Cowley and Another v Hahn

• Jurisdiction: South Africa
• Court: Eastern Cape Division
• Judge: Mullins J
• Judgment Date: 03 December 1985
• Citation: 1987 (1) SA 440 (E)

Mullins J:

On 5 May 1983 the defendant signed a written offer to purchase the first plaintiff's property, a small-holding situated near Gonubie in the district of East London, for R50 000. The offer was accepted in writing by first plaintiff on I the following day.

The sale was negotiated by a Mrs Dalbock on behalf of second plaintiff, which is a firm of estate agents carrying on business in Gonubie. In terms of clause 9 of the written offer, defendant undertook not to withdraw the offer, and agreed that, in the event of non-fulfilment by him of the conditions of sale J resulting in cancellation thereof, second plaintiff

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A would be entitled to recover from defendant such commission as it would have earned should the sale have been concluded. When first plaintiff accepted defendant's offer she agreed to pay commission to second plaintiff in the sum of R2 500, this being calculated at the customary rate prevailing at that time.

B On 7 May 1983 second plaintiff forwarded the signed offer and acceptance form to one Bell, the attorney nominated by first plaintiff to attend to the registration of transfer. On 3 June 1983, however, first plaintiff telephoned Bell and informed him that she understood defendant wished to resile from the contract. Defendant had apparently contacted someone in second plaintiff's office at about the end of May 1983 and C stated that he no longer wished to purchase the property. Bell immediately tried to contact defendant by telephone, but only succeeded in doing so on 8 June 1983. On that occasion defendant advised Bell that he had advised second plaintiff that he was no longer interested in purchasing the property, D that he was not prepared to sign any documents or apply for a bond, and that he did not regard himself as bound by the contract. He volunteered to Bell that he had been drinking beer on the day in question, which fact could be confirmed by a friend, Rautenbach, who had been with him on that day, and that he would not have agreed to buy the property if he had not been drinking. He regarded the property as overpriced. In answer to E a question by Bell, he said that first plaintiff could resell the property if she wanted to and that, even if first plaintiff held him to the contract, she would get nothing from him as the money 'had to come out of his pocket'. By this he presumably meant to convey that he did not have the money available to pay the purchase price.

The terms of this discussion between Bell and defendant were F not disputed by defendant.

On 14 June 1983 Bell wrote to Hahn informing him that first plaintiff had accepted his repudiation of the contract, that she would attempt to resell the property and that, if it was sold for less than R50 000, she would hold defendant liable for damages in the amount of any loss sustained on the resale. Bell G also advised defendant that second plaintiff demanded payment of its commission in the amount of R2 500 in terms of clause 9 of his written offer. There was apparently no response by defendant to this intimation.

Both second plaintiff and other estate agents thereupon endeavoured to resell first plaintiff's property, but the only H offer received was from first plaintiff's brother, one Wittstock, whose offer of R44 000, dated 28 June 1983, first plaintiff eventually accepted as being the best price she could obtain.

The present action is by first plaintiff for damages in the sum of R6 000, being the difference between the contract price of I R50 000 agreed to by defendant and the amount of R44 000 which first plaintiff eventually received for the property. Second plaintiff's claim is for commission on the said sale in the sum of R2 500 in terms of clause 9 of the written offer.

In his plea, defendant denied that he was bound in law by the written offer made by him. He admitted his refusal to proceed J with the implementation of the sale. He put first plaintiff to proof of her claim for

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damages, and denied that second plaintiff was entitled to its A claim for commission, in view of his alleged right to resile from the sale.

Defendant sought in his plea to justify his repudiation of the contract on the following grounds. Firstly, he claimed that the written offer and acceptance form signed by himself and first plaintiff did not comply with the provisions of s 2(1) of the B Alienation of Land Act 68 of 1981 in that E there was registered against the title deed of the property a usufruct in favour of Mrs Susan Elizabeth Wittstock, that she was not a party to the written agreement, and that she had not consented in writing to the alienation of her interest in the said property. Secondly, defendant pleaded that there was a right of way traversing the said property on to an adjoining property. C He claimed that prior to signing the offer to purchase he had no knowledge of the right of way, or that it was ever disclosed to him. He went further and alleged that second plaintiff, through one of its employees, 'orally represented that there was no right of way traversing the said property, such representation having been made in reply to a direct question D asked by the defendant'.

He pleaded further that second plaintiff's said employee knew that defendant had no knowledge of the right of way, and knew further that defendant would act on any representation made 'in this regard'. He alleged that second plaintiff's said employee therefore owed defendant a duty of care not to misrepresent whether or not there was a right of way traversing the E property, but nevertheless fraudulently, alternatively recklessly and negligently, misrepresented that there was no right of way.

Finally, defendant pleaded that even if the written agreement was valid in terms of the provisions of Act 68 of 1981, the failure to disclose the existence of the aforesaid usufruct in favour of Mrs Wittstock also constituted a fraudulent, alternatively negligent, misrepresentation, entitling defendant F to repudiate the contract.

Defendant did not in his plea suggest that he was entitled to cancel the sale because he had been under the influence of liquor when he signed the written offer, although there was some reference in the evidence to the fact that he had been G drinking beer at the time, as had been stated by him to Bell.

Before reviewing the evidence, I should mention that no evidence was led on behalf of the defendant, who also did not himself enter the witness box. Mr Froneman, who appeared for the defendant, accordingly did not seek to persuade me that I should find in favour of the defendant on the issues of the H alleged misrepresentations. I propose nevertheless briefly to summarise the evidence led on behalf of the plaintiffs in order for there to be a better appreciation of the...