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[2011] ZAFSHC 127
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Kitsopoulos v Cherangani Trade & Invest 113 (Pty) Ltd (60/2010) [2011] ZAFSHC 127 (25 August 2011)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No.: 60/2010
In the review between:
MRS HARALAMBOU
KITSOPOULOS
…........................................
Plaintiff
and
CHERANGANI TRADE &
INVEST 113 (PTY) LTD
….................
Defendant
JUDGMENT:
LEKALE, AJ
HEARD ON:
7
& 8 JUNE 2011
_______________________________________________________
DELIVERED ON:
25
th
AUGUST 2011
_______________________________________________________
INTRODUCTION:
[1] This is an action for
effective payment of an amount of R275 000-00 in respect of the
commission which the plaintiff allegedly
earned in her capacity as an
estate agent on a sale and ultimate transfer of a commercial property
which took place on the 23
rd
October 2009.
[2] The defendant resists
the claim on the basis that in terms of the contract between the
parties as well as the defendant’s
practices and policies the
plaintiff was only entitled to R75 000,00 which was duly paid to
her in terms of an order of this
court given on the 4
th
March 2010 pursuant to an agreement between the parties.
BACKGROUND
[3] The plaintiff was
employed by the defendant as an estate agent from the 1
st
May 2008 to July 2009 when she left unceremoniously following a
dispute over commission sharing.
[4] On the 20
th
July 2009 the plaintiff finalised a transaction involving the sale of
a commercial property which realised a total amount of R500 000,00
in commission. The seller was Jannie Lubbe (Lubbe), the curator bonis
of the owner of the property.
[5] A dispute ensued
between the parties over how the commission was to be shared. The
plaintiff contends that she is entitled to
70% of the commission
excluding Vat in terms of her verbal employment agreement while the
defendant, on its part, maintains that
the plaintiff is only entitled
to 30% of the commission which she, further, has to share equally
with one Sechaba Mokoena (Mokoena)
who, according to the defendant,
was the agent who sourced and listed the relevant property with it.
[6] Plaintiff,
eventually, issued summons against the defendant for recovery of her
share of the commission.
[7] Defendant entered
appearance to defend the action, whereupon, the plaintiff launched an
application for summary judgment which
was eventually settled on the
4
th
March 2010 with the defendant advancing R75 000,00
to the plaintiff as an interim payment out of the funds kept in trust
by
the conveyancer who attended to the transfer of the property. In
fact the amount in question represents 15% of the total commission
earned.
[8] Defendant,
thereafter, delivered a plea to the effect that the plaintiff was
only entitled to market and sell residential properties
in terms of
her employment contract.
[9] At the end of the
trial on the 8
th
June 2011 the parties agreed, inter alia,
that the defendant shall amend its plea, whereafter, they shall
submit heads of arguments
no later than the 15
th
July
2011.
[10] The parties obliged
and the defendant amended its plea to the following effect, among
others:
[10.1] that the agreement
between the parties was to the effect that the plaintiff may sell
property of whatever nature subject
to 30/70 commission split in
favour of the defendant in respect of commercial property;
[10.2] that the agreement
was further to the effect that the plaintiff would join the defendant
in order to build and run its residential
property unit;
[10.3] that the relevant
property was sourced by Mokoena from its owner Mr. Savvas Kyriacou
(Kyriacou).
[11] Plaintiff duly
replied to the amended plea.
FACTUAL DISPUTE:
[12] The parties are at
variance over the following questions of fact:
[12.1] whether or not the
oral agreement between the parties provided for 70/30 commission
sharing in the plaintiff’s favour
on a sale of commercial
property out of hand; and
[12.2] whether or not
Mokoena was a listing agent in respect of the relevant commercial
property and is, as such, entitled to half
(50%) of the commission
payable to the plaintiff.
PLAINTIFF’S
VERSION:
[13] The plaintiff
testified that she was approached and persuaded by the defendant’s
managerial employee Botha Barnard (Barnard)
to join the defendant and
when she eventually gave in, in April 2008, she had eleven years of
illustrious career in property market
behind her back. She accepted
the defendant’s offer of 70/30 commission splitting in her
favour on sale of any property out
of hand and 50/50 on sale by
auction. She was motivated by Barnard’s assurances that she
would get lots of referrals as well
as the possibility that she was
going to make a lot of sales. Her own business, which she conducted
with her partner and from which
she was entitled to 100% commission,
was not doing well as it was during a recession. The said business
was only starting and was
not yet on the move when she joined the
defendant. She was not aware of Mokoena’s alleged role as a
sourcing agent in respect
of the property in question and when she
approached Barnard with information that she had a buyer for the
property the latter referred
her to the administrator Otto Lessing
(Lessing) as the one who had information about the same. Lessing even
called Lubbe in her
presence to get details about the property.
Following the sale Barnard completed the relevant internal form
indicating that she
was the sole agent involved. On the date on which
she left the defendant she attended a meeting and learnt for the
first time that
from thence onwards commission on the sale of
commercial property would be 30/70 in favour of the defendant in all
instances. When
she objected and pointed out that that was not the
agreement when she got employed, Barnard responded that those who did
not want
to work that way may leave. She thereupon took her bag and
left. She never asked Mokoena for any municipal plans for the
property
in question.
[14]
Jannie Lubbe
testified that he never gave Kyriacou or his erstwhile attorney any
permission to give anyone an instruction to sell the property
in
question. He further never met Mokoena. He conceded that it was
possible that he met the defendant’s Johnny Bateman and
Lessing
early in 2009 when Kyriacou’s property was discussed. He
furthermore conceded that he would not know if Kyriacou
mandated
Mokoena to sell the relevant property subject to his (Lubbe) approval
as the curator bonis.
DEFENDANT’S
VERSION:
[15]
John Kenneth
Bateman
, the defendant’s managing director testified that
the plaintiff was approached and appointed to build and head the
defendant’s
residential property division because of her
reputation and skills in the residential property market. The
plaintiff fitted the
defendant’s plans and profile. Plaintiff
was not restricted, in her marketing activities, to residential
property and could
sell any property subject to applicable commission
structures. She was allowed a favourable 70/30 commission split for
sale of
residential property out of hand while other agents are only
entitled to 50% of the commission in such circumstances. The
commission
structure with regard to commercial property has always
been 70/30 in favour of the defendant because sale of such property
is
its core business. No agent has ever received more than 30% on a
sale of commercial property since the inception of the defendant.
Not
even him or other shareholders of the defendant who also work as
agents ever received more than 30%. He cannot speak for Barnard
on
why he did not list Mokoena as a listing agent in the internal form.
He met Lubbe in February 2009 in preparation for an auction
scheduled
for March 2009 in respect of, inter alia, Maitland Hotel which
Mokoena had sourced from Kyriacou. He does not know when
Mokoena
sourced the property involved in the present dispute and only knows
that Mokoena had a sole mandate to sell the same. He
probably
misunderstood his affidavit in opposition of the application for
summary judgment where it states that the plaintiff could
only sell
residential property and that Mokoena sourced the relevant property
from Lubbe. The plaintiff wanted the commission structure
in respect
of commercial properties to be changed at the meeting which preceded
her departure and had an argument with Barnard
when he and the latter
did not entertain the issue. The plaintiff did not get the support
she expected from other agents.
[16]
Sechaba Dennis
Mokoena
testified that he left the defendant’s employ after
the sale of the property in question and that he had not yet received
his share of the relevant commission as the listing agent because of
the present proceedings. He made enquiries from Barnard after
the
commission in 2009 when he was still in defendant’s employ. He
was employed as property broker and he could market and
sell any
property subject to applicable commission structures. Commission on
sale of commercial property was always 70/30 in the
defendant’s
favour. He sourced the relevant property before July 2009 from
Kyriacou and it was put on auction but it was
not sold. Bateman would
have been the auctioneer. His first Fidelity Fund Certificate was
only issued on 1
st
June 2009. He had a sole mandate to
sell the property although he could not recall the date on which he
received the same as well
as the duration of the mandate. The
plaintiff was aware of his role as a sourcing agent because she asked
him for the plans of
the same and further told him that she had
succeeded in selling the property. Plaintiff even confirmed that she
was going to share
the commission with him. At the meeting which led
to the plaintiff’s departure the latter shouted and had a
quarrel with
the facilitator of the meeting, Barnard. Prior to the
meeting the plaintiff was always talking about the different
commission structures
and pointed out that she needed more. He
conceded that he did not know the terms of the plaintiff’s
contract with the defendant
and the commission structure on which she
was appointed.
APPLICABLE LAW:
[17] The parties limited
the issues to a factual dispute relating to the terms of the
plaintiff’s employment contract with
regard to commission
sharing as well as the question whether or not Mokoena is entitled to
share in the commission payable to the
plaintiff.
[18] The parties are,
further, ad idem that the legal technique applicable to resolution of
factual disputes requires a court to
make findings on the credibility
of various factual witnesses, their reliability and the probabilities
in order to come to a conclusion
on disputed facts.
(
see Stellenbosch
Farmers’ Winery Group Ltd and Ano. v Martell & Cie SA &
others 2003(1) SA 11 (SCA)
).
FINDINGS:
[19] It is clear from
available evidence and heads of arguments submitted that the parties
are effectively in agreement that:
[19.1] the plaintiff was
approached and recruited to take up employment with the defendant
because of her impeccable reputation
in the property market industry.
In this regard it was, therefore, not necessary for the plaintiff to
prove her standing in that
industry prior to taking up employment
with the defendant.
[19.2] Barnard played a
pivotal role in the recruitment of the plaintiff and was, further, at
the centre stage when the plaintiff
walked out of the meeting which
preceded the termination of her employment;
[19.3] Barnard further
played a prominent role in the identification of the agent involved
in the sale of the relevant property
insofar as he completed the
relevant internal form and he further referred the plaintiff to
Lessing for details of the property
in question;
[19.4] Mokoena as a
property broker was entitled to market and sell property in the same
way as the plaintiff was entitled to do
so and was, as such, subject
to the laws applicable to estate agents.
[20] I am satisfied from
available evidence that the defendant was prepared to and, in fact,
did make concessions in favour of the
plaintiff in order to secure
her services insofar as she was, according to Bateman, allowed 70%
commission on the sale of residential
property while other agents,
such as Mokoena, were only entitled to 50% commission in such
circumstances.
[21] On the terms of the
employment contract it is the plaintiff’s word against that of
Bateman insofar as Barnard’s
evidence was not tendered.
Mokoena’s evidence on this issue is of no assistance to the
defendant because he effectively contradicted
Bateman. Where Bateman
testified that the plaintiff sought to introduce commission splitting
as an issue for discussion and, when
it could not be entertained, she
burst out, Mokoena testified that Barnard told everyone present at
the meeting that there were
different commission structures and that
a sale of commercial property results in 70/30 commission split in
favour of the defendant.
The plaintiff made a good impression as a
witness in that she was firm and clear in her testimony on the issue.
Bateman, on the
other hand, was not reliable on the terms of the
contract regard being had to his affidavit delivered in opposition of
the application
for summary judgment and his viva voce evidence. In
this regard it should be noted that in the affidavit he deposed to
the effect
that the plaintiff was only entitled to sell residential
property when she was appointed but in his oral evidence he admitted
that
she was entitled to sell any property. The explanation proferred
by Bateman for the contradiction in question is simply that he
probably misunderstood the affidavit on that issue. This explanation
is, with respect, not convincing regard being had to the fact
that
Bateman testified that he understood Afrikaans and he gave
instructions to the lawyers who drafted the affidavit in question.
The issue in question was as important to the summary judgment
application as it is to the present proceedings because it had a
bearing on commission splitting. Bateman would, most probably, have
discovered the mistake before he signed the affidavit if it
was in
deed a mistake. The same mistake also permeated the plea which was
eventually amended at the end of the proceedings.
[22] The evidence of
Barnard would have been relevant and pertinent to the issue had it
been tendered. No explanation was offered
for not adducing his
evidence when indications are that he was able to testify and was
still in the defendant’s employ. Mr
Pohl contends, on behalf of
the plaintiff, that an adverse inference be made against the
defendant for failing to call Barnard
as a witness. In my view it is
irresistible to infer, as a probability, that the arrangement between
the parties was that the plaintiff
would receive 70% commission on
sale of any property out of hand.
(
see Galante v
Dickinson 1950(2) SA 460 (A) @ 465
)
[23] The sale of property
out of hand does not entail costs on the part of the defendant as the
case is with an auction sale. In
my judgment the fact that sale of
commercial properties forms the core business of the defendant does
not per se negate the possibility
that the plaintiff was allowed 70%
commission on all sales made out of hand as a carrot to lure her into
the defendant’s
fold. The same applies equally to Mr Steyn’s
argument, on behalf of the defendant, to the effect that not even
Bateman who
is the defendant’s shareholder nor Barnard who
occupies a high position within the defendant’s structures was
and is
allowed a percentage higher than 30 % in commission on a sale
of commercial property out of hand. In this regard I may only point
out that shareholders stand to benefit from the net profits of the
defendant.
[24] It is more probable,
in my opinion, that no distinction was made among various properties
when the agreement was made and that
the commission split on a sale
of any property out of hand was agreed to be 70/30 in favour of the
plaintiff. It was, most probably,
because of that knowledge that
Bateman initially denied that the plaintiff was entitled to sell
commercial property.
[25] Mr Pohl correctly
and effectively concedes in argument that Mokoena sourced the
relevant property during or before February
2009 for, if it was not
sourced, it would not have been on the defendant’s books.
[26] Mokoena testified
that his first Fidelity Fund Certificate was issued on the 1
st
June 2009 and, as such, after the date on which he sourced the
property which, according to him, was placed on unsuccessful auction
prior to its actual sale in July 2009.
[27] It is contended for
the plaintiff that Mokoena is, in law, not entitled to remuneration
because, as at the date on which he
sourced the relevant property, he
was not in possession of a Fidelity Fund Certificate.
[28] As correctly
submitted by Mr Pohl, for a person to perform any act as an estate
agent and to be remunerated therefor he must
be in possession of a
valid Fidelity Fund Certificate.
(
see section 34A read
with section 26 of Estate Agency Affairs Act No. 112 of 1976 as
amended and Rostan Investments (Pty) Ltd &
Ano. v Littlewood
2001
(3) SA 555
(SCA)
)
[29] It is clear from
available evidence emanating from the defendant’s side that, at
the time when Mokoena could reasonably
possibly have sourced the
relevant property from Kyriacou, he was not in possession of a valid
fidelity fund certificate as an
employee contemplated in paragraph
(c) (ii) of the definition of ‘
estate agent’
in
section 1 of the Estate Agency Affairs Act.
[30] Mokoena was,
therefore, in law not acting as an estate agent contemplated by the
definition of ‘estate agent’ when
he sourced the relevant
property and is, as such, not entitled to share in the commission
payable to the plaintiff.
[31] Even if the court is
wrong in the aforegoing finding, I am persuaded by available evidence
that, when Kyriacou mandated Mokoena
to sell the relevant property,
he (Kyriacou) did not have the legal capacity to do so insofar as
Lubbe,
qua
his curator bonis, had not consented to or ratified
such a contract. The mandate was, therefore, a nullity for lack of
contractual
capacity on the part of Kyriacou as correctly contended
by Mr Pohl.
[32] The plaintiff was,
therefore, entitled to 70% of the total commission realised excluding
VAT as at the 23
rd
October 2009 when transfer was passed.
She received 15% of the total commission or R75 000,00 on the
12
th
March 2010 and is, as such, entitled to payment of a
capital amount of R275 000,00 by the defendant.
[33] The plaintiff is,
thus, further entitled to interest at the rate of 15,5% per annum on
R350 000,00 calculated from the
23
rd
October 2009 to
the 12
th
March 2010 and further interest on R275 000,00
from the 12
th
March 2010 to date of final payment plus
costs.
ORDER:
[34] In the result the
defendant is liable for payment of R275 000-00 to plaintiff
together with interest as set out in paragraph
[33] above.
[35] Defendant shall,
further, pay plaintiff’s costs.
_______________
L. J. LEKALE, AJ
On behalf of Plaintiff :
Adv. L LER. Pohl
Instructed by:
Rossouws –
Attorneys Bloemfontein
On behalf of Defendant :
Adv. J W Steyn
Instructed by:
E.G Cooper Majiedt Inc.
Bloemfontein