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[2016] ZANCHC 84
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Kapa Koni Investments CC v Abrinah 7804 (717/2016) [2016] ZANCHC 84 (14 October 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
NORTHERN
CAPE DIVISION, KIMBERLEY
Case
number: JA 78/10
Case No: 717/2016
Heard
on: 19/08/2016
Delivered
on: 14/10/2016
In
the matter between:
KAPA KONI
INVESTMENTS CC
APPLICANT
And
ABRINAH
7804
RESPONDENT
JUDGMENT
MAMOSEBO J
[1] The
applicant, Kapa Koni Investments CC, seeks a declarator that the
agreement concluded between it and Abrinah 7804 on 04 August
2015 in
terms of which the latter sold immovable property known as 44 De
Beers Street, Kimberley, is still valid and the purported
cancellation thereof by Abrinah 7804 on 07 March 2016 is wrongful.
There was no opposition to the condonation sought by Adv Cronje,
appearing for Kapa Koni, for the late filing of the heads of
argument.
[2]
The respondent raises two defences. First, it contends that the
suspensive condition set out in the agreement has not been met,
wherefore the agreement is
void
ab initio
. Clause
4 of the agreement stipulates:
(4)
This agreement is subject to the condition that the purchaser obtains
from a bank or other financial institution a loan for
not less than
R5 000 000.00 (Five Million Rand) in principle within 6 (six) months
of signing of this agreement, to be secured
by registration of a
mortgage bond over the property to be registered simultaneously with
transfer.
[3]
Alternatively, that the respondent has validly cancelled the
agreement as a result of the applicant’s failure to provide
the
guarantees requested by the respondent in terms of the agreement.
Clause 2 stipulates:
“
(2)
The purchase price is the sum of R5 000 000.00 (Five
Million Rand) and will be paid in cash and/or secured by a
written
guarantee from a bank or other financial
institution, payable free of exchange, against registration
of
transfer of the property into the name of the purchaser and which
guarantee shall be presented and/or cash shall be payable
by the
purchaser to the seller’s hereinafter appointed conveyancers
within 14 days from the date of being requested to do
so by the
conveyancers.”
[4] Clause 9 stipulates:
“
(9)
If the purchaser should fail within the 14 (fourteen) days of being
required to do so, to furnish the guarantee required in
terms of
paragraph 2 hereof or fail to complete the necessary documents for
purposes of the passage of transfer or fail to pay
the costs of
transfer or commit any other breach of the conditions of this
agreement, the seller shall be entitled forthwith, and
without
notice, to declare this sale cancelled, without prejudice to any
other rights which the seller may have in law.”
Historical Background
[5]
Mr Donald Solani, the deponent to the Founding Affidavit, is the sole
member of the applicant, Kapa Koni Investments CC, a Close
Corporation having its registered address at 2 Gerrit Schouten
Avenue, Royldene, Kimberley. Abrinah 7804 (Pty) Ltd is a company
with
limited liability situated at 80 Alsatian Road, Midrand, Gauteng
Province. Mr Mathipane Augustine Tsebane is a director of
the
respondent.
[6]
Mr Solani telephonically contacted Mr Tsebane on 05 February 2016
informing him that the Small Enterprise Finance Agency (SEFA)
has
approved the loan applied for by Kapa Koni in the amount of
R4 500 000.00 (Four Million Five Hundred Thousand Rand).
SEFA followed up by letter dated 09 February 2016 addressed to Mr
Solani confirming that funding was approved. There was therefore
a
shortfall of R500 000.00.
[7]
It is common cause between the parties that the security was not
obtained within the six months of the stipulation, that is,
by 03 or
04 February 2016. However, on 10 February 2016 and about six or seven
days after the applicant had failed to comply with
the suspensive
condition, Mr Solani met with Mr Tsebane at his (Mr Tsebane’s)
offices in Midrand where the agreement was
discussed. Mr Tsebane is
said to have insisted that Mr Solani make a further attempt to secure
the balance of the purchase price
in order to comply with the
agreement and that he (Mr Tsebane) will discuss the matter with his
wife. Mr Solani also alleged that
Mr Tsebane’s wife
telephonically contacted him on 12 February 2016 and confirmed her
husband’s arrangement.
[8]
Mr Tsebane confirmed the meeting in Midrand but commented as follows
in answer to the further averments made by the applicant:
“
24.2
In amplification of the aforesaid denial, I confirm that at the
meeting aforesaid I unequivocally and unambiguously informed
the
applicant’s representative that I required payment of the full
purchase price, and that I would not accept payment of
any amount
less than the full purchase price although the applicant’s
representative was attempting to persuade me to accept
a purchase
price of R4.5 million, being the amount which he had allegedly been
able to raise as loan finance at the time, on his
version.”
24.3
At the time I
was potentially contemplating agreeing to revive the void ab initio
agreement with the applicant, if he was able to
secure the full
purchase price within a few days, but this did not occur.”
Tsebane
further denied that his wife had a telephonic discussion with Mr
Solani. There is no confirmatory affidavit by his wife
to that
effect.
[9]
On 15 February 2016, five days after meeting with Mr Tsebane and
three days after speaking with his wife telephonically, Abrina
7804’s
attorneys wrote a letter to the applicant referring it to Clause 4 of
the agreement. The letter reads:
“
TRANSFER
OF ABRINAH 7804 PTY LTD REG NO. 2008/020089/07 TO KAPA KONI
INVESTMENTS CC REG NO. 2010/105717/23.
We
refer to the above matter and advise that we act herein on behalf of
our client Abrinah 7804 Pty Ltd.
We
herein refer to the Deed of Sale signed on the 4
th
August 2015 and refer to Clause No. 4. We note that the provisions of
this clause have not been complied with.
We
further refer you to Clause No.2 and No. 9 respectively.
Against
the above background, we now afford you a period of 14 days to comply
with Clause No 2 of the agreement, failure of which
shall result in
the agreement being automatically cancelled.”
(Own
emphasis)
[10]
It is clear from the aforementioned letter that the applicant was
afforded an extension of a period of 14 days to comply with
Clause 2
of the agreement which means that he had until 29 February 2016 to
comply with the agreement. It is impermissible for
Abrinah 7804 to
now argue that the contract had lapsed and it could not have extended
a lapsed contract. The 14 day period is calculated
from 15 February
2016. The letter is silent in as far as the contract being void ab
initio is concerned.
[11]
It is also significant to note that in a letter by Haarhoffs Inc
dated 16 February 2016 addressed to Mathipane Tsebane Attorneys
in
which Mr Hannes Rust, an attorney at Haarhoffs Inc, confirmed that
the amount of R4 500 000.00 of the purchase price
had been
approved by the Small Enterprise Finance Agency. A request was
made to Mr Tsebane to consider reducing the purchase
price or to
grant an extension for 28 business days to enable the applicant to
secure the difference. On 22 February 2016
Mr Tsebane responded
to the aforementioned request in one sentence that his client’s
instructions were not to vary the Deed
of Sale.
[12]
On 23 February 2016 Mr Fanie Engelbrecht, a Managing Director of Tau
Pele Construction (Pty) Ltd, addressed an email to Mr
Rust in the
following terms:
“
Mnr
Donald Solani, ‘n direkteur van Tau Pele, het my vanmôre
kom sien rakende ‘n lening van R500 000.00 +
R102 000.00
= R602 000.00 wat hy dringend wil aangaan by ons firma ten einde
sy Kapa Koni Investment se kooptransaksie
van ‘n eiendom in
Kimberley te finaliseer. Ons is bewus daarvan dat in terme van tyd
wat alreeds verloop het, hierdie aangeleentheid
baie dringend
afgehandel moet word.
Die
ander direkteure het alreeds toestemming aan my verleen om voort te
gaan om ‘n behoorlike ooreenkoms met Mnr Solani en
Partye in
plek te stel en op voorwaarde dat alle ooreenkomste stiptelik
onderteken word, sal ons die R602 000.00 aan Mnr Solani
en/of sy
entiteit leen.
Ek
deel u daarom meedat ons prokereur, Mnr Deon Rossouw van Honey
Prokereurs, Noordstad, Bloemfontein vanaf more aan hierdie en
ander
ooreenkomste tussen ons en Mnr Solani gaan werk. Sodra ons die nodige
handtekeninge van Mnr Solani asook ander aandeelhouers
in die firma
Asijiki gekry het rakende hierdie asook etlike ander uitstaande sake,
sal ons die lening aan Mnr Solani toestaan.
Hierdie
skrywe dien dan net om op hoogte te bring van die aandag wat daar
tans aan die saak gegee word.”
[13]
Two days prior to the cut-off date and on 26 February 2016 Honey
Attorneys addressed a letter to the Conveyancers, Haarhoffs
Inc, to
this effect:
“
TRANSFER
ERF 18627: ABRINAH 7804 (PTY) Ltd / KAPA KONI INVESTMENTS CC
The
above matter as well as the telephone conversation between writer
hereof and your Mr Hannes Rust today refers.
We
confirm that our office holds upon instruction of Kapa Koni
Investments CC an amount of R602 000-00 in trust.
We
hereby undertake to pay the amount of R500 000-00 to you on date
upon which the transfer of Erf 18627 from Abrinah 7804
(Pty) Ltd to
Kapa Koni Investments CC is lodged at Kimberley Deeds Registry.
The
amount of R102 000-00 is to provide for the transfer costs
herein.
Please
furnish us with an invoice for the transfer costs.
We
confirm that this amount will be paid to yourselves upon request to
pay such.
This
undertaking is non-transferrable and should be returned to our office
upon registration of the transfer referred to above.”
(Emphasis
added)
[14]
Pursuant to the letter from Honey Attorneys Mr Rust, from Haarhoffs
Attorneys, wrote an e-mail to the respondent’s attorneys
confirming the loan agreement between the applicant and Tau Pele
incorporating the outstanding balance. In that same email Haarhoffs
enquired from the respondent’s attorneys whether the respondent
was VAT registered to enable them to proceed with the necessary
documentation to effect transfer.
[15]
Clause 2 requires that the purchaser shall pay within 14 days of
being requested to do so by the conveyancers. It is common
cause that
Haarhoffs Attorneys as the defendant’s nominated conveyancers
had not requested the applicant to make such a payment.
At the stage
when Honey Attorneys wrote the letter to Haarhoffs, the entire R5
million rand and transfer costs were secured.
[16]
The respondent’s contention that this agreement cannot be
enforced is firstly, based on the date the agreement was entered
into, 04 February 2016, and the lapsing of the six months period
after the date of signature. In the alternative, the respondent
raised Clauses 2 and 9 to the effect that the applicant had failed to
raise the contracted amount within the specified timeframe
and
contends that it is accordingly entitled to the automatic
cancellation thereof.
[17]
It is trite that if a suspensive condition in a contract has not been
fulfilled by the date stipulated in the contract, then
the agreement
automatically falls away. However, in this instance, had the
respondent intended to enforce the contractual
provision strictly, it
would not have extended the period by 14 days as stated earlier.
That, in my view, constituted a waiver
or an extension of the period.
The respondent breathed new life into the corpse in writing. Coupled
with the fact that before the
cut-off period the entire required
amount including the transfer costs were secured and communicated
through to the respondent’s
attorneys. It cannot now be said
that the applicant has failed to comply with the stipulated
conditions. In any event, the respondent
cannot aprobate and
reprobate. Tindall JA in
Van
Schalkwyk v Griesel
1948 (1) SA 460
(A) at 473 enunciated the test as to whether a person
who has waived his accrued right to cancel or has elected after such
accrual
not to enforce a right as follows:
“
'Whether
the plaintiffs conduct disentitling him to claim recission is called
a waiver of his right or an election after repudiation
not to enforce
that right, or whether the correct terminoloy is that the plaintiff
'cannot both aprobate and reprobate, as was
said in Bowditch v Peel
and McGill
1921 AD 561
at 573, is not important. Whether a
plaintiff’s conduct must be held to so disentitle him is a
matter of inference depending
on the facts of the cas
e
and the nature of
the particular contract. The test is well expressed in Halsbury's
Laws of England 2nd ed Vol 23 ad paragraph 55
'The
acts and conduct relied upon as evincing the representee's affirmance
must be such as are more consistent, on a reasonable
view of them,
with that than with any other theory. It is not sufficient to point
to acts of a neutral character or acts which
are equally consistent
with a possible ultimate intention to disaffirm or with a mere
suspension of judgment."
See
also
Palmer v
Poulter
1983
(4) SA 11
(T).
[18]
Having regard to the circumstances surrounding the agreement from 10
February 2016 I am satisfied that the respondent had not
summarily
terminated the agreement. On its own version at the meeting with the
applicant “he potentially contemplated to
revive the contract”
but infact did so. There was no communication between the
respondent’s attorneys and Haarhoffs
Attorneys to stop them
from further pursuing the transfer of the property. The applicant
raised the required amount within the
extended period and equity
requires that the property be transferred to it.
[19]
On the issue of costs: There is no reason why the successful party
should not be awarded the costs.
It
is ordered:
1.
That the
agreement between the Kapa Koni Investments CC and Abrinah 7804 (Pty)
Ltd concluded on 04 August 2015 is still valid.
2.
That the
purported cancellation of the agreement by Abrinah 7804 (Pty) Ltd on
07 March 2016 was wrongful.
3.
That Abrinah
7804 (Pty) Ltd pays the costs of this application on the party and
party scale.
____________________________
MAMOSEBO
J
NORTHERN
CAPE DIVISION
For
the applicants:
Adv PR Cronje
Instructed
by:
Towell Groenewaldt Attorneys
For
the 2
nd
respondent:
Adv AG Van Tonder
Instructed
by:
Van de Wall Inc