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[2011] ZAGPJHC 126
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Banda and Another v Van der Spuy and Another (08/5489) [2011] ZAGPJHC 126 (23 September 2011)
NOT
REPORTABLE
SOUTH GAUTENG HIGH COURT,
JOHANNESBURG
CASE
NO
: 08/5489
DATE:23/09/2011
In the matter between -
RAYMOND
BANDA
....................................................................
1ST
PLAINTIF
PATRICIA
FYNN
......................................................................
2ND
PLAINTIFF
and
FRANK JOHANNES VAN DER
SPUY
..................................
1ST
DEFENDANT
ALICIA ANASTATSI VAN DER
SPUY
..................................
2ND
DEFENDANT
JUDGMENT
BORUCHOWITZ J
INTRODUCTION
[1] In terms of a
written agreement entered into on 4 May 2007 the plaintiffs purchased
from the defendants a fixed property situate
at 14 Gunter Street,
Villiersdorp, Western Cape, for the sum of R1 240 000.00. The
plaintiffs duly paid the purchase price and
the property was
transferred to them on 7 November 2007.
[2] The dwelling on the
property has a thatch roof. The plaintiffs allege that when the sale
was entered into the defendants were
aware and failed to disclose to
them, that the roof suffered from material latent defects that caused
it to leak. In paragraphs
9.1 to 9.5 of the particulars of claim it
is alleged that the defects included the following:
(1) The pitch of the
thatch roof varied between 30 and 40 degrees, whereas the minimum
pitch required in order to keep the thatch
waterproof and to avoid
excessive decomposition of the thatch was 45 degrees;
(2) Reinforcing wire
required to bind the thatch was absent, alternatively inadequate;
(3) No edge purlins were
installed;
(4) The laths were spaced
too far apart; and
(5) The design of the
roof structure was inadequate.
[3] The plaintiffs claim
payment from the defendants of the sum of R449 499, together with
interest and costs.
[4] The claim is premised
on a number of alternative bases. The main claim is for the
reduction of the purchase price of the property
based upon the actio
quanti minoris, alternatively for payment of damages arising from a
breach of the warranty to which reference
is made in paragraph 8
below. It alleged that the defendants fraudulently, and with the
intent to induce the plaintiffs to enter
into the agreement, failed
to inform them of the continued existence of the defects, and that
accordingly they are entitled to
a reduction in the purchase price
equivalent to the reasonable cost of remedying the defects.
Alternatively, it is alleged that
such failure to inform the
plaintiffs constitutes a breach of the warranty, entitling the
plaintiffs to damages in such sum.
[5] The alternative claim
is for delictual or contractual damages flowing from an alleged
fraudulent or negligent misrepresentation.
The claim is founded on
the following allegations: That prior to signature of the agreement
on 4 May 2007, the defendants and
their agents represented to the
plaintiffs that they were in possession of a written guarantee
issued, regarding the soundness
of the roof and that the defects that
had been rectified. The representations were false in that no
written guarantee was in place
and the defects had not been repaired.
The representations were fraudulently or negligently made, and in
fact induced the plaintiffs
to enter into the agreement. The
plaintiffs entered into the agreement believing the representations
to be true and have accordingly
suffered damages.
[6] In a further
alternative claim it is alleged that on 25 July 2007 the parties
entered into a written addendum to the sale agreement
in terms of
which the plaintiffs waived the suspensive condition contained in
clause 15 of the main agreement and agreed to transfer
the written
guarantee from the roofing contractor to them. Prior to entering
into the addendum the defendants represented to the
plaintiffs that a
valid guarantee was in place but knew this was not true. In
consequence of the representation they were induced
to enter into the
addendum and therefore claim damages in the aforementioned amount.
[7] In their plea the
defendants deny liability. They specifically deny that the roof has
defects as alleged, or that they made
any fraudulent or negligent
misrepresentation as contended for. They plead that before the
agreement of sale was entered into
they disclosed and handed all
documentation to the plaintiffs in respect of a prior incident where
a leak in the roof occurred
during an exceptionally heavy rainstorm
in 2006. The roof was repaired and the repairs were guaranteed by
the contractor. They
also plead that the property was sold
voetstoots and that they are excused from liability in respect of the
alleged latent defects
in accordance with the provisions of clause 1
of the agreement.
[8] Four
witnesses testified on behalf of the plaintiffs, namely the first
plaintiff, Mr Raymond Banda; Mr Patrick Adam Braaf, the
thatcher who
had effected repairs to the roof; Ms Yvonne Spreeth, an estate agent
in Villiersdorp and Mr Abraham Visagie, a structural
engineer and
expert in thatch roofs. The first defendant, Mr Frank Johannes Van
der Spuy and his brother, Roelof Van der Spuy,
are the only witnesses
called in support of the defendants’ case. I will refer to
the their evidence when dealing with
the specific issues in dispute.
MAIN CLAIM
[9] Clause 1 of the
agreement provides as follows:
“
The
seller warrants that as at the date of acceptance of this offer there
are no latent defects in the property known to the seller
and that
save for this, the property is sold voetstoots … ”
[
10] The
clause is unusually worded. It incorporates both an express warranty
in respect of “
latent defects in the
property known to the seller
”, as
also a
voetstoots
provision. To facilitate a proper understanding thereof it is
necessary to refer to the relevant common-law principles.
[11] The
position at common law is that in the absence of agreement to the
contrary, a contract of sale ordinarily imports an implied
warranty
against latent defects. In terms of such warranty a seller is liable
for any latent defects in the thing sold which either
destroy or
substantially impair its utility or effectiveness for the purpose for
which it was sold or for which it is commonly
used. The existence of
a latent defect entitles the purchaser to rescission of the contract
and repayment of the purchase price
against return of the thing sold,
or to a reduction of the price corresponding to the diminution of its
value owing to the latent
defect. These are the so-called Aedilitian
actions.
[12] A
purchaser cannot recover consequential damages from a seller (except
a merchant seller) who has bona fide sold a thing suffering
from a
latent defect unless the contract embodies an express warranty
against defects (see Cugno v Nel
1932 TPD 289
; Wille & Millin’s
“Mercantile Law of South Africa” (18 ed) at 243 and cases
there cited). It is presumably
for this reason that the express
warranty is embodied in the first sentence of clause 1 of the
agreement. The legal consequence
of the warranty is that the
defendants would be liable for consequential damages (in addition to
Aedilitian relief) in the event
of the plaintiffs proving that the
defendants at the date of acceptance of the offer knew of the
existence of the alleged latent
defects.
[13] Clause
1 also provides that the property is sold
voetstoots
.
This provision serves to exclude the seller from liability in
respect of all defects of which he was genuinely ignorant up to
and
at the time of the sale (see
Knight v
Trollip
1948 (3) SA 1009
(D) at 1013). A
seller will be deprived of the protection afforded by a
voetstoots
clause where the purchaser proves that the seller (1) was aware of a
defect in the thing sold at the time of the making of the
contract;
and (2)
dolo malo
,
that is deliberately concealed its existence from the purchaser with
the purpose of defrauding him (see
Van der
Merwe v Meades
1991 (2) SA 1
(AD) at 8E-F).
[14
] In
considering the question of fraud it is important to note that
ignorance due to negligence or ineptitude, mere non-disclosure
is
insufficient to found an action for fraud and nullify the protection
of a
voetstoots
clause. It would have to be shown: that the defendants knew of the
defects at the time of the making of the contract and that
the
purchasers had no knowledge thereof; and that the plaintiffs
designedly concealed their existence from the purchaser or craftily
refrained from informing the purchaser of their existence (see the
Meade
s’
case
supra
and
the reference therein to
Glaston House
(Pty) Limited v Inag (Pty) Limited
1977 (2)
SA 846
(A) at 867G-868A, and
Knight
at 1013; see, also,
Forsdick v Youngelson
1949 (2) P.H. A57N, and
Waller v Pienaar
2004 (6) SA 303
(C) at paras 8 & 9).
[1
5] To
succeed on the basis of the warranty the plaintiffs must show that as
at the date of acceptance of the offer the defendants
were aware of
the existence of the alleged latent defects and to overcome the
provisions of the
voetstoots
clause the plaintiffs would be required to establish that the
defendants were aware of the defects and that they designedly or
craftily concealed their existence from the plaintiffs for the
purpose of defrauding them.
WHETHER THE ALLEGED
DEFECTS ARE LATENT IN NATURE
[16] It
is common cause that the thatch roof was damaged and developed
certain leaks during a severe storm that occurred in 2006.
In
consequence, the defendants lodged a claim with their insurers, ABSA.
They in turn appointed Mr Bornmann, an independent loss
adjustor, to
assess the validity of the claim and in particular to determine
whether the damage that had occurred was caused by
an insured vent or
peril covered by the policy.
[17] Bornmann
inspected the property and found that there were structural problems
with the roof but that these were not the result
of an insured peril.
He recommended in a written report to ABSA (Exhibit A p 4) that
structural repairs to the roof be effected
and that ABSA make an ex
gratia payment to the defendants in respect of the cost of the
remedial work required.
[18] Although
not an expert in the construction and structure of thatch roofs,
Bornmann made a number of pertinent observations
during his
inspection of the property. He observed that the top horizontal beam
was cracked and that the split pole, trusses or
struts were spaced
too far apart, causing the thatch to sag in places. There was
evidence of movement of the roof; the trusses
had moved, causing
cracks in the walls where they were affixed and the flashing had
pulled away from the walls, causing water to
enter and to run down
the interior walls. In his view, the trusses had to be reinforced
and supported by horizontal beams or poles.
[19] Mr
Braaf, a professional thatcher, was contracted to attend to the
remedial work. Braaf, who did not give evidence as an expert,
also
testified that the horizontal beam was cracked and that the trusses
or struts were too far apart, causing the roof to sag.
He suggested
that the they be supported and strengthened as indicated on a sketch
(Exhibit A, p 9) the work that was indicated
in order to reinforce
the roof. He also thought that the pitch of the roof was too low.
He provided the first defendant with
a quotation, which the first
defendant accepted telephonically. There is a dispute as to whether
during this telephone conversation
Mr Braaf told the first defendant
that there were fundamental structural problems with the roof. This
dispute will be dealt with
later in the judgment. Braaf performed
the certain remedial work by replacing the tie beams with thicker
poles and bolts, and
propped up the thatch to tighten the ropes which
kept them in place. He also installed king posts to support the
trusses.
[20] The
only expert called on behalf of the plaintiffs was Mr Abraham
Visagie, a structural engineer and member of a company
specialising
in thatch roofs. Visagie is an expert in the construction and design
of thatch and Cape reed roofs. He inspected
the roof on 8 September
2010, some four years after work had been performed on the roof by
Braaf. His findings were, essentially,
that the roof was mostly
constructed at the incorrect pitch. The recommended pitch is 45º;
he found that 75% of the roof
was 35º and the remaining
portions of the roof 26.56º. He opined that a pitch below 30º
cannot be regarded as functional
as the roof would leak water, which
would have gone into the thatch or reeds. Visagie observed severe
deflection in the ridge
line from outside. He explained that
deflection is when a structure element is going down or is deflected
out of line from the
intended design alignment or construction. The
ridge beam in the kitchen and lounge had failed. In his view the
remedial work
that had been performed was not sufficient to make the
structure safe in order to ensure that it functions optimally and in
accordance
with engineering guidelines. The roof, in his view, was
incorrectly engineered and the whole roof needed to be replaced.
Re-thatching
would not suffice as the incorrect pitch would cause the
roof to retain water and decay, and eventually leak. The defendants
failed
to adduce any countervailing expert evidence and the evidence
of Visagie is largely unchallenged.
[2
1] Having
regard to the evidence of Visagie, supported as it is by the
observations of Bornmann and Braaf, there can be no doubt
that the
design of the roof structure is inadequate. The evidence of these
witnesses overwhelmingly establishes that the pitch
of the roof is
incorrect and the thatch roof in its present condition cannot be
regarded as functional. Leaks are bound to occur;
objectively
viewed, the remedial work performed is not sufficient to make the
structure safe, and would not pass engineering guidelines.
These are
clearly abnormal qualities or attributes which destroy or
substantially impair the utility or effectiveness of the property
for
the purpose for which it had been sold and is commonly used. These
defects are clearly latent in that they would not have
been visible
or discoverable upon inspection by the ordinary purchaser (see
Holmdene Brickworks (Pty) Limited v Roberts
Construction Co Limited
1977 (3) SA 670
(AD) at 683H
in fin
to 684C, and cases there cited).
[22] The
plaintiffs, as laymen, would have had no reason to suspect that there
was a problem with the thatch roof, no matter how
reasonably
observant or alert they had been. The plaintiffs would have had to
rely either upon frank disclosure by the defendants
as to the
existence of the problem, if the defendants were aware of the full
extent thereof, or to have called in an expert to
inspect the roof
before purchasing the property. I accordingly hold that the defects
that existed at the time of the conclusion
of the sale agreement were
latent in nature.
DEFENDANTS’
KNOWLEDGE OF THE DEFECTS
[2
3] The
vital question (insofar as the main claim is concerned) is whether
the defendants were aware of the latent defects when the
agreement of
sale was entered into. If they were, the defendants would have
breached the warranty provided for in clause 1 of
the agreement. As
already indicated, to overcome the
voetstoots
clause the plaintiffs would be required to show not merely that there
was non-disclosure of the defects, but also that the defendants
designedly or craftily concealed their existence from the plaintiffs
for the purpose of defrauding them.
[24] The
following is, in broad terms, a summary of the evidence given in
respect of this core question.
[25] The
plaintiffs were introduced to the property by the first defendant’s
agent, Ms Yvonne Spreeth, in March 2007. They
initially visited and
inspected the property in March 2007 and the first defendant again
attended the premises, on his own, at
the end of April 2007. The
plaintiffs submitted a written offer to purchase on 4 May 2007, which
was accepted by the defendants
on that date. The sale was subject to
the successful sale by the plaintiffs of their house in Johannesburg.
This condition was
subsequently waived in terms of the addendum
executed on 25 July 2007. The addendum includes the following
provision concerning
the guarantee: “Seller to transfer
guarantee on thatch roof to purchaser from the contractor”.
The relevance of this
clause will be dealt with below when evaluating
the alternative claim.
[26] The
first plaintiff’s evidence is that when he initially viewed the
house he noticed that there was some plaster that
was cracked above
the door, and that the painting over it was slightly discoloured. Ms
Spreeth explained to him that some work
had been performed on the
roof and that this had caused the plaster to come off. At the end of
April 2007, when he again viewed
the property, he stumbled upon
sign-boards belonging to certain estate agents. He called one of the
agents, who turned out to
be the second defendant; she referred him
to the first defendant.
[27]
The first plaintiff contacted the first defendant who told him that
the contractor had given them a guarantee for the remedial
work that
had been performed, which guarantee would be given to the plaintiffs
when the property was sold. Nothing was said concerning
the transfer
of the guarantee in the agreement entered into on 4 May 2007,
however. A clause to this effect was included in the
addendum of 25
July 2007. The first plaintiff also did not have sight of the
guarantee when the offer was submitted on 4 May 2007
and nor did he
request to see it.
[28] The
property was registered into the names of the plaintiffs on 7
November 2007, upon which day the plaintiffs took occupation.
[29] All
appeared to be well until approximately November/December 2007, when
it rained and the thatch roof began to leak. It is
then that the
plaintiffs began to press Spreeth in order to procure transfer from
the defendants of the guarantee that had been
promised. When the
guarantee were not forthcoming, the plaintiffs lodged a complaint
against Pam Golding Estates, for whom Spreeth
worked, as the
plaintiffs felt that it was their responsibility to obtain the
guarantee from the defendants. Eventually, in January
2008, Spreeth
delivered a letter to the plaintiffs issued by Braaf dated 2 November
2006, in which a purported guarantee dated
27 July 2007 is recorded
in manuscript. The guarantee reads:
“
Ses maande waarborg vanaf
tydperk wat gewerk was aan riefdak. Dit geld nie vir wind en
reënskaade
”
[
30] The
plaintiffs did not consider this to constitute a proper written
guarantee as it had expired at about the end of May 2007
and did not
cover wind and rain damage. The first plaintiff testified that had
he known that there was no written guarantee he
would have caused the
roof to be inspected and if the defects had then been discovered he
would have reduced his offer to purchase
the property by the cost of
the repairs.
[31] Ms
Yvonne Spreeth’s evidence is that at the time that Pam Golding
Estates were mandated to sell the property, she was
told that a
guarantee for repair-work to the roof was in the possession of the
defendants and she presumed that this was a written
guarantee. After
signature of the addendum she received Braaf’s letter
purporting to contain the guarantee and forwarded
it to the first
plaintiff. Spreeth also testified that the defendants had told her
of the work that had been performed. In a
letter to the Estate
Agents Board (Exhibit A p 35), Spreeth stated that at a subsequent
viewing of the property she informed the
first plaintiff that
repair-work had been carried out on the roof but did not specify what
work had been done as she had not been
informed of the details of the
remedial work that had been performed.
[32] Mr Braaf’s
evidence is the first defendant called him on the telephone to accept
the quotation, and during this
conversation he told him that there
were structural problems with the roof, namely that the pitch was too
low and that the trusses
were too far apart. Braaf claims that he
also told the first defendant that the repairs would be of a
temporary nature only and
that the first defendant said this was
acceptable as he intended to sell the property in due course. The
first defendant strenuously
denies that Braaf informed him that the
thatch roof was fundamentally defective and that the repairs would be
of a temporary nature
only and disputes Braaf’s assertions in
this regard.
[3
3] Bornmann,
the loss adjustor’s testimony is that he informed the first
defendant that the trusses and cracked beam had to
be reinforced to
prevent further movement and cracking. After the work had been
performed by Braaf, he reported to the first defendant
that the
repairs that had been carried out were an improvement but were not
done in a way he would have wanted them to be done
and were not
optimal. This is not disputed by first defendant. It is common
cause that Bornmann’s report to ABSA (Exhibit
A p 4) was
not made available to the first defendant.
[3
4] The
following facts emerge from testimony of the first defendant. He
denies in the strongest terms that at the time of the conclusion
of
the agreement, either he or his wife, the second defendant, had
knowledge of the defects referred to in paragraphs 9.1 to 9.5
of the
particulars of claim. They live and carry on business in Kempton
Park. The property was purchased for investment purposes
in 2004.
The defendants have never lived in the property and always hired same
out to tenants. The first defendant’s brother,
Roelof Van der
Spuy, who lived nearby in Villiersdorp looked after the property on
the defendants’ behalf from time to time.
[3
5] The
first defendant testified that in about September 2006, whilst
visiting the property he observed that rain damage had occurred
in
the lounge and he lodged a claim with the plaintiffs’ insurers,
ABSA. He thereafter met Bornmann at the property, who
explained to
him that there were structural problems caused by the main beam that
had cracked, and that the struts or trusses which
were spaced too far
apart, causing movement in the roof. Bornmann expressed the view
that horizontal reinforcement was necessary.
The first plaintiff
decided to go ahead with the repair-work suggested by Bornmann as he
was made to understand that if he did
not, the defendants would not
be able to obtain further insurance from ABSA.
[36] First
defendant instructed his brother, Roelof, to obtain a quotation from
a contractor and to supervise the necessary repairs.
He (the first
defendant) returned to Johannesburg. Roelof procured the trusses of
Mr Braaf and thereafter sent a quotation give
to him by Braaf. The
first defendant was satisfied with the quotation and authorised
Roelof to accept same and to instruct Braaf
to proceed with the work.
At that stage the first defendant had no contact with Braaf. After
the repairs had been effected, he
received a further quotation from
Braaf and he decided to contact him as there were differences between
this quotation and the
one that had originally been submitted. He
spoke to Braaf telephonically. Braaf confirmed that the differences
related to certain
additional paintwork that had to be effected.
First defendant accepted Braaf’s explanation, as already
indicated. The first
defendant denies that during this telephonic
conversation he was told by Braaf that the repairs would be of a
temporary nature
and that there were fundamental structural problems
with the roof relating to the pitch of the roof. As far as he was
concerned,
the repair-work effected by Braaf had effectively taken
care of the water damage that had occurred.
[
37] The
first defendant concedes that during his conversation with Braaf they
discussed the question of a guarantee in respect of
the repairs that
had been effected. First defendant contends that he requested a
guarantee for a year but Braaf insisted that
the guarantee would only
be good until “
after the first
rains
”. First defendant understood
that the guarantee given by Braaf would be good until after the first
rains in about June or
July of 2007.
[
38] In
cross-examination the first defendant admitted that the question of
him furnishing a guarantee to the plaintiffs was discussed
with the
first plaintiff prior to entering into the sale agreement on 4 May
2007 and that during the negotiations he indicated
to the first
plaintiff that he was prepared to make over his rights under the
guarantee to the plaintiffs. He did this because
at that stage the
guarantee had not yet expired. He admits that when the addendum was
signed on 25 July 2007, the guarantee had
expired as the first rains
had taken place. I will deal later with the relevance of this
admission when evaluating the alternative
claim.
[39] Roelof
Van der Spuy, the brother of the first defendant, corroborated the
first defendant’s evidence in regard to the
obtaining of a
quotation from Mr Braaf, and first defendant’s limited
involvement with him. In particular, Roelof Van der
Spuy confirmed
that it is he who obtained a quotation from Mr Braaf and escorted
Braaf around the property when he attended at
the premises for the
first time. He, on behalf of the first defendant, accepted the
quotation and instructed Braaf to proceed
with the work. He
inspected Braaf’s work from time to time.
[40] The
defendants’ knowledge of the condition of the thatch roof would
at best be based on their personal observations when
visiting the
property and what had been told to them by Bornmann, Braaf and the
first defendant’s brother, Roelof. The first
defendant was
undoubtedly aware of the presence of rain damage that had occurred in
the lounge and he would have been aware that
the main beam was
cracked and that the trusses needed reinforcement to prevent further
movement of the roof and cracking of plaster.
This was pointed out
to him by Bornmann, the loss adjustor, when Bornmann visited the
property after the lodgement of the claim.
[4
1] Bornmann
was clearly unaware that the fundamental problem with the roof was
that it was mostly constructed at the incorrect pitch.
Had he been
so aware he would as a probability have mentioned this in his report
and informed the first defendant accordingly.
Bornmann had a clear
recollection of his visit to the property and his discussions with
the first defendant and was a satisfactory
and reliable witness. At
no stage did Bornmann suggest that he found any of the latent defects
alleged in paragraphs 9.1 to 9.5
of the particulars of claim. The
first defendant relied essentially upon what Bornmann told him and
elected to proceed with the
recommended remedial work based on this
recommendation.
[42] Only
a structural engineer or expert thatcher who measured the pitch of
the roof would have been in a position to say with
certainty that the
low pitch of the roof was the fundamental cause of the problems.
Significantly, only the structural engineer,
Visagie, who actually
measured the pitch in 2010, well after the agreement of sale was
entered into, states with certainty that
the roof is mostly
constructed at the incorrect pitch. According to Visagie, the
recommended pitch is 45º; he found that
75 percent of the roof
was 35º and the remaining portions of the roof 26.56º. He
testified that a pitch below 30º
cannot be regarded as
functional as the roof would leak water.
[43] Mr
Braaf was adamant that he discussed the pitch of the roof with the
first defendant during their conversation when the quotation
was
accepted that this is disputed by the first defendant.
[44] Mr
Braaf did not impress the Court as a reliable or satisfactory
witness. He did not have an independent memory of his visit
to the
premises and it is clear that he was uncertain as to whether his
dealings were with the first defendant or his brother,
Roelof. He
claimed that the first defendant called him to accept the quotation,
whilst the uncontested evidence of Roelof as corroborated
by the
first defendant is that it was he, Roelof, who had first contacted
Braaf and later accepted the quotation. Braaf conceded
in
cross-examination that he only spoke to the first defendant for the
first time telephonically after the work had been completed.
[45] Mr
Braaf claims that he contacted Mr Bornmann to inspect the work after
he had finished, but this is denied by Bornmann. The
probabilities
are that if Mr Braaf had spoken to Bornmann he would also have told
him about the problems with the pitch of the
roof. Significantly,
Bornmann makes no mention that there were problems with the pitch
either in his evidence or in his report
to ABSA.
[46] Mr
Braaf gave contradictory evidence concerning the pitch of the roof
and the repairs that would be necessary in order to rectify
same. He
contended, on the one hand, that he had told the first defendant that
the pitch of the roof was incorrect and that no
amount of repair
other than to replace the roof would offer a long-term solution.
Yet, in apparent contradiction of this, Mr Braaf
testified that he
did not deem it necessary to replace the whole roof. He was also
adamant that he would not have quoted for unnecessary
repairs if the
entire roof had to be replaced.
[47] Mr
Bornmann impressed the Court as a reliable witness. He had a clear
and independent recollection of his visit to the property
and all
that had occurred.
[48] On
a proper conspectus of the material evidence and the probabilities
that emerge therefrom, I find that when the agreement
of sale was
entered into the defendants did not appreciate that the design
structure of the roof was fundamentally flawed or inadequate.
They
would not have known that the roof was mostly constructed at the
incorrect pitch, as testified to by the structural engineer,
Mr
Abraham Visagie. They were aware that the roof had leaked during the
rains that had occurred in about September 2006, and that
remedial
work had been performed in order to reinforce the cracked beam and
the trusses. The leaks did not re-occur during and
after the first
rains in June or July 2007, and the defendants would have had no
reason to question the quality of the remedial
work that had been
performed by Mr Braaf.
[49]
Prior to entering into the agreement on 4 May 2007, the defendants
made disclosure to the plaintiffs of the fact that the
thatch roof
had leaked during rains in 2006, and that remedial work had been
performed. They also disclosed this to their agent,
Spreeth, who
imparted this information to the plaintiffs. The plaintiffs could
have consulted an expert with a view to establishing
whether the
remedial work had been properly effected and whether there were any
further problems with the roof before entering
into the agreement of
sale but they chose not to do so. The present case is not an
instance in which there was an involuntary
reliance by the plaintiffs
upon the defendants for information concerning the defects.
[
50] The
plaintiffs have failed to establish on a balance of probabilities
that when the sale was entered into the defendants had
knowledge of
the latent defects and that they designedly, craftily or fraudulently
concealed their existence from the plaintiffs.
In the circumstances
the plaintiffs cannot rely on the warranty incorporated in the first
sentence of clause 1 of the sale agreement,
and nor can they overcome
the effect of the
voetstoots
clause therein contained.
[5
1] For
these reasons the plaintiffs’ main claim falls to be dismissed.
THE ALTERNATIVE CLAIMS
[5
2] The
plaintiffs’ case is that prior to signature on 4 May 2007, the
defendants and their agent represented to them that
a valid written
guarantee regarding the soundness of the thatch roof was in place and
that the defects had been rectified. These
representations were said
to have been fraudulently or negligently made with the intention of
inducing the plaintiffs to enter
into the agreement. In consequence
the plaintiffs claim damages in the sum of R449 499. In the further
alternative, such damages
are claimed on the basis of the
actio
ex empto
. The amount claimed as damages
constitutes the replacement cost of the entire roof structure.
[53] There
is no justification in the evidence for the amount claimed. Visagie
testified that the cost to replace the roof as at
6 February 2008 was
R344 662 plus Value Added Tax. Later, in his evidence, Visagie
determined the base figure to be R309 698 plus
14% VAT of R43 357.72,
leaving a total of R353 055.72. In argument, yet a further amount
was put forward as appropriate.
[54] In
order to succeed the plaintiffs must establish a fraudulent or
negligent misrepresentation on the part of the defendants
in relation
to the guarantee; that such misrepresentation induced the
plaintiffs to contract on the terms set out in the agreement
of sale
and the addendum, and that in consequence the plaintiffs have
suffered patrimonial loss equivalent to the replacement cost
of the
entire roof structure.
[5
5] The
following further factual and/or legal considerations arise in regard
to the alternative claims:
(1) Whether the
defendants and their agents represented to the plaintiffs that they
were in possession of a written guarantee as
alleged.
(2) The materiality of
the guarantee and, more particularly, whether the plaintiffs would
have entered into the agreement on its
terms or on different terms
had they known there was no guarantee or written guarantee.
(3) Whether
damages in respect of the latent defects are claimable at all, given
the fact that the property was purchased
voetstoots
.
(4) Whether
the loss claimed is a direct consequence of the misrepresentations
made in relation to the guarantee.
(5) If
damages are claimable,(a) whether the damages claimed arise as a
direct consequence of the misrepresentations made; (b)
whether the
appropriate measure of damages is the replacement cost of the roof as
a whole or some other amount. It is trite that
a litigant who sues
in delict is entitled to the aggregate or losses sustained as a
direct consequence of having been induced to
enter into the contract,
whereas a litigant who sues in contract sues to have his bargain or
its equivalent in money (see Trotman
and Another v Edwick
1951 (1) SA
443
(A) at 449B-C; Ranger v Wykerd
1977 (2) SA 976
(A) at 991B-E and
994H-995A, and cases there cited; also see Davidson v Bonafede
1981
(2) SA 501
(C)); (c) whether the appropriate measure of damages is
the replacement cost of the roof, given the fact that the guarantee
only
applied to the remedial work that had been performed in
remedying the leak.
[5
6] It
was submitted by defendants’ counsel that the furnishing of the
guarantee was not material to the plaintiffs. I do
not agree with
this contention. It is common cause that the furnishing of a
guarantee was discussed by the parties prior to the
conclusion of the
agreement of sale on 4 May 2007. The first plaintiff testified that
prior to submitting the offer the first
defendant told him that
repairs had been carried out on the roof and that a guarantee was in
place which would be transferred to
the plaintiffs. This is admitted
by the first defendant. It is also common cause that when the
agreement was signed on 4 May
2007 no provision was made for the
transfer of the guarantee but this was rectified later on 25 July
2007, when the parties entered
into the written addendum.
[57] It
was further argued on behalf of the defendants that first plaintiff
had no right to assume that the guarantee was in writing
as nobody
had told him that it was. This argument is specious. In my view, it
would have been reasonable for the plaintiffs to
have assumed that
the guarantee was in writing. Ms Spreeth, the defendants’ own
agent, presumed that the guarantee that
the defendants were to make
over to the plaintiffs was a written guarantee and she imparted this
to the first plaintiff. This
much is to be implied from her letter
to the Estate Agency Board (Exhibit A p 35).
[58] The
evidence demonstrates that the defendants were less than candid with
the plaintiffs in regard to the existence of the guarantee.
The
first defendant knew that Mr Braaf had given him an oral guarantee
which, to say the least, was tenuous. According to the
first
defendant he had asked Braaf for a guarantee for a year, but this was
refused. Braaf was only prepared to guarantee his
workmanship until
“after the first rains”. The first defendant testified
that his understanding was that the guarantee
would be good until
after the first rains in about June or July 2007.
[59] When
entering into the agreement on 4 May 2007, the first defendant did
not disclose to the plaintiffs that the guarantee was
only limited
until the advent of the first rains. Worse still, when the
defendants signed the written addendum on 25 July 2007,
they knew,
but failed to disclose, that the guarantee had lapsed.
[60] It
was put to both the first plaintiff and Mr Braaf by defendants’
counsel that a verbal guarantee of one year had been
agreed upon.
This instruction, given by the first defendant to his counsel, was
clearly incorrect and the first defendant conceded
as much in
cross-examination. Later, it was put to Braaf by defendants’
counsel that first defendant would testify that
he had asked for a
guarantee until after the first rain season, for one year, and that
Braaf had agreed to this. All of this reflects
adversely on the
first defendant’s credibility and version in respect of the
guarantee.
[61] The
evidence tendered by the first defendant in regard to the guarantee
is also inconsistent with what is stated in paragraph
9 of the
defendants’ plea. It was there pleaded that before the
agreement of sale was entered into the defendants disclosed
and
handed all documentation to the plaintiffs in respect of a prior
incident, where a leak in the roof occurred during an exceptionally
heavy rainstorm in 2006. It is apparent from the evidence that no
documentation (which presumably would have included the guarantee)
was handed to the plaintiffs.
[6
2] The
first defendant was clearly unsettled when cross-examined in regard
to the non-disclosures and contradictory versions put
by his counsel
and was unable to advance any credible or plausible explanation.
[6
3] It
is obvious that when the addendum was entered into on 25 July 2007
the defendants had no written guarantee in their possession
and the
oral guarantee that they purported to have had lapsed. On the
probabilities the defendants gave the undertaking to deliver,
what at
that stage was a non-existent guarantee, because they did not wish to
sabotage or derail the contract and hoped that in
the fullness of
time there would be no need on the part of the plaintiffs to rely
upon same.
[6
4] The
defendants knew, at the time of the signing of the agreement in May
2007, that the guarantee would lapse on the coming of
the first
rains, and were aware when the addendum was signed of the fact that
the guarantee had lapsed. To have undertaken in
these circumstances
to provide a guarantee was thoroughly misleading and in my view
fraudulent.
[
65] For
these reasons I am satisfied that a fraudulent misrepresentation was
made by the defendants to the plaintiffs in regard
to the existence
of the guarantee and their ability to transfer same to the
plaintiffs.
[66
] This
finding raises two important questions: (a) Whether the damages
claimed arise as a direct consequence of the fraudulent
misrepresentation relating to the guarantee; and (b) whether reliance
can be placed by the defendants on the
voetstoots
clause which would exclude any liability for latent defects.
[67
] As
to the question posed in (a) above, the first plaintiff testified
that had he known there was no written guarantee he would
have had
the roof inspected and that should he have discovered the defects he
would have reduced his offer by the cost of the repairs.
This
contention is difficult to accept. The plaintiffs did nothing before
signing the agreement to establish whether a written
guarantee was in
existence or to determine the terms and scope of the guarantee. They
must, as a probability, have known that
the guarantee related only to
the remedial work performed by the contractor. Having been
forewarned prior to signing the agreement
that there had been
previous rain damage requiring remedial work, the plaintiffs could,
if they so wished, have approached an expert
to inspect the roof to
establish whether the remedial work had been properly executed and
whether there were any other defects
present. I am not satisfied
therefore that the damages claimed, namely the cost of replacement of
the roof, arise as a direct
consequence of the defendants’
fraudulent conduct in relation to the guarantee.
[68] The
guarantee, even if provided by the defendants to the plaintiffs,
would not have prevented the plaintiffs from suffering
loss as a
result of the presence of the latent defects. It is common cause or
not in dispute that the guarantee given by the contractor,
Mr Braaf,
only related to the remedial work performed and did not operate as a
guarantee or indemnification in respect of all latent
defects.
[69] I
find therefore that the damages claimed, being the cost of replacing
the thatch roof as testified to by the expert, Visagie,
do not arise
as a direct consequence of the defendants’ fraudulent conduct
in relation to the guarantee.
[70
] As
to the question posed in (b), it is a trite legal principle that
absent proof of designed or active concealment of the defects,
the
voetstoots
clause
would exclude liability for any latent defects such as those that
exist in the present case (see
Van der
Merwe v Meads
,
supra
,
and cases there cited, especially
Knight v
Trollip
,
Forsdick
v Young
and
Glastenhouse
(Pty) Limited v Inag
). I have already
found that the defendants as a probability were not aware that the
thatch roof suffered from a fundamental structural
defect relating to
the pitch of the roof and therefore could not have known or foreseen
that an inspection of the roof by an expert
might lead to the
disclosure of the latent defects. The defendants could not have made
the misrepresentations relating to the
guarantee with the intention
of designedly or craftily concealing or preventing the plaintiffs
from discovering the existence of
the latent defects. The defendants
are thus entitled to rely upon the
voetstoots
clause in order to resist the plaintiffs’ claims.
[71
] Accordingly,
the alternative claim for delictual damages cannot succeed.
[72] So
far as reliance is placed on the actio ex empto, the following
considerations are relevant. A litigant who sues in contract,
sues
to have his bargain or its equivalent in money. The promised
guarantee only covered the remedial work performed by Mr Braaf.
It
did not purport to indemnify the holder in respect of all latent
defects in the thatch roof. The plaintiffs would, at best,
upon
proof that the remedial work was not properly performed, be entitled
to be placed in the position that they would have occupied
had the
guarantee been furnished (see Trotman v Edwick, supra; Ranger v
Wykerd, supra, and cases there cited). The plaintiffs
cannot be
placed in a better position they would have occupied under the
contract simply because the guarantee was not furnished
by the
defendants. Damages ex empto have in any event not been established.
[73
] In
the result, the alternative claims fall to be dismissed.
[74] As
far as costs are concerned, the following considerations are
relevant: The defendants’ reprehensible conduct in relation
to
the guarantee is, in my view, sufficient ground to deprive them of a
portion of their costs. I also bear in mind that some
4½
hours of Court time was lost as a result of indulgences sought by the
plaintiffs. Some 90 minutes was lost on 12 October
2010, when the
plaintiffs’ witnesses were not available timeously in order for
the Court to start at 10h00, and on 13 October
2010, Mr Bornmann was
unavailable to testify and the matter had to stand over until the
following day. These costs should properly
be paid by the
plaintiffs. Having regard to these considerations and the facts of
the case as a whole, I am of the view that it
is just and equitable
that each party bears its own costs.
THE ORDER
[75] The
following order is granted.
The plaintiffs’
claims are dismissed.
Each
party is to
pay its own costs.
DATED
at JOHANNESBURG on this the
23
rd
day of SEPTEMBER 2011
P BORUCHOWITZ
JUDGE OF THE SOUTH
GAUTENG
HIGH COURT
ATTORNEY
FOR PLAINTIFFS
...........
MR
M WAGENER
INSTRUCTED
BY
..................................
BOWMAN
GILFILLAN INC
COUNSEL
FOR RESPONDENTS
.....
ADVOCATE
B M HEYSTEK
INSTRUCTED
BY
...................................
MARITZ
BOSHOFF & DU PREEZ INC