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[2016] ZAFSHC 85
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Bosman N.O. and Another v Mortimer Toyota (Pty) Ltd (A166/2015) [2016] ZAFSHC 85 (9 June 2016)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case Number: A166/2015
In the matter between:
LEON BOSMAN N.O.
IZAK
DANIEL BOSMAN N.O.
and
MORTIMER TOYOTA
(PTY) LTD
CORAM:
LEKALE,
J
et
MOTIMELE,
AJ
et
ZIETSMAN, AJ
JUDGMENT
BY:
ZIETSMAN,
AJ
HEARD
ON:
30 MAY
2016
DELIVERED
ON:
9 JUNE
2016
[1]
This is a full bench appeal emanating from a judgment by a single
judge of this division after leave to appeal had been granted.
[2] In
summary the background and facts of this matter as appears from the
pleadings and the evidence before the court
a
quo
,
are that the plaintiff trust as represented by one of its trustees,
Mr Bosman, issued summons against the defendant, Mortimer
Toyota
(Pty) Ltd (Reitz) claiming damages in the amount of R250 000,00
based upon an alleged oral agreement entered into between
the trust
and Mortimer Toyota during the beginning of February 2013. The
alleged terms whereof are that plaintiff delivered
a Hilux vehicle to
the defendant to be placed on the defendant’s display floor for
second hand vehicles and to be marketed
on behalf of the plaintiff at
a selling price of R250 000,00. It is further alleged that
the defendant breached the
contract by selling the vehicle without
the knowledge and consent of the plaintiff at a selling price of
R180 000,00 and that
defendant delivered the vehicle to the
purchaser without obtaining payment of the purchase price.
Consequently defendant
sold plaintiff’s Hilux vehicle and
failed to pay the agreed selling price of R250 000,00, to the
plaintiff as agreed.
[3]
The defence raised, by Mortimer Toyota, was that a certain Mr Wium,
the branch manager of Mortimer Toyota at Reitz, did not
have the
necessary authority to conclude any agreement with the plaintiff as
alleged and consequently the agreement is denied.
Although
other defences were raised, the main issue between the parties was
whether the aforesaid Mr Wium had the necessary
authority to act on
behalf of the defendant in conclusion of such an oral agreement with
the plaintiff.
[4] In
replication, the plaintiff relied on estoppel, in that the
defendant’s representative was indeed duly authorised to
enter
into the agreement, and in the alternative that should it be found
otherwise, the defendant should be estopped from denying
Wium’s
authority. In this regard the plaintiff pleaded that the
defendant was bound based on ostensible authority,
relying on a
number of factors, amongst others that the defendant represented to
the plaintiff that Mr Wium as the branch manager
of Mortimer Toyota,
Reitz had the necessary authority to enter into any agreements with
the public at large pertaining to the buying
and/or selling of
vehicles at Mortimer Toyota, Reitz.
[5] It
was also reiterated by the plaintiff that as far as his claim of
R250 000,00 is concerned, the amount represents the
agreed
selling price of R255 000,00, less defendant’s commission
of R5 000,00 in the event of the sale occurring,
in which event
and upon delivery of the vehicle to the purchaser, the amount of
R250 000,00 would be payable to plaintiff
forthwith.
[6]
The court
a
quo
found that the plea of estoppel had not been proved by the plaintiff
and the defendant is in those circumstances not liable.
The
court
a
quo
found that Wium did not have ostensible authority to act on behalf of
the defendant, amongst others because of the fact that the
plaintiff
knew, or ought to have known that although Wium is the branch manager
at the Reitz branch of Mortimer Toyota, he being
an attorney
(although not practicing any more) and an astute businessman, that
Mortimer Toyota is in the business of buying and
selling vehicles to
and from the public, and that Mortimer Toyota is bound by the Second
Hand Goods Act, 6 of 2009 which came into
effect on 30 April 2012,
and also the
Consumer Protection Act, 68 of 2008
. In that
instance the defendant would have introduced internal measures and
regulations to which its employees are bound.
Such internal
measures being a prohibition amongst others, to enter into any
agreements called private agreements.
[7] It
is also common cause between the parties that the Reitz Toyota
dealership, previously belonged to an entity called Greyling
Broers,
and it was sold to the present defendant during 2012. It is
also common cause between the parties that the plaintiff
previously
had similar agreements with Greyling Broers as represented by amongst
others the same Mr Wium and it was never brought
to plaintiff’s
attention that defendant’s sales representatives were not
entitled to sell motor vehicles on behalf
of clients to third parties
for commission.
[8]
The court
a
quo
found that it must be accepted that Greyling Broers sold second hand
vehicles on behalf of plaintiff in the past, and that he as
a
businessman and attorney should have made enquiries from the
defendant – a company of outsiders unknown to him, with many
branches and a head office in KwaZulu Natal – whether it would
be prepared to act as agent in the selling of plaintiff’s
vehicles, similar to that with Greyling Broers. The court
a
quo
found that the plaintiff failed to do so and that it cannot rely with
success on the version that the defendant’s internal
measures
were unknown to him. The court
a
quo
also found that the plaintiff must be held to have actual knowledge
of defendant’s automark business and the manner in which
it
operated. The automark brand had certain promises which were
advertised to the public at large through amongst others
a newspaper
circulated in the Bethlehem and Reitz districts, called the Die
Vrystaat.
[9] As
will be clear from the aforesaid, the central question which this
court has to decide is whether the defendant was estopped
from
denying the lack authority on the part of Mr Wium to have concluded
on behalf of the defendant the contract the plaintiff
contended for.
The main issue, therefore, is whether there was a representation by
the defendant (not its agent) that it
can and may conclude agreements
with the public at large through its branch manager Mr Wium in the
circumstances.
[10]
Although the court
a
quo’s
reasons as to why the plaintiff ought to have known about the
internal measures and regulations of the defendant’s Reitz
branch, might be questionable, in that the court might have placed a
higher burden upon the plaintiff because of the fact that
he is an
attorney and astute businessman, than it normally should have done,
it is clear that the plaintiff entered into an agreement
with Mr Wium
in a private deal and therefore with him personally, and not with
Mortimer Toyota.
[11]
It was furthermore clear that this specific agreement, as were the
previous agreements which the plaintiff entered into with
amongst
others Wium, was an “out of hand” selling of his
vehicle. Meaning a deal in which plaintiff required
from the
salesman of the defendant to sell the vehicle on its behalf to a
third party without the defendant buying the vehicle
and on-selling
it to a third party. This is regarded as a private deal or
private sale, because the deal in its entirety
does not go through
the books of the defendant. No documentation, invoices, etc.
are issued by the defendant, and according
to Mr Neethling on behalf
of the defendant:
“
Meneer
Bosman het ook gesê dat die voertuig uit die, hy wil
R250 000,00 vir die voertuig hê en die verkoopsman
wat die
voertuig verkoop sal hy R5 000,00 kommissie betaal en op daardie
stadium het ek omgedraai en weg geloop.”
See
Volume 1, page 271, line 20 to 25.
[12]
So also Mr A J Stone on behalf of the defendant testified that the
agreement was
“
uit
die hand uit”
agreement.
He explained that that meant
“
Uit
die hand uit, wat beteken die uitdrukking? --- Wel, “uit die
hand uit” beteken as u sou na my toe kom met ‘n
voertuig
van u eie en ek maak u prys vir die voertuig en u is nie tevrede
daarmee nie dan sal, met ander woorde ek ruil dan nie
die voertuig in
nie, dan sal u die voertuig uit die hand uit verkoop, wat beteken dit
is ‘n privaat verkoop aan iemand anderster,
maar nie aan my, of
die handelaar nie.”
See
volume 2, page 360, line 9 -15.
[13]
In my view it should have been clear to Mr Bosman, that the defendant
is not in the trade and business of facilitating private
deals or as
they called it “uit die hand verkoping”. It is also
clear from the aforesaid that it is not Mortimer
Toyota who will earn
the commission as referred hereto and above, but the specific
salesman (in a private deal). This fact should
and could have been
determined by the plaintiff well-knowing that he is no longer dealing
with Greyling Broers from Reitz, but
with Mortimer Toyota, a company
with several outlets and a head office in KwaZulu Natal.
Defendant’s usual trade and
business is the buying and selling
of vehicles from the public and to the public.
[14]
Further confirmation for the fact that this was a private deal, was
the advertisement placed in the Landbou Weekblad, which
clearly shows
that the vehicle was advertised by “Thabo”, being the
representative of the plaintiff, with his cell
number in Petrus
Steyn. It does not seem as if the defendant ever advertised the
vehicle, as being for sale, under its own
name. According to
the evidence the advertisements were indeed paid for by the plaintiff
and/or plaintiff’s representative,
and not by the defendant.
See volume 2, page 485.
[15]
From the aforesaid it is clear that both Mr Bosman and Mr Wium (the
branch manager of the defendant) knew that the private
transaction
would not go through the books of the defendant and that the
transaction was dealt with on the side. Wium therefore
did not mind
the defendant’s business, but his own.
[16]
From the aforesaid facts it seems that Mr Wium was on a frolic of his
own. In the decision of
Glofinco
v Absa Bank Limited t/a United Bank
2002 (6) SA 470
(SCA) at para [12] the SCA stated the requirements
for holding a principal liable on the basis of ostensible authority
of his agent.
In paragraph [14] of the same judgment of the
SCA, however, Nienaber JA stated the following:
“
Of
course that does not mean that a bank is liable to a third party ex
contractu for all the actions and transactions of the branch
manager
when the latter is in truth minding not the bank's business but his
own.”
[17]
It must be determined who Mr Wium in these circumstances represented
when he concluded an agreement with Mr Bosman on behalf
of the
plaintiff. In my view this was a private deal, and the evidence
shows that Mr Wium facilitated the plaintiff in selling
the
plaintiff’s vehicle “out of hand” or private,
without intervention of the defendant. For that purpose
Mr Wium
utilised, amongst others, the display floor of the defendant, without
the defendant’s knowledge and in fact contrary
to the
defendant’s clear instructions to him that he was not to
entertain private deals in the circumstances.
[18]
The court
a
quo
also
found the following:
“
[14]
It is also important to remember that in order for ostensible
authority to be relied upon, the representation
must have been
created by the principal and not the agent. A person holding
himself out as the principal’s agent cannot,
of itself, impose
liability on the principal. See
LAWSA
,
3
rd
edition, volume 1, para [162], with reference to
NBS
Bank Limited v Cape Produce Co (Pty) Ltd
loc
cit
at para [25] where it was also stated that it is not enough that an
impression was in fact created as a result of the representation
as
it is also necessary that the representee should have acted
reasonably in forming that impression.”
A view
that I align myself with.
[19]
The court
a
quo
also correctly found that the burden of proof rests on the person who
relies on estoppel. In paragragh [16] of the judgment
the court
a
quo
stated the following:
“
The
representee has to show that he was misled, i.e. that a certain state
of facts exist which actually does not exist. He
should have
been misled by the person who he seeks to hold liable as principal or
by someone for whose conduct such person is responsible.”
See
volume 3, paragraph [16].
[20]
In my view the facts in
casu
are comparable to the facts in the
Glofinco
matter, furthermore, besides any other reasons advanced by the court
a
quo
,
some of which might be criticised, this in itself, namely that Mr
Wium acted on a frolic of his own in dealing with the plaintiff,
is
in fact a clear indication that there was not a representation by the
defendant that Wium contracted with plaintiff on its behalf.
The plaintiff knew this or at least ought to have known this.
[21]
Therefore in those circumstances, it could not be found that there
was any representation by the defendant to enter into an
agreement
with Mr Bosman. He did a private deal.
[22]
In my view therefore, the appeal cannot succeed and I would recommend
the following order:
1.
The
appeal is dismissed with costs.
________________
P. ZIETSMAN, AJ
I concur.
I therefore make the
following order:
The appeal is dismissed
with costs.
_______________
L. J. LEKALE, J
I concur.
_____________________
A.
M.
M. MOTIMELE, AJ
On behalf of the
appellant: Adv. J. Y. Claasen SC
Instructed
by:
Phatshoane
Henney Inc.
BLOEMFONTEIN
On behalf the
respondent: Adv. J. J. Meiring
Instructed
by:
McIntyre
& Van der Post
BLOEMFONTEIN
/eb