De Villers v Goosen (2009/23474) [2012] ZAGPJHC 199 (23 October 2012)

NOT REPORTABLE

SOUTH GAUTENG HIGH COURT, (JOHANNESBURG)

CASE NO: 2009/23474

DATE:23/10/2012

In the matter between:

DE VILLERS PETRO SUSANNAH.............................................Plaintiff

And

GOOSEN, GRENVILLE RICHARD..............................................Defendant

JUDGMENT

Coram: WHITCUTT AJ

Heard: 19th and 22nd October 2012

Delivered 23rd October 2012

INTRODUCTION

This is an action by the plaintiff arising out of a written acknowledgment of debt dated 1 December 2006 (“the AoD”) in terms of which the defendant acknowledged his indebtedness to one Ronald Irvine in the amount of R850 000.

Ronald Irvine passed away on 26 July 2008.

On or about 28 January 2009, the plaintiff and the executrix of Ronald Irvine’s estate concluded a written deed of cession in terms of which the plaintiff took cession of Ronald Irvine’s rights against the defendant in terms of the AoD.

The plaintiff thereafter instituted the present action. The principal defence raised by the defendant on the pleadings is that due to a mutual mistake, the AoD does not correctly reflect the terms of the agreement concluded between himself and Ronald Irvine and that, in consequence, it falls to be rectified. In his counterclaim, the defendant seeks to rectify the AoD by the insertion of the following further clause -

“In the event of the death of the Creditor before the payment of the amount of R850 000,00 then and in that event any remaining outstanding balance as at the time of death will be regarded as being written off and no further amounts shall be payable by the Debtor in respect of the Acknowledgment of Debt.”

In addition, the defendant contends that the balance claimed is incorrectly calculated because it fails to take account of two payments in the aggregate of R120 000. Lastly, he pleads that the AoD constitutes a credit agreement and that the requisite procedures provided for in the National Credit Act No 34 of 2005 have not been complied with.

THE EVIDENCE

These are the issues that arise from the pleadings. The evidence disclosed the detail of the context from which they arise and against which they fall to be adjudicated. In brief, the facts are these: Ronald Irvine, a calm and soft-spoken person, was the step-father of the defendant, Mr Goosen, having married Mr Goosen’s mother, Maureen. After Maureen died in 2004, and with his health declining, he moved into a retirement village called Tarentaal Village. There he met the plaintiff, Mrs de Villiers. In due course, they decided to marry. They were married in July 2006: Mrs de Villiers testified that they were married for 2 years and 20 days.

Ronald Irvine and his late wife, had survived his brother, Anthony Irvine. On Anthony’s death, he left money to Ronald and Maureen. Mr Goosen acted as Anthony’s executor, but even after Anthony Irvine’s estate was wound up, he retained control of these funds. He administered them. From time to time, when his debtors didn’t pay and his creditors came calling, he used these funds to tide him over. He testified that he did so with his mother’s knowledge and permission and that he would pay her back in cash. How much was taken and how much paid back was never firmly established, but events came to a head

during July and August 2006.

Mrs de Villiers testified that she and Ronald Irvine wanted to buy a joint unit at Tarentaal. When they tried to do so, Ronald Irvine became aware just how depleted the funds in his account had become. She said that he had a lot of meetings with his children, but that she didn’t attend them because this was not her business.

Ms Deidre Green, the customer services manager of the Alberton branch of ABSA Bank, testified that Ronald Irvine came to see her when he became concerned about the balance in his account: there was less money than he’d expected to see. He asked her to do an investigation. He explained to her that he’d received an inheritance and his stepson, Mr Goosen, had power of attorney and had been issued with bank card.

When Ms Green obtained the bank statements, he identified the transactions that he was aware of. Ms Green testified that, when they calculated the transactions that he did not know of, the amount was in excess of R1 million. On her advice, Mr Irvine cancelled the power of attorney and stopped the bank card because many of the transactions taken place that he didn’t know of had been done with the ATM card and Mr Irvine himself did not have a card.

Mr Goosen, when he gave evidence, said that his mother and step-father had felt unsafe using an ATM, so he would repay them in cash. He had not kept proper accounts and could not substantiate all his repayments.

At this time, Mr Irvine looked to his step-daughter, Karen Dixon, for help. It emerged from her evidence that it was she who had given her step-father the advice to see Ms Green at ABSA.

Two family meetings were then held: the first on or about 1 August 2006, and the second 2 weeks later. Both meetings were attended by Mr Ronald Irvine, Karen Dixon, Mr Goosen and their two step-brothers, Craig and Rory Cooper.

Mr Goosen testified that at the first meeting, his step father and siblings presented the information to him and asked him to explain why there were differences. He explained how the shortfalls had arisen. He said that his mother wasn’t around to corroborate and his father remembered some of these transactions, but not others.

According to Mr Goosen’s evidence, he felt under pressure to acknowledge his indebtedness and come to terms about repayment because he feared criminal charges should he not do so. Mrs Dixon’s evidence was different: she said the siblings feared that Mr Goosen was vulnerable and that they couldn’t press him too hard for fear that he may harm himself. She was not examined about the threat to lay criminal charges.

Both Mr Goosen and his step-sister Mrs Dixon confirmed that at the first meeting, because Mr Goosen couldn’t prove that he had given money back, he was given an opportunity to attempt to reconcile the borrowings in order to reach a figure at a second meeting to be held 2 weeks later. Mr Goosen also wrote out a cheque to Mr Irvine, in the amount of R20 000.

Two weeks later, there was a subsequent meeting. Mrs Dixon explained that they had decided as a family to handle the matter in the family, without resorting to legal action because they felt there was no benefit from that. She said “the only thing we wanted was for Grenville [the defendant] to pay Dad money back until my Dad was not there anymore”. She became very emotional as she recounted these events.

Both Mrs Dixon and Mr Goosen testified that at the second meeting, Mr Goosen confirmed again that he had taken money with their mother’s knowledge and had paid money back, but that he couldn’t prove the repayments. He made a further payment of R100 000 by cheque at the second meeting. The family agreed on a figure of R850 000 as a “token amount”, without any further attempts to calculate it forensically. They agreed that Mr Goosen would repay the amount in monthly instalments of R3 500 for a period of 18 months, whereafter it would be increased and, in Mrs Dixon’s words, “we’d leave it there. It was a sensitive family matter. We drafted an agreement or verbally agreed that we would make a loan agreement and he would pay every month until my Dad died. We knew my Dad didn’t have a long time to live, he had a heart problem and more than 18 months before he had been told by the doctor that he had six months to live. So that Grenville would carry on paying until Dad died and then there’d be no more claims against him.”

Mrs Dixon was asked whether Mr Irvine agreed with the repayments coming to an end when he passed away. She said he had.

There was then a delay until the written AoD was prepared and signed. Mrs Dixon prepared the document from a standard form precedent that the family bought. She attributed the delay to pressures of work and her responsibilities in her own family. She explained that she has no background in law and didn’t understand some of the standard form provisions contained in the precedent.

Mr Goosen stated that when he signed the document, he looked to ensure that the amount of the debt and the amount of the repayments accorded with what had been agreed at the August meetings, but did not notice that the provision that the repayments would terminate on his death was not present. He continued to make payments of R3 500 per month until Mr Irvine’s death when, according to his understanding of the agreement reached, his obligation to continue paying, terminated. It was not until he received demand from the executors of Mr Ronald Irvine’s estate in late 2008 and early 2009 that he realized the AoD did not correctly reflect what he understood the agreement to have been, more particularly in that the agreement did not expressly provide for its termination on the death of Mr Irvine.

After the AoD was signed, Mrs de Villiers testified that Mr Ronald Irvine brought it home and gave it to her, saying; “Look after this. That is to look after you.” He indicated that she should try to get a medical aid. She said Mr Irvine made no mention of the AoD terminating on his death and she stated that she would have expected him to have mentioned that, had this been the agreement. Under cross examination, after having been pressed on the question whether her husband had told her that the

repayments would terminate on her death, Mrs de Villiers added to her evidence, saying that her husband’s words on giving her the AoD were; “This is to look after you after my death.” She dismissed the proposition put to her in cross examination that at a lunch held by Mrs Dixon sometime in July 2007, she had been bitter that the AoD repayments would terminate on her husband’s death, because looking after him was quite an onerous task and she felt she deserved more. That, however, was Mrs Dixon’s recollection of the interaction, as she testified.

Before assessing the evidence, mention needs to be made of 1 further factor: Mrs Dixon and Mr Goosen both dealt with the events of August 2006 on the basis that it was a family arrangement that would terminate on the death of Mr Ronald Irvine. Both stated that the family had no interest in pursuing claims against Mr Goosen after Mr Irvine’s death. Both operated on the understanding that Mr Irvine’s estate would pass to them and Mr Irvine’s grandchildren. Mr Goosen said that he had been unaware until the morning of the trial that Ronald Irvine had signed a joint will with Mrs De Villiers on 23 January 2007, in terms of which their joint estate (for they were married in community of property) would be left to Mrs de Villiers’ daughter. Mrs Dixon was also unaware of the later will. In other words, by making the arrangement that they did, the siblings believed that they were compromising their own interests and those of the Mr Irvine’s grand-children. At the time (August 2006),

they were so doing, since the joint will had not yet been signed. Mrs Dixon was cross examined about the consequences to the remaining heirs of writing off the debt. It was put to her that if it was indeed so that the debt was written off on the death of Mr Irvine, and at the time it remained substantial, then Mr Goosen would be placed at an advantage over the remaining children and grandchildren. Mrs Dixon replied; “We discussed that and said Grenville got off easy if Mr Irvine lived only 2 months but if he lived for 20 years then sorry for you.”

THE ISSUES

Of the issues on the pleadings, only two remain after evidence and argument. The first is whether the AoD falls to be rectified in the respect claimed. The second, namely the application of the National Credit Act, only arises if rectification fails, because it is only in the absence of rectification that there remains a continuing obligation to pay.

I pause to mention two other issues that in my view were disposed of by the evidence and in argument. The first is the question of the amount of the indebtedness. Mr Goosen pleaded that the two cheque payments of R20 000 and R100 000 respectively, which were made at the meetings in August 2006, fall to be deducted from the agreed amount. I do not agree. In the first place, the amount of the indebtedness was only fixed at the second meeting, after the two payments had been made. In the second place, when Mr Goosen signed the acknowledgment of debt in December 2006, after those payments had been made, he did not cause the principal indebtedness to be reduced by R120 000. He testified that he checked the amount and the repayments before signing. He seeks no rectification of the amount of the principal debt in the AoD nor is there any sustainable basis for him to have done so.

The second issue is the interpretation of clause 3 of the AoD. Clause 3 reads as follows -

“3. I undertake to make regular payments of R3 500 (Three Thousand Five Hundred Rand) each, the first such payment being due on the 5th December 2006 and each subsequent payment being due on the 5th day of each and every month thereafter for a period of 18 (Eighteen) months. Thereafter a new agreement will be entered into in June 2008, thus increasing the monthly repayments by a minimum of R1 000-00.”

Counsel for both parties were in agreement that on a proper construction of the agreement, this clause provided for an increase by R1 000 per month in the repayments after 18 months.

I turn now to the rectification claim.

“When a written contract does not reflect the true intention of the parties to it, but has been executed by them in the mistaken belief that it does, it may be rectified judicially so that the terms which it was always meant to contain are attributed in fact to it. That, as a general principle, is well recognised by both South African and English law.”1

The onus rests upon the party seeking rectification. In Bardopoulos and Macrides v Miltiadous,2 the court held as follows -

“A party seeking to obtain rectification must show the facts entitling him to obtain that relief 'in the clearest and most satisfactory manner' - see Bushby v Guardian Assurance Co. (1915, W.L.D. 65 at p. 71), and as is pointed out in Taylor v Cape Importers (1938 CPD 362 at p. 368), where the common intention is to be shown not by any writing but by verbal evidence, the Courts may have great difficulty in determining whether there was a mistake in the written contract. These cases do not, I consider, require more than a balance of probability in favour of the party seeking rectification but indicate that such a claim is in fact difficult to prove.”

Does the evidence adduced on behalf of the defendant discharge the onus?

In National Employers’ General Insurance Co Ltd v Jagers, 3 the court held as follows -

“It seems to me, with respect, that in any civil case, as in any criminal case, the onus can ordinarily only be discharged by adducing credible evidence to support the case of the party on whom the onus rests. In a civil case the onus is obviously not as heavy as it is in a criminal case, but nevertheless where the onus rests on the plaintiff as in the present case, E and where there are two mutually destructive stories, he can only succeed if he satisfies the Court on a preponderance of probabilities that his version is true and accurate and therefore acceptable, and that the other version advanced by the defendant is therefore false or mistaken and falls to be rejected. In deciding whether that evidence is true or not the F Court will weigh up and test the plaintiff's allegations against the general probabilities. The estimate of the credibility of a witness will therefore be inextricably bound up with a consideration of the probabilities of the case and, if the balance of probabilities favours the plaintiff, then the Court will accept his version as being probably true. If however the probabilities are evenly balanced in the sense that they do not favour the plaintiff's case any more than they do G the defendant's, the plaintiff can only succeed if the Court nevertheless believes him and is satisfied that his evidence is true and that the defendant's version is false.

This view seems to me to be in general accordance with the views expressed by Coetzee J in Koster Ko-operatiewe H Landboumaatskappy Bpk v Suid-Afrikaanse Spoorweë en Hawens (supra) and African Eagle Assurance Co Ltd v Cainer (supra). I would merely stress however that when in such circumstances one talks about a plaintiff having discharged the onus which rested upon him on a balance of probabilities one really means that I the Court is satisfied on a balance of probabilities that he was telling the truth and that his version was therefore acceptable. It does not seem to me to be desirable for a Court first to consider the question of the credibility of the witnesses as the trial Judge did in the present case, and then, having concluded that enquiry, to consider the probabilities of the case, as though the two aspects constitute separate fields of enquiry. In fact, as I have pointed out, it is only where a consideration of the probabilities fails to A indicate where the truth probably lies, that recourse is had to an estimate of relative credibility apart from the probabilities.”

I have considered the evidence closely. I also carefully assessed the demeanour of all three family witnesses when they gave their evidence. I approached the assessment without preconceptions or sympathies. I was favourably impressed by all three witnesses.

Mrs de Villiers gave her evidence frankly and honestly. She freely conceded in her evidence in chief that she was not party to the meetings at which the agreement was reached. Her skepticism about the rectification claim arises because the terms sought to be introduced is at odds with her recollection of her husband’s statement that the AoD would secure her interests after his death and because she believes her husband would have told her of the agreement.

Mr Goosen also made a favourable impression. Although the facts giving rise to the acknowledgment do not reflect favourably upon him and the manner in which he may have abused a position of trust, in utilising moneys that did not belong to him but over which he had control, for his own purposes, he acknowledged these shortcomings and testified frankly about them. I have borne in mind, too, that his evidence may be self-serving. That is a reason to approach it with caution, but not a reason without more simply to discount it. This is not, however, a criticism that can be leveled against the evidence of Mrs Dixon.

Mrs Dixon was evidently still quite emotional about the events to which she testified, but was emphatic about the agreement that was reached as she understood it. Her explanation as to how the AoD was reduced to writing was consistent with her freely conceded absence of qualifications to have done so.

The peculiar feature about this claim for rectification is that, unlike the typical situation where the two parties to a contract are in dispute about whether the terms thereof reflect accurately their underlying agreement, and each testifies as to their contrary versions, in this matter, the parties who negotiated the agreement are ad idem that the written agreement does not accurately reflect the agreement reached. The plaintiff sues as a cessionary and was not present at the negotiations. Mr Irvine, who was present, is deceased.

Mr Botha, for the plaintiff, referred me to Van der Byl NO v Barclays Bank4 as an example of a case where the surrounding facts and circumstances themselves gave weight to the rectification contended for. He submitted that in this matter, there are no surrounding circumstances that support the rectification claim, but instead

listed 5 factors that militate against the rectification. I deal with each in turn.

Firstly, he said that the time period that elapsed between reaching the agreement and signing it would have permitted Mr Goosen to consider the matter at his leisure and ensure there were no mistakes. The evidence, however, does not support that contention: Mrs Dixon took time to prepare the document, but when it was presented for signature, Mr Goosen simply checked the amounts and the repayment schedule. This factor is, on a proper conspectus of the facts, neutral.

Secondly, reliance was placed on Mr Goosen’s concession in cross examination that the AoD was the only agreement between the parties. That does not take the matter further, given the evidence of the meetings of August 2006.

Thirdly, the fact that the parties inserted a capital amount despite knowing that Mr Ronald Irvine would not in all probability live for long enough to be repaid was raised as an indicator that the debt would not die with Mr Irvine. This must be assessed against the undisputed fact that the siblings and Mr Irvine wished to keep the dispute within the family, to the exclusion of lawyers. That the parties may, in effect, have reached a different agreement, one in the nature of an agreement by Mr Goosen to pay maintenance to his step-father for the remainder of his life, and that such an agreement may have better expressed the underlying wishes of the parties does not mean one can simply discard the agreement they did in fact reach.

Fourthly, the reference in ABSA’s letter at B35 to a reported conversation in which Mr Goosen indicated that he would furnish proof of an agreement confirming that the payments ceased on death is also not decisive. The author of the letter did not give evidence of the conversation (she no longer worked at the Bank and could not be traced), but the letter is perfectly consistent with Mr Goosen’s version, namely that the true agreement was that the obligation to pay ceased on Mr Irvine’s death. How that would be proved is a separate matter.

Lastly, Mr Botha referred to Mrs de Villiers’ evidence of Mr Irvine’s words when giving the AoD to her that it would be for her. That issue is dealt with elsewhere in the judgment.

In summary on this point: where there is surrounding evidence either in support of or destructive of the rectification of the contract, that evidence must be taken into account. It may even be decisive, given that claims for rectification are considered difficult to prove. But in this matter, if the siblings and their step-father reached an agreement one way (that the AoD would endure beyond the death of Mr Irvine) or the other (that it would not) that would be a matter for themselves to decide, and there is nothing objective either way that indicates support for one version or the other, nor would a choice either way be inherently improbable. That being so, the oral evidence of the parties becomes more important.

Although one may be critical of the way in which Mr Goosen conducted himself in signing the AoD without checking that it correctly reflected what he considered the agreement to be, and the failure by Mrs Dixon to ensure that the critical term was contained in the agreement, there is, in my view, nothing inherently improbable about the version advanced by Mr Goosen and Mrs Dixon that such a term was agreed. I have carefully considered the evidence, recounted earlier. That a family should come together to deal with a situation that confronts them, and to reach agreement to ensure that Mr Irvine should at least have the benefit of an income for the remainder of his life, was a practical arrangement that did not dwell on the past but looked to make the best of the situation. That the family should seek to keep the arrangement private, and not involve lawyers, is also understandable. This was not an agreement that simply let Mr Goosen off the hook: on the contrary, he was confronted by the remainder of his family who acted in the interests of Mr Irvine to hold him to account. That the family should seek to draw a line after Mr Irvine’s death is also not improbable. Indeed, at the time they did so, the remaining siblings were acting against their own vested interests as they perceived them, but not against those of Mr Irvine (nor of Mr Goosen).

Moreover, there is, strictly speaking, no counterveiling version of the agreement as it was concluded at the August meetings. The evidence of those meetings, as recounted by two witnesses who were both present, directly supports the claim for rectification. That Mr Irvine told Mrs De Villiers that the AoD would secure her interests is an indication that at the time the AoD was signed (December 2006), Mr Irvine felt it secured her interests. For so long as he lived, it did indeed do so. But to infer that it would continue to do so after his death flies in the face of the direct evidence to the contrary given by Mr Goosen and Mrs Dixon. He is not available to explain how he himself sought to reconcile the mutually incompatible impressions that his kin continue to harbour.

In the circumstances, I find that the written AoD does not correctly reflect the true agreement reached between the defendant and Mr Irvine in August 2006 and it falls to be rectified as prayed for by the defendant.

That being so, it is not necessary to consider the provisions of the National Credit Act.

The final issue to be dealt with is that of costs. I am aware that costs usually follow the result, but that I have a discretion in this regard. I asked both parties’ Counsel whether, in the circumstances of this case, an alternative approach would not be appropriate along the lines set out below.

This is a case about the consequences to survivors of the loss of a loved one. The calm and softly spoken Mr Irvine was a step-father to Mr Goosen and Mrs Dixon. He was a husband to Mrs de Villiers. His death has left a vacuum for all three of these people who were in court. The uncertainty about the AoD has left an unintended legacy of dispute. Mrs De Villiers may not have been successful in prosecuting this claim on the AoD, but she can in no way be criticized for having tried. To the contrary, she believed that her husband intended to look after her after his death and the document he gave her, on the face of it, bears out

that belief. Mr Goosen, on the other hand, has successfully defendant the claim, with the result that, in effect, he has been

excused from a debt that would otherwise have burdened him for many, many years, albeit one which he had incurred whilst the custodian of his step-father’s money.

It would in my view serve only to add a bitter legacy to this family dispute were I to order either party to pay the other’s costs. I asked Counsel whether it would not be appropriate to order that each party pay their own costs, regardless of whether the plaintiff were to be successful or the defendant were to be successful. They both agreed to this proposal which in my view is the fairest and most appropriate in the circumstances.

In the result, I make the following order -

The written Acknowledgment of Debt dated 1 December 2006 and attached to the particulars of claim marked “A” is rectified by the addition of the following new clause 13 - “In the event of the death of the Creditor before the payment of the amount of R850 000,00 then and in that event any remaining outstanding balance as at the time of death will be regarded as being written off and no further amounts shall be payable by the Debtor in respect of the Acknowledgment of Debt.”

The plaintiff’s claim is dismissed.

Each party is to pay their own costs.

_____

C WHITCUTT

ACTING JUDGE OF THE HIGH COURT

APPEARANCES

J H DE VILLIERS BOTHA COUNSEL FOR

PLAINTIFF

SENEKAL SIMMONDS INC PLAINTIFF’S

ATTORNEYS

A N BOTHA COUNSEL FOR DEFENDANT

CHRIS FOURIE ATTORNEY ATTORNEYS FOR

DEFENDANT

DATE OF TRIAL: 19 AND 22 OCTOBER 2012

DATE OF JUDGMENT: 23 OCTOBER 2012

1 Spiller and Others v Lawrence 1976 (1) SA 307 (N) at 307H; Levin v Zoutendijk 1979 (3) SA 1145 (W) at 1148A; Dormell Properties 282 CC v Renasa Insurance Co Ltd and others NNO 2011 (1) SA 70 (SCA) at [32] 80F

2 1947 (4) SA 860 (W) at 863-864

3 1984 (4) SA 437 at 440

4 1953 (2) SA 141 at 143I to 144A