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[2016] ZASCA 147
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Tamryn Manor (Pty) Ltd v Stand 1192 Johannesburg (Pty) Ltd (785/2015) [2016] ZASCA 147 (30 September 2016)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
Reportable
Case
No.785/2015
In
the matter between:
TAMRYN
MANOR (PTY) LTD
APPELLANT
and
STAND
1192 JOHANNESBURG (PTY) LTD
RESPONDENT
Neutral
citation:
Tamryn
Manor v Stand 1192 Johannesburg
(785/15)
[2016] ZASCA 147
(30 September 2016)
Coram:
Maya
DP, Bosielo, Saldulker and Van der Merwe JJA and Fourie AJA
Heard:
01
September 2016
Delivered:
30
September 2016
Summary
:
A written agreement for the sale of an immovable property in respect
of which the party who signed the agreement as the
purchaser is not
the true purchaser as a result of a
bona
fide
error common to the parties: the agreement is capable of
rectification to reflect the true purchaser where
ex
facie
the document all the essential elements for a valid contract for the
sale of land have been met.
ORDER
On
appeal from
:
Gauteng Local Division of the High Court, Johannesburg (Cilliers AJ
sitting as a court of first instance).
1.
The appeal is upheld with costs.
2.
The order of the court a quo is set aside and replaced with an order
dismissing the exception with costs.
JUDGMENT
Bosielo
JA (Maya DP, Saldulker and Van der Merwe JJA and Fourie AJA
concurring):
[1]
This appeal, brought with the leave of this court, raises a crisp
legal issue: whether an agreement for the sale of land in
circumstances where the person who signed as the purchaser is not the
true purchaser, is capable of being rectified to substitute
the true
purchaser.
[2]
The salient facts of this case relevant to the resolution of this
appeal can be set out succinctly as follows: on 16 August
2007,
Tamryn Manor (Pty) Ltd (the appellant) concluded a written agreement
for the sale of an immovable property, being Erf 1192,
Marshalltown,
Johannesburg with Stand 1192 Johannesburg (Pty) Ltd (the respondent)
for an agreed purchase consideration of R3,2m.
This agreement was
reduced to writing. An agent acting on behalf of the respondent
signed whilst Ryan Edward Otto (Otto) signed
ostensibly as the
purchaser. Otto did not indicate on the deed of sale that he was
signing as an agent or representative of the
appellant. Furthermore,
on the same day, 16 August 2007, Otto signed a Suretyship Agreement
in terms whereof he bound himself jointly
and severally as surety and
co-principal debtor in solidum with the purchaser for the due and
punctual performance by the purchaser
of all its obligations in terms
of the agreement of sale of the immovable property.
[3]
In terms of clause 2.1 of the agreement, the appellant was required
to pay a deposit of ten per cent of the purchase price to
the
seller’s attorneys upon signature of the agreement. The
appellant and not Otto, paid R320 000, being the agreed ten per
cent
deposit of the purchase price to the respondent’s attorneys in
terms of clause 2.1 of the agreement. Furthermore, the
appellant paid
R278 002 representing the transfer duty and all other costs of
transfer of the immovable property as required by
clause 7.1 of the
agreement. On or about 16 October 2008, the appellant furnished the
respondent with guarantees in the amounts
of R1 184 480,23 and R1 695
519,71 in respect of the balance of the purchase price. It is not in
dispute that the respondent had
demanded and duly accepted these
guarantees. The balance of the purchase price was to be covered by a
written bank or other guarantee
acceptable against registration of
the transfer of the property into the appellant’s name to be
furnished by the appellant.
[4]
Notwithstanding the fact that the appellant had complied with its
obligations in terms of the agreement, and the lapse of a
reasonable
time, the respondent failed or refused to do all that was necessary
and sign the necessary documents to effect registration
and the
transfer of the property into the appellant’s name as envisaged
by clause 7 of the agreement. As a result, the appellant
instituted
an action against the respondent seeking an order directing it to
cause the transfer and registration of the immovable
property, into
the appellant’s name, as well as rectification of the agreement
to reflect it as the true purchaser and not
Otto.
[5]
In seeking rectification, the appellant averred that due to a
bona
fide
mutual error of the parties, the agreement did not reflect the common
intention of the parties correctly as it erroneously reflected
Otto
as the purchaser and not the appellant. The appellant averred that,
contrary to what appears
ex
facie
the agreement, it was the common continuing intention of the parties
that the appellant was the true purchaser.
[6]
The respondent filed two exceptions to the appellant’s
declaration. The respondent’s main defence is a complete
denial
of the existence of any error regarding who the real purchaser was.
It asserted that the written agreement correctly reflected
what the
parties intended namely, that it contracted with Otto and not the
appellant. Based on this, it asserted that there was
no basis for the
rectification of the agreement.
[7]
The respondent further pleaded specially that if it is true, as the
appellant asserted, that the written agreement does not
reflect the
correct purchaser, then this rendered the agreement invalid as it did
not comply with the strict requirements of s
2(1) of the Alienation
of Land Act 68 of 1981 (the
Alienation of Land Act). As
a result,
rectification of the agreement is not permissible.
[8]
As
s 2(1)
is central to this dispute I find it necessary to quote the
relevant section. It reads as follows:
‘
No
alienation of land shall be of any force or effect unless it is
contained in a deed of alienation signed by the parties thereto
or by
their agents acting on their written authority
.’
[9]
In its replication to respondent’s special plea, the appellant
pleaded that the formal validity of the written agreement
had to be
determined ex facie the agreement. It pleaded further that if proper
regard had to the agreement and its terms, it is
clear that it
complied with the provisions of
s 2(1)
of the
Alienation of Land Act
in
that the agreement was reduced to writing and signed by both
parties or their agents acting on their written authority. It
asserted
that in the circumstances, it had satisfied the requirements
for rectification and therefore rectification was permissible. It
persisted with its claim as set out in its declaration.
[10]
The court below agreed with the respondent that the agreement as it
stood, did not reflect and identify the appellant as the
purchaser.
It held that Otto was identified in unqualified terms as the
purchaser in the agreement. Crucially, it held that to
correct the
alleged mistake, extraneous evidence of the negotiations preceding
this agreement was necessary. This was not permissible,
so it was
held. The court then concluded that in the circumstances the
agreement was not capable of being rectified.
[11]
As recently as 2005, this court reaffirmed the correct approach to
the question whether to grant rectification or not as follows
in
Inventive
Labour Structuring
:
[1]
‘…
As
a general rule the determination whether rectification of a
suretyship should be ordered or not involves a two-stage enquiry.
The
first is to determine whether the formal requirements contained in s
6 of the General Law Amendment Act 50 of 1956 are met.
The focal
point at this stage is whether the written document on its own,
constitutes a valid contract of suretyship or not. If
it does not,
the enquiry ends there. If it does, then the enquiry moves to the
second leg which focuses on whether a proper case
for rectification
has been made out. If the answer to the latter question is in the
affirmative, an order for rectification must
be granted.’
See
also
Intercontinental
Exports.
[2]
[12]
I interpose to state that this case took an unorthodox route. The
respondent preferred to raise two special pleas to the appellant’s
declaration. The appellant filed a replication to the respondent’s
amended plea. In turn, the respondent filed an exception
to the
appellant’s replication. It is trite that when a court is
dealing with an exception, it is bound to accept the pleadings
as
they are. As a result, I have no choice but to determine this appeal
on the pleadings as they stand.
[13]
As set out in
Weinerlein
v Goch Buildings
[3]
the starting point is whether this agreement meets the statutory
requirements set out in
s 2(1)
of the
Alienation of Land Act. For
an
agreement for the sale of land to be valid, it has to be reduced to
writing and signed by the parties thereto or by their agents,
duly
authorised in writing.
Wilken
v Kohler.
[4]
This principle was endorsed further in
Dowdle’s
Estate v Dowdle and others
[5]
where
the court held:
‘
Before
there can be rectification of a contract of sale of a fixed property,
there must be a written contract, which on the face
of it complies
with the requirements of
s 30
of Proc 8 of 1902. It seems to be that
this is implicit in the reasoning of
Weinerlein
v Goch Buildings Ltd
1925
282, the locus classicus on the law to the rectification of contracts
for the sale of fixed property. . . . I agree with Mr
Claasen’s
contention that you cannot, by rectification, invest a document
which, on the face of it is null and void, with
legal force.’
Evidently,
this requires us to scrutinise the written agreement to see, if
ex
facie
the document, the formal requirements are met.
[14]
On the face of it, there is no dispute that the written agreement
clearly identifies who the seller and the purchaser are,
as well as
what the merx and the agreed price are. These are the essential
elements for a valid contract of sale. It is not in
dispute that the
agreement for the sale of the immovable property was reduced to
writing, and duly signed by the parties.
Ex
facie
the
written agreement, all the statutory requirements set out in
s 2(1)
of the
Alienation of Land Act have
been met. As a result I find that
the agreement is formally valid. It follows ineluctably that, having
passed this hurdle, this
agreement is capable of rectification.
Magwaza
v Heenan
1979
(2) SA 1019
(A);
Intercontinental
Exports (Pty) Ltd v Fowles
1999 (2) SA 1045
(SCA) at para 10;
Swanepoel
v Nameng
2010 (3) SA 124
(SCA) at para [15].
[15]
Based on the above exposition, I am driven to conclude that the court
a quo erred in granting the respondent’s exception.
As this
court is not in a position to enter into the second stage of the
enquiry whether to grant rectification, the matter must
be referred
back to the trial court to decide if indeed rectification should be
granted.
[19]
In the result, the following order is made:
1.
The appeal is upheld with costs.
2.
The order of the court below is set aside and replaced with an order
dismissing the exception with costs.
____________
L
O Bosielo
Judge
of Appeal
APPEARANCES:
For
Appellant: S
Pincus SC
Instructed
by:
Mathopo
Attorneys, Johannesburg
Bahlekazi
Attorneys, Bloemfontein
For
Respondent: SJ Reinders
Instructed
by:
Lingerfelder
& Baloyi Attorneys, Pretoria
Van
Wyk & Preller Attorneys, Bloemfontein
[1]
Inventive Labour Structuring
(Pty) Ltd v Corfe
[2005]
ZASCA 139
;
2006 (3) SA 107
(SCA) para 6.
[2]
Intercontinental
Exports (Pty) Ltd v Fowles
1999 (2) SA 1045
(SCA) para 13.
[3]
1925 AD 282.
4
1913
AD 135.
51947
(3) SA 340 (T) at 354.