Gert Leopold Ehlers NO and Others v Hendrik Graphorn NO and Others

On 20 June 1998, the KwaZulu-Natal Nature Conservation Board ('the Board') held a game auction where buffalo were sold, described in the catalogue and elsewhere as disease-free, particularly free from corridor disease. Erf 1435 Sinoville (Pty) Ltd ('Sinoville'), represented by Graphorn, purchased six buffalo (Lot 801) for R636,000. These buffalo were subsequently released on the farm Kleine Waterval pursuant to a contract with Tangeni Boerdery Nr 2 ('Tangeni'), represented by Ehlers. Tangeni farmed cattle on this property. The buffalo turned out to be infected with corridor disease, which was transmitted to the cattle via brown ear ticks (bruinoorbosluise), resulting in the death of over 200 cattle and the destruction of the buffalo. The buffalo originated from Weenen Nature Reserve, which had received buffalo from Addo Elephant Park (disease-free) in 1983-1984, but had also received 24 buffalo from Spioenkop Nature Reserve in August 1996. Pathological tests revealed that the Weenen and Spioenkop buffalo were infected, though other source herds were not. The infection was traced to either the introduction of an infected buffalo from Pretoria Zoo (where corridor disease may have existed in 1979) or the introduction of infected brown ear ticks through capture equipment, bedding, or other animals moved from infected areas.

• Whether the Board made a negligent misrepresentation that the buffalo were disease-free
• Whether it was an implied term of the contract between Tangeni and Sinoville that the buffalo would be disease-free
• What standard of care applied to the sale of buffalo as disease-free based on lineage rather than pathological testing
• Whether the permit system and industry practice of selling buffalo as disease-free based on Addo origin without testing was sufficient to negate negligence

1. Tangeni's appeal against the Board succeeded with costs including costs of two counsel. 2. Tangeni's appeal against Sinoville was dismissed with costs. 3. The trial court's order in case 2753/99 was replaced with a declaration that the Board is liable to Tangeni for delictual damages arising from the misrepresentation that the buffalo (Lot 801) were disease-free, and ordering the Board to pay Tangeni's costs including two counsel and expert witness fees. 4. Sinoville's appeal against the Board succeeded with costs, and the Board's appeal against Sinoville was dismissed with costs. 5. The trial court's order in case 2058/01 was replaced with a declaration that the Board is liable to Sinoville for delictual damages arising from the misrepresentation, and ordering the Board to pay Sinoville's costs.

A person makes a negligent misrepresentation when a reasonable person in their position would not have made the representation under the circumstances. When selling buffalo as disease-free based on lineage, a reasonable person must first consider whether there is any possibility the animals could have become infected since removal from a disease-free source. Where such possibilities exist (introduction of infected animals or vectors), cannot be quantified, and the consequences of infection are catastrophic, a reasonable person must verify the representation through available testing, particularly where such testing is inexpensive relative to the value of the animals and potential damages. Industry practice and regulatory compliance (such as permit systems) are merely factors in assessing reasonableness and do not establish a safe harbor where investigation would reveal foreseeable risks. An implied term of a contract must reflect the actual or deemed intention of both parties; it cannot be established where one party clearly relied on a third party's representation rather than on any undertaking by the contracting party.

The court noted that the permit system was never intended as verification of disease status but merely confirmed lineage and that land was registered for disease-free buffalo. The court observed that after the infection was discovered, the Board implemented precautions against tick transmission (treating vehicles and equipment with acaricide, using separate capture materials) which demonstrated acceptance that tick transmission was possible, even though this acceptance was not based on new scientific knowledge. The court commented that expert witnesses who testified that selling buffalo as disease-free based solely on origin was acceptable practice contradicted themselves in other testimony stating that testing was the only reliable confirmation of disease status.

This case establishes important principles regarding negligent misrepresentation in the context of wildlife sales in South Africa. It clarifies that industry practice and regulatory compliance (such as the permit system) do not necessarily establish a reasonable standard of care when the defendant could foresee risks of contamination and could easily verify representations at minimal cost relative to potential harm. The case emphasizes that sellers making representations about disease status must conduct reasonable investigations, particularly where: (1) there is a foreseeable possibility of contamination; (2) the consequences of misrepresentation are catastrophic; and (3) verification is relatively inexpensive. The judgment also provides guidance on establishing implied contractual terms, requiring clear evidence that both parties actually intended or would have intended the term if asked at the time of contracting.