Reasons for order:
DE JAGER J:
Apart from costs, the applicants (Roland Ingo Werner Graf Zu Bentheim Techlenburg-Rheda and Martha Angela Charlotte Zu Bentheim Techlenburg-Rheda, respectively) pray that the agreement signed by them on 12 March 2024 is binding on the parties and that the respondents (Vivian Theo Diergaardt and Willem Johannes Petrus Cloete, respectively) be ordered to sign it. The application comes before court as an interlocutory proceeding to the main action between the first respondent as the plaintiff and the applicants and the second respondent as the defendants, respectively. The parties are referred to as they are in the action.
The plaintiff instituted action against the first and second defendants in March 2019. The plaintiff claims that the first and second defendants be evicted from an erf situated in Windhoek (the property) based on his lawful ownership and their unlawful occupation. Following a joinder application by the first and second defendants, the second respondent joined the action as the third defendant in February 2020. The first and second defendants discovered that the property they inherited was sold to the plaintiff without their permission. Thet the third defendant was instrumental in the transfer documents. They intended to raise a counterclaim for the property to be transferred to them. In the counterclaim, the first and second defendants claim that the property be transferred to them based on their ownership and the plaintiff acquired transfer into his name in circumstances unknown to them and without their authorisation and consent and that the plaintiff’s deed of transfer is void and/or voidable and liable to be set aside.
In a letter dated 18 January 2024, the plaintiff’s legal practitioners informed the first and second defendants’ legal practitioners that their client (the plaintiff) was still desirous of resolving the matter on the ‘same terms’, and they attached a proposed deed of settlement previously sent to the first and second defendants’ erstwhile legal practitioners. In a joint status report dated 23 January 2024, it was recorded that the matter has become settled in principle save for one outstanding issue about the City of Windhoek account to be paid by the first and second defendants. On 24 January 2024, since the parties have been engaged in settlement negotiations since October 2022, numerous postponements were granted to settle the matter, and the plaintiff was, at the time, in default of making discovery and delivering witness statements, the court ordered the plaintiff to make discovery and file witness statements, and the parties were ordered to file a proposed pre-trial order. The matter was further postponed for a pre-trial conference. The defendants signed the deed of settlement on 12 March 2024. However, in a letter dated 28 March 2024, the plaintiff’s legal practitioners informed the first and second defendants’ legal practitioners that the plaintiff was no longer desirous to settle the matter and it should proceed to trial.
The first and second defendants contend that the proposed deed of settlement constituted an offer by the plaintiff to the defendants and, upon acceptance by the first and second defendants, became binding on the plaintiff.
Before dealing with the plaintiff’s opposition, it is recorded that after the plaintiff passed away on 22 July 2020, his widower, Maria Diergaardt, was appointed executrix of his deceased estate. She appointed Josua Jacobus Meuwesen, in his capacity as the nominee of FM Oehl Trust CC, as her agent for the deceased estate.
The application is opposed on the following bases. Following the 24 January 2024 court order, the plaintiff’s legal practitioners consulted with the executrix. They asked if she could find any documentary evidence to be discovered gainsaying the first and second defendant’s version. She could not, and a witness statement was filed for the plaintiff. Before filing the plaintiff’s witness statement, and whereas the executrix would have difficulties successfully defending the counterclaim on the limited evidence at hand and under the representations in the plea, counterclaim and the first and second defendants’ witness statements, the plaintiff’s legal practitioners were instructed to provide the first and second defendants with the proposed deed of settlement. Subsequently (it is not stated when), the executrix found some relevant documents, and further investigations revealed that the property was transferred to the plaintiff under a bona fide sale and a valid power of attorney by the first and second defendants to the third defendant. When the settlement offer was made, the executrix believed the first and second defendants’ representations that the power of attorney was falsified. Insofar as there was no misrepresentation and the first and second defendants truly believed that the power of attorney was impeachable, the deed of settlement was concluded based on that common assumption. Considering the further evidence discovered after the fact, that assumption was incorrect. The executrix would never have made the offer had she known that the power of attorney was valid. The error amounts to a unilateral iustus error on the executrix’s part. It was iustus because the first and second defendants must have known that the power of attorney and subsequent property transfer were valid. The first and second defendants misrepresented the actual situation to the executrix who acted under it. The error renders the agreement voidable, and the executrix elects not to be bound by the deed of settlement and to set it aside.
The first and second defendants complained that the plaintiff is affirming the agreement (by raising their unilateral iustus error) and denying its existence simultaneously, and he is raising fictitious factual disputes.
The plaintiff argued that because of the misrepresentation and unilateral iustus error, the court should not conclude that there is a binding agreement in place.
Whether there is a binding agreement is separate from an enquiry whether an existing agreement must be enforced.
To decide whether a contract exists, the question is primarily whether there is true agreement between two or more parties revealed by external manifestations judged objectively. The foundation of a contract is agreement by consent, which is judged from external facts on whether the parties' minds have met. Absent fraud, their minds’ external manifestation, is considered without the workings of their minds. Our law follows a generally objective approach to the existence of contracts. It does, however, not preclude a plaintiff from advancing the cause of action of error, and it does not exclude the operation of mistake as grounds for avoiding contractual liability. Considering the case facts, the doctrine of quasi-mutual assent need not be considered.
As a rule, a binding contract is constituted by accepting an offer and consensus is usually evidenced by offer and acceptance. In some cases, it would not be as simple as an offer and an acceptance, but the case before court is not one of those. In the case before court, the offer and acceptance are both undisputed. There is thus no factual dispute to decide whether there is a binding agreement. Moreover, during oral argument, the plaintiff’s counsel conceded, subject to his further argument in the following paragraph, that there is an agreement between the plaintiff and the first and second defendants. The court is not dealing with a case where there was no consensus. Consensus is conceded on the papers. The court concludes there was an unconditional offer by the plaintiff and an unequivocal acceptance by the first and second defendants, which resulted in a binding agreement between the plaintiff and the first and second defendants.
The plaintiff’s counsel, however, further argued that the plaintiff could avoid the consequences of the agreement by his unilateral iustus error caused by the first and second defendants’ misrepresentation (rendering the agreement voidable at the plaintiff’s instance) and because of that, the court should not find that there is a binding agreement. The plaintiff elected not to be bound by the agreement and to set it aside. There is, however, no counter-application to have the agreement set aside.
If a party was induced to conclude a contract by the misrepresentation of an existing fact, such party is entitled to rescind the contract if the misrepresentation was material, if it intended to induce him to conclude the contract and if it did induce him to conclude the contract. An iustus unilateral error (if caused by a misrepresentation of the other party) may be used to avoid the contract. Once the contract is proved and a party enforces it, the party who wishes to resile from it will bear an evidential burden to rebut it by showing there was a misrepresentation (including its falseness) and that the mistake was reasonable. The plaintiff’s opposition to the relief sought does not dispute consensus and acknowledges the agreement’s existence. In such circumstances, the opposition should be raised to avoid the agreement’s enforcement, not its existence.
There is a material factual dispute on whether there was a misrepresentation and an iustus unilateral error. According to the first and second defendants, they made no representations. They said they simply pleaded their case and instituted a counterclaim, and if the plaintiff believed it to be correct and later came to believe that it was based on incorrect averments, it was not the first and second defendant’s fault. They further stated that they never intended to divest themselves of the property’s ownership, and they were unaware of the sale concluded between the plaintiff and the third defendant. They also pointed out the following. The deed of sale relied on by the plaintiff does not describe the property (which is the subject matter of the sale). The plaintiff signed it as the purchaser and the third defendant as the seller on 26 November 2013, while the power of attorney that would have enabled the third defendant to sell the property to the plaintiff was only given on 27 November 2013.
Whereas the settlement offer emanated from the plaintiff, not the first and second defendants, the plaintiff will be hard-pressed to show that the first and second defendants, by their alleged misrepresentation, intended to induce the plaintiff to conclude the deed of settlement. As stated before, there is a material factual dispute about whether there was a misrepresentation. The court cannot decide that issue on the papers in motion proceedings. However, considering the relief sought by the first and second defendants, the court is not required to determine that issue because it is not asked to enforce the agreement, which would be a consequence of the agreement the plaintiff could seek to avoid. The court is asked to pronounce whether there is a binding agreement. For the reasoning set out above, there is a binding agreement. As explained above, the issues raised by the plaintiff for why he should be excused from the consequences of the agreement will only arise if and when the first and second defendants enforce it. The court expressly states that the issues raised by the plaintiff for why he should be excused from the agreement are not decided at this juncture, and it would, at the opportune time when and if the agreement is enforced, be open for the plaintiff to raise those issues to avoid its consequence.
Having concluded that there is a binding agreement between the plaintiff and the first and second defendants, it is unnecessary to order the plaintiff to sign it.
The court must also determine a cost issue that arose from the case being postponed on 9 December 2024. In the court order dated 16 October 2024, the first and second defendants were ordered to attend to the indexing on or before 20 November 2024, and they were ordered to deliver their heads of argument on or before 27 November 2024, whereafter the plaintiff’s heads of argument were ordered to be due on 4 December 2024. The matter was furthermore postponed to 9 December 2024 for hearing. The first and second defendants failed to attend to the indexing. Under rules 131(6) and (7), because of that failure, the case was not heard on 9 December 2024. On 9 December 2024, the case was postponed to 10 February 2025 for hearing. Following the plaintiff’s prayer for costs from the first and second defendants because of the postponement, those costs stood over. Under practice direction 48(2) and after the first and second defendants failed to attend to the indexing, the plaintiff had to do it not more than three days before 27 November 2024. The plaintiff failed to do so. In those circumstances, there is no cost order for the costs occasioned by the postponement on 9 December 2024.
For the interlocutory application under INT-HC-OTH-2024/00731, costs follow the event in line with the general cost rule but are capped under rule 32(11).
In conclusion, the order is as set out above. |
