This Gauteng judgment Trident South Africa (Pty) Ltd / Bateman Trident (Pty) Ltd v Shainne John Taylore & 2 Others has reaffirmed that economic pressure does not in itself create a basis to escape a settlement agreement on the grounds of duress. 

In this case it was argued that a settlement agreement was signed under duress out of a concern about the costs of the litigation that would otherwise proceed and the impact that would have on the signatory’s financial position.   The court held that the type of duress which was complained of is not recognised in our law as “…it is not duress to cause economic harm or even ruin to another.  As it in not unlawful to drive a hard bargain, it cannot be the basis of duress” without something unlawful or unconscionable in the dealings.

The Court also referred to the Supreme Court of Appeal decision in the Medscheme Holdings (Pty) Ltd & Another v Bhamjee which said:

“For it is not unlawful, in general, to cause economic harm, or even to cause economic ruin, to another, nor can it generally be unconscionable to do so in a competitive economy.  In commercial bargaining the exercise of free will (if that can ever exist in any pure form of the term) is always fettered to some degree by the expectation of gain or the fear of loss…hard bargaining is not the equivalent of duress, and that is so even where the bargain is the product of an imbalance in bargaining power.  Something more – which is absent in this case – would need to exist for economic bargaining to be illegitimate or unconscionable and thus to constitute duress.”

The applicant sought to make the settlement agreement an order of court.  The court held, relying on the authority of the Supreme Court of Appeal in Road Accident Fund v Taylor, that when parties to litigation confirm that they have reached a compromise, a court has no power to embark upon an enquiry as to whether the compromise was justified on the merits of the matter or was validly concluded.  The court need only consider whether it would be appropriate to incorporate the terms of the compromise into an order of court.

On the facts the court considered the terms of the compromise and found that there was nothing inappropriate about incorporating them in a court order. 

The signatory had been represented by a senior attorney at the time of concluding its settlement agreement from a large reputable law firm. The settlement agreement was preceded by back and forth emails between the relevant parties and their attorneys and the signatory had signed the agreement and actively took steps to implement the agreement.