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VANARTHDOY (PTY) LTD v ROOS

 

(APPELLATE DIVISION)

 

1979 May 22, 30   WESSELS JA, CORBETT JA, JOUBERT JA, GALGUT AJA and HOEXTER AJA

 

Principal and agent-Estate agent-Commission-When entitled to­ "Efficient cause" of conclusion of contract-What constitutes­ Factors to be taken into account-Circumstances where estate agent who introduced neither the property to the purchaser nor the would­be purchaser to the seller is nevertheless efficient cause of conclusion of contract.

 

Defendant, the owner of a farm situate in the Eastern Transvaal lowveld, was comparatively old and his son R took care of his business affairs. In about 1970 W, the owner of a contiguous farm, informed defendant and R that he wanted to buy defendant's farm. Defendant did not want to sell at that stage but told W that, should he decide to sell, he would give W the right of first refusal. During March/ April 1975 R told W that defendant had decided to sell his farm if he could find another farm, nearer to Pelindaba where he lived, to purchase. During June/July 1975 W approached one V, a director of plaintiff company, and proposed to him that he could effect a "double deal" by selling defendant's farm to him (W) and another farm to defendant. W asked him not to disclose his name because he surmised that defendant would raise his price if he came to know that an offer was being made by the owner of a contiguous farm. During July 1975 V obtained from defendant the necessary mandate to sell his farm for R180 000, and made an offer of R150 000 on behalf of a would-be purchaser, without disclosing his name, but the offer was summarily refused. A further offer of R1 70 000 was also refused by Rand at the beginning of September 1975 V was authorised by W to make an offer of R1 80 000. V had the offer, which included a provision that it would be irrevocable until 30 September 1975, reduced to writing and, after' it had been signed by W, V told R by telephone that he had the offer and then for the first time disclosed that W was the prospective purchaser because he was of the opinion that the offer would be acceptable. On 9 September defendant told him that he must get a higher price, but did not terminate his mandate. V reported to W and advised him to wait. On 13 September R authorised V to place an advertisement for the farm at R210 000 in the local newspaper, but there was no reaction thereto. R informed V that the defendant was no longer willing to sell the farm. After 14 October 1975 V obtained information that the farm had been sold to one of W's companies for R200 000. The Court a quo found that the plaintiff had obtained the necessary mandate, but found further that plaintiff had not proved that V's actions were the efficient cause of the conclusion of the contract. On appeal,

 

Held, that the fact that V had not in fact introduced W to the defendant, seeing that the latter was already aware that W was a potential purchaser of the farm, was in no way of decisive importance.

 

Held, further, that the fact that W knew the property, and that V accordingly did not "introduce" it to him, was in the circumstances of little or no importance.

 

Held, further, that the fact that defendant on 5 September 1975 realised that W was the person who would pay R180 000 for the farm was directly caused by V's actions which had led to W making a written offer.

 

Held, however, that the question was not whether the farm would eventually in any case have been sold, even if V had not concerned himself with the sale thereof, but whether his actions were in fact the efficient cause of the conclusion of the contract occurring.

 

Held, further, that the mere fact that a seller informed his agent that he wished to sell at a higher price than originally mentioned, would not in the normal course affect the existence of a mandate already conferred, and a seller was at liberty to accept a lower price or even insist on a higher price; if the agent's actions had been the efficient cause of the sale, he would be entitled to com­ mission calculated on the selling price, higher or lower as the case might be. The advising of the agent of the conditions on which the owner was prepared to sell was in reality not part of the mandate, but it was essential information which was given to the agent to put him in a position to execute his mandate.

 

Held, accordingly, that the revelation to defendant of W's name as' prospective purchaser, and the presentation of the written offer to buy the farm for R180 000, led directly to R's negotiations with W, which negotiations led to the conclusion of the contract, and that V's actions in the execution of the mandate were indeed the efficient cause of the sale.

 

Held, accordingly, that plaintiff was entitled to commission calculated on the purchase price of R200 000.

 

The decision of the Transvaal Provincial Division in Vanarthdoy (Edms) Bpk v Roos reversed.

 

Appeal against a decision in the Transvaal Provincial Division (NICHOLAS J). The facts appear from the judgment of WESSELS JA.

 

W J Hartzenberg for the appellant: Gluckman v Landau and Co 1944 TPD 261 at 273 is applicable; Sammet v Jacobs and Co 1928 AD at 366-368 is directly applicable in this case. Just as in that case an agreement came into being if the loan was accepted and the commission would then have become payable, an agreement could have come into being in the present case at R180 000 and then there would have been no doubt that the commission would have been payable. The fact that the respondent thereafter negotiated for an increased purchase price With the purchaser who was introduced to him by the appellant did not relieve him of the fact that appellant executed his mandate. As shown in Werbranchek v L K Jacobs & Co Ltd 1948 (4) SA at 678 it is possible that a seller must pay commission to more than one agent.

 

D H van Zyl for the respondent: If appellant's joining of the negotiations between respondent and Wilkens could be regarded as a new factor, it was not at all decisive in regard to the conclusion of the contract of sale. See Aida Real Estate Ltd v Lipschitz 1971 (3) SA at 8730-8740; Doyle v Gibbon 1919 TPD 220; Eschini v Jones 1929 CPD 18; Gordon v Slotar 1973 (3) SA 765. About the concept causa causans or rather efficient cause see Martin v Currie 1921 TPD at 59; Burt v Ryan 1926 TPD at 682; Gluckman v Landau & Co 1944 TPD at 279; John Wilkinson & Partners (Pty) Ltd v Berea Nursing Home (Pty) Ltd (In Voluntary Liquidation) 1966 (1) SA at 795H-799A; Michael v Vermeulen and Another 1971 (1) SA at 443E-F; Aida Real Estate Ltd v Lipschitz (supra); Gordon v Slotar 1973 (3) SA at 773H; Pretorius v Meyer 1975 (3) SA 279; A J Kerr The Law of Agency 2^nd ed (1979) at 156-166.

 

Hartzenberg in reply.

 

Cur adv vult.

 

Postea (May 30).

 

WESSELS JA: This appeal is against the judgment of NICHOLAS J in the Transvaal Provincial Division whereby an order of absolution from the instance with costs was granted in respect of appellant's claim for payment by respondent of sales commission in the amount of R12 000 in respect of the sale of respondent's (defendant's) game farm Argyle (the property) to a company in which Victor Wilkens had the controlling interest. In appellant's (plaintiff's) particulars of claim the following was, inter alia, averred:

 

"3. During about July 1975 defendant personally gave a verbal mandate to the plaintiff, as represented by H L van der Merwe, to find a purchaser for defendant's farm Argyle situate in the district of Pilgrim's Rest at a purchase price of R180 000.

 

4.         It was a tacit provision of such mandate that the defendant would pay to the plaintiff property commission on the purchase price of the property or any portion thereof should the defendant sell it through the agency of the plaintiff at plaintiff's normal tariff, alternatively at the normal tariff payable to estate agents on such transactions.

 

5.         In execution of the abovementioned mandate plaintiff informed defendant that a certain Victor Wilkens was interested in buying the abovementioned property at a purchase price of R180 000 and in fact presented an offer to the defendant in which a company known as Victor Wilkens Familie Beleggings (Pty) Ltd offered to buy the abovementioned property from the defendant at R180 000."

 

It is common cause that the deed of sale concerned was signed respectively by the defendant and Wilkens (as representative of the company known as Vicrina Beleggingsmaatskappy (Pty) Ltd) on 9 and 14 October. The purchase price amounted to R200 000. In para 6 (b) of the particulars of plaintiff's claim it is averred that the transaction was concluded

 

"as a result of the plaintiff's execution of its obligation under the mandate, as set out in paras 3 and 4 above''.

 

The deed of sale, inter alia, provided as follows:

 

"5. The seller will be responsible for payment of agent's commission calculated at five per cent on the purchase price to Chris Roos from the deposit payable in terms of para 1 (a) above.

 

9. The parties further expressly agree that as the seller already pays agent's commission in respect of this sale, the seller is hereby expressly exempted from the obligation to pay any further commission to anyone whatever and if any com­ mission is in fact payable or may be payable to any other agent whatever the purchaser will be compelled to pay such commission to such other agent, if any."

 

Mr Chris Roos, to whom reference is made in para 5 above, is defendant's son. Hereinafter I refer to him as Roos (Jnr). It is common cause between the parties that the fact that the property was sold to a company and not to Wilkens personally is of no importance in answering the question whether plaintiff is entitled to payment of commission or not.

 

According to defendant's plea the following is, inter alia, denied:

 

(a)       that any mandate in regard to the sale of the property was given to plaintiff, and further,

 

(b)       that in any case the sale was concluded as a result of plaintiff's negotiations.

 

The Court a quo found that plaintiff had proved on a balance of probabilities that a mandate was given to plaintiff to sell the property. I shall presently refer to the provisions of the contract. As regards the second issue, however, the Court a quo found that plaintiff had not discharged the onus and, therefore, granted an order of absolution from the instance with costs in favour of defendant. In this regard the judgment of the Court a quo reads as follows: ".........."

 

It is of importance to determine the exact provisions of the mandate in order to make a finding as to whether commission is payable or not. See, inter alia, Gluckman v Landau & Co 1944 TPD 261 at 268. In other words if the provisions of the mandate are looked at, which occurrence makes plaintiff entitled to the payment of commission? As regards plaintiff's particulars of its claim, it appears (1) that a mandate was granted to plaintiff to find a purchaser for the property at a purchase price of R180 000, and (2) that defendant would pay commission to the plaintiff'' on the purchase price of the property or any part thereof should the defendant sell it through the agency of the plaintiff''. The relevant occurrence is, therefore, the sale of the property, provided it happened through the agency of plaintiff. In this regard reference can be made to a passage in the decision already quoted where MURRAY J formulated it as follows:

".........."

 

In the present case, as I have already indicated, the property was sold during October 1975 by the defendant to the company concerned and the question is, therefore, whether Van der Merwe's actions in regard to the transaction was the efficient cause of the sale.

 

Before I deal with the question, I refer to what was said on appeal on behalf of defendant, viz that the Court a quo erred in its finding that defendant granted a mandate to sell the property to plaintiff. The finding was made on the probabilities and the Court a quo's view that defendant and Roos (Jnr) were not credible witnesses. Van der Merwe's evidence, on the contrary, accorded with the probabilities and was regarded to be reliable. The argument on appeal did not convince me at all that the Court a quo erfed in regard to the abovementioned finding. On the contrary, careful consideration of the evidence convinced me that the finding is correct.

 

The historical background of the litigation between the parties can be briefly summarized as follows. Defendant was the owner of the property which is situate in the Eastern Transvaal lowveld, but he was ordinarily resident at Pelindaba where he had a holiday resort. He was comparatively old and his son, Roos (Jnr) took care of his business affairs. Wilkens, a well-known and wealthy man, was the owner of a farm which adjoined the property. He, like defendant, did also not reside on the farm. Apparently Wilkens was anxious to buy the property because it was contiguous to his farm. During about 1970 he informed defendant and Roos (Jnr) that he was interested in buying the property. Defendant did not want to sell at that stage but told Wilkens, should he decide to sell he would give Wilkens the right of first refusal. At the beginning of 1975 defendant decided to sell the property if he could get a farm nearer to Pelindaba. Roos (Jnr) informed Wilkens of this decision during March/April 1975. The correct date cannot be determined on the evidence. According to Roos (Jnr) Wilkens appeared to be "interested" and he indicated that ''he would try and assist us in finding another farm''. Van der Merwe, a director in the plaintiff company, testified that Wilkens approached him during July (or possibly during June) 1975 and informed him that he was interested in buying the property and that there would be an opportunity for Van der Merwe to do a "double deal", viz to earn commission on two transactions. The one transaction would be the sale of defendant's property, while the second transaction would be the sale of a farm to defendant. Wilkens' evidence that on that occasion he told Van der Merwe that he was negotiating with ''the two Roos gentlemen" about the purchase of the property, was denied by Van der Merwe, and can just not be true. In my opinion the evidence of Wilkens creates the impression that he did not hesitate to tell untruths. Where his evidence conflicts with that of Van der Merwe, I would accept the latter's version without hesitation. Van der Merwe, as could be expected, immediately took steps to pull off the suggested "double deal". The first step was to obtain a mandate from the defendant. I have already referred thereto that the Court a quo's finding that the defendant during July 1975 granted a mandate to plaintiff to sell the property, was correct. On this occasion Van der Merwe made an offer of R150 000 on behalf of a prospective buyer, without disclosing his name. Van der Merwe's evidence that Wilkens requested him not to disclose his name because he suspected that defendant would increase his price if he came to know that the offer was being made by the owner of a continguous farm, can readily be accepted. According to Van der Merwe the offer was summarily refused. Roos (Jnr) could not remember that such an offer had been made. If the numerous occasions on which Roos (Jnr) could not remember, are taken into account, it becomes clear that he was not blessed with a good memory. Wilkens authorised an offer of R160 000, which was, however, not conveyed to defendant because Van der Merwe realised that it would be unacceptable. He pretended to Wilkens, however, that the offer was refused. He was then authorised to make an offer of R170 000. This offer was conveyed to Roos (Jnr), but it was refused. Later, at the beginning of September 1975, Van der Merwe was authorised to make an offer of R180 000. Van der Merwe then realised that that was an offer which would be acceptable to defendant. He decided to reduce the offer to writing. Early on the morning of 5 September 1975 Van der Merwe got in touch with defendant telephonically, inter alia, to obtain information about defendant's date of birth. Thereafter, still on the same day, a written ''Offer to Purchase'' was completed and signed by Wilkens on behalf of the purchaser (Victor Wilkens Familie Beleggings (Pty) Ltd). Para 4 of the offer provides:

 

"This offer will be irrevocable if the seller accepts the offer not later than 30 September 1975 ... and will be considered to be a binding deed of sale on acceptance."

 

It must be observed that it was not provided that the offer would have lapsed if. it was not accepted by 30 September. After the signing of the offer Van der Merwe informed Roos (Jnr) telephonically that he obtained an offer for R180 000 and then for the first time he mentioned that Wilkens was the prospective purchaser. He was asked in evidence-in­chief what Roos (Jnr's) reaction was. His reply reads as follows:

 

''There was no reaction, they only mentioned that they knew Victor Wilkens.'' On the same occasion Van der Merwe made an appointment to meet Roos (Jnr) at Pelindaba on 9 September 1975. Early the morning of that day Van der Merwe arrived at Pelindaba. During the day they travelled to Rustenburg where a so-called co-agent (Mr Johan Pretorius) joined them. The rest of the day was spent in viewing farms which were on the market. About 6.30 pm Van der Merwe and Roos (Jnr) returned to Pelindaba. In the presence of defendant, Mrs Roos and Roos (Jnr) reference was made to Wilkens' written offer. In this regard Van der Merwe testified as follows;

 

"What happened then? - I told them that I had the offer of Mr Wilkens. I took the offer form from the car but nobody took it from me;

Did you tell them about the contents of the offer form? - l only said that I had an offer which was signed by the seller, Mr Victor Wilkens."

 

The reference to Wilkens as "seller" is obviously incorrect. He mentioned that the offer was valid until 30 September 1975. In reply to questions put by the Court a quo Van der Merwe testified as follows:

 

"What actually did Roos say when you told him that you had the written offer -  what did he say? -  He said that they could get more for the farm.

He said that they could get more for the farm? Did he refuse the offer? - My Lord, he did not pick up the offer and look at it. In other words, he did not accept it.

Did he refuse it? - He did not refuse, he said nothing about refusing or anything of that nature.

Did he show any interest in it? - He only said that we must go higher with the price.''

 

It must be observed that plaintiff's mandate to sell the farm was not terminated. Van der Merwe was merely informed that defendant was no longer willing to sell the property at R180 000. On 12 September 1975 Van der Merwe took Roos (Jnr) and his brother De Wil to a farm in the Lydenburg district, but they were not interested in buying it. In the meantime Van der Merwe reported to Wilkens about what happened on 9 September 1975 and advised him to wait as the offer would remain valid until 30 September 1975. On 13 September 1974 Van der Merwe met Roos (Jnr) and his brother De Wil on the property. About what happened there Van der Merwe testified as follows:

 

"Now well, the following day, it was 13 September, what happened then? - Then I went to Argyle. I visited the two brothers there.

By the Court: You travelled to Argyle? - Yes. And who did you visit? - The two brothers who are now on the farm.

Mr Hartzenberg: That is now Messrs Chris Roos and De Wil Roos, is that correct? - That is correct, yes.

Yes? - And there I went and visited them on the farm and the sale of - offer of Victor Wilkens for their farm again cropped up in conversation and they again asked me whether I thought that we could get more for the farm. I also again explained to him that it was difficult at that time to find purchasers for bushveld farms.

Why? - I beg your pardon, let us just make sure. - With the riots in Mozambique, that had reference to our conversation that day.

Yes? But did you think anything further ... - I told them if you want higher prices I am going to advertise the farm for you in our local newspaper and they gave me permission and said; 'see whether you can get a higher price'."

The farm was accordingly advertised in a local nespaper for sale at R210 000. The amount included provision for commission in the amount of R10 000. The particulars which appeared in the advertisement were, according to Van der Merwe, obtained from Roos (Jnr) and his brother, De Wil. There was, however, no reaction to the advertisement. According to Van der Merwe, Roos (Jnr) informed him that defendant was no longer inclined to sell the property, and that he should no longer bring prospective purchasers to the property. Later (on a date which must have been after 14 October 1975) Van der Merwe obtained information that the property had in fact been sold to one of Wilkens' companies (viz Vicrina Beleggingsmaatskappy (Pty) Ltd).

 

The foregoing historical background is mainly based on Van der Merwe's evidence. Defendant, Roos (Jnr) and Wilkens testified differently in regard to the most important facts. Their reliability and veracity are so much under suspicion that little, if any, weight can be attached to their evidence. The main question on appeal is, therefore, whether in the light of Van der Merwe's evidence it can be found that plaintiff has proved on a balance of probabilities that his actions were the efficient cause of the conclusion of the contract between defendant and Wilkens' company.

 

I refer briefly to the motivation of the Court a quo for the finding that plaintiff has not proved that Van der Merwe's actions were the efficient cause of the conclusion of the contract. In the first place the Court a quo mentions the fact that Van der Merwe did not in fact introduce Wilkens to the defendant, because the latter was already aware thereof that Wilkens was a potential purchaser of the property. In my opinion this consideration is. not of decisive importance at all. It can be accepted, notwithstanding the fact that Roos (Jnr's) as well as Wilkens' evidence appears to be exaggerated in this regard, that defendant was aware thereof that Wilkens was interested in the purchase of the property. It is, however, remarkable that neither Roos (Jnr) nor Wilkens started negotiating directly after the first-mentioned informed· Wilkens during March 1975 that the property was in the market. From Van der Merwe's evidence it appears that Wilkens was indeed reluctant to bring it to defendant's notice that he was a prospective purchaser. The fact that defendant heard that Wilkens was the person who was prepared to pay R180 000 for the property was directly due to Van der Merwe's actions which led to Wilkens' written offer which was irrevocable until 30 September 1975. The fact that Wilkens knew the property and that Van der Merwe, therefore, did not have to "introduce" it to him is, in my opinion, of little importance, if any. The Court a quo also refers thereto that Van der Merwe "did not iron out any difficulties or overcome any problems". It is true that there were no particular problems which had to be overcome, except for the fact that Wilkens did not want to negotiate with the defendant directly. This problem was overcome when Van der Merwe during July 1975 heard that defendant would be prepared to accept R180 000 as purchase price. As this was the price which Wilkens was prepared to pay it was no longer necessary for him to conceal his identity. Indeed, Wilkens said in his evidence that he was all along prepared to pay as much as R200 000 for the property. Further the Court a quo says that: ".........."

 

I have already indicated above which actions of Van der Merwe led to the conclusion of the contract. In my humble opinion the question is not whether the farm would eventually in any case have been sold to Wilkens even if Van der Merwe had not concerned himself with the sale thereof, but whether his actions were in fact the efficient cause of the conclusion of the contract occurring, which happened during October 1975.

 

The question was raised whether the occurrences on the property on 13 September 1975 led to the creation of a new mandate which substituted that which was granted to plaintiff during July 1975. As far as it may be relevant, I am of opinion, that the question must be answered in favour of plaintiff. The mere fact that a seller informs his agent that he wishes to sell at a higher price than originally mentioned will not in the normal course affect the existence of a mandate already conferred, unless it is eg provided that commission will only be payable if the property is sold at the increased price. Where the owner mentions a particular price to his agent, he is at liberty to accept a lower price or even to insist on a still higher price. If the agent's actions were the efficient cause of the conclusion of the contract, he would be entitled to commission and the amount thereof would be calculated on the purchase price irrespective of whether it was higher or lower than the price which the owner mentioned to the agent. Indeed, in my opinion, the advising of the agent of the conditions on which an owner is prepared to sell is in reality not part of the mandate. It is essential information which is given to the agent to put him in a position to execute his mandate.

 

In passing it is remarkable that, according to their evidence, neither defendant nor Wilkens negotiated with each other after 9 September 1975. Wilkens was, according to him, all along prepared to pay up to R200 000 for the property. Defendant was aware thereof that Wilkens was anxious to buy the property and on 5 September 1975 he heard that he was prepared to pay R180 000. Although it is not normally the agent's duty to take part uninvitedly in the further finalizing of the transaction after he has introduced a prospective purchaser to the owner, it is in the circumstances of the present case somewhat strange that Wilkens, otherwise than previously, did not authorise Van der Merwe to increase the offer and that Roos (Jnr) did not suggest to Van der Merwe that Wilkens should be approached to increase his offer to R200 000. Only a few days before the conclusion of the contract (ie according to the evidence of Roos Jnr and Wilkens) Roos (Jnr) contacted Wilkens and within a question of hours the sale was concluded. The evidence which creates the impression that that was the first occasion on which Roos (Jnr) and Wilkens negotiated directly with each other after the latter's name was on 5 September 1975 revealed as a prospective purchaser, appears suspicious to me. In the first place lingering occurred until the period which was mentioned in the written offer expired. Secondly, although Van der Merwe did not raise the question of commission, and was also not entitled thereto according to the evidence of Roos (Jnr) and Wilkens, defendant deemed it advisable to insert the clauses 5 and 9, already quoted, in the deed of sale. The subsequent attempts by Roos (Jnr) and Wilkens to mislead Van der Merwe regarding the conclusion of the contract, strengthens the inference that they conspired in an endeavour to ensure that commission of R12 000 was not paid to plaintiff.

 

In my opinion the revelation to defendant of Wilkens' name as prospective purchaser, and the presentation of the written offer to buy the farm for R180 000, led directly to Roos (Jnr's) negotiations with Wilkens, which negotiations led to the conclusion of the contract, and Van der Merwe's actions in the execution of the mandate which was granted to plaintiff can in fact be regarded as the efficient cause of the sale. In my opinion plaintiff was entitled to commission calculated at 5 per cent on the purchase price of R200 000. Plaintiff limited its claim, however, to R9 000.

 

The appeal accordingly succeeds with costs. As regards the amount which is payable to plaintiff, the provisions of Act 55 of 1975 are applicable. The order of the Court a quo is altered to read as follows:

 

"Judgment in favour of plaintiff in the amount of R9 000 with costs.''

 

CORBETT JA, JOUBERT JA, GALGUT AJA and HOEXTER AJA concurred.

 

Appellant's Attorneys: Ross & Jacobsz, Pretoria; Naude & Naude, Van de Wall & Partners, Bloemfontein.' Respondent's Attorneys: Teichert & Kruger, Pretoria; McIntyre & Van der Post, Bloemfontein.

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