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[2010] ZAGPJHC 190
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Newman Design CC t/a Wizards Gallery v Document House (Pty) Ltd (10515/2010) [2010] ZAGPJHC 190 (24 November 2010)
IN
THE SOUTH GAUTENG HIGH COURT, JOHANNESBURG
(REPUBLIC
OF SOUTH AFRICA)
CASE
NUMBER: 10515/2010
DATE:
24 NOVEMBER 2010
In the
application between
NEWMAN DESIGN CC
t/a WIZARDS
GALLERY
......................................................
APPLICANT
And
THE DOCUMENT
HOUSE (PTY)
(LTD)
...................................................................
RESPONDENT
JUDGMENT
EF Dippenaar AJ
[1] This is an
application for the payment of the balance of the purchase price of
R1 million for the goodwill of a business sold
by the Applicant to
the Respondent.
[2] The parties
conducted a written Sale Agreement (“the Agreement”) on
8 September 2009 relating to the
sale of a clothing
business which trades from the Hyde Park Shopping Centre as a going
concern.
[3] Clause 10 of the
Agreement details how payment of the R1 million payable by the
Respondent in respect of the goodwill of the
business was to be paid.
R150 000,00 was to be paid on signature and the balance in
instalments of R40 000,00 per month over a
period of 23 months
commencing on 31 October 2009.
[4] Clause 10.2 of
the Agreement contains an acceleration clause which provides that if
any payment is not made on due date, the
full amount then outstanding
would became immediately due or payable.
[5] It is common
cause between the parties that a total sum of R270 000,00 of the R1
million was paid but that no further payments
were made by the
Respondent since 30 January 2010. The Respondent paid the amount of
R150 000,00 in September and continued making
the R40 000,00 monthly
payments without demur until 30 January 2010.
[6] It is further
common cause that the Respondent took occupation of the business and
the premises in Hyde Park during September
2009 and has remained in
occupation thereof and has enjoyed all the benefits thereof. The
Respondent has not disclosed the basis
on which it has thus remained
in occupation and the answering papers are silent on this issue.
[7] At the time the
Agreement was concluded, there was a dispute between the Applicant
and the landlord, Hyprop pertaining to the
windows to the shopfront,
the replacement costs of which the Applicant contends amounts to some
R62 462,50 and which it is
attempting to resolve with the
landlord directly. No mention of this dispute is made in the
Agreement concluded between the parties
and it is common cause that
the Respondent was at the time of conclusion of the Agreement not
aware of the damage to the windows
or the dispute between the
Applicant and the landlord relating thereto.
[8] The Applicant
launched the current proceedings on 18 March 2010 after demanding
payment of the outstanding balance on 4 March
2010 and advising the
Respondent that it was invoking the acceleration clause contained in
the Agreement on 9 March 2010.
[9] The Applicant
contends that in the circumstances and based on these common cause
facts, the full outstanding balance of R730
000,00 is due owing and
payable to it.
[10] The Respondent
sought to strike out various allegations contained in the Applicant’s
replying affidavit on the basis
that it constituted new matter. The
Respondent in its heads of argument contended that if the new matter
was not struck from the
record, it would require a postponement and
leave to file a further affidavit dealing with such new matter. At
the hearing of
the application the Respondent did not persist with
its request for a postponement and no further affidavit was filed by
it. The
Respondent apparently did not consider itself prejudiced in
proceeding with the matter on the papers as they stand. Having
considered
the offending paragraphs in the replying affidavit, I am
not convinced that these paragraphs constitute matter but rather
constitute
responses to issues raised by the Respondent in its
answering papers.
[11] Both parties at
inception of the matter confirmed to me that neither of them wished
the matter to be referred to trial; and
if I were to find that there
were irresoluble disputes on the papers, the application was to fail.
I specifically raised this issue
with counsel in light of the
Respondent’s contention in its heads of argument that the
matter was to be referred to trial
by virtue of the existence of
irresoluble factual disputes on the papers.
[12] The Respondent
relies on clause 4 of the Agreement which provides that the
Respondent “shall take over the premises currently
held in Hyde
Park...being shop 52C and will enter into a new lease with Hyprop by
the agreement of Reinette Van Tonder of Hyde
Park Management with Naz
Jacobs...” and contends in rather ambiguous terms that by
virtue of the dispute between the landlord
and the Applicant, the
landlord was not prepared to conclude a new lease agreement with the
Respondent.
[13] It further
avers that the Agreement contained a tacit term, to be inferred from
clause 4, that the Applicant at the time of
conclusion of the
Agreement, expressly represented to the Respondent that “all
conditions pre-requisite to the transfer of
the lease in terms of
clause 4 of the agreement and all impediments thereto would be
attended to as between the Applicant and the
landlord including...the
replacement of the plate glass windows at the premises” and
that it is entitled to a rectification
of the Agreement to include a
warranty by the Applicant that the window would be replaced “as
soon as possible after the
conclusion of the Agreement”. The
Respondent however did not institute any counter application for such
rectification.
[14] Upon a proper
interpretation of clause 4 of the Agreement and having regard to the
express words contained therein, the clause
does not envisage that
the Applicant is obliged to procure a right of occupation for the
Respondent and the Respondent does not
contend this. Clause 4.1
specially provides that the Respondent’s representative will
enter into a new lease with Hyprop
by the agreement of Reinette van
Tonder of Hyde Park Management with Naz Jacobs.
[15] In order to
determine whether the tacit terms contended for by the Respondent can
be imported into the Agreement, the so called
“officious
bystander” test is to be applied: See: Wilkens v Voges,
[1994] ZASCA 53
;
1994
(3) SA 130
(A).
[16] In my view, the
following factors militate against the tacit terms being imported
into the Agreement: The parties were not
legally represented or
assisted by an attorney at the time the Agreement was concluded and
the Agreement nowhere else refers to
any warranties given or
contemplated by the parties at the time. The Agreement provides that
it constitutes the sole record of
the agreement between the parties
in relation to the subject matter thereof. At the time the Agreement
was concluded, the Respondent
was not aware of any dispute between
the Applicant and the landlord, and the Applicant regarded this
dispute as not concerning
the Respondent and being an issue between
it and the landlord. This dispute was further not referred to at the
time in the correspondence
between the parties. It is accordingly
doubtful that, had the parties been asked at the time of conclusion
of the Agreement, whether
the tacit terms contended for was included
in their agreement, their respective answers would be in the
affirmative. In my view,
it does not appear that the parties’
intention at the time included the tacit term or warranty contended
for.
[17] At the time the
Agreement was concluded during September 2009 no formal dispute had
yet arisen between the Applicant and the
landlord regarding the
scratching of the windows of the business premises by cleaners of the
landlord, although the parties were
all aware of the existence of the
scratches. This is common cause between the parties and is not
disputed by the Respondent who
on its own version was unaware of any
disputes. The correspondence between the parties at the time does not
support the Respondent’s
version. This puts pay to the
Respondent’s reliance on the alleged tacit term as the
scratches to the windows do not appear
to have been an issue or in
the irrelevant of the minds of the parties at the time the Agreement
was concluded between them.
[18] The issue only
arose as a debate between the parties months after the conclusion of
the Agreement and as such could not reasonably
have formed part of
the Agreement between them.
[19] In my view, had
the Respondent sought rectification of the Agreement, which
significantly it has not done, it would not on
the available facts
have been entitled thereto.
[20] I accordingly
hold that the tacit terms contended for by the Respondent, cannot be
imported into the Agreement between the
parties.
[21] Even if the
Applicant was obliged in terms of the Agreement to remove any
impediment to the Respondent’s occupation of
the premises or
possession of the business, factually, it does not appear that any
such “impediment” to the Respondent’s
possession of
the business or occupation to the premises exists and it does not
appear that, even if I am not correct and the tacit
term contended
for by the Respondent, can be read into the Agreement (which I am not
satisfied is the case), it would not provide
the Respondent with a
valid defence to the Applicant’s claim.
[22] The Respondent
further places reliance on the exceptio non adimpleti contractus and
contends that it is absolved from payment
of any further instalments.
[23] This reliance
on the excepho non adimpleti contactus appears to be misconceived and
the exception can only find application
where the obligations of the
parties are reciprocal.
[24] In the absence
of the tacit terms and warranty contended for by the Respondent,
there can be no reciprocal obligations in the
Agreement between the
Applicant and the Respondent, which can render the exception
applicable.
[25] On the common
cause facts, the Applicant finally discharged its obligation to the
Respondent to give possession of the business
to it by doing so
during September 2009. The Respondent’s obligation to pay the
agreed goodwill payment of R1 million in
terms of clause 10 of the
Agreement endured for the entire instalment period of 23 months
(disregarding for present purposes the
acceleration clause).
[26] The Applicant’s
obligations under the Agreement did not extend to issues such as the
quality or condition of the premises
or expenses in relation thereto.
The shopfront windows did not fall with the category of the premises
to be sold.
[27] The
Respondent’s contentions that irresoluble factual disputes
exist on the papers, must be seen against the backdrop
of the
requirements of a bona fide factual dispute, as formulated by Heher
JA in Wrightman t/a JW Construction v Headfour (Pty)
Ltd and Another,
[2008] ZASCA 6
;
2008 (3) SA 371
SCA paragraphs 11 to 13, as follows:
“[11] The
first task is accordingly to identify the facts of the alleged
spoliation on the basis of which the legal disputes
are to be
decided. If one is to take the respondent’s answering affidavit
at face value. The truth about the preceding events
lies concealed
behind irresoluble disputes. On that basis, the applicant’s
application was bound to fail. Bozalek J thought
that the court was
justified in subjecting the apparent disputes to closer scrutiny.
When he did so he concluded that many of the
disputes were not real,
genuine or bona fide. For the reasons which follow I must
respectfully agree with the learned judge.
[12] Recognising
that the truth almost always lies beyond mere linguistic
determination the courts have said that an applicant who
seeks final
relief on motion must, in the event of conflict. Accept the version
set up by his opponent unless the latter/s allegations
are, in the
opinion of the court, not such as to raise a real, genuine or bona
fide dispute of fact or are so far-fetched or clearly
untenable that
the court is justified in rejecting them merely on the papers:
Plascon-Evans Paints Ltd v van Riebeeck Paints (Pty)
Ltd
1984 (3) SA
623A
at 634E-635C. See also the analysis by Davis J in Ripoll-Dausa v
Middleton NO and Others
2005 (3) SA 141C
at 151A-153C with which I
respectfully agree. (I do not overlook that a reference to evidence
in circumstances discussed in the
authorities may be appropriate).
[13] A real, genuine
and bona fide dispute of fact can exist only where the court is
satisfied that the party who purports to raise
the dispute has in his
affidavit seriously and unambiguously addressed the fact said to be
disputed. There will of course be instances
where a bare denial meets
the requirements because there is no other way open to the disputing
party and nothing more can therefore
be expected of him. But even
that may not be sufficient if the fact averred lies purely within the
knowledge of the averring party
and no basis is laid for disputing
the veracity or accuracy of the averment. When the facts averred are
such that the disputing
party must necessarily possess knowledge of
them and be able to provide an answer (or countervailing evidence) if
they are not
true or accurate but, instead of doing so, resets his
case on a bare or ambiguous denial the court will generally have
difficulty
in finding that the test is satisfied, I say ‘generally”
because factual averments rarely stand apart from a broader
matrix of
circumstances all of which needs to be borne in mind when arriving at
a decision. A litigant may not necessarily recognise
or understand
the nuances of a bare or general denial as against a real attempt to
grapple with all relevant factual allegations
made by the other
party. But when he signs the answering affidavit he commits himself
to his contentions, inadequate as they may
be, and will only in
exceptional circumstances be permitted to disavow them. There is a
serious duty imposed upon a legal advisor
who settles an answering
affidavit to ascertain and engage with facts which his client
disputes and to reflect such disputes fully
and accurately in the
answering affidavit. If that does not happen it should come as no
surprise that the court take a robust view
of the matter.”
[28] In my view, the
Respondent has failed to set out his defence in sufficient
particularity to justify a conclusion that it is
bona fide, inter
alia, for the following reasons:
[28.1] The
Respondent has failed to provide any documentary evidence regarding
the alleged unwillingness of the landlord to conclude
a lease
agreement with it and has provided no detail of its discussions or
negotiations with the landlord regarding a lease;
[28.2] No
confirmatory affidavit from the landlord’s representatives is
attached to the answering papers;
[28.3] The
Respondent has dealt with this issue in vague and ambiguous terms in
the answering papers and has not committed itself
to a definitive
version, which it should reasonable have been able to do; and
[28.4] The
Respondent has failed to disclose on what basis he has remained in
occupation of the premises since September 2008 and
apparently
studiously avoid the issue entirely in its answering papers.
[29] In the
premises, I hold that there is no bona fide dispute of fact, material
to the determination of this application.
[30] I further hold
that the Applicant is on the papers entitled to the relief sought by
it.
[31] I accordingly
make the following order:
[31.1] The
Respondent is directed to make payment of an amount of R730 000. 00
to the Applicant;
[31.2] The
Respondent is directed to pay interest on the amount in [31.1] above
at the rate of 15.5% per annum a tempore morae
from 10 March 2010 to
date of payment;
[31.3] The
Respondent is directed to pay the costs of the application.
EF DIPPENAAR
ACTING JUDGE OF
THE HIGH COURT
Date of hearing :
13 May 2010
Date of judgement
: 24 November 2010
For Applicant :
Adv B Slon
Eversheds
For Respondent :
Adv M Novitz
Schindlers
Attorneys