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[2021] ZAWCHC 34
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Coessa Development Consortium (Pty) Ltd v Clarence NO and Others (1977/2019) [2021] ZAWCHC 34 (26 February 2021)
THE
HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION)
JUDGMENT
Case
No: 1977/2019
In
the matter between
COESSA
DEVELOPMENT CONSORTIUM (PTY) LTD
APPLICANT
and
GRAHAM
CLARENCE NO
FIRST
RESPONDENT
TERENCE
SMITH NO
SECOND
RESPONDENT
TERGRAHM
PROJECTS CC
THIRD
RESPONDENT
K
CARRIM COMMERCIAL PROPERTY
HOLDINGS
(PTY) LTD
FOURTH
RESPONDENT
REGISTRAR
OF DEEDS
FIFTH
RESPONDENT
Coram:
Rogers
J
Delivered:
26
February 2021 (by email to the parties and same-day release to
SAFLII)
JUDGMENT
Rogers J
[1]
I
use the same abbreviations as in the main judgment. Coessa has sought
leave to appeal my judgment delivered on 2 December 2020.
The parties
agreed that I could adjudicate the application for leave to appeal
(‘LTA’) on the papers, ie with reference
to Coessa’s
LTA and TGT/TPC’s responding submissions.
[2]
The
first set of proposed grounds of appeal concern my conclusion that
DKVG was intended to be a party to the settlement agreement
and that
because DKVG refused to sign the settlement agreement never came into
force. The LTA asserts that the “central reason’
for my
finding was that DKVG owed obligations not only to Coessa but also to
TGT and incurred obligations under the settlement
agreement to both
sides.
[3]
In
truth, my starting point was that the document made provision for
DKVG to sign as a party; that two of the cited parties to the
litigation (Absa and the Registrar of Deeds) were deliberately
omitted while others (including DKVG) were specifically included;
that all the designated parties to the settlement agreement other
than DKVG signed it as parties; that Coessa’s attorneys
sent
the document to DKVG for signature; and that the latter refused to
sign.
[4]
All
of this pointed strongly to a conclusion that DKVG was intended to be
a party, and this was borne out by the fact that DKVG’s
refusal
to give effect to the settlement agreement (by giving the required
undertaking in respect of the amount of R900,000) was,
and throughout
remained, from Coessa’s perspective an obstacle to giving
effect to the settlement.
[5]
It
is correct that I went on to say that the terms of the settlement
agreement provided ample justification for DKVG to have been
a party.
Coessa, in the LTA, repeats the argument made on its behalf at the
main hearing to the effect that DKVG held the money
paid by TGT as an
agent for Coessa alone and that DKVG’s obligations were owed
solely to Coessa. That contention in my view
is quite untenable.
Great reliance is placed by Coessa on the fact that in the preamble
of the settlement agreement it was recorded
that in February 2008 TGT
paid the purchase price ‘to the First Defendant’ (ie
Coessa). However, the relevant clause
in the preamble goes on to
state that the money is being held by DKVG in trust.
[6]
It
is common cause that TGT paid the money to DKVG, not to Coessa (see
para 23 of the founding affidavit, which TGT and TPC admitted).
It
was paid to DKVG in terms of a perfectly standard deed of sale in
terms whereof Coessa was only entitled to the purchase price
against
transfer to TGT. In those circumstances, the conveyancer is not the
seller’s agent in the sense of an agent to receive
the purchase
price in discharge of the purchaser’s obligation to effect
payment. The whole point of paying money to a seller’s
conveyancer, to be held in trust pending transfer, is so that if the
seller goes insolvent before transfer, the purchase money
does not
fall into the seller’s insolvent estate (cf
AA
Farm Sales (Pty) Ltd (t/a AA Farms) v Kirkaldy
1980
(1) SA 13
(A) at 16H-17C).
[7]
The
legal position is that the conveyancer owes fiduciary obligations in
respect of the entrusted purchase money to both the seller
and the
buyer, with an obligation to account to the one or the other
depending on future events. The seller has no claim on the
money held
in trust until transfer has been effected, and if transfer does not
go through the conveyancer is obliged to restore
the money to the
buyer
(
Holder
v Rovian Trust (Estate) (Pty) Ltd
1975
(3) SA 895
(N) at 899G-900G;
Van
der Vliet v Adler, Kessly and Salomon
1979
(3) SA 1156
(W) at 1160E-1161G;
Bruwer
& another v Pocock & Bailey Ingelyf & another
[2009] ZAWCHC
167
para 20).
[8]
That
was the position in the present case. It has never been suggested
that DKVG was entitled to release the trust money to Coessa
before
transfer
.
When
the preamble to the deed of settlement recorded that TGT had paid the
purchase price ‘to the First Defendant’,
it meant no more
than that TGT had complied with the obligation imposed by the deed of
sale to pay the purchase price to Coessa’s
conveyancers to be
held on the standard basis.
[9]
In
para 3.7 of the LTA it is stated to be irrelevant that Coessa and
Barday were ‘obviously mistaken’ and that the important
question is ‘not what they thought, but rather what the effect
of the settlement agreement was’. That would be true
once it
were established that a settlement agreement was in fact concluded.
Intention, however, is central to the question whether
DKVG was
intended to be a party to the settlement.
[10]
The
LTA contends that I should not have brushed aside Aronoff’s
letters of 4 July 2014 and 31 March 2015 as mere ‘sabre
rattling’. In the light of the overwhelming evidence mentioned
earlier in my main judgment, my conclusion in para 32 in this
regard
seems to me to be the only plausible one.
[11]
I
thus do not think that there is a reasonable prospect of another
court finding that the settlement agreement came into force.
That
being so, the LTA would have to be dismissed, even if another court
might reasonably come to a different conclusion on the
alternative
question of prescription. It so happens, however, that on that
question, too, Coessa does not enjoy reasonable prospects
of success.
[12]
As
counsel for TGT pointed out in her written submissions, the LTA does
not seek to impeach my finding (in para 34) that Coessa
failed to
establish that prescription ever started to run. As to my further
finding on tacit acknowledgment, the LTA says that
I should have
found that TGT’s occupation was separate from Coessa’s
debt to pass transfer. However, the question is
not the separate
juridical nature of occupation and transfer. The question is a
factual one – did Coessa factually (albeit
tacitly) acknowledge
an ongoing obligation to give transfer? The answer to that question,
as I explained in the main judgment,
is heavily influenced by the
fact that the owner, Coessa, continued without demur to allow TGT to
remain in occupation. Factually,
what could account for the owner’s
acquiescence in that state of affairs other than a recognition of
TGT’s right to
transfer?
[13]
In
the circumstances I make the following order:
The
application for leave to appeal is dismissed with costs.
____________________
O L Rogers
Judge of the High
Court
Western
Cape Division
APPEARANCES
For
Applicant
M
Verster
Instructed
by
Richard
Liddle Attorneys
13
Belgravia Road
Athlone
For
Respondent
B
C Wharton
Instructed
by
Rubinstein’s
Attorneys
1
st
Floor, Hill House
43
Somerset Road
Green
Point