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[2018] ZASCA 134
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Rossouw v Hanekom (741/2017) [2018] ZASCA 134 (28 September 2018)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
Reportable
Case
No: 741/2017
In
the matter between:
ESTELLE
ROSSOUW
APPELLANT
and
JACOBUS PETRUS
HANEKOM
RESPONDENT
Neutral
citation:
Rossouw
v Hanekom
(741/2017)
[2018] ZASCA 134
(28 September 2018)
Coram:
Lewis,
Tshiqi and Van der Merwe JJA and Mothle and Nicholls AJJA
Heard:
6
September 2018
Delivered:
28
September 2018
Summary:
Contract
– claim for damages – fraudulent misrepresentation and
non- disclosure established.
ORDER
On
appeal from:
Western
Cape Division of the High Court, Cape Town (Savage and Cloete JJ
sitting as court of appeal):
1 The appeal is upheld
with costs.
2 The order of the high
court is set aside and replaced with the following:
‘
The appeal is
dismissed with costs.’
JUDGMENT
Van
der Merwe JA (
Lewis
and Tshiqi JJA and Mothle and Nicholls AJJA
concurring)
[1]
On 12 February 2011 the appellant, Ms Estelle Rossouw, entered into a
deed of sale with the respondent, Mr Jacobus Petrus Hanekom.
In terms
thereof, Mr Hanekom sold the property known as erf […], […]
Street, Strand (the property) to Ms Rossouw.
Shortly after Ms Rossouw
and her family moved into the house on the property, they discovered
that the roof leaked seriously and
that the drains were constantly
blocked. Ms Rossouw subsequently also discovered that alterations had
been made to the roof structure
and sewage system without the
required statutory approval.
[2]
Ms Rossouw consequently sued Mr Hanekom in the regional court of the
Western Cape for damages in the amount of R232 017. Her
claim was
based on fraudulent misrepresentation (in respect of the roof) and
fraudulent non-disclosure (in respect of the absence
of statutory
approval and the sewage system). Thus, her claim was founded on
delictual liability and not on the implied warranty
of a seller that
the merx is free of latent defects. Therefore, the voetstoots clause
in the deed of sale was inapplicable. However,
clause 25 of the deed
of sale did provide for an acknowledgement that no representations
had been made to Ms Rossouw, but it is
trite that it could not bar a
claim based on fraudulent misrepresentations. See GB Bradfield
Christie’s
Law of Contract in South Africa
7ed at 587 and 340. At the commencement of the trial, the
regional court (Ms C M Nziweni) by agreement made an order separating
the issues in respect of the merits and the quantum of the claim. The
trial proceeded only on the merits of the claim.
[3]
Ms Rossouw and her husband testified in her case. She also called two
expert witnesses, namely Mr JH Burger (an engineer) and
Mr J Ligthart
(a plumber). After an application for absolution from the instance at
the end of Ms Rossouw’s case had been
refused, Mr Hanekom
testified. He called the estate agent that he had mandated to sell
the property, Ms Chrisna Scheepers, as a
witness. At the conclusion
of the trial the regional court found for Ms Rossouw. It declared
that Mr Hanekom was liable to pay
such damages resulting from the
fraudulent misrepresentation and non-disclosure as Ms Rossouw may
prove. It also directed Mr Hanekom
to pay costs, including the fees
of counsel (on the regional court scale) and of the expert witnesses.
[4]
Mr Hanekom appealed to the Western Cape Division of the High Court,
Cape Town. The court (Savage J, Cloete J concurring) upheld
the
appeal with costs. It set aside the order of the regional court and
replaced it with the following:
‘
The
defendant’s application for absolution from the instance is
granted with costs, including the costs of one counsel, on
the
Magistrate’s Court scale.’
This
court subsequently granted special leave to appeal to Ms Rossouw.
[5]
It appeared from the evidence that, during the period from 2005 to
2008, Mr Hanekom effected alterations to the buildings on
the
property. Prior to these alterations, there was an open area between
the house and a freestanding outbuilding containing a
garage and
other rooms. The sewage system was routed through that open area.
This included a manhole. The sewage pipes from a bathroom
and toilet
in the house and a toilet and scullery in the outbuilding were
directed through the manhole.
[6]
The alterations entailed the enclosure of the open area by the
creation of three new rooms. These were referred to as a ‘braai
room’, the extension of a television room and a small lounge.
The new roof structure that joined the house and the outbuilding
followed the pitch of the roof of the house and formed a valley
gutter with the mono-pitched roof of the outbuilding. The sewage
pipes, gullies and manhole were covered by a concrete floor and
ceramic tiles. Although a rodding eye was inserted at the back
of the
house, the result of the alterations was that a major part of the
sewage system was situated underneath the floor of the
new rooms.
[7]
In terms of the National Building Regulations and Building Standards
Act 103 of 1997 (the Act), the prior written approval of
the relevant
local authority was required for the construction of the alterations.
For this purpose building plans had to be submitted
to the local
authority in terms of s 4 of the Act. Section 7 of the Act provides
that the local authority may grant or refuse an
application for
approval only after consideration of the recommendation of a building
control officer. Building plans in respect
of the alterations were
only submitted to the local authority on 6 February 2011, some six
days before the deed of sale was entered
into. The building plans
were somehow approved by the local authority during June 2011, but
obviously on the basis that construction
could then commence and
would be subject to inspection. Only after inspection of the
completed works would a certificate of occupancy
be issued in terms
of the Act.
[8]
In his evidence, Mr Burger explained that the structure of the new
roof was defective. There was inadequate connection detail
between
the new sloping roof structure and the existing outbuilding. A
laminated beam across the opening between the existing television
room and the extension thereof, leaned over and twisted considerably
under the load of the new roof structure. All of this caused
progressive sagging of the new roof structure and leaking of the
valley gutter.
[9]
The new rodding eye proved to be of no use in opening the severely
blocked sewage system. As a result, the manhole and sewage
pipes had
to be uncovered. This required the removal of the concrete floor in
the braai room and the extension of the television
room. Mr Ligthart
testified that he discovered that the main cause of the blockage was
a collapsed pipe some 300 to 400 millimeters
down the sewage line
from the manhole. However, the self-evident defect was that that
problem could not be rectified because the
manhole had unlawfully
been covered by a concrete floor.
[10]
In order to obtain the permission of the local authority in terms of
s 14 of the Act to occupy the house, Ms Rossouw had to
replace the
defective roof structure and to reroute the sewage line around the
house. She claimed the costs of these measures as
damages.
[11]
Ms Rossouw pleaded that Mr Hanekom had represented to her that the
leakages of the roof ‘had been repaired and attended
to and
would accordingly no longer occur’. She also pleaded that,
inter
alia
,
Mr Hanekom did not disclose that the alterations had not been
approved by the local authority nor that the sewage system and
manhole had been covered by a concrete floor during the alterations.
[12]
In her testimony Ms Rossouw said that prior to the deed of sale she
had viewed the property with Ms Scheepers. On that occasion,
Mr
Hanekom’s wife was present. Whilst they moved through the
house, Ms Scheepers simply said, in passing, that the leak in
the
braai room had been fixed and this was confirmed by Ms Hanekom. Ms
Rossouw testified that this was the only information that
had been
conveyed to her and her husband in respect of the roof prior to the
deed of sale. Mr Rossouw confirmed this in his
evidence. Both
testified that nothing had been said about the absence of approval of
building plans in respect of the alterations
or the covering of the
sewage system.
[13]
In his evidence, Mr Hanekom acknowledged that the leaking roof had
been a problem for a long time. He said there had been many
unsuccessful attempts to fix that problem. When he went onto the
roof, he personally observed that rainwater collected in the middle
of the valley gutter and did not run off. During January 2011 he was
specifically informed as follows by a building contractor,
Mr Ramos:
‘
The main
issue seems to be the trusses and supports that have sagged in the
middle causing the water to sit in the middle and not
flow properly.
With a heavy rain it will sit and overflow right above the lounge.’
Mr
Hanekom knew, however, that the work that he contracted Mr Ramos to
do during January 2011, would not address the cause of the
sagging of
the roof structure. On his own evidence, he had no honest belief at
the time of the deed of sale that the leaking roof
had been fixed.
(See
Banda
& another v Van der Spuy and another
[2013] ZASCA 23
;
2013 (4) SA 77
(SCA) para 22). He knew that he was
obliged to obtain the prior approval of the local authority for the
alterations, but ascribed
his failure to do so to financial distress.
He knew full well, of course, that the sewage system and manhole had
been covered by
a concrete slab.
[14]
Mr Hanekom testified that he specifically instructed Ms Scheepers to
inform potential buyers that the roof had leaked; that
waterproofing
work had been done; that a 12 month guarantee had been given in
respect of that work; but that the effectiveness
of the work could
only be determined during the coming rainy season. He said that he
also instructed Ms Scheepers to disclose that
building plans in
respect of the alterations had not been approved.
[15]
Ms Scheepers testified that she informed Ms Rossouw during the
negotiations that the roof leaked because the gutter was too
small,
but that it had been replaced and that there was a warranty in
respect of that work. However, in contradiction of what was
put to
the Rossouws and of the evidence of Mr Hanekom, she then said that it
was Mr Hanekom who personally fully explained the
situation with the
leaking roof to the Rossouws prior to the deed of sale. She denied
that she had been instructed to disclose
that building plans in
respect of the alterations had not been approved. During
cross-examination she accepted that the aforesaid
evidence of Ms
Rossouw in respect of what had been said about the roof, was correct.
[16]
The trial court analysed the evidence and concluded that the evidence
of the Rossouws was credible and had to be accepted.
It rejected the
evidence of Mr Hanekom and Ms Scheepers that conflicted with that of
the Rossouws. There is no reason to interfere
with these findings. On
the contrary, they were fully justified by the record.
[17]
Regrettably, the high court failed to properly apply itself to the
issues and the evidence. It showed no appreciation of the
trite
principle that it was bound by the trial court’s findings of
credibility, unless they were found to be affected by
material
misdirection or to be clearly wrong. The court a quo also held that,
on her own evidence, Ms Rossouw did not prove that
it had been
conveyed to her that the leakages of the roof would no longer occur.
This displayed a formalistic and unrealistic approach.
On the
accepted evidence of Ms Rossouw, it was conveyed to her that the roof
had been repaired and was no cause for concern. This
was manifestly a
material misrepresentation of the true facts. The court a quo
completely misunderstood Ms Rossouw’s case
in respect of the
non-disclosures. Her case was that Mr Hanekom did not disclose that
building plans in respect of the alterations
had not been approved
nor that the sewage system and manhole had been buried under a
concrete floor. It was common cause that none
of this had been
disclosed. Finally, it should be said that the substitution of the
order of the trial court with an order of absolution
from the
instance at the end of Ms Rossouw’s case, despite the fact that
both Mr Hanekom and Ms Scheepers testified in his
case, is
incomprehensible.
[18]
Mr Hanekom acknowledged that he was obliged, personally or through
his agent, to convey the full facts in respect of the leaking
roof to
Ms Rossouw. He also rightly accepted that he was obliged to disclose
the absence of statutory approval in respect of the
alterations. The
same must apply to the covering of the sewage system and manhole.
This was a serious matter directly linked to
the absence of statutory
approval. On the accepted evidence, Mr Hanekom and his agent
materially misrepresented the true position
in respect of the roof
and failed to disclose matters that would clearly play a crucial role
in Ms Rossouw’s decision to
acquire the property or not. In all
the circumstances, the most probable inference is that the
misrepresentation and non-disclosures
were made deliberately in order
to induce the sale. This constituted fraud. The regional court
correctly found that Ms Rossouw
had proved her case on the merits.
[19]
For these reasons the appeal must be upheld. The following order is
issued:
1 The appeal is upheld
with costs.
2 The order of the high
court is set aside and replaced with the following:
‘
The
appeal is dismissed with costs.’
_________________________
C
H G van der Merwe
Judge
of Appeal
APPEARANCES
For
Appellant: P J Greyling
Instructed
by:
Hanlie
Visser Attorneys, Cape Town
Schoeman
Maree Inc., Bloemfontein
For
Respondent: H G McLachlan
Instructed
by:
Hannes
Pretorius, Bock & Bryant Attorneys, Cape Town
Van
Wyk & Preller Attorneys, Bloemfontein