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Vigne v Miles (CA32/2017) [2020] ZAECGHC 108 (29 September 2020)

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IN THE HIGH COURT OF SOUTH AFRICA

EASTERN CAPE DIVISION, GRAHAMSTOWN

CASE NO: CA32/2017

Date heard: 11 September 2020

Date delivered: 29 September 2020

In the matter between:

MARGARET MAY VIGNE

 

Plaintiff/Appellant

 

and

 

 

 

DAVID LEO MILES

 

Defendant/Respondent



JUDGMENT

LOWE, J

INTRODUCTION

[1]          This is an appeal against the dismissal of Appellant’s action for payment of Estate Agent’s Commission arising from the sale and transfer of Farm Number 74, Komga, Eastern Cape (“the Property”).

[2]          There is a cross appeal against the Magistrate’s costs order in part.

[3]          It should immediately be said that the Magistrate, in my view correctly, found that Respondent had given Appellant a mandate to sell the property and that the sale was due to Plaintiff’s introduction of the purchaser with no intervening cause. 

[4]          The Magistrate however concluded that, this notwithstanding, Appellant failed to prove that there was an agreement that this would result in payment of commission – though on what basis is not entirely clear – and thus Appellant failed, her claim being dismissed with costs.

[5]          It should be said that the trial was unnecessarily lengthy to say the least.

[6]          Having regard to the Magistrate’s clearly correct finding on the mandate, introduction of the purchaser and that Appellant was the effective cause of the sale, the main issue in this appeal is whether, in so doing, Appellant established, on the evidence, an agreement that commission was payable in the event of her being the effective cause of the property sale.

THE LAW

[7]          It was common cause that a claim for Estate’s Agents commission must establish:

[7.1]     A relevant fidelity fund certificate[1].

[7.2]     A mandate to find a purchaser. (Such mandate may be express or tacit[2].)

[7.3]     Due performance of the mandate which depends on the terms of the mandate[3].  This usually requires:

[7.3.1] an introduction of a purchaser to the seller;

[7.3.2] that the purchaser was willing and able to purchase when the contract was signed;

[7.3.3] that a valid sale contract was concluded;

[7.3.4] that the introduction was the effective cause of the contract; and

[7.3.5] the amount of commission payable in terms of the mandate[4].

[7.4]     If nothing is said about commission Plaintiff is entitled to rely on a tacit term that commission is payable according to the generally accepted tariff[5].

[8]          Appellant pointed out in argument that if there is no express agreement an implied or tacit contract may be inferred under certain circumstances.  This is stated thus in LAWSA[6]:

4 Implied or tacit contract  If there is no express agreement between principal and agent, an implied or tacit contract may be inferred under certain circumstances. It would seem that there are two conflicting tests for inferring the existence of a tacit or implied contract.[7]

The first test is the “no other reasonable interpretation” test[8]. This test is explained as follows: in order to establish a tacit consent it is necessary to show, by a preponderance of probabilities, unequivocal conduct which is capable of no other reasonable interpretation than that the parties intended to, and did in fact, contract on the terms alleged. It must be proved that there was in fact consensus ad idem.[9]

The second test is the “most plausible probable conclusion” test.[10] According to that test, a tacit contract has been established where, by a process of inference, the most plausible probable conclusion from all the relevant proved facts and circumstances is that a tacit contract has come into existence.[11]

[9]          The onus is on Appellant to establish that the event has occurred entitling the agent to commission[12].

[10]       In Muller (supra), the issues at trial were essentially whether a mandate had been given to the estate agent to find a purchaser for the property and the rate of commission payable.  Both questions were answered in the agents favour with commission at 7%.  On appeal these findings were challenged.

[11]       Referring to the two tests applicable to establishing a tacit contract the Appeal Court pointed out that both tests required proof of the primary facts on a balance of probabilities the difference being in the strength of the inference to be drawn from those facts.

[12]       In short the balance of probabilities flowing from unequivocal conduct must establish that the parties intended to, and in fact did, tacitly contract on the terms alleged.  The law considers the conduct of both parties objectively and the circumstances of the case generally[13].

[13]       Once the mandate, express or tacit has been established it follows, absent contrary terms, that the agent is entitled to commission.

[14]       If the rate of commission is not expressly agreed the entitlement to commission is at a reasonable rate in the event of a sale, this usually taken as the prevailing on customary (standard) rate.

[15]       In Muller (supra) [14] the Court held as follows:

I accordingly hold that the tacit mandate was proven with the requisite degree of certainty. It has become common cause that the plaintiff was the effective cause of the eventual sale to Mrs Melck. It follows that the plaintiff is entitled to commission on the actual purchase price.

The magistrate awarded commission at the rate of 7 % on the price (plus VAT), being the institutionally recommended rate for this type of transaction. Mrs Swart testified in chief that this was the usual rate and a permissible rate. This evidence was confirmed by her employer, Mrs Snyman, who stated that while commission was always negotiable, cutting it was not encouraged. Reverting to Mrs Swart, it emerged during cross-examination that her average rate was 6 % plus VAT, though obviously she got 7 % on some transactions. In this instance no rate of commission was agreed at the outset, and circumstances pre-empted a negotiated commission at a later stage. The principle is then that the estate agent is entitled to a reasonable remuneration in the event of a sale, which is usually taken as the prevailing or standard or “customary” rate of commission, being in this case 7 % plus tax. De Villiers & Macintosh: Law of Agency in South Africa 3 ed at 362, 365–6. It is possible that had events followed a different course, Mrs Swart may have agreed to accept a lower rate, but that is not what happened in fact. Mr Maree argued that the plaintiff should receive the commission which Mrs Swart would probably have agreed to accept, which counsel contended was 6 % plus tax. It is not correct, in my view, to approach the plaintiff’s claim as though it were a claim for damages. It was a claim for a reasonable remuneration. In the circumstances I have no fault to find with the magistrate’s decision to award the institutionally approved rate of commission, being a rate which is regularly charged by estate agents, albeit not without exception.”

[16]       In this matter however what was pleaded was on oral agreement of mandate to find a buyer for the property.  It was further pleaded that there was an express, alternative implied, alternative tacit term that on due performance of the mandate Appellant would be paid commission at the generally accepted tariff this being pleaded as 7%.

[17]       An implied term arises by operation of law.  A tacit term is an unexpressed provision of the contract arising from the parties common intention – inferred from the express terms and surrounding circumstances[15].

[18]       In this matter the evidence established a verbal mandate to sell the property, commission not being directly referred to and no rate of commission discussed.  In fact the contrary was not put to Appellant, nor could it have been on Respondent’s evidence as later transpired.  Respondent resorted to the fact that there had been an intervening attempt to sell to Cape Gannet Property and in that agreement the purchaser was to pay commission.  In essence Respondent simply said that he did not think that Appellant was entitled to commission as the actual sale to Riverview Trust was a “second deal”

THE APPROACH TO APPEALS

[19]       Criticism of the evidence for Appellant must be seen in the light of the following principles which guide an appellate court as to the proper approach to an appeal on fact, applicable to both civil and criminal appeals, as set out in R v Dhlumayo and Another [16]:

1.           An appellant is entitled as of right to a rehearing, but with the limitations imposed by these principles;  this right is a matter of law and must not be made illusory.

2.            Those principles are in the main matters of common sense, flexible and such as not to hamper the appellate court in doing justice in the particular case before it.

3.            The trial Judge has advantages – which the appellate court cannot have – in seeing and hearing the witnesses and in being steeped in the atmosphere of the trial.  Not only has he had the opportunity of observing their demeanour, but also their appearance and whole personality.  This should never be overlooked. 

4.            Consequently the appellate court is very reluctant to upset the findings of the trial Judge.

5.            The mere fact that the trial Judge has not commented on the demeanour of the witnesses can hardly ever place the appeal court in as good as position as he was.

6.            Even in drawing inferences the trial Judge may be in a better position than the appellate court, in that he may be more able to estimate what is probable or improbable in relation to the particular people whom he has observed at the trial.

7.            Sometimes however, the appellate court may be in as good a position as the trial Judge to draw inferences, where they are either drawn from admitted facts or from the facts as found by him.

8.            Where there has been no misdirection on fact by the trial Judge, the presumption is that his conclusion is correct;  the appellate court will only reverse it where it is convinced that is wrong.

9.            In such a case, if the appellate court is merely left in doubt as to the correctness of the conclusion, then it will uphold it.

10.          There may be a misdirection of fact by the trial Judge where the reasons are either on their face unsatisfactory or where the record shows them to be such;  there may be such a misdirection also where, through the reasons as far as they go are satisfactory, he is shown to have overlooked other facts or probabilities.

11.          The appellate court is then at large to disregard his findings on fact, even though based on credibility, in whole or in part according to the nature of the misdirection and the circumstances of the particular case, and to come to its own conclusion on the matter.

12.          An appellate court should not seek anxiously to discover reasons adverse to the conclusions of the trial Judge.  No judgment can ever be perfect and all-embracing and it does not necessarily follow that, because something has not been mentioned, therefore is has not been considered.

13.          Where the appellate court is constrained to decide the case purely on the record, the question of onus becomes all-important, whether in a civil or criminal case.

14.          Subject to the difference as to onus the same general principles will guide an appellate court both in civil and criminal cases.

15.          In order to succeed, the appellant has not to satisfy an appellate court that there has been “some miscarriage of justice or violation of some principle of law or procedure”. 

16.          The English practice in regard to “concurrent findings of fact by two courts” has no application in South Africa.”

[20]       It was appreciated by the trial Court that in respect of the analysis and resolution of disputed issues in a civil trial a Court must consider the credibility of witnesses and their reliability against the inherent probabilities and improbabilities of the matter.

[21]       In National Employers General Insurance Co. Ltd v Jagers [17] it was stated as follows:

It seems to me, with respect, that in any civil case, as in any criminal case, the onus can ordinarily only be discharged by adducing credible evidence to support the evidence of the party on whom the onus rests.  In a civil case the onus is obviously not as heavy as in a criminal case, but nevertheless where the onus rests on the Plaintiff as in the present case, and where there are two mutually destructive stories, he can only succeed if he satisfies the court on a preponderance of probabilities that his version is true and accurate and therefore acceptable, and that the other version advanced by the Defendant is therefore false or mistaken and falls to be rejected.  In deciding whether that evidence is true or not the court will weigh up and test the Plaintiff’s allegations against the general probabilities.  The estimate of the credibility of a witness will therefore be inextricably be bound up with a consideration of the probabilities of the case and if the balance of probabilities favour the Plaintiff, then the court will accept his version as being probably true.  If, however, the probabilities are evenly balanced in the sense that they do not favour the Plaintiff’s case any more than they do the Defendant’s, the Plaintiff can only succeed if the court nevertheless believes him and is satisfied that his evidence is true and that the Defendant’s version is false.” [18]

[22]          In SFW Group (supra) the following was said:

[5]    On the central issue, as to what the parties actually decided, there are two irreconcilable versions.  So, too, on a number of peripheral areas of dispute which may have a bearing on the probabilities.  The technique generally employed by courts in resolving factual disputes of this nature may conveniently be summarised as follows. To come to a conclusion on the disputed issues a court must make findings on (a) the credibility of the various factual witnesses; (b) their reliability; and (c) the probabilities. As to (a), the court's finding on the credibility of a particular witness will depend on its impression about the veracity of the witness. That in turn will depend on a variety of subsidiary factors, not necessarily in order of importance, such as (i) the witness' candour and demeanour in the witness-box, (ii) his bias, latent and blatant, (iii) internal contradictions in his evidence, (iv) external contradictions with what was pleaded or put on his behalf, or with established facts or with his own extracurial statements or actions, (v) the probability or improbability of particular aspects of  his version, (vi) the calibre and cogency of his performance compared to that of other witnesses testifying about the same incident or events. As to (b), a witness' reliability will depend, apart from the factors mentioned under (a)(ii), (iv) and (v) above, on (i) the opportunities he had to experience or observe the event in question and (ii) the quality, integrity and independence of his recall thereof. As to (c), this necessitates an analysis and evaluation of the probability or improbability of each party's version on each of the disputed issues. In the light of its assessment of (a)(b) and (c) the court will then, as a final step, determine whether the party burdened with the onus of proof has succeeded in discharging it.”

[23]       It is important to emphasise that “an analysis and evaluation of the probability or improbability of each party’s version on each of the disputed issues” is required in order to evaluate the effect of the probabilities on the evidence of the witnesses.  Only once all the above is considered can a decision be taken as to whether the requisite onus has been discharged. 

[24]       One must of course have regard to a conspectus of all the evidence.  Probabilities must be distinguished from conjecture and speculation, within the four corners of the proved facts. 

THE FINDINGS OF FACT

[25]       It was not seriously contested that Appellant was given an express verbal mandate to find a buyer for the property, by the seller.

[26]       It is clear from what has already been set out above as to Appellant’s evidence that commission was not discussed at the time the mandate was given to Appellant and that a rate was not agreed or referred to at all.

[27]       It was clear however that Respondent was fully aware that Appellant was an estate agent acting as such at all times relevant.

[28]       That Appellant was not in fact entitled to commission on the ultimate sale of the property was not put to Appellant other than to suggest that she was not the effective cause  of the ultimate sale, this being a “second deal” with intervening parties having come and gone.  

[29]       The real issues were in fact:

[29.1]   Whether the final sale was one to the party originally introduced to the property by Appellant (De Keyser).

[29.2]   That Commission was payable, and the rate thereof.

[30]       Appellant’s largely uncontradicted version was effectively that it had been clear, by implication, that she would be entitled to commission on a sale of which she was the affective cause, and that the commission rate would be negotiated when she had a “real buyer”.

[31]       In fact the property was sold on 19 May 2011 to a purchaser introduced by Appellant and subsequently Respondent himself on various occasions conceding to Appellant that he would pay her commission.  There is no doubt on the evidence that Appellant was the effective cause of this sale.

[32]       Respondent’s case, as put, was that he had so admitted in error as he had forgotten that commission would be paid by a third party (Cape Gannet) and not him.  He also said that he had not reached agreement in respect of commission, though his evidence was highly unconvincing.

[33]       On the appropriate approach to the evidence, the Magistrate’s finding that there was a mandate given, and a sale of which Appellant was the affective cause, cannot be faulted.

[34]       As to the identity of the final purchaser it cannot be gainsaid that one Jan De Keyser was specifically personally introduced to the property, and to the seller by Appellant in a personal visit to the property by way of boat on the river through the farm.

[35]       Not only did this appear from, and was recognised in, a draft deed of sale (albeit payment of the commission of R68400 to be paid to Appellant by the purchaser), but the evidence of the final sale established Appellant as the effective cause of that sale.

[36]       The eventual sale was to the Riverview Trust, the commission earning event, and was effectively to De Keyser himself as trustee thereof.

[37]       Again the Magistrate’s findings on this evidence cannot be faulted.

THE COMMISSION AMOUNT

[38]       The commission entitlement follows clearly from the above mandate by tacit term Appellant being entitled to commission at the prevailing or customary rate.  This is established, on the acceptable evidence, as the common intention of Appellant and Respondent though not directly expressed.

[39]       Considerable expert evidence was given as to the customary rule of commission in this regard.

[40]       Appellant herself contended for 7% as the usual rate.

[41]       Appellant’s witness Mr Claasen supported this as the customary rate on the sale of farms.

[42]        Respondent’s witness Mr Kidson suggested 5% commission may be appropriate.

[43]       In my view regard must be had to Appellant’s own evidence that a previous deed of sale relevant to the property stipulated commission at 5% and that she had been prepared to accept this as a compromise.

RESULT

[44]       In my view the Appellant has established an entitlement on the evidence to 5% commission on the sale to the Riverview Trust.

[45]       The costs must follow the result both in the Magistrate’s Court and on Appeal.

ORDER

[46]       In the result the following order issues:

1.    The Appeal succeeds with costs.

2.    The Magistrate’s order is set aside and replaced as follows:

2.1      Defendant is to pay to Plaintiff the sum of R110,000.00 (being 5% of the sale price of R2,200,000.00).

2.2          Defendant is to pay interest at the legal rate from 19 May 2011 to date of payment.

2.3          Defendant is to pay Plaintiff’s costs of suit.”

__________________________

M.J. LOWE

JUDGE OF THE HIGH COURT

RONAASEN, AJ:

I agree.

__________________________

O.H. RONAASEN

JUDGE OF THE HIGH COURT (ACTING)

Appearances:

Obo Appellant:                    

Adv A.D. Schoeman SC

Instructed by:                       

Huxtable Attorneys, Grahamstown

Obo Respondent:   

Adv C.B. Wood

Instructed by:                       

Netteltons Attorneys, Grahamstown

[1] Section 26 Estate Agency Act 112 of 1976

[2] Muller v Pam Snyman Eiendomskonsultante (Edms) Bpk 2001 (1) SA 313 (C)

[3] Phillips v Aida Real Estates (Pty) Ltd 1975 (3) SA 198 (A)

[4] Gardner & Another v Margo 2006 (6) SA 33 (SCA)

[5] Muller (supra)

[6] Vol 18, 3rd Edition, paragraph 4

[7] Muller (supra) 2001 (1) SA 313 (C) 320A–C. See Steer Property Services (PtyLtd t/a Steer & Co v Estate Agency Affairs Board 2002 3 All SA 103 (C) 109g–110a.

[8] Standard Bank of SA Ltd v Ocean Commodities Inc  1983 1 All SA 145 (A); 1983 1 SA 276 (A). Cf Gordon Lloyd Page & Associates v Rivera  2000 4 All SA 241 (A); 2001 1 SA 88 (SCA) par 11.

[9] Standard Bank of SA Ltd v Ocean Commodities Inc supra 292B–C.

[10] Joel Melamed & Hurwitz v Cleveland Estates (PtyLtdJoel Melamed & Hurwitz v Vorner Investments (PtyLtd [1984] ZASCA 4; 1984 2 All SA 110 (A); 1984 3 SA 155 (A).

[11] Joel Melamed & Hurwitz v Cleveland Estates (PtyLtdJoel Melamed & Hurwitz v Vorner Investments (PtyLtd supra 165B–C.

[12] Tyrone Selmon Properties (Pty) Ltd v Phindana Properties 112 (Pty) Ltd [2006] 1 All SA 545 (C) [53]

[13] NBS Bank Ltd v Cape Produce Company (Pty) Ltd 2002 (1) SA 396 (SCA);  Starways Trading 21 CC v Pearl Island Trading 714 (Pty) Ltd [2017] 4 All SA 568 (WCC).

[14] At 323C-H.

[15] Delfs v Kuehne & Nagel (Pty) Ltd 1990 (1) SA 822 (A);  Wilkins NO v Voges [1994] ZASCA 53; 1994 (3) SA 130 (A) as to whether such term is actual or imputed.

[16] [1948] 2 All SA 566A

[17] 1984 (1) SA 437 (ECD) 440 – 441.

[18] See also:  SFW Group (supra).