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[2010] ZAGPPHC 235
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Epic Properties (Pty) Ltd v Le Hanie NO and Others (43031/2008) [2010] ZAGPPHC 235 (9 December 2010)
NOT
REPORTABLE
IN
THE NORTH GAUTENG HIGH COURT, PRETORIA
CASE
NO: 43031/2008
DATE:
9/12/2010
In
the matter between:
EPIC
PROPERTIES (PTY) LTD
….................................................................................
Applicant
and
WILLIE-JOHN
LE HANIE N.O.
….......................................................................
First
Respondent
WILHELM
LAMBERTUS LE HANIE N.O.
….................................................
Second
Respondent
CHRISTIAN
LE HANIE N.O.
…..........................................................................
Third
Respondent
QUENTIN
RAYMONT OLIVIER
…..................................................................
Fourth
Respondent
ANTHONY
WILTON INC
…................................................................................
Fifth
Respondent
JUDGMENT
Delivered:
09/12/2010
RDCLAASSEN
J
:
1.
First
to Third Respondents are the trustees of the Wilgenof Trust
{"the
trust).
In
those capacities they bought a game farm from Applicant, which
contract was cancelled because the guarantee to be provided by
the
trust was 1 day late. The cancellation was confirmed by a Court
order.
2.
The
Fourth Respondent is an attorney and a director of the Fifth
Respondent. They are cited as being the conveyancing attorneys,
and
for holding a certain balance of the money paid to them as part of
the deposit in terms of the sale agreement. They are still
holding
onto that money, because the Applicant and the trust are fighting
about who should get it and who is entitled to it. Applicant
is also
claiming costs on an attorney and client scale against them for not
having paid out the money as of yet.
3.
The
issue in this case arose because an earlier contract between
Applicant and the trust was void. In terms of the void agreement
the
deposit of R520 000.00 was paid to the Applicant's erstwhile
appointed conveyancing attorneys, who also paid the auctioneer's
fee
from it. After the first agreement was formally terminated, the
second agreement, the present
"deed
of
sale" ("the
deed'),
was
concluded.
4.
The
trust had, however, obtained possession of the property after the
first agreement, and had obtained a lessor for the property,
who paid
a deposit of R37,500.00 plus four instalments of R37,500.00 each in
respect of rental. In terms of the deed no occupational
rental prior
to transfer of the property was provided for. After cancellation of
the deed the Applicant obtained the property back
from the trust,
together with the lease.
5.
Clause
14 of the deed (the same as in the previous agreement) stipulated the
following;
"Breach
Should
either party commit a breach of any of the conditions hereof, and
remain in default for 7 days after despatch of a written
notice by
registered post, the aggrieved party shall be entitled to, and
without prejudice to any other rights available at law;
14.1
.....
14.2
.....
14.3
In
the event of the purchaser being in default the seller may claim
retain
(sic)
all
amounts paid by the purchaser as roukoop or a genuine pre-estimate of
damage suffered by the seller, and furthermore the purchasers
shall
not be entitled to compensation from the seller for any improvements
of whatsoever nature he may have caused on the property,
whether with
or without the seller's consent; and .,.."
6.
In
this matter the Applicant is claiming the full balance of the deposit
(as is in the hands of the Fourth and Fifth Respondents),
as well as
the rental paid to the trust, referred to in paragraph 4 above.
7.
The
trust's defence is that the whole of the claim is subject to the
Conventional Penalties Act, No. 15 of 1962, ( the CPA) and
that the
Applicant cannot claim both the roukoop
and
damages (i.e. the rental). Furthermore, it would in any event be
prejudicial to the trust should it be paid out
in
toto
to
the Applicant.
8.
The
Applicant's answer to this is that even if it is subject to the CPA,
it has suffered so much prejudice that it should not be
reduced in
any way.
9.
ROUKOOP:
Mr
Bava's argument (on behalf of the Applicant) was that in respect of a
roukoop clause, the CPA does not apply. He relied on various
authorities:
LAWSA:
Consumer Credit: Immovable Property, para 105; Handelseg, Vol. 1, Van
Jaarsveld en Oosthuizen 1978 SA; General Principles
of Law of
Contract of Van Rensburg and Treisman at page 264; and
The
Practitioner's Guide to the Alienation of Land Act, at page 196.
10.
In
Handelsreg
of
Van
Jaarsveld and Oosthuizen,
it
is specifically stated at page 121 that the Act does not apply to a
roukoop provision, but
"....is
wei van toepassing op gewone verbeuringsbedinge".
Counsel
did not refer to it, but Section 4 of the Act is to my mind also
applicable and it reads as follows:
"A
stipulation whereby it is provided that upon withdrawal from an
agreement by a party thereto under circumstances specified therein,
any other party thereto shall forfeit the right to claim restitution
of anything performed by him in terms of the agreement, or
shall, not
withstanding the withdrawal, remain liable for the performance of
anything thereunder, shall have effect to the extent
and subject to
the conditions prescribed in Sections 1 to 3 inclusive, as if it were
a penalty stipulation."
11.
In
Custom
Credit Corporation (Pty) Ltd v Shembe
1972 (3) SA 462
(A)
the
following is said in respect of the abovementioned section at page
473
in
fine
to
474 B:
"The
reference in Section 4 to a withdrawal by a party to an agreement
therefrom is in fact a concept of a wider connotation
than that of a
party in breach of his contractual obligation. The former includes
the latter but would also include the case where
the withdrawal
results from the operation of a resolutive condition stipulated for
in the agreement. If it is correct to say that
Section 4 also
contemplates a breach, there is no reason to place a restrictive
meaning upon the words "anything performed
by him in terms of
the agreement". They are words of wide connotation and quite
clearly embrace instalments on the purchase
price. I conclude,
therefore that Section 4 of the Conventional Penalties Act does apply
to the present agreement"
12.
This
quotation must be compared to Clause 14(3) of the deed. From a
reading it seems to me that Section 4 deals exactly with the
situation envisaged in Clause 14.3. Since Section 4 is not excluded
in the deed it must be applied to this contract. For that reason
it
is clear to me that the CPA does apply to this contract, regardless
of what the parties termed the provision, i.e. whether as
a roukoop
or a pre-estimate of damages.
13.
Having
found that, it must be decided
(1
)
whether the R520,000.00 is a fair and reasonable
"penalty"
and
(2) whether Applicant is entitled to any part of the rental received
by the trust.
14.
The
facts are that the trust had possession of the property for about a
year, between the two contracts. For the first three months
nothing
was earned from it. Thereafter Jakaranda obtained a lessee for 4
months, at a rental of R37 500 per month, plus a deposit
of even
amount. However, no occupational rental was contracted for. If one
takes into account that the property could have been
rented out for
the full year at the same rate, it would have earned an amount of
R438 000. Simply on that basis alone, I do not
think that the trust
will be disproportionately prejudiced in forfeiting the deposit
already paid. To my mind Applicant is entitled
to withhold the full
amount of R520 000.00 of the deposit. Therefore the trust via the
Fourth and Fifth Respondents must pay the
money held in trust by them
together with the interest thereon to the Applicant. In detailing its
prejudice, the Applicant also
referred to various other
expenses/losses incurred/caused by the cancellation. They relate
i.a.
to
intervening costs to obtain a court order to confirm the termination
of the first contract, and also an intervening application
to ward
off the respondents' application to have the deed confirmed. These
issues however, to my mind, amount to a claim for damages
proper.
Applicant did not claim for damages in the contract itself. Whereas
it is permissible to claim for both if so contracted,
applicant
cannot do so in this instance. It may refer thereto to indicate the
amount of prejudice it has suffered, so as to justify
the roukoop
amount, but cannot claim it as damages, because it was not contracted
for.
See:
Bank
of Lisbon Limited v Venter
1990
(4)
SA
463.
15.
As
regards the rental money, Applicant is not entitled to it as well. As
already pointed out, damages was not contracted for, and
it is
forbidden in terms of Section 1 (1) and (2) of the CPA.
16.
Applicant
has in the alternative claimed another ground for payment of the
rental. This is based on an offer made by the trust that
the
Applicant may get the rental money, subject to certain conditions,
which were posed as a settlement to the whole issue. This
offer was
not only rejected but in fact the Applicant refused permission to the
trust to let the property out. In the answering
affidavit the trust
states that it is still willing to honour its undertaking in that
regard. In the replying affidavit the Applicant
accepts the offer.
The trust, however, maintains that when the offer was so accepted it
was not on the table any more and therefore
no acceptance thereof
could take place.
17.
From
the reading of the affidavits,
I
accept
that the offer to make good the understanding, was still on the
table. The problem for the Applicant is however that the
full
undertaking was on the table, which required in essence that
Applicant waive a claim to either the deposit or the rental.
As it
now stands, the Applicant wishes to enforce both. That was not the
offer that was put forward. Under those circumstances
the Applicant
cannot lay claim to the rental.
18.
The
trust, however, also has a counterclaim on the basis of the CPA, in
that the property that Applicant received back from the
trust was at
that time far more valuable, plus the further benefit of the
improvements made on the property in the amount of approximately
R50
000,00. The alleged increase in value of the property is based on a
sworn valuation obtained by the trust, as well as the fact
that the
trust itself did make an offer to the Applicant to purchase the
property for that price. This offer was rejected. The
claim is also
based on the allegation that the Applicant is not entitled to the
roukoop clause. In the formulation of the claim,
the trust states, in
the heads of argument, that the trust wants the deposit back, but the
applicant will be entitled to the rental
received by the trust. The
balance in favour of the trust is then R46 236,00. Having found that
the applicant is entitled to the
deposit, and that the trust will be
unduly prejudiced if the rental is also paid over, this claim cannot
succeed. Furthermore the
contract clearly states the any improvements
will also be forfeited.
19.
COSTS:
The
last issue is the question of costs, and more particularly the costs
of the Fourth and Fifth Respondents. The Applicant claims
that this
case should not have happened at all, had the Fourth and Fifth
Respondents not only
(1
)
acted for the trust and the Applicant at the same time, as being the
Applicant's appointed conveyancer, but also (2) not kept
the part of
the deposit that should have gone to the Applicant at the outset. On
that basis the Applicant claims attorney and client
costs against the
Fourth and Fifth Respondents.
20.
It
is true that Fourth and Fifth Respondents were appointed as the
conveyancing attorneys on behalf of the Applicant, but it was
also
known to all parties that they were in fact the trust's attorneys of
record all along. When the dispute arose about whether
the Applicant
is entitled to the deposit and the rental, the Fourth and Fifth
Respondents actively supported their own client's
case. When the
Applicants then pointed out to the Respondents that they in fact had
a conflict of interest, they withdrew as the
trust's attorneys. Their
attitude was then that they hold the money in trust and will pay over
to whom so ever is entitled thereto,
when that issue becomes settled.
On that basis they claim to have been
"stakeholders".
21.
There
is no dispute that the costs in the main must follow the result. The
only question remains that of the Fourth and Fifth Respondents
which
I shall consider as one entity.
22.
What
is clear from the facts is that the dispute about the entitlement to
both the deposit and the rental arose at a very early
stage. That is
so because both parties claim both. The Fourth and Fifth Respondents
in actual fact sat in the middle, although
they assisted the trust
initially. (They did withdraw and new attorneys were appointed for
the trust.) The applicant says they
were the
"agents"
of
the Applicant regarding the conveyancing. The fact is that the
"parties"
appointed
them as such in the deed. Therefore they were the agents of both in
respect of the conveyancing, but remained the attorneys
of record of
the trust. It is so that they only withdrew after the conflict of
interest was pointed out to them. However, in essence
they did not in
effect unfairly prejudice or benefit either party except to keep the
money in trust. I can therefore not penalise
them. Since the
applicant was essentially successful in the application, it is fair
that they should not be made to suffer unfairly.
It would be fair
that the respondents pay applicant's costs, jointly and severally.
In
the result the following order is made:
1.
The
Fourth and Fifth Respondents are ordered to pay to the Applicant the
amount of R232.117.68 together with interest earned thereon
to date
of payment;
2.
The
respondents are to pay the costs of the application, jointly and
severally
3.
The
trust's counterclaim is dismissed with costs.
R
D CLAASSEN
Judge
of the High Court