Penny v Walker

• Jurisdiction: South Africa
• Citation: 1936 AD 241

Penny Appellant v Walker Respondent
1936 AD 241

1936 AD p241

Citation	1936 AD 241
Court	Appellate Division
Judge	Wessels CJ, Curlewis JA, Stratford JA, Beyers JA and De Villiers JA
Heard	March 26, 1936; March 27, 1936
Judgment	April 14, 1936

Flynote : Sleutelwoorde

Costs — Several issues — Success on one issue only — Investigation of others necessary to decide such issue — Discretion of Court — Appeal for costs.

Headnote : Kopnota

Where there are technically separate issues in an action, but all the issues had to be raised in order to lead evidence so as to enable the trial Judge to give a correct judgment upon the issue on which the litigant succeeds, then there must be some exceptional reason for not adopting the general principle that the successful litigant is entitled to all his costs and for ordering him to pay the costs of the issues on which he has failed.

Plaintiff and defendant signed a written agreement of sale whereunder the latter sold to the former for the sum of £1,200 a farm the true value of which was £3,000. This sale was in pursuance of a prior verbal contract whereunder the defendant had agreed to sell the farm to the plaintiff, if the latter should be unsuccessful in obtaining a loan of £1,200 for him. To a claim for transfer, the price having been paid, the defendant pleaded among other defences mental incapacity and undue influence. A trial Court dismissed the claim on the ground that the plaintiff had made no bona fide attempt to obtain the loan, as he wished to obtain the farm for himself, and had thereafter fraudulently induced the defendant to sign the written agreement upon the representation that he could not obtain the loan, but made no order as to costs as the defendant had failed on the other defences he had pleaded.

Held, allowing a cross-appeal from the order as to costs, that though the defendant had failed on some issues, as such issues had to be pleaded and investigated in order that the Court could come to a conclusion on the issue upon which the defendant had succeeded, the Court had erred in depriving him of his costs.

The decision of the Eastern Districts Local Division in Penny v Walker in part confirmed and in part reversed.

Case Information

Appeal and cross-appeal from a decision of the Eastern Districts Local Division (GRAHAM, J.P.).

The facts appear from the judgment of WESSELS, C.J.

Reynolds, K.C., for the appellant: As there was practically complete performance of the contract of sale and acceptance of benefits by defendant, he can no longer rely on a condition precedent. See Halsbury's Laws of England (Hailsham ed., vol 7, paras. 299, 304, pp. 220, 223); Addison on Contracts (11th ed., pp. 55, 145); Behr v Burness (3 B and S. 751); Puit v Dourie (5 B and S. 20); White v Beeton (7 H and N. 42); Carter v Scargill (L.R. 10 Q.B. 564), Bentsen v Taylor, Sons & Co. (1893,

1936 AD p242

2 Q.B. 274); Ollive v Booker (l Ex. 416 and 74 R.R. 696); Meyrick v Dyson (41 T.L.R. 368).

A condition precedent can be waived. See Halsbury's Laws of England (Hailsham ed., vol. 7, para. 305, p. 223); Alexander v Gardner (1 Bing. N.C. 671); Segal v Mazzur (1920 CPD 634).

As to costs, all the costs were incurred on the issues on which. defendant entirely failed, and there was no tender of repayment or of costs. Consequently plaintiff should have had costs. See Lebedina v Schechter & Haskell (1931 W.L.D. 247); Union Share Agency and Investment Co. v Green (1926 CPD 129) and Voet (4.1.22; 4.2.9). O. H. Hoexter, K.C., for the respondent was only called upon on the question of costs but his heads of argument contained the following points: The obligation undertaken by respondent to sell was subject to fulfilment by appellant of his prior obligation to endeavour to raise a loan. See Voet (45.1.19); Grotius (3.3.47, 50); van Leeuwen's Roman Dutch Law (Kotze's trans., vol. II, p. 33); Maasdorp's Institutes (4th ed., vol. 111, p. 82); Algoa Milling Co. v Arkell and Douglas (1918 AD 145); Domisse v Brummer (1921, E.D.L. 249); Bodenstein v Frankfurth (1928 T.P.D. 210) and Aymard v Webster (1910 T.P.D. 123). To put the point in another way, there was a prior oral warranty, not inconsistent with the document, which forms part of the consideration of the main contract. See Phipson on Evidence (1930 ed., p. 556); Heilbut, Simons & Co. v Buckleton (1931, A.C. at pp. 47, 51); Newman v Gatti (24 T.L.R. 18); de la Salle v Guildford (1901, Z K.B. 215); Morgan v Griffith (L.R. 6 Exch. 70) and Jacobs v Batavia Trust Ltd. (1924, 2 Ch. 329).

Alternatively the valuation upon which the contract was based involved a mistake as to the area amounting to one-third of the total area sold. Defendant was unaware of this and his ignorance. amounted to justus error. This could not be pleaded because the fact was unknown to defendant until it came out in evidence for plaintiff in the closing stages of the trial. See van Pletsen v Henning (1913 AD at p. 95); Cole v Union Government (1910 AD 263); and Algoa Milling Co. v Arkell and Douglas (1918 AD at p. 157). The mistake was one of fact and reasonable and was not supina aut affectata. See Voet (18.1.6); Aliwal North Divisional Council v de Wet (T.S.C. 232) and Natal Bank v Kuranda (1907, T.H at p. 165).

1936 AD p243

The mistake being one as to price was an obstacle to consent.

See Voet (18.1.5); Mackeurtan on Sale of Goods in S.,4. (2nd ed., pp.118-24) and Pothier on Obligations (paras. 34 and 37). Where no blame attaches to the person labouring under the mistake, the other party cannot claim the benefit of the contract. See van der Byl v van der Byl (16 S.C at p. 349); Caithness v Fowlds (1910, E.D.C at p. 267); Huddersfield Banking Co. v H. Lister & Son (1895, 2 Ch. 273, at p. 280); Burge on Colonial Laws (vol. III, p. 743). Where such a mistake is established there is no consensus ad idem. See van Rensburg v Rice (1914, E.D.L. 217, at p. 226); for the seller cannot be compelled to sell the whole at a price fixed for a part only. See Calverley v Williams (1790, 1 Ves. 210 and 30 E.R. 306).

The difference between the price and the value is great enough to have given the right to a rescission on the ground of laesio enormis.

See Voet (3.18.5) and Maasdorp's Institutes (4th ed., vol. III, p. 224, note 20). A fortiori so great a difference is a complete obstacle to any consensus ad idem. There is therefore no contract at all, though the price could be rectified if rectification would represent what the parties actually agreed. See van Rensburg v Rice. (supra, at p. 228). But in the present case a rectification of the price at this stage would be tantamount to the making of a new contract. Alternatively the contract is void because the defendant was mentally incapable of entering into this particular contract. Broadly speaking insanity is simply a negation of sanity and defendant's mental arrestment is or may be as much a negation of sanity as mental deterioration. Insanity renders a contract utterly void. See Molyneux v Natal Land Colonisation Co. (1905, A.C. 555); Pheasant v Warne (1922 AD 481); Rehne's Estate v Rehne (1930 OPD 80). It is the fact of insanity not the declaration that is the test of contractual capacity. See Pienaar v Pienaar's Curator (1930 OPD 171). Though an insane person. is not precluded from contracting during a lucid interval, the onus of establishing that the person actually understood and intended the contract is on the party seeking to hold him bound. See Pienaar (supra at pp. 174-5).

If there had been an order of detention under Act 38 of 1916, the onus would have been on plaintiff to prove affirmatively That the defendant did understand. See Levin v Mechanich (1931, E.D.L. 32). Proof of a mental defect such as prima facie to lead

1936 AD p244

to the conclusion that the defendant could not understand the contract into which he entered shifted the onus to the plaintiff to prove affirmatively that he did so understand. Alternatively the bargain resulted from an abuse of the influence acquired and the trust reposed, which is covered by an equitable extension of the doctrine quod metus causa, which has not been much developed in the Roman-Dutch authorities but is entirely consistent with the principles of our law. See Mackeurtan on Sale of Goods in SA (2nd ed., pp. 134, 1136, 137); Lee on Roman-Dutch Law (p. 104.) and Wille and Millin on Mercantile Law (7th ed., p. 7).

The doctrine is more at home in our law than in English law in view of the rebuttable presumption of law that a bargain is unconscionable in every sale where one of the contracting parties has been prejudiced to the extent of half or more than half. See Maasdorp's Institutes (4th ed., vol. 3, pp. 223-4).

Undue influence is the unconscientious use by one person of power possessed by him over another to induce that other to enter into a contract. See Halsbury's Laws of England (1st ed., vol. 7, para. 736, p. 357); Chitty on Contracts (18th ed., pp. 809, 813-5) and Pollock on Contracts (7th ed., p. 600).

It is the fact of undue influence and not any particular legal relationship which matters. See Halsbury's Laws of England (vol 7, para. 737). Particular legal relationships, e.g., attorney and client, necessitate proof that by no industry could the client have got a better bargain. See Armitage Trustees v Allison (32 N.L.R... 88 at pp. 102-8). There is no reason in law why an equal onus should not be cast upon any other person in whom implicit trust is reposed. Once the fact of influence is established there must be proof that the contract was not induced thereby. See Halsbury's Laws of England (vol. 7, para. 737, 1st ed., p. 359).

Alternatively Estment mala fide fixed an arbitrium pravum to the knowledge of plaintiff and defendant is not bound, and its effect is manifesta iniquitas (see Digest, 17.2.79, and Voet,

As to costs there was only one issue in the court below -...