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[2014] ZAGPPHC 349
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Capstone 32 (Pty) Ltd v Du Preez (16205/2013) [2014] ZAGPPHC 349 (19 February 2014)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
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 […..] and
director of Rose Innes Du Preez Inc at […]
and also
practising at […].
[3]
The relevant portion of the plaintiff's particulars of claim are as
follows:
"3.
0n 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.
4.1
The 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
20 Redelinghuys 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
4.2
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