McNaught and Company/ Mark Leathers

Tue, Dec 5, 2017

In the matter between

Mc NAUGHT AND COMPANY/ MARK LEATHERS                                    APPLICANT


SUNDAY TIMES                                                                                            RESPONDENT

MATTER NO: 3515/09/2017


1.         McNaught and Company (“applicant”), a firm of attorneys represented by its memmber Mr Mark Leathers, seeks leave to appeal the Ruling of the Press Ombud dated 17 October 2017 in which the applicant’s complaint against Sunday Times (“respondent”) was dismissed.  The complaint was in respect of an article which appeared in the respondent’s edition of 24 September 2017, with the headline “Gran alleges sin of commiision – Re/Max agent takes R92,000 cut even though seller pulled out”.  The article made for a sorry read.  One Mrs Ellis, a widow, paid to the applicant a full purchase price to buy property from a certain seller; the applicant was to be the transferring conveyancer. Re/Max Advance (“Re/Max”) was the estate agent facilitating the sale. The seller suddenly revoke the power of attorney she had given to the applicant to transfer the property.  Notwithstanding demand from the applicant, the seller refused to restore the power.  The applicant, in their second letter to the seller, then cancelled the agreement of sale on behalf of Mrs Ellis.  The latter was refunded her money by the applicant, but less the agent’s commission, a whopping R92,055.00; this amount  was deducted and paid overt to Re/Max,  a franchisee of Re/Max South Africa (“the franchisor”).

2.         Holding Mrs Ellis liable for the commission was said to be on the basis of a term in the agreement of sale which provided that in the event the sale failed, the seller and the purchaser would be liable to pay it to the agency.  Mrs Ellis complained that her attention was never drawn to that term; she said she was made to sign the agreement on the boot of a car, the agent assuring her that the agreement contained standard terms.  The article referred to some correspondence between Mrs Ellis’s attorneys and the applicant.  It appeared from the correspondence that the applicant held a firm view that the commission was correctly deducted and paid to the agent.  It also appeared that the respondent took up the matter with the franchisor, whose response was that such a clause was not standard, but that a franchisee had the authority to put in their own terms.  Eventually, Mrs Ellis’s money was refunded.

3.         The applicant’s complaint was that neither it nor Re/Max were contacted by the journalist for comment; as a result, the article was one-sided and caused severe commercial harm.

4.         After analysing the facts, the Ombud came to the conclusion that while it would have been better for the journalist to have spoken to Re/Max (a Mr de Lange being the specific agent), he found no breach of the Press Code.  His view is that the journalist did speak to Mr Goslet, Re/Max South Africa’s Chief Executive Officer, who told the journalist that he had spoken to Re/Max Advance.  The Ombud also relied on correspondence between the applicant and Mrs Ellis’s attorneys. He dismissed the complaint.  I agree with the Ombud’s Ruling, for the reasons he gives.  I also wish to add what follows below.

5.         For a start, there are certain fundamental facts which are common cause. 

5.1 A term which holds the purchaser liable for the payment of commission when the seller is the guilty party is unusual; certainly not common or standard.  5.1  The purchaser was innocent, the guilty party being the seller. 

5.3 The applicant did deduct the commission and paid it to the agent. 

5.4 At least at some point, the applicant sought to defend the payment.

No amount of spin doctoring or response from the applicant could have changed these fundamental indisputable facts.

6.         It appears that the opportunity the applicant wanted was for it to advance the argument that it was Mrs Ellis who “cancelled” the agreement.  This is persisted upon in the applicant’s application for leave to appeal, in which the applicant says the Ombud wrongly accepted the article’s statement that the seller suddenly cancelled the agreement.  The applicant says that on the contrary, it was Mrs Ellis who “freely and voluntarily cancelled the sale concerned.”  In reality, the applicant wanted an opportunity to advance what would have amounted to a futile response in that it would not have cut ice with an average reader. An average reade would still have felt that the deal did not fail as a result of any fault on the part of Mrs Ellis, but the seller.  The sympathy which the applicant complains that it was being whipped up by the article in favour of Mrs Ellis would not have been dispelled.  For that matter, even before a court of law, no fault would have been found on the part of Mrs Ellis for the failure of the deal.  While it may constitute brilliant juristic reasoning (which the applicant says it was not given the opportunity to advance) that it was Mrs Ellis who “cancelled” the contract, sympathy both in the court of public opinion and the court of law would still lie with her as an innocent party. Granting the applicant the opportunity to comment, only for it to davance the kind of argument above, would have been a futile exercise.

7.         As the respondent says in opposing the application, this was an article in a newspaper; it was not an assignment written by a law student.  All the article was saying was that it was through no fault of Mrs Ellis that the deal was scuppered; the deal failed because the seller revoked the power of attorney.  The applicant’s statement that Mrs Ellis freely and voluntarily cancelled the deal cannot be correct; “freely and voluntarily”, when the power of attorney to transfer property has been revoked?  Even in terms of the law proper (as opposed to a newspaper context), the failure of the deal cannot be as a result of any fault on the part of Mrs Ellis; the seller was to blame.  Indeed, in its letters of 26 July 2017 and 17 August 2017, the applicant states in so many words that the seller would be the guilty party.  This is precisely the message conveyed by the article.  In fact, in both letters, it is stated by the applicant to the seller that she would be liable for the agent’s commission; but despite this, the applicant took money from Mrs Ellis to pay the agent.  In the article, Mrs Ellis is quoted as saying that she had done everything and on time and did not breach the agreement; of course she is absolutely right.  The legalistic argument by the applicant about who “cancelled” the deal holds no water in relation to the content and context of the article in a newspaper for public consumption.

8.         The respondent relied on correspondence between Mrs Ellis’s lawyers and the applicant; obviously, the correspondence speaks for itself.  Notably, in the correspondence, the applicant defended taking Mrs Ellis’s money to pay the agent, a conduct which flies in the face of what is said in the applicant’s two letters referred to above. The applicant, being the author of the letters, was in posession their possession and aware of their content even before the matter reached the Ombud; indeed, even as at the time it lodged the complaint.

9.         For all the reasons given above, as well as those by the Ombud, my view is that the application has no reasonable prospects of success before the Appeals Panel of the Pess Council; it is therefore dismissed

Dated this 4th day of December 2017

Judge B M Ngoepe, Chair, Appeals Panel