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

• Jurisdiction: South Africa
• Citation: 2014 (5) SA 297 (SCA)

Prinsloo NO and Others v Goldex 15 (Pty) Ltd and Another
2014 (5) SA 297 (SCA)

2014 (5) SA p297

Citation	2014 (5) SA 297 (SCA)
Case No	243/11; [2012] ZASCA 28
Court	Supreme Court of Appeal
Judge	Brand JA, Cachalia JA, Mhlantla JA, Wallis JA and Boruchowitz AJA
Heard	March 14, 2011
Judgment	March 28, 2011
Counsel	HF Oosthuizen for the appellants.; AB Rossouw SC (with JHA Saunders) for the respondents.

Flynote : Sleutelwoorde B

Estoppel — Res judicata — Issue estoppel — Operation — Plea may not be upheld where it will cause unfairness. C

Headnote : Kopnota

In this case a trust sold a farm to Goldex. Goldex later purported to cancel the sale on the basis of an alleged fraudulent misrepresentation prior to the sale by the trust's representative, a Mr Prinsloo.

The trust then applied to a court to compel Goldex to perform. Goldex in its answering affidavit set out the details of the misrepresentation. The court's D finding was that Prinsloo had made the fraudulent misrepresentation and it dismissed the trust's application.

Thereafter the trust applied to the court for leave to appeal, but was refused, and it subsequently applied to the Supreme Court of Appeal (SCA) for leave to appeal, but was again refused.

Sometime later Goldex and a Mr Scheepers brought an action against the trust E and Prinsloo in his personal capacity. It was for delictual damages suffered as a result of Prinsloo's fraudulent misrepresentation while representing the trust. In their particulars of claim Goldex and Scheepers alleged that Prinsloo had made the fraudulent misrepresentation. The trust and Prinsloo denied this allegation in their plea. Goldex and Scheepers replicated that, given the motion court's finding of fraudulent misrepresentation, F the exceptio rei judicata estopped the trust and Prinsloo from denying the allegation. The court upheld Goldex and Scheepers' contention and the trust and Prinsloo appealed to the SCA. The question in the SCA was whether to endorse the high court's decision.

Held, that the requirements of res judicata were that the cause of action, relief G and parties be the same in the earlier and later proceedings. However, the requirements of same cause and same relief could be dispensed with where the same issue had been finally decided in the previous proceeding — the form of res judicata known as issue estoppel. A plea of issue estoppel could only be permitted though if it would not cause unfairness in the later proceeding. (Paragraphs [23] and [26] at 305A – C and 305H – 306A.) H

Here, the relief claimed differed in the application and the action. Yet the issue decided in the application — whether Prinsloo had made a fraudulent misrepresentation — was the same as in the action, as were the parties (at least insofar as the trust was concerned). However, even though the requirements of issue estoppel were present, it would be unfair to uphold I the plea and to bind the trust to the motion court's finding. This was because the motion court had failed to properly investigate the allegation of fraud before coming to the conclusion of its existence, and because the trust had had no opportunity to challenge the finding in an appeal. Accordingly the appeal was upheld and the plea of res judicata dismissed. (Paragraphs [11], [15] and [27] – [28] at 301H – 302B, 302H/I – 303B and 306A/B – D.) J

2014 (5) SA p298

Cases Considered

Annotations A

Case law

Southern Africa

African Farms and Townships Ltd v Cape Town Municipality 1963 (2) SA 555 (A): referred to

Amalgamated Engineering Union v Minister of Labour 1949 (3) SA 637 (A): referred to B

Bafokeng Tribe v Impala Platinum Ltd and Others 1999 (3) SA 517 (B) (1998 (11) BCLR 1373): referred to

Boshoff v Union Government 1932 TPD 345: followed

Evins v Shield Insurance Co Ltd 1980 (2) SA 814 (A): referred to

Holtzhausen and Another v Gore NO and Others 2002 (2) SA 141 (C): referred to C

Kommissaris van Binnelandse Inkomste v Absa Bank Bpk 1995 (1) SA 653 (A) ([1995] 1 All SA 517): dictum at 676B applied

Man Truck & Bus (SA) (Pty) Ltd v Dusbus Leasing CC and Others 2004 (1) SA 454 (W): referred to

National Sorghum Breweries Ltd (t/a Vivo African Breweries) v International Liquor Distributors (Pty) Ltd 2001 (2) SA 232 (SCA) ([2001] 1 All SA 417): referred to D

Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A): referred to

Prinsloo NO v Goldex 15 (Edms) Bpk (TPD case No 372/2005): referred to

Sewmungal and Another, NNO v Regent Cinema 1977 (1) SA 814 (N): referred to E

Shokkos v Lampert, NO 1963 (3) SA 421 (W): considered

Smith v Porritt and Others 2008 (6) SA 303 (SCA): dicta in para [10] applied

Western Johannesburg Rent Board and Another v Ursula Mansions (Pty) Ltd 1948 (3) SA 353 (A): referred to.

England F

Carl Zeiss Stiftung v Rayner & Keeler Ltd [1966] 2 All ER 536 (HL): referred to.

Case Information

HF Oosthuizen for the appellants. G

AB Rossouw SC (with JHA Saunders) for the respondents.

An appeal from the North Gauteng High Court, Pretoria (Pretorius J). The order is in para [28].

Order H

(a)

The appeal is upheld with costs.

(b)

The order of the court a quo is set aside and replaced with the following:

'The defendants' plea of res iudicata in the form of issue estoppel I is dismissed with costs.'

Judgment

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.

2014 (5) SA p299

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...