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Stellenbosch Farmers' Winery Ltd v Apostolos Vlachos t/a Liquor Den (2) (117/99) [2001] ZASCA 45 (27 March 2001)

THE SUPREME COURT OF APPEAL

OF SOUTH AFRICA

Case No: 117/99

In the matter between


STELLENBOSCH FARMERS’ WINERY LIMITED Appellant


and


APOSTOLOS VLACHOS t/a LIQUOR DEN Respondent

CORAM: NIENABER, MARAIS, OLIVIER JJA, MELUNSKY et NUGENT AJJA

DATE HEARD: 8 MARCH 2001

DATE DELIVERED: 27 March 2001

JUDGMENT

MARAIS JA

MARAIS JA: [1] Having initially thought otherwise, I agree that the appeal should be dismissed with costs. I base that conclusion upon a narrow finding of fact and so refrain from assenting to all of the propositions of fact and law in the judgment of Nienaber JA. In my view, it is clear that even although defendant’s failure to fulfil his clear legal duty to apprise plaintiff of the true facts was, objectively regarded, reasonably capable of misleading and did in fact initially mislead plaintiff to believe that he remained its customer, the situation changed as time went by. While defendant’s continuing failure to fulfil his duty to inform plaintiff of the true state of affairs remained reasonably capable of so misleading plaintiff, the fact of the matter is that a point was reached when defendant’s mere silence ceased to induce plaintiff to believe that it was still its customer. So much was that so that plaintiff set about seeking positive reassurance in that regard. In short, defendant’s mere silence alone (or failure to fulfil his duty to speak) was no longer regarded by plaintiff as a sufficient indication that nothing had changed. Objectively regarded, it was. Subjectively regarded by plaintiff, it was not. From that moment onwards the silence of defendant ceased to have the inducing effect upon plaintiff which it had thitherto had, namely, a readiness to supply and extend credit.
[2] Understandably, plaintiff sought positive reassurance on that score and, equally understandably, sought it from defendant himself. Had defendant provided that assurance plaintiff would no doubt have continued to supply as before but the real^[1] cause of its renewed belief that defendant was its customer would have been defendant’s positive assurance that that was so, not defendant’s continuing silence. Defendant would of course have remained liable thereafter. As it happened, plaintiff was given the positive assurance which it wanted but, unbeknown to it, the assurance emanated, not from defendant, but from Da Silva who impersonated defendant. It was that false assurance and not defendant’s continuing silence (which by then had come to be regarded as equivocal by plaintiff) which caused plaintiff to continue supplying and extending credit.
[3] Unless responsibility for Da Silva’s impersonation of him can be laid at defendant’s door, the positive assurance so given cannot be raised against defendant to found an estoppel. For the reasons given by Nienaber JA I do not believe it can.
[4] In as much as goods supplied prior to the vital telephone call must be regarded as having been paid for, and liability for goods supplied thereafter cannot be attributed to defendant, plaintiff’s claim against defendant must fail.
[5] The narrow finding of fact upon which my conclusion rests makes it unnecessary to deal with the problems which exercised my mind at a time when it seemed to me that defendant’s failure to fulfil his duty to inform plaintiff of the changed circumstances was a concomitant cause of plaintiff’s belief that defendant was still its customer. Those problems related to such questions as: the validity and appropriateness of attempting to assign differing weights to the causal effect of two factors each of which, objectively regarded, was calculated to mislead (and was therefore material in the sense in which the law uses that word) and each of which did in fact contribute to the erroneous belief ^[2]; the causative implications of persistent silence where a duty to speak continues to exist even after another potent causative factor has entered upon the stage and played an inducing role which it would not have been able to play if the duty to speak had been discharged (a problem distinct from, and not to be seen as a mere manifestation of, the unsustainable breadth of the discredited “facilitation” theory); the usefulness or otherwise of the deployment of such epithets as “proximate”, “direct” or “immediate” where the premise is that there are concomitant causes both of which have had an inducing effect, either singly or in combination.^[3]
[6] Thankfully, I am spared the necessity of further enquiry by the finding of fact that defendant’s silence had ceased to mislead plaintiff by the time the
telephone call was made. On the rock of that factual finding plaintiff’s claim must founder.

R M MARAIS

JUDGE OF APPEAL

^[1]

As Jansen JA preferred to call it. See Saambou-Nasionale Bouvereniging v Friedman 1979 (3) SA 978 (A) 1005A-F. For myself, I would say the sole cause.
^[2]The problem also arises in the field of contract. In England, in the 7^th edition (1969) of Cheshire and Fifoot, Law of Contract, the authors state: “The court allows no post-mortem examination into the relative importance of the contributory causes, once it is proved that the representation complained of was one of those causes.” (At pages 244-5.) In both that edition and the 13^th edition (1996) (Cheshire, Fifoot and Furmston’s) the following appears:

“It is clear, however, that the right to relief would be endangered if a defendant were free to evade liability by proof that there were contributory causes, other than his misrepresentation, which induced the plaintiff to make the contract, and that his representation was not the decisive cause.
Cranworth LJ asked:

‘Who can say that the untrue statement may not have been precisely that which turned the scale in the mind of the party to whom it was addressed?’

The courts, therefore, although denying relief to a plaintiff who entirely disregards the misrepresentation, have consistently held that the misrepresentation need not be his sole reason for making the contract. If it was clearly one inducing cause it is immaterial that it was not the only inducing cause. In Edington v Fitzmaurice, for instance:

‘The plaintiff was induced to take debentures in a company, partly because of a misstatement in the prospectus and partly because of his own erroneous belief that debenture holders would have a charge upon the property of the company.’

Thus he had two inducements, one the false representation, the other his own mistake, and on this ground it was pleaded - unsuccessfully - that he was disentitled to rescission.” (At pages 244 and 281-2 respectively.)

Whether that approach is compatible with our law and whether, if it is, it is to be confined to the question of the right to resile from a contract and not extended to the doctrine of estoppel, need not be decided.

^[3]In Spencer Bower and Turner, Estoppel by Representation 3 ed (1977) it is said:

“It has already been pointed out ----- also, that ‘immediate’, ‘direct’, or ‘proximate’ causation, in so far as these epithets suggest the necessity of establishing anything over and above a real causal nexus are misleading and inaccurate. ----- It is not necessary that the representation should be the sole or exclusive cause of the representee altering his position; it is enough that it is a cause of his doing so, provided that a real causal nexus is established.” (At pages 102-3. See too pages 74-5.)