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[2012] ZASCA 127
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Hano Trading CC v J R 209 Investments (Pty) Ltd (650/11) [2012] ZASCA 127; 2013 (1) SA 161 (SCA); [2013] 1 All SA 142 (SCA) (21 September 2012)
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THE SUPREME
COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case No: 650/11
In the matter between:
HANO TRADING CC
...............................................................................
Appellant
and
J R 209 INVESTMENTS (PTY) LTD
..........................................
First Respondent
NEDBANK LIMITED
..............................................................
Second
Respondent
Neutral citation
Hano Trading CC v J R 209
Investments (Pty) Ltd
(650/11)
[2012] ZASCA 127
(21 September
2012)
Coram:
MTHIYANE DP, VAN
HEERDEN, MHLANTLA, BOSIELO JJA AND ERASMUS AJA
Heard:
30 August 2012
Delivered:
21 September 2012
Summary:
Rules of court – rule 6 –
non-compliance – filing of further affidavits – test to
be applied – Indulgence
– factors to be presented in
application for court to exercise discretion to allow further
affidavits. Contract – breach
– notice of –
requirements in terms of contract.
_________________________________________________________________
ORDER
__________________________________________________________________
On appeal from:
North
Gauteng High Court, Pretoria (Tlhapi J sitting as court of first
instance):
The appeal is dismissed with costs.
__________________________________________________________________
JUDGMENT
__________________________________________________________________
ERASMUS AJA (MTHIYANE DP, VAN HEERDEN, MHLANTLA, BOSIELO
JJA concurring):
[1] The issues in this appeal are whether the court a
quo should have allowed the filing of further affidavits, as
envisaged in
rule
6(5)(e)
of the Uniform Rules of Court,
and to
whether the first respondent (applicant a quo) was entitled to a
declarator and ancillary relief, to be discussed later in
the
judgment. For convenience I shall refer to the first respondent as
the respondent in view of the fact that the second respondent
was
cited nominally and played no role, either in the proceedings in the
court below or in this appeal.
[2] The respondent brought an application in the court
below for a declaratory order that an agreement entered into between
itself
and the appellant on 2 June 2009 is valid and binding on the
parties thereto. The ancillary relief prayed for was in relation to
the registration of the property in terms of the agreement.
[3] The appellant opposed the matter by filing an
answering affidavit together with supporting documents. The defence
raised therein
contained a denial that the agreement between the
parties was enforceable, as it had been legally cancelled in terms of
clause
14 of the agreement which reads:
‘
14.
Default/Breach
In the event that (sic: of) the Purchaser committing a breach of any
of the terms of this Agreement and failing to remedy such
breach
within a period of 14 (fourteen) days after receipt of a written
notice from the Seller calling upon the Purchaser to remedy
the
breach complained
of
, then the Seller shall without
further notice cancel the Agreement and the Purchaser shall forfeit
all monies paid as a deposit
to the Seller, and the Seller shall
claim and recover all damages from the Purchaser.’(My
emphasis.)
This clause must be read with clause 12.2:
‘
12.2 Any notice given by prepaid registered
post in terms of this clause shall be deemed to have been received by
the addressee
within 7 (seven) days after the date of posting.’
[4] The appellant attached a letter dated 3 December
2009 addressed to an entity whose name was not the same as the
respondent and
to an address that did not conform with the
respondent’s chosen
domicilium citandi
et executandi
in terms of the agreement. It
further denied that the respondent had previously tendered or had the
ability to make
payment of the deposit in the manner prescribed by the agreement, the
details of which will be discussed below.
[5] The respondent replied to the answering affidavit
and laid a basis, by referring to common cause facts between the
parties,
to infer that the averments made by the appellant were
unsustainable. In particular, that there was no proper compliance
with clause
14 of the agreement upon which the appellant could rely
for its insistence that it had cancelled the agreement.
[6] No new issues were raised in the replying affidavit
of the respondent, but the appellant deemed it necessary to obtain
various
affidavits and documentation, most of which were generated
after the filing of the respondent’s replying affidavit.
[7] The appellant filed these documents seemingly with
the registrar and placed them on the court file without leave of the
court
as envisaged in rule 6(5)(e) of the rules of court.
[8] The court a quo, per Tlhapi J, ruled these further
affidavits inadmissible. Relying on the evidence contained in the
three sets
of affidavits, referred to above, the agreement was ruled
to be valid and binding upon the parties.
[9] Rule 6 of the rules of court reads:
‘
6 Applications (rules of the court)
(1) Save where proceedings by way of petition are prescribed by law,
every application shall be brought on notice of motion supported
by
an affidavit as to the facts upon which the applicant relies for
relief.
(2)….
6(5)(d) Any person opposing the grant of an order sought in the
notice of motion shall-
(i) ….
(ii) within fifteen days of notifying the applicant of his intention
to oppose the application, deliver his answering affidavit,
if any,
together with any relevant documents; and
(iii) ….
(e) Within 10 days of the service upon him of the affidavit and
documents referred to in sub-paragraph (ii) of paragraph (d) of
subrule (5) the applicant may deliver a replying affidavit. The court
may in its discretion permit the filing of further affidavits.’
[10] A litigant in civil proceedings has the option of
approaching a court for relief on application as opposed to an
action. Should
a litigant decide to proceed by way of application,
rule 6 of the Uniform Rules of Court applies. This rule sets out the
sequence
and timing for the filing of the affidavits by the
respective parties. An advantage inherent to application proceedings,
even if
opposed, is that it can lead to a speedy and efficient
adjudication and resolution of the disputes between parties. Unlike
actions,
in application proceedings the affidavits take the place not
only of the pleadings, but also of the essential evidence which would
be led at a trial. It is accepted that the affidavits are limited to
three sets.
1
It follows thus that great care must be taken to fully
set out the case of a party on whose behalf an affidavit is filed. It
is
therefore not surprising that the rule 6(5)(e) provides that
further affidavits may only be allowed at the discretion of the
court.
[11] Rule 6(5)(e) establishes clearly that the filing of
further affidavits is only permitted with the indulgence of the
court.
A court, as arbiter, has the sole discretion whether to allow
the affidavits or not. A court will only exercise its discretion in
this regard where there is good reason for doing so.
[12] This court stated in
James
Brown & Hamer (Pty) Ltd
(
previously
named
Gilbert Hamer & Co Ltd) v
Simmons NO
1963 (4) SA 656
(A) at 660D-H,
that:
‘
It is in the interests of the
administration of justice that the well-known and well established
general rules regarding the number
of sets and the proper sequence of
affidavits in motion proceedings should ordinarily be observed. That
is not to say that those
general rules must always be rigidly
applied: some flexibility, controlled by the presiding Judge
exercising his discretion in
relation to the facts of the case before
him, must necessarily also be permitted. Where, as in the present
case, an affidavit is
tendered in motion proceedings both late and
out of its ordinary sequence, the party tendering it is seeking, not
a right, but
an indulgence from the Court: he must both advance his
explanation of why the affidavit is out of time and satisfy the Court
that,
although the affidavit is late, it should, having regard to all
the circumstances of the case, nevertheless be received. Attempted
definition of the ambit of a discretion is neither easy nor
desirable. In any event, I do not find it necessary to enter upon any
recital or evaluation of the various considerations which have guided
Provincial Courts in exercising a discretion to admit or
reject a
late tendered affidavit (see e.g. authorities collated in
Zarug
v Parvathie,
1962 (3) SA 872
(N)). It
is sufficient for the purposes of this appeal to say that, on any
approach to the problem, the adequacy or otherwise of
the explanation
for the late tendering of the affidavit will always be an important
factor in the enquiry
.’
[13] It was then later stated by Dlodlo J in
Standard
Bank of SA Ltd v Sewpersadh & another
2005
(4) SA 148
(C) at paras 12-13:
‘
The applicant is simply not allowed in law
to take it upon himself and (to) file an additional affidavit and put
same on record
without even serving the other party with the said
affidavit. . .
Clearly a litigant who wished to file a further affidavit must make
formal application for leave to do so. It cannot simply slip
the
affidavit into the Court file (as it appears to have been the case in
the instant matter). I am of the firm view that this
affidavit falls
to be regarded as
pro non scripto.
’
[14] To permit the filing of further affidavits severely
prejudices the party who has to meet a case based on those
submissions.
Furthermore no reason was placed before the court a quo
for requesting it to exercise a discretion in favour of allowing the
further
affidavits. Consequently the court a quo was correct in
ruling that the affidavits were inadmissible.
[15] Having ruled that the court a quo was correct in
its finding to disallow the filing of further affidavits, and the
potential
evidence contained therein, I now turn to the relevant
facts.
[16] On 2 June 2009, the parties entered into a written
agreement whereby the appellant sold land to the respondent for the
amount
of R7,5 million. A non-refundable deposit of R2 million was
payable, of which it was recorded that an amount of R1,25 million had
already been paid and utilised by the appellant. This amount was paid
by a third party, Centurus Pty Ltd, on behalf of the respondent.
[17] In respect of the outstanding R750 000 the
agreement read:
‘The balance of the deposit being R750 000,00 (SEVEN HUNDRED
AND FIFTY THOUSAND RAND) payable in
cash or bank cheque or bank
transfer directly
to the Seller or the Seller’s nominated
beneficiary by the Purchaser on 12
th
June 2009.’ (My
emphasis.)
[18] The balance of the purchase price would only become
payable on registration or on 12 June 2014 which was also the agreed
date
upon which that the respondent would take full occupation and
possession of the property. The respondent failed to pay the balance
(R750 000) of the deposit by the stipulated date of 12 June 2009. The
respondent claimed that this was due to an administrative
oversight.
[19] On 23 October 2009, without any prompting or
enquiries from the appellant, M & T Development (Pty) Ltd drew a
cheque for
R750 000, payable to the appellant on behalf of the
respondent. The respondent instructed its agent to facilitate the
delivery
thereof to the appellant. The agent in turn contacted the
appellant’s attorney, who is the current attorney of record, as
well as the firm of attorneys mandated in the agreement to attend to
the transfer of the property.
[20] The response received from the attorney by
electronic mail on 29 October 2009 reads:
‘I had the opportunity of meeting Mr James Semoka and Simon
Sebyenane in this regard. I confirm that their instruction are
that
they
are not selling the farm anymore and as such the deed of sale
is null and void.
’ (My emphasis.)
It is noteworthy that the two persons mentioned by the
attorney are the same persons mentioned in the agreement as the
representatives
of the appellant.
[21] The respondent then, on 25 November 2009, tendered
payment in the form of the same cheque directly to the appellant’s
attorney. The covering letter from the respondent’s attorney
included a paragraph in the following terms:
‘We understand from our client you refused to accept the above
payment by reason of the AGREEMENT having been cancelled,
for want of
our client having paid the deposit by 12/06/2009.
Clause 2.3 of the AGREEMENT is not a suspensive clause. You have also
failed to invoke the provisions of clause 14 of the AGREEMENT.
As a
result, the AGREEMENT remains binding and our client keeps you bound
to the provisions of the AGREEMENT. We require your written
confirmation, within three (3) days from receipt hereof that you keep
yourself bound to the AGREEMENT, in the absence of which
we shall
approach the High Court for an interdict against you.’
[22] This letter was met with a prompt response, dated
27 November 2009, from the same attorney that wrote the e-mail,
referred
to in para 20 above, to the agent of the respondent a month
before. It reads:
‘We refer to the above matter and confirm receipt of your
letter dated 25
th
instant. Kindly advise as to whether
your client by tendering the cheque, a copy of which you attached to
your letter, was rectifying
the breach it has committed.’
[23] As the response from the appellant’s attorney
did not address the cancellation of the agreement it was followed by
another
letter, dated 3 December 2009, in which the respondent’s
attorney again drew the attention of the appellant’s attorney
to clause 14. No response was received to this letter until 1
February 2010, to which I shall revert later. Instead, the
appellant’s
attorney wrote a letter dated 3 December 2009 and
sent it to JR 29 Investment (Pty) Ltd, which is not the name of the
respondent.
This registered item was also despatched to an address
which was incomplete in a material manner as regards the
domicilium
citandi et executandi
chosen by the
respondent in the agreement.
[24] This letter posted on 7 December 2009 reads:
‘We refer to the above matter and advise that you are in breach
of your obligations in terms of the offer to purchase signed
by
yourself and our client Hano Trading cc.
This letter serves as a notice to you to rectify the breach within 14
days of receipt of this letter failing which the agreement
shall be
cancelled without further notice to yourself.’
It is instructive to note that the attorney did not
alert his colleague, representing the respondent, of this
correspondence and
the respondent did not receive this letter.
[25] On 1 February 2010 the respondent’s attorney
requested the appellant’s attorney to provide a response to his
letter
of 3 December 2009. The appellant’s attorney responded
as follows:
‘We refer to the above matter and in particular your even dated
letter, wherein you are referring to your letter dated 3
rd
December 2009.
In as far as we are [sic: concerned] the letter dated 3
rd
December 2009 did not require us to respond as you have indicated
certain steps that you were in the process of taking.
We further refer you to our letter which we wrote to you in response
to your letter dated 25
th
November 2009 in which we
requested you to state whether by tendering the cheque your client
was attempting to rectify the breach
to which we did not get a
response.
Kindly let us hear from you what your client intends doing since it
had failed to comply with its obligations in terms of the offer
to
purchase that it has signed with our client.
Our client’s instructions is that your client has failed to
comply with its obligation in terms of the agreement and therefore
the contract or agreement has been cancelled.’
I pause to note that nothing is said in this letter,
which was posted by registered post on 7 December 2009, about the
notice in
terms of clause 14, nor is any other issue raised more
particularly the manner and form of the payment.
[26] The respondent then launched the proceedings in the
court a quo on 21 May 2010. The appellant replied and in its
affidavit
it primarily raised three defences, namely that: (a) the
respondent was unable to pay the deposit, (b) the appellant had
served
a notice in terms of clause 14 read with clause 12.2 and that
the respondent had failed to remedy the breach; and (c) the tender
made by the respondent was not a valid tender in terms of clause 2.3
of the agreement. Before this court, the appellant claimed
further
that the continued repudiation by the respondent entitled the
former’s non-compliance with clause 14 before cancellation.
Not
only was the last defence never raised on the papers, but it is also
in direct contradiction to the appellant’s defence
that, in
sending the letter of 3 December 2009, it provided the respondent
with a notice to remedy its breach.
[27] It is common cause that the respondent never
tendered the portion of the deposit in the amount of R750 000
strictly in accordance
with the agreement. The cheque tendered is not
one of the three forms of payment described in clause 2.3. However,
and with regard
to the conduct of the appellant herein, it is
disingenuous to raise this as a defence at this stage.
2
[28] The appellant relies on the fact that an entity
other than the respondent drew the cheque that was tendered; and then
infers
that the respondent does not have the ability to perform in
terms of the agreement insofar as it relates to the balance of the
deposit. This inference, in my view, is misplaced as the initial
amount of R1,25 million was also not paid by the respondent company
but by an entity that was not necessarily related to the respondent.
The identity of the source of the money was never a term of
the
agreement and the appellant’s reliance thereon is clearly
misplaced.
[29] Clause 2.3 of the agreement requires the payment to
be in one of three forms, being ‘cash or bank cheque or bank
transfer’.
The cheque drawn on the account of M & T
Development (Pty) Ltd does not qualify as one of the above. The
question that arises
is whether the respondent’s failure to
strictly comply with the mode of payment was a relevant factor
warranting the purported
cancellation
of the agreement by the appellant.
[30] It is my view that the appellant cannot rely solely
on this fact to validly cancel the agreement for the following
reasons:
First, if this amounted to a breach, the provisions of
clause 14 had to be followed. Second, at the time when the
appellant’s
attorney wrote the e-mail message dated 29 October
2009 to the agent, he could not have been aware that the cheque was
not a’
valid tender’ in terms of the agreement. In fact
at that stage he was not even aware that the balance of the deposit
would
be paid by a cheque, his view was that the agreement was ‘null
and void’.
[31] I now turn to the appellant’s reliance on
compliance with clause 14 of the agreement. In order for the
appellant to succeed
in this regard it had to show that it complied
strictly with the peremptory provisions of clause 14. The appellant
was obliged
in terms of the said clause to notify the respondent in
writing, of the breach complained of. The appellant further had to
prove
that the respondent received such notice. If the notice was
despatched by registered post, the appellant could rely on clause
12.2
as it would deem the respondent to have received the notice
within 7 days of the date of posting.
[32] This presupposes that the notice was sent to the
correct address and to the correct entity. For the purpose of the
correct
identity and address of the respondent, clause 12.1 provides
that;
‘All notices to be given by either of the parties to the other
in terms of this Agreement, shall be given by prepaid registered
post
or by telegram or facsimile, or be delivered by hand to:
12.1.1 . . .
12.1.2 The Purchaser: JR 209 INVESTMENTS (PTY) LTD
GROUND FLOOR, BLOCK 5, PHASE 4
BOARDWALK OFFICE PARK
HAYMEADOW STREET
FAERIE GLEN.’
[33] The notice that the appellant relies on in the
instant matter, dated 3 December 2009, was despatched by registered
post. Although
the proof of registration does not indicate that it
was prepaid, as required in terms of clause 12, it will be accepted
as such
for present purposes. As indicated above, the appellant
addressed the notice to JR 29 Investment (Pty) Ltd instead of JR 209
Investments
(Pty) Ltd. The address also did not indicate that it was
in ‘Boardwalk Office Park’. It would appear that the
failure
to identify Boardwalk Office Park would have rendered
delivery of the notice impossible, as Haymarket Street in Faerie Glen
consists
of numerous businesses and office premises. The provision
contained in 12.1 of the agreement is peremptory as is evident from
its
wording, ie if the information is not in compliance with that
stipulated in the agreement, the deeming provision of 12.2 does not
apply.
[34] Moreover on a closer analysis of the notice itself,
it is evident that it entirely fails to indicate, and call on the
respondent
to remedy, any particular breach complained of. It thus
fails to comply with the requirements of clause 14.
[35] In my view the non-compliance with clause 14
prevents the appellant from relying on any of the three breaches on
which it purported
to rely to cancel the agreement.
[36] The court a quo was therefore correct in declaring
the said agreement valid and binding upon the appellant and the
respondent
and ordering the appellant to pay the costs.
[37] Consequently the appeal is dismissed with costs.
_____________________
NC Erasmus Acting Judge of Appeal
APPEARANCES
For Appellant: G M Young
Instructed by: Botha Massyn, Thobejane
c/o Malebye Attorneys, Pretoria
Rossouws Attorneys, Bloemfontein
For Respondent: M C Erasmus SC
Instructed by: A B Lowe
A B Lowe Attorneys, Pretoria
Honey Attorneys, Bloemfontein
1
Transnet
Ltd v Rubenstein
2006 (1) SA 591
(SCA) para
28;
Minister of Land Affairs and Agriculture
v D & F Wevell Trust & others
2008
(2) SA 184
(A) para 43;
MEC for Health,
Gauteng v 3P Consulting (Pty) Ltd
2012 (2)
SA 542
(SCA) para 28.
2
Taggart
v Green
1991 (4) SA 121
(W);
Edengeorge
(Pty) Ltd v Chamomu Property Investments
(Pty)
Ltd
1981 (3) SA 460
(T).