Brief Summary

Contract — Sale of immovable property — Validity of offer to purchase — Dispute regarding existence of agreement — Respondents claimed a valid offer to purchase property was concluded on 10 August 2020, while appellants denied this, asserting a counter-offer was made and subsequently withdrawn — Court a quo confirmed the rule nisi and ordered transfer of property to respondents — Appellants appealed, raising issues of compliance with procedural rules and the merits of the alleged agreement — Appeal dismissed, with court finding that the respondents had established a valid agreement in accordance with the formalities of a contract of sale.

Comprehensive Summary

Summary of Judgment

1. Introduction

The matter concerned an appeal against the whole judgment and order of the Eastern Cape High Court (court a quo), per Maswazi AJ, in motion proceedings in which the successful applicants (now the respondents) had obtained an order confirming a rule nisi and compelling the trustees of a family trust to take steps to transfer immovable property to them.

The parties were Mfundo Mabusela and Thandeka Judith Mabusela (trustees) and the Amathuse Family Trust (together, the appellants) on the one hand, and Bulelani Booi and Zanda Booi (the respondents) on the other. The property in issue was Erf [...], situated at B[...] D[...], C[...] R[...], which belonged to the Trust. The dispute arose from negotiations conducted through an intermediary, and centred on whether a valid written contract of sale complying with statutory formalities had been concluded.

Procedurally, the appeal was accompanied by interlocutory disputes concerning compliance with the Uniform Rules of Court governing appeals. The respondents sought an order declaring that the appeal had lapsed due to late steps and non-compliance. The appellants, in turn, sought condonation for the late filing of the appeal record and sought reinstatement of the appeal. Leave to appeal was granted by the Supreme Court of Appeal.

The general subject-matter of the dispute was whether a valid offer and acceptance were concluded in writing for the sale of land (at a particular purchase price), and whether the Trust could be compelled to effect transfer to the respondents.

2. Material Facts

It was common cause that the property belonged to the Amathuse Family Trust and that the first and second appellants were trustees. It was also common cause that the negotiations occurred through an individual, Esme Coetzee, who had been mandated to sell the property at a particular asking price.

Chronologically, the court treated the exchange between the parties as involving multiple offers and counter-offers. An initial offer to purchase (OTP) reflecting a purchase price of R450 000.00 was signed by the respondents and dated 10 August 2020. The appellants rejected this offer, which led to further negotiations about price.

Further communications recorded that the respondents enquired whether the appellants would consider R500 000.00, and the appellants indicated they could accept R525 000.00. Subsequently, a figure of R505 000.00 appeared on documentation by way of alteration to the earlier OTP, but the appellants’ case was that they did not initial that alteration to signify acceptance. The appellants’ version (as summarised by the appeal court) was that an initial next to an alteration signifies consent to the amendment, and they did not provide that consent in relation to the R505 000.00 figure.

On 17 August 2020, the appellants communicated that R525 000.00 remained their price, but they could accept R515 000.00 as the least acceptable amount. The appellants characterised this as a counter-offer at R515 000.00. The court recorded that the OTP later reflected an alteration to R515 000.00, effected by the first appellant, and that the trustees signed the OTP and forwarded it to Coetzee. However, the appellants’ case was that the respondents did not initial or counter-sign the alteration to R515 000.00 to signify acceptance of the counter-offer.

The respondents’ reply in the application proceedings asserted that they offered to purchase at R515 000.00 and that this was accepted by the appellants, while at the same time maintaining that the “date of the agreement” was 10 August 2020. The appeal court noted the internal tension in this assertion as it appeared to place acceptance at a later date while insisting on an earlier contractual date.

A further fact relied upon in the appeal judgment was that the court a quo had regard to a letter addressed to the transferring attorneys (retained by the appellants), which stated that the Trust entered into a written agreement “on or about 10 August” with a purchase price of R515 000.00. The appeal court considered that statement to be inaccurate on the evidential material before it, particularly given the timeline of the negotiations reflected in the papers.

In relation to the interlocutory appeal steps, it was common cause that there were failures by the appellants to comply timeously with certain appeal-rule requirements (including delays in procuring a hearing date and delays in filing the appeal record). The appellants’ attorney provided various reasons for those delays, including administrative and professional constraints and difficulties compiling the record. The court ultimately treated the explanation as inadequate, but considered that condonation could still be granted depending on prospects of success and the interests of justice.

3. Legal Issues

The appeal raised two clusters of legal questions.

First, on the interlocutory issues, the court had to determine whether the appeal was deemed to have lapsed under the relevant rules due to non-compliance, and if so, whether the appeal should be reinstated and whether the late filing of the appeal record should be condoned. This aspect involved the application of established standards for condonation, including a discretionary assessment anchored in the interests of justice and fairness.

Second, on the merits, the central legal question was whether, on the motion papers, the respondents had established the existence of a valid written deed of alienation for the sale of land that complied with section 2(1) of the Alienation of Land Act 68 of 1981, including whether there was consensus on the purchase price and whether acceptance was properly signified in writing.

The merits dispute was predominantly one of application of law to fact in motion proceedings, and therefore also required identifying which version of disputed facts should prevail under the Plascon-Evans rule. The determination depended on whether, on the appellants’ version together with facts admitted or not genuinely disputed, a valid sale agreement was proved.

4. Court’s Reasoning

On the preliminary relief concerning lapse, reinstatement, and condonation, the court set out the relevant appeal rules and emphasised that the consequences of failing to apply for a hearing date timeously and to file the record could result in an appeal being deemed to have lapsed, subject to reinstatement by the appeal court. It also noted further procedural shortcomings, including the late filing of a power of attorney and complaints about failure to furnish security for costs as required.

The court evaluated the explanation advanced by the appellants’ attorney for non-compliance and described the manner in which the appeal had been handled as tardy, finding that the explanation fell short of reasonableness. However, it treated that deficiency as not determinative. Drawing on Constitutional Court and Appellate Division authority, the court approached condonation as an enquiry directed at the interests of justice, requiring a weighing of factors including the extent and cause of delay, the effect on the administration of justice, the reasonableness of the explanation, the importance of the issues, and especially the prospects of success on appeal.

The court held that a proper decision on condonation and reinstatement required an assessment of the merits, because strong prospects of success could justify condonation even where the explanation was poor. It therefore turned to the substantive question: whether a valid agreement of sale complying with the statutory formalities had been concluded.

In addressing the merits, the court accepted that there had been a sequence of offers and counter-offers. It noted that the court a quo had found that no agreement was concluded on 10 August 2020 at R450 000.00, and that further negotiations led to a purchase price of R515 000.00 which the court a quo treated as accepted and compliant with section 2(1) of the Alienation of Land Act. The appeal court’s focus, however, was on how the matter ought to have been decided in motion proceedings where material disputes existed about acceptance and the significance of alterations and initials.

The court reasoned that the matter ought to have been determined on the appellants’ version together with those facts that were common cause or admitted, as required by the Plascon-Evans approach. On that footing, it treated the appellants’ version as establishing that the Trust’s stance at R515 000.00 amounted to an offer (or counter-offer) which still required acceptance by the respondents in the manner contemplated by the documents. The court accepted the appellants’ contention that, in context, a party’s initials next to an alteration signified consent to that alteration, and it considered it significant that the respondents had not initialled the purchase price alteration to R515 000.00.

The court also considered the timing and content of the respondents’ prior signature on the OTP. It reasoned that the respondents’ signatures, placed earlier when the OTP reflected R450 000.00, could not denote consent to the later altered figure of R515 000.00. On this approach, the appeal court concluded that consensus on the purchase price, expressed in the manner required for a valid deed of alienation, had not been established on the papers in a way that could support the order compelling transfer.

The court further noted that reliance on a letter suggesting an agreement “on or about 10 August” at R515 000.00 could not be reconciled with the documentary sequence demonstrating that the R515 000.00 figure emerged later in the negotiations. This reinforced its conclusion that the matter should have been resolved on the appellants’ version for purposes of motion proceedings.

Having found that the appeal had reasonable prospects of success and should succeed on the merits, the court held that it was in the interests of justice to dismiss the application declaring the appeal lapsed and to grant the indulgences sought (condonation and reinstatement), notwithstanding the inadequacy of the explanation for delay.

On costs, the court applied the general principle that costs follow the result in respect of the appeal itself, but distinguished the interlocutory indulgence applications. It held that the appellants should bear the costs of their condonation and reinstatement applications because they sought an indulgence and the respondents’ opposition was justified given the appellants’ conduct of the appeal process. Conversely, the court made no costs order in relation to the respondents’ application seeking a declaration that the appeal had lapsed.

5. Outcome and Relief

The court dismissed the respondents’ application for an order declaring that the appeal had lapsed. It condoned the late filing of the appeal record and reinstated the appeal.

On the merits, the appeal was upheld with costs, including costs occasioned by the employment of two counsel. The court a quo’s order was set aside and substituted with an order discharging the rule nisi issued on 27 October 2020, thereby removing the compulsion on the trustees to effect transfer.

The appellants were ordered to pay the costs of the applications for condonation and reinstatement. No order as to costs was made in respect of the respondents’ application to declare that the appeal had lapsed.

Cases Cited

Van Wyk v Unitas Hospital [2007] ZACC 24; 2008 (2) SA 472 (CC).

United Plant Hire (Pty) Ltd v Hills and Others 1976 (1) SA 717 (A).

Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd [1984] ZASCA 51; 1984 (3) SA 623 (A).

Legislation Cited

Alienation of Land Act 68 of 1981, section 2(1) (with reference also to section 28 in the text of section 2(1)).

Rules of Court Cited

Uniform Rules of Court, Rule 49(2).

Uniform Rules of Court, Rule 49(6)(a) and Rule 49(6)(b).

Uniform Rules of Court, Rule 49(7)(a) and Rule 49(7)(d).

Uniform Rules of Court, Rule 49(13).

Uniform Rules of Court, Rule 7(2).

Held

The appeal court held that, applying the motion-proceedings approach to factual disputes, the matter should have been determined on the appellants’ version together with admitted and common-cause facts. On that basis, the respondents had not established that a valid written agreement of sale for land had been concluded at the purchase price of R515 000.00, because the respondents had not signified acceptance of the altered purchase price in the manner contended for by the appellants, and the respondents’ earlier signature could not serve as acceptance of a later altered amount.

The court further held that, despite an inadequate explanation for procedural non-compliance, the appeal had reasonable prospects of success and it was in the interests of justice to grant condonation, reinstate the appeal, and dismiss the application declaring the appeal lapsed. The court set aside the substantive order compelling transfer and discharged the rule nisi.

LEGAL PRINCIPLES

The grant or refusal of condonation is a discretionary enquiry guided by the interests of justice and fairness to both parties, taking account of factors including the extent and cause of delay, the reasonableness of the explanation, the effect on the administration of justice, the importance of the issues, the respondent’s interest in finality, and critically the prospects of success on appeal.

In motion proceedings where disputes of fact arise, the Plascon-Evans principle requires the court to decide the matter on the facts stated by the respondent (here, the appellants in the court a quo) together with facts admitted by the applicant (here, the respondents), unless the respondent’s version is not such as to raise a real, genuine, or bona fide dispute.

A sale of land must comply with the statutory formalities in section 2(1) of the Alienation of Land Act 68 of 1981, requiring a deed of alienation signed by the parties (or their authorised agents). Where the papers show negotiations involving offers and counter-offers, the existence of a compliant written agreement depends on proof of consensus and proper acceptance as reflected in the signed documentation, assessed in accordance with the applicable motion-proceedings approach to disputed facts.

Mabusela and Others v Booi and Another (CA149/2021) [2023] ZAECMKHC 54 (2 May 2023)