Omar and Others v Xanadu Properties 16 CC and Others (7312/2005) [2009] ZAKZHC 9 (23 February 2009)

Omar and Others v Xanadu Properties 16 CC and Others (7312/2005) [2009] ZAKZHC 9 (23 February 2009)

The court found that the applicant was induced to enter into the auction sale agreement by a fundamental and material misrepresentation regarding the DTI grant, which was advertised and represented as accruing to the purchaser but was in fact not transferable. This misrepresentation vitiated consensus ad idem, resulting in no contract being formed. The applicant's mistake was reasonable and justifiable in the circumstances. The court further held that the auctioneer's failure to draw the applicant's attention to the commission clause, which contradicted the advertisement and oral representations, constituted a misrepresentation by non-disclosure. As a result, the applicant was entitled to...

Citation
[2009] ZAKZHC 9
Parties
Applicant: Ismail Omar; Applicant: Ismail Omar NO; Applicant: Muhammad Ismail Omar NO; Respondent: Xanadu Properties 16 CC; Respondent: First Trust Auctioneers; Respondent: Ray D. Dunnington; Respondent: Stephan John Grant
Court
High Courts - Kwazulu Natal
Jurisdiction
South Africa
Judgment Date
23 February 2009
Case Number
7312/2005
Procedural Posture
Civil Application / Judgment After Hearing of Oral Evidence
Outcome
Application granted. The contract was declared null and void ab initio. The second respondent was ordered to repay the deposit to the applicant, with interest. Costs awarded against the second, third, and fourth respondents jointly and severally.
Judges
Levinsohn DJP
Legal Topics
Misrepresentation, Auction Sale, Contract Nullity, Commission Entitlement, Caveat Subscriptor, Restitution
Commercial and Corporate Civil Procedure Misrepresentation Auction Sale Contract Nullity Commission Entitlement Caveat Subscriptor Restitution

Case Brief

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Parties

Ismail Omar

Applicant

Ismail Omar NO

Applicant

Muhammad Ismail Omar NO

Applicant

Xanadu Properties 16 CC

Respondent

First Trust Auctioneers

Respondent

Ray D. Dunnington

Respondent

Stephan John Grant

Respondent

Procedural Posture

Civil Application / Judgment After Hearing of Oral Evidence

Legal Issues

  1. 1 Whether the auction sale agreement was null and void due to a fundamental misrepresentation regarding the DTI grant.
  2. 2 Whether the applicant is entitled to restitution of the deposit paid.
  3. 3 Whether the auctioneer was entitled to appropriate commission from the deposit despite representations to the contrary.

Ratio Decidendi

The court found that the applicant was induced to enter into the auction sale agreement by a fundamental and material misrepresentation regarding the DTI grant, which was advertised and represented as accruing to the purchaser but was in fact not transferable. This misrepresentation vitiated consensus ad idem, resulting in no contract being formed. The applicant's mistake was reasonable and justifiable in the circumstances. The court further held that the auctioneer's failure to draw the applicant's attention to the commission clause, which contradicted the advertisement and oral representations, constituted a misrepresentation by non-disclosure. As a result, the applicant was entitled to...

Court Disposition

Application granted. The contract was declared null and void ab initio. The second respondent was ordered to repay the deposit to the applicant, with interest. Costs awarded against the second, third, and fourth respondents jointly and severally.

Orders

  • The second respondent is directed to pay to the first applicant the amount of R249,375.00.
  • The second respondent shall pay interest on that amount at the applicable mora rate calculated from 24 May 2005 to the date of payment.