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[2010] ZAGPJHC 85
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Furman and Another v Batha (10044/07) [2010] ZAGPJHC 85 (23 September 2010)
NOT REPORTABLE
SOUTH GAUTENG HIGH COURT, JOHANNESBURG
CASE NO
:
10044/07
DATE:23/09/2010
In the matter between:
FURMAN,
ASHLEY
........................................................................
First
Plaintiff
FURMAN, BELINDA
(formerly
FAWELL)
....................................................................
Second
Plaintiff
and
BATHA,
PETA
(KIM)
.........................................................................
Defendant
______________________________________________________________
J U D G M E N T
______________________________________________________________
LAMONT, J
:
[1] On 4 November 2004 the
parties signed a written agreement in terms whereof the plaintiffs
agreed to sell and deliver certain
immovable property to the
defendant at a price of R1,95 million. It was a term of the contract
that:
“
9.
AGENT’S COMMISSION
The seller and the purchaser
acknowledge that they have dealt directly with each other and that no
agent was responsible for introducing
the purchaser to the seller in
respect of the transaction recorded herein. Should any claim be made
against the seller by any agent
for the payment of agent’s
commission in respect of the transaction recorded herein, the
purchaser indemnifies and holds
the seller harmless in respect of any
such claim.
”
[2] During 2005 Vered Estates
(Pty) Ltd (hereafter the estate agent) instituted action against the
two plaintiffs claiming payment
of R100 000,00 and other relief on
the basis that the estate agent had on 31 August 2004 concluded a
mandate to find a purchaser
for the property forming the
subject-matter of the sale between the plaintiffs and defendant, that
it had performed its mandate
and was entitled to payment in that it
had introduced the defendant to the property.
[3] After the estate agent sued
the plaintiffs, the plaintiffs approached the defendant. They
notified the defendant that the action
had been instituted and
requested the defendant to provide evidence to enable them to defend
the action. They also informed the
defendant of her obligation to
them under and in terms of clause 9 quoted above. The defendant
attended a consultation with the
plaintiff’s attorneys and
thereafter signed a document (to be used to oppose a summary judgment
application) supporting the
plaintiffs in their defence of the
action. The basis of the defence was that the agent had not
introduced the defendant to the
property and was neither the direct
nor indirect cause of the sale. The claim was made that the defendant
had become aware of the
property some time prior to the plaintiffs
having signed the mandate with the agent and that she had contacted
the plaintiffs after
the mandate had expired and was not introduced
to the property by the agent.
[4] The plaintiffs subpoenaed
the defendant to attend trial and prior to the trial the defendant
consulted with the plaintiffs’
attorneys and also at a stage
went to the plaintiffs’ house with a list containing a set of
facts which she wished to discuss.
There she discussed the list with
the second plaintiff.
[5] The parties attended the
trial instituted by the agent. At that trial inter alia the first
plaintiff and defendant gave evidence.
[6] The record of proceedings has been lost.
[7] All that remains is the judgment of the magistrate who heard the
matter. The parties gave evidence at the hearing before
me of
certain of the events which had transpired at the Magistrate’s
Court during the trial.
[8] At the trial an expert was
called to give evidence as to what an appropriate fair and reasonable
charge would have been for
the work performed by the agent. During
the course of the cross-examination of the first plaintiff he
conceded that the amount
claimed was a fair and reasonable charge.
By reason of this concession the magistrate found that the parties
were in agreement
as to the quantum in the amount of R100 000,00. At
the time the first plaintiff made that concession he was an expert in
the field
and it was his expert view that the charge which he
conceded was fair and reasonable was in fact fair and reasonable.
[9] On behalf of the estate
agent one Bush testified. She testified that she had on 13 September
2004 invited the defendant to
view the plaintiff’s house by
arrangement.
[10] The next day she phoned to
apologise as she had failed to make the necessary arrangements. The
defendant told her that she
had seen the house and loved it. On 16
September Bush telephoned the defendant and invited her to a show day
which was to be held
on 19 September. The defendant in fact attended
the show day and signed a register reflecting her attendance. On 23
September Bush
phoned the defendant to see whether she wanted to buy
the property. The defendant informed her that she was unsure. Later
the defendant
told Bush that she was considering renting. Bush later
heard that the defendant had subsequently purchased the property.
This evidence
was agreed to be true by the defendant.
[11] The defendant added a
series of facts. She had viewed the house during or about 1 to 3
August 2004 by mere chance. On that
occasion she had knocked on the
door and was met with a domestic servant who allowed her to see
inside the house when she opened
the door. She was also then told
that the house was for sale. Some time later (maybe a week) she
returned to the house where she
met the second plaintiff who
confirmed the house was for sale. She was told that another offer had
been signed with another buyer.
An appointment arranged with Bush
for 13 September to view the house. She was told to wait at a corner
near the immovable property
in question. She was not told that she
was to be shown the property in question. Bush failed to honour the
appointment and had
failed to tender her apology. She had later
attended the show day at the invitation of Bush and had informed Bush
she would rather
rent a property instead of buying.
[12] The magistrate considered
all the evidence and came to the conclusion that judgment should be
granted in favour of the agent
and granted an order against the first
and second plaintiffs jointly and severally directing them to pay the
estate agent R100
000,00 together with interest at the rate of 15,5%
per annum from 4 April 2005 to date of payment and costs of suit.
[13] The plaintiffs lodged an appeal against the order. The appeal
was not prosecuted.
[14] The plaintiffs instituted
the present action against the defendant claiming an indemnification.
[15] The defendant defended the action. The defences were the
following:
The defendant was not a party to the Magistrate’s Court action
and hence was not bound by the order.
The estate agent had not
introduced the defendant to the property and was not the effective
cause of the sale.
The defendant was not bound by
the indemnification clause which had been inserted but should have
been removed from the agreement.
It was misrepresented to her that
the clause was removed. For sake of convenience I refer to this
defence as the claim of the
defendant that the clause was not
binding on her.
[16] When the matter came before me the claim of the defendant that
the clause was not binding on her was abandoned.
[17] Throughout the period of
time until the abandonment of that defence the defendant had relied
upon it. The defendant at no
time wanted to or would have otherwise
than under compulsion have joined in the proceedings between the
estate agent and the plaintiffs.
[18] The first issue to be
determined is whether or not it is sufficient for the plaintiffs only
to establish that the judgment
was granted against them to entitle
them to recover from the defendant. The second issue is whether or
not in any event the agent
was the effective cause of the sale.
[19] These were the only issues which were before me.
[20] The defendant throughout
the period of the action between the agent and the plaintiffs was
aware of the action and participated
in it although not as a party.
The defendant well knew throughout the period that the plaintiffs
regarded her as being a person
who would be liable to indemnify them
should judgment be granted against them. The plaintiffs did not
expressly invite the defendant
to join in the litigation and neither
did they compel her to join in by taking appropriate steps to join
her.
[21] In the matter of
Executors
Estate S.F. Richards v Executors Estate F.I. Jonsson, Sen
[1906]
27 NLR 593
it was held that a person who had given an indemnity was
bound to honour it in respect of the costs of the legal proceeding
and
the amounts claimed in circumstances where they had given the
indemnity had been called upon to intervene and to defend the action.
[22] In the present case the
defendant was not expressly called upon to intervene and defend the
action. It is apparent that had
she been so called upon she would
have refused to intervene and defend as her attitude was that the
indemnity clause was not binding.
The defendant at all times knew of
the existence of the action and could have intervened had she wished
to do so. In the matter
of
Akoon
v Jhavary
1935 NPD 282
it was held that a person who had notice of the action and who wished
to become a party had an opportunity to intervene. If he
did not
intervene this was not fatal to the rights of recovery.
[23] It appears to me that the
position of the plaintiffs in the present case is similar
(notwithstanding the jurisprudential differences)
to a person who
claims on the basis of a breach of a warrant against eviction. There
is no doubt in the case of a plaintiff suing
for a breach of a
warranty against eviction that all that is necessary to be
established is a
virilis
defensio
where he has
given proper notice to the seller. Proper notice in the present
circumstances is constituted by notice as to the
existence of the
action and notice that the plaintiffs intended to recover from the
defendant in the event of their losing the
action.
[24] In the matter of
Lammers
and Lammers v Giovannoni
1955 (3) SA 385
(A) the following was held at 392F-H:
“
Once
the seller is called upon to defend the buyer in his possession but
washes his hands of the whole matter, it does not seem
to me to be
open to him to meet the buyer's claim by saying that the latter could
or should have resisted the true owner's claim
more energetically or
skilfully; for it was open to him, the seller, to have taken steps to
protect the buyer and himself. What
those steps would be in any
particular case would depend on the available procedure; including,
in appropriate cases, i.e. where
it is the right of the buyer and not
the right of the seller that may provide the means of resisting the
true owner, the taking
of a
procuratio
in rem suam.
”
All that is required of the
plaintiffs is the taking of reasonable steps to allow the defendant
to defend the claim made against
the plaintiffs and thereafter the
prosecution of the defence in a reasonable manner.
[25] The submission was made in
the present case that additional persons should have been called to
give evidence at the trial
including one Esther and that the
concession concerning quantum should not have been made. The
question to be answered is whether
the conduct of the plaintiffs
constituted a failure to prosecute the defence in a reasonable
manner.
[26] Insofar as the issue of
Esther is concerned the claim that Esther should have been called is
founded upon an allegation made
by the defendant that she had seen
the house pursuant to Esther having allowed her to view it. This
viewing took place according
to the defendant by way of Esther
opening the door to the house and the defendant being able to see
such portions of the house
as satisfied her. There was no viewing in
the sense of taking the defendant through the house. These facts were
not made known
to the plaintiffs otherwise than through a laconic
note which was discussed by the defendant on the night prior to the
hearing.
The plaintiffs knew nothing of the alleged viewing neither
did Esther. It is apparent that had Esther been called she would not
have been able to advance the case of the plaintiffs.
[27] Insofar as the agreement to
the quantum is concerned, such was properly conceded at the trial as
the first plaintiff accepted
that the amount claimed was a reasonable
charge in the circumstances. He in any event had no evidence to
contradict the evidence
given by the plaintiff’s expert.
[28] In these circumstances it
appears to me that the defendant was afforded proper notice of the
proceedings; had ample opportunity
to intervene and take over the
conduct of the case herself. She did not do so. While she was not
expressly called upon to defend
the position of the plaintiffs it is
apparent that she was called upon to defend it in the sense of
providing evidence for the
case to be best conducted. The plaintiffs
conducted a virilis defensio and accordingly the defendant is bound
by the order made.
The plaintiffs needed to do no more than establish
existence of the order.
[29] It is my view accordingly
that the defendant is obliged to meet the obligation undertaken in
clause 9 and make the payments
necessary to indemnify the plaintiffs
in respect of the estate agents claims and the cost of defending
them.
[30] To the extent that the
second issue was debated before me it is necessary to deal with it.
The defendant was in my view a
wholly unsatisfactory witness.
[31] One of the pivotal features
of the defendant’s claim was that she had been to the house at
an early stage. This was
not raised by the defendant until the night
before the trial and until then was not known to anyone. I accept
the evidence of
the plaintiffs that they did not know of the visit
and find that the defendant’s claim to have visited the house
at the early
stage is untrue.
[32] The defendant said she had
known of the existence of the property for some time. On her own
version she told the agent at
a critical point in time that she had
no interest in it and wished to rent it. There was no reason for the
defendant to have said
this unless she was designedly misleading the
agent and designedly setting up a position where she could negotiate
with the plaintiffs
for a discount. If she did say it and it was true
then the conduct of the agent changed her mind and thus they were the
effective
cause of the rule.
[33] The claim was made by the
defendant that the indemnification clause was unenforceable as it
should have been excluded from
the agreement. This claim was
abandoned. However, it must not be forgotten that it was made. The
defendant must have given her
attorneys instructions concerning the
claim. Her claim was that she had instructed her original attorneys
to remove the clause.
It is improbable that the defendant who was
legally represented at the time could have given instructions to her
legal representative
to remove the clause and yet they would have
advised her to sign the document with the clause in it.
[34] The defendant is no
newcomer to property transactions; she is familiar with how they take
place and the consequences of using
an agent. It is in the light of
this knowledge that her evidence must be considered. The defendant
well knew that she had been
to a show day after an invitation by the
agent. She in fact signed a document reflecting her attendance at the
show day. She had
dealings with the estate agent prior to signing
the contract. She knew that the agent was marketing the house in
question and
in fact invited her to go to it. This knowledge
notwithstanding, she stated that she had not been introduced by any
agent. She
concealed the facts concerning the estate agent which
must have been fresh in her mind from the plaintiffs. There is no
doubt in
my mind that had she raised the fact of her attendance at
the show day by invitation and her signing of the register that the
plaintiffs
would not have been prepared to conclude the contract on
the basis they did. The probability is accordingly that the
plaintiffs
did not know of these facts. The defendant concealed them
dishonestly. The defendant cannot but have known that the register at
the show day is kept to enable the estate agent not only know who had
been there but also to track people introduced to the property.
[35] The facts show in my view
that the defendant attended upon the property having been introduced
to it by the agent. The fact
that she may have had prior knowledge of
its existence and of the fact that it was for sale is irrelevant.
She viewed the whole
property for the first time on the show day
which she attended at the instance of the agent and only then was she
a serious buyer.
[36] It is probable in my view
that the defendant so manipulated the facts as to conceal her
involvement with the agent with the
direct intention of achieving the
cheaper purchase price which she did. Her evidence became vague and
uncertain on this and many
other issues when she was pressed. The
reason for this was in my view the fact that her evidence was not
true. Apart from the improbabilities
referred to above her evidence
contained many inconsistencies. For example she conceded she had
signed documents which were commissioned
- there was only one such
document she could have signed, the affidavit opposing summary
judgment, she denied commissioning it.
She claimed to have been shown
the house by Esther. In common parlance to be shown a house is to
enter and see it. The defendant
when she realised that her claim was
improbable in the light of evidence by the plaintiffs that Esther
never lets any one in suddenly
claimed to have been shown the house
by seeing it through the front door. The defendant claimed that
there was no negotiation
regarding the purchase price. Later she
agreed that there had been negotiation. This may seem an immaterial
issue but it impacts
on the evidence as to how the price was arrived
at. The plaintiffs’ evidence was that they had reduced the
price by the amount
of the commission. The defendant denied this and
stated originally there had been no negotiation as evidence
corroborating the
denial and to show that the plaintiffs had a
financial interest in inserting the commission clause. The plaintiffs
had said the
price was reduced for the defendant’s benefit and
the nett amount they were to receive remained the same. When the
changed
evidence is considered in this light the inconsistency is
material. There is also a probability which needs to be considered in
this context. If the price was negotiated and commission was
discussed as it inevitably must have been one would have expected
the
commission saving to be shared on some basis. The fact that it was
not shared is indicative on the probabilities of the plaintiffs
evidence being true. I accept the evidence of the plaintiffs and
reject the defendant’s evidence.
[37] The defendant in my view is
accordingly on any basis obliged to indemnify the plaintiffs for the
amount of their indebtedness
to the agent as well as all the costs
occurred by the plaintiffs. The amount paid by the plaintiffs to the
agent is the sum of
R131 056,00. The plaintiffs are indebted to the
agent in the amount of the taxed costs which have not yet been taxed.
The plaintiffs
are indebted to their attorneys for the payments due
by them to their own attorneys in defending the action. The
plaintiffs are
entitled to the costs of the present action.
[38] The amount paid to the
agent was paid on 6 April 2007 and the plaintiffs are entitled to
interest on that amount at the rate
of 15,5% per annum from 6 April
2007 to date of payment.
[39] I would accordingly make
the following order:
The defendant is directed to pay to the plaintiffs jointly and
severally:
The sum of R131 056,00;
Interest on the sum of R131 056,00 at the rate of 15,5% per annum
from 6 April 2007 to date of payment;
The taxed costs of suit of Vered
Estates (Pty) Ltd in respect of the action instituted by it against
the first and second plaintiffs
under Case No. 25866/2005 in the
Johannesburg Magistrate’s Court;
The plaintiffs’ taxed
attorney and client costs due to Attorneys Michael Krawitz and Co
arising out of its instruction to
defend the action instituted by
Vered Estates (Pty) Ltd against the first and second plaintiffs
under Case No. 25866/2005 in
the Johannesburg Magistrate’s
Court.
Costs of this action.
_____________________________
C G LAMONT
JUDGE OF THE SOUTH GAUTENG
HIGH COURT, JOHANNESBURG
Counsel for 1
st
and 2
nd
Plaintiff : Adv. N. Riley
Attorneys for 1
st
and 2
nd
Plaintiff : Michael Krawitz & Co
Counsel for Defendant : Adv.
S. Aucamp
Attorneys for
Defendant : Fluxmans Inc
Date of hearing : 14
September 2010
Date of Judgment : 23 September 2010