Republic of South Africa

REPORTABLE
		IN THE HIGH COURT OF SOUTH AFRICA 
		(WESTERN CAPE HIGH COURT, CAPE TOWN)

CASE No: 10887/2004
the matter of

JOMOVEST TWENTY-FIVE CC

and

ENGEL & VOLKER WESTERN CAPE (PTY) LTD    	Respondent / Plaintiff

			JUDGMENT DELIVERED : 17 JUNE 2010

MATTER HEARD ON 21 APRIL 2010

On behalf of Applicant/Defendant 			: AdvSWalther
Attorney(s)						: Ince Wood & Raubenheimer

On behalf of Respondent/Plaintiff 			: Adv P Eia 
Attorney(s)						: Rahman Inc

Republic of South Africa

REPORTABLE
IN THE HIGH COURT OF SOUTH AFRICA 
(WESTERN CAPE, CAPE TOWN)
CASE No: 10887/2004

In the matter between:

JOMOVEST TWENTY FIVE CC

and

JUDGMENT DELIVERED : 17 JUNE 2010

[1]  This is an application for leave to amend the plea in which the Applicant, who is the Defendant in the action, seeks to withdraw an admission made therein. The Respondent, who is the Plaintiff in the action, opposes the application. For the sake of convenience the parties will be referred to hereinafter as cited in the action, namely, the Defendant and the Plaintiff respectively.

[2] On 15 December 2004, the Plaintiff instituted action against the Defendant claiming payment of the sum of R111 000.00 being its share of the commission arising from the sale of certain immovable property situate at 8 Theresa Avenue, Camps Bay and owned by Mr and Mrs Lasker. The Defendant defended the action and filed a plea in which it made certain admission that form the subject matter of this application.

The Proposed Amendment
[3] The Defendant seeks leave to amend paragraphs 2 and 4 of its plea in the following respects:

The Unamended Pleadings

[4]      The Plaintiff in its Particulars of Claim to the Summons alleges: (i) that in or about June 2004, the Defendant was appointed and/or provided with a joint mandate to sell the immovable property situated at 8 Theresa Avenue, Camps Bay (the "property"), by the owners being Mr and Mrs Lasker (the "sellers"); (ii) that, in or about mid September 2004, Plaintiff introduced the purchaser, Jacqueline Clark (the "buyer") to the property; (iii) that at the time the Defendant informed the Plaintiff that it had the sole mandate to sell the property; and (iv) that it was a term of an oral agreement between the Plaintiff and the Defendant that they would share the commission on a 50/50 basis in accordance with prevailing custom among estate agents.

[5] The Defendant in its Plea admits: (i) that the Defendant held a joint mandate to sell the property, which joint mandate was replaced with a sole mandate as from 31 August 2004; (ii) that the Plaintiff was made aware thereof and (iii) that it earned the commission on the sale of the property but avers (iv) that there was no oral agreement to share the commission on a 50/50 basis as alleged.

[6] The Plea as it stands, in my opinion, amounts to a confession and avoidance. The Defendant in clear and unequivocal terms makes certain admissions in the Plea, which constitute the confession. The Defendant in clear and unequivocal terms denies that an oral agreement was concluded between the Defendant and the Plaintiff to share the commission and such denial constitutes the avoidance. In light of the admissions, it is unnecessary for the Plaintiff to adduce evidence to prove the admitted facts and it is equally unnecessary for the Defendant to adduce evidence to contradict those facts. The only issue the Plaintiff is called upon to prove is the oral agreement to share the commission. Should the amendment be granted, the Plaintiff will also be required to prove that the Defendant held the mandate to sell the property.

[7] The Defendant seeks to withdraw the admissions on the basis that it was not involved in the transaction, but one of its associated entities, namely Retrospective Trading 466 CC ("Retrospective"), had held the mandate to sell the property and had earned the commission. It is common cause that the sale of the property was concluded by Reid using the pro forma deed of sale of the Defendant and in terms of the concluded deed of sale, the commission was payable to the Defendant. It is also common cause that, at all material times of the transaction, the same members constituted both the Defendant and Retrospective.

The Law

1 respectively, comments as follows:
"... withdrawal of an admission is usually more difficult to achieve because 
(i) it involves a change of front which requires full explanation to convince the court of the bona fides thereof, and (ii) it is more likely to prejudice the other party, who had by the admission been led to believe that he need not prove the relevant fact and might, for that reason, have omitted to gather the necessary evidence. The Court will, therefore, in the exercise of its discretion, require an explanation of the circumstances under which the admission was made and the reasons for now seeking to withdraw it."

“

Evaluation
[14] I now evaluate the evidence to determine whether the Defendant, objectively speaking, has crossed the threshold to establish the existence of the jurisdictional fact, namely, whether the Defendant has tendered evidence to show a reasonable basis for making the original mistaken admission and for withdrawing such admission. The evidence tendered is as follows:
(i) In the first place, Van der Spuy states in the founding affidavit that Reid used the incorrect Deed of Sale and she did not apply her mind to the issue that the incorrect party had been sued. These statements not only amount to hearsay, but are contradicted by Reid in her founding affidavit in support of the application for security. Van der Spuy goes on to state that Reid is uncooperative with the present attorney of the Defendant. This is confirmed by Eugene Nico Bester ("Bester") in his affidavit dated 1 April 2010. No explanation is given by them why Reid is uncooperative. The only plausible inference the court can draw is that she does not want to contradict the affidavit filed by her in support of the application for security for costs and in the circumstances perjure herself. Besides the fact that the crucial allegations of both Pienaar and van der Spuy concerning the mistaken admission being hearsay, the founding affidavit of Reid in the application for security for costs stands uncontradicted and is inconsistent with the proposed amendment.

(ii)  In the second place, Reid in her founding affidavit dated 14 June 2005 to the application for security for costs, states:
b)	Firstly, that the Defendant had a sole mandate, expiring on 30 September 2004, to sell the property. It appears that a joint mandate was replaced by a sole mandate after 31 August 2004, which appears to have lasted only for a month as it expired on 30 September 2004. It appears further that the property was sold within the period of the sole mandate and the Defendant earned the commission;
c)	
d)	Thirdly, that no agreement to share commission was concluded between Marion Taylor and herself.

"What takes place is this: the agent in effect represents to the other contracting party that he has authority to bind his principal; and within the limits of that authority he consents to the terms of the agreement on his principal's behalf. There is a representation by the agent personally, and a contract by him in his capacity as agent. The representation is in respect of a matter which is peculiarly within his knowledge, and of which the other party knows nothing at all. But the latter enters into the contract on the faith of the representation and, the agent intends that he shall do so; it forms the basis of the whole agreement. Under these circumstances we are surely justified in implying, on the part of the agent, a personal undertaking that his principal shall be bound by the contract, and that if not, he will place the other party in as good a position as if the principal were bound."

e)	The one in respect of Atlantic Seaboard area shows: firstly, that it was signed in Cape Town in May 2008 by Reid and her husband, RA Reid on behalf of the Franchisee and by the Franchisor in Johannesburg on 11 June 2008; secondly, that van der Spuy and Britz were not a party to such agreement and thirdly, that Reid and one RA Reid bound themselves as sureties in respect of this agreement.
f)	These franchise agreements do not show what situation prevailed at the time the sale of the property was concluded and which parties were involved. It therefore has very little, if any, evidential value.

(ix) In the ninth place, the court cannot exclude the possibility that the joint mandate was held by the Defendant and Retrospective. In this regard, the following facts are compelling: firstly, that both entities had the same members; secondly, that the joint mandate expired on 31 August 2004 and thereafter the sole mandate was secured; thirdly, that the administrative address of both entities is given as 139, Kloof Street, Gardens to which address the banking statements were sent; fourthly, the sale of the property was completed on the Deed of Sale of the Defendant and fifthly, the commission cheque was made payable to the Defendant, but was either endorsed over to, or the proceeds paid over to Retrospective and lastly but importantly, that the Reids held the franchise for the Atlantic Seaboard in accordance with the franchise agreement tendered as evidence and dated 11 June 2008 and what is significant is the fact that Mr Reid purported to have given the indemnity to the Sellers and dated 26 October 2004 and the transaction was negotiated by Mrs Reid and concluded in and during September 2004. The element of bad faith cannot be excluded. However, for present purposes I am not required to make such finding for reason that will become apparent in due course.

The Finding
[15] In the circumstances, I conclude that the admissions made in the Plea is consistent with the objective facts and inconsistent with the allegations contained in the proposed amendment. I accordingly hold that the Defendant has failed to establish the jurisdictional fact by tendering evidence to show a reasonable basis firstly, for making the mistaken admissions and secondly, for withdrawing such admissions.

The Exercise of Discretion

The Order
[17] In the premises the application for the amendment of the Plea to withdraw the admission is refused with costs.
E. MOOSA