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[2016] ZAGPPHC 861
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Maroi Boerdery CC v Rabie and Others (A560/2013) [2016] ZAGPPHC 861 (19 September 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
A560/13
Date:19/9/2016
MAROI
BOERDERY
CC
PLAINTFF/
2
nd
APPELLANT
and
MANNETJIE
RABIE
...................................................................................
1
st
DEFENDANT
MONTANA
AIR
CC
.
...................................................................................
2
nd
DEFENDANT
MULTI
AIRCRAFT SERVICES
CC
............................................................
3
rd
DEFENDANT
And
DELRA
PLANT HIRE CC
....
.........................................
THIRD.
PARTY/FIRST APPELLANT
APPEAL
- JUDGMENT
KHUMALO
J
(with THLAPI
J
and
BAFILATOS AJ
concurring)
INTRODUCTION
[1]
This is an appeal against the judgment delivered by Makgoka
J
on
1 August 2011, in terms of which he made the following order:
[1.1]
The Plaintiff's claims against both the 1
st
and 3
rd
Defendants are each dismissed with costs;
[1.2]
Judgment is granted against the Third Party ("Delra Plant Hire
CC") in favour of the Plaintiff.
[2]
The 1st Appellant Delra Plant Hire, ("Delra") is appealing
the order made against it in favour of the 2
nd
Appellant,
Marci Boerdery CC. In turn, the 2
nd
Appellant
("Plaintiff'') is cross appealing against the dismissal of its
claim against the 3
rd
Defendant and against the costs
order awarded to the 1
st
Defendant, Rabie Mannetjie. The
appeal is with leave of the court a quo. I shall, for the sake of
convenience, refer to the 1
st
Appellant as Delra and the
2
nd
Appellant as Plaintiff. All other parties are
referred to as in the court a quo.
[3]
The Plaintiff instituted an action against the 1
st
Defendant, a director at Delra, claiming the repayment of R419 000.00
it allegedly paid to 1
st
Defendant to purchase a used
aircraft, a 1975 Socate Rallye 235E with registration 25-JSH ("the
aircraft"), and against
2
nd
and 3
rd
Defendant for damages it alleges to have suffered as a result of the
aircraft having been found to be corroded on its sparwings
and not
airworthy.
[4]
The 1
st
Defendant was sued allegedly in his capacity as
the owner of the aircraft and the 2
nd
and 3
rd
Defendants as agent companies that certified the aircraft to be in
good condition and furnished a Mandatory Periodic Inspection
("MPI")
report shortly before it was sold to the Plaintiff. The claim against
the 2nd Defendant, was settled during the
trial.
PLEADINGS
[5]
In its Plea, 1st Defendant alleged that the aircraft belonged to
Delra. As a result Plaintiff joined Delra as a Third Party
and
proceeded henceforth on the basis that either the 1st Defendant or
Delra was the owner who sold it the aircraft.
[6]
Plaintiff alleged that 1st Defendant and Delra duly represented by
Piet van Blerk t/a Flying Trust ("Van Blerk") concluded
the
sale and expressly or tacitly warranted the aircraft to be airworthy,
fit for the purpose for which it was intended, free of
latent defects
and to have been subjected to a pre-purchase inspection, conducted by
the 3rd Defendant and supposedly paid for
by the 1
st
Defendant, when the aircraft had extensive corrosion, rendering it
un-airworthy.
[7]
The 3rd Defendant was also accused by the Plaintiff of having
breached an agreement it allegedly concluded with Delra on 3 August
2003 by failing to carry out a pre-purchase inspection in a
workmanlike manner and to report on the extensive corrosion that was
present on the aircraft.
[8]
In the alternative Plaintiff alleged that
the 3
rd
Defendant had a legal duty of care which it breached, resulting in
it suffering damages
which include costs incurred for further
inspection to ascertain the extent of the corrosion, as well as
storage costs and the costs
of leasing an alternative aircraft
amounting to R302
762.76.
The amount was during the trial amended to R483 285.64.
[9]
The 1st Defendant denied entering into an agreement with the
Plaintiff in terms of which he received any form of payment from
Plaintiff and being liable for the latter's damages. He however
pleaded that the aircraft was sold by Delra to Flying Trust on
August
2003. This was confirmed by Delra, it too denying any liability to
the Plaintiff.
[10]
The 3rd Defendant denied concluding an agreement with the Plaintiff
that it had breached, or owing the Plaintiff a duty of
care.
[11]
The court a quo found that the issues to be decided upon were
twofold, namely:
[11.1]
Whether when Barry or Van Blerk sold the aircraft to the Plaintiff,
he was acting as an agent of the 1st Defendant and Delra
or of Flying
Trust.
[11.2]
Whether the
3rd Defendant owed a duty of care to the Plaintiff
when it performed the MPI in August 2003 and
whether its
failure to report
the corrosion on the aircraft
resulted in the Plaintiff suffering the
damages
claimed.
EVIDENCE
LED
[12]
The evidence relating to the conclusion of the sale of the aircraft
was, on behalf of the Plaintiff, led by Nel, Barry and
Van Blerk. The
experts, Myers, Portwig and Greger, gave an expose· of the
nature and extent of the corrosion found on the
aircraft.
[13]
Nel, a trained pilot, who is with her husband a member of the
Plaintiff, testified that during 2003, she came across
an
advertisement by CDC Aviation (Pty) Ltd ("CDC") offering
the aircraft for sale. She arranged with Van Blerk the owner
of CDC
to view the aircraft where it was stored at Lanseria Airport
('Lanseria"). Accompanied by her father, she was shown
the
aircraft by Van Blerk. Her father, once an owner of a similar
aircraft and knowledgeable on such aircrafts was impressed. The
aircraft was then flown to Wonderboom Airport at their instance for a
pre-purchase inspection which was carried out by one Riekert
Stroh of
the 2
nd
Defendant. Stroh reported minor problems that he
insisted must be fixed before the aircraft is sold. Thereafter Barry,
a salesman
at CDC facilitated the sale. Van Blerk assured her that
the repairs will be paid for by the owner, identified by Barry to be
the
1st Defendant.
[14]
On completion of the repairs Nel, on behalf of the Plaintiff, paid
the purchase price to ED Flying Trust and flew the aircraft
to
Musina. She flew it frequently to accumulate as many hours as she
could towards qualifying for her commercial flying license.
A few
weeks later the studs to the nose-wheel fell off. The aircraft was
taken to Wonderboom where Stroh fixed the problem. During
June 2004,
a further problem was encountered now with the aircraft's radio. She
took the aircraft to one Mike Myers ("Myers")
at Naturelink
who suggested to do an MPI test as well. The test revealed corrosion
on the aircraft's spars-wing that someone had
tried to "paper"
over. According to Myers the aircraft could not fly, and fixing it
was not commercially feasible. The
aircraft remained stored at
Naturelink that levied
storage charges
of R500 per
month. Ne! alleges that she would not have purchased the aircraft had
she been aware of the defects. She bought the
aircraft from CDC and
Van Blerk who never mentioned Delra or 1st Defendant nor had she ever
heard anything about the company before.
[15]
Under cross examination she confirmed that she purchased the aircraft
from CDC, and that her particulars of claim were incorrect.
The
allegation that R399 000 was payable to 1st Defendant was also
incorrect. The allegation that R20 000 payment of commission
to
Flying Trust was part of the oral agreement, was also incorrect as
this amount was part of the purchase price.
[16]
According to Barry, he was at the time employed as a salesman by CDC
Aviation, Van Blerk's company, earning a commission.
He saw the
aircraft for
the first time at Lanseria where it was
stored for some time.
In
November 2003
he saw
the aircraft at Transafrican Aviation, freshly painted and
upholstered and contacted
1
st
Defendant whom he
has known since the days when he was
still employed at
Transafrican, to find out if he would be interested in selling the
aircraft.
1
st
Defendant was prepared to sell the
aircraft for R350 000.00 (excluding Vat) not mentioning who the owner
was. He although was
aware of Delra from his days at Transafrican.
Using CDC's letterhead,
he advertised for the sale of the
aircraft on the internet without revealing the ownership nor the
capacity in which he was selling
the aircraft. Nel responded to the
advertisement. The aircraft was taken for a pre-purchase inspection
and minor problems were
identified. 1
st
Defendant paid
the costs of repairs.
Until that time he had not mentioned the 1
st
Defendant as the
aircraft's owner.
The aircraft was
never his or CDC's or Flytrust's. Nel purchased the aircraft on
behalf of Plaintiff and an invoice was issued by
Flytrust to
Plaintiff. The amount on the invoice made out to Flying Trust was
transferred to the personal account of the 1
st
Defendant
on 19 November 2003.
[17]
Barry agreed under cross examination that 1
st
Defendant
acted on behalf of Delra and that he never revealed to the 1
st
Defendant the name of the Plaintiff as the purchaser nor did he tell
him about the R20 000 commission. He deliberately also did
not tell
Nel about the 1
st
Defendant to avoid direct communication
between them and in order to secure the commission. They could have
dealt directly with
one another, denying him his commission. He was
at no stage authorized by either Delra or Venter, who was a director
at Delra to
sell the aircraft on behalf of either of them.
[18]
Van Blerk a director and shareholder of CDC indicated that Flying
Trust was the main entity holding shares in CDC whose principal
business was buying and
selling aircrafts.
His evidence was
similar to that of Barry.
He could not produce
any document
that
confirmed
a
direct
sale
of
the
aircraft
between
the
Plaintiff
and the
1
st
Defendant and /or
Delra.
[19]
Myers, the expert, confirmed the MPI results of the inspection he
conducted on the aircraft when he found the corrosion to
be
extensive. The aircraft was also inspected by Portwig and Greger both
senior employees of the Commissioner for Civil Aviation
confirming
the nature and extent of the corrosion. They all agreed that had the
2
nd
and 3
rd
Defendant properly carried out
the MPI and inspected the logbook where the existence of the
corrosion was already recorded by
a previous MPI, they could have
detected the corrosion and taken remedial action. Furthermore,
the
3rd Defendant failed to adhere to the regulations and technical
standards prescribed by the CAA
pertaining to performing
the MPI. They concluded that the aircraft was valueless as it was not
airworthy and was unrepairable .
.
[20]
Snyman the physical Metallurgist, the last witness to testify did not
take the matter any further. The logbook already established
the time
lines in respect of the corrosion whose existence seemingly was not
disputed.
[21]
Besides the 1
st
Defendant testifying on his behalf, he
together with Venter testified on behalf of Delra.
[22]
Venter testified that he, the 1
st
Defendant and his
step-son were members of the Delra. The 1
st
Defendant
managed the business whilst he was involved in the financial aspects
of the business. Delra bought the aircraft in August
2002 for R159
1.1
through a sale facilitated by Barry who was also to attend to its
registration in the name of Delra. They took delivery in September
2002. Registration never took place, notwithstanding Barry
undertaking to do it. His attempt to register the aircraft himself
with the CAA failed. He was informed that it could not be registered
as the certificate of registration was outstanding. The 3
rd
Defendant refurbished the aircraft with a new dashboard panel,
leather seats and fresh paint. 1
st
Defendant then flew
the aircraft to Lanseria Airport for service. At Lanseria it could
not start due to a flat battery. 1
st
Defendant called
Strimer from 3
rd
Defendant who replaced the battery. 1
st
Defendant then flew it to Margate and returned. A few weeks later
Venter experienced problems doing a pre-flight inspection. He
called
Strimer to collect and repair the aircraft and for 3
rd
Defendant to do an MPI inspection since the report was due in a
month. The inspection was done on 27 August 2003 and the aircraft
remained with 3
rd
Defendant.
After Barry had
spoken to 1st Defendant about the sale he
asked
Barry for the entity
in
whose name the tax invoice was to be
issued. Barry told him to
issue the invoice in the name of Flying
Trust. Venter gave Barry the 1
st
Defendant's account
details into which the purchase price was to be paid because Delra
owed 1
st
Defendant money and the purchase price would
liquidate the debt.
[23]
Barry
never
indicated
to
him his intention to advertise
the sale
of the aircraft, or that he had done so nor did he mention his
intention to sell it
on behalf of Delra to the
Plaintiff or any other person. He neither mentioned Van Blerk or the
Plaintiff nor the commission he was
earning from the
sale.
Furthermore, if payment was not made, Delra would have looked to
Barry or Flying Trust.
[24]
The 1
st
Defendant's testimony was corroborative of
Venter's evidence. He confirmed that Barry phoned and asked him if he
would be interested
in selling the aircraft. He later also asked to
do an inspection on the plane. According to him he sold the aircraft
to Barry.
After that Venter took over on behalf of Delra. Venter
showed him the Fly Trust invoice during the court case. He was
adamant that
neither he nor Delra mandated Barry to sell the aircraft
on behalf of Delra. They would not have sold it to any another entity
except Barry because it had no registration papers. Barry knew about
it.
[25]
No evidence was led on behalf of 3rct Defendant.
[26]
The court did not make any factual findings and decided the matter
based on probabilities, holding that by their conduct, 1
st
Defendant and Venter, directors at Delra, acting on behalf of Delra,
authorized Van Blerk
Ua
Flying Trust (represented by Barry)
to
sell the aircraft to a third entity,
which happened to be the
Plaintiff. Therefore holding that Plaintiff's restitution claim
against Delra should succeed and dismissed
with costs the claim
brought against the 1
st
Defendant in his personal
capacity on the basis that it is not supported by the evidence led.
It also burdened the Plaintiff with
a costs order on the ground that
it should have withdrawn the claim against 1
st
Defendant
when it joined Delra as the Third Party.
[27]
The court further regarded its decision finding Delra liable, to
exclude the possibility of the 3rd Defendant being liable
as well.
The claims were found to be mutually exclusive, and it declared that
the Plaintiff could not succeed against both. On
the other hand
stating that, if its finding of mutual exclusivity is negated, its
conclusion would be that, for 3
rd
Defendant's
liability
to
arise there must be
a
causal
nexus
between
3
rd
Defendant's
negligence and
the Plaintiff's damages; further
holding
that neither a special relationship nor a sufficiently close
connection between the 3rd Defendant's negligence and the Plaintiff's
damages was established. Accordingly finding that the ultimate loss
suffered by the Plaintiff was too remote.
APPEAL
[28]
Delra's grounds of appeal against the findings of the court a quo are
that:
[28.1]
the court erred when it concluded that a tacit agreement of mandate
was concluded between Delra and Van Blerk, and that pursuant
to the
agreement Van Blerk represented by Barry acted as an agent of Delra
and concluded an oral agreement of sale with the Plaintiff;
[28.2]
the court erred when it found that the mentioned tacit agreement
could be inferred from the surrounding circumstance,
since the
Plaintiff failed to establish a tacit mandate. Therefore such tacit
mandate could not be inferred from the conduct of
the Delra's
directors;
[28.3]
the court a quo should have found that there was no evidence that Van
Blerk was expressly or tacitly authorized or mandated
to sell the
aircraft on behalf of Delra and Plaintiff, having failed to discharge
the onus it bore to establish the tacit mandate.
On the contrary
there was overwhelming evidence that Delra sold the aircraft to
Barry/ Flying Trust.
[29]
On the other hand the Plaintiffs grounds for appealing the findings
of the court a quo in respect of the 3
rd
Defendant, are
that
[29.1]
the court should have found that since the 3rd Defendant issued a
certificate of release to service and certified the aircraft
and all
its equipment to be serviceable for flight,
it owed a duty of care
to any pilot, passenger
or prospective purchaser of the
aircraft for the period of validity of
the certificate,
because it would have been impossible to sell the aircraft as
airworthy without the presence of a valid airworthy certificate, it
could only have been sold with the existence of such a certificate;
[29.2]
the court erred in finding that Plaintiff had not proven either
factual or legal causation and
had not placed any reliance on the
MPI performed
by the
3rd
Defendant when deciding
to purchase the aircraft. It should
have found that it
was one of the factors that the Plaintiff's
representative took
into account when deciding whether or not to purchase the aircraft;
[29.3]
the court erred when it found that 3
rd
Defendant could not
have foreseen, when performing the
MPI in August 2003, that the Plaintiff
(or any other
prospective purchaser) would on the strength of the
assertion
of airworthiness from the seller, purchase the aircraft.
The
Plaintiff as a prospective purchaser should have been found to be a
reasonably foreseeable purchaser in the light of the evidence
that
the aircraft was not able to be sold without a valid and current
certificate of airworthiness.
[30]
The Plaintiff did not persist with the allegations in its particulars
of claim that there was an agreement between itself and
the 3
rd
Defendant. It relied solely on the general duty of care. The issue
will therefore be dealt with as raised in the particulars of
claim
and during the trial.
[31]
The Plaintiff also criticized the court a quo for finding that its
claims against Delra and 1
st
Defendant and as against the
3
rd
Defendant were
mutually exclusive.
It argued
that the court should have found that both Delra and the 3
rd
Defendant were legally responsible for the Plaintiff s loss and
could be held co-extensively liable to the of their individual
liability based on Delra's contractual liability and 3rd Defendant's
delictual liability.
[32]
The issues to be determined are summarized as follows:
[32.1]
in respect of Delra's appeal; Whether from Venter and 1st Defendant's
conduct interacting with Barry on behalf of Van Blerk,
a tacit
mandate could be inferred, it appearing as if Barry was selling the
aircraft as an agent of Delra.
[32.2]
in respect of Plaintiffs appeal:
[32.2.1]
If the issuing of the MPI certificate or a guarantee that the
aircraft is in good condition or good for its purpose, invoked
a duty
of care to the general public? that is a duty of care to third
parties. It is also of significance to note that when the
argument
was raised in the court a quo it was not in such general terms. Its
context was narrowed and restricted only to a duty
of care owed to
the Plaintiff. What the enquiry entails is establishing if 3rd
Defendant's negligence in conducting the inspection
was a direct
cause of the damages suffered by the Plaintiff, as an alternative to
any other potential purchaser, pilot or passenger,
extending to the
general public.
[32.2.2]
Whether or not the Plaintiff's claims against the 1st Defendant and
Delra on one hand and that against the 3rd Defendant
on the other,
were mutually exclusive? Could Delra and the 3rd Defendant be held
co-extensively liable?
[33]
I will however deal with the contentions in the following manner and
sequence:
(i)
Whether or not the evidence justifies the conclusion that was reached
by the court a quo regarding the tacit mandate;
(ii)
a determination whether the claims are mutually exclusive;
(iii)
examine the law regarding the effect of issuing of a warranty or
certification by a third party and liability on the breach
of the
duty of care, which enquiry entails establishing if 3rd Defendant's
negligence in conducting the inspection was a direct
cause of the
damages suffered by the Plaintiff. I will assume that the negligence
of the 3rd Defendant is no longer in contention.
TACIT
MANDATE
[34]
A tacit mandate is implied or inferred and is generally referred to
as ostensible authority. It is defined as the power to
act as agent,
indicated by circumstances even if the agent may not truly have been
given the power. The principal must have conducted
himself in a
manner that
misled a third party
into believing that the agent
had authority. Similarly, misrepresentation can also create an
appearance that the agent had authority
to act on the principal's
behalf which in our law is also known as apparent authority.
While
this kind of authority may not have been conferred
by
the principal it is still taken to be the authority of the agent
as
it
appears to others:
see
Hely-Hutchinson v Brayhead Ltd and Another
(1968
]
1QB 549 (CA).If the agent in the circumstance holds himself out as
having the nature and extent of authority he does not have,
the
company will be bound by his
apparent authority to
those who do not know the actual extent and nature of his
authority if any. The emphasis being placed on the authority
"as it appears to
others".
This fact is enunciated in
Hely -Hutchinson
by
Lord Denning's following
words:
"The
company is bound by his ostensible authority in his dealings with
those who do not know of the limitation. He may himself
do the
"holding out", Thus if he orders goods worth €1000 and
signs himself "Managing Director " for and
on behalf of the
Company, the Company is bound to the other party who does not know of
the €500 limitation...."
[35]
This is opposite to actual authority which decrees that an agent who
wishes to perform a juristic act on behalf of a principal,
requires
authority to do so, either express or implied, for the act to bind
the Principal. The principal will then have to confer
the necessary
authority expressly or impliedly and the agent is taken to have
actual authority. See Kerr the
Law of Agency
4ed (Lexis Nexis
Butterworths 2006) at 27.
[36]
In considering the point the court a quo, besides also mentioning
Hely,
referred to
NBS Bank Ltd v Cape Produce
Co
(Pty) Ltd and Others
2002 (1) SA 396
as distilling the
requirements that the Plaintiff is required to prove, in order to
establish the Defendant's ostensible authority.
Unfortunately
NBS
has been found to conflate the elements of ostensible authority
with those of estoppel and to have overlooked the statement taken
from
Hely-Hutchinson CA
that emphasized that apparent
authority
is
the
agent's
authority
as
it appears
to
others.
For that reason
NBS'
status
as the authority on the elements of apparent authority has been put
to question; see
Makate
v Vodacom
2016 (4) SA
121
(CC).
[37]
The conflation in
NBS
supposedly occurred as a result of an
original statement that Lord Denning made in
Hely
with special
reference to English law, which is pointed out to have been
incorrectly imported into our law as it is, in
NBS.
Lord
Denning had revealed that 'the presence of authority is established
if it is shown that a principal by words or conduct has
created an
appearance that the agent has the power to act on its behalf. Nothing
more is required. The means by which that appearance
is represented
need not be directed at any person. In other words the principal need
not make the representation to the person
claiming that the agent had
apparent authority'. The statement was settled on as resolving the
issue, ignoring that in the statement
Denning stressed that
'(o)stensible or apparent authority is the authority of an
agent
as it appears to others.'
I fully agree with such sentiments.
Consequently representation by the agent has to be taken into account
as well, requiring that
in any particular case, the court should
examine closely how the authority was allegedly exercised in the
company sought to be
held liable and the purported agent in order to
ascertain whose conduct and whose representations would bind the
company.
[38]
The court a quo proceeded then to apply incorrectly, as in
NBS,
the requirements of estoppel to determine whether from Venter and
1st Defendant's conduct a tacit agreement (of agency) can be inferred
as having been conferred upon Barry, to sell the aircraft on Delra's
behalf, and holding that this was proved. This was despite
the
evidence showing that the Plaintiff acted solely on the
representation made by Van Blerk and Barry, who on the contrary
confessed
to have gone to great lengths to conceal information on the
original owner. The real enquiry should have taken into account the
conduct or representations of both Venter and 1st Defendant on behalf
of Delra vis-a-vis that of Van Blerk and Barry as it appeared
to Nel.
The evidence of Nel being of importance in order to prove her state
of mind.
[39]
According to Nel she has never heard of Venter, 1st Defendant or
Delra, nor was she aware of Barry's prior association with
Delra or
its directors. Barry was also
de facto
not in the employ of
Delra. She knew Barry to be the salesman at CDC. The advertisement of
the sale of the aircraft that she responded
to was put up by Barry in
the name of CDC. She arranged for the viewing of the aircraft with
Van Blerk, the owner and director
of CDC. Thereafter Barry
facilitated the sale on behalf of CDC. Van Blerk oversaw the
pre-purchasing inspection at Nel's father's
instance and supervised
the repairs. Ultimately Nel paid the purchase price to Barry c/o
Flying Trust, which apparently was the
holding company of CDC. Nel
took possession of the aircraft from Van Blerk. These are the factual
circumstances and conduct that
influenced Nel at the time.
[40]
Nel a
propos
conceded that she labored under the belief that
CDC was the seller of the aircraft. Such a fact, together with the
whole of the
evidence, (including the documents filed of record and
the purported agent's (Barry) representations) cannot be ignored as
they
are relevant to her state of mind, and are to be taken into
consideration to determine the authority as it appeared to her. The
statements and conduct must, when taken in total, be such as
reasonably to convey to a person dealing with the purported agent/s,
the impression that he has the authority to conclude the transactions
in question on behalf of the alleged principal, and thereby
inducing
the belief in that person that they have the authority of the alleged
principal.
In
Electrolux v (Pty) Ltd v Khota
1961 (4) SA 244
(W) Trollop J
remarked at 250 C-E
that
'"the
court should not be quick or over anxious to infer from an owner's
conduct, including his negligence, a representation
that the
possessor is vested with the dominium or jus disponendi; the conduct
should be such as to proclaim clearly and definitely
to all who are
concerned that the possessor is vested with the dominium or jus
disponendi; secondly if the owner's conduct does
not measure up to
that high standard, the Court should then scrutinize the evidence of
the Respondent carefully and closely to
ascertain whether the
representation was indeed the real and direct or proximate cause of
the Respondent believing that the possessor
did have the dominium or
jus
disponendi."
[41]
Barry corroborates Nel's evidence that he never mentioned to her who
the original owner was, albeit for selfish reasons, to
protect the
deal and his commission. According to him he was preventing the
possibility of the parties dealing with each other
directly and
cutting him out. Nevertheless, what is key is that he never presented
to Nel to be acting on behalf of Delra or exhibited
such authority at
any stage. Therefore based on Barry and Van Blerk's evidence that
they made representations as CDC, which led
Nel to believe CDC was
the seller, Plaintiff's purchase of the aircraft consequently had
nothing to do with any representation
or conduct by 1st Defendant and
Venter.
[42]
A furthe:- assessment of Barry's conduct to establish whether or not
he intended to obtain a mandate from Delra that would
bind the latter
to Plaintiff proves the contrary. He did not inform any of Delra's
directors of his decision to offer the aircraft
for sale to the
public nor did he mention the Plaintiff as the buyer for the recordal
of the payment or transaction. The trial
court's contention that it
should have been of no consequence that Barry mentioned Flying
Trust's name as the entity in whose name
Delra was to issue a tax
invoice, since the directors knew Barry as a salesman is unfounded.
The contention is inconsistent with
the totality of the appearances
and representations as proven by all the evidence. Van Blerk had
testified that
CDC carries on the business of buying and selling
aircrafts
and
Flying Trust is
a subsidiary of
CDC.
It therefore would make sense if 1st Defendant or Venter
said that they sold the aircraft to CDC and believed Barry and Van
Blerk
when they presented to them that the invoice should reflect the
buyer to be Flying Trust that indeed it is so. That also cannot
be
countenanced, as
per
the court's finding, by Van Blerk's
assertion that CDC had no intention of owning the aircraft since we
are dealing with a conduct
or representation that determines a
perception "as it appears." There is nothing in the conduct
of Van Blerk and Barry
that indicated that they were offering to sell
the aircraft on behalf of Delra.
Therefore the interest shown by
1st
Defendant and Venter
to Barry's enquiry
about selling the aircraft cannot be regarded as conferring
a
mandate on him or Flytrust to sell the aircraft to third parties
on Delra's behalf.
[43]
In
NBS,
whereas the facts indicated that it was not the
appointment of Mr Assante (the purported agent) and the usual powers
of the bank
manager that attracted the plaintiffs specifically to his
branch, but presentations Assante made. The application of the
incorrect
principle led to the court holding that his appointment
amounted to representation by the bank that he had authority to
conclude
investment transactions of the kind made by him with the
plaintiffs.
[44]
The importance of consideration of all evidence was indicated in
South
African Broadcasting Corporation v Coop and
Others
2006 (2) SA 217
(SCA) ([2006] ZASCA
30)
(SABC) where it was stated that:
"The
Plaintiff's case was not limited to the appointment of the various
relevant officers who acted on the SABC's behalf. It
included their
senior status, the trappings of their appointment.
the manner
in
which they went about their dealings with the plaintiffs, the use
of official documents and processes,
the apparent approval of
subordinate and related organisations, such as the pension fund and
medical scheme, the length of time
during which the Ludick option was
applied, the Board's own financial accounts and the conduct of the
CEO's who were Board members."
In
the same way as in the
NBS
Bank case, the
SABC
created
a facade of regularity and approval
and it is in the totality of
the appearances that the representations relied on are to be
found.'
[45]
In
casu,
notwithstanding the court a quo encouraging the
evaluation of each piece of assertion against the total evidence, the
court a quo
went on and ignored some of the evidence on the basis
that it was not in line with the pleadings.
[46]
It is most significant that the Plaintiff bore the onus to prove or
establish facts that show on a balance of probabilities,
the conduct
that induced it to believe that Barry and Van Blerk were acting on
behalf of Delra (the alleged ostensible authority,
other than CDC or
Flytrust). Having failed to show such representation and in its
place, there being the relevant concessions made
by Plaintiff's key
witnesses, Barry (the supposedly agent) and Nel, the court should
have found that the Plaintiff failed to discharge
the onus. Instead,
it refused to attach any weight to the concessions, notwithstanding
Plaintiff carrying the onus. The reason
it proffered for disregarding
the concessions was that they were at odds with the particulars of
claim. It is not for the court
to choose which evidence to rely upon
when there is material contradiction between averments in the
pleadings and those made during
trial, especially by a party that
carries the onus. This is an instance where an order for absolution
from the instance would be
appropriate, if not a dismissal; see
Forbes
v Golach
&
Cohen
1917
AD 559.
The Plaintiff had failed to establish the ostensible
authority it relied upon, therefore its claim should not have
succeeded.
[47]
Barry and Van Blerk's testimony though intended to support Plaintiff,
by establishing Delra's conduct, circumstances or representations
from which their agency could be inferred was devoid of any
allegation of such conduct or representations. They also did
not
allege to have sought such a mandate nor to have made Venter or 1st
defendant aware of their intention to sell the aircraft
to a third
party. Even when the sale was concluded, Delra was not informed that
the sale was concluded with Plaintiff on their
behalf. Payment was
also done by Flying Trust.
MUTUAL
EXCLUSIVITY
[48]
The court a quo also had to decide how its decision on the liability
of the Delra would impact on the question of whether or
not a claim
can also be brought against the 3rd Defendant, when the 3rd Defendant
had argued and the court having concurred that
claims against 1st
Defendant and Delra and that against 3rd Defendant are mutually
exclusive.
[49]
It is of importance to note that the Plaintiff couched its claims
such that from each of the 1st to 3rd Defendant and Delra,
an amount
of R483 285.64 for damages is claimed, besides the claim on breach of
contract on the basis of which repayment of the
purchase price is
sought from 1st Defendant and Delra. The court a quo found the claims
to be mutually exclusive and made provision
for an alternative order,
in case of dissention. The general rule is subject to the
qualification that the same conduct may amount
to a breach of
contract and a delict, provided the Plaintiff's declaration makes it
clear by the necessary allegations of fact,
that both wrongs have
been committed there is no reason why he should not claim damages for
both in the same action, provided he
makes it clear what damages he
claims for the breach of contract and what damages for the delict;
see
Bull v Taylor
1965 (4) SA 29
(A) 38G. So, finding in
favour of the Plaintiff on the breach does not exclude a possibility
of a further finding in favour of
the Plaintiff on delict. The court
will then have to frame its order in such a way that the Third Party
is not overcompensated
by recovering the same loss from both
Defendants; The court in
Johnson v Jainodien
1982 (4) SA 599
held that:
"there
was no reason why the two claims cannot be made against the two
Defendants
respectively
without the Plaintiff having to
rely, as against the second Defendant on a previous excussion of the
first Defendant or on an inability
on the first Defendant's part to
meet the claim." (my emphasis)
[50]
It is the same principle that applies in agency proceedings where it
is also not necessary for the Third Party to excuss the
principal
before proceeding against the agent. The fact that the amount is the
same in each claim is not of any significance. The
fact that the
amount claimed from each of the Defendants is identical does not in
the circumstances afford a reason for importing
the technical
doctrine of excussion, which is normally applicable to a surety
agreement, into a situation such as that arising
in the present case.
Accordingly the causes of action against the two Defendants might be
different, still there is no reason why
the two claims cannot be
brought against the two Defendants respectively. Naturally it will,
at the trial be a question of fact
whether Plaintiff has suffered a
loss which he claims from second Defendant. The amount he is likely
to recover from the first
Defendant could be a relevant consideration
in the ultimate determination of the amount of the loss he has
suffered and for which
second Defendant is responsible; see
Johnson
v Janodien on p604H. This also should not inhibit the court to
make the right order, should the Plaintiff be successful in the
action,
which would ensure that Plaintiff does not receive the amount
in question from both Defendants. In that instance the delictual
claim should contain all the elements of a delictual claim,
sufficient to form the basis of a valid claim based on delict.
DUTY
OF CARE TO THIRD PARTIES
[51]
The issuing of a certificate to the owner of the aircraft guarantees
not only the owner but also any other end user of such
an aircraft of
its airworthiness therefore invoking an obligation, that is the duty
of care not only to the owner but also to all
other potential end
user or purchasers of that aircraft, that is the argument advanced
against the 3rd Defendant. As the issuer
of the certificate who has
been found to be negligent he must be held liable on the basis that
he should have foreseen that potential
users or purchasers will act
on the strength of the certification.
[52]
Our law now firmly recognises that a negligent misrepresentation will
give rise to delictual liability provided all the necessary
elements
of such liability are satisfied; see
Axiom Holding v Deloitte and
Touche,
Unreported case no 303/04 delivered on 1 June 2005 (SCA).
However, decisions by courts on whether to grant or withhold a remedy
for negligent misstatement causing economic loss, are made conscious
of the importance of keeping liability within reasonable bounds.
[53]
The test to be applied as expounded in cases of
S v Mokgethi en
Andere
1990 (1) SA 32
(A), at 390 - 41 B;
International
Shipping Company (Pfy) Ltd v Bentley
1990 (1) SA 680
(A), 694
I at 700 E-701G;
Smit v Abrahams
(109/1992)
[1994] ZASCA 64
; [1994] 4 All 679 (AD) (16 May 1994);
Standard
Chartered Bank of Canada v
Nedperm Bank Ltd
(320)
/93)
[1994] ZASCA 146
;
1994 (4) SA 747
(AD);
[1994] 2 All SA 524
(A)
(30 September 1994), is a flexible one in which factors such as
reasonable foreseeability, directness, the absence or presence of
a
novus
actus interveniens,
legal policy, reasonability, fairness and justice,
all
play their part.
[54]
In general, a representer or provider of a certification has no duty
to third parties with whom there is no relationship or
where the
factors as set out in the
Standard Chartered Bank of Canada v
Nedperm Bank Ltd 534
and similar cases aforementioned are absent.
[55]
The test for determining where the new cause has intervened between
the conduct and the result is, as is in the ordinary case,
one of
foreseeability,
that is, was the
actus
of a kind which
a reasonable man would have foreseen as a possible consequence of his
actions?
[56]
The doctrine of foreseeability in relation to the remoteness of
damage does not require foresight as to the exact nature and
extent
of damage. It is sufficient if a person sought to be held liable
therefore should have reasonably foreseen the general nature
of the
harm that might, as a result of his conduct, befall some person
exposed to a risk of harm by such conduct; see
Smit v Abrahams
p85.
[57]
I however agree with the findings of the court a quo with regard to
Plaintiff's claim against the 3rd Defendant, that the Plaintiff
failed to establish any factual or legal causation. The onus was on
Plaintiff to prove that the 3rct Defendant's negligent conduct
caused
or materially contributed to the harm giving rise to the claim. Which
if proven, the second leg of the onus was to prove
that the negligent
act on the part of the 3rct Defendant was linked sufficiently closely
or directly to the loss, for legal liability
to ensue, or whether the
loss is too remote; see
Minister of Police v Skosana
1977 (1)
SA 31
(A) at 34 E-G.
[58]
The undisputed evidence is that the 3rd Defendant furnished Delra
with the MPI on 27 August 2003 for the purpose of repairs
and for
Delra's usage of the aircraft,
since it was due. At the time
3rd Defendant would not have foreseen that the Plaintiff would
purchase the aircraft allegedly on
the basis of its report. Therefore
there was no legal duty upon the 3rd Defendant towards the Plaintiff.
The evidence led on behalf
of Plaintiff also indicates that factually
the MPI was not taken into account by Plaintiff when it bought the
aircraft but it was
on the strength of the pre-purchase inspection
conducted by Stroh. The question of any MPI certificate was never
raised when Plaintiff
purchased the aircraft. There is no evidence
that it formed the basis of its alleged contract and thus not a
causa
sine qua
non.
[59]
Under the circumstances I propose the following order:
THE
ORDER
[59.1]
The 1st Appellant's appeal is upheld with costs. The order of the
court a quo against the 1st Appellant (Third Party) is
set aside.
[59.2]
The 2nd Appellant's cross appeal against the dismissal of its claim
against the 3rd Defendant is dismissed with costs.
[59.3]
The 2nd Appellant's cross appeal against the costs order in favour of
the 1st Defendant is dismissed with costs.
___________________
N
V KHUMALO J
JUDGE
OF THE HIGH COURT
GAUTENG
DIVISION:PRETORIA
I
AGREE AND
IT
IS
SO ORDERED
__________________
V
V THLHAPHI
JUDGE
OF THE HIGH COURT
GAUTENG
DIVISION:PRETORIA
I
AGREE
G
BOFILATOS
JUDGE
OF THE HIGH COURT
GAUTENG
DIVISION; PRETORIA
For
the 1
st
Appellant:
….
ADV
HOLLANDER
Instructed
by:
.................
GJERSOE INC
…
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