Seaton v First National Trust Asset Management and Trust Company (Pty) Limited and Others (3878/2005) [2008] ZAKZHC 38 (22 May 2008)

IN THE HIGH COURT OF SOUTH AFRICA

DURBAN AND COAST LOCAL DIVISION

3878/2005

COLIN MAX SEATON PLAINTIFF

versus

FIRST NATIONAL TRUST ASSET MANAGEMENT

AND TRUST COMPANY (PTY) LIMITED FIRST DEFENDANT

DOREEN ELIZABETH RICHARDSON SECOND DEFENDANT

DAVID VERNON STEYN THIRD DEFENDANT

RESERVED JUDGMENT

Delivered on: 22 May 2008

NTSHANGASE, J

[1] During March 2005 the plaintiff instituted action seeking orders requiring first defendant, as executor of the estate of plaintiff’s late wife Gillian Margaret Seaton [“the deceased”] who died on 29 July 2004, to transfer to him certain immovable property situated at 42 North Grove, 118 Prospect Hall Road, Durban North [“the property”]. The second and third defendants are cited as interested persons from whom no relief is sought. The particulars of claim were amended during September 2007 to include new paragraphs which read:

“That in any event, in the unlikely event of the deceased having predeceased the plaintiff, then it was an implied, alternatively, tacit term of the agreement that Plaintiff would continue to have the right to exclusive use and enjoyment of the property for the remainder of his life;”

“alternatively, an order declaring that the plaintiff shall continue to have exclusive rights of use and enjoyment over the property for the remainder of his life.”

[2] At the commencement of the hearing of the matter the original cause of action was abandoned. With that abandonment was a concession that ownership of the property vested in the deceased in her lifetime and presently constitutes an asset in the deceased’s estate. This left for decision, as the only issue, whether or not an implied or tacit agreement had existed between plaintiff and deceased to the effect that in the event of the deceased predeceasing the plaintiff he would continue to have the right to exclusive use and enjoyment of the property for the remainder of his life.

[3] In opposing the relief sought by plaintiff, the first respondent denies the existence of any implied or tacit agreement by virtue whereof plaintiff would continue to have the right to exclusive use and enjoyment of the property for the remainder of his life. In addition to opposing the relief sought by plaintiff first respondent claims in reconvention for an order ejecting plaintiff from the property and payment of R3500 per month as agreed upon by the parties as representing a reasonable rental for the property, from the 29th day of July 2005 until date of judgment “being rental which the first defendant could otherwise receive for the property during such occupation”, alternatively by reason of plaintiff “being unjustly enriched at the first defendant’s expense in the aforesaid sum which constitutes reasonable rental for the premises in question.”

Background

[4] During October 1970 the plaintiff married the deceased out of community of property. They executed an ante-nuptial contract which accorded each the liberty to dispose of own property as thought fit. During 1973 or 1974 they decided to buy a house. According to the plaintiff the deceased paid R2000.00 as a deposit for it and he paid the balance. The mortgage bond over this property was registered in the name of the deceased. The plaintiff could not secure a mortgage bond as he was then not long in the employment of ‘Daily News’ where he worked as a type setter. That property was later sold and with the proceeds the property now in issue was purchased during or about 1994. As was the first property, the property now in issue was registered in the name of the deceased. The plaintiff testified that this was by reason of their common expectation that the plaintiff would predecease the deceased because of plaintiff’s advanced age in relation to deceased’s age and also because of his poor health. It would obviate the inconvenience of transferring the property from the estate of the plaintiff upon his death and spare the deceased the costs in that regard. He testified of an agreement between them which entitled him to stay on the property for the remainder of his life in the unexpected event of the deceased predeceasing him. Therein lies the basis of his cause of action.

[5] The second and third respondents could only testify of the acrimony which prevailed in the relationship of the plaintiff and deceased shortly before her death. They did not and were not in a position to gainsay directly the testimony of the plaintiff in regard to the alleged existence of the agreement between the plaintiff and deceased. Only the deceased would have been in a position to do so. She lies interred, and her voice can only now be represented by her Will executed on 14 June 2001 which left the property in issue to the second defendant failing her to her nephew. I shall refer to it later.

The agreement

[6] It is necessary to examine briefly the evidence led in order to determine whether or not the agreement took plaice. I think the proper point of departure is to deal with the acknowledged ownership of the property as having vested in the deceased in her lifetime and that it presently constitutes an asset in her estate. I say ‘acknowledged’ by reason of the concession of such ownership albeit belatedly, by the plaintiff at the commencement of the hearing in November 2007. It will be recalled that in regard to ownership it was stated by the plaintiff in a letter addressed to the first defendant’s attorney, which is Annexure “E” to the plaintiff’s particulars of claim, as follows:

“We reiterate that the property was registered in her name for the sake of convenience only and she held same, as such, simply as nominee for our client, at best for the deceased, she was under an obligation to re-transfer the property to our client upon her death.” [my emphasis]

If, as is stated here, it was agreed that the deceased would hold the property as plaintiff’s nominee who would, upon her death, re-transfer the property to the plaintiff, it would hardly postulate a state of mind in any of the parties which, at the time, would have given birth to an agreement that upon her death, the plaintiff would live on the property for the remainder of his life, for, what it does postulate is a position that inter partes the plaintiff was recognised as the owner of the property. Plaintiff’s version which suggests that he was the owner and the deceased a nominee would also call to question why, in the deed of sale by which the property was acquired, the deceased was not reflected as plaintiff’s nominee.

[7] In regard to the nature of the agreement the plaintiff proffered a version which vacillated between “implied or tacit” and also “oral” as its description. He said “it was a verbal thing between us.” He also said “it was a natural thing between us that I will stay there if she died before me, which was not expected.” He also said “it was a natural thing between us that I will stay there if she died before me, which was not expected.” He also stated under cross-examination “it was a standing thing between us.” Under re-examination when asked:

“Was that specifically discussed between you or was that commonly understood?”

he answered:

“Ja, it was understood that if she died I could stay there. I mean its natural, she did not want me to be kicked out.”

The plaintiff appeared to experience a difficulty in providing an exact description of what he terms as an agreement as, in answer to the question as to when the issue [the agreement] was discussed he stated:

“Oh, years ago”

This is irreconcilable with his response that “… it was understood … its natural …”, thus an implied agreement.

This vacillation is clearly unsatisfactory and certainly does not serve to lend veracity to plaintiff’s claim to the existence of an agreement which accords him a right to live on the property for the remainder of his life.

[8] What he admittedly correctly refers to as a “natural thing” to be readily implied in a normal marriage situation was, in their particular case tempered with by the terms of their ante-nuptial contract which provide –

“that each of the intended consorts shall be at full liberty to dispose of his or her property and effects, by will, codicil or other testamentary disposition as he or she may think fit.”

He stated his understanding of this to be “…what was mine was mine and what was hers was hers.” The ante-nuptial contract was not varied to accord with the purported agreement. Even the deceased’s Will itself failed to provide for the usufruct now contended for. The Will of course was drawn up much later than the time at which the agreement would have been born, a factor assailable by argument that the surrounding circumstances proper to take into account to read the state of the parties’ minds are those which existed at the time of the agreement.1 I do not regard the failure of the Will to recognise the existence of the purported agreement as an irrelevant factor to be left out of consideration as a surrounding circumstance, given the fact that there was, according to the plaintiff, never a change in the good relationship which prevailed during the subsistence of their marriage. When the existence of problems in their relationship was suggested under cross-examination his response was –

“Not between man and wife, not that problem. She had a drinking problem.”

[9] In order to discharge the onus to prove an implied or tacit term the plaintiff must prove –

“…whether, regard being had to the express terms of the Agreement, there is any room for importing the alleged implied term.”2

In the face of the provisions of the ante-nuptial contract earlier referred to, plaintiff is burdened to prove that there is room for importing the alleged implied term.

Further on the issue of their relationship, in answer to the question –

“How would you describe the relationship between you and your wife?”

his response was –

“How do you mean, we got on well together. By that what do you mean?”

When the question was pursued his response was –

“Yes, we got on very well together.”

[10] Another issue on which I have not been provided with a reason in these proceedings is why the present claim based on the alleged agreement was withheld when the action was instituted in 2005 until shortly before the hearing in 2007, which makes it a factor which compels for the plaintiff’s contention as to the existence of an agreement to suffer a perception that it might be no more than a disingenuous afterthought. I am at a loss why the plaintiff’s contention in regard to the agreement was not saved this perception,

[11] In the determination of the state of mind of the parties as at the alleged time of the agreement, it is worthy of note that the plaintiff and the deceased shared an expectation that the plaintiff would predecease the deceased by reason of his poor health and advanced age in relation to deceased’s age. In answer to the question whether he ever thought she would die before him, his answer was an emphatic –

“Never, never in 100 years. I wouldn’t have thought that.”

On the possibility of the deceased predeceasing him he was asked whether he and Mrs Seaton ever discussed the possibility of her dying before him he, in a less emphatic response, said –

“Well, sometimes we did,”

and, in the same breath he said

“but the thing is, you know honestly, I expected to die first.”

In the consideration of surrounding circumstances would this manifest the existence of a state of mind in any of the parties from which an agreement as contended for by the plaintiff would have been born? I think not. It must be accepted therefore that as at the time of the acquisition of either property their state of mind only envisaged that the plaintiff would predecease the deceased. It is, in my view, a state of mind which clearly discounts as clearly improbable the contemplation of the deceased predeceasing the plaintiff and it negatives the existence of a climate in which an agreement oral, tacit or implied as contended for by plaintiff would have taken place. It provides no room for importing the alleged implied term. There was neither an oral nor an implied or tacit term of the nature contended for by the plaintiff.

[12] I find it unnecessary to deal with further submissions which assail the plaintiff’s contention and claim with reference to the Alienation of Land Act 68 of 1981 and the Deeds Registries Act 47 of 1937 as, in my conclusion, for the foregoing reasons, the plaintiff’s claim must fail.

The counterclaim

[13] The parties shall, for convenience, be described as in the proceedings in convention. In its capacity as the duly appointed executor of the estate of the deceased in this matter the first defendant claims in reconvention for an order ejecting the plaintiff from the immovable property in issue and for damages at the rate of R3500 per month from 29 July 2005 regarded by the defendant as the date upon which the plaintiff was obliged to vacate the premises, until date of judgment, as rental which the first defendant could otherwise receive for the property during occupation thereof by plaintiff alternatively such payment is claimed on the grounds of the plaintiff “being unjustly enriched in the aforesaid sum which constitutes a reasonable rental for the premises in question.”

[14] The parties agreed on the amount of R3500 as representing reasonable rental for the property and that the matter be dealt with on that basis.

The claim for the order of ejectment

[15] In regard to the claim for the order of ejectment it is not in issue between the parties that the provisions of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 [‘PIE’] applies. This matter is dealt with on that basis.

[16] The claim is opposed for non-compliance with the provisions of section 4 of PIE.

What also still lingers, and was dealt with in proceedings in convention, is the plaintiff’s defence of a usufruct over the property. He has conceded that according to law ownership in respect of the property vested in the deceased and that it is presently an asset in the deceased’s estate and also that in terms of the Will of the deceased the property is left to the deceased’s mother, the second defendant, failing her the third defendant. He conceded to being in unlawful occupation of the property under pressure and clearly in the context of cross-examination in which he could not deny that the property was left to second defendant, failing her, the third defendant and that therefore he could not legally sustain a claim to a right in respect of the property as against the beneficiaries in terms of the deceased’s Will.

[17] I deal now with the issue of compliance with the provisions of PIE. Section 4(2) provides:

“At least 14 days before the hearing of the proceedings contemplated in subsection 1, the court must serve written and effective notice of the proceedings on the unlawful occupier and the Municipality having jurisdiction.”

It is not in issue that there was not compliance in terms of the letter of these provisions. Unlike what occurred in Moela v Shoniwe3 where there was notice though not authorised and directed by an order of court, was, in casu, no notice at all. Ms Gabriel who appeared for the defendants argued that there was none the less substantial compliance with the provisions of PIE sufficient to achieve the objects of the statutory provisions. She, in that regard, relies on various authorities including the case of Unlawful Occupiers, School Site v City of Johannesburg where it was stated:

“Nevertheless, it is clear from the authorities that even where the formalities required by statute are peremptory it is not every deviation that is fatal. Even in that event the question remains whether, in spite of the defects the objects of the statutory provision had been achieved.”4

In the case of Unlawful Occupiers, School Site supra, as was the case in Maoela supra, a notice, albeit defective, had in fact been served. Needless to say that the passage just now cited does now say that defects in the required formalities can never be fatal. It directs for an examination of the defective compliance to determine whether or not despite the defects the objects of the statutory provision had been achieved. In that regard Ms Gabriel’s submissions appear to invite the court to pay regard to proceedings in convention and therefrom to find that the plaintiff was therein given written and effective notice of the proceedings as being for his eviction, to find also of course that he was notified in those proceedings of the date and time of hearing and that the plaintiff was placed in a position to distil from the evidence led in proceedings in convention what the grounds were upon which his eviction is sought and lastly that the court take cognisance of the fact that he was throughout legally represented, and that all of this efficiently represented what the notice contemplated in subsection 2 must state and set out. I do not agree.

[18] It brings me now to the purpose to be served by the notice. In that regard the following was said in Unlawful Occupiers, School site supra:

“The purpose of section 4(2) is to afford the respondents in an application under PIE an additional opportunity, apart from the opportunity they have already had under the Rules of Court, to put all the circumstances they allege to be relevant before the court”5 [my emphasis]

In Cape Killarney Property Investments (Pty) Ltd v Mahamba6 it was stated:

“…(T)he purpose of s4(2) is clearly to afford the respondents in eviction proceedings a better opportunity than they would have under the Rules to put all the circumstances that they allege to be relevant before the court” [my emphasis].

[19] I examine now what in fact happened in the present case. In paragraph 8 of the particulars of the counterclaim the first defendant undertook that –

“(o)nce the pleadings in the counterclaim are closed, and before the order foreshadowed herein is granted, the first defendant will comply with the provisions of section 4 of Act 19 of 1998”.

Both the plaintiff and even his legal representative became entitled to await the fulfilment of that undertaking. They waited in vain. The closing paragraph of the “minutes of a pre-trial conference held on 10 August 2007…” also reads:

“The defendant accepts that if they are successful in their counterclaim they will have to institute proceedings for the eviction of the plaintiff in terms of the PIE Act.”

It was not to be. What in fact happened is that Ms Gabriel proclaimed the closure of the defendants case in convention and enquired: “I don’t know if my learned friend wants to lead any evidence in respect of … the counterclaim.” Mr Pillay for the plaintiff responded:

“No … there is no evidence specifically that we need to lead, but we reserve our rights on the procedural aspects.”

Nothing further was done to advance the proceedings on the counterclaim. At that stage the matter was adjourned. It is evident that the Municipality was subsequently advised of the proceedings from its response submitted upon resumption of the proceedings. When the proceedings were resumed both parties did no more than close their respective cases on the counterclaim and thereafter presented argument.

[20] In both instances in paragraph 18 supra in which undertakings were made that eviction proceedings in terms of PIE would be set afoot, both the plaintiff and his legal representative awaited fulfilment thereof and would have ‘withheld fire’ pending fulfilment of such undertakings. The failure to fulfil the undertakings in question would, in my view clearly prejudice and embarrass, not only the plaintiff but also his legal representative in the conduct of the plaintiff’s case on eviction. It may even be argued that no case was presented on the issue of eviction in the light of what followed the closure of the defendant’s case in convention as set out earlier in this judgment. Admittedly, part of the evidence led in proceedings in convention would probably overlap with evidence which would have been led in reconvention. It is not necessary for me also to speculate how the plaintiff would have conducted his case. In argument the plaintiff’s response to the pleadings on behalf of the first defendant on the counterclaim is assailed as disclosing a bare denial and no defence. It is not clear to me what there is in the first defendant’s pleadings to attract a defence when paragraph 8 thereof states:

“Once the pleadings in the counterclaim are closed, and before the order foreshadowed herein is granted, the first defendant will comply with the provisions of section 4 of Act 19 of 1998.”

Those are provisions which would, in terms of section 4(5)(c) of PIE have “set out the grounds for the proposed eviction,” and only then would the plaintiff have been placed in a position to proffer a defence.

[21] What happened in this case therefore does not remotely support Ms Gabriel’s contention that there was substantial compliance with the provisions of section 4 of PIE. I conclude therefore that the provisions of PIE were defied and, in the present case, have not been substantially complied with, and for the foregoing reasons the application for ejectment must fail.

[22] I assume that had the matter of eviction in this matter proceeded to be dealt with in all of its aspects, particularly under section 4(7) of PIE, a spot light would also probably have fallen on the response from the EThekwini Municipality which shows that land cannot reasonably be made available to plaintiff, and would have fallen also on the peculiar circumstances in which this 72 year old sickly and infirm plaintiff finds himself as a person now in unlawful occupation of the very property he himself and his deceased wife had purchased, as was shown to be common cause in proceedings in convention, a property in their sole ownership which, through the subsistence of their marriage, was their common and only home; peculiar circumstances in which he woke up someday two weeks after the death of his wife to be told that his wife, the deceased, in whose name they had both decided to register the property, had, in her Will left such property to the second defendant, failing her the third defendant. From that had arisen his unsurprising failed claim initially for ownership of the property, later abandoned for a claim to a usufruct over the property.

The claim for damages

[23] The question to be decided is whether the first defendant is entitled to claim money from the plaintiff either on the basis of damages for unlawful occupation or unjust enrichment. Such liability is disputed by the plaintiff.

[24] The background to the dispute is common cause. The plaintiff has remained in occupation of the property for the duration of and beyond the period in issue in the claim. Though denied by the plaintiff, his occupation of the property is without legal entitlement. The claim for payment of rental from 29 July 2005 allows for a period of grace of one year after the death of the deceased within which, according to the first respondent, the plaintiff could have made arrangements for alternative accommodation.

[25] There is agreement between the parties that R3500.00 would be reasonable rental. The first respondent refers to a letter from plaintiff’s attorneys dated 5 November 2004 which conveys his refusal to pay rental. The plaintiff testified that his attorney had not shown him such letter and that he had never been told either to vacate the property or to pay rental which would have left him with R500.00 on his monthly pension of R4000.00. It was argued on his behalf that there is no suggestion that but for its occupation by the plaintiff the property would have been advertised on the open market for rental, or that the first defendant is suffering damages at the rate of R3500.00 which first respondent could otherwise receive per month either from plaintiff or from any other person. No evidence of a clear demand to the plaintiff to vacate or pay rental was adduced.

[26] Far from manifesting a desire to put it out for rental, the second and third defendants testified of the second defendant’s desire to take up residence with her sister on the property because of the convenience the property would accord to the 93 year old second defendant by its location near a shopping centre. Presently she lives in a granny flat under daily care of the third respondent and his wife. She does not pay rental.

[27] In support of its claim for damages the evidence adduced on behalf of the first defendant took the first defendant’s case no higher than to provide proof that the property would, in the market, fetch a rental of R3500.00 per month; nor has evidence been adduced to show that the defendant was in any way impoverished while the plaintiff, the defendant in reconvention, was unjustly enriched, in support of the claim for unjust enrichment.

“Voordat verrykingsaanspreeklikheid kan ontstaan moet bewys word dat gelyktydig met die verarming van die eiser, daar ook ʼn verryking vir die verweerder was” 7

For the foregoing reasons I make the following order:

Order

The plaintiff’s claim is dismissed.

The first defendant’s counterclaim is dismissed.

Each party is to pay own costs in respect of proceedings both in convention and in reconvention.

Date of Hearing: 17 March 2008

Date of Judgment: 22 May 2008

Counsel for the plaintiff: Adv I Pillay

Instructed by: FB Scott and Company

c/o Pearce Lister Co.

Counsel for the defendants: Adv A A Gabriel

Instructed by: Larson Falconer Inc.

1 Van der Merwe v Viljoen 1953(1) SA 60 at 65D.

2 Pan American World Airways Inc. v SA Fire and Accident Insurance Co. Ltd, 1965(3) SA 150(A) at 175C

3 2005(4) SA 357 (SCA)

4 2005(4) SA 199 (SCA) at 2009 G-H

5 at 209I

6 2001(4) SA 122 at 1229E-F

7 Van der Merwe en Olivier Die Onregmatige Daad 6th ed. 483

18