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[2016] ZASCA 198
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Basson and Others v Hanna (37/2016) [2016] ZASCA 198; [2017] 1 All SA 669 (SCA); 2017 (3) SA 22 (SCA) (6 December 2016)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 37/2016
In
the matter between:
CHRISTIAAN
JOHANNES BASSON
FIRST APPELLANT
PAUL
DREYER
SECOND APPELLANT
PLOT
31 VAALBANK CC
THIRD APPELLANT
and
TYRONE
PAUL
HANNA
RESPONDENT
Neutral
Citation:
Basson
v Hanna
(37/2016)
[2016] ZASCA 198
(6 December 2016)
Coram:
Shongwe, Willis, Zondi, Dambuza and
Mathopo JJA
Heard:
18 November 2016
Delivered:
6 December 2016
Summary:
Contract: parties’
failure to agree on interest rate in a contract does not render the
contract invalid: claim for damages
in lieu of specific performance
where subject matter of the contract has been alienated, is competent
in law.
ORDER
On
appeal from
Gauteng
Local Division of the High Court, Johannesburg (P G Cilliers AJ
sitting as court of first instance):
1
The appeal is dismissed with costs.
2
Paragraphs 1 and 2 of the court below’s order are set aside and
replaced
with the following:
‘
1
The first defendant is ordered to pay to the plaintiff the amount of
R1 212 994.80.
2
The first defendant is ordered to pay to the plaintiff interest on
the amount
of R1 212 994.80 at the rate of 9,5 per cent per
annum, calculated from 14 September 2014 to date of final payment.’
JUDGMENT
Zondi
JA (Shongwe, Willis, Dambuza and Mathopo JJA concurring):
[1]
This is an appeal against the judgment of the Gauteng Local Division
of the High Court, Johannesburg (P G Cilliers AJ) awarding
damages in
lieu of specific performance in favour of the respondent and ordering
the first appellant to pay the respondent the
amount of R1 762 626.46
and interest on that amount at the rate of 15,5 per cent per annum
from 20 May 2008 to date of
final payment. The appeal against the
judgment, which has since been reported
sub
nom Hanna v Basson & others
[2016]
1 All SA 201
(GJ), is with the leave of that court.
[2]
One of the issues that were before the court below and which still
remains an issue in this Court, is whether the parties’
failure
to reach consensus on the applicable rate of interest, rendered the
agreement null and void. The second issue that was
raised by the
court a quo at the hearing of the application for leave to appeal,
was whether a claim for damages as a surrogate
for specific
performance is competent in law. This point was raised because of the
remarks by Smallberger ADCJ in
Mostert
NO v Old Mutual Life Assurance Co (SA) Ltd
2001
(4) SA 159
(SCA) at 186B-H regarding the correctness of the majority
decision in
ISEP
Structural Engineering and Plating (Pty) Ltd v Inland Exploration Co
(Pty) Ltd
1981 (4)
SA 1
(A) holding that a claim for damages in lieu of specific
performance is not competent in law.
[3]
At the hearing the parties informed the court, firstly, that the
amount of R1 762 626.46 granted by the court below
as
damages is incorrect. It is not what the respondent had sought;
secondly, that the court below in calculating the amount of
R1 762 626.46 ignored the calculations of the appellants’
actuary, on which both parties had relied at the trial;
and thirdly,
that the mora interest rate determined by the court below is
incorrect. The mora interest should have been granted
at a rate of
9,5 per cent from the date of service of the amended particulars of
claim not summons.
[4]
Flowing from this, the appellants informed the court that in the
alternative to dismissal of the respondent’s claim or
absolution from the instance, it would request that it be ordered to
pay R1 212 994.80, together with interest on that
amount at
the rate of 9,5 per cent per annum from 14 September 2014 to date of
payment and costs. On the other hand the respondent
indicated that it
would request that the judgment be maintained except that the capital
amount granted by the court below should
be replaced with the amount
of R1 212 994.80, together with interest at the rate of 9,5
per cent per annum calculated
from 14 September 2014 to date of
payment.
[5]
The respondent, Mr Tyrone Paul Hanna, instituted an action against
the appellants seeking an order compelling the first appellant
(Basson) to transfer one third of the member’s interest in the
third appellant (the CC) to the respondent against payment
of the
outstanding balance, alternatively payment of the sum of
R2 650 824.72 as damages in lieu of specific performance.
Mr Paul Dreyer (Dreyer), the second appellant was the second
defendant in the court below and he plays no role in this appeal.
[6]
The basis of the respondent’s claim is that he, Basson and
Dreyer concluded an agreement during 2002 in terms of which
Basson
agreed to sell to each of them one third of his member’s
interest in the CC for R624 953 payable in monthly instalments
of R8 229.32 over a period of 20 years. According to the
respondent the agreed rate of interest was prime plus 1 per cent
per
annum, fluctuating. In addition thereto the respondent agreed to pay
a third of the CC’s monthly maintenance and operating
costs.
Basson conducted his banking activities with ABSA Bank, which at the
time of the conclusion of the agreement had a prevailing
prime
interest rate of 17 per cent.
[7]
Basson and the CC defended the action and denied that the respondent
was entitled to an order for specific performance or damages
as a
surrogate for performance. They contended among others, that the
respondent, by failing to pay all amounts due by him in terms
of the
agreement timeously and in full, repudiated the agreement as a result
of which Basson cancelled the agreement; alternatively
that no
agreement came into being as there was no consensus between the
parties regarding the rate of interest which would apply
in respect
of the agreement. Basson and the CC though admitting that the
interest rate was prime plus 1 per cent denied that it
was a variable
one. They contended that the rate was fixed.
Factual
background
[8]
It is common cause that during 2002 the respondent, Basson and Dreyer
concluded an oral agreement relating to the development
of the Farm
Vaalbank IR, Farm No 476, Unit 31, situated on the banks of the Vaal
River (the property) and a sale by Basson to the
respondent and
Dreyer of one third of his member’s interest in the CC. At the
time of the agreement Basson was the sole member
of the CC which
owned the property concerned. Basson undertook to develop the
property by building three separate houses each with
a cottage on the
property. He financed the development.
[9]
Building operations on the property commenced in August 2002 and were
finalised at the end of November 2002. The parties took
occupation of
each of the three residential units on the property on 1 December
2002. During January 2003 Basson issued to the
respondent a tax
invoice dated 11 December 2002 confirming the purchase price of
R624 953 (the capital amount) for the sale
of a 33 and a third
per cent share of the member’s interest in the CC, payable in
monthly instalments of R8229.32. In addition
to paying the monthly
instalments the respondent also had to pay a third of the CC’s
monthly operating expenses and maintenance
costs. The respondent’s
evidence was that in compliance with his contractual obligations, he
regularly paid the monthly instalment
of R8 229.32, together
with his portion of the CC’s expenses. That went on until 2007
when the relationship between
the respondent, on the one hand, and
Basson and Dreyer on the other, turned sour.
[10]
It is important to mention that during the trial Basson alienated a
third of his member’s interest in the CC, the subject
matter of
the contract, to his brothers. Hence the respondent amended his claim
so as to introduce an alternative claim for damages
as a surrogate
for specific performance.
Agreement
on the interest rate
[11]
The terms of the agreement regarding the interest rate are in
dispute. Basson’s evidence was that the fixed interest
rate was
agreed upon. Basson’s words were:
‘
Die
rentekoers kon enige kant toe gegaan het. Dit was ‘n vaste
betaling, daar was nie, in my tyd was daar nooit gepraat oor
‘n
wisselende rentekoers nie.
Wat
was die, kan u onthou, Mnr Basson, wat gebeur het met die rentekoerse
op daardie stadium? Was die rentekoers oppad op, of wat
die
rentekoers oppad af? --- Jy weet ek is nie ‘n bankier nie, so
ek hou nie rentekoerse dop nie, of ek het nie… Nee,
ek het nie
geweet wat die rentekoerse doen, of dit op of af gaan nie.’
[12]
Dreyer’s evidence was that the purchase price for his one third
of the member’s interest in the CC, similar to
that of the
respondent, was R624 995 from which he deducted R130 000
which he spent on the property. His evidence was
that the interest
rate was 18 per cent per annum and was fixed. He stated that he was
aware that in 2003 the respondent had expressed
a concern to him that
he was paying the interest at a fixed rate when the trend was that
the interest rates were on the decline.
Dreyer explained to the
respondent that there was nothing he could do about it, because this
was what they had agreed to pay.
[13]
The court below found that although the parties agreed that the
interest rate would be prime plus 1 per cent they did not reach
an
agreement on whether the interest rate would be fixed or variable. It
found it unnecessary to make a definite finding on the
disputed
issue. This was so, the court below reasoned, because it was not
necessary to make a finding on whether the respondent
was in arrears
with his repayments when Basson purported to cancel the agreement on
20 February 2008 or 27 February 2008. Basson
had already taken the
position before 7 June 2007 that the agreement was invalid and
unenforceable and persisted in that position
until 25 February 2009.
[14]
The appellants attack this finding. They contend that its implication
is that the parties did not have consensus on a material
term of the
agreement, that no agreement came into being between the parties and
that the respondent could therefore not claim
specific performance or
damages in lieu of specific performance on a non-existing agreement.
The appellants maintain that the onus
was on the respondent to prove
the terms of the agreement, which he failed to do.
[15]
Without a finding, contend the appellants, on what the parties agreed
upon as far as the interest rate is concerned, it was
impossible to
determine the quantum, which was crucial as the determination of the
balance outstanding was dependent on the nature
of the interest; that
is to say whether fixed or fluctuating, which is an element which the
respondent had to allege and prove
in order to succeed in his claim.
The appellants accordingly submit that absolution should have been
granted.
[16]
I disagree. In general, the parties’ failure to agree on the
rate at which the amount payable under the agreement is
to be
calculated, does not render the agreement invalid. If no rate has
been agreed on, expressly or impliedly, and the rate is
not governed
by any other law, the rate of interest is that prescribed from time
to time by notice in the gazette by the relevant
Minister in terms of
the
Prescribed Rate of Interest Act 55 of 1975
.
Repudiation
[17]
In the particulars of claim the respondent alleged that Basson
repudiated the agreement and that, at his election he was entitled
to
claim performance
in
forma specifica
entailing an order compelling Basson to transfer a third of the
member’s interest in the CC to him, against payment of the
outstanding amount to Basson alternatively damages as a surrogate for
performance. The respondent led evidence, both oral and documentary
to demonstrate that Basson had repudiated the agreement.
[18]
The court below accepted the respondent’s version that Basson
repudiated the agreement on or before 7 June 2007 and that
he did not
repent his repudiation of the agreement before the attempted
cancellation of the agreement on 27 February 2008. I agree
with the
court below’s conclusion and reasoning underlying it. There is
no appeal against this finding and it must therefore
stand.
[19]
Objectively viewed, Basson’s actions after 7 June 2007
constituted conduct from which the only reasonable inference that
could be drawn was that he did not regard himself bound by the
agreement and that he was not prepared to perform its terms.
[1]
This
is apparent from the correspondence which exchanged between the
parties. In a letter dated 6 August 2007 Basson’s attorneys
informed the respondent’s attorneys that there was no valid
agreement between the parties. In a further letter dated 20 February
2008 the respondent’s attorneys were informed by Basson’s
attorneys that the agreement was null and void, because of
its
non-compliance with the Property Time-Sharing Act and the Share
Blocks Control Act.
[20]
The respondent himself viewed Basson’s conduct as a repudiation
of the agreement. Hence the respondent issued summons
against Basson
originally seeking an order for specific performance.
[21]
Subsequent to the repudiation of the agreement by Basson in April
2007, the respondent elected to hold Basson to the terms
of the
agreement. The respondent repeatedly asked Basson to furnish him with
the total outstanding amount so as to settle his indebtedness
to
Basson. When Basson threatened to cancel the agreement because the
respondent was allegedly in arrears with his monthly instalments
and
contributions towards the expenses of the CC, the respondent made
payment of the amount that was alleged to be owing. The court
below’s
conclusion that Basson repudiated the agreement, was therefore,
correct.
Specific
performance as remedy for breach
[22]
Christie’s
Law
of Contract in South Africa
7
ed
[2]
at
616 states:
‘
The
remedies available for a breach or, in some cases, a threatened
breach of contract are five in number. Specific performance,
interdict, declaration of rights, cancellation, damages. The first
three may be regarded as methods of enforcement and the last
two as
recompenses for non-performance. The choice among these remedies
rests primarily with the injured party, the plaintiff,
who may choose
more than one of them, either in the alternative or together, subject
to the overriding principles that the plaintiff
must not claim
inconsistent remedies and must not be overcompensated.’
(Footnote omitted.)
[23]
There are many cases in which it was held that if one party to the
agreement repudiates the agreement, the other party at his
election,
may claim specific performance of the agreement or damages in lieu of
specific performance and that his claim will in
general be granted,
subject to the court’s discretion.
[3]
[24]
Farmers’
Co-operative Society
[4]
concerned
a claim for the delivery of certain movables, alternatively for
damages. The question was whether specific performance
should be
decreed.
[5]
Innes
JA answered that question as follows at 350:
‘
Prima
facie
every
party to a binding agreement who is ready to carry out his own
obligation under it has a right to demand from the other party,
so
far as it is possible, a performance of his undertaking in terms of
the contract. As remarked by KOTZE, C.J., in
Thompson
vs. Pullinger
(1
O. R., at p. 301), “the right of a plaintiff to the specific
performance of a contract where the defendant is in a position
to do
so is beyond all doubt.” It is true that Courts will exercise a
discretion in determining whether or not decrees of
specific
performance should be made. They will not, of course, be issued where
it is impossible for the defendant to comply with
them. And there are
many cases in which justice between the parties can be fully and
conveniently done by an award of damages.
. .’
[25]
In
Woods
[6]
the
court was concerned with the action to enforce the execution and
performance of a contract for the lease of certain land with
a
furnished house and other buildings thereon. The question related to
the basis of assessment of damages when an alternative prayer
for
damages is granted. Innes CJ stated at 310:
‘
It
is a common practice, in South Africa to add to a prayer for specific
performance, an alternative prayer for damages. That course
has been
followed in the present case. Damages so claimed must, of course, be
proved and ascertained in the ordinary way. The
authorities do
not warrant a punitive assessment.’
[26]
Victoria
Falls & Transvaal Power Co Ltd
[7]
also
concerned the question of an assessment of compensation. Innes CJ
stated at 22:
‘
The
sufferer by such a breach should be placed in the position he would
have occupied had the contract been performed, so far as
that can be
done by the payment of money, and without undue hardship to the
defaulting party. The reinstatement cannot invariably
be complete,
for it would be inequitable and unfair to make the defaulter liable
for special consequences which could not have
been in his
contemplation when he entered into the contract. The laws of Holland
and England are in substantial agreement on this
point. Such damages
only are awarded as flow naturally from the breach, or as may
reasonably be supposed to have been in the contemplation
of the
contracting parties as likely to result therefrom (see
Voet
45, 1, 9, Pothier,
Oblig
sec. 160;
Hadly
v Baxendale
,
9 Exch. p. 341;
Elmslie
v African Merchants Ltd
.,
1908, E.D.C., p. 8-9, etc.).
’
[27]
From the above analysis it seems that the principle, that a party who
is, prima facie entitled to specific performance may
claim in the
alternative damages as surrogate for specific performance, has been
consistently followed by the courts until the
majority in
ISEP
Structural Engineering & Plating Ltd v Inland Exploration
brought
doubt as to the correct position.
Competency
of respondent’s claim
[28]
It was submitted by the appellants that the respondent’s claim
for damages as a surrogate for specific performance should
fail
because that claim is not competent in law.
ISEP
was cited as
authority in support of that proposition. In response the respondent
submitted that his claim for damages in lieu of
specific performance
is competent in law and that the principle stated in
ISEP
should not be
followed as it is against weighty authority and besides criticism,
its correctness was doubted by this Court in
Mostert
NO v Old Mutual Life Assurance Co (SA) Ltd
referred
to above.
[29]
In
ISEP Structural
Engineering & Plating (Pty) Ltd
the
city council sold certain property ‘voetstoots, absolutely as
it stands’ to the respondent, Inland Exploration Company.
The
purchase price was agreed upon after some negotiations which involved
the refusal by the seller to warrant that the property
would be
reinstated to its original condition. The lessee of the property,
ISEP
,
had constructed certain concrete ramps on the property. In terms of a
lease between the seller and
ISEP
,
it was obliged, on termination of the lease to reinstate the premises
to their original condition. The lease terminated before
the sale to
the respondent. Subsequent to the sale the seller ceded to the
respondent its right against
ISEP
to have the property restored. The respondent instituted an action
against
ISEP
claiming the sum of R15 000 alleged to be the costs of restoring
the leased premises to the same condition in which it was
received by
ISEP
in terms of the lease between the city council and
ISEP
.
The respondent’s claim was a claim for damages in lieu of
specific performance.
[30]
The three main judgments that were delivered were those of Jansen JA,
Van Winsen AJA and Hoexter AJA. Kotze JA concurred in
the judgment of
Van Winsen AJA and Viljoen JA concurred in the judgment of Hoexter
AJA. Hoexter AJA agreed with Jansen JA’s
conclusion that our
law does not recognise a claim for the objective value of the
performance as an alternative remedy to specific
performance.
[31]
Jansen JA stated at 6G-H
:
‘
That
a plaintiff may claim either specific performance or damages for the
breach (in the sense of
id
quod interest
,
ascertained in the ordinary way) is, on the authorities cited, beyond
question. And it would seem that fundamentally these are
the only
alternatives recognized in our practice (leaving aside the
possibility of a combination of the two), particularly in respect
of
an obligation
ad
factum praestandum
.
Certainly no cogent authority has been cited to us to show that there
is any other. However, it has been suggested that there
is the
possibility of a plaintiff claiming "damages" in the sense
of the objective value of the performance in lieu of
the performance
itself. This would not be damages in the ordinary sense at all, but
amount to specific performance in another form.
’
[32]
He went on to say at 7E:
‘
A
case which seems more in point is
National
Butchery Co v African Merchants Ltd
1907 EDC 57
where damages were granted "in lieu of specific
performance", but this seems but slender authority for this
Court, in
effect, to recognize a remedy akin to specific performance
in the shape of a claim for the objective value of the performance.
It
may be pointed out, if there were justification for recognizing such
a remedy, it would entail the introduction of a number of
ancillary
rules. Has the plaintiff an election of claiming either performance
or its objective value? If he claims the latter,
may the debtor
tender actual performance? (Cf D Joubert "Skadevergoeding as
Surrogaat van Prestasie" 1975
De
Jure
32; "Some Alternative Remedies in Contract"
1973
SALJ
37
at 44 - 47.) If specific performance were to be refused because it
would operate "unreasonably hardly" on the defendant,
would
the plaintiff still be entitled to the objective value of the
performance itself? It would seem not - otherwise the
very
hardship leading to refusal of the specific performance could still
be inflicted upon the debtor by granting the objective
value of the
performance, as would be illustrated by the case of an obligation to
reinstate in respect of a building destined for
immediate demolition.
In a case such as the present, the award of the objective value
(reasonable costs of reinstatement) would
be as unreasonable as an
order for specific performance.
’
[33]
There has been severe criticism of the majority decision in
ISEP
[8]
and
Smallberger ADCJ in
Mostert
NO v Old Mutual Life Assurance Co (SA) Ltd
2001
(4) SA 159
(SCA) para 74 doubted its correctness and said that a
reconsideration of the majority decision is called for.
[34]
In
Mostert NO,
Mostert, a curator
of a certain pension fund, instituted action against Old Mutual for
damages. Mostert’s claim arose from
two payments made by Old
Mutual to a third party. The payments were made pursuant to an
insurance policy in terms of which Old
Mutual held the pension fund’s
investment. Mostert’s main claim was based on an alleged breach
by Old Mutual, when
making the payments, of its contractual
obligations to the pension fund under the policy.
[35]
In his particulars of claim Mostert had alleged that the pension fund
had suffered damages as a result of such breach. Mostert
did not seek
to claim damages as a surrogate for performance. He disavowed
reliance on that claim.
[36]
Smallberger ADCJ remarked that Mostert’s claim for damages as a
surrogate for performance was competent unless the majority
decision
in
ISEP
precluded that claim, which he doubted it did. He
stated, however at para 75 that:
‘
From
a practical point of view, it would have made no difference in the
present matter had Mostert claimed damages as a surrogate
for
performance, and the claim had been recognised on the basis that
Isep’s
case
was wrongly decided . . . The approach to the quantification of the
fund’s loss would therefore have basically been the
same had
the claim been one for damages as a surrogate for performance rather
than damages for breach.’
[37]
The question is whether this is an appropriate matter in which to
reconsider the correctness of the majority decision in
ISEP
.
In my view, this is not.
ISEP
is distinguishable from the facts of the present matter. There, the
court dealt with a lease and the case concerned the obligation
of
reinstatement under a lease. What was said there is no more than a
ratio in regard to the limited class of contracts of reinstatement
under a lease and does not constitute a ratio of general application
in the law of contract.
[38]
Furthermore, the practical difficulties expressed by Jansen JA in
ISEP
at 7F of the judgment as justification for not recognising a claim
for damages in lieu of specific performance, do not arise in
the
present matter. For instance, Jansen JA pointed out that recognising
such a remedy would entail the introduction of a number
of ancillary
rules to deal with the possibility of a contest between the specific
performance and the economic value for specific
performance. There is
no such contest in this matter and the award of the objective value
of performance would not cause Basson
any hardship. The respondent
does not have to choose between the two remedies. He is restricted to
a claim for the economic value
for specific performance following
alienation by Basson of the property forming the subject matter of
the contract. Thus specific
performance has become impossible. Where
specific performance is not possible, the parties have no choice.
[9]
[39]
To the extent that what was said by Jansen JA in
ISEP
at 6G-H and 7E may
be construed as constituting the ratio of general application in the
law of contract, I have a difficulty with
it. Justice cries out aloud
for damages in lieu of specific performance in this particular case,
precisely because specific performance
by the appellants is not
possible. This is the case in which ‘justice between the
parties can be fully and conveniently done
by an award of damages’.
(
Farmers’
Co-operative Society
at
350)
[40]
The respondent is ready to carry out his own obligation under the
agreement and has a right to demand either literal performance,
or
monetary value of the performance, from Basson. The respondent’s
claim for damages, to the extent that he seeks the monetary
value of
the performance, is akin to a claim for the replacement value of the
lost property.
[41]
A creditor’s right to demand performance from the debtor cannot
be at the debtor’s mercy. The exercise of that
right cannot
depend on what the debtor chooses to do with the asset to which the
creditor’s right relates. To say that a
claim for damages as a
surrogate for specific performance is not recognised in law, would
deprive the creditor of the right, where
it has elected to enforce
the contract, to be put as much as possible, in the position that it
would have been in if the performance
was made
in
forma specifica
.
[42]
The respondent is entitled to the relief that he seeks. He has
established that he concluded a valid agreement with Basson;
that
Basson repudiated the agreement; that he was willing to carry out his
obligation under the agreement; and that he had elected
to hold
Basson to the terms of the agreement. Because of Basson’s
conduct, which rendered specific performance impossible
the
respondent amended his particulars of claim so as to introduce a
claim for damages in lieu of specific performance. The parties
have
agreed on the quantum and the mora interest rate to be awarded should
the appeal fail. This means that the judgment of the
court below
should be corrected to the extent proposed by the parties. As regards
the question of costs, there is no reason to
deprive the respondent
of his costs.
The
Order
[43]
In the result the following order is made:
1
The appeal is dismissed with costs.
2
Paragraphs 1 and 2 of the court below’s order are set aside and
replaced
with the following:
‘
1
The first defendant is ordered to pay to the plaintiff the amount of
R1 212 994.80.
2
The first defendant is ordered to pay to the plaintiff interest on
the amount
of R1 212 994.80 at the rate of 9,5 per cent per
annum, calculated from 14 September 2014 to date of final payment.’
________________
D
H Zondi
Judge
of Appeal
Willis
JA (partially dissenting):
[44]
I agree with the order proposed by Zondi JA. I have, however, two
qualifications to his reasoning, which I think need to be
mentioned.
The first is that, to the extent that
Isep
Structural Engineering and Plating (Pty) Ltd v Inland Exploration Co
(Pty) Ltd
1981 (4)
SA 1
(A) does not allow any exceptions to the principle that, in
the law of contract, there are only two alternative remedies for
an
aggrieved party: specific performance or damages for breach, this
case illustrates that such a principle cannot be sustained
– at
least not without qualification. There has been clear
authority, in this court previously, that a claim for damages
in lieu
of specific performance could, in certain circumstances, succeed.
See, for example
Farmers’
Co-op Society (Reg) v Berry
1912 AD 343
at 350 and
Victoria
Falls and Transvaal Power Company Limited v Consolidated Langlaagte
Mines Limited
1915
AD 1
at 22.
Mostert
No v Mutual Life Assurance Co (SA) Ltd
2001
(4) SA 159
(SCA), to which Zondi JA has referred, also seems to be
consonant with this line of reasoning on the matter.
[45]
My second qualification relates to the question of the rate of
interest. In my opinion, the probabilities in this case make
it much
more likely that a rate of interest had been agreed upon than not.
Furthermore, it is more probable, in the circumstances,
that the
interest rate would have been calculated by reference to the prime
rate than the appellants’ contention is that
there was a flat
rate (18%), especially as this was a long term venture. The question
of the rate of interest to be applied in
this case is largely
irrelevant because, if I understood counsel for both sides correctly
during the course of argument, they agreed
that, if damages were to
be awarded, the most practical and efficacious way of dealing with
the issue would be to apply the prescribed
rate of interest, as
gazetted by the Minister in terms of the
Prescribed Rate of Interest
Act 55 of 1975
. For this reason, I have no difficulty with Zondi JA’s
proposed order.
______________
NP
Willis
Judge
of Appeal
APPEARANCES:
For
appellants:
D T v R Du Plessis SC
Instructed
by:
Olivier
& Malan Attorneys, Randburg
c/o
Phatsoane Henney Inc, Bloemfontein
For respondent:
G M Young
Instructed by:
Goërtz Attorneys
Inc,
c/o DM Bakker Attorneys,
c/o Craig Baillie
Attorneys, Johannesburg
c/o
Symington and de Kok, Bloemfontein
[1]
Nash v Golden Dumps (Pty)
Ltd
1985 (3) SA 1
(A) at
22D-F. This dictum was referred to with approval by this Court in
Datacolor International
(Pty) Ltd v Intamarket (Pty) Ltd
[2000] ZASCA 82
;
2001 (2) SA 284
(SCA) para 16.
[2]
G B Bradfield
Christie’s
Law of Contract in South Africa
7
ed (2016) at 616.
[3]
Farmers’ Co-operative
Society (Reg) v Berry
1912
AD 343
;
Victoria Falls &
Transvaal Power Co Ltd v Consolidated Langlaagte Mines Ltd
1915
AD 1
;
Woods v Walters
1921
AD 303
;
Shill v Milner
1937 AD 101
;
Haynes v
Kingwilliamstown Municipality
1951
(2) SA 371
(A);
Rens v
Coltman
1996 (1) SA 452
(A).
[4]
Ibid.
[5]
At 349.
[6]
Supra fn 3.
[7]
Supra fn 3.
[8]
See for instance Oelofse (1982)
TSAR
at 63 et seq and those that are cited in para 74 of
Mostert
NO v Old Mutual
.
[9]
‘Some Alternative Remedies in Contract’
1973 SALJ 37
at
46.