Desmond James Thompson v South African Broadcasting Corporation

The SABC entered into a sponsorship agreement and a television production commissioning agreement on 10 December 1993 with an entity described as Houston Video & Film Distributors (Pty) Ltd. The appellant, Desmond James Thompson, signed the agreements on behalf of this entity, knowing that no such company existed. Despite this, the television programme was produced by Thompson and the SABC paid R240 581,04 for production. Only part of the sponsorship fee was paid, leaving an outstanding balance. The SABC initially sued Thompson as principal, which failed, and later amended its claim to one in delict based on fraudulent or negligent misrepresentation, alleging that it was induced by Thompson’s misrepresentations about the existence of the company to enter into the agreements and to pay the production fee.

The appeal was upheld with costs. The order of the court a quo was set aside and replaced with an order granting absolution from the instance, with no order as to costs in the court a quo.

The case is significant for clarifying the requirements of causation and proof of damage in delictual claims based on fraudulent misrepresentation in South African law. It confirms that even where fraud is established, a plaintiff must still prove that the misrepresentation causally induced the transaction and resulted in actual patrimonial loss.