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[2009] ZAGPPHC 188
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Groenewald v West Country Estates (7467/07) [2009] ZAGPPHC 188 (6 May 2009)
NOT
REPORTABLE
IN THE HIGH COURT OF SOUTH AFRICA
(NORTH GAUTENG DIVISION)
Case No: 7467/07
Date:06/05/2009
In
the matter between:
GROENEWALD,
GRETE
........................................................................
Plaintiff
And
WEST
COUNTRY
ESTATES
..................................................................
Defendant
JUDGMENT
The
parties
1.
The Plaintiff, an elderly woman resident in Fichardt Park, Orange,
Free State instituted action against the defendant, West Country
Estates, a firm carrying on business at Flora Centre, Florida North,
Gauteng as a property agent.
Relief
2.
The plaintiff seeks the following relief against the defendant:
2.1.
Payment of the sum of R294 520.00;
2.2.
Interest thereon from date of summons to date of payment at the rate
of 15.5% per annum;
2.3.
Costs of suit.
3.
The defendant is defending the action and denies liability to the
plaintiff.
Cause
of action
4.
The cause of action is set out in the plaintiffs Particulars of
Claim, the most pertinent of which are the following:
6.
Gedurende
ongeveer 1989 (1998) en te Florida, het die Eiseres, handelende in
haar persooniike hoendanigheid, en die Verweerder,
behoorlik
verteenwoording deur J.J. Joubert 'n mondeiinge, alternatiewelik
skriftelike kontrak gesluit, die voile besonderhede
waarvan nie meer
binne die kennis van die Eiseres val nie, met die volgende die
uitdruklike, alternatiewelik stilswyende, verder
alternatiewelik
geimpliseerde terme:
6.1.
Dat die Verweerder aangestel word as die Eiseres se verhuringsagent;
6.2.
Dat die Verweerder die Deeltitel eenheid names die Eiseres moet
uitverhuur teen die mees - voordelige huurinkomste;
6.3.
Dat die Verweerder moes toesien dat die eenheid behoorlik onderhou
word, en die Eiseres in kennis moes stel van enige gebreke
of ander
probleme wat uit die verhuring van die eenheird mog ontstaan;
6.4.
Dat die Verweerder die ooreengekome maandelikse huurgeld namens die
Eiseres vanaf die huurders moet invorder;
6.5.
Dat die Verweerder uit die gevorderde huurgeld die volgende uitgawes
en verpligtinge namens die Eiseres moet betaal:
6.5.1.
Die maandelikse verbandpaaiement aan ABSA Bank;
6.5.2.
Die maandelikse heffings verskuldig aan die Regspersoon van Cheviot
aan die Regspersoon of sy aangewese bestuursagent;
6.5.3.
Enige ander uitgawes in verband met die instandhouding van die
eenheid.
6.6.
Dat die Verweerder enige surplus-inkomste aan die Eiseres moet
oorbetaal;
6.7.Dat
die Verweerder uit hoofed van sy posisie as agent van die Eiseres te
aiie tye bona fide en met die nodige sorgsaamheid,
en in beiang van
die Eiseres, haar belange bestuur, beskerm en met die hoogste trou
sal hanteer.
7.
Die
Verweerder het sy mandaat gedeeiteiik uitgevoer deur inter alia die
Eiseres se deeltiteleenheid uit te verhuur, van tyd tot
tyd huur in
te vorder, van tyd huur oor te betaal aan die verbandouer, en ook van
tyd tot tyd die heffings te betaal.
8.
Die
Verweerder het sy kontraktuele verpligtinge teenoor die Eiseres
verbreek deurdat:
8.1.
Die Verweeder versuim het om stiptelik en elke maand die maandelikse
heffings aan die deeltitelbestuurder, te wete Constantia
Management
oor te betaal;’’
5.
In response to these allegations, the defendant pleaded thus:
“
6.
AD PARAGRAAF 6
Die
Verweerder oieit soesifiek dat gedurende of omtrent middle 1998 het
die Verweerder. behoorlik verteenwoordig deur J.J. Joubert.
en ene
Ben Groenewald (“Groenewald”) 'n mondelinge ooreenkoms
aangegaan met die volgende terme en voorwaardes:-
6.1.
Dat die Vermeerder aangestel word om Groenewald se eiendom gelee te
17 Mount Cheviot. Cheviot Road East, Florida Hills, Roocepoort
namens
Groenewald te verhuur teen die mees voordeligste huurinkomste;
6.2.
Dat die Verweerder die ooreengekome maandelikse huurgeld namens
Groenewald vanaf die huurders moes invorder:
6.3.
Dat die Verweerder soos en wanneer die gelde gevorder is die
maandelikse heffings verskuldig aan die regspersoon van Cheviot
of sy
aangewese bestuursagent moes vereffen en die balans daarvan in 'n
oenomineerde rekening deur Groenewald verskaf moes inbetaal:
6.4.
Dat die huurder in die eiendom aanspreeklik sou wees vir die betaling
van alle water en elektrisiteit en ander gelde verskuldig
aan die
regspersoon en/of die plaaslike munisipaliteit en dat die Verweerder
geen verantwoordelikheid daarvoor wou aanvaar nie.”
(My
underlining)
6. It is within the context of these
pleadings supplemented by evidence that the matter will have to be
considered and decided.
Background
7.
The plaintiff was the owner of certain immovable property known as
Unit 17 Mount Cheviot situate at Florida, under a sectional
title
scheme managed by the Constantia Body Corporate. She acquired the
property in 1998 through finance from ABSA Bank. The property
was
initially occupied by her husband who, at the time of the purchase
was working in Johannesburg. After he had left to join the
plaintiff
in the Free State, she decided to put the property on the rental
market in a scheme managed by the defendant. Before
her husband left
Florida for Free State, he identified a letting agency known as West
Country Estates. As he was not the owner
of the property, he could
not conclude any agreement with the defendant but merely furnished
the plaintiff with the particulars
of the latter.
8.
During 1998 the plaintiff, in a telephonic conversation mandated the
defendant through Jan Joubert Senior to manage the Unit
on her behalf
subject to the following terms and conditions:
8.1.
The defendant would manage and let the unit on her behalf on the most
propitious rentals;
8.2.
Ensure that the unit is properly maintained and to notify the
plaintiff of any defect or problems arising from the rental of
the
unit;
8.3.
The defendant shall pay expenses and meet the following obligations
on behalf of the plaintiff:
8.3.1.
Pay the monthly instalments to ABSA;
8.3.2.
Pay the monthly levies due to the Body Corporate or its
representatives;
8.3.3.
Pay any expenses relating to the maintenance of the unit;
8.3.4.
The surplus income be paid to the plaintiff.
9.
The defendant, represented by Jan Joubert Senior, accepted the
mandate and let the property to suitable tenants at a rental of
R3000.00 per month. The first tenant was a Pakistani who occupied the
unit for a few months followed by Vanessa Jacobs. The third
and last
tenant was Mr. Summers who occupy the property from January 2003 to
March 2004.
Relevant
events
10.
During the tenancy of Mr. Summers, certain events which formed the
basis of this action occurred. It would appear that the defendant
did
not fulfil its duties properly and had fallen in arrears in respect
of levies in an amount of R 8010.19. The Body Corporate
then issued
summons against the plaintiff for payment of the aforesaid amount;
the summons was served by affixing a copy thereof
on the front door
of the Unit. On his return from work on the 22nd August 2003, Mr.
Summers found the summons affixed to the main
door of the residence.
On the following day he took the summons and handed it to Joubert
Junior at the offices of the defendant.
11.
During September 2003, Mr. Summers found affixed to the main door of
the Unit, a copy of a Warrant of Attachment in Execution.
Realising
the seriousness of the situation, he again proceeded to the
defendant’s offices; he demanded to see Joubert Junior
and
tried to establish why action had not been taken or whether the
plaintiff had been notified of these court processes. Joubert
Junior
did not take lightly to Mr. Summers’ alleged interference in
their affairs and a verbal altercation ensued. Mr. Summers
tried to
obtain the particulars of the plaintiff but his efforts were in vain.
Due to lack of action or any form of intervention
by the defendant,
the property was eventually sold in execution for the mere R 8 010.19
plus costs.
12.
Word of the sale of the property eventually came to the attention of
the plaintiff; she reported the matter to the Council for
Estate
Agents. During one of the sessions, she saw a copy of the summons in
the defendant’s (Joubert Junior) file. For some
reason or the
other, this matter was never resolved by the Council for Estate
Agents.
Plaintiff case
13.
lt is common cause that the plaintiff telephonically gave a mandate
to the defendant in terms of which the latter acted as a
letting
agent for the plaintiff subject to the terms and conditions set out
in the pleadings. It is further common cause that the
main functions
of the defendant were, amongst others to let the premises at a
market-related rental to suitable tenants, to collect
rentals
regularly from the tenants; service the levies and other services,
deduct its standard commission and deposit the balance
into the
Plaintiffs nominated account. Between 2001 and 2003, the defendant
let the property to three tenants, the last of whom
was Mr. Summers
whose contract commenced in January 2003 and was due to terminate in
January 2004, subject to renewal for a further
12 months. The rental
payable by Summers was an all-inclusive rental of R 3 000.00 the
first of which was payable in February 2003.
14.
The plaintiff testified that during the period 2003 - 2004 she didn’t
receive regular reports from the defendant except
the report about
the Pakistani and the question of the stove about which Mr. Summers
complained. She was not kept abreast about
the levies. At one stage
she received notification from her bank, ABSA, that her account had
accumulated a substantial amount of
interests due to late payment.
She did not receive a copy of the summons and Warrant of Execution
neither did the defendants inform
her about the action the Body
Corporate has instituted against her for arrears rates and services.
Had she been notified about
this, she would have taken appropriate
steps to settle the arrears as the Unit was her valuable investment.
She was bitterly disappointed
and aggrieved by the conduct of the
defendants who failed to fulfil their mandate faithfully, honestly
and with due diligence.
Cross-examination of the defendants did not
bring anything new facts to light nor where there any material
contradictions in her
evidence.
15.
Mr. Summers’ evidence was pertinent to the issue and
demonstrated clearly that it was the attitude of the defendant which
led to this unfortunate state of affairs. He acted in the most
responsible manner and his response to the court processes reflected
a sense of maturity, concern and responsibility which was lacking
from the defendants. Had he been timeously aware of the plaintiff
contact details, the latter would surely not have lost her valuable
asset which was sold for a song under circumstances which call
for an
answer from the attorneys who handle the matter which, in my view,
should have been taken up on appeal in accordance with
the decision
in Jaftha v Schoeman and Others; Van Rooyen v Stoltz and Others
[2004] ZACC 25
;
2005
(2) SA 140
(CC) at 165d―e read with s66 (1) of the Magistrate
Courts’ Act 32 of 1944.
The defendants’ case
16.
The defendants aver that the levies were paid in accordance with
whatever had been paid by or recovered from the tenants for
that
particular month; but denied that their duties encompassed payment to
the Body Corporate for water and electricity services
which,
according to them, were the sole responsibilities of the tenants.
They concede, however, that the levies were not paid punctually
and
regularly and accumulated interests. They deny emphatically any
knowledge of the summons and warrant of execution. Joubert
Senior
states that he retired from the business during 2002 when his sons
and daughter took over the administration of the firm.
It is
interesting that when he was told about the summons and Warrant of
Execution, he responded that: "had these processes
come to my
knowledge I would have driven to Bloemfontein to hand it over to the
Defendant.”
17.
A close scrutiny of the statement from Constantia Sectional Title
Management (Pty) Ltd dated 23rd May 2006 for the period January
2001
to 2003, it appears that the levies payable in respect of the Unit
for February 2001 was R532.00 plus a special levy of R98.00.
From
March 2001 the levy was R582.00. Levies were not paid regularly and
at times double payments were effect. For instance on
6th July 2001
an amount of R1090.00 was paid; in August and September up to
December 2001 payment of R1190.00 was made. From August
2002 no
payments were made except an amount of R612.00 in December 2002.
Thereafter an amount of R1240.00 was paid in March 2003.
This
statement handed in as Exhibit “B” demonstrates in no
uncertain terms that the maintenance of the levy account
was totally
irregular and this explains why the Body Corporate resorted to
instituting action for the recovery of the arrears.
18.
Mrs. Groenewald could not be described as the best witness. Her
recollection of the facts was not that good but that could be
ascribed to the fact that she was completely unaware of 90% of how
the defendant administered her affairs. She was kept in the
dark most
of the time. One could also point a finger at her and ask why at any
given time she had never come to Florida to check
on the state of her
property and the administration of her affairs; why she had not
demanded a report/account from the defendant;
or why she had not
instructed an attorney to call upon the defendants to render a proper
account of the administration of her affairs.
On the whole, she was a
good witness though sometimes talkative as a result whereof she could
not answer some of the questions
pertinently. Apart from these
criticisms the Court accepts her evidence and cannot find any
material contradictions or even conclude
that she deliberately
avoided some questions put to her during cross-examinations. The
Court does not doubt the credibility of
her evidence in so far as it
relates to the merits of the case. The Court accepts that she was
never informed of these processes
otherwise she could take the
necessary steps to protect her investment.
19.
As for Mr. Summers, he was the most impressive of all the witnesses
and he displayed the intelligence one could not ascribe
to the
defendants’. His evidence was to the point and he stated
whatever he told the Court with conviction and shown no bias
whatsoever in the matter. The Court was impressed by his concern
about the consequences of lack of concern on the part of West
Country
Estates in protecting the interests of the plaintiff in accordance
with their mandate. The Court accepts his evidence and
cannot doubt a
single word of his evidence that he paid his rentals religiously. He
answered all questions pertinently and without
any degree of
prevarication or even embroidering his answers.
20.
As for the defendant, there is nothing to write home about it
witnesses. Both Joubert were very poor to the core and it is quite
clear that they were strangers to veracity. I have no doubt that
Johan Junior was given both these court processes personally by
Summers and he, for some reasons better known to himself, refrained
to take appropriate action nor did he, as a diligent agent
would have
done, take any steps to intervene, inform the plaintiff or even
negotiate with the Body Corporate. Had the defendant
fulfilled its
mandate diligently and faithfully, the plaintiff would not found
herself in this situation.
21.
It is settled law that one of the natural incidences of a contract of
mandate is that the agent is obliged to fulfil the agreed
functions
honestly, punctually, properly and with care and diligence. Secondly,
and equally important is to account to the principal
for all actions
taken in pursuance of its functions. It is against this principle
that the conduct of the defendant must be analysed
and tested. In
David Trust and Others v Aegis Insurance Co. Ltd and Others
[2000] ZASCA 108
;
2000 (3)
SA 289
SACC the appellants had and trusted their business affairs to
a partnership of chartered accountants, KS whom they have mandated
to
effectively run their business. Included in the mandate was the
investment of certain surplus funds with certain banks. Due
to theft
by certain members of KS, the partnership had certainly suffered loss
and liquidated. The court pointed that the mandate
entrusted to KS
was of utmost importance for the interest of the appellant just as it
is important to the plaintiff in this matter.
The court points out at
298 that one of the naturalia of a mandate in general is that:
“
..
.the mandatory was obliged, first, to perform her/his functions
faithfully, honestly and with care and diligence, and, secondly
to
account to her/his principles for her/his actions. KS has committed
breaches of its mandate. It had done so, in the first place,
by its
failure to perform it duties honestly.. .or diligently. ’’
22.
If there is compelling evidence that the defendant deviated from
these standards and the principal have suffered loss as a result
of
their dereliction of responsibility, the defendant can certainly not
escape any liability. When one considers the evidence,
in particular
the evidence of Mr. Summers, the conclusion is inescapable that not
only did the defendant perform its functions
perfunctorily, dismally
or negligently but its conduct was without doubt deliberate. I cannot
imagine how the defendants could
let a pensioner lose what was a
valuable investment in her life. This boggles my mind. Hence my
conclusion that their conduct was
deliberate, not even grossly
negligent. If the defendant is still in business, I recommend that it
be reported to the Board of
Estate Agents and that the latter deals
decisively with this matter.
23.
I now turn to consider the question of quantum of damages. At the
time of the sale in execution of the Unit, the balance owing
on the
bond to ABSA was the sum of R61 131.86, the net balance of the
proceeds of the sale in the amount of R263 180.86 was paid
over to
the Plaintiff. According to the plaintiff the fair and reasonable
market value of the property at the time of the sale
in execution was
in the region of R560 000.00. The plaintiff contends that had the
property been sold in the open market it could
have easily fetched
the sum of R560 000.00. Consequently she had suffered a loss in the
sum of R294 520.00 being the difference
between what she received
after the sale in execution and what the property could have fetched
had it been sold in the open market.
Although no valuation of the
property had been placed before the court, it is common cause that
the property market enjoyed a degree
of buoyancy from about 2003
until 2007. This piece of evidence by the plaintiff has not been
disputed by the defendant and the
court accepts that the property
could have been sold for the sum of R560 000.00 in the open market.
24.
Having considered the quantum on the basis of the evidence before me,
I come to the conclusion that judgment should be entered
in favour of
the plaintiff for the amount claimed.
I
accordingly make the following order:
1.
The defendants are ordered to pay plaintiff the amount of R294
520.00;
2.
Interest thereon at the rate of 15.5% per annum from date of summons
to date of payment;
3.
Costs of suit.
T.J.
VILAKAZI
Acting
Judge of the High Court