MAKONI
JA: This
is an appeal against the whole judgment of the High Court handed down
on 24 September 2018 wherein it granted the first respondent's
claim against the appellant.
BACKGROUND
FACTS
The
following facts are common cause.
The
second respondent Bernard Chiswa
(“Bernard”)
entered into a car hire agreement with the first respondent Car
Rental Services (Private) Limited (“Car Rental Services”) in
October 2015. In terms of the agreement, he was issued with a motor
vehicle, a Ford Everest, and was expected to make payments as per the
vehicle hire agreement. He failed to do so until the motor vehicle
was withdrawn from him.
The
first respondent sought the services of the police for the second
respondent to return the motor vehicle by laying criminal charges
against him.
The
appellant, sister to the second respondent, offered to settle the
debt and the criminal charges were withdrawn. She signed an
acknowledgement of debt and a payment plan. In due course, she
withdrew the offer to settle the debt. The first respondent
thereafter caused summons to be issued against the appellant and
Bernard, jointly and severally claiming the sum of US$13,868.90.
The
appellant applied for the appointment of a curator
ad
litem
on behalf of Bernard on the grounds that he was not of sound mind. On
17 March 2017, a provisional order was granted and a curator
ad litem
was appointed.
The
matter was not prosecuted further.
As
a result of the provisional appointment of a curator
ad litem,
the first respondent withdrew its claim against Bernard and proceeded
against the appellant.
PROCEEDINGS
BEFORE THE COURT
A QUO
Car
Rental Services sued the appellant and Bernard jointly and severally
for the payment of US13,868.90 for the
rental
charges due to it. The basis for the claim in respect of Bernard was
that he had entered into an agreement with Car Rental Services for
the hire of a motor vehicle and had failed to pay in terms of the
agreement.
In
respect of the appellant it was averred that she had agreed “to
take over the debt due by the first defendant (Bernard) and had
assumed full responsibility of it which undertaking the Plaintiff
(Car Rental Services) agreed and accepted.
(sic)”.
In
their joint plea the appellant and Bernard disputed liability.
Bernard
pleaded that he did not have the requisite mental capacity to enter
into a contract. The appellant put in issue the validity of the
acknowledgement of debt she signed on the basis that the initial
agreement, which gave rise to the acknowledgement of debt, was void
ab
initio.
TWO
ISSUES WERE REFERRED TO TRIAL NAMELY:
1.
Whether or not the agreement entered into between Bernard and Car
Rental Services was valid.
2.
Whether the obligation assumed by the appellant in an acknowledgement
of debt and payment plan dated 2 March 2016 is valid and binding.
Regarding
the first issue, the court found that the agreement of sale between
Car Rental Services and Bernard was invalid for the reason that he
was not compos
mentis
at the time he entered into the contract.
In
respect of the second issue, the court
a quo quoted
from the declaration the basis
of the appellant's
liability as follows:
“The
second defendant (appellant) herein agreed on 2 March 2016 to take
over the debt due by the first defendant (Bernard) and assumed full
responsibility of it which undertaking the plaintiff agreed and
accepted.”
The
court found that the validity
or otherwise
of the agreement between Car Rental Services and Bernard is
irrelevant.
The
appellant, after being advised of how investigations proceeded in
respect of mentally incapacitated persons, offered to pay the debt to
avoid the incarceration of her brother.
It
opined that the debtor was replaced and that it was a case of
delegation. It
defined delegation as a form of novation in which, by agreement
between all parties concerned, a third party is introduced as a
debtor in substitution of the original debtor, who is discharged. It
further opined
that the new agreement was not dependant on the validity of the
agreement between Car Rental Services and Bernard. It, therefore,
found the appellant liable
and made an order that she pays the respondent the amount due in
terms of that agreement.
Aggrieved
by this decision the appellant noted an appeal to this Court seeking
an order reversing the decision of the court a
quo.
THE
APPEAL
The
appellant attacks the judgment of the court a
quo
on the following grounds: I quote these verbatim.
“1.
The honourable court
a quo
erred when it found as it did that the second defendant was liable to
the plaintiff in the sum of US$13,868.90 with interest at the rate of
3.5 percent from 1 April 2016. After having made the finding as she
did that the agreement between the plaintiff and the first defendant
was
invalid
due to his mental incapacity
to
contract.
1.1
For the stronger reason that once a finding was made that the initial
agreement was null and void, the subsequent agreement which purported
to replace the non-existent agreement was itself null and void, it
being premised on a nullity.
2.
The honourable court
a quo
erred at law when it found as it did that the parties had novated the
initial agreement by delegation.
2.1
For the stronger reason that novation by delegation requires
agreement of all parties to the initial agreement, which the first
defendant in his mental state could not possibly give. To that end
there was no novation to talk about.
3.
The honourable court
a quo
erred at law when it concluded as it did that the plaintiff had sued
the second defendant based on the novated agreement when the summons
and declaration clearly show that the defendants were sued jointly
and severally with one paying the other to be absolved.
3.1
For the stronger reason that if the plaintiff was suing the second
defendant based on the subsequent agreement, it would not have sued
the first defendant or demanded judgment against them jointly and
severally and more important, it would have been apparent from the
pleadings.
4.
The court
a quo
erred when it found as it did that the second defendant was liable
for payment of anything or at all when regard is had to the fact that
she unilaterally offered to pay the debt and subsequently
unilaterally withdrew the offer which fact was not disputed by the
plaintiff”.
SUBMISSIONS
BEFORE THIS COURT
Mr
Diza,
for the appellant, submitted as follows.
The
court
a quo
could not competently come to the conclusion that there was a
delegation. Delegation is a novation which pre-supposes that there
is a pre-existing agreement which is binding which was not the case
in this matter. It found that the agreement between the respondent
and Bernard was not binding. No rights or obligations could be
transferred from the agreement. It could not be novated. In any
event, for delegation to take
place, all the parties have to agree. This could not competently take
place as when the acknowledgement of debt was signed, Bernard was
admitted into a mental institution. The acknowledgement of debt is a
unilateral
document. It cannot be an agreement which falls in the confines of
delegation.
Mr
Manjengwah
for the respondent filed extensive heads of argument where he
advanced argument that there was a compromise in the circumstances of
this matter. In the last paragraphs of the heads of argument, under
the heading: “Whether the court order can be supported on grounds
which were rejected by the trial court” he advanced argument that
when the second
respondent signed the Acknowledgement of Debt an expromissio
occurred. He concluded by submitting that the doctrine
of compromise was applicable in the circumstances of the present
matter. Alternatively, the judgment of the court can be supported on
the basis of expromissio.
In
his submissions before this Court, he totally abandoned the argument
in respect of the doctrine of compromise.
His
submissions were as follows:
The
Appellant interposed herself as between the first and second
respondents. This is where an outsider intervenes between two parties
and undertakes to satisfy that which is demanded by one party from
the other party. Such an undertaking is independent of the underlying
obligations or issues between the parties. He relied on the authority
of Baker
NO vs Total South Africa (Pvt) Ltd
1990 (3) SA 159, for this proposition. It is a step through which a
novation can be achieved. The one who originally owed can plead that
the debt was extinguished by the interceder. This arrangement does
not depend on whether the underlying agreement was valid or not.
On
being engaged by the court regarding the issue of the doctrine of
compromise, he conceded that there was no involvement of Bernard when
the new agreement was entered into. He could not, therefore, argue,
with confidence, that a proper compromise was concluded when the
original debtor was not involved. He could not argue that the
acknowledgement of debt was a compromise but rather that it was an
expromissio.
In
rebuttal, Mr Diza
took note of the concession made that there was no compromise in the
circumstances of this matter.
On
the doctrine of expromissio,
he relied
on Black's Law Dictionary, 2nd
ed, where it was defined as an act in which a creditor accepts a new
debtor who becomes bound instead
of
the old debtor with the latter being released. It is a species of
novation. The underlying agreement has to be valid. The creditor
must accept the new debtor. Nothing was advanced in this matter to
show that the new debtor was accepted by the creditor. The first
respondent went on to sue both the old and the new debtor jointly and
severally.
ISSUE
With
the argument regarding the doctrine of compromise having been
abandoned, the issue for determination is whether the doctrine of
expromissio
applied
to the circumstances of this matter.
THE
LAW
An
expromissio
is a type
of novation by which a creditor accepts a new debtor in place of a
former one, who is then released. [Black's Law Dictionary (8th ed.
2004), Page 1752]. The new
debtor, known as an expromissor,
becomes
solely liable for the original debtor's debt. Thus,
an expromissio
has been described as an
assumption of liability for the debt of another. See Total
South Africa (Pty) Limited v Bekker
NO
1992 (1) SA 617.
An
expromissio
has the following characteristics:-
(i)
It occurs
with the consent of the creditor.
(ii)
At the instance of the new debtor.
(iii)
The effect being that the old debtor is released from the obligation.
An
expromissor
differs
from a surety in that a surety is bound together with his principal
to the creditor. See Bouvier Law Dictionary (6th
ed, Childs & Peterson, Philadelphia, 1856) at page 597. Since an
expromissio
is
a form of novation, it
is
dependent on the validity of the principal agreement.
An
expromissio
was
defined in Total
South Africa (Pty) Limited v Bekker
NO
supra where
the court in contextualizing the concept of intercessio
quoted with approval the following extract from Wessels'
Law of Contract in South Africa, 2nd edition at 968:
"3778.
There are several ways in which a person, without being compelled to
do so by law, may intervene in a contract between two parties ob
maiorem creditoris securitatem.
The Roman jurists called this intervention an intercessio
on the part of the stranger to the contract ('per
intercessionem aes alienum suscipiens' (D.
14.3.19.3). 'Se
medium inter debitorem et creditorem interponere'
(Voet, 16.1.8)).3779.
3779.
The term intercession is a convenient one to denote the intervention
of one person (intercessor) in the obligation of another either by
way of substituting or adding a new debtor (Nov., 4.1; C.8.40
(41).19).
3780.
The
stranger may either intervene by contracting with the creditor in
such a way that the original debtor is completely liberated,
or else he may promise the creditor to become liable for the debt,
the original debtor continuing to remain bound.
In
the former case, called expromissio
by the glossators, there is a complete novation
- the old debtor and intercessor are liable, they may either both be
principally bound to the creditor or else the debtor may be
principally liable, whilst the intercessor is only bound in
subsidium,
ie., in case the creditor cannot obtain payment from the principal
debtor." (Emphasis added)
An
expromissio
is, therefore, a form of intercessio.
Intercessio
is the general act of assuming liability for another person's debt
by contract with his creditor. It can either be privative or
cumulative depending on the extent of intervention.
With
privative intercessio,
the intercessor takes upon himself an existing obligation of a debtor
thereby liberating the debtor of his obligations in the principal
agreement. Thereafter the debtor can if sued plead that the debt was
extinguished by the intercession of the third party. Such is the case
of an expromissio.
While
with cumulative intercessio,
the intercessor together with original debtor become principally
bound to the creditor as in cases of suretyship. (See Smith et al, A
Dictionary of Greek and Roman Antiquities, 1890).
Since
an expromissio
is
a species of novation, the principles applicable to novation are
apposite in determining the fate of an expromissio
where
the
original agreement is invalid.
In
Mupotola
v Southern African Development Community SC7/06
ZIYAMBI JA made the following pertinent remarks regarding novation on
p5 of the judgment:
“Novation
means replacing an existing obligation by a new one, the existing
obligation being thereby discharged. See The Law of Contract in South
Africa Third Ed by R.H Christie at p498.
The
above definition presupposes that both the existing obligation and
the new one arise out of valid contracts.
'When
parties novate they intend to replace a valid contract by another
valid contract.' See Swadif (Pvt) Ltd v Dyke 1978 (1) SA 928 (A) at
940 quoted by Christie in the Law of Contract in South Africa, supra.
The
starting point, therefore, in determining this issue is to consider
whether the first agreement constituted a valid contract.
This
being so, the
first agreement was a non-event and there could be no novation of a
contract which did not exist…”
(Own emphasis)
It
is evident that the validity of the former obligation determines the
validity of an expromissio.
In
line with the reasoning adopted by the court in the Mupotola
case supra,
it would mean that the original agreement has to be valid for an
enforceable expromissio
to
come into existence.
An
expromissio
cannot,
therefore, stand on an invalid principal agreement.
The
court in Hamilton
v Van Zyl
1983 (4) SA 379 (ECD) at 383D-E, in distinguishing between novation
and compromise stated:
“In
pointing out the difference between novation and compromise
(transactio)
Wessels on The
Law of Contract in South Africa
2nd
ed. vol. II para. 2458 states:
'There
is a great similarity between transactio
and novation and as a rule the principles which apply to the latter
apply to the former. (Voet
46.2.3). There is however this difference between the two. When
parties novate they intend to replace a valid contract by another
valid contract, and if therefore the novated contract is invalid, the
novating contract is, as a general rule, of no effect.
If, however, a claim is made upon a contract, about the validity of
which the defendant has a doubt, and a transactio
follows, the defendant cannot upset the compromise on the ground that
the agreement which was compromised was in fact invalid.'.”
(Emphasis added)
Consequently,
the principal agreement has to be valid for a legally enforceable
expromissio
to
ensue.
Where the initial agreement is invalid, the subsequent contract is of
no force and effect. The remarks of LORD DENNING in MacFoy
v United Africa Co Ltd
[1961] 3 All ER 1169 (PC) at 1172I to the effect that nothing can
ensue from a nullity apply.
ANALYSIS
The
first respondent in paragraph 36 of the Heads of Argument sought to
argue as follows:
“The
undertaking by the Appellant was based on the appreciation that
second Respondent was liable to first Respondent such liability
exposed the second Respondent to a potential detention. On the
Appellant's part the undertaking was an overture to the first
respondent to stop the process that might lead to the second
Respondent detention. Rather, the undertaking was made on the basis
of the Appellant's belief that second Respondent might not survive
detention in a mental institution. It was motivated by the desire to
protect the second Respondent, it cannot be invalidated by the same
condition that motivated its being made. What the Appellant did in
her undertaking, was to independently assume an obligation for the
payment of money in favour of the Plaintiff. It therefore is of no
consequence if the second Respondent was under a mental incapacity
when he took the Plaintiff's vehicle in terms of the rental
agreement”.
All
he has succeeded in doing is clouding
an otherwise very clear issue.
Once
the court
a quo
made
a finding that the agreement between the first respondent and Bernard
was void, no expromissio
can ensue. Expromissio
is a species of novation which entails the replacing of an existing
obligation by a new one.
In
casu,
the court a
quo
having found that the original agreement was void,
there
was no obligation in existence and therefore the appellant could not
intervene or intercede in a non-existent obligation.
Further,
as is clear from the summons, the second respondent was not released
as a debtor by the alleged intercession by the appellant. The first
respondent sued both the original debtor and the intercessor jointly
and severally in terms of the original agreement and in terms of the
new agreement.
In
an expromissio,
the debtor is liberated of his obligations in terms of the original
agreement. The debt is extinguished by the intercession and he
cannot, therefore, be sued on the basis of that debt. The suit
against both the intercessor and original debtor also demonstrates
that the creditor, the first respondent had not accepted the new
debtor in the place of the former one.
As
is clear from the above, the first respondent did not manage to
establish that an expromissio
ensued. He abandoned the argument regarding compromise. The appeal
has merit and must succeed. There is no basis why costs should not
follow the cause.
In
the result I will make the following order:
1.
The appeal succeeds with costs.
2.
The judgment of the court
a quo
be and is hereby set aside and substituted with the following:
“The
plaintiff's claim be and is hereby dismissed with costs”.
GARWE
JA: I
agree
MAVANGIRA
JA: I
agree
Mhishi
Legal Practice,
appellant's legal practitioners
Wintertons,
1st
respondent's legal practitioners
