About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Eastern Cape High Court, Port Elizabeth
SAFLII
>>
Databases
>>
South Africa: Eastern Cape High Court, Port Elizabeth
>>
2017
>>
[2017] ZAECPEHC 4
|
|
Lochner v Schaefer Incorporated and Others (3518/16) [2017] ZAECPEHC 4 (24 January 2017)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE LOCAL DIVISION, PORT ELIZABETH
Case
no. 3518/16
Date
heard: 22/11/16
Date
delivered: 24/1/17
Not
reportable
In
the matter between:
JOHAN
ANDRE LOCHNER
Plaintiff
and
SCHAëFER
INCORPORATED
First Defendant
MORNé
SCHAëFER
Second Defendant
TANIA
SCHAëFER
Third Defendant
JUDGMENT
PLASKET,
J:
[1]
This is an application for summary judgment in which the only issue
to be decided is whether the defendants have raised a bona
fide
defence to the plaintiff’s claim.
The
facts
[2]
The plaintiff, Dr JA Lochner, instructed the first defendant,
Schaëfer Incorporated, a firm of attorneys and conveyancers,
to
‘procure the registration of the transfer of the Plaintiff’s
property, Erf [...] H. to its purchaser, one Jaco Van
Rooyen’.
Those instructions were accepted and a contract of mandate duly came
into existence. The second and third defendants,
Mr Morné
Schaëfer and Ms Tania Schaëfer, are directors of Schaëfer
Inc and, it is alleged, jointly and severally
liable with it for its
debts and liabilities incurred during their tenure as directors.
[3]
The contract of mandate contained the following material terms: (a)
Schaëfer Inc would do whatever was necessary to procure
the
registration of transfer of the property from Dr Lochner to the
purchaser; and (b) the proceeds of the sale would be paid by
Schaëfer
Inc into Dr Lochner’s bank account, as specified in clause 5 of
the contract.
[4]
A tacit term was also pleaded: that the attorney or attorneys who
executed the mandate ‘would act without negligence and
with the
necessary care, skill and diligence which would be expected from them
in the circumstances’.
[5]
Schaëfer Inc proceeded to register the transfer, to receive
payment from the purchaser and deposit an amount of R512 720.13
into an account which it believed was the account of Dr Lochner. As
it transpired, a fraud had been perpetrated on Dr Lochner and
Schaëfer Inc. An amount of R244 372.21 was ‘saved’
from the predations of the perpetrators of the fraud and
paid to Dr
Lochner with the result that, it was alleged, he suffered damages in
the amount of the difference between this amount
and the amount that
was due to him. He accordingly claimed R268 347.92 as damages
for the breach of contract on the part of
Schaëfer Inc.
[6]
In an affidavit in opposition to the application for summary
judgment, Ms Tania Schaëfer, the attorney who dealt with the
registration of transfer of the property, set out the events that led
to the unfortunate situation that gave rise to Dr Lochner’s
claim.
[7]
She stated that, having received the instruction from Dr Lochner, his
wife’s e-mail address – [w.....@gmail.com]
– was
stipulated in the deed of sale for communication purposes. During the
process of registration of transfer of the property,
she communicated
with Dr Lochner regularly by way of this e-mail address and by way of
cell phone calls. She also received communications
from Ms Lochner by
way of e-mail from time to time.
[8]
During the course of the transaction, Ms Lochner provided Ms Schaëfer
with the details of an Investec account number into
which the
proceeds of the sale were to be paid.
[9]
On 5 August 2016, the transfer documents were lodged in the Deeds
Office and Ms Lochner was informed of this by sms. On 10 August
2016,
Schaëfer Inc received an e-mail from Ms Lochner requesting a
progress report. She was informed that transfer should
be registered
on the following day.
[10]
On 16 August 2016, Schaëfer Inc received an e-mail, ostensibly
from Ms Lochner requesting a progress report and, on the
following
day, received another e-mail requesting that the banking details be
changed. The e-mail stated:
‘
Thank
you very much for your kind assistance in the sale of our property.
We
would like the full proceeds of the sale to be paid into our FNB
account as against the Investec bank account that was provided
earlier.
Find
banking details below:
Bank
Name: FNB
Account
Name: Dr JA Lochner
Branch
Code: 251345
Account
Number: [6...]
Kindly
confirm receipt and send me a proof of payment as soon as payment has
been made.
I
anticipate your usual prompt response.’
[11]
A blank document headed ‘Authority by seller and power of
attorney to effect transfer’ was sent by reply for signature.
It reflected the FNB account as the account into which the balance of
the proceeds of the sale would be paid. It was returned with
what
appeared to be Dr Lochner’s signature appended to it.
[12]
The transfer was registered on 17 August 2016 and the parties were
informed by sms that payments in respect of the transaction
would be
made within two to three business days. On 18 August 2016 at 12h49 an
amount of R512 720.13 was transferred from
Schaëfer Inc’s
trust account into the FNB account and an sms was sent to Ms Lochner
to report on this. On the same day
proof of payment with the final
account was e-mailed to Ms Lochner.
[13]
On 19 August 2016 Ms Lochner telephoned Schaëfer Inc to enquire
whether the balance of the purchase price had been paid.
She was
informed that it had, indeed, been paid into the FNB account. Ms
Lochner said that Dr Lochner did not have an FNB account.
It appears
that an unknown person had intervened and, using a false e-mail
address, had purported to be Ms Lochner when giving
instructions to
deposit the proceeds of the sale into the FNB account. The only
difference between Ms Lochner’s e-mail address
and that of the
perpetrator of the fraud was in the spelling of her surname: a second
‘n’ was inserted in Lochner by
the fraudster.
[14]
The Fraud Division of FNB was contacted immediately and a request was
made to block the account into which the funds had been
paid.
Schaëfer Inc’s bank, ABSA, was also informed and it
contacted FNB to ensure that the FNB account was blocked.
Ms Lochner
too contacted FNB for the same purpose. It was confirmed by an
official employed by FNB that the account would be blocked
immediately. When, later on 19 August 2016, Ms Schaëfer
contacted FNB, she was informed that the account had been blocked.
[15]
It was later ascertained that four small withdrawals totalling R12
000 were made from the account between 18 and 22 August
2016 and a
large withdrawal was made on 23 August 2016, after FNB had been
requested to block the account.
[16]
The defendants state that they have a bona fide defence to the claim:
they were not negligent in the performance of the mandate
in the
circumstances outlined in Ms Schaëfer’s affidavit.
The
issue
[17]
Although Dr Lochner pleaded that the contract of mandate contained a
tacit term to the effect that the mandate would be executed
without
‘negligence and with the necessary care, skill and diligence’,
Mr Scott, who appeared for Dr Lochner, argued
that proof of
negligence was not necessary: all that had to be established in order
to succeed in the claim was that the mandate
had not been executed.
Mr van der Linde, who appeared for the defendants, argued, on the
other hand, that fault was indeed a requirement
of a claim founded on
the contract of mandate, certainly in respect of an attorney and
client relationship.
[18]
It is trite that ‘attorneys are mandatories of their
clients’.
[1]
Authority for this proposition may be found in both the judgment of
the court below (per O’Donovan J) and on appeal (per
Muller JA
and Kotze JA) in
Slomowitz
v Kok
.
[2]
The matter involved a damages claim brought by a client against an
attorney who had allowed the client’s claim to prescribe.
The
claim, O’ Donovan J held, was based on the attorney’s
‘failure to carry out a mandate that he had accepted
from the
plaintiff’.
[3]
On appeal, Muller JA had stated that the attorney had been prepared
to act on the client’s behalf and ‘het die mandaat
aanvaar’.
[4]
[19]
Professor Midgley states that it has long been recognised by the
courts, in South Africa and elsewhere, that an attorney who
agrees to
perform work for a client in effect undertakes to do so with a
reasonable degree of skill, care and diligence. He concludes
that
this duty is a ‘duty not to be negligent’.
[5]
[20]
Professor Midgley’s view is supported by (inter alia)
Slomowitz
v Kok
.
[6]
O’Donovan J, in the court below, held that ‘[i]n carrying
out his mandate the defendant was obliged, personally or
through
others, to exercise the knowledge, skill and diligence to be expected
of an average practising attorney’.
[7]
On appeal, Kotze JA held:
[8]
‘
In
the absence of testimony by the appellant and a direct and
satisfactory explanation why the instructions to effect service were
delayed to the Thursday before the Sunday on which the right to
institute action became prescribed it is, in my view, impossible
to
fault the finding of the learned trial Judge that the appellant ran a
needless risk and executed his mandate in a negligent
manner.’
[21]
Mr Scott referred me to two cases,
Scoin
Trading (Pty) Ltd v Bernstein NO
[9]
and
Legogote
Development Co (Pty) Ltd v Delta Trust & Finance Co
.
[10]
Both of these matters concern contracts of sale and are essentially
concerned with whether liability to pay mora interest requires
fault
on the part of the debtor. As they are not concerned with the
contract of mandate, they are not relevant to this case.
[22]
My conclusion is that fault on the part of the defendants is a
necessary element of liability in terms of the contract of mandate
that had been entered into between Dr Lochner and Schaëfer Inc.
Mr Scott’s argument to the effect that the defendants
are
liable simply on the basis that they did not execute the mandate is
therefore not correct.
[23]
Mr Scott also argued that, in any event, on the version put up in the
answering affidavit, the defendants were negligent. I
am not prepared
to make that finding on the papers. That is a matter that can only
properly be determined after evidence has been
led and tested by
cross-examination. I am satisfied, however, that the defendants have
raised a bona fide defence – that
despite not having executed
the mandate, their failure was not due to their negligence
The
order
[24]
I make the following order.
(a)
The application for summary judgment is dismissed.
(b)
The defendants are granted leave to defend.
(c)
The costs of this application shall be costs in the cause.
_________________________
C
Plasket
Judge
of the High Court
APPEARANCES
For
the plaintiff: P Scott SC instructed by BLC Attorneys, Port Elizabeth
For
the defendants: H van der Linde SC instructed by Schaëfer Inc
[1]
JR Midgley
Lawyers’
Professional Liability
at 5.
[2]
Symington
v Kok
1983 (1) SA 130
(A). Unusually, the judgment in the court below is
reported with the judgments on appeal.
[3]
At 130H.
[4]
At 134D.
See too
Benson
& another v Walters & others
1984 (1) SA 73
(A) at 83A-B.
[5]
Midgley
(note 1) at 84-85.
[6]
Note 2.
[7]
At 132E.
[8]
At 137B.
[9]
Scoin
Trading (Pty) Ltd v Bernstein NO
2011 (2) SA 118 (SCA).
[10]
Legogote
Development Co (Pty) Ltd v Delta Trust & Finance Co
1970 (1) SA 584
(T).