Law Reports


Division: The Supreme Court of Appeal
Before: Cameron, Nugent, Cloete, Ponnan JJA & Snyders AJA
Heard: 17 March 2008
Delivered: 28 March 2008

Summary: Estate Agency Affairs Act 112 of 1976 - section 34A - estate agent not entitled to remuneration if functions performed in absence of fidelity fund certificate - client who pays remuneration in such circumstances not entitled to claim its return.

Neutral citation: Taljaard v Botha Properties (666/06) [2008] ZASCA 38 (28 March 2008)

Justice RW Nugent said that section 34A of the Estate Agency Affairs Act which relates to fidelity fund certification and remuneration "was not enacted for the benefit of clients", because they "have incurred a contractual obligation to pay remuneration to an estate agent who has performed his or her mandate".

The Act, instead, is designed to "penalise estate agents who have breached the section" which "prohibits any person from performing any act as an estate agent unless a fidelity fund certificate has been issued to him or her".

In Noragent (Edms) Bpk v De Wet, it was held that this section does not have the effect of "invalidating the contract of mandate of an estate agent who acts in contravention of its terms". An estate agent who claims remuneration and does not have a valid fidelity fund certificate, however, is opening him or herself up to criminal charges and if the commission hasn't yet been received, he/she may have a battle extracting it from a seller who refuses to hand it over.

Said Nugent (at Paragraph [7]), "An estate agent who claims remuneration in conflict with s 34A might expose himself or herself to criminal sanction 6 and will be prevented from enforcing his or her claim, but I do not think it follows by necessary implication that a client who has settled his or her contractual obligation is accorded a right of action for its return."

He continued at [8], "It is well-established that legislation is to be construed so as to interfere as little as possible with established rights.7 While it might indeed seem anomalous that an estate agent is prohibited from enforcing a claim for remuneration that has become due, but may retain that remuneration if it has been paid, that apparent anomaly arises as no more than an incident of the purpose of the section. Had it been intended to confer a right of action upon a client for recovery of monies that became contractually due, it would have been a simple matter to do so in express terms. Absent the express conferral of a right of action I do not think it is conferred by necessary implication."

The Appeal was accordingly dismissed with costs.

6. Section 34 provides that 'any person who contravenes or fails to comply with any provision of this Act' shall be guilty of an offence.
7. Steyn Die Uitleg van Wette 5ed p. 97.

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