THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA
JUDGMENT

Case No:  693/08

In the matter between:

JUAN JACQUES JACOBS                                                               APPELLANT
v

IMPERIAL GROUP (PTY) LTD                                                      RESPONDENT

Neutral citation:
Jacobs v Imperial Group (693/2008) [2009] ZASCA 167
(1 December 2009).

Coram:

Mthiyane, Lewis, Heher, Mlambo, Mhlantla JJA
Heard:

19 November 2009
Delivered:

1 December 2009

Summary:    Contract – owner’s risk notice – incorporated in contract of service.
Service provider entitled to assume that customer saw disclaimer
on notice boards.

Motor vehicle stolen – service provider shielded from liability by
owner’s risk notice.

________________________________________________________________

ORDER
________________________________________________________________

On appeal from: South Gauteng High Court, Johannesburg (Tsoka J sitting as
court of first instance).

The following order is made:

The appeal is dismissed with costs.

________________________________________________________________

JUDGMENT
________________________________________________________________

MLAMBO JA (Mthiyane, Lewis, Heher, Mhlantla JJA concurring):

[1] On 8 September 2005 the appellant, represented by his brother-in-law,
Mr Pierre Jacobs (Jacobs), entered into a contract of service with the respondent
in terms of which the appellant’s motor vehicle, a Vito Mercedes Benz, was left in
the respondent’s care, at its Potchefstroom Cargo Service Centre, for repairs. To
this end Jacobs and the respondent’s representative signed an ‘order form’. The
order form contained on its reverse certain terms and conditions titled ‘conditions
of contract’. Clause 5 of these conditions of contract provided:

‘We acknowledge that Cargo Potchefstroom shall not be liable in any way whatsoever or
be responsible for any loss or damages sustained from fire, burglary and/or unlawful
acts (including gross negligence) of the representative, agents or employees.’

[2] There was also, at the respondent’s service centre, a disclaimer or
owner’s risk notice displayed prominently on notice boards at three locations, to
wit, the passenger vehicle office, the customer reception entrance and at the
cashier’s window. The disclaimer read:

‘Vehicles are left at owner’s risk.
Voertuie word hier gelaat op eienaars risiko.’

[3] The vehicle was stolen whilst still under the respondent’s custody and the
appellant duly instituted an action in the South Gauteng High Court for damages
arising from the consequent loss of the vehicle. It was common cause in the
proceedings before the high court that Jacobs was not aware of the conditions of
contract at the back of the order form he signed. And the court accepted that he
did not see the owner’s risk notice displayed on the notice boards. The
appellant’s case was that it was not bound by the owner’s risk clause and further
that Jacobs did not have authority to bind him to that disclaimer. On the other
hand the respondent relied on the owner’s risk notice to resist liability.

[4] The high court (Tsoka J) found that Jacobs was properly authorised to
bind the appellant. The court also concluded that the owner’s risk notice
displayed on notice boards at the respondent’s premises where the motor vehicle
was stolen, was incorporated into the contract entered into by the parties. That
court further concluded that the respondent had done all that was reasonable to
bring to Jacobs’ attention the contents of the owner’s risk notice. The appeal,
with leave of this court, is directed at these findings and is premised essentially
on the following contentions:

(a)
that the applicability of the owner’s risk notice had to be determined with
reference to the disclaimer contained in clause 5 of the conditions of
contract set out on the back of the order form signed by the parties when
concluding the contract;

(b)
that Jacobs did not have the requisite authority to bind the appellant to the
terms of the owner’s risk notice.

[5] The appellant’s submission regarding the applicability of the owner’s risk
notice was that there was no reference to this notice in the disclaimer in the
conditions of contract (Clause 5). This meant, so the argument went, that the
owner’s risk notice was excluded from the contract entered into between the
parties. The appellant further submitted that the clause 5 disclaimer could not be
relied upon to shield the respondent from liability as it did not mention theft
specifically. An alternative argument was that we should interpret that notice in
the appellant’s favour, it being the respondent’s document, as the English version
which did not mention theft, was inconsistent with the Afrikaans version which did
mention it.

[6] The appellant’s argument that the conditions of contract formed part of the
agreement between the parties is misconceived. In this regard the appellant had
specifically pleaded in his particulars of claim and replication that the conditions
of contract did not form part of the contract between the parties and were
therefore unenforceable. Though the respondent in its plea pleaded that the
conditions of contract formed part of the contract, the parties reached consensus
at the pre-trial stage that the respondent was not placing any reliance on the
conditions of contract, thus effectively excluding them from the ambit of the case.
The respondent relied solely on the owner’s risk notice to escape liability.

[7] We cannot ignore the pleadings. It is clear that the issue that has always
been at the centre of the dispute between the parties was the applicability of the
owner’s risk notice. And it is also clear that despite the appellant’s stance now on
appeal, the parties reached consensus in terms of which they limited the factual
enquiry that was to feature before the high court and this excluded the conditions
of contract. In fact, the high court specifically found that it was common cause

between the parties that the conditions of contract did not form part of the case.
This finding, for that matter, is not attacked on appeal.

[8] I now consider the appellant’s argument that Jacobs, as his agent, did not
have authority to bind him to the owner’s risk notice. This brings to the fore the
question whether in fact Jacob’s authority was limited. There is no evidence from
Jacobs or anyone else to suggest that Jacob’s authority was limited. In fact, the
evidence is clear that, when handing over the motor vehicle, and signing the
necessary paperwork, there was nothing circumscribing his authority. The
respondent was perfectly justified in relying on Jacobs’ conduct, which evinced
all the attributes of actual authority. It is trite that ‘the law, as a general rule,
concerns itself with the external manifestations, and not the workings, of the
minds of parties to a contract’.1 The conclusion of the high court that Jacobs had
the necessary authority to conclude the contract is beyond reproach. He properly
bound his principal, the appellant, to the terms of the contract which included the
owner’s risk notice.

[9] This brings me to the question whether the owner’s risk notice in this case
could be successfully relied upon by the respondent to escape liability for the
loss of the motor vehicle given that it was found that Jacobs did not see it. The
approach to this question is to enquire whether the respondent acted sufficiently
reasonably in bringing to the attention of its customers in general, and to Jacobs
in particular, the existence of the owner’s risk notice: Durban’s Water
Wonderland (Pty) Ltd v Botha2

‘The answer depends upon whether in all the circumstances the appellant did what was
“reasonably sufficient” to give patrons notice of the terms of the disclaimer.’
See also King’s Car Hire (Pty) Ltd v Wakeling 1970 (4) SA 640 (N) at 643H.

1 Sonap Petroleum (SA) (Pty) Ltd (formerly known as Sonarep (SA) (Pty) Ltd v Pappadogianis
1992 (3) SA 234 (A) at 238I-J.
2 1999 (1) SA 982 (SCA) at 991H-I.

[10] The evidence is that the owner’s risk notice was prominently displayed, in
clear and unambiguous terms, on notice boards at the respondent’s passenger
vehicle office, at the entrance to the reception and at the cashier’s window.
Clearly, it was displayed in such a manner and at such locations on the
respondent’s premises to inform any customer leaving a motor vehicle there of its
applicability. This, to me, was more than sufficiently reasonable and the fact that
Jacobs says he did not see it does not assist the appellant. The respondent was,
in my view, entitled to assume, having displayed the notice in this manner, that
any of its customers would notice it. This is not a case where the disclaimer was
not prominently displayed or is located in a misleading manner as was the case
in Mercurius Motors v Lopez.3

[11] In the result the appeal is dismissed with costs.

__________________
D MLAMBO
JUDGE OF APPEAL

3 2008 (3) SA 572 (SCA) para 33.

APPEARANCES:

COUNSEL FOR APPELLANTS:    M M Segal
INSTRUCTED BY:
Whalley van der Lith, Johannesburg
CORRESPONDENT:
Wessels & Smith Inc, Bloemfontein

COUNSEL FOR RESPONDENT: G Kairinos
INSTRUCTED BY:

Couzyns Inc, Rosebank
CORRESPONDENT:
Hugo & Bruwer Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal

Date:
1 December 2009

Status:
Immediate

Please note that the media summary is intended for the benefit of the
media and does not form part of the judgment of the Supreme Court
of Appeal.

JUAN JACQUES JACOBS V IMPERIAL GROUP (PTY) LTD

The Supreme Court of Appeal (SCA) today confirmed the decision of the South
Gauteng High Court which had ruled in favour of Imperial Group (Pty) Ltd.

The high court had dismissed an action for damages by Jacobs arising from the
loss, through theft, of his Vito Mercedes Benz motor vehicle whilst in the custody
of Imperial Group. The vehicle had been delivered to Imperial by Jacobs’ brother-
in-law, on his instructions, for repairs.

Imperial Group resisted the action on the basis of an owner’s risk notice
displayed prominently at the premises to the effect that:

‘Vehicles are left at owner’s risk
Voertuie word op eienaars risiko gelaat.’

The SCA confirmed the high court’s conclusion that the owner’s risk notice was
incorporated into the contract concluded between the parties and that Jacobs

was bound by it. The SCA also confirmed that Jacobs’ agent, his brother-in-law,
who concluded the contract had the necessary authority to do so.

In the final analysis the SCA upheld the high court’s conclusion that Imperial
Group had acted sufficiently reasonable in prominently displaying the owner’s
notice on notice boards at three locations within its premises. This, the court
found, was sufficient to bring the attention of its customers to the existence of the
notice. This, the SCA further found, shielded Imperial Group from liability for the
loss of the vehicle.