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[2011] ZAGPJHC 96
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Pizzaro Trading (Pty) Ltd v Miller and Others (2010/48639) [2011] ZAGPJHC 96 (26 August 2011)
REPORTABLE
SOUTH GAUTENG HIGH COURT,
JOHANNESBURG
CASE NO:
2010/48639
DATE:26/08/2011
In the matter between:
PIZZARO
TRADING (PTY) LTD
….....................................................
Appellant
and
MILLER
NICOLAS JAMES
VAUGHAN
.........................................
Respondent
MILLER
MORGAN GEARY
...............................................
Second
Respondent
PAM
GOLDING PROPERTIES (PTY) LTD
...........................
Third
Respondent
J U D G M E N T
WEPENER, J
:
[1] The applicant seeks an order
declaring an agreement of sale (the agreement) in respect of
immovable property entered into by
the applicant as seller and the
first and second respondents as purchasers (referred to as the
respondents) to be of full force
and effect and binding upon the
parties. The third respondent is an estate agency whose employee,
Birbeck, facilitated the signing
of the agreement. The third
respondent took no part in these proceedings but filed an affidavit
to explain its roll and the facts
which led to the signing of the
agreement.
[2] The applicant is the
registered owner of the immovable property. The applicant was at all
times represented by Mr Segev (Segev)
who also deposed to the
founding and replying affidavits. Segev mandated the third respondent
to find a purchaser for the property.
[3] During August 2010 Birbeck
brought to the applicant a written offer to purchase the property,
which offer had been signed by
the respondents, addressed to Segev on
behalf of the applicant. The written document contains the following
on the first page:
“To Joseph Segev. on Behalf of Pizzaro
Trading (Pty) Ltd (“the Seller”)”. The offer
indicated that it was
open for acceptance until 16:00 on 21 August
2010 and it was deemed to be accepted on signature by the applicant
irrespective of
when notification thereof was given to the
respondents.
[4] On 21 August 2010, prior to
16:00, Segev signed the offer to purchase resulting, on the face of
it, in a written agreement of
sale of the property coming into being.
[5] The written agreement
contains some usual clauses pertaining to a sale of property and also
a clause as follows:
“
12.3 If the property is
owned by a Company, Close Corporation, Trust or other juristic person
the natural person who accepts this
Offer shall do so on behalf of
such Company, Close Corporation or Trust and warrants that he/she is
duly authorised to represent
the Seller”
[6] It is signed by Segev on the
last page with the following words printed under his signature:
“Seller (or on behalf of
the seller and duly authorised)”.
[7] The respondents complained
that they did not know that they would be contracting with a company
and that they established that,
because the seller was a company, the
transfer would be delayed.
[8] However, in my view, the two
facts referred to above should have alerted the respondents that the
seller may be a juristic person.
[9] The respondents further
alleged that the agreement was not completed when they signed it i.e.
that a blank space was left when
it was signed thus rendering the
agreement void for want of compliance with s 1 of the Alienation of
Land Act 68 of 1981 (the Act).
[10] The blank space, it was
said, was due to the absence of the name of the seller when the
agreement was signed by the respondents.
The respondents opine that
as a result of the fact that there is a full stop after the
deponent’s name, before the company’s
name, it is
apparent from the written document that the name of the company was
inserted as an afterthought.
[11] Mr Cothill, who appeared for
the respondents argued that the words “…on behalf of
Pizzaro…” were
filled in later. The respondents state
that the “on behalf of Pizzaro” - portion was an
afterthought. It is not clear
when the afterthought allegedly
occurred. However, according to Birbeck, the name of the seller was
completed prior to Segev signing
the agreement.
[12] The respondents are not able
to contradict Birbeck. Indeed the respondents accept that Birbeck
filled in the name of the seller.
They do not positively state that
it was filled in after Segev signed the offer to purchase, nor do
they have any basis to so allege.
There is consequently no dispute of
fact as contended by Mr Cothill regarding this issue.
[13] It is therefore common cause
that the name of the seller was left blank when the respondents
signed the agreement, which led
to the argument that the agreement is
invalid for want of compliance with s 2(1) of the Act, which argument
I deal with below.
[14] Mr Cothill raised a further
defence to the relief sought by the applicant. He said that there are
two contradictory clauses
contained in the agreement which renders
the agreement inchoate and thus null and void.
[15] An additional issue raised
was the fact the Birbeck did not act as agent of the respondents. Mr
Kuny, who appeared with Mr
Lavine, did not argue differently and
accepted that Birbeck fell into the category of persons referred to
by Jajbhay J in
Just
Names Properties 11 CC and Another v Fourie and Others
2007 (3) SA 1
(W) at paragraph 32 where he said:
“
In the present case I
believe that Oosthuizen, who was the estate agent, was not an agent
of either the seller or the purchaser
in the technical sense of the
word. She had acted as a mere nuntius between the parties. The
conduct of Oosthuizen, in the circumstances
of the present matter,
reminds one of the learned article by Prof E Kahn in
(1980) 97 SALJ
342
, where the learned professor referred to the estate agent as
‘that legal oddity, the estate agent’. Professor Kahn
further states:
‘
Generally
speaking, an estate agent is only entrusted with the task (no
obligation) of finding a purchaser of immovable property.
It is rare
indeed for him to act as an agent
stricto
sensu,
clothed with authority to enter into a contract on behalf of his
principal. See
Bird
v
Summerville
1961 (3) SA 194
(A) at 202C-E’.
”
Mr Kuny however, argued that
Birbeck was indeed authorised to fill in the name of the seller.
[16] I deal with the further
defences raised in argument although there are other issues contained
the affidavits and in counsel’s
heads of argument, which were
not pursued.
[17] S 2(1) of the Act reads as follows:
“
No alienation of land
after the commencement of this section shall, subject to the
provisions of section 28, 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”.
[18] In
Godfrey
v Paruk
1965 (2) SA
738
(D), Caney J said at 739F
“
It is well established
by a series of cases decided on the corresponding legislation which
has prevailed for many years in the Transvaal
and the Orange Free
State, that for compliance with sec. 1 (1) the writing must identify
the subject matter of the contract; it
must be defined or described
with such a degree of precision as to enable it to be identified
without recourse to the evidence
of the parties. In addition, the
essential terms of the contract must be contained in it and the
identity of the parties must appear.
In
Fram
v.
Rimer
,
1935
W.L.D. 5
at p.
8
,
BARRY, J., said that the identity of the parties ‘is as much an
essential term of the contract as the subject matter’,
and this
has been repeated more than once, but with the greatest respect to
those who have used the expression “essential
term” it
appears to me more appropriate to say that the identity of the
parties is an “essential part” of the
contract, as
HORWITZ, A.J., said in
Rademeyer
v.
Hughes
,
1946 O.P.D. 430
at p. 434…”
[19] As was the case in
Godfrey,
on the face of it the
document under consideration in the matter before me would appear to
constitute a binding agreement complying
with the provisions of the
Act. All the requirements appear in it and it has been signed by the
seller and the purchaser. The essential
parts are contained therein.
[20] Mr Cothill argued that by
leaving a blank space regarding the name of the seller, the agreement
was null and void for want
of compliance with s 2 of the Act. For
this proposition he relied on
Fourlamel
(Pty) Ltd v Maddison
1977 (1) SA 333
(A) and
Just
Names Properties 11 CC supra
–
the latter case which was upheld on appeal in
Just
Names Properties 11 CC and Another v Fourie and Others
2008
(1) SA 343
(SCA).
[21] The
Fourlamel
matter at 342A-B accepts that difficulty may arise in agreements
required by statute to be embodied in a document and signed by
the
parties. Miller JA, in
Fourlamel
at 341H-342B, said
regarding documents which are required to be in writing:
“
The
plain, grammatical meaning of the words used in
sec.
6
appears to me to be clear. The section presupposes that an agreement
of suretyship has been reached - “contract of
suretyship
entered into” - and it provides thereafter that such agreement
shall not be valid
‘
unless
the terms thereof are embodied in a written document signed by or on
behalf of the surety’.
What is it that requires to be
signed by the surety? It is surely the written document containing
the terms of the agreement…
In the case of an agreement which
is not by law required to be in writing, it may be that a document
signed by a party before the
terms of the agreement had been embodied
therein would be binding upon him in the absence of fraud or error in
connection with
the recording of the terms subsequent to his
signature…. But, where the terms of a contract are required by
statute to be
embodied in a document and signed by a particular party
as a manifestation of his assent to such terms, there are
considerable
difficulties, both notionally and practically, in the
way of acceptance that insertion by another of the terms of the
agreement
after the party has appended his signature to a blank piece
of paper, constitutes compliance with such statute.”
[22] On the facts which I accept,
Birbeck filled in the full name of the seller prior to the applicant
signing the document. The
respondents did not gainsay this. All they
say is that the seller’s name was left blank when they signed
it. It was explained
by Birbeck how he, with full knowledge and
agreement of the respondents, undertook to insert the correct name of
the seller.
[23] However, the fundamental
difference between an agreement required to be in writing, which is
void and one which is valid was
referred to in
Jurgens
& Others v Volkskas Bank Ltd
[1992] ZASCA 152
;
1993
(1) SA 214
(A). The distinction between the
Fourlamel
case and the facts of
the matter under consideration was stated in
Jurgens
by Hoexter JA at 218J-218B:
“
It
need hardly be said that there is a fundamental difference between,
on the one hand, the situation in which after a surety has
signed and
delivered a blank form to the creditor, the latter unilaterally
completes the blank form by filling in some of the contractual
terms,
and, on the other hand, the situation in which the surety has signed
a blank form which is then filled in, by, or for and
on behalf of the
surety, before the document so completed is delivered to the
creditor. In the
Fourlamel
case
this court was concerned only with the former situation.
A
prerequisite for a contract of suretyship is that the offer
communicated by the would-be surety to the creditor must be complete.
In the instant case, so it seems to me, the appellants communicated
their offers to the respondent when the documents in question,
duly
filled in, were delivered by or on behalf of the appellants to the
respondent. It cannot be suggested that, on the face of
them, these
offers were in any respect incomplete. At that juncture they
contained the terms essential for the material validity
of a contract
of suretyship (the identity of the creditor; the identity of the
surety or sureties; and the amount of the principal
debt.) These
terms had been incorporated at the group office by the secretaries of
the group for and on behalf of the appellants.
Each such document
bore the signatures of those of the appellants named therein. It is
not in dispute that the suretyships thus
delivered to the respondent
were accepted by it.”
[24] Birbeck fulfilled the
function of the secretary referred to by Hoexter JA in
Jurgens
.
The respondents received a copy of the signed agreement containing
the seller’s name two days after they signed it. Numerous
correspondence followed in which the seller was referred to as
Pizzaro Trading (Pty) Ltd or Pizzaro Trading. The respondents’
reservation regarding the fact that the seller was a company
manifested shortly after they received the signed copy of the
agreement.
The issue was raised thus:
“
I am concerned that we
were not made aware that the property was in a company name until
after the agreement was signed. The seller’s
details were only
inserted by you after we had signed the agreement in good faith. I
had spoken to my lawyers … as you know
we need early
occupation and transfer and opted to pay an occupational rent as soon
as guarantees were in place. Under normal circumstances
we would
expect to have transfer in two to three months. We could be placed in
a position that the transfer is delayed die to the
necessary company
information … if we had known that the property was registered
in a company name then we would have inserted
more clauses in the
agreement of sale which would have protected us from being penalised
for such possible delays. Please can I
have your comments.”
[25] The conduct of the
respondents fall within what has been said in
Godfrey
v Paruk
1965 (2) SA
738
(D) at 742C-743:
“
Apart
from the foregoing, there is another approach to the problem which
also convinces me that the plaintiff’s declaration
does
disclose a cause of action. I consider that the approach should be
realistic. The Courts are fully aware that, just as the
owners of
properties give options to persons entitling them personally or
others to whom such options may be assigned, to purchase
properties,
so also persons wishing to buy properties sign offers which are
intended to be put before the owners in the hopes of
acceptance.
Where such an offer bears the signatures of the seller and of the
purchaser (the latter offering and the former accepting),
I see no
legal obstacle to finding that to be a contract, subject to any
defences which may be raised in a plea. Although the principle
is
that “an offer can be accepted only by the person to whom it is
made”, SCHREINER, J.A., saying that in
Hersch
v.
Nel,
supra
,
went on to say that that statement could be misleading if the person
to whom the offer is made is understood in its ordinary sense
as the
person to whom the words of the offer are uttered or addressed;
“
for what
decides who can accept an offer is the intention of the offeror as
proved by the terms of the offer and by any other evidence
that may
be admissible”.
The learned Judge of
Appeal goes on to show the variations that can be arrived at upon a
proper construction of the offer.
The document in the
present case, although addressed to Maghrajh, is not expressed as an
offer to purchase the property from him;
nor is the property
described as being his. The plaintiff merely said: “I hereby
offer to purchase the above described property
. . .”
The document bears in itself some indications of being based upon a
stereotyped form for signature by prospective
buyers; it contains in
three places the word “purchaser”, whereas if the
plaintiff had written it as a letter in the
ordinary course offering
to buy the property, he would have used the word “me” in
two of those places and “I”
in the third. It also
contains the word “seller”, whereas if the document were
written as a letter offering to buy
from Maghrajh it would in place
of the expression “on the part of the seller” have read
“on your part”.
Moreover, it bears a formal caption.
It
appears to me, consequently, to be not true to say that the document
is an offer to Maghrajh, or that he is the offeree. Some
undefined
person is the offeree. This I arrive at without resort to any
extrinsic evidence; the right to accept the offer, so long
as it
remains open, lay with some undefined person. It is true that by
resort to extrinsic evidence the identity of that person
might be
discovered, but that is unnecessary because the defendant accepted
the offer and the plaintiff was content. It might very
well have
happened that someone unacceptable to the offeror might have
purported to accept his offer; in that event a contest would
have
arisen as to the right of that person to do so.
That
contest, however, is not before me. Someone who was acceptable to the
offeror accepted the offer, namely the defendant, and
the only
question is whether the document satisfies the legislation. On the
face of it, the parties are
ad
idem
,
subject to any defences that may be pleaded, and the document does
satisfy the requirements of the legislation.”
[26] Apart from the evidence of
Birbeck that he undertook to write in the correct name of the seller
once established, the inference
is that the respondents allowed this
to occur. They were content that the name of the seller be inserted
by Birbeck and they accepted
it.
[27] In
Hill
v Faiga
1964 (4) SA
594
(W) Trollip J (as he then was) said at p 596D-G:
“
Approaching
the problem in that manner, I think that
ex
facie
the
document the respondent intended that the offer it embodied should be
made to the owner of the property. At the foot of the
document a
space was provided for the acceptance of the offer by the owner of
the property; and it must be assumed that the respondent
was aware
not only of what appeared above but also of that provision below her
signature at the time she signed. The inference
is then irresistible
that by signing it she intended making the offer to the owner of the
property who would, if he accepted, sign
in the space therein
provided. That she might not have known at that stage who the owner
was is immaterial, because the offer,
in order to be effective, does
not necessarily have to be made
“
for
acceptance by a particular person whom the offeror has in mind, as an
identified individual, at the time when he makes the offer”
(
Hersch
v.
Nel,
supra
at
p. 693). It follows that the person who was in fact the owner was
entitled to accept the offer, and that this acceptance in writing
under his signature would result in a contract valid and binding
under sec. 1 (1) of the Act.”
[28] Although the
Hill
case continued to deal
with admissible extrinsic evidence to identify the seller such need
not be done in the present matter as
the identity of this seller is
not in dispute – it is indeed the applicant as is evident from
the deed of sale itself.
[29] In
Hersch
v Nel
1948 (3) SA 686
(A) Schreiner JA said at p693
“
An
offer to the public generally, such as that in the smoke-ball case
(
Carlill
v.
Carbolic Smoke Ball
Company
(1893, 1
Q.B. 256))
, illustrates the fact that an offer is not necessarily
made only for acceptance by a particular person whom the offeror has
in
mind, as an identified individual, at the time when he makes the
offer…”
[30] In
the circumstances, and accepting that Birbeck acted as a
nuntius
and
having regard to the evidence, the respondents authorised Birbeck to
insert the seller’s name and were indeed content
that Birbeck
could insert the name of the seller in the agreement resulting in a
valid and binding agreement coming into existence
when the agreement
was signed by the applicant.
[31] The
final argument by Mr Cothill was that the agreement was void as a
result of two contradictory clauses. The argument is
that clause 3
provides that the purchasers shall not be entitled to make any
alteration or addition to the property prior to transfer
whilst a
handwritten clause 15 states that if the buyers wish to make certain
changes to the exterior and interior regarding cosmetic
decoration
upon occupation or earlier and subject to the guarantees being
furnished, they may do so. It is apparent that clause
3 deals with
alterations and additions to the property whilst clause 15 deals with
cosmetic decorations. It is trite law that the
construction to be
given to a contract should favour validity. See
Boland
Bank Beperk v Steele
1994 (1) SA 259
(T) and I am of the view that the clauses deal with
two different types of activity. Clause three deals with alterations
of a major
or permanent nature whilst clause 15 deals with minor or
temporary work which is also evident from the fact that clause 15
envisages
the possibility of such cosmetic work being restored to its
original condition in the event of the sale not continuing. In my
view
there is no merit in the defence.
[32] Should I be wrong in
this conclusion, it is an established canon of construction that in
written contracts where the contract
is partly written and partly in
print, effect should be given to both parts but where there is an
irreconcilable conflict between
the written and printed parts, the
former prevails.
Wessels,
in Law of Contracts South Africa 2
nd
ed paras 1981-1982 states:
“
1981.
Where a contract consists partly of printed and partly of written
words, courts of law will construe both together, but will
give
greater weight to the written than to the printed portion where these
are in conflict and where they tend to different results
(Lawson,
Contracts, s. 389 (4); Bishop, Contracts, s. 413;
Simmons
v. Hurwitz
,
1940 W.L.D. 20
;
Bull
v. Estate Bull and Another
,
1940
§
W.L.D.
133).
1982.
It sometimes occurs that a printed form of contract is used for the
sake of convenience, in which blank spaces appear which
are to be
filled in according to circumstances; there is often a speace (sic)
left where conditions are inserted in writing which
are peculiar to
the particular contract. In such cases if the blanks are not properly
filled in, or if the printed matter is not
carefully scrutinised,
many words and phrases may creep in which are not germane to the
particular contract the parties intended
to make. The written part
may then be in conflict with the printed portion. In such cases,
courts of law usually give more importance
to the written matter,
for, having been prepared for the special occasion, it is more likely
to express the real intention of the
parties than the stereotyped
language of the written portion. In
Thornton
v. Sheffield R.R. Co.
(5 Am. St. Rep., at p. 339), STONE, C.J., says: ‘It is a rule
of interpretation of deeds and other instruments partly written
and
partly printed that the written portions are presumed to have
commanded the stricter attention of the parties; and if there
is an
irreconcilable conflict between them, the written prevails over the
printed matter. This is but the teaching of human experience
crystallised into law.’ See
Luis
de Ridder, Ltd. v. Andre & Cie S.A.
(Lausanne),
1941, 1 All E.R. 380.
”
Also
see
Taylor
N.O. v The Master and Others
1980 (4) SA 414
(T) at 417H-419F and
Stocks
Construction (OFS) v Metter-Pingon
1980 (1) SA 507
(A) at 519C-D.
[33] Mr Kuny sought costs
on the attorney and client scale. Clause 10.2 of the agreement
provides that in the event of the seller
enforcing its rights by way
of legal proceedings, the legal costs so incurred shall be paid by
the purchaser on the scale as between
attorney and client.
[32] The agreement is
consequently not inchoate, but valid and enforceable.
[34] The
respondents have failed to show any valid defence to the claim of the
applicant and an order is issued in the following
terms:
1. It is the declared
that the agreement of sale dated 21 August 2010 in respect of the
property known as Portion 12 (a portion
of Portion 1) of Erf 1301
Morningside, Extension 136 Township, Registration Division IR,
Province of Gauteng entered into by the
applicant and the first and
second respondents is of full force and effect and binding on the
parties to the agreement.
2. The
first and second respondents are directed, jointly and severally, the
one paying the other to be absolved, forthwith to make
payment of an
amount of R4 500 000 to the applicant by payment of the said amount
to the trust account of attorneys Cranko Karp
& Associates Inc
within 7 days of the date of this order alternatively to furnish to
Cranko Karp & Associates Inc a bank
or other approved guarantee
in favour of the applicant within the aforesaid period.
3. The
first and second respondents are directed, jointly and severally, the
one paying the other to be absolved to pay to Cranko
Karp &
Associates Inc the costs of the transfer of the property into their
name, including any interest in respect of transfer
duty payable to
the South African Revenue Services.
4. The
first and second respondents are directed to sign or furnish all
documents necessary in order to affect transfer of the property
into
their names when called upon to do so by Cranko Karp & Associates
Inc.
5. In
the event of the respondents failing to comply with paragraph 5 above
within 14 days of date of this order the sheriff of
this Court is
authorised and directed to sign on behalf of the first and second
respondents all documents necessary in order to
effect transfer of
the property into the names of the first and second respondents.
6. The
first and second respondents are ordered to pay the costs of this
application on the scale as between attorney and client.
FOR APPLICANTS:
.............
Adv
D Kuny SC with Adv K Lavine
Attorneys:
................................
Cranko
Karp & Associates Inc
FOR RESPONDENTS:
........
Adv C Cothill
Attorneys:
...............................
Henkel
Gregory Inc
Date of Judgment:
.................
26
August 2011