About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: South Gauteng High Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: South Gauteng High Court, Johannesburg
>>
2016
>>
[2016] ZAGPJHC 338
|
|
Jubi Properties (Pty) Ltd v Boyce (12286/2016) [2016] ZAGPJHC 338 (7 December 2016)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA,
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO:
12286/2016
In
the matter between:-
JUBI
PROPERTIES (PTY) LTD
Applicant
and
GENIA STEPHANIE BOYCE
Respondent
JUDGMENT
CRUTCHFIELD
AJ:
[1]
This matter came before me on the opposed motion roll of 12 September
2016.
[2]
The applicant sought orders in the following terms:
2.1 The rectification of
an agreement regarding the transfer of an immovable property situated
at Erf […] Melrose North,
Ext 2, being […] I. Road,
Melrose North (‘the property’), entered into between the
applicant and the respondent
(‘the agreement’), to
reflect the date of signature of the agreement by the respondent as
14 December 2014;
2.2 Declaring the
agreement valid and binding on the applicant and respondent;
2.3 Ordering the
respondent to do all things and sign all documents necessary to
effect transfer of the property to the applicant;
2.4 In the event of the
respondent failing to comply with paragraph 2.3 above, within ten
(10) days of the date of the order herein,
that the Sheriff (or his
lawful Deputy) be authorised to do all things, and sign all
documents, necessary to effect transfer of
the property to the
applicant.
2.5 Costs of the
application.
[3]
Two issues arose for determination:
3.1 Whether or not the
agreement lapsed for lack of fulfilment of the suspensive
condition contained therein; and
3.2 Whether or not the
applicant repudiated the agreement, as alleged by the respondent.
[4]
Briefly stated, the common cause facts were the following:
4.1 The applicant
submitted, on 9 December 2014, a written offer to purchase the
property, (‘the offer’), to the respondent.
4.2 The offer provided in
terms that it was ‘irrevocable until 5pm on Friday, 12 December
2014 (whereafter it shall be deemed
to have lapsed)’.
4.3 The offer was not
accepted by 17h00 on 12 December 2014.
4.4 At the request of the
respondent, the applicant’s authorised representative, one Mr
Rubenstein (‘Rubenstein’),
met with the respondent, her
attorney Mr R Kosviner, (‘Kosviner’), and the estate
agent, on Sunday 14 December 2014
at the property (‘the
meeting’).
4.5 The parties’
negotiated and agreed upon certain changes sought by the respondent
to the offer, the terms of which were
reduced to a handwritten
document drafted by Kosviner at the meeting, and referred to as the
‘heads of agreement’ (‘the
heads of agreement’).
4.6 The parties initially
intended to draft a fresh agreement incorporating the terms agreed to
on 14 December 2014, but elected
instead at the meeting to utilise
the offer together with the heads of agreement, which two documents
together comprised the terms
of the agreement.
4.7 The parties dispensed
with the need for any further written agreement.
4.8 Thus, the agreement
was concluded and signed by the parties at the meeting on 14 December
2014, by way of signature of
the offer and the heads of agreement.
4.9 Notwithstanding, the
parties decided at the meeting to date the agreement 12 December
2014. (I deal with the parties’
contradictory versions as to
why the agreement was backdated, hereunder.)
4.10 The material terms
of the agreement relevant to this application are the following:
4.10.1
The purchaser of the property was identified as ‘Jubi
Properties and/or a nominee’.
4.10.2
A letter of satisfaction on due diligence would be issued to the
seller in writing within 10 days. If the letter was
not
delivered, the due diligence would be deemed to have failed, and the
agreement would be of no force and effect.
4.10.3
A non-refundable deposit of R400 000.00 (four hundred thousand
rand) was payable by the applicant to the respondent
within 48 hours
after confirmation of receipt by the applicant of the due diligence
acceptance letter.
4.10.4
Upon registration of the rezoning of the property, the applicant
would furnish a bank guarantee payable to the respondent
or her
nominee of R3 200 000.00 (three million two hundred
thousand rand).
4.10.5
The offer was “
ACCEPTED BY THE SELLER on this the 12
th
day of December 2014”
.
4.11 In terms of the
agreement, the applicant performed a due diligence exercise in
respect of the property between 15 December
2014 up to and including
24 December 2014.
4.12 Rubenstein, on 24
December 2014, notified Kosviner together with the respondent and
estate agent, that the due diligence requirement
of the agreement had
been satisfied.
4.13 Thereafter, the
parties continued to give effect to the agreement on the basis that
it had been rendered unconditional.
4.14 The deposit of
R400 000.00 was paid into Kosviner’s trust account.
4.15 The respondent
signed a power of attorney on 6 January 2015, enabling the applicant
to commence with the rezoning process.
4.16 Rubenstein, on 21
January 2015, received notification confirming that the respondent
had instructed the conveyancing attorney,
one Pestana, (‘Pestana’),
to proceed with the transfer of the property into the applicant’s
name.
4.17 During October 2015,
the respondent requested an earlier implementation of the agreement
than was provided for, as she was
suffering financial difficulties
and required funds sooner than originally anticipated.
4.18 On 11 December 2015,
Pestana corresponded with attorneys Calteaux & Partners, to the
effect that the respondent had given
her approval for the transfer to
proceed.
4.19 During January 2016,
the respondent requested Rubenstein to furnish the guarantees ‘as
soon as possible’ pursuant
to her financial constraints at the
time. The applicant lent the respondent R101 000.00 in
respect of the rates clearance,
and R49 000.00 for her personal
use, to be repaid by way of setoff against the purchase price of the
property.
4.20 On 14 January 2016,
the respondent signed a power of attorney authorising Pestana to
effect transfer of the property and signed
the relevant transfer
documents.
4.21 Rubenstein was
advised that the applicant’s nomination of ‘Irene Road’
as the entity to take transfer of
the property, could potentially
attract double transfer duty. Pursuant thereto, Rubenstein
sought signature of a fresh agreement
between Irene Road (as the
purchaser), and the respondent, (‘the Irene Road agreement’),
which the respondent undertook
to consider.
4.22 On 3 March 2016,
Rubenstein advised that a ‘cancellation agreement’ in
respect of the agreement, would be signed
only once the respondent
had signed the Irene Road agreement.
4.23 During March 2016 or
thereabouts, Rubenstein became aware that the respondent,
notwithstanding the agreement, was attempting
to sell the property
anew. Hence, Rubenstein advised the respondent that if his nomination
of Irene Road was problematic, he would
proceed with the transfer in
the applicant’s name, which he elected to do.
4.24 On 15 March 2016,
the respondent’s then attorneys, Dykes Van Heerden Inc (‘DVH’),
advised the applicant that
the agreement had lapsed due to
non-fulfilment of the suspensive condition, or had been cancelled
pursuant to applicant’s
alleged repudiation of the agreement,
which repudiation the respondent had accepted.
4.25 (The lapse of the
agreement allegedly arose from the respondent’s acceptance of
the agreement ‘on or about 12 December
2014’, and, the
repudiation, pursuant to the applicant’s alleged statement that
it did not have sufficient funds. The
latter was a purported
reference to the applicant seeking to avoid the levy of double
transfer duty on the transaction.)
4.26 The applicant
procured the issue and delivery of the guarantees on 17 March 2016.
4.27 On 24 March 2016,
DVH advised inter alia that the date of the agreement was 12 December
2014, and, the heads of agreement,
which was signed before the offer
was drafted, clearly stated that the agreement was subject to a due
diligence taking place within
ten days of signature of the heads of
agreement.
4.27.1
Hence, the respondent alleged that the agreement had lapsed as the
letter of satisfaction on due diligence, (which was to
be issued to
the seller in writing within ten days, failing which the due
diligence would be deemed to have failed and the agreement
to be of
no force and effect), was completed and delivered to the respondent
within ten days of 14 December 2014.
[5]
The parties agreed that the provision for satisfaction of the due
diligence and delivery of the letter of satisfaction within
ten days
(‘the ten day period’), comprised a suspensive condition,
(‘the suspensive condition’), failure
of which would
result in the lapse of the agreement (as claimed by the respondent).
[6]
Thus the critical issue for determination was the date upon which the
ten day period for the performance of the due diligence
and delivery
of the letter of satisfaction, incepted.
[7]
The applicant argued that commercial meaning must be given to the
provision for the ten day period, which could only mean ten
days from
the date of the agreement coming into existence, being the date upon
which acceptance of the offer was conveyed to the
applicant.
[8]
The issue was the date upon which the ten day period commenced and
the fact that the parties backdated the agreement, which
is perfectly
acceptable in commercial dealings between parties, did not
necessarily mean that the parties intended the ten day
period to
operate with effect from that date.
[9]
The applicant explained in the founding papers that the reason the
agreement reflected 12 December 2014 as the date of the respondent’s
acceptance, was the parties’ common concern at the time that if
the agreement reflected acceptance on 14 December 2014, the
respondent would be accepting a lapsed offer. Hence, in order to
avoid any confusion or dispute, they agreed to ‘backdate’
the respondent’s signature to reflect 12 December 2014.
[10]
As a result of the respondent’s insistence that the date of the
agreement was 12 December 2014, and the ten day period
incepted with
effect from that date, the applicant initially claimed rectification
of the agreement to reflect the date of signature
or acceptance as 14
December 2014, this being the date on which the agreement was
concluded between the parties. The applicant
agreed with me,
ultimately, that it was unnecessary to rectify the agreement.
[11]
It serves to mention that the counsel who drafted the respondent’s
heads of argument was not the counsel who argued the
matter. Given
that the respondent’s counsel at the hearing disavowed reliance
upon the respondent’s heads of argument,
(correctly so in my
view), I do not deal with the arguments raised therein.
[12]
Mr Hitchings on behalf of the respondent argued that the parties
recorded the date of signature as 12 December 2014, as
they
intended the rights and obligations comprising the agreement to
operate from that date. The parties’ motive could not
affect
their common intention. Hence, the applicant was obliged to
reconcile himself with a reduction of the ten day period
to eight
days. Motive could not be conflated with intention and it was
necessary only to consider what was written on the
document.
[13]
Pursuant to the respondent’s reliance on 12 December 2014
as the date of the agreement, she contended non-fulfilment
of the
suspensive condition and the lapse of the agreement.
[14]
In my view, the issue afore and hence the matter in its entirety, is
capable of determination on a reasonably simple basis.
[15]
The offer to purchase provided expressly that it would lapse if not
accepted by 17h00 on 12 December 2014.
[16]
The offer was not
accepted as required and hence it lapsed automatically. The principle
that; ‘(w)hen the acceptance of an
offer is conditioned to be
made within a time ... prescribed by the offeror, then the prescribed
time limit ... should be adhered
to’, has applied in our law
since at least 1924.
[1]
[17]
Thereafter, on 14 December 2014, the parties met and negotiated the
terms of an agreement to sell and purchase the property.
The
parties did so with reference to the content of the lapsed offer and
the manuscript heads of agreement. Consensus was reached
between the
parties in respect of the sale and purchase of the property, on
14 December 2014. (Whilst the meeting was at the
instance of the
respondent, I do not consider this to be a material factor.)
[18]
It is trite that in order
for an agreement to come into existence, there must be an unequivocal
acceptance of the offer. A
contract is made at the time and
place where consensus is reached.
[2]
’
[19]
Thus, it was on
14 December 2014 that both parties knew what the other intended
by way of performance, and each consented to
the other’s
intention
[3]
in respect of the
sale and purchase of the property. It was on that day that the
parties reached agreement upon the terms of the
agreement, and the
contract was established. The contract came into existence on
14 December 2014.
[20]
Initially, the parties
intended signing a new document incorporating the terms of the
agreement concluded on 14 December 2014.
However, they
agreed at the meeting on 14 December 2014 that the documents
comprising the lapsed offer together with the heads
of agreement,
adequately served to incorporate and reflect the terms of their
agreement. Hence, the parties signed those
two documents, which
together comprised their agreement,
[4]
on 14 December 2014.
[21]
I have already found that the offer lapsed upon the absence of
acceptance by 17h00 on 12 December 2014. However,
the fact
that the parties chose to utilise the document comprising the lapsed
offer in establishing their agreement on 14 December
2014, is
irrelevant to the fact that the agreement came into existence on
14 December 2014. It was convenient for the parties
to conclude
the agreement with reference to the lapsed offer document, and the
latter formed part of the agreement reached on 14
December 2014.
[22]
It would be contrived and artificial, in my view, to reach any other
conclusion.
[23]
Given this finding, it is
unnecessary to consider the applicant’s argument that the
stated time in the offer represented ‘a
stipulation for the
exclusive benefit of the offeror, which benefit he can elect to
waive’.
[5]
[24]
Nor is it necessary to consider the parties’ conduct subsequent
to 14 December 2014, which appeared to support the
applicant’s
contention that as from 14 December 2014, the parties conducted
themselves on the basis that the agreement
was unconditional.
[25]
As regards the date when the ten day period commenced, I do not
consider it necessary to rectify the date of the agreement
from 12 to
14 December 2014.
[26]
Clause 12 of the lapsed offer document provided that:
26.1 ‘The purchaser
requests 10 days due diligence on the property to ensure all aspects
of a viable development are obtainable.’
26.2 ‘A letter of
satisfaction on due diligence will be issued to the seller in writing
within 10 days. If no letter is delivered,
the due diligence has
failed and this agreement is of no force and effect.’
[27]
The heads of agreement provided that:
‘
1. Due diligence
in respect of proposed sectional title development of not less than
eight (8) units, within ten (10) days of signature
hereof. …
3. Due diligence to
include financial feasibility for above development, within ten (10)
days of signature hereof, as well as positive
geo-tech report on the
sight. …
7. These heads will be
incorporated into the agreement of sale/offer to purchase. In
the event of any conflict between the
terms of the agreement of sale
and the above terms, the latter terms shall take precedence and shall
apply.’
[28]
It is apparent that the lapsed offer document did not specify a date
upon which the ten day period commenced whilst the heads
of agreement
referred to ‘within ten days of the signature’ thereof.
[29]
As a general proposition, and absent a specific contractual
provision, a term of a contract cannot come into existence or
commence operation prior to the establishment of the contract. The
suspensive condition could not incept prior to the applicant
having
knowledge of the respondent’s acceptance thereof, or the
agreement coming into existence, on 14 December 2014.
[30]
Accordingly, the ten day period commenced with effect from
14 December 2014.
[31]
Moreover, I am supported in my finding by the provision in the heads
of agreement to the effect that in the event of a conflict
between
the lapsed offer document and the heads of agreement, the latter
would take precedence and apply.
[32]
Hence, the parties’
stated intention in the event of a variance between the terms of the
two documents, was that the heads
of agreement would apply.
[6]
Thus, the provision that the due diligence would be completed within
ten days of signature of the heads of agreement, which date
the
respondent conceded was 14 December 2014, finds application.
[33]
In respect of Mr Hitchings’ argument that the parties intended
the rights and obligations to flow from 12 December 2014,
there was
no evidence to indicate that the parties, (having signed on
14 December 2014, dated the agreement 12 December
2014, and
determined that the heads of agreement would take precedence and
apply in the event of a conflict), intended the rights
and
obligations comprising the agreement to flow from 12 December
2014.
[34]
Furthermore, the argument failed to take account of the fact that the
ten day period was a stipulation for the benefit of the
applicant,
and only the applicant could waive or reduce that period.
Accordingly, the respondent had to demonstrate that
the applicant was
aware of the benefit of two days that he was allegedly waiving on 14
December 2014, and that he understood and
assented thereto, which the
respondent failed to do.
[35]
The respondent referred briefly to the applicant’s alleged
repudiation of the agreement. There is no basis, however,
for the
alleged repudiation as the applicant, subsequent to becoming
aware that the respondent intended utilising the proposal
of the
nominee as a basis for alleging repudiation, disavowed reliance upon
the nominee and unequivocally affirmed his intention
to take transfer
in the applicant’s name.
[36]
In the circumstances, I find that an agreement was concluded between
the parties on 14 December 2014, which agreement
was dated
12 December 2014. The ten day period referred to in
clauses 12 of the lapsed offer document and clauses 1
and 3 of the
heads of agreement incepted with effect from 14 December 2014.
[37]
Based on the aforegoing, I grant the following order:
1. The agreement in
respect of the transfer of the property situated at Erf […]
Melrose North, Ext 2, commonly known as […]
I. Road, Melrose
North (‘the property’), entered into between the
applicant and the respondent on 14 December
2014, is declared
valid and binding on the applicant and the respondent.
2. The respondent is
ordered to perform all acts and things and sign all documents
necessary to effect transfer of the property
to the applicant.
3. In the event of the
respondent failing to comply with paragraph 2 of this order within
ten (10) days hereof, the Sheriff (or
his lawful deputy) is
authorised to perform all acts, do all things and sign all documents,
necessary to effect transfer of the
property to the applicant.
4.
The respondent is ordered to pay the costs of the application.
_________________________________________________
A
A CRUTCHFIELD
ACTING
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
COUNSEL
FOR APPLICANT
Mr J Blaauw SC.
INSTRUCTED
BY
Edward Nathan Sonnenberg.
COUNSEL
FOR RESPONDENTS
Mr B Hitchings.
INSTRUCTED
BY
S Brown Attorneys Incorporated.
DATE
OF HEARING
12 September 2016.
DATE
OF JUDGMENT
7 December 2016.
[1]
Laws v
Rutherfurd
1924
AD 261
;
Rose
& Rose v Alpha Secretaries Ltd
1948
(1) SA 454 (A).
[2]
Christie’s
Law of Contract in South Africa
G
B Bradfield 7
th
edition 37.
[3]
Wille’s
Principles of South African Law
Francois
du Bois et al 9
th
edition 741.
[4]
Johnston
v Leal
1980
(3) SA 927 (A).
[5]
Manna
v Lotter
2007
(4) SA 315
(C) [26].
[6]
[6]
Privest
Employee Solutions (Pty) Ltd v Vital Distribution Solutions (Pty)
Ltd
2005
(5) SA 276
(SCA) [23].