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IN THE HIGH COURT OF SOUTH AFRICA

(EASTERN CAPE, PORT ELIZABETH)

CASE NO.: 1287/09

HEARD ON: 5/11/2009

In the matter between:

SIMPHIWE THANKSLORD HELESI First Applicant

BONGANI BURNS NQINI Second Applicant

and

TRADEPOST 62 (PTY) LIMITED T/A AFRICAS

AUCTION AUTHORITY First Respondent

WEST BANK LIMITED Second Respondent

JUDGMENT

MAKAULA AJ

[1] This application was launched on 13 May 2009 with applicant seeking an order in the following terms:-

“1. Directing the Respondents to deliver the vehicle Toyota Quantum with       registration Number CG 14204 to the First Applicant, pending the final       determination of this application;

2. Directing the Respondents to deliver the registration documents, including a document authorizing the Second Applicant to register the Land Rover Discovery with registration numbers DML 523 EC in his name;

3. Directing the applicant to pay the costs of this application;

4. Directing the Applicants be granted further and/ or alternative relief.”

[2] The first respondent opposed the application and filed a counter application seeking the following order:

“1. That the Second Applicant be compelled to pay to the First 

      Respondent the sum of R162 000,00 plus VAT, i.e. R184 680,00;

2. That the Second Applicant pay to the First Respondent interest on the aforegoing sum at the legal rate of 15,5% per annum from due date, being the 26^th of March 2009, to date of payment;

3. That the Second Respondent be ordered to pay the costs of this Counter Application as between attorney and client.

4. Further and/ alternative relief.”

[3] The following facts are common cause :

3.1 The first applicant is involved in the Taxi Industry as a business person and the second applicant is a medical practitioner practicing as such;

3.2 On 25 March 2009 the first respondent auctioned cars on behalf of the second respondent which were repossessed by the latter from its defaulting customers;

3.3 On 24 March 2009 the second applicant and Dumisane Madikane went to preview the motor vehicles and second applicant filled in what is called a Buyers Registration Form in which he appointed as his representative Dumisane Madikane;

3.4 On 25 March 2009, the first applicant and Tango Nqini attended the auction sale. Tango Nqini bided for a Toyota Quantum (Quantum) and a Land Rover Discovery (Land Rover);

3.5 The purchase price for the Quantum was R180 000,00 plus commission, book fee and VAT which came up to R214 778,00 and the Land Rover for R195 000,00 plus commission, book fee and VAT which came up to R232 580,00.

3.6 On 6 March 2009, the first applicant and second applicant attended        to the office of the first respondent to pay for both motor vehicles. On       arrival they were presented with invoices for both vehicles. The        Quantum was invoiced at R18 000,00 and no longer at R180 000,00        and the Land Rover at the same price as bided for. He then paid        both  amounts as invoiced. It is not disputed though by the applicants        that Mandy  Snapes, who is an employee of the first respondent,        made a mistake when she captured the price of the Quantum by        capturing   R18 000,00  instead of R180 000,00.

3.7 Applicants were then given the registration papers, a letter authorizing        that the quantum be registered in the name of the second applicant        and the keys to the quantum. The applicants could not get the        registration papers for the Land Rover as they were at the head office        of the second respondent in Cape Town.

3.8 When they were at the gate, the security guard queried the         correctness of the purchase price of the quantum and refused to         allow   it through until the purchase price was corrected and bid         amount paid.  The respondents had to leave the quantum there.

 3.9 The first applicant armed with the registration papers went to register         the quantum in his name even though it was still with the first         respondent. Having registered it, first applicant sought delivery of         the Quantum and the registration papers for the Land Rover. The         first respondent refused to deliver the Quantum and did not give him         the registration papers of the Land Rover claiming that they would         only do so upon payment of the balance of the purchase price of the         Quantum.  That refusal led to the present application.

[4] The applicant’s argument as I understood it, is that in spite of the initially agreed amount of R180 000,00, the first respondent unilaterally changed it by issuing an invoice of R18 000,00 thus making a new offer which in turn was subsequently accepted by the second applicant by paying the invoiced amount. Since the second applicant paid by cheque, in terms of the residual rule ownership passed when the cheque was met by the bank, so the argument went. The second leg of the second applicant’s arguments is that the respondents cannot rely on the mistake made by Mandy Snape in order to escape liability in terms of the new agreement because of the application of the doctrine of quasi mutual assent. For purposes of this judgment I shall not deal with the principles referred to by the applicants for the reasons to follow.

[5] The respondents’ argument on the other hand is to the effect that there was no agreement between the first applicant and the respondents and therefore he has no locus standi to bring the application. The respondents further submitted that the issuing of a wrong invoice did not constitute a variation of the existing agreement because there was no consensus between the parties to vary the purchase price and therefore variation could not have occurred. The invoice, so the argument went, was just an instrument used in the execution of the agreement which already existed.

[6] When I perused the Buyers Registration Form (the form) which was signed by the second applicant it has conditions which appear thereon. Before, I deal with the conditions, the form reflects that the second applicant appointed Dumisane Madikane as his representative. The form reads thus:

“Conditions for sale of sale of movable assets by auction

In respect of all goods offered for sale at the auction the highest bidder shall be the Purchaser. The auctioneer has the right to control and regulate the bidding and may withdraw any goods on auction at any time before the sale thereof. On the fall of the hammer each sale shall be finally and irrevocably concluded , subject only to such suspensive conditions as may be applicable to the goods and have been announced in respect thereof, the risk in the goods sold shall pass to the Purchaser. Ownership of the goods shall pass to the Purchaser upon full and final payment of the purchase price/ default price. In the event of a dispute regarding the identity of the highest accepted Purchaser, the auctioneer may appoint the purchaser or he may immediately re-auction the lot. The auctioneer’s decision shall be final and binding. The auctioneer is not responsible for any errors of description of goods as indicated on the auction catalogue or mentioned during the auction. The Purchaser shall be deemed to have inspected and examined the goods, which they purchase. All sales are final and Voetstoets and the Purchaser shall have the obligation to acquaint themselves with the condition and state of the goods purchased by them. Neither the seller of the goods nor the auctioneer give any warranties or guarantees or make any representations in regard to the condition or state of any goods on auction. A buyer’s premium may be leveled and, if so, will be announced at the start of the auction. All goods sold to the Purchasers at the auction, shall after the sale thereof remain on the auction premises at the Purchasers’ risk, in particular for any loss which may occur in regard to the goods purchased. All bids are exclusive of VAT. All goods sold may only be removed from the auction premises and possession of goods shall only be given to the Purchaser thereof after payment of the purchase price and on presentation of a paid invoice thereof in full to Aucor. The Purchaser shall not be entitled to cancel the sale as a result of the failure of the Seller to deliver or sign the required documents in a reasonable time. Aucor shall under no circumstances, be liable to the purchaser for any losses or damages suffered by the Purchaser as a result of the termination of any sale concluded in respect of any goods or, the failure or liability of Aucor to deliver any of the goods, in an amount exceeding the value of the goods in question. In the event of any Purchaser failing to pay the full purchase price (“the default price”) of any goods purchased within the prescribed time or falling to comply with any of these conditions of sale Aucor shall have a lien over and shall have the right to resell such goods by public auction or private auction or private sale without notice to the Purchaser, who shall forfeit his deposit, which Aucor shall be entitled to retain, without prejudice to any other claim which Aucor may have against Purchaser by reason of the latter’s breach of these Conditions of Sale. Should Aucor re-sell any such goods and should the net proceeds thereof (after deducting commission and all costs) be less than the default price the Purchaser shall forthwith upon demand pay to Aucor, as damages, such difference. The Purchaser consents to the jurisdiction of the Magistrate Court in the event of it becoming necessary for Aucor to take any legal action against the purchaser, the Purchaser agrees to pay all the attendant costs and expenses incurred, as between attorney and own client. The Purchaser shall be bound by all announcements made by the auctioneer at the commencement of and during the auction irrespectively of whether he is present at the time such announcements are made. For all purposes, including litigation, relating to and arising from these conditions the Purchaser determines as his Domicilium citandi et executandi the address inserted by him on the buyer’s card issued to him at the auction and signed by him. Save for the announcements referred to above, no variations or announcements thereto shall be of any force or effect unless reduced to writing and signed by both parties. No indulgence which Auctor may grant to the Purchaser shall prejudice or constitute a waiver of the rights of Aucor, who shall not thereby be precluded from exercising any rights against the Purchaser which may have arisen in the past or might arise in the future.

SURETY

In the event of the Purchaser purchasing any goods at the auction as agent for and on behalf of any other person, company, close corporation or other entity or party the Purchaser hereby binds himself as surety and co-principal debtor with his principal for all the obligations of his principal for all goods purchased by him at the auction for his principal and including, in particular, the obligation to pay the purchase price for such goods to Aucor.” (my underlining)

[7] It is clear that there was no agreement between the respondents and first applicant in terms of the form. The form stipulates that a contract of sale between the second applicant and the respondents would be concluded on the fall of the hammer. It is further apparent from the form that any variation or amendment to the contract would have to be in writing and signed by both parties. The contention by the second applicant is thereof misplaced and cannot stand in the light of the agreement of sale he entered into with the respondents.

[8] It is without doubt that after the conclusion of the public auction the parties were ad idem regarding the purchase price of the Quantum that it was R180 000,00 hence the second respondent according to him was surprised to find out the following day that the purchase price had dropped to R18 000,00. It really boggles the mind to hear an argument like the one presented by the applicants. It is inconceivable and does not make business sense for the respondents to unilaterally drop the purchase price by R162 000,00 and without communicating that to the second applicant. The second applicant had inspected the Quantum before and was satisfied with the purchase price thereof. How on earth can it be dropped by such an amount for no tangible reason. This is said in the back drop of what the second applicant avers that immediately when they reached the gate it was brought to their attention by the security guard of the applicant that there was a mistake regarding the amount reflected on the invoice as it did not tally with the amount appearing on the documents in his possession. It was immediately communicated to the applicants that the lady who captured the information made a mistake. The mistake is conceivable because only one digit is missing that is “zero”. That missing “zero” makes the whole difference. The actions of the applicants are really suspicious because instead of clearing a glaring mistake with the respondents, they decided to use the documents at their disposal to register the Quantum in the name of the first applicant. The actions of the applicants are really disingenuous. That is even borne out by the fact that they decided keep quiet because the difference in money was “to their own advantage”.

[9] The second applicant had an obligation to pay the purchase price which was R180 000,00 plus the other additions. The first respondent in turn had an obligation to deliver to the second applicant the Quantum upon the purchase price being paid. Since the purchase price had not been paid, it could not have been expected of the respondents to have delivered the Quantum. The residual rule and quasi mutual assent relied upon by the second applicant are not applicable in this instance in the light of the agreement entered into with the respondents as evidenced by the form. If there was to be variation, it would have been in terms of the agreement between them.

[10] The papers in respect of the Land Rover were withheld by the respondents for no reason. They did not have a right to refuse to release them because there was no dispute regarding the Land Rover. Furthermore, the papers were tendered after this application had been launched. The application was launched on 13 May 2009 and served on the respondents 14 May 2009. The documents were forwarded to the second respondent’s attorney under cover of a letter dated 10 June 2009. Surely the second applicant would be entitled to the costs thereof.

[11] For the reasons alluded to in the preceding paragraph the order sought in the first prayer of the main application cannot succeed. I hold that the contract entered into between the parties on 25 March 2009 had not been rescinded or varied. It is still valid and the second applicant is still bound by the terms thereof.

[12] In the result I make the following order :

1. That the order sought directing the respondents to deliver the Toyota Quantum with registration letters and numbers CG 14204 to the first applicant is dismissed and the applicants are ordered to pay the costs of the application one paying the other to be absolved;

2. That the respondents are ordered to deliver to the second applicant the registration documents including a document authorizing the second applicant to register the Land Rover with registration number DML 523 EC in his name and the respondents are ordered to pay the costs thereof up to the 10^th June 2009 when the tender was made; one paying the other to be absolved;

3. That the second applicant is ordered to pay the first respondent the balance of the purchase price being an amount of R184 680,00 and the second applicant is ordered to pay the costs of the counter-application.

_________________

M. MAKAULA

ACTING JUDGE OF THE HIGH COURT

DATE DELIVERED : 1 DECEMBER 2009

FOR THE APPLICANTS : ADV NOBATANA

INSTRUCTED BY : SIMPHIWO JACOBS & ASSOCIATES

STARPORT BUILDING

140 GOVAN MBEKI

PORT ELIZABETH

FOR RESPONDENTS : MR SPRUYT

INSTRUCTED BY : FRIEDMAN SCHEKTER

75 SECOND AVENUE

NEWTON PARK

PORT ELIZABETH

FORM A

FILING SHEET FOR EASTERN CAPE JUDGMENT

PARTIES:

SIMPHIWE THANKSLORD HELESI

BONGANI BURNS NQINI

AND

TRADEPOST 62 (PTY) LTD T/E AFRICAS AUCTION AUTHORITY

WEST BANK LIMITED

• Registrar CASE NO: 1287/2009

• Magistrate: HIGH COURT, PORT ELIZABETH-

EASTERN CAPE LOCAL DIVISION

• Supreme Court of Appeal/Constitutional Court:

DATE HEARD: 5 NOVEMBER 2009

DATE DELIVERED: 01 DECEMBER 2009

JUDGE(S): MAKAULA AJ

LEGAL REPRESENTATIVES -

Appearances:

• for the State/Plaintiff(s)/Applicant(s)/Appellant(s): ADV NOBATANA

• for the accused/defendant(s)/respondent(s): MR SPRUYT

Instructing attorneys:

• Plaintiff(s)/Applicant(s)/Appellant(s): SIMPHIWO JACOBS & ASSOCIATES

• Respondent(s)/Defendant(s): FRIEDMAN SCHEKTER

CASE INFORMATION -

• Nature of proceedings : CIVIL MATTER

• Topic: DAMAGES

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