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[2014] ZAGPPHC 24
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Capstone 32 (Pty) Limited v Du Preez (16205/2013) [2014] ZAGPPHC 24 (19 February 2014)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
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IN THE HIGH COURT OF
SOUTH AFRICA
/ES
(
GAUTENG DIVISION,
PRETORIA
)
CASE NO: 16205/2013
DATE: 19 FEBRUARY 2014
IN THE MATTER BETWEEN
CAPSTONE 32 (PTY)
LIMITED
...........................................................
PLAINTIFF
AND
CASPER JAN HENDRICK DU
PREEZ
...........................................
DEFENDANT
JUDGMENT
MOGOTSI, AJ
Introduction
[1] The plaintiff seeks judgment excepting paragraphs 3.1 to 3.7
and 4.2 of defendant's plea due to "lack of the necessary
averments" to sustain a defence against plaintiff's action.
Parties
[2] Capstone 32 (Pty) Ltd is a company duly registered and
incorporated with limited liability in accordance with the company
laws
of the Republic of South Africa and having its main place of
business at Suite 501 the Pinnacle, Parking Street, Nelspruit. Casper
Jan Hendrik du Preez is an attorney, residing at 2[…] R[…]
Street, B[…] and director of Rose-Innes Du Preez
Inc at 20
Pilgrim Street and also practising at 20 Pilgrim Street,
Barberton.
[3] The relevant portion
of the plaintiff's particulars of claim are as follows:
"3. On or about 2
nd
day of November 2011 and at Barberton, the plaintiff and the
defendant entered into a written agency and commission agreement,
a
copy of which is annexed hereto and marked 'POC1' ('the agreement').
4. 4.1The express maternal terms of
the agreement were,
inter alia
, as follows:
4.1.1 the plaintiff
authorised the defendant to sell on behalf of the plaintiff the
property set out in paragraph 1 of the agreement
('the property');
4.1.2 the gross purchase
price at which the property could be sold was the sum of
R21 600 000,00 or any other price which
could be negotiated
between the plaintiff and any prospective purchaser introduced by the
defendant;
4.1.3 the plaintiff
agreed to pay commission to the defendant at the rate of 8% of the
gross purchase price excluding value added
tax, which commission
became due upon the conclusion of a valid and binding agreement of
sale being concluded between the plaintiff
and a prospective
purchaser and which commission would be payable on the date of
registration of transfer of the property into
the name of the
prospective purchaser;
4.1.4 the plaintiff
authorised the transferring attorney ('the conveyancer') to deduct
the commission from the purchase price or
any part thereof.
5. In and during June
2012 and at Barberton, the plaintiff represented by a certain Simon
Jorgeman and the defendant personally,
entered into an oral agreement
('the oral agreement') in terms whereof it was agreed that in the
event of the defendant finding
a buyer for the property in the amount
of R19 million, the defendant would be entitled to commission
including value added
tax in the amount of R500 000,00 and would
not be entitled to commission at the rate of 8% of the gross purchase
price excluding
value added tax as agreed to in the agreement."
[4] The defendant pleaded as follows to the particulars of claim:
"3.
AD
PARAGRAPH 3 THEREOF
3.1 The written mandate
'POC1' was intended to record certain important aspects of an oral
mandate that already existed at the time
of the signing of 'POC1'
between plaintiff and Rose-Innes Du preez Inc as represented by
the defendant in his capacity as
a director of Rose-Innes Du preez
Inc.
3.2 The plaintiff,
represented by
inter alia
Mr Dror Torgeman, was aware before
the signing of 'POC1' that the defendant – acting in his
capacity as an attorney and director
of Rose-Innes Du preez Inc –
had already commenced to perform the mandate contract and had already
identified and introduced
to plaintiff a potential purchaser to the
plaintiff's properties namely the Department of Rural Development and
Land Reform.
3.3 Prior to the signing of
'POC1' the plaintiff knew that the defendant at all relevant times
conducted a practice as an attorney
from his residential address at
20 Redelinghuys Street, Barberton under the name and style of
Cas du Preez Attorneys, as well
as a practice as attorney in his
capacity as a director of Rose-Innes Du Preez Inc at 20 Pilgrim
Street, Barberton and also
from the address at 2[…] R[…]
Street.
3.4 Annexure 'POC1' was not
signed with the intention that it should serve as the exclusive
record of the existing mandate agreement
aforesaid, nor with intent
to bring about a new mandate agreement.
3.5 At all times relevant
the plaintiff knew that the defendant was performing and would be
performing the aforesaid mandate in
his capacity as an attorney, and
more specifically in his capacity as a director of Rose-Innes Du
Preez Inc.
3.6 Annexure 'POC1',
properly interpreted in context, confirmed the mandate of the
defendant in his capacity as an attorney namely
as director of
Rose-Innes Du Preez Inc, to conduct negotiations on behalf of the
plaintiff with a view thereto that it would result
in a sale of the
properties listed in 'POC1' in which event the commission provided
for in 'POC1' would be payable.
3.7 Alternatively, and in
so far as it may be held that the mandate was given to the defendant
personally, the defendant in obtaining
the mandate acted in his
capacity as agent for a principal, being Rose-Innes Du Preez Inc.
AD
PARAGRAPHS 4.1.1
TO 4.1.4 THEREOF
In the result the defendant contends that the
terms as set out in 4.1.1 to 4.1.3 constituted terms of the mandate
as between
Rose-Innes Du Preez Inc and the plaintiff, but not all
the terms thereof.
5.
AD
PARAGRAPH 5 THEREOF
The
defendant denies each and every allegation contained in this
paragraph as if specifically traversed.
8.
AD
PARAGRAPH 8 THEREOF
At no
stage prior to payment was there any dispute about the fact that
Rose-Innes Du Preez Inc was entitled to commission in the
amount of
R1 520 000,00 plus value added tax ('VAT')."
[5] The plaintiff's exception was framed as follows:
1. The plaintiff hereby
notes an exception to paragraphs 3.1 to 3.7 and 4.2 of the
defendant's plea ("the plea") on the
basis that the
aforesaid paragraphs lack the necessary averments to sustain a
defence to the plaintiff's particulars of claim.
1.1 The plaintiff's case is
founded upon the terms of a written agency and commission agreement,
which is annexed to the particulars
of claim as annexure 'POC1' ("the
agreement").
1.2 The defendant admits
the conclusion of the agreement as between himself and the plaintiff.
1.4 The reliance by the
defendant on the oral mandate between the plaintiff and Rose-Innes is
precluded by the parol evidence rule
in the extrinsic evidence of the
oral mandate is inadmissible on the basis that such evidence would
contradict and/or vary the
relevant terms of the agreement.
2.1 In terms of the
agreement, properly constructed and interpreted:-
2.1.1 if regard is had to
the following paragraphs 4.1.1, 4.1.2 and 4.1.3, the construction as
contended for by the defendant in
paragraph 3.6 of the plea is not
capable of being sustained.
3. 3.1 In terms of the agreement,
properly construed and interpreted as above, the defendant bound
and/or entitled himself solely
and exclusively as a principal and not
as an agent acting on behalf of a principal.
3.2 The defendant, in
paragraph 3.7 of the plea, pleads that the defendant in concluding
the agreement acted in his capacity as
agent for a principal, being
Rose-Innes.
3.3 The defendant is
precluded from relying on the aforesaid defence by virtue of the fact
that extrinsic evidence in this regard
is inadmissible on the basis
that such evidence would contradict and/or vary the relevant terms of
the agreement.
4. As a consequence of
the aforesaid, paragraphs 3.1 to 3.7 and 4.2 of the plea lack the
necessary averments to sustain a defence
against the plaintiff's
action and are therefore excipiable.
It is the plaintiff's contention that the defendant is precluded
from relying on the alleged oral agreement by virtue of the parol
evidence or integration rule. The plaintiff further contends
that the oral agreement alleged by the defendant contains terms
which
are at variance with the written agreement.
The parol evidence rule provides that where a jural act is
incorporated in a document, it is not generally permissible to adduce
extrinsic evidence of its terms. In
Venter v Bircholtz
1972 1 SA 276
(A) at 282 the Appellate Division accepted
Wigmore
's
description of parol evidence rule as the "integration rule".
This description was later endorsed in
National Board (Pretoria)
(Pty) Ltd v Estate Swanepoel
1975 3 SA 16
(A) 26. Wigmore
Evidence
3
rd
ed par 2425 describes the rule as
follows:
"This
process of embodying the terms of a jural act in a single memorial
may be termed the integration of the act, ie its formation
from
scattered parts into an integral documentary unit. The practical
consequence of this is that its scattered parts, in their
former and
incohate shape, do not have any jural effect; they are replaced by a
single embodiment of the act. In other words when
a jural act is
embodied in a single memorial, all the utterances of the parties on
that topic are legally immaterial for the purposes
of determining
what are the terms of their act."
Similarly in the earlier decision of
Union Government v
Viannini Feno Concrete Pipes (Pty) Ltd
1941 AD 43
at 47,
WATERMEYER AJA observed:
"Now
this court has accepted the rule that when a contract has been
reduced to writing, the writing is in general regarded
as the
exclusive memorial of the transaction and in a suit between the
parties no evidence to prove its terms may be given save
the document
or secondary evidence of its contents, nor may the contents of such
document be contradicted, altered, added to or
varied by parol
evidence."
The plaintiff argues further that evidence the defendant seeks to
adduce during trial would contradict the terms of the contract
entered into.
The defendant contends that the circumstances of this case fall
within exceptions to the parol evidence rule, see
Johnston v Leal
1980 3 SA 927
(A) where CORBETT JA (at 944B-C) said:
"Where
a written contract is not intended by the parties to be exclusive
memorial of the whole of their agreement but merely
records a portion
of the agreed transaction, leaving the remainder as an oral
agreement, then the integration rule merely prevents
the admission of
extrinsic evidence to contradict or vary the written portion: it does
not preclude proof of the additional or
supplemental oral agreement
..."
The defendant therefore says there is a preceding oral agreement
that supplements "POC1" (the agreement) and where extrinsic
evidence can be advanced without regard being had to "POC1"
such evidence would be admissible as constituting an exception
to the
parol evidence rule in the form of a partial integration of the
preceding oral agreement.
The partial integration rule then raises the same question as the
integration rule and that is, was the writing the sole and memorial
of the agreement? In traditional terms, the content of a
document may not be "added to" by parol evidence if it
was
intended to be the sole memorial of the transaction; but that it may
be added to if the written document was not intended to
embody the
whole transaction. It may not be "added to" by parol
evidence which contradicts it.
In this case the plaintiff says "Pursuant to the agreement
and the oral agreement being concluded ..."
The defendant also says:
"The
written mandate 'POC1' was intended to record certain important
aspects of an oral mandate that already existed at the
time of
signing of 'POC1' ."
And he goes on to say:
"Annexure
'POC1' was not signed with the intention that it should serve as the
exclusive record of the existing mandate agreement
aforesaid, nor
with intent to bring about a new mandate agreement."
In
Johnston v Leal, supra,
the point was made that the
court may look at the surrounding circumstances (including the
negotiations) in order to determine whether
there has been a total or
partial integration. This in itself is suggestive of the fact
that the court may have regard to
extrinsic evidence to ascertain the
true intention of the contracting parties.
Wigmore
at par 2430 regards the correct inquiry for
determining the admissibility to a collateral agreement to be:
"Whether
the writing was intended to cover a
certain subject
of
negotiation; for if it was not, then the writing does not embody the
transaction on that
subject
: and one of the circumstances of
decision will be whether the one subject is so associated with others
that they are in effect
'parts' of the same transaction, and,
therefore, if reduced to writing at all they must be governed by the
same writing."
The fundamental question as
Wigmore
recognised is as to the
intent of the parties to restrict the writing to specific elements or
subjects of negotiation.
In
Philmatt (Pty) Ltd v Mosselbank Developments CC
1996 2
SA 15
(A) the principle enunciated in
Johnston v Leal
that the
integration rule does not "preclude the court from enquiring
into the true content of the transaction in order to
determine [its]
validity" was applied to allow extrinsic evidence to show that a
contract failed to include a material term
and that it was,
therefore, void for failing to comply with the requirements of
section 2(1)
of the
Alienation of Land Act 68 of 1981
.
The rules applicable to the admissibility of extrinsic evidence
developed from a strict formalistic approach as applied in the
Delmas
Milling v Du Plessis
case to an approach where any extrinsic
evidence may be admitted as long as it is admissible in terms of
rules of evidence and
it falls within the category of what HARMS DP
stated in the
KPMG Chartered Accountants (SA) v Securefin Ltd
case as "context" or "factual matrix".
It also "seems clear that the function of a well-founded
exception that a plea or part thereof does not disclose a defence to
the plaintiff's cause of action is to dispose of the case in whole or
in part. It is for this reason that exception cannot
be taken
to be part of a plea unless it is self-contained, amounts to a
separate defence and can therefore struck out, without
affecting the
remainder of the plea."
Paragraphs 3.1 to 3.7 and 4.2 are not self-contained.
Paragraphs 2, 3.8.1, 3.8.2, 4.1, 5, 6.2, 8, 9 and 10 of the
defendant's
plea are the continuation of all the paragraphs the
plaintiff excepts to.
There also appears to be ambiguity or lack of completeness in
"POC1" hence both parties are talking about oral agreement
preceding or subsequent to the completion of the written agreement.
For all the above reasons, the exception cannot succeed and in the
result I make the following order:
1. The exception is dismissed.
2. The costs are to be costs in the cause of the main action.
D D MOGOTSI
ACTING JUDGE OF THE GAUTENG DIVISION, PRETORIA