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[2010] ZAWCHC 633
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Summs NO and Others v De Lange and Another (17779/2010) [2010] ZAWCHC 633 (20 December 2010)
IN THE HIGH COURT OF
SOUTH AFRICA
(WESTERN CAPE HIGH
COURT, CAPE TOWN)
CASE NO: 17779/2010
In the matter between:
J
W SUMMS N O
…........................................................................
First
plaintiff
L
T SUMMS N O
…...................................................................
Second
plaintiff
C
F HAASBROEK N O
…..............................................................
Third
plaintiff
and
CHANTILLY
TRADING 30 (PTY) LTD
…..........................................
Defendant
JUDGMENT DELIVERED ON
20 DECEMBER 2010
BLIGNAULT
J
:
[1] This is an opposed
application for provisional sentence. Plaintiffs act herein as the
trustees of the J W S Trust. Defendant
is a company duly incorporated
under South African law, named Chantilly Trading 30 (Pty) Ltd.
[2] Plaintiffs claim from
defendant an amount of R18 279 427,09 plus interest thereon at the
rate of 7% per annum from 1 July 2010
to date of payment.
[3] In para 1 of the
plaintiffs' summons it is alleged that their cause of action against
defendant arises from:
An
agreement of sale of certain immovable property concluded on 23
October 2006 between plaintiffs as seller and L K de Lange
and L J
Tapsell
"on
behalf of a company to be formed as Purchaser"'.
A
copy of the agreement of sale is annexed to the summons.
A
statement that on a date subsequent to 25 October 2006 defendant
"ratified
and adopted the rights of the purchaser in terms thereof, thus
becoming bound as purchaser to the terms of the
Agreement of Sale".
A statement that the sum
of R18 279 429,97 has become due and payable by the purchaser.
[4] In para 2 of the
summons it is alleged that plaintiffs' claim in terms of the deed of
sale is secured by a first mortgage bond
over certain property, which
was, pursuant to the deed of sale, executed and registered under bond
No 35744/2007 at Cape
Town
by Petra Van Nieuwholtz as the duly authorised agent of
defendant.
1
[5] The agreement of sale
is annexed to the summons. On the first page of the deed of sale the
purchaser is defined as follows:
"LEONARD KRUGER
DE LANGE ID NO 551002 5134 08 4
MARRIED OUT OF
COMMUNITY OF PROPERTY and
CHRISTOPHER JOHN
TAPSELL ID NO 640831 5002 00 5
MARRIED
OUT OF COMMUNITY OF PROPERTY In our personal capacities on behalf of
a company to be formed: (hereinafter referred to as
"the
Purchaser")."
[6] The agreement of sale
is replete with references to the purchaser. Clause 12 of the deed of
sale reads as follows:
SURETY
LEONARD
KRUGER DE LANGE AND CHRISTOPHER JOHN TAPSELL representing
the
Purchaser
herein
bind ourselves in their personal capacity unconditionally and
irrevocably as sureties for and co-principal debtors jointly
and
severally with
the
Purchaser
for
the due and punctual performance by
the
Purchaser
of
all its obligations to
the
Seller
due
in terms of the deed of sale and shall enter into a separate surety
agreement with
the
Seller"
[7] At the end of the
deed of sale the signatures of De Lange and Tapsell appear in the
following form:
"SIGNED
at
PAROW
on
the
23
rd
day
of
OCTOBER
2006
AS WITNESSES
1._____________________
__________________
PURCHASER
Chantilly Trading 30
(Pty) Ltd
Herein represented by
2. Leonard Kruger de Lange
SIGNED
at
PAROW
on
the
23
rd
day
of
OCTOBER
2006.
AS
WITNESSES
:
1.
________________ ______________________
PURCHASER
Chantilly Trading 30
(Pty) Ltd
Herein represented by
2.
Christopher John Tapsell"
[8]
Defendant filed an opposing affidavit. It was deposed to by De Lange
on behalf of defendant. Defendant's principal defence on
the merits
was the
exceptio
non adimpleti contractus.
De
Lange alleged, in short, that plaintiffs had not performed its
obligations to deliver fully serviced erven to defendant. He provided
details of the alleged breaches of the agreement of sale by
plaintiffs. Defendant also gave notice of its intention to institute
a counterclaim for the damage suffered by it.
[9] Plaintiffs filed a
replying affidavit in which defendant's allegations regarding its
breaches of the agreement were denied.
[10] The application was
heard by me on 3 November 2010. The heads of argument of counsel
dealt mainly with the issues raised in
the affidavits. At the hearing
of the matter, however, additional issues were raised. The Trust was
granted leave to supplement
its written argument in order to deal
with these issues.
[11] On 9 November 2010
plaintiffs gave notice of an application for the amendment of the
summons by the insertion of the following
words:
"and whether
Defendant admits or denies Defendant's signature or the authority of
Defendant's agent."
[12]
At the same time plaintiffs' counsel submitted further written
argument which was described as a
"Supplementary
note filed on plaintiff's behalf.
[13]
In this supplementary note counsel for plaintiffs submitted that the
deed of sale and the mortgage bond are liquid documents
for purposes
of provisional sentence and that both these documents had been signed
by defendant within the meaning of Rule 8. Defendant's
complaint that
the summons did not contain an invitation to defendant to admit or
deny defendant's signature, he submitted, was
cured by the amendment
sought by plaintiffs. The remainder of counsel's submissions dealt
with the
exceptio
non adimpleti contractus.
[14] Defendant filed a
notice of objection to the amendment of the summons of plaintiffs.
[15]
Counsel for defendant also filed additional written argument. He
submitted that the deed of sale could not be a liquid document
in the
absence of defendant's signature or that of its agent. Counsel
submitted further that plaintiffs had not made the essential
allegation that the notification of the agreement by defendant had
been in writing. The rest of counsel's argument dealt with the
exceptio
non adimpleti contractus.
[16] Counsel for
plaintiffs retaliated with yet a further written argument.
[17] Before dealing with
the merits of defendants' defence there are questions which require
prior determination. I consider first
whether the agreement of sale
can support the application for provisional sentence.
[18] It is not clear from
the agreement of sale whether defendant, Chantilly Trading 30 (Pty)
Ltd, had been incorporated on 23 October
2006 when the agreement of
sale was signed. If it had, the agreement would have been invalid for
lack of compliance with the provisions
of section 2(1) of the
Alienation of Land Act 68 of 1981 ("the Act").
[19]
If defendant had not been incorporated by 23 October 2006, section 35
of the Companies Act 61 of 1973 might have been applicable
as a
law
falling
within the ambit of sub-section 2(2) of the Act. Section 35 of the
Companies Act reads as follows:
"35.
Power as to pre-incorporation contracts.
-
Any
contract made in writing by a person professing to act as agent or
trustee for a company not yet incorporated shall be capable
of being
ratified or adopted by or otherwise made binding upon and enforceable
by such company after it has been duly incorporated
as if it had been
duly incorporated at the time when the contract was made and such
contract had been made without its authority.
Provided that the
memorandum on its registration contains as an object of such company
the ratification or adoption of or the acquisition
of rights and
obligations in respect of such contract, and that such contract has
been lodged with the Registrar together with
the lodgement for
registration of the memorandum and articles of the company."
[20] It is apparent,
however, that there are a number of requisites for the application of
section 35 of the Companies Act. Plaintiffs
have not expressly or
impliedly pleaded that these pre-requisites have been complied with.
[21]
A second problem in this regard is whether the ratification and
adoption of the agreement by defendant, although alleged by
plaintiffs, can be regarded as an unconditional acknowledgement of
indebtedness by defendant for purposes of provisional sentence.
See
Erasmus
Superior
Practice
B-64.
[22] It is accepted that
where the defendants liability is dependant on a simple condition, an
allegation that it has been complied
with would be sufficient for
provisional sentence. In the present case, however, the very
existence of the agreement is dependant
upon the condition that it be
adopted by defendant. This is not in my view a simple condition which
would not be dependant upon
the production of extrinsic evidence.
[23] I am accordingly of
the view that plaintiffs are not entitled to provisional sentence on
the strength of the agreement of sale.
[24] Plaintiffs' claim
for provisional sentence also purports to be based on the mortgage
bond annexed to their summons marked 'B'.
It is clear from the
summons and the mortgage bond that it is intended to secure the
balance of the purchase price owing to plaintiffs
under the agreement
of sale. The mortgage bond is accordingly materially dependant upon
the agreement of sale and can have no validity
on its own.
[25] Sub-rule 8(3)
requires that all documents upon which the claim for provisional
sentence is founded shall be annexed to the
summons.
[26] The judgment of
Nestadt J in Longtill Construction v Liberhorn (Pty) Ltd
1987 (2) SA
240
(W) contains a full discussion of the authorities on the meaning
and effect of this sub-rule. He summarised the position as follows,
at 244CD:
"In the light of
what has been stated above, any one of the following (similar)
chteria fall to be applied in determining whether
the building
contract is a document upon which the plaintiff's claims are founded
(thus necessitating it having to be annexed to
the summons): Whether
it is necessary to determine the defendant's liability; or material
to the plaintiff's cause of action; or
whether the action is so
dependent on it that it cannot proceed without a consideration of it;
or whether it forms a vitally important
part of the plaintiff's
claims against the defendant."
[27]
In
the light of the problems regarding the validity of the agreement of
sale mentioned above, the mortgage bond similarly fails
to provide a
basis for provisional sentence.
[28] Plaintiffs' summons
accordingly lacks averments to sustain the action.
[29] In the result,
plaintiffs' application for provisional sentence is refused with
costs.
A
P BLIGNAUT