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[2012] ZASCA 211
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Lekup Prop Co No 4 (Pty) Ltd v Wright (2012 (5) SA 246 (SCA); [2012] 4 All SA 136 (SCA)) [2012] ZASCA 211; [2012] ZASCA 67 (23 May 2012)
THE SUPREME COURT OF APPEAL OF
SOUTH AFRICA
JUDGMENT
Case No: 286/11
Reportable
In the matter between:
LEKUP
PROP CO NO 4 (PTY) LTD
…..................................................
APPELLANT
and
JOHN
COLIN WRIGHT
…...................................................................
RESPONDENT
Neutral
citation:
Lekup Prop Co No 4 (Pty) Ltd v Wright
(286/11)
[2012] ZASCA 67
(23 May 2012).
Coram:
Cloete, Cachalia, Snyders and Leach JJA,
and Petse AJA
Heard:
2 May 2012
Delivered:
23 May 2012
Summary: Contract: doctrine of fictional fulfilment:
state of mind of party against whom doctrine invoked, discussed.
Practice and procedure: difference between status of
affidavits where matter referred to trial, as opposed to evidence on
specific
defined issues.
______________________________________________________________
ORDER
______________________________________________________________
On appeal from:
South Gauteng High Court,
Johannesburg (Vally AJ
sitting as court of first instance):
1 The appeal succeeds with costs, including the costs of
two counsel.
2 Paragraphs 1 to 3 and 5 to 7 of the order of the court
a quo are set aside and the following order substituted therefor:
‘
(a) It is declared that the
agreement of sale concluded by the parties on 12 April 2004 in
respect of the proposed portion 12 of
erf 39 Sandhurst lapsed on 31
December 2005 and was of no force or effect after that date.
(b) The defendant is ordered to pay the plaintiff’s
costs of suit in respect of the claim and counterclaims and the costs
of the application proceedings.’
3 Paragraph 4 of the order of the court a quo stands,
viz ‘The counterclaims of the defendant are dismissed’.
______________________________________________________________
JUDGMENT
______________________________________________________________
CLOETE JA (CACHALIA, SNYDERS AND LEACH JJA AND PETSE
AJA CONCURRING):
[1] The present appeal concerns primarily the state of
mind a party must be shown to have had for the doctrine of fictional
fulfilment
to be invoked successfully against that party.
[2] The appellant, a company, owns erf 39 in the
township of Sandhurst. On 12 April 2004 it sold a portion of the erf
to the respondent,
Mr John Colin Wright. The agreement of sale
incorporated an annexure A, which provided:
‘
Notwithstanding
anything contained to the contrary in the said Agreement of Sale, the
Purchaser records that:
1. he is aware that the property
is not yet sub-divided and this Agreement of Sale is subject to
sub-division being formally approved
and registered by not later than
31 October 2004, as per sub-division plan attached as annexure B1,
B2, B3.
2. In the event of sub-division
not being registered by 31 October 2004, this Agreement of Sale shall
be cancelled.’
The parties executed a series of addenda extending the
date. The final extension was to 31 December 2005. By that date the
sub-division
had not been approved, much less registered. The case
was conducted on the basis that despite the reference to cancellation
in
para 2, the meaning of the clause was that if the condition had
not been fulfilled on the date specified, the agreement would lapse.
[3] The appellant, as applicant, instituted motion
proceedings against the respondent in the South Gauteng High Court in
which it
sought a declaratory order that the agreement had indeed
lapsed. After the respondent had delivered his answering affidavit
the
matter was, by consent, referred to trial. The appellant in its
declaration asked for similar relief to that claimed in its notice
of
motion, which stood as a simple summons. The respondent delivered a
plea and counterclaim. In his plea, the respondent alleged:
’
14.1
The Plaintiff deliberately and intentionally failed to procure the
required rezoning and subdivision of the property;
14.2 Based on the doctrine of
fictional fulfilment, the relevant term/s of the contract must
therefore,
inter alia
for purposes of the Plaintiff’s
allegation that the agreement had lapsed, be deemed to have been
fulfilled;
Alternatively:
14.3 The Plaintiff has breached
the agreement by failing:
14.3.1 to exercise due and
proper care in order to ensure that the rezoning and subdivision of
the property was obtained timeously;
14.3.2 to take all reasonable
and necessary steps to timeously obtain the rezoning and subdivision
of the property as it was required
and obliged to do in terms of the
agreement;
14.4 The plaintiff should not be
permitted to rely on its own breach and negligence in order:
14.4.1 to escape from its
obligations under and in terms of the agreement;
14.4.2 to let the agreement
lapse or be permitted to cancel the agreement to the prejudice of the
Defendant.
14.5 The Defendant is entitled
to the relief set out in his counterclaim which is filed herewith.’
The relief sought by the respondent in his counterclaim
relevant for present purposes was:
’
30.1 A
Declaratory Order that the Agreement has not lapsed;
30.2 An Order for specific
performance in terms whereof the Plaintiff is directed to fulfil its
contractual obligations to procure
the rezoning and the subdivision
of the property and to take all necessary and reasonable steps to
achieve this, including the
signing of all documents to give effect
thereto.’
The further allegations in the plea, and the further and
alternative relief sought in the counterclaim (to one aspect of which
I
shall briefly have to return), were not pursued.
[4] The appellant’s application for sub-division
was approved by the City of Johannesburg in March 2007, subject to
conditions.
On fulfilment of the conditions, the sub-division would
have been capable of registration in the Deeds Registry.
[5] The trial court (Vally AJ) found in favour of the
respondent and on 23 February 2011 made an order that incorporated
the following
paragraphs:
‘
1. The
plaintiff’s claim for a declaratory order is dismissed.
2. It is declared that the
agreement of sale of the property has not lapsed and the suspensive
condition contained in Clause 2 of
Annexure A to the agreement is
deemed to have been fulfilled.
3. The plaintiff is to take all
the necessary steps to effect the transfer of the property to the
defendant and the defendant is
to meet all his obligations in terms
of the purchase of the property within three months of the date of
this order.
4. The counter claims of the
defendant are dismissed.’
The remaining three paragraphs of the order dealt with
costs. The trial court subsequently granted the appellant leave to
appeal
to this court.
[6] I propose dealing first with the law relating to
fictional fulfilment. The remedy is an equitable one that had it
origins in
Roman law, that was accepted in Roman-Dutch law and that
was first analysed by this court in two decisions handed down in
1924,
namely,
Gowan v Bowern
1924
AD 550
and
MacDuff & Co Ltd (in
liquidation) v Johannesburg Consolidated Investment Co Ltd
1924 AD 573.
In the latter case Innes CJ succinctly
stated the position as follows:
1
‘
[B]y
our law a condition is deemed to have been fulfilled as against a
person who would, subject to its fulfilment, be bound by
an
obligation, and who has designedly prevented its fulfilment, unless
the nature of the contract or the circumstances show an
absence of
dolus
on his
part.’
For present purposes, two aspects require emphasis: the
meaning of dolus, and the requirement that nothing short of dolus
will suffice.
[7] Dolus in this context does not bear its usual
meaning of deliberate wrongdoing or fraudulent intent but a more
specific meaning,
namely, the deliberate intention of preventing the
fulfilment of the condition in order to escape the obligation subject
to it.
In
Gowan v Bowern
Wessels
JA said:
2
‘
The
Court must hold that if a contract is made subject to a casual
condition then if the person in whose interest it is that it
should
not be fulfilled deliberately does some act by which he hinders the
accomplishment of the condition, he is liable as if
the condition had
been fulfilled. But a party cannot be said to frustrate a condition
unless he actively does something by which
he hinders its
performance. There must be an intention on his part to prevent his
obligation coming into force.
There is nothing to prevent his
folding his arms and allowing events to take their course.
Paul
,
in D.45.1.85.7, uses the word
curaverit
,
and
Cujacius
also uses this term in dealing
with the promissor’s liability.
Curare
ut
or
ne
here signifies to bring actively
about a certain set of circumstances . . . The only
culpa
for which a promissor
sub
conditione
is liable
is some deliberate act, some act done with the intention of causing
the condition to fail or, perhaps, also a deliberate
omission
3
where there is a duty to do
something, by which he frustrates the happening of the condition in
his own interest in order to enrich
or benefit himself.’
Towards the end of his judgment the learned judge said:
4
‘
I do
not think that the Civil law goes further than this:─
If a promise is made subject to
a casual condition the promissor may not for his own benefit, in
order to escape the consequences
of the contract, actively do
something to prevent the fulfilment of the condition. To do so is
dolus
.’
In his judgment in
Koenig v
Johnson & Co Ltd
1935 AD 262
at 272
5
the same learned judge, then Chief Justice, referred to
part of the first passage just quoted and, in a later passage in the
Koenig
case
6
(that was subsequently approved in
Ferndale
Investments (Pty) Ltd v DICK Trust (Pty) Ltd
1968
(1) SA 392
(A) at 395A-C) said:
‘
[I]f
it is the fault of the person in whose favour the condition is
inserted that the condition cannot be fulfilled, or if he intended
to
prevent the condition from being fulfilled, the law considers the
condition to have been fulfilled as against him. The nature
of the
contract is always an important element. In some cases the person
benefitted by the non-performance of the condition can
sit still and
do nothing to assist in its fulfilment; in other cases it is his
legal duty to assist in the condition being fulfilled,
and in all
cases if he deliberately and in bad faith prevents the fulfilment of
the condition in order to escape the consequences
of the contract the
law will consider the unfulfilled condition to have been fulfilled as
against the person guilty of bad faith.’
In
Scott & another v Poupard
& another
1971 (2) SA 373
(A) at 378H
Holmes JA, who delivered the majority judgment, said that the
principle underlying the doctrine of fictional fulfilment
may be
stated thus:
‘
Where
a party to a contract, in breach of his duty, prevents the fulfilment
of a condition upon the happening of which he would
become bound in
obligation and does so with the intention of frustrating it, the
unfulfilled condition will be deemed to have been
fulfilled against
him.’
[8] If the intention was to escape the obligation, it
matters not whether the person concerned was actuated by the purest
or the
basest of motives, because the doctrine is concerned with
intention, not motive. In
Koenig v Johnson
Koenig sold and transferred to Johnson & Co his
shares in the Contex company. Payment of the last instalment of the
purchase
price was conditional on Koenig delivering letters patent
for which application would have to be made by Contex. Johnson &
Co believed, on legal advice, that any such application would be
improper as it would infringe the existing patent rights of another
party. It accordingly used its newly acquired controlling interest in
Contex to prevent the making of the application. Wessels
CJ said:
7
‘
If
Johnson & Co deliberately and intentionally frustrated Koenig on
delivering the “new patent,” their opinion and
motive are
immaterial.’
[9] The other point that requires emphasis is that for
the doctrine to be applied to the action or inaction of a contracting
party,
what must be proved is intention in the sense just discussed ─
negligence does not suffice. That is apparent from a number
of
judgments delivered in this court. In
Gowan v
Bowern
Innes CJ said:
8
‘
It is
difficult to see how the principle of fictional fulfilment of a
condition can operate on the mere ground of
culpa
.
It will I think be found that in cases in which there may be duty on
the promissor to take any active steps to bring about the
fulfilment
of a condition, that duty arises either from a term of the contract
itself, or because the omission of such steps will
render the
happening of the condition impossible. In the last mentioned case the
neglect to take the steps will generally be due
to a desire to defeat
the condition, and the doctrine would apply.’
In the same case De Villiers JA quoted
9
what is clearly the translation by Sir Henry Juta
10
of Van der Linden’s
Institutes
of Holland
1.14.9.2:
‘
The
conditions are deemed to be fulfilled when the debtor, who has bound
himself subject to them, is himself and intentionally the
cause of
their not being fulfilled.’
11
The learned judge, in the course of referring to the
Roman law and other Roman-Dutch law authorities, then went on to say:
‘
If
such person, whom I shall call the debtor, deliberately hinders or
impedes the fulfilment of the condition, he is liable just
as if the
condition had been fulfilled.’
12
I have already (in para 7 above) quoted two passages
from the judgment of Wessels JA at 571-2 from which it is quite clear
that
that the learned judge, having analysed the old authorities, was
of the view that only intentional conduct suffices. The learned
judge
also said:
13
‘
It
seems to me difficult to extract from the texts of the
Corpus
Juris
that
mere negligence on the part of the promissor which may incidentally
cause the conditions to fail is enough . . . He need not
be diligent
so that the condition may be fulfilled. Nor can I find in any of the
older commentators a clear statement that a condition
has to be
regarded as fulfilled if, through the
culpa
of the
party interested, the condition is frustrated. . . . It is true that
Gowan’s delay in forwarding the vessel indirectly
caused the
second instalment [on the payment of which Bowern’s claim
against Gowan for commission depended] to fail, but
the delay was not
purposely plotted so that the condition should fail and this seems to
me essential. Gowan must have contrived
something which caused the
second instalment not to be paid.’
[10] In the
MacDuff
case Innes CJ, in the course of his review of the old
authorities, referred
14
to the same passage in Van der Linden to which De
Villiers JA had referred in
Gowan v Bowern
and concluded with the passage referred to in paragraph
6 above. Solomon JA also referred to the passage in Van der Linden
and continued:
15
‘
The
rule, as laid down in the passage from
Van
der Linden
cited
above, is an equitable one, based upon the principle that it is
contrary to good faith for a party, who finds that he has
entered
into a disadvantageous contract deliberately to set about to prevent
the other party from fulfilling a condition upon which
his own
obligation depends.’
[11] In the present case the appellant accepted that he
had a tacit contractual duty to take all reasonable steps to ensure
that
the property was sub-divided and the sub-division registered.
The addendum to the agreement did not contain a true condition but
the doctrine of fictional fulfilment has been extended. It is an
equitable doctrine and equity demands that in certain cases a
contracting party should be held to a bargain where it has
deliberately not performed an obligation for the purpose of avoiding
the contract:
Du Plessis NO & another v
Goldco Motor & Cycle Supplies (Pty) Ltd
2009
(6) SA 617
(SCA) paras 22-29.
[12] Therefore in the present matter, in order
successfully to invoke the doctrine of fictional fulfilment, the
respondent bore
the onus of proving that the appellant, by deliberate
commission or omission, prevented the sub-division from taking place,
with
the intention of avoiding its obligations under the agreement. I
proceed to examine the evidence.
[13] Mr John Alastair Legh was called to give evidence
by the appellant. At the time that the agreement was concluded, he
and Mr
David Kuper were equal shareholders in the appellant and he
was a director. Kuper died before the matter was heard. Legh
testified
that he and Kuper were property owners and developers and
that they had purchased erf 39 through the appellant for this
purpose.
Their intention was to sub-divide the erf and sell it. To
this end they appointed a town planner, who, when his advice proved
to
be erroneous, was substituted with another town planner, Mr Henry
Nathanson; and an estate agent, Mr Eskel Jawitz. The appellant
called
both Nathanson and Jawitz to give evidence.
[14] Legh said in his evidence-in-chief that he and
Kuper ‘desperately wanted’ the sub-division to go
through. He confirmed
that the time within which the sub-division was
to take place as reflected in the addendum to the agreement was
extended on 28
October 2004 to 31 January 2005; on 31 January 2005,
to 30 April 2005; on 25 April 2005, to 31 July 2005; and on 29 July
2005,
to 31 December 2005. He said that the extended dates were
discussed with Nathanson, which the latter disputed. Legh’s
evidence
was that he thought Nathanson was proceeding diligently with
the rezoning process. He also said that even after the final
extension
had been granted at the end of July 2005, ‘we really,
really wanted to get rid of these properties’.
[15] Jawitz had been an estate agent for 41 years when
he testified. He said that the property market had turned in about
2000 and
that in 2004 it was ‘definitely rising, very buoyant
and very vibrant’. In re-examination he said that at no time
between
April 2004 (when the agreement was concluded) and 31 December
2005 (the date of the final extension) did the shareholders of the
appellant ever decide that they wanted to get out of the agreement
but, on the contrary, they were ‘totally amenable to extend
the
period . . . notwithstanding the increase in market values, they were
very happy to extend it based upon their belief that,
as I understood
it, sub-division was going to come through in ... this period’.
He went on to express the opinion that:
‘
[T]here
was no point in the sellers selling either the stand or the property
at the time that they did if they were not of the belief
that in
actual fact sub-division would come through. Then they should have
rather waited until sub-division came through and then
put the
properties back on the market which would have then realised for them
a substantially higher price.’
Junior counsel, who alone represented the respondent at
the trial, cross-examined Jawitz further after he had been
re-examined,
and in so doing elicited the following evidence:
‘
Again,
if the sellers would have had no intention, or if they honestly
believed that sub-division was not coming through, then again
it
reinforces my comment, M’Lord, that they should have rented out
the property for a year or two and then when sub-division
came
through they would have put it on the market and then sold it for
more, but they chose to sell it at the market price then
according to
my discussions with them and according to my understanding that in
actual fact the whole sub-division was in the process
and that they
had every expectation that it was going to come through within the
relevant times’
and:
‘
[M]y
point was if they honestly did not expect sub-division to come
through it would have paid them to rent it out for R25 000
and
put it on the market when sub-division came through, because as it is
they were selling it at a 2004 price and they would have
received the
money at 2005 or 2006 which in itself was almost crazy M’Lord.’
[16] Nathanson explained what happened about the
sub-division. There were at the time two routes that could be
followed: either
under the Town Planning and Townships Ordinance 15
of 1986 or under the
Development Facilitation Act 67 of 1995
.
Nathanson’s evidence was that the procedure under the Ordinance
would have taken longer, especially if there were objections;
whereas
under the Act, there are time-frames imposed which had the
consequence that from the time an application for rezoning and
sub-division was submitted to the time it was granted, 129 days would
lapse, despite objections.
[17] In May 2004 the decision was taken on behalf of the
appellant to follow the route prescribed by the Act. The reason given
by
Legh was that although this process cost significantly more ‘we
wanted to transfer these two properties’ and it was
considered
that the procedure under the Act would be quicker. Nathanson
accordingly prepared an application under the Act. He described
the
process as ‘cumbersome’ and said that this was the reason
why the application was only ready in September 2004.
The Act
requires the application to be served on a ‘designated
officer’. But at about that time the legal advisers
to the
Johannesburg City Council, who were the designated officers under the
Act, all resigned as designated officers pursuant
to a resolution of
the Council. Consequently there were no designated officers until one
was appointed on 27 January 2005 and that
person had to be trained.
As a result the system only began to operate again in about March
2005. Nathanson had left a copy of
the application on the desk of the
Registrar of the Development Facilitation Tribunal, which he took to
the new designated officer;
but he did not ‘trigger’ the
application, ie he did not ask the designated officer to consider it,
as that would have
started the 129 day process which he did not wish
to do, for the reasons that follow.
[18] In March 2005, Nathanson met with the senior legal
advisor of the City of Johannesburg and he was given a copy of an
affidavit
that the Council was going to use to challenge the
applicability of the Act. (The challenge commenced in March 2005 and
culminated
more than five years later in the decision by the
Constitutional Court reported as
Johannesburg Metropolitan
Municipality v Gauteng Development Tribunal and others
2010 (6)
SA 182
(CC).) Also in March, Nathanson established that the Council
was not going to recognise any decisions taken under the Act by the
Development Facilitation Tribunal and that it would not participate
in any applications under the Act. He had discussions with
various
persons at the Council, the Development Facilitation Registrar’s
office and members of the Tribunal and formed the
view that the
Council’s challenge would be resolved within a short space of
time; and he was of the view that the Council’s
prospects of
success were ‘remote’.
[19] Nathanson was at the time aware of s 67 of the
Act, subsections (2) and (3) which provide:
‘
(2)
After a land development application has been lodged in terms of this
Act the same or a substantially similar land development
application
may not also be brought in terms of any other law.
(3) If a land development
application has been rejected in terms of this Act, the same or a
substantially similar land development
application may not, within a
period of two years, thereafter be brought in terms of any other
law.’
Nathanson interpreted the effect of these sections to be
that in the event of the Council succeeding in its challenge, an
application
under the Act would fail and that he could not then bring
a similar application under the Ordinance within a period of two
years;
and that an application under the Act and the Ordinance could
not be brought simultaneously.
[20] Nathanson said that the decision not to file the
application for enrolment was taken by himself, ‘with my
client’s
knowledge’. Legh, on the other hand, said in
cross-examination that had he known that Nathanson had not proceeded
with the
application, he would have been ‘shocked’.
[21] On 15 November 2005 Nathanson wrote a letter to
Legh in which he summarised what had already happened; set out in
detail what
in his view would happen if the appellant continued with
its application under the Act or brought a new application under the
Ordinance;
and recommended that the application under the Act be
abandoned and that an application be brought under the Ordinance. The
appellant
did not react to the recommendation until the following
year.
[22] On 6 December 2005 the respondent sent a letter to
Jawitz requesting a further extension of time for the approval of the
sub-division.
This time the appellant refused.
[23] The trial court found against the appellant on two
bases. The first was that the appellant had acted unreasonably in
refusing
a further extension after 31 December 2005. The second was
that the appellant had made no application for sub-division, either
under the Ordinance or the Act, before that date. The trial court
also rejected the argument that no dolus had been established,
finding that despite agreeing to the extensions, the appellant did
not do anything to ensure that the condition was fulfilled;
and that
by its action and deliberate inaction, the appellant had frustrated
the fulfilment of the condition.
[24] The reasoning of the trial court overlooks one
fundamental point: the onus was on the respondent to show that it was
the appellant’s
intention, by not taking steps to secure
sub-division of the erf, to escape its obligations under the
contract. Whether the appellant
acted reasonably or not, is
irrelevant, save to the extent that this might indicate the
appellant’s intention; and in any
event, so far as the first
finding of the trial court is concerned, the obligation on the
appellant was limited to the lifetime
of the contract. If the
obligation could not be fulfilled within the agreed period, the
appellant was perfectly entitled to refuse
a further extension.
[25] The mere fact that the appellant gave extensions at
all creates the probability that it had no intention to escape from
its
obligations in terms of the agreement by exploiting the condition
to which they were subject. Legh’s evidence summarised above
in
para 14 was that the appellant had no such intention. That evidence
was not challenged and there is no reason to reject it.
Jawitz’s
evidence quoted above in para 15 negatives any suggestion that the
members of the appellant were intent on destroying
the bargain. There
is no reason to reject his evidence either. And even if Nathanson did
agree with the appellant in March 2005
that he would hold back the
application under the Act, the reason was not to frustrate the
contract. The reason was, in Nathanson’s
words:
‘
[A]s
at June, July 2005 I was still of the view that it would make sense
to wait it out and just see for the next while whether
it was going
to be resolved and the expectation was that it was, because you could
not have or it was my understanding that you
could not have these
three spheres of government simply allowing the system to break down
like this.’
[26] Had the intention been to frustrate the agreement,
the appellant would not have granted the two further extensions which
it
did (on 25 April and 29 July). Nor does the appellant’s
failure to respond to Nathanson’s letter of 15 November 2005
before the end of the year indicate such an intention. Nathanson’s
recommendation was incapable of being implemented by 31
December. If,
on the other hand, Nathanson did not tell the appellant about his
intention not to activate the application under
the Act, and if it be
assumed both that he was negligent (I emphasise that this is an
assumption) and that his negligence can be
attributed to the
appellant, this does not suffice. For the reasons already given, only
dolus suffices.
[27] The mere fact that there was a delay does not mean
that the appellant was actuated by dolus. In the heads of argument
drafted
by senior counsel then representing the respondent (who did
not appear before us) much reliance was placed on the decision in
Thanolda Estates (Pty) Ltd v Bouleigh 145
(Pty) Ltd
2001 (3) SA 196
(W). In that case
Wunsh J concluded
16
that the defendant had an obvious duty to take steps to
procure the fulfilment of the conditions (that sub-division of the
property
be approved and that a township establishment on the
property be approved in principle within 180 days); and further
concluded
17
that ‘the defendant’s conduct in avoiding
the fulfilment of the condition was intentional’. The latter
finding
distinguishes that case from the present. The question facing
the court in that case, as formulated by the learned judge,
18
was ‘whether the non-fulfilment of the conditions
can properly be attributed to the defendant’s conduct’.
That
question does not arise for decision in this case, and I
expressly refrain from deciding on the correctness of the view
expressed
by Wunsh J as to the incidence of the onus involved in
answering it.
[28] The correct approach to the question facing this
court ─ whether dolus in the sense required has been
established ─
is set out in the following passage from the
judgment of Innes CJ in the
MacDuff
case at 590 (and as I have already pointed out, it
applies equally to deliberate and calculated inaction):
‘
Where
the nonfulfilment of the condition is due to the deliberate and
calculated action of the debtor,
dolus
will
ordinarily be present. But the nature of the contract or the
established intention of the parties may conceivably negative
it even
then ─ and in such a case the doctrine would not operate.’
[29] In argument, senior counsel who represented the
respondent on appeal nailed his colours to the mast and relied solely
on what
Nathanson did and did not do, the submission being: first,
that it should be inferred from Nathanson’s action and inaction
that he intentionally prevented the fulfilment of the condition; and
second, that his intention should be attributed to the appellant.
I
have considerable difficulty with the second proposition, but it is
unnecessary to explore it further. The case advanced in oral
argument
was not pleaded; it was not put to Nathanson; and counsel found
himself unable to show from the record facts from which
the inference
for which he contended, could properly be drawn.
[30] The action and inaction of those acting on the
appellant’s behalf was not shown to have been prompted by a
desire to
escape the obligations it had under the agreement. The
respondent accordingly did not discharge the onus on him and the
relief
based on the doctrine of fictional fulfilment sought by him
and granted by the court a quo, should have been refused.
[31] Similar relief cannot be obtained by a decree of
specific performance. Assuming, again without deciding, that the
appellant
breached the contract by not obtaining registration of
sub-division timeously, the effect of such a failure would be that
the contract
lapsed. It could therefore no longer be enforced. The
remedy of specific performance would accordingly not be available,
and the
respondent would be limited to a claim for damages for breach
of contract. Although such a claim was pleaded, and quantified on
the
basis of the loss to the defendant of the profit he would have made
but for the appellant’s breach, no evidence whatever
was
tendered to prove the amount of the loss. The respondent’s
counsel nevertheless asked that paragraph 4 of the order made
by the
court a quo should be amended so that it dismissed only the claims
based on fictional fulfilment and for specific performance,
and
decreed absolution from the instance in respect of the claim for
damages. We were informed from the bar that the defendant
wishes to
pursue the damages claim if it has not prescribed (a question on
which I express no opinion) and we were urged to open
the door that
the trial court had closed. But the insurmountable difficulty facing
the defendant is that he brought no cross-appeal
against the order
dismissing all of his counterclaims and this court is accordingly not
entitled to interfere with that order in
the manner suggested:
SA
Railways and Harbours v Sceuble
1976 (3) SA 791
(A) at 793F-794E;
Shatz Investments (Pty) Ltd v Kalovyrnas
1976 (2) SA 545
(A)
at 560G-H.
[32] Before making the appropriate order, I wish to say
something about the manner in which the trial was conducted. It will
be
recalled that the appellant initiated motion proceedings and that
the matter was referred to trial after the respondent had filed
his
answering affidavit. At the trial, the respondent was allowed to read
from that affidavit and did so, extensively. That was
not the correct
procedure. A witness who gives evidence in trial proceedings, must do
so in the ordinary way. In our practice,
lay witnesses are not
usually permitted to read from pre-prepared statements even if those
statements have been prepared by themselves.
The learned judge a quo
was under a misapprehension as to the status of the affidavits, as
appears from what he said whilst Legh
was being cross-examined,
namely: ‘I will accept that the affidavits in this application
are proper evidence before this
court’. Affidavits filed may of
course be used for cross-examination and also as proof of admissions
therein contained, but
(save to the extent that they contain
admissions) they have no probative value; and in the absence of
agreement, they do not stand
as the witness’s
evidence-in-chief, or supplement it. And if, by agreement, they are
to be treated as such, it is unnecessary
and a waste of time and
costs for them to be read into the record. A referral to trial is
different to a referral to evidence on
limited issues. In the latter
case, the affidavits stand as evidence save to the extent that they
deal with dispute(s) of fact;
and once the dispute(s) have been
resolved by oral evidence, the matter is decided on the basis of that
finding together with the
affidavit evidence that is not in dispute.
[33] The following order is made:
1 The appeal succeeds with costs, including the costs of
two counsel.
2 Paragraphs 1 to 3 and 5 to 7 of the order of the court
a quo are set aside and the following order substituted therefor:
‘
(a) It is declared that the
agreement of sale concluded by the parties on 12 April 2004 in
respect of the proposed portion 12 of
erf 39 Sandhurst lapsed on 31
December 2005 and was of no force or effect after that date.
(b) The defendant is ordered to pay the plaintiff’s
costs of suit in respect of the claim and counterclaims and the costs
of the application proceedings.’
3 Paragraph 4 of the order of the court a quo stands,
viz: ‘The counterclaims of the defendant are dismissed’
_______________
T D CLOETE
JUDGE OF APPEAL
APPEARANCES:
For Appellant: M D Kuper SC (with him S P Pincus)
Instructed by:
Faber Sabelo Edelstein, Johannesburg
Matsepes Incorporated, Bloemfontein
For Respondent: J Both SC (with him J Bothma)
Instructed by:
Hattingh Ndzabandzaba Attorneys, Centurion
Naudés, Bloemfontein
1
At
591.
2
At
571.
3
A
question settled in
Ferndale
Investments (Pty) Ltd v DICK Trust (Pty) Ltd
1968
(1) SA 392
(A).
4
At
572.
5
The
judges who heard that appeal were equally divided. See p 298.
6
At
272.
7
At
273.
8
At
553.
9
At
566.
10
Which
in the 5
th
ed
(1906) is at p 112-113.
11
Morice’s
translation 2 ed (1922) p 138 is: ‘Conditions are considered
to have been fulfilled, if the debtor who has
bound himself under a
condition is himself intentionally the cause of its not being
fulfilled.’
12
At
566.
13
At
571-2.
14
At
591.
15
At
599.
16
In
para 16.
17
Ibid.
18
Ibid.