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[2016] ZAGPJHC 391
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Crous International (Pty) Ltd v Printing Industries Federation of South Africa (2012/34717) [2016] ZAGPJHC 391; [2017] 1 All SA 146 (GJ) (30 September 2016)

REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA,
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 2012/34717
(1)
REPORTABLE:
YES / NO
(2)
OF
INTEREST TO OTHER JUDGES: YES/NO
In
the matter between:
CROUS
INTERNATIONAL (PTY)
LTD
Plaintiff
and
PRINTING
INDUSTRIES FEDERATION
OF
SOUTH
AFRICA
Defendant
J
U D G M E N T
COPPIN,
J
:
[1]
In this action the plaintiff, an estate agency, claims an amount of
R1 570 087,00 (alternatively R1 535 087,00) from the defendant
[1]
as commission for the sale of the defendant’s property,
situated at erven 1 and 2, Laser Park, Honeydew (“
the
property
”),
during about 2008 (or 2009), to First Ready Development 695 Ltd,
trading as the African Leadership Academy (“
ALA
”).
[2]
The issues are relatively crisp. The first and main issue is whether
the plaintiff introduced ALA to the defendant and was the
effective
cause of the sale.  The second issue is whether the plaintiff is
entitled to payment of a commission in circumstances
where during
2008 and 2009, crucial periods in the history of the conclusion of
the sale, it was not in possession of a valid fidelity
fund
certificate (referred to in this judgment as a “
certificate
”,
and in plural as “
certificates
”)
as contemplated in sections 26 and 34A of the Estate Agency Affairs
Act
[2]
(“
the
Act
”).
[3]
[3]
The first issue is mainly factual, whereas the second issue is mainly
legal.
[4]
The plaintiff called four witnesses in the following order:  Mr
Moletsane Lebone, a manager at the Estate Agency Affairs
Board (“
the
Board
”), who testified concerning the issue of certificates
by the Board; Mr Timoteus Crouse, a director of the plaintiff, who
was primarily involved with the mandate given to the plaintiff by the
defendant (represented by its Chief executive Officer at the
time, Mr
Sykes) to find a buyer and/or tenant for its property. He was the
primary witness for the plaintiff. Thirdly, Ms Deli
Nkambule, a legal
manager employed in the compliance department of the Board who also
testified about the issue of certificates
by the Board, including
concerning the reasons the plaintiff was not placed in receipt of
such certificates for 2008 and 2009.
The next witness called
was Mrs Heleta Getruida Crouse, the daughter-in-law of Mr Timoteus
Crouse and also co-director of the plaintiff.
She testified mainly
concerning the plaintiff’s execution of the mandate given to it
by the defendant and her evidence supplemented
and corroborated that
of Mr Crouse in certain respects.  Lastly, the plaintiff called
Mr Haasbroek, an accountant, who testified
concerning the financial
statements of the plaintiff for,
inter alia,
the periods 2008
and 2009, and including about the directorship of the plaintiff.
[5]
The defendant only called one witness, namely Mr Patrick Lacey, who
is now retired, but who, before his retirement, was Chief
Executive
Officer (“
CEO
”) of the defendant after the
retirement of Mr Sykes. He testified generally about the efforts to
sell or lease the property
at the time when Mr Sykes was the CEO of
the defendant and subsequently when he became CEO and specifically
concerning the conclusion
of the sale agreement between the defendant
and ALA.
[6]
All the witnesses, generally, made a reasonably good impression in
the witness stand. In the final analysis the differences
in their
actual evidence, dealing with the same aspect, was minimal. Mr Lacey,
for example, disputed that the plaintiff was the
effective cause of
the sale and therefore entitled to a commission, merely on the basis
that ALA’s representative dealt and
negotiated directly with
him, without the intervention of the plaintiff or its
representative(s), but did not dispute the facts
testified to by Mr
and Mrs Crouse which, according to them, established that the
plaintiff was, indeed, the cause of the sale.
The background facts
regarding the lease and sale of the property are largely, common
cause and are also borne out by the minutes
of the management
committee of the defendant and correspondence which were introduced
as evidence by consent of the parties. I
will discuss aspects of the
witnesses’ evidence insofar as may be relevant when dealing
with the issues and the extent to
which I accept or reject their
evidence in respect of those issues.
[7]
I shall now proceed to set out the background and chronology of
events, which, as I have stated, is by and large common cause.

Having done so, I will proceed to deal with the two main issues
referred to at the outset. In respect of each I shall relate the

arguments advanced by the parties, then deal with the applicable law
and my findings.
BACKGROUND AND CHRONOLOGY OF EVENTS
[8]
During about 2007, before any involvement of the plaintiff, or Mr, or
Mrs Crouse, the defendant, which until then, was operating
a printing
college on the property through its subsidiary, known as  Media
Training Centre (“
the Centre
”), no longer required
the use of the entire property for its own purposes and  entered
into a written lease agreement
with ALA during about May 2007 in
terms of which the ALA was to occupy part of the property and use the
Centre’s facilities
on the property for an agreed rental
amount.
[9]
In terms of their agreement ALA was
inter alia
to rent the
property for the period 1 September 2008 to 20 December 2009 and then
from 5 January 2009 to 30 June 2009.  ALA
also had an option to
extend its rental of the facilities on the property until the end of
June 2010.  In entering into the
agreement, ALA was represented
by its founder and CEO, Mr Fred Swaniker and the Centre was
represented by Mr Nick Delport, its
Managing Director. Mr Christopher
Bradford of ALA and Ms Lynne Hetherington of the Centre, signed the
rental agreement as witnesses.
[10]
On 19 June 2007 ALA, represented by Mr Swaniker and the Centre,
represented by Mr Delport, also entered into a further agreement
in
terms of which ALA was given the right of first refusal to purchase
the property. It was, inter alia, a condition that the right
had to
be exercised within the first two years of occupancy, or prior to the
expiry of the lease agreement that ALA had with the
Centre.
[11]
It is common cause that at the management committee meeting of the
plaintiff, held at the property on 27 February 2008, Mr
Sykes
inter
alia
reported to the meeting that ALA had been informed that the
property was valued at between R70 million and R72 million, excluding

subdivision.
[12]
It is not disputed (as reported by Mr Sykes at the said meeting) that
ALA had made an initial offer to purchase the property
for R35
million in cash and a further R25 million in deferred payments and
allowing for discounted use of the property by the Centre.
In
terms of its first offer ALA wanted the property to be transferred to
it upon payment of the R35 million.
[13]
Mr Sykes reported at the same meeting that ALA had been advised that
the offer was not likely to be accepted by the defendant
and that the
property would be put on the market, albeit subject to ALA’s
right of first refusal.
[14]
According to Mr Sykes (as recorded in the minutes which were accepted
as true and what they purport to be) the original developer
of the
property had been approached and had been given until the end of
March 2008 to find a buyer. The president of the defendant,
one Mr E
V Ronne and the past president, one Mr L P Retief, were to be
involved in any sale negotiations.
[15]
During about March 2008 discussions were held between Mr Swaniker of
ALA and Mr Sykes of the plaintiff. Pursuant to such discussions
per
letter dated 25 March 2008 ALA made another offer to the defendant to
purchase the property. According to Mr Swaniker’s
letter, ALA’s
bankers had valued the property at R64 million. The offer included
purchasing the land, buildings and “
some base furniture
”.
In essence, ALA offered to pay the amount in instalments. The total
purchase price increasing with the time it took to
complete the
payment. Thus, if payment was completed by 31 December 2008, ALA was
going to pay R65 million; if payment was completed
by 30 June 2009,
ALA was going to pay R68 million and if completed by 31 January 2010,
ALA was going to pay R70 million for the
property.
[16]
On 7
May 2008 the management committee of the defendant
met again where Mr Sykes reported that two valuations of the property
had been
obtained, one valuing the property at R70 million and the
other valuing it at R72 million.  He also reported on the offer
of ALA and that it was agreed not to accept ALA’s offer, unless
it was unconditional and accompanied by financial guarantees.
It was
decided that the CEO, at that stage Mr Sykes, would write to ALA and
continue negotiating with ALA.
[17]
ALA submitted an updated offer to the defendant for the purchase of
the property. It is contained in a letter dated 6 July
2008, from Mr
Swaniker to Mr Sykes, informing that, following their discussions of
24 June, ALA was presenting an updated offer.
The terms of the
updated offer were
inter alia
that the purchase price would be
R70 million, payable by way of a deposit of R10 million, of which R2
million was non-refundable,
and a balance of R60 million payable in
three instalments, as follows: R10 million by 31 April 2009, R10
million by 30 September
2009 and R40 million by 31 December 2009.
There were other conditions.
[18]
The defendant’s management committee met on 9 July 2008.
Mr Sykes reminded the meeting that the sale of the property
was in
progress; that the offer received from ALA was not a clean offer, but
final negotiations were taking place at the time,
which were expected
to be finalised by the end of July.  Of importance, it was
agreed that ALA’s updated offer be declined
and that Mr Sykes,
Mr M Birch and Mr M Delport meet with ALA to explain to it the
defendant’s position, including its desire
to receive a
guaranteed offer to purchase.
[19]
On 3 September 2008 the defendant’s committee met. It is
recorded  that Mr Sykes updated the meeting by noting that
the
defendant was waiting for the South African Police Service (“
SAPS
”)
to accept the defendant’s offer for the sale of the property.
SAPS had indicated that they were willing to
purchase the property
but a process had to be followed in terms of which the defendant had
to make an offer to SAPS which SAPS
was to accept. The process was to
be lengthy.  It was also noted that ALA would be given the
opportunity to respond to the
SAPS offer. Mr Sykes was to report to
ALA and to keep them abreast of developments.  Mr Sykes informed
the meeting that ALA
offered no guarantees and payment was dependent
on ALA’s ability to raise the necessary funds.  It was
noted that the
defendant required guarantees and it was also agreed
that the property would be sold as a whole without subdividing it, as
subdivision
was no longer viable and would be costly.
[20]
In the minutes of the defendant’s management committee meeting
held on 5 November 2008 it is noted that three parties
were at that
stage interested in purchasing the property. A special resolution had
to be passed by the defendant in terms of which
the sale of the
property would be agreed to. The president of the defendant was
mandated to agree to a price of R70 million for
the property, if
necessary.  The president (Mr Ronne) and Mr Sykes (the CEO at
the time) were to represent the defendant in
negotiating the sale of
the property, together with attorneys Cliffe Dekker.
[21]
Of relevance to this matter, in the management committee minutes of
25 February 2009 it is recorded
inter alia
that there was a
concern about the ALA’s payment of its rental; and that ALA had
paid an amount late. Mr Sykes informed the
meeting that ALA’s
roll-over rental option had lapsed in 2008; That even though ALA were
advertising the property as their
facility and would find it
difficult to move, the defendant was willing to sell the property to
anyone who made an acceptable offer
to the defendant and that ALA
would be obliged to move in that case.
[22]
It was mentioned in those minutes that ALA had made an offer of R40
million “
to take ownership plus another R20 million
(unsecured by the end of 2009)
”.  ALA had indicated
that they would make another offer if that offer was not acceptable
to the defendant. It was noted
further that the property was valued
at R77 million on the open market. Of significance, Mr Sykes proposed
that additional agents
be employed and that the defendant should
advertise the property.  Mr Sykes was also mandated to negotiate
with ALA concerning
the cession of the lease to the defendant.
It was noted that “
the objective was to sell by June
”.
[23]
In an email dated 20 March 2009, from Mr Crouse to Mr Sykes, the
former thanks Mr Sykes for “
again confirming
” the
defendant’s mandate to market the property. For the sake of
completeness, the email of Mr Crouse continues as
follows:
“
Elda and I had a long
session yesterday thinking strategically on how to find the correct
buyer for your property.
We have drawn up a provisional list of
institutions and people that will be approaching during the next few
weeks.
Attention has also been given to
our modus operandi.
1.
We will advise you
of the names of persons we have contacted on a regular basis.
2.
If we have an
interested party whether it be a potential buyer, an estate agent or
an auctioneer we will personally bring such a
person to view the
property.
We want to suggest that you or Nick
will not be introduced to such a person on that occasion.
Please point us to a staff member
that can open any area for us that
we might not have access to without a key.  Such a party will
not be allowed to visit the
property without being accompanied by
either Elda or myself.
3.
You will refer any
interested parties that may approach you directly to us.
4.
We will approach
one or two estate agents provisionally.
5.
At this stage we
will not bring an auctioneer to the college but will make enquiries
anyhow.  This information will be shared
with yourselves.
6.
We have noted that
the present lease over the property will expire by the end of June
2009. You will consult with us before you
give any extension thereof.
We
are confident that we will be successful in finding you a suitable
buyer or tenant. …
”
[24]
It is important to note, as confirmed in subsequent correspondence,
that the defendant had in 2008 already given the plaintiff
a sole
mandate to market the property. The evidence – which was
undisputed – was that the plaintiff was given a mandate
by Mr
Sykes on behalf of the defendant to find a buyer for the property and
that this mandate was given in February or March 2008.
SAPS’
offer was a product of the plaintiff’s marketing of the
property. Other offers that came through the plaintiff
for the
property were from ADV Tech, the For Change Foundation and Buffshelf
(Pty) Ltd.
[25]
Mr Sykes responded to Mr Crouse’ email in an email of the same
date (i.e. 20 March 2009), in which he states:
“
Thank you for your note.
PIFSA’s objective is to get our property marketed as widely as
possible as soon as possible
and I am happy with your proposal in
principle.
Would you please confirm your
commission structure? I know we discussed it last year, but I don’t
want to rely on memory in
something as important as this!
Our
contact person on site will be Chris Mason until August, but I hope
we have a sale well before then.
”
[26]
In a further email dated 23 March 2009 Mr Crouse informed Mr Sykes as
follows:
Elda took Les Fatherly of SA Land
to visit the College site with a view to send out a flyer to all the
investors on his database.
We will send you a copy when it comes to
hand.
We would also like to put up a
large Crous International ‘For Sale’ board up at the Zeis
Road corner of the property.
Will it be okay by you?
Regarding our commission
structure:  We normally use the SAPOA suggested scale which is:
5%
on the first R1 million;
3½%
on the second R1 million;
2½%
thereafter.
Should we work with another agent
we will share commission but the split will be stipulated in the Deed
of Sale or Offer to Purchase.
Please
rest assured that we will be giving our best attention to the sale of
your property.
”
[27]
From the defendant’s management committee’s minutes for
the meeting held on 13 May 2009 it is,
inter alia,
apparent
that the defendant was having issues with ALA about payment for
services and there was a fear of litigation that may result
from
improvements which ALA had made to the property and in particular
concerning the tennis courts which it built there. Regarding
the sale
of the property the following is recorded:
“
6.
Sale of Honeydew Property
It
was reported that the property details had been given to various
agents and about 600 different companies.  Interest had
been
shown by the For Change Foundation and Crawford College. The asking
price was R70 million for us plus the agent’s fee
on top of
that. Investors had suggested a price of R56 million, subject to an
anchor tenant being secured.  Mr M Bath suggested
that PIFSA
could consider it an investment and profit from it if it was managed
professionally.  SAPS may be willing to sign
a lease and there
were other possibilities.  Mr Bath and Mr Sykes were asked to
investigate alternatives to an outright sale.
”
[28]
In an email dated 4 June 2009 from Mr Sykes to Mr Crouse, the former
provides Mr Crouse with the lease agreement ALA had with
the Centre.
He informs Mr Crouse that the defendant “
would not enter
into such an agreement again because we would want a clean rental
with the other charges either being paid by the
tenant or reimbursed.
ALA is not very good at reimbursement or paying on time
”.
[29]
By letter dated 22 June 2009 Mr Sykes, on behalf of the defendant,
confirmed the mandate which the defendant had given to the

plaintiff.  The letter states:
“
Confirmation of revised
mandate
In 2008 PIFSA gave Crous
International the sole mandate to market our property situated in
Laser Park, Honeydew. As you will recall,
this mandate included the
brief to work with any other agent, or auctioneer and share the
commission payable on a sale.
On 18 May 2009, following a meeting
held to discuss the property options available to PIFSA, I was
requested by the chairman of
our central chamber, Mike Bath to
contact Crous International and then expand the mandate to include
the possible finding of a
tenant for the premises, and for Crous
International to manage the letting of the property.
The
purpose of this letter is simply to formally record the amended
mandate that up to now has been a verbal agreement.
”
[30]
In a letter dated 22 June 2009 Mr Crouse, on behalf of the plaintiff,
refers Mr Sykes to a meeting that he had with Mr Sykes
on 17
June 2009 and included certain information for the defendant’s
consideration. It included an offer from Buffshelf 10 Trust
for the
purchase of the property for R60 million, but of greater
significance, it informed that the plaintiff had received an offer
of
lease from ALA for the entire property for 10 years (which meant the
defendant would have to find alternative premises for itself
by no
later than 1 September 2009).  The offer included a right of ALA
of first refusal to purchase the property at any time
during the
tenancy and an option to buy the property for R70 million during the
first year of the lease and for an amount escalated
by 7% more per
annum as from the second year of the lease.
[31]
In the letter Mr Crouse informs Mr Sykes that if the defendant
decides to enter into the lease with ALA the plaintiff could
arrange
for the drafting of a formal lease agreement to be signed by ALA and
the defendant.  Further, that the plaintiff would
take
responsibility for the rent collection and management of the property
at a fee of 5% (excluding VAT) of the rental income.
Further
and of significance for the issues to be decided in this case, that
should a sale agreement with ALA be entered into “
in terms
of the lease agreement
” the plaintiff “
will be
entitled to sales commission at the suggested SAPOA rate
”.
The letter concludes as follows:
“
We await your decision and
want to assure you of our continued service to your best interest.
”
It
is common cause that over the period from about 26 June 2009 the
defendant’s management committee considered the proposals
and
ALA’s offer and the defendant’s members made
counter-proposals.
[32]
It is further not disputed that the plaintiff negotiated the rental
agreement with ALA.  This is confirmed in an email
dated 29 June
2009 from Mr Crouse to Mr Sykes. The latter part of the email’s
concluding paragraph states:
“
If everything goes according
to plan we hope to get the signed lease agreement from ALA by Friday
3 July.  Herewith a copy
of the rental agreement we will use.
As you will notice the agreement is somewhat in favour of the
lessor.  We will
keep you informed of any developments.
”
[33]
ALA dealt with the plaintiff in negotiating the lease agreement.
[34]
It is common cause that at its meeting of 8 July 2009 the defendant’s
management committee discussed the proposals received,
including
ALA’s offer to lease. The overall attitude towards the lease
proposal of ALA seems to have been positive.
Of importance, it
was resolved that Mr Birch and Mr Sykes of the defendant would set up
a meeting to propose and approve  the
terms of the lease
agreement.
[35]
The terms of the lease were negotiated with the plaintiff’s
involvement.  This is confirmed in a letter dated 9
July 2009
from Mr Crouse to Mr Sykes.  Accompanying the letter was a
signed agreement of lease for two years entered into
between ALA and
the defendant. The lease commenced on 1 August 2009 and was to
terminate on 31 July 2011, and it included an option
to renew the
lease for a year.  Notice of intention to renew had to be given
six calendar months prior to termination of the
lease. ALA also had
the option to purchase the property until 31 July 2011 for an amount
of R75 million (inclusive of VAT at 0%)
escalating at the rate of 7%
per annum as from 1 August 2010.  It was also agreed that the
defendant “
may not sell the property during the term of the
lease without the written consent of
” ALA.
[36]
It was not seriously disputed that early in November or December 2010
Mr Patrick Lacey telephoned the plaintiff where he spoke
to Mrs
Crouse and enquired from her whether ALA was still interested in
purchasing the property. He testified that he contacted
the plaintiff
because he must have been asked by either Mr Sykes or Mr Latter to
find out what ALA’s attitude was and since
he did not know and
had never dealt with ALA before, that is, either with Mr Bradford or
Mr Swaniker, he enquired from the plaintiff,
who has had dealings
with them. It is not disputed that early in December 2010 Mr Bradford
of ALA contacted Mr Lacey directly and
they had a meeting at which Mr
Bradford informed Mr Lacey of ALA’s intention to purchase the
property and its financial standing
in that regard. Negotiations
followed which, eventually, culminated in the sale. It is not
disputed that the plaintiff, including
Mr and Mrs Crouse, were not
included in these negotiations.
[37]
Bowman Gilfillan Attorneys (Mr Van Hoogstraten) were engaged to
prepare an agreement of sale. By 27 January 2011 they had emailed
a
draft agreement to ALA and the plaintiff was copied in the email.
Shortly thereafter ( in February 2011) the agreement
was concluded
between ALA and the defendant in terms of which the defendant sold
the property to ALA for a total purchase price
of R 61 403 508-99.
WAS
THE PLAINTIFF THE EFFECTIVE CAUSE OF THE SALE OF THE PROPERTY TO ALA
?
[38]
It is trite that the
onus
is on the party in the position of
the plaintiff to prove that it was the effective cause of the sale.
I consider it useful
to first relate the submissions made by the
parties in support of and against a finding that the plaintiff was
the effective cause
of the sale.
[39]
The defendant’s counsel submitted that the plaintiff was not
the effective cause of the sale for the following reasons:
The
plaintiff did not introduce ALA to the property or to the defendant
and did not negotiate the sale agreement which was ultimately

concluded between ALA and the defendant. The defendant’s
counsel submitted that the “
primary reasons
” for
the sale were the following: From the time ALA was first introduced
to the property in 2007 it considered the property
suitable for its
purposes and wanted to buy the property; prior to 2008 ALA “
had
become ensconced in the property
” i.e. had made substantial
improvements to the property, including building a tennis court and
basketball court and installing
an electrical fence, etc., on the
property for which it was not compensated; since 2007 the defendant
wanted to sell the property
and made desperate efforts to sell it in
2009, including by closing its training facility that was housed on
the property; since
2008 ALA was prepared to purchase the property
and the defendant was prepared to sell it for R70 million; the only
reason ALA’s
offer was not accepted was because it could not
pay the full price immediately upon transfer; in February 2011 ALA
was prepared
to make a cash offer and the defendant was prepared to
accept a lower offer than previously because of the increased
financial
pressures brought to bear upon the defendant.
[40]
The defendant’s counsel further submitted that “
it is
common cause
” that the plaintiff played no role in
persuading ALA to make a cash offer or in persuading the defendant to
accept an amount
for the property which was less than what was
previously expected. It was further submitted by the defendant’s
counsel that
the plaintiff’s contentions as to why its efforts
were to be regarded as constituting the effective cause of the sale
“
varied as the case progressed
”.  In this
regard it was pointed out that in its particulars of claim the
plaintiff alleged that it had introduced ALA
to the property. In its
further particulars for purposes of trial the plaintiff alleged that
this introduction occurred when the
plaintiff informed the defendant
that ALA was prepared to lease the property with the option to buy;
in his opening address counsel
for the plaintiff reiterated that the
plaintiff had introduced ALA as a potential purchaser of the property
and ALA, in purchasing
it, was exercising the option to purchase
contained in the lease agreement it concluded with the defendant that
had been negotiated
by the plaintiff;  Mr Crouse, according to
defendant’s counsel, “
disavowed any reliance on
introducing ALA as a potential purchaser of the property
”.
[41]
According to this argument of the defendant’s counsel, Mr
Crouse in his evidence, in effect, conceded that Mr Sykes had
told
him that the defendant was in discussion with ALA about the latter
buying the property, but was sceptical about the eventual
conclusion
of the sale with ALA and that the defendant thus wanted the plaintiff
to find other purchasers.  According to this
argument, Mr
Crouse’s understanding was that if the defendant sold to ALA
then “
they were the agent
”.  However, it was
only strained relations between ALA and the defendant that prevented
the conclusion of an agreement
directly between them.  Counsel
for the defendant further, still on the theme of varying versions,
submitted that Mr Crouse
testified in chief,
inter alia,
that
it was the plaintiff that caused ALA and the defendant to conclude
the lease agreement which, subsequently, caused the sale
take place,
but under cross-examination, according to this argument, Mr Crouse’s
version “
became that the plaintiff was entitled to
commission because it brokered the lease agreement”
which
“
contained an option to buy and this option was exercised
”.
[42]
The defendant’s counsel described the reasons, which the
plaintiff proffered for being the effective cause of the sale,
as “
a
theory
” and submitted that it was an “
unsustainable
”
theory because “
as a matter of law
” the option in
the lease was not exercised and the offer made by ALA to the
defendant was lower than the amount stipulated
in the option and was
in fact “
a new offer
”.  It was further
submitted that the plaintiff had not played any role in the
acceptance of this “
new offer
”. According to the
defendant’s counsel, Mr Lacey denied that there was a strained
relationship between the defendant
and ALA and submitted that his
evidence in that regard was not challenged.
[43]
It was further submitted that during the  cross-examination of
Mr Lacey “
a new theory was propounded
” by the
plaintiff that it was the effective cause of the sale, namely, that
the conclusion of the lease agreement in 2009,
in which the plaintiff
was involved, gave ALA enough time to raise the funds with which to
purchase the property. According to
the defendant’s counsel,
this theory is “
entirely speculative and not supported by
any evidence
.
There is also no evidence that the lease
agreement was a sine qua non of the sale agreement
”.
[44]
The defendant’s position, thus summarised, was that the
plaintiff did not introduce ALA to the property or to the defendant;

its efforts were confined to brokering a lease agreement between ALA
and the defendant for which it was paid in excess of R600
000,00; ALA
and the defendant independently, eighteen months later, negotiated
and concluded the sale agreement; the plaintiff
did not contribute to
the negotiation and conclusion of the sale.  Further, that there
is no evidence from which it could
be inferred that the plaintiff was
the effective cause of the sale and the plaintiff’s claim ought
thus to be dismissed with
costs.
[45]
The plaintiff’s contentions, briefly, were the following: The
lease agreement, which was negotiated by the plaintiff
and entered
into between ALA and the defendant on 9 July 2009, contains an option
to purchase, and “
must be seen holistically as one with the
eventual purchase agreement concluded between ALA and the
defendant
”.  The plaintiff’s counsel explained
that this meant that “
one cannot think away certain parts of
the transaction without the transaction falling away in its
entirety
”.  Plaintiff’s counsel gave as an
example “
if we think away either the lease or think away the
negotiated improvements or think away the option, all of which had
been negotiated
by the plaintiff, there would have been no eventual
sale agreement
”.  The plaintiff, seemingly, was
submitting that the sale was caused by the lease which contained the
option and if
there was no lease or no option there would have been
no sale.
[46]
Elaborating on this theme, the plaintiff’s counsel further
submitted that even though ALA always wanted to purchase the
property
the offers it made directly to the defendant were always rejected,
but the lease was then negotiated in terms of which
a future sale was
envisaged at the time when ALA was able to purchase.  Relying on
a passage in “
South
African Property Practice and the Law
”
[4]
to the effect that an “
able
”
buyer is one who is only at the time of the conclusion of the sale
agreement in a financial and legal position to carry
out its terms –
it was submitted on behalf of the plaintiff that the fact that ALA
did not have the money to purchase the
property at the time of the
conclusion of the lease with the defendant did not mean it was not an
able buyer.  It was such
a buyer because it had the money at the
time of the conclusion of the sale.
[47]
Relying on the decision in
Vanarthdoy
(Edms) Bpk v Roos
[5]
(“Vanarthdoy”),
plaintiff’s counsel submitted that if a potential purchaser is
aware of the property and has procured a right of first refusal
(i.e.
an option to buy) from the seller and the seller sells the property
to that same purchaser through the efforts of an estate
agent, the
seller is liable to pay the estate agent’s commission.
[48]
Plaintiff’s counsel also referred to the decision in
Nach
Investments (Pty) Ltd v Knight Frank South Africa (Pty) Ltd
[6]
(“
Nach
”)
and submitted that an estate agent was entitled to commission in
circumstances where it sold the property to an existing
tenant who
had a right of pre-emption.  The plaintiff’s counsel
pointed to similarities between the facts of the present
case and
those in
Nach
and in particular to the fact that the Appellate Division in
Nach
went further, because even though there the agent had found another
purchaser (i.e. other than the tenant with the option to purchase)

and the sale eventuated after the offer of this other potential
purchaser was presented to the tenant, who then exercised its option

to purchase, the agent was still held to have been the effective
cause of the sale, which entitled it to its commission.
[49]
Seemingly, drawing from the
Nach
decision, plaintiff’s
counsel submitted that “
the mere fact that ALA was a tenant
and might have had the right of pre-emption, which had expired or
not, does not detract from
the fact that the plaintiff was the
effective cause of the sale
”.
[50]
It was further submitted on behalf of the plaintiff that even though
ALA did not purchase the property for R75 million (as
per the option)
and only purchased for approximately R61,5 million, the plaintiff was
still the effective cause of the sale. The
mere fact that the
defendant agreed to accept a lower price does not result in the
plaintiff being deprived of its commission.
In that regard reference
was made to the decision in
Burt
v Ryan
[7]
(“
Burt
”).
[51]
The plaintiff has to prove on a balance of probabilities that it had
a mandate to find a purchaser for the property
[8]
and that it has duly performed its mandate.
[9]
[52]
Even though it appears to have been in contention at some point, it
can hardly be said that the plaintiff did not have a mandate
to find
a purchaser for the property. Secondly, it is perhaps true that it
could hardly be contended that the plaintiff introduced
ALA to the
defendant, because ALA had been a tenant and an aspirant purchaser of
the property long before the plaintiff was given
a mandate.
That fact, however, is irrelevant, unless the plaintiff and the
defendant had agreed, as part of the plaintiff’s
mandate, that
the commission will only be earned if the sale was to a purchaser
that had been introduced by the plaintiff to the
defendant. There was
some suggestion by the defendant in another context that that was the
case, but it was not placed in issue
during testimony and I cannot
find on the evidence that that was the term of the plaintiff’s
mandate.
[53]
The defendant’s counsel, for example, relied on what Mr Crouse
said in his evidence-in-chief concerning what Mr Sykes
had told him
about ALA and its intentions to purchase the property. According to
Mr Crouse, Mr Sykes told him at the time of the
mandate that the
defendant (or Mr Sykes and his colleagues) were in discussions with
ALA to see if ALA wanted to purchase the property,
but he (i.e. Mr
Sykes) did not believe that the sale with ALA would eventuate.
According to the defendant’s counsel’s
interpretation of
this evidence – “
the defendant thus wanted the
plaintiff to look for other purchasers
”. Counsel also
submitted that Mr Crouse testified that his understanding with Mr
Sykes was that if the defendant sold to
ALA “
is hulle …
die agente …
”
[54]
The defendant’s counsel’s submissions were in another
context and vaguely suggested that Mr Crouse testified that
the
mandate of the plaintiff was to find a purchaser other than ALA who
had already been introduced to the defendant.
[55]
However, Mr Crouse testified that the terms of the plaintiff’s
mandate did not exclude finding ALA as a tenant, or as
a buyer of the
property.  Mr Crouse’s evidence is corroborated by
inter
alia
his email to Mr Sykes dated 20 March 2009 and Mr Sykes’
reply to him on that same date; a follow-up email from Mr Crouse to

Mr Sykes dated 23 March 2009 and the defendant’s letter to Mr
Crouse dated 22 June 2009. In none of those missives is it
stated or
suggested that the plaintiff’s mandate did not include bringing
about a lease (or sale) between ALA and the defendant.
On the
contrary, the fact that the plaintiff did, in fact, with the approval
of the defendant (and Mr Sykes), negotiate the 2009
lease that was
entered into between ALA (or First Ready Development 695 Ltd.) and
the defendant, which also gave ALA an option
to purchase the
property, puts paid to the defendant’s counsel’s
suggestions.  Mr Sykes was also not called as
a witness.
[56]
There was no real issue made of ALA’s willingness and ability
to purchase. The latter aspect has to be adjudged as at
the date ALA
concluded the sale with the defendant.
[57]
The main remaining issue under this heading, regarding the proof of
the plaintiff’s mandate, therefore, is whether the
plaintiff
was the effective cause of the sale agreement between ALA and the
defendant.
[58]
It has been stated that to be an effective cause the agent’s
conduct must not only be a
causa
sine qua non
but a
causa
causans
[10]
as held in
Webranchek
v L K Jacobs and Co Ltd,
[11]
which is also referred to in
Nach
[12]
.
These are relative concepts and the distinction between them is not
as crisp and clear as their frequent use might suggest.
When a
sine
qua non
emerges
as the only causative factor it is readily accepted as also being the
causa
causans
,
but it is only where there are a number of causes competing to be the
effective cause that the distinction has any meaning
[13]
.
[59]
An agent’s conduct, even though it is a
causa
sine qua non
,
will only be an effective cause (
causa
causans
)
if there is no new, sufficiently weighty intervening cause breaking
the chain of causation between the agent’s conduct and
the
eventual conclusion of the sale.
[14]
[60]
But it is established, generally, that in the absence of a new
weighty intervening cause between the estate agent’s
endeavours, in relation to the sale and the conclusion of the sale,
those endeavours constitute the effective cause of the sale
[15]
.
Each case has to be decided on its own facts.
[61]
Even though ALA was a tenant and interested in purchasing the
property the evidence shows that the defendant had negative
perceptions toward ALA and was sceptical of its ability to afford, or
even to sustain, its tenancy of the property. The plaintiff,
armed
with a mandate to find a tenant and/or buyer for the property, saw
potential in ALA and, successfully and with the defendant’s

apparent approval, negotiated and caused the conclusion in 2009 of
the new lease between ALA and the defendant. The plaintiff was
also
instrumental in negotiating the option of ALA to purchase the
property which option was made part of the lease.
[62]
In terms of the option the defendant was obliged, for its duration,
to keep the offer to purchase the property, open for acceptance
and
to do nothing to prevent ALA from exercising the option to purchase
the property.
[63]
The plaintiff’s conduct in
inter
alia
negotiating the lease with the option, has, in my view, on a balance
of probabilities, been shown to be a
condictio
sine qua non
of the sale.  It was also the
causa
causans
of the sale, or to put it another way, there was no weighty new
intervening cause between the plaintiff’s endeavours to present

ALA as a potential purchaser and the conclusion of the sale. On the
authority of the decision in
Burt,
the
mere fact that ALA purchased for less than the option price does not
detract from the plaintiff having been the effective cause
of the
sale.
[16]
[64]
The option in a sense committed the defendant to selling to ALA for
the duration of the option, unless ALA was not willing
to purchase.
[65]
In conclusion on this point, I find on the facts that the plaintiff
has established on a balance of probabilities that it had
carried out
the terms of its mandate to find a buyer for the property- that buyer
being ALA- and that the plaintiff was the effective
cause of the sale
between ALA and the defendant. Mr Lacey’s contrary opinion is
rejected.
IS THE PLAINTIFF NEVERTHELESS
ENTITLED TO BE PAID A COMMISSION
?
[66]
The mere fact that the plaintiff fulfilled its mandate and was the
effective cause of the sale does not entitle it to be paid
the agreed
commission.  In terms of section 26 read with section 34A of the
Act, which were referred to at the outset of this
judgment, the
plaintiff would only be entitled to the commission, if at the time of
performing the acts as estate agent (i.e. its
endeavours, which are
the effective cause of the sale) those sections had been complied
with.
[67]
As pointed out at the outset, it is common cause that during 2008 and
2009, including the dates of the conclusion of the lease
between ALA
and the defendant, which the plaintiff was actively involved in, the
plaintiff itself was not in possession of a certificates
because
certificates had not been issued to it.
[68]
The plaintiff’s case, concerning compliance with sections 26
and 34A, was, essentially, that although it was not in physical

possession of certificates, those certificates ought to have been
issued to it, because it had complied with the requirements for
their
issue and the failure to issue was purely due to a technical system
problem at the Board, as a result of which certificates
were not
printed and consequently issued to the plaintiff.
[69]
The evidence of both, Mr Lebone and Ms Nkambule, who were called by
the plaintiff, was to the effect that the plaintiff had
complied with
the requirements for the issue of the certificates but that they were
not printed due to a technical problem at the
Board and consequently
were not issued to the plaintiff.
[70]
The evidence of those two witnesses was further to the following
effect:  A certificate is only valid for a year.
When an
estate agent, such as the plaintiff, applies for a new certificate,
the Board establishes whether the requirements for
the issue of the
certificate had been met, before issuing the certificate to the
agent.  If the requirements are satisfied,
a certificate is
issued, not only to the company, but also to the principals (i.e.,
directors) of the company. If the company does
not comply with the
requirements for issue then no certificates are issued to either the
company or to its principals (directors).
[71]
It is common cause that even though the plaintiff had not been issued
with certificates for 2008 and 2009, its directors, Mr
Timoteus
Crouse and Mrs Crouse, had been issued with certificates for those
years. The plaintiff’s counsel resultantly argued
to the effect
that this was a unique situation and that for all intents and
purposes it ought to be assumed that the company, i.e.
the plaintiff,
had been issued with certificates for those years, as it complied
with the legal requirements and the failure to
issue was due to a
technical glitch at the Board.  The fact that the principals
were issued with certificates, according to
the plaintiff’s
counsel’s argument, is further confirmation of the plaintiff’s
compliance with the requirements
of the Act.
[72]
The plaintiff’s counsel further submitted that the object and
purpose of sections 26 and 34A,
inter
alia,
is to regulate the activities of estate agents and to maintain and
promote their standard and conduct, but more particularly, to
prevent
persons and entities, who do not meet the legal requirements set,
from operating as an estate agents, or from conducting
business as
estate agents.  Relying on the decisions of the Supreme Court of
Appeal in
Cape
Killarney Property Investments (Pty) Limited v Mahamba
[17]
(“
Cape
Killarney
”)
and in
Theart
and Another v Minnaar NO, Senekal v Winskor 174 (Pty) Limited
(“
Theart
”)
[18]
the plaintiff’s counsel submitted, in essence, that form should
not be elevated above substance; the plaintiff complied with
the
requirements for the issue of certificates for 2008 and 2009 and
certificates were issued to its principals in recognition
of such
compliance; The certificates for plaintiff were merely lacking
because of the Board’s technical difficulty in printing
them.
The argument was to the effect that the requirements of sections 26
and 34A of the Act had been substantially complied
with, because the
general purpose of those sections had been achieved.
[73]
Plaintiff’s counsel submitted further that nothing turned on
the points that the defendant tried to make concerning the
audit
report, particularly, regarding the erroneous recording in it that Mr
Dawie Crouse was a director of the plaintiff, whereas
he was not. And
the evidence presented by the plaintiff, through Mrs Crouse and Mr
Haasbroek, in that regard and to that effect,
was not countered and
ought to be accepted.
[74]
The defendant’s argument, in essence, was that section 34A of
the Act was strict and the plaintiff’s failure to
possess
actual certificates for 2008 and 2009 was fatal to its case.  It
was submitted that the term “
issue
”, in the
context of
inter alia
sections 26 and 34A of the Act, meant
that a certificate must have been produced and given to the
plaintiff.  A person who
wants to do business legally and
effectively as an estate agent is required by the Act to obtain a
certificate. When the certificates
were not issued to the plaintiff
for 2008 and 2009 the plaintiff had a duty to rectify the situation.
The plaintiff has remedies
against the Board for not issuing it with
a certificate for the relevant years, but the failure to have such
certificates, for
whatever reason, did not entitle the plaintiff to
conduct business as an estate agent for the period(s) during which it
did not
have such certificates.
[75]
In supplementary heads of argument counsel for the plaintiff relied
on the Supreme Court of Appeal’s decision in
Taljaard
v T L Botha Properties
(“
Taljaard
”)
[19]
which dealt,
inter
alia,
with
the seller who tried to recover the commission he paid from an estate
agent who did not have a certificate at the relevant
time.  The
plaintiff’s counsel in particular referred to what was held
there, namely, that section 34A of the Act does
not invalidate the
contract of mandate of an agent who acts contrary to the provisions
of section 26 of the Act and that section
34A was not enacted for the
benefit of clients who have a contractual obligation to pay an estate
agent which performed its mandate,
but was intended to penalise
estate agents who have breached that section.
[76]
The plaintiff’s counsel also relied on the decision in
Theart
where
the Supreme Court of Appeal was dealing with the requirements of a
notice issued in terms of section 4 of the Prevention Of
Illegal
Eviction From And Unlawful Occupation Of Land Act (“
PIE
”)
[20]
read with Rule 55 of the Magistrate’s Court Rules and
inter
alia
held that even though the provisions of section 4 of PIE were
peremptory and the notice, which had been served on the respondent,

was in some respects deficient in respect of the requirements of
section 4(2) of PIE and Rule 55, it would not be fatal if the
notice
achieved the purpose contemplated in those provisions. Whether the
purpose had been achieved could not be determined abstractly,
but had
to be determined in the light of the facts of the particular
case.
[21]
[77]
The plaintiff submitted with reference to the decisions in
Taljaard
and
Theart
that on the evidence, in the present case, the
Board had applied its mind and had accepted that the plaintiff had
complied with
the requirements for the issue of certificates for the
relevant years and, accordingly, the Board had issued certificates to
the
principals of the plaintiff, but, due to a technical error on the
Board’s part, failed to issue certificates to the plaintiff

itself. The mere fact that certificates were not printed and issued
to the plaintiff was not fatal, because the legislative purpose
had
been achieved in the case of the plaintiff.  The plaintiff had
applied for their issue and had submitted its financial
statements to
the Board which found them to have been in compliance.
[78]
The defendant’s further argument on this point was, briefly,
the following:   Legally it is irrelevant why
a certificate
was not issued to the plaintiff; Section 34A is clear and unambiguous
and requires that a certificate must have been
issued to the estate
agent. Relying on the decision in
Cool
Ideas 1186 CC v Hubbard
[22]
it
was submitted that the plain wording of the section cannot be ignored
because of “
some
perceived inequity in its operation
”.
[79]
It was further submitted on behalf of the defendant that “
if
the approach proposed by plaintiff was adopted it would mean that in
respect of the myriad of laws which require a citizen to
hold some or
other licence, certificate or permission, the citizen would be at
liberty to ignore the law if it believed that the
licence,
certificate or permission ought in fact to have been issued to him or
her
”. According to this argument the plaintiff’s
approach is “
inimical
” to the rule of law.
[80]
In supplementary heads of argument the defendant’s counsel
submitted further that it does not assist the plaintiff to
attempt to
distinguish between the issuing and the printing of the certificates.
To physically exist the certificate needs to be
printed and if it is
not printed it cannot be issued. The fact that the Board might have
applied its mind and accepted the fact
that there had been compliance
by the plaintiff, or had approved the renewal, does not amount to
issuing the certificates.
[81]
According to the defendant’s counsel, the word “
issue
”,
in section 34A of the Act, is used as “
a
transitive verb
”
,
i.e.
a verb which has an object, in this instance the certificate. In
Protea
Assurance v Finger
[23]
it
was held that the word “
issue
”
ordinarily means “
to
send (hand) out, publish or put into circulation
”.
Reference was also made to
S
v Paleka
[24]
,
where, following an earlier decision in
Rajee
v Zeerust Town Council
[25]
,
the majority of the full court, having reviewed different usages of
the word “
issue
”
– concluded that “
the
common denominator seems to be that the person who issues must have
committed himself to the overt act of giving out or sending
forth or
communicating
”.
[82]
Referring to the facts of the present case, the defendant’s
counsel submitted that no certificates exist for 2008 and
for 2009
and the only certificate which the plaintiff produced bears the date
5 August 2009 as the date of issue. To find on the
evidence that
certificates for 2008 and 2009 were issued would do violence to the
wording of section 34A of the Act. The defendant’s
counsel
further submitted that the
Taljaard
decision supported the
defendant’s argument. Section 34A has as its purpose to ensure
that estate agents do not practice
as such while they are not in
physical possession of a valid certificate.
[83]
Reference to the decision in
Theart
is perhaps appropriate to
the extent that a purposive approach was adopted by the Supreme Court
of appeal to determine whether
the requirements of PIE were met. The
facts and circumstances dealt with in that case otherwise differ
materially from the facts
of the present.
[84]
The court in
Theart
found that even though the procedure of
the High Court and that of the Magistrate’s Court, as stated in
its rules, differed,
the number of notices to be issued to give
effect to section 4(2) of PIE was not prescribed. The section merely
required “
that written and effective notice of the
proceedings be served on the unlawful occupier and the municipality
fourteen days before
an order for eviction could potentially be
granted
”.  The Supreme Court of Appeal found that even
though the notices in the two cases before it were not contained in
separate
documents and were not served separately, the notices that
were served (duly authorised by the respective magistrates) “
complied
with subsection 4(2) and (5) of PIE
” and that, on the
facts, the object of section 4(2), to give the occupiers sufficient
and effective notice of the intended
eviction, was achieved.
[85]
In this case sections 26 and 34A of the Act specifically require that
a valid certificate be issued to an estate agent or to
every person
employed by him or her as an estate agent. Section 34A specifically
provides that an estate agent would only be entitled
to remuneration
for an act performed as estate agent if at the time of performance of
that act a valid fidelity fund certificate
had been issued to that
estate agent. In terms of both sections, where the agent is a
company, certificates are issued to the company
and its directors.
[86]
In
Lek
v Estate Agents Board
[26]
the Cape High Court, upon considering the provisions of the Act as it
stood then
[27]
held
inter
alia
that “
an
application for a fidelity fund certificate is tantamount to an
application for permission to trade, for without such certificate
the
appellant cannot carry on an estate agency business
”.
[28]
On appeal the Appellate Division confirmed the decision of the
Provincial Division.
[29]
Trollip JA, writing for unanimous court, in respect of the Act, as it
stood then,
inter
alia,
stated:
“
The effect of the Estate
Agents Act 112 of 1976 (‘the Act’) is that henceforth no
person can perform any act as estate
agent unless inter alia, a valid
‘fidelity fund certificate’ has been issued to him (s
26(a)).  To get such a
certificate he has to apply in the
prescribed manner to the Estate Agents Board (s 16(1)).  This is
a body (herein called
‘the Board’) that is set up under
the Act (see chap 1) to maintain and promote the integrity of estate
agents in the
Republic (s 7).  If the Board is satisfied that
the requirements of the Act have been duly complied with, it must
issue the
certificate, which is valid until 31 December of the year
to which the application relates (s 16(2)).  A certificate shall

not be issued, or if issued, be valid, unless the provisions of the
Act have been complied with (s 16(3)) …
”
[87]
Since the
Lek
decision the provisions of the Act have been
amended in certain respects, but the core of its provisions which
have been referred
to in this judgment are, basically, the same.
[88]
Section 39(2) of the Constitution
[30]
requires every court when interpreting any legislation to promote the
spirit, purport and objects of the Bill of Rights.
In terms of
section 22 of the Constitution “
every
citizen has the right to choose their trade, occupation or profession
freely
”
.
The
practice of a trade, occupation or profession may be regulated by
law
[31]
.
In the present case the Constitutionality of sections 26 and 34A of
the Act was not challenged at all and in the absence
of any obvious
unconstitutionality in their provisions their validity is assumed.
[89]
The sections do regulate the practice of the profession of an estate
agent. The court is constitutionally obliged, when interpreting
those
sections, to seek to promote the right to freely choose a trade,
occupation, or profession, rather than restrict that right.
A strict,
narrowly textual, or literal approach, as contended for by the
defendant, is not apposite to achieving that objective.
A more
purposive, or substantive, approach is called for.
[90]
As pointed out by Van Winsen AJA in
Maharaj
and Others v Rampersad
[32]
,
“
[t]he
enquiry... is not so much whether there has been ‘exact’,
‘adequate’ or substantial compliance with
this injunction
; but rather whether there has been compliance therewith. The enquiry
postulates an application of the injunction
to the facts and a
resultant comparison between what the position is and what, according
to the requirements of the injunction,
it ought to be. It is quite
conceivable that a court might hold, that, even though the position,
as it is is not identical with
what it ought to be, the injunction
has nevertheless been complied with. In deciding whether there has
been compliance with the
injunction the object sought to be achieved
by the injunction and the question whether this object has been
achieved, are of importance.”
[91]
In
Liebenberg
NO and Others v Bergrivier Municipality
[33]
the Constitutional Court held the approach or test to be “
whether
there has been compliance with the relevant precepts in such a manner
that the objects of the statutory instruments concerned
have been
achieved.”
[92]
The enquiry thus must proceed from the point of determining what the
purpose(s) of the provisions under discussion is and whether
that
purpose has been achieved in circumstances where certificates for the
relevant periods were not issued to the company, but
only to its
directors, because of a technical difficulty the Board had in
printing the company’s certificates.
[93]
Section 26 of the Act provides that no person is to perform any act
as estate agent unless a certificate has been issued “
to him
or her
” and “
to every person employed by him or
her as an estate agent
”. The section then goes on to
provide that – “
if such a person is a company
”
a valid fidelity fund certificate must also be issued to “
every
director of that company
”
[94]
Section 34A of the Act is free from the slight (although
insignificant) ambiguity to be found in section 26 caused by the
reference in that section to estate agents as either “
him or
her
”, while, it is also intended to regulate the position
of entities such as companies and close corporations that have no
gender.
Section 34A just refers to “
estate agent
”
as defined in section 1 of the Act. That section provides that if the
estate agent is a company the company will only be
entitled to
remuneration for acts performed as an estate agent if at the time of
the performance of those acts a valid fidelity
fund certificate has
been issued to the estate agent (i.e. the company) and to every
director of the company. In light of the fact
that a certificate is
only issued to the directors if the company has complied with the
requirements for the issue of a certificate,
it is uncertain what the
position is where the company has complied and (a) certificate(s)
have been issued to the directorship,
but due to a printing problem
the Board has a separate certificate was not printed and issued to
the company.
[95]
Nevertheless, if the purpose or object of those provisions have been
achieved those sections would, substantively, have been
complied
with. They have a common purpose to ensure that those performing acts
as estate agents are registered with the Board and
meet the
requirements for the issue,  by the Board, of a licence,
permitting them to perform those acts lawfully for

remuneration.
[96]
In terms of section 7 of the Act the objects of the Board, having
regard to the public interest, are to promote the standard
of conduct
of estate agents and to regulate the activities of estate agents. In
terms of section 9(1)(a) part of the funds of the
Board consists of
the prescribed levies paid by estate agents to the Board. The Act in
section 6(2) obliges estate agents
to apply to the Board, within the
prescribed period and in the prescribed manner, for a registration
certificate and the application
must be accompanied  by the levy
that is envisaged in section 9(1)(a). In terms of section 16(3),
subject to sections 28(1),
28(5) and 30(6) of the Act, if the Board
receives the application and the prescribed levy and is satisfied
that the applicant is
not disqualified in terms of section 27 from
being issued with a certificate- it is obliged to issue the applicant
with a certificate
in the prescribed form. Section 16(4) provides
that a certificate shall not be issued if the Act is not complied
with.
[97]
The evidence, that stands uncontested, is that the plaintiff has
complied with all of the provisions of the Act and there was
no
reason at all why certificates for 2008 and 2009 could not have been
issued by the Board to the plaintiff, save for the fact
that the
Board has not been able to print those certificates.
[98]
The plaintiff, an artificial, though legal, person, can only execute
acts through human agency, in this instance, through its
directors,
acting in their capacity as such. The directors of the plaintiff have
been issued with certificates for the requisite
periods and would not
have been issued with such certificates if the plaintiff did not
comply with the requirements of the Act
and regulations (i.e., for
the issue of a certificate(s)). In any event, the evidence given, in
particular by Ms Nkambule, that
the plaintiff had complied with the
requirements, was not challenged or refuted. One can, therefore,
conclude that there has been
compliance with sections 26 and 34A of
the Act even though certificates were not issued to the plaintiff
company itself due to
a printing difficulty the Board experienced. In
substance (though not form) the plaintiff was authorised by the Board
to perform
acts as estate agent for payment.
[99]
The consequence of this is that the plaintiff’s claim to be
remunerated for the acts it performed as estate agent during
2008 and
2009 (when it was not itself issued with certificates) and which
resulted in the conclusion of the sale agreement, ought
to succeed.
It was not disputed that if the plaintiff proves it is entitled to be
paid commission for the sale, the amount of the
commission would be
calculated as agreed.  Mr Crouse’s evidence of the
agreement on that issue, which is also corroborated
by the
correspondence that was exchanged between Mr Crouse and Mr Sykes, was
not really challenged.  I find on the evidence
that it was
proved that it was agreed between the parties, represented by Mr
Crouse and Mr Sykes, respectively, that in the event
of a sale, the
plaintiff would be entitled to commission calculated on the SAPOA
scale. Applied to the price for which the property
was sold (i.e.,
R61 403 508-77), it comes to the following: 5% on the first R1million
(i.e., R50000-00); plus 3 ½% on the
second R1million (i.e.,
R35000-00); plus 2 ½% on the balance of the purchase price
(i.e., R1485 087-00), giving a total
of R1 570 087-00.
[100]
Any and all costs previously reserved are to be costs in the cause.
[101]
In the result the plaintiff is granted judgment against the defendant
for the following:
1. Payment of the amount of R 1 570
087-00;
2. Payment of interest, at the
applicable legal rate, from 15 September    2011 to
date of payment ;
3. Costs of suit ;
__________________________________________
P COPPIN
JUDGE
OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
FOR
THE PLAINTIFF

MR R DEN HARTOG
INSTRUCTED
BY

HARVEY NOSSEL
FOR
THE DEFENDANT

MS A DE KOCK
INSTRUCTED
BY

FLUXMANS INC
[1]
A
company incorporated in terms of section 21 of the Companies Act 61
of 1973. It is sometimes referred to in correspondence discussed
in
this judgment by the acronym of its name, namely, “PIFSA”.
[2]
Act
No 112 of 1976.
[3]
In
terms of section 26:  “
No
person shall perform any act as an estate agent unless a valid
fidelity fund certificate has been issued to him or her, and
if that
person is a company to every director of the company.
”
In terms of section 34 of the Estate Agency Affairs Act:  “
No
estate agent shall be entitled to any remuneration or other payment
in respect of or arising from the performance of any act
as estate
agent, unless at the time of such performance a valid fidelity fund
certificate had been issued to that estate agent
and, if it is a
company, to every director of that company.
”
[4]
Delport
H J ‘
South
African Property Practice and the Law
‘(Juta; 2001) at 315.
[5]
1979
(4) SA 1 (AD).
[6]
2001
(3) All SA 295
(A).
[7]
1926
TPD 680
at 682.
[8]
See
Harms
Precedence
of Pleadings
(8
th
edition) (LexusNexus) p 20 and the authorities cited there,
including
Botha
v Smith
1976 (4) SA 885 (A).
[9]
See
Harms
ibid
at 21;
Phillips
v Aïda Real Estate (Pty) Ltd
1975
(3) SA 198 (A).
[10]
See
LAWSA
2
nd
edition
Vol 9 para 583 and the cases cited in footnote 5.
[11]
1948
(4) SA 671
(A) at 679.
[12]
Para
10 at p 298.
[13]
LAWSA
2
nd
edition
Vol 9 para 583
et
seq.
and
the cases cited there.
[14]
See
Mano
et Mano Ltd v Nationwide Airlines (Pty) Ltd and Others
2007 (2) SA 512
(SCA).
[15]
Ibid.
[16]
See
Burt
v Ryan
1926 TPD 680
at 682.
[17]
2001
(4) SA 1222 (SCA).
[18]
2010
(3) SA 327 (SCA).
[19]
[2008] ZASCA 38
;
2008
(6) SA 207
(SCA).
[20]
Act
No 19 of 1998.
[21]
See
at 333H-334G para 50.
[22]
2014
(4) SA 474
(CC) para [52].
[23]
1970 (4) SA 663 (O).
[24]
1986 (1) SA 361
(T) at 401H.
[25]
1938
TPD 283.
[26]
1978
(3) SA 160 (C).
[27]
The
Act then was the “
Estate
Agents Act 12 of 1976
”
– the name of the Act was subsequently amended to the “
Estate
Agency Affairs Act No 112 of 1976”.
[28]
See
at 171H.
[29]
The
decision of the Appellate Division is reported as
Estate
Agents Board v Lek
1979 (3) SA 1049 (AD).
[30]
The
Constitution of the Republic of South Africa,1996.
[31]
For
the application of section 22, see
Affordable
Medicine Trust and Others v Minister of Health and Others
2006 (3) SA 247 (CC).
[32]
1964
(4) SA 638
(A) at 646C. Also referred to by O’Reagan J in
African
Democratic Party v Electoral Commission and Others
[2006] ZACC 1
;
2006 (3) SA 305
(CC);
2006 (5) BCLR 579
(CC) para 24. See also
Shalala
v Klerksdorp Town Council and Another
1969 (1) SA 582
(T) per Colman J at 587H-588C;
Kopel
v Marshall and Another
1981 (2) SA 521
(W) per Margo J at 524E-F; and
Beukes
NO v Mdhlalose, Mdhlalose v Mkhonza and
Another
1990 (2) SA 768
(N) per Wilson J at 774J-775C.
[33]
2013
(5) SA 246
(CC);
2013 (8) BCLR 863
(CC) paras 22-26 ( and the cases
cited there).