Government Employees Pension Fund v VR & L Rental (Pty) Ltd t/a Dros Fried Chicken and Another (A203/2020) [2021] ZAGPPHC 675 (11 October 2021)

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHERS JUDGES: NO

(3) REVISED: YES

APPEAL CASE NO: A203/2020

In the matter between:

GOVERNMENT EMPLOYEES PENSION FUND

Appellant

(Plaintiff in the

Court a quo)

and

VR & L RENTAL (PTY) LTD t/a DROS FRIED CHICKEN

First Respondent/

Cross Appellant

(First Defendant in the

BAREND NICOLAAS LABUSCHAGNE

Second Respondent/

(Second Defendant in the

JUDGMENT

BASSON J

[1] This is an application for leave to appeal against the whole of the judgment and order delivered by Magistrate B Dangalazana on 27 February 2020. Written reasons were handed down on 23 March 2020.

[2] The appellant (Government Employees Pension Fund) issued summons against the respondents (VR and L Rental (Pty) t/a Dros Fried Chicken (first respondent) and Barend Nicolaas Labuschagne (second respondent)) for alleged arrear rental stemming from a lease agreement for a property situated in Castle Walk Shopping Centre. The alleged arrears were for the months of August 2016 to January 2017 in an amount of R160 933.00.

[3] The fact that a valid lease agreement was concluded between the appellant and the first respondent and further that there was a valid surety agreement between the appellant and the second respondent were not in dispute. It was common cause that an email was sent on 7 June 2016 reflecting the minutes of the meeting that was held between the parties and their representatives. This meeting was held on 10 March 2016. This letter reads as follows and was sent by Ms Maria Prioste (“Prioste”) to various recipients:

“Good afternoon all.

With regards to the abovementioned matter and hereby advise that Mr. Kevin Roman has hereby approached me to address this matter

FACTS OF EVENTS

On the 10 March 2016 @ 1.30pm a meeting was held at PIC Pretoria offices which the relative persons were present

Stephen Matabane

Zanobuhle Ntombela

Maria Prioste

Leon

Ben

Rene Jordaan – CEO of DFC

The following was agreed upon by all parties on under mentioned – Franchisee

1. Franchisee – Leon and Ben will be liable up to including August 2015 in the amount of R177 371.08

2. The Deposit held by the Landlord in the amount of R86 914.02 to be appropriated towards the arrears

3. Leaving a balance of R90 457.06 this amount to be settled over a period of 6 months (acknowledgement of Debt) to be set in place.

Franchisor Rene Jordaan

[1] Will be liable from 01/09/2015 and including arrears from that date to now

[2] The total arrears of R292 865.18 which is up to and including June 2016

[3] A new lease agreement was to have been sent to Rene Jordaan wef 01/09/2015 (however the arrears was much less in March 2016 when the meeting was held)

[4] Rene Jordaan to pay 50% of the arrears and the balance to be settled over a period of 6 months (acknowledgement of Debt or alternatively to be inserted in the new lease agreement as a special condition clause)

I trust that the abovementioned clarifies the matter.

Kind Regards,

Property Manager”

The pleadings

[4] Relying on this letter, the respondents pleaded that they were not indebted to the appellant and that they had paid the appellant in full the amount agreed upon in full and final settlement of the dispute between the parties. The respondents further pleaded that the parties have entered into a partly written and partly oral agreement which superseded the lease agreement between them. It is further pleaded that it is further a “material express,

alternatively tacit, further alternatively implied terms of the new agreement” that the existing lease agreement between the appellant and the first respondent would be cancelled, that the respondents would be liable for all arrear rentals up to and including August 2015. The respondents claim that the e-mail sent (and quoted hereinabove) confirms the new agreement and the terms and conditions of the agreement. Apart from the details pertaining to the alleged settlement agreement, the names of the individuals who attended the meeting are also reflected. In terms of this alleged settlement agreement, the lease agreement between the parties was cancelled with effect from end of August 2015 and the respondents had to pay the appellant an amount of R90 457.06 after the deposit paid by the respondents of R86 914.02 had been deducted. The balance had to be paid over a period of six months.

[5] The appellant replicated by pleading that, in the event the court does find that there was a further partly written and partly oral agreement, the appellants pleaded that Prioste was never authorized to act on behalf of the appellant and that any action taken by Prioste that is in conflict therewith is null and void. In the premises, the appellant pleaded that the alleged settlement agreement is “illegal” and null and void.

Onus

[6] As point of departure the principles regarding onus of proof should be restated. I can do no better than to quote from the locus classicus Pillay Appellant v Krishna and another Respondents[1] where the court summarised the principles as follows:

“It consequently becomes necessary at the outset to deal with the basic rules which govern the incidence of the burden of proof the onus probandi - for upon them the decision of this case must ultimately rest. And it should be noted immediately that this is a matter of substantive law and not a question of evidence; Tregea and Another v Godart and Another (1939 AD 16, at p. 32).

The first principle in regard to the burden of proof is thus stated in the Corpus Juris: "Semper necessitas probandi incumbit illi qui agit" (D. 22.3.21). If one person claims something from another in a Court of law, then he has to satisfy the Court that he is entitled to it. But there is a second principle which must always be read with it: "Agere etiam is videtur, qui exceptions utitur: nam reus in exceptione actor est" (D. 44.1.1). (Exceptio does not mean, of course, an exception in the sense in which the term is now used in our practice.) Where the person against whom the claim is made is not content with a mere denial of that claim, but sets up a special defence, then he is regarded quoad that defence, as being the claimant: for his defence to be upheld he must satisfy the Court that he is entitled to succeed on it.”

[7] The onus of proof is central to deciding this appeal and the principles as set out in Pillay[2] must be borne in mind.

Pre-trial minutes

[8] In the pre-trail minutes dated 25 April 2019 it was specifically agreed upon between the parties that the plaintiff (the appellant) had the onus of proof and duty to begin in respect of the claim but, importantly, that the defendant (the respondents) had the onus to prove the alleged further agreement.

Proceedings in the court a quo

[9] The matter was heard on 5 December 2019. The appellant, as per the pre-trial minutes, commenced the proceedings with leading the evidence of two witnesses. When the appellant closed its case, the matter was postponed to 27 February 2020. The respondents applied to lodge an application for absolution. The court made the following findings: Firstly, it accepted that the email of 7 June 2016 constituted the settlement agreement and secondly, that Prioste had ostensible authority to act on behalf of the appellant.

[10] Neither of the two witnesses called to testify on behalf of the appellant Ms Ranyapedi (a regional property managerat Mowana the property agency on behalf of the plaintiff) and Mr Mochadiba (a Tenant Liaison Centre Manager) were present at the meeting of 10 March 2016 and neither of them could confirm that a settlement agreement was in fact concluded. Rantjapedi’s evidence mainly dealt with the powers of the property managers regarding the signing of contracts, and she was led extensively on that issue. This is consistent with was pleaded by the appellant, namely that Prioste did not have the authority to act on behalf of the appellant. No evidence was led on behalf of the appellants regarding the alleged agreement that was concluded which is not surprising in light of the pleadings. Also, neither of the two witnesses (as already pointed out) was present at the meeting which culminated in the email of 7 June 2016 and was therefore not able to testify regarding the alleged conclusion of the settlement agreement. Indicative of the fact that the respondents were always aware of the onus, is what was put to Rantjapedi in cross-examination. It was put to her that witnesses for the respondent will come and testify that a “firm agreement” with certain terms was reached between the parties. It was further put to her that she would not be able to “say yes or no” to that proposition to which she replied in the affirmative. The respondents were thus fully aware that the onus to prove the existence or conclusion of the settlement agreement was on them and not on the appellant.

[11] Notwithstanding the clear instance of the onus and the fact that neither of the witnesses was able to testify as to the content of the agreement (which the respondent pleaded was partially written and partially oral) the Magistrate granted absolution with each party to pay its own costs.

[12] I am, considering the aforegoing, of the view that the Magistrate erred in granting absolution from the instance in circumstances where the burden of proof to prove the conclusion of the settlement agreement rested on the respondent. It does not follow, in my view, that the fact that it was common cause that a meeting took place on 10 March 2016 and that certain payments were made, that an agreement was concluded. This was for the respondents to prove. See Arter Appellant v Burt Respondent:[3]

“The question of the correctness of that judgment is now before us. The onus, it should be remembered, was on the defendant. If he discharged it he was entitled to judgment; if he failed to discharge it then the plaintiff was bound to succeed. In either event there was no room for absolution. The order to that effect was made solely on the ground that the magistrate did not appear to have sufficiently appreciated the effect of the correspondence.”

[13] Absolution from the instance may only be granted at the end of a plaintiff’s case it there is no sufficient evidence upon which a reasonable person could find for him or her. The defendants (the respondents in this matter) would only have been entitled to judgment if they discharge the burden of proof. In such circumstances the judgment would be a dismissal and not an absolution of the instance. If a defendant fails in discharging the onus, then the plaintiff will be entitled to judgment. As the court affirmed in Ramnath v Bunsee:[4]

“The truth turns upon para (c) of section 48 of the Magistrate’s Court Act. This reads:

The court may, as a result of the trial of an action, grant absolution from the instance, if it appears to the court that the evidence does not justify the court in giving judgment for either party”

Speaking of the identical section 46 (c) of the 1917 statute, Matthews, J., in Subakka v Moonigadu, supra said:

“The provisions of that action do no more than state the course which should be observed in all courts where a judicial officer in unable to satisfy himself on which side truth lies”

Paras. (a) and (b) of section 48 relate to judgement for the Plaintiff and the Defendant respectively, in so far as he has proved his case. As to paragraph (c), clearly if the evidence does not justify the court in giving judgment for the Defendant because he has not proved his case, when the onus is upon him to do so, that very fact justifies the court in giving judgment for the Plaintiff, having regard to the logical principles relating to onus. It cannot be said that the evidence does not justify the court in giving judgment for the Plaintiff, in those circumstances. Consequently there is no room for an absolution’.

[14] Similarly, in Sentraalwes Personeel Ondernemings (Edms) BPK v Nieuwoudt[5], the Court held:

“Die laaste grond waarop aansoek om absolusie gedoen is, was dat daar weens wanvoorstelling deur die eiser se agent aangaande die betekenis van klousule 21 van die kontrk geen wilsooreenstemming end us geen kontrak tussen die partye tot stand gekom het nie. Dis n feitevraag waarna die bewyslas op die verweerderes gerus het...Daar was dus geen ruimte vir die bevel van absolusie van die instansie nie. Sien Arter v Burt 1922 AD 303 te 306.

Die Landdros behoort dus die aansoek om absolusie van die instansie van die hand te gewys het. Die appel slaag gevolglik met koste wat insluit die koste van twee advokate”.

[15] The court thus erred in not having taken cognisance of the fact there was no evidence on behalf of the respondents regarding a further new agreement that was allegedly concluded on a partial written, partial oral basis as was pleaded by the respondents but denied by the appellant. Consequently, the court was not in a position to find that a new lease agreement and or settlement agreement had been concluded between the applicant and the respondents in the absence of evidence to this effect: The respondents have not discharged the burden of proof that rested upon them to show that a new lease agreement and/or settlement agreement was reached between the parties.

[16] The appeal must therefore succeed. Regarding costs of the appeal, costs should follow the result and the respondents are ordered to pay the costs.

Costs: Absolution of the instance

[17] What should the court do with costs order made by the Magistrate in granting absolution with each party to pay its own costs particularly

considering the principle that costs should follow the result as was pointed out by the Supreme Court in De Klerk v ABSA Bank Limited and Others,[6] where the Supreme Court of Appeal held as follows:

“Counsel who applies for absolution from the instance at the end of a Plaintiff’s case takes a risk, even though the Plaintiff’s

case may be weak. If the absolution from the instance succeeds the Plaintiff’s action is ended, he must pay the costs and the Defendant is relieved of the decision whether to lead evidence and of having his body of evidence scrutinised should he choose to provide it. But time and time again Plaintiff’s against whom absolution has been ordered have appealed successfully and left the Defendant to pay the costs of both the application and the appeal and with the need to decide what is to be done next. The question is this case is whether the Plaintiff has crossed the low threshold of proof that the law sets when a Plaintiff’s case is closed but the Defendant’s is not”.

[18] There was some debate in court about whether the court should disturb the costs a quo order in granting order of absolution. I did not understand the appellant to seriously argue that the costs order should be set

aside. I have decided that, because the issue of costs eminently fell within the discretion of the trial court and in the absence of any misdirection, not to disturb the costs order.[7] The order of the court a quo is thus replaced with an order that the application for absolution is dismissed and that the costs order that each party pay its own costs stand.

Cross- appeal

[19] The respondents also filed a notice of cross-appeal in respect of the costs order of the court a quo (that each party must pay its own costs) and submitted that it should be replaces with an order that the appellant had to pay the

respondents’ costs alternatively that a punitive costs order be made.

[20] Apart from the fact that the respondents have made out no case before this court why the costs order should be disturbed, in any event, because the appeal against the order of absolution succeeds, the cross-appeal is largely academic. The cross-appeal is dismissed with no order as to costs.

Order

1. The appeal is upheld with the respondents to pay the costs.

2. The order of the Magistrate granting absolution from the instance is replaced with an order that the application for absolution from the instance is dismissed.

3. The costs order of the court a quo is confirmed.

4. The cross-appeal is dismissed with no order as to costs.

AC BASSON

JUDGE OF THE HIGH COURT

GAUTENG DIVISION OF THE HIGH COURT, PRETORIA

Electronically submitted therefore unsigned

I agree.

T SKOSANA

ACTING JUDGE OF THE HIGH COURT

Delivered: This judgment was prepared and authored by the Judge whose name is reflected and is handed down electronically by circulation to the Parties/their legal representatives by email and by uploading it to the electronic file of this matter on CaseLines The date for hand-down is deemed to be 11 October 2021.

Date of hearing: 6 May 2021

Appearances:

For the appellant:

Adv M Bester

Instructed by:

MF Jassat Dhlamini Inc

For the respondents: Adv P van der Schyf

Instructed by:

Hatting & Nzabandzaba Attorneys

[1] 1946 AD 946 at 951.

[2] Ibid.

[3] 1922 AD 303 ad 306.

[4] 1961 (1) SA 394 (N)

[5] 1979 (2) SA 537 (C) at 546A-B.

[6] 2003 (4) SA 315 SCA at 320.

[7] See in general regarding the court’s powers to interfere with a costs order made by the court a quo: Hotz and Others v University of Cape Town [2017] ZACC 10.