IN THE HIGH COURT OF SWAZILAND
Held at Mbabane
Case No.2495/2011
In the matter between:
ROMEO BUTLER
Applicant
And
TOKYO CARS (PTY) LTD
1st Respondent
SWAZILAND REVENUE AUTHORITY
2nd Respondent
IAN PIETERSEN
3rd Respondent
SKIRT INVESTMENTS (PTY) LTD
4th Respondent
Neutral citation:
Romeo Butler vs Tokyo Cars (PTY) LTD and
Others (2495/2011) [2014] [SZHC 112]
(06 June 2014)
1
Coram:
Hlophe J
For Applicant:
Mr. T. M. Mlangeni
For Respondent:
Mr. S. C. Simelane and Mr. Piliso
Date Heard:
05 June 2013
Date Delivered:
06 June 2014
Summary
Law of Agency – Respondent sold applicant a motor vehicle. After taking delivery
of same, Applicant was required to change its registration plates following a
nation wide exercise at the instance of the relevant ministry - Applicant discovered
that the registration documents and plates handed over to him for the vehicle were
not authentic – As the issue of the registration documents and plates complicated
Respondent claimed to have been an agent for a disclosed principal and that the
Applicant had known about that state of affairs when the motor vehicle was sold Applicant seeks an order compelling first Respondent to pay the amount demanded
by the Swaziland Revenue Authority in order to facilitate the vehicle registration –
First Respondent contending such amount should be demanded from the third or
fourth Respondent as a disclosed principal – Whether Applicant entitled to the
2
reliefs sought – Whether first Respondent acted as an agent of a disclosed
principal from the evidence – Respondent’s agency status not disclosed and
principal not disclosed therefore - Effect of such failure in law – Agent of an
undisclosed principal liable in such circumstances in law – Respondent liable
therefore and application succeeds – Third and/or fourth Respondent’s liability to
first Respondent and its extent commented upon.
JUDGMENT
[1]
This is an application in which the Applicant sought an order in the
following terms:1.
That the normal rules of court as to notice, time limits and procedure
be and are hereby dispensed with and that the matter [is] heard as an
urgent one;
2.
That the first Respondent be and is hereby directed and ordered to
forthwith pay customs dues to the second Respondent in respect of the
motor vehicle whose particulars appear below, being:Make:
Toyota Hilux
Type:
Double Cab
Model:
2008 4x4 3.0 D4D
Chassis No.:MR0FZ29G701531364
3
3.
That the first Respondent be and is hereby ordered and directed to do
all that is necessary to enable registration of the motor vehicle in the
name of the Applicant.
[2]
4.
Costs of suit, but only against the first Respondent.
5.
Further and/or alternative relief.
Although brought under a certificate of urgency, it turned out when
the matter was eventually heard that it could not be dealt with as
such as this aspect of the matter had been overtaken by events. It
further transpired that it required oral evidence to be led as there
were issues in dispute which could only be resolved through such
evidence being led.
[3]
The basis of the application from the Applicant’s point of view
was that he had purchased the motor vehicle fully described herein
above from the first Respondent in June 2010. When purchased
the said motor vehicle was parked in the first Respondent’s yard
where several other motor vehicles were parked for sale as the first
4
Respondent was in the business of importing and selling motor
vehicles to the members of the public.
[4]
It is common cause that the motor vehicle concerned was sold for a
sum of E270, 000.00 (Two Hundred and Seventy Thousand
Emalangeni). The said sum was by agreement paid in instalments
and by means of cheques. The first instalment was a cheque of
E150, 000.00 (One Hundred and Fifty Thousand Emalangeni)
followed by six cheques of E20, 000.00 (Twenty Thousand
Emalangeni) each for the balance of E120, 000.00.
[5]
The Applicant contends that upon paying the deposit and handing
over the postdated cheques to the first Respondent the vehicle was
delivered to him and that he immediately made use of it after he
was given what were said to be its registration documents, called a
blue book together with its registration plates.
5
[6]
It was to transpire later that the so called registration documents
and plates for the motor vehicle were fake after which they were
returned to the first Respondent. These were replaced with others
which themselves later turned out to be fake as well. It was at this
time, according to the Applicant, that it transpired that the motor
vehicle concerned did not belong to the first Respondent but to
some third party – the third or fourth Respondent on whose behalf
it was sold. He says the allegation was that the first Respondent
had only sold the motor vehicle concerned as an agent of a
disclosed Principal. The Applicant denied this had been disclosed
to him as at the time he purchased the motor vehicle concerned
[7]
The Applicant alleged further that he had paid all the amounts
forming the purchase price to the first Respondent itself, something
he would not have done had he known that the first Respondent
was merely an agent of the third or fourth Respondent. This was
all the moreso because the entity said to be the owner of the
6
vehicle - the fourth Respondent - was a company belonging to the
third Respondent who was a person well known to him such that it
would have been more convenient for him to purchase directly
from that person or his company and even to pay him directly as it
would have been cheaper for him to do so, particularly because the
third Respondent was a person he had gone to school with at
Salesian High School in Manzini.
[8]
Otherwise it was to transpire that for the motor vehicle to be
registered authentically, there had to be paid a sum of E30, 000.00,
with the second Respondent as customs dues. It was in this regard
that the Applicant prayed for the orders cited above.
[9]
The first Respondent opposed the application and filed its
opposing papers. It stated therein in the merits that it was not
liable to the Applicant. It was contended, on its behalf, and per its
Managing Director, one Nadeem Mushtag, that the vehicle sold to
7
the Applicant was owned by a company called Skirt Investments
(PTY) LTD (Skirt Investments), whose Director was one Ian
Pieterse. It was contended further that when the motor vehicle was
sold to the Applicant, it had been disclosed to him that the first
Respondent was merely an agent for Skirt Investments (PTY) LTD
or its Director, Ian Pieterse.
[10] It was alleged that the agreement between the said Skirt
Investments and the first Respondent was that the latter would
remit all the amounts received pursuant to the sale of any of the
several motor vehicles delivered to the Applicant by the first
Respondent for sale, including the one forming the subject matter
of these proceedings, to the said Skirt Investments.
8
[11] It was also alleged in the papers filed of record that this fact was
not only disclosed to the Applicant but was also well known to him
given that before he could pay the deposit towards the fixed
purchase price of the motor vehicle, the Applicant had met Mr. Ian
Pieterse who allegedly walked into the first Respondent’s yard and
confirmed to him the fact that the motor vehicle concerned
belonged to him together with its purchase price.
[12] The first Respondent further raised several points in limine which
included a contention that the matter was not urgent in view of the
time it had taken Applicant to institute the proceedings after
becoming aware of the state of affairs as well as an alleged nonjoinder of the material parties in Skirt Investments and/or Ian
Pieterse together with a contention that the requirements of an
interdict were neither pleaded nor proved.
There was also a
contention that the matter had disputes of fact, which meant that it
could not be resolved on the papers. It was contended that this
9
court was enjoined to dismiss the matter through upholding the
points in limine raised.
[13] When the hearing of the matter commenced before me, it was
conceded by the parties that the point on urgency had already been
overtaken by events given that all the facts had already been placed
before court and no party was going to suffer any prejudice if the
matter was being heard in its merits which was in itself after a year
of its having been instituted in court. In fact a way forward as
regards the entire matter was agreed being that the Applicant was
going to serve papers on Skirt Investments and Ian Pieterse who
were to be joined as parties in the proceedings. This court further
directed that the question whether or not it was disclosed to the
Applicant at the time the sale of the motor vehicle was concluded
that the first Respondent was merely an agent of Ian Pieterse or
Skirt Investments, had to be referred to oral evidence. Otherwise
the rest of the issues raised as points in limine, it was agreed were
10
to be dealt with together with the merits. I can only comment that
this was indeed a welcome development when considering that the
circumstances of the matter necessitated a practical approach
which in turn ensured the modern trend of dealing with matters on
substantial points as opposed to merely determining technical
points based on no less than perfect procedural points which
otherwise takes the matter nowhere just as it does not necessarily
engender prejudice to any of the parties. See in this regard the
Shell Oil Swaziland (PTY) LTD vs Motor World (PTY) LTD t/a
Sir Motors Appeal Case No. 23/2006.
[14] It became clear to me that the matter turned on the question
whether or not there was a disclosed principal on behalf of whom
the motor vehicle was being sold as at the time the sale was
concluded. This aspect of the matter was referred to oral evidence
in appreciation of the fact that there was a sharp dispute of fact
surrounding it.
11
[15] In support of the application, the Applicant gave oral evidence and
mainly confirmed what was stated in its papers. Paramount in such
evidence was the allegation that after the agreement of sale was
concluded, Mr. Ian Pieterse appeared at the scene per chance.
Whilst it would transpire that at some stage thereafter there were
even engagements between the Applicant and Ian Pieterse,
particularly as regards the provision of the registration cards and
plates for the motor vehicle, the material stage here is the time of
the conclusion of the sale that is was there any disclosure of a
Principal by the first Respondent as at that time or put differently
did Applicant become aware of Mr. Ian Pieterse or Skirt
Investments ownership of the motor vehicle concerned prior to the
sale?
[16] According to the Applicant, it was not disclosed to him at the time
the motor vehicle was sold allegedly on behalf of Ian Pieterse or
Skirt Investments by the first Respondent that it was merely an
12
agent of the said Ian Pieterse or Skirt Investments. The Applicant
contended that had that been disclosed to him, he would have not
paid the purchase price to the first Respondent but he would have
paid same to the said Ian Pieterse or Skirt Investments directly and
would have even chosen to conclude the sale with Ian Pieterse
given that the latter was a person well known to him, a schoolmate
at Salesian High School in Manzini, with whom he would have
even negotiated a better price, which would have eliminated the
usual commission payable to an agent in practice.
[17] Otherwise it was common cause that the first Respondent’s
Managing Director, Mr. Mushtag had tried very hard to ensure that
the Applicant does receive assistance from Skirt Investments or
Mr. Pieterse, but this it was common cause again happened after
problems had ensued with regards the passing of ownership in the
motor vehicle and particularly the registration of the motor vehicle
concerned in the purchaser’s name.
13
[18] The first Respondent led two witnesses being Mr. Mushag and one
of the first Respondent’s employees referred to as Sergener Noor.
It suffices for me to point out that both Respondent witnesses
confirmed each other’s version on the material point namely that
there was disclosure prior to the conclusion of the sale that the car
belonged to Skirt Investments (PTY) LTD. Even though they each
said so, however, such did not signal the end of the matter as I now
had to consider their demeanour as their credibility as witnesses.
My conclusion on this aspect of the matter was that it did not
favour them. I for instance would not understand why the cheques
had to be issued to first Respondent if Ian Pieterse was already
there. I further do not accept that the Applicant and Mr. Pieterse
who knew each other well would not have decided to conclude the
sale on their own including the payment of the purchase price
directly to the seller. It is further not plausible why the Applicant
would have bothered the first Respondent with the registration
plates and documents when he encountered problems if he had
known he was dealing with Ian Pieterse or Skirt Investments as the
14
real seller. I was left with a distinct impression that the version of
the two witnesses on this point had been rehearsed.
[19] Having said that, I must say that I have no doubt that the first
Respondent did not know that the registration plates supplied by
Ian Pieterse and or Skirt Investments were not genuine. I am also
not in doubt that the first Respondent had not colluded with Skirt
Investments or Ian Pieterse to misrepresent the facts to the
Applicant. This however does not mean that I can agree with the
first Respondent that it had disclosed to the Applicant as at the
time of the sale of the motor vehicle, that it was an agent for Ian
Pieterse or Skirt Investments or even that the Applicant got to
know prior to the sale that the first Respondent was merely an
agent of the third or fourth Respondent. This is because of what I
have stated in the foregoing and the following paragraph.
15
[20] From the demeanour of the two witnesses as at the time they
appeared before me, I was convinced that the person whose
version was more probable was the Applicant. This is because he
paid the purchase price to the first Respondent instead of the said
Skirt Investments (PTY) LTD whose Managing Director Ian
Pieterse was known to him. Furthermore, I accept the version by
the Applicant that as a businessman he was very much alive to the
fact that it would be cheaper for him to pay the purchase price
directly to Ian Pieterse who was well known to him instead of
having to pay the first Respondent as a middle man. It is common
knowledge that a middle man would require to be paid a
commission which astute businessman would be able to avoid if
the seller is approached directly. Furthermore the Applicant gave
his evidence in a free flowing manner and confidently.
[21] I am therefore convinced that whilst the first Respondent did not
intend to defraud the Applicant, he however did not disclose to him
16
that he was acting as an agent. The question would invariably be
whether by failure to disclose his Principal as I have found, the
first Respondent is then liable to the Applicant for the amount
associated with registering the motor vehicle.
[22] I will start of from the premise of accepting that the first
Respondent was an agent of the third or fourth Respondent, with
the only question for answer being whether or not this status had
been disclosed to the Applicant and in particular what the effect of
non-disclosure of this is in law. The general rule in the law of
agency is that if an agent acts within his mandate or scope of
authority and discloses his principal, he acquires no liability,
unless he agrees to be personally liable. See in this regard JTR
Gibson’s The South African Mercantile and Company Law,
Seventh Eition, Juta and Company at page 242.
17
[23] On the other hand where the agent contracts with a third party
without disclosing his principal, he may be held responsible or
liable for the transaction. In reality in such a situation the third
party (the purchaser of the item sold) has a choice in terms of
which he could choose to pursue his claim against the principal or
the agent. At page 242 of the book, the South African Mercantile
and Company Law; Paragraph (III) (Supra) the author of the
book; GTR Gibson, puts the position in the following words:“Where an agent contracts with a third party and
does not disclose that there is acting for a
principal, the third party may hold him personally
liable on the contract (Natal Trading & Milling
Co.
Ltd
v
Inglis
(Supra);
Cullinan
v
Noordkaaplandse Aartappelkernmoerkwekers
Kooperasie Bpk (Supra). As we have seen above,
the liability of the principal and agent is
alternative and the third party has the option of
holding either the principal or the agent liable.
Similarly, either the undisclosed principal or the
agent may enforce the contract”
18
[24] In another aspect of the text referred to in the foregoing excerpt,
the learned author puts the position as follows at page 237 of the
said book:“Even if the agent acts in his own name and does not
disclose the existence of the principal, the principal will
be bound, provided the agent acts within his authority…
In such a case the third party has the option of holding
either the principal or the agent liable, but, once having
elected to sue one, he is debarred from subsequently
proceeding against the other”.
[25] From the foregoing, taken together with the finding I have reached
that the first Respondent had not disclosed that he was acting for a
certain principal, it is clear that the first Respondent cannot avoid
liability as the third party (the purchaser) chose to proceed against
it. The Applicant (the purchaser of the motor vehicle in question)
made itself clear who its choice of a Respondent or an opponent
litigant was; that is the first Respondent as opposed to Ian Pieterse
or Skirt Investments (PTY) LTD. If this is the case it is clear I
must enter judgment against the party proceeded against by the
19
Applicant who is the first Respondent in this matter. Of course the
first Respondent has a right to recover the sum it will pay to the
Applicant from the agent’s Principal who in these proceedings is
Skirt Investments or Mr. Ian Pieterse. I can only note that these
two do not seem to be having a problem with that prospect
occurring as they chose not to defend the proceedings despite their
having been served with the papers which was akin to them
resigning their fate to what the court concludes. On the other hand
the first Respondent never sought such an order. It suffices for me
to say that in the interests of Justice, I should give the first
Respondent leave to set the matter down and motivate or ask for an
order against the said Skirt Investments paying to it the amounts it
would have paid Applicant as a result of this judgment on a basis
more akin to a third Party Procedure, should it decide to take
advantage of this leave.
Otherwise the third and fourth
Respondents are specifically ordered to cooperate with the
Applicant and first Respondent in facilitating the registration of the
motor vehicle concerned in the name of the Applicant.
20
[26] That being the case I am constrained to reach one conclusion
which is that the Applicant’s application succeeds with costs as
against the first Respondent.
Delivered in open Court on this the ……day of …………2014.
______________________
N. J. HLOPHE
JUDGE – HIGH COURT
21