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[2015] ZASCA 54
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Hansa Silver (Pty) Ltd and Others v Obifon (Pty) Ltd t/a The High Street Auction Company (192/2014) [2015] ZASCA 54; 2015 (4) SA 17 (SCA) (30 March 2015)
Links to summary
THE SUPREME
COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 192/2014
In
the matter between:
HANSA
SILVER (PTY)
LTD
...............................................................................
FIRST
APPELLANT
IVOR
ICHIKOWITZ
......................................................................................
SECOND
APPELLANT
JAN
JONATHAN
SERFONTEIN
......................................................................
THIRD
APPELLANT
ERF G OF
THE FARM DUIKERBULT 360
CC
..........................................
FOURTH
APPELLANT
THABA
PHUTI SAFARI LODGE (PTY)
LTD
.................................................
FIFTH
APPELLANT
and
OBIFON
(PTY) LTD t/a THE HIGH STREET
AUCTION
COMPANY
..................................................................................................
RESPONDENT
Neutral citation:
Hansa
Silver (Pty) Ltd v Obifon (Pty) Ltd t/a The High Street Auction
Company
(192/2014)
[2015] ZASCA 54
(30
March 2015).
Coram:
Navsa ADP, Shongwe and Saldulker JJA
and Van der Merwe and Meyer AJJA
Heard:
3 March 2015
Delivered:
30 March 2015
Summary:
Auction ─ sale with reserve price
─ whether vendor bids should be identified as such depends on
the facts of each case
─ bids by auctioneer on behalf of
sellers in present circumstances not constituting misrepresentation
inducing sale.
ORDER
On appeal from
Gauteng
Local Division, Johannesburg (Masipa J sitting as
court of first instance):
1 The appeals of the appellants are dismissed with
costs, including the costs of two counsel.
2 The cross-appeal is upheld with costs, including the
costs of two counsel and the order of the court a quo is supplemented
by
adding the following:
‘
The
applicants are jointly and severally ordered to pay the costs of the
third party proceedings, including the costs of two counsel.’
JUDGMENT
Van
der Merwe AJA (Navsa ADP, Shongwe and Saldulker JJA and Meyer AJA
concurring):
[1]
This appeal concerns the validity of sale agreements entered into
pursuant to a public auction. The central issue is whether
the sale
agreements were invalidated by bids of the auctioneer on behalf of
the sellers. The court a quo (Masipa J) on application
by the
purchasers seeking an order of invalidation, held that they were not
invalid. I shall say more about the purchasers in due
course.
Background
[2]
The Thaba Phuti Safari Lodge (the lodge) is a game farm and lodge
comprising immovable properties and a business as a going
concern.
The third appellant, Mr Jan Jonathan Serfontein, the fourth
appellant, Erf G of the Farm Duikerbuilt 360 CC, and the fifth
appellant, Thaba Phuti Safari Lodge (Pty) Ltd, (the sellers) were the
owners of the assets comprising the lodge. At all relevant
times the
sellers were represented by Mr Serfontein. The respondent, Obifon
(Pty) Ltd t/a The High Street Auction Company (High
Street),
conducted business as an auction house.
[3]
On 28 August 2011 the sellers gave a written mandate to High Street
to sell the lodge by public auction or private treaty. In
terms of
the mandate a reserve price of R25 million was fixed. In terms of the
mandate the sellers appointed High Street or its
agent, to bid on
their behalf at a public auction, up to the reserve price. It
provided further that should the sellers sell the
lodge during the
mandate period or within a period of 12 months after the mandate
period to any purchaser introduced to the sellers
or the lodge within
the mandate period, the sellers would be liable for payment of
commission of 10 per cent plus VAT on the sale
price. The mandate was
to endure until 1 January 2012.
[4]
Thus the lodge was offered for sale at an auction held on 2 November
2011. The auction was conducted on behalf of High Street
by Mr
Jonathan Anthony van Reenen (the auctioneer). He held impressive
qualifications in the field and had vast experience in conducting
auctions in South Africa and abroad. High Street’s rules of the
auction were contained in a document signed by the auctioneer.
The
document stated that the rules complied with s 45 of the
Consumer Protection Act 68 of 2008 (the CPA) and the regulations
thereunder. These regulations were promulgated by Government Notice
R293 in Government Gazette no 34180 of 1 April 2011 (the
regulations).
[5]
The rules of the auction stated that the sale in respect of any lot
was complete when the auctioneer announced its completion
by the fall
of the hammer and the statement ‘sold’, and that until
then, a bid may be retracted. The following rules
of the auction are
of significance:
‘
3.
Unless otherwise announced, all lots are sold subject to a reserve
price and to a five day acceptance period in favour of the
seller;
4.
Unless otherwise announced, the High St. Auction Co and the
Auctioneer are entitled to bid on behalf of the seller up to the
reserve price.’
[6]
The auction was advertised in ‘The Auctioneer’. The
advertisement stated that the rules of the auction were available
on
a specified website as well as at the offices of High Street. In
terms of the advertisement, notice was given that all sales
were
subject to a ‘minimum reserve’, unless otherwise stated.
The advertisement made clear that the auctioneer had
the right to bid
on behalf of the owner.
[7]
The advertisement attracted the attention of the second appellant, Mr
Ivor Ichikowitz. He was interested in acquiring the lodge
for another
entity, which turned out to be the first appellant, Hansa Silver
(Pty) Ltd (Hansa). I refer to Mr Ichikowitz and Hansa
collectively as
the purchasers. Mr Ichikowitz made contact with High Street and
expressed his interest in the lodge. High Street
took Mr Ichikowitz
by helicopter to inspect the lodge prior to the auction and he
consequently attended the auction on 2 November
2011.
[8]
Although he was equivocal in his founding affidavit, Mr Ichikowitz
had in fact registered as a bidder at the auction and had
signed the
standard bidder registration form which had been completed by his
personal assistant. In the bidder registration form
Mr Ichikowitz
acknowledged that he had read, understood and was bound by High
Street’s terms and conditions of the auction.
He also provided
the documents that High Street required in compliance with the
Financial Intelligence Centre Act 38 of 2001 (FICA).
He was presented
with paddle number 129.
[9]
At the commencement of the auction the auctioneer read out the rules
of the auction to approximately 50 persons present. A transcript
thereof was attached to the papers. The transcript confirmed that
after he had read the rules to the audience, the auctioneer had
invited questions. It is uncontested that there were no questions
from the audience. Mr Ichikowitz said that he had not paid attention
to the rules that regulated the auction, even though he realised that
they constituted contractual terms of the auction. The purchasers
correctly admitted that Mr Ichikowitz was bound by the rules of the
auction. It is trite that if the rules of an auction are read
out at
the commencement of the auction or made available by another
reasonable method, ‘they are binding even on bidders
who arrive
late and have not read them or heard them read out’. See R H
Christie, the
Law of Contract in South
Africa
, 6
ed (2011) at 47. Regulation 21(8)(a)
of the regulations is to similar effect. It provides that the rules
of an auction need not
be read out at an auction, if they had
been made available to the general public at least 24 hours prior to
the commencement
of the auction.
[10]
The lodge was lot 5 at the auction. It was sold to Mr Ichikowitz for
R20 million, in circumstances fully set out below. Pursuant
hereto
three written agreements of sale were entered into on 9 November
2011. In terms of these agreements each of the sellers
sold its
respective portion of the assets comprising the lodge to Mr
Ichikowithz on behalf of a company to be formed. The total
purchase
price in terms of the three agreements was R20 million. High Street
was a party to each agreement. Each agreement provided
that the
purchaser was liable for payment of commission to High Street in the
amount of 10 per cent of the purchase price plus
VAT. The total
commission amounted to R2,28 million and was duly paid to High
Street.
[11]
On 10 January 2012 a first addendum was entered into in respect of
each of the three sale agreements. The parties to these
addenda were
the respective sellers and Hansa, on the basis that it was nominated
by Mr Ichikowitz as the purchaser of the lodge.
In terms of the
addenda each sale agreement was essentially amended to provide for
extension of the date on which the balance purchase
price had to be
secured and for Hansa to take occupation of the lodge on 1 January
2012, which it did.
[12]
There are two video recordings of the events at the auction. One
displays a view from the auctioneer’s podium onto the
floor and
another provides a view from the floor towards the auctioneer. The
former recording was shown to Mr Ichikowitz by High
Street during
February 2012. This happened at the request of Mr Ichikowitz, after
the media carried a story of alleged misconduct
at an auction of a
well-known wine estate. Attorneys acting for the purchasers obtained
copies of both video recordings. Correspondence
between the attorneys
of the purchasers and High Street followed, culminating in a letter
by the former dated 15 May 2012. In terms
of this letter High Street
was notified that the purchasers did not consider themselves bound by
any of the sales pursuant to the
auction. A refund of the commission
was demanded. No similar letter was directed to the sellers. High
Street took issue with the
stance adopted by the purchasers and
refused to accede to their demand.
[13]
Consequently, on 27 August 2012, the purchasers launched the
application referred to earlier in terms of which they, inter
alia,
sought an order that they were not bound by the sale agreements and
also claimed repayment of the commission paid to High
Street.
Notably, on the same date Hansa and the respective sellers signed the
second addenda to the sale agreements. The second
addenda were signed
on behalf of Mr Ichikowitz on 4 September 2012. The second addenda
amended the sale agreements and the first
addenda. In terms of the
second addenda certain transactions, defined as ‘trigger
events’, were required to be concluded
by 31 October 2012. If
they were not, a total credit of R2 million in respect of the
purchase price of the lodge was to be given.
The first of these
transactions was a sale agreement in terms of which Mr Ichikowitz
would acquire shares held by Mr Serfontein
in a company named UIS
Analytical Services (Pty) Ltd. The second was a joint venture heads
of agreement in terms of which a joint
venture would be established
by Mr Ichikowitz and Mr Serfontein and to which Mr Serfontein would
provide free geological services
to the value of R2 million. These
transactions were concluded within the stipulated time. The
properties constituting the lodge
were therefore transferred to Hansa
in terms of the sale agreements as amended by the first and second
addenda thereto against
payment of R20 million. In short, the object
appears to have been to exclude High Street’s entitlement to
commission.
[14]
High Street opposed the application. It also joined the sellers as
third parties in terms of rule 13 of the Uniform Rules of
Court. In
the notice High Street claimed payment of its commission in respect
of the auction from the sellers, upon condition that
the purchasers
are successful in the main application. For this relief High Street
relied on the terms of the mandate and its performance
in terms
thereof. The sellers objected to the third party notice on the basis
that it constituted improper use of rule 13. On the
merits they
opposed the relief claimed mainly on the ground that the conduct of
the auctioneer as described in the founding affidavit,
disentitled
High Street from payment of commission in terms of the mandate. I
shall in due course allude to the alleged conduct
of the auctioneer
in some detail.
[15]
The court a quo found for High Street and dismissed the application
of the purchasers with costs, including the costs of two
counsel and
considered it unnecessary to deal with the third party proceedings.
Consequently it made no order in respect of the
costs thereof. The
purchasers applied for leave to appeal against the dismissal of the
application. The sellers applied for leave
to appeal on the ground
that the court a quo failed to deal with the third party proceedings
and should have ordered High Street
to pay the costs thereof. High
Street in turn applied for leave to cross-appeal for an order that
the purchasers jointly and severally
pay the costs of the third party
proceedings. Leave to appeal to this court was granted by the court a
quo in respect of all these
applications.
The
auction
[16]
In the founding affidavit Mr Ichikowitz said that the video
recordings indicated the following in respect of the bidding after
the price of R15 million had been reached. By gesticulating around
the room, so Mr Ichikowitz claimed, the auctioneer represented
that
bids emanated from genuine bidders, whilst there were none. A
representative of High Street would, so it was alleged, point
to an
area where a bid was supposedly made when in fact there had been no
such bid. The auctioneer would conduct himself as though
he was
accepting a bid from a bidder in that area. No bid was in any manner
identified as a bid by or on behalf of the sellers.
In sum the case
of the purchasers was that the video recordings provided evidence of
fraudulent conduct ─ sham bidding ─
by the auctioneer and
other representatives of High Street.
[17]
In the answering affidavit, however, the auctioneer provided a
detailed and materially different version with specific reference
to
the timestamp on one of the video recordings. Some of its significant
moments are reproduced below. It is necessary to explain
that a third
party bidder by the name of Dr S A Hoseini was registered with the
auctioneer. Messrs Beck, Jacobson, Kleynhans and
Dall were
representatives of High Street that rendered assistance at the
auction. The second applicant is of course Mr Ichikowitz:
‘
00:27:05
:
I announce the nominal opening bid to get the auction started at R9
million;
00:27:20
:
The third party bidder places his bid for R12.5 million.
00:27:28
:
I place a vendor bid on behalf of the seller at R15 million by saying
“I have it at 15 sir”;
00:27:50
:
The second applicant places what I believe to have been his first bid
at R16 million. I confirm receipt of the bid by saying “I
have
got your 16 sir”;
00:27:54
:
Beck confers with the second applicant by crouching down to his
level. Beck then signals me that the second applicant wanted to
bid
an increment of R500 000 and not a million. However, I had
already by then placed a further bid for R17 million on behalf
of the
seller by saying “I have it at 17 now sir”;
00:28:04
:
The second applicant places a further bid for R18 million.
00:28:06
:
I place a further bid at R19 million on behalf of the seller by
saying “I am back at 19 sir”;
00:28:25
:
I call for bids at R19.5 million;
00:28:31
:
Jacobson confers with the second applicant and on the second
appellant’s instruction makes a bid. I assume the bid is R19.5
million but Jacobson corrects the second applicant’s bid to
R19.25 million;
00:28:50
:
I make a further vendor bid at R19.5 million by saying “I have
it at 19.5”;
00:29:04
:
I say that we are going up in quarters and Jacobson thereafter places
a bid for another “quarter” on behalf of the
second
applicant, thus raising the bid to R19.75 million. Dall is conferring
with Serfontein who indicates to Dall that he would
accept R20
million for the lot. At that point the seller is thus reducing his
reserve price from the stated R25 million to R20
million;
00:29:28
:
Pretorius indicates to me that the third party bidder is out. At this
point in the vicinity of the seller Kleynhans joins Dall
and Dall
explains to Kleynhans that Serfontein had indicated that he would
reduce the acceptable price to R20 million. Kleynhans
then confers
with and gets confirmation of this from Serfontein, whereupon he
moves towards the direction of the second applicant;
00:29:54
:
Kleynhans reaches the second applicant and advises the second
applicant that his bid of R19.75 million is a little too low, but
that if he went to R20 million, the seller will accept it;
00:30:07
:
The second applicant indicates to Kleynhans that he is prepared to up
his bid by R250 000 to R20 million so as to meet the
price
indicated by the seller:
00:30:10
:
Kleynhans indicates to me that he has a bid for R20 million from the
second applicant and that it is “on the market”,
indicating to me and the floor that the seller’s reserve price
has now been reduced and met by the bid;
00:30:25
:
I indicate that the property is on the market;
00:30:30
:
Pretorius indicates that the third party bidder is definitely out by
waving his hands in front of his stomach; and
00:30:34
:
I bring the hammer down on the sale at R20 million.’
The
picture that emerges is of bids by Dr Hoseini and Mr Ichikowitz
interspaced by bids by the auctioneer on behalf of the sellers,
all
below the reserve price.
[18]
In reply Mr Ichikowitz said that he had been advised that in the
light of the competing version of the auctioneer, the court
would not
be in a position to conclude that the sale of the lodge had been
fraudulently procured, without the hearing of oral evidence,
but
submitted that the court should nevertheless find in favour of the
purchasers on the version of the auctioneer. Significantly,
however,
he also said the following:
’
15.1
In these paragraphs Van Reenen deals with the events at the auction
itself.
15.2 I am advised and submit that the court is obliged
to accept what is stated by Van Reenen subject to:
15.2.1 a comparison therewith with the video recordings;
and
15.2.2 the fact that what he alleges is not complete in
all respects.’
No
indication was given that a comparison of the version of the
auctioneer with the video recordings would reveal a material
difference.
Analysis
[19]
In this court the purchasers relied on two grounds for the claim that
the sale agreements and the first addenda were invalid.
The first was
that because of non-compliance with the regulations, the auctioneer
was not permitted to bid at the auction at all.
The second ground was
that the auctioneer was obliged to identify his bids on behalf of the
sellers, but failed to do so.
[20]
The purchasers relied on regulations 26(3) and (4) which provide:
‘
(3)
The auctioneer must ensure that a person who intends to bid on behalf
of another, produces a letter of authority expressly authorising
him
or her to bid on behalf of that person, and both that person and the
person bidding on his or her behalf must meet the requirements
of
subregulation (2).
(4) The auctioneer must ensure that if a person will be
bidding on behalf of a company, the letter of authority contemplated
in
subregulation (3) must appear on the letterhead of the company and
must be accompanied by a certified copy of the resolution authorising
him or her to do so.’
The
bidder’s record indicated that paddle number 355 had been
registered for purposes of vendor bidding in respect of lot
5.
It is common cause, however, that the auctioneer did not
produce any such document.
[21]
These provisions must be read with regulation 26(1) and (2). In terms
of regulation 26(1) the auctioneer must have a bidder’s
record
for every auction ‘to record the identity of all bidders at an
auction’. Regulation 26(2) states that the auctioneer
must
ensure that every prospective bidder is registered prior to the
commencement of the auction. Such registration must with the
necessary changes meet the requirements of Chapter 1 of the
regulations in terms of FICA.
[22]
The ordinary meaning of regulation 26(3) and (4) is clear. The
auctioneer must ensure compliance by prospective bidders. Their
purpose is clearly to identify bidders in order to enable
communication with successful bidders for purposes of matters such as
delivery of the goods and securing payment of the purchase price. In
this context the ordinary meaning of these provisions makes
good
sense. Everybody at an auction knows or could easily ascertain the
identity and location of the auctioneer and the auction
house, where
applicable. Regulation 21(2)(b) provides that the rules of an auction
must contain the full names, physical address
and contact details of
the auctioneer, and where applicable, of the auction house. I find
therefore that regulation 26(3) and 26(4)
are not applicable to an
auctioneer who intends to bid on behalf of a seller.
[23]
As stated earlier, the purchasers’ queries were prompted by
media reports of sham bidding at the auction of a wine estate.
Auction bids by or on behalf of the seller (vendor bidding) must be
distinguished from sham bidding. Instances of sham bidding
are bids
in terms of an underhand arrangement to artificially raise the sale
price or a non-existent bid represented as a real
bid. Sham bidding
is of course unlawful. In terms of the common law vendor bidding is
prohibited at auctions without reserve. See
G Hackwill
Mackeurtan’s
Sale of Goods in South Africa
5 ed (1984) at 250 para 16A.12.
Subject hereto, vendor bidding and bidding by or on behalf of the
auctioneer is expressly recognised
by the CPA. Section 45(4) and (5)
thereof provide:
‘
(4)
Notice must be given in advance that a sale by auction is subject to
─
(
a
) a reserved or upset price; or
(
b
) a right to bid by or on behalf of the owner
or auctioneer, in which case the owner or auctioneer, or any one
person on behalf
of the owner or auctioneer, as the case may be, may
bid at the auction.
(5) Unless notice is given in advance that a sale by
auction is subject to a right to bid by or on behalf of the owner or
auctioneer
─
(
a
) the owner or auctioneer must not bid or
employ any person to bid at the sale;
(
b
) the auctioneer must not knowingly accept any
bid from a person contemplated in paragraph (
a
); and
(
c
)
the consumer may approach a court to declare the transaction
fraudulent, if this subsection has been violated.’
[24]
The argument of the purchasers raised the question whether vendor
bidding is only permissible if identified as such at the
time. We
were not referred to any authority for such proposition.
Contemporaneous identification of vendor bidding is not required
by
s 45 of the CPA. Section 45(5) requires no more in this regard
than that notice must be given in advance that the sale
is subject to
the right to bid by or on behalf of the owner or the auctioneer.
Regulation 21 deals extensively with prohibited
behaviour of an
auctioneer. Regulation 28 contains provisions in respect of bidding.
Neither requires identification of vendor
bids as such. This accords
with the position of other bidders. A bidder is not obliged to
identify himself or herself when bidding.
[25]
It is common knowledge that the auctioneer is the agent of the seller
and that the purpose of the auction is to obtain the
best possible
price for the benefit of the seller. It is not intended to provide
the public with the opportunity to obtain bargains.
Vendor bidding is
only permitted in case of prior notice thereof. No person is
compelled to bid at such auction nor to bid higher
than what the
bidder is willing to spend. A vendor bid up to the reserve price does
not deprive a bidder of a sale below the reserve
price. That is the
result of the reserve price itself. And the acceptance of a bid below
the reserve price is, in any event, within
the control and province
of the seller.
[26]
In my view the enquiry should centre on whether the non-disclosure of
a vendor bid in any given case constituted a misrepresentation.
That
question must of course be decided on the facts and circumstances of
each case. If the failure to identify a vendor bid as
such does
constitute a misrepresentation in the particular circumstances, an
auction sale may in terms of general principles of
contract be
avoided if the misrepresentation was material and induced the sale.
[27]
High Street submitted that the auctioneer’s bids on behalf of
the sellers were in fact identified as such in the context
in which
they were made. This submission finds support in the New Zealand
judgment in
Commerce Commission v Grenadier Real Estate Ltd
─
[2004] 2 NZLR 186
, to which we were referred by the purchasers. There
the court referred to the Fair Trading Act of 1986 which provides
that the
vendor of property makes a false or misleading
representation with respect to the price of the property if the
vendor, or any agent
acting on behalf of the vendor, makes a vendor
bid for the property. However, this does not apply if there is a
reserve price for
the property and the bid is made before the reserve
price is reached and is clearly identified as a vendor bid. The New
Zealand
legislation therefore expressly requires clear identification
of a vendor bid. In para 44 of the judgment the following is said
in
respect of the identification of a vendor bid:
‘
Clarity
in this respect could be achieved in a number of ways. No particular
language would be needed. It would not, for instance,
be necessary to
use the words “vendor’s bid” or the equivalent on
each occasion of lodging such a bid. Some degree
of shorthand which
does not have a tendency to mislead would suffice, such as the
expressions which Mr Smith and Mr Woodley referred
to in their
evidence: “The bid is with me” or “I have the bid
now”.’
I
find no material difference between these bids and the vendor bids of
the auctioneer as reflected in para 17 above.
[28]
In addition, the purchasers did not show that the auctioneer’s
bids on behalf of the seller constituted material misrepresentations
that induced the sale agreements. The rules of the auction made clear
that the auctioneer was entitled to bid on behalf of the
seller up to
the reserve price. Mr Ichikowitz is an experienced businessman who
had in the past purchased several properties on
auction. It is very
unlikely that a person in his position who had been made aware of the
possibility of vendor bidding by the
auctioneer, would be misled by
the vendor bids in question. Mr Ichikowitz has only himself to blame
for ignorance of the possibility
of vendor bidding by the auctioneer.
What is more, he took a deliberate decision to raise his bid to meet
the reduced reserve price
of R20 million. Any prior misrepresentation
therefore in any event did not induce the sale agreements.
[29]
It follows that the court a quo correctly refused the relief claimed
in the notice of motion. Although there is much to be
said for the
argument that the purchasers did not cancel the sale agreements qua
the sellers and therefore cannot approbate and
reprobate, it is not
necessary to decide that issue.
[30]
As a last resort the purchasers asked that the matter be referred to
trial. This was prayed for in the alternative in the court
a quo. It
must therefore be accepted that it exercised the discretion not to
refer the matter to trial. The question is whether
there is any
ground on which the exercise of this discretion could be interfered
with on appeal. The exercise of this discretion
should to a large
extent be guided by the prospects of viva voce evidence tipping the
balance in favour of the purchasers in respect
of the allegations of
fraud. See
Kalil v Decotex (Pty) Ltd &
another
1988 (1) SA 943
A at 979H. In
the light of para 18 above and the fact that the purchasers made no
attempt to place the video recordings before
court, there appears to
be little or no prospect of establishing the alleged fraud at a
trial. I am by no means convinced that
the court a quo should have
referred the matter to trial.
[31]
It remains to deal with the costs of the third party proceedings. I
do not agree that rule 13 could not be employed by High
Street in
respect of the sellers. In terms of rule 13(1)(
b
)
a party may, inter alia, make use of third party procedure where an
issue in a matter is substantially the same as an issue which
will
arise between such party and a third party and should properly be
determined between any of the parties to the matter and
the third
party. Rule 13 is intended to avoid multiplicity of actions. Rule
6(4) makes it applicable to applications. The purchasers
relied on
the alleged conduct of the auctioneer to avoid the sale agreements.
The sellers relied on the same conduct to avoid payment
of commission
in terms of the mandate. That is substantially the same issue that
was properly determined between the purchasers,
High Street and the
sellers. It was reasonable in the circumstances for High Street to
join the sellers. The issue on which the
purchasers and the sellers
made common cause, was determined in favour of High Street. In my
view the court below should have ordered
the purchasers jointly and
severally to pay the costs of the third party proceedings.
[32]
A judgment or order may subsequently be supplemented in respect of
accessory or consequential matters which the court overlooked
or
inadvertently omitted. See
Firestone
South Africa (Pty) Ltd v Gentiruco
1977
(4) SA 298
(AD) at 306H;
Ex Parte
Minister of Social Development & others
[2006] ZACC 3
;
2006 (4) SA 309
CC para 30-31. The costs of the third party
proceedings in the court below is such a matter. Counsel for the
sellers intimated
that either the purchasers or High Street should
pay these costs and that it did not matter who it was. In these
circumstances
it was not necessary for the sellers to appeal. They
should in my view have approached the court a quo for an order in
respect
of the costs of the third party proceedings. It follows that
the appeal of the sellers must fail and that High Street’s
cross-appeal
must succeed.
[33]
In the result the following order is made:
1 The appeals of the appellants are dismissed with
costs, including the costs of two counsel.
2 The cross-appeal is upheld with costs, including the
costs of two counsel and the order of the court a quo is supplemented
by
adding the following:
‘
The
applicants are jointly and severally ordered to pay the costs of the
third party proceedings, including the costs of two counsel.’
_______________________
C
H G VAN DER MERWE
ACTING
JUDGE OF APPEAL
APPEARANCES:
For
1 and 2 Appellant: P van Blerk SC (with him A Laser)
For
3
rd
to 5
th
Appellants: B M Slon
Instructed by:
Brian Kahn Inc, Craighall Park
Claude
Reid Inc, Bloemfontein
For
Respondent: A R Gautschi SC (with him C J Bresler)
Instructed by:
De
Jongh Botes Inc, Melrose North
Phatshoane
Henney, Bloemfontein