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[2016] ZAGPJHC 376
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Heart Rate Properties CC v Wynstar (2015/11210) [2016] ZAGPJHC 376 (24 May 2016)
HIGH
COURT OF SOUTH AFRICA
(GAUTENG
LOCAL DIVISION, JOHANNESBURG)
Case
No. 2015/11210
Not
reportable
Not of
interest to other judges
Revised.
In
the matter between:
HEART
RATE PROPERTIES
CC
Applicant
and
WYNSTAR
ELECTRONICS
CC
Respondent
Case summary:
Sale of land – Suspensive condition providing that the
agreement is subject to the obtaining of a loan
of not less than a
stated amount against the security of a mortgage bond within 30 days
from a stated event -Fulfilment or Waiver
of - fulfilment of the
suspensive condition or waiver of its fulfilment before the agreed
cut-off time not proved - accordingly
no sale and no entitlement to
specific performance.
JUDGMENT
MEYER, J
[1] The applicant, Heart
Rate Properties CC, claims specific performance from the respondent,
Wynstar Electronics CC, of a written
agreement concluded between them
on 22 October 2010 in terms whereof the respondent sold and the
applicant purchased an immovable
property situated in Wadeville,
which property is a subdivision of a larger tract of land (the
property) for a purchase consideration
of R12,5 million. At the
time of the sale the subdivision had already been approved by the
relevant town council and was
in the process of being registered.
[2]
The purchase price was payable by means of a deposit of R100 000
(that was duly paid) and the balance of R12,4 million was,
in terms
of clause 4.3 of the agreement, to be secured by a guarantee from a
bank or registered financial institution delivered
to the
transferring attorney within 60 days of fulfilment of the suspensive
condition set out in clause 18.2 (the suspensive condition),
which
reads:
‘
The offer is
subject to the Purchaser obtaining a bond from a bank or registered
financial institution of not less than R12 400
000,00 (TWELVE MILLION
FOUR HUNDRED THOUSAND RAND)
within
30 (thirty) days
from
registration of the sub-division referred to in paragraph 1 above.’
(Emphasis
added)
The suspensive condition,
it is common cause, means that that the agreement is subject to the
obtaining of a loan of not less than
R12,4 million against the
security of a mortgage bond within 30 days from registration of the
subdivision.
[3]
The registration of the subdivision of the property was delayed for
reasons that are presently not relevant. The delay
resulted in
the applicant launching what the parties referred to as ‘the
enforcement application’ against the respondent
in this court
on 13 September 2012. One of the defences raised by the
respondent in its answering affidavit in the enforcement
application
was that the agreement was null and void due to the non-fulfilment of
the suspensive condition contained in clause
18.2 thereof. To
that the applicant replied as follow:
’
19.
Paragraph 18.2 is a suspensive condition relating to the purchaser
obtaining a bond from a financial institution for an amount
not less
than R12 400 000.00 within 30 (thirty) days from registration of the
sub-division referred to in paragraph 1 above
(of
the agreement)
.
20.
Paragraph 1 of the agreement refers to the sub-division which the
respondent has failed to give effect to and which forms
the very
nature of the application.
21. As
the respondent has failed to give effect to the sub-division, the
suspensive condition referred to in paragraph 18.2
is not yet
operable.’
[4]
On 28 March 2013, Mphahlele, AJ granted the relief which the
applicant in terms of its notice sought against the respondent.
The order reads:
‘
1.
The Respondent is to give effect to the subdivision of 233 WADEVILLE
EXTENSION 1 on or before the 31 December 2013, failing
which the
Sheriff is authorised to sign the necessary documentation to give
effect thereto and the Applicant is authorised to pay
the costs
associated therewith and that such costs are deducted from the
purchase price.
2.
The Respondent is to pay the costs of this application excluding the
costs occasioned by the Applicant’s
supplementary replying
affidavit.’
[5]
The subdivision of the property was registered on 8 January 2015.
The respondent’s attorneys, Marais Stephens, notified
the
applicant’s attorneys, Senekal Simmonds Inc, thereof in a
letter dated 9 January 2015. The letter concluded
as follows:
‘
Your
client is called upon to provide proof within 30 (thirty) days that
he has obtained a bond in the sum of R12,400,000-00 (twelve
million
four hundred thousand rand) and thereafter to furnish the guarantee
referred to in clause 4.3.’
[6]
Under cover of a letter dated 10 February 2015 wherein it is stated
‘[f]ind attached hereto proof of the facility granted
to our
client in terms of paragraph 8.2 (sic) of the agreement’, the
applicant’s attorneys furnished to the respondent’s
attorneys a ‘PROPERTY FINANCE LETTER OF GRANT’ from First
National Bank addressed to the applicant and dated 9 February
2015
(FNB’s letter of grant’). Therein the following is
inter alia stated:
‘
Loan Amount
(to be disbursed on date of Registration)
:
R 10 000 000.00
Excluding capitalised fees
Future
Use
: R 6 500 000.00
Access to this amount is subject to
normal credit assessment
procedure and approval
Bond
Amount
: R 16 500 000.00’
[7]
In a letter dated 23 February 2015 the respondent’s attorneys
advised the applicant’s attorneys that there was no
agreement
between the parties due to the non-fulfilment of the suspensive
condition within the cut-off time and repayment of the
R100 000
deposit paid was offered to the applicant. The applicant’s
attorneys responded by letter dated 24 February
2015. Therein
the following is inter alia said:
‘
3. The
intention of clause 18.2 is to ensure that our client, with the
assistance of a financial institution, could raise
the necessary
funds to pay the purchase price.
4. Our
client has now procured a bond with First National Bank for an amount
of R16 500 000,00 as is evident from the letter
addressed to our
client dated 9 February 2015 and forwarded to yourselves. It is
not for your client to question the terms
and conditions of the
facility granted to our client. All that your client requires
is that guarantees be delivered in respect
of the purchase price.’
[8] On 24 March 2015 the
present proceedings were launched by the applicant for specific
performance by the respondent of the agreement.
The applicant
on the one hand maintains that the suspensive condition was duly
fulfilled and on the other hand that it was waived
by it as
purchaser. It is to the question whether the suspensive
condition was indeed fulfilled that I first turn.
[9]
The Supreme Court of Appeal, in
Dormell Properties 282 CC v Renasa
Insurance Co Ltd and others NNO
2011 (1) SA 70
(SCA), held as
follows:
‘
[26] . . .
The terms of the contract are the decisive criterion by which any
potential expiry of a deadline has to be determined:
'These passages show, I think, that
where time has to be computed under a contract, we must look
primarily at the terms of the contract,
in order, if possible, to
discover from them what the parties intended, and that it is only
when the contract is not decisive upon
the point, that it is
admissible to introduce the rules of law with regard to computation
of time.'
Per Solomon JA in
Joubert v Enslin
1910 AD 6
at 46.
[27] In Roman law, which our law has
retained in this respect, the expiry of a period of time could be
calculated either by the
natural or the civil method. The natural
method calculates
'de momento in momentum'
, from the exact
moment of the first day, upon which the period to be calculated
commences, to the exactly corresponding moment
of the last day. The
civil method of computation includes the first day of the period to
be calculated and excludes the last day;
see
Cock v Cape of Good
Hope Marine Assurance Company
(1858) 3 Searle 114
, in which a
marine insurance policy that was taken out for the period of one
year, from 14 August 1857 to 14 August 1858, was held
to have expired
at midnight of 13 August 1858. Compare Windscheid
Pandects
4
ed (1875) para 103(1); Gane
The Selective Voet Book
XLV, Title
1, Section 19. C Lee & Honoré
The
South African Law of Obligations
2 ed at 49 state:
'141 Calculation of period
If a contract provides that something
shall be done within a stated number of days from the date of its
conclusion or from any other
event, in the absence of expression to
the contrary, in calculating the number of days the day on which the
contract was concluded
or the event took place is understood to be
the first day of the period and the last day is excluded. The same
applies if the period
is reckoned, not by days, but by months or
years. [3.15.2. Moyle’s translation 5 at 133]’
[10]
In
Versveld v SA Railways and Harbours
1937 CPD 55
,
Watermeyer, J said the following:
'In every computation of time there
must be an instant from which time runs. But this instant may not be
clearly defined inasmuch
as time may run from or after the occurrence
of an event or from after a day or date. If it is to run ''from'' a
day or date or
the occurrence of an event, the instant will have to
be determined either by the relevant intention or by rules of law,
because
the word ''from'' is ambiguous; the day or date from which
time runs or on which the event occurs from which time runs, may or
may not be included in the calculation. (See
Joubert v Enslin
1910 AD at 47.)
[11]
In
Wille’s Principles of South African Law
9
th
Ed at 825 it is stated that:
‘
. . . if the
words ‘of’ or ‘from are used there is an ambiguity
as to whether the day mentioned is to be included
or not in the
period. In such a case the last day of performance is
ascertained by a method of calculation known as the computatio
civilis, which provides that the last day of the period is excluded
because that day is considered as completed at the moment of
its
birth, ultimus dies coeptus pro complete habeteur; the consequence is
that the day of the event is considered to be the first
day of the
period, or put more simply, that day is included in the period.
[D 44.7.6; Voet 44.3.2; Goudsmit 1.5.79;
Joubert
v Enslin
1910
AD 6
at 35, 48;
Versveld
v SA Railways and Harbours
(supra)
at 57; and se
Kleynhans
v Yorkshire Insurance Co Ltd
1957
(3) SA 544
(A);
South
African Mutual Fire and General Insurance Co Ltd v Fouche
1979
(1) SA 302
(A) at 309-10.]’
[12] It is specified in
the suspensive condition
in casu
that the loan must be
obtained ‘within’ 30 days ‘from’ the event of
registration of the subdivision.
The contract or its context is
not decisive on what the parties intended should be the expiry of the
deadline for the fulfilment
of the suspensive condition and there are
no indications to show that the parties had not intended the ordinary
civil method of
computation to apply. Therefore, in terms of
the rule formulated in
Joubert v Enslin
, supra, the ordinary
civil method of computation must be applied. The day on which
the subdivision was registered (8 January
2015) is to be taken as the
first day in the calculation of the 30 day period and the last day is
to be excluded. Thus, the
deadline for the fulfilment of the
suspensive condition was at midnight on Friday, 6 February 2015.
The applicant only obtained
the loan from First National Bank on
Monday, 9 February 2015, which was after the suspensive condition had
already failed.
[13] The applicant also
contends that the period of 30 days began to run only when it was
notified of the registration of the subdivision
on 9 January 2015.
The applicant’s contention in this regard militates against the
clear and unambiguous wording of
the suspensive condition nor is
there any support for it in the agreement as a whole or its context.
This contention in any
event does not assist the applicant. If
fulfilment of the suspensive condition should take place within 30
days of the event
of notification of the registration of the
subdivision, then, in terms of the rule formulated in
Joubert v
Enslin
, supra, the first day of the 30-day period is 9 January
2015, which means that the deadline expired at midnight on Saturday,
7
February 2015. The suspensive condition was, therefore, not
fulfilled before the expiry of the deadline for its fulfilment.
[14] I also agree with
the respondent’s contention that the loan granted to the
applicant in terms of FNB’s letter of
grant was for an amount
of R10 million and not R12,4 million as contemplated in the
suspensive condition. Only R10 million
was to be advanced on
registration of transfer of the property and the advance of the
further sum of R6,5 million was subject to
FNB’s normal credit
assessment procedure and approval. There was, therefore, not
performance of the suspensive condition.
[15]
Conditions of the nature in question (containing a deadline for
fulfilment) are for the sole benefit of the purchaser and hence
capable of being waived by the purchaser before expiry of the
deadline. (See
Westmore v Crestanello and others
1995
(2) SA 733
(W) at 735-739.) The following was stated by
Nienaber JA in
Road Accident Fund v Mothupi
2000 (4) SA 38
(SCA) regarding waiver:
‘
[15]
Waiver is first and foremost a matter of intention. . . .
[16] The test to
determine intention to waive have been said to be objective …
.That means, first, that intention to waive,
like intention
generally, is adjudged by its outward manifestations . . .; secondly,
that mental reservations, not communicated,
are of no legal
consequence . . . ; and, thirdly, that the outward manifestations of
intention are adjudged from the perspective
of the other party
concerned, that is to say, from the perspective of the latter’s
notional
alter
ego
,
the reasonable person standing in his shoes.’
. . .
[19]
Because no one is presumed to waive his rights . . . , one, the
onus
is
on the party alleging it and, two, clear proof is required of an
intention to do so . . . . The conduct from which waiver
is
inferred, so it has frequently been stated, must be unequivocal, that
is to say, consistent with no other hypothesis.’
[16] In the instant case
it is common cause that the applicant did not in express terms notify
the respondent before the expiry
of the deadline for fulfilment of
the suspensive condition that it no longer relied on the protection
afforded by the condition
and that the sale would not be off if it
could not raise the necessary loan from a bank or other registered
financial institution
against the security of a mortgage bond.
The issue between the parties is whether it did so by conduct.
The question
to be decided, therefore, is whether the applicant’s
conduct was consistent only with an intention not to rely on the
suspensive
condition.
[17] The applicant’s
contention is that it intimated such intention in the enforcement
application. It avers that ‘[t]he
enforcement application
itself and the applicant’s affidavits by necessary implication
amount to an abandonment by the applicant
of the right to rely on
clause 18.2.’ Also that the subsequent correspondence exchanged
between the parties ‘. . .
is consistent with the fact that the
applicant would not and could not deny liability under the agreement
by relying on clause
18.2.’ The enforcement application,
so the applicant avers, was ‘. . . aimed at the ultimate goal
of the agreement,
i.e. the transfer of the property to the applicant
against payment of the purchase price’ and it ‘. . .
could not pursue
that goal, especially by way of legal proceedings,
unless it unconditionally committed itself to give effect to the
agreement.’
The applicant further avers that the order it
sought and obtained in the enforcement application – that the
costs of effecting
the subdivision should be deducted from the
purchase price payable in terms of the agreement - presupposes the
complete execution
of the agreement. The purchase price is only
payable after the agreement had become unconditional.
[18] The applicant’s
conduct in launching the enforcement application, in stating what it
did in its replying affidavit in
those proceedings and in seeking the
order it obtained, in my view, was not consistent only with an
intention not to rely on the
suspensive condition. On the
contrary, the applicant took issue with the respondent’s
allegation that the suspensive
condition had not been fulfilled and
it stated that the period within which the necessary loan was to be
obtained would only commence
to run once the registration of the
subdivision had taken place, which was the substantive relief it
claimed in those proceedings.
Nowhere in its affidavits was it even
suggested that it had already waived any reliance on the suspensive
condition.
[19] The order
authorising the sheriff to sign the necessary documentation to
facilitate the registration of the subdivision of
the property and in
such event for the applicant to pay the associated costs and to
deduct such costs from the purchase price,
was only given as an
alternative remedy should the respondent have failed to comply with
the order to ensure the registration of
the subdivision on or before
31 December 2013. The applicant’s conduct in seeking that
order is certainly not consistent
only with an intention not to rely
on the suspensive condition. It could very well have been
founded on an optimism that
the required loan would be obtained and
the deadline met. ‘If a suspensive condition fails to
take effect the parties
revert to the position which they occupied
before the contract was concluded. Property transferred and
money paid in anticipation
of the condition must be transferred back
and repaid.’ (C Lee & Honoré
The
South African Law of Obligations
2 ed para 98.)
[20] The subsequent
correspondence exchanged between the parties is also not consistent
only with an intention ‘that the applicant
would not and could
not’ rely on the suspensive condition. The opposite holds
true as is patently evident from the
exchange of correspondence to
which I have referred in paragraphs 5-7 earlier in this judgment.
[21] The applicant,
therefore, has not proved the fulfilment of the suspensive condition
nor a waiver of its fulfilment before the
agreed cut-off time.
Non-fulfilment of the suspensive condition rendered the agreement
void
ab
initio. (See
Paradyskloof Golf Estate (Pty)
Ltd v Stellenbosch Municipality
2011 (2) SA 525
(SCA), para 17.)
There is accordingly no sale and the applicant is not entitled to
specific performance. My conclusion
renders it unnecessary to
consider the other issues raised on the papers.
[22]
In the result the following order is made:
The application is
dismissed with costs, including those of senior counsel when
incurred.
P.A. MEYER
JUDGE
OF THE HIGH COURT
Date
of hearing: 27 January 2016
Date
of judgment: 24 May 2016
Counsel
for the applicant: HA Van der Merwe
Instructed
by: Senekal Simmonds Inc, Bedfordview, Johannesburg
Counsel
for respondent: HP Van Nieuwenhuizen
Instructed
by: Marais Stephens Attorneys, Bryanston, Johannesburg