Prinsloo NO and Others v Goldex 15 (Pty) Ltd and Another

• Jurisdiction: South Africa
• Court: Supreme Court of Appeal
• Judge: Brand JA, Cachalia JA, Mhlantla JA, Wallis JA and Boruchowitz AJA
• Judgment Date: 28 March 2011
• Citation: 2014 (5) SA 297 (SCA)
• Hearing Date: 14 March 2011
• Docket Number: 243/11 [2012] ZASCA 28
• Counsel: HF Oosthuizen for the appellants. AB Rossouw SC (with JHA Saunders) for the respondents.

Brand JA (Cachalia JA, Mhlantla JA, Wallis JA and Boruchowitz AJA concurring):

[1] The respondents instituted an action against the appellants in the North Gauteng High Court for damages allegedly resulting from a J fraudulent misrepresentation made in connection with the sale of a farm.

Brand JA (Cachalia JA, Mhlantla JA, Wallis JA and Boruchowitz AJA concurring)

The appellants denied the allegations of fraud on which the respondents A rested their claim. The respondents thereupon raised a plea of res iudicata in the form of what has become known as issue estoppel. When the matter came before Pretorius J in the court a quo, the parties sought and obtained an order from her that the special defence of res iudicata should be dealt with at the outset and before the hearing of any evidence. B At the end of these preliminary proceedings Pretorius J upheld the plea of res iudicata with costs. The present appeal against that judgment is with the leave of the court a quo.

[2] The appeal therefore turns on the question whether, in the light of C the facts and circumstances of this case, the plea of res iudicata was rightly upheld. For present purposes those facts and circumstances are not in dispute. Shorn of unnecessary detail, they are as follows. The first two appellants, Mr NM Prinsloo and Ms JJ de Bruin NNO, appear in their representative capacities as trustees of the NM Prinsloo Trust. The third appellant is the same Mr Prinsloo, this time in his personal capacity. The D first respondent, Goldex 15 (Pty) Ltd, is a company of which the second respondent, Mr JW Scheepers, is the sole director and shareholder. For the sake of convenience, I shall refer to the trust represented by the first two appellants as 'the trust'; to the third appellant as 'Prinsloo'; to the appellants jointly as 'the appellants'; to the first respondent as 'Goldex'; to the second respondent as 'Scheepers'; and to the respondents jointly E as 'the respondents'.

[3] Pursuant to a written deed of sale entered into on 4 October 2004, the trust sold the farm Rykdom in the Limpopo Province to Goldex for R2,6 million. During the negotiations preceding the sale, the trust was F represented by Prinsloo, and Goldex by Scheepers. During February 2005 Scheepers purported to cancel the sale on behalf of Goldex, essentially on the basis of fraudulent misrepresentations allegedly made by Prinsloo on behalf of the trust during the negotiations preceding the sale. G

[4] In reaction to Goldex's purported cancellation of the sale, the trust brought an urgent application in the North Gauteng High Court for an order compelling Goldex to take transfer of Rykdom against payment of the agreed purchase price. The answering affidavit on behalf of Goldex was deposed to by Scheepers. In broad outline the alleged fraudulent H misrepresentation he relied upon for cancellation of the sale amounted to the following. Prior to the sale, so Scheepers said, he made it clear to Prinsloo that he would not be interested in buying the farm if any claim had been lodged against it in terms of the Restitution of Land Rights Act 22 of 1994, referred to, for the sake of brevity, simply as 'land claims'. I Prinsloo thereupon gave him the assurance that he was not aware of any such claim. So important was this representation, Scheepers contended, that the parties specifically stipulated, in clause 18 of the deed of sale, that the seller was not aware of any land claim against the property. Contrary to these assurances, so Scheepers said, it transpired after the sale that a land claim had indeed been lodged in respect of Rykdom by J

Brand JA (Cachalia JA, Mhlantla JA, Wallis JA and Boruchowitz AJA concurring)

A the Mapela community. Moreover, so Scheepers contended, the circumstances were such that Prinsloo must have been aware of this claim at the time and that his misrepresentation was therefore fraudulently made.

[5] In the replying affidavit by Prinsloo, on behalf of the trust, he B admitted that he gave Scheepers the assurance that there was no land claim against Rykdom and that this assurance subsequently proved to be erroneous. He denied, however, that he was aware of the land claim which had indeed been lodged against Rykdom when he gave Scheepers the assurance to the contrary. In the absence of fraud, so Prinsloo contended, Goldex was bound, by an express provision in the deed of C sale, not to rely on any representation by the seller with regard to the property sold, which turned out to be untrue.

[6] In the event, the urgent application was dismissed by Webster J. In the course of his judgment he formulated the dispute for determination, as he saw it, thus:

D 'The issue between the parties is whether [Prinsloo] is guilty of having made a material fraudulent misrepresentation to the director of [Goldex] that no valid land claim had been made or was pending in relation to the property, when the agreement of sale was entered into by the parties.'

E [7] In determining that issue, Webster J subjected the affidavits before him to a detailed analysis. This led him to the following finding:

'It is my considered view that [Prinsloo], when he entered into a written agreement of sale of the farm did so in the full knowledge that the farm was the subject of a land claim and that he deliberately withheld this F information from Scheepers, the representative of [Goldex].'

[8] Following upon the dismissal of its urgent application, the trust unsuccessfully sought leave from Webster J to appeal against his judgment. A subsequent application by the trust to this court, for leave to appeal, met with the same fate. This marked the end of the trust's G endeavour to compel specific performance of the sale. However, as it turned out, it did not mark the end of litigation resulting from the sale. What then followed was the action by the respondents against the appellants for damages which eventually gave rise to this appeal.

H [9] As I have indicated by way of introduction, the action by the respondents against the appellants, jointly and severally, was for delictual damages allegedly suffered by both Goldex and Scheepers as a result of Prinsloo's fraudulent misrepresentation on behalf of the trust. In their particulars of claim the appellants again relied on the allegation that, during the course of negotiations preceding the sale, Prinsloo represented I to Scheepers that he was unaware of any land claim in respect of Rykdom, which representation turned...