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[2023] ZAFSHC 512
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Free State Development Corporation v Green and Others - Appeal (A33/2023) [2023] ZAFSHC 512 (18 December 2023)
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IN THE HIGH COURT
OF SOUTH AFRICA
FREE STATE
DIVISION, BLOEMFONTEIN
Case no:
A33/2023
Reportable: YES/NO
Of Interest to other
Judges: YES/NO
Circulate to Magistrates:
YES/NO
In
the matter between:
FREE
STATE DEVELOPMENT CORPORATION
Appellant
And
GREGORY
GREEN
1st
Respondent
ANNIE
CHRISTINE GREEN
2nd
Respondent
REGISTRAR
OF DEEDS, BLOEMFONTEIN
3rd
Respondent
KRAMER
WEIHMANN INCORPORATED
4th
Respondent
CORAM:
MBHELE,
AJP
et
REINDERS, ADJP
et
VAN ZYL, J
HEARD
ON:
04
OCTOBER 2023
DELIVERED
ON:
18 DECEMBER 2023
JUDGMENT
BY:
MBHELE, DJP
[1]
This is an appeal against the
judgment of a single Judge of this Division wherein the respondents
approached the court a quo on
motion for an order in the following
terms:
1.1
That the 3
rd
Respondent be appointed as Conveyancing Attorneys with all rights and
obligations therewith associated for the transfer of the
immovable
property known as
Erf 5[…],
T[...] N[...], District T[...] N[...], Free State Province.
1.2
That the 1
st
Respondent be ordered and directed to sign
all necessary transfer and registration documents required to effect
transfer of the
immovable property known as
Erf 5[…],
T[...] N[...], District T[...] N[...], Free State Province
, into
the names of the Applicants at the office of the 3
rd
Respondent being Kramer Weihmann Attorneys, 24 Barnes Street,
Westdene, Bloemfontein, within 7 days from date of this order.
1.3
That the Registrar of the Honourable Court be authorized to sign all
necessary transfer
and registration documents required to effect
transfer of the immovable property known as
Erf 5[…],
T[...] N[...], District T[...] N[...], Free State Province
, into
the names of the Applicants in the event of the 1
st
Respondent failing to comply with paragraph 2 above.
1.4
That the 2
nd
Respondent be authorized to register the
immovable property known as
Erf 5[…], T[...] N[...],
District T[...] N[...], Free State Province
, into the name of the
Applicants after all necessary transfer and registration documents
have been duly signed and any further
legal requirements have been
met.
1.5
That the 1
st
Respondent be ordered to pay the costs of
this application on an attorney and client scale.
[2]
The court a quo granted prayers 2-4 and in prayer 1 it
ordered the appellant to appoint a Conveyancer from its
panel within
14 days from the date of the order to transfer the property into the
names of the respondents while in prayer 5 it
ordered the appellant
to pay costs on party an party scale.
[3]
The appellant entered into a written
agreement of sale with the first and second respondents (the
respondents) for a property situated at Erf 5[…] T[...]
N[...], District T[...] N[...], Free State Province (the property)
following a written offer by the latter made during March 2017. The
purchase price was an amount of R179 944.60. The purchase
price
and all arrears due and payable had to be settled within 90 days from
14 July 2017.
[4]
The following are the salient terms of the agreement:
2.1
The purchase price would be paid to the appellant on the date of
registration of transfer.
2.2
Occupation of the property shall be given to the First and Second
respondents on the date
referred to in schedule E to the agreement
from which date all benefits and risks of right, title and interest
in respect of the
property shall pass to the respondents;
2.3
The respondents shall from date of occupation be responsible for all
assessment, rates and
taxes and other imposts levied in respect
thereof;
2.4
The respondents shall be liable for payment of occupational interest
or rental in the amount
as referred to in schedule E to the agreement
monthly in advance as from date of occupation until date of
registration;
2.5
Schedule E indicates occupational interest as not applicable;
2.6
Ownership of the property shall pass to the respondents upon the date
of registration of transfer
thereof into their names;
2.7
Transfer of the property shall be effected by the appellant within a
reasonable period after
the respondents shall have paid the full
purchase price as envisaged in the agreement;
2.8
The costs incurred in connection with the drawing of the agreement
and registration of transfer
and any bond as well as all the costs
incurred in connection therewith shall be payable by the respondents
to whoever is responsible
for effecting the transfer and
registration;
2.9
The respondents undertook to pay for and obtain the necessary
clearance certificate from
the local authority to enable the
appellant to proceed with obtaining a Deed of Grant for the
incorporation and transfer to the
respondents.
[5]
The respondents had been in occupation of the property before the
agreement of sale was entered
into and they were still in occupation
on the date of hearing of this matter.
[6]
The respondents paid the purchase price of R179 944.60 to the
appellant on 17 August 2017.
By 30 June 2018 the outstanding amount
owing to the local authority (Mangaung Metropolitan Municipality) for
clearance figures
was R102 027. 83. This amount remained unpaid
until March 2021 when the respondents made their first part payment
towards
the clearance certificate.
[7]
The respondents made their first payment of R54 972. 48 to
Mangaung Municipality towards
the clearance figures on 10 March 2021.
The respondents attribute failure to pay clearance figures
early enough to unavailability
of financial resources on their part.
On 25 April 2022 the respondents successfully applied to the
Municipality for debt incentive
which resulted in the outstanding
amount for clearance figures being reduced from R91 093. 25 to R56
406.89.
[8]
On 22 June 2021 the respondents’ attorneys wrote a letter to
the appellant’s attorneys
informing them that they had paid
clearance figures and expected the appellant to effect transfer. On
05 August 2021 a follow up
letter was written by the respondent’s
Attorneys demanding immediate transfer of the property and further
threatened that
in case of default they would approach court within
14 days of the letter to compel the appellant to effect the transfer
of the
property.
[9]
The respondents paid an amount of R56 406. 89 in full on 24
April 2022.
On 09 May 2022, 10 days
after the above payment, the respondents instituted these
proceedings. At that time, they had not provided
the appellants with
the rates clearance certificate nor had they notified the appellant
that clearance figures have been paid in
full.
[10]
The payment followed a letter written by the appellant’s
Attorneys on 09 March 2022 with the following
contents:
‘
Please note that
in 2017 our client had initially instructed Messrs Malebogo Maeyane
Attorneys in Sasolburg who then appointed Symington
and De Kok as
their correspondent to assist with the transfer and your client
failed to timeously pay the rates and clearance figures.
We attach
hereto a certificate from Mangaung Municipality, a reading whereof it
will reveal the amount owed by the property at
that time. (sic)
Kindly let us know when
your client is ready to pay same so that a new clearance figures can
be re-applied. We also refer you to
clause 4.5 of the deed of sale in
terms of which your client is liable for payment of occupational rent
until date of registration
and under these circumstances your client
owes occupational rent form the date in which he took occupation of
the property until
date of registration.’
[11]
It is common cause that the agreement between the appellant and the
respondents stipulates, in the special
condition in clause 16. 2,
that the respondents must pay for and obtain necessary clearance
certificate from the local authority
to enable the appellant to
proceed with the transfer of the property to the respondents. It is
not in dispute that the said payment
was only made 5 years after the
contract was entered into and the purchase price was paid.
[12]
Pending the fulfilment of a suspensive condition, the contract is
inchoate
[1]
. Inchoate refers to
a transaction that has started but incomplete.
In
a transaction involving sale of immovable property as it is the case
in the present matter, a person can have an inchoate title
if the
processes involved in conferring the title are incomplete. In
the current matter the respondents’ entitlement
to the transfer
of the property was dependent on the fulfilment of the conditions
stipulated in clause 16 of the contract. See
Mia
v Verimark Holdings (Pty) Ltd
where
the following was said:
“
The
conclusion of a contract subject to a suspensive condition creates ‘a
very real and definite contractual relationship’
between the
parties. Pending fulfilment of the suspensive condition the eligible
content of the contract is suspended. On fulfilment
of the condition
the contract becomes of full force and effect and enforceable by the
parties in accordance with its terms. No
action lies to compel a
party to fulfil a suspensive condition. If it is not fulfilled the
contract falls away and no claim for
damages flows from its failure.
In the absence of a stipulation to the contrary in the contract
itself, the only exception to that
is where the one party has
designedly prevented the fulfilment of the condition’’
[2]
[13]
In
Design
and Planning Service v Kruger
[3]
the following was said:
‘
In
the case of a suspensive condition, the operation of the obligations
flowing from the contract is suspended, in whole or in part,
pending
the occurrence or non-occurrence of a particular specified event (cf
Thiart v Kraukamp
1967 (3) SA 219
(T) at p. 225). A term of the contract, on the
other hand, imposes a contractual obligation on a party to act, or to
refrain
from acting, in a particular manner. A contractual obligation
flowing from a term of the contract can be enforced, but no action
will lie to compel the performance of a condition (
Scott
and Another v Poupard and Another,
1971
(2) SA 373
(A) at p 378
in fin
).’
[14]
In
R v Katz
[4]
1959 (3) SA 408
(C)
at 417 D -G
A
literal acceptance of the traps' evidence as to what transpired at
the various interviews does not, in my opinion, lead to the
conclusion that the sale to which they testified was subject to a
suspensive condition. The word 'condition' in relation to a contract,
is sometimes used in a wide sense as meaning a provision of the
contract, i.e. an accepted stipulation, as for example in
the
phrase 'conditions of sale'. In this sense the word includes ordinary
arrangements as to time and manner of delivery and of
payment of the
purchase price, etc - in other words the so called
accidentalia
of
the contract. In the sense of a true suspensive or resolutive
condition, however, the word has a much more limited meaning,
viz. of
a qualification which renders the operation and consequences of the
whole contract dependent upon an uncertain future
event.
…
..
Where the qualification defers the operation of the contract, the
condition is suspensive, and where it provides for dissolution
of the
contract after interim operation, the condition is resolutive.
[15]
The wording of clause 16.2 of the contract that the parties entered
into in the current matter defers certain
obligations between the
parties to an uncertain future event. The duty on the appellant to
transfer the property to the respondents
was dependent on payment of
clearance figures and obtaining of the clearance certificate by the
respondents which the respondents
failed to fulfil for nearly five
years from the date of the signing of the contract.
[16]
It is worth noting that the appellant’s Attorneys requested the
respondents’ Attorneys to inform
them once the amount owing for
clearance figures had been paid, the respondents failed to do so.
They instead ran to court to file
these proceedings seeking the
aforementioned orders.
[17]
The respondents failed to keep their end of the bargain. For the
period that the amounts for clearance
certificates were not paid the
respondents’ entitlement to the transfer of property was
suspended. They were not entitled
to demand the transfer of property
in the manner that they did when they were the ones who failed to
fulfil the conditions set
out in clause 16.2 of the contract.
Their application was brought prematurely.
[18]
The judgment of the court
a quo
does not set out reasons that
gave rise to the orders that the court issued. It simply contained a
summary of facts and the orders.
The appeal ought to succeed. There
is no reason why costs should not follow the results.
[19]
I accordingly make the following order:
ORDER:
1.
The appeal is upheld with costs, such
costs to include those consequent upon the employment of counsel.
2.
The order of the court a quo is set
aside and substituted as follows:
2.1
The application is dismissed with costs
2.2
Applicants are to pay the respondent’s
costs including the costs consequent upon the employment of counsel.
N.M. MBHELE, AJP
I concur.
C. REINDERS, ADJP
I concur.
C. VAN ZYL, J
Appearances:
For
the Appellant:
Adv.
RJ Nkhahle
Litheko
Motsoeneng Inc
Bloemfontein
For
the 1
st
, 2
nd
& 4
th
Respondent:
Adv.
GC Steenkamp
Kramer
Weihmann Inc
Bloemfontein
[1]
Christie’s
Law of Contract in South Africa page 178; Joseph v Halkett
(1902) 19
SC 289
at 293 and 294 where the following was said:
‘
In
this case, where the broker undertook to receive the earnest money
and hold it in trust for the parties, until he received
the earnest
money there was no completed contract. If there had been a completed
contract the defendant in this case would have
had recourse against
the purchaser, but with no completed contract he had no such
remedy.’
[2]
Mia
v Verimark Holding (Pty) Ltd ( 522/208)
[2009] 2010 (1) All SA 280
(SCA );
Corondimas
v Badat
1946
AD 548
at 551, 558-559; Palm Fifteen (Pty) Limited v Cotton
Tail Homes (Pty) Ltd
1978 (2) SA 872
(A) at 887; Odendaalsrust
Municipality v New Nigel Estate Gold Mining Co Ltd
1948 (2) SA
656
(O) at 665-667.
[3]
Design
and Planning Services v Kruger
1974 (1) SA 689
(T) at 695 B-D
[4]
1959
(3) SA 408
(C ) at 417 D-G