About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Eastern Cape High Court, Port Elizabeth
SAFLII
>>
Databases
>>
South Africa: Eastern Cape High Court, Port Elizabeth
>>
2020
>>
[2020] ZAECPEHC 37
|
|
Borcherds and Another v Duxbury and Others (1522/2020) [2020] ZAECPEHC 37; 2021 (1) SA 410 (ECP) (22 September 2020)
IN THE HIGH COURT OF
SOUTH AFRICA
EASTERN CAPE LOCAL
DIVISION, PORT ELIZABETH
Case
No.: 1522/2020
Date
Heard: 13 August 2020
Date
Delivered: 22 September 2020
In
the matter between:
JUANE GERALDO
BORCHERDS First
Applicant
EDLYNNE RONIQUE
TOU Second
Applicant
and
JOHN CLINTON
DUXBURY First
Respondent
KIM JERI-LEE
DUXBURY Second
Respondent
JB
KNOETZE Third
Respondent
N
KNOETZE
Fourth Respondent
LYNETTE@LAW
ATTORNEYS Fifth
Respondent
HUIZEMARK UITENHAGE
Sixth
Respondent
JUST PROPERTY
UITENHAGE Seventh
Respondent
THE REGISTRAR OF
DEEDS Eighth
Respondent
JUDGMENT
RONAASEN
AJ:
Introduction
[1]
On 28 July 2020, pursuant to an application
brought on an urgent basis by the applicants, I granted an interim
order, by agreement,
in terms of which the first, fifth and eighth
respondents were interdicted from taking any steps which would cause
the sale or
transfer of the immovable property known as erf 5829,
Levydale, Uitenhage, situated at 22 Settlers Crescent, Levydale,
Uitenhage
(“the property”) to the third and fourth
respondents.
[2]
The interim order was to remain in effect
pending the determination of the relief sought by the applicants in
terms of part B of
the notice of motion, namely that:
2.1.
the first respondent be directed to sign
all documents necessary to effect transfer and registration of the
property to the applicants
in accordance with a contract for the sale
of the property (“the contract”) concluded on 9 June
2020, within three
days of the documents being presented to him by
the conveyancer appointed to effect the registration of transfer;
2.2.
in the event of the first respondent
failing to comply with the order sought in terms of paragraph 2.1,
above the Sheriff of the
High Court be authorised to sign the
documents on his behalf;
2.3.
the fifth respondent be directed to pay the
costs of the application, including the reserved costs attaching to
the granting of
interim relief
de bonis
propriis
on the scale as between
attorney and client, alternatively, that the first and fifth
respondents be directed to pay the costs of
the application, jointly
and severally, the one paying the other to be absolved, on the scale
as between attorney and client.
[3]
As will be apparent from this judgment what
was meant to be a relatively simple property transaction was
escalated into an unnecessary
and protracted dispute, necessitating
expensive litigation to provide a resolution to the dispute.
Underlying the dispute were
the attempts by the fifth respondent to
assist the first respondent to escape liability under the contract.
The dispute was primarily
precipitated by the conduct of the
following persons:
3.1.
the agent employed by the seventh
respondent, who introduced the applicants to the property.
Despite the seventh respondent
being in line to earn a commission of
R56 000.00 from the sale the agent merely sent the offer to
purchase, which was accepted
by the first respondent, to the first
respondent by electronic means. Had the agent made an effort to
earn her commission
and taken the trouble to present the offer to the
first respondent personally and obtain his signature and that of the
second respondent,
indicating her written consent to the transaction,
this litigation could have been avoided or substantially reduced in
its scope;
3.2.
the director of the fifth respondent, Ms
Volschenk, an attorney of this court. Her ill-advised conduct,
at the outset, set
into motion a train of events leading to the
litigation. Had she taken time to properly consider the terms
of the contract
and advise the first respondent correctly as to its
terms the litigation could have been avoided. She was also the author
of further
efforts to assist the first respondent to avoid liability
in terms of the contract.
The contract
[4]
The contract came into being on 9 June
2020, when the applicants’ offer to purchase the property was
accepted by the first
respondent. The property is registered
solely in the name of the first respondent. He is, however,
married in community
of property to the second respondent and,
consequently, her written approval of the contract was required in
terms of
section 15(2)(a)
of the
Matrimonial Property Act, 88 of
1984
. Although there was some dispute as to whether this latter
formality was complied with, I am satisfied that it was, as will
appear later in this judgment.
[5]
The following terms of the contract
underlie the disputes I am called upon to decide:
5.1.
clause 8, entitled “
MORTGAGE
”,
which reads as follows:
“
This
entire Agreement is subject to the Purchaser being able to obtain a
Final Quotation (or any document with a similar effect,
confirming an
approval in principle of a loan, as well as an acceptable property
assessment) from a registered financial institution
by not later than
30 June 2020 confirming that a loan has been approved for the amount
of R1 120 000.00 or such other
amount agreed to by the
purchaser in writing on security of a mortgage bond to be registered
over the Property.”
5.2.
Clause 16, entitled “
72
HOUR RATIFICATION
”, in the
following terms:
“
Prior
to the fulfilment of the suspensive conditions in clauses 8, 13 and
14 the seller retains the right to continue marketing
the property
which is the subject of this agreement and in the event of the seller
receiving a satisfactory written offer free
of suspensive conditions
(which shall be interpreted to include an offer in which all
suspensive conditions have been fulfilled)
from a third party, he
shall notify the purchaser in writing, furnishing the purchaser with
a copy of such written offer and giving
the purchaser 72 hours
(excluding Saturdays, Sundays and public holidays) notice to waive or
prove fulfilment of the suspensive
conditions aforementioned, and if
the purchaser fails to give the seller written proof of such waiver
within such 72 hour period
the Seller shall be entitled to cancel
this agreement forthwith by giving written notice to the purchaser to
that effect.”
[6]
It is common cause that clauses 13 and 14
as they appear in the printed contract did not form part of the
contract and were deleted
by the parties.
The suspensive
condition and its fulfilment
[7]
On 17 June 2020 Ms Lynette Volschenk, a
director of the fifth respondent, addressed an email to the
applicants, in the following
terms:
“
We
confirm that we have been instructed to attend to the transfer of the
property, which you have also made an offer on through
Just Property,
and our instructions from the seller is as follows:
1.
The seller has subsequent to receiving your
offer, received a higher offer for R1 170 000.00, on which
offer the purchaser’s
bond was approved on Friday.
2.
We have also been notified that you have
obtained a bond approval in principle, but your offer is less than
the 2
nd
offer.
3.
We attach hereto the Ratification notice,
in terms of which take notice that the seller has received the ‘more
satisfactory
offer’ as required by the ratification notice
clause in your offer to purchase (clause 16).
4.
This notice therefore serves to advise you
of the seller exercising his right to accept the more satisfactory
offer and to grant
you the opportunity to increase your offer and
obtain your final bond approval within 72 hours of date hereof.
5.
Kindly sign the attached notification and
return to us via email as a matter of urgency.
6.
Should you decide not to proceed with your
offer, we request that you notify us accordingly.
Kindly contact our office
should you have any questions.
[8]
The email was accompanied by an inelegantly
phrased document entitled “NOTIFICATION OF THE 3 DAY CLAUSE”
and essentially
repeated what was set out in the email. The
competing offer, which emanated from the third and fourth respondents
also accompanied
the email.
[9]
From the email and the notice it is clear
that the first respondent required the following from the applicants,
namely that they:
9.1.
increase the purchase price they were
prepared to pay for the property to at least meet the price offered
by the third and fourth
respondents; and
9.2.
were to make their offer unconditional,
i.e. free from suspensive conditions either by obtaining bond
approval for the increased
purchase price or waiving the benefit of
the suspensive condition.
[10]
It is apparent from the language of the
email and the notice that the first respondent required of the
applicants to do both of
the things contemplated in paragraph 9
above.
[11]
Clause 16 of the contract does not allow
for the interpretation attached to it by the first respondent, on the
advice of the fifth
respondent. The clause does not allow for
the first respondent, as seller, to call on the applicants, as
purchasers to increase
the price they were prepared to pay for the
property to meet or improve on a subsequent offer. It only
allows the seller
to call on the purchasers to make their offer
unconditional through the fulfilment or waiver of the suspensive
condition.
[12]
The first and fifth respondents, on
discovering that the notice was ill-conceived, disingenuously,
attempted to rely on the notice
selectively by simply ignoring the
fact that the notice had required the applicants to increase the
purchase price they were prepared
to pay for the property in
conjunction with making their offer unconditional, rather than
withdrawing the notice and issuing a
fresh notice which complied with
the provisions of clause 16 of the contract
[13]
The notice, requiring of the applicants, to
both increase their offer and make it unconditional, in combination,
was thus invalid
and of no force and effect. The first
respondent cannot therefore rely on the applicants’ alleged
failure to comply
with the notice as a ground to escape liability
under the contract. They were not obliged to do so given the
form in which
the notice was couched.
[14]
It is not disputed that the applicants had,
in any event, timeously in terms of clause 16, entirely fulfilled the
requirements of
the suspensive condition by 22 June 2020. They thus
satisfied the terms of clause 8 of the contract. That, however,
is not
the end of the matter as the first respondent, on advice of
the fifth respondent has contended for the invalidity of the contract
on a number of other grounds, which are considered, below.
Further grounds of
alleged invalidity of the contract
[15]
Section 2(1) of the Alienation of Land Act,
68 of 1981 (“the Act”) provides as follows:
“
No
alienation of land after the commencement of this section shall,
subject to the provisions of section 28, be of any force and
effect
unless it is contained in a deed of alienation signed by the parties
thereto or by their agents acting on their written
authority.”
[16]
The first and the fifth respondents contend
that the contract does not comply with section 2(1) of the Act in the
following respects:
16.1.
the requirement of signature has not been
satisfied;
16.2.
an employee of the seventh respondent, the
first respondent’s agent, completed various blank spaces in the
printed document
containing the contract after signature thereof by
the first and second respondents. As a result and on the
authority of
Fraser and Another v
Viljoen
[2008] ZASCA 24
;
2008 (4) SA 106
(SCA) at
[6]
it
is contended that it cannot be said that the whole agreement between
the parties was reduced to writing and is therefore rendered
void;
and
16.3.
the second respondent, to whom the first
respondent is married in community of property, was not identified as
a party to the contract.
[17]
I shall deal with the question of signature
under a separate heading, below. For purposes of discussing and
deciding on the
two other grounds of invalidity contended for by the
first and fifth respondents I shall assume that the contract was
validly signed
by the first respondent.
[18]
The first and fifth respondents allege that
when the first respondent had signed the contract the following
information had not
been filled in on the printed form:
18.1.
the place where and the date when the
parties had appended their respective signatures to the contract;
18.2.
the physical addresses of the parties;
18.3.
the first respondent had not provided the
identity of the conveyancing attorneys who would attend to the
transfer of the property
to the applicants;
18.4.
the agent who had introduced the property
to the applicants had not signed the contract.
[19]
Not one of the pieces of absent information
feature as a requirement to constitute a valid alienation of land in
terms of section
2(1) of the Act. In fact, the absent
information cannot be elevated to be described as terms of the
contract, which had been
omitted. No evidence has been adduced
by the first respondent to show that the absent information was
regarded as material
to the contract and that there would be no valid
contract if this information were not included in the printed form
when it was
signed by the parties. There was no evidence that
for a valid contract of sale of the property the parties had to agree
on
the identity of a conveyancing attorney. Absent such an
agreement it was solely within the discretion of the first respondent
as to who would be appointed to attend to the conveyancing and he
could vary the identity of the conveyancer at his will.
The
applicants cannot be penalised because the first respondent’s
agent incorrectly identified the conveyancer.
[20]
This matter is therefore clearly
distinguishable on the facts from
Fraser
where the terms subsequently inserted into the contract were material
terms of the contract, namely the description of the property
concerned and the names of the purchasers.
[21]
It is common cause that although the
property is an asset in the joint estate of the first and second
respondents it is registered
only in the name of the first
respondent. In such circumstances all that
section 15(2)(a)
of
the
Matrimonial Property Act requires
is that the second respondent
was to provide her written consent to the transaction. There is
no requirement in section 2(1)
of the Act that in such circumstances
the person in the position of the second respondent must be
identified in the deed of alienation
as a seller. The fact that
she appended her signature (describing her as a seller) and her
initials to the contract is confirmation
of her written consent to
the transaction. There is no evidence from the second
respondent to indicate that by appending
her signature and initials
to the contract she did so with any intention other than to signify
her written consent to the transaction
in satisfaction of the
requirement of the
Matrimonial Property Act. She
signed
willingly, when asked to do so, to support the first respondent in
concluding the sale of the property.
Signature of the
contract by the first and second respondents
[22]
It is undisputed that the first respondent
signed the contract and initialled it where appropriate by utilising
an application loaded
on his cellular telephone called “
DocuSign
”.
[23]
The applicants’ offer to purchase was
sent to the first respondent by email by an employee of the seventh
respondent.
It was received by him on his cellular telephone
and was then imported into the
DocuSign
application on his phone and signed and initialled by using the
application which contained his sample signature and initials.
The second respondent, subsequently, signed the contract using the
same application.
[24]
It was not disputed in argument that the
first and second respondent’s sample signatures and initials
contained in the
DocuSign
application had as their origin so-called “wet”
signatures and initials of the first and second respondents, which
were then photographed and imported into the application.
[25]
It was submitted by the first and second
respondents that by utilising the
DocuSign
application to sign the contract they had applied electronic
signatures to the contract within the meaning of the Electronic
Communications
and Transactions Act, 25 of 2002 (“ECTA”).
The provisions of ECTA, which allow for the electronic signature of
documents, have no application in respect of transactions for the
alienation of land in terms of the Act by virtue of the provisions
of
section 4(3) of ECTA read with Schedule 1 thereto.
Consequently, so the argument goes, the contract is of no force and
effect as it does not satisfy the signature requirement of section 2
(1) of the Act.
[26]
No evidence was placed before me that the
parties intended this to be an electronic transaction.
[27]
The words “
sign
”
or “
signed
”
are not defined in the Act.
[28]
The approach of the courts to signatures
has always been pragmatic, not formalistic. They look to
whether the method of the
signature used fulfils the function of a
signature - to authenticate the identity of the signatory - rather
than to insist on the
form of the signature used. In the days
before electronic communication, the courts were willing to accept
any mark made
by a person for the purpose of attesting a document, or
identifying it as his act, to be a valid signature.
Spring
Forest Trading v Wilberry
2015 (2) SA
118
(SCA) at [25]-[26]. A “signature” is the
person’s distinguishing mark made with the intention to be
identified
as his mark.
PM Wulfsohn -
Formalities in respect of Contracts of Sale of Land Act, 71 of 1969
,
page 45-46.
[29]
The following passage from
Chisnall
and Chisnall v Sturgeon and Sturgeon
1993 (2) SA 642
(WLD) at 645E-F is apposite (case references
excluded):
“…
-
signing is achieved by a mark or marks intended to represent the
relevant person, if the making of the market is done with the
function of making the document and act of the writer, of signifying
the assent of the party to that which is embodied in the document.
An enquiry concerning assent must of course, not be into what the
signatory subjectively planned but what his act signifies to
the
other party. If a party’s signature does receive an
unnecessary designation, the known inaccuracy of that designation
does not cause the signature itself to be lacking (or void).”
[30]
In ordinary usage the word “signature”,
used without qualification (as in the Act), means signature by name
or signature
by mark.
Harpur NO v
Govindamall and Another
[1993] ZASCA 110
;
1993 (4) SA 751
(AD) at 756I.
[31]
The court in
Harpur
referred to the English judgment in
Goodman
v J Eban Ltd
[1954] 1 QB 550
(CA) where
the majority of the court found that a signature could be effected by
means of a rubber stamp. The importance
of this case lay in the
recognition in both the majority and minority judgments that the
ordinary popular meaning of the verb “sign”
means sign by
name or sign by mark, which accords with the dictionary definition of
sign.
Harpur
at 757E.
[32]
In
Harpur
at 757I with reference to the word “signature” the
following definition in
Black’s
Law Dictionary
5th edition at 1239 was
cited with approval:
“
The
act of putting one’s name at the end of an instrument to attest
its validity; the name thus written…… And
whatever
mark, symbol or device one may choose to employ as representative of
himself is sufficient”.
[33]
Counsel for the first, second and fifth
respondents referred me to the judgment of the Supreme Court of
Appeal in
Global & Local Investments
Advisors (Pty) Ltd v N L Fouche
[2019]
ZASCA. This judgment did not concern a transaction for the sale
of land. The court referred with approval to
Harpur
,
which it said was one of two cases which had given extensive and
authoritative definitions of” signature”. It
is
clear from the judgment that the judgment in
Harpur
played a prominent role in its formulation. With reference to
the judgment of
Da Silva v Janowsky
1982 (3) SA 205
(AD) at 218-219C the court in
Global
at [13] approved the statement that in order for a party to be bound
to a contract it is necessary that he appended his signature
thereto
with the intention of binding himself to such contract.
[34]
In
Global
at [11], without any context being given, reference is made to the
minority judgment in the English case of
Goodman
referred to above. The import of the majority and minority
judgments in
Goodman
were placed in proper context in
Harpur
,
a judgment which was clearly followed and applied in
Global
.
Global
cannot therefore be read as limiting in any way the import of the
judgment in
Harpur
by which the court in
Harpur
was in any event bound. The reference to
Goodman
in conjunction with
Harpur
serves
to confirm that it is recognised that the ordinary, popular meaning
of the verb “sign” is sign by name or sign
by mark as
stated in
Harpur
at 757E.
[35]
As stated the signatures and initials of
the first and second respondent as contained in the
DocuSign
application were digitised versions of originally handwritten
signatures and initials. In this regard the work
Contract
- General Principles by Van Huyssteen, Lubbe and Reinecke, 5
th
edition
at 5.32, page 163 states that
in the context of statutory formalities such as the Act “
the
requirement of signature may conceivably be satisfied by a so-called
electronic signature, where a handwritten signature is
digitised and
attached to an electronic document, although this procedure is open
to abuse
”.
[36]
In this matter there is no suggestion of
abuse.
[37]
On the application of the abovemnetioned
authorities it is clear to me that by affixing their signatures and
initials to the contract,
utilising the
DocuSign
application:
37.1.
the first respondent signed the contract as
envisaged in section 2(1) of the Act with the intention of being
bound to the contract
as seller; and
37.2.
the second respondent signed the contract
with the intention of conveying her written consent to the
transaction as required by
section 15(2)(a)
of the
Matrimonial
Property Act. In
any event this Act does not preclude the use of an
electronic signature to confirm the required written consent.
[38]
There is no evidence to gainsay my
abovementioned findings. The simple act of transmitting the
signed contract to their agent
confirms their intentions as described
in the preceding paragraph. My findings in this regard are in
accordance with the
pragmatic approach adopted by our courts to the
concept of signature as opposed to a formalistic approach.
[39]
The first and second respondents are thus
bound to give effect to the contract as prayed for by the applicants
in part B of the
notice of motion.
Costs
[40]
There is no doubt that costs must follow
the result in this matter.
[41]
Undoubtedly this matter was largely
precipitated by the over-zealous quest by the fifth respondent for
the conveyancing fees attaching
to the sale of the property and for
securing a slightly more financially lucrative purchase price for the
first respondent.
[42]
The fifth respondent played an active role
as a party to these proceedings. She deposed to the principal
affidavits filed
on behalf of the first respondent, even, quite
improperly, deposing to facts which were not within her personal
knowledge and which
required confirmation by the first and second
respondents. The fifth respondent was the cause of these
proceedings by way
of the invalid notice in terms of clause 16 of the
contract. Ms Volschenk caused the opportunistic moving of the
defensive
“goalposts” as reg dispute escalated.
[43]
The applicants contend that I should award
costs on a punitive scale. In my view that contention should be
upheld, for the
following reasons:
43.1.
as stated, these proceedings were initiated
by an invalid notice in terms of clause 16 of the contract;
43.2.
when the invalidity of the notice was
pointed out to the first and fifth respondents they persisted in
relying on the invalid notice
in support of the contention that the
suspensive condition in clause 8 of the contract had not been
fulfilled in the absence of
a bank valuation of the property;
43.3.
despite the first respondent clearly
indicating his intention to be bound to the contract, as described
above, he then, on the advice
of the fifth respondent, embraced the
“signature” defence to escape liability in terms of the
contract;
43.4.
the applicants have been put to
considerable expense to enforce their rights in terms of an obviously
valid contract. They
should not be left out of pocket as a
result.
Order
[44]
I thus make the following order:
1.
The first respondent is directed to sign
all documents necessary to effect transfer and registration of the
immovable property known
as erf 5829, Levyvale, Uitenhage and
situated at 22 Settlers Crescent, Levyvale, Uitenhage held by the
first respondent under title
deed T98018/2004CTN from the first
respondent to the first and second applicants in accordance with the
contract of sale and purchase
dated 9 June 2020 concluded between the
first respondent and the first and second applicants, within three
days of the required
documentation being presented to him by the
conveyancer appointed to effect the registration of transfer of the
said immovable
property.
2.
That in the event of the first respondent
failing to comply with the order in 1. above the sheriff of the
High Court, Uitenhage
is authorised and directed to sign such
documentation on his behalf.
3.
The first and fifth respondents are
directed to pay the costs of this application, including the costs
attendant on the obtaining
of interim relief, as taxed or agreed, on
the scale as between attorney and client, jointly and severally, the
one paying the other
to be absolved.
O H RONAASEN
ACTING JUDGE OF THE
HIGH COURT
Appearances:
For
Applicants:
Adv L Ellis instructed
by Lessing Heyns Keyter Van der Bank Inc, Port
Elizabeth
For 1
st
, 2
nd
and 5
th
Respondents:
Adv L R
Kroon instructed by Lynette@Law c/o Annali Erasmus Inc, Port
Elizabeth