About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2017
>>
[2017] ZASCA 185
|
|
Cradle City (Pty) Ltd v Lindley Farm 528 (Pty) Ltd (1212/2016) [2017] ZASCA 185; 2018 (3) SA 65 (SCA) (6 December 2017)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case No: 1212/2016
In the matter between:
CRADLE
CITY (PTY) LTD
APPELLANT
and
LINDLEY
FARM 528 (PTY) LTD
RESPONDENT
Neutral
citation:
Cradle
City v Lindley Farm
(1212/2016)
[2017] ZASCA 185
(06 December 2017)
Coram:
Navsa
ADP and Tshiqi and Petse JJA and Tsoka and Mbatha AJJA
Heard:
06
November 2017
Delivered:
06
December 2017
Summary:
Interpretation
– Sale Agreement – Indemnity and Undertaking –
respondent to provide vacant occupation –
reciprocity principle
applicable – the obligations interlinked – remedy –
judgment suspended until vacant occupation
is given –
counterclaim – absolution from the instance.
ORDER
On
appeal from:
Gauteng
Division of the High Court, Pretoria (Strijdom AJ sitting as a court
of first instance):
1.
The
appeal is upheld to the limited extent reflected in the substituted
order that follows:
‘
(a)
The defendant is ordered to pay in respect of claim 3 an amount of
R3 767 158 less an amount of R1 159 095,
together
with interest thereon at 15.5% per annum a
tempora
morae
(b)
Judgment against the appellant in respect of claims 1 and 2, together
with an amount of R1 159 095, is suspended until
such
period as the unlawful occupiers are evicted from the property’
2.
The
appeal in respect of the counterclaim is upheld.
2.1
The
order of the court below is substituted as follows:
‘
(a)
Absolution from the instance is granted.’
3.
In
respect of costs pertaining to both the claim and the counterclaim,
each party is ordered to pay its own costs.
JUDGMENT
Tshiqi
JA (Navsa ADP and Petse JA and Tsoka and Mbatha AJJA concurring):
[1]
The issues
that arise in this appeal concern a written sale agreement concluded
on 23 March 2009 between the respondent (the plaintiff
in the high
court) Lindley Farm 528 (Pty) Ltd, and the appellant (the defendant
in the high court) Cradle City (Pty) Ltd, and encompasses
a
subsequent Indemnity and Undertaking, signed by the parties on 7 May
2009. In terms of the sale agreement Lindley Farm sold the
immovable
property, described as Remaining Extent of Portion 13 of the farm
Lindley 528, measuring 90,2408 hectares and held under
deed of
transfer T3914/1990 (the property) to Cradle City for an amount of
R112 million, excluding VAT.
[2]
The
relevant clauses of the sale agreement are the following:
‘
2.
Purchase price
The
purchase price of the Property is an amount of R112 000 000, 00 (One
Hundred and Twelve Million Rand) excluding VAT,
2.1
It is recorded that, at date hereof, the Purchaser has paid a
non-refundable amount of R19 000 000, 00 (Nineteen Million Rand)
excluding VAT, as a deposit to the Seller in respect of the purchase
price, an amount of R3 000 000, 00 (Three Million Rand) as
a
non-refundable penalty agreed by the parties and agreed interest of
R2 325 000, 00.
2.2
The balance of the purchase price, in an amount of R93 000 000, 00
(Ninety Three Million Rand) excluding VAT is payable as follows:
2.2.1
R43 000 000, 00 on registration of transfer of the property into the
name of the Purchaser:
The
Purchaser shall deliver an irrevocable guarantee, acceptable to the
Seller’s conveyancer, for an amount of R51 680 000,
00 (Fifty
one million six hundred and eighty thousand Rand) (being R43 000 000,
00 plus R8 680 000, 00 VAT) to the conveyancer
before or on
27/03/2009.
The
parties shall procure that transfer of the property be effected into
the name of the Purchaser as soon as possible after signing
hereof by
both parties. All outstanding documents to give effect to the
aforegoing shall be submitted to the conveyancer before
or on
27/03/2009.
2.2.2
R50 000 000, 00 (Fifty Million Rand), plus VAT thereon, plus arrear
interest in an amount of R7 267 175, 00 (as at 31/03/2009)
plus
further interest as set out in 2.2.3 is payable not later than 30
(thirty) months after registration of transfer of the property
into
the name of the Purchaser.
Should,
at expiry of the aforementioned 30 months, special economic/financial
conditions exist and not sufficient sales in the proposed
township
having been realised to satisfy the Nedbank bond and to pay the
balance [of the] purchase price the Purchaser may request
the Seller,
not later than 60 days before expiry of the said 30 months, for an
extension of a further 6 months for payment of the
balance purchase
price.
In
the event of the aforegoing extension be[ing] requested the
provisions of 2.2.5 below will come into operation.
2.2.3
The balance [of the purchase] price and arrear interest – from
time to time – shall attract interest at prime
calculated
monthly in arrear[s], compound, and payable together with the amount
as set out in 2.2.2 above.
2.2.4
All monies received shall, firstly, be applied towards interest due
and thereafter towards [the] balance purchase price.
It
is agreed that the initial Nedbank loan amount will not exceed R170
000 000, 00.
It
is recorded that, after payment of the Nedbank loan all payments
received in respect of sales, net of commission, VAT and cost
of
sales even before the date referred to an 2.2.2 above, shall be paid
to the Seller.
2.2.5
Should payment as contemplated in 2.2.2 above – i.e. after 30
(thirty) months – not be made on due date:
2.2.5.1
A penalty of 20% of the amount then outstanding, shall become due and
payable by the Purchaser to the Seller.
2.2.5.2 The Seller shall have a right
to register a second bond on the Cradle City properties in favour of
the Seller as additional
security, the costs of such registration to
be for the account of the Purchaser.
…
.
4. Possession and risk
Possession
shall be given by the Seller to the Purchaser on the date of
transfer, together with vacant occupation, from which date
the
Purchaser shall be entitled to all benefits from and be liable to all
risks of ownership in respect of the Property including
liability for
rates and taxes and any other charges of levies on the Property from
such date.
[3]
When the
sale agreement was concluded, it was known to both parties that there
were unlawful occupiers on the property, but when
it transpired,
shortly before transfer that the unlawful occupiers had not yet been
evicted, Mr Pansegrouw, a director of Lindley
Farm, in what seems to
have been an attempt to appease Cradle City, wrote a letter dated 4
May 2009 to them stating:
‘
The
company will fully comply with the Provisions of clause 4 as set out
in the Agreement of Sale dated 23/03/2009.
Should
there be any unlawful occupiers present on the property at the date
of registration of the Transfer of the Property, we undertake
to
remove any such occupiers at our cost within a reasonable time but
not later than 28/02/2010, [the] said undertaking will only
apply to
the number of unlawful occupiers that might be present on the
Property at the time as stated above.
We
confirm that Lindley Farm 528 (Pty) Ltd will not be held responsible
for the removal of any additional unlawful occupiers which
might
occupy the said Property after the date of registration of the
transfer.’
[4]
The
property was transferred from Lindley Farm to Cradle City on 7 May
2009, but on this date, seemingly in an effort to address
concerns
pertaining to the presence of the unlawful occupiers on the property,
the parties signed an Indemnity and Undertaking
which reads as
follows:
‘
1.
We, the undersigned,
LINDLEY FARM 528 (PROPRIETARY) LIMITED (“Lindley Park 528”)
hereby –
1.1
agree and undertake in favour
of CRADLE CITY (PROPRIETARY) LIMITED (“Cradle City”), by
no later than 31 August 2009
at our cost, to take all such steps and
to do and procure the doing of all that is requisite in order to
lawfully evict all squatters
including but not limited to all on the
list attached hereto marked as Appendix 1, occupying the Remaining
Extent of Portion 13
of the Farm Lindley No. 528, Registration JQ,
the Province of Gauteng, measuring 90. 2408 (ninety point two four
zero eight) hectares
(the “Land”) as at the date upon
which the Land is transferred into the name of Cradle City in the
relevant Deeds Office
(the “Squatters”)
1.2
indemnity and hold Cradle City
harmless against:-
1.2.1
any and all claims, losses,
damages, actions; liabilities, expenses, including, all legal fees
and expenses on an attorney and own
client basis (collectively, the
“Claim/s”) which may be made against Cradle City-
1.2.1.1
as a result of a breach of any
or all of our undertakings referred to in this indemnity;
1.2.1.2
arising from or ancillary to or
connected with the occupation of the Squatters on the Land and/or the
eviction or removal of the
Squatters from the Land;
1.3
agree and undertake in favour
of Cradle City to make payment under this indemnity as soon as Cradle
City becomes obliged to make
any payment in respect of any of the
Claim/s in an amount equal to the amount paid by Cradle City to
settle the Claim/s.
2.
We, the undersigned, CRADLE CITY (PROPRIETARY) LIMITED hereby-
2.1
agree and undertake to sign all documents and do what is reasonably
necessary to enable Lindley Park
528 to perform its obligations set
out in 1.1’.
[5]
The
contemplated eviction of the unlawful occupiers was not achieved by
31 August 2009 and it is their presence on the property
and the
refusal by Cradle City to pay the balance of the purchase price that
has led to the present dispute. Lindley Farm instituted
action
against Cradle City. Claim 1 consisted of two parts. In the first
part it claimed payment of the balance of the purchase
price plus
VAT, and in the second part of Claim 1 it claimed payment of the
penalty of 20% which would be due in terms of clause
2.2.5.1 of the
agreement. In Claim 2 it claimed payment of the clearance costs it
alleged it had paid on Cradle City’s behalf.
In this regard it
relied on Clause 3 of the sale agreement which stipulates that any
amounts advanced by it to pay for transfer
and clearance costs would
be paid by Cradle City to it within 90 days from the date of
registration of transfer. Claim 3 concerned
an alleged entitlement to
monies payable by the Gauteng Department of Roads and Transport, in
respect of expropriation of a portion
of the property. It alleged
that the parties had concluded an oral agreement which was thereafter
confirmed via email on 2 March
2010 in terms of which Cradle City
agreed to pay Lindley Farm an amount of R3 767 158, which
represented a partial compensation
which the Department paid for the
expropriation of the portion of the property.
[1]
[6]
After
Cradle City entered an appearance to defend, Lindley Farm launched an
application for summary judgment, placing reliance on
the terms of
the sale agreement. Cradle City opposed the application for summary
judgment and Lindley Farm filed a replication.
After argument, leave
to defend was granted to Cradle City. In its plea, Cradle City
referred to the Indemnity and Undertaking
and alleged that this
formed an essential part of the sale agreement and should therefore
be read therewith.
[7]
Regarding
the first part of Claim 1, Cradle City pleaded that Lindley Farm had
not complied with the terms of Clause 4 of the sale
agreement and the
Indemnity and Undertaking in that it failed to provide it with vacant
occupation. In this regard it pleaded that
Lindley Farm was not
entitled to the balance of the purchase price and had issued summons
prematurely. Concerning the second part
of Claim 1, it disputed
liability for the penalty, and said that upon a proper interpretation
of the sale agreement, the penalty
provision contained in 2.2.5.1
does not apply.
[8]
Regarding
Claim 2, it denied that Lindley Farm was entitled to the relief
claimed. And with regard to Claim 3, Cradle City pleaded
that the
obligation to refund Lindley Farm arose only if the former was in a
position to do so which it was not, because it suffered
significant
damages as a result of the breach by Lindley Farm of the terms of the
sale agreement.
[9]
Cradle City
referred to a number of repeated payments of an amount of R77 273
each of which were received by Lindley Farm,
totalling R1 159 095
which it said concerned another sale agreement concluded between
Lindley Farm, Cradle City and Lanseria
Warehousing (Pty) Ltd. It said
that Lindley Farm’s claim for the remainder of the purchase
price could only have been due
30 months after transfer. It then
pleaded that any amount it may have owed to Lindley Farm for interest
was extinguished by set-off
and particularly by the payment of the
numerous instalments of R77 273, which combined, amounted to
R1 159 095.
[10]
Cradle City
also filed a counterclaim in terms of which it claimed damages
against Lindley Farm in an amount of R300 000 000.
In this
regard it alleged that it had already paid Lindley Farm an amount of
R43 000 000 as at the date of transfer, but that as
a result of the
failure on the part of the latter to provide vacant occupation and as
a result of fraudulent misrepresentation
made by Lindley Farm to the
effect that it would procure an ejectment of the occupiers from the
property, it had suffered significant
damages. It alleged that if
vacant occupation had been provided, the property would have been
valued at R300 000 000,
but that the consequence of the
occupation of the property by the unlawful occupiers was that it was
valueless.
[11]
In its
adjusted replication Lindley Farm alleged that the Indemnity and
Undertaking had the effect of varying Clause 4 of the sale
agreement
and that instead of having an obligation to give vacant occupation,
the only obligation was that it had to have taken
all the steps and
done and procured all that was required in order to lawfully evict
all squatters from the property by no later
than 31 August 2009,
which duty it alleged it had complied with. In the alternative,
Lindley Farm alleged that should the court
find that Cradle City was
entitled to withhold the payment due on the 27 November 2011 until
unlawful occupiers had been evicted,
then the reasonable cost to
achieve the eviction of the unlawful occupiers and vacant possession
of the property would not exceed
an amount of R6 000 000. It
then pleaded that the court should find that Cradle City was entitled
to be paid a reduced contract
price, to be determined at the
discretion of the court, but not exceeding R6 000 000.
Subsequent to the hearing of the appeal,
Lindley Farm filed
supplementary papers and increased the amount of R6 000 000
to an amount of R10 000 000
instead. I will deal with these
two tenders in further detail hereinafter.
[12]
Three
witnesses testified at the trial: two property valuators, namely Mr
Grant Fraser, for Lindley Farm and, Mr Roger Long for
Cradle City and
one of the directors of Lindley Farm, Mr Jacobus Pansegrouw. The two
valuators had prepared a joint minute in which
they stated that there
were approximately 40 unlawful occupiers who occupied approximately
20 structures. However, during Mr Long
and Mr Pansegrouw’s
testimonies, it transpired that there were probably 44 or more
structures. Mr Long said that he and Mr
Fraser were informed by the
Bank’s representatives that the Bank would not approve property
finance whilst there were unlawful
occupiers on the property.
[13]
During
cross examination, Mr Pansegrouw conceded that the unlawful occupiers
were difficult and unwilling to co-operate. He also
agreed that in
his affidavit in support of an application for their eviction he had
stated that the whole Cradle City development
was in suspense as a
result of the unlawful occupation. It thus transpired that the
original calculation that the cost of the negative
influence of the
presence of the unlawful occupiers in the property was approximately
R6 000 000 was unreliable. First, the valuators
were unaware of the
presence of another group and second, they were not aware that the
unlawful occupiers were not willing to move.
Both these
considerations were not factored in the initial calculations.
[14]
That brings
me to the question whether Cradle City was entitled to vacant
occupation or not. At the commencement of the trial in
the high court
Lindley Farm conceded that clause 4 of the sale agreement meant that
Cradle City would be given vacant occupation.
The question for
determination is whether the Indemnity and Undertaking should be
interpreted to mean that Lindley Farm was expected
to provide vacant
occupation as foreshadowed in clause 4 of the sale agreement or
whether, as contended by Lindley Farm, all that
was expected from it
was to show that it had taken the necessary steps towards that goal.
If the contention by Lindley Farm is
accepted, this would lead to the
inescapable conclusion that in signing the Indemnity and Undertaking
agreement Cradle City abandoned
its right to vacant occupation which
it was entitled to in terms of the sale agreement, and settled for a
lesser right which would
be satisfied if it was only shown that
Cradle City had taken the legal steps aimed at achieving the
eviction.
[15]
Cradle City
on the other hand, submitted that the Indemnity and Undertaking did
not release Lindley Farm from its obligation to
provide vacant
occupation, but only postponed that obligation from the date of
transfer, to the 31 August 2009. Regarding the balance
of the
purchase price, Cradle City submitted that the obligations of the
parties are reciprocal, and that for as long as it has
not been given
vacant occupation, there is no obligation on it to pay.
[16]
A proper
interpretation of the Indemnity and Undertaking requires a
consideration of its language, context, purpose and background.
(See
Ekurhuleni
Metropolitan Municipality v Germiston Municipal Retirement Fund
2010 (2) SA 498
(SCA) at para 3;
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012 (4) SA 593
(SCA) at para 18)
[17]
The terms
of the Indemnity and Undertaking must be considered in the following
context: the letter dated 4 May 2009 was written
some 3 days before
the date of registration, when it transpired that the unlawful
occupiers still remained on the property. In
the letter Lindley Farm
said that it would ‘fully comply with the provisions of Clause
4, as set out in the agreement’
and that ‘should there be
any unlawful occupiers present on the property at the date of
registration of the Transfer of the
Property, [it] under[took] to
remove any such occupiers at [its] cost within a reasonable time but
not later than 28/02/2010. It
is clear therefore that the purpose of
the letter was to assure Cradle City that Lindley Farm would comply
with the terms of the
sale agreement, albeit on a different date. On
7 May 2009, which was the date on which registration was to happen,
the Indemnity
and Undertaking was signed. This, too, although
different in construction from the letter, is consonant with the
objective, ie
to provide vacant occupation.
[18]
There is no
logical reason why a party who realised, at the date of transfer that
a condition that gave it a stronger right had
not been complied with,
would suddenly enter into an agreement that weakens that right,
especially if the weakened right compromises
the very purpose for
which it entered into the agreement. The submission by Lindley Farm
that for as long as steps were taken to
obtain eviction, it did not
matter whether such steps were in fact eventually successful or not
lacks merit.
[19]
A finding
that vacant occupation was not envisaged, would mean that Cradle City
was prepared to spend substantial amounts of money
on property that
would not be suitable for the purpose for which it was bought, and
that included ineluctably obtaining finance
to that end, which would
not be possible with the obstruction presented by the unlawful
occupiers. This does not make sense. It
follows that the purpose of
the Indemnity and Undertaking was to assure Cradle City that it would
be given vacant occupation within
a reasonable period but not later
than 31 August 2009 to enable it to proceed with the contemplated
development
[20]
This then
brings me to the question whether the balance of the purchase price
is due and payable by Cradle City. Cradle City chose
not to exercise
its right to cancel the sale agreement but elected to hold Lindley
Farm to it. In these circumstances the answer
to whether the balance
of the purchase price is payable or not depends on whether the
reciprocity principle is applicable. The
principle of reciprocity
(
exceptio
non adimpleti contractus
)
recognises the fact that in many contracts, the common intention of
the parties, expressed or unexpressed, is that there should
be an
exchange of performances. Whether there is such an intention must
often be determined by an interpretation of the contract
(See Van der
Merwe et al
Contract:
General Pronciples 5
th
ed (2015)
at 335; and the references therein). In fact, there is a presumption
that interdependent promises are reciprocal unless there is
evidence
to the contrary (
Contract
General Principles
,
supra). The common intention is that neither should be entitled to
enforce the contract unless he/she has performed or is ready
to
perform his/her own obligations. (See RH Christie and G Bradfield
Christie’s
Law of Contract in South Africa
6
th
ed (2011) at 437;
Hauman
v Nortje
1914 AD 293
at 300;
Wolpert
v Steenkamp
1917 AD 493
at 499;
Nesci
v Meyer
1982
(3) SA 498
(A) at 513F).
[21]
The
principle also applies where the performance of the defendant must be
rendered in instalments and the plaintiff is subject to
a duty that
must be fulfilled before or on the date of the defendant’s
instalment. Reciprocal obligations may even arise
from separate
contracts (see
Motor
Racing Enterprises (Pty) Ltd (in Liquidation) v NPS (Electronics)
Ltd
1996 (4) SA 950
(A);
Contract,
General Principles
supra).
[22]
Where a
contractant does not properly perform in terms of an indivisible
obligation and the co-contractant upholds the contract,
the latter
may retain the inadequate performance or reject it and claim proper
performance. If the inadequate performance is rejected,
the
contractant who has committed mal-performance cannot claim
counter-performance unless he/she offers proper performance anew.
If,
however, the inadequate performance is retained, the question arises
whether the contractant who has performed defectively
or incompletely
may, in spite of his/her inadequate performance, claim
counter-performance from the defendant. (See
Contract,
General Principles
at
337)
[23]
If a
defendant does withhold his performance he/she will have to allow the
plaintiff the opportunity to complete defective performance
in so far
as proper performance still remains possible. The explanation for
this is that a defendant who upholds the contract and
relies on the
defence of reciprocity, in effect, demands proper performance and is
therefore only entitled to withhold performance
in so far as proper
performance is outstanding (see
BK
Tooling (Edms) Bpk v Scope Precision Engineering (Edms) Bpk
1979 (1) SA 391
(A) at 412). If the defective performance is
eventually properly completed by the plaintiff the defence of
reciprocity is exhausted
(see
Thompson
v Scholtz
1991 (1) SA 232
(SCA) at 242G).
[24]
A plaintiff
who is temporarily unable to perform may nevertheless be granted
judgment but will not be entitled to execute on it
without performing
or tendering performance. If he/she delays performance for an
unreasonable time the defendant, notwithstanding
the judgment against
him/her, may cancel the contract after duly placing the plaintiff
in
mora.
Subjective
impossibility to receive or make performance at most justifies the
other party in exercising an election to cancel the
contract. (See
McGlinchey
v De Kok
1985 (2) SA 550
(D);
Unibank
Savings and Loans Ltd (formerly Community Bank) v ABSA Bank Ltd
2000 (4) SA 191
(W) at 198B;
R
H Christie: The Law of contract in South Africa
at 440)
[25]
In the
present matter the sale agreement created bilateral obligations and
it was envisaged that the Plaintiff (Lindley Farm) would
perform
before the Defendant (Cradle City). The Plaintiff had to procure for
the Defendant vacant occupation by 31 August 2009,
whereas the
Defendant only had the obligation to pay the remainder of the
purchase price 30 months after date of transfer; the
30 month period
expired only in November 2011. The unlawful occupiers are still in
the property and it follows therefore that until
Lindley Farm has
given vacant occupation, it has not delivered to Cradle City the
property in the state the parties agreed upon.
This finding however
does not necessarily mean that a suitable remedy in the present
circumstances is to dismiss the application
for eviction until vacant
occupation has been given. The reality is that Cradle City has made
an election to retain the inadequate
performance and has not
terminated the contract.
For
that reason and as will be illustrated herein below, it is necessary
to explore the two alternative solutions proposed by Lindley
Farm.
[26]
In the
first alternative Lindley Farm has submitted that in the event the
court finds that Cradle City was entitled to withhold
the payment
until vacant occupation has been given, the court should reduce the
contract price with an amount not exceeding R6 000
000. Whilst
this has been found to be a workable solution in other matters, (see
Hauman v
Nortjie
1914
AD 293
;
Klopper
v Engelbrecht
1998 (4) SA 788
(W);
BK
Tooling (Edms) Bpk v Scope Precision Engineering (Edms) Bpk
1979 (1) SA 391
(A)) this option is not suitable in this matter
because Mr Fraser conceded that the basis on which he and Mr Long
calculated the
cost of the negative influence of the presence of the
unlawful occupiers in the property was incorrect. This renders the
estimate
of approximately R6 000 000 unreliable and it is not
possible in the circumstances to quantify the negative impact of
presence
of the unlawful occupiers on the property. As stated above,
Lindley Farm has now tendered an alternative amount of R10 000 000,
but the basis for the quantification of this amount is unclear and
cannot resolve the problem.
[27]
In the
further alternative Lindley Farm, in its heads of argument, asked
that it should nevertheless be given the judgment in its
favour, but
that it should be held not to be entitled to execute upon it without
performing or tendering performance. Cradle City
submits that this
option is not suitable in this matter because it is difficult to get
the unlawful occupiers off the property,
that there is no precedent
for granting this kind of a relief under circumstances such as these
and that it would render the defence
of
expectio
nugatory.
[28]
Whilst I
accept that the eviction of the unlawful occupiers has proven to be
more complicated than what the parties originally anticipated,
the
reality, as stated above, is that Cradle City has made an election to
persist with the agreement and did not terminate it.
However, it is
clear from the evidence that Lindley Farm is continuing with its
efforts to evict the unlawful occupiers in order
to present vacant
occupation to Cradle City. Neither party has accepted that this is
not achievable. If an order along the lines
proposed by Lindley Farms
is granted, there will be no prejudice on either party. This remedy
would provide Lindley Farm with an
opportunity to take all measures
possible in order to lawfully evict the unlawful occupiers within a
reasonable time in order to
make sure that the defective performance
is eventually properly completed. In that event it would be able to
execute the judgment
granted in its favour. In the event that it
fails to remedy the defective performance within a reasonable time,
then Cradle City
would have the option to terminate the contract and
claim any proven damages arising from any proven breach. If the
unlawful occupiers
are evicted, the defence of reciprocity would be
exhausted and Cradle City would be entitled to execute its judgment.
[29]
This then
brings me to Claim 3. It was not seriously disputed by Cradle City
that the defence of reciprocity was not available to
it in relation
to Claim 3. The amount was due in terms of a separate portion of the
land for which it received compensation from
the State. The proviso
that Cradle City had to pay it when it is in a position to do so
means that it had to pay it once the money
had been paid to it. This
amount is due and payable.
[30]
Regarding
the counterclaim, no evidence was led to show what the market value
of the property was at the date of the conclusion
of the sale
agreement nor its value now that it is occupied by the unlawful
occupiers. Cradle City thus failed to adduce sufficient
evidence to
prove its claim. An appropriate order should have been to grant
absolution from the instance. (See
Oliver’s
Transport v Divisional Council, Worcester
1950 (4) SA 537
(C)
[31]
Costs
In light of the
conclusion reached above, both in relation to the claim and the
suspension of the order, it would be just and equitable
to require
each party to pay its own costs. The same will apply in respect of
the costs of the court below.
[32]
I make the
following order:
1.
The appeal is upheld to the limited extent reflected in the
substituted order
that follows:
‘
(a)
The defendant is ordered to pay in respect of claim 3 an amount of R3
767 158 less an amount of R1 159 095, together with interest
thereon
at 15.5% per annum a
tempora
morae
(b)
Judgment against the appellant in respect of claims 1 and 2, together
with an amount of R1 159 095, is suspended until such
period as the
unlawful occupiers are evicted from the property’
2.
The appeal in respect of the counterclaim is upheld.
2.1
The order of the court below is substituted as follows:
‘
(a)
Absolution from the instance is granted.’
3.
In respect of costs pertaining to both the claim and the
counterclaim, each party
is ordered to pay its own costs.
___________________
Z L L Tshiqi
Judge
of Appeal
APPEARANCES
For
the Appellant:
M P Van der Merwe SC
Instructed
by:
Saunders Venter Van der Watt, Somerset West
Lovius
Block, Bloemfontein
For
the Respondent:
H B Marais SC with H P Van Nieuwenhuizen
Instructed
by:
Barnard’s Inc., Kempton Park
Honey
Attorneys, Bloemfontein
[1]
The email confirming the oral agreement records that the parties
agreed that Lindley Farms would be paid the full R4 372 413
even though the particulars of claim indicate R3 767 158