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[2010] ZAGPPHC 12
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Naude v Aucor (Sandton) Pty Ltd (27784/2006) [2010] ZAGPPHC 12 (5 February 2010)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG HIGH COURT, PRETORIA)
CASE
NO: 27784/2006
DATE:
5 February 2010
IN
THE MATTER OF:
STEPHANUS
JACOBUS NAUDE PLAINTIFF
AND
AUCOR
(SANDTON) PTY LTD DEFENDANT
JUDGMENT
Prinsloo.
J
[1]
In this trial which came before me the plaintiff claims some R375
000-00 from the defendant auctioneering company as his alleged
share
in commission flowing from a property transaction. Mr Van der
Waltappeared for the plaintiff and Mr Den Hartog appeared
for the
defendant.
SUMMARY
OF THE PLEADINGS
[2]
The plaintiff alleges that during or about March or April 2006 and in
Rustenburg he entered into a verbal agreement with the
defendant,
represented by Mr Brian Holburn, the said Holburn
having
been duly authorised by the defendant to enter into such agreement on
behalf of the defendant.
[3]
The plaintiff alleges that the defendant undertook to pay him the
amount of R375 000-00 if he divulged information and particulars
to
the defendant regarding the identity of a possible purchaser of a
commercial property situated at 2 Ferro Street, Rustenburg
("the
property") belonging at the time to Micawber 321 (Pty) Ltd ("the
owner").
The
plaintiff further alleges that he thereafter assisted the defendant,
which acted as property agent in terms of a mandate received
from the
owner, to bring about the conclusion of an agreement of sale of the
property to a willing and able purchaser. It was agreed,
so it is
alleged by the plaintiff, that the amount of R375 000-00 would be
payable upon receipt by the defendant of its agent's
commission from
the owner, following the successful sale to the purchaser.
It
is alleged that the plaintiff fulfilled all his obligations in terms
of the agreement, that the property was duly registered
in the name
of the purchaser introduced by the plaintiff, that the owner paid the
commission to the defendant, but that the latter
has failed to pay
the plaintiff's share as agreed.
[4]
The defendant pleads that indeed, it did receive a written mandate
from the owner to sell the property at a price of some R8,5
million
whereupon commission of some 10% would be payable in the event of the
defendant finding a willing and able buyer. The mandate
agreement,
dated
20 January 2006, forms part of the pleadings and part of a document
bundle, exhibit A, handed in during the trial. It is common
cause
that Mr Brian Holburn ("Holburn") signed the mandate
agreement on behalf of the defendant.
[5]
The defendant pleads further that in January 2006 it gave Holburn,
"an independent estate agent practising for his own
account",
a mandate to find a purchaser for the property.
The
defendant pleads that in terms of this mandate, it was agreed that
should the defendant sell the property to a purchaser
introduced
by Holburn
(my emphasis) then Holburn would be entitled to the payment of
commission by the defendant on the basis that the defendant's
commission,
after expenses, would be divided between the defendant
(60%) and Holburn (40%).
The
defendant pleads that on or about 23 February 2006 the defendant
soldthe property to Savcio Holdings (Pty) Ltd ("the buyer")
"
who
had been introduced to the defendant by Holburn
"
(my emphasis) for the purchase price of R8 250 000-00 which included
the defendant's commission in an amount of R750 000-00.
[6]
In the alternative, so the defendant pleads, and in the event of a
finding that the alleged agreement between the parties was
concluded,
the defendant pleads that Holburn was not authorised to represent the
defendant in the conclusion of the agreement as
alleged.
[7]
In response to this plea the plaintiff filed a reply to the effect
that the defendant is legally estopped from alleging that
Holburn was
not duly entitled, mandated or authorised to act as the defendant's
agent in concluding the agreement relied upon by
the plaintiff and
that the defendant is also estopped from alleging that Holburn did
not in fact represent the defendant when the
agreement was concluded,
acting as the defendant's duly mandated and authorised agent and
representative.
[8]
The defendant then filed a notice in terms of Rule 30, alleging that
the reply constituted an irregular step, firstly because
it was not
signed by an advocate as required by the provisions of rule 18 and
secondly because it was filed out of time.
[9]
It was common cause, in the proceedings before me, that the plaintiff
abandoned the reliance on estoppel in view of the defendant's
objection aforementioned. The plaintiff conducted the case on the
basis that the facts demonstrated, on the probabilities, that
Holburn
in fact had the necessary authority, or at least the necessary
implied authority, to bind the defendant when entering into
the
agreement relied upon by the plaintiff.
THE
EVIDENCE
[10]
The plaintiff, Stephanus Jacobus Naude, is a businessman in
Rustenburg. He is also a qualified optician or optometrist.
[11]
In 2006 he owned business premises in Ferro street where the
property, forming the
subject
of this case, was also situated.
[12]
On driving past the property, he saw a sign that the property will go
on auction on 16 February 2006. A replica of this sign
is exhibit
"A2". It contains the defendant's "Aucor" logo at
the top and the name of the defendant, Aucor (Sandton)
(Pty) Ltd at
the bottom. There is a photograph of the warehouse situated on the
property, and interested parties are notified that
the property can
be viewed by appointment and that they must contact "Brian - 082
254 1192". This is Mr Brian Holburn.
[13]
The plaintiff took down the details and telephoned Holburn for
moreinformation. The latter caused exhibit "A1", "A2"
and "A3" to be telefaxed to the plaintiff. "A1"
is a covering letter by a lady from "Aucor, Midrand",
"A2"
is the notice referred to and "A3" is a notice bearing the
Aucor logo, referring to the "Rustenburg
warehouse", and
supplying details of the property and the improvements thereon. On
the bottom it also has the website printed
namely:
www.aucor.com
.
The property would be sold as a "letting enterprise"
because it housed a long term tenant, namely Metcash Trading Africa
(Pty) Ltd, which was paying a monthly rental of some R125 000-00 at
the time, which would escalate annually at 10%.
[14]
Initially the plaintiff intended buying the property himself, but
later he spoke to a friend, Mrs. Elmari Vogel, of a company
called
Tenso, a subsidiary of the eventual purchaser Savcio Holdings (Pty)
Ltd ("Savcio").
[15]
The plaintiff then contacted Holburn again for yet more detail
whereupon the latter telefaxed the draft conditions of sale
in terms
of which the seller (Micawber 321 (Pty) Ltd)
would
dispose of the property as a "letting enterprise". These
are exhibits "A4-A12".
[16]
Exhibit A4 is the covering letter and it reads as follows:
"Dear
Jaco,
Please
find attached conditions of sale.
Below
are our bank details:
Aucor
Trust Account FNB Sandcom Branch Branch Code: 260950
Account
number: 61049073713
I
will forward my agreement letter to you when I return to the
office this afternoon.
Best
regards Brian Holburn
Aucor
(Sandton) (Pty) Ltd Tel: (011) 237 4402 Fax: (011) 237 4418"
It
is common cause that Holburn, at all relevant times, had an office in
the defendant's premises and that he had free access to
the
defendant's telephone and telefax facilities and made use of the
defendant's administrative staff.
[17]
On 17 February 2006, the day after the scheduled auction sale, the
plaintiff phoned Holburn and asked him whether the property
had been
sold. He was told that there was no sale because the amount offered
was too low.
[18]
The plaintiff then contacted people at Temso to find out if that
company would be interested in letting the property from him
if he
were to purchase same. The Temso people said
they
would rather buy the property themselves.
[19]
Later the plaintiff received the following note from Holburn to which
an addendum to the conditions of sale was attached. (Exhibits
A13
and14):
"Dear
Jaco,
Please
find attached addendum to the conditions of sale.
Best
regards
Brian
Holburn Aucor (Sandton) (Pty) Ltd Tel: (011) 237 4402 Fax: (011)
237 4418."
Holburn's
fax is dated 17 February 2006.
[20]
On the same day Temso wrote to the plaintiff confirming an interest
in buying the property for R8,47 million. Temso found the
purchase
more attractive because the tenant, Metcash, or "Cash 'n
Carry" was prepared to buy themselves out of the
long term lease
for some R2 million. This would be payable to the prospective
purchaser (Temso or Savcio).
[21]
Thereupon the plaintiff negotiated the "buying out" of the
lease between Metcash and Savcio and confirmed, in a letter
to
Medcash, that the latter would address a written offer to Savcio in
terms of which they would buy themselves out of the lease
for R1,5
million payable over eighteen months.
It
is common cause that this arrangement was duly concluded between
Metcash and Savcio and that the plaintiff was the effective
cause in
bringing about this transaction. In the absence of the transaction
between Metcash and Savcio, it is improbable that the
latter would
have ultimately
bought
the property. In any event, it is also not disputed that the
plaintiff was the effective cause of the eventual successful
transaction between Savcio and the seller. The plaintiff introduced
Savcio to the defendant who was acting as the agent of the
seller.
This is not disputed. The allegation in the plea that the property
was sold to Savcio "who had been introduced to
the defendant by
Holburn" is untrue. It is also not in line with Holburn's own
evidence.
[22]
During the course of negotiating the transaction, Savcio asked for
more details of the property, including plans and the like.
The
plaintiff conveyed this request to Holburn, who, on 17 February 2006,
telefaxed the following message to the plaintiff:
"Dear
Jaco,
The
seller has no plans of the Rustenburg warehouse. Herewith some
details for your information.
Regards
Brian."
This
message was faxed on a "fax transmission" containing the
Aucor logo and details of all the Aucor branches all over
the
country. Attached to this telefax were municipal accounts showing
details of rates and taxes, as well as a so-called "sub-divisional
diagram". These are exhibits A18-A21.
[23]
As a result of the plaintiff's involvement in the transaction, as
described, it was arranged that Savcio would hold a board
meeting on
22 February to make a final decision as to whether
or
not it would buy the property. The plaintiff conveyed this
information to Holburn who, on 17 February 2006, sent the following
telefax message to the plaintiff, also on the official fax
transmission sheet carrying the Aucor label and all the other Aucor
details:
"Dear
Jaco,
This
confirms that Aucor and yourself will receive 10% each of the net
commission each plus VAT paid by the buyer as introduced
by
yourself. I will supply you with a more formal letter next week.
Hoping all goes well on 22 February.
Regards
Brian"
This
telefax, exhibit A22, received a great deal of attention during the
trial before me. It is also common cause that Holburn
never wrote
the "more formal letter" the following week. Holburn never
managed to explain why he did not do so.
[24]
There is no evidence, of any nature, that Holburn, or anyone else on
behalf of the defendant for that matter, ever told the
plaintiff that
Holburn was a so-called "independent estate agent practicing for
his own account" as alleged in the plea
and that he could not
bind the defendant with regard to commission matters.
[25]
The plaintiff testified that the message contained in A22 is in line
with a discussion he had had earlier with Holburn, namely
that each
would receive 10% commission. Under "each" the plaintiff,
understandably, understood Aucor and himself. No
one informed him
about the alleged separate arrangement between Holburn and Aucor. The
10% was understood by the
plaintiff
to mean 10% of the purchase price.
[26]
On 23 February 2006 Mr Liebenberg of Savcio telefaxed a letter to the
plaintiff confirming that the decision to purchase had
been taken,
and sending the plaintiff a copy of the written offer to purchase
(exhibits "A23" -"A31").
"A32"
is the written confirmation by Metcash addressed to Savcio about the
buying out of the lease as arranged and negotiated
by the plaintiff.
[27]
Thereupon the plaintiff informed Holburn of the written offer and the
written agreement between Savcio and Metcash and supplied
Holburn
with copies. The plaintiff also supplied the seller, represented by
one Mr Steven Herring, with copies of these documents.
[28]
It is common cause that Savcio then bought the property from Micawber
for R8 250 000,00. This included an agreed commission
amount of R750
000-00 which the seller then duly paid over to the defendant.
[29]
On 24 March 2006 the seller, represented by Mr Herring, sent the
plaintiff a letter to which an "agreement" between
the
seller and the defendant was attached. It is a short agreement
between the seller represented by Steven Herring and the defendant,
represented by James Dall. It is exhibit "A34" and "A35".
It reads as follows:
"Whereas,
an Agreement of Sale of a Letting Enterprise has been concluded
between Micawber 321 (Pty) Ltd and Savcio Holdings
(Pty) Ltd
'Savcio' in respect of portion 1, erf 2283, Rustenburg extension 9
('the Property') being 2
Ferro
Street, Rustenburg,.
Whereas
further, Micawber undertakes to pay Aucor the sum or R750 000-00
excluding VAT as commission on registration of transfer
of 'the
Property' into the name of Savcio.
Whereas
further Aucor accepts that the commission of R750 00000 is in
full and final settlement of all commissions payable
by Micawber to
Aucor.
Whereas
further Aucor undertakes to settle and pay any and all claims of
commissions Mr. Jaco Naude may have in respect of the
sale of the
property.
Whereas
further, Aucor indemnifies Micawber of any and all claims of
commission Mr Jaco Naude may have as against Micawber."
(Emphasis added.)
This
agreement is dated 24 February 2006.
[30]
Upon receipt of this agreement from the seller, the plaintiff, still
under the impression that he and the defendant would each
receive 10%
of the purchase price as commission, telephoned Holburn to complain
because there was only one amount of R750 000-00
payable as
commission. He also enquired about the "indemnity" included
in the agreement. The plaintiff then, clearly
and unambiguously,
testified as follows:
Holburn
said that they couldn't do better than negotiating a total
commission of R750 000-00. The plaintiff needn't be concerned,
because the "50/50" arrangement was still in place and
the
plaintiff
would get his 50% upon registration of the property in the name of
the buyer.
The
plaintiff asked Holburn to put this in writing. The plaintiff
clearly testified then that when Holburn told him that he would
get
50% as explained, it was acceptable to him. He testified that he
conveyed his acceptance to Holburn.
[31]
The plaintiff never received the written confirmation from Holburn.
He telephoned Holburn repeatedly. The latter would put
the telephone
down in his ear and later refused to talk to him any further.
[32]
Eventually, and on 7 July 2006, almost five months after the
transaction had been concluded, Holburn wrote the following note
(exhibit "A36") to the plaintiff and telefaxed same to the
latter on the 12
th
of July 2006.
"Dear
Jaco,
Herewith
calculations relative to property sold in Rustenburg. Selling price
(below mandate) R7 500 000-00 Aucor commission
only 5% R375
000-00
Advertising
costs R88 059-56
Brian
% commission 15%
R43
041-07
Due
to you (agent structure) 20% of Brian commission
R8
608-21
All
prices exclusive of VAT
I
will phone you Tuesday 11 July 2006.
Regards
Brian
Holburn
This
time he did not write the note under the official Aucor logo but
only on a blank piece of paper.
[33]
Of course, exhibit "A36" contains false and misleading
information in many respects: the purchase price was R8 250
000-00
and not R7 500 000-00, although it included the commission of R750
000-00. Aucor got 10% of the commission and not 5%. There
was no
evidence about the alleged "advertising costs" neither was
the deduction of such costs ever negotiated with the
plaintiff as is
evidenced by exhibit "A22". The whole "structure"
of 15% for Holburn and 20% of that for the
plaintiff was never
negotiated with the plaintiff. Nothing in this document corresponds
with the defendant's plea, referring to
60% for the defendant and 40%
for Holburn.
[35]
In discussions with Holburn, the latter often referred to Mr James
Dall of Aucor as "his boss" ("sy baas").
This
evidence of the plaintiff was never disputed when he was cross
examined or when the other witnesses on behalf of the defendant
testified. Because of this information, the plaintiff telephoned Dall
and explained his dilemma to him. Dall also put down the
telephone in
his ear. The plaintiff thereafter repeatedly tried to get hold of
Dall who ultimately said: "Stop phoning me
because you are
fucking annoying me." This evidence I find convincing. It has a
ring of truth. In my view it is inherently
improbable that the
plaintiff, as I summed him up in the witness box, would have sucked
this type of evidence out of his thumb.
When Dall was confronted with
this evidence he admitted that he was annoyed but denied having used
the particular words.
[35]
t was after this that the plaintiff consulted his attorney and took
legal action. The plaintiff emphatically denied that there
was any
question of Holburn not having represented Aucor. He referred to the
Aucor letterheads, telephone numbers and other detail
already
mentioned.
[36]
The plaintiff was subjected to extensive cross-examination. In my
view he was not discredited in any way whatsoever. He stuck
to his
evidence and made a particularly good impression as a witness. He
knew nothing about the alleged "60/40%" arrangement
between
the defendant and Holburn. For him Holburn was Aucor and Aucor was
Holburn. The significance of "A22" was that
he and the
defendant would each get the same percentage of the commission. This
was afterwards confirmed in his verbal arrangement,
supra,
with
Holburn.
[37]
When it was put to the plaintiff that there was an arrangement
whereby Holburn could share the latter's commission with the
plaintiff, the plaintiff respondent by pointing out that if this was
so, Holburn should have specified it in "A22" when
he had
the opportunity to do so. The plaintiff reiterated that he had made
all the arrangements to make the transaction a reality
and he trusted
Holburn throughout. He confirmed that Holburn never sent the "formal
letter" as he promised in "A22".
He
was emphatic when testifying about the agreement of "50/50"
with regard to the commission of R750 000-00. About this
"50/50"
conversation, it was put in cross-examination that: "Holburn
ontken dit". His answer was "dit
het wel plaasgevind".
When Holburn testified, he admitted the conversation but disputed
the contents.
[38]A
somewhat nonsensical proposition was also put to the plaintiff to the
effect that Holburn,
after
all, was not convinced that the plaintiff had found and introduced
the buyer. The incorrectness of this proposal was later
conceded by
Holburn himself. Of course, this proposition was not pleaded either.
It was common cause throughout that the plaintiff
had found and
introduced the buyer.
[39]
The interesting proposition was also put to the plaintiff that
Holburn would say that he wrote "A36" "om van
u
ontslae te raak". My overall impression is that both Dall and
Holburn tried to "get rid of the plaintiff" after
they had
received the benefit of the plaintiff's introduction of the buyer.
[40]
When it was put to the plaintiff in cross-examination that Holburn
had no authority to bind the defendant he gave the following
significant answer (paraphrased from my notes):
"Ek
stem nie saam nie. Brian Holburn was Aucor. Sy naam was op die
advertensie. Ek praat met hom op Aucor se landlyn in
Sandton. Alles
was op Aucor briefhoofde behalwe "A36" wat lank daarna
getuur is. Ek glo met opset want hulle weet
hulle is verkeerd om my
nie te betaal nie."
[41]
After the plaintiff's case was closed, there was an application for
absolution from the instance, which I refused.
[42]
James Dall, was the first of the two defence witnesses. In February
2006 he was employed "at the defendant" with
a title "Chief
Executive - Property Division". He managed the Sandton
property division.
Amongst
his activities was included: "recruiting agents, finding
properties for auction and doing the whole procedure."
The
agent would interview the purchaser, give information and ultimately
the auction would take place. The standard commission was
10% which
was paid by the purchaser and not the seller. He worked on a
commission basis for the defendant. When asked if he was
employed by
the defendant he said he was "appointed" by them. He said
the agents were not employed by the defendant.
Holburn was an
independent "commission only" agent. If Holburn introduced
a buyer, he would get 40% of the commission
if he handled the sale.
(But under the direction of this witness)
[43]The
witness also referred to "A65" which is a calling card. It
bears the Aucor logo and particulars and contains the
inscription
"Brian Holburn Real Estate Specialist". This visiting card
also contains the Aucor telephone number and fax
number. The witness
testified that the agents had no authority to commit Aucor to pay
commission.
[44]
Significantly, when the witness testified about the written mandate,
supra,
which
the defendant obtained from the seller (also exhibit "A66"
- "A67") he said that it was his job to sign
this mandate
and "the agent has no role in this. Strangely though, it became
common cause that Holburn in fact signed this
particular mandate. The
witness said: "This mandate may have been signed by Brian".
In fact, the evidence showed that
it was Holburn who signed it.
[46]
The evidence of this witness about exhibits "A34" and "A35"
the "written indemnity" (in favour
of the seller in respect
of the plaintiff's commission) was totally unsatisfactory. He said
that when he signed this agreement
on behalf of the defendant, Mr
Herring told him that the plaintiff might bring a claim for
commission. The seller did not want
to pay this commission.
He
told the seller that he knew of no commission claim and therefore he
was quite happy to accept the wording as quoted,
supra.
Holburn
had not told him of any claim or any commission arrangement.
It
is convenient to re-visit the essential wording of this indemnity
which this witness signed on behalf of Aucor:
"Aucor
undertakes to settle and pay any and all claims of commissions Mr
Jaco Naude may have in respect of the sale of the
property.
Aucor
indemnifies Micawber of any and all claims of commission Mr Jaco
Naude may have against Micawber."
This
is in clear conflict with what was pleaded and what this witness
tried to testify, namely that the Aucor commission stands
untouched,
and the "agent" can share his commission with a third party
who may introduce a buyer but without binding
Aucor in any way
whatsoever.
I
add that it also appears from the written mandate that it would lapse
by 17:00 on 16 February 2006, so that Dall and Holburn were
in a race
against time to get the transaction concluded. They testified as
much. Even though there was a "window" period,
of seven
days for the seller to accept the offer, it is clear that Dall and
Holburn were in a hurry to conclude the deal. These
circumstances may
also have inspired Holburn to write "A22" and Dall to sign
the indemnity.
[46]
Dall's performance under cross-examination, particularly with regard
to the indemnity, was wholly unsatisfactory. He testified
that he was
very closely involved with this particular transaction. He liaised
with the agent and visited the seller with Holburn
before they got
the
mandate.
He looked at the figures and the reserved price. Yet, when the
mandate lapsed, and Holburn came the next day to tell him
that he had
a buyer, he can't even remember asking Holburn how this came about.
He can't remember whether he asked Holburn where
he got the buyer.
When Herring confronted him about the possible claim for commission
he did not bother to check the origin of
such commission with Holburn
before signing the indemnity. If his evidence (and the plea) is to be
believed that Holburn would
be liable for the commission of a third
party who introduced a buyer there was no logical explanation for
this witness to bind
Aucor to pay such commission. This question he
could not answer satisfactorily. I had to caution him to stop giving
a different
answer every time. Thereupon he gave the following
strange answer which I paraphrase from my notes:
"In
a case like that, if there had been a claim where Brian Holburn had
agreed to give away a share of his commission,
Aucor would have
paid that agent and paid the balance of 40% to Brian Holburn."
This,
again, flies in the face of the plea and main version that the Aucor
commission stands untouched and the agent must pay
the third party
from his own share.
Against
this background, the witness could not or would not explain why he
signed the indemnity, or, at least why he did so before
establishing
the true details from Holburn.
The
witness was so uncooperative that I had to record that he would not
answer the questions.
[47]
As far as "A22" is concerned, the witness could do no
better than to say that it was
obviously
wrong. When asked whether he had confronted Holburn with the document
he said: "Yes he does not quite know why he
wrote it like that".
It was put to him that "A22" was used as a red herring to
get the plaintiff to divulge his
information without any serious
intention to compensate him afterwards. He said that he knew nothing
about this document or the
negotiations leading up thereto. I find
this strange in the light of his earlier evidence that he was deeply
involved with the
whole transaction.
[48]
His evidence about "A22" was completely unsatisfactory and
unimpressive. The same applies to "A36". He
said that he
had never seen it before and that it did not make sense. He had to
agree that it contained a series of false allegations.
This I have
dealt with.
[49]
As to "A65" (the visiting card) he confirmed that Holburn
was an agent of Aucor and that Holburn had access to the
Aucor fax
machine. He tried to draw an artificial distinction between the
telefax "letterhead" and other letterheads.
He tried to
play down the fact that Holburn always wrote his messages to the
plaintiff on the official Aucor stationery.
[50]
This witness also attempted to discredit the plaintiff's evidence
about the "50/50" arrangement with Holburn. He
did so on
the grounds that such an arrangement would mean the Holburn would get
no commission. I disagree. The fact is that on
the plaintiff's
version the defendant would still get R375 000-00, which it would
have lost altogether, but for the effort of the
plaintiff. There
appears to be no reason, on the probabilities, why the defendant
could not have shared this amount with Holburn,
if indeed there was
such a sharing arrangement in existence.
[52]
For all the reasons mentioned, I found this witness to be
particularly unsatisfactory and evasive. It was clear to me that
he
failed to take the court into his confidence.
[52]
The second and last defence witness was Brian Holburn. In February
2006 he worked with Aucor (the defendant) to get properties
for
auction. He was paid on a "structured commission basis". In
his own words, he was "employed" by Aucor for
approximately
eight years and the commission structure changed from time to time.
In 2006 he would get 40% of the nett commission.
[53]
He confirmed that he had an office in the Aucor building in Midrand
at 562, 15
th
road. He had the facilities including the telephone, a desk and the
administrative staff at his disposal. He also worked from home
for
his own account. He said he never negotiated in terms of the Aucor
commission share of 60%. In my view this makes nonsense
of exhibit
"A22" where he wrote, in his own words:
"Dear
Jaco,
This
confirms that Aucor and yourself will receive 10% each of the net
commission each plus Vat paid by the buyer as introduced
by
yourself."
Of
course, he was confronted with "A22" in cross-examination
and it was pointed out to him that "A22" makes
no mention
of the fact that he (Holburn) must pay the plaintiff's commission out
of his share. His answer was:
"Yes,
I wrote it in haste."
He
was asked, with reference to the "60/40%" arrangement
pleaded and testified about, why
this
was not mentioned in "A22" and where the 10% referred to by
himself in "A22" came from. He gave a vague
and
unsatisfactory answer, referring to clause 11 of the conditions of
sale which, in my view, has no bearing on the issue in question.
It
was put to him that he was avoiding the question. He ended up
reverting to the "60/40%" arrangement and he said that
he
would have been obliged to give the plaintiff 10% of his share,
which, according to him, would be R75 000-00. Added mathematically,
this makes no sense: even if he was entitled to 40% of the gross
commission of R750 000-00 (which, according to him he wasn't as
it
should have been the nett commission) his share would have been R300
000-00, 10% of which would have
been
R30 000-00.
It
is fair to say that Holburn's evidence was vague, confusing and
utterly unconvincing.
When
he was asked what he meant by the 10% that Aucor would receive when
he wrote "A22", he said that it was "badly
worded".
[54]
Not surprisingly, he was then confronted with exhibit "A36",
which I quoted, and in respect of which I pointed out
that it has no
bearing whatsoever with reality neither does it accord with the
pleadings or other evidence offered on behalf of
the defendant. I
have also pointed out that Dall had to concede that "A36"
was nonsensical. Holburn said:
"I
am not 100% sure what my thinking was. The detail I cannot
explain."
When
it was pointed out that his statement, in "A36", that the
Aucor commission was "only 5%" was a lie, he
said "it
was a mistake; it should read "10%".
When
it was pointed out to him that his own statement that "Brian
percentage commission 15%" was a lie, he said that
he could not
remember the structure, it was five
months
after the event. The 5% was a mistake and the rest he could not
remember. He was an utterly unconvincing and, in my view,
an
untruthful witness.
[55]
At times, during cross-examination, he tried to suggest that the
plaintiff did not actually introduce the buyer. Eventually
he
conceded that the plaintiff did exactly that.
[56]
He also could not explain the indemnity signed by Dall in the
agreement, exhibit "A34" and "A35". He said
by
then he was no longer involved in the proceedings. This, in my view,
does not correspond with the general impression left by
Dall, in his
testimony, namely that they conducted the proceedings together.
[58]
He was confronted with his repeated evidence that the plaintiff's
share would have been R75 000-00, as explained,
supra,
and
he was asked to explain the discrepancy between this figure and the
amount of R8 608,21 which he offered the plaintiff in "A36".
His answer, paraphrased from my notes what that he "was a little
under duress" and that "he did not want to repeat".
[58]
It was put to him that "A36" was an attempt by him to fob
off the plaintiff and get rid of him. To this proposition
he would
not comment. In my view, this is exactly what happened. In a way, it
corresponds with the evidence of Dall who said that
when the
plaintiff kept on trying to elicit an explanation, he, Dall, spoke to
Holburn who said that he would "sort Naude
out".
[59]
In cross-examination, Holburn was confronted with the evidence of the
plaintiff about the actual agreement,
supra,
that
the plaintiff and Aucor would each get 50% or R375 000-00 of
the
commission. In his evidence in chief, Holburn was silent on this
issue but it was put to him in cross-examination. Paraphrased
from my
notes, he acknowledged the "telephone call mentioned". He
said "I did not have the documents. It would have
been an absurd
commission. Not in terms of the telephone conversation."
It
was put to him that according to his counsel he would deny that any
conversation took place with the plaintiff after the latter
had
received "A34" and "A35". His answer was that he
was "unsure". He was asked whether he had
written letters
of appointment from Aucor to illustrate the commission structure of,
for example, "60/40%". He confirmed
that he indeed had
such letters, and that the details changed from time to time over
the eight year period. New documents would
replace the old ones. He
agreed that it would have been a simple matter to refer to those
documents to support his case about
the commission structure. No
such documents were ever disclosed by the defendant.
[60]
For the reasons I have mentioned, I considered Holburn to be a
particularly unsatisfactory and evasive witness.
BRIEF
REMARKS ABOUT THE LEGAL POSITION
[61]
In is necessary to consider the defendant's plea to the effect that
Holburn had no authority to bind the defendant company.
This must be
done against the background of the legal principles applicable.
[62]
In support of his argument that the plaintiff had failed to prove
that Holburn had the necessary authority, Mr Den Hartog referred
me
to
Tuckers
Land and Development
Corporation
(Pty) Ltd v Perpellief
1978
(2) SA 11
TPD. I was referred to the following passage at 15A-C:
"In
contracting with a company the following categories of person or
persons acting or purporting to act on its behalf may
be
encountered:
(a)
The Board of Directors;
(b)
The Managing Director of Chairman of the Board of Directors;
(c)
Any other person or persons such as an ordinary Director or Branch
Manager or Secretary."
In
terms of the judgment, where someone contracts with a company through
the medium of the persons referred to in (a) and (b), the
company
will usually be bound because these persons or bodies, will, unless
the articles of association decree otherwise, be taken
to have
authority in one form or another to bind the company in all matters
affecting it.
It
was testified on behalf of the defendant that Holburn was not a
director. There was no evidence in rebuttal available to the
plaintiff. No argument was advanced about whether or not Holburn was
authorised by the defendant company's articles of association
to bind
the company in this regard.
The
main thrust of Mr Den Hartog's argument, if I understood it
correctly, was that the position is different when one is contracting
with someone falling in category (c),
supra.
The
relevant passage at 15D-Freads as follows:
"The
same does not apply where the company is represented by the category
of person referred to in paragraph 4(c) above.
Here a third party is
not automatically entitled to assume that such person has authority
and the company is not precluded from
repudiating liability on the
ground that he had no authority to bind it."
It
is stated in the judgment, at 15F-H, that the plaintiff, in a case
involving category (c), must prove that the "director
or other
person purporting to represent the company had authority". It
was argued on behalf of the defendant that the plaintiff
had failed
to discharge this
onus.
[63]
Mr Van der Walt, in his closing address, relied on the case of
Wolpert
v Uitzigt Properties (Pty) Ltd and Others
1961
(2) SA 257
WLD.
In
that case, the learned judge also dealt with the categories or
"agencies" of the company which a party generally
deals
with when contracting with a company. The third category is
described as follows at 266D-H which is the passage relied
upon by
Mr Van der Walt:
"(3)
Any person or persons such as an ordinary Director, a Branch
Manager, a Secretary, a Committee of Directors or
a combination
of a Director or Secretary, who have express or implied
authority. Such implied authority can be inferred,
when the
official acting in behalf of the company purports to exercise an
authority which that type of official usually
has, even thought
the official is exceeding his actual authority
(Halsbury
3
rd
ed., vol. 6 page 431) but the company would not be bound:
if
the person so acting acted beyond their usual authority. If they
did, the third party may still be protected under (4)
below. (my
note: (4) refers to the category ostensible authority flowing from
estoppel as a result of representations made
by the company. As
indicated,
supra,
a
reply based on estoppel was abandoned by the plaintiff. It should
also be borne in mind that the estoppel generally comes
into play
when the plaintiff relies on representations made by the company
that the agent had authority, whereas, in the
present instance,
the case is based more on the conduct of Holburn and the plaintiff
relies, not on ostensible authority,
but on express or implied
authority.)
if
the party knew that the official was acting beyond his actual
authority â¦
(iii)
if the circumstances are such as to put him on enquiry;
(iv)
if the registered documents of the company make it clear that the
official concerned has not actual authority.
Under
this heading, it would, in my opinion be irrelevant whether the third
party knew the contents of the registered documents
of the company or
not. See
Gower
2
nd
ed. Pages 146 and 151, and Palmer
Company
Law
17
th
ed. page 37.)"
[64]
It may be noted that
Wolpert
was
quoted with approval and discussed in
Tuckers
at
14B-15H.
Wolpert
was
discussed with other relevant decisions on the subject.
[65]
In
Tuckers,
at
14D-E, the learned judge also referred to section 69 of the
Companies Act, No 61 of 1973 which reads as follows:
"69(1)
Contracts on behalf of a company may be made as
follows:
(a)
any contract which if made between individual persons would by law be
required to be in writing .
(b)
any contract which, if made between individual persons would by law
be valid though made orally only and not reduced to writing,
may
be
made orally on behalf of the company by any person acting under its
authority, express or implied, and may in the same manner
be varied
or discharged
."
(Emphasis added.)
[66]
It therefore appears from section 69 that the company may be bound by
a person with express authority or implied authority
or in a case of
ostensible authority. The latter (estoppel) situation no longer
applies and the question of express authority does
not appear to
apply because express authority "may be given by a company's
articles of association or by resolution of the
members or board of
directors" -
Tuckers
at
14F. No evidence in this regard is available. That leaves only the
question of implied authority. In
Tuckers
at
14F-H, the learned judge, referring to
Wolpert
at
266, the passage relied upon by Mr. Van der Walt, said the following:
"(b)
Implied authority exists 'when the official acting on behalf of
the company purports to exercise an authority which
that type of
official usually has, even though the official is exceeding his
actual authority'. (Per Claasen, J in
Wolpert's
case,
supra
at
266.)
To
the same effect is the following statement by De Villiers J in
Broderick
Motors Distributors
(Pty)
Ltd v Beyers
1968
(2) SA 1
(O) at 4, where the following is stated:
'The
rule applicable is set out in the
Law
of Agency in South Africa
by
De Villiers and Macintosh, 2
nd
ed. page 56: 'where an agent is employed to act in the course of
his trade, business or profession as agent, he has implied
authority to bind his principal in regard to matters which are
necessary to enable him to perform the ordinary duties incidental
to his position as agent, or which form part of the ordinary
course of business transacted by that agent.' '
(See,
too
Smith
v Mouton
1977
(3) SA 9
W at 18) or it may be inferred from the acquiescence of
the directors in a course of dealing inside the company itself ."
[67]
In
Smith
v Mouton, supra,
at
18F, the following passage is also quoted with approval from
McKenzie, The Law of Building Contracts and Arbitration in South
Africa, 2
nd
ed. page 67:
"In
addition to any express authority which an architect may have been
given by his employer, he has implied authority
to do whatever is
normally and reasonably incidental to the performance of any act
which he has been employed to do in the
course of his profession."
I
am alive to the fact that this example of implied authority may not
necessarily involve someone acting on behalf of a company
as such.
CONCLUSIONARY
REMARKS
[68]
It appears that the evidence offered on behalf of the defendant is
not in line with the defendant's plea in the following
respects:
Holburn
was not "an independent estate agent practising for his own
account". On his
own
evidence he was "employed" by the defendant. The
undisputed evidence is that he described Dall as his boss ("sy
baas"). He said he had letters of appointment covering the
eight year period and illustrating his commission structure.
The
defendant failed to make discovery of these letters. Dall could also
not explain why these letters were not disclosed although
he
testified that they existed.
The
purchaser, Savcio, was also not introduced to the defendant by
Holburn as pleaded. It is quite clear from the evidence, and
was
conceded in cross-examination, that the buyer was introduced by the
plaintiff, and that the latter was the effective cause
of the whole
transaction including the arrangements to buy out the Metcash lease,
which, in itself, facilitated the eventual
purchase of the property.
[69]
I am of the view that the plaintiff succeeded to prove, on a balance
of probabilities, that implied authority on the part
of Holburn
existed as the facts correspond with the example quoted in
Tuckers
at
14H:
"Where
an agent is employed to act in the course of his trade, business or
profession as agent, he has implied authority
to bind his principal
in regard to matters which are necessary to enable him to perform
the ordinary duties incidental to his
position as agent, or which
form part of the ordinary course of business transacted by that
agent":
1.
The company may be bound by statute in the case of implied authority
on the strength of the provisions of section 69(1)(b),
supra;
2.
Holburn stated that he had been employed by the company for eight
years.
3.
He had a visiting card, disclosed by the defendant, describing him as
"real estate specialist"
under
the Aucor logo with the Aucor telephone numbers and address
particulars.
4.
His name appeared on the advertisement outside the premises to be
auctioned as the contact person. The advertisement is emblazoned
with
the Aucor logo and also carries the name of the defendant company at
the bottom.
5.
When contacted by the plaintiff as a result of the advertisement he
wrote to the plaintiff:
"Dear
Jaco,
...
Below are our bank details, I will forward my agreement letter to
you when I return to the office this afternoon.
Best
regards Brian Holburn
Aucor
(Sandton) Pty Ltd ..." (See exhibit "A4")
6.
He corresponded with the plaintiff on a number of occasions, already
described earlier in this judgment, under the Aucor logo.
7.
He was "employed to act in the course of his trade, business or
profession as agent ." in the words of the learned
author quoted
in the example in
Tuckers
at
14H
supra
and
this is confirmed by the evidence of Dall,
supra.
It
also appears from the visiting card, "A65".
8.
Without question, in dealing with the plaintiff, he busied himself
"in regard to matters which are necessary to enable him
to
perform the ordinary duties incidental to his position as agent, or
which form part of the ordinary course of business transacted
by that
agent." - see the example quoted earlier.
[70]
In his own handwriting, he emphatically wrote on "A22" on
the Aucor logo that the
plaintiff
and Aucor would each receive the same percentage commission. He never
testified that he was not authorised to make that
statement. Dall did
not testify to that effect either.
[71]
He signed the written mandate in terms of which the seller authorised
the defendant company to sell the property - exhibit
"A67".
[72]
Where he was intimately involved in the transaction with Dall, the
latter was prepared to sign the indemnity, "A34"
and "A35",
undertaking to pay the plaintiff's commission, if any.
Indeed,
in the light of this indemnity signed by Dall, one may well be
justified in concluding that Holburn had express authority
to bind
the company rather than merely implied authority. Nevertheless, on
the acceptance that the former may not have been proved
on a balance
of probabilities, I am of the view that the latter, namely implied
authority, was proved, for all the reasons mentioned.
[73]
The agreement relied upon by the plaintiff was proved on the strength
on the plaintiff's clear and impressive evidence. The
evidence
offered in rebuttal was vague and unsatisfactory. The reasons for
this conclusion have been illustrated.
[74]
The version of the plaintiff is supported by the probabilities: he is
an experienced businessman who went to great lengths
to put this
transaction together in order to earn a substantial amount in
commission. He would not have disclosed the necessary
details to the
defendant without a firm undertaking that he would earn the money.
There is nothing
improbable
in the agreement relied upon as it was formulated during the final
telephonic discussion with Holburn: Holburn and Dall
still managed to
earn an amount of R375 000-00 without effectively lifting a finger.
On the probabilities, they would have been
happy to enter into such
an agreement, particularly in view of the fact that the seven day
window period was about to expire.
FOR
THE PLAINTIFF: ADV. P J VAN DER WALT
INSTRUCTED
BY: F&F VAN DER WALT INC
FOR
THE DEFENDANT: ADV DEN HARTOG
INSTRUCTED
BY: HARVEY NOSSEL