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[2014] ZAFSHC 182
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Van Den Blink Properties CC v Erasmus N.O and Another (2557/2012) [2014] ZAFSHC 182 (26 August 2014)
FREE STATE HIGH
COURT, BLOEMFONTEIN REPUBLIC OF SOUTH AFRICA
Case
No. : 2557/2012
DATE:
26 AUGUST 2014
In matter
between:
VAN DEN BLINK
PROPERTIES CC
............................................
Plaintiff
And
ABEL HENDRIK
ERASMUS N.O
......................................
1st
Defendant
ABEL HENDRIK
ERASMUS JNR N.O
............................
2nd
Defendant
HEARD ON: 19 AND
20 AUGUST 2014
DELIVERED ON: 26
AUGUST 2014
JUDGMENT BY:
MOTLOUNG AJ
Introduction
[1] The plaintiff is
suing the defendant, a trust duly represented by the first and second
defendant as its trustees, for an amount
sounding in money for an
estate agent’s commission, together with ancillary relief.
Facts briefly
[2] The plaintiff
averred in its particulars of claim, amongst others, that:
2.1. During or
around February 2011 the parties concluded a verbal agreement in
terms of which the following were express or alternatively
implied
terms:
2.1.1. The plaintiff
was orally mandated to find the defendant a lessee for its building
situate at Erf 22089, Me Gregor Street,
East End, Bloemfontein, also
known as the Interstate Bus Lines Building.
2.1.2. The rental
payable shall be at least R119 700.00 plus VAT per month.
2.1.3. The plaintiff
accepted the said mandate.
2.1.4. During or
around the 18 February 2011 the plaintiff, represented by its duly
authorized agent, Mr Hercules Snyman (Snyman),
introduced the South
African Local Government Asoociation (SALGA), duly represented by its
employee, to the building mentioned
above.
2.1.5. During the
above-mentioned period, and also on the 11 March 2011, Snyman
introduced the defendant, duly represented by its
employee, and SALGA
to each other.
2.1.6. As a direct
cause of the above-mentioned introduction to each other, SALGA rented
the building of the defendant mentioned
above and occupied it during
April 2012.
2.1.7. The plaintiff
was the effective cause of the said lease and consequently the
plaintiff duly executed its mandate.
2.1.8. It was an
express term or alternatively an implied term of the agreement that
if the plaintiff duly executed its mandate,
it would be paid a
commission of R330 701.00 plus a VAT amount of R 46 298.14 (total of
R376 999.14).
2.1.9. The plaintiff
was represented in the said oral agreement by Snyman, a duly
certified estate agent and its employee, whilst
the defendant was
represented therein by Mr Abel Hendrik Erasmus.
1.1.10. That the
defendant was consequently indebted to the plaintiff in the amount of
R376 999 14, but refuses and / or neglects
to pay the said amount to
the plaintiff notwithstanding due demand for payment.
[3] The defendant
filed its plea in which it admitted the existence of the oral
agreement, but averred that it was not indebted
to the plaintiff as
the plaintiff failed to execute its mandate, in that it failed to
deliver or present a written lease contract
between the Defendant and
SALGA, duly accepted by the defendant, before the plaintiff could be
entitled to payment of any commission.
This was stated by the
defendant to have been the most important term of the agreement,
which the plaintiff failed to comply with
and on the basis of which
the plaintiff was thus not entitled to any commission, and that the
unfinished mandate referred to above
had to be completed by another
agent.
Representation
and submissions by the parties
[4] Mr Loubser
represented the plaintiff whilst Mr Reinders represented the
defendant during the trial of the matter.
[5] The plaintiff
led the evidence of its sole member Ms Verna Louise Van Den Blink and
its employee Snyman in support of its case
and then handed in by
agreement an expert report regarding the fairness and reasonableness
of the amount claimed, then handed in
a copy of a Fidelity Fund
Certificate issued to Snyman, marked as exhibit A, and then closed
its case, after which the defendant
closed its case without leading
any evidence.
[6] Both counsel
then presented argument for their clients’ respective cases. In
short, Mr Loubser submitted that the plaintiff
made out its case as
shown by the history of the matter and the necessary paper trail.
According to him, the plaintiff succeeded
in proving that both the
plaintiff and Snyman had been issued with the necessary Fidelity Fund
certificates as required by section
26 of the Estate Agency Affairs
Act 112 of 1976, as amended (the Act). He further submitted that the
plaintiff proved all the necessary
requirements for it to be entitled
to the payment of the commission. Mr Reinders, on the other hand,
submitted that the plaintiff
failed to prove that both it and Snyman
were duly issued with the necessary Fidelity Fund certificates in
line with the provisions
of section 26 read with section 34A of the
Act, and thus the plaintiff’s claim was unenforceable. He also
argued that the
plaintiff failed to prove that it was entitled to the
payment of commission, as it failed to prove that it had completed
its mandate,
as Snyman clearly stated that the plaintiff would have
been entitled to the payment of commission only once the parties had
agreed
on the lease agreement, which he did not achieve.
Summary of the
evidence led
[7] Ms van den Blink
testified that:
7.1. She is the sole
member of the plaintiff that was duly incorporated and even produced
the certificate of incorporation of the
plaintiff, and has been
registered with the Estate Agents Board since the year 1994 to date,
and has at all material times been
in possession of the relevant
Fidelity Fund certificates, which get issued annually.
7.2. Snyman worked
for her and the plaintiff and has also been in possession of the
necessary Fidelity Fund certificates.
7.3. She referred to
pgs 41 to 42 of the court bundle in which she personally addressed a
letter to SALGA in which she stated a
summary of the the history of
the engagement or interactions betweem the parties since November /
December 2010 and leading up
to the 22 June 2011 (date of the
letter), and concluded by asking SALGA to indicate if it was still
interested in the deal.
7.4. The plaintiff
did not finally produce the lease agreement because SALGA said it was
no longer interested in the building.
7.5. The plaintiff
is claiming the estate agents commission for all work done, as the
reasonable amount based on certain SAPOA rates
and formula being used
in the estate agents sector.
7.6. Linder
cross-examination, she testified that:
7.6.1. To her
knowledge, the plaintiff, as a close corporation, was never issued
with a separate and distinct certificate in its
own name since she
entered the business of being an estate agent, and the Estate Agents
Board has never queried hers or the close
corporation’s
operations since then.
7.6.2. She knows
that without the necessary certificates one is not entitled to
commission, and Snyman had to be in possession of
a Fidelity Fund
certificate for her to employ him, but not as a principal, but as an
agent, and she would not have employed Snyman
had she not seen his
certificate.
[8] Snyman testified
that:
8.1. He worked for
the plaintiff during 2011 and worked for it for a period of two
years, during which period Fidelity Fund certificates
were issued in
his own name, although he was never in possession of the said
certificates.
8.2. It was he, in
the main, who dealt with the defendant and SALGA in respect of the
building to be leased. SALGA was the first
to contact him looking for
office space measuring approximately 1500m.
8.3. The defendant
insisted that it would attend to the administrative side of things.
8.4. The amount of
commission payable was never agreed upon or calculated and they never
agreed as to when the commission was going
to be paid, but it was
never part of the agreement that commission would only be payable
once a written lease agreement had been
concluded.
8.5. He was involved
in a whole lot of correspondence exchanged between the parties in
order to execute the mandate (to take the
process forward). In this
respect he referred the court to a string of correspondence exchanged
between himself and SALGA and the
defendant, contained in the court
bundle. In particular, he referred to pgs 43 to 52, 12, 52 to 53, 15
to 16, 18 to 19, 23 to 25,
28 to 29, 27 to 27, 30, 73 to 74, 98 and
the lease agreement from pg 59. I do not deem it necessary to refer
to the individual
contents of each of the documents he referred me
to. However, to the extent necessary, I will deal briefly with those
contents
I deem pertinenently relevant for purposes of my judgment.
It is important to point out that no challenge was raised as regards
the admissibility of all the documents referred to above, including
the correctness or truthfulness of their contents. The said
documents
showed extensive engagement and correspondence between all the
parties involved, over a long time, and that Snyman was
the centre
and catalyst in an endeavour by SALGA to obtain office space and the
defendant to provide such office space to SALGA.
8.6. He could not
agree on the amount of commission payable with the defendant as he
was pushed off the deal by SALGA indicating
in October 2011 that it
was no longer interested in the office space.
8.7. His mandate was
only to get a lessee for the building, and his mandate would have
been met once he had succeeded in meeting
the requirements of the
lessee, and the lessee had agreed terms with the defendant.
8.8. The invoice for
the commission payable was sent to the defendant on the 25 January
2012 for services rendered, and for him
services rendered and
commission meant the same thing. He also referred to another invoice
sent to the defendant on the 29 September
2011.
8.9. After a lot of
correspondence was exchanged between the parties, including visits to
inspect the building with SALGA and addressing
its requirements to
the defendant, SALGA indicated in writing on the 18 October 2011 that
it was no longer interested in the building
and thus the deal was
off.
8.10. It was
subsequently discovered that the defendant had, for the first time,
directly dealt with SALGA on the 12 October 2011
- which was six days
before SALGA purported to cancel the deal - by writing to SALGA
directly regarding the requirements of SALGA,
in which correspondence
the defendant concluded that: “It is hereby stated and expected
that final final approval of this
offer shall be provided not later
than 31 October 2011. Should there be any questions regarding the
above, please contact me on
082 331 5459”.
This was the first
time that the defendant had dealt directly with SALGA, without
facilitation by him (Snyman), and he was subsequently
informed by
SALGA that the defendant actually encouraged it to terminate or
cancel the deal with the plaintiff.
8.11. It was
subsequently discovered that the defendant actually concluded a lease
agreement with SALGA on the 22 December 2011.
An addendum thereto was
subsequently concluded on the 7 Octber 2013.
8.12. According to
him, he was the effective cause of the lease agreement between the
defendant and SALGA although the sealing of
the agreement was
concluded by another agent not associated with the plaintiff.
[9] Thereafter the
expert report of Mr Kenneth William Kahts regarding the
reasonableness and fairness of the amount of commission
charged by
the plaintiff (filed per notice in terms of Rule 36(9)(b) was
admitted as an exhibit by agreement between the parties.
[10] Sections 26 and
34A of the Act govern the eligibility of an estate agent to claim and
be entitled to commission. In short,
the two sections read together
provide that no one (including any entity) may have the right to
claim and be entitled to the payment
of commission as an estate agent
unless such person was duly issued with a valid Fidelity Fund
certicate by the Estate Agency Board.
[11] The SCA
interpreted and applied the provisions of the two sections mentioned
above in the decision of Taljaard v TL Botha Properties
[2008] ZASCA 38
;
2008 (6) SA
207
(SCA) and determined what the effect of non-compliance with
sections 26 and 34A is. The court stated per Nugent JA the following
at para [4]:
“Section 34A
does not in terms invalidate the contract of mandate of an estate
agent who acts in conflict with section 26
...I think it is clear
that .. .the validity of a contract of mandate is unaffected by an
act of the estate agent in breach of
section 26”.
The court went on to
state that the only consequences of non- compliance with the said
provisions was the threat of a criminal sanction
and inability to
enforce the payment of the commission if not already paid, and that
if already paid pursuant to the fulfilment
of the mandate, the
commission cannot be claimed back.
[12] The
requirements for eligibility to claim commission are trite by now,
being:
12.1. The estate
agent must have been given the mandate, and
12.2. The estate
agent must have executed the mandate by introducing the parties that
finally concluded the transaction to each
other, and
12.3. The estate
agent must have been the effective cause of the transaction that was
finally concluded.
[13] It is also
trite that where the parties did not agree on a specific amount of
commission payable, it is an implied term of
the mandate that an
estate agent would be entitled to an amount of commission which is
fair and reasonable.
[14] The question of
whether an estate agent who introduces a purchaser to a property,
where sale is concluded through another agent,
is the effective cause
of the sale and thus entitled to commission, was dealt with and
determined by the SCA in the fairly recent
decision of Wakefields
Real Estate v Attree
2012 (5) SA 246
SCA, and I intend to be guided
by this decision in deciding this matter as I am of the view that it
is almost on all fours with
the facts of this case.
[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 BLIKK 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).
[18] Similarly,
Snyman was issued with a valid certificate with effect from the 29
May 2011. At the time of concluding the oral
mandate agreement with
the defendant, around February 2011, Snyman did nor possess a valid
Fidelity Fund Certificate and thus he
and the plaintiff on whose
behalf he acted then, did not meet the requirements of section 26 of
the Act as at the time of obtaining
the mandate.
[19] However, in
line with the Taljaard decision mentioned above, the said
non-compliance did not invalidate the concluded mandate
agreement.
Therefore, I find that a valid oral mandate agreement was indeed
concluded between the plaintiff and the defendant.
[20] However, the
commission payable could not be enforced by the plaintiff unless and
Snyman had been issued with his certificate
on the 29 May 2011, and
unless and until the lease agreement had been cobcluded between SALGA
and the defendant.
[21] On the facts of
this case, and as shown by the evidence led, no specific time had
been agreed upon for the payment of commission.
Therefore, the
plaintiff (estate agent) would only have been entitled to the payment
of commission once SALGA (as the lessee) and
the defendant (as the
lessor) had agreed on the lease agreement. Put differently, the
plaintiff could not and would not be entitled
to any commission
unless and until a lease agreement was concluded between the parties.
[22] The facts of
this case must be distinguished from those of Venter Agentskappe
(Edms) Bpk v De Sousa
[1990] ZASCA 37
;
1990 (3) SA 103
(A), where the
written mandate contract stated that the commission earned would only
be payable on some future date (upon date of
transfer of the
property). In that case the court found that the commission had been
earned in full and only its date of payment
had been postponed to a
future date (being the date of transfer). In this case, the
commission had not been earned in full unless
and until the parties
concluded the lease agreement.
[23] After being
issued with the said certificate in May 2011, Snyman continued with
the implementation of his mandate by continually
engaging with both
the defendant and SALGA in an endeavour to get them to finally agree
terms, until SALGA, at the instance and
instigation of the defendant,
made it impossible for the plaintiff to conclude or finalize its
mandate on the 18 October 2011,
by stating that it was no longer
prepared to consider the lease proposal.
By that date, Snyman
was at an advanced stage of trying to get the defendant and SALGA to
agree on the fact that the defendant was
able to meet and satisfy the
space and other requirements of SALGA, after which the defendant
itself would have prepared to the
preparation and signing of the
lease agreement.
[24] Snyman, and by
necessary implication the plaintiff (as the employer and real party
to the mandate agreement), was therefore
entitled to enforce payment
of the commission for services rendered after being issued with a
Fidelity Fund Certificate, being
since the 29 May 2011. On the facts
mentioned above, Snyman indeed performed a lot of work in trying to
get the parties to conclude
the lease agreement (as per his mandate),
after which he would have been entitled to claim commission and
enforce its payment.
[25] I find that the
defendant had indeed undertaken to attend to the administrative side
of things as testified by Snyman, which
would have included the
undertaking by the defendant itself to attend to the drawing of the
lease agreement, as long as SALGA had
issued the so-called letter of
intent, which Snyman was clearly in the process of trying to obtain
when the defendant rendered
it irrelevant to the process on the 12
October 2011 by substituting itself for the plaintiff in dealings
with SALGA. Pgs 12, 48
and 52 provide more than sufficient proof of
the fact that the defendant had undertaken in writing to produce the
written lease
agreement itself, and that it is false to allege that
it was a term of the mandate that Snyman must produce such written
lease.
[26] Be that as it
may, I find that this fact is irrelevant to the proper determination
of this case. I also comment in passing
that if it had become
necessary to resort to and apply the doctrine of fictional fulfilment
to this case, I would have had no hesitation
in doing so. I would
have found that the defendant deliberately conspired with SALGA with
the intention to con the plaintiff out
of its commission. The
principles applicable to the doctrine of fictional fulfilment were
discussed and applied by the SCA in the
decision of Lekup Prop Co. No
4 (Pty) Ltd v Wright 2012 SCA. I would have similarly had little
hesitation applying the principles
stated in EC Chena & Sons CC v
Lame & Van Blerk
[2006] ZASCA 10
;
2006 (4) SA 574
(SCA) to find that, to the
extent that it was necessary to plead such fictional fulfilment in
the plaintiffs particulars of claim
and that the plaintiff had in
fact not done so, a deviation from the rule to hold a party strictly
to its pleadings would have
been justified, as no prejudice
(legitimate prejudice) would be caused to the defendant by doing so,
and that the defendant should
not be allowed to derive benefit from
its own dishonest conduct. However, it is not necessary to resort to
the said doctrine in
this case, as the matter can be comfortably be
decided along the principles stated in the Wakefields decision
mentioned above.
[27] There is no
doubt or question that Snyman, on behalf the plaintiff, introduced
SALGA to the building that SALGA finally occupied
after concluding a
lease agreement through another unrelated agent. There is also no
doubt that Snyman introduced SALGA and the
defendant to each other.
[28] Furthermore, I
find that the history of the matter and the accompanying paper trail
show beyond any shadow of doubt (at the
very least on the balance of
probabilities) that Snyman was the effective cause of the lease
agreement finally concluded between
SALGA and the defendant.
[29] The facts in
Wakefields were briefly as follows: An estate agent was given a
mandate by a seller to find a purchaser of an
immovable property.
After the estate agent introduced a prospective purchaser to the
immovable property, the prospective purchaser
indicated at some point
that it (purchaser) was no longer interested in purchasing the
property. The estate agent accepted this
eventuality, only to
discover subsequently that the seller had subsequently (after the
cancellation by the purchaser) sold the
same immovable property to
the same purchaser, using another estate agent. In deciding whether
the initial estate agent was entitled
to the commission on the sale
finally concluded using another estate agent, the SCA had the
following to say, amongst others:
“[14] It is
notoriously difficult, when there are competing estate agents, to
determine who is the effective cause of the
sale that eventuates. It
may be that more than one agent is entitled to commission. This was
put trenchantly by Van den Heever
JA in Webranchek v L K Jacobs &
Co Ltd
1948 (4) SA 671
(A) at 678 where he said: ‘Situations
are conceivable in which it is impossible to distinguish between the
efforts of one
agent and another in terms of causality or degrees of
causation. In such a situation it may well be (it is not necessary to
decide
the point) that the principal may owe commission to both
agents and that he has only himself to blame for his predicament; for
he should protect himself against that risk. ’ Van den HeeverJA
continued (at 679):
‘[A] judge who
has to try the issue must needs decide the matter by applying the
common sense standards and not according
to the notions in regard to
the operation of causation which “might satisfy the
metaphysician” .... The distinction
between the concepts causa
sine qua non and causa causans is not as crisp and clear as the
frequent use of these phrases would
suggest; they are relative
concepts. ... It stands to reason, therefore, that the cumulative
importance of a number of causes attributable
to one agent may be
such that, although each in itself might have been described as a
causa sine qua non, the sum of efforts of
that agent may be said to
have been the effective cause of the sale. ’
[17] The high court
relied on Basil Elk Estates (Pty) Ltd v Curzon
1990 (2) SA 1
(T) in
concluding that the first introduction by the estate agent had been
outweighed by intervening factors. Various personal
factors had
stopped the prospective purchaser in that case from concluding a
sale. But nine months later circumstances had changed
and the
purchaser bought the property through another estate agent. The court
held that the intervening factors were such as to
make the initial
introduction relatively unimportant.
[18] In my view Aida
Real Estate Ltd v Lipschitz
1971 (3) SA 871
(W) is more instructive.
Although Nicholson J quoted from it extensively, he did not apply the
principles cited.
In that case an
estate agent had introduced a purchaser who ultimately negotiated
directly with the seller in concluding a sale.
The agent was
nonetheless held to be the effective cause of the sale and entitled
to commission. Marais J said (at 875E-H) that
protracted negotiations
about finances are often attendant on transactions brought about by
an estate agent. In that case it was
the purchaser who had concluded
the deal, but it was the estate agent’s ‘wisdom and
business acumen’ that brought
together the eager seller and the
purchaser who was able to overcome financial obstacles. Marais J said
that ‘[i]n such a
case the agent would be entitled to
remuneration, no matter whether he selected the potential purchaser
by chance or by foresight.
A commission agent is paid by results and
not by good intentions or even hard work. ’
[19] This matter is
little different from Aida. But for Walker’s introduction of
the house to Howard, the latter would not
have been aware of the
existence of the property. It was Walker’s ‘wisdom and
business acumen’ that made her
take Howard to Monteith Place in
Durban North. Howard was not looking in that area at the time, and
preferred to buy a house in
the area where she and her family then
lived. She claimed to have been frustrated that Walker took her to
see houses in Durban
North that were out of their price range, but
she nevertheless did view them. And when Walker took Howard to
Monteith Place Howard
‘loved’ the house, and returned
with her husband the following day, accompanied by Walker. Howard
conceded that she
and her husband were very interested in the house
but said that, given financial constraints (that later fell away),
they could
not afford it.
Walker gave up
trying to negotiate a sale with Howard only when told that she had
stopped looking for a house to buy and that she
and her husband were
going to renovate their existing home.
[20] If Howard had
herself approached the Attrees, and persuaded them to sell Monteith
Place to her at a lower price (that is, assuming
there was no
intervention at all by De Marigny) Wakefields would undoubtedly have
been entitled to commission, as was the agent
in Aida. So too, had
the Attrees approached Howard directly and offered to sell to her at
a lower price, Wakefields would likewise
have been entitled to
commission: Walker was the effective cause of the sale”.
[30] Applying the
same approach to the facts of this case, I find that the plaintiff
has succeeded in proving on the balance of
probabilities, at the very
least, all the requirements for it to claim the commission. I find
that the plaintiff has successfully
proved that it had a valid
mandate from the defendant to find a lessee (SALGA) for the rental of
its building, and that, acting
in accordance with the said mandate,
the plaintiff went about executing it even after the 29 May 2011
until the 18 October 2011
(when it was pushed off the deal), and that
the plaintiff was the effective cause of the lease agreement
ultimately concluded between
the defendant and SALGA, and that the
plaintiff is thus entitled to claim its fair and reasonable
commission, and finally that
such commission is due, payable and
enforceable, as Snyman, the plaintiff and Ms van den Blink were each
issued with a valid certificate
in compliance with the provisions of
sections 26 and 34A of the Act. Therefore, the plaintiff must succeed
in its claim.
[31] There is no
reason why the ordinary rule of the costs following the result should
not apply.
[32] Consequently, I
hereby make the following order:
32.1. The defendant
is ordered to:
32.1.1. Pay a sum of
R376 999.14 to the plaintiff.
32.1.2. Pay interest
on the amount of R376 999.14 at the rate of 15.5 % per annum with
effect from the 1 May 2012 to the date of
payment in full.
32.1.3. Costs of the
action.
I. MOTLOUNG AJ
For applicant:
Adv PJ Loubser Instructed by: Eugene Holtzhausen Attorneys
Bloemfontein
For Respondent:
Adv SJ Reinders Instructed by: WJJ Spangenberg Attorneys Bloemfontein