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[2010] ZAWCHC 211
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DG Premier Propety Cape (Pty) Ltd t/a Dogon Group v Chestnut Hill Investments 260 (Pty) Ltd and Another (26681/2009) [2010] ZAWCHC 211 (27 October 2010)
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE HIGH COURT. CAPE TOWN)
Case No: 26681/2009
in the matter between
DG PREMIER PROPERTY CAPE (PTY) LTD
t/a DOGON GROUP
….....................................................................................
Applicant
and
CHESTNUT HILL INVESTMENTS 260
(PTY) LTD
…...................................
First
Respondent
GREAT FORCE INVESTMENTS 205 (PTY)
LTD
….................................
Second
Respondent
Counsel for the Applicant:
B K Pincus SC (with him D
Goldberg)
Instructed by: Bowman Gilffilan Attorneys
Counsel for First Respondent: O Rogers SC (with him A
Kantor)
Instructed by: Bernadt Vukic
Potash
S
Getz
No appearance for the Second Respondent
Court: Western Cape High Court
Judge:Griesel J
Heard: 13 October2010
Judgment 27 October 2010
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
Case
No 26681/09
In
the matter between:
DC
PREMIER PROPERTY CAPE,
(PTY)
LTD t/a
DOGON
GROUP
…...........................................................
Applicant
and
CHESTNUT
HILL INVESTMKNTS 2611
(PTY)
LTD
….................................................................................
First
Respondent
GREAT
FORCE INVESTMENTS 205
(PTY)
LTD
…..............................................................................
Second
Respondent
Court:
GRIESEL
J
Heard:
13
October 2010
Delivered:
27
October 2010
JUDGMENT
GRIESEL
J:
[1]
The applicant is an estate agency, claiming agent's commission
arising from a properly transaction entered into between the
first
and second respondents on 6 August 2009 in respect of erf 319
,
Clifton.
[2]
The applicant took the somewhat unusual and bold step of launching
its claim by way of motion proceedings, m the notice of motion,
The
applicant initially sought, against both respondents, an order that
they each pay the applicant R1 million as commission upon
transfer of
erf 3
1
9
into the name of the purchaser.
[3]
In its founding papers the applicant's main cause of action against
the first respondent (the seller) was based on an alleged
oral
mandate. It relied, in the alternative, on the terms of an addendum
to the deed of sale concluded between the first and second
respondents on 6 August 2009. (The claim against the second
respondent - the purchaser has been settled after these proceedings
had been instituted and its position is not relevant for purposes of
tills judgment.)
[4]
There
are various tactual disputes between the parties relating to the main
cause of action based on the oral mandate. In the view
that I take of
the mailer, however, it is not necessary to consider those disputes
in any detail, or to decide whether or not such
disputes are
bona
fide,
or
to decide whether or not the matter should be referred for oral
evidence or to
trial.
In my view, the matter can be decided on the papers with reference to
the applicant's alternative cause of action based on
clause
4.1
of
the addendum to the deed of sale, which reads as follows:
"The
seller shall pay to Dogon Group ("the agent") commission in
the sum of" R1 000 000 (inclusive of VAT) or
such lesser amount
as
may
be
agreed between them in writing upon the transfer dale of the properly
into the name of the purchaser. In addition, the purchaser
shall nay
die agent commission in the sum of R1 000 000 (inclusive of VAT) or
such lesser amount as may be agreed between them
in writing over and
above the Property Price paid to the Seller, directly to the agent
upon
registration
of transfer (and after fulfillment of all the
conditions
precedent). Commission
shall
only be deemed to he earned by the agent and payable by the Seller
and Purchaser upon registration of transfer.”
[51
The applicant contended that these provisions constituted an
agreement tor its benefit
(stipulatio
alteri),
the
benefits of which it had accepted. In its founding affidavit, the
applicant referred to the above provisions and stated: 'To
the extent
necessary, applicant has accepted alternatively hereby accepts the
benefits under the written sale agreement.'
In
its answering affidavit the first respondent denied that the
applicant had accepted the benefits flowing to it in terms of this
agreement'. It continued: 'However, if it did so (which I deny), then
it is only entitled to commission "upon registration
of
transfer". 'Transfer has not yet taken place," Elsewhere,
the first respondent denied, without elucidation, 'that
it was open
for applicant lo accept those benefits in its founding affidavit.. .'
It contended, further, that if the applicant
did accept the benefits
under the sole agreement (which it again denied), "then
applicant repudiated same by seeking to claim
commission prior to the
transfer of erf 319 Clifton to second respondent".
[6]
In reply, the applicant reiterated that il had accepted the benefits
flowing to it in terms of the agreement and would have
done so far
sooner, had the first respondent not refused to provide the applicant
with a copy of the agreement when called upon
to do so. (Ms Dogon
stated on behalf of the applicant that she saw the addendum for the
firsl lime when it was annexed to the second
respondent's answering
papers in these proceedings.)
[7]
In argument before me, counsel for die firs! respondent did not
persist with any of the 'defences' raised in the answering affidavit
to this part of the applicant's claim. Instead, counsel submitted
that the provisions of clause 4.1 do hot constitute an agreement
for
the benefit of the applicant, as contemplated by our law. Counsel
relied in this context especially on the following
dictum
from
the judgment of Smalberger JA in
Total
South Africa (Pty) Ltd vBekker NO:
1
"As
was pointed out by Schreiner JA in
Crookes
NO and Another v Watson and Others
1956
(1) SA 277
(A) at 291B-C, "a contract for the benefit of a third
person is not simply a contract, designed to benefit a third person;
it is a
contract
between two persons that is designed lo enable a third person to come
in as a party to a contract with one of the other
two". The mere
conferring of a benefit is therefore not enough; what is required is
an intention on the part of the parties
to a contract that a third
person can, by adopting the benefit, become a party to the
contract.''
2
[8]
As always, however, each case must be decided on its own facts: or,
as it was put in
George.
Ruggier & Co
v
Brook:
3
'It
is entirely a question whether there is an intention that the third
party can, by adoption of the
promise,
become a party to the contract, in which it is embodied.'
[9]
in the
Total
c
ase,
supra,
the
agreement in question was held not to constitute a
stipulatio
alteri, inter alia
,
because
there was no express wording to such effect, nor was there any
provision for acceptance by the third party of any benefit
thereunder. Furthermore, the terms of the agreement did not support a
"necessary implication' to that effect. In any event,
so it was
held, there was no evidence dial the third party had ever accepted
the benefit at a time when it was open for him to
do so.
4
[10]
in the
George
Ruggier
case,
supra,
the
purchaser of fixed property addressed a letter to the agents of the
seller, who were acting on the latter's behalf, in which
the
purchaser offered to buy the property at a stated figure and to pay
half the agent's commission. The seller accepted the offer.
The agent
subsequently sued the purchaser directly, based on the undertaking.
The court found -
"that
it
was
intended by all concerned that this undertaking of the defendant
could be adopted by the plaintiff so as to give him a right
of action
against the defendant in the event of the sale going through on the
terms proposed [by the purchaser]'.
5
A
direct contract between the agent and the purchaser came into being
upon acceptance by the agent of the benefit.
[11]
In the present matter, counsel for the respondent argued that the
provisions of clause 4, quoted above, 'constituted merely
a
distribution of the risk of commission between [the first and the
second respondents] and had nothing lo do with conferring any
benefits on the applicant". I disagree. From the express terms
of the agreement it is clear to me that the agreement was intended
lo
be one for the benefit of the applicant where it records in
peremptory terms that each of the seller and the purchaser "shall
pay' to die applicant commission in the specified sum of Rl million,
(It is common cause that the second respondent had in fact
reached
agreement with the applicant that its portion of the commission would
be reduced
10
R500
000 and that this amount had been paid by the second respondent.) The
sole purpose of the addendum, signed on the same day
as the main deed
of sale, was to regulate the question of commission payable to the
applicant and the respective contributions
by the buyer and seller.
In this regard, it is noteworthy that, in concluding the addendum,
the first and second respondents actually
agreed to share the
liability for commission on almost identical terms as was originally
proposed by the first respondent in the
first draft of the deed of
sale, forwarded to the applicant during April 2009 for submission to
the second respondent.
[12]
Counsel for the first respondent also submitted that-
'there
is in- circumstance which is absolutely destructive of an implication
in the applicant's favour: on the applicant's own version,
the terms
of
the sale were deliberately concealed from it. If the intention of the
respondents on 6 August 2009 had been that the provisions
regarding
commission were for the applicant's benefit, and if their intention
had been that the applicant could acquire rights
thereunder by
accepting the benefit, they would not have kept the agreement from
Dogon.'
[13]
Counsel for the applicant pointed out, on the other hand, that this
argument would have carried greater weight had the first
respondent
at all times been bona fide in its dealings with the applicant which,
according to the applicant, was not the case.
In my view, this
argument is not without merit. However, it is not necessary for me to
make a specific finding to this effect.
Suffice it for purposes
hereof to state that the first respondent has not persuaded me that
the inference it seeks to draw from
the first
respondent's
withholding from the applicant of the signed agreement is in fact the
most probable one.
[14]
Further support tor the applicant's interpretation of clause 4.1 is
to be found in the affidavits of both respondents herein.
In its
answering affidavit the second respondent on at least five occasions
— expressly referred lo clause 4.1 as a
'stipulatio
alteri'.
In
an aborted application for leave to file a further affidavit, the
first
respondent's
attorney of record, likewise, repeatedly referred to clause 4.1 as a
'stipulatio
alteri'.
Thus,
where both parties to the addendum at one stage recognised the
provisions of clause 4 for what they are. it would, in my view,
be
'absurd' now to attribute to the clause a different interpretation,
as contended for by the first respondent.
6
[15]
Had the applicant elected to reject the benefit stipulated in terms
of the addendum, it could of course (if so advised) have
proceeded
against the first respondent for the full amount of the claim in
terms of the oral mandate on which it also relied. However,
it
elected to accept the benefit stipulated between the buyer and seller
and I can think of no reason why such election should
not be
enforced.
Conclusion
[16]
It follows that the applicant is entitled to an order in the
following terms:
first
respondent is ordered to pay to the applicant -
(a)
the amount of Rl million (one million Rand);
(b)
interest on the said amount
a
tempore morae
to
date of payment; and
(c)
costs of suit, including the costs of two counsel.
B M GRIESEL
Judge
of the High Court
1
[1991] ZASCA 183
;
1992
(1) SA 617
(A) at 625E-G
2
See
also
Joel
Melamed & Hurwiz
v
Cleveland
Estates (Pty) Ltd 1984
(3)
SA
155
(A)
at 1
72B-1:
Unitrans
Freight (Pty) Ltd v Santani Ltd
2004
(6)
SA
21
(SCA)
para
14
3
1966
(1)
SA
17
(N) at 23H.
See
also Consolidated
Frame
Cotton'Corporation Ltd
v
Sithole
& others 1985 (2
)
SA 18 (N) at
24 F.
4
At
6250-1.
5
At
24G
[]
6
Cf
Aussenkehr
Farms (Pty) Ltd v Trio Transport
CC
2002 (4) SA
483
(SCA)
paras 23, 25