REPUBLIC OF SOUTH AFRICA
GAUTENG DIVISION OF THE HIGH COURT, PRETORIA
CASE NO: 70993/2011
DATE: 10 APRIL 2014
NOT REPORTABLE
NOT OF INTEREST TO OTHER JUDGES

In the matter between:
THE STANDARD BANK OF SOUTH AFRICA LTD.........................................................Plaintiff
and
IZIMOTO TRADING (PTY) LTD t/a GLOBAL NISSAN................................................Defendant
JUDGMENT
KGANYAGO AJ
[1] The plaintiff has instituted an action against the defendant claiming two amount of R660 660.40 with two alternative claims of R214 000.00 and  R100 000.00 respectively. The plaintiff’s claim is based on an alleged  misrepresentation made by the defendant.
[2] According to the plaintiff, the defendant sold to the plaintiff two tipper  trucks which the defendant misrepresented as new whereas they were  second hand trucks. The plaintiff further alleges that the defendant has  misrepresented to them that the two trucks were having added extras  whereas they did not have them. The plaintiff alleges that they made  payment to the defendant based on the misrepresentation.
[3] According to the plaintiff, the misrepresentations by the defendant were  material and made with the intention to induce the plaintiff to enter into  the agreements, which the plaintiff did. The plaintiff is of the view that,  had they been aware of the true facts, they would not have entered into  the two sale agreements. The plaintiff is of the view that based on the  defendant’s misrepresentations, they are entitled to claim cancellation of  the sale agreements and claim repayment of the purchase price in  respect of each of such sale.
[4] The action is defended. The defendant denies any misrepresentation.  According to the defendant, Novus Asphalt CC (“the consumer”),  approached them and enquired about purchasing two demo tipper  trucks. The consumer inspected the two trucks, whereafter they  acknowledged that the two trucks were in good order and condition. The  consumer was well aware that the two tipper trucks were demos, and  they willingly bought them.
[5] The plaintiff called three witnesses to testify. The first witness to testify  was Deon van Rooyen. He testified that presently he is employed by  Northwest Powerstar. He is selling commercial vehicles. He is having  23 years of experience in that field.
[6] He had inspected the two tipper trucks. During 2006 and 2007, the two  tipper trucks were used as demo vehicles by the Super Group. At some  stage, Super Group sold the two trucks in question to BB Trucks in  Polokwane.
[7] The two trucks were used as demo vehicles for almost two years. Their  mileage would have been around 30 000 km. The two trucks would not  have been classified as new as they were refurbished as a result of fair  wear and tear.
[8] When the two vehicles were sold to BB Trucks, they did not have any  extras. At the time they were sold to BB Trucks, their value was  R520 000.00 each excluding VAT.
[9] The defendant has sold the two trucks for R734 000.00 each. That  would not have been a reasonable price.
[10] The witness was cross-examined. The witness conceded that demo  vehicles are not registered but that they are put on a roadworthy test. He conceded that it was correct for the defendant to refer the two trucks as new when the customer registered them for the first time. He conceded  that he cannot say whether the price charged by the defendant for the  two trucks was unreasonable or not.
[11] The second witness to testify for the plaintiff was Mr Johan Otto. He  testified that he is employed by Efficient and Finance doing vehicle  finance.
[12] During 2008 he assisted the consumer to prepare an application to  finance two trucks. When he was approached, Wesbank had already  declined the application of the consumer.
[13] The invoice that he received from the defendant was addressed to  Wesbank. He prepared the application and submitted it to the plaintiff.  On the application he wrote that the vehicles were new. The application  was approved and the consumer was requested to pay a 20% deposit. It  is easy for a bank to finance a new vehicle than a second hand vehicle.
[14] The documents that were submitted to him to assist the consumer to  apply for finance, were indicating that the vehicles were new. Nobody  has told him that they were used vehicles. Had he known that they were  used vehicles, he would not have written them as new on the application form.
[15 The witness was cross examined, and he conceded that on the defendant’s application for finance which the consumer has signed, the  tipper truck has been described as demo and stated that maybe that was  the reason why Wesbank had declined the consumer’s application. He  conceded that the invoice issued by the defendant, described the tipper  truck as second hand goods. He however stated that it was for the first  time he sees the defendant’s invoice even though it is dated 25 January  2008. He conceded that the consumer has signed the release  documents to confirm that he had inspected the vehicles and that he was  satisfied with its condition.
[16] Rozane Meintjies testified as the plaintiff’s third witness. She testified  that she is employed by the plaintiff in the vehicle and assets finance. Mr  Otto has brought the consumer’s application for finance to her. The  application was accompanied by a copy of an invoice. The invoice was  stating that the vehicle was new. The application was approved.
[17] For the bank to pay, it must receive an invoice from the dealership. She  was never given documents that indicate that the tipper truck were either  used or demo.
[18] The witness was cross-examined and she conceded that for a new  vehicle, a deposit is not required. She further conceded that prior to the  finalisation of the deal, one Danie Botha had phoned her to inform her  that the trucks in question were used vehicles.
[19] Danie Botha was the only witness to testify on behalf of the defendant.  He testified that at the beginning of January 2008, the consumer came  with the intention of buying two trucks. His application for finance was  approved by the plaintiff.
[20] The consumer came to the dealership together with his wife. He  inspected the trucks and was happy with their condition. The trucks in  question were demo vehicles.
[21] The consumer was assisted by a broker Mr Otto to process their  application for finance. He (witness) did not get any joy from Mr Otto,  and the process of applying for finance was taking time to be finalised.  He phoned Ms Meintjies to enquire about the status of the consumer’s  application. During their discussion he found out that Ms Meintjies was  under the impression that the trucks were new. He however, corrected  her, and told her that they were used trucks.
[22] The witness was cross-examined and he conceded that they did not add  any extras on the two trucks. He denied that the invoices that were  allegedly submitted to the plaintiff for payment, were invoices that  emanates from the defendant.
[23] That is in short the evidence that was adduced by both parties. It is not in  dispute that the defendant has sold the two tipper trucks to the  consumer. It is not in dispute that the consumer was financed by the  plaintiff for the purpose of the two trucks. It is not dispute that the  consumer had taken delivery of the two tipper trucks after the plaintiff has  paid the defendant the purchase price.
[24] The plaintiff is alleging that that the defendant has described the two  tipper trucks as new whereas they were not new. According to the  plaintiff, the defendant knew that the two tipper trucks were used  vehicles, but instead issued false invoices which described the two trucks  as new. The plaintiff submit that had they known about the factual  position, they would not have financed the two trucks.
[25] The defendant denies having presented any false invoices to the plaintiff.  According to the defendant, the consumer was aware that the two trucks  were demo vehicles, and has inspected them and was satisfied with their  condition, hence he signed a written authority to release them for the  plaintiff to effect payment.
[26] Van der Merwe, Van Huyssteen, Reinecke and Lubbe on Contract  General Principles, second edition at page 95 state the following: -
The elements of delict misrepresentation in contrahendo are: -
An act (conduct), which displays the quality of wrongfulness, is usually
accompanied by fault or blameworthiness on the part of the wrongdoer,
and causes an undesirable result (either the very conclusion of the contract or some detrimental result (damage) flowing from the contract.)”
[27] In the case of International Shipping Company (Pty) Ltd v Bentley  (138/89 [1989] ZASCA 138 at paragraph 64-65 the court said the  following:-
“As has previously been pointed out by this court, in the law of delict causation involves two distinct enquiries. The first is a factual one and  relates to the question whether the defendant’s wrongful act was the  cause of the plaintiff’s loss. This has been referred to as factual  causation.
The enquiry as to factual causation is generally conducted by applying the so-called ubut-for” test which is designed to determine whether a  postulated cause can be identified as a causa sine ctuanon of the loss in  question. In order to apply the test one must make a hypothetical  enquiry as to what probably would have happened but for the wrongful  conduct of the defendant. The enquiry may involve the mental  elimination of the wrongful conduct and the substitution of a hypothetical  course of a lawful conduct and the posing of the question as to whether  upon such an hypothesis plaintiff’s loss would have ensued or not. If it  would in any event have ensued, then the wrongful conduct was not the  course of the plaintiff’s loss; aliter, if would not so have ensued. If the  wrongful act is shown in this way not to be a causa sine guanon of the  loss suffered, then no legal liability can arise. On the other hand,  demonstration that the wrongful act was a causa sine guanon if the loss  does not necessarily result in a legal liability.
The second enquiry then arises, viz whether the wrongful act is sufficiently closely or directly to the loss for legal liability to ensure or  whether, as it is said, the loss is too remote. This is basically a juridical  problem in the solution of which considerations of the policy may play a  part. This is sometimes called legal causation. ”
[28] Mr Otto was instrumental in securing finance for the consumer. He is the  one who has prepared the motivation on behalf of the consumer after the  consumer’s application was declined by Wesbank. Mr Otto is the one  who has submitted the consumer’s application for finance to Ms  Meintjies. The invoice that was used was a copy of the one that was  initially submitted to Wesbank. Ms Meintjies accepted the invoice  addressed to Wesbank without questioning it. In my view, it is strange  that Ms Meintjies has accepted an invoice addressed to Wesbank  without questioning it. During the trial it was not explained why she had  accepted that invoice without querying it.
[29] Mr Otto when preparing the motivation on behalf of the consumer, was  well aware that the consumer’s first application at Wesbank was  declined, and he knew the reasons why it was declined and those  reasons were never disclosed during the trial. He could not have  assisted the consumer without enquiring why his first application was  declined. Mr Otto on accepting the mandate to assist the consumer, he  would not have repeated the same facts that led to Wesbank declining  the first application. During cross-examination he stated that maybe the  reasons why Wesbank has declined the consumer’s application was that  the trucks were not new. In my view he knew that the plaintiff will decline  the consumer’s application if he repeats the same information that was  submitted to Wesbank. The only way to assist the consumer was to  state that the trucks in question were new, whereas he knew that was not  the case.
[30] The invoice that was submitted by Mr Otto to Ms Meintjies for the  purposes of approving the finance, is without the defendant’s logo. The  defendant disputes that the said invoice emanate from them. On the  invoice which the defendant alleges that it was issued by them, the  trucks in question have been described as used. However, Ms Meintjies  disputed ever receiving or seeing the invoice which the defendant alleges  that it emanates from them. The question is where did Mr Otto obtained  the invoice that is disputed by the defendant. This could not be  established during the trial.
[31] Another question which was not dealt with during the trial is whether for  the purposes of approval of the finance, do they use the invoice or the  quotation. In my view, an invoice is for payment whilst a quotation can  be used to approve the loan. In this case an invoice was used to  approve a loan instead of a quotation, and that raises more questions  than answers.
[32] Apparently it took some time before the consumer’s application for  finance was approved. During this period, Mr Botha the employee of the  defendant was very much anxious to have the deal finalized. He even  phoned Ms Meintjies on several occasions enquiring about the progress  of approving the consumer’s application. During the discussion with Ms  Meintjies, it came to his attention that according to Ms Meintjies the  trucks which were to be financed were new. Mr Botha immediately  brought it to the attention of Ms Meintjies that the vehicles in question  were used trucks. Ms Meintjies conceded that she was informed more  than once by Mr Botha that the vehicles in question were used trucks. If  indeed the papers before her were indicating that the trucks in question  were new, the information she received from Mr Botha should have  raised a red flag and she should have requested clarity as to why the  information she was having on the application was different from what Mr  Botha was telling her. However, she elected to ignore the information  given to her. During the trial she could not explain why she had ignored  the information given to her by Mr Botha.
[33] In my view Ms Meintjies has been negligent in ignoring the information  given to her by Mr Botha. Had she been more careful and followed up  the information given to her by Mr Botha, she would have known that the  transaction which they were financing was for used trucks and not new  trucks.
[34] Ms Meintjies has conceded that for a new vehicle, a deposit is not  required and that a deposit is required for a used vehicle. In this case  the consumer was requested to pay a deposit of 20% on both trucks.  The question is why the consumer was requested to pay a deposit of  20% if it was not the policy of the plaintiff to request a deposit for a new  vehicle. Ms Meintjies could not explain this during the trial. This gives  credence to why I pointed out in paragraph 33 above, that Ms Meintjies  might been colluding with Mr Otto.
[35] Before the plaintiff could pay the defendant, it must be satisfied that the  consumer is satisfied with the product that was delivered to it. That will  be confirmed by the release authority which the consumer is required to  sigh if satisfied. In this case the consumer has signed the release  authority confirming that he had inspected the two trucks and that he was  satisfied with their condition.
[36] Mr Otto conceded that the consumer has signed the release authority in  his presence and he (Mr Otto) is the one who took the release authority  to the plaintiff. If the release authority was signed in the presence of Mr  Otto, in my view Mr Otto was witnessing that indeed the consumer had  inspected the vehicle and was satisfied with its condition. If the two  trucks have already clocked 30 000km on the speedometer, as part of  the inspection, the consumer could have easily noticed that. The  consumer was the person who was in a better position to explain  whether the defendant had sold him a new or used trucks. However, the  plaintiff has failed to call him as a witness.
[37] In my view the plaintiff has failed to prove that there was any  misrepresentation on the part of the defendant, since Mr Botha has  expressly informed Ms Meintjies that the two trucks were used.  Furthermore, the consumer had inspected the two trucks and was happy  with their condition. The speedometers of the two trucks had already  clocked more than 30 000km, of which in my view the consumer would  have easily noticed that. The person who could have clarified all these  discrepancies is the consumer. However, the plaintiff has failed to call  him as a witness. In my view, the failure to call the consumer as a  witness by the plaintiff, is fatal to their case.
[38] In my view, if there was any misrepresentation, the person to be held  liable is Mr Otto who prepared the motivation for the consumer and Ms  Meintjies who ignored Mr Botha when he expressly told her that the two  trucks were used and not new. The plaintiff has to establish a causal  link between the misrepresentation relied upon and the damages it  eventually suffered. See Fourie v First Rand Bank Ltd 2013 (1) SA 204  (SCA). In my view the plaintiff has failed to link the defendant to the  alleged misrepresentation.
[39] Under the circumstances, in my view, the plaintiff has failed to proof that  they have entered into the agreements with the defendant based on the  misrepresentation made by the defendant. Therefore I don’t find any  reasons why the sale agreements should be cancelled and the defendant  be ordered to repay the plaintiff’s purchase price in respect of the sale  agreements.
[40] In the result I make the following order:-
The plaintiffs claim is dismissed with costs.
MF KGANYAGO
ACTING JUDGE OF THE GAUTENG
DIVISION OF THE HIGH COURT, PRETORIA