THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Reportable
Case No: 978/2018

In the matter between:

ATLANTIC BEACH HOMEOWNERS ASSOCIATION NPC
FIRST APPELLANT

HARRY WHITE
SECOND APPELLANT

ELMARIE CAMPBELL REAL ESTATE (PTY) LTD
THIRD APPELLANT

ELMARIE CAMPBELL
FOURTH APPELLANT

and

THE ESTATE AGENCY AFFAIRS BOARD
RESPONDENT

Neutral citation:
Atlantic Beach Homeowners Association NPC v The Estate Agency
Affairs Board (978/2018) ZASCA 112 (16 September 2019)

Coram:
Navsa, Wallis, Mbha and Dambuza and Van Der Merwe JJA

Heard:

15 August 2019

Delivered:

16 September 2019

Summary: Estate Agents – whether the first and second appellants operated as estate
agents in terms of the Estate Agency Affairs Act 112 of 1976 – court held that by
concluding and implementing a property partner agreement the first and second
appellants did not hold themselves out or advertise themselves as estate agents –
appeal upheld with costs.

______________________________________________________________________

ORDER
______________________________________________________________________
On appeal from: Western Cape Division of the High Court, Cape Town (Steyn J sitting
as court of first instance):
1 The appeal is upheld with costs.
2 The order of the court a quo is set aside and replaced with the following:
‘a) The respondent’s decision to charge the appellants as communicated to the
appellants on 11 April 2016 is hereby reviewed and set aside.
b) The respondent is interdicted from proceeding with the prosecution of the said
charges against the appellants.
c) The respondent is ordered to pay the applicants’ costs.’

______________________________________________________________________

JUDGMENT
______________________________________________________________________

Mbha JA (Navsa, Wallis, Dambuza and Van Der Merwe concurring):

[1] This appeal is against the judgment and order of the Western Cape Division of
the High Court, Cape Town (per Steyn J), in terms of which the Court dismissed the
appellants’ application for an order: declaring that the first and second appellants were
not estate agents as defined in s 1 of the Estate Agency Affairs Act 112 of 1976 (the
Act); reviewing and setting aside the decision of the respondent to charge the

appellants with contraventions of the Act; and interdicting the respondent from
proceeding with the prosecution of the disciplinary proceedings against the appellants.
The basis of the judgment was that it was inappropriate for the Court to intervene in
unterminated disciplinary proceedings. This appeal is with leave of the Court a quo.

[2] The first appellant, Atlantic Beach Homeowners Association NPC (ABHOA) is the
home owner’s association for the Atlantic Beach Estate (the estate), situated in
Melkbosstrand on the West Coast outside Cape Town. Its membership consists of
owners of immovable property within the estate and its object is the control over and
maintenance of buildings, services and amenities within the estate. The second
appellant, Harry White (Mr White) is ABHOA’s chief executive officer. The third
appellant, Elmarie Campbell Real Estate (Pty) Ltd (Pam Golding), a franchisee of the
Pam Golding Group, is an estate agent as defined in the Act. The fourth appellant,
Elmarie Campbell (Ms Campbell) is the managing director of Pam Golding. The
respondent is the Estate Agency Board (the Board) established under s 2 of the Act.

[3] During August 2015, the respondent charged the appellants with certain alleged
contraventions of the Act. The charges emanated from an agreement that had been
concluded between ABHOA represented by Mr White and Pam Golding, duly
represented by Ms Campbell, on 9 July 2015. The agreement, styled Property Partner
Agreement (PPA), was for a three year period and provided for the appointment of Pam

Golding as ABHOA’s property partner, on a non-exclusive basis,1 for the marketing of
properties forming part of the estate.

[4] In terms of the agreement, ABHOA agreed to grant Pam Golding certain
marketing benefits which were described in clause 4 of the agreement. These included
that ABHOA would, at its cost and expense: display Pam Golding’s name and branding
on ABHOA’s marketing pamphlet and map of the estate; on a weekly basis cause one
property to be advertised in a local newspaper and in ABHOA’s newsletter; display a ‘for
sale’ sign branded with Pam Golding’s name and corporate logo on the relevant
property; provide access to ABHOA’s electronic media advertising template; entitle Pam
Golding to indicate on its corporate stationery that it was associated with ABHOA;
provide residents of the estate with a fridge magnet which included Pam Golding’s
contact details, provide a link from ABHOA’s website to that of Pam Golding in respect
of properties for sale; and display Pam Golding’s contact details and logo at all
entrances to the Estate.

[5] As a consideration for these marketing benefits, Pam Golding would pay
ABHOA a marketing fee equal to 1%, excluding value-added tax, of the gross purchase
price of each property sold by Pam Golding up to a purchase price of R5 million, and
0.5% of anything above that price. In addition to payment of the marketing fee, Pam
Golding would be obliged at all times to use its best endeavours to promote and extend
sales of properties in the estate and enhance its reputation by making all efforts to

1 Clause 3.2 of the agreement expressly recorded that it was not intended that the relationship created in
terms of thereof was to be that of a partnership or joint venture and that the agreement was not to be so
construed.

promote it. Pam Golding also warranted that its sole business was to operate as an
estate agency and that all the necessary licences, certificates and permits necessary to
operate the business of an estate agency were in place.

[6] What precipitated the charges against the appellants was a complaint lodged
with the Board by attorneys representing certain estate agents, against Pam Golding
and Ms Campbell. In essence, the complaint was that ABHOA granted to Pam Golding
the exclusive right to market properties within the estate, in consideration for
commission of 1% of the purchase price of any property sold in the estate through Pam
Golding. Significantly, no complaint was laid against ABHOA and Mr White.

[7] ABHOA and Mr White were charged on three counts. Count 1 was an alleged
contravention of s 26 of the Act, which requires any person who performs any act as an
estate agent to be a holder of a valid fidelity fund certificate. It was alleged that during
July 2015 ABHOA and Mr White, without holding a valid fidelity fund certificate issued
by the Board, operated or held themselves out to be estate agents and signed the PPA
in terms of which they agreed to act as  ‘spotters’.  Listed under this general charge
were various alleged transgressions which were in effect obligations undertaken by
ABHOA in terms of clause 4.2 of the PPA.

[8] Count 2 was an alleged contravention of s 34A of the Act read with regulation 2.4
of the code of conduct published on 24 December 1992,2 in that during the relevant
period ABHOA and Mr White received or contracted for remuneration or other payment
as an estate agent, without holding a valid fidelity fund certificate. This charge arose
from the stipulation for remuneration in clause 5 of the PPA.

[9] Count 3 was an alleged contravention of regulation 2.4 of the code of conduct
and regulation 2(c) of the Specifications of Service 1981. The allegation was that during
the relevant period, ABHOA and Mr White had charged for and received a consideration
of 1% of the gross purchase price of each property sold by Pam Golding and Ms
Campbell in respect of canvassing the sellers or purchasers of immovable property
situated within the estate, in exchange for the marketing benefits and other estate agent
facilities afforded to Pam Golding.

[10] The single charge against Pam Golding and Ms Campbell was based on clause
5 of the PPA. It was alleged that in breach of regulation 2.1 of the code of conduct,3
read with regulation 2(c) of the Specifications of Services 1981, Pam Golding and Ms
Campbell undertook to pay ABHOA the marketing fee of 1% of the gross purchase price
of each property sold by Pam Golding or Campbell of sales value up to R5 million and

2 GN R3415 in GG 14489: In terms of the s8(b) of the Act, the Board has the power to frame and publish,
with the approval of the Minister of Trade, a code of conduct which shall be compiled with by estate
agents and to take such steps as may be necessary or expedient to ensure such compliance.
3 Regulation 2.1 of the code of conduct provides that an estate agent shall not in or pursuant to the
conduct of his business do or omit to do any act which is or may be contrary to the integrity of estate
agents in general.

0,5% (percentage) of the sale value and above R5 million, for the duration of the PPA,
at a time when the latter had not been issued with a valid fidelity certificate.

[11] Upon receipt of the charges, the appellants approached the court a quo seeking
a declarator that ABHOA and Mr White were not estate agents as defined in the Act.
They also sought an order reviewing and setting aside the Board’s decision to charge
them, averring that the charges against Pam Golding and Ms Campbell were based on
what the appellants contended to be the Board’s misapprehension that ABHOA and Mr
White had been conducting themselves as estate agents. The appellants further sought
an order interdicting and restraining the Board from proceeding with the prosecution of
the charges against them.

[12] On 20 April 2018, the court a quo decided the application on the basis that the
question whether ABHOA and White had operated as estate agents, was one which
properly fell to be determined by the Board’s committee of enquiry and that it would be
inappropriate for the court to decide this issue and to grant the consequential review
and interdictory relief. In arriving at this conclusion, the court a quo held that no
exceptional circumstances had been shown to justify the intervention of the court at that
stage of incomplete disciplinary proceedings.

[13] Before us, the appellants’ initial stance was to attack the court a quo’s approach
that it was inappropriate to intervene in undetermined disciplinary proceedings. They did
however argue that the issue of jurisdiction of the Board was a threshold question that

had to be determined in advance of the disciplinary proceedings in question. The Act
did not empower the Board to decide whether or not someone fell within the definition of
an estate agent and therefore, so the argument continued, this was a matter of statutory
interpretation that only a court could decide. In the light of the conclusion that I have
reached, it is not necessary to express a view on the latter argument.

[14] Ultimately,  Counsel for both parties agreed that the matter fell to be resolved by
determining whether or not ABHOA or Mr White, on the evidence relied upon by the
Board, performed any act as an ‘estate agent’ as defined. Only para (a) of the definition
of ‘estate agent’, as set out in the Act is presently relevant. It provides that estate agent:
‘means any person who for the acquisition of gain on his own account or in partnership, in any
manner holds himself out as a person who, or directly or indirectly advertises that he, on the
instructions of or on behalf of any other person –
(i) sells or purchases or publicly exhibits for sale immovable property or any business
undertaking or negotiates in connection therewith or canvasses or undertakes or offers to
canvass a seller or purchaser therefor; or
(ii) lets or hires immovable property . . .; or
(iii) collects or receives any moneys payable on account of a lease of immovable property . . . ;
or
(iv) renders any such other service as the Minister on the recommendation of the board may
specify from time to time in the Gazette.’

[15] In Rogut v Rogut4 Holmes AJA stated that the words ‘for the acquisition of gain’
modify the holding out or the advertising, rather than the selling, buying or letting of
property. He said that this connotes that an estate agent, as defined, is a person who is,
inter alia, looking for business. Thus, a person who merely does one or more of the acts
listed in subparagraph (i) to (iv) of the definition, does not thereby bring himself or
herself within the definition, unless he has also held himself out or so advertised, for the
acquisition of gain, that he is a person who does these things. Holmes AJA also
observed that if the legislature had intended that the performance simpliciter of any act
listed in paras (a)(i)(ii), (iii) and (iv) of the definition of ‘estate agent’ should render the
person performing it subject to the Act, he would have expected it to say so. It follows
that the key words in the definition of estate agent are ‘holds out’ or ‘advertise’. Clearly,
they must precede the instructions or mandate and without such ‘holding out’ or
‘advertising’, there cannot be an ‘estate agent’ as defined.

[16] In the result, the issue to be decided in this case crystallised to whether ABHOA
or Mr White has in any manner, directly or indirectly, held themselves out as persons
who sell properties of others for commission or advertised themselves as persons who
do so. In this regard, the Board highlighted the obligations of ABHOA which are set out
in various clauses of the PPA, and submitted that the terms of the PPA and its
implementation demonstrated that for the acquisition of gain, ABHOA had held itself out
to be a property partner of Pam Golding for the sale of immovable properties in the
estate, which constituted conduct of an estate agent as defined in the Act.

4 Rogut v Rogut 1982 (3) SA 928 (AD) at 937H-938A-C.

[17] It is common cause that ABHOA had implemented the PPA, in the following
manner:
(i) In the property section of the Sunday Times Neighbourhood Marketplace publication
of 31 January 2017, the ‘Agency Guide’ referred to ‘Atlantic Beach Estate’, as appearing
on page 19 thereof. On this page, however, properties were advertised for sale by Pam
Golding and ABHOA was only indicated as its ‘sole property partner’.
(ii) ABHOA allowed Pam Golding to advertise estate properties for sale in the weekly
newsletter distributed by ABHOA to residents;
(iii) The relevant ‘For Sale’ signs, ‘Sold’ signs and displays at the entrance to the estate
displayed the names and logos of the estate and Pam Golding. On all of these it was in
some or other manner indicated that Pam Golding was a ‘property partner’ in relation to
the estate. This also applied to the fridge magnets.
(iv) Under the words ‘Property for Sale’ ABHOA’s website provided a link to the website
of its property partner, Pam Golding.

[18] A careful perusal of the property partner agreement and the evidence of
implementation thereof does not reveal that ABHOA or Mr White in any manner held
themselves out or advertised that they sought mandates to sell property. There is no
evidence that ABHOA or Mr White solicited approaches from the general public to
purchase or sell properties on their behalf for commission. The property partnership
agreement involved nothing more than the provision by ABHOA to Pam Golding of
marketing benefits, which are specified in the agreement in return for the consideration
specified in the PPA.

[19] For these reasons, I am satisfied that there is nothing placed before this court
that suggests that, by concluding and implementing the property partner agreement,
ABHOA or Mr White held themselves out or advertised themselves as persons that
seek to sell the properties of others for commission. Thus there is no evidence that they
acted as estate agents as defined. In the result they should not be subjected to the
envisaged disciplinary proceedings. As the charge against Pam Golding and Ms
Campbell is entirely dependent on ABHOA or Mr White having acted as estate agents,
the same applies to them. I find, accordingly, that the appellants have made out a case
for the grant of the orders in paragraphs 2 and 3 of the Notice of Motion. In the
circumstances the following order is made:
1 The appeal is upheld with costs.
2 The order of the court a quo is set aside and replaced with the following:
‘a) The respondent’s decision to charge the appellants as communicated to the
appellants on 11 April 2016 is hereby reviewed and set aside.
b) The respondent is interdicted from proceeding with the prosecution of the said
charges against the appellants.
c) The respondent is ordered to pay the applicants’ costs.’

_______________
B H Mbha
Judge of Appeal

APPEARANCES:

For Appellant:

E Fagan SC
Instructed by:

Hayes Inc, Cape Town

Webbers Attorneys, Bloemfontein

For Respondent:

S P Rosenberg
Instructed by:

Edward Nathan Sonnenbergs, Cape Town

Symington & De Kok Attorneys, Bloemfontein