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[2014] ZAGPPHC 307
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Standard Bank of South Africa Ltd v Izimoto Trading (Pty) Ltd t/a Global Nissan (70993/2011) [2014] ZAGPPHC 307 (10 April 2014)
REPUBLIC
OF SOUTH AFRICA
GAUTENG
DIVISION OF THE HIGH COURT, PRETORIA
CASE
NO: 70993/2011
DATE:
10 APRIL 2014
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
In
the matter between:
THE
STANDARD BANK OF SOUTH AFRICA
LTD
.........................................................
Plaintiff
and
IZIMOTO
TRADING (PTY) LTD t/a GLOBAL
NISSAN
................................................
Defendant
JUDGMENT
KGANYAGO
AJ
[1]
The plaintiff has instituted an action against the defendant claiming
two amount of R660 660.40 with two alternative claims
of R214 000.00
and R100 000.00 respectively. The plaintiff’s claim is
based on an alleged misrepresentation made
by the defendant.
[2]
According to the plaintiff, the defendant sold to the plaintiff two
tipper trucks which the defendant misrepresented as
new whereas
they were second hand trucks. The plaintiff further alleges that
the defendant has misrepresented to them
that the two trucks
were having added extras whereas they did not have them. The
plaintiff alleges that they made payment
to the defendant based
on the misrepresentation.
[3]
According to the plaintiff, the misrepresentations by the defendant
were material and made with the intention to induce
the
plaintiff to enter into the agreements, which the plaintiff did.
The plaintiff is of the view that, had they been
aware of the
true facts, they would not have entered into the two sale
agreements. The plaintiff is of the view that based
on
the defendant’s misrepresentations, they are entitled to
claim cancellation of the sale agreements and claim
repayment of
the purchase price in respect of each of such sale.
[4]
The action is defended. The defendant denies any
misrepresentation. According to the defendant, Novus Asphalt CC
(“the
consumer”), approached them and enquired about
purchasing two demo tipper trucks. The consumer inspected the
two
trucks, whereafter they acknowledged that the two trucks
were in good order and condition. The consumer was well aware
that the two tipper trucks were demos, and they willingly bought
them.
[5]
The plaintiff called three witnesses to testify. The first witness to
testify was Deon van Rooyen. He testified that presently
he is
employed by Northwest Powerstar. He is selling commercial
vehicles. He is having 23 years of experience in that
field.
[6]
He had inspected the two tipper trucks. During 2006 and 2007, the
two tipper trucks were used as demo vehicles by the Super
Group.
At some stage, Super Group sold the two trucks in question to BB
Trucks in Polokwane.
[7]
The two trucks were used as demo vehicles for almost two years.
Their mileage would have been around 30 000 km. The two
trucks
would not have been classified as new as they were refurbished
as a result of fair wear and tear.
[8]
When the two vehicles were sold to BB Trucks, they did not have
any extras. At the time they were sold to BB Trucks, their
value
was R520 000.00 each excluding VAT.
[9]
The defendant has sold the two trucks for R734 000.00 each.
That would not have been a reasonable price.
[10]
The witness was cross-examined. The witness conceded that
demo vehicles are not registered but that they are put on a
roadworthy test. He conceded that it was correct for the defendant to
refer the two trucks as new when the customer registered
them for the
first time. He conceded that he cannot say whether the price
charged by the defendant for the two trucks
was unreasonable or
not.
[11]
The second witness to testify for the plaintiff was Mr Johan Otto.
He testified that he is employed by Efficient and Finance
doing
vehicle finance.
[12]
During 2008 he assisted the consumer to prepare an application
to finance two trucks. When he was approached, Wesbank
had
already declined the application of the consumer.
[13]
The invoice that he received from the defendant was addressed
to Wesbank. He prepared the application and submitted it
to the
plaintiff. On the application he wrote that the vehicles were
new. The application was approved and the consumer
was requested
to pay a 20% deposit. It is easy for a bank to finance a new
vehicle than a second hand vehicle.
[14]
The documents that were submitted to him to assist the consumer
to apply for finance, were indicating that the vehicles
were
new. Nobody has told him that they were used vehicles. Had he
known that they were used vehicles, he would not have
written
them as new on the application form.
[15
The witness was cross examined, and he conceded that on the
defendant’s application for finance which the consumer has
signed, the tipper truck has been described as demo and stated
that maybe that was the reason why Wesbank had declined
the
consumer’s application. He conceded that the invoice
issued by the defendant, described the tipper truck as
second
hand goods. He however stated that it was for the first time he
sees the defendant’s invoice even though it is
dated 25
January 2008. He conceded that the consumer has signed the
release documents to confirm that he had inspected
the vehicles
and that he was satisfied with its condition.
[16]
Rozane Meintjies testified as the plaintiff’s third witness.
She testified that she is employed by the plaintiff
in the
vehicle and assets finance. Mr Otto has brought the consumer’s
application for finance to her. The application
was accompanied
by a copy of an invoice. The invoice was stating that the
vehicle was new. The application was approved.
[17]
For the bank to pay, it must receive an invoice from the dealership.
She was never given documents that indicate that
the tipper
truck were either used or demo.
[18]
The witness was cross-examined and she conceded that for a
new vehicle, a deposit is not required. She further conceded
that prior to the finalisation of the deal, one Danie Botha had
phoned her to inform her that the trucks in question
were used
vehicles.
[19]
Danie Botha was the only witness to testify on behalf of the
defendant. He testified that at the beginning of January
2008,
the consumer came with the intention of buying two trucks. His
application for finance was approved by the plaintiff.
[20]
The consumer came to the dealership together with his wife.
He inspected the trucks and was happy with their condition.
The
trucks in question were demo vehicles.
[21]
The consumer was assisted by a broker Mr Otto to process
their application for finance. He (witness) did not get any joy
from Mr Otto, and the process of applying for finance was taking
time to be finalised. He phoned Ms Meintjies to enquire
about
the status of the consumer’s application. During their
discussion he found out that Ms Meintjies was under
the
impression that the trucks were new. He however, corrected her,
and told her that they were used trucks.
[22]
The witness was cross-examined and he conceded that they did not
add any extras on the two trucks. He denied that the
invoices
that were allegedly submitted to the plaintiff for payment, were
invoices that emanates from the defendant.
[23]
That is in short the evidence that was adduced by both parties. It is
not in dispute that the defendant has sold the two
tipper trucks
to the consumer. It is not in dispute that the consumer was
financed by the plaintiff for the purpose of
the two trucks. It
is not dispute that the consumer had taken delivery of the two
tipper trucks after the plaintiff has paid
the defendant the
purchase price.
[24]
The plaintiff is alleging that that the defendant has described the
two tipper trucks as new whereas they were not new.
According to
the plaintiff, the defendant knew that the two tipper trucks
were used vehicles, but instead issued false
invoices which
described the two trucks as new. The plaintiff submit that had
they known about the factual position,
they would not have
financed the two trucks.
[25]
The defendant denies having presented any false invoices to the
plaintiff. According to the defendant, the consumer was
aware
that the two trucks were demo vehicles, and has inspected them
and was satisfied with their condition, hence he
signed a
written authority to release them for the plaintiff to effect
payment.
[26]
Van der Merwe, Van Huyssteen, Reinecke and Lubbe on Contract General
Principles, second edition at page 95 state the following:
-
The
elements of delict misrepresentation in contrahendo are:
-
An
act (conduct), which displays the quality of wrongfulness, is usually
accompanied by fault or blameworthiness on the part of
the wrongdoer,
and causes an undesirable result (either the very conclusion of the
contract or some detrimental result (damage)
flowing from the
contract.)”
[27]
In the case of International Shipping Company (Pty) Ltd v
Bentley (138/89
[1989] ZASCA 138
at paragraph 64-65 the court
said the following:-
“
As
has previously been pointed out by this court, in the law of delict
causation involves two distinct enquiries. The first is a
factual one
and relates to the question whether the defendant’s
wrongful act was the cause of the plaintiff’s
loss. This
has been referred to as factual causation.
The
enquiry as to factual causation is generally conducted by applying
the so-called
u
but-for”
test which is designed to determine whether a postulated cause
can be identified as a
causa
sine ctuanon
of
the loss in question. In order to apply the test one must make a
hypothetical enquiry as to what probably would have
happened but
for the wrongful conduct of the defendant. The enquiry may
involve the mental elimination of the wrongful
conduct and the
substitution of a hypothetical course of a lawful conduct and
the posing of the question as to whether upon
such an hypothesis
plaintiff’s loss would have ensued or not. If it would in
any event have ensued, then the wrongful
conduct was not the course
of the plaintiff’s loss; aliter, if would not so have ensued.
If the wrongful act is
shown in this way not to be a
causa
sine guanon
of
the loss suffered, then no legal liability can arise. On the
other hand, demonstration that the wrongful act
was
a
causa
sine guanon
if
the loss does not necessarily result in a legal liability.
The
second enquiry then arises, viz whether the wrongful act is
sufficiently closely or directly to the loss for legal liability
to
ensure or whether, as it is said, the loss is too remote. This
is basically a juridical problem in the solution of
which
considerations of the policy may play a part. This is sometimes
called legal causation. ”
[28]
Mr Otto was instrumental in securing finance for the consumer. He is
the one who has prepared the motivation on behalf
of the
consumer after the consumer’s application was declined by
Wesbank. Mr Otto is the one who has submitted
the consumer’s
application for finance to Ms Meintjies. The invoice that was
used was a copy of the one that was initially
submitted to
Wesbank. Ms Meintjies accepted the invoice addressed to Wesbank
without questioning it. In my view, it is strange that
Ms
Meintjies has accepted an invoice addressed to Wesbank without
questioning it. During the trial it was not explained why
she
had accepted that invoice without querying it.
[29]
Mr Otto when preparing the motivation on behalf of the consumer,
was well aware that the consumer’s first application
at
Wesbank was declined, and he knew the reasons why it was
declined and those reasons were never disclosed during the
trial. He could not have assisted the consumer without enquiring
why his first application was declined. Mr Otto on accepting
the
mandate to assist the consumer, he would not have repeated the
same facts that led to Wesbank declining the first
application.
During cross-examination he stated that maybe the reasons why
Wesbank has declined the consumer’s application
was that the
trucks were not new. In my view he knew that the plaintiff will
decline the consumer’s application
if he repeats the same
information that was submitted to Wesbank. The only way to
assist the consumer was to state that
the trucks in question
were new, whereas he knew that was not the case.
[30]
The invoice that was submitted by Mr Otto to Ms Meintjies for
the purposes of approving the finance, is without the
defendant’s
logo. The defendant disputes that the said
invoice emanate from them. On the invoice which the defendant
alleges that
it was issued by them, the trucks in question have
been described as used. However, Ms Meintjies disputed ever
receiving
or seeing the invoice which the defendant alleges that
it emanates from them. The question is where did Mr Otto obtained the
invoice that is disputed by the defendant. This could not
be established during the trial.
[31]
Another question which was not dealt with during the trial is whether
for the purposes of approval of the finance, do
they use the
invoice or the quotation. In my view, an invoice is for payment
whilst a quotation can be used to approve
the loan. In this case
an invoice was used to approve a loan instead of a quotation,
and that raises more questions than
answers.
[32]
Apparently it took some time before the consumer’s application
for finance was approved. During this period, Mr
Botha the
employee of the defendant was very much anxious to have the deal
finalized. He even phoned Ms Meintjies on
several occasions
enquiring about the progress of approving the consumer’s
application. During the discussion with Ms Meintjies,
it came to
his attention that according to Ms Meintjies the trucks which
were to be financed were new. Mr Botha immediately brought
it to
the attention of Ms Meintjies that the vehicles in question were
used trucks. Ms Meintjies conceded that she was informed
more than
once by Mr Botha that the vehicles in question were used trucks.
If indeed the papers before her were indicating
that the trucks
in question were new, the information she received from Mr Botha
should have raised a red flag and she
should have requested
clarity as to why the information she was having on the
application was different from what Mr Botha
was telling her.
However, she elected to ignore the information given to her.
During the trial she could not explain why she
had ignored the
information given to her by Mr Botha.
[33]
In my view Ms Meintjies has been negligent in ignoring the
information given to her by Mr Botha. Had she been more careful
and followed up the information given to her by Mr Botha, she
would have known that the transaction which they were financing
was for used trucks and not new trucks.
[34]
Ms Meintjies has conceded that for a new vehicle, a deposit is
not required and that a deposit is required for a used
vehicle.
In this case the consumer was requested to pay a deposit of 20%
on both trucks. The question is why the consumer
was requested
to pay a deposit of 20% if it was not the policy of the
plaintiff to request a deposit for a new vehicle.
Ms Meintjies
could not explain this during the trial. This gives credence to
why I pointed out in paragraph 33 above, that
Ms Meintjies might
been colluding with Mr Otto.
[35]
Before the plaintiff could pay the defendant, it must be satisfied
that the consumer is satisfied with the product that
was
delivered to it. That will be confirmed by the release authority
which the consumer is required to sigh if satisfied.
In this
case the consumer has signed the release authority confirming
that he had inspected the two trucks and that he was satisfied
with their condition.
[36]
Mr Otto conceded that the consumer has signed the release authority
in his presence and he (Mr Otto) is the one who took
the release
authority to the plaintiff. If the release authority was signed
in the presence of Mr Otto, in my view Mr
Otto was witnessing
that indeed the consumer had inspected the vehicle and was
satisfied with its condition. If the two trucks
have already
clocked 30 000km on the speedometer, as part of the inspection,
the consumer could have easily noticed that.
The consumer was
the person who was in a better position to explain whether the
defendant had sold him a new or used
trucks. However, the plaintiff
has failed to call him as a witness.
[37]
In my view the plaintiff has failed to prove that there was
any misrepresentation on the part of the defendant, since
Mr
Botha has expressly informed Ms Meintjies that the two trucks
were used. Furthermore, the consumer had inspected the
two
trucks and was happy with their condition. The speedometers of
the two trucks had already clocked more than 30 000km,
of which
in my view the consumer would have easily noticed that. The
person who could have clarified all these discrepancies
is the
consumer. However, the plaintiff has failed to call him as a
witness. In my view, the failure to call the consumer
as a witness
by the plaintiff, is fatal to their case.
[38]
In my view, if there was any misrepresentation, the person to be
held liable is Mr Otto who prepared the motivation for
the
consumer and Ms Meintjies who ignored Mr Botha when he expressly
told her that the two trucks were used and not new.
The
plaintiff has to establish a causal link between the
misrepresentation relied upon and the damages it eventually
suffered. See Fourie v First Rand Bank Ltd
2013 (1) SA 204
(SCA).
In my view the plaintiff has failed to link the defendant to
the alleged misrepresentation.
[39]
Under the circumstances, in my view, the plaintiff has failed to
proof that they have entered into the agreements with
the
defendant based on the misrepresentation made by the defendant.
Therefore I don’t find any reasons why the
sale agreements
should be cancelled and the defendant be ordered to repay the
plaintiff’s purchase price in respect
of the sale agreements.
[40]
In the result I make the following order:-
The
plaintiffs claim is dismissed with costs.
MF
KGANYAGO
ACTING
JUDGE OF THE GAUTENG
DIVISION
OF THE HIGH COURT, PRETORIA