: YES/ NO
(3) REVISED.
In the Full Court Appeal of:
A[...] M[...] Appellant
(Plaintiff in the Court a quo)
and
H[...] M[...] First R espondent
(First Defendant / Excipient in the Court a quo)
H[...] M[...] N.O.
(In his capacity as Trustee of the
A[...] Trust : IT 8998/07) Second Respondent
(Second Defendant / Excipient in the Court a quo)
A[...] M[...] N.O.
(In her capacity as Trustee of the
A[...] Trust: IT8998/07) Third Respondent
(Third Defendant in the Court a quo)
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THE STANDARD BANK OF SOUTH AFRICA LIMITED Fourth Respondent
(Fourth Defendant in the Court a quo)
THE MASTER OF THE HIGH COURT: PRETORIA Fifth Respondent
(Fifth Defendant in the Court a quo)
FULL COURT JUDGMENT
THE COURT:
[1] This appeal serves before the Full Court wi th leave having been granted by
the Court a quo on 9 April 2024. [2] The appeal is against the whole of the judgment and order delivered by
Acting Justice Bokako under case number GP Number 42362/2021 on 31 August
2023. The Court a quo upheld paragraphs 1 to 6 of an exception raised against the
appellant’s particulars of claim in the Court a quo.
BACKGROUND FACTS [3] The appellant and the f irst respondent were married and in the course of the
marriage a Family Trust, the A[...] Trust with Trust No. IT8998/07 was established on
12 July 2007. The a ppellant, the first respondent and the late Jan Andreas
Rautenbach were duly authorised to act as the trustees of the A[...] Trust in terms of
Section 6 of the Trust Property Control Act, No. 57 of 1988.
[4] The marriage falter ed and the a ppellant and the first respondent entered into
a settlement agreement in respect of their anticipated divorce on 18 December 2015. The appellant and the first respondent were divorced in 2016 under case number
1258/2016 in this Division and the settlement agreement was made an order of court.
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[5] Mr Jan Andreas Rautenbach, the third trustee, passed away on 5 April 2018.
[6] On 24 August 2021 the appellant sued the first to fifth respondents setting
out claims for maintenance, contempt of court, specific performance of the settlement agreement and and alternatives thereto including a claim for damages.
[7] On 6 December 2021 the first and second defendant filed a notice of
exception to the last two claims , which exception was upheld by the Court a quo on
31 August 2023 .
[8] The causes of complaint raised by the first and second defendants in the
exception only relate to the plaintiff’s third claim, the alternatives to the plaintiff’s third
claim and the plaintiff’s fourth claim.
[9] The first and second defendants in the Court a quo excepted to the plaintiff’s
particulars of claim on the basis that the particulars of claim disclose no cause of action against the first and second defendants. T he exception was not based on
vagueness and embarrassment.
[10] In light of the aforesaid it is not necessary to set out the claims in the
particulars of claim related to the first claim (maintenance) and the second claim
(contempt).
[11] The A[...] Trust is the registered owner of two immovable properties, namely:
11.1 […] R[…] Street, S […] 1[…], M[…], Gauteng (“the M […] property”);
and
11.2 Unit 8 […], Scheme S […] Number 2[ …] with Title Deed No. S[ …],
located at 1[ …] S[…], Z[…] E[…], KZN (“the Z[ …] property”).
[12] In terms of the settlement agreement these properties were to be transferred
to the plaintiff. However, this had not taken place, giving rise to the third claim in the particulars of claim.
[13] In the particulars of claim it was pleaded regarding the Trust:
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13.1 That it is the registered owner of the two aforesaid immovable
properties;
13.2 That the plaintiff, the first defendant and Mr Jan Andreas
Rautenbach are the trustees;
13.3 That the plaintiff and the first defendant undertook in the settlement
agreement to take a joint Trust decision to transfer the M[...] property into the
name of the plaintiff (clause 5.3 of the settlement);
13.4 That the plaintiff and the first defendant undertook to jointly take a
Trust decision by the Trust to transfer the Z[...] property into the name of the
plaintiff.
[14] The plaintiff contends that the first defendant failed to give effect to clause 5 of
the settlement agreement relating to the two aforesaid properties. The plaintiff
consequently claimed specific performance, with an alternative of damages.
[15] In paragraph 14.2 of the particulars of claim the following is pleaded:
“14.2 In light of the aforesaid the plaintiff prays for an order of specific
performance against the first and second defendants that:
14.2.1 The first and second defendants be ordered to take all necessary
steps to take the joint decision with the plaintiff in her capacity as the third defendant to transfer the M[...] property and the Z[...] property to the plaintiff
within 7 days after the granting of the order;
14.2.2 The first, second and third defendants take all necessary steps to
effect the transfer of the M[...] property and the Z[...] property to the plaintiff,
and within 2 months after the granting of this order.”
[16] The alternative for damages is based on the court declining specific
performance. The market value of the M[...] property was pleaded to be
R9 000 000.00 and the Z[...] property R4 800 000.00 . It was also pleaded that the
outstanding bond amount relating to the Z[...] property, owed to Standard Bank , is
the amount of R2 484 588.97. The damages claim therefore totalled
R11 315 411.03.
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[17] As a further alternative the plaintiff pleads an oral agreement concluded in
January 2012 at Pretoria, when the Trust acquired the Z[...] property. The terms of
the agreement are that the plaintiff and the first defendant would be responsible for
the bond payments and monthly instalments payable to Standard Bank, payment of monthly levies, utilities and insurance. A ny amount paid by either the plaintiff or the
first defendant would be reflected in their loan account s in the Trust for the benefit of
the payer, and that the loan account would be repayable on demand. [18] The plaintiff pleads that she paid R1 888 426.31 in respect of the bond, paid
levies in respect of the Z[...] property of R270 105.12 and paid utilities of R161
803.26 and insurance of R305 012.80. The Trust is therefore indebted to the plaintiff
in the amount of R2 625 347.50, comprising the total of the aforesaid, which amount
the plaintiff demanded from the Trust.
[19] As a further alternative the amount of R2 625 347.50 is claimed on the basis
of enrichment, the plaintiff contending that those expenses were incurred in the bona fide but mistaken belief that the Z[...] property would be transferred to the plaintiff in
terms of the settlement agreement.
[20] In Claim 4, the plaintiff claims against the Trust in terms of a suretyship
concluded on 25 January 2012 at Pretoria, in terms of which the plaintiff and the first defendant bound themselves as sureties and co- principal debtors for the Trust for
the liabilities of the Trust to Standard Bank.
[21] The plaintiff claims that she made payment to Standard Bank in the amount of
R1 888 426.31, thereby extinguishing the debt of the Trust to Standard Bank in that
amount, which amount she claims back from the Trust.
THE CONTENTIONS OF THE PARTIES IN THE COURT A QUO
First ground of exception
[22] The first ground of exception was that ex facie a settlement, the Trust is not a
party to the agreement, therefore the plaintiff has failed to disclose a cause of action against the Trust.
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[23] The plaintiff contends that, in the introduction of paragraph 8 of the particulars
of claim, the plaintiff pleaded express, alternatively tacit, alternatively implied terms
of the settlement agreement, expressly averring in paragraph 7.2 that the agreement
was reached between the plaintiff and the first defendant, both acting personally and
in their capacities as trustees of the A[...] Trust. It was further contended that
exception is not the appropriate stage at which to settle questions of interpretation of
the contract.
Second ground of exception
[24] The second ground of exception relates to the alternative cause of action in
paragraph 14.4 of the particulars of claim, where the plaintiff pleads an oral
agreement for payment of expenses pertaining to the Z[...] property.
[25] In the exception the first and second defendants contend that the plaintiff
failed to plead what the terms of the alleged verbal agreement were in concluding that the plaintiff is entitled to full payment of the alleged payments from the Trust, or
that the alleged terms continue to apply (paragraph 6 of the exception).
[26] The excipients further contend that the plaintiff has not pleaded that it was a
term of the 2012 oral agreement that the Z[...] property would be transferred into the
name of the plaintiff at some future date. It is only in terms of the settlement
agreement that the plaintiff would acquire ownership of the Z[...] property, after
fulfilment of a suspensive condition provided for in clause 5.5 (paragraph 8 of the
exception).
[27] The fourth ground of exception expands on this issue and alleges a failure to
plead compliance with a suspensive condition. As the fourth ground of exception is
interwoven with the second, it is not dealt with separately.
[28] The clause in question provides that the M[...] and Z[...] properties will be
transferred by Couzyn Hertzog & Horak within 3 months after signature of the agreement. The contention on behalf of the plaintiff , in response to the second
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ground of exception, was that the plaintiff does not claim transfer of the M[...] and
Z[...] properties in terms of the alternative claim but claims payment in terms of the
oral agreement.
[29] The excipient contended that the plaintiff did not make averments necessary
to overcome or comply with the “suspensive condition” .
[30] Plaintiff denied that it was a suspensive condition but contended that the
interpretation of the agreement should stand over for trial.
Third ground of exception
[31] The third ground of exception was that Rautenbach, the third trustee, was not
cited as a party to the proceedings .
[32] The plaintiff’s response was that he had passed away and that his trusteeship
terminated on his death.
Fifth ground of exception [33] The fi fth ground of exception was that the plaintiff did not disclose a cause of
action against the Trust as principal debtor in terms of the suretyship agreement.
[34] The plaintiff’s response was that clause 14.4 of the particulars of claim sets
out the terms of the oral agreement, in terms of which expenses paid in respect of
the Z[...] property would be reflected in the loan account of the Trust, which would be
repayable on demand. In paragraph 14.4.11 of the particulars of claim the plaintiff
pleads that demand is made in terms of the summons .
Sixth ground of exception
[35] The exception provides that the plaintiff failed to attach “KLM” as referred in
clause 6.2 of the settlement agreement, rendering the pleadings excipiable.
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[36] The plaintiff’s response is that Annexure KLM refers to a list of movable
assets which the plaintiff would retain, and which were present in the M[...] property.
As the plaintiff does not claim any relief pertaining to the M[...] property, the
annexure is not required in terms of Rule 18(6) for purposes of pleading.
THE JUDGMENT A QUO
[37] In the judgment the Court a quo expressly stated that she does not intend
dealing with all the grounds of exception but will focus on the crux of the relief sought against the assets owned by the Trust. The Court found that, as a first step, the
plaintiff should have joined the Trust to the proceedings (paragraph 7 of the
judgment). The Court found that the Trust had a direct and substantial interest in the
relief sought and should have been joined (paragraph 14). The Court concludes in paragraph 16:
“16. To put matters into perspective, the plaintiff’s third and fourth claim is
centred around the Trust which is not a party to these proceedings. Having
sketch ed the above, the plaintiff’s claim is excipiable.”
[38] The Court found that the third trustee should have been cited. Having
discussed only the issue of joinder and having found the Trust not to be a party to the proceedings, the Court proceeded to uphold all six grounds of exception (Order,
paragraph 17 - CaseLines 0- 8).
DISCUSSION
[39] The parties advance similar arguments before this Court to those that were
raised before the Court a quo. It is trite that th e power of a court of appeal to
intervene is triggered by the identification of a misdirection by the Court a quo.
[40] In this case t he Court a quo made a fundamental misdirection by finding that
the Trust was not a party to the proceedings.
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[41] During the hearing, counsel for the excipients contended that the Court a quo
misunderstood the complaint regarding the Trust. The crux of the complaint was that
Mr Rautenbach was not a party to the settlement agreement and therefore no valid agreement was concluded between the parties and the Trust. This is not the point raised on the papers before us. The first ground of exception referred to above
illustrates this. In particular, it is not the basis upon which the Court a quo upheld the
exception.
[42] The particulars of claim make it clear that the plaintiff instituted action against
the first defendant and against the Trust, citing the remaining trustees at the time of
institution of the action.
[43] Although Mr Rautenbach was also an appointed trustee, he had passed away
by the time the action was instituted in the Court a quo. The death of a trustee
results in the vacation of the office of trustee. In Du Plessis v Van Niekerk 2018 (6)
SA 2018 (FB) at paragraph [30]) Daffue, J stated:
“[30] … The term ‘vacation of office’ may be regarded as more
problematic, but in my view it is not. The authors in Honoré deal from 225
and further with five eventualities. The death of a trustee is an obvious eventuality, as are the vacation of office by a trustee appointed ex officio , the
revocation of a constitution under which the trustee was appointed and the termination of the trust. …”
[44] The Court a quo therefore erred in not discerning that the Trust was already a
cited party in the proceedings that served before her. As this was the sole basis of
the judgment of the Court a quo, this Court does not have the benefit of the Court a quo’s reasoning in respect of the other grounds of exception. This is in itself an oversight by the Court a quo, particularly as she upheld the exception on all six grounds that were raised. The absence of a r easoned judgment for the upholding of
all six grounds of exception complicates an assessment of the order appealed
against on appeal .
[45] None of the grounds of exception that were raised should have been upheld.
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[46] Insofar as the excipients contend that the settlement agreement ( Annexure
B1 to the particulars of claim) is an agreement only between the plaintiff and the first
defendant and does not constitute evidence of an agreement between those parties
and the Trust, the premise of the submission is one of interpretation. While ex facie the written agreement, the Trust is not expressly cited as a party, the pleadings
pertaining to the agreement make it clear that the parties acted in their personal and
representative capacities. So, for example, in clause 5 of the settlement agreement,
reference is made to a joint decision as trustees.
[47] It will rarely be appropriate to resol ve an issue of interpretation of a written
agreement at exception stage. This particularly s o when the issues arising from the
exception involve facts not yet before the court. In this instance it is apparent that
evidence may impact the interpretation. It is therefore inappropriate to interpret the
agreement at the exception stage in order to determine the correctness of the
pleadings (see Francis v Sharp 2004 (3) SA 230 (C) at page 237).
[48] It will be for the Trial Court to assess evidence in order to determine whether
the Trust was in fact a party to the settlement agreement or not. The primary ground
of exception, the sole basis on which the Court a quo upheld the exception, is
therefore fundamentally flawed. The trust was pleaded as a party to the proceedings.
Whether that is so is for the trial court to determine.
[49] The second ground of exception relates to the plaintiff’s entitlement to
payment of disbursements from the Trust. It is alleged that insufficient allegations
were made to make the Trust liable. This is incorrect. The plaintiff is calling up her
loan account which is payable on demand. The loan account consists of the
amounts that were disbursed on behalf of the Trust pertaining to the Z[...] property.
[50] The allegation by the excipients that the terms in clause 5.5 of the agreement
constitutes a suspensive condition is also flawed. It is no more than a term of the
agreement. The oral agreement concluded in 2012 was not an agreement aimed at
effecting transfer of the property. It reflects an agreement on how the parties would
deal with expenses incurred by them in respect of Trust liabilities pertaining to the Z[...] property.
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[51] The third ground of exception relates to the citation of the deceased trustee.
This has been dealt with above.
[52] The fourth ground of exception is based on the excipient’s interpretation of
clause 5.5 as constituting a suspensive condition. As this is again an issue of
interpretation, the exception stage is not the time when these issues need to be
finally determined. Ho wever, on the face of it, there is nothing suspensive about the
terms of clause 5.5. Compliance with the time period was premised upon all the
parties complying with their obligations in terms of the agreement. The plaintiff’s
claim is based on non -compliance by the first defendant in his capacity as trustee to
take decisions that were meant to be taken in terms of the settlement agreement.
[53] This ground must therefore fail.
[54] The fifth ground relates to the claim based on the suretyship annexed as
Annexure I to the particulars of claim. In terms thereof, the plaintiff and the first defendant bound themselves as sureties for the payment of the debts of the Trust in
favour of Standard Bank. The excipient contends that it is not pleaded that Standard Bank had made demand on the plaintiff for payment. It is contended that she has no right of action against the Trust for payments of amounts alleged to be made by her to the Trust in terms of her obligation as surety.
[55] The excipient misconstrues the particulars of claim. The plaintiff contends
that she made payments to Standard Bank on behalf of the Trust and not to the
Trust. She recovers such disbursements by calling up her loan account.
[56] The position in law has not been decided finally whether a demand by the
creditor is a prerequisite for a liability of a surety in terms of a suretyship.
[57] In LAWSA, Suretyship paragraph 303 the following is stated:
“Where one co- surety has paid only part of the principal debt the position is
anything but clear. Two questions arise in such a case: Firstly, whether the
paying co- surety is entitled to any contribution at all before he or she has paid
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the whole debt, and secondly, if he or she is entitled to a contribution whether
that contribution should be in respect of the full amount paid by him or her or
only in respect of the excess over what would be his or her proportionate
share of the debt. In Lever v Buhrmann it was clearly the view of the court
that a co- surety who has paid more than his proportionate share of the
principal debt (although not the whole debt) has a right of action against his co-sureties, that the question whether he has a right to contribution in respect
of the full amount paid or only in respect of the excess of that amount over his proportionate share of the debt was not touched upon. In Nosworthy v Yorke the question whether a co- surety can recover a contribution before he
has paid the whole debt was expressly left undecided. In Hoyer v Martin the
court held that in the case of a continuing suretyship a surety who was paid
the whole of the principal debt outstanding at a particular time may claim a
contribution from a co -surety, even though the principal debtor may thereafter
incur further debts for which the sureties will be liable. In Noakes v Whiteing, however, Davies J inclined strong into the view that until the creditor has been
paid in full, a co- surety who has paid more than his proportionate share of the
debt is not entitled to recover a contribution from another co- surety, but this
part of the judgment was arbiter. In the latest judicial pronouncement of the
matter Van Zijl JP held in effect in A SA Investments (Pty) Ltd v Smit that a
co-surety who becomes co- surety by reason of his having entered into a
separate deed of suretyship cannot be sued by fellow co- surety for his
proportionate share until the latter has paid the full debt which was
guaranteed by the sureties.
The ASA Investments case is strongly criticised by Ca ney, who argues that
on equitable grounds a co- surety who has paid part of the principal debt
should be allowed to recover a proportionate share of what he or she has paid
(not merely of the excess of what he or she has paid over his or her proportionate share) from each of his or her co- sureties. There is certainly
force in Ca ney’s argument: On the other hand, he or she dismisses perhaps
too lightly the objection of the courts to the multiplicity of actions and the
‘tortuous and expensive procedure’ that may result if sureties were allowed to
start litigating amongst them before the creditor has been paid in full.”
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[58] In this instance the claim is not against the co- surety but against the principal
debtor . A surety has a right of recourse against the principal debtor for payments
made as surety to extinguish the liability of the debtor pro tanto as against the
creditor ( see A BSA Bank v Scharrighuisen 2000(2) SA 998 (C) at par [12] and
[28]).
[59] This ground of exception therefore fails.
[60] The sixth ground of exception relates to the failure to annex Annexure KL M
to the particulars of claim. That annexure is a schedule of movables, which are
irrelevant to the pleadings. No relief is claimed in respect of movable assets, being
the list contained in Annexure KL M.
[61] At best, even if pleadings did cover the content of Annexure KL M, the failure
to annex Annexure KLN would render the pleadings vague and embarrassing.
That, however, is not the exception raised before us. If the excipients had correctly
identified this ground as one rendering the pleadings vague and embarrassing, the plaintiffs would have had an opportunity of responding to a rule 23(1) notice to c ure
the cause of complaint by annexing the annexure in question. However, the excipients went straight for the jugular, on an issue not relevant to the pleadings.
This exception must fail.
[62] In the premises there are no grounds upon which the judgment of the Court a
quo could be upheld.
[63] The issue of costs arises. In particular, the question arises whether the Trust
should be burdened with the costs in circumstances where the first defendant (first
respondent in the appeal) has failed to comply with the terms of the settlement
agreement. The settlement agreement is not merely an undertaking to sign a Trust
resolution in respect of the transfer of properties. It is an agreement that has been
made an order of court. Non- compliance with an order of court in such
circumstances is a relevant factor in determining liability for costs. In this instance,
such liability lies with the first respondent (first excipient and first defendant a quo).
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[64] In the premises the following order is made:
ORDER:
1. The appeal is upheld with costs.
2. The judgment and order of the Court a quo is set aside and is replaced with
the following:
“The exception is dismissed with costs, such costs to be paid by the first defendant
on Scale B.”
LABUSCHAGNE J
Judge of the High Court
BAM J : I concur
JUDGE OF THE HIGH COURT
MBONGWE J: I concur
JUDGE OF THE HIGH COURT