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[2014] ZAFSHC 193
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Tubane v Machakela and Others (799/2014) [2014] ZAFSHC 193 (30 October 2014)
IN THE HIGH COURT OF
SOUTH AFRICA
FREE STATE DIVISION,
BLOEMFONTEIN
Case No.: 799/2014
In the matter between:
KESEBELWANG
REBECCA TUBANE
…............................................................................
Applicant
and
TEFU DAVID
MACHAKELA
….....................................................................................
1
st
Respondent
RAYMOND KHOKHOP
….............................................................................................
2
nd
Respondent
THE FREE STATE
ADVICE CENTRE
…....................................................................
3
rd
Respondent
MANGAUNG
METROPOLITAN MUNICIPALITY
…...............................................
4
th
Respondent
HEARD ON:
26 JUNE 2014
JUDGMENT BY:
JAJI, AJ
DELIVERED ON:
30 OCTOBER 2014
[1] This matter came before me in the
form of an application for an order in the following terms:
(i) that the first
to third respondents be ordered and directed to repay to the
applicant within ten (10) days of the granting this
order – the
following amounts:
(i)
First respondent
R100 000.00
(ii)
Second respondent
R39 000.00
(iii)
Third respondent
R22 500.00
(ii) that the first
respondent be ordered to furnish to the applicant, within ten (10)
days of the granting of this order, a true
and proper statement,
together with substantiating documents, reflecting how the amount of
Two Hundred Thousand Rand (R200 000.00)
which
was paid into the first respondent’s FNB account with number
62033622350 on 11 April 2013,
was disbursed;
(iii) that the
applicant be granted leave to approach this Honourable Court, on the
same papers duly amplified – if so advised
– for an order
that the respondents be ordered to pay to the applicant the balance
of whatever amount(s) appears to be due
to the applicant in terms of
the aforesaid statements rendered;
(iv) insofar as
the applicant is unable to recover any of the amounts being
successfully claimed from the first and second respondents,
that the
applicant be granted leave to approach the Honourable Court, on the
same papers – duly amplified – if so advised
– to
claim any damages it may be able to prove against the third
respondent;
(v) that the first,
second and third respondents are ordered – jointly and
severally to pay the costs of the application on
the scale as between
attorney and client.
[2] The first, second and fourth
respondents have not opposed the application. Service has been
properly effected against
these respondents. Only the third
respondent has filed papers opposing the application. The
applicant does not seek
relief against fourth respondent. The
applicant’s claim against first and second respondent for the
monies that it
had received from the third respondent is undefended
and unopposed. Both first and second respondents have not
delivered
answering affidavits opposing relief sought against them.
The cost order against them on an attorney and client scale is also
not contested. The applicant is not proceeding with the
debatement claim.
[3] The applicant contended that the
third respondent has caused payment to be made to the
first and second respondents
in breach of its mandate and to the
applicant’s detriment. The third respondent was negligent
in the discharge of its
duties and the applicant averred that insofar
as she may not be able to recover any of the monies that were paid to
the first and
second respondents, it is submitted that it was
entitled to an order which will allow it to seek damages against the
third respondent.
[4] She submitted that despite service
of this application the third respondent has not effected
payment of the amount
that it presently hold in trust and the amount
that it debited in respect of fees and charges. It claimed that
the present
application was occasioned by the third respondent’s
disregard of its mandate and for its negligent conduct.
[5] It was alleged that the third
respondent’s opposition was frivolous because it lacked a
defence. Applicant submitted
that the third respondent should
be ordered to pay costs on attorney and client scale jointly and
severally with the first and
second respondent.
[6] The issue that had to be decided
was whether applicant has made a proper case for repayment of certain
monies received and
or kept by the first to third respondents
pursuant to the deed of sale. Whether the deed of sale was
void
ab initio
alternatively voidable.
[7] The second issue was whether the
third respondent was negligent in the discharge of its duties in
terms of its mandate with
the applicant.
[8] The first issue was whether the
applicant has made out a proper case for repayment of monies paid to
first and second respondents.
The first, second and fourth
respondents did not oppose the relief sought. The third respondent
does not object to relief sought
in as far as other respondents are
concerned. The third respondent will abide by the court’s
decision.
[9] It had no objection to transfer the
money back to the applicant. It submitted that the main dispute
in the application
as far as it was concerned related to its alleged
negligence and the applicant’s entitlement to recover any
hypothetical
damages from the third respondent.
[10] It admitted and conceded that it
was not entitled to the amount of Three Thousand Five Hundred Rand
(R3 500.00), was only entitled
subsequent to registration of
property. Property was never registered. The abatement claim
was abandoned by the applicant.
[11] On the papers, based on
submissions by the applicant and concessions by the third respondent,
a proper case for repayment
of the monies has been made. The
first and second respondents have not opposed the application.
Clearly on papers,
the deed of sale was
void
ab initio or at
least voidable. The first and second respondents have elected
not to contest the validity of the deed of
sale. They were
parties to same. The third respondent has no instructions to
argue and oppose on their behalf.
The first respondent fraudulently
misrepresented the facts and made the applicant to believe that the
property concerned belonged
to him. The law states that if the
misrepresentation was fraudulent or negligent, the innocent party is
entitled to damages.
Once it has been discovered that
representation was incorrect , it is against good faith for the party
who made it to continue
to hold the innocent party to a contract so
obtained on these basis, it is apparent that the deed of sale was
void
ab initio
.
(See:
Viljoen
vs Hillier
1904 TS 312
;
Woodstock,
Claremont, Mowbray and Rondebosch
Councils
v Smith
1909(26) SC 681, 700 –
701;
Corbelt
v Harris
1914 CPD 535
– 545.)
[12] It is generally accepted that the
person to whom a misrepresentation has been made is under no
obligation to ascertain whether
it is a misrepresentation and may
rely on it without making further enquiries even if the ascertainment
of truth would be a simple
matter and he was negligent or stupid in
not ascertaining it. (Law of Contract in South African Law, 5th
Ed by R.H. Christie
at page 285)
Fraudulent
misrepresentation is a delict, as with all the claims for delictual
damages, the plaintiff must prove that the delict,
in this case,
fraudulent misrepresentation was related to the loss suffered as
cause and effect in a sufficiently direct faulusion
to be regarded as
the legally effective cause of the loss.
(See:
Beukes
v Bekker
1924 EDL (4) 13;
Case
of Good Hope Bank v Fischer
(1886)
4 SC 368
at 378 – 379;
Ranger
v Wykerd
1977 (2) SA 976
(A) 991
F.)
[13] The applicant submitted in the
main dispute regarding the third respondent, the following:
•
The
third respondent purported to be a provider of legal services.
It should therefore act in the best interest of the mandatory;
•
Applicant
contended that an implication, which was basic requirement when the
third respondent advised and drafted the contract,
was for the third
respondent to establish that the first respondent, being the seller
had the right to pass ownership to the applicant.
It was
indicated that the first respondent was the owner and before payment
of money to it, third respondent should have satisfied
itself that
first respondent was indeed the owner.
It submitted that this could have been
verified by a mere Deed’s Aktex search. Further, the
third respondent as a drafter
of the agreement which represented the
memorial of the parties ought to have known or should have been aware
of the terms of the
agreement between the parties. Clearly, the
third respondent should have not paid over monies until registration
to applicant’s
name. This is a simple measure to
safeguard interests of the applicant. The third respondent
varied the terms of the
agreement without express authority of the
applicant by paying monies to the first and second respondent.
Indeed this was
an invalid variation without express authority from
the parties concerned. In any event, applicant submitted that the
third respondent
did not even warn her of the dangers of paying
monies without proof of ownership from the seller, assuming or
believing that the
third respondent was authorized to pay the monies
over which is in any event vehemently denied by the applicant.
[14] Applicant submitted that the third
respondent was negligent and as such the applicant may on the same
papers, properly amplified
if needs be, apply to court for damages
that it may prove.
Applicant contended that the third
respondent alleged that it had no problem to pay over the monies it
hold in trust. It had however
failed to pay in spite of a letter of
cancellation a year ago. It further opposed the application and as a
result the applicant
was entitled to cost whether on attorney and
client or party and party scale. The court had to show
disapproval of the conduct
of the third respondent.
[15] The third respondent correctly
pointed out in the heads of argument that the main dispute as far as
it was concerned related
to its alleged negligence and the applicants
entitlement to recover any hypothetical damages from the third
respondent. Clearly,
all other submissions by the third
respondent that do not deal or go to the root of this alleged
negligence are irrelevant.
The third respondent is not acting
on behalf of the first and second respondents. Therefore it
cannot comment on the voidability
of the deed of sale. It
cannot introduce hearsay evidence in interpretation of a contract to
which it was not a party to
it. It actually conceded in the papers
that it was not party to the agreement but only drafted it.
There is no answering
paper from the first and second respondents
opposing the relief against them. The applicant’s submissions
stand unchallenged
in that respect. The third respondent, as it
had conceded, had to deal with the alleged negligence and applicant’s
entitlement to recover from it any proven damages.
[16] In its opposing papers, third
respondent claimed to render certain legal professional services,
which primarily consists of
drafting contracts, preparation of legal
opinions to corporate entities and the public at large. Surely,
from the above,
the third respondent had to have some
certain skill and expertise to do this kind of work. This clearly
required some
expertise which could not be done by a lay man. (page
57, para 3.1 of the papers)
He alleged that he
was informed that the first respondent was the owner of the immovable
property. He further alleged that
he drafted a document titled
“Consent to Sale Property” to ensure that there was no
misunderstanding. (page 59,
paragraph 3.6)
Clearly, the consent
given by the first respondent was invalid as he was not the owner and
could not have given such consent.
[17] He claimed that the first
respondent informed him that he may pay commission and as such
discussed with the applicant who in
turn authorized payments. (page
61, ad paragraph 3.9). The applicant denied this assertion and
submitted that even
the deed of sale did not cater for commission.
It was written in it “zero” commission.
[18] The third respondent denied that it
was appointed by the applicant as its agent or was mandated either
expressly or impliedly
to facilitate purchase of the property and/or
to conduct negotiation prior to the conclusion of the deed of sale
(page 67, ad paragraph
10 thereof, especially, paragraph 8.1).
In the third respondents own papers, he submitted that it was
mandated and consulted
by the parties prior to the conclusion of the
deed of sale that he now denies in this paragraph.
In paragraph 3.3 and 3.3 on page 57 of
the opposing affidavit, third respondent confirmed the consultation
and mandate to draft
the deed of sale. It is therefore not
correct that there was no mandate prior to the conclusion of the deed
of sale.
It claimed that it was requested to draft a written
deed of sale which would have complied with all the legal
requirements and
which would encapsulated the agreed terms and
conditions of the sale agreement.
The alleged deed of
sale made no mention of commission but the commission was paid out.
Clearly the agreed terms as per the mandate
(page 68, ad paragraph
8.3.1) were not followed. The third respondent unilaterally without
authority varied the terms of agreement.
He claimed that he had
informed the parties that he was a paralegal (page 68, ad paragraph
11). The statement or above submission
is irrelevant if it seeks to
abdicate responsibility regarding legal consequences of his action
(page 57, paragraph 3.1 third respondent
renders legal professional
services, not ordinary services but professional, primarily
consisting drafting of contracts and preparation
of legal opinions,
to corporate entities and the public at large). In light of the above
contention, it becomes nonsensical and
disingenuous to plead that the
third respondent is a mere para-legal.
[19] The third respondent strangely
submitted that it was within the parties contemplation that the
estate agent’s commission
was payable (page 78, ad paragraph 24
thereof, especially paragraph 25.2). He went on to further
allege that the first respondent
was by law entitled to do with his
money as he pleases, the third respondent has elected not to include
the issue of estate agent
commission in the deed of sale (page 79, ad
paragraph 34, especially 25.3). The third respondent gave two
(2) explanations
regarding commission i.e. it was contemplation of
parties that it would be paid and that he had elected not to include
it in the
deed of sale because the first respondent was entitled to
do as he wishes with his money.
There are legal
challenges emanating out of the submission by the respondent.
Firstly, the deed of sale is the contract between
the parties.
They should be on the same understanding as to the terms of
contract. They had to reduce into in writing
all the terms and
sign the agreement to confirm their wishes. Clearly the issue
of commission was excluded by the deed of
sale and could not be
contemplated otherwise. Secondly, the third respondent could
not boldly claim that the monies belonged
to the first respondent
when the property was not of yet transferred and registered in the
applicant’s name. Surely,
somebody who purports to render
professional legal services especially to corporate entities and give
legal opinion should be aware
of at least how ownership passes.
[20] He conceded that he was mandated
to attend to the transfer of the immovable property (page 80, ad
paragraph 37 thereof, especially
at paragraph 28.2). Strangely
this submission is not stated at (page 21, ad paragraph 14.2) in the
heads of argument.
It is deliberately ignored.
It narrated and tried
to account for the monies in its position. It referred to fees,
charges, money to pay all the charges and
fees to be levied by a firm
of attorney, who would have attended to the transfer (page 81, ad
paragraph 38, especially 29.1.1 and
29.1.2). Third respondent
in his own papers submitted that he was mandated to attend to the
transfer of the immovable property
not the firm of attorneys.
He purported to render professional services. Clearly he could
not render these services
hence reference to Messrs Hill, McHardy &
Herbst. He also as is the first respondent was in collusion
misrepresented
facts to the detriment of the applicant.
The third
respondent, in light of the above cannot attempt to absolve itself by
submitting that he told the applicant and respondent
that he was a
paralegal (ad paragraph 40 thereof, page 82 ad paragraph 30.1).
It cannot at this late stage as alleged( in
page 22 of its head of
argument, especially paragraph 14.5) claim that
“
the
third respondent is not an attorney or an estate agent or an auditor
for that matter ………therefore it cannot
be
inferred that it had certain usual and customary instructions”.
This submission is sterile, clearly
cannot hold water because the respondent professes to be an expert
who
“
renders
professional legal services, and give legal opinions, draft contracts
for corporate entities”.
Clearly, it was normal to expect a
certain standard of skill and expertise from him.
The mandate of the
third respondent is conceded as per page 80 of the opposing papers,
ad paragraph 37 thereof, especially at paragraph
28.2
“
to
receive; to keep; to administer and pay the money received in respect
of the purchase price and attend to the transfer of the
immovable
property”.
It did not carry the mandate
professionally as expected of him and as per his mandate.
The third respondent cannot reconcile
his submission that it was not his mandate or instruction to make
enquiries into the ownership
of the property. How would he
attend to transfer the immovable property as per his agreed mandate
if the issue of ownership
was not relevant to him? Obviously, the
issue of ownership of the property and all other consequential issues
relating to transfer
of property should be within the third
respondents mandate and understanding.
[21] It denied that it made payments to
the first respondent without the permission of the applicant.
It is common practice
that monies are transferred to the seller only
after the property has been transferred and registered to the buyer.
This
is a security measure and also to safeguard interest of the
buyer in the event something untoward or contrary the contract
occurs.
For the third respondent to allege that there’s
no clause vitiating against payment before transfer of property is
really
clutching straws. Normally, the applicant would be
justified in the circumstances to allege that the third respondent
effected
the payments without its authority to its detriment.
[22] On the papers, the applicant has
made out a case against first, second and third respondents.
First and second elected
not to oppose but the third respondent
opposed the application in so far as it related to its negligence.
The third respondent
alleged that it was entitled to a fee for
his services that were rendered (page 26, third respondent’s
head of argument,
paragraph 15) Legally, the third respondent
could not claim for services rendered when its actions were the
direct result
of the damages to the applicant. In any event the
services rendered are not explained. The mandate to him was not
carried
but the contrary occurred i.e. variation of the deed of sale
without express authority of the parties.
[23] In the case of
Mlenzana v
Goodrick & Franklin Inc
2012 (2) SA 433(FB)
, a case for
liability for professional negligence, the court found that, S, on
behalf of the defendant, did not take reasonable
steps, not
only to obtain information she believed was required, but also
exercise the skill, knowledge and diligence expected
of an average
attorney. As a result of such “disturbingly”
shocking lack of skill, knowledge, diligence and care,
she failed to
appreciate the value of the vital information her client had supplied
before the expiry of the prescriptive period……
”
Since
S, had failed to exercise the skill, knowledge and diligence expected
of an average attorney, she had acted negligently and
her negligence
rendered the defendant liable to the plaintiff.”
[24] There is duty which was owed by the
third respondent to the applicant. Its failure resulted in the
applicant suffering
damages. Accordingly, the application
should succeed.
COSTS
[25] The court agrees with the
contention of the applicant that it must show its disapproval of the
third respondents conduct.
There is no explanation justifying
non-payment of monies when a letter of cancellation was addressed to
the respondent a year ago.
It was obliged to pay the money
because the money was in trust, held on behalf of the applicant.
[26] When the applicant cancelled, the
mandate ended and the money should have been paid less whatever
disbursements. The
third respondent, a year later claims that
it has no problem paying the money. There was no justification
to delay payment
and even to oppose payment by opposing the
application. The applicant has been needlessly put out of
pocket by the third
respondent who used dilatory defences attempting
to contest an indefensible application with no prospects of success.
Clearly,
the fact that first and second respondents never bothered to
oppose this application, third respondent should have clearly
considered
its position. The third respondent attempted to take
away applicant’s right of recourse in the event the applicant
does not recover monies paid to first and second respondent.
This is a bad attempt and should be discouraged. Courts
can
never take away the constitutionally guaranteed rights of litigants
to have their disputes adjudicated upon by competent courts.
The third respondent had hoped to dispose any claim that the
applicant might have against it before the applicant could even bring
it before court.
[27] Accordingly, the application
succeeds as prayed for in paragraphs 1, 4 and 5 of the notice of
motion dated 24 February 2014.
ORDER
[28] 1. The first to third respondents
are ordered and directed to repay to the applicant, within ten (10)
days of granting this
order – the following amounts:
(i)
First respondent
R100 000.00
(ii)
Second respondent
R39 000.00
(iii)
Third respondent
R22 500.00
2. Insofar as the
applicant is unable to recover successfully the monies claimed from
the first and second respondents, the applicant
is granted leave to
approach this Honourable Court on the same papers duly amplified –
if so advised – to claim any
damages it may be able to prove,
against the third respondent;
3. The first,
second and third respondents are ordered – jointly and
severally, the one paying the other to be absolved, to
pay costs of
this application on an attorney and client scale.
___________
N.P. JAJI, AJ
On behalf of applicant: Adv WA Van
Aswegen
Instructed by: Phatshoane Henney Inc
BLOEMFONTEIN
On behalf of third respondent: Adv JC
Kotze
Instructed
by:
Hill
McHardy & Herbst
BLOEMFONTEIN