About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2016
>>
[2016] ZAGPPHC 1040
|
|
CF & SP Investments CC v PPA Lightco CC and Another (94051/2015) [2016] ZAGPPHC 1040 (15 December 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION. PRETORIA)
15/12/2016
CASE
NO: 94061/2015
Reportable:
No
Of
interest to other judges: No
Revised.
In
the application between:
CF
& SP INVESTMENTS
CC
Applicant
and
PPA
LIGHTCO
CC
First
Respondent
ZENIA
SMITH
Second
Respondent
JUDGEMENT
Rautenbach
AJ
1.
The Applicant is seeking an order, that a valid agreement came into
being in respect of the sale of a certain property, Erf 448
Nelspruit
Ext 2 Township; Registration Division JU Province, Mpumalanga, an
order for specific performance, compelling transfer,
alternatively an
order interdicting First Respondent from dealing with the property,
pending finalization of an action to be instituted,
with punitive
costs.
2.
The First Respondent opposed this application alleging that the
agreement has lapsed on 21 September 2015 as a result of an alleged
non-fulfilment of the suspensive condition and secondly that no
agreement came into existence.
3.
An urgent application was brought by the Applicant on 7 December 2015
interdicting the First Respondent from proceeding with
the sale and
registration of the said property. The urgent application was heard
on 17 December 2015 and His Lordship Mr Justice
Fourie granted an
interim order interdicting the First Respondent from selling the
property or in any way dealing or encumbering
it pending the
finalisation of the main application, costs to be costs in the
application.
4.
On 19 March 2015 the Applicant and the First Respondent entered into
a written sale agreement ("the first agreement")
in which
the Applicant purchased the property in Nelspruit as described above
in paragraph 1.
5.
In terms of clause 2.2 of the first agreement, same was subject to a
suspensive condition for payment in cash or delivery of
an acceptable
guarantee by the Applicant on or before 1 June 2015.
6.
This was in line with conditions contained in agreements of this type
allowing for a period of time contained in a suspensive
condition to
enable a purchaser to obtain a loan for purposes of an acceptable
guarantee by or on a certain date in the future.
7.
It is common cause that the second agreement was signed on 21 July
2015, which is after 28 June 2015, the date already expired
for the
delivery of the guarantees as mentioned in clause 2.2. It is further
common cause that the grievance specifically provides
for:
“
Such date only to be
extended by the written agreement of First Respondent.”
8.
The First Respondent, amongst defences it rely upon, alleged that the
agreement is null and void from inception as the date for
the
provision of guarantees has already lapsed and that the agreement
itself is self-destructive.
9.
It is clear from the papers that the parties acted as if the date of
28 June 2015 for the provision of guarantees was not really
material,
as correspondence took place between the parties, as if the process
were continuing towards its logical conclusion, being
the
finalisation of the transaction through payments and registration of
the property.
10.
Turning back to clause 2.2 of the agreement it stipulates that:
"The purchase price shall be
secured by the payment in cash or
,
the delivery of an
acceptable guarantee or guarantees by the purchaser to the seller on
or before 28 June 2015, which date may only
be extended by written
agreement by the seller failing which this agreement will be of no
further force and effect.”
11.
The purchase price is dealt with in clause 2 of the agreement
"CF3",
page 36 of the paginated papers which reads as follows:
"2.1 The purchase price is the
sum of R2 100
000.00
(two million one hundred thousand Rand)
payable in cash against registration of transfer of the property into
the name of the purchaser.
2.2 The purchase price shall be
secured by the payment in cash or the delivery of an acceptable
guarantee or guarantees by the purchaser
to the seller on or before
28
June 2015, which date may only be extended by the written
agreement of the seller, failing which this agreement will be of no
further
force or effect. In the event that such
a
guarantee or
guarantees
are
delivered they shall make provision of the full
purchase price in cash to the seller free of bank exchange against
registration
of transfer."
12.
I am of the view that the only proper interpretation of clause 2.2 is
that either cash or the delivery of acceptable guarantees
by the
purchaser to the seller must be given or secured on or before 28 June
2015. It is common cause that this date is actually
a date before the
actual agreement was signed on 21 July 2015.
13.
From the papers before me it is abundantly clear that both parties
acted, since the signing of the contract, as if there was
a valid
contract between the parties and that the Applicant would be given
the opportunity of supplying the required guarantees
to finalise the
contract between the parties. The Applicant mainly relied on an
extension of the period within which the guarantees
had to be
secured. The Applicant further contends that such extension was given
in writing and presumably by the conduct of the
parties over a period
of time and that it was therefore not possible for the First
Respondent to have cancelled the agreement of
sale without relying
and giving effect to the provisions of clause 9 of the agreement of
sale.
14.
In my view it was not a cash sale due to the interpretation given
above to clause 2.2 and further on the papers of the Applicant
itself
it makes out a case that it was not a cash sale.
15.
The only point of contention that remains is whether the First
Respondent was entitled to cancel and/or resile from the agreement
"CF3".
16.
As far as the various alleged extensions relied upon by the Applicant
are concerned, the Applicant specifically relies on the
well-known
judgement
Neethling v. Klopper en Andere
1967 (4) SA 469
AD
where
the following is stated in the headnote:
"The
revival of
a
contract of sale of land which contract has been
terminated, by waiver of the rights which arise from the termination
of the contract,
does not have to comply with the requirements of
section 1 of Act 68 of 1957."
(which is an
accurate summary of the Court's findings contained in his judgement)
17.
Further reliance is put on the matter of
Construction v. Basfour 3581 (pty) Limited
2013 (6) SA 160
(KZP)
where Swain J stated
at
163 8 - E:
"As stated in the oft-quoted
victim of Watermeyer AJ in Segal
v. Mazzur
1920 CPD 634
at 645
'Now, when an event occurs which entitles one party to
a
contract
to refuse to carry out his part of the contract, that party has the
choice of two causes.
He can either elect to take advantage of
the event or he can elect not to do
so.
He is entitled to
a
reasonable time in which
to make up his mind. Whether he
has made an election one way or the other is
a
question of
fact to be decided by the evidence. If, with knowledge of the breach,
he does an
unequivocal act which necessarily implies
that he has made his election one way, he will be held to have made
election that
way; this is, however, not
a
rule of law,
but
a
necessary
inference of fact from his conduct:
See
Croft v. Lumley
[1858] EngR 626
;
(6 HLC 672
at 605) per Bramwell B; Angehm and Piel
v. Federal Cold Storage Limited
(1908 TS 761
at 786) per Bristow J.'"
18.
The Applicant attempts in my view hereby to argue that the First
Respondent similarly had an election either to proceed with
the
execution and finalisation of the agreement or to object against it
by for instance claiming that the agreement is null and
void.
19.
In my view the judgements quoted by the Applicant
are not really applicable to the facts before me. This is not a
matter where a
breach of the agreement .took place in terms of which
the innocent party failed to act on. In other words, to cancel or to
seek
compliance of any contractual obligation within a certain period
of time.
20.
In this matter the condition, whether this is a
term or a so-called real condition, was impossible from the outset to
fulfil. It
was not possible to either pay cash or to secure the
guarantees before or on the 28th June 2015.
21.
Insofar as a possible waiver of the rights of the
First Respondent is concerned, the parties were
ad
idem
that such waiver could only be done
before the time for the fulfilment of the condition has arrived.
(Christie
-
The
Law of Contract in South Africa, di' Edition, pages 151 to 152).
22.
Despite what is contained in the papers, there seems to me to be no
other explanation in the circumstances that both parties
on the
probabilities made a mistake in inserting the date
"28 June
2015".
I suppose that no one will ever know what was really
intended although one would have expected that the real intention was
probably
to refer to a date somewhere in future on the 28th of a
later month or a date closer to the end of month 2015. In
First
National Bank, A Division of FirstRand Bank Limited v. Clear Creek
Trading 21 (Pty) Limited and Another
2014 (1) SA 23
(GNP) at page 27
the Court remarked as follows at
paragraph 18:
"18. If the Plaintiff's stance
were that the written Agreement did not correctly reflect the prior
agreement entered into between
the parties or indeed the common
intention of the parties, then the proper course for the Plaintiff
would have been to seek rectification.
It is also trite that while
the written contract stands unrectified it must exclude evidence to
prove the true version by the combined
effect of the parol evidence
rule and the rule that no evidence may be given to alter the clear
and unambiguous meaning of a written
contract."
23.
In my view this avenue was open to the Applicant who thought if fit
not to bring such an application.
24.
Before writing this Judgement, I have thus requested both parties to
address me on the question as to whether Applicant's failure
to apply
for a rectification of the contract is fatal to the Applicant's
application. The Applicant filed a rather short reply
stating that
the matter was never pleaded on that basis and is from my reading of
Applicant's argument actually an irrelevant consideration
as to a
proper adjudication of this application. On behalf of the Respondents
it was argued that the Applicant's failure to do
so is in fact fatal
to its application.
25.
In my view there was an impossibility to give effect to the terms
and/or conditions of the contract and that the contract was
in such
circumstances null and void. The only remedy in my view that the
Applicant had was to at an appropriate time, to have brought
an
application for rectification of the contract in relation to the date
of 28 June 2015 which I have already stated could never
have been the
real intention of the parties. The Applicant's failure to do so leave
me in a position to come to one conclusion
only and that is that the
contract as it stands is null and void and the First Respondent is
not bound to any of its provisions.
In the circumstances I find in
favour of the Respondents in the main application.
26.
As far as the costs are concerned, it is trite that the costs
normally are awarded to the successful party. In this case however
as
far as the urgent application is concerned, I take note of the
conduct of the Applicant who, despite the fact that it must have
known of the defect in the written contract and the fact that
contract was probably null and void, proceeded with the matter as
if
a valid contract existed between the parties. Its sudden turnabout
motivated by a new purchaser probably offering a higher purchase
price, actually left the Applicant with no other option but to launch
an urgent application to at least protect its rights and
to oppose
the matter leaving the final determination of the matter to this
Honourable Court. In the circumstances I am not going
to deprive the
First Respondent of all its costs but in my view it is fair and just
in the circumstances to make no orders as to
costs as far as the
urgent application was concerned.
27.
In the premises I make the following orders:
1. There is no order
as to costs in relation to the
urgent application
which was brought in December 2015.
2. The main application of the
Applicant is dismissed.
3. The Applicant is ordered to pay the
First Respondent's costs in the main application on the party to
party scale.
__________________
Rautenbach
AJ
27
November 2016