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[2017] ZAGPJHC 365
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Mamathuba v Nisch (0041888/16) [2017] ZAGPJHC 365 (24 November 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, JOHANNESBURG
Case
number: 0041888/16
Not
reportable
Not
of interest to other judges
Revised.
24/11/2017
In
the matter between:
DR
R C
MAMATHUBA
APPLICANT
AND
A
W G
NISCH
RESPONDENT
JUDGMENT
GOODMAN,
AJ:
1.
This
matter relates to the validity of an agreement of sale of land
concluded between the applicant, as buyer, and the respondent,
as
seller.
2.
The
sale agreement at issue was concluded on 29 June 2015, and related to
the property described, in clause 2.1,
as
“Portion 2 and the Remainder of Holding 44, Kyalami A/H, City
of Johannesburg, Gauteng Province”
.
Its material terms were as follows:
2.1.
The
applicant undertook to pay a purchase price of R5
500 000.00,excluding VAT, in respect of the property within 15
days
of fulfilment of all suspensive conditions.
2.2.
He
also undertook to pay a deposit of R300 000.00, to be paid in
four equal tranches, with the last instalment due on 1 December
2015.
2.3.
The
sale was subject to the suspensive condition that the applicant
secured cash or obtained a loan in the amount of R5 200 000.00
within 6 months of the date of signature of the agreement, or such
extended period as the respondent in writing allowed.
2.4.
If
the suspensive condition was not fulfilled, the agreement would lapse
and be of no force and effect. Clause 7.1.4 provided
that, in
that event, the respondent would be entitled to retain the deposit
paid, and all interest accrued on it, as damages.
3.
Attached
to the sale agreement was a plan that set out the proposed
subdivision of the property. It recorded the extent, position
and boundaries of each proposed subdivided portion. The plan is
not referred to in the sale agreement, but it (and the subdivisions
marked on it) have been initially by each of the parties and the
applicant accepts that it formed part of the sale agreement that
he
signed.
4.
It
is common cause that at the time that the sale agreement was
concluded, the City Council had approved the application for the
subdivision of the property and the Surveyor General had approved the
subdivisional diagrams, but that no certificate of subdivision
had
been issued by the Deeds Office.
5.
Subsequently,
the parties concluded a written addendum to the sale agreement that
varied its terms. In terms of the Addendum,
the property to be
purchased was the full extent of Holding 55 Kyalami (and not
sub-divided portions of it) and the purchase price
was increased to
R8 250 000.00. The suspensive condition was amended to provide
that the agreement would lapse if the applicant
failed to secure cash
or a loan in an amount of R7 950 000. 00. The period for fulfilment
of the suspensive condition was not extended.
The remaining
terms of the sale remained the same. (The applicant initially
disputed that he had signed the Addendum but
did not persist with
that complaint in reply or before me.)
6.
In
the event, the applicant did not secure the funding required and the
suspensive agreement was not fulfilled. The respondent
has
retained the deposit paid to him. However the applicant
contends that he is not entitled to do so because the agreement
was
void
ab initio
.
He seeks to have it declared as such, and to have the R300 000.00
deposit repaid to him as a consequence.
The
grounds of the alleged invalidity
7.
In
his founding papers, the respondent alleged that the sale agreement
is invalid on two separate grounds:
7.1.
First,
he claims that the respondent misrepresented the property to be sold,
in that he did not specify to the applicant that it
had not yet been
sub-divided. That misrepresentation is so material, he claims,
that it vitiated both the sale agreement
and its subsequent
amendment.
7.2.
Second,
he contends that the sale agreement is invalid under
section 2(1)
of
the
Alienation of Land Act 68 of 1981
because it failed adequately to
describe the property to be sold. His complaints, in
particular, were that (a) the sale agreement
did not state that the
property had not yet been subdivided, and (b) in any event, because
the subdivision had not yet been effected,
the property was not
capable of being sold per the agreement. Again, he argued that
because the initial agreement was void,
it could not be rectified or
rendered valid by the subsequent Addendum.
8.
At
the hearing of the matter, the applicant’s representative
sought to add another ground of alleged invalidity – namely
that subdivision of the property had to be undertaken in accordance
with section 3(e)(i) of the Subdivision of Agricultural Land
Act 70
of 1970 (“the Agricultural Land Act”), and that there was
no evidence of compliance prior to the conclusion
of the sale
agreement or, indeed, the institution of these proceedings.
9.
In
my view, however, the applicant is not entitled to rely on this
ground of objection. He did not put compliance with the
Agricultural Land Act in issue in his papers, and the parties have
accordingly not properly pleaded whether the land in question
falls
within the remit of that Act, whether section 3(e)(i) applies and
whether its requirements were met.
[1]
The Agricultural Land Act simply did not form an aspect of the case
the respondent was called to meet, and entails factual
enquiries that
were not ventilated on the papers. It is not an issue that I
can permissibly determine on the papers before
me.
10.
Finally,
the applicant contended that even if the sale agreement was validly
concluded, the respondent is not entitled to retain
the deposit paid
because it has not complied with
section 19(1)
of the
Alienation of
Land Act, which
requires a party to afford its counterparty notice of
breach and an opportunity to rectify before cancelling an agreement
for the
sale of land.
[2]
11.
Against
that background, I turn to consider each of the applicant’s
complaints in turn.
The
alleged misrepresentation
12.
The
applicant’s complaint as to misrepresentation is that he could
not have known, from the terms of the sale agreement, that
the
property he sought to purchase had not yet been subdivided at the
time that he concluded the sale agreement.
13.
To
be actionable, a misrepresentation must have been material and
induced the claimant to have concluded the sale agreement.
The
pertinent question is thus whether the applicant had been misled as
to the status of the subdivision at the time that he entered
into the
sale agreement and whether he concluded the agreement in reliance on
that misrepresentation.
14.
It
seems to me, on the papers, that the applicant must have been aware
that the sub-division of the property had not yet gone through
at the
time that he signed the agreement in question. That appears
from two documents:
14.1.
First,
the plan attached to the sale agreement and initialled by the
applicant records the “proposed” sub-divisions
of the
property, implying that they had not yet, at the date of signature,
been finalised. The respondent has offered no
explanation for
his signature of that plan if he was indeed unaware that the
subdivision had not yet occurred.
14.2.
Second,
on 7 December 2017, the respondent sent an email recording the
applicant’s intention to purchase the whole property
(including
portion 1) and suggesting that the applicant buy it as a single piece
of land to save on costs and administration.
He then advised
the applicant that “
the
Holding 55 subdivisions are registered at council . . . This
means that once the property is in your name you can, at
any time,
register the individual subdivisions at the Deeds Office”
.
In response, the applicant did not express concern or surprise at
that fact. Instead, he agreed to buying the property
as a
single piece of land. This is consistent with his already
knowing that the subdivision had not been effected before
the sale.
15.
I
thus find that, on the probabilities, the applicant was not misled as
to the subdivision status of the property subject to sale.
16.
But
even if the applicant had been misled as to the status of the
subdivision, he was aware by no later than 7 December 2015 that
the
subdivision had not yet been registered and decided nevertheless to
enter into the Addendum – thus electing to enforce
the sale
agreement rather than to rescind. Having done so, he cannot now
seek to escape his obligations under the sale agreement,
as
amended.
[3]
17.
I
accordingly find that the sale agreement is not invalid for
misrepresentation by the respondent.
The
description of the property in the sale agreement
18.
In
the alternative, the applicant contended that the sale agreement is
invalid because it sold a merx that did not yet exist and,
moreover,
was inadequately described in the sale agreement (which failed to
specify that the property had not yet been subdivided).
19.
Section
2(1)
of the
Alienation of Land Act requires
that any sale of land
must be by way of written agreement which, inter alia, describes the
land to be sold sufficiently that it
can be ascertained by reference
to the provisions of the contract alone.
[4]
An agreement that fails adequately to describe the property is
usually invalid from inception, and cannot be rectified.
[5]
It follows that if the applicant’s objection in this regard is
well-founded, both the sale agreement and the Addendum
will be
invalid.
20.
However,
in my view, the objection is without merit. A subdivision need
not be registered in order for the subdivided property
to be capable
of transfer.
[6]
That is
because the property in question exists in fact and can be sold.
[7]
Congruent with that,
regulation 32
to the Regulations to the
Deeds
Registries Act 47 of 1937
[8]
provides that property may be sold provided there is a diagram
thereof. The certificate is merely proof of the subdivision;
it
does not give effect to it.
[9]
21.
In
the present case, the Surveyor General had approved the subdivisional
diagram and the properties were consequently capable of
being sold,
even in the absence of the subdivision having been registered.
The applicant’s claim that the property
did not yet exist
because the subdivision had not been registered is, in the
circumstances, misplaced.
22.
I
also do not accept that the property at issue was inadequately
described in the sale agreement. The
Alienation of Land
Act requires
merely that the
res
vendita
is identified without resort to the parties or extrinsic evidence.
In this case, the description of the property considered
together
with the attached diagram provided adequate certainty in this
regard. I am satisfied that the parties were ad idem
as to the
property sold, and that this was capable of objective determination
from the content of the agreement.
23.
In
the circumstances, I find that the sale agreement was valid. It
follows that the Addendum is not tainted by any invalidity
and was
also validly concluded.
Section
19
of the
Alienation of Land Act
24.
Once
that is so, the sale agreement failed only by virtue of the
non-fulfilment of the suspensive condition. The effect was
that
the agreement lapsed.
25.
Clause
7.1.4 of the sale agreement permitted the respondent, by agreement,
to retain the deposit even in the event that the sale
agreement
lapsed. The applicant contended before me that the respondent
was required to invoke and adhere to the requirements
of
section 19
of the
Alienation of Land Act before
he could rely on that clause.
26.
But
in my view, that is not so.
Section 19
stipulates certain
requirements that must be fulfilled before a seller cancels a land
sale for breach of contract. But in
this case, no breach of
contract was alleged. Rather, the agreement failed to come into
operation because the suspensive
conditions were not met. In
those circumstances,
section 19
did not apply.
Conclusion
27.
For
these reasons, I find that the applicant has failed to advance any
basis for invalidating the sale agreement ab initio, or for
escaping
his obligation to pay a deposit and the respondent’s
entitlement to retain it in the event that the suspensive conditions
were not fulfilled.
28.
I
accordingly make the following order:
(a)
The
application is dismissed with costs.
----------------------------------
I
A GOODMAN, AJ
ACTING
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION
JOHANNESBURG
Attorney
for the Applicant: Mr KP Masenya
Counsel
for the Respondent: Adv CJ Smit
Date
of hearing: 14 November 2017
Date
of Judgment: November 2017
[1]
The
Constitutional Court has confirmed that it is a question of fact
whether land is properly classified as agricultural land within
the
meaning of the Agricultural Land Act: see
Wary
Holdings (Pty) Ltd v Stalwo (Pty) Ltd and Another
[2008] ZACC 12
;
2009
(1) SA 337
(CC) para 62.
[2]
Section
19(1) states:
“
No
seller is, by reason of any breach of contract on the part of the
purchaser, entitled -
(a)
to enforce any
provision of the contract for the acceleration of the payment of any
instalment of the purchase price or any other
penalty stipulation in
the contract;
(b)
to terminate
the contract; or
(c)
to institute an
action for damages,
unless
he has by letter informed the purchaser of the breach of contract
concerned and made demand to the purchaser to rectify
the breach of
contract in question, and the purchaser has failed to comply with
such demand.”
[3]
See,
in this regard,
Bowditch
v Peel and Magill
1921
AD 561
at 572–573.
[4]
Clements
v Simpson
1971
(3) SA 1
at 7;
[1971]
3 All SA 196
(A);
Vermeulen
v Goose Valley Investments (Pty) Ltd
2001 (3) SA 986
(SCA) at 999.
[5]
Magwaza
v Heenan
1979
(2) SA 1019
(A);
Headermans
(Vryburg) (Pty) Limited v Ping Bai
1997 (3) SA 1004
(SCA) at 1010.
[6]
Pesic
and Another v Wetdan W38 CC and Others
2006
(5) SA 445
(W) paras 28-30.
[7]
Hamilton-Browning
v Denis Barker Trust
2001
(4) SA 1131
(N) at 1139E.
[8]
Published
in
GNR.474
of 29 March 1963.
[9]
Pesic
para 28.