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[2016] ZAGPPHC 1154
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Momentum Group Limited v Myburg (46098/2010) [2016] ZAGPPHC 1154 (22 November 2016)
THE
REPUBLIC OF SOUTH AFRICA
IN
THE GAUTENG HIGH COURT: PRETORIA
Reportable:
NO
Of
interest to the other judges
Case
number: 46098/2010.
Date:
22-11-16
MOMENTUM
GROUP LIMITED
Plaintiff
AND
SUNNET
MYBURG Defendant
Heard:
25 July 2016
Delivered:
22 November 2016
Summary:
Counter claim by the defendant. Claim for damages arising from
alleged misrepresentation.
Damages for pure economic loss. Duty to
disclose detailed information misrepresentation claim.
Judgment
Molahlehi
AJ
Introduction
[1]
The initial claim in this matter, which was instituted by the
plaintiffs, concerned payment of the amount of R150 000.00. The
claim
arose from the employment contract of the defendant. The defendant
conceded to the liability in respect of that claim.
[2]
The defendant's claim in the present matter is based on the alleged
misrepresentation by the plaintiff. She contends that but
for the
misrepresentation made by the plaintiff’s representative, she
would not have resigned from her previous employment
with ABSA bank
to join the plaintiff. The defendant is claiming payment in the
amount of R150 455.00 from the plaintiff.
Background
facts
[3]
It is common cause that the defendant resigned three months after
assuming employment with the plaintiff. Prior to taking employment
with the plaintiff, the defendant was, as indicated earlier, employed
by ASSA bank in the brokerage department for a period of
27 (twenty
seven) years. She resigned from ASSA to join the plaintiff.
The
case of the defendant
[4]
The defendant in support of her case testified that prior to
accepting the offer of employment she had two meetings with Mr
Williams, the representative of the plaintiff. At the first meeting,
the parties discussed the proposal that the defendant should
join the
employ of the plaintiff.
[5]
The details of the terms of the employment contract it would seem was
discussed at the second meeting. At this meeting, the
copy of the
statement of the commission earned by the defendant whilst at ASSA
was handed over to Mr Williams.
[6]
The defendant testified that during the meeting she indicated to Mr
Williams that she would want to be placed at the plaintiff’s
head office and that she wanted to start working immediately.
According to her, Mr Williams indicated during that meeting that
there were 50 000 leads available to work from. She understood that
the leads mentioned by Mr Williams were of such a nature that
she
would be able to earn a commission and did not simply refer to the
name and number of the client.
[7]
During cross-examination, the defendant conceded that she did not
discuss with Mr Williams the quality and the nature of the
leads. She
also stated that she decided to take the offer of employment after
discussing the matter with her husband. Her husband
had earlier
discussed the matter with Mr Van Zyl of the plaintiff.
[8]
Following the discussions with Mr Williams and the acceptance of the
employment contract, the defendant commenced her employment
with the
plaintiff during June 2009. Her complaint is that Mr Williams did not
keep to his promise in that she was not given the
office, she was not
placed at the head office and did not have access to the electronic
system of the plaintiff. She was given
the board room as an office.
The most important aspect of her complaint is that she was not given
the number of leads which had
been promised. She testified that she
only received four leads during her first mon2th which she received
from the call centre.
Those leads according to her were not of good
quality and included policies that had matured and had been
surrendered.
[9]
The defendant also testified having informed Mr Williams that she is
not a person who will go into the street looking for clients
and that
her expectation was to commence working immediately on assumption of
her duties.
[10]
Following her resignation the defendant instituted the present
proceedings, claiming damages arising from the alleged
misrepresentation
made by the plaintiff.
[11]
The second witness of the defendant was Mr Van Linden, the expert
witness for the respondent, testified about the calculation
of
defendant of the salary of the defendant.
The
case of the plaintiff
[12]
The first witness of the plaintiff was Mr Williams, the regional
manager. He testified that he was introduced to the defendant
by Ms
Lizzette Joubert, one of the employees of the plaintiff.
[13]
He did not dispute that at the first meeting with the defendant they
did discuss the leads which were available. He also indicated
that
the issue of office space, telephone lines and computers to be used
by the defendant were discussed.
[14]
At the second meeting with the defendant, the amount which the
plaintiff would pay regarding the neutralisation of the financial
consequences of her having to leave the employ of ABSA was discussed.
[15]
Mr Williams conceded that the defendant did complain about not having
an office and was given the board room next to the head
office. He
did not dispute having discussed the issue of the leads with the
defendant but contended that he could never have said
that they were
of good quality. He did not deny having said to the defendant that
she did not blame her for resigning. He also
did not recall ever
making any representation to the defendant regarding her employment.
[16]
The second witness of the plaintiff was Ms Lizzett Joubert, who
testified that she knew the defendant prior to her joining
the
plaintiff and that she introduced her to Mr Williams. She attended
the meeting between Mr Williams and the defendant where
the
employment contract was discussed. At that meeting, the issue of an
office where the defendant would work from, was discussed
but she
could not recall what was agreed to regarding the office of the
defendant. She confirmed that the defendant was in fact
allocated the
board room which she used as her office. She also confirmed that
50,000 leads were discussed but that it was never
said that they
would be allocated to the defendant.
[17]
The third witness of the plaintiff was Mr Myburg, a former colleague
of the defendant's ex-husband. He testified that he received
the call
from the defendant's ex-husband who informed him that his wife was
intending to take employment with the plaintiff. They
did not discuss
the issue of the leads but the concern of the defendant's husband was
the nature of the commission which the plaintiff
would pay to his
wife if she was to join the plaintiff. It seems that he was satisfied
when he was informed that the commission
is paid at a hundred
percent.
[18]
The fourth witness of the plaintiff was Mr Moodley, the in-house
attorney. He testified mainly about the calculation of the
damages
that had been made by the plaintiff’s expert witness.
Evaluation/analysis
[19]
The case of the defendant, as I understand it, is based on delictual
damages arising from the alleged misrepresentation made
by Mr
Williams as the representative of the plaintiff. The damages claimed
are not based on a cancellation of the employment contract,
in the
form of resignation by the defendant, but rather on the alleged
misrepresentation as stated above.
[20]
The claim is based on delict and concerns pure economic loss alleged
to have been suffered by the defendant. The key aspect
of the
representation which was made concerns the 50,000 leads. In this
respect, the defendant contends that but for the representation
made
by Mr Williams, in particular about the leads, she would not have
resigned from ABSA in order to take employment with the
plaintiff.
[21]
It
has
been
accepted,
since
the
decision
in
Administrator
Natal
v
Trust
Bank
of
Africa
BPK
[1]
that
the principles of aquilian liability on negligent misrepresentation
does apply in our
law.
In
order
for
negligence
or
gross
negligence, for that
matter,
to
attract
delictual liability
it
must
be
shown
that
the
conduct
relied
on
was
wrongful.
In
other
words,
the
existence of negligence does not automatically lead to delictual
liability.
[22]
The defendant's claim is based on pure economic loss. The issue of
wrongfulness in the context of delictual liability for pure
economic
loss is determined on the basis of whether or not there existed a
legal duty on the alleged wrongdoer.
[23]
In
order
to
succeed
in
a
delictual
liability claim based
on
economic
loss,
the
plaintiff
must
show
that
the
act
or
omission
of
the
wrongdoer
was,
according
to
Telematrix
(Pty) Ltd
v
Advertising
Standards
Authority,
[2]
wrongful
and
negligent
and
was
the
cause
of
the
loss suffered by the innocent party.
[24]
In Telematrix (supra) the Supreme Court of Appeal in dealing with the
issue of delictual liability said:
"[13]
When dealing with the negligent causation of pure economic loss it is
well to remember that the act
or omission is not prima facie wrongful
('unlawful' is the synonym and is less of a euphemism) and that more
is needed. Policy
considerations must dictate that the plaintiff
should be entitled to be recompensed by the defendant for the loss
suffered (and
not the converse as Goldstone J once implied unless it
is a case of prima facie wrongfulness, such as where the loss was due
to
damage caused to the person or property of the plaintiff). In
other words, conduct is wrongful if public policy considerations
demand that in the circumstances the plaintiff has to be compensated
for the loss caused by the negligent act or omission of the
defendant. It is then that it can be said that the legal convictions
of society regard the conduct as wrongful, something akin
to and
perhaps derived from the modern Dutch test 'in strijd ... met hetgeen
volgens ongeschreven recht in het maatschappelijk
verkeer betaamt'
(contrary to what is acceptable in social relations according to
unwritten law).
[25]
The
issue of public policy consideration in determining liability for
pure economic loss received
attention
earlier
in
Cape
Empowerment Trust
Ltd
v
Fisher
Hoffman
Sithole,
[3]
where
the
court
held
that:
"[21]
The element of wrongfulness is more problematic. Since we are dealing
with pure economic
loss - as opposed to a loss resulting from injury
to person or property- wrongfulness is not presumed. More is needed.
Considerations
of public and legal policy dictate whether FHS should
be held legally liable for the loss resulting from the misstatement
or whether
it should be afforded legal immunity ....
With
reference to these considerations of policy some categories have
crystallised where legal liability for pure economic loss
will be
imposed as a matter of course ... "
[26]
The two policy consideration that plays a significant role in the
determination of the existence of wrongfulness in the context
of
negligent misstatements are stated in the case of Cape Empowerment
Trust (supra) in the following terms:
"
... first, whether the representation was made in a business context
and in response to a serious request and, secondly,
whether the
plaintiff was dependent upon the defendant to provide the information
or advice sought."
[27]
The most important indicator and the one that carries considerable
weight in determining whether liability for wrongfulness
should be
imposed on the party accused of misrepresentation is the
"vulnerability of risk" on the part of the party
complaining of the misrepresentation. This concept entails having to
determine whether the party accused of wrongful conduct could
not
avoid the risk of harm to the other party. In Cape Empowerment Trust,
the court in dealing with the concept of "vulnerability
of
risk,' had the following to say:
"[28]
....What is now well established in our law is that a finding of non
vulnerability on the part of the plaintiff
is an important indicator
against the imposition of delictual liability on the defendant. ... "
The role of this consideration
is best illustrated, I think, by
McHugh J in
Perre
v
Apand
(Pty)
Ltd
[1999] HCA 36
;
(1999) 198 CLR 180
(H C of A)]
supra
para 118:
'Cases
where a plaintiff will fail to establish a duty of care [or,
wrongfulness in the parlance of our law] in cases of pure economic
loss are not limited to cases where imposing a duty of care would
expose the defendant to indeterminate liability or interfere
with a
legitimate acts of trade. In many cases there will be no sound reason
for imposing a duty on the defendant to protect the
plaintiff from
economic loss where it was reasonably open to the plaintiff to take
steps to protect itself. The vulnerability of
the plaintiff to harm
from the defendant's conduct is therefore ordinarily a prerequisite
to imposing a duty. If the plaintiff
has taken or could have taken
steps to protect itself from the defendant's conduct and was not
induced by the defendant's conduct
from taking such steps, there is
no reason why the law should step in and impose a duty on the
defendant to protect the plaintiff
from the risk of pure economic
loss."
[28]
In the present case it is common cause that whilst Mr Williams made
the statement about the 50 000 leads, he did not provide
information
about their nature and quality. Also of importance is the fact that
the defendant never inquired as to what the information
about the
leads entailed. There is no evidence in this regard that Mr Williams
had a legal duty to inform the defendant of the
nature and the
quality of the leads.
[29]
It is also important to note that the defendant did not plead that
the plaintiff in informing her about the leads had a legal
duty to
also inform her about the nature and quality of the leads which Mr
Williams was referring to. In addition, there is no
evidence as to
how many of those leads would be given to the defendant.
[30]
In the context where the defendant was familiar with the sector and
the work is done in the position she had accepted, it seems
to me
reasonable to expect her to have enquired more about the details
relating to the leads before relying on the information
furnished by
Mr Williams. It further seems to me that whilst knowing what her
expectation was regarding the nature and the quality
of the leads,
she decided not to communicate the same to the plaintiff. It would,
therefore, be unreasonable and untenable, in
my view, to impose
liability on the plaintiff when regard is had to public policy
consideration.
[31]
It is thus my view, having regard to the totality of the facts and
the circumstances of this case, that the defendant has failed
to show
that Mr Williams acted negligently in not disclosing the nature and
quality of the leads. The defendant has failed to show
that the
plaintiff in making the representation about the leads reasonably
foresaw the loss of the defendant suffered and failed
to prevent the
same.
[32]
In light of the above the applicant's claim stands to fail. I see no
reason why costs should not follow the results.
Order
[33]
In the premises the defendant's counter claim is dismissed with
costs.
_______________________
E
M Molahlehi
Acting
Judge of the Gauteng High
Court:
Pretoria.
Appearances:
For
the Plaintiff: Adv J F Steyn
Instructed
by Gerings Attorneys
For
the Defendant:
Instructed
by: Rianie Strijdom Attorneys
[1]
1979 (3) SA 824 (A).
[2]
2006 (1) 461 SA (SCA)
[3]
2013
(5) SA 183
(SCA)