Blake and Another v Cassim Another (255/07) [2008] ZASCA 67; [2008] 4 All SA 15 (SCA); 2008 (5) SA 393 (SCA) (29 May 2008)

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[2008] ZASCA 67
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Blake and Another v Cassim Another (255/07) [2008] ZASCA 67; [2008] 4 All SA 15 (SCA); 2008 (5) SA 393 (SCA) (29 May 2008)

REPUBLIC
OF SOUTH AFRICA
SUPREME COURT OF APPEAL
OF SOUTH AFRICA
REPORTABLE
Case
number:
255/07
In
the matter between:
MICHAEL
HUGH BLAKE
...
1
st
Appellant
ODHIN
INVESTMENTS CC
...
2
nd
Appellant
and
ZAHEER
CASSIM
...
1
st
Respondent
THEODOR
WILHELM VAN DEN HEEVEN NNO
...
2
nd
Respondent
CORAM
:
MPATI
AP, CAMERON, CLOETE, PONNAN JJA and LEACH AJA
HEARD
:
5
MAY 2008
DELIVERED
:
29
MAY 2008
Summary:
Contract
– sale of immovable property – no obligation on seller to define
form of guarantee before making demand for furnishing
it – written
agreement stipulates clearly time when guarantees to be furnished –
seller entitled to cancel for failure to furnish
guarantees on due
date.
Neutral
citation:
M
H BLAKE AND ANOTHER v Z CASSIM AND ANOTHER (255/2007)
[2008] ZASCA 67
( 29 MAY 2008)
_____________________________________________________________________
JUDGMENT
_____________________________________________________________________
MPATI
AP:
[1]
This appeal concerns the interpretation of certain clauses in a
written agreement of sale of a 100% member’s interest in the
second
appellant, a close corporation (the CC). The issue in the appeal is
whether the purchaser, Mr M I Mia, and subsequently the
respondents,
who are the trustees in Mr Mia’s insolvent estate, breached their
contractual obligations, as buyers, by failing to
deliver acceptable
guarantees for payment of the balance of the purchase price in terms
of the agreement. A related issue, which
is crucial to the appeal, is
whether the first appellant validly and lawfully cancelled the
agreement pursuant to the alleged breach.
[2] On 15 April 2002 Mr
Mia and a consortium of six persons, represented by the first
appellant, who was part of the consortium, concluded
a written
agreement in terms of which Mr Mia purchased from the consortium a
100% member’s interest in the CC. The purchase price
was R1 600
000.00. The consortium was engaged in the development of immovable
property on the north coast of KwaZulu-Natal, which
was to be
marketed under a sectional title scheme to be known as ‘Lazy
Lizard’. The agreement records that the developer, Dusky
Dolphin
Share Block (Proprietary) Limited, is the registered owner of the
immovable property concerned and that it was in the process
of
erecting, or had completed the erection of, a sectional title scheme
(the scheme). The developer intended to apply, upon erection
of
sectional title units forming part of the first phase of the scheme,
for the registration of the sectional plan in respect of
such units
and the opening of a sectional title register incorporating them.
[3] The agreement records
further that upon the opening of the register ‘and upon compliance
with the provisions of’ the agreement,
a unit, which it is common
cause was a penthouse on the top floor of the proposed building, was
to be transferred to the second appellant
at the purchaser’s
expense. The unit was thus to be an asset in the second appellant.
[4] Clause 8.1 of the
agreement stipulates, among other things, that as soon as reasonably
possible after signature thereof the sellers
shall ‘deliver and
hand over’ to their attorneys, pending fulfilment by the purchaser
of his obligations, an amended founding
statement (form CK 2)
duly signed, resigning their membership of the second appellant. This
would enable the registration of
Mr Mia as sole member of the second
appellant.
[5] The terms on which
the purchase price was to be paid are partly set out in a schedule to
the written agreement. The relevant parts
of the schedule provide:
‘
A .
. . .
B. . . .
C.
. . .
D.
R1
600 000.00
(Purchase Price – words
and figures)
D.1
R50
000.00 (FIFTY THOUSAND RAND)
(Deposit – words and
figures)
D.2
R1
550 000.00 (ONE MILLION FIVE HUNDRED AND FIFTY THOUSAND)
(Balance
of Purchase Price – words and figures)
D.2.1.1
R250
000.00 (TWO HUNDRED AND FIFTY THOUSAND)
(First guarantee –
words and figures)
D.2.1.2
(First date to furnish
guarantee)
D.2.2.1
R1
300 000.00 (ONE MILION THREE HUNDRED THOUSAND)
(Second guarantee –
words and figures)
D.2.2.2
(Date to furnish second
guarantee)
. . .’
It
will be noted that no dates were stipulated for the furnishing of the
guarantees.
[6]
Clause 5 of the agreement reads:
‘
PAYMENT
OF THE PURCHASE PRICE
5.1 A deposit of SEE ITEM
D.1 OF THE SCHEDULE shall be paid to the Attorneys within 7 (Seven)
days of signature hereof by the parties
to this agreement;
5.2 The balance of the
purchase price in the amount of SEE ITEM D.2 OF THE SCHEDULE shall be
paid by the Purchasers to the Attorneys
on transfer date and pending
the transfer date shall be secured as follows:-
5.2.1 a Bank guarantee
acceptable to the Attorneys for the amount of SEE ITEM D.2.1.1 shall
be furnished to the Attorneys on or before
SEE ITEM D.2.1.2 OF THE
SCHEDULE;
5.2.2 a Bank guarantee
acceptable to the Attorneys for the amount of SEE ITEM D.2.2.1 OF THE
SCHEDULE shall be furnished to the Attorneys
on or before SEE ITEM
D.2.2.2 OF THE SCHEDULE;
. . .’
Clause 20 of the written
agreement contains special conditions which are in the following
terms:
’
20.1
. . .
20.2 With reference to
clause D of the schedule, it is recorded that the said guarantee is
to be furnished from the proceeds of the
sale of the purchaser’s
property, namely 5 Villa La Mer, North Beach Road, Umdloti.
20.2.1 The purchaser
shall have 12 months from date hereof, to sell the said property. At
the end of the said 12 months period, this
condition shall expire and
guarantees for the full purchase price shall be provided by the
purchaser.’
The
term ‘transfer’ is defined in the written agreement as ‘the
date of registration in the Registrar of Close Corporations
Office,
Pretoria, of the Amended Founding Statement (CK 2) reflecting the
Purchasers as owners of the members’ interest and the
words
“transfer date” shall have the corresponding meaning’.
[7]
Subsequent to the conclusion of the agreement, the first appellant
assumed all the sellers’ rights and obligations under it.
It is not
in dispute that Mr Mia only paid R25 000.00 of the agreed
deposit of R50 000.00. There were some skirmishes between
the parties
to the agreement arising from Mr Mia’s failure to pay the deposit
in full, but these are not germane for the determination
of this
appeal. Mr Mia’s estate was, however, provisionally sequestrated on
14 October 2003 and, finally, on 25 November 2003.
On 18 December
2003 the respondents were appointed as joint trustees in Mr Mia’s
insolvent estate. Following their appointment
the respondents advised
the first appellant’s attorneys, by letter dated 23 December 2003
that they intended to proceed with the
purchase, on behalf of the
insolvent estate, of the members’ interest in the CC.
[8]
Further correspondence passed between the parties relating to the
furnishing of guarantees for the balance of the purchase price.
On 21
January 2004 the first appellant’s attorneys (Mooney Ford
Attorneys) placed the respondent
in
mora
.
The relevant portion of the letter reads:
‘
.
. . you have failed to deliver the bank guarantees referred to in
clauses D.2.1.1 and D.2.2.1 of the schedule to the Sale Agreement,
notwithstanding our request for same.
Notice is hereby given to
you in terms of clause 13 of the Sale agreement that you are to
remedy your aforesaid breaches within FOURTEEN
(14) days after the
date of posting hereof.’
Should you fail to remedy
your breach aforesaid, our instructions are that the seller intends
cancelling the Agreement without prejudice
to the seller’s rights
to claim damages.
. . .’
Clause 13 of the
agreement stipulates that –
‘
[i]n
the event of either party committing any breach of the terms of this
agreement, and failing to remedy such breach within 14 days
of the
date of the posting by prepaid registered post by the aggrieved party
to the offending party requiring the remedying of such
breach to the
address chosen by the offending party as his domicilium citandi et
executandi below, then without any further notice
the aggrieved party
shall be entitled either to claim specific performance under this
agreement or alternatively to cancel this agreement.
. . .
’
In
response
1
the
respondents confirmed holding R250 000.00 in trust
2
for
payment to Mooney Ford Attorneys and attached to their letter an
undertaking by their attorneys to pay that amount. The respondents
also expressed disagreement with the contention on behalf of the
first appellant that the second guarantee (of R1 300 000.00) was
due
and averred that it would be due ‘on date of transfer’.
3
[9]
However, on 2 February 2004 the respondents wrote to Mooney Ford
Attorneys advising that they were ‘in a position to deliver
guarantees for the full amount of R1 550 000.00’. The
last paragraph of the letter reads:
‘
We
are issuing the guarantee for the balance [of the] purchase price in
favour of your firm to comply with the conditions of the contract.
Should you wish to amend the guarantee, please let us know what your
guarantee requirements are.’
In
a letter dated 4 February 2004 Mooney Ford Attorneys directed that
the guarantee ‘is to be expressed as being payable upon written
confirmation’ of the following:
‘
1.
Opening of the sectional register in respect of the scheme to be
known as Lazy Lizard.
2. Transfer from Dusky
Dolphin CC to Insolvent Estate M I Mia of proposed unit 702 in the
scheme to be known as Lazy Lizard.
3.
Release of the property described in 1 above from the operation of
the existing [bond] by Dusky Dolphin CC in favour of Absa Bank
Limited.’
4
On the same day the
respondents replied in the following terms:
‘
.
. .
We have been advised by
Standard Bank that a bond has been granted in favour of the purchaser
in the amount of R2 250 000.00 but that
their standard policy will be
to authorise and sign bank guarantees only upon the completion of the
building. Accordingly, guarantees
for the full balance outstanding
(R1 550 000.00) will be issued upon the opening of the Sectional
Title Register.
. . .’
On
6 February 2004 the respondents passed on to Mooney Ford Attorneys a
letter they had received from Standard Bank confirming the
bond
amount of R2 250 000.00 and the guarantees for R1 550 000.00 which
would be issued ‘once the following conditions have been
met’:
‘
1.
Opening of a Sectional register for the scheme Lazy Lizard.
2. Transfer of the
property into the name of Odhin Investments CC.
3. Cancellation of all
existing bonds over the property.
4. Final inspection by
SBSA (Standard Bank of South Africa) after completion.’
[10]
Mooney Ford Attorneys rejected the letter from Standard Bank on the
basis that its format ‘does not constitute a bank guarantee
and is
not acceptable in terms of the provisions of clause 5.2.2 read
together with item D.2.2.1 of the schedule’.
5
They
advised further that the first appellant ‘has cancelled the
Agreement’.
[11]
Following a further exchange of correspondence between Mooney Ford
Attorneys and the respondents, the latter launched an application
for
an order declaring invalid the cancellation of the agreement by the
first appellant. When the matter came before Hurt J in the
Durban
High Court it was agreed between the parties that the respondents
would deliver a declaration and that the matter proceed
to trial.
[12]
The declaration was delivered on 27 May 2004, but yet further
correspondence was exchanged between the parties during the period
June to November 2004. The respondents attempted to furnish a
guarantee from Standard Bank purporting to secure the balance of the
purchase price but Mooney Ford Attorneys returned it as certain
paragraphs were unacceptable to them.
[13]
In their amended declaration the respondents alleged that on a proper
construction of the agreement the earliest date upon which
the seller
was entitled to call for delivery of, and Mr Mia became obliged to
provide, a banker’s guarantee for the amount of R1 300 000.00
representing the second guarantee ‘was no earlier than a reasonable
time before the date upon which [the first appellant’s attorneys]
would be in a position to lodge the necessary documents required for
the registration of transfer of unit 702’.
6
The
respondents accordingly sought an order directing the appellants to
deliver to them ‘all documentation to enable them to obtain
registration into their name of an unencumbered 100% member’s
interest in [the CC]’.
7
[14]
It may be mentioned that it is not in dispute that the sectional
title register was eventually opened on 21 January 2005 and
that
documentation for the transfer of the first unit in the scheme was
lodged with the Registrar of Deeds in Pietermaritzburg on
12 January
2005. That unit was transferred into the name of the purchaser
thereof on 21 January 2005. I mention this merely because
it was
pleaded in the declaration, the respondents alleging that they were
unaware of these developments at the time.
[15]
In their plea the appellants relied on clause 20.2 of the written
agreement and averred,
inter
alia
,
that regardless of whether or not the Umdloti immovable property (Mr
Mia’s) was sold, the purchaser would be obliged to furnish
the
first and second guarantees within a period of twelve months of the
date of the conclusion of the agreement. The court
a
quo
(Hurt
J) upheld the respondent’s claim and declared the written agreement
to be of full force and effect. It granted ancillary relief
in
accordance with draft orders furnished by the parties’ legal
representatives at its request. This appeal is with its leave.
[16]
It seems to me that the resolution of the issues in this matter
depends upon a proper construction of clause 20.2.1
8
of
the written agreement. However, the court
a
quo
found
in favour of the respondents on two bases. With regard to clause
20.2.1 it said:
‘
.
. . I do not think that it is necessary to delve into the question of
whether clause 20.2 of the “true agreement” between the
parties
should be interpreted as requiring the purchaser to deliver a
guarantee for the full purchase price at the end of the twelve-month
period referred to in clause 20.2. What is abundantly clear in this
case is that by the time the seller’s attorney was instructed
to
deal with this aspect of the performance of the contract, both
parties were genuinely under the misapprehension that their contract
stipulated that “the second guarantee” would have to be provided
at the time when it was necessary to secure the seller’s rights
in
the course of transfer. In such circumstances it would be artificial
in the extreme to judge the parties’ dealings in relation
to the
guarantees, by the application of contractual provisions of which
both of them were unaware.’
(p
633)
The
‘misapprehension’ referred to by the court
a
quo
relates
to another document which is identical to the written agreement, but
amended without authority by the sellers’ agent who
had inserted,
in the schedule thereto, the words: ‘ON DATE OF TRANSFER’ in the
space provided for the date on which the second
guarantee was to be
furnished.
9
The
amendments were effected after the written agreement had been signed
by the parties.
[17]
The court
a
quo
accordingly
reasoned that the matter had to be considered ‘in the light of the
exchanges which took place during and after December
2003’. The
exchanges referred to are (a) a letter written by respondent on 22
December 2003 to Mooney Ford Attorneys advising,
inter
alia
,
that they would furnish guarantees within 48 hours of receiving
clarification on certain matters relating to plans for the property;
(b) a letter dated 14 January 2004 in which Mooney Ford Attorneys
called for, among others, both guarantees to be furnished forthwith,
as they were due; (c) a letter from the respondents to Mooney Ford
Attorneys dated 27 January 2004,
10
expressing
disagreement with the latter’s view that the second guarantee was
due, and stating that it would only be due ‘on date
of transfer’;
11
(d) a
reply dated 2 February 2004 in which Mooney Ford Attorneys
acknowledged that an error had occurred at the time of the conclusion
of the agreement for which rectification was required as it was
common cause that the guarantee could not be delivered on date of
transfer, but prior to transfer and thus on demand; and (e) a
response from the respondents dated 3 February 2004 stating, in the
last paragraph thereof, that the guarantees were clearly intended to
be delivered ‘when you are in a position to lodge for transfer’.
[18]
Citing
Hofmeyr
NO v Brunofarms (Pty) Ltd
12
and
Wehr
v Botha NO
13
the
court
a
quo
,
accepting that the guarantees were to be furnished before transfer,
held that they (guarantees) were due ‘on demand when the
conveyancer
is ready to lodge the documents required for transfer’.
The court accordingly concluded that the
mora
notice
of 21 January 2004
14
‘
was
ineffective as a precursor to a valid cancellation of the contract’.
[19]
It is true that the correspondence just referred to
15
shows
that the authors had before them the unauthorised ‘amended version’
of the written agreement. The first appellant, who was
the only
witness to testify at the trial, apart from an expert witness, said,
however, that he had always had in his possession a
copy of the
unamended version of the written agreement. But apart from the first
appellant’s assertion, it seems to me that the
court
a
quo
was
clearly wrong in ignoring the terms of the actual contract and to
decide the issue of the due date of the guarantees on a term
that was
never agreed upon, which was inserted after the written agreement had
been signed by the parties to it. Clause 15.1 of the
written
agreement provides:
‘
This
agreement constitutes the sole and exclusive memorial of the
agreement between the Seller and the Purchaser and no alteration,
variation, deletion or consensual cancellation hereof shall be
binding on either the Seller or the Purchaser unless reduced to
writing
and signed by both parties.’
The insertion in issue
was not signed by the parties to the agreement and therefore not part
of their agreement.
[20]
The second basis upon which Hurt J found for the respondents relates
to the form of the guarantees that were to be furnished.
The written
agreement provides only that guarantees acceptable to the sellers’
attorneys were required.
16
In
this regard the court
a
quo
said:
‘
Where
the form of the guarantee is not defined with reasonable clarity in
the contract (e.g. where the contract stipulates that the
guarantee
must be in a form “acceptable to the seller’s attorney”), and
where the seller is driven to put the purchaser on
terms to deliver
the guarantee, he should make it clear to the purchaser what
particular features of the guarantee would make it
“acceptable”
to him. Otherwise he will be putting the purchaser on terms to remedy
a situation where the purchaser cannot be
sure that what he does will
constitute proper performance.
’
And further:
‘
It
was not, in my view, open to the seller’s attorney to stipulate
simply that guarantees be delivered, on pain of cancellation,
and
then to sit back and wait for a tender before deciding what sort of
guarantee would be acceptable. In my view, it was incumbent
upon the
attorney, at the stage when he purported to put the Plaintiffs on
terms to remedy their alleged breach, to define precisely
what form
of guarantee would be treated as “acceptable” by him. It is clear
from the correspondence, however, that it was only
in the letter of 4
February 2004 (which was at the very end of the fourteen day period
stipulated in the letter of 21 January 2004)
that the format of the
guarantees required by the seller’s attorney was clarified.’
According
to this reasoning an obligation is placed on the seller to define
what form of guarantee would be acceptable before a demand
may be
made for the furnishing of a guarantee.
[21]
I do not agree with this proposition. The form of a guarantee in a
written contract of sale will generally be ascertainable from
the
terms of the particular agreement, if not separately agreed upon by
the parties. The parties may, of course, agree to amend the
form
agreed upon in the written agreement. And once a guarantee has been
furnished the seller will either accept or reject it. If
it is
rejected, the seller will obviously advise the basis of the
rejection, which, if unreasonable, may be challenged by the
purchaser.
[22]
In
Dharumpal
Transport (Pty) Ltd v Dharumpal
17
the
written contract of sale of certain buses stipulated that the bills
of exchange to be provided by the purchaser ‘shall be endorsed
as
guarantor and co-principal debtor by a person whom the seller shall
consider as sufficient and suitable’. In an exception to
a claim
for payment of the balance of the purchase price, it was argued on
behalf of the excipient that the stipulation made the
contract depend
solely upon the will of the seller and was thus unenforceable. This
court held that the seller was not entitled to
reject a proposed
guarantor from pure caprice; and that at least the seller must
exercise an honest judgment in deciding whether
the proposed
guarantor was sufficient and suitable.
18
Hoexter
JA, for the unanimous court, elaborated thus:
‘
I
can see no reason why a Court should not be able to determine whether
the seller has exercised the
arbitrium
boni viri
in
rejecting a proposed guarantor. In the case of
Machanick
v Simon
,
1920 C.P.D. 333
, in which goods were sold subject to the seller’s
approval of the buyer’s financial stability, it was held by JUTA,
J.P., that
the discretion thus given to the seller had to be
exercised
arbitrio
boni viri
.
In the present case a discretion is given to the seller to approve of
the guarantor, and he must exercise that discretion
arbitrio
boni viri
.’
(p
707A-B)
Similar considerations
would apply in a matter such as the present.
[23]
In their letter to Mooney Ford Attorneys dated 2 February 2004 the
respondents convey that they were to issue a guarantee ‘in
favour
of your firm to comply with the conditions of the contract’. Mooney
Ford Attorneys were then invited to advise of their
requirements
‘[s]hould you wish to
amend
the
guarantee’. (My emphasis.) This clearly indicates, in my view, that
the respondents were in a position to establish what the
requirements
of the guarantee were in terms of the contract, but were willing to
depart from them in accordance with the wishes of
the appellants. But
nothing would have prevented the respondents from ignoring
‘additional’ requirements, or an amendment to
the requirements
agreed upon in the written agreement if those were, e.g. onerous or,
for whatever reason, unacceptable to them,
and to furnish a guarantee
that is in compliance with the terms of the agreement. It would then
be open to the respondents to lodge
a challenge in the event of the
seller’s rejection of the guarantee.
[24]
I am satisfied that in placing an obligation on the seller to define
what form of guarantee would be acceptable before a demand
can be
made for the furnishing of it, the court
a
quo
erred.
The defence of the
exceptio
non adimpleti
contractus
raised
by the respondents on the grounds that the appellants were not
entitled to demand performance (furnishing of a guarantee) whilst
they had failed to advise of a format of the guarantee consistent
with the agreement cannot be sustained.
[25]
In any event, the letter from Standard Bank
19
which
was passed on to Mooney Ford Attorneys by the respondents on 5
February 2004, besides the fact that it does not constitute a
guarantee, clearly set new conditions regarding the furnishing of the
guarantees. It stated that the guarantees would be
furnished
once
certain conditions had been met. The contents of the letter thus
amounted to an alteration of the terms of the agreement between
the
parties. This is prohibited by clause 15.1 of the written agreement,
20
unless
the alteration was signed by both parties. This brings me to the
proper construction of clause 20.2 of the written agreement.
[26]
Counsel for the respondents submitted that on a fair reading of the
agreement, and having regard to clause 20.2.1,
21
Mr Mia
was given a period of 12 months before there could be any call for
guarantees. It is only after the twelve-month period that
the
condition would expire and that ‘guarantees for the full purchase
price shall be provided by the purchaser’. And as to the
time when
the guarantees could be demanded, counsel argued, on the principle
enunciated in
Hammer
v Klein and another
22
and
Wehr
v Botha,
23
that
such guarantees could only be required after the period of 12 months,
provided the first appellant was in a position to perform,
that is,
provided the seller was ready to effect transfer of the member’s
interest in the second appellant.
[27]
I do not agree. Clause 20.2 of the written agreement stipulates
clearly that the first guarantee of R250 000.00 was to be furnished
from the proceeds of the sale of Mr Mia’s fixed property at
Umdloti. Clause 20.2.1 afforded Mr Mia a period of 12 months from the
date on which the agreement became effective, within which to sell
that property. This means that Mr Mia had 12 months to sell his
property, and that the first guarantee would not be due until the
expiry of that period. However, upon the expiry of the twelve-month
period, and if Mr Mia’s property had not been sold, this condition
also expires ‘and guarantees for the full purchase price shall
be
provided . . .’. A time was, therefore, stipulated as to when the
first guarantee was to be furnished. If it had been furnished
as
stipulated, then the second guarantee in respect of which no time had
been agreed upon, would have become due when the seller
was ready to
effect transfer of the member’s interest in the second appellant.
[28]
The position changed, however, when Mr Mia failed to furnish the
first guarantee within the agreed twelve-month period. Now both
guarantees had to be furnished. In my view, it would make no
commercial sense were the sellers to stipulate a time for the
delivery
of the first guarantee and to be content with no time being
fixed for the delivery of both guarantees in the event of a failure
to
furnish the first guarantee. In my view, a proper construction of
clauses 20.2 and 20.2.1 is that upon failure by Mr Mia to furnish
the
first guarantee, as indeed occurred, both guarantees had to be
furnished upon the expiry of the agreed period of 12 months. At
the
risk of repeating, the second part of clause 20.2.1 reads:
‘
At
the end
of
the said 12 months period, this condition shall expire and guarante
es
for
the
full
purchase
price shall be provided by the purchaser.’
(My
emphasis.)
Two
things were to occur at the end of the period of 12 months. The first
is that the period within which the first guarantee had
to be
furnished was to expire. The second is that guarantees (plural) for
‘the full purchase price,’ i.e. guarantees for the
full
balance
of the
purchase price had to be provided.
[29]
It follows that when Mooney Ford Attorneys made demand on 21 January
2004 that the guarantees be furnished the guarantees were
due. The
seller was accordingly entitled to place the respondents
in
mora
.
And upon the respondents’ failure to remedy the breach within the
time stipulated in the demand, the seller was entitled to cancel
the
agreement. The appeal must therefore succeed.
[30]
Counsel were agreed that in the event of the appeal succeeding, costs
should follow the result, except for those costs occasioned
by the
filing by the appellants of their fourth set of affidavits in the
application, and the respondents’ filing of a fifth set.
The
appellants tendered the costs occasioned by the filing of these
additional affidavits.
[31]
The following order is made:
1. The appeal is upheld
with costs.
2.
The order of the court
a
quo
is
set aside and for it is substituted the following:
‘
(a)
The plaintiffs’ claim is dismissed with costs, which costs are to
exclude the costs occasioned by the filing, by the respondents
in the
application (defendants), of a fourth set of affidavits and the
applicants’ (plaintiffs’) filing of a fifth set.
(b) The costs occasioned
by the filing of the additional affidavits referred to in (a) above
are to be paid by the first defendant.’
MPATI AP
CONCUR:
CAMERON JA
CLOETE JA
PONNAN JA
LEACH AJA
1
By
letter dated 23 December 2003, but faxed in January 2004.
2
The
amount was deposited in the trust account of Mooney Ford Attorneys
on 4 February 2004.
3
The
respondents apparently laboured under a wrong impression. After
signature of the agreement the
sellers’ agent had inserted the words ‘on date of transfer at
paragraph D.2.2.2 of the schedule’. The words inserted were,
however, not a term of the agreement signed by the parties to it.
4
In
a previous letter dated 2 February 2004 Mooney Ford Attorneys had
indicated that they would accept
guarantees in their favour as suggested by the respondents in their
letter of 2 February 2004. The letter also reminded the respondents
that the guarantees ‘are now due’.
5
Per
letter dated 10 February 2004.
6
The
main claim set out in the amended declaration is for rectification
of the agreement. In a minute of a
pre-trial conference in terms of Rule 37 held on 4 May 2006 it is
recorded that the respondents intended to rely ‘on the alternative
claim set out in paragraphs 10-15 of [the] amended declaration’.
That is the claim summarised in paragraph 14, and on which the
trial
proceeded.
7
There
is also an alternative order sought which it is not necessary to set
out here.
8
Quoted
in para 6 above.
9
There
was also another insertion in the schedule, which is not relevant
for the determination of the issues.
10
This
letter was in response to Mooney Ford Attorneys’ letter of 2
January 2004 referred to in para 7 above
and which placed respondents
in mora
.
11
This
was obviously because of the insertion made by the sellers’ agent
as mentioned in para 17 above.
12
1955
(2) PH A 42.
13
1965
(3) SA 46
(A) at 59E-H.
14
See
para 7 above.
15
Above
para 15.
16
See
clause 5.2 quoted in para 5 above.
17
1956
(1) SA 700
(A).
18
At
707A.
19
Referred
to in para 9 above.
20
Quoted
in para 19 above.
21
Quoted
in para 5 above.
22
1951
(2) SA 101
(A) at 105E–106C.
23
Above
footnote 13.