Withok Small Farms (Pty) Ltd and Others v Amber Sunrise Properties 5 (Pty) Ltd (664/07) [2008] ZASCA 131; 2009 (2) SA 504 (SCA) ; [2009] 2 All SA 65 (SCA) (21 November 2008)

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[2008] ZASCA 131
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Withok Small Farms (Pty) Ltd and Others v Amber Sunrise Properties 5 (Pty) Ltd (664/07) [2008] ZASCA 131; 2009 (2) SA 504 (SCA) ; [2009] 2 All SA 65 (SCA) (21 November 2008)

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THE
SUPREME COURT OF APPEAL
REPUBLIC
OF SOUTH AFRICA
JUDGMENT
Case no: 664/07
In
the matter between:
WITHOK
SMALL FARMS (PTY) LTD 1
ST
APPELLANT
BOULEIGH
113 (PTY) LTD 2
ND
APPELLANT
AUCOR
SANDTON (PTY) LTD 3
RD
APPELLANT
and
AMBER
SUNRISE PROPERTIES 5 (PTY) LTD RESPONDENT
Neutral
citation:
Withok
Small Farms (Pty) Ltd v Amber Sunrise Properties Ltd
(664/07)
[2008] ZASCA 131
(21 November 2008)
______________________________________________________________
Coram SCOTT, LEWIS JJA
et
GRIESEL AJA
Date of hearing : 7 NOVEMBER 2008
Date of delivery : 21 NOVEMBER 2008
Summary: Sale by public auction – 'Agreement and
Conditions of Sale' signed by purchaser – seller given 7 days to
'confirm'
sale – not a sale subject to a condition but an offer to
purchase open for 7 days – 'Agreement and Conditions of Sale'
making
provision for seller to sign on date to be specified –
contract coming into existence when seller signs – no need for
acceptance
to be communicated to purchaser.
_____________________________________________________________
_
ORDER
______________________________________________________________
On appeal from:
the
High Court, Pretoria (RABIE J sitting as
court of first instance):
The following order is made:
[A] The appeal is upheld. The respondent is to pay the
costs of appeal of the first and second appellants and those of the
third
appellant.
[B] The order of the court a quo is set aside and the
following substituted in its place:
'(a) The application is dismissed with costs.
The counter application is upheld and the
following order is made:
1 The agreement and conditions of sale, signed by the
applicant on 13 June 2006 and the first and second respondents on 20
June
2006, in terms of which the applicant purchased Holdings 380,
381 and 387 Withok Estates Agricultural Holdings from the first and

second respondents respectively, is declared to be of full force and
effect;
2 The applicant is ordered to furnish the first and
second respondents with a bank guarantee or such other irrevocable
guarantee
acceptable to the first and second respondents for the
balance of the purchase price within 30 (thirty) days of the granting
of
this order or
alternatively
to pay such balance to the first and second respondents' conveyancers
as identified in the agreement within 30 (thirty) days of
the
granting of this order, such amount to
be held in trust by the said conveyancers pending
transfer of the properties as provided for in paragraph 3 below;
3 The first and second respondents are ordered, through
their conveyancers as appointed in the agreement, to effect transfer
of
the properties to the applicant upon receipt of payment from the
applicant of all costs and amounts referred to in clauses 9, 10
and
12 of the agreement and the rendering of a guarantee or
alternatively
payment as referred to in paragraph 2 hereinabove;
4 The applicant is ordered to pay interest
a
tempore morae
to the first and second
respondents on the amount of R3 550 010,00 at a rate of 15,5%
calculated from 20 June 2006 to the date
of payment and to pay any
collection charges on the amounts stipulated herein and in paragraphs
2 and 3 above duly levied by the
first and second respondents'
conveyancers in accordance with the applicable guidelines and rules;
5 The applicant is ordered to pay the costs of this
counter application on a scale as between attorney and client.'
______________________________________________________________
JUDGMENT
SCOTT JA
(Lewis JA and
Griesel AJA concurring):
[1] The first and second appellants are the registered
owners of certain immovable property situated in Gauteng ('the
Withoek properties').
The third appellant is Aucor Sandton (Pty) Ltd,
which carries on business as auctioneers in Johannesburg. On 13 June
2006 the Withoek
properties were put up for sale at a public auction
held by Aucor. The auction was attended by Dr Mohamed Adam who
represented
the respondent. His bid for the properties, being the
highest, was accepted by Aucor. At the conclusion of the auction,
Adam signed
the 'Agreement and Conditions of Sale' to which the
auction was subject, as did Mr Paul Winterstein on behalf of Aucor. I
shall
refer to this document as 'the conditions of sale', as the
parties have done, although strictly speaking the provisions for the

most part constitute terms and not conditions.
[2] Clause 1 reads as follows:
'The Properties shall be
provisionally sold to the highest bidder subject to confirmation of
the sale by the Seller within seven
(7) days and the highest bidder
shall be bound by his bid for seven (7) days from date of signature
of these conditions by the
Purchaser.'
On the morning of 20 June 2006 (being a date within
seven days of the date of the respondent's signature) Mr Marthinus
van Rensburg,
acting for and on behalf of the first and second
appellants (to whom I shall refer as 'the sellers') completed the
latter's details
and confirmed the sale in writing by adding his
signature, as depicted on the final page of the conditions of sale.
It is common
cause that the confirmation of the sale was not
communicated to the respondent within the time contemplated in clause
1. It appears
that the respondent did not receive notice of the
confirmation until some time early in July 2006.
[3] The respondent subsequently applied in the High
Court, Pretoria, for an order declaring the agreement to be of no
force and
effect and for the repayment of the deposit of R454 290
which it had paid to Aucor, together with interest and costs. The
sellers
and Aucor – the latter had been cited as the third
respondent – opposed the application and contended that
notwithstanding
the failure to communicate the confirmation of the
sale to the respondent within the seven-day period, the agreement
nonetheless
became of full force and effect on 20 June 2006 when it
was confirmed by Van Rensburg. In addition, the sellers – but not
Aucor
– brought a counter application for an order declaring the
agreement to be of full force and effect and for an order directing

the respondent to pay the balance of the purchase price and to take
various steps to enable transfer to be given. The matter came
before
Rabie J who upheld the respondent's application and dismissed the
counter application, with costs. The appeal is with the
leave of the
court a quo.
[4] It was common cause between the parties in this
court, as it was in the court below, that the only issue in dispute
was whether
the 'confirmation' of the sale had to be communicated to
the respondent within the seven-day period.
[5] I have previously quoted clause 1 of the conditions
of sale. It is necessary to refer to certain other provisions. Clause
11
requires the purchaser to pay a deposit and provides further that:
'the Purchaser shall within
thirty days after confirmation of these conditions by the Seller
furnish the Seller with a bank guarantee
. . . .'
and that:
'In the event of the sale not
being confirmed by the Seller, the amount paid by the Purchaser will
be refunded . . . .'
Clause 12 renders the purchaser liable for the
auctioneer's commission and affords the auctioneer:
'the right, on confirmation, to
deduct such commission (plus VAT) and costs from the deposit paid in
terms hereof . . . .'
Clause 16 reads:
'In the event of the Seller
declining to sign these conditions of sale, he/they shall not be
called upon to furnish reasons therefor.'
Clause 20 reads:
'The highest bidder shall,
immediately after the sale, sign these conditions and if the
Purchaser purchases on behalf of a principal,
he shall divulge the
name of such principal upon signature hereof at the foot of this
agreement. The Seller however, shall sign
the conditions only upon
confirmation of the sale.'
[6] It was contended on behalf of the sellers and
Aucor, both in this court and the court below, that the
conditions of sale, signed by the respondent and Aucor at the time of
the
auction, constituted an agreement of sale subject to a suspensive
condition, being the confirmation of the sale by the sellers,
and
that the condition was fulfilled immediately upon the confirmation
and without the need for it to be communicated to the respondent.
The
contention was rejected by Rabie J who held that no agreement of sale
was concluded at the time of the auction and that the
only
consequence of the agreement concluded at that stage was to bind the
respondent to its bid for a period of seven days. The
learned judge
held that the reference in the conditions of sale to the
'confirmation' of the sale accordingly had to be construed
as a
reference to the acceptance of an offer. The judge proceeded to
examine the provisions of the conditions of sale (which he
construed
as being an offer) to determine whether it expressly or impliedly
indicated a mode of acceptance other than that required
by common
law, namely that it be communicated to the offeror. He found that
there was insufficient to indicate that the common
law rule was not
to apply and, as the sellers' acceptance had not been communicated to
the respondent within the seven-day period,
the respondent had to
succeed and the counter application be dismissed.
[7] The document is poorly drafted. It is couched in
language suggestive of a sale subject to a suspensive condition.
Thus, clause
1 speaks of the properties being 'provisionally' sold
'subject to confirmation by the seller'. There are numerous other
references
to the sellers being required to 'confirm' the sale. But
as pointed out by this court in
Benlou
Properties (Pty) Ltd v Vector Graphics (Pty) Ltd
[1992] ZASCA 158
;
1993 (1) SA 179
(A) at 186F-J a distinction is drawn in our law
between a pure and a mixed potestative condition. The former is
invalid because
its fulfilment depends entirely upon the unfettered
will of the promissor. A typical example, and the one given in the
Benlou
case, is: 'I
will pay you R500 if I wish to do so'. In the present case, the
conditions of sale reserved to the sellers an unlimited
choice
whether to sell or not. It gave rise to no obligation on their part
whatsoever and accordingly no agreement of sale came
into existence
at the time of the auction.
[8] I interpose that by reason of the provisions of
s 3
of the
Alienation of Land Act 68 of 1981
the sale of the properties
in the present case was not required to be in writing and signed by
the parties. The mere fact that
the sellers were to sign at some
later date would not on that account have precluded a contract of
sale from coming into existence.
[9] In terms of clause 1 of the conditions of sale the
respondent bound itself to keep its bid open for a period of seven
days.
To that limited extent a binding contract came into existence.
The true nature of that contract was an option granted by the
respondent
to the sellers to sell the properties on the terms and
conditions set out in the document. I accordingly agree with the
court a
quo that on a proper construction the reference in the
conditions of sale to the confirmation of the sale had to be
construed as
a reference to the acceptance of an offer.
[10] I turn now to the question whether the offer was
accepted within the seven-day period. It is a trite principle of the
common
law that, unless the contrary is established, a contract comes
into being when the acceptance of the offer is brought to the notice

of the offeror. It is also trite that an offeror may indicate,
whether expressly or impliedly, the mode of acceptance by which
a
vinculum juris
will be
created. If there is doubt it will be presumed that the contract will
be completed only when the acceptance of the offer
is communicated to
the offeror. See
Driftwood Properties (Pty)
Ltd v McLean
1971 (3) SA 591
(A) at 597C-G.
This was a case in which the court was similarly concerned with an
offer that was open for a limited period. The
contract, which took
the form of an offer to purchase, contained a clause that read:
'7 That this offer is open and
binding upon both parties until signature by both parties on or
before the 17
th
May 1969, failing which it shall lapse if only signed by one party.'
The unsigned offer was presented to the seller who
signed it and thus became the offeror. The court concluded that
although clause
7 was badly phrased it prescribed the manner in which
the contract was to be concluded. It was accordingly enough that the
purchaser
had signed before 17 May 1969 and there was no need for
that fact to be communicated to the seller.
[11] In each case it will be necessary to consider the
terms of the offer to determine the mode of acceptance required.
Where, however,
the offer takes the form of a written contract signed
by the offeror, the inference will more readily arise in the absence
of any
indication to the contrary that the mode of acceptance
required is no more than the offeree's signature. This is
particularly so
where provision is made in the written contract for
the offeree to specify the date on which he or she signs the
contract. In
Reid v Jeffreys Bay Property
Holdings (Pty) Ltd
1976 (3) SA 134
(C) at
137D-G E M Grosskopf AJ (as he then was) said the following (my
translation):
'However, even when writing is
not a formal requirement, written contracts are an everyday
occurrence in the commercial world. The
object of reducing a contract
to writing (whether voluntarily or required by statute) is normally
to achieve certainty and to facilitate
proof (cf, eg,
Woods
v Walters
,
1921 AD
303
,
Van Wyk v
Rottcher's Saw Mills (Pty) Ltd
1948 (1) SA 983
(A)). It is presumably for the same reason that the
date and place of signature is normally specified in written
contracts. The
signing of a written contract is the usual manner in
which parties indicate their agreement to its terms and certainty as
to the
place and date of the conclusion of the contract can be
equally as important for the parties to the contract as certainty as
to
its content.
Consequently it is inherently
improbable that any of the parties to such a contract would intend
that the time and place of the
conclusion of the contract would be
determined not from the document itself but by way of evidence
aliunde
.'
I readily endorse the views expressed by the learned
judge which accord with common sense and commercial practicalities.
Indeed,
if the position were otherwise, the consequence would be to
defeat the very object of reducing the contract to writing. Quite
apart
from certainty as to the terms of the contract, that object in
a case such as the present would be to avoid disputes as to the date

upon which the offer was accepted.
[12] I return to the facts of the present case. When
Adam signed the conditions of sale, the final page of that document
(which
had not yet been completed and signed by the sellers) would
have read:
'I/we
___________________________________________________________________
in my/our capacity as the
Seller:
HEREBY CONFIRM THIS SALE ON
THE CONDITIONS AS HEREIN SET OUT
DATED AT
____________________________
ON THIS
______________
DAY OF
_________________
2006
AS WITNESSES:
1.
______________________
2.
______________________
___________________
SELLER
SELLERS TELEPHONE NUMBER:
_______________________________
SELLERS FAX NUMBER
______________________________________
'
Once completed and signed by the sellers, the document
would have served as a recordal of the date and place of the
'confirmation'.
This to my mind constitutes the clearest indication
that the mode of acceptance was to be the signature of the sellers.
[13] Some reliance was placed on the second sentence in
clause 20 (quoted in para 5 above) in support of a contrary
construction.
It reads:
'The Seller, however, shall sign
the conditions only upon confirmation of the sale.'
Commenting on the clause, Rabie J said:
'In my view, the proper
interpretation of this last sentence of the clause is that it allows
for confirmation of the sale in another
manner than by signing the
agreement. In other words that the seller can confirm the sale but
once he has done that, he must sign
the agreement.'
Based on this construction of clause 20 the learned
judge reasoned that the sellers' signature could not be equated with
the acceptance
of the offer; that the agreement was silent on the
manner in which the sellers were to accept the offer and accordingly
the ordinary
common law rule that requires the offeror to be notified
of the acceptance had to be applied.
[14] With respect to the judge, I think he reads into
the clause what is not there. The second sentence in clause 20 must
be read
in context. The first sentence provides for when the bidder
is to sign the conditions of sale, namely 'immediately after the
sale'.
The second sentence provides for when the seller is to sign.
It says in effect that he will sign only when he confirms the sale

(ie accepts the offer), not before. The implication is clear: the
sale will be confirmed when he signs. Anyone reading the contract

would see that it was 'confirmed' on 20 June 2006 and that is how the
parties would have known the contract would be understood.
It is also
of some significance that clause 16 deals with the consequences of
the seller 'declining to sign these conditions'.
The implication is
that failing to sign is the equivalent of failing to confirm.
[15] It was not in dispute that Van Rensburg signed the
conditions of sale on the morning of 20 June 2006, ie within the
seven-day
period referred to in clause 1. It follows that in my view
a valid sale came into existence on that date and that the appeal
must
succeed.
[16] The following order is made:
[A] The appeal is upheld. The respondent is to pay the
costs of appeal of the first and second appellants and those of the
third
appellant.
[B] The order of the court a quo is set aside and the
following substituted in its place:
'(a) The application is dismissed with costs.
(b) The counter application is upheld and the
following order is made:
1 The agreement and conditions of sale, signed by the
applicant on 13 June 2006 and the first and second respondents on 20
June
2006, in terms of which the applicant purchased Holdings 380,
381 and 387 Withok Estates Agricultural Holdings from the first and

second respondents respectively, is declared to be of full force and
effect;
2 The applicant is ordered to furnish the first and
second respondents
with a bank guarantee or such other irrevocable
guarantee acceptable to the first and second respondents for the
balance of the
purchase price within 30 (thirty) days of the granting
of this order or
alternatively
to pay such balance to the first and second respondents' conveyancers
as identified in the agreement within 30 (thirty) days of
the
granting of this order, such amount to be held in trust by the said
conveyancers pending transfer of the properties as provided
for in
paragraph 3 below;
3 The first and second respondents are ordered, through
their conveyancers as appointed in the agreement, to effect transfer
of
the properties to the applicant upon receipt of payment from the
applicant of all costs and amounts referred to in clauses 9, 10
and
12 of the agreement and the rendering of a guarantee or
alternatively
payment as referred to in paragraph 2 hereinabove;
4 The applicant be ordered to pay interest
a
tempore morae
to the first and second
respondents on the amount of R3 550 010,00 at a rate of 15,5%
calculated from 20 June 2006 to the date
of payment and to pay any
collection charges on the amounts stipulated herein and in paragraphs
2 and 3 above duly levied by the
first and second respondents'
conveyancers in accordance with the applicable guidelines and rules;
5 The applicant be ordered to pay the costs of this
counter application on a scale as between attorney and client.'
_________
D G SCOTT
JUDGE OF APPEAL
Appearances:
For First and Second Appellant:
JC
Uys
For Third Appellant:
KW
Lüderitz
Instructed by:
For 1
st
and 2
nd
Appellant:
Van Rensburg Schoon & Cronjé
Inc, Pretoria
Naudes, Bloemfontein
For 3
rd
Appellant:
Cyril Ziman Attorneys
c/o Jacobson & Levy, Pretoria
E G Cooper & Sons Inc, Bloemfontein
For Respondent:
F H
Terblanche SC
H R Fourie
Instructed by:
Solomon
Nicolson Attorneys, Pretoria
Hill McHardy & Herbst Inc,
Bloemfontein