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[2014] ZAGPJHC 30
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Laynes v Coco Haven 1100 CC and Another (25220/2013) [2014] ZAGPJHC 30 (10 March 2014)
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 25220/2013
In
the matter between:
ERIC
LAYNES
Applicant
and
COCO
HAVEN
1100
CC
First
Respondent
STUPEL
& BERMAN
INCORPORATED
Second
Respondent
J
U D G M E N T
MASHILE,
J
:
[1]
This is an application to compel the First Respondent to do all
things necessary and to sign all documents to enable the Second
Respondent to:
1.1
Register the sectional scheme Coco Villas, situated at E [……],
Gauteng
in terms of the
Sectional Titles Act 95 of 1986
; and
1.2
Register transfer of Unit 1 of the said sectional scheme into the
Applicant’s name.
[2] The Applicant further
seeks, in the event of the First Respondent failing to observe the
order, that it be decreed that the
sheriff be authorised and directed
to do all things necessary and to sign all documents necessary to
effect the abovementioned
relief.
[3] On 18 March 2011 at
Germiston the Applicant and the First Respondent (parties) concluded
a written sale agreement in terms of
which the First Respondent sold
section 1
of Coco Villas (about to be registered) of Erf 1052,
Primrose to the Applicant for a purchase price of R1 050 000.00.
[4] The purchase amount
was payable in cash against registration of transfer of the
property which amount was to be secured
by guarantees acceptable by
the first respondent, payable free of exchange upon registration of
transfer of the property, delivered
to the First Respondent within
days of execution of the agreement.
[5] The registration of
transfer of the property was to be effected by the Second Respondent
of 70 […..] within a reasonable
time after the Applicant has
complied with the relevant clauses of the agreements and made payment
to the Applicant’s conveyancers
of transfer duty, stamp duty
and all other costs of transfer and matters incidental thereto, for
all of which the applicant was
to be liable and obliged to pay on
demand.
[6]
The agreement also had a ‘no variation or cancellation except
in writing clause’ the relevance of which will become
obvious
as the judgment unfurls below.
[7] On
9 June 2011 the parties concluded another deed of sale largely
containing similar provisions as the earlier agreement except
that
the purchase price was R750 000.00. For some incomprehensible
reasons the parties resolved to cancel the second deed
of sale.
[8]
Having done so, the First Respondent then proceeded to enter into
another deed of sale, this time, however, with Mr Samuel Jacobus
Laynes, the Applicant’s father. The agreement was once
again similar in most respects except that the purchase price
was R1
050 000.00.
[9]
The First respondent argues that the conclusion of the second
agreement oustered the applicability of the first agreement.
The mutual cancellation of the second agreement meant that he was at
liberty to enter into another agreement with any other willing
party.
[10]
In view of the existence of the agreement between Samuel Jacobus
Laynes and the First Respondent, the Applicant lacks
locus
standi
. The only provisions
that can be enforced are those of the agreement between
Samuel Jacobus Laynes and the First
Respondent to which the Applicant
is not a party.
[11]
Sharply opposed to this approach, is the Applicant who contends that
the first agreement was never annulled as there was no
written
agreement to vary it as per the provisions of clause 7.2 of the First
Agreement.
[12]
In so far as the Applicant is concerned, the second agreement should
basically be disregarded and the provisions of the first
agreement
should stand as though no subsequent agreement was ever considered or
concluded.
[13]
The failure of the parties to obey the ‘no variation or
cancellation except in writing clause’ prior to entering
into
the second agreement rendered it impossible for the parties to enter
into another one.
[14]
Accordingly, asserts the Applicant, the First Respondent could not
have gone ahead to conclude another agreement with a third
party.
[15]
The issues that the court must determine are therefore the following:
15.1
What effect, if any at all, did the conclusion of the second
agreement have on the first agreement?
15.2
What was the result of the mutual cancellation of the second
agreement, if any, on both the first agreement
and that between the
First Respondent and Samuel Laynes?
15.3
Which of the two agreements, the first or the third, should be
operative for purposes of the sale?
WHAT
EFFECT, IF ANY AT ALL, DID THE CONCLUSION OF THE SECOND AGREEMENT
HAVE ON THE FIRST AGREEMENT?
[16]
The First Respondent asserts that the first agreement was voluntarily
novated by the parties’ conclusion of the second
agreement
alternatively, that the Applicant waived its rights to enforce the
terms and conditions of the first agreement.
[17]
Novation
means replacing an existing
obligation by a new one, the existing obligation being thereby
discharged, but novation is not to be
regarded as a form of payment.
See Christie’s
Law
of Contract in South Africa
6
th
Edition Page 466. The parties in the present case varied the
price of the property as agreed in the first agreement.
In this
regard one can hardly state that the first agreement has been
novated. See the following passage from Christie’s
Law
of Contract in South Africa
:
“
When
the common intention is to vary one obligation of the old contract,
such as the price in a contract of sale, leaving all the
other terms
intact, it is sometimes said that there has been a novation of that
one obligation, but this is really a misuse of
the word novation. The
contract has not been novated but varied, and any action would
properly be brought on the old contract as
varied, not on a purely
imaginary new contract containing all the old contract's terms
and one of its own
.”
[18] Novation requires
the presence of intention and consensus of the contracting parties.
The Applicaant has annexed certain
correspondence to his Replying
Affidavit between his attorneys and the conveyencers to demonstrate
that the common intention between
the parties has always been to
registrer transfer into his name.
18.1 In
an e-mail message dated 31 January 2013 emanating from the attorneys
of the Applicant the parties are
described as the Applicant and the
First Respondent;
18.2 In
a letter from the conveyencers dated 21 February 2013, which contains
confirmation that the Applicant
has paid an amount of R740 00.00
towards the purchase price of the property, the Applicant continues
to be referred to as the purchaser;
18.3
Again in a letter dated 19 March 2013 the Applicant’s
attorneys describe the two parties as the
only parties involved in
this transaction;
18.4
The letters dated 3, 10, 13 and 24 May 2013, which were exchanged
between the conveyencers and the Applicant’s
attorneys state
the parties as the only transacting ones;
18.5
Further correspondence dated 28 and 29 May and 12 June 2013 also
confirms that the parties concerned in this
transaction are the First
Respondent and the Applicant.
[19] If the argument of
the First Respondent is to succeed then there needs to be an
explanation of the persistent reference in
the correspondence to the
parties as the only ones engaged in this transaction. I did not
find any such account in the papers
of the First Respondent.
[20] Moreover, I fail to
comprehend why the parties involved in this transaction would still
be regarded as the First Respondent
and the Applicant in 2013 when
another agreement with a third party was concluded as erly as 18 July
2011. The continued
reference to the parties in 2013 and the
mutual cancellation fortify my strong belief that the parties meant
to proceed with the
first agreement.
[21]
If the second agreement did not novate or cancel the first agreement
the question then remains, what should the court make
of the second
agreement. The only rational and sensible conclusion is that
the parties agreed to vary the purchase price
from R1 050 000.00
to R750 000.00. This does not amount to a novation or
cancellation of the old agreement
but it is simply a variation not
supported by the provisions of the very agreement that it seeks to
alter.
[22]
If it is a variation it becomes important to scrutinize the
provisions of the first agreement insofar as variation of its terms
and conditions are concerned. Clause 7.2 of the first agreement
provides:
“…
No
variation of the terms of this agreement or cancellation thereof
shall be of any force or effect unless reduced to writing and
signed
by the parties hereto
.”
[23]
Reference to the ‘no variation or cancellation except in
writing clause’ makes it immediately apparent that there
is no
proof of cancellation or valid variation. The First Respondent
has passionately argued that the mere fact that the
parties entered
into the second agreement, which is in writing, should be sufficient
to obviate the need to comply with Clause
7.2
supra
.
This argument must be rejected on the ground that the intention of
the parties does not support the version that they intended
to vary
or cancel.
WHAT
WAS THE RESULT OF THE MUTUAL CANCELLATION OF THE SECOND AGREEMENT, IF
ANY, ON BOTH THE FIRST AGREEMENT AND THAT BETWEEN THE
FIRST
RESPONDENT AND SAMUEL LAYNES?
[24]
The conclusion and the subsequent cancellation of the second
agreement would have had no effect whatsoever on the validity
of the
first agreement and this is for the following reasons:
[24.1
There was no novation;
24.2
The purported variation is not supported by the evidence before
court;
24.3
The parties did not cancel the first agreement.
[25] One is obliged to
conclude as stated above when one observes the conduct of the parties
especially after 18 months of the conclusion
of the agreement between
the First Respondent and Samuel Laynes.
WHICH
OF THE TWO AGREEMENTS, THE FIRST OR THE THIRD, SHOULD BE OPERATIVE
FOR PURPOSES OF THE SALE?
[26]
The finding that the second agreement was invalid from the onset
means of course that the First Respondent could not have entered
into
another agreement with a third party, Samuel Laynes. That
agreement cannot prevail over the first agreement. Accordingly,
the third agreement having come into being after the first one must
fall by the wayside as the two cannot co-exist.
[27]
The First Respondent has also contended that the Applicant’s
inaction to exert its rights stemming from the first agreement
constitutes a waiver. ‘Waiver is first and foremost a
matter of intention. Whether it is the waiver of a right
or a
remedy, a privilege or power, an interest or benefit, and whether in
unilateral or bilateral form, the starting point invariably
is the
will of the party said to have waived it.’ Per Nienaber
JA in
The Road Accident Fund v R E
Mothupi
2000 (4) SA 38
(SCA)
[28]
He argues further that the Applicant “obviously introduced his
father, Samuel Laynes, to the First Respondent. “
This is
supposed to reinforce the assertion that the Applicant has waived his
rights. The court was not apprised of how the
First Respondent
and Samuel laynes came to conclude the agreement. There is
therefore nothing obvious about it.
[29]
There is no conduct on the part of the Applicant from which it can be
inferred that he impliedly waived his rights to enforce
the terms of
the first agreement against the First Respondent. If anything,
the evidence points to the contrary because the
Applicant was
surprised when he found out that the sectional scheme and by
extension, the unit, had not been registered as agreed.
[30]
From the time of discovering that no registration of transfer had
taken place, a whole exchange of correspondence took place
between
his attorneys and the Second Respondent culminating in this
application. I have referred to some of those letters
in
paragraph [18] above. The circumstances from which one can
deduce that a party has waived his rights must be inconsistent
with
any other theory. See the
Road
Accident Fund
case
supra
.
[31]
The First Respondent has put forward the assertion that the Applicant
should have set forth such adequate allegations in his
founding
affidavit that would not require him to raise new ones in his
replying affidavit. As a general rule the First Respondent
is
correct. The Applicant should stand or fall by his founding
affidavit. However, the exception is that where a respondent
raises new averments when answering to the founding affidavit, an
applicant would have the right to put the record straight in
the
replying affidavit. See the following extract of Hiemstra J
from the case of
[zRPz]Registrar
of Insurance v Johannesburg Insurance Co Ltd
(1)
1962 (4) SA 546
(W):
“
The
rules of procedure are made to facilitate litigation; they are always
subject to the over-riding discretion of the Court. The
Court will
take into account whether any of the parties is prejudiced if the
rules are not strictly observed. …
I am not
prepared to allow the rules of procedure to tyrannise the Court where
an important matter has to be thrashed out
fully and all the facts
have to be put before the Court
.”
[32]
The Applicant could not have foreseen that the First Respondent would
rely on the cancellation of the second agreement to enter
into
another agreement with a third party. Insofar as he was concerned,
the second agreement was cancelled and the only agreement
existing
between the parties was the first. In view of that, he did not
see the need to deal with the second and the agreement
between Samuel
Laynes and the First Respondent. However, it became important
for him to delve into those after the First
Respondent has raised
them.
[33]
The First Respondent strongly felt that the Applicant should have
joined Samuel Lanes to these proceedings as he has also concluded
an
agreement with the First Respondent concerning the same property.
The agreement between the parties is the operative one
and besides,
that between the First Respondent and Samuel Laynes is null and void
because it could not have come into existence
while the first
agreement was still alive. For a party to be joined the must
exist a direct and substantial interest in the
matter and not just a
financial interest. See Erasmus, Superior Court Practice, Page
B1 – 94.
[34]
Lastly, the First Respondent holds the view that there is a real
issue of fact, which this court cannot adequately resolve
without the
backing of oral evidence. In this regard he referred this court
to the case of Petersen v Cuthbert & Company
Ltd
1945 AD 420
at
428 f. The decision is no doubt correct but I differ sharply
with the First Respondent’s approach insofar as he
thinks it
applies here. The matter is capable of resolution on the papers
and there exists no dispute of facts at all.
[35]
In the circumstances, I find that:
35.1
The first agreement was not novated, varied, cancelled or waived;
35.2 In
view of the parties’ failure to comply with Clause 7.2 of the
first agreement, the second agreement
was null and void
ab
initio
its purported mutual cancellation notwithstanding;
35.3]
The agreement between the First Respondent and Samuel Laynes is
invalid because the property, which is the subject
of the sale in the
agreement, had been purchased by the Applicant already at the time of
the purported sale.
[36]
In the result, the application succeeds and I make the following
order:
The
First Respondent is ordered to comply with all the requirements of
the
Sectional Titles Act 95 of 1986
and specifically to do all
things necessary and sign all documents necessary to effect the
registration of the sectional scheme
Coco Villas situated at E [….]
Registration Division I.R, Province of Gauteng, Authority Ekurhuleni
Metropolitan Municipality,
in the sectional title register;
The
First Respondent is to do all things necessary and to sign all
documents necessary to effect the registration of Unit 1 of
the
sectional scheme, Coco Villas, in the name of the Applicant;
The
Second Respondent is ordered to register Unit 1 of the above
mentioned sectional scheme in the name of the Applicant;
Should
the First Respondent fail and/or refuse to comply with the orders
set out in Paragraphs 1 and 2 above, the sheriff of this
court is
hereby authorised and directed to do all that is necessary and to
sing all documents necessary on behalf of the First
Respondent to:
4.1
effect the registration of the sectional scheme, Coco Villas, in
terms of the
Sectional Titles Act No. 95 of 1986
; and
4.2
effect the transfer of Unit 1, Coco Villas, into the name of the
Applicant
5.
The
First Respondent is ordered to pay the costs of this application.
_________________
B
MASHILE
JUDGE
OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
COUNSEL
FOR APPLICANT: Adv. G V R Fouche
INSTRUCTED
BY: Yammin Hammond Incorporated
COUNSEL
FOR RESPONDENTS: Adv. J C Viljoen
INSTRUCTED
BY: Stupel & Berman Incorporated
DATE
OF HEARING: 31 October 2013
DATE
OF JUDGMENT: 10 March 2014