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2012
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[2012] ZAKZDHC 95
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Vicki Momberg t/a Homes & Properties v Shellwell NO and Others (7863/2009) [2012] ZAKZDHC 95 (6 December 2012)
In
the KwaZulu-Natal High Court, Durban
Republic
of South Africa
Case No : 7863/2009
In
the matter between :
Vicki
Momberg t/a Homes & Properties
...............................................................
Plaintiff
and
Graham
John Shellwell NO
.....................................................................
First
Defendant
Roderick
Robert Stainton NO
.............................................................
Second
Defendant
Peter
C Odgers NO
................................................................................
Third
Defendant
Judgment
Lopes J
[1] The plaintiff in this matter
carried on business as an estate agent under the name and style
‘Homes & Properties’.
During 2005 she was given a
mandate by Classic Crown Properties 157 CC (‘Classic Crown’)
to find a purchaser for a
property situated at 28 Hillbrow Road,
Kloof, KwaZulu-Natal (‘the property’). The property was
suitable for development
as a housing estate.
[2] In due course, and pursuant to her
work and industry the property was sold to the Wenlin Trust. The
defendants are the trustees
of the trust.
[3] The plaintiff avers in her claim
that at the time of the conclusion of the written sale agreement it
was orally agreed that
the trust accepted liability for, and agreed
to pay, the plaintiff estate agent’s commission. It is also
alleged that the
defendants undertook to give the plaintiff a sole
mandate to sell the sectional title units (‘the units’)
to be erected
on the property in settlement of her commission claim.
In due course and on the 7
th
June 2006 the property was
transferred to and registered in the name of the trust.
[4] The plaintiff alleges that the
trust repudiated its obligations in terms of the oral agreement by
failing to give her the sole
mandate, and in the circumstances she
has suffered damages in the amount of the commission which she should
have been paid. That
commission is in the sum of R267 847,56.
[5] The trust admits that the
plaintiff introduced the property to the trust and that she was the
effective cause of the sale. They
also aver that she performed her
obligations in terms of the mandate and became entitled to receive
payment of her commission claim,
albeit on the basis pleaded by the
trust.
[6] The defendants admit the
conclusion of the oral agreement between the plaintiff and the trust,
but aver that the trust was to
pay the plaintiff commission of R15
000 and to provide the plaintiff with a mandate to sell the units
which were to be developed
on the property. They expressly deny that
the agreement was that the trust would furnish the plaintiff with a
sole mandate for
those sales. They aver that having paid the R15 000
and having offered the plaintiff a joint mandate with Acutts of Kloof
to market
and sell the units, the trust has complied with its
obligations in terms of the oral agreement.
[7] A number of witnesses testified
for the plaintiff and I deal with them in what I view to be the most
logical sequence.
[8] Johan George Anthony Lochner told
the Court that he was one of three members of Classic Crown and that
he had been involved
in property deals for approximately 15 years.
Classic Crown owned the property and because they were not interested
in developing
it as a residential property development, Classic Crown
gave the plaintiff a mandate to sell the property for R4 500 000.
[9] An offer was made by the trust but
because it was insufficient the offer was not accepted. Eventually an
agreement was reached
that Classic Crown would sell the property to
the trust, but that Classic Crown would not be in any way responsible
for the payment
of the plaintiff’s commission. Various
agreements were signed by Classic Crown, the necessity for more than
one agreement
being signed having been occasioned by the substitution
of the trust, as the ultimate purchaser of the property, in place of
a
close corporation which had previously been intended to be the
purchaser.
[10] Mr Lochner confirmed that the
plaintiff was the effective cause of the sale of the property, and he
recalled that there had
been a commission structure in place, but he
could not recall the details of it. It was his view that it would
have been based
on the plaintiff’s usual charges. However,
because Classic Crown could not get the purchase price they wanted
for the property,
it was agreed that Classic Crown would not pay the
plaintiff’s commission. That was to be sorted out between the
plaintiff
and the trust.
[11] Mr Lochner was adamant that he
was not aware of the financial limitations of the trust but simply
knew and understood that
Classic Crown would not be paid the R4 500
000 which it wanted, and accordingly they agreed not to be bound to
pay the commission.
There were extensive negotiations regarding the
purchase, but the commission was to be sorted out between the
plaintiff and the
trust.
[12] David Patrick Jones testified
that he was employed as the managing agent for Acutts, estate agents
operating in Kloof and Hillcrest.
In 2008 Acutts were given a sole
mandate by the trust to market, promote and sell five of the six
residential units which had by
then been developed on the property.
That sole mandate was to endure for three months.
[13] Pursuant to a request made by
Peter Odgers, a trustee of the trust, a meeting was held between Mr
Jones, Mr Odgers and the
plaintiff. Mr Odgers had told him that he
had a moral obligation to include the plaintiff in the sale of the
units and wanted her
to share in the commission. In an effort to
please the trust as his client, Mr Jones agreed to attempt to
accommodate the plaintiff.
At the meeting Mr Jones proposed two
options :
that the plaintiff and Acutts share
the anticipated advertising and promotional costs of selling the
units, and split the commission
on a 50/50 basis; or
that the plaintiff work as an agent
and be paid accordingly – i.e. 50% of the commission would be
paid to Acutts, and the
remaining 50% would be shared equally
between the plaintiff and Acutts.
[14] Mr Jones understood from the
tenor of the meeting that there was an arrangement between Mr Odgers
and the plaintiff that she
would get the commission. At the meeting
Mr Odgers sat in front of him and said that there was nothing in
writing which he had
to get excited about.
[15] It was clear to Mr Jones that the
plaintiff was unhappy with both the suggested arrangements, and the
meeting ended abruptly
with the plaintiff leaving the meeting in what
he described as an agitated or excited state. However, Mr Jones did
not know the
background to the meeting, or the arrangements which had
been concluded between Mr Odgers and the plaintiff. No agreement was
reached
with regard to the involvement of the plaintiff in the sale
of the units.
[16] Mr Jones told the court that
despite heavy marketing only one unit was sold by Acutts in the first
three months of 2008. He
attributed this to the economic depression
which occurred in January of 2008. That unit had been sold for R3 000
000 and Acutts
expended R100 000 on advertising and promotional
costs. Another three units were sold by Acutts over the next two
years but on
an open mandate basis.
[17] Fiona Margaret Patrick told the
court that she was an estate agent working for Harcourts in
Pietermaritzburg. She had been
told about the property by the
plaintiff at a time when she worked for Nile Properties . One Anthony
Wilmans was her employer and
he was interested in purchasing the
property. Mr Wilmans then decided that he did not want to do the
project on his own, and approached
Mr Odgers because they had
previously worked together on property developments. However,
eventually Mr Wilmans decided not to go
ahead, and Mr Odgers decided
to purchase and develop the land, through the vehicle of the trust.
Ms Patrick and the plaintiff were
involved in various discussions
with Mr Odgers, showing him plans, taking him to the site, etc.
[18] When asked by the plaintiff
whether she recalled her negotiations with Mr Wilmans regarding the
terms and conditions of the
sale and commission, Ms Patrick said it
had been discussed with Mr Wilmans that in lieu of commission the
plaintiff would get a
sole mandate for the units to be developed.
When Mr Wilmans decided not to go ahead with the project and Mr
Odgers took over, it
was clear that the same terms and conditions
would apply. The sole mandate for the units to be built would be
given to the plaintiff.
[19] When asked by the plaintiff if
the sole mandate had not been for her, Ms Patrick replied that the
sole mandate was always in
lieu of the commission on the sale of the
land.
[20] By agreement between Ms Patrick
and Mr Odgers, Ms Patrick was paid the sum of R15 000 by Mr Odgers
for the work which she had
done. This was because she was not
included in the commission arrangements, but had nonetheless done
work together with the plaintiff
for Mr Odgers. Ms Patrick confirmed
in cross-examination that the agreement had been that the mandate to
sell the units was given
in lieu of the commission due to the
plaintiff on the original sale of the land.
[21] Ms Patrick also said that she was
present with the plaintiff and Mr Wilmans when it was discussed that
he would withdraw from
the sale and he made it clear that the
situation regarding the commission payable to the plaintiff would
continue. With regard
to the discussions between the plaintiff and Mr
Odgers regarding the offer of a mandate in lieu of the commission for
the original
sale of the land, Ms Patrick said she was not involved
in those discussions but had understood from the plaintiff that it
was a
sole mandate.
[22] The plaintiff then testified that
during 2005 she had been given a mandate to sell the property by
Classic Crown, and she had
introduced the property to Mr Wilmans of
Nile Properties. He was keen to buy it but had considered doing it
together with Mr Odgers.
Pursuant to various negotiations, and at the
time they sat down to sign the first agreement, Mr Odgers told her
that Mr Wilmans
would not be buying the property with him. She told
Mr Odgers she could not offer him a commission deal on the same basis
as she
would have offered to Mr Wilmans because she had previously
dealt with Mr Wilmans and did not know Mr Odgers. Mr Odgers then said
that he would honour the same terms offered to her by Mr Wilmans
which the plaintiff recorded in her evidence as being that she
would
be paid commission for the sale of the land or she would be given a
sole mandate to sell the individual units to be developed
on the
property.
[23] The plaintiff had approached Ms
Patrick for assistance because she worked for Mr Wilmans whose
offices were in Hillcrest. She
assisted in obtaining information
required by the plaintiff regarding the property.
[24] The plaintiff told the court that
she was never introduced to the other trustees of the trust and only
dealt with Mr Odgers.
The negotiations had taken place over a three
or four month period and although the initial contract records that
it was signed
during 2005, that was an error and it was in fact
signed in 2006.
[25] After the sale, the plaintiff
approached Mr Odgers to record her sole mandate in writing, and he
said that that would only
be done when the units were completed. Much
later the plaintiff became aware that Mr Odgers had given a sole
mandate to Acutts
and phoned him to ask him about it. He denied he
had done so but the plaintiff was then presented with evidence in the
form of
an advert in a publication described as ‘The Home
Guide’. The advert was by Acutts recording that they had a sole
mandate.
The plaintiff again phoned Mr Odgers who asked her to go and
speak to Mr Jones and discuss the question of the joint mandate with
him. The plaintiff protested that that was not the agreement that was
reached, and that she had agreed not to charge commission
only if he
awarded her a sole mandate.
[26] The plaintiff testified that she
attended the meeting with Mr Odgers and Mr Jones but said that
contrary to Mr Jones’s
evidence she was not given an option of
paying half the costs and sharing the mandate with Acutts. The only
option of which she
was aware was that Acutts would take 50% of the
commission as the sole mandate vested in them, and she would have to
split the
remaining 50% commission equally between herself and
Acutts.
[27] After leaving the meeting the
plaintiff again contacted Mr Odgers who proposed to give her a sole
mandate over certain properties
he was selling down the South Coast.
As she did not work down the South Coast and it was not feasible for
her to do so, and because
those properties were going for a lower
price, she viewed this offer as not being beneficial to her and
rejected it. In due course
she rendered an invoice for 6% (plus VAT)
of the purchase price to the trust. The plaintiff recorded that she
had charged Mr Odgers
6% because that was approximately what she had
charged on previous deals.
[28] In cross-examination and in reply
to a suggestion that Mr Odgers would say that the trust was unable to
pay more than R4 000
000 and that is how the purchase price and
commission had been arrived at, the plaintiff said that the deal she
concluded with
Mr Odgers regarding the commission had been done to
enable Mr Odgers to have more money to develop the property. In reply
to the
suggestion that she had insisted on the commission the deal
would have fallen through, the plaintiff recorded that Mr Odgers
accepted
that he would pay the commission or give her a sole mandate
for the sale of the units. The plaintiff reiterated that this is what
had initially been offered to her by Mr Wilmans.
[29] When it was put to the plaintiff
that Ms Patrick had testified that she was to be given a sole mandate
in lieu of the commission,
she insisted that that was wrong and that
it had been an alternative arrangement. She had not recorded the
agreement in writing
because she trusted Mr Odgers.
[30] The plaintiff said that in her
subsequent discussions with Mr Odgers, he said that the market had
turned and he thought that
she would not be able to sell the units.
She agreed that her case was that she had concluded a verbal
agreement with Mr Odgers
to pay her commission on the sale of the
land. No rate had been agreed for the commission and no fixed amount
had been agreed.
The incentive to the plaintiff to accept a sole
mandate instead of being paid the original commission was that she
would earn more
commission on the sale of the units and would release
Mr Odgers from paying the commission on the sale of the property.
[31] In reply to the suggestion that
Mr Odgers would say in his evidence that the agreement was that the
plaintiff would be given
a mandate to sell the sectional title units
on the property and not a sole mandate, the plaintiff pointed out
that she would never
have agreed to that because she would simply not
have entertained the possibility of forfeiting her commission to
every other agent
who could sell the property. She reiterated that
there were only two options, either the trust was to pay her
commission on the
original sale, or give her a sole mandate for the
sale of the individual units.
[32] In cross-examination the
plaintiff reiterated that she had only gone to see Mr Jones because
Mr Odgers had asked her to do
so. She also emphasised the fact that
she did not accept the shared mandate offered to her by Mr Odgers
instead of the commission
which she was due on the sale of the
property. She was not concerned about accepting the sole mandate
because she was confident
that with her very good sales record she
would be able to sell the units.
[33] The plaintiff denied the
suggestion that had she concluded an agreement with Mr Jones as he
suggested, that she would have
made as much money as she would have
on the commission on the land deal.
[34] It appeared from the evidence of
the plaintiff that she was at odds with counsel and the court on the
way in which the evidence
of Mr Jones was to be interpreted reading
the options which he had put to her. In her view, on either option
offered by Mr Jones,
Acutts would have taken 30% of the commission
and the remainder would thereafter have been split in accordance with
the options
which he proposed.
[35] In cross-examination it was put
to the plaintiff that at no stage did Mr Odgers promise to pay
commission on the land deal.
The plaintiff pointed out that it would
not have been a feasible proposition for her to abandon the right to
commission in exchange
for R15 000 and the right to sell the units on
the basis of a mandate equivalent to that of other agents.
[36] The only explanation which the
plaintiff could give for not having included her right to commission
from the trust in the final
sale agreement, was because she took Mr
Odgers at his word. She pointed out that in the advertising
literature put out by Acutts
for the sale of the individual units,
Rod and Cheryl Hall were cited as agents, and they were related to Mr
Odgers and recorded
as the agents who were operating the sole
mandate.
[37] That was the case for the
plaintiff. Mr
Prior
who represented the trust applied that the
defendant be absolved from the instance. I gave a short judgment at
that stage and dismissed
the application for absolution.
[38] Peter Cecil Odgers then testified
that he was the third defendant and trustee of the Wenlin Trust. He
had been in property
development as a contractor or developer on
small projects and did so via the vehicle of Ivory Palms Properties
CC of which he
was a 100% member. He developed residential property
only, and mainly in the Kloof/Hillcrest area.
[39] Mr Odgers admitted that during
mid 2005 Classic Crown had given the plaintiff a mandate to sell the
property. He had been telephoned
by Ms Patrick who asked him if he
wanted to look at the property. Ms Patrick and the plaintiff had then
shown him the property.
He had known at that time that Ms Patrick was
employed by Mr Wilmans who was a property developer in Hillcrest. Mr
Odgers in fact
rented offices from Mr Wilmans.
[40] He said that although Mr Wilmans
may have phoned him at the time, Mr Wilmans was not involved with him
in the deal. Mr Odgers
was unable to recollect whether the recorded
date of 2005 in the original offer to purchase drawn up by the
plaintiff was a mistake,
and should have read 2006. Mr Odgers had no
recollection of the rejection of the initial offer to purchase and
could not remember
the original price which Classic Crown had asked
for the property.
[41] Mr Odgers emphasised that his
ability to purchase the property was limited by the maximum amount of
R4 000 000 which the trust
could raise for the purchase of the land.
He did not believe he could have obtained more money than the R4 000
000 as he had based
his fundraising on a deposit of R800 000.
[42] Mr Odgers said that he had put
the deal to his fellow trustees who were happy with it and signed the
sales agreement and transfer
documents. He said that his role in the
matter was effectively that of a manager who executed construction
activities on the site.
[43] Mr Odgers was adamant that there
was no commission payable to the plaintiff because there was no money
to pay her. He stated
in cross-examination that under normal
circumstances in KwaZulu-Natal the commission is paid by the seller
and there was no reason
for him to get involved in the commission. He
said that he could not go up in price and Classic Crown was not
prepared to accept
R3 900 000 and then pay the commission. A
stalemate had been reached and had the plaintiff been paid any
commission the deal would
not have gone ahead.
[44] Mr Odgers said that he and the
plaintiff had sat down and discussed the option of providing a future
financial benefit but
not one in lieu of the commission. He
emphasised that no deal was concluded with her. She could walk away
from the deal or get
involved in the marketing of the units to be
built on the property. Mr Odgers then said that he had offered the
plaintiff a mandate
to sell the units at a future date when he
completed them. They were finished by October 2007. Mr Odgers
emphatically denied having
agreed to be liable for the commission
payable to the plaintiff on the sale of the land.
[45] When asked about the
interpretation of Clause 10 of the sale agreement which dealt with
agent’s commission, Mr Odgers
emphasised that in the clause he
indemnified the seller against claims by agents other than the
plaintiff. He also emphasised the
fact that the clause in no way
bound him to pay any commission whatsoever to the plaintiff. Mr
Odgers stated that at no stage did
the plaintiff insist on her claim
for commission, and he recorded that she must have known that the
code of conduct of estate agents
required that sole mandates had to
be in writing.
[46] Mr Odgers stated that the scheme
had been launched in October of 2007 by Mr Jones of Acutts with whom
he had concluded a sole
mandate. He said that before he had given Mr
Jones a mandate he had told him he had given the plaintiff a mandate
to sell the property.
He said that because of that he would like to
arrange a meeting to discuss a dual mandate between the plaintiff and
Acutts to market
the six units, and he asked Mr Jones to contact the
plaintiff. He then phoned the plaintiff to tell her to expect a call.
[47] Mr Odgers was adamant that he did
not attend the meeting which was held with Mr Jones and the
plaintiff. When referred to the
fact that the plaintiff said she had
phoned him regarding the sole mandate which he gave to Acutts, he
initially said she may have
phoned him and then said he had no
recollection of it. He said that he had been told by Mr Jones that he
had offered the plaintiff
a 50/50 deal and she had walked out. When
he later phoned the plaintiff she said that she did not want to get
involved.
[48] Mr Odgers then stated that when
the plaintiff refused her mandate, he had given the sole mandate to
Mr Jones. When questioned
on this statement later he said that this
had been after the meeting between Mr Jones and the plaintiff.
[49] Mr Odgers went to great lengths
to explain the working of a sole mandate and the importance of
negotiating the rate of commission,
the length of time of the mandate
and the amount which would be spent on the promotion and advertising
of the units. He confirmed
that no units had been sold by Acutts
during the three months of the sole mandate given to them. The only
unit that was sold was
one which he had sold privately.
[50] In cross-examination Mr Odgers
confirmed that he had at no stage undertaken to pay commission to the
plaintiff. When it was
pointed to him that in the initial offer to
purchase it was recorded that he was responsible for commission, he
conceded that he
had been wrong in making the initial statement. Mr
Odgers also accepted that, contrary to the defendants’
pleading, the R15
000 had been paid to Ms Patrick and not to the
plaintiff.
[51] Mr Odgers was emphatic that he
had offered the plaintiff a mandate and not a sole mandate. What he
said he had meant by that
was that he sent the plaintiff to enter
into a joint mandate with Mr Jones and she had walked out of the
meeting. He seemed unwilling
to concede the point that he had only
offered the plaintiff a joint mandate, and insisted that he had
offered her a mandate. He
said that he had phoned the plaintiff and
told her that she was not entitled to a sole mandate and wanted her
to discuss the matter
with Mr Jones. He had wanted them to arrive at
an agreement regarding the sharing of the commission. Mr Odgers said
that he had
told Mr Jones that he had an arrangement to give the
plaintiff a mandate and wanted them to do a deal.
[52] When the plaintiff put to Mr
Odgers in cross-examination that he had suggested to her that he had
properties on the South Coast
which she could market, he replied that
he was doing property deals at the time on the South Coast. When the
question was repeated
he said that he could not remember. Exhibit
‘A’, which Mr Odgers conceded was an email sent by his
secretary to the
plaintiff, was then put to him which demonstrated
clearly that he had suggested to the plaintiff that she market his
properties
on the South Coast.
[53] When pressed about his knowledge
of the selling price of the land, he eventually conceded that he must
have been aware of it
but could not recall it. When it was put to Mr
Odgers that when Mr Lochner had rejected his first offer, they had
held a meeting,
he could not recall whether Mr Lochner was there or
not.
[54] Mr Odgers was then referred to
page 32 of the plaintiff’s discovered documents. That document
was an extract from a sale
brochure covering the period from the 29
th
January 2009 to the 4
th
February 2009. It described Acutts
as having a sole mandate over the sale of one of the units and
recorded the agents as Rod and
Cheryl Hall. Mr Odgers stated that he
had cancelled the sole mandate he had given to Acutts after the end
of the first three months
of 2007, and that they had simply carried
on on their own initiative in describing themselves as having had a
sole mandate during
2009. In evidence of this he pointed to a sale
which had been made by Pam Golding Properties on the 5
th
October 2008.
[55] When asked whether he had ever
agreed to, or proposed, that the plaintiff share her mandate, Mr
Odgers replied that she had
never referred to a sole mandate. When
the question was repeated, he said that he could not recall whether
he had done so.
[56] When further cross-examined on
whether he expected the plaintiff to walk away from the sale of the
land with no commission,
he curiously replied that he had never said
so. He reiterated that it was not the duty of the purchaser to pay
commission and that
he had told her that he only had R4 000 000 to
spend on the property.
[57] In reply to a further question Mr
Odgers suggested that although the plaintiff had introduced the buyer
and seller she had
not done so effectively. When it was pointed out
to him that that was common cause and that the parties had accepted
that the plaintiff
was the effective cause of the sale, Mr Odgers did
not reply.
[58] When again asked on what basis he
believed the plaintiff would simply have walked away from her
commission, he said that they
had discussed the mandate and she had
signed the sale agreement. He also said that he had told Mr Jones
that he had to share the
sole mandate with the plaintiff. Mr Odgers
then reiterated that he had given the plaintiff a mandate and then
told her to go and
see Mr Jones. He had also made it clear in his
evidence that he expected her to share a mandate with Acutts. Mr
Odgers then appeared
not to understand the difference between giving
the plaintiff a mandate and requiring her to share a mandate with
Acutts. When
the economic difference between those two arrangements
was pointed out to him he stated that he had not viewed the matter
that
way.
[59] When asked whether he had a copy
of the sole mandate which he concluded with Acutts, he replied that
it had probably been shredded.
He said that Mr Jones did not have a
copy.
[60] When it was pointed out to Mr
Odgers that his counsel had not put to either the plaintiff or Mr
Jones that he had not attended
the meeting which they said he had
attended, he said that he had told his counsel that.
[61] The next witness for the defence
was Roderick Robert Stainton a chartered accountant who had worked as
a property developer
since 1990. He was one of the three trustees of
the trust which he administered together with the other trustees. He
recorded that
the trust had typically used Mr Odgers for property
transactions and that Mr Odgers’s authority was limited. All
purchases,
sales and encumbrances of properties had to be authorised
by the three trustees. He recorded that the beneficiaries of the
trust
were two of Mr Odgers’s daughters. He said that when Mr
Odgers found a suitable transaction he would bring it to the other
trustees and they would consider it.
[62] The remainder of Mr Stainton’s
evidence may be summarised as follows :
he went to great lengths to persuade
the court that both he and Mr Shellwell, the first defendant,
effectively controlled the
trust and that the role of Mr Odgers was
a lesser one and that he was required to obtain the sanction of the
other defendants
with regard to any important decision affecting the
trust;
although he was not involved in the
negotiations for a commission he was adamant that there was nothing
improbable in the plaintiff
walking away from a commission of R250
000 in exchange for a mandate to sell the units which would only
have benefitted her if
she sold the units, and had to do so in
competition with other agents;
Mr Stainton had no real recollection
of the financial limits which had been placed on the trust at the
time but said that the
trust would not have proceeded unless it
could have afforded to do so. It would have borrowed against the
funds which it had,
but that would have been dependant upon Standard
Bank with whom they raised finance;
Mr Stainton described Mr Odgers as
being very enthusiastic about the deal and he said that had funds
been available Mr Odgers
would have tried everything to persuade
them to pay more;
Mr Stainton had not become aware that
there was a problem for the commission payment until the trust had
been summonsed by the
plaintiff;
Mr Stainton was aware of the sole
mandate which had been given to Acutts and he had been involved in
the making of that decision.
He was unable to say whether any units
had been sold in terms of that sole mandate, but knew that they were
concerned at the
time because the market had turned and the banks
were insisting that they sell some of the stock; and
Mr Stainton reiterated his view that
at the time the sale of the land had taken place, the property boom
was at its height and
any broker would do whatever they could to
secure access to stock, and that is why the plaintiff would have
been willing to forego
her commission in order to attempt to sell
the units being developed on the land.
[63] In cross-examination it emerged
that despite Mr Stainton having told the court that he had been
involved in property development
since 1990, he had worked as a
project manager at Group 5 during 1997 and had left the industry and
only returned in approximately
2006 or 2007. At the time of the sale
of the property he had been involved in a surf shop and was
consulting to a software company
and what he described as a
telematics company.
[64] When asked whether he and the
first defendant had been active trustees in the trust at the time of
the sale of the immovable
property he first said he was not sure of
the date of the sale and then said that since the trust’s
inception he had had
the influence and control over all fixed
property deals or encumbrances to the fixed properties. When asked
what he and the first
defendant did more than Mr Odgers in the
running of the trust, he said that his role was to protect the assets
of the trust and
that Mr Odgers’s authority to do so was
limited.
[65] When it was put to Mr Stainton
that the first defendant had told the plaintiff that he was just a
signatory to the trust and
had no real say in the decisions of the
trust and wanted to step out of the trust, Mr Stainton replied that
soon after this crisis
the first defendant had tendered his
resignation. He described the first defendant as a family friend and
the conveyancer for the
trust. He had not been called as a witness
because he was no longer involved in the trust.
[66] It was put to Mr Stainton by the
plaintiff that if he had been closely involved in matters of the
trust, as he alleged he was,
he would have realised that the former
girlfriend of Mr Odgers had been defrauding the trust for a number of
years. Mr Stainton
confirmed that the trust had been extensively
defrauded by the ex-girlfriend of Mr Odgers but said that he had not
detected this
because he had relied on the auditors of the trust to
detect these sorts of problems.
[67] Despite the fact that Mr Stainton
said that Mr Odgers’s authority was limited and that he could
not in any way bind the
properties, he conceded that Mr Odgers would
have had the authority to make decisions about the commission payable
to the plaintiff.
When questioned about the relationship between the
plaintiff and Mr Odgers with regard to the agreement reached between
them, he
said he had no doubt that Mr Odgers had offered the
plaintiff a mandate as a recognition for the work which she did. He
said that
the R15 0000 had been paid to Ms Patrick because he had
been comfortable with the fact that she was no longer part of the
plaintiff’s
team and that R15 000 was due to her for what she
had done.
[68] Significantly, in his evidence Mr
Stainton said that he had never before done a deal where no
commission was paid to the agent
responsible for the sale of the
property. He said that he had not applied his mind to the question of
commission at the time.
[69] When it was put to him by the
plaintiff that the first defendant had said that he and the first
defendant had had nothing to
do with the trust, Mr Stainton did not
answer the question directly but resorted to saying that he could
only account for his own
actions. When asked whether, prior to the
negotiations for this deal, he had been involved in dealing with the
bank for the trust
or whether that had been done by Mr Odgers, he
said that there were instances where he had done so and instances
where he had not
done so.
[70] Mr Stainton told the court that
the trust was insolvent. Although it had some assets in the form of
properties, the bonds owed
to the banks on those properties far
exceeded their value. He said that if the plaintiff was successful in
her action she would
not be able to recover the amount sued for, nor
even her costs. He said that he had personally undertaken to pay the
trust’s
cost in the action.
[71] Mr Stainton said that although he
conceded that Clause 10 of the sale agreement which dealt with the
commission was an unusual
clause he had not paused to consider it
when he had signed the contract. He said that this was because he had
not been party to
the discussions regarding commission with Mr
Odgers.
[72] That was the defendants’
case.
[73] In assessing the evidence of the
various witnesses in my view Messrs Lochner, Patrick and Jones were
good witnesses who gave
their evidence in a straightforward manner. I
accept that they honestly believed that what they told the court had
taken place.
[74] With regard to the plaintiff, she
was in some respects an unsatisfactory witness. She refused to answer
questions and constantly
launched into speeches which had nothing to
do with the question put to her. What she appeared to be doing was
trying to anticipate
where the questions were going, and then to
neutralise the effect of the questions by giving long explanations.
She constantly
spoke over the top of persons asking questions and
frequently interrupted when questions were being asked.
[75] In assessing the evidence of the
plaintiff I am mindful of the fact that she was an unrepresented
litigant. Had she been represented
and had she received proper legal
advice, I have no doubt that many of the problems which she exhibited
in her evidence and in
the running of her case would not have
occurred.
[76] In my view Mr Odgers was a poor
witness. He appeared to have a perfect recollection of certain events
and yet on numerous occasions
when he could not answer a question, he
said the matter had happened five or six years ago. His evidence was,
in my view, contradictory
on the following aspects :
he said that he had had no reason to
get involved in the commission payment to the plaintiff and
repeatedly said that he was not
responsible for the commission. This
was despite the fact that commission had clearly been discussed
between him and the plaintiff
as evidenced by the initial sale
agreement which had been drafted, and in which he had acknowledged
liability for commission
to her;
Mr Odgers had initially distanced
himself from the suggestion that he had proposed that the plaintiff
market properties on the
South Coast. It was only when Exhibit ‘A’,
the email from his secretary was put to him, that he conceded this,
and
then apparently reluctantly;
the defence as pleaded was that Mr
Odgers had concluded an agreement with the plaintiff in terms of
which the trust was to give
her R15 000 and a mandate to sell
individual units once they had been developed. In his evidence he
said that he had made no
deal whatsoever with the plaintiff and then
claimed that he had complied with his obligations in terms of the
agreement by sending
her to Mr Jones, whom he had told to share his
mandate with the plaintiff. He appeared to have no understanding of
the difference
between offering the plaintiff a mandate, and
offering her a mandate which she had to share; and
Mr Odgers’s evidence was
unsatisfactory with regard to his reasons for including Clause 10 in
the final sale agreement.
He initially sought to explain it on the
basis that the purchaser bore no obligation for commission in
KwaZulu-Natal and that
it was normally a seller’s obligation.
He said that in terms of Clause 10 he was not liable for commission
and had undertaken
to indemnify the seller, Classic Crown, from any
claim for commission by any other agent, excluding the plaintiff.
[77] In my view Mr Odgers’s
evidence cannot be in accordance with the probabilities. On his
version the plaintiff, who was
the effective cause of the sale of the
immovable property, was prepared to walk away from a substantial
commission on the promise
of a R15 000 payment and the right to a
mandate to sell the individual units to be developed on the property.
This is improbable
because :
the commission which had been earned
by the plaintiff at that stage was in excess of R250 000;
the units in respect of which a
mandate was offered to the plaintiff were not yet constructed. It
was Mr Odgers’s view as
a developer that a better purchase
price would be obtained by not selling the units off plan but rather
completing them, establishing
proper gardens around them and
furnishing them. Mr Odgers may well have been correct in this
assumption, but it meant that the
plaintiff would have had to wait
for the completion of the units which took approximately 18 months
before she could exercise
the mandate which Mr Odgers said he had
given her;
the mandate, as pleaded by the
defendants and testified to initially by Mr Odgers was, as
emphasised in both the pleadings and
evidence, not a sole mandate
but a mandate. Why would the plaintiff agree to compete against
other agents for her commission
on the basis that if she did not
sell the units she would get no commission whatsoever when she was
entitled to be paid over
R250 000. This seems to be wholly
improbable. The probabilities in this regards are bedevilled by the
fact that Mr Odgers clearly
did not understand the difference
between a mandate and a shared mandate and this was despite his long
experience as a property
developer. The suggestion that the
plaintiff would have accepted a shared mandate is as improbable as
the suggestion that she
would have waived her right to commission
and elected to compete openly with other agents in an effort to
recover monies which
she had already earned and which were due to
her.
[78] With regard to Mr Stainton, in my
view he was a witness who tried his best to resurrect the
unsatisfactory aspects of Mr Odgers’s
evidence. Like Mr Odgers
and the plaintiff before him, he frequently did not answer the
question, and resorted to rambling explanations
in an attempt to
neutralise the effect of questions put to him.
[79] What remains for me to consider
is whether the plaintiff has established the right to commission on a
balance of probabilities.
In that regard she bears the onus.
[80] The principal problem with the
plaintiff’s case is that her version of the agreement and the
version of the agreement
as testified to by Ms Patrick differ
significantly. On Ms Patrick’s version the plaintiff was
promised a sole mandate in
lieu of the commission she would have
earned on the land. This was stated by Ms Patrick in her
evidence-in-chief, in cross-examination
and in questions from the
court. There is no doubt that on the evidence of Ms Patrick the deal
was that the plaintiff abandoned
her right to commission on the sale
of the land in exchange for what she believed would be a sole mandate
from the trust to market
the units once they had been developed on
the property. There was no conditional aspect about that arrangement.
[81] On the evidence of the plaintiff
however, the contract was that she would only give up her right to
commission on the land
deal if she was given the sole mandate. She
described these terms as being in the alternative – i.e. that
if she did not
get the sole mandate she would be paid the commission.
[82] The problem is that the
plaintiff’s evidence is directly contradicted by that of Ms
Patrick. When the plaintiff’s
pleadings are examined, the
allegations made in paragraph 12 of her particulars of claim as to
the terms of the agreement complicate
the matter further. The two
terms of the agreement i.e. the acknowledgement of the plaintiff’s
right to commission and the
grant to her of a sole mandate are
recorded as two terms of the agreement without indicating how they
are linked. It is clear on
the evidence of the plaintiff and all the
other witnesses that that was never the arrangement. Given that the
relationship between
the plaintiff and Mr Odgers was at that stage a
new one, it is highly improbable that he would have given her both
commission and
the sole mandate, 18 months in advance. Indeed, that
was never what was contended for by the plaintiff.
[83] On the plaintiff’s case
there are three possible versions of the contract – that
pleaded, that put forward on the
plaintiff’s own evidence and
that related by Ms Patrick. In the circumstances I cannot be
satisfied that the plaintiff has
established, on a balance of
probabilities, the contractual basis on which she was entitled to be
paid by the trust. The differences
in her version are not
insignificant because on the version of Ms Patrick the measure of the
plaintiff’s damages would not
have been the amount of the
commission on the sale of the property, but rather the profit which
she forfeited on the sale of the
units. Had this measure of damages
been pleaded the trust could no doubt have raised questions as to the
extent to which the plaintiff
could have or should have mitigated her
damages.
[84] With regard to the version as
pleaded by the plaintiff it is not only improbable but not in
accordance with her evidence. The
version to which the plaintiff
testified is the most probable version but is contradicted by her
pleadings, the evidence of Ms
Patrick and the defendants’
version. The plaintiff did not seek to amend her pleadings to accord
with her evidence, and I
did not believe it was appropriate for me to
suggest to her that she do so, particularly at the end of the case.
That may have
constituted an undue interference in the defendants’
defence.
[85] In all the circumstances I am not
satisfied that the plaintiff has established her cause of action on a
balance of probabilities
and her case must fail.
[86] With regard to the question of
costs, I have decided to exercise my discretion in ordering each
party to pay their own costs.
I do this because :
in the pleadings of the trust and the
evidence given by its trustees, the trust did not honour the
contractual arrangements which
it admitted having owed to the
plaintiff;
the trust embarked on, and continued
the litigation in the certain knowledge that if the plaintiff won
her case she would not
have been able to recover either her claim or
her costs;
the trust itself was not placed in
any position of economic prejudice by the action because one of the
trustees had undertaken
in his personal capacity to pay the legal
costs of the trust;
I was not impressed with either of
the witnesses who gave evidence for the trust; and
it is clear that whatever the
agreement which was concluded between Mr Odgers and the plaintiff,
he sought to deprive her of any
realistic form of compensation for
the work she had carried out, and for which she was, at the time of
the conclusion of the
sale of the property, entitled to be paid.
That the provisions of Clause 10 of the sale agreement were worded
as they are clearly
indicated that the trust did not want to record
in writing at that stage that it was liable for the plaintiff’s
commission.
However, it was clear on the evidence of the trust’s
witnesses that Mr Odgers concluded some form of agreement with the
plaintiff.
[87] In the circumstances I make the
following order :
the defendant is absolved from the
instance;
each party is to pay their own costs
of the action.
Date of hearing : 29
th
November 2012
Date of judgment : 6
th
December 2012
For the Plaintiff : In person
For the Defendant : P Prior
(instructed by Pearce Du Toit and Moodie)