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[2013] ZASCA 187
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Kingswood Golf Estate (Pty) Ltd v Witts-Hewinson and Another (223/2013) [2013] ZASCA 187; [2014] 2 All SA 35 (SCA) (29 November 2013)
THE SUPREME COURT OF
APPEAL OF SOUTH AFRICA
JUDGMENT
Case
No: 223/2013
Reportable
In
the matter between
KINGSWOOD
GOLF ESTATE (PTY) LTD
……………………………
.
APPELLANT
and
JONATHAN
MARK WITTS-
HE
WINSON
………………
.......
FIRST
RESPONDENT
MICHELLE SUSAN WITTS-HEWINSON
…………………
.
SECOND
RESPONDENT
Neutral
citation:
Kingswood
Golf Estate (Pty) Ltd v Witts-Hewinson & another (223/13)
[2013]
ZASCA 187
(29 November 2013)
Coram
:
Brand, Ponnan, Cachalia, Bosielo and Shongwe JJA
Heard:
12 November 2013
Delivered:
29 November 2013
Summary:
Contract - whether clause 1. 2. 4 of the addendum to the deed of sale
concluded by the parties is so vague that it can
be regarded as void
for vagueness and thus unenforceable - whether the court below erred
in considering the post-contractual newsletter
of November 2004 to
give content to clause 1. 2. 4 - whether the court below erred in
ordering the appellant to construct a clubhouse
substantially in
compliance with the newsletter within two years of the order.
ORDER
On
appeal from:
Western
Cape High Court, Cape Town (Meer J sitting
as
court of first instance):
1.
The
appeal is upheld.
2.
The respondents are directed to pay the appellant’s costs in
the appeal, including the costs of two counsel, jointly and
severally.
3.
The
order of the court a quo is set aside and replaced with the
following:
3.
1 ‘The application is dismissed.
3.
2
The applicants are ordered, jointly and severally, to pay the
respondents’ costs, including the costs occasioned by the
employment of two counsel.’
JUDGMENT
BOSIELO
JA
(Brand,
Ponnan, Cachalia and Shongwe JJA concurring):
[1]
This
is an appeal against the judgment and order of the Western Cape High
Court (Meer J) granted on17 September 2012 in terms whereof
the court
granted the following order:
‘
IT
IS ORDERED:
1.
It is declared as follows:
1.1
In
terms of the deed of sale concluded between the applicants and the
first respondent, a copy of which is Annexure “JWH2”
to
the founding affidavit of the first applicant, the first respondent
undertook to construct and/or be provided at the Kingswood
Golf
Estate a clubhouse, duly furnished in accordance with the upmarket
quality and nature of the proposed development (the clubhouse),
within a reasonable period after the date of conclusion of the sale
agreement, being 10 March 2004;
1.2
A
reasonable period for the construction of the clubhouse has elapsed;
1.3
The
first respondent has not constructed the clubhouse contemplated in
the sale agreement;
1.4
The
first respondent is not entitled in terms of the deed of sale to
construct the clubhouse only at such time as it considers it
prudent
and/or viable to do so.
2.
That
the first respondent is ordered to cause a clubhouse to be built
substantially in accordance with the design of the architect
Andrew
Horne, referred to in the Kingswood Golf Estate newsletter dated
November 2004, incorporating the facilities and amenities
identified
therein and duly furnished in accordance with the upmarket quality
and nature of the Kingswood Golf Estate Development,
such clubhouse
to be constructed and made available to the members of the Kingswood
Golf Estate Homeowners’ Association,
including the applicants,
at the first Respondent’s expense, within 2 years of the date
of this order.
3.
The
First Respondent shall pay the costs of the application.’
[2]
This
appeal against that order is with the leave of this Court.
[3]
The
background facts to this case are largely common cause. They can be
succinctly set out as follows. The parties hereto entered
into a
written deed of sale on 10 March 2004 in terms whereof the
respondents purchased from the appellant the property at Kingwood
Golf Estate. Attached to the deed of sale was an addendum which
contained some representations made by the appellant. Both the
deed
of sale and addendum were signed by the appellant on 10 March 2004
and by the respondents on 15 March 2004. The relevant part
of the
addendum reads as follows:
‘
Notwithstanding
the provisions of the deed of sale to which this addendum is annexed,
the parties record and agree that: ‘The
Seller acknowledges
that the Purchaser has entered into this Deed of Sale on the strength
of the representations that the seller
will, at expense, cause the
following to be constructed and/or furnished for the benefit of the
proposed development and Homeowners
Association, namely;
1.2.4
a
clubhouse, duly furnished in accordance with the upmarket quality and
nature of the proposed development.’
The
clause which is at the heart of the dispute is clause 1. 2. 4.
[4]
Significantly,
the deed of sale contained so-called non-variation and
non-representation clauses which read:
‘
17.1.
The terms of this agreement form the sole contractual relationship
between the parties hereto and no variation of this agreement
shall
affect the terms hereof unless such variation shall have been reduced
to writing and signed by all the parties hereto. 20.3.
Save as
specifically set out in this agreement, the purchaser acknowledges
that neither the seller nor any person acting or purporting
to act on
behalf of the seller has made any representations, and has given any
warranties relating thereto this sale is accordingly
“voetstoots”.’
[5]
Though
the appellant had built a clubhouse the respondents contended (as
will presently emerge) that this was not the one contemplated
in
clause 1. 2. 4 of the addendum. This caused the first respondent to
write a letter to the appellant on 24 August 2010 wherein
he recorded
his complaint that a reasonable time within which the clubhouse
should have been built, had already passed. That period
was
calculated to be seven years from the date the respondents purchased
their property. A flurry of correspondence then ensued
between the
appellant and respondents.
[6]
In
a letter dated 8 October 2010, the appellant responded as follows:
‘
We
do however wish to point out to you that the clubhouse which we
intend to construct when financial and market conditions make
it
financially prudent and economically viable to do so, is a project
which we envisage outside our contractual
obligations
towards purchasers liker yourselves. You appear to overlook the fact
that we have already provided clubhouse facilities
which are adequate
for the present needs of the development.
Your
repeated contentions that we are in breach of our obligations
contractually undertaken is again rejected. Needless to say,
your
requests that we provide you with confirmations and undertakings
regarding the building of a further clubhouse are also rejected.’
[7]
Predictably,
this letter added fuel to an already toxic and volatile situation.
The respondents responded as follows to that letter
in para 5 of a
letter dated 13 October 2010:
‘
It
ill behoves you to refer to the building of a “further
clubhouse”. The existing facility, used as a temporary
clubhouse,
is nothing more than that (ie, a temporary facility).You
yourself have never referred to the existing facility as anything
else.
What I have placed the seller on terms to deliver is not a
‘further clubhouse’ but indeed the clubhouse contemplated
in terms of and specifically referred to in the deed of sale executed
by Kingswood Golf Estate (Pty) Limited on 15 March 2004.’
[8]
This
rather acrimonious exchange led inexorably to this case. The main
allegation is that the appellant has failed to construct
a clubhouse
as agreed in terms of clause 1. 2. 4 of the addendum to the deed of
sale.
[9]
The
appellant opposed this application. The gravamen of his defence is
that he has constructed and made available to golfers, members
of the
public and, importantly, members of the Kingswood Homeowner’s
Association, including the respondents, clubhouse facilities
at the
Gatehouse Complex with effect from 15 December 2007. According to the
appellant this clubhouse has been constructed and
‘furnished in
accordance with the upmarket quality and nature of the Kingswood Golf
Estate development.’ To demonstrate
this, he has attached to
his papers a copy of the floor-plan of the clubhouse at the Gatehouse
Complex and a number of photographs
which show the following of
features of the clubhouse: a restaurant and a bar, a lounge area, a
deck area, gentlemen’s toilet
and shower facilities, the
ladies’ toilet and shower facilities, a proshop, entrance
area, Gatehouse Complex Building
and parking area. Based on this, he
asserts that he has complied with his obligations embodied in clause
1. 2. 4 of the addendum
to the deed of sale.
[10]
The
legal question to be answered in this appeal is very narrow, namely,
whether a reasonable person, reading clause 1. 2. 4 of
the addendum
as it stands, and, without the aid of the post-contractual newsletter
of November 2004, will be able to determine
what ‘a clubhouse,
duly furnished in accordance with the upmarket quality and nature of
the proposed development at Kingswood
Golf Estate’ is.
[11]
It
is common cause that clause 1. 2. 4, on its own, does not contain any
indications, specifications, benchmarks, characteristics
or
particulars to enable one to determine what ‘a clubhouse built
and furnished in accordance with the upmarket quality and
nature of
the proposed development’ should look like. Nor is it in
dispute that the only document which contains some specifications
or
indications as to the kind of clubhouse which was envisaged in the
addendum is the post-contractual newsletter sent out on behalf
of the
appellant in November 2004. The question is whether the newsletter is
admissible to add content to a clause which is admittedly
vague.
[12]
The
respondents submit that this post-contractual newsletter is relevant
and permissible to lend content to or amplify clause 1.
2. 4. On the
other hand, the appellant’s contention is that the newsletter
is inadmissible as it constitutes extrinsic material.
[13]
The
court below not only admitted the newsletter; it granted judgment in
the respondents’ favour in accordance with its terms.
The
appellant’s main contention as to why the court erred in doing
so, is that the phrase ‘a clubhouse, duly furnished
in
accordance with upmarket quality and nature of the Kingswood Golf
Club development’ is so vague and uncertain that one
cannot
tell with any measure of certainty what was envisaged by the parties.
Consequently, the appellant urged us to find that
clause 1. 2. 4 of
the addendum is void for vagueness and thus legally unenforceable.
[14]
In
the alternative, the appellant submitted that he has complied with
clause 1. 2. 4 of the addendum as he has constructed clubhouse
facilities at the Gatehouse Complex which are ‘in accordance
with the upmarket quality and nature of the Kingswood Golf Club
development.’
[15]
The respondents
responded as follows in their replying affidavit:
‘
The
applicant’s complaint is not that the Gatehouse complex is not
in keeping with the upmarket quality and nature of the
development at
Kingswood. As Laker is doubtless well aware, the applicant’s
case is something entirely different, namely,
that the first
respondent has not delivered on its obligation in respect of the
(permanent) clubhouse facility contemplated in
terms of the deed of
sale.’
[16]
The
respondents do not dispute the fact that the appellant has built a
clubhouse at the Gatehouse Complex and further that the facilities
are in keeping with the upmarket quality and nature of the
development at Kingswood. Their complaint is that this is not in
terms
of the deed of sale. Their reasons for saying so is that it is
common cause that the present clubhouse was not intended to be
permanent
and therefore did not constitute compliance with the deed
of sale. But this argument seems to rest on a non sequitur. The mere
fact that everybody envisaged a better clubhouse to be built in
future does not mean that the present one failed to satisfy the
requirements of the agreement.
[17]
This
brings me back to the essential question - what were the terms of the
agreement? What must the clubhouse look like? The court
a quo found
the answer in the newsletter of November 2004. But on what basis can
that letter be incorporated into the deed of sale?
[18]
Counsel
for respondents was pressed to concede that in terms of the current
law, such a step is not permissible. However, he sought
to avoid the
effect of the prohibition by submitting that such material and
circumstances surrounding the conclusion of the contract
can be used
to give content to the contract but not necessarily to be
incorporated as a term of the contract. He relied on Natal
Joint
Municipal Pension Fund v Endumeni Municipality
2012 (4) SA 593
(SCA)
as support for his proposition.
[19]
To
my mind reliance on Endumeni was misplaced. Endumeni is no authority
for the proposition that in order to interpret a clause
in a written
contract, reliance can be placed on post-contractual extrinsic
material.
According
to Endumeni the proper approach to the interpretation of documents is
to ‘consider at the outset, the context and
the language
together, with neither predominating over the other’.
[20]
In
addition, the respondents’ approach militates against
nonvariation and non-representation provisions in clauses 17.1
and 20.3 of the addendum to the deed of sale. The two clauses
expressly precludes reliance or any amendment, additions or
variations
to the deed of sale unless reduced to writing and signed
by both parties. The post-contractual newsletter of November 2004 was
never signed by any of the parties. It therefore does not form part
of the deed of the sale.
[21]
Finally,
the respondent’s approach also militates against the parol
evidence rule which was thus enunciated in Lourey v Steedman
1914 AD
532
at 543:
‘
The
rule is that when a contract has once been reduced to writing no
evidence may be given of its terms except the document itself,
nor
may the contents of such document be contradicted, altered, added or
varied by oral evidence’.
See
also
Union
Government
v
Vianini
Ferro-Concrete Pipes (Pty) Ltd
1941
AD 43
at 47.
[22]
Over
the years, this rule has received universal recognition by our
courts. It was recently reaffirmed by this Court in KPMG v Scurrefin
Ltd
2009 (4) SA 399
(SCA) at para 39 as follows:
‘
First,
the integration (or parol evidence) rule remains part of our law.
However, it is frequently ignored by practitioners and
seldom
enforced by trial courts. If a document was intended to provide a
complete memorial of a jural act, extrinsic evidence may
not
contradict, add to or modify its meaning (Johnson v Leal
1980 (3) SA
927
(A) at 943B).’
[23]
Based
on the above, it follows that the cou
rt
below erred in accepting the
newsletter
of November 2004 to add content to clause 1. 2.
4
of
the addendum to the deed of sale.
[24]
However,
the respondents had another string to their bow. This was
based
on the principle arbitrio boni mori. Building on this, the
respondents submitted in the alternative that clause 1. 2. 4 creates
a fettered discretion for the appellant to decide what constitutes ‘a
clubhouse duly furnished in accordance with the upmarket
quality and
nature of the proposed Kingswood Golf Club development’. I
understand the submission to mean that, notwithstanding
the fact that
clause 1. 2. 4 of the addendum might be vague, the appellant could
still invoke his discretion and use it bona-fide
to build a clubhouse
which, in his discretion, would qualify as ‘a clubhouse, duly
furnished in accordance with the upmarket
quality and nature of the
proposed development at Kingswood Golf Club’.
[25]
I
find this submission to be startling as the respondents themselves
disputed the fact that the appellant had any discretion as
set out
above. This is the only reason why they rejected the appellant’s
assertion that he had exercised his discretion when
he built the
clubhouse at the Gatehouse Complex, the quality whereof the
respondents did not challenge. This makes their submission
rather
disingenuous if not fallacious. Evidently, the reliance by the
respondents’ counsel on the principle of arbitrio boni
viri is
misplaced. The misconception is further illustrated by the case in
which counsel for the respondents sought to find authority,
ie NBS
Boland Bank Ltd v One Berg River Drive CC & others
1999 (4) SA
928
(SCA). What that case turned on was a discretion expressly
bestowed upon one of the contracting parties which is absent in this
case. In short, the present contract does not bestow any discretion
on the appellant.
[26]
Even
if I were to agree with the respondents that the appellant had a
fettered discretion, the respondents would still fail, in
my view, as
it is common cause that the appellant has, whilst exercising his
discretion, built a clubhouse at the Gatehouse Complex.
The
respondents do not dispute that it is ‘duly furnished in
accordance with the upmarket quality and nature of the Kingswood
Golf
Course development’. However, they insist that it is not in
terms of clause 1. 2. 4 of the addendum in that it is not
built at
the place agreed upon. Undoubtedly, this presents a serious dispute
of fact on this very critical issue which cannot be
resolved on the
papers as they stand as I still do not know the kind of a clubhouse
which was envisaged in clause 1. 2. 4 of the
addendum. Applying the
principle in Plascon-Evans Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A), one would have had either to resolve this issue on
the appellant’s version or, at worst, dismiss the application.
[27]
In
sum, I therefore find that the court below erred, first, in accepting
the post-contractual newsletter of November 2004, to amplify
or lend
content to clause 1. 2. 4 of the addendum, second, in finding that
the deed of sale clothed the appellant with some fettered
discretion
based on the arbitrio boni mori principle, and third, in granting an
order for specific performance as such an order
would be impractical
to implement. Undoubtedly, it would be wellnigh impossible for a
court to monitor the implementation of such
an order. It follows that
this appeal must succeed.
[28]
In
the result the following order is made:
1.
The
appeal is upheld.
2.
The
respondents are directed to pay the appellant’s costs in the
appeal, including the costs of two counsel, jointly and severally.
3.
The
order of the court a quo is set aside and replaced with the
following:
3.1
‘The application is dismissed.
3.
2
The applicants are ordered, jointly and severally, to pay the
respondents’ costs, including the costs occasioned by the
employment of two counsel.’
L
O BOSIELO
JUDGE
OF APPEAL
Appearances:
For
Appellant: LS Kuschke SC (with him HC Schreuder)
Instructed
by:
C &
A Friedlander Inc., Cape Town
Naudes
Attorneys, Bloemfontein
For
Respondent:
J
Muller SC
Instructed
by:
Cliff,
Dekker, Hofmeyer Inc.; Cape Town
Webbers
Attorneys, Bloemfontein