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[2014] ZAGPPHC 401
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Kosmos X6 Homeowners Association v Leopont 64 Properties (Pty) Ltd (39233/08) [2014] ZAGPPHC 401 (6 June 2014)
IN
THE NORTH GAUTENG HIGH COURT, PRETORIA
(REPUBLIC
OF SOUTH AFRICA)
CASE
NUMBER: 39233/08
DATE:
2014.06.06
NOT
REPOTABLE
NOT
OF INTEREST TO OTHER JUDGES
KOSMOS
X6 HOMEOWNERS
ASSOCIATION
..............................................................
PLAINTIFF
vs
LEOPONT
64 PROPERTIES (PTY)
LTD
......................................................................
DEFENDANT
and
JACOBUS
JUACHUM
GRABE
..........................................................................................
3
RD
PARTY
JUDGMENT
MABUSE
J
:
[1].
This is an application brought by way of a combined summons for
rectification of certain agreements of purchase and sale of
land in a
development area and furthermore for an interdict in terms whereof
the defendant is ordered to perform certain acts.
In this matter the
dispute between the parties concerns the attributes of a development
at Kosmos Extension 6 or otherwise known
as Falcon View Estate.
[2].
The plaintiff is an association incorporated in terms of the
provisions of section 21 of the Companies Act 63 of 1971, as it
then
was, and conducted, at the time it commenced litigation in this
matter in 2008, its business at its registered office situated
at
Falcon View Estate, Main Gate Office, Kosmos Drive, in the province
of North West. The plaintiff was incorporated on 3
March 2005.
According to its memorandum of association, in modern parlance now
called Memorandum of Incorporation (“MOI”),
the main
business of the plaintiff is the promotion, advancement and
protection of the communal interests of the owners and occupiers
of
Kosmos X6 Township.
[3]. The defendant
is a company duly incorporated with limited liability in accordance
with the company statutes of this country,
with its principle place
of business at 6 Dwars Street, Krugersdorp. The defendant is
the owner and developer of the said
township of Kosmos Extension 6.
The third party is an adult businessman whose chosen
domicilium
citandi
is plot 23 Vieira Street, Amaros Agricultural Holdings,
Roodepoort, in the province of Gauteng. By agreement reached by
the
parties at the commencement of the trial and which was
subsequently made an order of the court the issues involving the
third party
were separated in terms of Rule 13(A) of the Uniform
Rules of Court from the current trial. Accordingly relief in
this matter
is sought only against the defendant.
THE
ISSUES TO BE DECIDED AT THIS STAGE AS AGREED BETWEEN THE PARTIES
[4].
On the application of the parties the court granted, right at the
inception of the trial, the agreed order for the separation
of
issues. This court was called upon, in this truncated trial, to
decide only the following issues:
(1)
the issues raised in paragraphs 1 to 8 and 11-12 of the plaintiff’s
particulars of claim;
(2)
the defendant’s plea of prescription in respect only of the
claim contained in paragraph 9;
(3)
the third party’s lack of authority to conclude agreements of
purchase and sale with the purchasers on behalf of the defendant;
(4)
an estoppel defence raised by the plaintiff against the defendant’s
plea of lack of jurisdiction in respect of the third
defendant;
(5)
the plea of nullity of the agreements relied on by the defendant,
and;
(6)
the implication of the replication of the plaintiff in particular
paragraph 5 of the summons.
[5].
The plaintiff has set out his cause of action against the defendant
as follows. During the period 1998 to 15 August 2006, the
defendant
was the owner of portion 176, a portion of the farm De Rust 478,
Registration Division, the province of North West on
which it had
established a township consisting of erven and streets as set out in
General Plan NO. SG 8467/2001, known as Kosmos
X6, otherwise, known
as Falcon View Estate. Initially the said township consisted of
four erven, namely 667, 668, 669 and
670. Erven 667 and 668
were later consolidated into one erf and renamed erf 678.
[6].
The defendant became the owner of the said erven under the following
circumstances. During the course of time and with developments,
the
defendant subdivided erven 669, 670 and 678 into a number of portions
that, following a number of different diagrams of the
said township
that were prepared from time to time and as occasions necessitated
such changes, it also renumbered from time to
time.
[7].
During the year 2004, and in terms of a written agreements of sale,
the defendant, duly represented at the time by one J.J.
Grabe (“Mr.
Grabe”), the third party in this matter, sold such portions in
the said townships of Kosmos Extension 6.
It is apposite at
this stage to point out that the defendant, while it acknowledges
that the said Mr. Grabe sold some of the erven,
disputes his
authority to do so.
[8].
The sale of the portions of the subdivided erven 669, 670 and 678
took place under the following circumstances. On 18
November
2002 and despite the fact that the proposed township of Kosmos
Extension 6 had not been declared or proclaimed as an approved
township in terms of the provisions of the Town Planning Ordinance 15
of 1986 (“the Ordinance”), Madibeng Local Municipality
granted the defendant, as a registered owner of the farm at the time
and as the applicant in respect of the proposed township,
permission
to enter into the contracts of purchase and sale of the proposed
portions in the proposed township of Kosmos Extension
6.
[9].
The said permission was granted subject to the defendant complying
with the provisions of subsection 97(4) of the Ordinance,
which
required the sale agreement to contain a clause stating that the
Township concerned was not an approved or a proclaimed township.
[10].
The relevant permission which had been founded on a resolution by the
Mayoral Committee Meeting held on 18 November 2002 stated,
among
others, that:
“
2.
That consent be granted that Leopont 64 Properties (Pty) Ltd, as the
registered owner of the property and applicant for the proposed
Township Kosmos Extension 6, comprising of erven 667, 668, 669 and
678, may enter into contracts and options as provided for in
section
97(1) of the Town Planning and Townships Ordinance, 1986, (Ordinance
15 of 1986) and that a clause stipulating that the
township is
not
an approved proclaimed township, be included in such contract or
option.”
[11].
On 31 May 2005 Madibeng Local Municipality, acting in terms of the
provisions of section 103 of the said Ordinance, declared,
in the
Provincial Gazette of the same date, the township of Kosmos Extension
6 to be an approved township. During October
2005 the
Municipality authorised the subdivision of Erven 669, 670 and 678
into portions in accordance with the approved General
Plan of Kosmos
Extension 6 Township. On 11 November 2005 and by way of an
extraordinary Provincial Gazette, the said municipality
published the
amended version of its declaration of 31 May 2005. Following
the said subdivision the defendant became the
owner of all the erven
in the said township and at the same time the developer of the said
township.
[12].
The details of both the purchasers and the portions in the proposed
township of Kosmos Extension 6 which are relevant to the
plaintiff’s
claim against the defendant are contained in annexures ‘FW4’
to ‘FW8’ inclusive to the
plaintiff’s combined
summons. These annexures are in fact the agreements of sale
purportedly concluded between the
defendant and certain of the
purchasers. Now annexure ‘FW4’ refers collectively
to the agreements of purchase
and sale in which a company called
Umhlaba Projects (Pty) Ltd (“Umhlaba”) the nominee of one
I. Ichikowitz (“Ichikowitz”)
had entered into such
agreements with the defendant either at Sandton or Roodepoort, some
on 31 March 2004 or 1 April 2004 and
others on 1 May 2004. The
relevant portions to which the agreements of sale grouped as ‘FW4’
are the following:
10.1
Portions 152, 151, 150, 149 and 146 of Erf 670 Kosmos Extension 6
Registration Division JQ in the province of North West.
After
the conclusion of the said agreements, the aforementioned portions
were respectively renumbered as portions 1, 2, 3, 4 and
5 of Erf 670.
10.2
Erf 38 of portion 667 and portion 671 also of erf 670 were after the
conclusion of the said agreements of purchase and sale,
respectively
renumbered as portions 91 and 93 of erf 678.
[13].
Annexures ‘FW5’ to the plaintiff’s summons consists
of agreements of sale entered into between PE Schröder,
as a
representative of Sarpo (Pty) Ltd and the defendant on 5 April 2004
either at Rustenburg or Roodepoort. Part of the
agreements of
sale in ‘FW5’ is a diagram. In terms of the said
agreements of sale, Sarpo had purchased, from
the defendant, the
property depicted by the figure ABCDEFG on the diagram which included
erven 14 to 22 of erf 667 and which subsequently
were renamed
portions 104 to 105 of erf 678 respectively.
[14].
On 24 March 2004 the defendant entered into an agreement of purchase
and sale at Rustenburg with Statsec 120 (Pty) Ltd which
at the time
was duly represented by its authorised representative with regards to
portion 145 of erf 670 and portion 144 of erf
670 which were later
renamed after the conclusion of the said agreement as portion 6 of
erf 670 and portion 7 of erf 670 respectively.
The said
agreement between Statsec 120 (Pty) Ltd and the defendant herein is
attached to the combined summons as annexure ‘FW6’.
Also attached to the combined summons and marked annexure ‘FW7’
is a collective reference to the agreements of sale
wherein Ulaka
Lodge Holdings (Pty) Ltd which name was later changed to Harts Falcon
View (Pty) Ltd is the nominee of I. Ichikowitz
who entered into the
agreements of sale with the defendant at Sandton or at Roodepoort on
31 March 2004. The relevant portions
involved in annexure ‘FW7’
are described as erf 115 of portion 668, erf 66 of portion 670 and
erf 23 of portion 667
and with the conclusion of the aforementioned
agreements they were renamed portion 22 of erf 678, portion 88 of erf
670 and portion
126 of erf 670 respectively. Finally annexure
‘FW8’ is the agreement of sale entered into between JCLR
Trust
duly represented at the time by its representative and the
defendant concluded on 5 April 2004 at Roodepoort with regard to erf
42 of portion 670, erf 48 of portion 667 and erf 70 of portion 667
which later and after the conclusion of the aforementioned agreement
on the 5 April 2004 were renamed as portion 63 of erf 678, portion 70
of erf 678, and portion 92 of erf 678 respectively.
The
agreements of sale referred to in annexures ‘FW4’ to
annexure ‘FW8’ inclusive only took place after
the
condition which was stipulated in paragraph 3 of the mayoral
resolution of 18 November 2002 had been complied with.
Paragraph 3 of the said resolution stated as follows:
“
That
this consent will only be applicable to erven 667, 668, 669 and 670
and shall take effect on the date when a services agreement
has been
completed and signed by both Leopont 64 Properties (Pty) Ltd and the
Council in receipt of the appropriate guarantees
as stipulated in the
signed agreement to be provided by Leopont 64 Properties (Pty) Ltd as
provided for in section 97(2) of the
Town Planning and Townships
Ordinance, 1986 (Ord 15 of 1986).”
[15].
Each agreement of sale referred to in annexures ‘FW4’ to
‘FW8’ contained the following further annexures:
1)
Offer to purchase;
2)
The diagram;
3)
Falcon View Estate Development Control Purpose and Aim which was
marked as annexure ‘B’ to the agreement of sale;
and
(4) Annexures ‘C’, ‘D’ and
‘E’.
[16]. The plaintiff
contends that it was an express, alternatively an implied and further
alternatively a tacit term of the agreements
referred to as annexures
‘FW4’ to ‘FW8’ that they would be so
concluded subject to certain terms and conditions.
The
plaintiff has fully set out in its particulars of claim the further
such terms. It is furthermore the plaintiff’s
case that
in respect of the agreements marked annexures ‘FW5’ and
‘FW6’ in addition to the express, alternatively
implied
and further alternatively tacit terms set forth in the preceding
paragraphs uch agreements would include the following
express,
alternatively tacit terms:
16.1
That a sewerage station and sewerage purification works will be
erected to the satisfaction of Madibeng Local Municipality
and any
other responsible authority; and,
16.2
That water would be pumped from the purification works to the said
drinking troughs along a pipeline to the four animal drinking
troughs
in the mountain area.
[17].
According to the plaintiff’s combined summons the agreements of
sale referred to as annexures ‘FW4’, ‘FW5’,
‘FW6’, ‘FW7’ and ‘FW8’ do not
correctly record the agreement, alternatively the common intention
between the defendant, as then represented by Mr. Grabe and each of
the purchasers, at the time when the said agreements were
concluded. The said agreements of sale do not correctly
record the entire terms of the agreement between the parties
or by
reason of the common mistake on the part of both parties, that is the
defendant and the purchasers, the agreements do not
include the
following terms:
17.1
That the seller would build a parking area as indicated on the
diagrams attached to each of the agreements of sale;
17.2
the seller would take all necessary steps to obtain a list on behalf
of the plaintiff for the recreation area indicated on
the diagram
attached to the agreements of sale (the recreation area), from the
relevant Governmental Department;
17.3
the recreation area would be cleaned, rocks and alien trees would be
removed and the land would be filled, topsoil would be
carted in and
grass would be planted and electricity and lightning would be
installed;
17.4
the seller would build a circle road around the sewerage pump station
in the recreation area;
17.5
the seller would erect a security wall between the waterfront area
and the waterfront erven to the west of the boat tow slope;
17.6
the seller would build an earth embarkment as per annexures ‘FW9’
to the particulars of claim as well as a long
sinking pad for boats
to the dam;
17.7
the seller would build an ablution facility for ladies and gentlemen
at the recreation area; and,
17.8
the seller would erect an electrical fence on top of the palisade
fencing around the sewerage purification works.
[18].
According to the plaintiff the defendant and the respective parties
had intended that the aforegoing terms should be pleaded
in paragraph
7.2 of the agreements of purchase and sale and should be reduced to
writing. Accordingly the plaintiff contends
that the agreements
of sale between the defendant as represented by Mr. Grabe and each of
the purchasers, do not correctly record
the agreements between the
defendant and each of the purchasers as a result of a common error by
the said Mr. Grabe and each of
such purchasers as represented.
It is for this reason that the plaintiff seeks rectification of the
various agreements of
sale in order to include the terms that are
referred to in paragraphs 16 and 17 supra.
THE
DEFENDANT’S SPECIAL PLEA OF PRESCRIPTION
[19]
In paragraph 4 supra I set out the issues that the parties have
agreed should be determined. These issues were advanced by
the
parties in no particular order. In dealing with them I will commence
with the defendant’s special plea of prescription
for the
simple reason that if this Court should uphold such a plea the need
to deal with the other issues will automatically fall
away. Although
the Court was requested to deal with the six specific points referred
to in paragraph 4 supra it is clear from the
defendant’s plea
that the defendant relies firstly, in its defence, on a special
defence, namely prescription. It is equally
clear, as it is practice,
that the defendant seeks a dismissal of the plaintiff’s claims,
without any reference to the merits
of such claims, if the court
upholds its special defence. The fact that the parties advanced the
points the court was required
to determine in no particular order did
not imply that the court should deal with all points singly despite
its finding on the
defendant’s special defence. It was, in my
view, in the contemplation of the parties that before the court could
deal with
the merits of the plaintiff’s claims, it must first
clear any hurdle in the form of special defences.
[20].
The defendant raised a special plea of prescription against the
plaintiff’s claims. It contended that, on the
facts in
the pleadings, the claims which constituted the foundation of the
plaintiff’s action became due more than three
years before 12
May 2009. According to the defendant, the plaintiff’s
claims was extinguished by prescription in terms
of the Prescription
Act No. 68 of 1969 (“the Act”), in particular s. 10(1)
and (2) thereof. On this basis the
defendant prays that the
plaintiff’s claims should be dismissed with costs.
[21].
It is only apposite for this court to set out the history of this
matter in order to put the defendant’s special plea
of
prescription in a better perspective. It is crucial to point
out firstly that the plaintiff and the defendant did not
conclude any
agreement between them with regard to the property or any attributes
of thereof. The plaintiff derives its
locus standi
from
a cession which it took from certain purchasers. These
purchasers were four companies and a trust. Before the
establishment of the plaintiff these purchasers were themselves
members of the defendant. All the purchasers who ceded their
rights of action to the plaintiff were themselves developers with no
intention to purchase the properties for their individual
residential
use. These purchasers were:
23.1
Sarpro Investments (Pty) Ltd which had purchased 22 sites;
23.2
Umhlaba Projects (Pty) Ltd which had purchased 7 pieces of land;
23.3
Ulaka Lodge (Pty) Ltd which had purchased 3 stands. Ulaka Lodge
(Pty) Ltd later became known as Harts Falcon View (Pty)
Ltd;
23.4
Statsec (Pty) Ltd 120 which had acquired 3 stands, and;
23.5
JCLR Trust which had bought 3 stands.
[22]
As I pointed out in paragraph 12 supra, the contracts which
constitute the bases of the plaintiff’s claims were concluded
between 25 March 2004 and 5 April 2004. A copy of the summons
commencing this current action was served on 20 August 2008
after
period of four years four months and twenty two days reckoned from 5
April 2004 had passed. On 12 October 2008 the
defendant
delivered, on the plaintiff, an exception to the summons on the basis
that it lacked the averments necessary to sustain
a cause of action,
in the alternative, that it was vague and embarrassing in some
respects. It is sufficient only to mention that
the defendant
proceeded to list all the respects in which it contended that the
summons was vague and embarrassing. Following
the said notice
of exception, on 21 May 2009 the plaintiff delivered its amended
particulars of claim.
[23] The plaintiff
requested the defendant to furnish precise dates on which the
defendant contended that the plaintiff’s
claim had arisen.
To this request, the defendant responded by stating that the
plaintiff’s claim arose:
“
on
or about the dates on which the contracts were signed, alternatively
within a reasonable time and thereafter which reasonable
time had
expired before May 2006.”
[24]
On a further question as to how the date 15 May 2009 (sic) was
relevant, which was the date on which the plaintiff amended
its
summons, the defendant alleged that the said date was the first date
on which a justiciable claim existed.
[25].
It is clear from the defendant’s plea that the precise date on
which the plaintiff’s claims arose was not stated
at least with
any precision. The Court is now called upon to decide the date
on which the plaintiff’s claims arose.
The purpose of
this exercise and its eventual result is to establish the date on
which prescription commenced to run and ultimately
the date on which
the plaintiff’s claims, if so, were extinguished by
prescription, if the defendant’s special defence
is anything to
go by. According to
Gericke v. Sack
1978
(1) S A 821
(A)
the duty to establish
the date on which prescription began to run is cast upon the
defendant.
[26]. In terms of s.
12(1) of the Act, prescription commences to run as soon as the debt
is due. According to the defendant’s
counsel, that date,
with specific reference to this matter, is the date on which the
agreements were concluded or 21 May 2005 perfected
its cause of
action. The last of such agreements were concluded, it will be
recalled, on 5 April 2004. Counsel for the defendant
contended that
because the agreements concluded were not subject to the fulfilment
of any suspensive condition, (I will later deal
with a condition to
which the agreements were subjected to), the date on which the
contracts were concluded, that is 5 April 2004,
or the date on which
the plaintiff delivered its amended claims, was the date on which the
debt became due. This was the
date on which the purchasers’
rights of action accrued. Accordingly, depending on the date of
the conclusion of the
various contracts and on the defendant’s
contention, the prescription began to run in respect of the contracts
from 24 March
2004 to 5 April 2004. Counsel for the defendant
relied on the following authorities. In
The Master v I L Back and
Company Ltd 1983(1) SA 986 [A] (“the Back case”),
the
court had to decide, inter alia, the date on which prescription began
to run. Counsel for the Master, the appellant in the said
authority,
had submitted on behalf of the Master that the debts, being fees
charged in terms of s.15(1) of the Companies Act 61
of 1973 and
published in Government Gazette 4128 of December 1973, had not become
due until the Master had assessed them. Simply
put counsel for the
Master had submitted that until the Master had first assessed the
fees payable to him by the respondent such
fees would not be due and
therefore prescription could not begin to run against them.
“
The
submission on behalf of the Master that the debts had not become due
until the Master had assessed the fee was framed as follows:
‘
(aa)
A debt being due in this context involves two things, namely that the
creditor is in a position to claim payment
forthwith and that the debtor does not have a defence to the claim
for immediate payment.
In
other words, that the creditor’s cause of action is complete-
as to
which see Evins v. Shield
Insurance Co Ltd
1980 (2) SA 814
(A) at
778”;
and
(bb)
It is an essential part of the cause of
action in the present case that
shall
have made an assessment and this involves a decision on the
gross value of the assets.
The
Court was then in agreement with the submission counsel for the
Master had made in “(aa) supra. It had the following to
say:
“
The
submission in (aa) is clearly correct.
The date on which the debt arose and the
date on which it is due are not necessarily the same, see List v.
Jungers
1979 (3) SA 106
(A) at 121. The import of the submission in
(aa) and (bb) is that the debt may well have arisen but that it had
not become due
as required by
s 12(1)
of the
Prescription Act. The
words “debt is due” must be given their ordinary meaning.
It seems clear that this means that there must be a liquidated
money
obligation presently claimable by the creditor for which an action
could presently be brought against the debtor. Stated
another way,
the debt must be one in respect of which the debtor is under an
obligation to pay immediately”.
In rejecting the
submission made by counsel for the Master in paragraph (
bb) supra
the court had the following to say at p.1005C-F:
“
This
balance sheet is part of the report which a judicial manager is
obliged to furnish in terms of ss 430
and
429(b) (ii) of the Companies Act.
We
thus have the position that, the gross value of the assets having
been determined as at 25 June, all the Master had to do was
to make
his assessment, ie make an arithmetical calculation. In any
summons which he issued he would merely have to allege
the determined
value of the assets and state the amount of the fee which is payable,
and which has been calculated in terms of
the rate provided in
annexure CM 103. The amount so calculated is not a fact proof of
which was necessary to complete the cause
of action. The calculation
was merely to prove the quantum of the fee. The Court a quo correctly
found (at 780 of the reported
judgment) that this was a procedural
matter relating not to the creation of a cause of action but only to
its proof.”
[27]
According to the above paragraph it is not so much the act of
registration of the properties in the names of the individual
purchasers as it is the conclusion of the purchase and sale
agreements that creates a cause of action for the purchasers or the
plaintiff in this case. The registration of the individual properties
in the names of the purchasers was not a fact proof of which
was
necessary to complete the purchasers’ cause of action. The
plaintiff’s cause of action arose on the date on which
they
concluded the agreements of purchase and sale with the defendant.
They had the right to claim immediate transfer of the properties
in
their own names. This, in my view, is the date on which prescription
commenced to run.
[
28]
The application of the principle set out in the Back case is not
restricted to monetary claim only. The Court in the Back case
set out
the law, as it did, because in that matter it dealt with an issue
that related to the payment of money. The same principle
will still
be applicable where the prescriptive period relates to obligations
that have their provenance in contracts. In this
regard see
Benson
And Another v. Walters And Others
1984 (1) SA 73
AD
at 82 where Van Heerden JA, after citing with approval the principle
set out in Back’s case, underscored it as follows:
“
In
parenthesis it may be pointed out that, if it was intended to
formulate the principle of general application, the words
“liquidated”
and “money” were clearly used
per incurium, since there is no doubt that prescription runs in
regard to unliquidated
claims for damages and also claims not
sounding in money”.
See
also
HMBMP Properties (Pty) Ltd
v King 1981(1) SA 986 (N) and Electricity Supply Commission v
Stewarts and Lloyd of SAP Ltd 1981(3) SA
314.
[29]
It is clear that the date on which it is contended by the defendant
that the prescriptions were to run was not chosen arbitrarily.
It is of paramount importance to point out that the period of
prescription of the plaintiff’s claim is three years, as set
out in the provisions of
s. 11(d)
of the
Prescription Act. This
is common cause between the parties for no other period of
prescription was bandied around. The defendant did not rely on
the other periods of prescription as set out in sections 11 (b) or
11(c) of the Act.
[30]The
plaintiff, however, holds a different view. While counsel for
the plaintiff acknowledges the provisions of s. 12(1)
of Act, he also
relied on the authority of
Benson and
Others v Walter and Others 1984(1) SA 72 at 82
supra.
He
submitted that what s. 12(1) means is that the debt must be
immediately claimable by the creditor in legal proceedings and;
(b)
in respect of which the debtor is under an obligation to perform
immediately. See in this regard
Western
Bank Ltd v SJJ Van Vuuren Transport (Pty) Ltd
1980 (2) S A 348
(T)
[31].
It was submitted by counsel for the plaintiff that in
casu
prescription could not commence to run because a condition precedent
to the running of the prescription had not been fulfilled.
That
condition was the registration of the properties into the names of
the purchasers. It is important, in my view, to point out
that this
condition was not specifically mentioned in any of the agreements
under scrutiny. Counsel for the plaintiff argued that
it was common
cause that transfer of the erven from the defendant to the purchasers
only took place on 16 August 2006. He developed
his argument and
stated that because section 12(1) of the Act prescribed that
prescription shall commence to run as soon as the
debt is due that
meant that the debt must be immediately claimable by the creditor in
legal proceedings and be one in respect of
which the debtor is under
an obligation to perform immediately. He continued with his argument
and stated that in this particular
case, before 16 August 2006, which
is the date on which the purchasers received ownership of their
properties, the purchasers had
no claim that was immediately
claimable. In this manner counsel for the plaintiffs says to the
defendant that “the plaintiff
says
you
cannot raise a special plea of prescription against our claims.
Prescription against our claims could not commence to
run before we
received ownership of the properties in our names or before the
properties were transferred into our names”.
It
is suggested that the defendant’s liability to transfer
ownership of the individual pieces of land to the respective
purchasers
was not a debt.
[32]This
approach seems to be inconsistent with the approaches adopted in some
authorities. In the first place, the defendant’s
identity
has remained the same at all material times. The purchasers in
their individual capacities and later as currently
constituted were
aware of the identity of the defendant. The defendant never changed
its identity. At the time they purchased
these lots, the
purchasers were at the same time members of the defendant. They
continued to be members of the defendant
until on 3 March 2005 when
they constituted themselves as the current plaintiff. It is not known
whether they ceased to be members
of the defendant on 3 March 2005.
As members of the defendant the duty lay on them not only to convey
ownership of the individual
properties into the individual
purchasers’ names but also to ensure that all the obligations
that arose from the purchase
and sale were complied with within a
period of 3 years in order to avoid prescription. Prescription
started to run the earliest
on 24 March 2004 and the latest 5 April
2004.
[33]
The mere fact that the defendant failed to transfer the properties
into the names of the individual purchasers did not mean
that the
debt was not due until the defendant did so. In this regard I
would adopt the approach set out in
The Master v I L Back and
Company Limited 1983(1) SA 986 [AD] at p.1005F-G:
“
The
mere fact that the Master must assess the fees in terms of annexure
C103 does not mean that no liability exists until he does
so.
If all that is required to be done to render the debt payable is a
unilateral act by the creditor, the creditor cannot
avoid the
incidence of prescription by studiously refraining from performing
that act
.”
It
went further and stated at p. 1005G-H that:
“
It
was urged that the Master had failed to act timeously and his delay
in doing so did not prevent prescription from running against
him. A
creditor’s right of action is not “postponed” until
such time as he may, either his wisdom or when he
thinks he ought to,
bestir himself.”
The
Court in Back’s case adopted the view set out in the preceding
two paragraphs.
[34]According
to
Munnikus v. Melamed
1998 (3) S A 873
(W),
a debt to perform contractual
obligations becomes due in accordance with the terms of the parties’
agreement. The pre-proclamation
agreements that the parties
concluded, all having the same wording, provided that:
“
1.
The purchase price was the sum of R…………..
Payable
as follows;-
A deposit of R………
shall be paid upon signature by the purchaser of this
agreement….
(b)
The balance of R………… shall be secured by
furnishing of the banker’s
guarantees
in a form acceptable to the seller’s conveyancer’s and
which
guarantees shall be delivered
to the seller’s conveyancers within 30
(thirty)
days of date of proclamation of the township.”
This
was, in my view, a term of the purported agreements. My understanding
of the said term was that despite the fact that the agreements
were
concluded beween 25 March 2004 and 25 April 2004, the parties had
agreed that the purchasers could not pay the balance of
the purchase
price before the township had been declared officially as a township
by Madibeng Municipality and until such had happened
there was no
debt. The purchasers could not lawfully claim delivery of the pieces
of land from the seller because they would not
have paid the balance
of the purchase prices. On the other hand the seller could not
lawfully claim payment of the balance of the
purchase price because
the township had not been officially proclaimed.
[35]
No dispute exists, in my view, that on 31 May 2005, acting in terms
of s 103 of the Ordinance, Madibeng Municipality declared
the
township of Kosmos X6 to be an approved Township. In the
circumstances the purchasers had until 1 June 2005 to pay the balance
of the purchase price by way of furnishing the seller’s
conveyancers with bank guarantees. The obligation to pay the balance
of the purchase price arose and the concomitant right to claim
transfer of the properties into their names arose simultaneously
on 1
June 2005. OAn 1 June 2005 the right to claim specific performance
under the terms of the agreement arose.
“
A
right to claim performance under a contract ordinarily becomes due
according to its terms or, if nothing is said, within a reasonable
time, which, in appropriate circumstances, can be immediately…………The
right to claim performance, and
thus the event, such as the expiry of
a maintenance period in a construction contract (Electricity Supply
Commissioner v. Stewarts
& Lloyds of South Africa (Pty) Ltd
1981
(3) SA 340
(A), or the receipt by a broker of the price of shares
sold on behalf of the plaintiff (Olthaver & List trust Co Ltd v.
Staunch
NO
1972 (4) SA 48
(SWA), or the determination of the amount
of an insured claims an indemnity from an insurer (Pereira v. Marine
and Trade Co Ltd
1975 (4) SA 745
(A) at 757F-785F, or, in the case of
property insurance, the date when the extent of the physical loss is
known~not the date of
the final ascertainment of the pecuniary extent
(Cape Town Municipality And Another V. Allianz Insurance Co Ltd
1990
(1) SA 311
(C) at 421F and 324A, or when the creditor has performed,
in whole or in part, as in the case of leases and contracts of work.”
See Munnikus v Melamed supra at 887D~887H.
[36]The
right to claim performance under the contract concluded by the
parties between 25 March 2004 and 4 April 2004 arose between
1 June
2005 the earliest and 1 July 2005 the latest. After payment of the
balance of the purchase price there would have been a
debt claimable
by the purchasers for the transfer of the pieces of land into the
various purchasers’ names and for the seller
to perform its
contractual obligations. The purchasers would have been immediately
entitled to sue for specific performance. Under
these circumstances a
claim in which a copy of the summons was served on 20 August 2008
would have become prescribed.
[37]
Whichever way one looks at it, n my view, the plaintiff’s
claims that are based on the agreements of purchase and sale
concluded between the plaintiff’s members and the defendant
from 24 March 2004 to 5 April 2004 and the resultant obligations
have
been extinguished by prescription.
[38].
THE PLAINTIFF’S SECOND CAUSE OF ACTION
I
now turn to the plaintiff’s second claim. The plaintiff’s
second cause of action, according to paragraph 12 of the
plaintiff’s
amended particulars of claim, arises from the following
circumstances. During the period 3 May 2007 to
4 June 2007 the
plaintiff, at all material times represented by its attorneys and the
defendant, also represented therein by its
attorneys, concluded a
written agreement of sale. The terms of the said agreement were
contained in annexures ‘FW11’
and ‘FW12’.
Annexure ‘FW11’ was a letter dated 3 May 2007 from the
plaintiff’s attorneys to
the defendant’s attorneys while
annexure ‘FW12’ was a letter dated 4 June 2007 from the
defendant’s attorneys
to the plaintiff’s attorneys. The
plaintiff contends that the contents of FW11 and FW12, read together,
constitute an agreement
or an undertaking.
[39]
It is the plaintiff’s case that it was the expressed terms of
the agreement alternatively of the binding undertaking
by the
defendant that the defendant would perform the work listed under the
heading (“
Uitstaande Dienste en Werke
soos op 29 Mei
2007”)
in annexure ‘FW12’. The work to be
performed is fully listed in the aforementioned amendment.
[40]
The plaintiff contends that despite the effluxion of a reasonable
time, the defendant had failed to perform its obligations
as set out
in annexure ‘FW12’. On the basis of the amendment’s
failure to perform in accordance with the
said obligations, the
plaintiff contends that it is entitled to an order of specific
performance against the defendant failing
which to damages in the sum
of R3,608,704.72.
[41]
The defendant does not dispute the contents of the letters. It is the
plaintiff’s interpretation of the contents of the
said letters
that the defendant has a very serious problem with. The defendant
disputes the plaintiff’s contention that the
contents of FW11
and FW12 constitute any agreement. In his heads of argument the
defendant’s counsel argued that it is common
cause that no
contract came into being regarding the “
Uitstande Dienste en
Fasiliteite”.
It is crucial, in my view, to analyse the
contents of the said letters. In the letter dated 3 May 2007, the
plaintiff’s attorneys
wrote, among others, the following to the
defendant’s attorneys.
“
1
Ons tree op namens die nuut verkose Direksie van die Kosmos X6
Huiseienaars Vereniging wat tydens ‘n vergadering op Saterdag
24 Maart 2007 verkies is. Volgens ons inligting tree u op namens die
ontwikkelaar, Leopont 64 Properties (Edms) Bpk en het u Mnr
Gert
Grobler, as hoof aandeelhouer, by bogemelde vergadering
verteenwoordig.
3.
Tydens die vergadering is deur die lede besluit om aan die nuut
verkose Direksie opdrag te gee om met die ontwikkelaar oor te
dra:
(1) dat die
Kosmos 6 Huiseienaars Vereniging nie op hirdie stadium bereid is
om verantwoordelikheid
te aanvaar vir
die beheer en administrasie van die dorp Kosmos X6 en dit van die
onwikkelaar oor te neem nie: en
(2)
dat van die ontwikkelaar vereis word word om die nodige stappe te doe
nom die
Dienste en fasiliteite aan
Kosmos X6 te verskaf soos hierna uiteengesit.
Volgens
die inligting tot ons beskikking was daar reeds kontrakteurs benoem
om die werk te verrig teen aanvaarbare norme en standard,
maar was
die kontrakteurs nie volmag gegee om met die werk voort te gaan nie”.
[42]
In response, the defendant’s attorneys wrote, among others, the
following to the
plaintiff’s
attorneys:
“
Soos
per die inhoud van ons skrywe gedateer 16 laaslede, is dit nie ons
intensie om te
reageer op al die
beweringe vervat in u vorige korrespondensie en met spesifieke
verwysing
na u skrywe gedateer 3
Mei 2007 nie, en gevolglik behou ons klient se regte voor om hierdie
aangeleentheid behoorlik aan te spreek by die
gekose tyd en forum, sou dit enigsins benodig
word
Derhalwe
moet ons versuim in die verband, nie gekonstrueer word as ‘n
erkenning van
Sodanige bewering
en/of onderneming om sodanige verpligtinge(wat ontken word) uit te
voer
nie
Gevolglik
is dit wel ons instruksies om die volgende aan u te openbaar:
(1)
Ons klient onderneem om sy juridiese
verpligting stiptelik n ate kom, soos vervat in die Diensooreenkoms
gesluit met die Munisipaliteit
van Madibeng. Enige beweerde
Verpligtinge wat
buite die kader van voormelde ooreenkoms val, word verwerp en sal nie
deur ons klient uitgevoer word nie,
(4)
Soos aan mnr. Dekker meegedeel op 28 laaslede, was ‘n bedrag
van R1 754 386,00
Opsy
gesit het en word huidiglik gehou in trust deur prokureurrs Swart,
Redelingshuis
en Nel, n Bedrag van
R250000,00 was sedertien aangewend om die tuine in orde te
kry.
(5)
Ons heg hierby aan ‘n uiteensetting van uitstande dienste en
werke soos op 29 Mei 2007 en gedeeltelik ter antwoord van
die inhoud
van u voormelde skrywe. Ten
Aansien
van die items gemerk is Geen goedkeuring/Opdrag, is di tons
instruksiesdat ons klient nie voormelde sal uitvoer nie, aangesien
dit nie deel deel van ons
klient
se juridiese verpligtinge is nie. In die verband verwys ons u
weereeens na
voormelde kommentaar
wat hierop betrekking het.”
[43]
I have deliberately left out certain paragraphs of the defendant’s
attorneys for the simple reason that they do not,
in my view,
contribute towards assisting the court to establish whether any
agreement came into being. For record purpose in paragraph
2 of the
said letter the defendant complained that Mr Grabe, who had been
appointed as the project manager had, during September
2006,
concluded an agreement with the defendant in terms of which he
undertook to complete the “
uitstande
werke”
within a reasonable after
which he would hand the development to the plaintiff. The same
paragraph contains, furthermore,
an attack on the ability of Mr Grabe
to effectively execute his mandate. Of crucial importance in this
paragraph is the acknowledgement
by the defendant that there works on
the development were incomplete or that there were still “
uitstande
werke
” on the development.
Paragraph 3 thereof refers to the alleged breach of contract by the
said Mr Grabe while in paragraph
5, the last paragraph of the said
letter, the defendant’s attorneys pointed out that Mr Grabe,
had in December 2006 and without
authority, allowed Kosmos Home
Owners Association to utilise the sewerage system and finally that
the sewerage system was installed
over certain properties without the
consent of the owners. It is for these reasons that I indicated that
these paragraphs will
not be of assistance in establishing the
creation of an agreement pleaded by the plaintiff and disputed by the
defendant.
[44]
The question now is whether the contents of FW11 and FW12 contain an
agreement. It is clear from the said FW12 that the defendant
undertook to complete certain services set out in the Service
Agreement with the Madibeng Municipality. It is also clear that it
refused to execute any other service. It is not the plaintiff’s
case that the Madibeng Municipality Service Agreement included
items
or some items in the plaintiff’s attorneys’ list of
“Uitstande Dienste en Fasiliteite.” In FW12 the
defendant’s attorneys did not indicate the items in the list of
“Uitstande Dienste en Fasiliteite” that were
set out in
FW11 which the defendant undertook to complete or execute. Instead
the defendant’s attorneys set out what in the
defendant’s
view was its on list of “Uitstande Dienste En Werke” as
at 27 May 2007. In this letter the defendant’s
attorneys sent
out a mixed bag of admissions and denials. While it admitted that
some works have not been completed it denied at
the same time that it
was obligated other works. There is therefore no clarity as to what
the parties have agreed to as the plaintiff
claims.
[45]
Relying on the authority of
Seeff
Commercial And Industrial (Pty) Ltd v. Silberman [2001]3 All S A 133;
2001 (3) S A SCA
, counsel for the
defendant submitted that FW11 and FW12, read together, do not
constitute an agreement because FW12 does not constitute
an
unequivocal acceptance of the plaintiff’s offer contained in
FW11. He regarded FW11 as an offer. An offer, as we understand
it,
consists of a proposal by one party, in this instance the plaintiff,
of the terms on the bases of which such a party is prepared
to
conclude a binding agreement with the offeree, in this case, the
defendant. The offer, in its fundamental nature, must be certain
and
definitive in its terms. If the submission made by counsel for the
defendant is anything to go by, I am satisfied that an offer
made by
the plaintiff and contained in FW11 is certain and definitive in its
terms. The offer must be accepted by the offeree as
an indication
that the offeree is prepared to be bound by the terms proposed by the
offeror. It is crucial that before such an
offer can develop into a
binding contract when it is accepted it is clear that it is intended
to be the whole offer. When only
part of the terms of the offer is
accepted and the others not, pending agreement on the outstanding
terms of the offer, no other
party has rights against the other of
them. See
Potchefstroom Municipal
Council v. Bouwer NO
1958 (4) S A 382(T).
In
this authority the parties had reached an agreement on the terms
relating to the letting and hiring of services and remuneration
but
had reached no agreement about the date of commencement of duties.
The court, finding that there was no contract, stated that
until the
date of assumption of duties was fixed by agreement between the
parties, there was no contract of service but only a
process of
negotiation.
[46] Lastly it was
argued by counsel for the defendant that the purported offer was made
by the plaintiff more than a year before
the claims were ceded to the
plaintiff. At the material time of the offer was not acting for the
individual purchasers. According
to him the undertaking could not be
regarded as an undertaking to comply with pre-existing contractual
obligations. If no agreement
resulted from the aforementioned
correspondence very little chance existed for the creation of any
obligations.
[47]
Accordingly I find that the contents annexures FW11 and FW12 do not
constitute an agreement.
[48] In the result I
find that the plaintiff’s claims contained in paragraph 9 of
the summons have been extinguished by prescription.
Accordingly
I make the following order:
The
plaintiff’s claim as contained in paragraph 9 of the
Plaintiff’s Particulars of Claim is hereby dismissed, with
costs.
_____________________
P.M.
MABUSE
JUDGE
OF THE HIGH COURT
APPEARANCES
:
Counsel
for Plaintiff: Adv. AJ Louw (SC)
Adv.
M Ackermann
Instructed
by: Len Dekker & Associate
Counsel
for the Defendant:
Adv. P Ellis
(SC)
Instructed
by: Lombard & Partners
Counsel
for the Third Party: Adv. LW de Koning (SC)
Instructed
by: O J Botha Attorneys
Date
Heard: 22 October 2012 – 2 November 2012 &
20
May 2013 – 3 June 2013
Date
of Judgment: 2014. 06. 06