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[2007] ZASCA 126
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Just Names Properties 11 CC and Another v Fourie and Others (324/06) [2007] ZASCA 126; [2007] SCA 126 (RSA); [2008] 2 All SA 487 (SCA); 2008 (1) SA 343 (SCA) (28 September 2007)
Links to summary
THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
CASE NO
:
324/06
Reportable
In the matter between :
JUST
NAMES PROPERTIES 11 CC ...........................
First
Appellant
ALEXANDER BALADAKIS ...........................
Second
Appellant
and
NICOLAAS
JACOBUS FOURIE
...........................
First Respondent
ANNIE SUSAN FOURIE
...........................
Second
Respondent
CHARTRADE
247 CC
...........................
Third Respondent
SPIROS KOUTROUMANOS
...........................
Fourth
Respondent
KLEANTHIS
MAOURIS
...........................
Fifth Respondent
PLATINUM MILE INVESTMENTS 218 (PTY) LTD
...........................
Sixth
Respondent
THE
REGISTRAR OF DEEDS, PRETORIA
...........................
Seventh
Respondent
_______________________________________________________________________
BEFORE: BRAND, HEHER JJA and MHLANTLA AJA
HEARD: 14 SEPTEMBER 2007
DELIVERED: 28 SEPTEMBER 2007
SUMMARY: Written agreement of an immovable property, whether the
sale agreement complied with the requirements set out in
section 2(1)
of the
Alienation of Land Act 68 of 1981
, in circumstances where
offer signed and delivered by offeree in incomplete form.
NEUTRAL CITATION: This judgment may be referred
to as
Just Names Properties v
Fourie
[2007] SCA 126 (RSA)
_______________________________________________________________________
J U D G M E N T
_______________________________________________________________________
MHLANTLA AJA
MHLANTLA AJA
:
[1] The appellants appeal, with the leave of the court a
quo, against a judgment of the Johannesburg High Court (Jajbhay J),
dismissing
the appellants’ claims with costs. The court a quo
found that the written agreement of sale of immovable property sought
to
be enforced by the appellants was invalid as it did not comply
with the provisions of s 2(1) of the Alienation of Land Act 68
of 1981 (‘the Act’).
[2] Apart from the first, second and seventh
respondents, the parties in this matter are involved in the business
of trading. On the
one hand, the appellants (together with the second
appellant’s family) operate three Pick ‘n Pay Family
Supermarkets
in Kempton Park, and on the other, the third to sixth
respondents run a supermarket called Glen Acres Spar in the vicinity
of the
appellants’ businesses. They also own other businesses
in the area. The fourth and fifth respondents are members of the
third
respondent and directors of the sixth respondent. The first and
the second respondents (‘the Fouries’) are husband and
wife. They jointly own the immovable property described as Holding
26, Kempton Park Agricultural Holdings (‘the property’).
[3] The second appellant
(‘Baladakis’), acting on behalf of the first appellant,
wanted to establish a fourth supermarket
in the same area and offered
to purchase the property from the Fouries. His offer which was
contained in a written document signed
by him was presented to the
Fouries on 17 January 2003 by an estate agent, Ms Julie Oosthuizen
(‘Oosthuizen’). Baladakis
offered to buy the property for
R1.8 m. What happened, according to the testimony of the
Fouries, was that Oosthuizen read the
document to them clause by
clause. It
inter
alia
contained a
clause 4.2 which required them to pay occupational rent in the amount
of R10 000 per month, after transfer of the
property into the
purchaser’s name. Oosthuizen also assured them that they would
have the entire purchase price ‘in their
pockets’ in
three months’ time.
[4] The Fouries
rejected the clause that required
them to pay occupational rent, contending that they could easily find
cheaper accommodation elsewhere.
In order to avoid the collapse of
the negotiations, Oosthuizen left the room to telephone Baladakis for
instructions to change the
controversial clause. Meanwhile having
made their point, the Fouries who were otherwise satisfied with the
offer, signed and initialled
each page.
[5] The proposed agreement was subject to a suspensive
condition that within six completed calendar months from the first
day of the
month succeeding acceptance of the offer, the purchaser
would be able to obtain approval in principle to the establishment of
a township
on the property with a specific business zoning.
[6] Oosthuizen informed the Fouries upon her return that
Baladakis had agreed that the offer be amended by deleting the clause
in
question. She told them that such an amendment would be effected
by replacing the page with a new page which would omit the clause.
To
facilitate the amendment she asked them to initial two blank sheets
of papers, which, they did. Oosthuizen took the signed sheets
and
offer with her when she left them. On the following day she returned
to the Fouries’ house and gave them a sealed envelope
containing the amended document on which the appellants have based
their claims in the present case. Without showing any interest
in its
contents the Fouries put the envelope aside still unopened. It is
common cause that page 3 of the agreement relied upon by
the
appellants, which contains the amended clause 4.2, is in a different
font and that it reflects the true agreement between the
parties.
[7] After the expiry of about three months the Fouries
were unhappy that the sale had stalled and that they had still not
received
the promised purchase price. They were unhappy with
Oosthuizen’s explanation for the delay and upon investigation
discovered
that she had lied to them about the lodging of a rezoning
application to the municipality.
[8] On 13 May 2003 the Fouries sold the same property to
the third respondent for R1.9 m. On 28 May 2003 an attorney,
Nel, representing
the Fouries, purported to cancel the agreement by
sending a registered notice to Baladakis. On 29 May 2003 the property
was transferred
into the name of the third respondent and a mortgage
bond was registered over the property in favour of the sixth
respondent, securing
an indebtedness of the third respondent. It is
these events which prompted the institution of the action by the
appellants against
the respondents. Broadly stated they sought an
order setting aside the transfer and the mortgage bond registered
over the property
and for transfer of the property in their names.
For present purposes the respondents raised two defences in the
alternative: that
the agreement was invalid for non-compliance with
s 2(1) of the Act; alternatively, that the Fouries had cancelled
the agreement
because of Oosthuizen’s fraud relating to the
suspensive condition.
[9] By agreement between the parties the court below
ordered a separation of the issues. The issues to be determined at
the initial
stage were whether the agreement between the appellants
and the Fouries complied with s 2(1) of the Act and if so,
whether the
Fouries were entitled to repudiate it on the basis that
it was induced by fraud.
[10] The first defence raised two issues: firstly, the
issue of fact, whether page 3 had indeed been signed in blank and,
secondly,
the issue of law, whether that would render the agreement
invalid in terms of s 2(1). Jajbhay J decided both these issues
in
favour of the respondent. Thus the first defence was upheld. In
consequence, it was not necessary to address the second defence.
[11] I shall first deal with the factual issue, that is,
whether the Fouries signed the document or part of it in blank. In my
view
the Fouries’ version that they were not satisfied with the
offer presented and that Oosthuizen telephoned Baladakis and told
him
about their concerns has to be accepted. Baladakis authorised
Oosthuizen to change the clause in accordance with the Fouries’
request. Baladakis also confirmed this when he testified. It was
never put to the Fouries that they had signed page 3 after Oosthuizen
had typed it.
[12] Even if the Fouries were as untrustworthy with
regard to their evidence in general as counsel for the appellants
contended, their
version on the issue under consideration is a simple
one and there is nothing to gainsay it because Oosthuizen was not
called to
testify by the appellants. This is despite the fact that
she was available and had consulted with the appellants’ legal
representatives.
It is common cause that the Fouries are
unsophisticated people who tend to sign whatever is presented to them
without first reading
it. Why would they lie about the issue of
signing a blank piece of paper? Furthermore, how would they know
about the legality and
consequences of signing in blank? These
questions remained unanswered, save for the speculation by counsel
for the appellant on the
possible conduct of the Fouries.
[13] In my view there is nothing improbable in their
version and it is accordingly not necessary to deal with credibility
findings.
In the result all that the court knows is that the Fouries
signed two blank pieces of paper which were completed subsequently.
It
is obvious that page 3 was prepared separately, as the typeface
and font differs from that of the other pages.
[14] I turn now to consider the issue of law. Section
2(1) of the Act provides:
‘
No alienation of land after the
commencement of this section shall, subject to the provisions of
section 28, be of any force or effect
unless it is contained in a
deed of alienation signed by both parties thereto or by their agents
acting on their written authority.’
[15] The appellants’ argument that, even if the
Fouries signed page 3 in blank, the agreement still complied with
these statutory
provisions, was primarily founded on the construction
that the amendment of page 3 rendered the document a counter-offer
made by
the Fouries as offerors which was accepted by Baladakis as
offeree. On this construction, counsel for the appellants submitted,
it
did not matter that the document had been incomplete at the time
of signature by the offeror as long as it was completed in accordance
with the offeror’s intention at the time of acceptance by the
offeree.
[16] It is clear that this whole
argument is rooted in the decision of
Jurgens
and others v Volkskas Bank Ltd
.
1
Jurgens
must
in turn be read in the light of
Fourlamel
(Pty) Ltd v Maddison
2
Both these cases concerned deeds of
suretyship. In construing a provision similarly worded to s 2(1)
of the Act, but pertaining
to deeds of suretyships, Miller JA said in
Fourlamel
:
3
‘
The plain, grammatical meaning of the words
used in sec 6 appears to be clear. The section presupposes that an
agreement of suretyship
had been reached – “contract of
suretyship entered into” – and it provides thereafter
that such an agreement
shall not be valid “unless the terms
thereof are embodied in a written document signed on behalf of the
surety”.
What is it that requires to be signed by the surety? It is surely the
written document containing the terms of the agreement . .
. .
In the case of an agreement which is not by law required to be in
writing, it may be that a document signed by a party before the
terms
of the agreement had been embodied therein would be binding upon him
in the absence of fraud or error in connection with the
recording of
the terms and subsequent to his signature. . . . But, where the terms
of a contract are required by statute to be embodied
in a document
and signed by a particular party as a manifestation of his assent to
such terms, there are considerable difficulties,
both notionally and
practically, in the way of acceptance that insertion by another of
the terms of the agreement after the party
has appended his signature
to a blank piece of paper, constitutes compliance with such statute.’
[17] In
Jurgens,
the sureties, relying on
Fourlamel
,
raised the defence that when they signed the deeds, the documents
contained blank spaces which were only filled in by their secretaries
after signature. It was common cause that all these suretyships were
returned to the bank (the creditor) after they had been completed
on
behalf of the sureties. In the light of these facts, this court held
that
Fourlamel
was distinguishable. The distinction
appears from the following statement by Hoexter JA:
4
‘
Suretyship is a bilateral jural act. . . .
It is a contract which arises from agreement between creditor and
surety and it involves
the acceptance of an offer. An offer is a
manifestation of the offeror’s willingness to contract, made
with the intention that
it shall become binding as soon as it is
accepted by the offeree. It is trite that an offer cannot be accepted
unless and until it
has been brought to the attention of the offeree.
It need hardly be said that there is a fundamental difference
between, on the one
hand, the situation in which after a surety has
signed and delivered a blank form to the creditor, the latter
unilaterally completes
the blank form by filling in some of the
contractual terms, [ie the
Fourlamel
situation] and, on the other hand, the situation
in which the surety has signed a blank form which is then filled in,
by or for and
on behalf of the surety, before the document so
completed is delivered to the creditor.’
[18] As I have said, it is therefore
crucial to the appellants’ whole argument, based on
Jurgens
,
that it was the Fouries and not Baladakis who made the (counter)
offer. In the event, the simple answer to the argument is, in my
view, that Baladakis remained the offeror throughout. The
construction of a counter-offer finds no support in the evidence. A
counter-offer
arises when an offeree rejects the original offer as a
whole or in part. A mere request during negotiations to modify a term
does
not amount to a counter-offer
.
The critical issue
in this matter is the telephone call which was made by Oosthuizen. It
is common cause that Baladakis received a
call from Oosthuizen while
she was at the Fouries’ home and that after the telephonic
discussion, Baladakis instructed her
to change the relevant clause.
[19] The counter-offer argument was also contradicted by
Baladakis when he testified. He stated that, when he received the
document,
he intended to regularise the contract so that it appeared
on the face of it to be a single composite document signed by him as
offeror.
The replacement page was also initialled by the same witness
to his signature who had initialled the other pages. He conceded that
he had initialled the replacement page so that it would appear the
same as all the other pages.
[20] It seems to me that a
counter-offer would have arisen if the Fouries had rejected the offer
and changed the clause in writing
without contacting Baladakis. A
classic example of a counter-offer can be found in the case of
Pretoria East
Builders CC and Another v Basson
5
.
[21] On a proper construction of the
Act, the offer had to be complete when the Fouries accepted and
signed it or at least had to
be signed by them in its completed form
before they released it for delivery to the other party (cf
Standard
Bank of SA v Jaap de Villiers Beleggings
6
.
The fact that they signed two blank pieces of paper is fatal to the
whole agreement. As Van Winsen J explained in
Van
Rooyen v Hume Melville Motors (Edms) Bpk
7
:
‘
What defendant signed was not an agreement
but a piece of paper. It is true that the placing on such piece of
paper of a number of
terms not embodied therein in writing at the
time that the defendant signed the paper might in form turn the piece
of paper into
an agreement but it was certainly not an agreement when
the defendant signed it and accordingly it cannot be regarded as an
agreement
having force and effect.’
[22] The invalidity of the agreement cannot be cured by
the fact that the amended clause reflected the intention of the
parties. The
Fouries’ signature did not perform the function
which the provisions of the Act required them to perform, namely, to
signify
that the written offer to which the signatures pertained, met
with their agreement.
[23] It follows therefore that the court a quo was
correct when it held that the first sale agreement did not comply
with the requirements
of s 2(1) of the Act and was accordingly
void and of no force and effect.
[24] In view of my conclusion it is not necessary to
consider the second defence. The appeal accordingly fails.
[25] In the result the appeal is dismissed with costs.
_____________________
N Z
MHLANTLA
ACTING
JUDGE OF APPEAL
CONCUR
:
BRAND JA)
HEHER JA)
1
[1992] ZASCA 152
;
1993
(1) SA 214
(A).
2
1977
(1) SA 333
(A).
3
At
341H - 342B.
4
At
218J - 219B.
5
2004
(6) SA 15 (SCA).
6
1978
(3) SA 955
(W) at 958A-E.
7
1964
(2) SA 68
(C) at 71C-E.