About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2015
>>
[2015] ZAFSHC 93
|
|
Bosman N.O, and Another v Mortimer Toyota (Edms) Bpk (Reitz) (2403/2013) [2015] ZAFSHC 93 (23 May 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No.: 2403/2013
In
the matter between:
LEONIE
BOSMAN N.O.
…...................................................................................................
1
st
Plaintiff
IZAK
DANIEL BOSMAN N.O.
….......................................................................................
2
nd
Plaintiff
and
MORTIMER
TOYOTA (EDMS) BPK (REITZ)
…...............................................................
Defendant
HEARD
ON:
25, 26 & 28 NOVEMBER 2014
JUDGMENT
BY:
DAFFUE, J
DELIVERED
ON:
23 MAY 2015
I
INTRODUCTION
[1]
A farming trust and the Toyota dealership at Reitz, Free State
Province are at loggerheads. A 2011 Toyota Hilux 3 litre
4X4
with registration letters and number DXT832FS (“the Hilux”)
is the bone of contention.
II
THE PARTIES
[2]
Leone Bosman and Izak Daniel Bosman, cited as first and second
plaintiffs, are the trustees of the Izak Bosman Trust, IT1836/1991.
I shall hereinafter refer to the trustees in the singular as
plaintiff. Adv J Y Claasen SC represented the plaintiff from
the onset according to the pleadings in this Division as well as in
the proceedings before me. Mortimer Toyota (Pty) Ltd,
a Toyota
dealership with branches in several towns as well as in the town of
Reitz, is the defendant in this matter. It has
been represented
by Adv AWM Harcourt SC, assisted by Adv J J Meiring.
III
THE DISPUTES ACCORDING TO THE
PLEADINGS
[3]
Plaintiff claims damages based on breach of contract from defendant
in the amount of R250 000,00 together with interest.
It
is the plaintiff’s case that it, duly represented by the one
trustee, Mr Izak Daniel Bosman (“Bosman”) and
defendant,
duly represented by its branch manager at Reitz, Mr Dirk Wium
(“Wium”), entered into an oral agreement during
the
beginning of February 2013 in terms whereof plaintiff delivered the
Hilux to defendant to be placed on defendant’s display
floor
for second hand vehicles and to be marketed on behalf of plaintiff at
a selling price of R250 000,00.
It is further alleged that 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 parted with plaintiff’s Hilux and
failed to pay to plaintiff the agreed selling price
of R250 000,00.
[4]
Several averments are disputed in the plea, but for purposes hereof
and as matters transpired during the trial, the essence
of
defendant’s defence is that Wium did not have any authority to
conclude an agreement on behalf of defendant as alleged
and
consequently the agreement is denied. It is also alleged that
plaintiff knew or ought reasonably to have foreseen that
Wium did not
have such authority. It is furthermore denied that plaintiff’s
claim constitutes an action for damages
in the sum R250 000,00.
[5]
Plaintiff filed a replication, repeating that the defendant’s
representative was duly authorised to enter into the agreement
with
plaintiff, alternatively, that defendant should be estopped from
denying Wium’s authority. In this regard plaintiff
pleaded that defendant was bound based on ostensible authority,
relying on a number of factors which have been dealt with in the
evidence to which I shall revert later. Pertaining to the claim
for payment of R250 000,00, plaintiff reiterated that
this
amount represents the agreed selling price of R255 000,00 less
defendant’s commission of R5 000,00 in the
event of a 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.
IV
VIVA VOCE
AND DOCUMENTARY EVIDENCE
[6]
Bosman was plaintiff’s only witness. He testified about
the agreement allegedly entered into between plaintiff and
defendant,
the history of his dealings with defendant’s predecessor, to
wit Greyling Broers who for many years operated the
Toyota dealership
in Reitz, and he also referred to several documents contained in a
bundle of documents received as exhibit “A”.
Wium,
with whom Bosman negotiated and with whom the oral agreement on
behalf of defendant was allegedly concluded, was not called
as a
witness by either plaintiff or defendant. A memory stick
containing a video tape recording, clandestinely obtained by
Bosman
during a conversation between him and Wium has been handed in as
exhibit “1” and a transcript of the conversation
forms
part of exhibit “A”. I shall return thereto later.
[7]
Three witnesses testified on behalf of defendant, to wit Mr Cornelius
Neethling (“Neethling”), a sales representative
of
defendant’s Reitz branch, Mr Andries Johannes Stone (“Stone”),
an employee of defendant’s Bethlehem
branch who was responsible
for branch visits at Reitz from time to time and Mr Ryan Seele
(“Seele”), a director of
defendant who gave detailed
evidence about the internal measures introduced by defendant since
taking over the Toyota dealership
on 1 September 2012.
[8]
It is not my intention to summarise the versions of the various
witnesses, but I shall firstly record the common cause facts,
thereafter deal with legal principles, legislation and authorities
and finally evaluate the evidence and submissions. The
following are common cause, unless specifically stated otherwise:
8.1 The
locus
standi
of first and second plaintiffs as the trustees of the Izak
Bosman Trust and their authority to act on behalf of the trust in
terms
of the provisions of section 6 of the Trust Property Control
Act, 57 of 1988. It was denied initially, but conceded during
the hearing.
8.2 Plaintiff was
the registered owner of the Hilux at all relevant times until
February 2013.
8.3 Wium was at all
relevant times the branch manager of defendant’s Reitz branch
which was a sub-branch of the Bethlehem
branch. He was
previously employed with Greyling Broers who conducted the Toyota
dealership for many years from the same
premises in Reitz until being
taken over by defendant on 1 September 2012. Mr JM (Mike)
Fourie (“Fourie”), who
was a former director of the
company that traded as Greyling Broers, remained on as sales
representative and employee of defendant
after the aforesaid
take-over. Neethling was employed at the Bethlehem branch
earlier, but became a sales representative
of defendant at the Reitz
branch sometime before February 2013.
8.4 Defendant’s
employees (the three sales representatives in particular) were not
entitled to do private work in competition
with their employer.
8.5 At the beginning
of February 2013 Bosman brought the Hilux to defendant’s
premises in Reitz. The vehicle was inspected
and he had a
conversation with Wium, Fourie and Neethling. Neethling left
the group after an altercation to which I shall
refer later.
Hereafter the Hilux was displayed in defendant’s showroom for
second hand vehicles.
8.6 There is
uncertainty about the time, but Bosman brought another vehicle, a
Toyota KZTE bakkie (“the KZTE”), to defendant’s
premises. It is Bosman’s version that it was agreed with
Wium that defendant would sell the KZTE on his behalf at a
selling
price of R80 000,00 or such lower amount as he might consent
to. On 18 February 2013 Wium obtained plaintiff’s
bank
account details and the amount of R70 000,00, a lower figure,
but consented to by Bosman, was paid into plaintiff’s
bank
account by way of a cheque, the depositor being reflected as Fourie.
It became common cause during the trial that Fourie’s
personal
cheque was deposited into the plaintiff’s bank account.
8.7 A Tata bakkie,
the property of plaintiff, was stored in the workshop on defendant’s
premises and during that time a transaction
was concluded directly
between plaintiff represented by Bosman and the purchaser, Mr Tiaan
Willemse. The purchase price of
R25 000,00 was paid
directly into the bank account of the plaintiff by Mr Willemse and
neither Wium, nor defendant had any
role to play in the negotiations
leading to the sale.
8.8 Four
advertisements for the private sale of the Hilux appeared in the
Landbouweekblad magazine of 8 and 15 February 2013 and
29 March 2013
and 5 April 2013 respectively. The Tata was also advertised for
sale, but the telephone number of Bosman’s
son was provided in
that instance. It is Bosman’s evidence that he was
responsible for the first two advertisements
and he could not explain
the second two advertisements, save to state that just before he left
for overseas on 27 March 2013 he
instructed Wium to place further
advertisements in the Landbouweekblad. The telephone number in
all four advertisements is
the same, but the last two advertisements
specifically refer to the name Thabo for purposes of enquiry. It
is common cause
that this is Bosman’s first name.
8.9 On 12 February
2013 defendant’s Reitz branch received a fax from plaintiff
comprising of a number of documents including
a Traffic Register
Number Certificate issued in 1996 but with no reference to any
vehicle, first plaintiff’s identity document,
her letter of
proxy, as well as the Letters of Authority issued to the two
trustees. Defendant’s counsel are mistaken
insofar as
they submit that these documents have any bearing on the Hilux
transaction. The Hilux’ first year of registration
is
2011.
8.10 On 14 February
2013 an electronic internet bank payment of R180 000,00 was
apparently made, not into the account of either
plaintiff, or
defendant, but to an entity identified as DNT Motor Mechanic and
Spares (Pty) Ltd. This entity is unknown to
the parties.
8.11 On 18 February
2013 and according to the documentation provided, a certain Gerrie
Steynberg confronted Wium with proof of this
alleged payment as well
as an affidavit deposed to by him at the Reitz Police Station
concerning payment of R180 000,00.
On that day Wium
released the Hilux to Steynberg. Whether it is merely a
co-incidence or not, it is peculiar that the R70 000,00
deposit
in respect of the KZTE was made on 18 February 2013, the same day
when the Hilux was delivered to Steynberg.
8.12 On 22 February
2013 the Hilux was transferred according to the Natis system from the
name of plaintiff into the name of one
A D Venter and on 26 February
2013 Barloworld Toyota Menlyn (Pty) Ltd paid AD Venter R235 000,00
for this vehicle and obtained
registration of transfer.
8.13 When Bosman had
his telephonic conversation with Wium on 27 February 2013, Wium did
not disclose that the Hilux had been sold
and delivered to
Steynberg.
8.14
When Bosman returned from abroad he had contact with Wium whereupon
he received the above documents and discovered that the
plaintiff’s
Hilux had apparently been sold, that neither plaintiff nor defendant
received the alleged purchase price and
that Wium was apparently
“…
duped into parting with
the Hilux to a confidence trickster”
,
a submission by defendant’s counsel which I find hard to
accept, bearing in mind Wium’s admissions during his
disciplinary
hearing to which I shall return.
8.15 Bosman laid
theft and fraud charges with the South African Police Service
immediately, but eventually filed an urgent application,
relying on
the
rei vindicatio,
against Barloworld Toyota Menlyn (Pty) Ltd
as first respondent in which application defendant was cited as
second respondent although
the application papers were never served
upon defendant. This application was heard as an opposed
motion, but dismissed with
costs. Hereafter Bosman decided to
confront Wium in private which conversation was clandestinely
videotaped and recorded.
By then, neither Bosman, nor his
attorneys of record had any contact with the directors of defendant
and no letter of demand was
sent to defendant.
8.16 Fourie and Wium
were charged for misconduct. Wium admitted guilt in that he
allowed the plaintiff’s vehicles to
be stored at defendant’s
premises in contravention of company policy. He also admitted
that he and/or Fourie sold two
vehicles (the Hilux and KZTE) without
the knowledge of defendant and that it was his intention to retain
the full proceeds or profit
margin personally. It should be
mentioned that Wium was charged with storing all three vehicles
referred to above on defendant’s
premises for possible re-sale
in contravention of clause 4 of the Motor Industry Main Agreement
which applied to him as employee.
8.17 Although
defendant introduced several internal measures after taking over the
Toyota dealership in Reitz, the public at large
and plaintiff in
particular was not advised of these measures, either by mail,
advertisements, or other notices.
8.18
Seele’s testimony was not really contested in cross-examination
and his version should be regarded as common cause.
The
effective date of the takeover of the Reitz dealership was 1
September 2012. The Reitz staff members were inducted and
the
basis of their employment with defendant was explained to them by one
of defendant’s directors. Wium agreed in
writing to the
so-called “staff induction checklist” and one of the
items explained on the checklist was the issue
of private work which
employees of defendant are not entitled to do. Clause 4
referred to above was
inter alia
made applicable to employees and it reads as follows:
“
Clause
4: Outwork. No employee shall: (a) solicit or take orders
for or undertake any work falling within the scope
of the Motor
Industry as defined in this Agreement, whether for gain or not, other
than for his employer:…..”
Seele
testified extensively about defendant’s various internal
systems governing the taking in of second hand vehicles that
clearly
rendered private work an aberration and anomaly. He explained
that second hand car dealers like defendant have to
comply with the
provisions of the Second Hand Goods Act. This Act provides for
record keeping by dealers in respect of the
acquisition or disposal
of second hand motor vehicles. Members of the South African
Police Force are entitled in terms of
the Act to do inspections and
to confiscate vehicles which are not dealt with in accordance with
the provisions of the Act.
Defendant’s sales
representatives were aware of the significance of the particular
legislation, i.e. the Second Hand Goods
Act as well as the Consumer
Protection Act. Defendant is not in the business of selling
clients’ second hand motor
vehicles for commission. Wium and
all other sales representatives of defendant were fully aware of the
defendant’s policy
and the risks involved in acting as such,
with particular reference to section 56 of the Consumer Protection
Act. Defendant
as a supplier of second hand motor vehicles is
bound by the provisions of this section which
inter
alia
states that a consumer may within
6 months after delivery of a second hand motor vehicle return the
vehicle to the supplier without
penalty and at the supplier’s
risk and expense. Seele admitted that the public at large was
not informed of defendant’s
internal policies in any manner
whatsoever.
8.19 The takeover of
the Toyota Dealership in Reitz was however well advertised. The
fact of the matter is that defendant
does not have a consignment
system in place in terms whereof vehicles are sold as agent for
owners. Defendant cannot invoice
purchasers in respect of any
sales if the vehicles are not part of their own stock. Wium who
previously worked for Greyling
Broers was regarded by defendant as a
trustworthy and reliable person and he was appointed as branch
manager of defendant’s
Reitz branch on the recommendation of
the directors of Greyling Broers.
8.20
Plaintiff’s three vehicles, i.e. the Hilux, KZTE and Tata were
never purchased by defendant, did not form part of defendant’s
stock and were never advertised for sale in any of defendant’s
advertisements. There is no evidence that the KZTE was
displayed in defendant’s showroom. The Tata was stored in
defendant’s workshop and never displayed in the showroom.
The Hilux was displayed in the showroom, albeit for a few days and
notwithstanding the circumstances and evidence to be considered
later.
[9]
The admissibility of the video tape recording and the transcript of
the conversation between Bosman and Wium were initially
objected to.
Reliance was placed on several grounds,
inter
alia
it being an invasion of privacy,
the putting of leading questions by Bosman to Wium and the fact that
the recording was made clandestinely.
It was not objected to on
the basis of accuracy. I provisionally admitted the transcript
which forms part of exhibit “A”
and the memory stick
containing the video recording as exhibit “1” on the
basis that I would eventually consider the
issue of admissibility at
the end of the trial. However defendant is now satisfied that
the video recording and transcript
may be admitted as evidence,
although consideration should be given to the weight to be attached
thereto. Defendant’s
concession is easy to explain.
Instead of being to the advantage of plaintiff, the video tape
recording and transcript tend
to support defendant’s
submissions and also show inconsistencies in Bosman’s version.
I will deal with this later
during the evaluation of the evidence.
V
LEGAL PRINCIPLES, LEGISLATION AND
AUTHORITIES
[10]
The proper approach to assessing facts begins with an evaluation and
assessment of the credibility of relevant witnesses, their
reliability and the probabilities. The often quoted formulation
of Nienaber JA in
Stellenbosch
Farmers’ Winery Group and Another v Martell et Cie and Others
2003 (1) SA 11
(SCA) at para [5] in dealing with two irreconcilable
versions is apposite:
“
To
come to a conclusion on the disputed issues a court must make
findings on (a) the credibility of the various factual witnesses;
(b)
their reliability; and (c) the probabilities. As to (a), the court's
finding on the credibility of a particular witness will
depend on its
impression about the veracity of the witness. That in turn will
depend on a variety of subsidiary factors, not necessarily
in order
of importance, such as (i) the witness' candour and demeanour in the
witness-box, (ii) his bias, latent and blatant, (iii)
internal
contradictions in his evidence, (iv) external contradictions with
what was pleaded or put on his behalf, or with established
fact or
with his own extracurial statements or actions, (v) the probability
or improbability of particular aspects of his version,
(vi) the
calibre and cogency of his performance compared to that of other
witnesses testifying about the same incident or events.
As to (b), a
witness' reliability will depend, apart from the factors mentioned
under (a)(ii), (iv) and (v) above, on (i) the opportunities
he had to
experience or observe the event in question and (ii) the quality,
integrity and independence of his recall thereof. As
to (c), this
necessitates an analysis and evaluation of the probability or
improbability of each party's version on each of the
disputed issues.
In the light of its assessment of (a), (b) and (c) the court will
then, as a final step, determine whether the
party burdened with the
onus of proof has succeeded in discharging it. The hard case, which
will doubtless be the rare one, occurs
when a court's credibility
findings compel it in one direction and its evaluation of the general
probabilities in another. The
more convincing the former, the less
convincing will be the latter. But when all factors are equipoised
probabilities prevail.”
[11]
In so far as plaintiff relies on breach of contract, the onus to
prove the contract, the breach thereof and contractual damages
rests
squarely on the shoulders of the plaintiff. This is trite:
he who alleges, must prove. In my view plaintiff
effectively
conceded that Wium was not actually authorised to enter into the
particular transaction on behalf of defendant with
plaintiff, and
therefore Bosman’s evidence was led with the aim to show that
defendant should be held liable on the basis
of ostensible authority
and that it should be estopped from relying on the true facts.
In this regard the onus is on plaintiff
to prove the requirements set
out in the authorities. In
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
as follows:
“
[12]
The requirements for holding a principal liable on the basis of the
ostensible authority of its acknowledged agent were recently
articulated in
NBS Bank Ltd v Cape
Produce Co (Pty) Ltd and Others
(
supra
in para [26] at 412C-E) by Schutz JA to be:
‘
1.
A representation by words or conduct.
2. Made by [the
principal] and not merely by [the agent], that he had the authority
to act as he did.
3. A representation
in a form such that [the principal] should reasonably have expected
that outsiders would act on the strength
of it.
4. Reliance by [the
third party] on the representation.
5. The
reasonableness of such reliance.
6.
Consequent prejudice to [the third party]’”
See
also
NBS Bank Ltd v Cape Produce Co
(Pty) Ltd
2002 (1) SA 396
(SCA)
paras [24] – [37] and
Absa Ltd
v Arif
2014 (2) SA 466
(SCA) paras
[29] – [34].
[12]
As stated in
Glofinco
loc cit
at
para [14], relying on
NBS Bank Ltd v
Cape Produce Co (Pty) Ltd
and
South
African Eagle Insurance Co Ltd v NBS Bank Ltd
2002 (1) SA 560
(SCA) at 574E-G, the appointment of someone to a
position of authority,
“
but with all
trappings pertaining to the post, is a factor that in itself is not
be under estimated.” Nienaber JA stated
further in para
[14] of
Glofinco
loc cit
as
follows:
“
Or
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.”
Marais
JA was at pains to state that in dealing with the scope of a branch
manager’s authority to bind a bank it remains a
question of
fact to be decided on a balance of probability and he also referred
to the position of a manager of a second hand motor
dealer in the
following words at 573H – 574B of the
SA
Eagle Insurance
judgment:
“
On
the other hand, the manager of a business the sole activity of which
is the buying and selling of used motor vehicles may well
be
justifiably thought to have been empowered by the proprietor to
negotiate purchases and sales for that is the manager’s
publicly proclaimed raison d’etre. (
Reed
NO v Sager’s Motors (Pvt) Ltd
1970 (1) SA 521
(RA).)
In each
case, it is the particular facts which will provide the answer
.”
(emphasis added.)
[13]
At para [17] of
Glofinco
Nienaber JA reiterated the following:
“
[17]
Internal limitations of which outsiders who do business with the
branch manager are unaware will not bind them. This
is a
principle as old as the law of agency itself.”
See
also:
City of Tshwane Metropolitan
Municipality v RPM Bricks (Pty) Ltd
2008 (3) SA 1
(SCA) para [12].
[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 [160], with reference to
NBS
Bank Ltd 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. It should be mentioned
at this stage that Mr Vito Assante, the NBS bank manager who featured
in both NBS Bank judgments quoted above had actual authority
to
represent the Bank in that capacity. In the one matter
concerning SA Eagle the court found at paragraph 30 that
the Bank
could not shelter behind the fact that Assante exceeded limitations
placed upon the precise extent of his authority, or
that he failed to
follow internally prescribed standard procedures. In
Glofinco
the majority found that the
respondent bank was not liable for the actions of its manager.
It concluded in paragraph 30 that
the representee, (Braude), acted
throughout not on representations of the bank, but on reassurrances
of the manager and therefore
the replication of estoppel was not
upheld.
[15]
The reliance by the third party on the representation must be
reasonable as mentioned above. It was found in the
Cape
Produce
judgment
loc
cit
that a facade of regularity was
created by the appointment of the bank manager who made it possible
for him to disregard any internal
control measures and to embark upon
schemes of dishonesty. See also
SA
Broadcasting Corporation v Coop
2006 (2) SA 217
(SCA) at 237A.
[16]
The burden of proof rests on the person who relies on estoppel.
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
LAWSA
,
3
rd
edition, volume 1, para [161]. The person relying on estoppel
must show that reliance on a representation was reasonable.
See
also:
Dlisane v Minister of
Correctional Services; Mathwetha v Minister of Safety and Security
1999 (1) SA 1020
(TKH) at 1034D – G. If a person knows or
believes that the real facts are not as stated in the representation,
he cannot
be heard to say that he was induced to act to his prejudice
on the faith of the representation. See
Hauptfleisch
v Caledon Divisional Council
1963
(4) SA 53
(CPD) at 57C.
[17]
If a person wilfully shuts his eyes and declines to see what is
perfectly obvious, he must be held to have had actual knowledge
of
it. See
Grant v Stonestreet
1968 (4) SA 1
(AD) at 20 and further and
Southern
Life Association Ltd v Beyleveld NO
1989 (1) SA 496
(AD) at 507H.
[18]
Much reliance was placed by defendant’s witnesses on
defendant’s internal policies, the Second Hand Goods Act and
the risks involved in purchasing and selling second hand motor
vehicles. The Second Hand Goods Act, 6 of 2009 came into effect
on 30 April 2012, being its date of commencement. It repealed
the old Second Hand Goods Act, 23 of 1955 in whole. The
purpose
of the Act is to regulate the business of dealers in second hand
goods and pawn brokers in order to combat trade in stolen
goods, to
promote ethical standards in the second hand goods trade and to
provide for matters connected therewith. All dealers,
i.e.
persons who conduct business dealing in second hand goods, including
scrap metal dealers and pawn brokers, must in accordance
with section
21 of the Act keep registers in the prescribed form and record in the
registers the prescribed particulars regarding
every acquisition or
disposal of second hand goods. Section 24 of the Act stipulates
that subject to section 21, a dealer
dealing in second hand motor
vehicles must also record in the prescribed register the particulars
regarding every acquisition or
disposal of a motor vehicle
contemplated in subsection 24(2). The information is required
in respect of the vehicle identification
number, the chassis and
engine number, the odometer reading, exterior and trim colour and any
distinguishing mark or feature in
respect of the particular vehicle.
Subsection 24(3) stipulates the details to be obtained from a person
acquiring from or
disposing of a motor vehicle to the dealer.
Chapter 8 of the Act deals with the authority of police officials.
The
evidence tendered on behalf of defendant confirms that the
witnesses had these wide powers and serious consequences in mind.
[19]
Defendant also relies on the Consumer Protection Act, 68 of 2008
(“the CPA”), for the introduction of its internal
measures and regulations to which its employees are bound. A
“
supplier
”
is
defined in the CPA as “
a person
who markets any goods or services
”
.
A consumer is entitled to safe and good quality goods as apparent
from section 55 of the CPA and therefore section 56 of
the CPA
provides for an implied warranty of quality. Section 56(1)
reads as follows:
“
In
any transaction or agreement pertaining to the supply of goods to a
consumer there is an implied provision that the producer
or importer,
the distributor and the retailer each warrant that the goods comply
with the requirements and standards contemplated
in section 55 except
to the extent that this goods have been altered contrary to the
instructions, or after leaving the control,
of the producer or
importer, distributor or retailer, as the case may be.”
The
consumer may in accordance with section 56(2) return the goods to the
supplier within 6 months after the delivery thereof without
penalty
at the supplier’s risk and expense if the goods fail to satisfy
the requirements and standards contemplated in section
55 and the
supplier must at the direction of the consumer either repair or
replace the failed, unsafe or defective goods or refund
to the
consumer the price paid by him for such goods. Subsection 56(3)
is also of importance and indicative of the risks
undertaken by
inter
alia
suppliers of goods and
retailers. There cannot be any doubt that defendant falls
within the definition of supplier and
is bound by the provisions of
the CPA and in particular section 56 thereof.
VI
EVALUATION OF THE EVIDENCE AND
ADMISSIONS OF THE PARTIES
[20]
Bosman is the only witness who testified in detail in respect of the
alleged agreement pertaining to the Hilux entered into
between
plaintiff represented by him and defendant represented by Wium at the
beginning of February 2013. Neethling accompanied
Fourie and
Wium upon Bosman’s arrival in order to inspect the Hilux and
his evidence related to the conversation between
him and Bosman until
the time that he decided to leave the others. Mr Claasen on
behalf of plaintiff submitted that in so
far as there are
contradictions between the versions of Bosman and Neethling, Bosman’s
version should be accepted.
According to him Neethling is an
unreliable witness. I accept that criticism can be levelled at
his evidence in certain instances,
but I am satisfied that he
provided a plausible version. It cannot be denied that Bosman’s
son had contact with him
at a stage about a possible trade-in of the
Hilux, being the vehicle used by the son and that he was under the
impression that
the vehicle was brought in for a valuation in order
to consider at what price it could be acquired. Neethling did
duty at
the showgrounds during that time to prepare for the
Bieliemielie festival and his uncertainty about events at the
dealership was
duly explained. He warned Wium that he was not
entitled to enter into private deals with Bosman and his evidence in
this
regard is uncontradicted. It appeared that Wium did not
heed his warning as is apparent from the minutes of his disciplinary
hearing. His version of the condition of the Hilux and his
comments in that regard is more probable than Bosman’s version
for the reasons to be mentioned later.
[21]
It is also Mr Claasen’s submission that Bosman was a client of
Greyling Broers for many years, that he had sold vehicles
to them and
purchased vehicles from them on many occasions and that he on a
weekly basis attended the dealership in order to
inter
alia
buy spare parts or bring in
vehicles for service. It may not be wrong to describe Bosman as
a true “Toyota man”.
Plaintiff also bought a second
hand Toyota vehicle to be used by Bosman’s son just before
February 2013. Although Bosman
was aware of the takeover of the
dealership by defendant in 2012, nothing has changed as far as he was
concerned and he regarded
it as “business as usual”.
It was never brought to his notice that defendant’s sales
representatives were
not entitled to sell motor vehicles on behalf of
clients to third parties for commission. I am of the view that
if it can
be accepted that Greyling Broers sold second hand vehicles
on behalf of plaintiff in the past, he as a businessman and attorney
should have made enquiries from 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 the plaintiff’s vehicles. This
he failed
to do. Plaintiff cannot rely with success on the version that
defendant’s internal measures were unknown
to it. A
reasonable deduction to be made from the evidence of Bosman, if he is
to be believed, is that he preferred to shut
his eyes and declined to
see what was perfectly obvious. Plaintiff must be held to have
actual knowledge of defendant’s
Automark business and the
manner in which it operated. I deal with the Automark brand
again later.
[22]
Instead of contacting defendant’s head office and/or written a
letter of demand to defendant immediately on 12 March
2013 after
being informed that defendant had breached the contract between the
parties causing plaintiff to suffer damages as defendant
failed to
pay to plaintiff the agreed amount of R250 000,00 upon delivery
of the Hilux to the purchaser, he laid complaints
of theft and fraud
with the South African Police Service. He did not accuse
defendant of any criminal activities. When
it dawned upon him
that the SAPS had dropped the theft charge, causing the vehicle not
to be “flagged” anymore, meaning
that whoever was in
possession thereof would be able to deal with it as he or she deemed
fit, he instituted urgent proceedings
in the High Court, Pretoria
against Barloworld Toyota Menlin (Pty) Ltd as first respondent to
prohibit it from dealing with the
Hilux pending finalisation of an
application for delivery of the Hilux to plaintiff. Although
defendant was cited as second
respondent, the application papers were
not even served on it. When this application was eventually
dismissed, Bosman still
did not communicate with defendant and/or
forward a letter of demand to it, claiming the plaintiff’s
contractual damages.
Instead Bosman confronted Wium in
private and clandestinely recorded the conversation on video tape.
[23]
I watched the video tape recording as I was invited to do and I have
no doubt in my mind that Bosman used bullying tactics
in the process
of putting leading questions to Wium in order for Wium to admit that
he acted on behalf of defendant in the hope
that this evidence could
be used to hold defendant liable as principal – incorrectly as
Bosman seemed to believe, on the
basis of vicarious liability as if
delictual liability was at stake. Wium, who eventually admitted
during his later disciplinary
hearing that he and Fourie facilitated
or attempted to facilitate the sale of plaintiff’s vehicles
without the knowledge
of defendant with the intention to retain the
proceeds or profit margins personally - the same person who was
regarded as trustworthy
and reliable - was either completely naïve
when he parted with the Hilux, or (and more probably) a fraudster who
participated
in a scheme to prejudice plaintiff, was clearly at a
disadvantage and in discomfort during the interview. His
overall expression
was that of being browbeaten. I am not
prepared to accept Bosman’s explanation for making the video
recording.
If he was confident that Wium had actual authority
to enter into the transaction on behalf of defendant with plaintiff
it would
really not be necessary to obtain the evidence that he tried
to obtain. Surely, he should have known, on his version, that
Fourie in particular, and possibly Neethling, would be able to
confirm his version. It was all along plaintiff’s case
that Wium as branch manager had actual authority to conclude the deal
on behalf of defendant and it raised the issue of ostensible
authority and estoppel for the first time in the replication. I
accept that it is trite that estoppel cannot be raised as
a cause of
action.
[24]
Bosman’s version that he does not read the Vrystaat newspaper,
it being a Bethlehem publication also distributed in Reitz
according
to him, struck me as highly improbable. There was no
cross-examination in this regard but his version cannot be
correct.
I find it highly unlikely and improbable. He obviously tried to
steer away from any knowledge of the several
advertisements placed by
defendant under the Automark brand in the newspaper and the fact that
none of his vehicles were ever advertised
by defendant as apparent
from these advertisements. I do not accept that a person of
Bosman’s stance in the community
who deals regularly with the
Toyota dealership in Reitz and often buy and sell Toyota vehicles
never reads defendant’s advertisements
as they appear from time
to time in the Vrystaat newspaper.
[25]
It is not contested that defendant has Toyota (new vehicles) and
Automark (used vehicles) dealerships in various towns in the
Eastern
Free State and Natal. Greyling Broers previously conducted a
Toyota and Automark dealership business in Reitz, but
since 1
September 2012 defendant commenced with an Automark dealership in
Reitz for its own account, but it does not keep new Toyota
vehicles
on its floor in Reitz. The Automark dealership entitles a
dealer to conduct second hand vehicle retail business,
usually
together with a Toyota parts and service business, using the
distinctive Automark signage. The first of plaintiff’s
photographs appearing in exhibit “A” shows the premises
of the Toyota dealership with the distinctive Automark logo
clearly
displayed. Ironically, this photograph, as well as others, has
been taken by Bosman. Defendant’s advertisements
in the
Vrystaat newspaper indicate in no uncertain terms that Automark
certified used vehicles are being offered for purchase.
The
so-called “Automark belofte”, containing seven
requirements for vehicles to be sold under the Automark brand,
appears vividly in each of the advertisements. Bosman visited
the Toyota dealership in Reitz on a weekly basis, but stated
in
cross-examination that he had never heard of the “Automark
belofte”, not even to speak of the seven requirements
contained
therein. I find this just as far-fetched and improbable as
Bosman’s version that he does not read the Vrystaat
newspaper,
trying to distance himself from the newspaper on the basis that it is
a Bethlehem newspaper distributed in Reitz.
The extracts of the
newspaper contained in exhibit “B” clearly show that the
newspaper does not only contain news pertaining
to Bethlehem and
Reitz, but even news of an athletics meeting held by the High School
Wilgerrivier in Frankfort, a neighbouring
town of Reitz. Petrus
Steyn, the district in which Bosman farms and the town in which he
conducts his attorney’s business,
is also a neighbouring town
of Reitz. Bosman frequently finds him in Reitz on his own
version. I cannot believe that
he, an Afrikaans speaking
person, does not read Vrystaat, an Afrikaans community newspaper.
If he would have read the newspaper
during the month of February 2013
he would have noticed that none of his vehicles were advertised by
defendant under the Automark
banner, or at all.
[26]
I am confronted with two diametrically opposed versions pertaining to
the inspection of the Hilux and the conversation entered
into at that
stage. As mentioned, Neethling testified that he had been
contacted previously by Bosman’s son who indicated
that he
wanted to trade in the Hilux for a new vehicle. Upon inspection
of the Hilux he was prepared to make an offer for
R238 000,00.
Repairs had to be done to the front fender and new rubberising had to
installed, whilst the tyres were
worn and had to be replaced.
Bosman denied that the tyres were worn or that this was even
mentioned and his version was that
the Hilux should be sold in that
same condition. Strangely enough the figure of R238 000,00
surfaced at a stage, even
on the version of Bosman, who testified
that he had been informed at a later stage that defendant could get a
cover price for the
vehicle in the amount of R238 000,00.
As mentioned earlier I am of the view that the probabilities as to
what happened
at this meeting favour defendant, but are even at best
for Bosman. I cannot see why Neethling would have left the
conversation
if Bosman merely jokingly asked him “om nie sy
Bethlehem maniertjies hier uit te haal nie” with reference to
the repairs
to be made to the Hilux. Neethling’s version
that he felt insulted by the manner in which his offer was rejected
and
therefore left is more probable. Bearing in mind the
odometer reading of the Hilux of just over 70 000 km and the
evidence
that a set of tyres would last between 30 000 and
40 000 km, it is probable that the Hilux was on its second set
of tyres,
that these were in fact not suitable and would have to be
replaced in order to resell the vehicle under the Automark banner.
[27]
I am not so convinced as defendant’s counsel that Bosman’s
instruction to Wium to sell the Hilux “uit die
hand uit”
of necessity meant that it was an instruction to Wium and/or Fourie
to sell without the authority of defendant.
On its own, it
would not be enough to make a negative finding against plaintiff, but
this instruction and/or arrangement must however
be considered
together with the factual matrix relating to the three vehicles of
plaintiff that Bosman wanted to dispose of.
[28]
It is Bosman’s evidence that the KZTE was handed over for
selling purposes before the Hilux, but on the video tape recording
he
indicated to Wium that he handed over the vehicles simultaneously.
This last version cannot be correct as neither Bosman,
nor Neethling
mentioned any discussion about the KZTE. I agree with
defendant’s counsel that the manner in which Bosman
dealt with
the KZTE and the Tata provides a parallel to his approach in respect
of the Hilux. There is sufficient merit in
the argument that
Bosman wanted to have his cake and eat it. Plaintiff wants the
court to find on the one hand that he was
bamboozled into a contract
with the Hilux – the defendant not informing him of its
internal procedures – while the
other two vehicle sales
proceeded outside the parameters of defendant’s control and
auspices to the advantage of plaintiff.
Bosman tried to
treat the Tata transaction as totally unrelated and with no bearing
on the dispute before the court because it
suits him to do so.
However he attempted to rely on the KZTE transaction to found an
unjustified estoppel defence.
Plaintiff’s pleaded case is
different. In the replication it is stated as follows:
“
Op
presies dieselfde wyse het die eisers in die verlede tweedehandse
voertuie verkoop en nuwe voertuie aangekoop by die verweerder
en deur
bemiddeling van die betrokke werknemer, Mnr Dirk Wium.”
1.3.10
Die verweerder se verteenwoordigers se magte het onder andere
ingesluit, soos in die verlede, die bevoegdheid om ‘n
ooreenkoms in die vorm en met die terme van die ooreenkoms tussen die
trust en die verweerder te sluit.”
In
response hereto the following further particulars were asked for
purposes of trial:
“
What
are the particulars of the ‘soortgelyke ooreenkomste’
that the defendant allegedly permitted Mr Dirk Wium to conclude
on
its behalf with third parties?”
Plaintiff
responded hereto as follows:
“
Die
besigheid was voorheen bekend as Greyling Broers en het die eiser
vele soortgelyke transaksies met hulle aangegaan en die jongste
transaksie is met Mnr Dirk Wium van verweerder aangegaan met
betrekking to ‘n 3 liter Toyota bakkie.”
This
3 litre Toyota bakkie is the KZTE referred to herein. The KZTE
transaction was concluded finally and payment made as
late as 18
February 2013 and thus after the alleged agreement pertaining to the
Hilux in the beginning of February. Bosman’s
evidence is
in direct contrast with plaintiff’s pleadings. As was the
case with the Hilux, the Tata was advertised
in the Landbouweekblad
with Bosman son’s cellphone number. This vehicle was
stored in defendant’s workshop.
A private deal was
entered into between Bosman and the purchaser and not one of
defendant’s sales representatives entered
into any negotiations
in that regard. The purchase price was paid directly into the
plaintiff’s bank account by the
purchaser and no commission
ex
facie
the evidence was ever paid over
to defendant. No tax invoice was issued by plaintiff according
to the evidence.
[29]
The KZTE was apparently not displayed in the display room for second
hand vehicles on defendant’s premises. If
it was the case
I would have expected Bosman to inform us about this. Again,
unlike as Bosman tried to indicate, no tax invoice
was issued in this
regard as well. It could not have been issued by plaintiff to
defendant as defendant did not purchase
the vehicle. It could
not have been issued to the purchaser as Bosman was not even aware of
the name of the purchaser and
the prize the purchaser paid for the
KZTE. He only knows that the plaintiff has received a cheque in
the amount of R70 000,00,
paid into its bank account by Fourie.
Bosman’s predicament in trying to explain value added tax
legislation and the
consequences upon a transaction of this nature is
indicative of the unbusinesslike manner in which he allegedly
contracted with
Wium.
[30]
After delivery of the Hilux to Wium in order to sell it on
plaintiff’s behalf according to Bosman, he had negotiations
with a certain Andrew of Ellisras, he being a possible purchaser.
He never mentioned this in his evidence in chief although
reference
was made thereto in the application papers in the urgent application
brought against Barloworld in the Pretoria High
Court. Again in
that case, he never asked Wium or anybody else of defendant to enter
into negotiations on plaintiff’s
behalf as one would have
expected, bearing in mind Bosman’s version that in the event of
a purchaser reacting to his Landbouweekblad
advertisement, defendant
would be entitled to R5 000,00 commission. Andrew never
came up with the money that was supposed
to be paid directly into
plaintiff’s bank account (or as Bosman testified, his
account.) In cross-examination Bosman
suggested that if the
transaction with Andrew would have gone through, he would have paid
the R5 000,00 commission over to
defendant. This is, as
argued on behalf of defendant, unconvincing as Bosman apparently did
not keep defendant and/or Wium
and/or Fourie up to date with his
negotiations with Andrew.
[31]
Contrary to plaintiff’s pleaded case, Bosman who specifically
relied on the KZTE transaction as the most recent transaction
in
order to succeed with the claim based on ostensible authority and
reliance on estoppel, did not testify that that transaction
was
concluded earlier than the agreement in respect of the Hilux.
Plaintiff failed to prove its case. It is clear that
the KZTE
transaction was not concluded prior to the negotiations pertaining to
the Hilux, but some time later. In any event
it should have
been clear to Bosman when he obtained a copy of the plaintiff’s
bank statement to ascertain whether the R70 000,00
was deposited
in respect of the KZTE, that it was done by way of a cheque deposit.
Red lights should have started to flash
pertaining to the identity of
the depositor, the clearance of the cheque and particularly in so far
as the cheque was not from
an established Toyota dealership such as
defendant. As mentioned above, this transaction does not
support plaintiff’s
pleaded case.
[32]
It is interesting to note that one of the so-called terms of the
agreement entered into in respect of the Hilux according to
plaintiff
is that it was an implied, alternatively tacit term of the agreement
that the defendant as motor vehicle dealer would
register the vehicle
as part of its dealer’s stock. On Bosman’s version
he was not even aware of such a requirement
and it only came to his
knowledge during the urgent application in the Pretoria High Court.
He obviously misconceived the
whole idea and did not understand that
a motor vehicle can only form part of a dealer’s stock if it is
acquired by the dealer
and only then is it necessary to act in
accordance with the provisions of the Second Hand Goods Act. It
is not plaintiff’s
case that it sold the Hilux to defendant and
this co-called implied, alternatively tacit term pleaded does not
make sense and is
immaterial.
[33]
Bosman’s version is inherently improbable. There are
internal contradictions in his evidence and also external
contradictions with what was pleaded and other objective facts.
I am not prepared to find that an agreement was entered into
as
alleged.
[34]
Even if it could be found that defendant was in the business of
marketing vehicles on behalf of clients, I furthermore find
it
improbable that defendant’s sales representatives would be
prepared to accept the Hilux for purposes of selling it on
behalf of
plaintiff at a prize much higher than the value placed on the
vehicle, to wit R238 000,00 and in the condition it
was. I
also find it improbable that, in such a case, defendant’s sales
representatives would be prepared to display
the Hilux in defendant’s
showroom while they were aware of the fact that Bosman had advertised
the vehicle personally with
his personal details and would be able to
compete with them in the selling of the vehicle. Obviously it
might be worthwhile
for a dishonest sales representative to try and
sell the vehicle on the side and without the transaction going
through defendant’s
books and thereby making some money on the
sideline.
[35]
I accept the version of Stone to the effect that during one of his
regular inspections of the Reitz branch, he found the Hilux
on
defendant’s showroom floor, whilst it did not form part of
defendant’s stock. He enquired from Wium in this
regard
who told him that it was a bakkie belonging to a farmer whereupon he
instructed him to remove the vehicle. At the
next visit the
vehicle was in fact removed from the showroom floor. It is true
that he mentioned in cross-examination that
the vehicle was removed
in his presence whilst he did not particularly testify about this in
his evidence in chief. Stone
had no reason to make up a story
and I find his version probable. I accept also that neither he,
nor any other employee of
defendant contacted Bosman to inform him
that the Hilux could not be displayed on defendant’s showroom
floor and had to be
removed.
[36]
I am satisfied that Bosman, being a businessman and attorney,
well-known at the Reitz dealership and frequently visiting Reitz,
tried to present himself as the proverbial stranger in Jerusalem.
He must have been aware of the factual material relied
upon by
defendant pertaining to acquiring and selling of motor vehicles, the
Automark dealership, what the Automark guarantee contains,
that
legislation such as the
Consumer Protection Act was
promulgated to
protect consumers and that retailers and suppliers such as second
hand motor vehicle dealers are at risk in dealing
with such
vehicles. I do not want to attribute to him detailed knowledge
of either the Second Hand Goods Act or the
Consumer Protection Act,
but
merely basic knowledge.
[37]
The facts
in casu
are clearly distinguishable from those in the two NBS Bank
judgments. Assante, the bank manager in those matters, was
given
wide and general powers and a façade of regularity was
created by the bank. The members of the public that dealt with
him relied on the representations by the bank and they acted
reasonably. In
Glofinco
on the other hand, the court accepted the principles enunciated in
the NBS Bank judgments, but found in favour of the bank for
the
reasons set out.
In casu,
defendant never represented to the
public that it was in the business of selling vehicles on behalf of
customers for commission.
It is an Automark dealer in respect
of its second hand vehicles. It is prepared to put its stamp of
approval on all vehicles
purchased for resale to the public and
therefore it certifies its vehicles as such and is prepared to give
its Automark promise
to its customers. The mere fact that Wium
was appointed branch manager was simply not enough to hold defendant
liable based
on ostensible authority if the totality of the evidence
is considered.
[38]
In conclusion I find that no actual agreement, either express or
implied, was concluded as alleged and furthermore, plaintiff
has not
proved the requirements for holding defendant liable on the basis of
ostensible authority and it has not proven to be entitled
to rely on
estoppel. There is no indication that defendant, and not its
employee, Wium, represented by words or conduct that
Wium and/or
Fourie had the authority to act as agents to sell second hand motor
vehicles on behalf of clients for commission.
That is not
defendant’s business. It purchases second hand vehicles
from customers and sells new and second hand vehicles
to customers.
[39]
The claim should be dismissed. Mr Claasen did not argue that in
the event of defendant being successful, it should
not be awarded
costs with the inclusion of the costs of two counsel. I am of
the view that the matter is sufficiently intricate
and important to
the parties to warrant the appointment of two counsel and my costs
order shall reflect this.
VII
ORDER
[40]
Therefore I make the following order:
1.
The plaintiffs’ claim is dismissed
with costs, such costs to include the costs of two counsel.
______________
J.
P. DAFFUE, J
On
behalf of plaintiff: Adv. J. Y. Claassen SC
Instructed
by:
Phatsoane
Henney Attorneys
BLOEMFONTEIN
On
behalf of defendant: Adv. A. W. M. Harcourt SC
assisted
by: Adv. J. J. Meiring
Instructed
by:
McIntyre
& Van der Post
BLOEMFONTEIN