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[2014] ZAWCHC 74
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Wium v Arijs (4567/2009) [2014] ZAWCHC 74 (28 May 2014)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
no: 4567/2009
DATE:
28 MAY 2014
In
the matter between:
FRANCOIS
JOHANNES
WIUM
...................................................
Plaintiff
And
FREDERICK
ARIJS
...................................................................
Defendant
JUDGMENT
DELIVERED
28 MAY 2104
SAVAGE
AJ
[1]
On
9 March 2009 the plaintiff, Mr Francois Johannes Wium, instituted
action against the defendant, Mr Frederick Arijs, for payment
of the
amount of R1 200 000.00, interest at the statutorily prescribed rate
calculated from 15 December 2008 and costs.
[2]
The
relevant background to the matter is as follows. On 25 March 2008 the
parties entered into a written agreement of sale in Cape
Town in
terms of which the plaintiff sold to the defendant his interest in a
close corporation holding certain immovable property
in Stellenbosch
(‘the property’). A second agreement was entered into on
the same date between the parties in terms
of which
inter
alia
the defendant would pay R1 200 000.00 (‘the capital amount’)
to the plaintiff if the plaintiff successfully obtained
certain
subdivision and rezoning rights in respect of the property. On 2
December 2008 the plaintiff obtained these rights when
an appeal was
finalised by the Western Cape Department of Environmental Affairs and
Development Planning and he thereafter sought
payment of the capital
amount. The defendant failed to adhere to an undertaking to pay on 28
February 2009 and the plaintiff thereafter
sued the defendant for
payment.
[3]
The
action was defended and an application for summary judgment opposed.
On 15 April 2009, the day before the summary judgment application
was
to be heard, the defendant paid the capital amount to the plaintiff.
The application was postponed and on 7 May 2009 summary
judgment was
refused with the defendant granted leave to defend the action. There
is no dispute between the parties that payment
of the capital amount
was due to the plaintiff and the amount paid. The matter proceeded to
trial in respect only of the plaintiff's
claim for interest and
costs.
[4]
In
his plea the defendant averred that on 15 April 2009 the plaintiff
concluded an oral agreement of compromise with the defendant,
represented by his attorney, Mr Herman Botes (‘Mr Botes’),
in terms of which the plaintiff undertook to withdraw his
action
against the defendant if the capital amount was paid on 15 April
2009. As a result, the defendant claimed he was not liable
to pay
interest and costs to the plaintiff. The plaintiff denied the
existence of any compromise agreement and persisted in his
claim for
interest and costs.
[5]
The
evidence of the defendant was that Mr Botes had spoken telephonically
to the plaintiff on 15 April 2009, confirmed that payment
of the
capital amount had reflected in his firm’s trust account the
previous day and that payment would be made to the plaintiff
the same
day. Mr Botes stated that the plaintiff informed him that he would
withdraw his action. After he was informed that the
summary judgment
application would proceed the following day, at 16h46 on 15 April
2009 Mr Botes sent an email to the plaintiff’s
attorney, Mr
Andries Maree, recording that:
‘…
Jou
klient het my vanoggend geskakel om te hoor oor die betaling van die
kapitale bedrag, tydens welke gesprek hy onderneem het
om jou
instruksies te gee om die aksie terug te trek’
.
[6]
At
08h17 on 16 April 2009 Mr Maree replied:
‘…
Hy
beweer daar is NOOIT in julle gesprekke melding gemaak van rente of
regskoste of betaling in volle en finale vereffening of kapitale
bedrag nie en moes hy aanvaar julle sal die rente en koste ook betaal
of minstens aanbied.
Hoe
dit ookal sy, dit sou sekerlik beter gewees het as jy enige “finale
skikking” met my bevestig het, want jou siening
van wat gebeur
het verskil heelwat van Frans se seining daarvan.
Sonder
benadeling van Frans se regte en bloot in ‘n poging om die saak
te skik, sal Frans ‘n additionele R50 000,00
aanvaar in volle
en finale vereffening van sy eis en rente en regskoste, op voorwaarde
dat dit vanoggend ‘n bevel van die
hof gemaak word en
betaalbaar is binne 7 dae…’
[7]
Mr
Botes conceded in cross examination the words ‘capital amount’,
‘interest’ or ‘costs’ had
not been used in
the telephone discussion, nor had a final settlement of the claim
been discussed and no reference was made to
a compromise agreement.
He accepted that the plaintiff in an email on 10 March 2009 had
raised concern regarding interest lost
given the non-payment of the
capital amount. Nevertheless, it was argued for the defendant that a
compromise existed as a result
of which the plaintiff had undertaken
to withdraw the action. Furthermore, issue was taken with the fact
that the plaintiff elected
to retain the capital sum and utilised the
monies in spite of being aware that there existed a dispute with
regards to interest
and costs.
[8]
The
evidence of the plaintiff was that he had telephoned Mr Botes on 15
April 2009 to enquire regarding payment and was informed
that he
would be paid that day. There was no discussion of interest and
costs, nor that payment was to be a full and final settlement
of his
claim and payment was not accepted on the basis that he would waive
or abandon his claim to interest and costs. The plaintiff
understood
that the action would be withdrawn after the capital amount, interest
and costs had been paid, although he was unsure
as to whether he had
mentioned the withdrawal of the matter. He emphasised that he
understood that interest and costs would be
quantified by the
attorneys.
[9]
It
was argued for the plaintiff that the probabilities did not favour
the defendant in that the plaintiff would not telephone the
defendant's attorney to offer to compromise his own claim.
Furthermore, this unusual bargaining process was not confirmed in
writing.
No compromise was reached and the presumption against waiver
must operate to the benefit of the plaintiff.
Evaluation
[10]
For
a compromise to have been reached such as to terminate a legal
obligation ‘
the
proposal, objectively construed, must be intended to create binding
legal relations and must have so appeared to the offeree
’.
[1]
This binding legal relation arises either where there exists
consensus between the parties or ‘
where
there is no real agreement between the parties…one of them is
reasonably entitled to assume from the words or conduct
of the other
that they were in agreement
’.
[2]
The existence of a compromise as a form of novation must be clearly
and unambiguously proved as a question of fact to be determined
from
the circumstances,
[3]
with the onus on the party alleging the compromise to prove it. Where
it is shown not to exist the purported compromise is void
and has no
effect on the subject matter of the dispute.
[11]
From
the evidence of both Mr Botes and the plaintiff it is clear that no
reference was made during their telephonic conversation
to payment of
the capital amount being in full and final settlement of the claim,
nor was interest or costs discussed. An agreement
to pay the capital
amount objectively construed did not amount to a proposal made by the
defendant to settle the claim without
payment of interest and costs
when no mention was made of payment being in full and final
settlement, nor of interest and costs.
Confirmation that payment
would be made to the plaintiff could not therefore, objectively on
the facts, have amounted to an offer,
whether expressly or tacitly
made, to settle the matter on terms different to that sought in the
particulars of claim. The defendant
was therefore not reasonably
entitled to assume from the words or conduct of the plaintiff that
the parties were in agreement as
to the terms of a compromise.
[12]
On
the basis that it is unusual for persons to give up rights
gratuitously unless there is a reason for their conduct, where such
rights are given up, waiver must be proved.
[4]
In
Borstlap
v Spangenberg
[5]
Corbett AJA, as he was then, stated that:
‘
Dit
is herhaaldelik deur ons Howe beklemtoon dat duidelike bewys van ‘n
beweerde afstanddoening van regte geverg word, veral
waar op ‘n
stilswyende afstanddoening staat gemaak word. Dit moet duidelik blyk
dat die betrokke persoon opgetree het met
behoorlike kennis van sy
regte en dat sy optrede teenstrydig is met die voortbestaan van
sodanige regte of met die bedoeling om
hulle af te dwing
.’
[13]
There
was no such indication made by the plaintiff that he intended to
waive his right to payment of interest and costs. The plaintiff’s
undertaking to withdraw his claim on receipt of payment was clearly
one made without a clear understanding of his rights and the
effect
of such withdrawal. Mr Botes, a practising attorney of many years
standing, obtained such an undertaking from the plaintiff
personally
in circumstances in which he knew the plaintiff to be legally
represented. This required of him at the least to draw
the effect of
the withdrawal to the attention of the plaintiff. Yet it is material
that following the discussion held, Mr Botes
neither recorded in his
email to the plaintiff’s attorney that there had been offered
or agreed a settlement or compromise
of the plaintiff’s claim,
nor that he had advised the plaintiff of the consequences of
undertaking to withdraw the matter.
[14]
To
determine whether there exists an inferred waiver, Nienaber JA in
Road
Accident Fund v Mothupi
[6]
stated that the test is objective, adjudged from the perspective of a
reasonable person in the position of the other party, that
outward
manifestations are relevant and uncommunicated reservations of no
legal consequence. With no reference made to payment
of the capital
amount in full and final settlement, nor any reference to interest
and costs, it cannot be inferred that the plaintiff
waived his claim
to such interest and costs.
[15]
Furthermore,
the retention by the plaintiff of the capital amount paid did not
amount to the acceptance of an offer to compromise
the claim given
that no such offer had been made by the defendant. This matter is
therefore distinct from
Be
Bop a Lula Manufacturing & Printing CC v Kingtex Marketing (Pty)
Ltd
[7]
in which on appeal it was found that the deposit of a cheque which
bore the words ‘full and final settlement of account’
amounted ‘…
to
an offer to the respondent to settle their dispute by payment of that
amount which the latter could have accepted or declined,
but on
acceptance of which the dispute between the parties would be
compromised
.’
[8]
Absa
Bank Ltd v Van de Vyver NO
[9]
and
Andy’s
Electrical v Laurie Sykes (Pty) Ltd
[10]
are distinguishable on the same basis.
[16]
The
plaintiff could not have compromised his claim when the terms of such
compromise had neither been offered to nor accepted by
him. Had the
defendant intended to offer payment in full and final settlement it
was required of him to state as much or to ensure
that outward
manifestations of such offer to compromise on this basis were
apparent to the plaintiff. The defendant’s purported
uncommunicated reservations are of no legal consequence.
[17]
In
Constantia
Insurance Co Ltd v Compusource (Pty) Ltd
[11]
in which awareness as to the existence of a contractual provision was
in issue, Brand JA stated with reference to
Sonap
Petroleum SA (Pty) Ltd (formerly known as Sonarep (Pty) Ltd) v
Pappadogianis
[12]
that ‘(i)
f
a reasonable person in their position would have realised that Rust,
despite his apparent expression of agreement, did not actually
consent to be bound by the clause, this clause could not be said to
be part of the agreement
’.
Harms AJA in
Sonap
Petroleum (supra)
[13]
made
reference to Blackburn J in
Smith
v Hughes
[14]
:
'If,
whatever a man's real intention may be, he so conducts himself that a
reasonable man would believe that he was assenting to
the terms
proposed by the other party, and that other party upon the belief
enters into the contract with him, and thus conducting
himself would
be equally bound as if he had intended to agree to the other parties
terms’.
[18]
Objectively
construed, the plaintiff did not compromise his claim in accepting
payment when the terms of such purported compromise
had not been
offered to him; nor can a finding be sustained that the plaintiff
waived or abandoned his claim to interest and costs
in return for
payment. His undertaking to withdraw the action he had instituted on
receipt of payment was clearly one made without
‘
behoorlike
kennis van sy regte’
[15]
but
did not amount to a waiver of his claim to interest and costs. In
such circumstances, it follows that with no compromise reached,
the
defendant is liable for payment of both interest on the capital
amount and the plaintiff’s costs.
Order
[19]
For
these reasons an order is made in the following terms:
1.
The
defendant, Mr Frederick Arijs, is to pay to the plaintiff, Mr
Francois Johannes Wium, interest on the amount of R1 200 000.00
at
the statutorily prescribed rate calculated from 15 December 2008.
2.
The
defendant is to pay the plaintiff’s costs.
K
M SAVAGE
Acting
Judge of the High Court
Appearances:
Plaintiff:
A Newton instructed by Van der Westhuizen Vos & Horn
Defendant:
J de Vries instructed by Mostert & Bosman
[1]
DT
Zeffertt “Payments In Full Settlement”
(1972) 89
SALJ
35
at 38;
Road
Accident Fund v Mothupi
2000
(4) SA 38
(SCA) at paras 16-17 per Nienaber JA.
[2]
Be
Bop a Lula Manufacturing & Printing CC v Kingtex Marketing (Pty)
Ltd
2008 (3) SA 327
(SCA) at para 10 with reference to RH Christie
The
Law of Contract in South Africa
5ed
(2006) 24 ff and
Sonap
Petroleum SA (Pty) Ltd (formerly known as Sonarep (SA) (Pty) Ltd) v
Pappadogianis
1992 (3) SA 234
(AD) at 238I–240B.
[3]
Paterson
Exhibitions CC v Knights Advertising and Marketing CC
1991 (3) SA 523
(AD) at 529D
[4]
Xenopoulos
and another v Standard Bank of SA Ltd and another
2001 (3) SA 498
(W) at 512E; Christie 6
th
ed at 457
[5]
1974
(3) SA 695
(A) at 704
[6]
2000
(4) SA 38
(SCA) at paras 16-17
[7]
2008 (3) SA 327
(SCA)
[8]
At
para 11
[9]
2002
(4) SA 397 (SCA)
[10]
1979
(3) SA 341 (N)
[11]
2005 (4) SA 345
(
SCA)
at para 16
[12]
1992
(3) SA 234 (A)
[13]
At
239G-H
[14]
(1871)
LR 6 QB
597
at 607
[15]
Borstlap
v Spangenberg (supra) per Corbett AJA