IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA

CASE NO: 66161/2012






In the matter between:

IN THE HIGH COURT OF SOUTH AFRICA
(GAUTENG DIVISION: PRETORIA)


WILLIAM MARTIN NEUMANN PLAINTIFF


and


EDELSTEIN FARBER GROBLER INC. DEFENDANT



JUDGMENT


CURLEWIS AJ:
(1) REPORTABLE: YES
(2) OF INTEREST TO OTHER JUDGES: YES
(3) REVISED: YES

DATE: 5 February 2025




Introduction:

[1] In this action, the Plaintiff sued the Defendant for damages resulting from
unsuccessful litigation by the Defendant against the Plaintiff’s previous employer,
Broll Gauteng (Pty) Ltd a nd Broll Property Management (Pty) Ltd (hereinafter
collectively referred to as “Broll”) in the Gauteng Division, Johannesburg with case
number 13114/2007.1 The Defendant represented the Plaintiff in the above matter
as the attorney of record.2

[2] The Plaintiff’s claim against the Defendant in the present matter is as a result of
the Defendant’ s alleged negligence in his duties as an attorney when the
Defendant represented the Plaintiff in the above matter.

[3] As per the order made in terms of Rule 33(4) to separate the issues, this judgment
will only address whether the Plaintiff was entitled to commission and if so, how
this commission is to be calculated.

Background:

[4] The Plaintiff was previously employed by Broll as a property broker in terms of a
contract concluded on or about 19 November 1998 (“the contract”) .3

[5] Broll ensured, alternatively had a responsibility to ensure, that all of its brokers
were holders of a valid Fidelity Fund Certificate in terms of Section 26(a) of the
Estate Agency Affairs Act 112 of 1976 (Hereinafter referred to as “the Act”).

[6] In terms of the contract between the Plaintiff and Broll, the following paragraphs
are of importance: 4

“2.1 Where you have introduced both the Lessor and the Tenant (or Buyer and
Seller) and have concluded negotiation w ith the parties to finality resulting
in a binding contract, you w ill be entitled to 50% (the Broker’s Share) of
the net commission received by Broll Tvl (Pty) Ltd.

2.2 Where any other Broker of Broll w as involved in the introduction of either
party to a transaction or assists in the negotiations to conclude the
transaction then the Broker’s Share shall be divided in a share to be
agreed upon. In the event of a dispute the decision of the Board of
Directors of the company shall be final.”


1 Summons at Caselines 001-23 to 001-30.
2 Ibid.
3 Annexure “WN1” POC, Caselines 008 -09 at Paragraph 5.
4 Caselines at 008-25 at para 8.1.2.
[7] During 2002, the South African Revenue Services (hereinafter referred to as
“SARS”) issued a request for information (referred to as RFI 08/2002) to property
brokers and developers to search for a property to lease with a capacity of
12 000m2 (Twelve Thousand Square Metres).5

[8] On or about March 2003, Broll responded to the request and listed the Plaintiff as
the broker as he had an existing relationship with that specific branch of SARS . Ms
Teagle and Ms Human of Broll were listed as contacts to assist the Plaintiff in this
regard.6 It is, however, common cause that the Plaintiff was the broker contacted
by SARS to assist and showed SARS properties in response to this request.

[9] Between February 2003 and August 2003, Ms Teagle was provided a sole
mandate for six (6) months in an oral, alternatively partially written, agreement with
Eskom to find a tenant for the property referred to as Megawatt Park with an extent
of 39 000m2 (Thirty Nine Thousand Square Metres).7

[10] It is apparent that RFI 08/2002 responded to by the Plaintiff and the sole mandate
provided to Ms Teagle by Eskom are two separate requests.

[11] Between March 2003 and November 2003, SARS had increased its required
capacity in its mandate in respect of RFI 08/2002 from 12 000m2 to 39 000m2.

[12] On 18 November 2003, a lease agreement was concluded between SARS and
Eskom for Megawatt Park (the “ ultimate lease”) .8 The present dispute arose from
the conclusion of the ultimate lease between SARS and Eskom .

[13] While not being able to take sole credit for the ultimate lease, the Plaintiff contends
that he was the sole cause of an agreement being reached between Eskom and
SARS because of his involvement with the initial request from SARS for a
12 000m2 premises. The Plaintiff therefore argues he is entitled to the full
commission on the 12 000m2 portion of the 39 000m2 and a share in the
remainder.9

[14] The Defendant argued that Ms Teagle and Ms Human were the sole cause of the
lease agreement between Eskom and SARS and that the amount paid to the
Plaintiff was a mere courtesy as the Plaintiff was not entitled to any commission
and was at best entitled to a third of the full commission payable.10

Issues to be determined:


5 Defendant’s Amended Plea, Caselines 001 -43 at Para 4D.
6 Ibid at para 4E.
7 Ibid at para 4F.
8 Judgment in case 13965/2005 page 10 line 3-4, Caselines 08-293.
9 Plaintiff’s Heads of Argument, Caselines 027 -18 – 27 at para 27- 37.
10 Defendant’s Heads of Argument, Caselines 028 -18 -27 at para 30 -70.
[15] In order to determine whether the Plaintiff had a successful claim against Broll the
following must be determined:

1. Whether the Plaintiff is legally entitled to commission.

2. If so, how this commission must be calculated, alternatively how much
commission the Plaintiff is entitled to.

Plaintiff’s entitlement to commission:

[16] In terms o f the Plaintiff’s contract with Broll, the Plaintiff was entitled to a 50%
commission if he was the cause of a conclusion of an agreement. Alternatively,
the Plaintiff was entitled to an agreed upon portion of the commission with any
other brokers who assisted him in concluding the contract.

[17] There are two issues argued between the parties with regards to the Plaintiff’s
entitlement, being whether the Plaintiff had a valid Fidelity Fund Certificate
while performing his functions as a broker and whether the Plaintiff was a n
effective cause of the agreement concluded between SARS and Eskom.
Fidelity Fund Certificate:
[18] With regards to the Fidelity Fund Certificate (hereinafter referred to as “FFC”),
the Defendant argued that the Plaintiff was not holding a valid FFC while acting
as a broker for the 12 000m2 deal during the period of March 2003 to May
2003.11

[19] The Plaintiff called Miss Lisbeth Phalane (hereinafter referred to as “Ms
Phalane” ), who is a Registration Supervisor at the Estate Agents Affairs Board
(the “ EAAB ”). Ms Phalane provided the court with the membership roll and
records thereof which showed that the Plaintiff was a registered member with
a valid FFC from 2002 to 2006.12

[20] During cross-examination the Plaintiff confirmed that in 2003, he was only
issued with his FFC on 18 October 2003 and thus did not have a valid FFC
while doing work for the 12 000m2 deal during the period of March 2003 to May
2003.13 The Plaintiff further confirmed that the reason for the delay was
unknown to him and that this was a common occurrence.14

[21] In terms of Section 26(1)(a) of the Act:


11 Ibid, Caselines 028-16 at para 26.
12 Caselines 003- 143-145.
13 Ibid, Caselines 028-16 at para 26
14 Plaintiff’s Heads of Argument, Caselines 027 -15 at para 19.
“No person shall perform any act as an estate agent unless a valid fidelity
fund certificate has been issued to him or her and to every person
employed by him or her as an estate agent and, if such person is –
a) a company, to every director of that company; or
b) a close corporation, to every member referred to in
paragraph (b) of the definition of ‘estate agent’ of that corporation.”

[22] The purpose of this Section and the establishment of the EAAB are to regulate
the activities of estate agents and to maintain and promote the standards of
conduct within the public interest.15

[23] In the case of Lek v Estate Agents Board ,16 Trollip AJ held that the “application
for a fidelity fund certificate is tantamount to an application for permission to
trade, for w ithout such certificate the appellant cannot carry on an estate
agency business.” Trollip AJ confirmed this on appeal and stated therein that
“…to get such a certificate he (the appellant) has to apply in the prescribed
manner to the Estate Agents Board (s16 ( 1))…If the Board is satisfied that the
requirements of the Act have been duly complied w ith, it must issue the
certificate [ …] A certificate shall not be issued, or if issued, be valid unless the
provisions of the Act have been complied w ith (s16 ( 3))…”17. In essence,
Section 26 of the Act is intended to ensure that the estate agent or its employer
are compliant with the requirements as set out in the Act.

[24] Coppin J confirmed this interpretation i n Crous International (Pty) (Ltd) v
Printing Industries Federation of South Africa18 where he stated that although
the provisions of the Act have been slightly amended, their meaning is the
same.

[25] Coppin J further stated that a strict or narrow interpretation of Section 26(1) (a)
of the Act would not achieve a purposive or substantive approach that is called
for by the court in terms of Section 39(2)19 and Section 2220 of the Constitution
of the Republic of South Africa, 1996.21

[26] An estate agent is required to within the year that they are making the
application for the certificate pay a levy in terms of Section 9(1) (a) of the Act

15 Estate Agent Affairs Act No 113 of 1976 at Section 7.
16 1978 (3) SA 160 (C)
17 Estate Agents Board v Lek 1979 (3) SA 1049 (AD).
18 (2012/34717) [2016] ZAGPJHC 391
19 “When interpreting any legislation, and when developing the common law or customary law, e very court,
tribunal or forum must promote the spirit, purport and objects of the Bill of Rights.”
20 “Every citizen has the right to choose their trade, occupation or profession freely”
21 Crous International (Pty) (Ltd) v Printing Industries Federation of South Africa (2012/34717) [2016] ZAGPJHC
391
as an annual contribution to the fund.22 The estate agent must apply within the
prescribed period and in the prescribed manner to the board for an FFC.23

[27] But for the present matter which hinges upon the entitlement of the Plaintiff to
commission and the quantum thereof if so entitled, neither party has taken
issue and/or raised the Plaintiff’s compliance or lack thereof with the
requirements found in the Act with regards to an application for a FFC to the
EAAB .

[28] There is no reason to deduce that the lack of the FFC was the fault of the Plaintif f
but rather the fault of the EAAB.

[29] Furthermore, in terms of Section 26 of the Act, it was the responsibility of Broll
to ensure that all of its employees acting as estate agents are in possession of
valid FFCs. The Plaintiff cannot be held at fault for Broll’s failure to compl y with
the EAAB.
Effective Cause:
[30] The Plaintiff argued that he engaged with SARS extensively in order to obtain
the lease mandate.24 The Plaintiff testified that he was provided with a verbal
mandate from his contact at SARS, Ms Panyane, to find office space to the size
of 3 225m2 , this was later increased to 12 000m2 and RFI 08/2002 was
issued.25 Ms Teagle and Ms Human confirmed that they were aware of the
Plaintiff’s engagement with SARS but that they were not aware that the Pla intiff
had received the mandate to find SARS leased premises, until the capacity was
increased to 39 000m2.26 Further, Ms Teagle and Ms Human only became
aware of the deal when the Plaintiff collected the tender documents issued by
SARS.27

[31] The Defendant argued that Ms Human and Ms Teagle solely pitched for and
obtained the sole mandate to market Megawatt Park for Eskom for a tenant.28
Further, that when the 12 000m2 tender came out; the Plaintiff, Ms Teagle and
Ms Human agreed to work together to prepare the tender documents.29

[32] During cross-examination the Plaintiff stated that he put forward Woodlands
and Sandown Valley Cresent and that Ms Human and Ms Teagle put forward
Megawatt Park for the tender.30 Ultimately, Megawatt Park was chosen.


22 Estate Agents Affairs Act at Section 15.
23 Ibid at Section 16(1).
24 Plaintiff’s Heads of Argument, Caselines 027 -21 at para 29.2.
25 Defendant’s Heads of Argument, Caselines 028 -22 at para 49.
26 Plaintiff’s Heads of Argument, Caselines 027 -21 at para 29.2.2.
27 Plaintiff’s Heads of Argument, Caselines 027 -22 at para 29.3.
28 Defendant’s Heads of Argument, Caselines 028 -20 at para 40 - 41.
29 Defendant’s Heads of Argument, Caselines 028-22 at para 45- 46.
30 Defendant’s Heads of Argument, Caselines 028 -22 at para 45- 46.
[33] It is apparent from the background above that the mandates given to Ms Teagle
and the Plaintiff were two separate mandates. Ms Teagle’s mandate was to find
a tenant for Eskom’s Megawatt Park and the Plaintiff’s was to f ind 12 000m2
office space for SARS.

[34] Heever AJ stated in Webranchek v IK Jacobs & Co Ltd , that an agent can be
considered an effective cause if “… the sale is chiefly attributable to the efforts
of plaintiff; in other words that those efforts constituted dominant or an effective
cause of the sale…”31

[35] The court in Aida Real Estate Ltd v Lipschitz stated as follows regarding
whether an agent was an effective cause:32

“A proviso has been added to the effect that the introduction of the able
and w illing buyer must have been the effective cause or causa causans of
the sale. If a new factor intervenes causing or contributing to the
conclusion of the sale and the new factor is not of the making of the agent,
the final decision depends on the result of a furt her enquiry... did the new
factor outw eigh the effect of the introduction by being more than or equally
conducive to the bringing about of the sale as the introduction w as, or w as
the introduction still overridingly operative? Only in the latter instance i s
commission said to have been earned.”

[36] In the case of Wynland Properties CC v Potgieter and Another ,33 the purchaser ,
one Mrs Durr, contended that the agent was not entitled to remuneration as
Mrs Durr’s sister- in-law renewed her interest in the property shown to her by
the estate agent and this lead Mrs Durr to contact the Seller directly and
purchase the property. The court agreed with the court a quo in that the sale
would have still materialised regardless of the agent introducing the purchaser
to the property and the seller, as the sale materialised due to the sister- in-law’s
intervention which sparked Mrs Durr’s interest again.34

[37] The Defendant contends that Ms Teagle and Ms Human would have become
aware of RFI 08/2002 despite the Plaintiff obtaining it from his SARS contact.
The Plaintiff, on the other hand, contends that Ms Teagle and Ms Human
ultimately only became aware when the Plaintiff came to fetch the tender
documents from SARS and would not have been aware of RFI 08/2002
otherwise.35 To my mind, the question at hand is whether Ms Teagle and Ms
Human becoming aware of RFI 08/2002 when they did, is an intervening event
as mentioned in Wynland Properties CC v Potgieter and Another .


31 1948 (4) SA 671 (A) .
32 1971(3) SA 871(W) .
33 1999(4) SA 1265 (C) at 1274.
34 Ibid.
35 Plaintiff’s Heads of Argument, Caselines 027 -21 at para 29.2.2.
[38] The Plaintiff did not introduce the clients (being SARS and Eskom) to one
another, nor did the Plaintiff show Megawatt Park to SARS. However, the
Plaintiff ultimately informed Ms Teagle and Ms Human about the tender for
SARS in the first place which resulted in them tendering Megawatt Park to
SARS when the request was amended from 12 000m2 to 39 000m2 and in the
signing of the ultimate lease.

[39] To argue that the Plaintiff did not have an effective cause in the signing of the
ultimate lease and that he did not see his mandate to its finality would be
incorrect.

[40] The Plaintiff is entitled to commission.






Calculation of Commission:

[41] The second issue to determine with regards to commission is how the
commission due to the Plaintiff must be determined.

[42] It is apparent that all three brokers had a part to play in the conclusion of the
ultimate lease and there was a misunderstanding regarding how the
commission should be split.

[43] According to the Plaintiff,36 he should receive “his full working commission for
which he had been mandated by SARS .”

[44] After the Plaintiff informed Ms Teagle and Ms Human about the tender for
SARS, there was an informal meeting held between the three brokers. There is
a discrepancy regarding what took place during this meeting. The Defendant
argues that the Plaintiff tacitly agreed with Ms Teagle and Ms Human to a third
of the commission on the transaction.37 The Plaintiff argues that he did not agree
with this decision and expressed this view.38 Alternatively, the Plaintiff stated
that if he was unresponsive within the meeting this did not mean that he tacitly
agreed with the decision taken.

[45] The reasonable inference to be drawn is that the Plaintiff’s version is correct as
the Plaintiff even went so far as to inform his boss, Mr Alcock,39 that there was

36 Plaintiff’s Heads of Argument, Caselines 027 -4 at para 4.
37 Defendant’s Heads of Argument, Caselines 028 -9 at para 11.9.
38 Plaintiff’s Heads of Argumen t, Caselines 027-22 at para 29.4-29.6.
39 Plaintiff’s Heads of Argument, Caselines 027 -22 at para 29.5 and Caselines 008- 259.
an issue between the three brokers regarding the split of the commission and
that ultimately the board must decide as is Broll’s formal policy . Mr Alcock’s
response was ultimately unhelpful and non-compliant with his duty as a director
on the board and non –compliant with the contract signed between Broll and the
Plaintiff which states at Paragraph 2.2 that in the event of a dispute as is seen
in casu there is a duty of the board to make a final determination . Furthermore
the Plaintiff has proceeded with litigation on a large scale on the division of the
commission .

[46] The Plaintiff, much like the sister- in-law in Wynland Properties CC v Potgieter
and Another40, played a causal role in the finality of the ultimate lease. The
meeting between the Plaintiff, Ms Teagle and Ms Human wherein the Plaintiff
was informed by Ms Teagle and Ms Human of the tender in respect of the 39
000m2 premises was a new intervening factor. However, ultimately the Plaintiff
was the cause of Ms Teagle and Ms Human tendering Megawatt Park to SARS.

[47] Without a clear decision between the brokers, and furthermore the board of
directors of Broll with regards to the commission split it would be unfair to deny
the Plaintiff what is ultimately due to him and what he has always argued for
(which is the full commission on the 12000 m2 and a third split of the remainder).
.

[48] Broll received the full commission on the ultimate lease representing the 39
000m2 in the Boruchowitz judgment.41 As a result of the relationship and contract
between Broll and its brokers, 50% automatically of that amount awarded by the
court vests in Broll. This leaves only the remaining 50% of the total commission
paid over to Broll for distribution between the brokers. From that remaining
amount, the Plaintiff is entitled to his 100% commission on 12000 m2 out of the
39 000 m2. Thereafter, the remainder of the commission on the 27000m2 should
be divided equally between the three brokers being (i) the Plaintff, (ii) Ms Teagle
and (iii) Ms Human. In final analysis, the Plaintiff should have received his 100%
commission on the 12000 m2 and a third of the commission on the 27000m2.The
Plaintiff is thus entitled to the difference between the amount paid to him by Broll
and the amount to be calculated as indicated above.







40 1999(4) SA 1265 (C).
41Index to Trial Bundle Volume 3, Caselines 008-284 at 55.