Cartoria Motor Industries (Pty) Ltd v Swanepoel (487/05 , 487/05) [2006] ZASCA 58; [2006] SCA 58 (RSA) (19 May 2006)

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[2006] ZASCA 58
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Cartoria Motor Industries (Pty) Ltd v Swanepoel (487/05 , 487/05) [2006] ZASCA 58; [2006] SCA 58 (RSA) (19 May 2006)

IN THE SUPREME COURT OF APPEAL OF
SOUTH AFRICA
NOT REPORTABLE
Case no: 487/2005
In the matter between
CARTORIA MOTOR
INDUSTRIES (PTY) LTD APPELLANT
and
J J SWANEPOEL RESPONDENT
Coram:
STREICHER, BRAND and HEHER JJA
Heard:
8 MAY 2006
Delivered: 19
MAY 2006
Summary:
Practice – absolution from the instance at the close of the
plaintiff’s case – test applied – fraudulent misrepresentation
–
prima facie
proof of.
Neutral
citation: This judgment may be referred to as Cartoria Motor
Industries v Swanepoel [2006] SCA 58 (RSA).
_____________________________________________________________________
JUDGMENT
_____________________________________________________________________
HEHER JA
HEHER JA:
[1] This is an appeal (with leave of this Court) against
an order of the Transvaal Provincial Division (Seriti J, Daniels J
concurring)
dismissing an appeal against an order of absolution from
the instance at the close of the plaintiff’s case in the
magistrate’s
court at Pretoria.
[2] The plaintiff (appellant) is a dealer in new and
used motor vehicles. The defendant (respondent) purchased a 1995
Mitsubishi 2.8
Pajero vehicle from the plaintiff’s Sinoville branch
during August 2000 for a price of R122 798,25. On 18 December 2000 he
resold
the same vehicle to the plaintiff’s Vermeulen Street branch
for R120 000,00. The plaintiff sued the defendant in the court of
first
instance in April 2001 on several alternative causes of action
for payment of R20 000,00 and costs. Fundamentally, the plaintiff’s
complaint was that the vehicle that the defendant had sold to it as a
2.8 Pajero was in fact a 2.5 model. The plaintiff relied on
an
express term of the written contract which allowed it to readjust
‘the price offered’ in the event of the sale documents including
incorrect information, alternatively it claimed damages for breach of
an express or implied term, further alternatively damages for
breach
of a warranty, then damages arising from a fraudulent
misrepresentation, and finally loss of profits (of R15 000,00)
arising
from the contemplated resale of a 2.8 model Pajero which the
defendant’s breach of contract had prevented.
[3] The written contractual terms of the sale were
common cause on the pleadings. The defendant denied or placed in
issue almost all
else. He also raised a defence of estoppel arising
out of an alleged representation made to him at the time of the
purchase of the
vehicle from the Sinoville branch.
[4] The plaintiff was unable to present direct evidence
of the circumstances of the sale because its salesman had died before
the
trial. Mr Nel gave evidence that he valued the vehicle offered to
the plaintiff by the defendant at R120 000,00 before the plaintiff
accepted the offer. The defendant signed the vehicle appraisal (which
also contained the provision for adjustment of the offered
price
referred to earlier). After the vehicle was found to be a 2.5 model
Nel revalued the vehicle at R100 000,00. The plaintiff
called Mr Roos
who had inspected the vehicle after the sale and ascertained that it
was indeed a 2.5 model. Mrs Viljoen testified
that the vehicle was
sold by the plaintiff to Monsan Trading on 23 April 2001 for R127
192,98 after repairs costing about R6500,00
had been made to it by
the plaintiff. Mr Vos of the Sinoville branch testified to the
circumstances under which the defendant had
complained to him that
the vehicle that he originally purchased in August 2000 was a 2.5
model and not a 2.8. I shall refer more
fully to the evidence in the
course of discussing the issues in the appeal.
[5] At the close of the plaintiff’s case the
magistrate granted the defendant’s application for absolution from
the instance.
He found in the plaintiff’s favour that the vehicle
was a 2.5 and not a 2.8 model Pajero. However, in giving judgment for
the defendant
on the application as a whole, he tested the
plaintiff’s evidence against proof on a balance of probabilities.
In doing so he misdirected
himself as the courts have many times
explained that the test at the stage of the close of the plaintiff’s
case is a much lighter
one. Most recently in
Gordon Lloyd Page and
Associates v Rivera and another
2001 (1) SA 88
(SCA) at 92E-93A
Harms JA said
‘The test for absolution to be applied by a trial court at the end
of a plaintiff’s case was formulated in
Claude Neon Lights (SA)
Ltd v Daniel
1976 (4) SA 403
(A) at 409G-H in these terms:
“. . . (W)hen absolution from the instance is sought at the close
of plaintiff’s case, the test to be applied is not whether
the
evidence led by plaintiff establishes what would finally be required
to be established, but whether there is evidence upon which
a Court
applying its mind reasonably to such evidence, could or might (not
should, nor ought to) find for the plaintiff. (
Gascoyne v Paul and
Hunter
1917 TPD 170
at 173;
Ruto Flour Mills (Pty) Ltd v
Adelson (2)
1958 (4) SA 307
(T).)”
This implies that a plaintiff has to make out a
prima facie
case
– in the sense that there is evidence relating to all the elements
of the claim – to survive absolution because without such
evidence
no court could find for the plaintiff (
Marine & Trade
Insurance Co Ltd v Van der Schyff
1972 (1) SA 26
(A) at 37G-38A;
Schmidt
Bewysreg
4
th
ed at 91 – 2). As far as
inferences from the evidence are concerned, the inference relied upon
by the plaintiff must be a reasonable
one, not the only reasonable
one (
Schmidt
at 93). The test has from time to time been
formulated in different terms, especially it has been said that the
court must consider
whether there is “evidence upon which a
reasonable man might find for the plaintiff” (
Gascoyne (loc
cit
)) – a test which had its origin in jury trials when the
“reasonable man” was a reasonable member of the jury (
Ruto
Flour Mills
). Such a formulation tends to cloud the issue. The
court ought not to be concerned with what someone else might think;
it should
rather be concerned with its own judgment and not that of
another “reasonable” person or court. Having said this,
absolution
at the end of a plaintiff’s case, in the ordinary course
of events, will nevertheless be granted sparingly but when the
occasion
arises, a court should order it in the interests of
justice.’
[6] On appeal, the Transvaal Court considered only
whether the plaintiff had proved the quantum of its claim. It
concluded that the
plaintiff had ‘failed to adduce any evidence of
proof of damages based on breach of contract’ and ‘failed to
adduce any evidence
which indicates that had the respondent not
committed a delict he would have been in a better financial position.
There is no evidence
about the market value of the motor vehicle in
question. The probabilities are that the respondent would have
negotiated on the basis
of the market value of the motor vehicle and
not on the trade-in value.’
[7] For the purposes of determining the present appeal
it will be sufficient to analyse the evidence presented by the
plaintiff in
support of the case based on fraudulent
misrepresentation. In this regard it was common cause in the appeal
that the vehicle sold
to the plaintiff was
prima facie
proved
to be a 2.5 model Pajero. There was also no dispute that the Purchase
Agreement which the parties signed contained the following
opening
words
‘I hereafter referred to as the Seller, agree to sell the following
article to Cartoria Toyota hereafter [referred] to as the Buyer,
and
declare and swear that the following particulars are true and
correct.’
One of such particulars was the vehicle description,
viz
‘95 Mitsubishi Pajero 2800 TDI’. So there was the
misrepresentation.
[8] There was no dispute at the trial that the plaintiff
had valued the vehicle according to the description in the vehicle
appraisal
form and had fixed the price which it offered for the
vehicle on the basis of that valuation, as the defendant must have
known it
would. That constituted the reliance on the
misrepresentation.
[9] As to the defendant’s knowledge of the falsity of
the representation Vos testified that the defendant had apparently
expressed
unhappiness to the salesman who negotiated the Sinoville
sale because he felt he had been sold a 2.5 and not the 2.8 model
represented
to him. Vos sent the vehicle to the Mitsubishi dealer who
confirmed that it was a 2.5 model. He informed the defendant and
furnished
him with various explanations for the mistake. He
testified, ‘Op ‘n latere stadium het ek en hy self kontak gemaak
en ek het
gedink ons het die ding uitsorteer, alhoewel ons altwee toe
onder – ons het altwee toe bewus geword van die feit dat dit ’n
2.5
is en dit daar gelaat.’
There was, therefore,
prima facie
proof before
the trial court that the defendant knew, at the time he made the
misrepresentation to the plaintiff in concluding the
second sale,
that the description of the vehicle was false.
[10] Proof of the quantum of damages depended largely on
the evidence of Nel. His expertise was
prima facie
established.
He told the magistrate that, in accordance with his experience and
everyday practice as chief valuer of the branch, he
had valued the
vehicle (on initial assessment as a 2.5 model and, after ascertaining
the true state of affairs, as a 2.8) on the
basis of its market
value, ie what the plaintiff would be prepared to pay for such a
vehicle in the market. He identified the factors
that, as a matter of
course, he took into account in arriving at such a valuation: the
market for that specific type of vehicle,
its availability, stocks on
hand, the date of first registration, the general condition of the
vehicle and its engine capacity (lesser
capacity means lesser power
and translates into lower price). He confirmed the statement in his
expert summary to the effect that
used car dealers did not purchase
such vehicles for more than their trade-in value but qualified this
by testifying that there is
no trade-in value on imported vehicles
(such as the 2.5 model Pajero) and that he had, therefore, fixed
market-related prices in
this instance.
[11] The court
a quo
(and, perhaps, the
magistrate also) understood Nel’s evidence to mean that the
plaintiff purchased vehicles at a value (the trade-in
value) which
was necessarily different from market value and, for that reason, the
difference between the two values fixed by Nel
was unacceptable as a
measure of the plaintiff’s damages.
[12] It seems to me that if Nel had used the same
standard on each occasion the measure of the loss would have been
prima facie
established irrespective of whether he applied
trade-in value or market value. (Strictly-speaking a trade-in was not
in question in
the present case as there was no exchange of vehicles
involved.) But, as I interpret his evidence, Nel told the magistrate
that when
a potential seller brings a vehicle to the plaintiff the
value which the plaintiff will place on that vehicle is no more or
less
than the plaintiff would be prepared to pay for it in the
market, ie the market created by sellers of and dealers in used cars.
That
was the market in which the defendant offered and sold the
vehicle in question. Both parties were willing participants and, for
the
purpose of determining the market values of 1995 2.5 and 2.8
models the evidence provided acceptable prima evidence of the
respective
values. The plaintiff paid a market value of R120 000,00
for what was represented as a 2.8 model; it received a 2.5 model
worth R100
000,00 in the market. Taking the plaintiff’s case at
face value, one has no reason to doubt that when the plaintiff took
delivery
of the vehicle it was R20 000 worse off than it would have
been if the delict had not been committed. That was sufficient to
establish
its damages,
De Jager v Grunder
1964 (1) SA 446
(A)
at 457D;
Erasmus v Davis
1969 (2) SA 1
(A) at 9, in the
absence of countervailing evidence from the defendant. That the
plaintiff afterwards sold the vehicle (as a 2.5
model) to Monsan
Trading at a profit had no effect on the fact of that loss and is
irrelevant as it would have had the R20 000 in
its hands had no
delict been committed, irrespective of the subsequent fate of the
vehicle.
[13] For the aforegoing reasons the magistrate and the
court
a quo
should have found that the defendant had a case to
answer at least in respect of the claim based on fraudulent
misrepresentation.
It is unnecessary in deciding this appeal to
express an opinion about the other claims.
[14] In the result therefore the appeal must succeed.
The following order is made:
1. The order of the court
a quo
is set aside and
replaced with the following:
‘
The appeal succeeds with costs. The order of the
magistrate granting absolution from the instance is substituted by an
order refusing
the application with costs. The case is remitted to
the magistrate for the continuation of the trial.’
2. The respondent is to pay the costs of the appeal.
___________________
J A HEHER
JUDGE OF APPEAL
STREICHER JA )Concur
BRAND JA )