De Wet and Another v The Rotary Club of Knysna

• Jurisdiction: South Africa
• Judge: Moosa J
• Judgment Date: 23 June 2000
• Docket Number: A 424/99
• Court: Cape Provincial Division
• Hearing Date: 31 March 2000
• Citation: 2001 JDR 0153 (C)

Moosa J:

Introduction:

The appellants instituted action against the respondent in the Knysna Magistrate's Court for damages. The claim arises out of injuries sustained by the second appellant as a result of a collision between a taxi and a cycle driven by him whilst participating in the Knysna Rotary Cycle Tour ("Cycle Tour") on 16 July 1994. The action was initially instituted by the first appellant claiming in his personal capacity, for medical and hospital expenses and in his representative capacity as father and natural guardian for the second appellant's injuries. After the second appellant reached the age of majority, he was cited as the second plaintiff in terms of a formal amendment granted by the court. The claim of the father is for R65 000 and the claim of the son is for R40 000.

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The Issues:

The trial was heard in two stages. The first of which dealt with the respondent's special plea that the claim had been compromised by an agreement reached on behalf of the parties by their respective attorneys. The second of which dealt with the merits of the case, that is, whether or not the respondent had been causally negligent in relation to the injuries sustained by the second appellant. It was agreed between the parties that the quantum of the claim would stand over for later determination.

On 28 November, 1997 the magistrate dismissed the special plea of the respondent. On 5 February 1998, the magistrate dismissed the appellants' claims. In a cross-appeal the respondent on the one hand appealed against the order granted by the magistrate on 28 November 1997. The appellants on the other hand appealed against the order granted by the magistrate on 5 February 1998. This court is therefore seized with the cross-appeal and the appeal.

Whether or not appellants' claims had been compromised:

It is common cause that all the elements of an agreement of compromise between the parties are present. The only issue in dispute is whether or not appellants former attorney, namely Mr McCallum ("McCallum") had authority to compromise the claims. The court a quo found that McCallum did not have the authority of the first and the second appellant to conclude the agreement.

Counsel for the parties agreed that, in the event of the second appellant found not to be bound by the compromise, the agreement will be of no force and effect in so far as the first appellant is concerned. The respondent pleaded and submitted that Mrs De Wet,

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the spouse of first appellant and mother of second appellant, had actual authority alternatively ostensible authority by estoppel, to conclude the compromise on behalf of the second appellant.

Actual authority:

Actual authority could either be express or implied. Such authority may be evidenced by direct proof of express authorisation, or failing that, by way of inference, on a balance of probabilities, on all the admissible facts given in evidence. (See INTERCONTINENTAL FINANCE & LEASING CORPORATION (PTY) LTD v STANDS 56 AND 67 INDUSTRIA LTD AND ANOTHER 1979 (3) SA 740 (W) at 748H.)

At the time when the action was instituted the second appellant was a minor and had no locus standi in judicio to sue in respect of delicts committed against himself. The assistance of the guardian was necessary to give him locus standi in judicio. (See GREYLING v ADMINISTRATOR, NATAL 1966 (2) SA 684 (D) at 689A-B; GUARDIAN NATIONAL INSURANCE CO LTD v VAN GOOL N O 1992 (4) SA 61 at 66E-G and the authorities cited therein.)

The compromise:

The undisputed evidence is that Mrs De Wet, at all material times, gave instructions to McCallum in this matter. In a telephone discussion Mr van Niekerk, the attorney for respondent ("Van Niekerk"), made an offer of settlement to McCallum. This offer of settlement was subsequently reduced to writing in a letter dated 4 November 1996 addressed by van Niekerk to McCallum. The relevant section of the letter reads as follows:

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"Our client is prepared to pay to your client (my emphasis) an amount of R15 000 in full and final settlement of his claim which amount is inclusive of his legal costs to date."

McCallum conveyed the offer to the first appellant who indicated that he was willing to settle the matter on the basis suggested. Mrs De Wet after being informed of the offer by her husband contacted McCallum telephonically. They discussed the offer and on McCallum's advice she accepted the offer. McCallum in turn informed Van Niekerk that the offer was accepted. The acceptance of the offer was confirmed in a letter, dated 8 November 1996, addressed by Van Niekerk to McCallum. The relevant section of the letter reads:

"We refer to the writer's telephone conversation with your Mr Chris McCallum on the 7th instant and confirm that the matter has been settled on the basis that our client will pay to your client (my emphasis) the sum of R15 000, which amount includes your client's costs."

It emerges from the evidence and more particularly from the aforesaid letters that neither van Niekerk, nor McCallum, nor Mrs De Wet, at the time they negotiated the compromise, applied their minds firstly, to the fact that two separate claims were being compromised and secondly, to the fact that the first appellant's capacity to act for the second appellant had ceased.

Insofar as the claims are concerned, McCallum testified that he did not consider the fact that he was dealing with two claims. He also did not explain to Mrs De Wet the fact that two claims were being compromised by the offer of R15 000. He could not give a satisfactory. explanation why the De Wets were not informed that. two claims were being

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compromised. He said it did not occur to him. He was looking at it as one matter and as one claim. The letters from Van Niekerk confirming the offer of compromise and subsequently the acceptance of the offer refer to one client and one claim. None of the parties to the compromise, at the time, focussed on the fact that two claims were being compromised and such claims belonged to two different parties.

The first appellant's capacity to act for the second appellant had ceased on 2 August 1996, when the son attained his majority. The offer was accepted on 7 November 1996. It is clear from the evidence that the parties to the negotiations of the compromise had overlooked the fact that a change had occurred in the legal status of the second appellant. The parties continued conducting the case as if no change had occurred.

Authority of the mother:

It is common cause that prior to the second appellant attaining majority, Mrs De Wet acted on behalf of the first appellant in giving instructions to McCallum in connection with the conduct of the matter. The evidence was that the second appellant made an input when any major decisions were made by the family in connection with the conduct of the case. There is no evidence that the second appellant specifically clothed his mother with authority to act for him after he had attained majority; nor is there evidence that he specifically withdrew any arrangement the family had with regard to the conduct of the case.

However, both mother and son testified that she had no authority to accept the offer on his behalf.. The mother went so far as to admit that the second appellant would not

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have accepted the offer. Despite such knowledge, she went ahead and accepted the offer. The only reasonable inference we can draw from the facts and surrounding circumstances is that she believed that she was compromising the claims on behalf of her husband. This inference is reinforced by the fact that the second appellant, at that stage, was not cited as a party to the proceedings.

Nothing, however, prevented the mother from persuading the son to accept or to ratify the offer ex post facto. The evidence is that the second appellant had repudiated the acceptance of the offer of compromise and instructed his mother to take whatever steps necessary to undo what she had done. Mrs De Wet immediately contacted McCallum telephonically to enquire whether the settlement could be reversed. She was subsequently informed that the respondent regarded the offer of compromise as a binding agreement. In my view this reaction and attitude of the second appellant and his mother is inconsistent with the notion that Mrs De Wet had actual authority from the second appellant to settle his claim.

Assumption:

The assumption by McCallum that Mrs De Wet was authorised by the second appellant to accept the offer on his behalf is, in my opinion, not reasonable in the circumstances. He did not inquire from Mrs De Wet whether she had actual authority from the second appellant. He further did not discuss with her how the two claims, namely that of the first and the second appellant, would be compromised. McCallum testified that he had no contact with the second appellant since the latter left for overseas but more particularly since he attained majority. He assumed that the mother had authority to settle the matter by virtue of the fact that he had gone overseas. He testified further that

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from the conduct of the father and son he had assumed that the mother had the authority to settle the claim. There is no factual basis for McCallum to have concluded that the mother had actual authority to settle the second appellants claim. The assumption relied on by respondent, cannot in my opinion, form the basis for such a conclusion.

Onus:

The onus to prove actual authority vests in the respondent. The respondent challenged the assertion that Mrs De Wet had no authority to compromise the second appellant's claim but laid no legal basis for such challenge nor countenanced such assertion. The probabilities, in my view, favour the notion that the mother did not have actual authority to compromise the second appellant's claim. In the...