In a classic case of think before you ink, a Durban couple who rushed into signing a purchase agreement for a R550,000 valued Chatsworth property before backtracking on the deal just days later, has been ordered to pay Wakefields Real Estate R40,000 in commission, as well as their legal fees.
This is despite the deal falling through the cracks after the couple’s daughter gave the house a thumbs down less than a day after the parents had been to view it and hurriedly signed a purchase agreement with the realtor on the same day.
The order against Patgonan and Thavanthree Naidoo was made by Judge Jacqueline Henriques (with Judge Mlaba concurring) in the Pietermaritzburg High Court last week.
The Naidoos had taken the matter on appeal after the Chatsworth Magistrate's Court also ruled against them.
The house was eventually sold to another family by another estate agent, but Wakefields demanded the R40,000 owed on the Chatsworth property after the Naidoos, of their own volition, decided to rush through the process, despite being offered a considered approach of taking their time to read the documents.
The Naidoos did not dispute signing the purchase agreement, but they posited that the sale was on condition of their daughter’s approval and on quotations for renovations.
Wakefield estate agent Kim Badsey denied this, giving evidence in court, along with trainee estate agent Adele Kleinschmidt, that the Naidoos did not inform them of such a condition.
Judge Henriques rejected the defences advanced by the Naidoos, and said they only had “themselves to blame” for rushing into signing the purchase agreement. He said Wakefields staff offered to have the documents emailed to them, but the Naidoos insisted on following the estate agent to her work place where they signed the documents in a boardroom on the same day.
The court established that the house was advertised on the Property Junction as a “renovators dream”. This was also disclosed to the Naidoos by Badsey, who noted that aluminium window frames, damp walls and cupboards needed renovating.
There was also no key at the property as the Naidoos, Badsey and Kleinschmidt entered through an unlocked broken door.
After inspecting the house, the Naidoos offered R550,000 after being told the sellers were seeking R570,000.
The sellers, the Reubens, accepted the R20,000 loss on the asking price on the same day as well and duly signed, while an annotation on the commission was also made, reducing Wakefields commission to just R40,000 from an initially higher amount.
After signing on March 25, 2015, which was also accepted by the sellers, no further discussions took place until the Naidoos wanted to inspect the property with a contractor with a view to get a quote for renovations.
On March 26, 2015, Badsey emailed the Naidoos informing them their offer had been accepted, but on March 27, 2015, the Naidoos wrote back informing they were pulling out of the deal.
In an email, Mr Naidoo complained renovating would be too costly and withdrew from the deal, but the estate agent wrote back and disclosed she would seek legal advice. The Naidoos later claimed on March 27, 2015, that the daughter did not like the property and a detailed response was provided to them including the allegations by the Naidoos that the offer was subject to the approval of his daughter.
Badsey in her mail dismissed this and said this would have been included as a special condition in the purchase and sale agreement had it been the case.
Judge Henriques dismissed this, saying it was the Naidoos who insisted on following the estate agents to their office.
Under cross-examination, Badsey denied that she insisted on the Naidoos signing the offer to purchase.
Judge Henriques found that the Naidoos had been offered an opportunity to think about it before making an offer after reading the documentation, but they sped up the process.
Kleinschmidt, who was the trainee intern, told the court that an amount of R25,000 to repair the windows had been shared with the Naidoos, but not for any other defects.
The Naidoos also tried to argue that the absence of one of the sellers’ signatures made the agreement null and void, but it was shown that the husband had been overseas and the wife had power of attorney. This was accepted by the court.
The Naidoos also tried to argue that they were not liable to the R40,000 commission, as they did not know they would have to pay it after withdrawing their offer to purchase.
Judge Henriques found that they only had “themselves to blame” for the ordeal and dismissed a claim that the estate agents had misrepresented themselves and also dismissed the iustus error defence - which infers a provision to escape contractual liability after committing a reasonable mistake.
“If the Naidoos were mistaken as to the contents of the purchase and sale agreement and in particular the commission clause it was due to their failure to properly read the sale agreement and the commission clause before signing the document.
“They are bound under the caveat subscriptor doctrine. In my view there is no evidence to support a defence based on iustus error,” said Judge Henriques.
He added: “I can find no misdirection in the court a quo's acceptance of the evidence of Ms Badsey as corroborated by Ms Kleinschmidt and the rejection of Mr Naidoos evidence. In addition and in the light of this, the grounds of appeal advanced by the Naidoos cannot succeed for the reasons advanced in the judgment and fall to be dismissed”.
Costs were awarded to Wakefields.