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[2018] ZAWCHC 72
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Voges v Business Venture Investments No 1034 (Pty) Ltd (12352/2017) [2018] ZAWCHC 72 (4 June 2018)
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Certain
personal/private details of parties or witnesses have been
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IN THE HIGH COURT OF
SOUTH AFRICA
WESTERN CAPE DIVISION,
CAPE TOWN
REPORTABLE
CASE
NO: 12352/2017
In
the matter between:
HENDRINA
MARIA
VOGES
Plaintiff
and
BUSINESS
VENTURE INVESTMENTS
NO
1034 (PTY)
LTD
Defendant
JUDGMENT
DELIVERED ON MONDAY 4 JUNE 2018
GAMBLE
J:
INTRODUCTION
[1]
The defendant has noted an exception to the
particulars of claim in an action in which the plaintiff, an 89 year
old woman, seeks
the repayment of the sum of R485 000 pursuant to the
cancellation of a contract with the defendant. For the sake of
convenience
I shall refer to parties as they are cited in the claim
in convention.
[2]
The facts are fairly straight forward. In
October 2010 the plaintiff purchased a right of occupation in respect
of a unit in the
frail care section of a retirement village in
Stellenbosch called “
Stellenoord
”
(hereinafter referred to as “
the
centre
”) in terms of a written
agreement (“
the agreement”)
concluded between herself, acting
personally, and the defendant, duly represented. The centre is said
to have been a place of residence
maintained for the accommodation
and care of aged persons and as such fell within the ambit of the
Housing Development Schemes
For Retired Persons Act, 65 of 1988 (“
the
Act”).
The purchase consideration
for the said right of occupation was the amount of R485 000,
which was paid before the plaintiff
took up residence at the centre
on 16 October 2010. The agreement contains a host of terms and
conditions only a few of which are
relevant to these proceedings, as
will appear hereunder.
[3]
Evidently the centre ran into financial
difficulty in 2016, so much so that the management of the defendant
decided to close it
on short notice to the elderly residents, the
plaintiff being one of those affected by the decision. On 16 August
2016 the defendant’s
attorney, Mr. Dunn, wrote to the plaintiff
on behalf of his client bemoaning the fact that the alleged
misconduct and intervention
of others had brought the centre to its
knees financially, and informing her of the imminent closure thereof.
It was said that
the attachment by the Sheriff of certain assets at
the centre on 11 August 2016 had rendered the proper running thereof
ineffective.
[4]
Prior to that, however, in a letter dated
12 August 2016 Strydom’s Attorneys of Randburg informed Mr.
Gary van der Merwe (a
representative of the respondent) of events
which occurred at the centre on 11 August 2016. It is common cause
that Mr. Hendrik
Strydom, the plaintiff’s son, is the sole
director of H.Strydom Inc, a firm of attorneys which practices as
“Strydom’s
Attorneys”. For the sake of convenience
I shall refer to the firm as “
Strydoms”.
[5]
In that letter Mr. Strydom recorded that he
had spoken to the respondent’s Mr. Johan Schneider the previous
day, that the
latter had informed him of the respondent’s
inability to render the required services to the plaintiff and that
it had therefore
been necessary to find alternate accommodation for
the plaintiff with immediate effect. Mr. Strydom also recorded that
on the same
day Mr. van der Merwe had informed him telephonically
that “
the amount of R485 000...
due
to Mrs. H.M.Voges,
will be
settled within 6 (six) months.”
(Emphasis
added)
[6]
On 19 August 2016 Mr. Dunn replied to Mr.
Strydom’s letter of the 12
th
,
apologizing for the inconvenience caused to the plaintiff while
noting that –
“
5.
My clients wish to place on record that the life right claim
of
Mrs.
Voges
will be paid out in terms of the
life right agreement or sooner if the sale of the retirement center
is concluded sooner.”
(Emphasis
added)
[7]
Six months came and went and it is common
cause that the centre had still not attracted a purchaser. This
notwithstanding, and despite
several reasonable demands from Mr.
Strydom, the acknowledged indebtedness to the plaintiff remained
outstanding. Accordingly,
on 11 July 2017 the plaintiff issued
summons against the defendant for repayment of the sum of R485 000
together with interest
and costs.
[8]
The
defendant opposed the action and on 28 August 2017 noted an exception
to the particulars of claim on the basis that they did
not disclose a
cause of action, contending that the plaintiff lacked the requisite
locus
standi.
It
is said in the notice of exception that the agreement contains a
stipulatio
alteri
[1]
in favour of Strydoms and that that entity is accordingly the only
party which has standing to sue for repayment of the value of
the
life right. The plaintiff took issue with the exception and when the
matter was argued before this court, Adv T.Sarkas appeared
on her
behalf while Mr. Dunn appeared on behalf of the defendant. The court
is indebted to the legal representatives for their
heads of argument
and submissions which have assisted in the preparation of this
judgment.
THE
APPROACH ON EXCEPTION
[9]
The
principles as to how to deal with an exception are by now trite. The
factual averments made in the particulars of claim are
to be taken as
being correct unless they are so improbable that they cannot be
accepted.
[2]
The test to be
applied to those averments is whether on all possible readings of
these facts no cause of action is made out.
[3]
It is for the excipient to further satisfy the court that the
conclusion of law for which the plaintiff contends cannot be
supported on every interpretation that can be placed on the facts
[4]
and the excipient is confined to the
complaint
contained in the notice of exception.
[5]
[10]
When dealing with an exception based on an
alleged failure to disclose a cause of action, the court will
consider whether the particulars
of claim either expressly or by
implication allege -
“
every
fact which it would be necessary for the plaintiff to prove, if
traversed, in order to support his right to the judgment of
the
Court. It does not comprise every piece of evidence which is
necessary to prove each fact but every fact which is necessary
to be
proved.”
[6]
[11]
Finally,
in order for an exception that a cause of action is not disclosed to
succeed, it must be shown that
ex
facie
the
allegations made by the plaintiff (and any document upon which her
cause of action may be based) the claim is in fact bad in
law: it is
not sufficient that it may be construed to be bad in law.
[7]
THE
MATERIAL TERMS OF THE AGREEMENT
[12]
In clause 11 thereof provision is made for
the termination of the right of occupation of a unit purchased under
the agreement.
“
11.1.39
The purchaser’s occupation right shall terminate-
·
upon his or her death, or in the event
of a married couple, the death of the surviving spouse;
·
as agreed between the seller and
purchaser;
·
in the event that the purchaser fails or
neglects to comply with any of the conditions contained in this
agreement or the house
rules, within 10 (ten) business days or such
shorter or longer period as the seller in its discretion may decide
and after the
date of delivery of a letter to that effect in which
the purchaser or his/her spouse is requested to comply with a
condition/s;
·
in
the event that the purchaser fails or neglects to pre-pay the monthly
levy on or before the 25
th
day of each month as contemplated in this agreement,
subject
to the provisions of
clause
25
[8]
herein;
·
on
relocation in terms of clause 15.1.45
[9]
“
The
passages underlined above and hereunder are manuscript additions to
the typed text of the
pro forma
agreement.
[13]
The agreement goes on to record the
consequences of such acts of termination.
“
11.1.40
Upon the termination of the occupation right as contemplated in 1.39
–
·
the
seller shall repay… the full purchase price…
to
H.Strydom Incorporated No. 97/04372/21 to be deposited in the bank
account of H.Strydom Incorporated who shall distribute the
purchase
price in accordance with clause 36
[10]
·
all risk and benefit in and to the
occupation right and the unit shall revert to the seller.
11.1.41 The repayment
of the amount as contemplated in 1.40 above shall occur
on receipt
of the purchase price on the re-sale of the
occupation right,
but
within 6 (six) months after the termination date, provided
that the purchaser and/or his/her spouse, as the case may be, has or
have vacated the unit.”
[14]
Clause 36, which is referred to in clause
11.1.40, appears entirely in manuscript at the end of the agreement
immediately before
the signatures of the parties and reads as follows
–
“
36.
Termination of Occupation Right
The amount paid to
H.Strydom Incorporated (No.97/04372/21) is on receipt thereof to be
distributed as follows.
1.
R300 000,00 to Hendrik
Strydom (ID No […]) or his heirs, executors or assigns.
2.
R100 000,00 to Cornelius
Heremias Strydom (ID No […]) or his heirs, executors or
assigns.
3.
R85 000,00 to Anton Johan
van Niekerk (ID No […]) or his heirs, executors or assigns.”
[15]
After the signatures of the seller and the
purchaser at the end of the agreement there is a third signature
above the following
manuscript insertion in the agreement.
“
H.Strydom
Incorporated
No.97/04372/21.
Duly authorized
Accepting
the terms of clause 11.1.40 and 36 herein”
It
is common cause that the signature appended above this insertion is
that of Mr. Hendrik Strydom.
[16]
In clause 1.1.1 the parties to the
agreement are defined as –
·
“
Business Venture Investments No
1034 (Proprietary) Limited, and
·
The Party named and described in
Appendix 1.”
Appendix
1 defines the purchaser as the plaintiff herein whose domicile is
given as care of Strydoms.
THE
STIPULATIO ALTERI
ARGUMENT
[17]
The defendant’s argument on exception
is that the provisions of clauses 36 read with 11.1.40 and 11.1.41 of
the agreement
constitute a
stipulatio
alteri
in favour of Strydoms and that
it is only that entity which has the standing to recover the amount
due to the plaintiff. I should
point out that Mr. Dunn accepted
unequivocally in argument that the defendant had breached the
agreement and that the value of
the life right (which for the sake of
convenience I shall call “
the
purchase price”
) was repayable.
The only question, he said, was to whom?
[18]
I should mention
en
passant
that it does not appear from
the papers why no tender for repayment has been made by the defendant
to Strydoms nor why the demand
by the plaintiff for repayment of an
acknowledged debt is being so resolutely defended, given that payment
to Strydoms would effectively
be to her son who appears to be
managing the aged plaintiff’s affairs. After all, in the
correspondence referred to above
more than one undertaking was given
to repay to the plaintiff what was acknowledged to be due to her. The
stance adopted is even
more difficult to understand in light of the
fact that in the initial written demand for repayment of the purchase
price, Mr. Strydom
asked on behalf of his mother that payment be made
into Strydoms’ bank account. It might ultimately be that the
defendant
is a recalcitrant debtor which is playing for time, but
that issue does not fall for determination in these proceedings.
[19]
The
principles applicable to a
stipulatio
alteri
were
succinctly summarised thus by Smalberger JA in
Total
South Africa
[11]
“
As
was pointed out by Schreiner JA in
Crookes
NO and Another v Watson and Others
1956 (1) SA 277
(A) at 291 B-C, ‘a
contract for the benefit of a third person is not simply a contract
designed to benefit a third person;
it is a contract between two
persons that is designed to enable a third person to come in as a
party to a contract with one of
the other two’.
The
mere conferring of a benefit is therefore not enough; what is
required is an intention of the part of the parties to a contract
that a third person can, by adopting the benefit, become a party to
the contract.
(Joel Melamed and Hurwitz
v Cleveland Estates (Pty) Ltd; Joel Melamed and Hurwitz v Vorner
Investments (Pty) Ltd
[1984] ZASCA 4
;
1984 (3) SA 155
(A) at 172D-F)”
The
argument advanced by the defendant, therefore, is that when Mr.
Hendrik Strydom appended his signature to the agreement on 6
October
2010 his firm, Strydoms, there and then became a party to the
contract and acquired the right (seemingly the exclusive
right) to
demand payment of the purchase price upon termination of the
contract.
[20]
The argument has to be considered, firstly,
in light of the provisions of clause 1.14 of the agreement which is
to the following
effect.
“
No
provision of this agreement shall (unless otherwise stipulated)
constitute a stipulation for the benefit of any person
(stipulatio
alteri)
who is not a party to this
agreement.”
The
significance of this provision is that the contracting parties (in
reality the defendant as the author of the
pro forma
agreement)
pertinently gave consideration to the importation of a
stipulation
alteri
into the agreement and were careful to circumscribe the
extent thereof.
[21]
The
agreement falls to be interpreted in accordance with the mandated
approach in
KPMG
and the cases which follow it
[12]
.
As Unterhalter AJ succinctly suggested in
Betterbridge
the
preferred approach is “
a
unitary endeavour requiring the consideration of text, context and
purpose.”
The
context of the agreement in this matter is that it is sourced in the
provisions of the Act: that will be the point of departure
in
interpretation and application of the agreement.
[22]
What was the overall purpose of the
agreement and what does a contextual reading thereof suggest about
the parties’ intentions?
In the first instance, the purpose of
the agreement is to provide accommodation to elderly people who can
afford to pay therefor.
It contains all manner of rules and
regulations regarding the way in which residents must conduct
themselves, how their rights
of occupation may be exercised and how
those rights will revert to the owner once occupation is relinquished
by the purchaser and/or
the surviving spouse in the event of death of
the other spouse.
[23]
Further,
and as already observed above, the agreement is particular about the
ambit and extent of any
stipulatio
alteri
arising
therefrom: such a provision can only operate in circumstances where
the person to be benefited thereby is actually a party
to the
agreement itself. The clause seems to find its genesis in s7 of the
Act which limits the class of person to whom a housing
interest
[13]
under the Act may be transferred to a retired person as defined under
the Act
[14]
, or the spouse of
such a retired person. In addition, a transfer of such interest to
any party other than a retired person (as
defined) can only be
effected with the consent of all the other holders of housing
interests in the centre.
[24]
The intention on the part of the
Legislature is clear: the purchase, occupation and transfer of
housing interests in centres falling
under the Act is to be the
preserve of older persons who require such accommodation and any
deviation from that situation must
enjoy the unanimous support of the
remaining residents. Any person seeking to claim contractual rights
under a
stipulatio alteri
will
be subject to the provisions of the Act and restricted by any express
terms in the agreement. In such circumstances, it is
hard to
understand how Strydoms, a corporate entity, could be regarded a
party to the agreement entitled to demand the primary
rights
contemplated under it. Simply put, the context and purpose of the
agreement do not accommodate a
locus
standi
argument such as that advanced
by the defendant. Rather, it seems as if one is dealing here with the
more restricted category of
benefit described by Smalberger AJ in
Total SA
,
incorporating His Lordship’s reference to the earlier decision
of that court in
Joel Melamed.
[25]
One cannot lose sight either of the
inherent probabilities which might accompany the purchase of a right
of occupation in a retirement
centre such as “
Stellenoord”.
Take, for example, the situation where
an elderly parent is unable to afford the cost of accommodation and
family members step in
and assist. In such circumstances, it is
conceivable that provision may be made in the agreement for the
payment of any amounts
so advanced to be paid to the family member(s)
upon, for instance, the demise of the occupant. It is accordingly
possible that
at the trial of this matter, evidence may be given
regarding background and surrounding facts which explain why
provision was made
in clause 11.1.40 for the payment of the purchase
price to Strydoms.
[26]
In
such circumstances, the family members’ signature to the
agreement would not constitute accession to a
stipulatio
alteri
but
would rather entitle the person(s) to payment as an
adjectus
solutionis causa.
[15]
Such
an
adjectus
is,
as the court put it in
Stupel
–
“
(A)n
entity, other than the creditor, to whom, by agreement between the
debtor and the creditor, the debtor is entitled to pay what
is due to
the creditor and so discharge its obligations.”
[27]
The signature of Strydoms at the end of the
agreement read together with the qualification attached to such
signature, was, on the
face of it, intended to provide for the
incorporation of that entity as a party to the agreement. It
therefore falls within the
ambit of the limitation imposed in clause
2.1.14 of the agreement. However, following
Total
SA,
I consider that the qualification to the signature appears to have
been intended to limit Strydoms’ incorporation into the
agreement only as a party to whom the benefits conferred by clause
11.1.40 of the agreement would accrue. That is, as the party
to whom
the purchase price was to be paid upon the termination of the
plaintiff’s life right under the agreement. Strydoms
is not,
for instance, entitled to demand transfer of the right of occupancy
upon the demise of the plaintiff or of any other rights
accruing
under the agreement.
[28]
The right conferred on Strydoms by clause
11.1.40 to receive payment must be read in conjunction with clause
11.1.39 which prescribes
the circumstances under which an occupant’s
right of occupation must terminate before the purchase price can be
repaid. Those
5 specified events have been set out in para 12 above
and, importantly, do not include termination of occupation pursuant
to the
cancellation of the agreement by the purchaser as a result of
the defendant’s breach thereof.
[29]
In argument, Mr. Dunn suggested that the
facts of the case established an agreement (as contemplated in the
second bullet point
in clause 11.1.39) between the seller and the
purchaser to terminate the plaintiff’s right of occupancy.
However, he was
unable to point conclusively to any such agreement,
either in the particulars of claim or in any of the documents
attached thereto
and I am not persuaded that the defendant’s
obligation to repay the purchase price arises from an agreement with
the seller.
In the result, I am of the view that the defendant has
not established (on any reading of the particulars of claim, together
with
the annexures thereto) that the clause in question constitutes a
stipulatio alteri
in favour of Strydoms, that that firm alone has the
locus
standi
to recover the admitted
indebtedness and that the plaintiff is non-suited in these
proceedings.
[30]
On
the contrary, the plaintiff’s entitlement to sue for repayment
of the purchase price is a right accruing to her from her
decision to
cancel, an election which is not disputed by the defendant in light
of its unequivocal admission that it breached the
agreement. Having
accepted that breach and validly cancelled the agreement, it is
beyond debate that the plaintiff is “
entitled
in principle to claim repayment of the purchase price, paid to the
seller in terms of the contract prior to its cancellation”.
This
is because “
(i)n
the contractual relationship between the plaintiff and the defendant,
the cancellation of the contract resulted in the defendant
becoming
obliged to make restitution to the plaintiff of her performance.”
[16]
CONCLUSION
[31]
In the result I am satisfied that the
defendant has failed to establish that the plaintiff lacks the
requisite
locus standi
in
these proceedings to recover the purchase price.
ORDER
OF COURT
The
defendant’s exception is dismissed with costs.
__________________
GAMBLE
J
[1]
Also known as a contract for the benefit of a third party
[2]
Voget
and others v Kleynhans
2003
(2) SA 148
(C) at 151H
[3]
Lewis v
Oneanate (Pty) Ltd and another
[1992] ZASCA 174
;
1992 (4) SA 811
(A) at 817 F
[4]
Trustees
for the Time Being of the Children’s Resource Centre Trust and
others v Pioneer Food (Pty) Ltd and others
2013 (2) SA 213
(SCA) at [36]
[5]
Alphina
Investments Ltd v Blacher
2008 (5) SA 479
(C) at 483D
[6]
McKenzie
v Farmers’ Co-Operative Meat Industries Ltd
1922 AD 16
at 23.
[7]
Vermeulen
v Goose Valley Investments (Pty) Ltd
2001 (3) SA 986
(SCA) at 997B.
[8]
Clause 25 is the breach clause in the agreement providing for 10
days written notice to be given to the defaulting party to remedy
before any cancellation can be effected. The clause is not relevant
to the dispute at this stage.
[9]
Clause 15.1.45 permits the management of the centre to relocate an
occupant of a unit to another unit or the frail care facility
in the
event that the occupant becomes unable to maintain herself. This
clause too is not presently relevant to the dispute.
[10]
Portions of the typed text which are deleted in manuscript have been
omitted.
[11]
Total
South Africa (Pty) Ltd v Bekker NO
[1991] ZASCA 183
;
1992 (1) SA 617
(A) at 625E-G
[12]
KPMG
Chartered accounts (SA( Pty) ltd v Securefin Ltd
2009
(4) SA 399
(SCA) at [39];
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012 (4) SA 593
(SCA) at [19];
Bothma-Batho
Transport (Edms) Bpk v S.Bothma & Seun Transport (Edms) Bpk
2014 (2) SA 494
(SCA) at [12];
Betterbridge
(Pty) Ltd v Masilo and others NNO
2015 (2) SA 396
(GNP) at [8];
Commissioner
for South African Revenue Services v Daikin Air Conditioning South
Africa (Pty) Ltd
[2018] ZASCA 66
(25 May 2018) at [31].
[13]
In s 1 of the Act, “
housing
interest”
is
defined as “
any
right to claim transfer of the land to which the scheme relates, or
to use or occupy the land”
[14]
i.e. a person who is 50 years or older
[15]
Stupel
and Berman Inc. v Rodel Financial Services (Pty) Ltd
2015 (3) SA 36
(SCA) at [13]
et
seq
[16]
Baker v
Probert
1985
(3) SA 429
(A) at 438H; 445D