Krügel Heinsen Incorporated v Thompson and Another

Couples Investment CC, represented by its sole member Catherine Thompson, concluded an agreement of compromise with FirstRand Bank to facilitate the sale of mortgaged property. In terms of the compromise, R500 000 from the sale proceeds was to be retained in trust by Krügel Heinsen Incorporated, the conveyancing attorneys, pending confirmation of a liquidation and distribution account in the winding-up of a related company (ILIPS). Before confirmation of the account, FirstRand’s attorneys erroneously instructed Krügel Heinsen to release the R500 000, which Krügel Heinsen did. When the error was discovered, FirstRand placed the money back into trust on the same terms. Couples nonetheless alleged repudiation of the compromise, purported to cancel it, and claimed payment of R500 000 from Krügel Heinsen for breach of mandate. The High Court dismissed the application, but the full court upheld Couples’ appeal and ordered Krügel Heinsen to pay R500 000 plus interest. Krügel Heinsen appealed to the Supreme Court of Appeal and sought to adduce further evidence showing that Couples had, through a settlement with FirstRand, authorised the R500 000 to be paid to the liquidators of ILIPS and had suffered no damages.

The application to adduce further evidence was granted. The appeal was upheld with costs. The order of the full court was set aside and replaced with an order dismissing the appeal with costs.

The case clarifies the stringent requirements for admitting further evidence on appeal in South African law, particularly where post-judgment facts negate an essential element of a claim. It reinforces that damages are a necessary element of a claim for breach of mandate against attorneys, and underscores that repudiation of contract must be assessed objectively and cautiously. The judgment also serves as a warning against litigants pursuing claims opportunistically after settlement.