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[2015] ZAGPJHC 343
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Hanna v Basson and Others (15003/08) [2015] ZAGPJHC 343; [2016] 1 All SA 201 (GJ) (1 September 2015)
REPUBLIC
OF
SOUTH AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO:15003/08
In the
matter between:
TYRONE
PAUL
HANNA
Plaintiff
versus
CHRISTIAAN
JOHANNES BASSON
First
Defendant
PAUL
DREYER
Second
Defendant
PLOT
31 VAALBANK
CC
T
hird
Defendant
JUDGMENT
PG
CILLIERS AJ
:
INTRODUCTION
[1] The Plaintiff seeks
an order against the First Defendant for specific performance of an
agreement. He does so in the form of
a claim for payment of a sum of
money
in lieu
of specific performance.
[2] The Plaintiff, the
First Defendant and the Second Defendant concluded an agreement
during 2002 relating to the development of
the Farm Vaalbank IR, Farm
No. 476, Unit 31, held under title deed T57406/1994 (“
the
immovable property
”) situated on the Vaal River.
[3] The Plaintiff, the
First Defendant and the Second Defendant intended the developed
property to serve as a weekend retreat for
them. Their intention was
to enter into a closely-knit relationship (akin to that existing
between family members) in their joint
use of the immovable property.
In this regard the immovable property was intended to be developed by
the construction of three
similar residences – each of them to
be used by each of the parties - and an employee’s cottage on
the immovable property.
[4] It is common cause
that the relationship of friendship that formerly existed between the
Plaintiff, on the one hand, and the
First Defendant and the Second
Defendant, on the other hand, came to an end.
[5] A bitter feud
followed in the litigation that ensued between, in particular, the
Plaintiff and the First Defendant.
THE FACTS
[6] The First Defendant
obtained the sole membership of the Third Defendant. He did so during
or about 2002.
[7] The Third Defendant
is, and was at all relevant times since 1994, the owner of the
immovable property.
[8] During 2002 the
Plaintiff and the Second Defendant had been friends for a period of
approximately 18 years.
[9] The Plaintiff and the
First Defendant were known to one another from business dealings that
they have had prior to and until
2002.
[10] At the time of
conclusion of the agreement in 2002 the First Defendant was the sole
member of the Third Defendant.
[11] The Plaintiff, the
First Defendant and the Second Defendant entered into informal
discussions towards the middle of the year
2002 in relation to the
possible development of the immovable property.
[12] During or about
July/August 2002 an agreement was concluded between the parties in
terms of which the immovable property would
be developed for the
aforesaid purpose.
[13] The terms of the
agreement are in dispute. I shall presently return to dealing with
this issue, to the extent that it is relevant.
[14] In August 2002 the
First Defendant commenced with the development of the three
residential units on the immovable property.
The First Defendant
financed the entire development.
[15] The development of
the three residential units was finalised towards the beginning of
December 2002.
[16] On 1 December 2002
the parties took occupation of each of the three residential units on
the immovable property.
[17] In January 2003 the
First Defendant presented the Plaintiff with a tax invoice that was
issued by the First Defendant to the
Plaintiff. The tax invoice is a
standard form tax invoice that was completed in the handwriting of
the First Defendant. In relevant
part it contained the following:
“
11-12-2002
Mr
T Hanna
←
33
⅓
%
share of Plot 31 CC
R633 250-00
Less:
-
Kitchen
R 8 297-00
A/C
Absa Bank Branch 334705
R624 953=00
A/C
NO 4042517679
R 8 229-32
”
[18] The undisputed
evidence of the First Defendant, with regards to the tax invoice,
entailed the following:
18.1
Since the day that the parties took occupation of the residential
units on the immovable property he informed the Plaintiff
and the
Second Defendant that the cost of development of the property had to
be re-paid to him over a period of twenty years at
the prime interest
rate of ABSA Bank Limited, together with 1 (one) percentage point;
18.2
The First Defendant was informed by a representative of Absa Bank
Limited that the prime interest rate of ABSA Bank Limited
at that
time amounted to 17%;
18.3
At the time that he presented the tax invoice to the Plaintiff his
then bank manager (one Willem Brits) informed him that a
re-payment
of the capital amount of R624 953 over a period of twenty years
(at the then prime interest rate of 17 percentage
points) together
with 1 (one) percentage point amounted to R8 229-32 per month;
18.4
The First Defendant then proceeded to complete the tax invoice issued
to the Plaintiff by writing the amount of R8 229-32
onto the tax
invoice. This constituted the monthly instalment that the Plaintiff
had to repay to the First Defendant over a period
of twenty years.
[19] The evidence of the
Plaintiff was that the monthly repayment of R8 229-32, together
with the Plaintiff’s portion
of the expenses with regards to
maintenance of the immovable property, were paid promptly by him
until 2007.
[20] The Plaintiff’s
further evidence in this regard was he, during the year 2007 also
paid the monthly instalment of R8 229-32
a year in advance.
[21] The First Defendant
did not dispute the aforesaid, but added, in his evidence, that
interpersonal difficulties arose with regards
to the following:
21.1
The Plaintiff brought a dog to the immovable property. This, the
First Defendant said, was in violation of the “house
rules”
that no animals would be brought to the immovable property;
21.2
The Plaintiff, on occasion, brought a number of people to the
immovable property and the relationship between the parties became
strained by reason of the noise that was created by the Plaintiff and
his guests;
21.3
The Plaintiff brought quad bikes onto the immovable property. This,
the First Defendant says was in violation of the “
house
rules
” that no noise pollution
would be created by any of the parties on the immovable property;
21.4
During the year 2006 the Plaintiff effected alterations to “
his
”
residence on the immovable property in that he converted the motor
vehicle garage to a bedroom.
21.5
The relationship between the Second Defendant and the Plaintiff
became strained for a reason that was not known or disclosed
to the
First Defendant.
[22] The aforesaid
complaints by the First Defendant were not put to the Plaintiff in
cross-examination. The first occasion on which
these complaints were
mentioned in the trial was during the First Defendant’s
evidence.
[23] I interpose at this
stage to mention the following:
23.1
The First Defendant’s evidence was that the Plaintiff and the
Second Defendant approached him in the year 2002 and requested
that a
membership interest of
⅓
(one
third) to each of them had to be transferred to them. The First
Defendant refused to adhere thereto and informed the Plaintiff
and
the Second Defendant that the
pro
rata
membership interest in the Third Defendant would be transferred to
them upon payment of the purchase price in full by each of them.
This
portion of the evidence of the First Defendant was not disputed by
the Plaintiff;
23.2
The First Defendant never, during the course of the years 2002 to
2007 advanced that the Plaintiff was in arrears with regards
to his
repayments in respect of the outstanding capital of R624 953-00,
or in any other respect. No evidence was presented
that the First
Defendant ever demanded from the Plaintiff to pay alleged arrear
amounts in respect of the monthly instalments on
the outstanding
capital of R624 953-00 – not until 20 February 2008.
[24] On 5 April 2007 the
Plaintiff requested the First Defendant to furnish him with the
outstanding balance of the capital amount
outstanding.
[25] In this regard the
evidence of the Plaintiff was that the First Defendant did not, when
the request was made, object to the
furnishing of the settlement
figure to the Plaintiff. This portion of the evidence by the
Plaintiff was not disputed.
[26] The First
Defendant’s formal response to the request by the Plaintiff to
be furnished with the settlement figure on the
outstanding capital
was to instruct his then attorneys of record, Negota SSH Incorporated
(“
Negota
”) to direct a letter to the Plaintiff and
to the Second Defendant in which the following conveyances were made,
in relevant
part:
“
We
confirm that our client is considering selling the property known as
Plot 31, Vaalbank and has received offers in the region
of
R5 000 000-00.
3.
As a gesture of courtesy, our client hereby affords you a period of
90 (ninety) days within which to submit a formal Offer to
Purchase,
should you wish to purchase the property from the Close Corporation.
Should our client not receive an acceptable Offer
to Purchase from
you before expiry of the 90 (NINETY) day period, the property will be
sold on the open market.
4.
Should you not wish to purchase the property, you are requested to
notify our offices of you decision as soon as possible, in
order for
our client to proceed with the marketing of the property.”
[27] The First Defendant
admitted in his evidence that the contents of the letter of 11 April
2007 were a lie. He testified that
he made the false conveyances only
to elicit a response from the Plaintiff and from the Second
Defendant.
[28] On 7 June 2007 the
Plaintiff’s then attorneys of record addressed a letter to
Negota. In the said letter the following
issues were recorded, in
relevant part:
“
The
contract is not disputed, but you have advised the writer that the
contract is invalid due to non-compliance with the
Alienation of Land
Act, 68 of 1981
….
The
Act is not applicable…..
In
breach of the contract, the CC intends to sell the Plot. We have to
reserve our client’s rights, including the right to
supplement
the facts set out in this letter….
How
does one take the matter further?
Our
client demands that:
1.
Your
clients agree to abide by the contract as set out herein.
2.
Your
clients agree to the registration of a caveat against the Plot’s
title deed to the effect that our client’s consent
to any
alienation of the Plot is required;”
[29] The First Defendant
therefore already took the position on or before 7 June 2007 that the
agreement that was concluded between
the parties was invalid and he
also communicated his stance in this regard to the Plaintiff.
[30] The First Defendant
reiterated that he regarded the agreement as invalid on 6 August 2007
when Negota recorded in this regard:
“
Our
client contends that no valid agreement has been entered into between
the respective parties.”
[31] The parties held an
informal discussion on 27 August 2007 and again on 30 August 2007.
[32] On 31 August 2007
the Plaintiff’s attorney confirmed that the First Defendant’s
attorney furnished him with an
undertaking that the First Defendant
would not proceed to sell the Third Defendant and/or its assets until
the parties have either
reached a settlement agreement or confirmed
that they were unable to reach a settlement agreement.
[33] In response to the
above confirmation of an undertaking Negota informed as follows on 10
September 2007:
“
We
have been instructed by our client, Mr C Basson that he is not
prepared to furnish your client with an undertaking that he will
not
dispose of the membership of the CC.”
[34] On 19 December 2007
the Plaintiff offered to purchase the Third Defendant and all of its
assets at a purchase consideration
of R3 750 000-00. This
offer was rejected by the First Defendant on 8 January 2008. In
rejecting the offer the First
Defendant’s then attorney
informed that the Plaintiff had an opportunity until 15 January 2008
to furnish to the First Defendant
an offer of no less than
R5 000 000-00 for the purchase of the Third Defendant.
[35] On 20 February 2008
another attorney, Mr André de Klerk (“
Mr de Klerk
”)
directed a letter to the Plaintiff’s attorneys of record. The
contents of this letter of demand are recited in its
entirety:
“
We
refer you to the above matter in which we have filed a notice of
intention to oppose on behalf of the First and Second Respondents.
We
are instructed to advise you on behalf of your client that the
agreement he relies on in his application is null and void and
unenforceable on the grounds set out in the correspondence attached
to your clients’ founding affidavit as well as on the
grounds
of the fact that the alleged agreement do not comply with the
provisions of the Property Time-sharing Act and the provisions
of the
Share Blocks Control Act.
Alternatively
and in the event that it should be found that the alleged agreement
is valid and legally enforceable, then our clients’
views are
that your client is in breach of the alleged agreement in that:
1.
Your
client has failed to pay his monthly instalments of R8, 229.32 to our
clients from July 2007 to date hereof. The arrears amount
to R65,
834.56.
2.
Your
client has also failed to pay his monthly contribution towards
electricity and water consumption, garden services, salary for
the
gardener and cost of maintenance amounting to approximately R1,
333.32 per months as from 1 December 2007 plus a contribution
of R1,
666.66 for a burst geyser in the bathroom of the gardener. The total
outstanding amount is R5, 666.62.
Our client, the First
Respondent has requested your client on various occasions that he is
in default and that our clients will
terminate you client’s
further occupation of the property.
We are instructed to
advise you, as we hereby do, that should the total amount of R71,
501.18 (R65, 834.56 plus R5, 666.62) not
be paid into out (sic) trust
account on/before Wednesday, 27 February 2008, the alleged agreement
with your client will be cancelled
forthwith and without any further
notice to you or your client. In the event of cancellation of the
alleged agreement, it will
be required that your client immediately
vacates the property.
Our
trust bank particulars are as follows:
André
de Klerk Attorneys
Absa
Bank Lynnwood
Account
number 405-098-7713
Branch
code 334-745
Reference
B108”
[36] On 21 February 2008
the Plaintiff’s attorneys responded to the aforesaid demand and
claims. In relevant part the following
issues were recorded:
“
However
our client denies that the agreement relied on is null and void and
we shall leave this matter to be finally decided on
by the courts.
With
regards to your alternative we place it on record that our client had
in fact paid up in advance with regards to monthly instalments
and
despite, on numerous occasions, requesting a detailed breakdown from
your client setting out exactly how much was outstanding,
same has
not been forth coming (sic). Our client once again tenders to settle
your client in full as soon as he has received said
breakdown. We
further require a detailed breakdown to determine exactly how you
calculated the amount of the arrears. Specifically
taking into
consideration, as
stated
above, our client has paid in advance with regards to the monthly
instalments.
With
regards to your claim for full monthly contribution towards
electricity, water and gas consumption said amount will be placed
into our trust account and held there pending the finalisation of
this matter. Our client however tenders to pay said amount over
immediately on receiving an agreement from your client confirming the
validity of the agreement between our respective clients
with regards
to the property….
We
also wish to understand on what basis your client intends cancelling
an agreement that he alleges is null and void.”
[37] In the meantime the
Plaintiff launched an urgent application on or about 7 February 2008
to obtain
interim
interdictory relief against the First
Defendant and the Third Defendant. The sets of relief that were
sought included an order
restraining the First Defendant from
alienating or encumbering any part or the whole of the membership
interest in the Third Defendant
and an order interdicting the Third
Defendant from alienating or encumbering the immovable property.
[38] Negota caused the
delivery of a notice of intention to oppose the urgent application on
behalf of the First Defendant and the
Third Defendant.
[39] Mr de Klerk also
caused the delivery of a notice of intention to oppose the urgent
application on behalf of the First Defendant
and the Third Defendant.
[40] On 22 February 2008
the Plaintiff’s attorney informed Mr de Klerk that a notice of
intention to oppose was received from
Negota in which it claimed to
be acting on behalf of the First Defendant and the Third Defendant.
Clarification was, in this regard,
sought from Mr de Klerk.
[41] On even date the
Plaintiff’s attorneys of record also required clarification
from Negota with regards to the issue of
delivery of notices of
intention to oppose both by Negota and by Mr de Klerk.
[42] On 22 February 2008
Mr de Klerk informed the Plaintiff’s attorneys by formal letter
that he would continue to act on
behalf of the First Defendant and
the Third Defendant. He also conveyed that Negota would withdraw the
notice of intention to oppose
that was delivered by it. The First
Defendant, in this letter, persisted with the stance that the
agreement between the parties
was invalid. The First Defendant also
again continued to claim, as alternative to the position taken that
the agreement was invalid,
payment of the alleged arrear amounts. The
following was stated with regards to the nature of the repayments on
the capital outstanding.
“
2.3
The monthly instalments, which is (sic) nothing else, but
occupational
interest
(my emphasis) on the amount of R633 250.00 are in arrears as is
clearly evidenced by annexure “
FA8
”
to your client’s founding papers
.”
[43] On 27 February 2008
the Plaintiff’s attorneys of record informed Mr de Klerk that:
43.1
The Plaintiff tendered an amount of R8 230-00 towards the
monthly instalments;
43.2
The Plaintiff was never furnished with copies of electricity bills
and the garden service statement, but that he was prepared
to pay the
amount claimed by the First Defendant into the trust account of the
Plaintiff’s attorneys with instructions to
pay same over as
soon as copies of the relevant documentation confirming the amount in
question were received;
43.3
Until clarification was brought, firstly, to the question as to whom
of Mr de Klerk and Negota held the mandate to act on behalf
of the
First Defendant and the Third Defendant as well as, secondly,
clarification was obtained on the validity of the agreement
between
the parties, the monies would be held in the trust account of the
Plaintiff’s attorneys.
[44] On 27 February 2008
Mr de Klerk informed the Plaintiff’s attorneys that he held the
mandate to act on behalf of the First
Defendant and the Third
Defendant. He also conveyed that Negota undertook to file a notice
withdrawing the notice of opposition
that was delivered by it.
[45]
Mr de Klerk also placed on record that, should the amount of R65,
834.56
alternatively
R71,
501.18 not be paid on 27 February 2008, per the demand of 20 February
2008, the “
alleged
”
agreement would be regarded as cancelled and that the Plaintiff then
had to vacate the portion of the immovable property
that he occupied.
[46] On 28 February 2008
the Plaintiff’s attorneys informed that the amount of R65,
834.56 would be paid under protest into
the trust account of Mr de
Klerk as soon as confirmation was received from Negota that they were
withdrawing as attorneys of record
and that Mr de Klerk indeed held a
mandate.
[47] On even date Mr de
Klerk informed the Plaintiff’s attorneys, in relevant part, as
follows:
“
The
alleged agreement has been cancelled on the 27
th
February 2008.
Our
client is in the circumstances not prepared to accept any further
payments from your client.
We
have again request Mr Seyffert Strydom of Negota SSH Incorporated to
withdraw as attorneys of record.”
[48] On 3 March 2008 the
Plaintiff’s attorneys informed Mr de Klerk that payment had
been made under protest on 29 February
2008 and that, should it later
be determined that Mr de Klerk was not the mandated attorney it would
be required that the monies
immediately be transferred to the trust
account of the Plaintiff’s attorneys.
[49] On 7 March 2008 Mr
de Klerk repaid to the Plaintiff’s attorneys the amount of R65,
834.58 and informed them that the
“
alleged
”
agreement was duly cancelled.
[50] On 12 March 2008 an
order was granted by agreement in the terms that the sets of
interim
relief were sought.
[51] In further
correspondence of 18 March 2008 and 3 April 2008 Mr de Klerk again
confirmed that all payments that were received
pending the outcome of
the action to be instituted constituted occupational rental (or
interest).
[52] On 22 May 2008 the
Plaintiff’s attorneys requested from Mr de Klerk to explain on
what basis the Plaintiff was regarded
as a tenant.
[53] No response was
received to the above request.
[54] On 7 October 2008 Mr
de Klerk again confirmed the view of the First Defendant that no
valid agreement was in existence between
the parties.
[55] The First
Defendant’s view that no valid agreement was in existence
between the parties was still persisted with as late
as 25 February
2009 when Mr de Klerk conveyed the following in this regard:
“
We
again record that our client’s view remains that there is no
agreement between him and your client with regard to the sale
of the
property, and that the monies that your client has paid thus far, is
accepted without prejudice to our client’s rights
and as
occupational compensation
.”
[56] The First Defendant
conceded in the present proceedings that a valid agreement was
entered into between the parties.
[57] The First Defendant
alienated a third of the membership interest in the Third Defendant
to his brothers. The membership interest
in the Third Respondent is
currently owned by the First Defendant, his brothers and the Second
Defendant. The transfer of the one
third membership interest in the
Third Defendant only took place after the commencement of the present
proceedings.
[58] The dispute between
the parties is to be adjudicated within the context of the aforesaid
set of facts.
THE
DISPUTES
[59] The following issues
were in dispute:
59.1
The issue whether the Plaintiff duly performed his obligations in
terms of the agreement;
59.2
The issue whether the First Defendant repudiated the agreement;
59.3
If so, the issue whether the First Defendant and/or the Third
Defendant were still in repudiation of the agreement prior to
the
date of cancellation of the agreement;
59.4
The issue whether the First Defendant validly cancelled the agreement
on 27 February 2008;
59.5
The issue whether the First Defendant made performance of the
Plaintiff’s obligations in terms of the agreement impossible
by
intentionally frustrating and preventing performance.
[60] The Plaintiff claims
payment of what it calls “damages
in lieu
of specific
performance”. The claim in this regard is for payment of the
amount of R1 808 853.43, less the contract
price.
[61] The First Defendant
contends that a valid cancellation of the agreement took place on 27
February 2008. Consequently, so the
First Defendant contends, an
order for specific performance, albeit in the form of payment of a
sum of money, is not sustainable.
[62] The First Defendant
also advances that, even if he did not cancel the agreement validly
on 27 February 2008, the Plaintiff
did not suffer any “damages”.
THE AGREEMENT
[63] The Plaintiff
pleaded the relevant terms of the agreement between the parties as
follows:
“
During
or about 2002 and at or near Johannesburg the Plaintiff and the First
and Second Defendants entered into an oral contract
(“
the
contract”
).
The material express,
alternatively
implied,
further alternatively
tacit
terms of the contract were inter alia:
8.1
The First Defendant would finance the construction of three similar
residences and an employee’s cottage on the plot;
8.2
The Plaintiff and the Second Defendant would each purchase a third of
the members’ interest in the Third Defendant from
the First
Defendant;
8.3
The Plaintiff, First and Second Defendants and their successors would
occupy a specific residence to be erected on the plot
and would take
occupation on completion thereof;
8.4
The Plaintiff, First and Second Defendants each would be responsible
for the maintenance of the individual residence (sic) they
occupied
on the plot;
8.5
The purchase prices payable by each of the Plaintiff and Second
Defendant to the First Defendant would be a third of the cost
of the
Defendant’s membership in the Third Defendant plus a third of
the construction costs of the three similar residences
and the
employee’s cottage on the plot, adjusted for individual changes
to the residences concerned;
8.6
The purchase prices for each of the third of members’ interest
purchased by the Plaintiff and Second Defendant was payable
in
monthly instalments over twenty years, the instalments to be
calculated at the prime interest rate charged by the First
Defendant’s
bank from time to time plus 1%;
8.7
The Plaintiff, First and Second Defendants would pay in equal shares
the running expenses of the Third Defendant including without
limitation property rates, services charges, borehole
maintenance costs, garden services, and employee costs;
8.8
………
8.9
………
8.10
8.10.1
……….
8.10.2
……….
8.11
Any party wishing to dispose of his third membership in the Third
Defendant would first offer such membership or right to the
remaining
persons from amongst the other parties [and their successors];
8.12
The selling price of such membership or right to any such membership
(sic) would not be more than the cost of such membership,
or in the
case of the sale of the First Defendant’s interest to be
calculated in the same manner as the cost of membership
of the
Plaintiff and the Second Defendant;
8.13
The First Defendant would allow the Plaintiff and the Second
Defendant access to the Third Defendant’s books of account
and
source documents, financial statements, and other documents
reflecting proof of compliance with regulatory prescriptions.”
[64] The Plaintiff
furthermore alleges that the agreement consisted, in part, of a
written memorial. In this regard the following
is pleaded:
“
On
or about 11
th
of December 2002 and at or near Randpark Ridge the Plaintiff and the
First Defendant agreed on the cost of the third membership
purchased
by the Plaintiff and the First Defendant reduced the agreement to
writing and recorded that:
9.1
The cost of the Plaintiff’s third membership would to be (sic)
R624 953-00;
9.2
The initial monthly instalment would be R8229-32; and
9.3
The Plaintiff would make payments into the First Defendant’s
account at his bank, Absa Account number 4042517679, Branch
code
334705.”
[65] The First Defendant
pleaded the following regarding the relevant terms of the agreement:
“
4.1
During or about December 2002, the First Defendant entered into an
oral agreement with the Plaintiff and Second Defendant at
the plot;
4.2
The agreement contained the following express, alternatively tacit,
alternatively implied terms:
4.2.1
The First Defendant would finance the construction of three similar
residences and an employee’s cottage on the plot;
4.2.2
The Plaintiff and the Second Defendant each purchased 1/3 of the
First Defendant’s members’ interest in the Third
Defendant from the First Defendant;
4.2.3
The purchase price in respect of the Plaintiff was the amount of
R624 953-00;
4.2.4
The purchase price was payable over a 20 year period in 240 monthly
instalments of R9 644-97 each, commencing on 11 December
2002;
4.2.5
The purchase price outstanding from time to time would bear interest
at a fixed annual interest rate of 18%;
4.2.6
……….
4.2.7
……….
4.2.8
…………
4.2.9
The Plaintiff and the Second Defendant would be liable towards the
Third Defendant for 1/3 of the monthly operation cost of
the plot;
4.2.10
Each party would be solely responsible for the maintenance costs
pertaining to the residence he was entitled to occupy;
4.2.11
In the event of either the Plaintiff or the Second Defendant wishing
to dispose of their right, title and interest to the
members’
interest of the Third Defendant prior to them having made payment of
the full purchase price and interest, the First
Defendant would
acquire a pre-emptive right in such intended disposition in which
event the Plaintiff and/or the Second Defendant
would only be
redeemed such portion of the capital of the purchase price actually
paid at that time;
4.2.12
In the event of the Plaintiff or the Second Defendant wishing to
depart from or exit from the agreement with the First Defendant,
before having paid off any capital on the purchase price, the First
Defendant would not be obliged to reimburse them and they would
forfeit any right, title and interest to the members’ interest
he may have acquired up to that stage;
4.2.13
In the event of the First Defendant wishing to dispose of this (sic)
members’ interest in the Third Defendant, he would
establish
the open market value for the particular residential unit to which he
had exclusive use and will offer same at such value
to the Plaintiff
and the Second Defendant;
4.2.14
Only the Plaintiff and the Second Defendant would be entitled to
purchase and acquire 1/3 of the First Defendant’s
members’
interest in the Third Defendant and none of their successors or
assigns would be entitled to same or to claim same;
4.2.15
In the event of breach by the Plaintiff of his obligations towards
the First Defendant, the First Defendant would be entitled
to cancel
the agreement and the Plaintiff and any person occupying a particular
residence on the plot through him, should immediately
vacate same.”
[66] In the First
Defendant’s evidence he disputed, in main, the following terms
alleged and relied on by the Plaintiff:
66.1
The agreement in relation to the applicable interest rate. The First
Defendant’s evidence in this regard was that it
was agreed that
the interest rate would be fixed at the then prime interest rate of
the First Defendant’s banker (ABSA Bank
Limited) plus 1 (one)
percentage point;
66.2
The precise terms of the right of pre-emption. It suffices to say
that the First Defendant did not dispute the portion of the
agreement
regarding the right of pre-emption that, should the Plaintiff wish to
dispose of his interest in the Third Defendant,
he had to offer same
for sale to the First Defendant and to the Second Defendant at an
amount equal to the original purchase price.
[67] The only relevant
term of the agreement that remained in dispute and that bear
relevance to the issues is the term relating
to interest. In
particular the dispute revolved around whether the interest rate was
to be fixed over the twenty year period of
repayment or whether the
interest rate was to be a fluctuating rate.
THE ISSUE OF BREACH OF
CONTRACT BY THE PLAINTIFF
[68] In the First
Defendant’s letter of demand of 20 February 2008 it was claimed
that the Plaintiff failed to pay his monthly
instalments for the
period July 2007 to 20 February 2008 and that the Plaintiff failed to
pay his monthly contribution towards
electricity and water
consumption, garden services, salary for the gardener and cost of
maintenance for the period 1 December 2007
to 20 February 2008.
[69] Any possible arrears
in the monthly instalments and in the contribution towards the
monthly electricity and water consumption,
garden services, salary
for the gardener and cost of maintenance accordingly only arose after
July 2007.
[70] The Plaintiff relied
on calculations that were made by an actuary, Mr Jacobson to show
that, if the interest rate was a fluctuating
one (and not fixed as
contended for by the First Defendant) that he was not in arrears with
regards to the monthly instalments
as at date of the letter of demand
on 20 February 2008 or as at date of cancellation.
[71] The report by Mr
Jacobson was not disputed by the First Defendant. The First Defendant
nevertheless persisted that the agreement,
in this regard, expressly
was that the interest rate was fixed at 18% per year.
[72] The First
Defendant’s version that the interest rate was agreed to be
fixed at 18% over the entire repayment period was
confirmed by the
Second Defendant in his evidence.
[73] I think that the
parties did not come to an express agreement on the issue whether the
interest rate would be fixed or whether
it would be a fluctuating
interest rate. The impression that I gained from the evidence of the
Plaintiff, the First Defendant and
the Second Defendant is that the
discussions surrounding the interest rate was limited thereto that it
was to be equal to the prime
rate of Absa Bank together with 1 (one)
percentage point.
[74] It is nevertheless
not, in my view, necessary to make any finding with regards to the
dispute regarding the question whether
the interest rate was to be
fixed or whether the interest rate was agreed to be a fluctuating
interest rate. This is so because
it is not necessary to make any
finding on the issue whether the Plaintiff was in arrears with
payment of the monthly instalments
as at 20 February 2008 or 27
February 2008. My reasons for this view follow.
[75] The First Defendant
already advanced before 7 June 2007 that the agreement was invalid
and unenforceable. The First Defendant
persisted in this view and
position taken by him until at least 25 February 2009.
[76]
In
Nash
v Golden Dumps (Pty) Ltd
[1]
Corbett
JA held as follows with regards to the repudiation of an agreement:
“
Where
one party to a contract, without lawful grounds, indicates to the
other party in words or by conduct a deliberate an unequivocal
intention no longer to be bound by the contract, he is said to
“repudiate” the contract….. where that happens,
the other party to the contract may elect to accept the repudiation
and rescind the contract. If he does so, the contract comes
to an end
upon communication of his acceptance of repudiation and rescission to
the party who has repudiated….”
[77]
The test for repudiation is not a subjective test. It is an objective
test.
[2]
[78]
In determining whether a party repudiated a contract the emphasis is
not on the repudiating party’s state of mind and
on what is
subjectively intended, but on what someone in the position of the
innocent party would think he intended to do. Repudiation
is
accordingly not a matter of intention, it is a matter of perception.
The perception is that of a reasonable person placed in
the position
of the aggrieved party. The test is whether such a notional
reasonable person would conclude that proper performance
(in
accordance with the true intention of the agreement) will not be
forthcoming. The inferred intention accordingly serves as
the
criterion for determining the nature of the threatened actual
breach.
[3]
[79]
In assessing the conduct from which the inference of impending non-
or malperformance is to be drawn, it ought to be borne
in mind that
conduct must be clear-cut and unequivocal. It must not be equally
consisted with any other feasibly hypothesis.
[4]
[80]
In
Tuckers
Land and Development Corpn (Pty) Ltd v Hovis
[5]
Jansen
JA said the following in this regard:
“
It
should therefore be accepted that in our law an anticipatory breach
is constituted by the violation of an obligation ex lege
flowing from
the requirement of bona fides which underlies our law of contract.”
[81]
Repudiation of a contract takes place before performance is due and
it may take the form of a statement that the party concerned
is not
going to carry out the contract.
[6]
[82] In my view the First
Defendant renounced the agreement prior to 7 June 2007 when the
position was taken by him in his communication
with the Plaintiff
that the agreement between the parties was invalid and unenforceable.
[83] The First
Defendant’s conduct constitutes conduct from which the only
reasonable inference can be that the First Defendant
did not regard
himself bound by the agreement and that he was not prepared to
perform in terms thereof. This inference is not equally
consistent
with any other feasible hypothesis.
[84] The First
Defendant’s conduct would have conveyed to the reasonable
person looking at the matter from the perspective
of the Plaintiff
that the First Defendant did not regard himself under obligation to
perform in terms of the agreement and to carry
out the agreement.
[85] The perception that
the First Defendant did not regard himself under obligation to
perform properly in terms of the agreement
was fortified in the
following:
85.1
The persistent conveyances by the First Defendant’s attorneys
until 25 February 2009 that no valid agreement was in existence
between the parties; and
85.2
The communication by the First Defendant that any payment that were
made by the Plaintiff were only paid as so-called “
occupational
interest
” and “
occupational
rent
”.
[86]
In my view then the First Defendant repudiated the agreement on or
before 7 June 2007 and he did not repent his repudiation
of the
agreement before the attempted cancellation of the agreement on 27
February 2008.
[7]
[87] Another
consideration is whether the First Defendant’s demand for
payment of the alleged arrears on 20 February 2007
(as alternative to
a court finding that the agreement is invalid and unenforceable)
assists the First Defendant to escape the legal
consequences of his
repudiation of the agreement.
[88] In my view it does
not.
[89] The First Defendant
was not entitled to both approbate and reprobate in this regard.
[90] Once a party to a
contract adopts the position that an agreement is invalid and
unenforceable, that party renounces the very
existence of an
enforceable agreement and the obligations created by it. If the
renounced agreement is ultimately found to be invalid
and
unenforceable no obligation in general rests on either party to
perform in terms of the agreement. If the renounced agreement
is
ultimately found to be valid and enforceable the party that took the
communicated view that the agreement was invalid and unenforceable
would have repudiated the agreement. In the latter case the party
that repudiates the agreement cannot in law be permitted to
simultaneously (even if it be in the alternative) claim specific
performance from the other party to the agreement whilst it is
contended that the agreement is invalid and unenforceable –
subject to the innocent party remaining, to the knowledge of
the
party repudiating, willing and able to perform.
[91]
In consonance with my aforesaid view it is trite law that, while
repudiation endures the innocent party is relieved from the
obligation to perform or render performance provided that the
innocent party remains, to the knowledge of the party repudiating,
willing and able to perform.
[8]
[92]
In
Erasmus
v Pienaar
[9]
Ackermann
R (as he then was) embarked on a detailed analysis of the effect of
an act of repudiation on the continued existence of
the obligation to
perform by the innocent party if he does not accept the repudiation
and does not terminate the agreement in consequence
thereof. After a
thorough and convincing analysis of the position in our law the
conclusion to which he had come was that the repudiation
does not
lead to the innocent party’s obligations to be
extinguished.
[10]
The innocent party’s obligation to perform is only suspended
for as long as the repudiation of the agreement is persisted
with,
subject thereto that the innocent party is at all times willing and
able to perform and that it is communicated to the party
that
repudiated.
[11]
I find myself in agreement with this view.
[93] The Plaintiff was
willing and able to perform his obligations in terms of the agreement
in full and such fact was conveyed
to the First Defendant since at
least 5 April 2007. This fact appears not only from the repeated
requests by the Plaintiff to be
furnished with the total outstanding
amount so as to effect payment thereof in full, but also from the
offer that was made to purchase
the Third Defendant at a purchase
consideration of R3 700 000-00.
[94] It was indeed also
the evidence of the Plaintiff that he stopped payment of the monthly
instalments by reason of the claims
that were made by the First
Defendant that the agreement was null and void. He only continued
with payments after he was advised
to do so. The Plaintiff’s
evidence in this regard was not placed in dispute.
[95] In the premises the
letter of demand of 20 February 2008 was invalid for the following
reasons:
95.1
The Plaintiff could not have been said to be
in
mora
with regards to his contractual obligations in a period that
performance thereof was suspended.
[12]
Once the duty to perform on the specified dates from month to month
was suspended, it cannot be said that the Plaintiff failed
to pay on
the appointed day;
95.2
It was not open to the First Defendant to demand specific performance
in the alternative
and
inconsistent with the main position taken by him that the agreement
was invalid and unenforceable.
[96] If I am wrong in my
aforesaid conclusions there exists a further difficulty regarding the
demand for payment on 20 February
2008.
[97] During the period 20
February 2008 and 27 February 2008 the First Defendant was ostensibly
represented by two different sets
of attorneys i.e. Mr de Klerk and
Negota. Negota only withdrew as attorneys for the First Defendant on
12 March 2008.
[98]
A debtor’s obligation is not discharged unless he can show that
he has made payment to a person recognised by law as
competent to
receive the payment in discharged of the obligation.
[13]
An agent must be an authorised agent to receive payment.
[14]
[99] If the Plaintiff
effected payment to Mr de Klerk and the last-mentioned attorney did
not have the authority to receive the
payment as agent, the First
Defendant could validly have advanced that the Plaintiff’s
obligation was not discharged by payment
to a person not recognised
by law as competent to receive the payment in discharge of the
obligation. The mere conveyance by Mr
de Klerk, as the then professed
agent, that he was authorised to receive payment on behalf of the
First Defendant would not have
bound the First Defendant if Mr de
Klerk was indeed not the agent of the First Defendant.
[100]
The conduct of the First Defendant in the above regard made proper
and timeous performance by the Plaintiff impossible in
that he
employed two different sets of attorney at the time and he failed to
take appropriate steps in the relevant notice period
to communicate
to the Plaintiff that Mr de Klerk was his authorised agent to receive
payment of the amounts claimed. In this regard
the First Defendant
failed to co-operate with the Plaintiff to the extent necessary so as
to enable the Plaintiff to perform and
he was accordingly in
mora
creditoris
.
[15]
[101] It follows that the
agreement was still
in esse
at the time that the present
proceedings were launched.
THE PLAINTIFF’S
ENTITLEMENT TO PAYMENT OF A SUM OF MONEY IN LIEU OF A CLAIM FOR
PERFORMANCE OF THE AGREEMENT IN FORMA SPECIFICA
[102]
The Plaintiff is accordingly in principle entitled to claim specific
performance of the agreement and his claim will generally
be granted,
subject only to the court’s discretion. In this regard Innes J
held as follows in
Farmers’
Co-op Society (REG) v Berry
:
[16]
“
Prima
facie every party to a binding agreement who is ready to carry out
his own obligations 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 Kotzé
CJ in Thompson v
Pullinger (1894) (1) OR at p301 “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 will 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.
But that is a different thing from saying that a defendant who has
broken his undertaking has the
option to purge his default by the
payment of money. For in the words of Storey (Equity
Jurisprudens, SEC.717 [a], “it
is against conscience that a
party should have a right of election whether he would perform his
contract or only pay damages for
the breach of it.” The
election is rather with the injured party, subject to the discretion
of the Court.”
[103] The First Defendant
disposed of the one third membership interest in the Third Defendant
that was intended by the parties
to the agreement to ultimately be
transferred to the Plaintiff. The disposition took place after the
present proceedings were commenced
with.
[104]
In accordance with the maxim
lex
non cogit ad impossibilia
specific performance will never be ordered if compliance with the
order would be impossible.
[17]
[105] The Plaintiff
sought an order for performance
in forma specifica
in the
original particulars of claim. The Plaintiff’s claim was
thereafter amended to the effect of seeking an order that
was
referred to in the amended particulars of claim as “damages as
surrogate of performance”. The amendment was brought
after the
disposition of one third of the membership interest in the Third
Defendant by the First Defendant.
[106]
In
Isep
Structural Engineering and Plating (Pty) Ltd v Inland Exploration Co
(Pty) Ltd
[18]
Jansen
JA argued that damages as surrogate of performance do not really
constitute a claim for damages, but rather amount to specific
performance in a different guise and if our law were to recognise
this remedy, many ancillary rules would have to be introduced.
[107]
It has become settled practice in the meantime that a claim for
payment of “damages
in
lieu
of specific performance” is competent to bring.
[19]
[108] In my personal view
the use of terminology referring to “damages” in claims
for the payment of a sum of money
in lieu
of performance of
contractual obligations
in forma specifica
is unfortunate.
Such claim is not strictly one for the payment of damages. The claim
remains one for specific performance, albeit
not in the nature of
performance
in forma specifica
. The use of the word “damages”
also unnecessarily creates confusion with a claim for the payment of
contractual damages
pursuant to a breach of contract. The nature of
the claim for payment of contractual damages pursuant to a breach of
contract and
the nature of a claim for the payment of a sum of money
in lieu
of performance of contractual obligations
in forma
specifica
are fundamentally different. The first concerns payment
of damages caused by reason of the breach of contract and can be
claimed
irrespective of whether the contract is rescinded or not. The
latter serves to obtain payment of a sum of money as surrogate for
performance
in forma specifica
, in appropriate circumstances.
It also only lies if the contract is not terminated.
THE DETERMINATION OF
THE EXTENT OF THE PLAINTIFF’S CLAIM
The general measure of
damages in contractual claims
[109]
As stated above, a claim for payment of damages
in
lieu
of specific performance should not be confused with a claim for
damages that follows as a result of breach of contract. In instances
of a claim for damages to be paid that were caused by a breach of
contract the innocent party can claim
interesse
intrinsecum et extrinsecum
(intrinsic damage and extrinsic damage).
[20]
[110]
In such cases the defaulting party will have to compensate the
injured party for his loss and it naturally follows from that
fact
that the injured party must be placed in exactly the same pecuniary
position that he would have been in if the contract had
been
performed. (
si
reiser vendita non tradatur in it qwod interest agitur: hoc est qwod
rym habere interest emtoris. Hoc autem interdum pretium
egreditur si
pluris interest qwam ris valeat vel empta est
).
[21]
[111]
Unlike damages claimed in delict, damages for breach of contract are
normally not intended to recompense the innocent party
for his loss,
but to put him in the position he would have been in if the contract
had been properly performed.
[22]
This does not mean that, in cases of breach of contract, a party does
not have the election, depending on the appropriateness,
whether to
pursue either his negative or positive
interesse.
[23]
The general measure to
determine the extent of a sum of money to be paid in lieu of
performance in forma specifica
[112] A claim for payment
of a sum of money
in lieu
of performance
in forma specifica
is an entirely different legal figure and legal remedy.
[113] The purpose of such
a claim is to put the innocent party, as much as possible, in the
position that he would have been in
if performance was made
in
forma specifica
.
[114]
In cases of the sale of a thing the general measure to put an
innocent party in such a position is to determine the market
value of
the thing sold and to subtract from that market value the value of a
counter performance (the price that had to be paid).
This is in
accordance with the rule of the English law that, if a vendor fails
to deliver goods and the purchaser had not paid
the price, then the
measure of damages is the difference between the contract price and
the market price of goods of a similar
description and quality at the
time when they ought to have been delivered.
[24]
The extent of the
Plaintiff’s claim
[115] The market value of
one third membership interest in the Third Defendant is not in
dispute. It amounts to R1 808 853,43.
[116] The contract price
is also not in dispute. It amounts to R624 953.00.
[117] The instalments
that have been paid by the Plaintiff is common cause. They are
reflected in the report by the actuary, Mr
Jacobson to total the
amount of R578 726.03.
[118] The First
Defendant’s argument, eloquently put forward by Mr du Plessis
SC, with regards to the amount of the Plaintiff’s
claim can
succinctly be summarised as follows:
118.1
It is not in dispute between the parties that they have agreed on a
right of pre-emption in favour of the First Defendant,
at a purchase
consideration equal to the original contract sum;
118.2
The subjective market value of one third membership interest
accordingly could never exceed the original contract price;
118.3
If the general measure to determine the extent of damages to be paid
in
lieu
of specific performance is to be applied
viz
.
the difference between market value and the contract price, the
Plaintiff does not have any claim for the payment of damages.
[119] The parties were
unable to furnish to me any authority in which it has been considered
what the effect of an agreed right
of pre-emption is on the
determination of the market value of a thing. I have also been unable
to find any comparable authority.
[120] It is necessary to
examine the nature of a right of pre-emption at the outset.
[121]
A right of first refusal is a preferent conditional right to
purchase, generally referred to as a right of pre-emption. This
right
gives the grantee a right to purchase if the condition in question is
satisfied.
[122]
The grant of a right of pre-emption does not compel the grantor to
sell. It only compels him to give the grantee the preference
in case
he decides to sell at all.
[25]
[123] The word “
refusal
”
was interpreted in English law, within similar context, to mean the
following:
“
Now,
a refusal, to my mind, implies an offer. A thing is not in ordinary
parlance refused before it is offered.
[26]
[124]
The aforesaid exposition was accepted in South African law to be
correct.
[27]
[125] It follows from the
aforesaid that the grantor of a right of first refusal is under
obligation to offer the grantee the thing
for sale and the offer has
to be one which is capable of being turned into a contract by
acceptance.
[126]
In
Owsianick
v African Consolidated Theatres (Pty) Ltd
[28]
Ogilvie
Thompson JA said the following with regards to a right of
pre-emption:
“
A
right of pre-emption is well-known in our law (C Cohen v Behr 1946
(CPD 942 at PP948 – 949 and authorities there cited)
and it is
to be distinguished from an option to purchase. Upon exercise of the
latter by the holder of the option, the granter
of the option is
obliged to sell. The granter of right of pre-emption cannot be
compelled to sell the subject of the right. Should
he, however,
decide to do so, he is obliged, before executing his decision to
sell, to offer the property to the grantee of the
right of
pre-emption upon the terms reflected in the contract creating that
right.”
[127]
If the terms of the right of pre-emption is not adhered to, the
grantee is entitled to claim damages if the thing is sold
in the open
market without adherence to the terms of the right of
pre-emption.
[29]
[128] The first
observation that needs to be made is that a right of pre-emption is a
personal right and it only serves to ensure
the following between the
contracting parties:
1281.1
That a restriction is placed on a sale of the thing in the open
market, unless it is offered firstly to the grantee of the
right of
pre-emption at the agreed price or the determined price;
128.2
The grantee of the right of pre-emption is offered the first
opportunity to purchase the thing at the agreed or determined
price –
irrespective of the true market value of the thing.
[129] It follows from the
aforesaid that, if the grantee of the right of pre-emption does not
avail himself/herself/it of the right
of pre-emption, the other
contracting party is free to sell the thing in the open market at a
price equal to market value.
[130] The agreed right of
pre-emption placed an obligation on the Plaintiff to offer his one
third membership interest to the First
Defendant at the original
contract price before it was open for him to sell it in the open
market. The agreed right of pre-emption
also entitled the First
Defendant to be offered the one third membership interest of the
Plaintiff at the original purchase price
before the Plaintiff would
have been entitled to sell his membership interest in the open
market.
[131] The second
observation to be made is that, on the contemplation of the parties
at the time of conclusion of the contract,
the Plaintiff would only
have obtained his membership interest in the Third Defendant after
the lapse of a period of twenty years.
He would, accordingly, not
have been entitled to sell one third of the membership interest in
the Third Defendant before the lapse
of a period of twenty years,
unless he made payment of the original contract price in full before
the expiry of the period of twenty
years.
[132] The third
observation that needs to be made is that it becomes a speculative
task if an attempt is made to predict what the
parties would have
done after the lapse of a period of twenty years or after payment of
the original contract price was made in
full and the Plaintiff wished
to dispose of one third of the membership interest in the Third
Defendant.
[133] In the period of
twenty years (and thereafter) many different possibilities might have
arisen. I name a few.
[134] The first is the
possibility that the First Defendant may have disposed of his one
third of the membership interest. The First
Defendant’s right
of pre-emption would then have been lost. The second possibility is
the death of the First Defendant, in
which event the right of
pre-emption would have come to an end. The third possibility is that
the parties to the agreement may
have jointly decided to dispose of
the immovable property in its totality at a market related price or
to have disposed of all
of the membership interest in the Third
Defendant at a market related price. The fourth possibility I mention
is that the immovable
property could have been destroyed or
expropriated.
[135] I have come to the
conclusion that the existence of the right of pre-emption does not
have a sufficiently exclusive relation
to the true market value
(price) of one third of the membership interest in the Third
Defendant to permit of equating the agreed
price on exercise of the
right of pre-emption to true market value of the one third membership
interest for the Plaintiff.
[136] The possible future
event of a sale of one third of the membership interest in the Third
Defendant to the First Respondent
by reason of the invocation of the
right of pre-emption is no more than one of several possibilities
that may occur in future.
[137] None of the several
possibilities (of which the invocation of the right of pre-emption is
but one) detracts from the fact
that the Plaintiff would, had the
contract been performed
in forma specifica
, have received a
membership interest of which the market value would have been equal
to one third of the objective market value
of the totality of the
membership interest in the Third Defendant.
[138] The fact that
disposal of the entirety of the membership interest in the Third
Defendant is a real possibility is evidenced
by the fact that the
Third Defendant threatened (albeit that he lied in this regard to
evoke a reaction) to dispose of the entirety
of the membership
interest in the Third Defendant and that he refused, even on the
threat of an application to be brought to the
High Court, to give an
undertaking that he would not do so.
[139] In my view the
fallacy in the argument that was advanced on behalf of the First
Respondent is that the argument elevates one
of several possibilities
as to future events to a singular stand-out fact that would occur
definitely, to the exclusion of any
other possible future event and
to then super-impose the agreed price on an objective market value.
[140] The effect of such
an approach would be to confine the value of performance
in forma
specifica
by the First Defendant only to the four corners of the
right of pre-emption. This is in my view untenable.
[141] In the premises I
find that the market value of one third of the membership interest in
the Third Respondent is equal to the
objective market value thereof.
The amount of the objective market value of one third of the
membership interest in the Third Defendant
that was agreed to by the
parties amounts to R1 808 853,43.
CONCLUSION
[142] The Plaintiff is
accordingly entitled to payment of a sum of money
in lieu
of
performance
in forma specifica
in an amount that constitutes
the difference between the objective market value of one third of the
membership interest in the
Third Respondent, less the original
contract price - after deducting the instalments that were paid by
him. The First Defendant
did not advance that interest should be
brought into the calculation and he did not provide present any
argument on the issue.
[143] The Plaintiff
claimed specific performance of the agreement since inception of the
present proceedings and the refusal by
the First Defendant to adhere
to the demand was not justified. The Plaintiff is accordingly
entitled to interest from the date
on which the present proceedings
were commenced with. Summons was served on 20 May 2008.
[144] In the result the
following order is made:
1. The First Defendant is
ordered to pay to the Plaintiff the amount of R1 762 626.46;
2. The First Defendant is
ordered to pay to the Plaintiff interest on the amount of
R1 762 626.46 at the rate of 15.5%
per annum, calculated
from 20 May 2008 to date of final payment;
3. The First Defendant is
ordered to pay the Plaintiff’s costs, inclusive of the reserved
costs of 25 February 2015.
_________________________________________________
P G CILLIERS
ACTING JUDGE OF THE
HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL
DIVISION, JOHANNESBURG
Date of Hearing: 24
February 2015, 25 February 2015, 18 March 2015, 19
March 2015
Date of Judgment:
___ August 2015
Counsel for the
Plaintiff: Adv. GM Young
Instructed by: Faber,
Goertz Ellis Austin Inc
c/o DM Bakker Attorneys
Tel: (011) 763 1592
Ref: Mr D Bakker/Fotto
Counsel for the First
Defendant and Third Defendant: Adv. D T v R Du Plessis SC
Instructed by: Olivier &
Malan
c/o Eastes Inc
Tel:(011)
021 2492 or 0792006165/6
Ref: HO-B171/mvdb
[1]
1985
(3) SA 1
(A) at 22D – F.
[2]
Datacolor
International (Pty) Ltd v Intamarket (Pty) Ltd
[2000] ZASCA 82
;
2001 (2) SA 284
(SCA)
at 294B.
[3]
Datacolor
International (Pty) Ltd v Intamarket (Pty) Ltd (supra) at 294F –
G.
[4]
Datacolor
International (Pty) Ltd v Intamarket (Pty) Ltd (supra) at 294J –
295A.
[5]
1980
(1) SA 645
(A) at 652G.
[6]
Kameel
Tin Co (Pty) Ltd v Brollomar Tin Exploration Ltd 1928 DPT 726 at 731
– 732.
[7]
In
terms of the Repentance Principle. See in this regard Sandown Travel
(Pty) Ltd v Cricket South Africa
2013 (2) SA 502
(GSJ) at
512H-515I.
[8]
Erasmus
v Pienaar
1984 (4) SA 9
(T); Moodley v Moodley
1990 (1) SA 427
(D);
GNH Office Automation CC v Provincial Tender Board, Eastern Cape
1998 (3) SA 45
(A) 51F.
[9]
(supra)
[10]
at
21A
[11]
at
21E, read with the passage at 28I – 29A.
[12]
In
Laws
v Rutherfurd
1924
AD261 at 262 Innes CJ stated
mora
debitoris
as follows: “
Principle
which applies when a debtor undertakes to discharge an obligation on
a specified date; the creditor need make no demand:
Dies interpellat
pro homine, and the debtor is in mora if he fails to pay on the
appointed day
.”
[13]
Harrismith
Board of Executors v Odendaal
1923 AD 530
at 539.
[14]
Christie:
The Law of Contract in South Africa (Sixth Eddition by R H Christie
and G D Bradfield) at 424
[15]
Martin
Harris en Seuns OVS (Edms) Bpk v Qwa Qwa Regeringsdiens
2000 (3) SA
339
(A) and Ranch International Pipelines (Transvaal) (Pty() Ltd v
LNG Construction (City) (Pty) LTd
1984 (3) SA 861
(W) in which a
wide definition of the concept of a failure to co-operate was
accepted from the then expositions of the
Vet and Yates at 163 –
175.
[16]
1912
AD 343
at 350
[17]
Christie
(supra) at 547
[18]
1981
(4) SA 1 (A)
[19]
In Mostert NO v Mutual Life Assurance CO (SA) Ltd
2001 (4) SA 159
(SCA) at para [74] serious doubts were expressed by the Supreme
Court of Appeal about the correctness of the majority decision
in
ISEP Structural Engineering (supra). The competence of such claim
was also considered in Sandown Travel (Pty) Ltd v
Cricket
South Africa
2013 (2) SA 502
(GSJ) at para [67]; Visagie v
Gerryts en ‘n Ander 2000 (3) SA 670 (C).
[20]
Pothier,
Oblig, s.162
[21]
D.19.1.1.pr;
D.10.4.9.8:39.2.4.7
[22]
Trotman
v Edwick
1951 (1) SA 443
(A) at 449B – C: “
A
litigant who sues on contract sues to have his bargain or its
equivalent in
money
or
in money and kind. The litigant who sues on delict sues to recover
the loss which he has sustained because of the wrongful
conduct of
another, in other words that the amount by which his patrimony has
been diminished by such conduct should be restored
to him
.”
[23]
Per
Farlem J (as he then was) in Main Line Carriers (Pty) Ltd v Jaad
Investments CC 1998 (2) SA 468 (C).
[24]
(Mayne
Damages 10
th
Edition, p167 - ; Katzenelenbogen Ltd v Mullen 1977 (4) SA 855 (A).
[25]
Owsianick v African Consolidated Theatres (Pty) Ltd
1967 (3) SA 310
(A) at 319D. although Ogilvie Thompson JA dissented in the case, his
exposition of Voet 18.1.2 and the judgment by Innes JA in
Van
Pletsen v Henning 1913 AD82 appears to be correct.
[26]
Manchester Ship Canal Co v Manchester Racecourse Co
[1900] 2 Ch 352
at 364.
[27]
Soteriou v Retco Poyntons (Pty) Ltd (supra) at 932G.
[28]
1967
(3) SA 310
(A) at 316
[29]
Venter v Birchholtz
1972 (1) SA 276
(AD) at 283H-284A