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Wakefields Real Estate

13 October 2011

Wakefields Real Estate v Attree (666/10) [2011] ZASCA 160 (28 September 2011) 

In this case the Supreme Court of Appeal upheld an appeal against a decision of the KwaZulu-Natal High Court (Nicholson J) which held that an etate agent, Wakefields Real Estate, who had introduced a purchaser, Fiona Howard, to a house in Durban North, which had subsequently been sold to her, was not entitled to  agent’s commission. A different estate agent, Mrs De Marigny, who fortuitously knew that she was interested in the house, had contacted Howard when she heard that the seller was willing to reduce the price.   Mrs De Marigny prepared an offer to purchase and persuaded the seller to reduce the price further which the buyer agreed to.  

 
The high court held that Wakefields Real Estate had no mandate to sell the house for a commission of six per cent of the price, and that Mrs De Marigny was the effective cause of the sale and entitled to commission on an agreed basis. 
 
On appeal it was not disputed that Wakefields Real Estate did in fact have a mandate to find a purchaser. The SCA set aside the order of the high court, finding that it was actually Wakefields  who had taken Fiona Howard, and subsequently her husband as well, to the house which she had liked, but which she and her husband thought was beyond their means. But for that introduction she would not have known that the house was for sale. Wakefields Real Estate was therefore the effective cause of the sale, and entitled to commission.
 
In upholding the appeal Lewis JA noted that:
 
"[14] It is notoriously difficult, when there are competing estate agents, to determine who is the effective cause of the sale that eventuates. It may be that more than one agent is entitled to commission. This was put trenchantly
by Van den Heever JA in Webranchek v L K Jacobs & Co Ltd 1948 (4) SA
671 (A) at 678 where he said:
‘Situations are conceivable in which it is impossible to distinguish between the efforts of one agent and another in terms of causality or degrees of causation. In such a situation it may well be (it is not necessary to decide the point) that the principal may owe commission to both agents and that he has only himself to blame for his predicament; for he should protect himself against that risk.’
Van den Heever JA continued (at 679):
‘[A] judge who has to try the issue must needs decide the matter by applying the common sense standards and not according to the notions in regard to the operation of causation which “might satisfy the metaphysician” . . . . The distinction between the concepts causa sine qua non and causa causans is not as crisp and clear as the frequent use of these phrases would suggest; they are relative concepts. . . . It stands to reason, therefore, that the  cumulative importance of a number of causes attributable to one agent may be such that, although each in itself might have been described as a causa sine qua non, the sum of efforts of that agent may be said to have been the effective cause of the sale.’
 
Although the high court had relied on Basil Elk Estates (Pty) Ltd v Curzon 1990 (2) SA 1 (T) Lewis was of the view that the correct approach would have been to correctly apply  the principles as cited in Aida Real Estate Ltd v Lipschitz 1971 (3) SA 871 (W). In that case [at 18] "an estate agent had introduced a purchaser who ultimately negotiated directly with the seller in concluding a sale. The agent was nonetheless held to be the effective cause of the sale and entitled to commission. Marais J said (at 875E-H) that protracted negotiations about finances are often attendant on transactions brought about by an estate agent. In that case it was the purchaser who had concluded the deal, but it was the estate agent’s ‘wisdom and business acumen’ that brought together the eager seller and the purchaser who was able to overcome financial obstacles. Marais J said that ‘[i]n such a case the agent would be entitled to remuneration, no matter whether he selected the potential purchaser by chance or by foresight. A commission agent is paid by results and not by good intentions or even hard work."
 
Full judgment

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