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[2013] ZAGPJHC 182
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Total Auctioneering Services and Sales CC t/a Consolidated Auctioneers v Transpaco Sheet Extrusion (Pty) Ltd t/a Terbo Plastics and Another (11226/2012) [2013] ZAGPJHC 182 (1 August 2013)
SOUTH GAUTENG HIGH COURT
JOHANNESBURG
CASE NO: 11226/2012
DATE:01/08/2013
In the matter between
TOTAL AUCTIONEERING SERVICES AND SALES CC
t/a CONSOLIDATED
AUCTIONEERS
........................................................
PLAINTIFF
and
TRANSPACO SHEET EXTRUSION (PTY) LTD
t/a TERBO
PLASTICS
................................................................
FIRST
DEFENDANT
SNAPSHOT INVESTMENTS 34 (PTY) LTD
......................
SECOND
DEFENDANT
J U D G M E N T
WEPENER J:
[1] In this action the plaintiff
seeks payment of a sum of money which it alleges is owed to it by the
defendant pursuant to an
agreement of mandate. The plaintiff is a
concern which, pursuant to mandates given to it, auctions property of
parties supplying
such mandates to the plaintiff to do so.
The Pleadings
[2] Before I deal with the
evidence in the matter I set out the relevant portions of the
pleadings, more particularly the allegations
pertinent to the
mandate.
‘
[4] On or about 25
January 2012 and at or near Johannesburg, the Plaintiff, then
represented by Mr Edidio Filipe Goncalves (“Chico”)
Da
Silva and Mr Grant Stockdale, they being duly authorised thereto and
the First Defendant, alternatively, the Second Defendant,
then
represented by Ilse Uys, the First Defendant’s Project Manager,
she being duly authorised thereto, and/or Louis Weinberg,
he being
duly authorised thereto entered into an Oral Mandate Agreement (the
Agreement), in terms whereof, the Plaintiff was mandated,
as the
First Defendant / Second Defendant’s auctioneer, to sell the
Property by way of public auction.
…
[7] The material terms of the
Agreement, whether express, alternatively implied, further
alternatively tacit, included inter alia
the following:
7.1 the Property was to be
auctioned on 25 January 2012;
7.2 In the event that the
Plaintiff caused the property to be sold unconditionally for a
selling price in excess of R2 600 000.00
nett of
commission, the First Defendant alternatively the Second Defendant
would accept such selling price and would conclude an
agreement of
sale with the purchaser who offered such purchase price.
[8] Pursuant to the conclusion
of the Agreement, the Property was auctioned on 25 January 2012, with
the following secured offers
being obtained by the Plaintiff on
behalf of the First Defendant, alternatively the Second Defendant, at
the auction and shortly
thereafter:
8.1 an offer of R2,600,000-00
plus commission of R260 000-00, i.e. a total offer to purchase
of R2,860,000-00;
8.2 an improved offer of
R3,000,000-00 plus commission of R300 000-00, ie a total offer
to purchase of R3,300,000-00, secured
by the plaintiff of 27 January
2012.
[9] Such offers were
communicated by the Plaintiff to the First Defendant.
[10] In breach, alternatively in
repudiation of the Agreement (which repudiation the Plaintiff does
not accept), on 30 January 2012,
the First Defendant, alternatively,
the Second Defendant, then represented by Louis Weinberg, a director
of the Second Defendant:
10.1 orally declined the offers
obtained by the Plaintiff as referred to in 8 above; and
10.2 orally advised the
Plaintiff, that the Frist Defendant, alternatively, the Second
Defendant had obtained an offer for R3,050,000-00
which offer, the
First Defendant, alternatively, the Second Defendant had accepted.
’
[3] These allegations were met by the defendants’ placing in
issue the first defendant’s liability and alleging that
the
mandate was given by the second defendant in the following terms:
‘
2.2. The relevant and
express, alternatively implied, further alternatively tacit terms of
the agreement were the following:
2.2.1 The plaintiff would, on
behalf of the second defendant, invite offers to the purchase of the
immovable property being Remaining
Extent and Portion 1 of ERf 74,
Chamdor situate at 27 Chenik Street, Chamdor, Krugersdorp (“the
immovable property”),
by way of public auction to be held on
the 25
th
of January 2012;
2.2.2. The second defendant
would be entitled, but not obliged, to accept in writing any offer
received at the said auction.
’
The Evidence on behalf of the Plaintiff
[4] The plaintiff called three
witnesses, Mr Da Silva, Mr Stockdale and Ms Pinto. Mr Da Silva, who
is a member of the plaintiff
and was the driving force behind the
execution of the mandate to sell the immovable property, testified
about the background of
the matter and how it came about that the
oral mandate to sell the immovable property came about. By virtue of
my view of the quality
of the evidence of Mr Da Silva, which I set
out below, I summarise it briefly and not in detail.
[5] The first defendant, as owner
of movable property mandated the plaintiff in writing during 2012 to
auction movable property
on 25 January 2012. All the terms of the
mandate were reduced to writing and neither party experienced any
difficulty in relation
to this agreement between them.
[6] A few days prior to the
auction it appeared that the immovable property of the second
defendant could also be on the market.
As a result of this the
plaintiff’s staff prepared certain for sale signs and advised
prospective clients of the immovable
property to be auctioned. When
acting thus the plaintiff did not yet have a mandate to sell the
immovable property. All the preparations
to auction the immovable
property were made without a mandate to sell it.
[7] Only on the morning of the auction is it said that Ms Uys, an
employee of the holding company of the first respondent, orally
agreed that the immovable property may be placed on an auction.
[8] The terms of the mandate were
that if the plaintiff auctioned the immovable property for more than
R2,6 million, the owner would
sell it. This, in its terms, implies
that the plaintiff would have earned a commission on the sale of the
immovable property.
[9] Mr Da Silva testified that
the auction realised R2,6 million. Thus, on any party’s version
the mandate was not fulfilled.
However, Mr Da Silva stated that
during the morning prior to the auction it was also discussed that
the auction of the immovable
property would be subject to
confirmation. This meant that the owner could either accept or reject
the price realised at the auction.
I hasten to mention that the
witnesses who testified on behalf of the defendants agreed that the
putting up of the immovable property
for sale was indeed subject to
confirmation by the owner. I will deal with aspect more fully later.
[10] Mr Da Silva, however, added
that the sale of the immovable property subject to confirmation by
the seller also allowed the
plaintiff to obtain improved offers
during a seven day period during which the auction price was subject
to confirmation. This
was vehemently denied by the defendants’
witnesses. It is this aspect of the evidence that needs careful
consideration.
[11] It is common cause that within the period of seven days post the
auction the plaintiff presented an offer in excess of R2,6
million to
the defendant, but at that time the second defendant had accepted an
offer for R3,1 million from another party.
[12] Before dealing with the
remaining witnesses who testified on behalf of the plaintiff, I find
Mr Da Silva to be a particularly
untrustworthy witness. He
contradicted his own evidence; he contradicted other witnesses who
testified on behalf of the plaintiff;
it was quite obvious that he
failed to respond to questions adequately or properly.
[13] The reason for this latter
fact was that he failed to listen to what was asked of him or was put
to him. If anything was said
by counsel he would go off on what can
best be described as a tangent without listening or properly
responding to the issue at
hand. I have little doubt that having
regard to Mr Da Silva’s coming to conclusions without having
regard to what was being
said or asked, he is an untrustworthy
witness in so far as the discussions between him and Ms Uys is
concerned. Indeed, having
regard to the deficiencies in his evidence
it falls to be rejected.
[14] It is also noteworthy that
the version that the plaintiff could supply further offers after the
auction date to the second
defendant and that the latter was obliged
to accept it if the offer exceeded R2,6 million, is nowhere to be
found in the pleadings.
It does not appear in an email which Mr Da
Silva sent to the defendant shortly after the auction, nor in a
letter of demand to
the defendant shortly thereafter. I will deal
with the probabilities flowing from this omission below.
[15] The second witness on behalf
of the plaintiff, Mr Stockdale, was not the party who concluded the
so-called mandate agreement
with the defendant. He did what a
property marketing employee does, when told to do so by his employer
i.e. prepare the documents
necessary to put in a ‘buyers pack’
for prospective purchasers and to make known the fact that the
auction of the immovable
property would take place on the 25
th
of January 2012. He contradicts the evidence of Mr Da Silva in
various respects. He confirms that Ms Uys, who acted for the
defendants,
showed himself, Mr Da Silva and Ms Pinto a document which
she said was an offer to purchase the immovable property. Although
there
is a dispute amongst the witnesses whether Mr Da Silva looked
at the document or paged through it or read it, it is irrelevant.
The
fact is that the document contained an offer in excess of the R2,6
million. The witness could not explain why Ms Uys, on behalf
of the
owner, having an offer well in excess of R2,6 million would have
agreed that the plaintiff would be successful in fulfilling
its
mandate if it received R1 more than R2,6 million.
[16] The witness further testified how he prepared the ‘buyers
pack’ of documents and other signage in relation to
the sale.
Again, it is significant that all this homework was done without any
mandate to sell the immovable property and the preparation
in
relation to the auction is consequently of no moment as it is common
cause that no mandate to sell the immovable property existed
prior to
the 25
th
of January 2012. It is also noteworthy that Mr
Stockdale went so far as to state that he laboured under the
impression that the
plaintiff had received a sole mandate to sell the
immovable property from Ms Uys. This, of course, is completely
incorrect and
no such sole mandate existed. He testified that his
view that his evidence that the plaintiff had this extended period to
obtain
higher offers than the R2,6 million and which would then
oblige the owner to accept the offer, was based on his perception
that
a sole mandate was offered to the plaintiff. In this regard he
stated that he believed that the plaintiff had a sole mandate to
market the immovable property for a period of seven days.
[17] This term i.e. that the plaintiff could go from the auction and
solicit further offers, according to Mr Stockdale, was only
agreed to
during the afternoon after the auction when Mr Da Silva announced so.
This evidence contradicts Ms Pinto and indeed seems
to be an
afterthought by the witness in relation to the allegation that there
was a period of seven days during which the plaintiff
could attempt
to obtain higher offers which the owner of the property would be
obliged to accept if higher than R2,6 million.
[18] In any event, Mr Stockdale testified that it was an announcement
by Mr Da Silva. There is not a shred of evidence that Ms
Uys accepted
this belated announcement after the auction as part of the mandate to
auction the immovable property subject to confirmation.
[19] In any event, this version
that the seven day window period was declared by Mr Da Silva after
the auction, was also a version
proffered by Mr Da Silva in cross
examination contrary to his evidence in chief. Such declaration after
the auction, in my view,
cannot form part of the alleged mandate.
[20] It becomes very clear that
Mr Da Silva did not obtain a good enough price at the auction and
that he was eager to see if he
could do better and earn a commission.
This does not elevate his eagerness to form part of the mandate given
to him by Ms Uys prior
to the auction.
[21] Having regard to the
contradictions in his own evidence, which I do not tabulate and the
contradictions between the witness
and Mr Da Silva I will be
reluctant to rely on any of his or Mr Da Silva’s evidence in so
far as it is contradicted by the
witnesses of the defendant. It is
noteworthy, however, that Mr Stockdale contradicts Mr Da Silva on the
very issue in relation
to the plaintiff’s right to solicit
higher offers during a period of seven days, which the owner of the
building was then
obliged to accept. This crucial contradiction, in
my view, results in the fact that a court cannot place reliance on
the evidence
of these two witnesses in relation to the alleged oral
mandate.
[22] The final witness called by
the plaintiff was Ms Pinto. Ms Pinto contradicted Mr Stockdale. She
contradicted Mr Da Silva in
certain respects. On her version the
purpose of the seven day window period was to allow the plaintiff to
better the offer which
was received at the auction. Her emphasis was
on this aspect and not the fact that the sale at the auction would be
subject to
the confirmation by the owner thereof. She confirmed that
when she met Ms Uys on Friday 20 January 2012, the only discussion
was
that a sale of immovable property would be subject to
confirmation. She confirmed that Ms Uys produced an offer in writing
by someone
else which was referred to during the discussion prior to
the auction. It was put to Ms Pinto that the written offer was for
R2,8
million and there would be no reason for Ms Uys to say that it
was an offer for R2,6 million and Ms Pinto agreed that she could
not
explain such strange conduct on behalf of Ms Uys.
[23] Ms Pinto contradicts both Mr
Da Silva and Mr Stockdale and is a lone witness as far as the alleged
mandate given to the plaintiff
prior to the auction for a period of
seven days is concerned. Plaintiff’s and defendant’s
witnesses contradict her,
the defendants’ witnesses who did
convincingly so if regard is had to the probabilities referred to
below, including the
case as pleaded.
Evidence on behalf of the defendant
[24] Mr Weinberg, a director of the first defendant, testified that
he was aware that the movable property was to be auctioned
on the
25
th
of January 2012. He was aware that Ms Uys had
arranged for the auction to occur. He testified that the second
defendant was the
owner of the immovable property. He testified that
he had received certain offers in relation to the immovable property.
He testified
that all final decisions in relation to the sale of the
immovable property had to be taken by a co-director or the chief
executive
officer, being a Mr Abelheim, who was at that time in
Germany. He confirmed the evidence of Ms Uys that she could not enter
into
a mandate to sell the immovable property without authority from
Mr Abelheim. Mr Weinberg confirmed that he was aware that there
was a
private buyer that would lead to a nett income for the seller of
R2,66 million at the time when the meeting was held with
Mr Da Silva
shortly before the auction. Mr Da Silva mentioned that the immovable
property could be put on auction subject to confirmation
i.e. subject
to the seller confirming the price obtained being acceptable. He
denied that there was any discussion that the owner
would sell the
property if an amount in excess of R2,6 million was obtained at the
auction or at a later date. He stated that he
did not agree to such
terms by virtue of the fact that the second defendant was in no hurry
to sell the property; the second defendant
already had a greater
offer than R2,6 million in hand; and thirdly neither he nor Ms Uys
had the authority to decide to sell the
property without the sanction
of the Mr Abelheim.
[25] Mr Weinberg confirmed that during the course of the next few
days an offer for R3,1 million was received through an independent
agent and that with the concurrence of Mr Abelheim that offer was
accepted. He confirmed that the plaintiff also submitted a further
offer during the next few days but that it was not accepted.
[26] Mr Weinberg made a good impression on me and no criticism was
levelled against him and I am of the view that none can be levelled
against him. His evidence was clear in every respect and I accept it
without hesitation.
[27] The next witness was Ms Uys who testified regarding the written
agreement to auction the movables. She stated that, shortly
before
the day of the auction, it was suggested that the immovable property
also be auctioned and that it was agreed that it could
be done on the
basis that it would be subject to confirmation. She further confirmed
that whatever she agreed was subject to the
approval of her chief
executive officer, Mr Abelheim. She is borne out by her
contemporaneous note sent to Mr Abelheim in relation
to her dealings
with the immovable property. It is clear that the contemporaneous
note only states that the immovable property
could be placed on
auction subject to confirmation. The additional version, that the
plaintiff could supply higher offers within
a period of seven days
and that that would oblige the defendant to sell the property, is
nowhere to be found. She further confirmed
the evidence of Mr
Weinberg that at the time that the mandate was entered into on the
morning of the 25
th
of January 2012, there was a higher
offer than R2,6 million in her possession which would have ensured a
higher income i.e. at
least R2,66 million to the second defendant .
She further confirmed that on the morning of the auction she saw the
notice boards
detailing the sale of immovable property at which she
was surprised. Although this surprise, was argued to be out of place,
I find
the argument without merit. It is common cause that all the
preparation to sell the immovable property on the auction was done
without a mandate. The mandate was allegedly finally arrived at on
the morning of the auction prior to the auction. It is only the
terms
of the mandate which are in dispute between the parties
[28] The witnesses were further
all in agreement that the meeting prior to the auction was quick and
short. No indepth discussion
took place. They were all in agreement
that Ms Uys had a document which she said contained an offer. For
some reason the plaintiff
wishes me to believe that she said it was
an offer for R2,6 million only and that if the plaintiff obtained an
offer in excess
thereof, that the owner would sell the property. I
will deal with the probability in relation to this aspect hereunder.
All the
witnesses agree that the sale of the immovable property was
subject to confirmation by the owner. Ms Uys, like Mr Weinberg,
denied
that the seven day window period was for the benefit of the
plaintiff to submit improved offers for the sale of the immovable
property.
Ms Uys, too, made a good impression on me and there is
little, if any, criticism against her evidence. I accept her evidence
and
prefer her evidence where it is in contrary to the evidence of
the plaintiff’s witnesses.
[29] Having stated what is said
herein and having come to the aforesaid conclusion and preferring the
evidence of the witnesses
of the defendants, I find that the
plaintiff’s version that it had the seven day window period in
which it could submit higher
offers to the owner of the immovable
property which it was obliged to accept, to be in conflict with the
truth. In addition I am
of the view that the probabilities in this
matter favour the defendants and far outweigh any probability that
may exist in favour
of the plaintiff.
Probabilities
[30] There are a number of
probabilities which favour the defendants’ version. The first
and foremost of these is the fact
that the second defendant had in
its possession a written offer to purchase in excess of R2,6 million
or to put it in the way that
the plaintiff wants me to believe, in
excess of R2,6 million and R1. It would be inconceivable why Ms Uys
would have granted the
plaintiff a mandate to sell the immovable
property for R2,6 million plus R1 while a written offer in her
possession would have
secured a much higher amount. None of the
witnesses could explain this strange behaviour on behalf of Ms Uys
and I find that it
is not strange but indeed improbable that she
would have finally given a mandate that the property could be sold if
R1 more than
R2,6 million was attained by the plaintiff whilst she
had a written offer in excess thereof.
[31] A further probability is that it cannot be disputed and indeed
it is common cause that Ms Uys was under obligation to obtain
approval from Mr Abelheim, who was in Germany, before she could enter
into any agreement such as the mandate alleged by the plaintiff.
That
this is so is borne out by the email sent by her contemporaneously to
Mr Abelheim at the time. Indeed Mr Da Silva was aware
that Ms Uys had
to obtain authority to enter into agreements at the auction for
selling some of the larger movable items which
were to be auctioned.
He stated ‘Obviously the principals are overseas in Germany.
Should it be the case, under the new Consumer
Protection Bill, we are
mandated to maximise and get the best possible price for our client.
We have given our client certain indicatives
of what we believe the
machines would achieve, but should it be the case that we do not
achieve the relevant the market value on
the relevant machines –
the two major extruders – automatically we will reserve those
machines, subject to confirmations
within two hours.’ Mr Da
Silva was very much aware that it was highly improbable that Ms Uys
could there and then take a
decision regarding the immovable property
without the principal in Germany agreeing thereto.
[32] It was the policy of the plaintiff to document its contractual
provisions with sellers. This included standard agreements
of mandate
which had to be signed before the plaintiff proceeded with any
auction. Such a document was indeed signed in relation
to the
movables. Mr Stockdale testified that a similar document in relation
to the sale of the immovable property existed. This
was not produced
to show that it contained the disputed oral term. The defendant
similarly had a policy to require written record
of contractual
provisions. This is borne out by the numerous emails between the
parties and Uys requiring written quotations before
she could obtain
authorisation.
[33] It cannot be disputed that neither Ms Uys nor Mr Weinberg had
authority to agree to the sale of the property. If that is so
why
would they have given authority that the property may be sold at the
price alleged by the plaintiff without the authority from
Mr Abelheim
in Germany? It is common cause that Mr Abelheim approved the
agreements in relation to the sale of the movables. I
find it
improbable that the parties did not know that Mr Abelheim would have
to approve the sale of an important asset such as
the immovable
property.
[34] Mr Weinberg testified there was no urgency to have the property
sold and it was more sensible to ‘test the waters’
by
putting the property up for sale at the reserved price to see what
could be realised rather than to commit the defendant to
a forced
sale should the plaintiff realise R2,6 million plus R.1 As indicated
above, this is an amount which is less than the amount
of the offer
second defendant had in hand.
[35] I have indicated that the
contents of the pleadings, emails and letters which all occurred
after the auction, are entirely
inconsistent with the plaintiff’s
version. Indeed the plaintiff’s version about the seven day
window period when it
had the sole right to bring offers higher than
R2,6 million, I find to be an afterthought. Such a case is not
apparent from its
pleadings which I set out earlier.
[36] Additionally, if one has
regard to the rules of auction and the agreement and conditions of
sale, such are entirely inconsistent
with the plaintiff’s
witnesses’ understanding that the sale would be subject to
confirmation but that a forced sale
would take place should an offer
of R2,6 million plus R1 be obtained. In both these documents the
second defendant’s unfettered
discretion to accept or decline
any offer is recorded.
[37] There is not a single document which supports the contention of
the plaintiff that it had the right to solicit further offers
after
the end of the auction which according to the auction rules closed
‘on the fall of the hammer’.
[38] The plaintiff’s case, on the probabilities, must fail.
Consumer Protection Act 68 of 2008
[39] The first defendant also
pleaded that pursuant to the regulations issued by the Minister of
Trade and Industry pursuant to
the
Consumer Protection Act 68 of
2008
, the auction of the immovable property did not comply with such
regulations and was pursuant to the provisions of
s 51(3)
as read
with
s 51(1)
of the aforementioned act, void.
[40] Having regard to the
conclusions reached above it is not necessary to venture into this
issue.
Counterclaim
[41] The plaintiff sued both the
first and second defendants in the alternative as being the party who
gave the oral mandate to
it to sell the immovable property. It is
quite clear from the evidence that the first defendant did not and
could not grant to
the plaintiff any mandate to sell the immovable
property. I need say little further about this issue and it was
conceded on behalf
of the plaintiff that it’s claim, if any,
lies against the owner of the immovable property, the second
defendant.
[42] Not much turns on this issue
by virtue of the conclusion reached by me above. However, this fact
is only relevant regarding
the first defendant’s counter claim.
It is common cause that after auctioning the movables of the first
defendant pursuant
to the written mandate given to it, the plaintiff
retained sums of money based on the allegation that the first
defendant owed
it a sum of money by virtue of the plaintiff having
performed it’s mandate to sell the immovable property.
[43] The plaintiff was not
entitled to withhold the money realised at the auction in relation to
the selling of movable property
save for its agreed costs and
commission and was obliged to pay over the monies realised less its
costs and commission to the first
defendant. The withholding of a
portion of the money on the basis that such was owed to it by the
first defendant or seemed due
to the successful performance its
mandate to obtain an offer in excess of R2,6 million for the
immovable property, was based on
an erroneous understanding of the
facts and the law.
[44] The first defendant is
accordingly entitled to judgment in its favour for the amounts
withheld by the plaintiff. The parties
were in agreement as to the
amount owing pursuant to the plaintiff having paid certain amounts
over to the first defendant and
transferring the balance to be held
in trust by the first defendant’s attorneys.
Conclusion
[45] In all the circumstances the
plaintiff’s claim falls to be dismissed with costs and judgment
is entered for the first
defendant against the plaintiff as follows:
It is declared that:
The plaintiff is indebted to the first defendant in the amount of
R277 088.04, together with interest:
On the amount of R227 088.04 at the rate of 15.5% per annum
from 9 February 2012 to date of payment;
On the amount of R68 400 at the rate of 15.5% per annum from
9 February 2012 to 18 July 2013.
The first defendant’s attorneys are entitled to pay out to
the first defendant the amount held in trust by them together
with
the interest accrued in respect of this amount;
The plaintiff is ordered to pay the first defendant the balance of
the amount referred to in 1.1 above, after payment of the
amount
referred to in 1.2 above.
The plaintiff is ordered to pay the first defendant’s costs of
suit in respect of its counterclaim.
WEPENER
J
JUDGE OF THE HIGH COURT
COUNSEL FOR THE
PLAINTIFF:
Advocate
L. Hollander
APPLICANT’S
ATTORNEYS:
Nowitz
Attorneys
COUNSEL FOR THE
RESPONDENT:
Advocate
A. De Kok
RESPONDENT’S
ATTORNEYS:
Fluxmans
Inc
DATES OF HEARING:
24 –
26 July 2013
DATE OF JUDGMENT:
1 August 2013