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[2011] ZASCA 161
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Wakefields Real Estate (Pty) Ltd v Attree and Others (666/10) [2011] ZASCA 161; 2011 (6) SA 557 (SCA) (28 September 2011)
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THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case no
:
666/10
In the
matter between:
WAKEFIELDS
REAL ESTATE (PTY) LTD
….............................................
Appellant
and
GAVIN WAYNE ATTREE
…...........................................................
First
Respondent
TRACEY ATTREE
….................................................................
Second
Respondent
FIONA ISOBEL HOWARD
…........................................................
Third
Respondent
Neutral citation:
Wakefields Real Estate v Attree
(666/10)
[2011] ZASCA 160
(28 September 2011)
Coram:
Navsa, Lewis, Ponnan, Mhlantla and Wallis JJA
Heard:
12 September 2011
Delivered 28 September 2011
Summary:
Whether estate agent who introduces a purchaser to a
property, where sale is concluded through another agent, is effective
cause
of the sale and entitled to commission.
_____________________________________________________________
ORDER
______________________________________________________________
On appeal from:
KwaZulu-Natal
High Court, Durban Nicholson J sitting as court of first instance):
The appeal is upheld with costs and the cross appeal is dismissed
with costs.
Paragraphs (a) and (b) of the order of the high court are set aside
and replaced with:
‘
The defendants are ordered to pay the
plaintiff the sum of R232 560 plus interest at the rate of 15.5 per
cent per annum from 11
October 2005 to date of payment, and costs of
suit.’
JUDGMENT
______________________________________________________________
LEWIS JA (NAVSA, PONNAN, MHLANTLA and WALLIS JJA concurring )
[1] The appellant in this matter, Wakefields Real Estate (Pty) Ltd
(Wakefields), is an estate agency. The first two respondents,
Mr and
Mrs Attree, sold their house at 37 Monteith Place (I shall refer to
the house as Monteith Place), Durban North, KwaZulu-Natal,
to the
third party, Mrs F Howard, who was joined at the instance of the
Attrees. The dispute between them is whether Wakefields
was the
effective cause of the sale and thus entitled to commission. The
Attrees in fact paid commission to another estate agency,
Pam Golding
Properties, which in turn shared it with a third agency, Remax Estate
Agents. Remax had the sole mandate to sell the
house at the time the
sale was concluded.
[2] The high court (Nicholson J) held that Wakefields had not been
given a mandate by the Attrees and also that they had not been
the
effective cause of the sale. It dismissed Wakefields’ claim.
The high court did not, in the circumstances, need to deal
with
Howard’s position, but it nonetheless ordered that the Attrees
pay her costs incurred prior to a rule 37 conference
held on 6
November 2009, and that she pay her costs after that date. She cross
appeals against the latter costs order. Leave to
appeal was granted
by this court.
[3] It will be immediately apparent that at least three estate agents
attempted to find a willing purchaser for the house. In fact
there
were more. I shall turn to a brief summary of the facts before
dealing with the legal principles applicable and the evidence
of the
parties and the estate agents.
[4] In 2001 the Attrees bought Monteith Place through Wakefields,
represented by Mr M Craig. Some two years later they acquired
a
vacant piece of land in Mount Edgcombe, and started building another
house there in 2004. A number of estate agents, including
Craig,
heard that the Attrees were building at Mount Edgcombe and offered to
find a purchaser for Monteith Place. At that stage,
the Attrees were
not sure that they would move to the new house, but did tell agents
that they could bring potential purchasers
to view Monteith Place.
Craig ‘listed’ the house on Wakefields’ books and
advertised it at a price of R3 775 000,
although Mr Attree
had said that he wanted R3 995 000.
[5] Craig, when giving evidence, maintained that Wakefields had sent
a standard letter to the Attrees confirming that it had a
mandate to
sell the house. Mr Attree denied ever receiving such a letter and
Craig could not produce a copy since Wakefields’
computer
systems had ‘crashed’. He did, however, produce a
standard letter to this effect, and insisted that he would
have sent
one to the Attrees. Nothing actually turns on this, for Wakefields
pleaded that there was an oral mandate, the express
(or implied)
terms of which included one that the Attrees pay estate agent’s
commission equivalent to the tariff amount plus
VAT. The amount
payable if that term were proved was agreed by all concerned to be
six per cent of the purchase price (less in
fact than the tariff
amount would have been).
[6] From time to time in 2005 Mrs Phoulla Walker, an estate agent
employed by Wakefields, took prospective purchasers to view Monteith
Place. She did not encounter either of the Attrees on these visits
but was let in by a domestic worker and always left a card to
show
that she had been there.
[7] Howard and her husband lived in Morningside, Durban. In January
2005 she attended a show day in a complex, where she encountered
Walker, the estate agent showing the property. Howard told Walker
that she was not really interested in the type of property on
show,
but wished to buy something older. Walker made a note of houses to
show Howard, and took her to view a number of houses in
different
areas. Although Howard was keen to remain in Morningside she
nonetheless went to see Monteith Place in Durban North in
March 2005.
In her own words she ‘loved’ the house. However, she told
Walker that the price was beyond her reach. Despite
that she visited
again with her husband and they spent some time there.
[8] When Walker phoned Howard after the second visit, on 6 March
2005, Howard told her that she and her husband had decided not
to buy
a new house. They were under financial pressure and needed to invest
money in their garage business. Walker accordingly
stopped phoning
Howard and showing her houses on the property market.
[9] Shortly afterwards, Howard went to the Gateway shopping centre
with a friend. Fortuitously they encountered the friend’s
aunt,
Mrs D de Marigny, an agent employed by Pam Golding Properties. When
Howard learned that De Marigny was an estate agent working
in the
Durban North area, Howard told her that she had seen Monteith Place
and had really liked it – the look and the layout
– but
that it was far too expensive, and she had stopped looking for a
while. She asked whether De Marigny knew of any other
properties that
were similar. De Marigny said that, offhand, she did not. In any
event Howard said that she still wished to live
in Morningside and De
Marigny said that she would put Howard in contact with the Pam
Golding agents who worked there.
[10] Early in April 2005 the Attrees were advised by Mrs D Hamilton
of Remax that they should lower their asking price to R3 495 000.
(This was termed ‘price counselling’.) They agreed to do
so and gave Remax the sole mandate to find a purchaser, arranging
for
Monteith Place to be put on show on Sunday 10 April. The sole mandate
was effective from 7 April, but the Attrees mistakenly
thought that
it would commence only the following Monday. Remax advertised the
house for sale on Friday 8 April at the lower price.
[11] Despite having given a sole mandate to Remax, Attree phoned two
other agents, one of whom was De Marigny, on 8 April, and
told them
that he had agreed to lower the price. De Marigny recalled that
Howard had said she really liked Monteith Place and on
Saturday 9
April phoned her to tell her that the price had been reduced. Howard
agreed to go back to the house with her husband
and made arrangements
to do so that day. De Marigny prepared an offer to purchase for
R3 400 000 and agreed to a reduced
commission. She took it
to the Attrees who accepted the offer that evening. As indicated, the
commission of R150 000 was shared
by Remax, which had the sole
mandate, and Pam Golding which claimed that it was the effective
cause of the sale.
[12] The high court found that there was no oral mandate given to
Wakefields to find a purchaser for a commission of six per cent.
On
appeal the Attrees did not persist in the argument that Wakefields
had no mandate, accepting that Monteith Place had been listed
for
sale by them and that they had had dealings with the Attrees and
brought potential purchasers to view it. They accepted also
that in
the absence of agreement as to the quantum of commission the rate
would have been six per cent.
[13] But the high court found also that De Marigny was the effective
cause of the sale – hence the dismissal of Wakefields’
claim. It reached this finding on several bases: that at the time
when Walker took the Howards to Monteith Place they could not
afford
the asking price; that De Marigny did more than Walker to secure the
sale; that the Attrees had been persuaded to reduce
the price; and
that the Howards were no longer under financial pressure in respect
of their business. The cumulative effect of
these factors, said the
judge, outweighed the effect of the initial introduction by Walker.
[14] It is notoriously difficult, when there are competing estate
agents, to determine who is the effective cause of the sale that
eventuates. It may be that more than one agent is entitled to
commission. This was put trenchantly by Van den Heever JA in
Webranchek v L K Jacobs & Co Ltd
1948 (4) SA 671
(A) at
678 where he said:
‘
Situations
are conceivable in which it is impossible to distinguish between the
efforts of one agent and another in terms of causality
or degrees of
causation. In such a situation it may well be (it is not necessary to
decide the point) that the principal may owe
commission to both
agents and that he has only himself to blame for his predicament; for
he should protect himself against that
risk.’
Van den Heever JA continued (at 679):
‘
[A]
judge who has to try the issue must needs decide the matter by
applying the common sense standards and not according to the
notions
in regard to the operation of causation which “might satisfy
the metaphysician” . . . . The distinction between
the concepts
causa
sine qua non
and
causa
causans
is
not as crisp and clear as the frequent use of these phrases would
suggest; they are relative concepts. . . . It stands to reason,
therefore, that the cumulative importance of a number of causes
attributable to one agent may be such that, although each in itself
might have been described as a
causa
sine qua non
,
the sum of efforts of that agent may be said to have been the
effective cause of the sale.’
[15] Was Walker’s introduction of Howard to Monteith Place in
itself the effective cause when the sale was concluded? The
high
court held not, for the reasons already described. And it found that
Walker, De Marigny, Howard, Mr Howard and Mr Attree,
all of whom
testified, were telling the truth to the best of their ability. In my
view, nothing actually turns on the respective
witnesses’
credibility. For the facts that are not in dispute are sufficient to
determine whether Wakefields were entitled
to commission. I should
note, however, that the evidence of De Marigny was far from
satisfactory and that the Howards, who allegedly
indemnified the
Attrees against paying commission to any agent other than Pam Golding
(an issue that does not arise in this appeal),
were not disinterested
witnesses.
[16] The high court concluded that the Howards dealt with De Marigny
‘because she was the most instrumental in securing the
sale’
and the judge ‘was not convinced a sale would have eventuated
without the efforts of Mrs de Marigny’. However,
the court
recognised that she ‘was fortunate in meeting the Howards (sic)
by accident’. She came ‘on the scene
when the obstacles
were capable of removal’. This, and the fact that she took them
to see Monteith Place again, tended ‘to
offset the notion that
the original introduction and visiting of the house was conclusive
and dominating’. The judge considered
that while Walker’s
introduction of Howard to the house was a sine qua non, it was not
the causa causans of the sale.
[17] The high court relied on
Basil Elk Estates (Pty) Ltd v Curzon
1990 (2) SA 1
(T) in concluding that the first introduction by the
estate agent had been outweighed by intervening factors. Various
personal
factors had stopped the prospective purchaser in that case
from concluding a sale. But nine months later circumstances had
changed
and the purchaser bought the property through another estate
agent. The court held that the intervening factors were such as to
make the initial introduction relatively unimportant.
[18] In my view
Aida Real Estate Ltd v Lipschitz
1971 (3) SA
871
(W) is more instructive. Although Nicholson J quoted from it
extensively, he did not apply the principles cited. In that case an
estate agent had introduced a purchaser who ultimately negotiated
directly with the seller in concluding a sale. The agent was
nonetheless held to be the effective cause of the sale and entitled
to commission. Marais J said (at 875E-H) that protracted negotiations
about finances are often attendant on transactions brought about by
an estate agent. In that case it was the purchaser who had
concluded
the deal, but it was the estate agent’s ‘wisdom and
business acumen’ that brought together the eager
seller and the
purchaser who was able to overcome financial obstacles. Marais J said
that ‘[i]n such a case the agent would
be entitled to
remuneration, no matter whether he selected the potential purchaser
by chance or by foresight. A commission agent
is paid by results and
not by good intentions or even hard work.’
[19] This matter is little different from
Aida.
But for
Walker’s introduction of the house to Howard, the latter would
not have been aware of the existence of the property.
It was Walker’s
‘wisdom and business acumen’ that made her take Howard to
Monteith Place in Durban North. Howard
was not looking in that area
at the time, and preferred to buy a house in the area where she and
her family then lived. She claimed
to have been frustrated that
Walker took her to see houses in Durban North that were out of their
price range, but she nevertheless
did view them. And when Walker took
Howard to Monteith Place Howard ‘loved’ the house, and
returned with her husband
the following day, accompanied by Walker.
Howard conceded that she and her husband were very interested in the
house but said that,
given financial constraints (that later fell
away), they could not afford it. Walker gave up trying to negotiate a
sale with Howard
only when told that she had stopped looking for a
house to buy and that she and her husband were going to renovate
their existing
home.
[20] If Howard had herself approached the Attrees, and persuaded them
to sell Monteith Place to her at a lower price (that is,
assuming
there was no intervention at all by De Marigny) Wakefields would
undoubtedly have been entitled to commission, as was
the agent in
Aida
. So too, had the Attrees approached Howard directly and
offered to sell to her at a lower price, Wakefields would likewise
have
been entitled to commission: Walker was the effective cause of
the sale.
[21] De Marigny, on the other hand, learned that Howard was
interested in Monteith Place quite fortuitously. She did nothing
about
it until phoned by Mr Attree who advised that he was asking for
less. At that stage it was only five weeks since Howard had seen
the
house with Walker. The effort that De Marigny put in amounted to no
more than making a phone call to Howard, arranging for
the Howards to
see the house again, drawing up the offer to purchase, persuading the
Attrees to lower their price even further
and accepting a reduced
commission. That may be regarded by some as a hard day’s work:
and she was undoubtedly instrumental
in concluding the sale. Indeed
she was reluctant to admit that Walker’s introduction, and the
work of the Remax agent who
had persuaded the Attrees to reduce the
asking price, had any effect on the sale of Monteith Place.
[22] Had Walker not shown the Howards the house first – the
initial introduction – Monteith Place would not have been
sold
to Howard through the agency of Pam Golding. Howard had ‘absolutely
loved the house’ and had persuaded her husband
to view it with
her. He too liked it but was concerned about finances. But for that
introduction De Marigny would not have known
that the Howards were
interested in the property (and that, as I have said, she discovered
quite fortuitously). She would not have
found a willing and able
purchaser before Remax’s show day. She reaped where she had not
sown. Despite De Marigny’s
later intervention, in my view
Walker’s introduction was the effective cause of the sale.
[23] Accordingly, Wakefields were entitled to commission at the rate
agreed by them to be applicable – six per cent. That
the
Attrees find themselves liable to pay more than one agent is of their
own making. This is the kind of situation described by
Van den Heever
JA in
Webranchek
where he said that a seller has ‘only
himself to blame for his predicament; for he should protect himself
against that risk’
(quoted above).
[24] As far as the cross appeal against the costs order is concerned,
Howard’s lack of success on the merits means that it
must fail.
There was no appeal against the order that the Attrees pay her costs
before the pre-trial conference on 6 November 2009.
And in this
regard there was some logic in the reasoning of the high court, which
in any event was exercising a discretion. The
cross appeal must thus
be dismissed and paras (c) and (d) of the high court’s order
(that the Attrees pay Howard’s
costs incurred prior to 6
November, and that she pay her own costs incurred after that date)
must stand.
[25] The appeal is upheld with costs and the cross appeal is
dismissed with costs. Paragraphs (a) and (b) of the order of the high
court are set aside and replaced with:
‘
The defendants are ordered to pay the
plaintiff the sum of R232 560 plus interest at the rate of 15.5 per
cent per annum from 11
October 2005 to date of payment, and costs of
suit.’
_____________
C H Lewis
Judge of Appeal
APPEARANCES:
FOR APPELLANT: B L Skinner SC
Instructed by
Neumann White, Durban
Alberts Attorneys, Bloemfontein
RESPONDENT: A J Troskie SC
Instructed by
Larson Falconer Inc, Durban
Symington & De Kok, Bloemfontein
THIRD PARTY: K C McIntosh
Instructed by
Berkowitz Cohen Wartski, Durban
Matsepes Inc, Bloemfontein.