Gowan v Bowern

• Jurisdiction: South Africa
• Judge: Innes CJ, De Villiers JA and Wessels JA
• Judgment Date: 15 August 1924
• Citation: 1924 AD 550
• Hearing Date: 19 March 1924
• Court: Appellate Division

Innes, C.J.:

I agree with the conclusion of my brother DE VILLIERS, and substantially on the same grounds. But in view of the importance of the law point involved, I desire to state in a few words the view which I take of it, That the £20,000 claimed in this action is not ordinary commission is clear. It represented the difference between the price which Gowan was to receive for the steamer (£120,000), and the price (R140,000), which Nemazee was to pay. That difference, unknown to the purchaser was to

Innes, C.J.

go into Bowern's pocket. The arrangement with regard to its payment as finally agreed upon between the parties was that if and when Gowan received the second instalment of the purchase price he would pay over £20, OOO to Bowern. Viewing the matter in the most favourable light for the respondent it may be said that there was a promise by Gowan to pay over the said amount upon the eventuality stated. Owing to the cancellation of the contract of sale by Nemazee with Gowan's assent, the instalment contemplated was never received by the latter. And the question arises whether as against Gowan the condition must be regarded as having been fulfilled, and whether therefore he is liable for £20,000 in spite of the fact that he never received the second instalment. It was a doctrine of the Roman law that a condition should be regarded as fulfilled if its non-fulfilment was brought about by the person who would have been under an obligation if it had actually been fulfilled. The authorities have been fully discussed in Liquidator, MacDuff Co. v Johannesburg Consolidated Investment Co., judgment in which is being delivered to-day, and I have nothing to add to my remarks in that case. The test to be applied is dolus: whether it is consistent with good faith for the promissor to have prevented the fulfilment of the condition. And that must be gathered from the nature and terms of the contract and from all the relevant circumstances. In this instance it is not suggested that Gowan assented to Nemazee's cancellation of the sale with the object of depriving Bowern of his commission. Owing to the circumstances stated by my, brother DE VILLIERS, the delivery of the steamer was delayed; but whether Gowan was to blame for all or any of the causes of delay, he was not actuated by the idea of preventing the fulfilment of the condition on which his liability to Bowern depended. It was suggested that he might be answerable for culpa - answerable that is to Bowern. It is difficult to see how the principle of fictional fulfilment of a condition can operate on the mere ground of culpa. It will I think be found that in cases in which there may be a duty on the promissor to take any active steps to bring about the fulfilment of a condition, that duty arises either from a term of the contract itself or because the omission of such steps would render the happening of the condition impossible. In the last mentioned case the neglect to take the steps would generally be due to a desire to defeat the condition, and the doctrine would apply. But here there was no duty owed by Gowan

De Villiers, J.A.

to make timeous delivery of the steamer. His obligation to do that was an obligation to Nemazee alone; and even so far as Nemazee is concerned it is admitted that, though there was considerable delay, he took no steps to place Gowan in mora.

The learned judge laid stress on the cable of the 22nd March 1918, as showing that Gowan undertook to insure the payment of Bowern's commission. But with great respect such an undertaking cannot be deduced from the message which ran: "when second payment received will pay you twenty thousand pounds, meantime we insure your amount." The last words clearly had reference to the fact that Gowan had insured the steamer for £I40,000, which covered Bowern's so-called commission as well as the price which Gowan was to receive. "Insure" did not mean "guarantee"; it related to a transaction of insurance which had actually taken place.

The appeal must succeed.

Judgment

De Villiers, J.A.:

The respondent, Thomas William Bowern. plaintiff in the court below, carries on business as a ship and general broker, under the style or firm of Bowern & Co., at Shanghai, China. The appellant, William Gowan, a ship broker and shipping agent, carries on business under the style or firm of Gowan & Co., at Cape Town. In the Cape Provincial Division Bowern claimed a sum of: £20, OOO as commission on the sale of a steamer, the property of Gowan, sold through Bowern to one Nemazee in March 1918. Judgment was given by VAN ZYL, J. for the amount claimed with costs, and the appeal is from that judgment.

The history of the transaction is somewhat involved. In December 1916 Gowan bought the steamship "Miramichi," then lying on the beach at Mombasa in a seriously damaged condition, from the lords Commissioners of the Admiralty In May 1917 he entered into a bill of sale with one Aaby of Drammen, Norway, by which he sold her to Aaby for the sum of £25,000, receiving £20,000 on account of the purchase price. Delivery was to take place when the vessel arrived at Durban. Temporary repairs were effected, but it was only in November 1917 that she was certified to he in a seaworthy condition so as to proceed to Durban, where she arrived in February 1918. On the 10th December 1917, however, Gowan was informed by the Board of Trade that it was unable to agree to the sale of the vessel to a foreigner; on the 19th

De Villiers, J.A.

January, 1918, the Shipping Controller cabled him that he concurred in the action of the Board of Trade in refusing to allow the transfer of the ship to a foreign buyer, and as late as the 19th March, 1918, the Naval Secretary to the Commander-in-chief at the Cape station wrote to inform him that the sale of the vessel to any foreign buyer was prohibited. Owing to the action of the authorities Gowan attempted to cancel the sale to Aaby and to return the £20,000, but Aaby refused to receive the money or to agree to the cancellation. On the contrary he instructed his local agent, Johannesen, to pay Gowan the balance of the purchase money and requested the latter to issue the documents to Messrs. Turner Brightman & Co., of London, thereby keeping the vessel under the English flag. Gowan on his part, by letter of the 25th February, 1918, declined "to be a party to any deceit regarding the transfer of this vessel." Aaby, however, did not allow the matter to rest there. According to a cable from the Board of Trade to Gowan, dated, 24th June, 1918, it appears that already on the 11th March the board had authorised the registration of the "Miramichi" in the name of Turner Brightman & Co., acting as nominees of Aaby. But it seems this action on the part of the Board of Trade only came to Gowan's knowledge some time in June of that year in the meantime, on the 11th February, 1918, Aaby obtained an interdict in the Natal Provincial Division on the vessel. While on the subject of interdicts it may be as well to mention that later, on the 19th June, 1918, a second interdict was granted at the instance of the master and owners of the S.S. "Hymen," which it was alleged had been damaged by the "Miramichi" having got loose from her moorings in Durban Harbour. Both interdicts were granted without prejudice to any right in the Crown to requisition the services of the "Miramichi."

When Gowan found that he was not allowed to transfer the vessel to Aaby, he entered into negotiations with Bowern b cable for the sale of the vessel. On the 29th December, 1917, he cabled to Bowern describing the steamer and her condition, and asked him to "submit best offer." On the next day Bowern replied by cable asking for further particulars and intimating that he would make an offer. This offer was made on the 12th March, 1918, by cable from Hong-Kong, which reads as follows: -

"Offer firm subject reply received here four days one hundred twenty thousand pounds nett subject following conditions stop

De Villiers, J.A.

Thirty thousand pounds cabled you against bill of sale through Bank on accepting offer stop Insurance policy covering marine and war risks for thirty thousand pounds taken out by you in favour of buyer stop Forty thousand pounds payable you seven days after vessel arrives Shanghai stop Balance purchase money remains on mortgage for twelve months at six per cent. per annum stop You must guarantee that an expenditure of not more. than twenty thousand pounds at Shanghai will put vessel in Al class condition stop We deduct from first two payments anything we obtain above our offer which considered our commission stop Buyer guaranteed British subject stop Reply care Victoria Hong-Kong."

It will be observed that according to this cable the balance of the purchase price to remain on mortgage was to he £50, OOO. On the next day Gowan cabled to Bowern: "Telegram 12th received. What do you mean by 'we deduct from first two payments anything we obtain above our offer which considered our commission.' Please make this commission question clear." To which a reply was sent on the 14th: "Our firm offer was £120,000 absolutely nett to you. Consequently obtaining our commission from probable buyer. Therefore we require that amount we sell above our firm offer to you should be considered our commission and bill of sale made out by you for price we sell to probable buyer. Our commission we shall deduct half from first payment £30,000 and half from second payment £40,000. Please confirm all our conditions immediately." To this Gowan replied by cable of the 15th: "Accept £120,000 nett. Bill of sale made inclusive your oommission which we hand bank here against first payment. Lloyd's insurance policy for first payment will be handed buyer's London bankers before steamer sails from Durban. The first and second payments will include your commission above one twenty." From what follows it would seem that by the last...