About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2013
>>
[2013] ZASCA 54
|
|
De Klerk and Another v Steven-Lee Properties (Pty) Ltd and Another (297/12) [2013] ZASCA 54 (4 April 2013)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not Reportable
Case No: 297/12
In the matter
between:
EUGENE BERNHARD
DE KLERK
................................
FIRST
APPELLANT
TANYA DE KLERK
.......................................................
SECOND
APPELLANT
And
STEVEN-LEE
PROPERTIES (PTY) LTD
....................
FIRST
RESPONDENT
THE REGISTRAR OF
DEEDS
..................................
SECOND RESPONDENT
Neutral citation
:
De Klerk v Steven-Lee Properties
(297/12)
[2013] ZASCA 54
(04 April 2013)
Coram:
Mthiyane DP, Brand,
Lewis JJA, Van der Merwe, Saldulker AJJA
Heard:
15
March 2013
Delivered:
04
April 2013
Summary:
Whether
clause in an agreement for the sale of immovable property creates a
suspensive condition- Tacit term- proper formulation-
Local
authority.
__________________________________________________________________
ORDER
_______________________________________________________________________________________
On appeal from:
Appeal from
South Gauteng High Court, Johannesburg (Maluleke J):
The appeal is
dismissed with costs.
JUDGMENT
SALDULKER AJA
(Mthiyane DP, Brand, Lewis JJA, Van der Merwe AJA concurring):
[1] At the heart of
this dispute is the interpretation to be placed on clause 15.1 of two
identical sale agreements entered into
by the appellants and the
first respondent in respect of two properties, situated within a
development (the development) in the
municipal jurisdiction of
Vanderbijlpark which in turn forms part of the Emfuleni Local
Municipality (the municipality). The development
is within the Vaal
River Barrage area as defined in the Vaal River Guide Plan.
[2] This appeal,
with the leave of the court below, is against the judgment by
Maluleke J in the South Gauteng High Court. In the
court below the
appellants sought an order declaring that clause 15.1 of the sale
agreements created a true suspensive condition
and that the
non-fulfilment thereof had rendered the sale agreements
unenforceable. In the alternative they claimed that
the
appellants were as a result of the non-performance
entitled to, and in fact had lawfully cancelled the two sale
agreements. The
relief sought was the re-transfer of the properties
to the first respondent against payment or refund of the purchase
prices and
interest thereon to the appellants. Maluleke J dismissed
the application with costs.
[3] I turn to
consider the facts giving rise to this appeal. During March 2007, the
appellants and the first respondent entered
into two sale agreements
for the purchase of the two properties. Pursuant to the obligations
arising from the sale agreements,
the immovable properties were
registered in the names of the appellants on 31 May 2007 and 8 June
2007. The purchase prices of
the two properties were respectively
R261 000 and R271 000.
[4] The relevant
clause 15.1 reads as follows:
‘
Clause
15 –
Special
Conditions
15.1
The DEVELOPER shall make the arrangements to
the satisfaction of the appropriate local authority for the provision
of essential
services to the street border of the property.
15.5 The
construction of the dwelling and outbuildings is to be completed
prior to occupation and within 24 months from date of
registration.’(My emphasis)
[5] Prior to the
sale of the immovable properties the first respondent applied for
approval of the proposed township from both the
municipality and Rand
Water Board (Rand Water). Both the municipality and Rand Water would
have to be satisfied with the proposed
sanitation system of the
proposed township. Rand Water, which is responsible for ensuring that
proper sanitation systems are in
place for any new developments to
protect the ecosystem of the Vaal River, approved the plans for the
proposed sanitation system,
subject to the proposed upgrading of
existing pump stations and service lines by the municipality. On 16
February 2006, the municipality
granted such consent as set out in
Annexure C1, and the township was proclaimed on 22 March 2006.
Annexure C1 reads as follows:
‘
We
would hereby like to confirm that all criteria set with regard to the
water and sanitation services to the abovementioned development
have
been met and the clearance for registration can now be issued.’
[6] However, after
the establishment of the township, towards the end of 2009, a dispute
arose between the municipality and Rand
Water, as a result of
failures that occurred at the municipality’s pump stations
eight and ten. These pumps deal with the
effluent waste of the
development, and the responsibility for their proper functioning
falls under the sphere of the municipality.
Rand Water was of the
opinion that the upgrade had not been adequate, and formed the
opinion that the municipality would not be
able to deal with the
effluent waste of the development and refused to approve further
building until the municipality had upgraded
their pump stations.
[7] Before us, the
appellants contended that the sale agreements contained a suspensive
condition in clause 15.1 that the first
respondent had to make
arrangements to the satisfaction of the appropriate local authority
for the provision of essential services
to the street border of the
properties, and this condition had not been met, alternatively not
met timeously. Additionally they
contended that the term ‘appropriate
local authority’ meant Rand Water. Alternatively, the
appellants contended that
there was a tacit term of the agreement
‘that the applicants would be entitled to construct dwellings
and outbuildings on
the properties within a reasonable time from date
of registration of the properties into the names of the applicants,
alternatively
within 24 months from date of registration as envisaged
in clause 15.5 of the sale agreement’.
[8] The following
issues arise in interpreting clause 15.1. Does clause 15.1 create a
suspensive condition? Who is the local authority?
Does an
interpretation of this clause require more from the developer than
what it can do?
Was
clause 15.1 a suspensive condition
?
[9]
The most important characteristic of a condition is that it relates
to a future uncertain event. In
Design
and Planning Service v Kruger
,
1
Botha J stated
as follows:
‘
[I]n
the case of a suspensive condition, the operation of the obligations
flowing from the contract is suspended, in whole or in
part, pending
the occurrence or non-occurrence of a particular specified event . .
. . A term of the contract, on the other hand,
imposes a contractual
obligation on a party to act, or to refrain from acting, in a
particular manner. A contractual obligation
flowing from a term of a
contract can be enforced, but no action will lie to compel the
performance of a condition.’
[10] The sale
agreements were concluded in 2007 and the township was proclaimed in
2006. Whatever conditions there might have been
no longer existed at
the time of the transfer of the properties into the appellant’s
names in 2007. It was a past event.
There is also nothing conditional
about the formulation of the provisions of clause 15.1. It is simply
a term of the agreement
which requires the developer to do whatever
it can to get the approval from the local authority. There is nothing
uncertain about
this term, nor is it dependent on the happening of
any uncertain future event. It does not say that the seller must
comply with
the local authority’s obligations, only that it
must ‘make arrangements to the satisfaction of the appropriate
local
authority’.
[11] Significantly,
in their letter of demand to the first respondent to comply with
clause 15.1, the appellants referred to the
first respondent as not
having complied with two conditions of the sale agreements and that
the first respondent had failed ‘to
secure the permission of
Rand Water to approve residential developments of several stands’.
The appellants did not refer
to the non-fulfilment of any suspensive
condition in the sale agreements.
Non-performance
[12] The appellants
contend that the first respondent failed to make arrangements to the
satisfaction of the appropriate local authority
(on their version
Rand Water) for the provision of essential services to the street
border of the property as per clause 15.1.
The question is whether
the first respondent did in fact do so. In my view, it did. This much
is clear from Annexure C1, which
the first respondent has provided as
proof of its compliance with the obligations set out in clause 15.1.
Annexure C1 is a letter
from Metsi-a-Lekoa, the Water Services Unit
of the municipality confirming that all criteria in regard to the
water and sanitation
services have been met. The developer clearly
made arrangements which satisfied the municipality. The response of
the appellants
to these averments is to merely deny that the terms of
clause 15.1 had been complied with.
[13] It makes no
difference to suggest, as the appellants do, that Annexure C1, which
is dated 16 February 2006, was sent prior
to them entering into the
agreements for the sale of the properties. Clearly, standard
agreements for the conclusion of the sale
of the properties were
used, at a time when certain conditions of the sale had already been
met. Transfer and registration of both
properties in the names of the
appellants were effected. The contract was performed. Upon transfer
of the properties to the appellants
the risk in the properties was
transferred to the appellants. The registration of the properties
into the names of the appellants
could not have taken place without
the first respondent having made the arrangements as per clause 15.1.
[14] In fact, at the
time of the registration, the appellants did not complain that clause
15.1 had not been complied with. Furthermore,
any interpretation of
the word ‘arrangements’ in my view, could never have
included a guarantee that the seller would
make some ‘future
plan’ to provide the services to the appellants. No further
contractual obligation rested on the
first respondent to ensure that
the local municipality complied with its undertakings to upgrade
their existing infrastructure.
Status of Rand
Water
[15] According to
the appellants the parties intended that the ‘appropriate local
authority’ was Rand Water and not
the local municipality. For
this contention, which they submit was common cause, the appellants
sought to rely on two documents:
the Services Agreement entered into
between the first respondent and the local authority and Annexure C
to the Guide Plan. The
Services Agreement is an agreement between the
first respondent and the municipality in regard to various services,
as set out
in that agreement, to be rendered for the whole proposed
township for the mutual benefit of the relevant parties, which does
not
include the appellants. Not being a party to the Services
Agreement, the appellants cannot in such circumstances rely on the
Services
Agreement to determine the content of the sale agreements in
question. Furthermore, the relevant section 2.2 of the Guide Plan
which reads ‘[e]xcept with the written consent of the Rand
Water Board no habitable buildings. ..sewage pumping installations
or
sewage works shall be permitted below the flood control line, as
defined’, does not bolster their argument any further.
It is
clear that the appellants are placing store on documents that they
are not party to, and may not have seen, and documents
which state
what Rand Water will or may not allow in the development.
[16]
In terms of Chapter 7, s 151 of the Constitution, the local sphere of
government consists of municipalities which have the
right to govern
the local government affairs of their communities in accordance with
national and provincial legislation. Water
and sanitation fall under
local government matters. The municipality is the appropriate local
authority. The Rand Water is a statutory
public water authority which
exercises its authority in terms of
s 84
of the
Water Services Act
108 of 1997
.
2
It cannot be
regarded as a municipal structure, and is therefore not a local
authority. The appellant’s reasoning is therefore
flawed. It is
clear from
Ehlers
v
Rand
Water Board,
3
that the function of
Rand Water includes environmental protection and the determination of
floodlines in the Vaal Barrage Area.
It does not qualify as a
municipality or a local authority.
[17] It has also
been contended by the appellants that even if this court finds that
the ‘appropriate local authority’
is the local
municipality, there still has not been compliance with clause 15.1 by
the first respondent. In this regard the appellants
submit that there
is an essential difference between what is contained in Annexure C1,
the letter of approval from the municipality,
and what the first
respondent states it has complied with. The first respondent states
that it has made arrangements to provide
essential services to the
street border of the properties. In contrast, the appellants point
out that in terms of Annexure C1 the
municipality has provided bulk
services to the entire development, but has not done so to the
individual erven. In my view the
appellants have not advanced such a
case on these papers. When the first respondent defended its stance
that it had in fact made
arrangements to the satisfaction of the
local authority, and attached Annexure C1, the appellants simply
denied this averment without
any explanation of the kind now being
raised in argument. In their papers, the appellants sought to blame
the municipality for
failing to upgrade the entire reticulation
system, and stated that Annexure C1 confirmed only that water and
sewage services were
installed to the township.
Tacit Term
[18]
A tacit term is not easily inferred by the courts. It has been
contended by the appellants, correlative to clause 15.5, that
it was
a tacit term of the sale agreements that the appellants would be
entitled to construct dwellings and outbuildings on the
properties
within a reasonable time from date of registration of the properties
into the names of the appellants, alternatively
within 24 months from
date of registration. The difficulty for the appellants is that this
so-called ‘tacit term’ that
they seek to rely on in their
alternative argument has not been formulated in precise or exact
terms
4
in their founding
affidavit. In the absence of an obligation on the part of the first
respondent to ensure that Rand Water approves
building plans,
specifically after registration, no such tacit term can be inferred
in the sale agreements.
[19] It is clear
that the first respondent cannot be blamed for the municipality’s
shortcomings in regard to its sewage system.
Rand Water adopted the
stance that the dwellings could be constructed only if proper sewage
treatment works and a pump station
was constructed that would service
the properties. It is because of this dispute between Rand Water and
the local authority that
the appellants who have taken transfer of
the properties now bear the risk, and must now deal with Rand Water.
[20] The requirement
by Rand Water, a statutory body, that the municipality upgrade its
infrastructure, and any failure to do so
by the municipality, cannot
vest a claim for cancellation of the agreement against the first
respondent. There is nothing more
that the first respondent could do
in terms of its obligations as per clause 15.1 of the sale
agreements. The first respondent
has no authority over the
municipality
nor over Rand Water.
There was no contractual obligation on the first respondent to ensure
that consent be granted by Rand Water
for the approval of building
plans. The first respondent was not in breach of any of its
contractual obligations, and therefore
no valid cancellations of the
sale agreements could follow.
[21] In regard to
the question of costs of the appeal, the first respondent seeks the
costs of two counsel. In the court below,
the matter was argued by
junior counsel on its behalf. The issues involved were not
complicated, nor were any complex legal issues
traversed, requiring
the services of two counsel. Accordingly costs of two counsel are not
warranted.
[22] In the result
the following order is made:
The appeal is
dismissed with costs.
_____________________
H SALDULKER
ACTING JUDGE OF
APPEAL
APPEARANCES
For Appellants : HP
Nieuwenhuizen
Instructed by:
Scholtz & Scholtz
Correspondents :
Schoeman Maree
For First
Respondent: M C Erasmus SC with Advocate N C Hartman
Instructed by : F
Van Wyk Inc
Correspondents : TLI
INC (Matus Michael Garber)
1
Design
and Planning Service
v
Kruger
1974 (1) SA 689
(T) at 695;
Tuckers Land and Development Corporation (Pty) Ltd
v
Strydom
1984 (1) SA 1
(A) at 10B-G.
2
Rand
Water Board
v
Milner
(2003) JOL 10841
(SCA) para 2.
3
Ehlers
v
Rand
Water Board
2006 (3)
SA 299
(SCA) paras 7.4 and 7.9 ;
Rand
Water Board
v
Rotek
Industries
(
Pty)
Ltd
2003 (4) SA 58
(SCA) para 2; See
s 84
of the
Water Services Act 108 of 1997
.
4
Desai
v
Greyridge Investments (Pty) Ltd
1974 (1) SA 509
(A) at
522H-523A;
Consol Ltd t/a Consol Glass
v
Twee Jonge
Gezellen (Pty)Ltd
2005 (6) SA 1
(SCA) para 51.