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[2013] ZAWCHC 126
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Goodrick v Goodrick (21128/2009) [2013] ZAWCHC 126 (8 May 2013)
REPUBLIC
OF SOUTH AFRICA
(
WESTERN
CAPE HIGH COURT, CAPE TOWN
)
Case no: 21128/2009
In the matter between:
CHARLES GOODRICK
.............................................................................................
Applicant
and
PATRICIA GOODRICK
.........................................................................................
Respondent
__________________________________________________________________
JUDGMENT delivered 08
May 2013
BOQWANA AJ
Introduction
The applicant brought an
application for rectification of a consent paper that was concluded
between the parties on 10 May 2010
and which was incorporated in a
final divorce order granted under the same case number on 19 May
2010. In essence the applicant
alleges that the consent paper does
not conform to the common intention of the parties regarding the
division of their joint
estate. The matter was referred to oral
evidence by Veldhuizen J on 12 December 2012.
In dispute between the
parties is the following:
2.1. whether it was the
common intention of the parties that the respondent would be entitled
to retain her half share of the net
proceeds of the sale of the
immovable property (the communal house of the parties) in addition to
receiving a settlement balance
of R739 018.00 or whether the
respondent would only be entitled to a settlement payment in the
total amount of R739 018.00,
which amount would include her half
share of the net proceeds of the sale of their immovable property.
2.2. whether parties
commonly intended that the sum of R739 018.00 would be paid to
the respondent from the applicant’s
half share of the net
proceeds or that the aforesaid sum would be paid to the respondent
from the total net proceeds, with the
balance of the net proceeds of
the immovable property accruing to the applicant.
2.3. whether the
applicant was apprised by Mr Bertus Hendrikse (‘Mr Hendrikse’)
an attorney at Bill Token and Hendrikse
(‘BTH’) of the
meaning and the effect of the consent paper before he signed it, in
particular in regard to the contents
of paragraph 5.3 and paragraph
5.4 thereof and whether the applicant was in any way misled or
defrauded by the respondent and/or
Mr Hendrikse as to the meaning and
contents of the consent paper he signed, in particular in regard to
the contents of paragraph
5.3 and 5.4 thereof.
2.4. Whether parties
intended to exclude the motor vehicles being a Pajero and a Toyota
Corolla registered in the plaintiff’s
name from the movable
property that each would keep in terms of clause 4.1 of the consent
paper
The relevant clauses in
the consent paper are the following:
‘
...
4.1.
The parties place on record, that the movable property has already
been divided between them and each party will retain the
movable
property presently in his/ her possession as his/her sole and
unfettered property.
........
4.2.3.
The Plaintiff and Defendant
shall in equal shares be entitled to
the net proceeds of the sale of the said immovable property
. For
calculation purposes of the net proceeds any capital gains tax
payable (if applicable), the outstanding bond, bond cancellation
costs, estate agents commission, municipal rates and taxes and other
related charges will first be deducted from the purchase price.
(Own
emphasis)
5.1.
First Plaintiff and Defendant has (sic) reached agreement that First
Plaintiff will make payment in the amount of R1 089 018.00
(ONE MILLION EIGHTY NINE THOUSAND AND EIGHTEEN RAND) to the First
Plaintiff
as part
of the division of the joint estate. (Own
emphasis)
5.3.
Defendant undertakes to pay the balance of R739 018.00 to First
Defendant from
his 50%
of
the net proceeds,
which he will receive from the sale of the immovable property
referred to in paragraph 3.2 above.
(
Own
emphasis
)
5.4.
First Plaintiff and Defendant further place on record that First
Plaintiff has already received an amount of R350 000.00
(THREE
HUNDRED AND FIFTY THOUSAND) of the amount owing in paragraph 4.1
(sic) above on 16 April 2010.
5.5.
Defendant authorises Bill Tolken Hendrikse Inc to make payment of the
outstanding balance owing to the First Plaintiff in terms
of
paragraph 5.3 directly to her.’
The applicant seeks an
order deleting the words ‘
as part
’ in paragraph
5.1, ‘
his part of’
in paragraph 5.3, ‘
the
50% of’
in paragraph 5.4 and the words ‘
excluding
the motor vehicles’
inserted after the words
‘the
movable property’
in paragraph 4.1 and the new paragraph
4.2 be added which read as follows:
‘
The
Defendant will retain the Pajero, CA 349424 and the Toyota Corolla,
CA 679 062 as his sole and unfettered property.’
The evidence
The parties were married
in community of property before they got divorced on 19 May 2010. It
is common cause that they both drew
up a document, known as annexure
CG1, attached to the applicant’s founding affidavit, before
they approached BTH to draw
up the agreement on their behalf. The
parties both agree that it was their common intention that they
would each receive 50%
of the joint estate.
The CG1 document
reflected the
nett
asset values of each of the parties, the
nett
asset value of the joint estate, the 50% split of the
joint estate and the amount that each of the parties would be
entitled
to at the end. It was apparent from CG1 that the applicant
had more assets than the applicant to the
nett
value of
R2 579 847.00 whilst the respondent only had R 507 301.00
in her name. The joint
nett
asset value of the estate was
recorded as of R3 087 148.00.
As reflected in CG1, the
applicant was initially liable to pay to the respondent an amount of
R 1 036 273.00. A further
amount of R52 745
representing 50% a cash bank account, known as the Park- it account
that the applicant held with Nedbank,
was added on to the
respondent’s amount due in a handwritten form. This amount of
R52 742 was added to the R 1 036 273.00
due to the
respondent, making the final amount due to the respondent in terms
of CG1 to be R 1 089 018.00. The applicant
paid an amount
of R350 000.00 on 16 April 2010 as indicated (by handwriting)
in CG1 and in the consent paper, reducing the
balance owing to R
739 018.00.
It is common cause that
BTH drew up the consent paper on behalf of the parties. The
applicant alleges that he approached Mr Hendrikse
with the
respondent on the respondent’s advice was and instructed him
to act for both parties as the parties wanted to
save costs.. He
also alleges that he paid Mr Hendrikse 50% of the legal costs for
the consultation. He admits however that Mr
Hendrikse had advised
him to get his own lawyer but he advised Mr Hendrikse that that
would defeat the whole objective of saving
costs. The respondent’s
version, supported by Mr Hendrikse and Leonore Everts (‘Everts’),
a secretary from
BTH, who also testified during oral evidence, is
that Mr Hendrikse was her attorney from the onset, who had acted for
her since
the issuance of the summons in relation to the divorce
proceedings. According to the respondent, Mr Hendrikse advised the
applicant
to find his own attorney but the applicant insisted that
he would represent himself. The significance of this part of the
evidence
is that the applicant alleges that Mr Hendrikse failed to
act in both parties’ interests but only protected the
respondent’s
interest as reflected in the consent paper. He
further alleges that Mr Hendrikse failed to properly bring to his
attention the
contents of the consent paper and particularly
paragraphs 5.3 and 5.4. These are the key paragraphs which the
applicant says
did not reflect what was agreed upon in CG1.
These paragraphs reflect
that the applicant would pay the outstanding amount of R739 018.00
from his 50% of the proceeds
of the immovable property and in the
event that the payment is not enough, any outstanding payment would
be paid to the respondent
within 10 days of the registration of the
immovable property.
According to the
applicant the value of the house was taken into account when
calculations leading to an amount of R 1 089 018.00
owing
to the respondent were made and she could not be entitled to be paid
an additional 50% from the proceeds of the house.
The value of
immovable property in CG1 was recorded as R 1 4000 000.00 and
divided in half (R 700 000.00) between the parties.
The house was sold for
an amount of R 1 630 000.00 long after the consent paper
had been signed and parties were divorced.
After all the applicable
deductions were made by BTH, the balance due to the parties was
R983 923.19. The parties were each
entitled to 50% of this
amount in terms of the consent paper which equalled R 491 961.60
for each. BTH paid to the respondent
her 50% (R491 961.60) and
also paid the entire 50% proceeds that belonged to the applicant to
the respondent to meet the
shortfall in conformity with clauses 5.4
and 5.5 of the consent paper. Therefore the respondent received the
entire R983 923.19
proceeds of the communal house.
The applicant’s
issue is that the intention between the parties was that the
respondent would be paid an amount of R 1 089 018.00
as a
full settlement amount, he paid the R 350 000.00 to reduce the
deficit to R 739 018.00 and that balance was to
be paid from
the proceeds of the house and the balance ,if any, would come to him
once sold and not from his 50% of the proceeds
only as that would
mean that the respondent gets more than what was agreed to and
intended by the parties and ultimately does
not reflect the parties’
intention that each party should get an equal share of the entire
joint estate, inclusive of the
proceeds of the immovable property.
The respondent agrees
that the intention was that each party should get at least 50% of
the joint estate but she alleges that
the R 1 089 018.00
amount in CG1 was part settlement as she was still entitled to 50%
of the proceeds of the house.
According to her (further) payment
from the 50% of the applicant’s proceeds of the house was to
satisfy her shortfall of
R739 018.00. Her half share could not
be taken into account towards payment of the shortfall as that would
be akin to taking
money due to her to pay herself. She alleges that
this was fully known and agreed with the applicant. It was also
explained by
Mr Hendrikse to both parties before the agreement was
signed.
It is common cause that
Mr Hendrikse gave both parties a copy of the unsigned agreement to
read but the applicant failed or neglected
to do so. The parties
differ on the extent to which Mr Hendikse went in explaining the
terms of the agreement. Mr Hendrikse and
the respondent suggest a
comprehensive and detailed explanation was done whilst the applicant
disputes that. Ultimately, he alleges
that Mr Hendrikse would
transfer what was in CG1 to the consent paper and did not think of
paying that much attention to the
detail of the contract. This is
disputed by Mr Hendrikse.
The applicant also wants
the consent paper to be rectified to exclude the motor vehicles. The
relevant clause 4.1 of the consent
paper dealing with movable
property states that: ‘
parties want to place on record that
movable property has already been divided between them and each
party will retain the movable
property presently in his/her
possession as his/her sole and unfettered property.
’ The
applicant’s argument is that the Toyota Corolla currently used
by the respondent is registered in his name and
paid by him. He
alleges that its reflection under his name in CG1 suggests that. If
the respondent wanted it she should pay for
it. According to him BTH
erred in not excluding the motor vehicles from clause 4.1 as
contemplated in CG1.
The respondent’s
version is that she was using the Toyota Corolla while the applicant
used the Pajero. The parties had been
separated for five years and
the applicant had never demanded the Toyota Corolla from her. She
suggests that the motor vehicles
which they had in their possession
were included in the movable property referred to in clause 4.1. I
have quoted above.
Analysis
Rectification is a well
established common law right. It provides an equitable remedy
designed to correct the failure of a written
contract to reflect the
true agreement between the parties to the contract. It thereby
enables effect to be given to the parties’
actual agreement.
1
In
Tesven CC and another v South African Bank of Athens
(1999) 4
All SA 396
(A) at paragraph 16
the Court held that:
‘
to
allow the words the parties actually used in the documents to
override their prior agreement or the common intention that they
intended to record is to enforce what was not agreed and so overthrow
the basis on which contracts rest in our law: the application
of no
contractual theory leads to such result.’
It is not necessary for
the plaintiff to show that there was a prior contract entered into
between the parties
per se
as pronounced in
Meyer v
Merchants Trust Ltd
1942 AD 244
at 253
where the Court held
:
‘
Proof
of an antecedent agreement may be the best proof of the common
intention which the parties intended to express in their written
contract, and in many cases would be the only proof available, but
there is no reason in principle why that common intention should
not
be proved in some other manner, provided such proof is clear and
convincing.’
Turning to the facts of
this case, both parties agree that their common intention was that
there would be a 50/50 split of the
joint estate at the end of the
day. The parties having been married in community of property, it is
clear that CG1 was drawn
with that common intention in mind.
On proper analysis of
CG1 it is clear that that document was more than just a list of
assets and liabilities. It is a document
that assigned values of the
joint estate as agreed by the parties and included calculations
which led to a result that culminated
in an amount of R 1089 018.00
due to the respondent. In other words this document formed the basis
upon which the joint estate
was to be shared or settled between the
parties. Parties decided to put a deemed net value of R 1 400 000.00
next to
the immovable property and divide such value in equal
amounts of R 700 000.00 each. The important issue here is that
when
the amount due to the respondent was determined the value of
the house was part of those calculations.
In my view the
applicant’s version sounds more probable that the amount of
R739 018.00 had to be paid from the net
proceeds of the sale of
the house and the balance paid to him. By doing this he took a risk
that should the house sell for less
he would have to meet the
shortfall but if it sold for more or the shortfall was paid up then
the balance would come to him.
I am not convinced by
the respondent’s version that each party was entitled to 50%
of net proceeds of the sale of the house
over and above the amounts
agreed to in CG1. The basis for this claim remains unclear to me.
Counsel for the parties, particularly
for the respondent brought a
number of annexures with calculations trying to convince the Court
of how the respondent would be
disadvantaged by the applicant’s
argument. This in my view is indicative of the difficulty the
respondent had in trying
to convince the court that her version was
more probable. In any event, these various scenarios that Ms Pratt
relied on in attempting
to illustrate the ‘fairness or
otherwise’ of the applicant’s version to the respondent
were not the basis of
the calculations in CG1 or the consent paper.
I did not get a
satisfactory answer from the respondent on why the value of
R1 400 000.00 would be included in the CG1
document if the
value due to her in CG1 was not intended to be a settlement figure
in respect of the joint assets. Had the value
of the house not been
included in the calculation in CG1 then one could say it would be
proper that the shortfall be paid from
the 50% of the applicant’s
net proceeds of the sale of the house. For the reasons above, I find
it highly improbable that
parties would agree that each would be
entitled to an extra 50% of the net proceeds of the house over and
above the settlement
values calculated in CG1, which would result in
the respondent being paid 1 089 018.00 plus 50% of her net
proceeds
and a shortfall of R739 018.00 being paid from the
applicant’s 50%.
That clearly puts the
respondent’s share out of kilter with the common intention of
splitting the joint estate 50/50. The
consent paper, insofar as that
issue is concerned is not in conformity with the underlying
intention between the parties.
In his book
Principles
of the Law of Contract
, (6 ed at page 154) AJ Kerr makes the
following remarks:
‘
Strictly
speaking, how the error came about is not relevant to the question of
rectification, but it is of interest to note that
while the disparity
between what the parties intended and what appears in the written
document may result from a bona fide mutual
mistake made by accident,
it may also result from an intentional or negligent act of one or of
both of the parties, or from one
of the parties, or from one of the
parties snatching a bargain, or from the use of standard form
documents ‘not adapted to
record correctly what had been orally
agreed before they were completed.’
It is possible that the
error was caused by one or a combination of the situations that Kerr
refers to. At the end of the day,
how the error came about is not
the primary issue to be determined. What is important is to find on
the balance of probabilities
what the true intention of the parties
was. When the courts refer to common mistake it is not that the
mistake must be mutual,
but the underlying agreement must have
been.
2
I therefore find that the underlying agreement provided for a 50%
spilt of the entire joint estate inclusive of the immovable
property
and not for an extra 50% share of the net proceeds of the immovable
property.
As regards motor
vehicles I am not satisfied with the applicant’s version that
the parties intended the motor vehicles to
be the excluded from
clause 4.1. The respondent’s version is in my view more
persuasive in that the reality accords with
what is in the consent
paper. Motor vehicles are movable property and the applicant was
using the Pajero which was in his possession
while the respondent
used and still has in her possession the Toyota Corolla. It seems to
me, the issue of the vehicles was an
afterthought and not really a
key issue when one has regard to the conduct of the applicant on
this aspect. The parties had been
separated for 5 years before the
divorce and continued to use those cars separately for all those
years. Clause 4.1 accordingly
is not inconsistent with the reality
of the parties at the time of the signing of the agreement
notwithstanding the vehicles
being registered under the applicant’s
name.
Brand JA in
Soil
Fumigation Services Lowveld CC v Chemfit Technical Products (Pty)
Ltd
3
held that:
‘
Though
this deserves some credit for ingenuity, it is clear that the remedy
of rectification is not one which easily lends itself
to a fallback
position by way of afterthought.
It
is a settled principle that a party who seeks rectification must show
facts entitling him to that relief 'in the clearest and
most
satisfactory manner' (per Bristowe J in
Bushby
v Guardian Assurance Co
1915
WLD 65
at
71; see also
Bardopoulos
and Macrides v Miltiadous
1947
(4) SA 860
(W)
at 863 and
Levin
v Zoutendijk
1979
(3) SA 1145
(W)
at 1147H - 1148A).’ (
own
emphasis
)
The applicant has not
shown his entitlement in ‘the clearest and most satisfactory
manner’ on the aspect relating
to the vehicles. The test is
what the underlying agreement was and in my view the underlying
agreement was for each party to
keep the movable property (that
would include the motor vehicles) that they each had in their
possession as their sole and unfettered
property. The aspect dealing
with motor vehicles in the applicant’s rectification
application must accordingly fail.
[30] Turning to costs, I
have given careful consideration on this issue. I take note of the
fact that costs orders were made in
respect of the postponement of 22
November 2012 where the applicant was ordered to pay wasted costs
occasioned by the postponement
and costs of the proceedings as at 12
December 2012 that costs for those proceedings would be costs in the
cause.
[31] In respect of these
proceedings I have taken into account the fact that this matter flows
from a matrimonial dispute where
each party have expressed their
respective financial difficulties during the course of their
evidence. Further, the applicant had
signed the agreement without
reading it and for that he is not entitled to costs in my view. On
the other hand the respondent has
opposed this application in an
instance where the common intention was clearly set out in CG1. In
that regard it is just that each
party pay their own costs.
[32] Oral evidence went
on for a number of days which in my view was a bit excessive having
regard to the fact that parties did
not depart materially from what
was set out in the affidavits.
[33] Given all those
considerations, I exercise my discretion not to order costs against
any of the parties.
[34] I therefore make the
following order:
1. Rectification of
paragraphs 5.1, 5.3 and 5.4 of the consent paper is granted as
follows:
1.1. The words ‘
as
part’
in the last sentence of paragraph 5.1 are to be
deleted;
1.2. The words ‘
his
50% of’
in paragraph 5.3 are to be deleted;
1.3. The words ‘
the
50% of’
in paragraph 5.4 are to be deleted.
2. The rectification
application in respect of the insertion of ‘
excluding motor
vehicles
’ in paragraph 4.1 and the insertion of a new
paragraph 4.2 is dismissed.
3. No order is made as to
costs.
________________
NP BOQWANA
Acting Judge of the High
Court
APPEARANCES
FOR THE APPLICANT: Adv E
JJ Spammer
Instructed by: Coetzer
Attorneys C/O Hayes Inc., Cape Town
FOR THE RESPONDENT: Adv
T-M Pratt
Instructed by: De Klerk &
Van Gend Inc., Cape Town
1
See
Intercontinental Exports (Pty) Ltd v Fowles
1999 2 SA 1045
(SCA)
2
Trust
Bank of Africa Ltd v Frysch
1976 2 SA 337
(C) at 338 E-G.
3
2004
(6) SA 29
(SCA) at 38J-39