Koumantarakis Group CC v Mystic River Investment 45 (Pty) Ltd and Another (172/07) [2008] ZASCA 53; [2008] 3 All SA 384 (SCA); 2008 (5) SA 159 (SCA) (14 May 2008)

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Koumantarakis Group CC v Mystic River Investment 45 (Pty) Ltd and Another (172/07) [2008] ZASCA 53; [2008] 3 All SA 384 (SCA); 2008 (5) SA 159 (SCA) (14 May 2008)

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REPUBLIC OF SOUTH AFRICA
THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Reportable
Case No: 172/07
In the matter between:
KOUMANTARAKIS GROUP CC
...
APPELLANT
and
MYSTIC RIVER INVESTMENT 45
(PTY) LTD
...
1
ST
RESPONDENT
REGISTRAR OF DEEDS
...
2
ND
RESPONDENT
______________________________________________________________
CORAM
: HOWIE P,
FARLAM JA, NAVSA JA, KGOMO AJA and MHLANTLA AJA
HEARD
:
14
March 2008
DELIVERED
:
14
May 2008
SUMMARY
:
Sale
of Land - Meaning and effect of clause in an  agreement of
sale
in terms of which a bank guarantee must  be provided-
whether
the  seller acted reasonably in  rejecting the guarantee.
Seller not entitled
to reject the guarantee and cancel the
agreement.
NEUTRAL CITATION:
This
judgment may be referred to as Koumantarakis v Mystic River (172/07)
[2008] 53 ZASCA (14 MAY 2008)
JUDGMENT
MHLANTLA AJA
[1] The appellant appeals against a decision of the
Durban and Coast Local Division (Madondo AJ) in terms of which an
application
to enforce an agreement of sale of immovable property
between the parties was dismissed with costs consequent upon the
employment
of two counsel. The court below found that the first
respondent had acted reasonably and in good faith in rejecting the
bank guarantee
the appellant had furnished, purportedly in terms of
the agreement. The court held that the first respondent had validly
cancelled
the agreement. This appeal is with leave of the court
below.
[2] The appeal turns on the meaning and effect of a
clause in an agreement of sale of immovable property in terms of
which a bank
‘guarantee’ must be provided by the purchaser to the
seller. It is necessary at this stage to commence by setting out the
factual
background.
[3] On 30 May 2006 at Durban, the appellant ( the
purchaser) and the first respondent (the seller) concluded a written
agreement in
terms of which the immovable property described as Erf
301, Portion 16, Springfield Park was purchased for R12 million plus
value
added tax.
[4] The purchase price, in terms of clauses 3.2 and 3.3
1
of the agreement of sale, was payable by way of:
(a) A deposit of R1 million secured by a bank guarantee
acceptable to the seller
and
payable to the seller on transfer to be lodged within three days of
fulfilment of the suspensive condition. The agreement was
made
conditional upon the purchaser conducting a due diligence exercise on
the property within a period of 30 days of acceptance
of the offer of
the agreement and after receipt of the resolutions of the seller.
(b) A similar guarantee for the balance of R11 million
payable on transfer had to be lodged within 45 working days of the
deposit
being lodged.
[5] The purchaser was furthermore obliged to notify the
seller within the time allowed for the due diligence exercise of its
intention
to proceed with the sale, failing which the agreement would
be cancelled. Correspondence was exchanged in this regard between the
parties. It is apposite at this stage to refer to this in some
detail.
[6] It became apparent to the purchaser as early as 15
June 2006 that the due diligence exercise would take longer than the
period
allowed. It accordingly applied to the seller for an extension
of time. That request was refused by the seller which thereafter
notified
the purchaser that it regarded the agreement as null and
void.
[7] On 7 July 2006 the purchaser’s agent directed a
letter to the seller’s attorney challenging the seller’s stance
in that
regard. The purchaser accordingly gave instructions to the
Standard Bank of South Africa Ltd (the bank) to prepare a guarantee
for
payment of the deposit in terms of the agreement.
[8] On the same day, the bank addressed a letter to the
seller’s conveyancers,
attaching
a specimen guarantee
, enquiring whether it
was acceptable. No response was received whereupon, on 11 July 2006,
the purchaser gave written notice to the
seller of its intention to
continue with the agreement. The purchaser’s agent also requested
the seller to submit a format of a
bank guarantee acceptable to it.
The seller did not respond.
[9] On 12 July 2006 at 14h00 the purchaser obtained a
guarantee from the bank in its standard form. Clause 4 thereof
provides as follows:
‘
Should any new or previously undisclosed fact
emerge which may prejudice the Bank’s security or any circumstances
arise to prevent
or unduly delay registration of the abovementioned
transaction/s we reserve the right to withdraw herefrom by giving you
written
notice to that effect, whereupon the said sum will no longer
be held at your disposal.’
[10] After the delivery of the said guarantee, the
seller’s attorneys, at 16h25 on the same day sent to the bank a
draft guarantee,
which would be acceptable to it. This draft was
different from the bank’s specimen guarantee and it included the
following clause:
‘
This letter of guarantee expires one year from
date of issue and is irrevocable’.
[11] On 17 July 2006 the seller rejected the purchaser’s
guarantee contending that paragraph 4 thereof contained a ‘right to
withdraw’
and that it required an irrevocable guarantee. It
demanded that the purchaser provide an amended guarantee. The
purchaser did not
comply. Later that day a notice was sent by the
seller’s attorneys to the purchaser to the effect that the seller
deemed the agreement
to be cancelled and null and void because the
purchaser had failed to present a guarantee acceptable to the seller.
Notably however,
a notice in terms of clause 14 of the agreement of
sale had not been given to the purchaser to enable it to cure the
alleged breach.
2
[12] On 24 July 2006 the attorneys for the purchaser
explained to the seller’s attorneys that the right of the bank to
withdraw
contained in the guarantee was a long-standing and general
practice of financial institutions and that the agreement could not
be
interpreted so as to subject the purchaser to the unreasonable
whim of the seller. Thus they called upon the seller, in terms of
clause 15 of the agreement, to indicate whether the purchaser’s
guarantee was acceptable, failing which, the purchaser would
institute
legal proceedings to enforce the agreement.
[13] Whilst this exchange was taking place an
advertisement in a weekly property magazine styled ‘Home Guide’,
for the period
27 July – 2 August 2006, came to the attention of
the purchaser. The advertisement related to the property in question,
which was
put up for sale, despite the agreement between the parties.
The asking price therein was R2 million higher than that in the
agreement
between the parties.
[14] On 4 August 2006 the seller’s attorneys addressed
a letter to the purchaser’s attorney rejecting the purchaser’s
contention
that the guarantee provided accorded with a long-standing
and general practice of financial institutions, alleging that this
only
applied where a purchase is conditional on the purchaser
obtaining a mortgage bond and, that the present was not such a case.
The
attorneys contended that the agreement was, in any event, not
conditional upon the purchaser obtaining finance from any banking
institution.
[15] On the same date, the seller’s attorneys sent a
letter to the purchaser itself, stating that the purchaser was in
breach of
clause 3.2 of the agreement in that it had failed to
furnish a guarantee acceptable to the seller. The attorneys attached
a draft
of the guarantee the seller required and indicated that the
seller, as it was legally entitled, would not accept a guarantee in
any
other format. The purchaser was directed, in terms of clause 16
of the agreement, to furnish the seller with the said guarantee
within
seven working days, failing which the purchaser would be
deemed to be in breach of the agreement and that the seller would
exercise
its rights to cancel the agreement.
[16] On 17 August 2006 the seller’s attorneys
addressed a letter to the purchaser advising it that the agreement
was being cancelled
due to the non-compliance by the purchaser as
stated above.
[17] On 21 August 2006 the purchaser launched an
application for an interim order restraining and interdicting the
seller from encumbering
the property or alienating it to any person
other than the purchaser and interdicting the second respondent from
registering the
transfer of the property to any person other than the
purchaser.
[18] In finding for the seller, the court below held
that Clause 3.2 presented two requirements, namely, that the
purchaser had to
provide the seller with a bank guarantee in the
amount of R1 million, and that such a guarantee had to be acceptable
to the seller.
The court also found that the fulfilment of the
requirement was largely dependent upon the seller’s discretion
regarding the nature
and acceptability of the bank guarantee. The
court accordingly held that in this case the function of the
guarantee was to provide
security and that the purchaser had been
fully aware of this from the outset.
[19] The court concluded that the seller had given due
consideration to and had exercised an honest judgment on the
acceptability
of the guarantee and found in favour of the seller.
[20] The issues which arise for determination in this
appeal can be outlined as follows:-
(a) The meaning and ambit of Clause 3.2 of the agreement
of sale;
(b) Whether the seller acted reasonably in rejecting the
guarantee provided by the purchaser.
[21] As regards the first issue, counsel for the
respondent submitted that the starting point of the enquiry lies in
the interpretation
of the language of both the agreement of sale and
the guarantee from the bank. He contended that the guarantee was
replete with loopholes,
dangers, doubts and uncertainties and that it
could not be said that the seller, in rejecting it, did not act
arbitrio bono viri
as
legal principle required it to do.
[22] The meaning and purpose of the word “guarantee”
has to be ascertained in relation to the context in which it is used.
In
Mouton v Mynwerkersunie,
3
Wessels JA said:
‘
Die woord “waarborg” het meerdere
betekenisse, en die sin waarin dit in ‘n bepaalde dokument gebruik
word, sou van die inhoud
en strekking van daardie dokument afhang.’
[23]
In
Hermes Ship Chandlers (Pty) Ltd v Caltex
Oil (SA) Ltd
4
Kriek J, after considering a number of decisions in
which the interpretation of the word ‘guarantee’ was considered,
said:
‘
The passages from the various judgments I have
mentioned deal with the popular or ordinary meaning of the word
“guarantee”, but
it seems to me that they demonstrate only that
the word is capable of bearing different meanings depending upon the
context in which
it is used. It seems to me also that when the
meaning of the word in a particular document is being considered, it
is undesirable
to commence the enquiry on the basis that any one of
its possible meanings predominates, and that the proper approach to
the question
is to be alive to the various meanings which it can bear
and by a consideration of the context in which it is used (together
with
such other circumstances as may be permissible) to decide which
meaning must be attributed to it in that context.’
[24] The nature of bank guarantees in relation to the
sale of immovable property is explained in various authorities as
follows: In
a sale of movables payment and transfer should take place
pari passu.
In a sale
of land, where large sums of money are usually involved, it is
obviously desirable to achieve the same result, since the
seller will
be reluctant to part with ownership of his land until he has the
money and the purchaser will be reluctant to part with
his money
until he has ownership of his land. It is thus necessary to resort to
a device in order to achieve as nearly as possible,
the desired
reciprocity of payment and transfer. The standard device is the
furnishing by the purchaser, when called upon to do so
by the
seller’s conveyancers who are ready to lodge the necessary
documentation, of a bank guarantee payable on registration of
transfer, normally a revocable guarantee unless the contract
expressly calls for an irrevocable guarantee.
5
Generally guarantees are required to be provided by a
date in advance of registration because the date of registration is
not precisely
predictable.
[25] Of course the particular wording of a clause in an
agreement of sale of immovable property which requires a guarantee
might be
such that one is left in no doubt that what is required is
security beyond what is set out in para 24 above and more
particularly
that an irrevocable guarantee such as that demanded by
the seller in the present case is what was intended.
[26] It was contended on behalf of the seller that
because the agreement in the present case required the guarantee to
be provided
in tiers well before transfer, there could be no doubt
that security rather than a revocable guarantee was intended and that
in effect
meant an irrevocable guarantee.
[27] This argument is without merit. The fact that the
agreement required the guarantees to be provided by dates in advance
of registration
does not, in my view, subject to the further analysis
of clause 3.2 set out hereafter, detract from the general nature of
guarantees
described earlier in this judgment.
[28] The express terms of clause 3.2 of the agreement
merely refer to a guarantee acceptable to the seller. Neither a
provision for
irrevocability nor a provision that the guarantee
provide security was expressly stipulated for in the agreement. It is
evident that
the guarantee provided only for the payment of the
deposit and balance of the purchase price. Furthermore, if what was
indeed required
was security of a kind as contended by counsel and
that the guarantee should be irrevocable, clause 3.2 should have said
so in express
terms. The contract was not in a standard form but
specially drafted. Irrevocability was provided for elsewhere but not
in clause
3.
[29] In
Wehr v Botha
,
N.O.
,
6
an agreement for the sale of immovable property for
R9000 provided for payment of the purchase price by way of a deposit
of R1000
with the balance to be
secured
by means of a banker’s guarantee or a reputable and
acceptable letter of guarantee to be paid on demand on registration
of transfer.
The court held that a contract which seeks to impose on
a purchaser an obligation to furnish security that the seller will in
any
event be paid the price ‘must place this extra duty and burden
on a purchaser in the clearest of terms.’
7
[30] Returning to the words used in clause 3.2, there is
no special magic to the words ‘secure’ or ‘security’. In
Rosen
v Ekon
8
the court stated that subject to any express term in an
agreement for the sale of immovable property, the function of the
bank guarantee
for payment against transfer is not one of security
but is one of payment. Wunsh J held:
9
‘
Most agreements for the sale of properties, and
indeed that in the present case, require a guarantee to be delivered
by a specified
date which would be more than a few days before
transfer. The legitimacy of a revocable letter of credit would be
open to challenge
in such a case if, because a date is fixed for the
delivery of a guarantee, the function of the guarantee becomes one of
security
rather than payment.’
Wunsh J further stated:
‘
Since the function of a property guarantee is
to provide for payment and not to serve as security, the delivery of
a revocable guarantee
is compliance with the purchaser’s
obligation. The statement in clause 4.2 of the agreement that the
balance of the purchase price
“shall be secured by means of a …
guarantee” does not detract from this view.’
[31] The court below dealt with the decision in
Rosen
and apart from distinguishing it rejected its
conclusion. The distinction is fallacious. The guarantee in this case
was to be payable
on registration of transfer as was the guarantee
for payment of the balance of the purchase price. The only ‘security’
afforded
by the provision of the guarantees was the knowledge that
the purchaser had access to the necessary funds to pay the purchase
price
when due. This was the same position in
Rosen
.
In my view, the finding in the
Rosen
case is correct and that matter is not distinguishable.
[32] In this case, it appears to me that the guarantee
in the context of this contract is not irrevocable and was not
intended to
serve as security in the true sense of the word. It is
evident that the letter issued by Standard Bank is a contractual
undertaking
and that payment will be made upon registration of
transfer.
[33] The parties agreed to structure payment in
staggered phases. This was a two-tier stage, where the guarantee for
the deposit had
to be furnished within three days after the due
diligence exercise and the guarantee for the balance to be provided
45 days later.
It was a term of the agreement that such guarantees
would only be payable upon a later date, that is, on registration of
transfer.
In my view, absent the word ‘irrevocable’ in the
present contract, one is left with the usual undertaking provided by
a financial
institution. If the seller required security pending
transfer, it should have stipulated in the agreement that it required
an irrevocable
guarantee. It is not for the seller to achieve by
later objection what it could have, but did not, achieve by
appropriate agreement.
[34] Aside from the general discussion in relation to
guarantees usually provided in relation to the sale of immovable
properties,
it is in my view necessary to have regard to the evidence
of Mr Roger Green and Mr Gareth Scott, who in the present case
deposed
to affidavits on behalf of the purchaser.
[35] Mr Green has practised as a conveyancer for over 30
years. He has extensive experience in the practice of property law
and conveyancing
and served on committees of Property Law Matters of
the Law Societies of KwaZulu-Natal and of South Africa for about 14
years and
eight years respectively. He has had extensive dealings
with letters of undertakings issued by financial institutions and
stated
that the guarantees issued by these institutions in property
transactions invariably contain a clause providing for the withdrawal
of the guarantee in certain circumstances, unless the parties have
agreed on an irrevocable guarantee. According to him clause 4
is
unexceptional and similar clauses are found in all guarantees issued
by financial institutions in property transactions.
[36] Mr Scott stated in his affidavit that he was
employed by Standard Bank as an accounts executive and was conversant
with the practice
and policy of the bank in regard to the issue of
the letters of undertaking. According to Mr Scott, the provision for
the right of
withdrawal was a standard clause that the bank required
in every guarantee regarding the transfer of property whether or not
mortgage
finance was required and that the bank would not permit the
deletion of such a clause.
[37] No contrary evidence was tendered on behalf of the
respondent. Counsel for the respondent argued that no reliance could
be placed
on the evidence of these witnesses and furthermore that
their evidence did not discharge the stringent requirements for
establishing
a trade usage or custom. Counsel further argued that the
clause was a recent development of a draconian nature imposed
unilaterally
on clients of financial institutions without just cause
and for the sole benefit of the institutions which have become a ‘law
unto
their own’.
[38] This submission cannot, in my view, prevail. Mr
Green’s experience is of importance and is relevant. It cannot be
denied that
he is an experienced conveyancer and has wide experience
in the field. He can rightly be regarded as an expert. In my view
this is
good and proper evidence that has to be accepted. Mr Scott’s
testimony is equally relevant. There is in my view no basis to reject
their testimony in this regard. I accordingly conclude that the
seller was not contractually entitled to insist on an irrevocable
guarantee.
[39] The final issue to be determined is whether the
seller acted reasonably when it rejected the guarantee. Put simply,
what is at
the heart of this part of the case, is the so-called
‘whimsical revocability’ of the guarantee. In order to determine
this issue,
the court must consider the grounds expressed by the
seller and apply a double requirement. First, a seller must exercise
an honest
judgment in deciding whether to accept or reject a
guarantee. (Honesty was not in issue here.) Second, the seller’s
decision to
reject must objectively viewed, be based on reasonable
grounds.
[40] In
Herbert Porter & Co.
Ltd v Johannesburg Stock Exchange,
10
the court held:
‘
When parties have stipulated in their contract
that something must be done to the “satisfaction” of one of them,
the Courts have
applied an objective test ─ what would satisfy a
reasonable man?’
[41] It is common cause that the bank reserved itself
the right to withdraw from the guarantee in two circumstances: First,
where
any new or previously undisclosed facts emerge which might
prejudice the bank’s security, and, second, where any circumstances
arise to prevent or unduly delay registration of transfer.
[42] Counsel for the respondent submitted that the
guarantee could be revoked at any time, that is, prior to and after
registration
of transfer. He furthermore argued that the previously
undisclosed facts would relate to dealings between the bank and the
purchaser;
that these were entirely outside the knowledge and beyond
the control of the respondent and that it was impossible for the
respondent
to judge objectively whether any such new or previously
undisclosed facts might prejudice the bank. It was submitted that
this meant
that the bank could act capriciously and on a whim.
[43] In regard to ‘new or undisclosed facts’, it has
to be borne in mind that the guarantee conferred rights on the seller
and
the bank would have to justify its withdrawal on grounds which
would have to be related to its security. It seems to me that the
bank would have to demonstrate which new facts had arisen or prior
material facts had not been disclosed. The construction adopted
by
the seller is unjustifiably an exaggerated characterisation of risk.
I am accordingly satisfied that the bank would not be entitled
to a
‘whimsical’ withdrawal but is limited to a withdrawal that is
factually based and related to its security. The reference
to the
‘bank security’ is a reference to the registration of a mortgage
bond over the immovable property which registration was
to occur
simultaneously with the registration of transfer.
[44] I turn to deal with the second prerequisite, that
is, ‘any circumstances that may arise to prevent or unduly delay’
the registration
of transfer. In
Friedman v
Blumenthal
11
Margo J stated the following:
‘
[I]t is of course correct that the occurrence
of an event which prevents the condition from being fulfilled would,
by implication,
discharge the guarantee. However, in my view it is
not an implied term of a guarantee in cases such as this that, if
“unforeseen
circumstances” arise which “unduly delay” the
final decision of the creditor’s claim, the guarantee is to be
discharged.
If, for example, a delay of say three or even more years
were to occur because of the unexpected congestion of the trial roll,
or
because of a prolonged illness of the Judge seized of the matter,
or because of repeated postponements forced on the applicant through
no fault of her legal representatives or herself, would the Court be
driven, in order to give business efficacy to the contract,
to hold
that the guarantee was discharged? I hardly think so.
It may be argued that such circumstances would not constitute undue
delay within the meaning of the provision whereby the bank has
reserved its right to withdraw from the guarantee. However, undue
delay in this context is not the same as unreasonable delay. The
undue delay here contemplated is such occasioned by unforeseen
circumstances, that is irrespective of breach of contract on the
applicant’s
part, whereas unreasonable delay would presumably be
delay which is unreasonable because of the applicant’s failure to
pursue the
claim with reasonable diligence. While there would no
doubt be an implied obligation on the applicant’s part in respect
of unreasonable
delay, the breach of which obligation would entitle
the bank to withdraw, the same does not necessarily hold good for
undue delay
in the particular sense in which the words “unduly
delay” are used in the guarantee in this case.’
[45] In
Friedman
12
the applicant sought an irrevocable guarantee the terms
of which had to be satisfactory to the applicant. The bank issued a
guarantee
but reserved to itself the right to withdraw should ‘any
unforeseen circumstances’ arise to prevent or unduly delay the
fulfilment
of the agreement. Margo J held that the applicant was
entitled to reject the guarantee as it was not irrevocable. However,
he stated
that the term ‘irrevocable’ could not have been
intended as an absolute, and that there could be circumstances
entitling the
bank to withdraw from its undertaking. The ambit of the
withdrawal clause in
Friedman
was
more extensive than in the present case.
[46] In
Davis v Braatvedt
13
the bank reserved the right to withdraw at any time
prior to registration of transfer should any circumstances arise
which prevent
or unduly delay the registration of the transaction. It
was contended on behalf of the purchaser that bank guarantees as a
matter
of practice were all couched in that sort of way and that the
seller must have known of it and could not be heard to complain about
it. The court left this question open after the seller’s counsel
had conceded that something in the nature of the trade usage had
grown up and ‘particularly where the right is unqualified and
exercisable by the grantor at its whim’.
[47] The words, ‘any circumstances’ would be limited
to the circumstances that would arise after the issue of the
guarantee and
occasion an undue delay in effecting transfer. It has
to be borne in mind that the seller is responsible for the timeous
transfer
of the property. It would thus be within the seller’s
powers to ensure maximum reduction of delay. In my view the right to
withdraw
is not as wide as contended for and is not liable to be
employed capriciously.
[48] Counsel for the respondent also argued that the
guarantee could be revoked after registration,
inter
alia
, due to the insolvency of the purchaser.
In my view, the post registration points raised are fanciful and are
accordingly rejected.
The possibilities raised by counsel could
perhaps have occurred during the communication delays of past eras.
Nowadays there would
be almost immediate communication relating to
registration of transfer due to current technology. It follows
therefore that this
is not a realistic argument and furthermore is
not a reasonable ground to reject the letter of undertaking.
[49] In my view the seller was not entitled to reject
the guarantee. In the result the guarantee delivered on behalf of the
purchaser
complied with the obligations set out in the agreement of
sale. The seller was consequently not entitled to cancel the
agreement
of sale between the parties. The court
a
quo
therefore erred in accepting the first
respondent’s argument. It follows therefore that the appeal must
succeed.
[50] The following order is made:
1. The appeal succeeds with costs.
2. The order of the court
a quo
is set aside and replaced by an order in the following
terms:
‘
(a) (i) The written agreement
concluded between the applicant and the first respondent on 30 May
2006 (the agreement) in respect of
the immovable property described
as Erf 301, Portion 16, Springfield Park (the property), is of full
force and effect;
The letter of undertaking TRN No. M466831 dated 12 July
2006 by The Standard Bank of South Africa Ltd is in compliance with
the
agreement;
(b) the first respondent is ordered to do all such
things and execute all such documents, within five days of the
service of this
order upon it, to cause the property to be
transferred from the first respondent to the applicant in the Deeds
Registry, Pietermaritzburg,
against provision by the applicant of a
guarantee in terms of clause 3.3 of the agreement;
(c) in the event of the first respondent failing to do
so, the Sheriff: Durban North is hereby authorised and directed to do
all such
things and execute all such documents to cause the property
to be so transferred;
(d) the first respondent is ordered to pay the costs of
this application.’
____________________________
N Z MHLANTLA
ACTING JUDGE OF APPEAL
CONCUR
:
HOWIE P
FARLAM JA
NAVSA JA
KGOMO AJA
1
Clauses
3.2 and 3.3 read:
A deposit by the PURCHASER
secured
by way of a Bank Guarantee acceptable to the
SELLER, in favour of the SELLER, and payable to the SELLER on
registration of transfer
of R1, 000,000.00 (one million rand). Such
Guarantee to be lodged with the CONVEYANCER within 3 (THREE) days of
fulfilment of the
suspensive condition. (Emphasis added).
The balance of the purchase price of R11, 000,000.00 (ELEVEN MILLION
RAND) and the VAT/TRANSFER DUTY payable, shall be secured
by a bank
guarantee acceptable to the SELLER, in favour of the SELLER and
payable to the SELLER on registration of transfer, such
guarantee to
be lodged with the CONVEYANCERS within 45 (FORTY FIVE) working days
of the date on which the deposit; in the form
of a guarantee;
referred to in clause 3.2 above is lodged with the CONVEYANCERS.
2
Clause
14 reads: SELLER’S RIGHT ON BREACH OF SALE:
‘
If the PURCHASER commits any breach of the
sale, the SELLER may serve on the PURCHASER notice in writing to
remedy such breach and
if the PURCHASER fails to comply with such
notice within 7 (seven) working days from date of receipt by it of
written notice calling
upon it to remedy such breach or failure, the
SELLER shall have the following rights, either of which he may
exercise in his discretion,
namely: 14.1…
14.2 to cancel the sale forthwith, by notice in writing to the
PURCHASER. . .’
3
1977
(1) SA 119
(A) at 136B.
4
1973
(3) SA 263
(D) at 267 E-G.
5
RH
Christie
The Law of Contract in South
Africa
5ed pp. 414-415,
Trichardt
v Muller
1915 TPD 175
,
Breytenbach
v Van Wijk
1923 AD 541
at 547.
6
1965
(3) SA 46
(A).
7
At
60G.
8
2001
(1) SA 199
(W)
9
At
208E-G and 209H.
10
1974
(4) SA 781
(W) at 789E.
11
1981
(2) SA 398
(W)
at 401E-H.
12
At
402D.
13
1989
(3) SA 327
(N) at 331J-332A.