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[2014] ZAGPPHC 210
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Colliers RMS (Pty) Ltd v Norcotrade 012 CC (4959/2011) [2014] ZAGPPHC 210 (14 March 2014)
/SG
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
DATE:
14 MARCH 2014
CASE
NO: 4959/2011
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
In
the matter between:
COLLIERS
RMS (PTY) LTD
…………………………………………………
.
EXCIPIENT
And
NORCOTRADE
012 CC
…………………………………………………
.
RESPONDENT
In
Re:
NORCOTRADE
012 CC
……………………………………………………
..
PLAINTIFF
And
COLLIERS
RMS (PTY) LTD
……………………………………………
..
DEFENDANT
JUDGMENT
CILLIERS,
AJ
[1]
This concerns an exception raised
against a portion of a replication.
[2]
The defendant is an auctioneer.
[3]
It is common cause that the defendant,
on instruction from Biotrace Trading 43 (Pty), put to auction an
immovable property situated
at Portion 1 of Erf 2623, Highveld
Extension 37, Registration Division JR, Province of Gauteng, known as
Building 1 Highgrove Office
Parck, 50 Tegel Avenue, Highveld
Extension, Centurion ("the property") and that this auction
took place on 17 April 2008.
[4]
The plaintiff and the defendant are
also, on the pleadings as they stand, ad idem that (1) the plaintiff
was the highest bidder
at the auction, (2) that the property was sold
to the plaintiff subject to compliance with the conditions of sale
and that the
plaintiff (in terms of the conditions of sale), paid to
the defendant commission in the amount of R985 000.00 together with
value
added tax in the amount of R137 900.
[5]
The conditions of sale (duly signed by
the plaintiff) contain the following relevant provisions:
(a)
Every bid constituted an offer to
purchase the property for the amount bid;
(b)
The property should be sold to the
highest bidder subject to compliance with the conditions of sale;
(c)
The conditions of sale constituted an
offer to Biotrace that was open for acceptance until close of
business on 17 April 2008;
(d)
The plaintiff was liable for payment of
the defendant's commission of 10% of the purchase price plus value
added tax;
(e)
In the event that Biotrace did not
accept the plaintiffs offer the defendant had to repay to the
plaintiff any deposit and commission
paid by the plaintiff.
[6]
In the plaintiffs particulars of claim
the averment is made that Biotrace failed to accept the plaintiffs
offer before close of
business on 17 April 2008.
[7]
In consequence of the above fact pleaded
the plaintiff claims repayment of the commission in the amount of
R985 000.00 together
with value added tax thereon in the amount of
R137 000.00 from the defendant.
[8]
In response to the averment in the particulars of claim that
Biotrace failed to accept the plaintiffs offer within the stipulated
time the defendant raised various defences, all of them pleaded in
the alternative:
"5.2 The
defendant pleads that Biotrace Trading 43(Pty) Ltd as seller accepted
the offer of the plaintiff before close of business
on 17 April 2008
and that the acceptance was communicated to the plaintiff before
close of business (sic) 17 April 2008.
5.3 The Seller
and the Plaintiff signed an addendum to the conditions of sale
confirming that the offer of the Plaintiff was accepted
before close
of business on the 17th April 2008. A copy of the addendum to the
conditions of sale is attached and marked 'P1'.
5.4
Alternatively, in the event of it being found that the addendum does
not constitute acceptance of the offer by the seller in
terms
of clause of 2.1 of the conditions of sale, then and in that event,
the Defendant pleads that:
5.4.1. the sale
of immovable property, was a sale of land by public auction in terms
of
Section 3
of the
Alienation of Land Act 68 of 1981
and
consequently, the provisions of
Section 2
of the said Act do not
apply;
5.4.2. thus, the
acceptance by the seller made telephonically on 17th April 2008,
complied with the provisions of clause 2.1 of
the conditions of sale.
5.5 Alternatively
to 5.2 and/or 5.3 and/or 5.4 above, in the event of it being found
that the acceptance of the offer by the seller
in terms of clause 2.1
of the conditions of sale did not take place on or before close of
business on the 17th of September 2008,
then and in that event, the
Defendant pleads that;
5.5.1 the
written addendum signed by the seller and purchaser constitutes, in
terms of the provisions of clause 19.2 of the agreement,
an
extension of time and/or a waiver and/or an indulgence of any
limitation contained in clause 2.1;
5.5.2
consequently the agreement is binding on the parties.
5.6 Further
alternatively to paragraphs 5.2 and/or 5.3 and/or 5.4 and/or 5.5
above, the seller accepted the offer prior to the
purchaser
withdrawing same and consequently the agreement is in any event
binding on the seller, the Plaintiff and the Defendant."
[9]
It is to the above that the plaintiff
delivered a replication to the entire plea, inclusive of the issues
raised in paragraphs 5.2
to 5.6 of the plea.
[10]
In respect of the issues raised in
paragraphs 5.2 to 5.6 of the plea the plaintiff replicated as
follows:
“
1.
AD
PARAGRAPHS 5.2 TO 5.6 THEREOF
1.1
The allegations therein contained are
denied, and the Defendant put to the proof thereof In particular, the
Plaintiff denies that
the seller accepted the Plaintiff's offer to
purchase the immovable property.
1.2
In amplication, the Plaintiff pleads as
follows:
1.2.1
The registered owner and seller of the
immovable property was Biotrace Trading 43 (Pty) Ltd
('Biotrace').
1.2.2
At all relevant times, the directors of
Biotrace were Warren Melville Jevon
('Jevon')
and Maria Louwisa Jevon, and the
sole shareholder was the Jevon Eiendoms Trust, of which Jevon and
Maria Louwisa Jevon were the
trustees.
1.2.3
The Plaintiff's offer to purchase was
accepted by Jevon, who purported to be a director of Biotrace acting
on behalf of Biotrace.
1.2.4
The immovable property constituted the greater part of the
undertaking of Biotrace and/or the whole or the greater part of
the
assets of Biotrace.
1.2.5
Jevon did not accept the offer pursuant
to a special resolution of the members of Biotrace that he do so,
neither was his purported
acceptance of the offer subsequently
ratified.
1.2.6
In the premises, his purported
acceptance was in breach of the provisions of Section 228 of the
Companies Act, 61 of 1973 (then
in force), and accordingly
unauthorised and of no legal effect.
Alternatively
to paragraph 1, and in the event that the Court holds that the
purported acceptance of the Plaintiff's offer by Jevon
was authorised
and of legal effect, the Plaintiff replicates as follows:
2.
AD
PARAGAPHS 5.3 AND 5.5 THEREOF
2.1
The Plaintiff admits that the addendum
relied upon by the Defendant reflects what appears to be the
signature of Dr Ayodele Oladapo
Dada
('Dr
Dada'), the managing member of
the Plaintiff, but pleads that the Plaintiff is not bound by the
terms of the addendum because Dr
Dada signed it in error.
2.2
The Plaintiff pleads that on a date
subsequent to 17 April 2008, a representative of the Defendant handed
to Dr Dada, a number of
documents and requested him to sign the
documents.
2.3
The plaintiff, and Dr Dada in
particular, was unaware and the
representative
of the Defendant negligently failed to disclose to
Dr
Dada, the fact that:
2.3.1
one of the documents so provided
purported to be an addendum to the offer to purchase;
2.3.2
the offer to purchase had not been
accepted by the seller before close of business on 17 April 2008
2.3.3
the Plaintiff's offer to purchase had
accordingly lapsed;
2.3.4
the addendum purported to confirm that
the Plaintiff's offer had been accepted immediately after the sale of
the immovable property,
when in truth and in fact it had not.
2.4
The Plaintiff, and Dr Dada in
particular, never intended to:
2.4.1
acknowledge and/or accept that the offer
had been accepted by the seller immediately after the sale of the
immovable property, when
in truth and in fact it had not; and/or
2.4.2
extend the time period within which the
seller was entitled to accept the offer; and/or
2.4.3
waive all or any rights that
it had in terms of clause 2.1 of the Conditions of Sale; and/or
2.4.4
grant an indulgence of any
nature to the seller of the immovable property.
2.4.5
In the premises, the
Plaintiff pleads that the alleged addendum to the offer to purchase
is void ab initio and of no legal force
and effect.
2.4.6
Save as aforesaid, the
allegations therein contained are denied and the Defendant put to the
proof thereof."
[11]
To the above the defendant raised an exception that is directed at
the portion of the replication concerning the reliance on
section 228
of the Companies Act 61 of 1973, to wit paragraph 1 of the
replication (inclusive of all of the sub-paragraphs thereto).
[12]
The defendant, at the hearing abandoned
reliance on the issue relating to the late delivery of the
replication. It is accordingly
only required to mention the remaining
three grounds for the exception raised. They are worded as follows:
"4.3.1
Firstly, that the contention by the Plaintiff in the replication that
the agreement between the parties is of no legal
effect is directly
contradictory to the Plaintiff's particulars of claim in which the
Plaintiff seeks to enforce the terms of the
agreement. (pE19, para.
6-16)
4.3.2
Secondly, the Plaintiff's
averments in the replication purport to establish an enrichment claim
by virtue of Section 228 of the
Companies Act, 61 of 1973, which
directly contradicts the contractual claim pleaded in the particulars
of claim. (p.E23, para.
17-19)
4.3.3
Lastly, insofar as the Plaintiff seeks,
in the replication, to rely on a claim on unjust enrichment, such
claim is not pleaded in
the particulars of claim and thus, the
Plaintiff purports to amend its particulars of claim by filing a
replication. (p.E23, para.
20-22)"
[13]
I proceed to deal with each of the
grounds raised separately, although they are, for the most part
intertwined and founded on the
same premise.
[14]
The complaint raised in the second
ground for the exception is that the replication, to the extent that
reliance is now placed also
on section 228 of the Companies Act, 61
of 1973 ("the Act"), is fatally defective to the plaintiffs
claim under contract
for repayment of the deposit [sic) paid to the
defendant.
[15]
The property was put up for sale at an
auction. The applicable legal principles relating to sales at an
auction must first be stated.
[16]
The auction was held on the terms set
out in the conditions of sale.
[17]
It
is trite that the terms of the conditions of sale at an auction are
binding on the bidders, the sellers and the auctioneer. They
may
create rights and obligations between the seller and the bidders, as
well as between the successful bidder and the auctioneer
on matters
such as the payment of auctioneer's commission.
[1]
[18]
The
first important issue that arises from the conditions of sale is that
the auction was held with reserve. That means that Biotrace
retained
the right to decide whether to sell or not and each bid, including
the highest was an offer that Biotrace may have accepted
or not in
its absolute discretion.
[2]
[19]
This
amounted to a pure potestative condition.
[3]
Such a condition is invalid because its fulfilment depends entirely
upon the unfettered will of the promissor
[4]
.
If this principle is applied to the term in the conditions of sale
that left to Biotrace the unfettered discretion to accept the
offer
or not i.e. to sell the property or not, it follows that the offer
gave use to no obligation on the part of Biotrace whatsoever
and
accordingly no agreement of sale at the property came into existence
at the time of the auction.
[5]
[20]
The said term did, however, bind the
plaintiff to keep open his bid until 17 April 2008, at close of
business. To that limited extent
a binding contract came into being
between the Plaintiff and Biotrace. The true nature of this contract
was an option granted by
the plaintiff to Biotrace to sell the
property on the terms and conditions set out in the conditions of
sale.
[21]
The
second important issue that arise from the conditions of sale is the
aspect of obligations created between the plaintiff and
the defendant
when the plaintiff appended his signature to the conditions of sale.
The conditions of sale from the basis of the
bargaining carried on
between the auctioneer and the bidder.
[6]
In this, the parties include at least the purchaser, the seller and
the auctioneer.
[7]
As between the plaintiff and the defendant the fixed obligations that
arose are that the plaintiff was under obligation at the
auction for
payment of the defendant's stipulated commission and the defendant
was under obligation to, in the event that Biotrace
did not accept
the plaintiff's offer, repay to the plaintiff any deposit and
commission paid to him.
[22]
The plaintiff's cause of action, in its
particulars of claim is founded on the contract between the plaintiff
and the defendant.
It is not founded on the limited contract between
the plaintiff and Biotrace. The first ground of exception fails to
properly recognise
the nature of the obligations that arose from the
conditions of sale and to fully appreciate the distinct, and
different obligations
that arose between Biotrace, the plaintiff and
the defendant.
[23]
In order to sustain the cause of action
against the defendant, it is an essential and necessary averment to
make that Biotrace did
not accept the plaintiffs offer or,
differently put, that Biotrace did not exercise the option to sell
the property by the stipulated
time i.e. by close of business on 17
April 2008.
[24]
The averments in the replication
relating to section 228 of the Act serve only as a further factual
and legal ground to support
the averment in the particulars of claim
that no acceptance of the offer (or exercise of the option) took
place with the stipulated
time period.
[25]
In my view the averments in the
replication relating to the provisions of section 228 of the Act is
in consonance with the claim
on contract against the defendant. It is
not fatally defective thereto.
[26]
It follows that the first ground of
exception cannot be sustained.
[27]
The second ground of exception, namely
that it is not possible to ascertain whether the claim is founded on
contract, or on unjustified
enrichment as well as the third ground of
exception namely that a new cause of action, founded on unjustified
enrichment, is introduced,
suffer from the same failure to properly
distinguish between the limited contract that existed between the
plaintiff and Biotrace
(as at the date of the auction) and the
contract between the plaintiff and the defendant.
[28]
The relevant portion of the replication relating to the
provisions of section 228 of the Act does not introduce a new cause
of action
founded on unjustified enrichment. It only introduce a
further legal ground and factual ground to support the averment in
the particulars
of claim that the offer to Biotrace was not accepted
within the stipulated time period.
[29]
Mr Carstensen, on behalf of the defendant had a further string
to this bow. He contended that the effect of conclusion of the
agreement
does not fall within the ambit of section 228 of the Act.
He contends that the conclusion of an agreement only does not
constitute
a disposal of property as contemplated by the provisions
of section 228 of the Act.
Only
the implementation of such an agreement, so the agreement goes,
constitutes a disposal within the meaning of the said provision.
[30]
This
is not a ground for the exception raised. The defendant is confined
to his stated grounds for the exception raised.
[8]
[31]
In the result the exception must fail on all of the grounds
that it is raised.
[32]
It is accordingly not required to deal with this further issue
raised in argument.
I
make the following order:
1.
The exception is dismissed.
2.
The defendant is ordered to pay the costs.
Heard
on
:
For
the
: Adv
Instructed
bv:
For
the
: Adv
Instructed
bv:
Date
of Judgment:
[1]
Christie: The law of Contract 6
th
edition p47-48, Hyams v Simpson
1908 TS 78
at 81
[2]
Christie: The Law of Contract p48
[3]
Benlou Properties (Pty) Ltd v Vector Graphics (Pty) Ltd
[1992] ZASCA 158
;
1993 (1) SA
179
(A) at 186F-J
[4]
See Benlou Properties (supra)
[5]
Withok Small Farms v Amber Sunrise Properties 5 (Pty) Ltd
2009 (2)
SA 504
(SCA) at paragraph [7], p508B-C
[6]
Withok (supra) at para [9], p508F; Shandel v Jacobs and Another
1949
(1) SA 320
(NPD) at 325-326 (Per
Carlisle
J) and at 329-330 (Per de Wet J)
[7]
Shandel v Jacobs (supra)
[8]
Jowell v Bramwell Jones and Others
1998 (1) SA 836
(W) at 899A-B