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[2013] ZAFSHC 113
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Hlabane and Another v Sebotsa and Others (858/2013) [2013] ZAFSHC 113 (6 June 2013)
FREE
STATE HIGH COURT. BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No. : 858/2013
In the matter between:
NAPE
WELCOME HLABANE
.....................................................................
1st
Applicant
KESELEPELE
LOUISA HLABANE
...........................................................
2nd
Applicant
versus
LEB
OGANG
LESLEY SEBOTSA
...........................................................
1st
Respondent
THE
REGISTRAR OF DEEDS. BLOEMFONTEIN
................................
2nd
Respondent
J
L JORDAAN ATTORNEYS
.................................................................
3rd
Respondent
HEARD
ON:
23 MAY 2013
JUDGMENT
BY:
LEKALE, J
DELIVERED
ON:
6 JUNE 2013
INTRODUCTION AND
BACKGROUND:
[1] The applicants, a
couple married in community of property, effectively moves this court
for an order in the following terms:
2.1.
That First Respondent be prohibited
from
selling,- otherwise alienating
and transferring
the
property known
as
Erf 55123, Mangaung, Extension
4,
Bloemfontein (the property),
to any person other than Applicants or in any way whatsoever
encumbering the property;
2.2.
That First Respondent be ordered to immediately instruct Third
Respondent to finalize the conveyancing process of transferring
the
property into the Applicants’ name, subject to the Applicants
paying the prescribed transfer costs;
2.3.
That First Respondent be ordered to immediately
sign
all necessary documents
and
do
all
things necessary in order to
give effect to the
order
contained in 2.2 above;
2.4.
That failing compliance by First Respondent with the terms of the
orders contained in 2.2 and 2.3 above,
the
Registrar of this Court is authorised
to sign all necessary documents and generally to do all things
necessary and take whatever
steps might be necessary to effect
transfer of the property into the name of Applicants and to comply
with the First Respondent’s
obligations arising out of the
orders contained in 2.2 and 2.3 above;
2.5.
That Third Respondent be ordered to immediately repay to Applicants
the amount of R150 000.00 paid
by
First Applicant into Third
Respondent’s trust account by way of electronic funds transfer
on
17
January 2013;
2.6.
That the First Respondent pays the costs of this application.”
[2] During or about
April 2012 the applicants responded to an advertisement which
marketed Erf 55123 Moshoeshoe Road. Bochabela,
Bloemfontein (the
property) for sale and,eventually, signed a Deed of Sale in respect
thereof with the first respondent, at the
offices of the estate
agent who was mandated to market the property viz. Retika Property
and Development (Retika) in terms of
which:
2.1. they purchased the
property for R324 000.00 inclusive of estate agent’s
commission;
2.2. the purchase price
was payable on demand.
[3]
On 4 May 2012 the applicants paid the full purchase price into the
bank account of Retika by way of electronic funds transfer
(EFT). On
10 May 2012 the first respondent,
inter
alia
, acknowledged, in writing,
receipt of payment of R150 000.00 and, further, confirmed that the
balance of the purchase price shall
be paid over to him on receipt
of a title deed from the municipality.
[4] The property was
transferred to the first respondent by the municipality on the 2nd
August 2012 and, on the 7 December 2012,
the first respondent caused
a letter to be directed to the applicants by Legal Aid SA demanding
payment of the balance of the
purchase price by no later than 28th
December 2012. On the 21st December 2012 the first respondent caused
an e-mail to be directed
to Retika by Legal Wise requesting
cancellation of the Deed of Sale on the ground of alleged breach' of
contract on the part
of the applicants.
[5]
On the 17th January 2013 the applicants paid an amount of R150
000,00 into the trust account of the third respondent, who
was
appointed by the first respondent to attend to the transfer of the
property into the names of the applicants. On the 18th
January 2013
the first respondent terminated the mandate of the third respondent
as the transferring attorney. In response the
applicants caused a
letter to be directed to Legal Wise by their attorneys pointing out
that the full purchase price had been
paid to Retika and, further,
demanding transfer of the property. On the 27th February 2012 the
applicants’ attorneys directed
a letter to the attorneys
appointed by the first respondent to attend to the transfer of the
property into the name of a third
party confirming that state of
affairs and, further, recording that the latter had undertaken to
hold back the transfer pending
the outcome of the present
application, which the applicants eventually launched on the 4th
March 2013 as a semi-urgent application
for a rule
nisi
and an interdictory relief of interim nature. The parties, however,
reached agreement on filing dates and the first respondent,
further,
undertook not to sell, transfer or alienate the property in any
manner whatsoever pending the finalisation of the instant
application. The parties have since filed opposing and replying
papers and the applicants, thus, effectively seek a final relief.
No
papers have been filed for and on behalf of the second and third
respondents although the applicants also seek relief against
the
third respondent.
ISSUE IN DISPUTE
[6] In the heads of
arguments filed and oral submissions before me the parties are at
variance on whether or not payment of the
purchase price to Retika
constitutes payment to the first respondent in the sense that the
former was mandated by the latter
to receive and retain payment on
his behalf. The parties are, further, in dispute over whether or not
there exists a genuine
dispute of fact, on the papers, warranting
either the dismissal of the application or the referral of the
relevant issue for
oral evidence.
CONTENTIONS FOR
THE APPLICANTS
[7]
Mr Louw, for the applicants, submits that it is clear from the
papers that a verbal agreement was concluded, after the deed
of sale
was signed, dealing with outstanding issues such as the method and
place of payment. That payment of the R150 000,00
to the first
respondent was made through Retika and it was the intention of the
parties that payment was not to be made directly
to the first
respondent by the applicants insofar as the written consent signed
by the first respondent employs the phrase “
will
be
paid
over
. There exists, according to the
applicants, no genuine dispute of fact warranting dismissal of the
application or referral to
oral evidence of the question whether or
not the estate agent was mandated to receive payment for and on
behalf of the first
respondent. Even in the face of such an alleged
dispute the court is entitled to adopt a robust approach and to have
regard to
the probabilities in order to determine the matter. The
circumstances of the instant matter, according to Mr Louw, justify
the
inference that Retika was empowered by the first respondent to
receive the purchase price for him.
CONTENTIONS FOR THE
FIRST RESPONDENT
[8]
Mr Pienaar contends, for the first respondent, that there exists a
dispute of fact which justifies the referral of the issue
to oral
evidence and that this dispute was foreseeable to the applicants
who, nevertheless, chose to proceed by way of motion
rather than
action. For the aforegoing reason the matter should, in his view, be
dismissed. The power to sell does not,
per
se,
include the power to receive
payment on behalf of the seller. The purchase price was ex
contractu
payable on demand and directly to
the first respondent. It is clear from probabilities that Retika was
the applicants agent for
payment to the first respondent insofar as
their consent was necessary when R150 000,00 was paid to the first
respondent. It
is, further, clear from the first applicant s conduct
of laying a charge with the police against Retika in respect of the
balance
of the purchase price that he did not regard payment to
Retika as payment to the first respondent. The first respondent is
and
was entitled to cancel the sale because of breach of contract on
the part of the applicants. No oral agreement was concluded between
the parties authorising payment of the purchase price to Retika.
Payment of R150 000,00
viz
balance of the purchase price to the third respondent by the
applicants, after the dispute with regard to payment of the balance
of the purchase price had already arisen, is further proof of the
fact that monies paid to Retika were held on behalf of the
applicants. That the application should be dismissed with costs
alternatively the dispute regarding Retika’s authority
to
receive payment on behalf of the first respondent be referred for
oral evidence.
APPLICABLE LEGAL
PRINCIPLES
[9]
It is correct, as the parties effectively submit, that material
disputes of fact in motion proceedings, where a final order
is
sought, are dealt with on the basis that the order sought is
justified by facts which are common cause between the parties
and
those facts which are alleged by or on behalf of the respondents.
The courts are cautious about deciding probabilities in
the face of
conflicts of facts in affidavits. (See
PI
ASCON-EVANS
PAINTS
LTD v VAN RIEBEE
CK
PAINTS (PTY) LTD
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at p 634 - 635 and
BUFFALO
FREIGHT SYSTEMS (PTY)
LTD
v CRESTLEIGH TRADING (PTY)
LTD AND
ANOTHER
2011
(1) SA 8
(SCA) at p 14 D-F.)
[10]
As Mr Louw correctly submits, a real, genuine and
bona
fide
dispute of fact can exist only
where the court is satisfied that the party who purports to raise
the dispute has, in his papers,
seriously and unambiguously
addressed the facts alleged to be in dispute. Where the allegations
regarded as raising the dispute
are, in the opinion of the court,
not such as to raise a real, genuine or
bona
fide
dispute of fact or are
farfetched or clearly untenable the court is justified to reject
them merely on the papers. (See
Wriqhtman
t/a J W Co
nstruction
v
Headfour (Ptv) Ltd
[2008] ZASCA 6
;
[2008] 2 ALL SA 512
(SCA).)
[11]
As the parties correctly submit, the power to sell property on
behalf of another does not, as a general principle, confer
on an
agent the power to receive the purchase money. Circumstances may,
however, exist which justify the conclusion that such
a power is
implied. (See
I
an
k
_v
Jacobs (1) SC 289 and R
v
Visaqie
1954 (4) SA 50
(O) at 51
G-H.)
[12]
The Estate Agency Affairs Board - Code of Conduct
(the
Code) of the 1st April 1993 provides,
inter
alia,
as follows:
“
9.
Trust Money and Interest
An
estate agent:
9.1.
...
9.2
...
9.3
...
9.4.
shall not include, or cause to be included, or accept the benefit
of, any clause in a contract of sale of immovable property
negotiated by him, providing for payment to the seller, prior to
registration of transfer of the property in the purchaser’s
name, of any portion of the purchase price entrusted to the estate
agent by the purchaser: provided that the aforegoing shall
not apply
if
(aa)
good cause exists: and
(bb)
the purchaser has prior to his signature of the contract in question
consented in writing in a document executed independently
of the
said contract, to such payment: and
(cc)
such document contains an explanation of the implications and
financial risks of such payment for the purchaser, and
(dd)
such document is signed by both the seller and the purchaser and the
estate agent in question.”
[13]
Section 32 of Estate Agency Affairs Act 112 of1976 (the Act), just
like section 78 of Attorneys Act 53 of 1979 in respect
of attorneys,
inclusive of conveyancers, on its part, obliges an estate agent to
open a trust account into which all monies received
in his business
from,
inter alia,
purchasers of property sold by him should be deposited and to pay
over the interest generated therefrom to the Fidelity Fund
in the
absence of a written agreement to the contrary.
[14]
Funds entrusted to the estate agent by the purchaser of an immovable
property are, generally, held on behalf of the latter
until transfer
of the property has taken place unless the contrary is apparent from
the sale contract or from any written instrument
in the same way in
which trust funds held by attorneys are for the credit of depositors
in the absence of any agreement to the
contrary. (See generally
Frikkie
Pretorius Inc and Another v GG
2011
(2) SA 407
(KZP).)
APPLICATION OF THE
LAW AND FINDINGS
[15] I am satisfied that
there exists no genuine dispute of fact on material aspects of the
matter insofar as the parties are
in agreement on the central point
of their dispute. The dispute, in my view, relates to interpretation
and implementation of
the agreement between the parties as evinced
by the consent signed by the first respondent and witnessed by the
agent who assisted
the parties at Retika, one Tisetso Mosebo
(Mosebo) and the principal estate agent on the 10th May 2012. The
aforegoing prevails
because, although the parties are in dispute
over the existence of oral agreement empowering Retika to receive
and keep the purchase
price for and on behalf of the first
respondent, they are ad idem about the existence of the consent in
question. The sale contract
provides for payment of the purchase
price on demand and, as correctly pointed out by Mr Louw, does not
specify the method and
place of payment. In my judgment, the
parties, eventually, concluded an agreement on, at least, the terms
reflected in the relevant
consent. The consent stipulates the event,
upon which occurrence, payment of the balance of the purchase price
shall fall due
and, further, provides proof of early payment of half
of the purchase price to the first respondent. I shall return to the
consent
later in the judgment.
[16]
Mosebo deposed in support of the application to,
inter
alia,
the effect that he was
mandated and expressly instructed by the first respondent to act as
his agent in receiving the purchase
price from the applicants. A
close perusal of the papers, however, reveals that his continuing
conduct and attitude, effectively,
gainsay his deposition insofar as
he treats and regards the purchase price paid as belonging to the
applicants until transfer
has taken place in their favour. This is
borne out by the fact that he secured the applicants consent before
half of the purchase
price could be released to the first respondent
as
quid pro quo
for allowing the applicants to commence with construction work on
the property. His e-mail to Legal Wise on the 7th January 2013,
further, buttresses this view insofar as it reads as follows in
part:
“
It
is
very strange to me that the seller can be paid his
money
in full before registration.”
Retika’s
attitude and conduct in this regard accord with the letter and
spirit of the Code insofar as the retention of the
funds, in its
account, until registration of transfer of the property in the
applicants’ names has taken place safeguards
the applicants’
interests, as purchasers, by minimising the financial risks to them.
This is, further, the same reason
why conveyancers, as practitioners
in terms of Attorneys Act, keep monies entrusted to them, as
consideration for the sale of
immovable properties, in trust until
registration has taken place in favour of the purchasers in the
absence of any agreement
or instruction to the contrary. The Code
regards registration of transfer in favour of purchasers as a
payment-triggering-event
and requires the purchaser, if he is so
advised, to consent to earlier payment to the seller “
in
writing in a document executed independently of the... contract’.
[17]
In my view, the answer to the real dispute between the parties lies
in the consent, which evidently constitutes proof of
an underlying
agreement providing for earlier release of the funds to the first
respondent and which,
ipso facto,
alters the default position
provided for by the Code and contemplated by the Act. The said
consent provides, inter alia, for payment
of the second half of the
purchase price after the first respondent has secured the title deed
from the municipality. The first
respondent, further, declares in
the consent that the same constitutes a collective agreement between
himself, the applicants
and Retika as the estate agent mandated by
him. Although the consent is,
stricto
senso,
not in compliance with the
Code, it, in my view, nevertheless provides proof of the existence
of a trilateral agreement among
the first respondent, the applicants
and Retika on the terms set out therein which are not in dispute. It
is clear, ex
facie,
the consent that it is a product of such an underlying oral
agreement, which provided for all the things reflected therein, as
Mr Louw correctly and effectively submits. The first respondent’s
version is, in my view, untenable insofar as it is not
compatible
and consistent with the consent although it, in the same breath,
embraces the same. I, therefore, reject it on the
papers as such.
After the first respondent secured the title deed from the
municipality on 2 August 2012, he was entitled to
receive payment of
the balance of the purchase price in accordance with the consent.
Retika was clearly mistaken in the e-mail
to Legal Wise because the
applicants had already consented to earlier payment to the first
respondent. In my opinion Retika was,
legally and professionally,
obliged to hold the funds on behalf of the applicants, as the
purchasers, until the payment-triggering-event
had occurred. The
agreed payment-triggering-event in casu occurred on 2 August 2012
.
[18]
The real question in the instant matter is whether or not after the
2nd August 2012, Retika kept the funds for and on behalf
of the
first respondent as his mandated agent. An answer to this question
depends on the answer to the question as to whether
or not, after
the date in question, in law and ethics Retika needed the
applicants’ consent before it could release the
relevant funds
to the first respondent. A positive answer to this question would
simply mean that Retika was still holding the
funds for the
applicants and was, as such, not the first respondent’s
mandated agent
vis-a-vis
the funds in question, while a negative answer would signify that
Retika held and continues to keep the funds for the first
respondent.
[19]
The effect of the Code, as I have already pointed out, is that, in
general, registration of transfer in the name of the purchaser
signifies the due date for payment of the purchase price to the
seller. After registration the purchaser, in law and logic, no
longer has a say or interest in the purchase price because he has
taken transfer of the
merx
which is, from thence, his property. Payment to the seller is made
by the agent without reference to him. If the agent fails
to release
the funds to the seller, after registration in favour of the
purchaser, the former has no recourse against the purchaser
and can
only look to the agent for satisfaction unless the full purchase
price has not been paid to the agent by the purchaser.
In
casu
the due date for the release
of the balance of the purchase price was anticipated and brought
forward to the date of receipt
of transfer by the first respondent
from the municipality. Once the first respondent had received the
title deed from the municipality,
the applicants fell out of the
picture in the matter of payment to the first respondent insofar as
they had already placed Retika,
as the estate agent, in receipt of
the full purchase price. It follows, therefore, that the first
respondent was barking up the
wrong tree when he demanded payment
from the applicants after 2 August 2012 with full knowledge that
Retika was placed in funds.
Retika was his agent and was keeping the
funds for him after that date.
[20]
The fact that the first applicant laid a charge, with the police,
against Retika or Mosebo is of no consequence in the instant
matter
because, as at December 2012, the funds were effectively in the
first respondent’s coffers insofar as Retika was
his chosen
pocket. The first respondent’s case is that he was not aware
that the fall purchase price was paid to Retika.
The aforegoing can,
with respect, not be correct when regard is had to the fact that it
is, effectively, not in dispute that
the first respondent received
half of the purchase price from Retika insofar as the first
applicant clearly and undisputedly
transferred funds into Retika’s
account on the 4th May 2012. It is, further, admitted by the first
respondent that the
first applicant informed him accordingly after
the applicants received a letter of demand from Legal Aid SA. The
first respondent,
further, clearly acknowledged, in the consent,
that the same constitutes a collective agreement between himself,
the applicants
and Retika as the estate agent mandated by him. At
that stage
viz
the 10th May 2012 the Deed of Sale had already been signed and
Retika’s mandate to advertise and market the property for
sale
had already been completed. The only mandate the first respondent
was, reasonably possibly, referring to was one to receive
and keep
funds on his behalf after receipt, by him, of the title deed. It
can, thus, not be correct, in my view, that Retika’s
mandate
was limited to marketing the property. The first respondent was and
still is not entitled to cancel the sale.
CLAIM AGAINST THE
THIRD RESPONDENT
[21]
There exists no reason for continued retention of the R150 000,00 by
the third respondent insofar as the full purchase price
has already
been paid to the first respondent in terms of the trilateral
agreement underlying the consent and through Retika.
The funds in
question are held for the applicants and they are entitled to the
same as depositors. (See
Frikkie
Pretorius Inc and Another v GG
,
supra.)
ORDER
[22] An order is,
therefore, granted in terms of prayers 2.1; 2.2; 2.3; 2.4; 2.5 and
2.6 in the Notice of Motion.
L. J. LEKALE, J
On behalf of applicants:
Adv MC LOUW
Instructed by: Honey
Attorneys BLOEMFONTEIN
On behalf of first
respondent: Adv CD PIENAAR
Instructed by:
McIntyre & Van der
Post BLOEMFONTEIN
On behalf of second
respondent: Registrar of Deeds:
BLOEMFONTEIN
On behalf of third
respondent: J L Jordaan Attorneys
BLOEMFONTEIN
/spieterse