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2014
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[2014] ZAGPJHC 386
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Bholat and Another v Louw and Another (2013/40364) [2014] ZAGPJHC 386 (15 August 2014)
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG LOCAL
DIVISION)
CASE NO: 2013/40364
DATE: 15 AUGUST 2014
In the matter between:
BHOLAT, MUHAMMAD
ZAKARIYA
................................
First
Applicant
BHOLAT,
SALEHA
….......................................................
Second
Applicant
And
LOUW, GIDEON
PRETORIUS
........................................
First
Respondent
BREYTENBACH MOSTERT SKOSANA
INC
...........
Second Respondent
JUDGMENT
FRANCIS J
1. The applicants brought an
application to direct the first and or second respondent to repay
them the sum of R186 000.00 which
they had paid over under protest to
the second respondent, a firm of attorneys that was acting for the
first respondent. The applicants
had purchased a house at an auction
and the respondents had contended that the sum of R186 000.00 was for
arrear interest in terms
of the sheriff’s conditions of sale.
2. The application was only opposed by
the first respondent.
3. On or about 2 August 2012 the
applicants purchased immovable property Erf 5 Valeriedene Township
(the property) at a sale in
execution conducted by the Sheriff,
Johannesburg West. The first respondent
was the execution creditor, at whose instance the sale in execution
was conducted. The
agreement of sale comprised of the Sheriff’s
conditions of sale.
4. The applicants duly complied with
their obligations in terms of clauses 6 and 8 of the conditions of
sale, specifically in that
they duly and timeously made payment of
the following sums of money towards the full purchase price:
4.1 The deposit of R19 975.00 on 2
August 2012;
4.2 The balance of the purchase price
of R1 422 036.00 on 13 August 2012.
5.The transfer was however delayed for
approximately 1 year due to problems that were not attributable to
either of the parties,
having stemmed from an illegal electrical
connection on the property (owned by
the execution debtor) as a result of which a rates clearance
certificate necessary to pass
transfer could not be obtained.
6. During June 2013 the second
respondent furnished the applicants with a statement of account,
claiming payment of the sum of R221
580.22, which had to be paid
prior to lodging the transfer. The largest component of that amount
was in respect of interest charged,
the further charges being in
respect of transfer costs, transfer of a usufruct and for charges
payable to the City of Johannesburg.
The interest charge was in
terms of clause 6 of the conditions of sale, which the first
respondent alleged he was entitled to.
7. The applicants disputed their
liability for interest. A revised statement of account was then sent
through on 8 July 2013, and
the amount of interest claimed was
reduced to R186 000.00. The applicants paid the full balance of
interest claimed of R186 000.00
under protest, since the transfer of
the property was under threat of being delayed further in the event
of its non-payment. They
brought this application to claim back the
sum of R186 000.00.
8. The issue to be determined is
whether the applicants were liable to pay the interest in terms of
the conditions of sale. In
deciding this issue this court will have
to decide whether the applicants have complied with the conditions of
sale. If they have
done so, it follows that the application should
be granted.
9. The respondents aver that by virtue
of the provisions of clause 6(b) of the conditions of sale, if the
transfer of the property
was not registered within one month after
the sale, the applicants are liable for interest regardless of them
having complied with
all of their payment obligation in terms of the
agreement. The respondents contended that although clauses 6(b) and
19 of the
conditions of sale on the face of it are contradictory, the
contract must be interpreted in a business like manner i.e. that
interest
is payable until transfer is registered. It was contended
that where an agreement is ambiguous, it should be interpreted in the
manner that gives it business efficacy. If transfer is for any
reasons delayed, even in this instance where the transfer was not
delayed as a result of the conduct on the part of the applicants,
then interest is still payable regardless of the fact that the
purchase process has already been paid.
10. The respondents pleaded in the
alternative that since the amounts paid by the applicants were held
in an interest bearing account,
the sum of R26 763.24 which they had
received as interest, should be deducted from the sum of R186 000.00.
They would be entitled
to the sum of R162 853.42 should the court
accept the applicants interpretation of the conditions of sale.
11. This court is required to interpret
the provisions of clauses 6, 8 and 19 of the conditions of sale. The
approach to the interpretation
of contracts that was expressed in
Coopers & Lybrand and Others v Bryant (3) SA 761 (A) was held to
be no longer consistent
with the approach to interpretation now
adopted by South African courts in
relation to contracts and other
documents, such as statutory instruments or patents. The test was
formulated in Bothma-Batho Transport
v Bothma & Seun Transport
2014 (2) SA 494
SCA at 499 F – H as follows:
“That summary is no longer
consistent with the approach to interpretation now adopted by South
African courts in relation
to contracts or other documents, such as
statutory instruments or patents. Whilst the starting point remains
the words of the
document, which are the only relevant medium through
which the parties have expressed their contractual intentions, the
process
of interpretation does not stop at a perceived literal
meaning of those words, but considers them in the light of all
relevant
and admissible context, including the circumstances in which
the document came into being. The former distinction between
permissible
background and surrounding circumstances, never very
clear, has fallen away. Interpretation is no longer a process that
occurs
in stages but is ‘essentially one unitary exercise’.
Accordingly it is no longer helpful to refer to the earlier
approach.”
11. Clauses 6, 8 and 19 of the
conditions of sale are relevant in this dispute. Clause 6 provides
as follows:
“6. a) The purchaser shall pay a
deposit of ten per cent of the purchase price of the sale, the
balance against the transfer
to be secured by a bank or building
society guarantee to be approved by Plaintiff’s attorney, to be
furnished to the sheriff within 21 days
after the date of sale.
b) If transfer of the property is not
registered within one month after the sale, the purchaser shall be
liable for payment of interest
to the Plaintiff at the rate of 15.5%
per annum no (sic) the respective amounts of the award to the
Plaintiff and the bondholder
in the plan of distribution as from the
expiration of one month after the sale to date of transfer
8. The Purchaser shall, on the day of
the sale, pay 6% (Six per cent) auctioneer’s charges on the
proceeds of the sale up
to the amount of R30 000.00 (Thirty Thousand
Rand) and thereafter 3.5% (Three point Five per cent) up to a maximum
fee of R7 000.00
(Seven Thousand Rand) and a minimum fee of R352.00
(Three Hundred and Fifty Two Rand). All the above mentioned amounts
shall be
payable by the Purchaser as a liability over and above the
purchase price.
19. The purchaser may obtain transfer
forthwith if he pays the whole price and complies with condition 8,
in which case any claim
for interest shall lapse,
otherwise transfer shall be passed only
after the purchaser has complied with the provisions of conditions 6
and 8 hereof”.
12.The starting point is to interpret
what clause 19 of the conditions of sale means. The wording of
clause 19 is clear. It provides
for two instances. The first is
that transfer may be obtained forthwith if the purchaser pays the
whole price and complies with
clause 8, in which case, any claim for
interest will lapse. The whole price would
include the purchase price of R1.2
million and the amounts referred to in clause 8 which is 6% of the
auctioneer’s charges
on the proceeds of the sale up to the
amount of R30 000.00 and thereafter 3.5% up to a maximum fee of R7
000.00 and a minimum fee
of R352.00. These amounts are payable by
the purchaser as a liability over and above the purchase price. Once
these amounts have
been paid any claim for interest will lapse and
the purchaser would be entitled to forthwith transfer.
13. The second instance envisaged in
clause 19 is that interest will only lapse where the purchaser has
complied with the provisions
of clauses 6 and 8 of the conditions of
sale. Clause 6(a) deals with the payment of a 10% deposit in cash
and the balance to
be secured by a bank or building
society guarantee to be approved by the plaintiff’s attorney to
be furnished to the sheriff
within 21 days after the date of the
sale. Clause 6(b) provides that where transfer of the property is
not registered within one
month of the sale, the purchaser shall be
liable for payment of interest to the plaintiff at the rate of 15.5%
per annum on the
respective amounts to the award of the bondholder in
the plan of distribution as from the expiration of one month after
the sale
to date of transfer. The provisions of clause 8 should also
be complied with.
14. It is common cause that the
applicants complied with the conditions set out in clause 8. The
sale took place on 2 August 2012.
The property was sold for R1.2
million. On 2 August 2012, the applicants in terms of their
obligations caused the sum of R129
975.00 to be paid to the Sheriff.
This amounts comprised of the deposit of the purchase price and the
further charges prescribed
in clause 8 of the conditions of sale.
15. It is further common cause that on
or about 13 August 2012, 11 calendar days after payment of the
deposit, the applicants caused
for the further sum of R1 422 036.00
to be paid over to the second respondent. It is common cause that
this payment covered the
full outstanding balance of the purchase
price, along with payment of the arrear utility bills and that the
applicants have made
payment of every cent they had in terms of the
conditions of sale. This payment was acknowledged by the second
respondent in their
letter dated 14 August 2012 as receipt of payment
for the purchase price.
16. There is nothing controversial or
ambiguous about the conditions of sale. Since it is common cause
that the applicants have
complied with the provisions of clauses 8
and
19, the claim for interest lapsed and
they should not have been charged any interest. They should have
been entitled to transfer
forthwith on fulfilment of those
conditions. Interest would only have accrued if they did not pay the
purchase price and the amounts
referred to in clause 8. This served
as an incentive for the purchaser to comply with the provisions of
clauses 8 and 19.
17. The applicants contended that they
are entitled to the sum of R186 000.00 which is what they allege they
paid for arrear interest
under protest. The respondents disputed
this and contended in the alternative that since the amount paid by
the applicants were
put into an interest bearing account, they are
not entitled to the full amount and that the sum of R26 763.24 which
the applicants
had received as interest should be deducted from the
sum of R186 000.00. They would therefore be entitled to the sum of
R162
853.42 should the court accept the applicants interpretation of
the conditions of sale. The applicants disputed this in their
replying affidavit.
18. It is trite that an applicant must
make out its case in its founding papers. The applicants claimed
that they paid R186 000.00
as arrear interest but failed to indicate
that the sum of R26 763.24 was credited to them as interest. The
applicants have failed
to proof that they are entitled to the sum of
R186 000.00. They are only entitled to the sum of R162 853.42.
19. The application stands to be
granted but for payment only for R162 853.42.
20. The applicants did not seek any
relief against the second respondent in the event that they did not
oppose the application.
The second applicant did not oppose the
application. The applicants are entitled to costs but these costs
should be limited to
the costs that are recoverable in the Regional
Court.
21. In the circumstances I make the
following order:
21.1 The first respondent is to pay the
applicants the sum of R162 853.42.
21.2 The first respondent is to pay the
costs of the application which costs are limited to those that are
recoverable in Regional
Court.
FRANCIS J
JUDGE OF THE HIGH COURT
FOR APPLICANTS : Y ALLI INSTRUCTED
BY SALEY, LAHER
& HOOSEN INC
FO RESPONDENTS : J P BLIGNAUT
INSTRUCTED BY
BREYTENBACH MOSTERT SKOSANA INC
DATE OF HEARING : 31 JULY 2014
DATE OF JUDGMENT : 15 AUGUST 2014