Mauerberger v Mauerberger

• Jurisdiction: South Africa
• Judge: Steyn J and Searle J
• Judgment Date: 20 October 1948
• Citation: 1948 (4) SA 902 (C)
• Court: Cape Provincial Division

Steyn, J.:

This is an exception to a declaration in which the plaintiff is seeking an order for the cancellation and rescission of certain documents, bearing plaintiff's signature, whereby he parted with and divested himself of a large number of assets and benefits which are enumerated in the declaration in favour of the defendant. A restoration of these assets and benefits is also claimed, plaintiff tendering to return to the defendant all benefits conferred upon him in and by the said documents.

The plaintiff alleges in his declaration that his signature to the documents was procured by defendant through the use of undue

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influence exercised upon him by the defendant and has set out therein a number of facts indicative of the relationship which existed between him and the defendant and supporting his averment that he was unduly influenced in acting as he did. These may be summarised as follows: he avers that he is the only son of the defendant and was at all material times closely associated with him in business, that he held various appointments as director and also held shares in divers companies, public and private, controlled directly or indirectly by the defendant, that he was the registered and beneficial owner of these shares and that at all material times their value was not less than £117,500, that he and his lawful issue were substantial beneficiaries under a certain Trust, known as the Mauerberger Trust, created by the defendant and others in 1936, and subsequently amended, whereunder very considerable sums of money and/or shares were settled by the defendant upon trustees for the benefit of certain persons, including himself and his lawful issue, that one of the companies in which he was a large shareholder, viz.: the M. Mauerberger Limited, was lawfully indebted to him in the sum of £25,482 13s. 8d. and that the Mauerberger Trust was lawfully indebted to him in the sum of £600, and in para. 3 of the declaration he alleges as follows: -

'In or about April, 1947, plaintiff was divorced from his wife by order of this Honourable Court, which further made an order in terms of a consent paper (the full details of which are immaterial hereto), which provided, inter alia, that the legal guardianship of plaintiff's minor child, a boy named Henry Michael, should be retained by the plaintiff, but that the custody thereof should be given to defendant with a right to the latter to pass the custody on to the plaintiff. The said child, who is plaintiff's only issue at all material times resided and still resides with the plaintiff.'

Plaintiff thereafter, in para. 6 of the declaration, avers that on various dates between 13 and 20 April he signed four documents described as 'A', 'Basis of Family Agreement', 'B', 'Notarial Deed', 'C', 'Supplementary Notarial Deed' and, 'D', 'Irrevocable Power of Attorney', whereby inter alia, in consideration of an undertaking by the defendant to pay him £10,000 and an annuity of £1,200 and to leave him with the sole guardianship and custody of his aforementioned minor son, he renounced and relinquished in defendant's favour all his right and title to his shareholdings above-mentioned and to any benefits conferred upon him in the aforesaid Mauerberger Trust, at the same time giving an irrevocable power of attorney enabling defendant to obtain transfer of the said shares, and further ceded to the

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defendant the debts of £25,482 13s. 8d. and £600 owing to him by M. Mauerberger, Limited, and the Mauerberger Trust respectively.

Having set out the above facts plaintiff's declaration then continued as follows: -

'7. Plaintiff's signature to all the aforesaid documents, 'A', 'B', 'C' and 'D' was procured by defendant through the use of undue influence exercised by him upon the plaintiff, more particularly in that: -

(a)

on or about 11th April, 1948, and at plaintiff's home, defendant orally stated to the plaintiff,

(i)

that he, defendant, had seen his attorneys and had made arrangements to take away from the plaintiff everything that he possessed, leaving him with only an overdraft at the Bank;

(ii)

that he, defendant, had withdrawn from the Mauerberger Trust the capital and investments therein so that plaintiff would obtain very little benefit therefrom;

(iii)

that he, defendant, had made arrangements to have all shares owned by the plaintiff and registered in his name declared to be the property of the defendant and that he, defendant, had informed the Income Tax Authorities that plaintiff had merely held such shares as nominee for defendant as the beneficial owner thereof;

(iv)

that he, defendant, would reduce plaintiff to the gutter and would, with money, procure persons to substantiate any statement which he, defendant, decided to make against the plaintiff, and that he had already obtained declarations from such persons that plaintiff had acknowledged to them that his shareholdings in various companies were held by plaintiff as a nominee for defendant;

(v)

that he, defendant, had been advised on high legal and medical authority that he could have the plaintiff certified as insane;

(vi)

that although he, defendant, had already denuded the plaintiff of all his assets he, nevertheless, as a matter of formality required the plaintiff to sign a document surrendering to the defendant all his shares and other assets in consideration for which defendant would give the plaintiff a sum of money, and leave the custody of plaintiff's child with the plaintiff, but that unless plaintiff sigued a document accepting such an arrangement, defendant would completely ruin the plaintiff.

(b)

On or about the 11th April, 1948, and at defendant's home, defendant orally stated to the plaintiff:

(i)

that he, defendant, had taken all plaintiff's assets away from him;

(ii)

that he, defendant, had terminated plaintiff's directorships in all companies controlled by defendant;

(iii)

that he, defendant, had again discussed with legal and medical authorities, the matter of having plaintiff declared insane;

(iv)

that he, defendant, had informed the Income Tax Authorities that plaintiff had held all his shares as nominee for the defendant...