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[2015] ZAFSHC 198
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Erasmus N.O. and Another v Verna van Den Blink Properties CC (A270/2014) [2015] ZAFSHC 198 (22 October 2015)
FREE
STATE
HIGH
COURT, BLOEMFONTEIN
REPUBLIC
OF
SOUTH AFRICA
Appeal No. : A270/2014
In
the appeal between:-
ABEL
HENDRIK ERASMUS
N.O.
1
st
Appellant
ABEL
HENDRIK ERASMUS (JNR)
N.O.
2
nd
Appellant
and
VERNA
VAN DEN BLINK PROPERTIES
CC
Respondent
CORAM:
KRUGER,
MOCUMIE
et
NAIDOO, JJ
HEARD
ON:
19
OCTOBER 2015
DELIVERED
ON:
22
OCTOBER 2015
[1]
This appeal concerns fidelity fund certificates issued to estate
agents under section 26 of the Estate
Agency Affairs Act 112 of 1976,
in particular where the estate agent is a close corporation.
[2]
In the court
a
quo
the respondent issued summons against the appellants in their
capacity as trustees of the Anthill Real Trust (the Trust) for the
payment of commission because the respondent was the effective cause
of the lease of property of the trust to the South African
Local
Government Association (SALGA). The court
a
quo
gave judgment in favour of the respondent.
[3]
The main point argued by Mr Reinders, for the appellant before us is
that the respondent close corporation
did not have a fidelity
certificate as contemplated in section 26 of Act 112 of 1976:
“
26.
No
person shall perform any act as an estate agent unless a valid
fidelity fund certificate has been issued to him or her and to
every
person employed by him or her as an estate agent and, if such person
is-
(a)
a
company, to every director of that company; or
(b)
a
close corporation, to every member referred to in paragraph
(b)
of the definition of
'estate
agent'
of that corporation.
”
[4]
Section 34A of Act 112 of 1976 reads as follows:
“
(1)
No estate agent shall be entitled to any
remuneration or other payment in respect of or arising from the
performance of any act referred to in subparagraph (i), (ii), (iii)
or (iv) of paragraph
(a)
of the definition of
'estate
agent'
,
unless at the time of the performance of the act a valid fidelity
fund certificate has been issued-
(a)
to
such estate agent; and
(b)
if
such estate agent is a company, to every director of such company or,
if such estate agent is a close corporation, to every member
referred
to in paragraph
(b)
of the definition of
'estate
agent'
of such corporation.
(2)
No person referred to in paragraph
(c)
(ii) of the definition of
'estate
agent'
,
and no estate agent who employs such person, shall be entitled to any
remuneration or other payment in respect of or arising from
the
performance by such person of any act referred to in that paragraph,
unless at the time of the performance of the act a valid
fidelity
fund certificate has been issued to such person.
”
Paragraph
(c)(ii) of the definition of “estate agent” in section 1
of Act 112 of 1976 reads:
“
(c)
(ii)
any person who is employed by an estate agent as defined in paragraph
(a)
and performs on his behalf any act referred to in subparagraph (i) or
(ii) of the said paragraph;
”
[5]
The trial court made the following findings:
“
[16]
The plaintiff has led evidence of proof of its incorporation (pgs 38
to 39 of the court bundle), and that
she and the plaintiff had been
issued with the necessary and valid Fidelity Fund Certificates at the
material times by the Estate
Agency Affairs Board. As correctly
pointed out by Mr Loubser, in my view, the Fidelity Fund Certificate
appearing on pg 37
of the court bundle, does meet the requirements of
proving that the sole member of the plaintiff and the plaintiff (a
close corporation)
were duly issued with a valid Fidelity Fund
Certificate. The certificate clearly shows
ex
facie
that:
16.1 It
is issued to ‘VAN DEN BLINK VERNA LOUISE’,
16.2 In
her ‘capacity’ as ‘Principal (Sole Proprietor at
Firm), and
16.3
Of the ‘Close Corporation’ called ‘VERNA VAN DEN
BLINK PROPERTIES trading as Sotheby’s
Lew Geffen International
Realty Bloemfontein’.
[17]
I find no merit in the submission that a separate and distinct
certificate, only in the name of the
plaintiff itself should have
been issued. After all, the defendant has not led any evidence
to that effect but merely sought
to lead evidence (by argument from
the bar) that such should be the position. I am satisfied that
the certificate leaves
no doubt about the fact that it has been
issued to Ms van den Blink, in her capacity as the principal of the
plaintiff specifically
mentioned by name in the said certificate.
Therefore, as testified by Ms van den Blink, that is how the
plaintiff has always
operated for years and the Board has never
queried its qualification to act as an estate agent, having issued
similar certificates
to it before. Furthermore, the said
certificate was valid for the period in issue (2011).
”
[6]
Mr Reinders refers to
Ronstan
Investments (Pty) Ltd and Another v Littlewood
2001 (3) SA 555
(SCA). In the
Ronstan
case the appellants sued the respondent for damages arising from
breach of contract by the respondent. In the High Court Fevrier
AJ
dismissed the appellant’s claim. In the
Ronstan
case the respondent was the sole owner of a company known as Perirand
Estates (Pty) Ltd which carried on business as an estate
agent.
However, the transaction that was relevant for the court case before
the Supreme Court of Appeal was concluded by
the respondent for his
own account and not on behalf of the company. A fidelity fund
certificate had been issued to the respondent
in his capacity as
director of the company. The appellants in the
Ronstan
case contended that because a fidelity certificate had not been
issued to the respondent on his own account, he was precluded by
section 34A from earning remuneration for any act that he performed
as an estate agent. In the Supreme Court of Appeal Nugent
AJA
(as he then was) stated that a person not issued with a fidelity
certificate is not entitled to perform any act as an estate
agent
(section 26) and is not entitled to remuneration if that person does
work as an estate agent (section 34A) (at par [21] of
the
judgment).
[7]
In this case the respondent relies on a fidelity certificate issued
to “Van den Blink Verna Louise”
for the year 2011.
Her capacity is stated as being “principal (sole proprietor at
firm)”. The words “Close
Corporation” or “CC”
do not appear on the certificate. At the bottom of the form the
name “Van Den
Blink” appears together with her ID
Number. The certificate was issued to her, not to the CC.
[8]
The court
a
quo
took the view that in the case of a close corporation that does
business as an estate agent, the certificate is issued to the member
or members of the close corporation, not to the close corporation.
It is not in dispute that no fidelity fund certificate
was issued to
the plaintiff close corporation. Mr Loubser for respondent says
that no certificate need be issued to the close
corporation. Mr
Reinders says that where the estate agent is a close corporation a
certificate has to be issued to the close
corporation as well as to
every member. (At this stage I do not deal with employees).
[9]
The regulations dealing with certificates under Act 112 of 1976
appear in GN R 1798 of 29 August 1986,
as amended by several other
Government Notices. Regulation 9 remained unamended:
“
9
(1) Any company or close corporation operating as an
estate agent is hereby exempted from the payment of the levy and
the
contribution referred to in regulation 2, provided a fidelity fund
certificate has been issued to each of its directors, or
members
contemplated in paragraph (
b
)
of the definition of estate agent in section 1 of this Act.
(2)
Notwithstanding the provisions of subregulation (1), such company or
close corporation shall in its
own name apply in terms of these
regulations for the issue to it of a fidelity fund certificate.
(3)
A fidelity fund certificate referred to in subregulation (2) shall be
issued free of charge and shall
to the satisfaction of the board be
displayed in a prominent position on the premises of the company or
close corporation concerned.
”
Regulation
9(2) states that a close corporation must in its own name apply for a
fidelity certificate which is issued free of charge
and which
certificate must be displayed on the premises of the close
corporation. Thus, if there is any doubt as to the wording
of
sections 26 and 34A, the regulations make it clear that a separate
fidelity certificate must be issued to the close corporation.
[10]
It is not in dispute that the respondent close corporation did not
have a fidelity certificate issued in its own
name. The
respondent relied on the fidelity certificate issued to Mrs Van den
Blink. That it could not do. In
these circumstances it is
not necessary to deal with the other issues in this appeal. The
appeal must succeed.
ORDER
1.
The appeal succeeds.
2.
The order of the court a quo is replaced with the following:
“
Plaintiff’s
claim is dismissed with costs”.
_____________
A. KRUGER, J
We
agree.
_______________
____________
B.C.
MOCUMIE, J
S. NAIDOO, J
On
behalf of appellants:
Adv S.J. Reinders
Instructed by:
Spangenberg Zietsman &
Bloem Att
BLOEMFONTEIN
On
behalf of respondent:
Adv P.J. Loubser
Instructed
by:
Eugene Attorneys
BLOEMFONTEIN
/wm