About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: High Court, Northern Cape Division, Kimberley
SAFLII
>>
Databases
>>
South Africa: High Court, Northern Cape Division, Kimberley
>>
2013
>>
[2013] ZANCHC 9
|
|
Merementsi v Visser (CA&R 3/2011) [2013] ZANCHC 9 (26 March 2013)
1
Reportable:
YES
/ NO
Circulate
to Judges:
YES
/ NO
Circulate
to Magistrates:
YES
/ NO
IN
THE HIGH COURT OF SOUTH AFRICA
(Northern Cape High
Court, Kimberley)
Case No: CA&R 3/2011
Heard: 21/11/2011
& 11/02/2013
Delivered: 26/032013
In
the matter between:
REGINALD MOSEKI MEREMENTSI
.........................
Applicant/Plaintiff
v
ANDREW MOSEKIMANG VISSER
...................
Respondent/Defendant
Coram: Kgomo JP; Williams J et
Pakati J
ORDER
The appeal is upheld with costs on
a party and party scale.
The order of the Court below is set
aside and replaced with the following order:
“
2.1. The defendant is ordered
to pay the plaintiff damages in the amount of R25 000.00.
2.2. The defendant is ordered to pay
interest on the R25 000.00 at the rate of 15% from the date of
this order to the date
of payment.
2.3. The Cape Law Society is
requested to investigate whether the firm of attorneys Robertson Du
Toit attorneys acted ethically
by interdicting the transfer of Stand
No 9400, House No 6005, Seleke Street, Mankurwane, Kimberley, from
the name of the defendant
(Andrew Mosekimang Visser) into the name of
the plaintiff (Reginald Moseki Merementsi); and what has happened to
the amount of
R11 421-00 that has not been accounted for; and to
ascertain to whom the amount of R16 270-00 lodged with attorney
Van
Vuuren should be paid; and to ensure further that it is done. The
Cape Law Society is requested to report back their findings to
the
Judge President through the Registrar of the High Court, not later
than 27 June 2013.”
JUDGMENT
KGOMO JP
(concurring in the judgment of
Pakati J. Williams J dissenting).
INTRODUCTION AND HISTORY
I have had the advantage of reading
the judgment of Pakati J (the scribe) and the separate judgment of
Williams J and concur in
the judgment of Pakati J. The case emanates
from the District Court. The appeal was heard on 21 November 2011 by
the two judges.
Pakati J produced an initial judgment from which
Williams J dissented.
I was then approached by the judges
to constitute a Full Court (three judges) to break the stalemate.
Several dates to re-argue
the appeal were not suitable to counsel.
Eventually counsel were given a date of hearing in August 2012. Just
before the appeal
was re-heard by a panel of three, counsel
approached me and requested a postponement because settlement
negotiations were taking
place. When the parties did not revert I
called in their legal representatives and allocated 11 February 2013
for the re-hearing.
On 11 February 2013 the respondent
(defendant), Mr Visser, terminated his counsel’s (Mr Anderson
of Legal Aid South Africa’s)
mandate. Notwithstanding our
persuasion to retain Mr Anderson, explaining that the legal issues
may be complex to a lay person,
the respondent persisted in his
attitude. He adopted the same attitude in the magistrate’s
court. We availed both sets
of Heads of Argument to him to
familiarize himself with the issues and to indicate whether he was
ready to proceed or ask for
a postponement. We adjourned for this
purpose and proceeded when he intimated that he was ready to
proceed. Needless to say,
Mr Visser argued outside the record.
Nevertheless, to his benefit, we had regard to the Heads of Argument
prepared by Mr Anderson.
ON THE MERITS OF THE CASE
Pakati J has written a
comprehensive judgment (paras 10-37). There is no need for a
repetition. I allude to a few peripheral matters
on the merits.
Williams J does not state that the
parties hereto had entered into a valid agreement of the sale of the
immovable property described
by Pakati J in the opening paragraph of
her judgment (para 10). It is therefore incomprehensible on what
basis or legal principle
it is suggested by Williams J that the
respondent could alter arbitrarily and orally the terms of a binding
written agreement
of the sale of immovable property.
In para 41 Williams J states, inter
alia:
“
As a result thereof the
full purchase price of R21 000, 00 was handed to the defendant’s
guardian, Mr Maropong. Hereafter
the defendant approached the
plaintiff with a request to increase the purchase price by R4000, 00
bringing the total purchase price
to R25 000, 00, in order for the
defendant to discharge his increased financial obligation towards the
municipality. The plaintiff
refused to pay the additional amount
requested, which in turn led to the defendant’s refusal,
despite numerous requests,
to sign the transfer documents.”
This aspect is concluded by Williams
J as follows in para 47:
“
As outlined herein-above,
it became clear shortly after entering into the agreement, that the
defendant was demanding a higher purchase
price and was steadfast in
his refusal to sign the transfer documents unless the plaintiff
complied, thus clearly envincing an
intention not to be bound by the
contract.”
A seller of property cannot evade
its obligations under a valid sale agreement because such seller
reckons that a more commercially
lucrative deal is to be had from
another potential purchaser. See
Pillay and Another v Shaik
and Others
2009(4) SA 74 (SCA) at 81B where the following
statement in a letter did not absolve the seller:
“
[O]ur client has decided
that it will not accept these offers by Mr S Pillay and Dr Motlanthe
respectively. If they are interested
in increasing the offering
price, our client may be prepared to consider their offers.
We are making arrangements for
the deposits to be refunded to these two purchasers together with the
interest which has accrued
thereon.”
Whereas the Pillay case deals with
quasi mutual assent the consequences of a valid agreement are no
different when a party attempts
to resile from the terms thereof. I
can therefore, with respect, not reconcile myself with the approach
by Williams J.
At paras 17, 18, 31, 32 and 33
Pakati J deals with a debt owed by Mr Visser (the defendant) to his
attorneys Robertson Du Toit
Attorneys for fees owed to them for
services rendered in a criminal matter. This debt has nothing to do
with the appellant/plaintiff
(Mr Merementsi) or the sale agreement
aforesaid between the parties in this appeal. I am unable to fathom
why Robertson Du Toit
Attorneys did not simply allow the sale of the
property to go through and recover their fees from the proceeds of
the sale as
soon as the property had been transferred to the
appellant.
In my view it appears that these
attorneys impermissibly stole a march, interfered with a valid
agreement and prevented its consummation.
From Pakati J’s judgment
(paras 17 and 18) she points out that it is not all too clear how,
following the sale in execution
initiated by Robertson and Du Toit,
the balance was disbursed or distributed after these attorneys
arrogated payment to themselves.
Hence the order at para 2.3 which I
am in agreement with. Magistrate Adams, the court a quo, was also
concerned on how the proceeds
of the sale were dealt with.
PAKATI J
(MAJORITY JUDGMENT)
The appellant, Mr Reginald Moseki
Merementsi (the plaintiff), instituted an action against the
respondent, Mr Andrew Mosekimang
Visser (the defendant), for damages
in the amount of R25 000-00 for failure to sign transfer documents
pertaining to immovable
property situated at Stand 9400, House No.
6005 Seleke Street, Mankurwane, Kimberley (the property), into the
name of the appellant.
The appeal is from the judgment of Ms CM
Adams, a district magistrate of Kimberley.
The defendant does not dispute that
he refused to sign the documentation to allow transfer. He admitted
that the plaintiff suffered
damages but denies that it was due to
any fault on his part. According to him the sale of his property at
the auction took place
in his absence and was not instigated by him.
At the conclusion of the trial the
Magistrate made the following order:
“
The plaintiff’s claim
is dismissed with costs. The Clerk of the Court is directed to
forward the matter to the Law Society
of the Cape of Good Hope and
the South African Board for Sheriffs in order to investigate the
transfer of funds in trust and immovable
property situated at stand
9400, house number 6005 Seleke Street, Mankurwane, Kimberley.”
The plaintiff was aggrieved by the
Court a quo’s order and appealed to this Court on the grounds
which are summarised in
his counsel’s Heads of Argument as
follows:
“
2.1 THE RESPONDENT’S
PLEA:
2.1.1 The first ground for the
appeal relates to the Respondent’s plea.
2.1.2 The Respondent admitted in his
plea to the appellant’s particulars of claim that:-
2.1.2.1 the immovable property was
sold; and
2.1.2.2 the appellant suffered
damages.
2.1.3 The Respondent did not raise
the defence in his plea that the Appellant had not complied with the
provisions of the agreement
of sale.
2.1.4 The Respondent also did not
raise the defence in his plea that it was the fault of Robertson Du
Toit Attorneys that the property
had been sold in execution and that
it was Robertson Du Toit Attorneys who had caused the Appellant’s
damages.
2.1.5 The Respondent’s plea
was never amended to record the new defences.
2.1.6 The Court a quo found that the
Respondent’s defence to the Appellant’s claim was that it
was the fault of Robertson
Du Toit Attorneys that the property had
been sold in execution and that it was Robertson Du Toit Attorneys
who had caused the Appellant
damage[s].
2.1.7 The court a quo erred in
finding that it was hearsay evidence that the Respondent had refused
to sign the transfer documents.
2.1.8 Paragraph 6 of the Appellant’s
particulars of claim states as follows:
“
The Respondent failed and
refused to sign any documentation with Van de Wall & Partners to
allow transfer of the property to
be effected to the Appellant.”
The Respondent pleads to
paragraph 6 in paragraph 3 of his plea that he had not signed any
documentation at Van de Wall and
Partners for transfer to be
effected.”
A synopsis of this matter is that
on 26 September 2003 the plaintiff and the defendant entered into a
written sale agreement for
the purchase of the immovable property.
The terms of the agreement read as follows:
“
This is a binding, amicable
and mutual agreement between
Mr
Andrew Mosekimang Visser
(ID No, 6202045859085) who is the owner and seller of ERF
00/00003/694 – Stand 9400 house number 6005 Seleke Street P.O
Mankurwane Vergenoeg, Kimberley Municipal district – Account
no: 072157081528 on the day (Friday) 26 September 2003 at Kimberley
Prison.
Between
Reginald Moseki
Merementsi
ID No: 68058045740087 who is the purchaser or buyer of
house number 6005 Seleke Street, Vergenoeg, Kimberley, ERF 694 Stand
9400,
with the total [voetstoots] cost price of R21, 000, 00 but with
the first payment of R16, 000, 00 in cash through our local
government
structure namely the Sol Plaatjie Municipality Private Bag
5030 Kimberley 8300 Tel: (053) 830 6911 – Housing Section –
Mr Jerry Majinja.
I,
Reginald Moseki Merementsi
,
requested and agreed with Andrew Mosekimang Visser to pay him the
outstanding amount [of] R5, 000, 00 within a period of six months
as
from the date of the first payment of R16, 000, 00.
Mr Merementsi will occupy the
property immediately upon payment of R16,000,00.
The transfer of
ownership
must be effective immediately upon receipt of the
outstanding amount (full amount) of R5, 000, 00 which succeeds the
R16, 000,
00.
Failing to honour this kind, humble,
honest and friendly agreement will nullify the selling transaction
and the final transference
of the above mentioned property to Mr R M
Merementsi. (cell no. 082 6792433).
BUYER: Reginald Moseki Merementsi
ID No. 6805045740087….
Created by R M Merementsi & A M
Visser.”
It is common cause that there was a
valid written agreement between the parties. The plaintiff paid the
purchase price of R21
000-00 to Mr Maropong, the defendant’s
relative, as per instructions of the defendant whilst the defendant
was in prison.
After payment of the purchase price the plaintiff
effected some improvements to the building without notifying the
defendant
and later moved into the property. The occupation is in
accordance with the written agreement.
The defendant alleged that he
refused to sign the transfer documents because the plaintiff had to
add R4 000-00 to the purchase
price of R21 000-00 to make it R25
000-00. The additional demand of R4000-00 was made orally after the
valid sale agreement had
been concluded and also after the R21
000-00 was already paid to Mr Maropong, in terms of the defendant’s
instructions.
It transpired that during March
2002 Mr Robertson, an attorney in Robertson and Du Toit Attorneys in
Kimberley, represented the
defendant in a criminal matter. As a
result of these rendered services the defendant owed the firm R12
000-00. Mr Robertson apparently
requested some form of security from
the defendant because the latter was not in a financial position to
pay his legal fees immediately.
The defendant undertook to settle
this account from the proceeds of the sale of the property. He
thereafter signed a special
power of attorney in favour of Mr
Robertson to do the conveyancing or to see to it that this was done.
When he failed to pay
the said fees Ms Du Toit obtained an interdict
against the defendant which prevented the sale of the property, and
at the same
time issued summons against him for the payment of R12
000-00. The firm obtained default judgment against the defendant in
the
magistrate’s court on 03 March 2003 after the defendant
failed to enter an appearance to defend. He also failed to bring
an
application for rescission of the default judgment even though he
was aware of the judgment. The property was then advertised
for sale
and subsequently sold in execution for R46 000-00.
The plaintiff testified that he
read about the sale of the property in a newspaper on 14 January
2005. He enquired from Robertson
and Du Toit Attorneys concerning
the sale of the property and was informed that the sale was going
ahead as advertised. He recovered
the purchase price of R21 000-00
that he paid to Maropong and added a sum of R25 000-00 and bought
back the property on 27 January
2005 for R46 000-00. Robertson and
Du Toit Attorneys received R18 309-00 inclusive of the ancillary
costs and interest realised
from the proceeds of the sale. The
balance of R16 270-00 was paid over to Mr Van Vuuren, the
defendant’s attorney at that
stage, where it is still kept in
trust. According to Ms Du Toit there was an outstanding amount of R5
594.40 due to them by the
defendant which they wrote off as a bad
debt. It is not clear from the record what gave rise to that debt.
It is also not clear
what happened to the balance of R11 421-00 to
tally up to R46 000-00.
Adv A Stanton, for the plaintiff,
argued that the defendant conceded in his plea that the property was
sold and that the plaintiff
indeed suffered damages. She argued
further that the defendant did not raise it in his plea that
Robertson & Du Toit Attorneys
were responsible for the sale of
the property and therefore caused the plaintiff to suffer damages.
There was also no allegation
that the plaintiff did not comply with
the terms of the agreement.
Mr WW Anderson of Legal Aid South
Africa, who prepared the Heads of Argument which the defendant
supposedly used after he inexplicably
terminated Mr Anderson’s
mandate, had contended that the plaintiff failed to prove who caused
the damages; when it had
occurred and to what extent. He contended
further that the damages were not limited in this case and there was
no agreement between
the parties that the plaintiff should effect
improvements to the property.
The plaintiff stated that he bought
the house at the auction sale because he would have lost all the
money he invested in renovating
the property and contended that the
defendant breached the contract by refusing to sign the
documentation allowing transfer of
the property into his name. The
defendant confirmed in para 3 of his plea that he did not sign the
documentation.
The court a quo in deciding the
matter made the following findings:
“
Subsequent to the signing
of the agreement in 2003 the plaintiff unilaterally amended the terms
of the agreement. The plaintiff
failed to act in accordance with the
agreement in that the terms regarding the payment of the purchase
price was made to a guardian
of the defendant instead of the local
municipality, specifically a certain Mr Majinja, as the agreement
provided.
The plaintiff testified that he
indeed met with Mr Majinja, but when he attempted to pay the
municipality the R16 000 as agreed
in the contract, the municipality
refused to accept it. The plaintiff conceded that the terms of the
contract were not performed
as agreed, stating in answer to a
question by the defendant that the written agreement had now been
transformed into a verbal agreement.
Later, the exact date being
unknown, the plaintiff appointed a [conveyancer] to attend to the
transfer of the property, albeit that
the agreement was not fulfilled
according to the conditions of how payment should be effected
therein.
Ms Du Toit who was called to
testify on behalf of the plaintiff, stated in her evidence that
transfer of the property would not
have been possible because an
interdict had been registered against the property on 09 June 2004,
this being 9 months after the
parties entered into the sale agreement
for the property in question, as her firm obtained judgment and
attached the property for
the debt due to them by the defendant which
has been mentioned early on in the judgment...
I am of the view that the court
is not in a position to decide whether the debt to Robertson Du Toit
was indeed due to them and
whether Robertson and Du Toit Attorneys
were correct to proceed with the sale in execution.
I find that the defendant is not
liable for the payment of damages to the plaintiff as he did not
cause the plaintiff to pay an
additional R25 000 in order to become
the owner of the property for an amount of R46 000 at a sale in
execution.
I find that the transfer of the
property as per the agreement between the parties never materialised
because there was no valid
agreement between the parties. The
conditions of the agreement were not fulfilled by the plaintiff. When
the conditions in the
agreement were not fulfilled, the sale was
nullified as per the agreement and transfer of the property could not
be effected.
Furthermore, the verbal
agreements between the parties were never reduced to writing in order
to comply with the prerequisites for
the sale of immovable property,
namely that a contract of this nature must be in writing.
The plaintiff alleges that his
damages were caused by the defendant due to the latter’s
refusal to sign certain transfer documents.
The plaintiff led hearsay
evidence as to this. According to the plaintiff he instructed an
attorney to attend to the drafting of
another agreement and the
transfer of the property. The plaintiff testified that he did not
read the agreement that was drafted
by the attorney but annexed his
signature to the document in any event. The attorney was not called
to testify about the alleged
refusal of the defendant to sign the
transfer documents or other documents.”
From the above it is clear that the
magistrate was, unfortunately, out of her depth. She failed to focus
on the law, both statutory
and the common law principles. She did
not consider the fact that the alleged subsequent oral and
unilateral attempt to change
a valid written agreement offends
against the parol evidence rule. The magistrate lost sight of the
fact that a matter admitted
by a party need not be proved by the
opponent. The judgment is also full of contradictions.
The defendant did not amend his
plea to include the new defences raised in the Heads of Argument.
The court a quo nevertheless
found that it was Robertson and Du Toit
Attorneys who caused the plaintiff damages. In
FPS LTD v
TRIDENT CONSTRUCTION (PTY) LTD
1989 (3) SA 528
(A) at 541I
-542B Eksteen JA held:
“
One of the prime functions
of pleadings is to clarify the issues between the parties. To this
end the Rules of Court require a defendant
in his plea to: ’Admit
or deny, or confess and avoid all the material facts alleged in the
combined summons or declaration
or state which of the said facts are
not admitted and to what extent…’ (Rule 22 (2)). A
defendant must therefore give
a fair and clear answer to every point
of substance raised by a plaintiff in his declaration or particulars
of claim, by frankly
admitting or explicitly denying every material
matter alleged against him.”
See also Rule 17(2) of the
Magistrates’ Court Rules. The magistrate therefore committed a
misdirection in allowing the defendant
to lead evidence advancing
the two new defences that were not raised in his plea.
S 2
of the
Alienation of Land Act,
no. 68 of 1981
, 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 the parties thereto or by
their agents acting
on their written authority.”
In
FRASER AND ANOTHER v
VILJOEN
[2008] ZASCA 24
;
2008 (4) SA 106
(SCA) at 110 F-G Combrinck JA had
this to say:
“
The reason for adopting
this approach [written contract] is not difficult to find. It is
sought to obviate disputes about the terms
of agreement, exclude the
possibility of fraud and perjury and avoid unnecessary litigation ---
the very mischief these types of
statutes are aimed at
.”
See in this regard
Johnston v Leal
1980 (3) SA 927
(A) at
946H per Corbett JA:
The other possible obstacle to
the admission of extrinsic evidence in this case is
s 1(1)
itself and
the policy underlying it, viz as already indicated, the prevention of
uncertainty and disputes concerning the contents
of contracts for the
sale of land and of possible malpractices in regard thereto. The main
effect of the section is to confine
the parties to the written
contract and to preclude reliance on an oral consensus not reflected
therein.”
The following principles as
propounded in the following authorities are also relevant to this
case:
28.1 In
HOLMDENE BRICKWORKS
(PTY) LTD v ROBERTS CONSTRUCTION CO LTD
1977 (3) SA 670
(A)
at 687B-C Corbett JA held:
“
The fundamental rule in
regard to the award of damages for breach of contract is that the
sufferer should be placed in the position
he would have occupied had
the contract been properly performed, so far as this can be done by
payment of money and without undue
hardship to the defaulting party…”
28.2
RH CHRISTIE IN THE LAW OF
CONTRACT IN SOUTH AFRICA, 5th edition,
at page 543 makes the
following principled comment:
“
Unlike damages for delict,
damages for breach of contract are normally (and this word must be
emphasised) not intended to recompense
the innocent party for his
loss, but to put him in the position he would have been in if the
contract had been properly performed.”
In
TROTMAN v EDWICK
1951 (1) SA 443
(AD) at 449B-C Van den Heever JA held:
“
A litigant who sues on
contract sues to have his bargain or its equivalent in money or in
money and kind.”
Innes CJ in
VICTORIA FALLS
AND TRANSVAAL POWER CO LTD v CONSOLIDATED LANGLAAGTE MINES LTD
1915 AD 1
at 22 had this to say:
“
The sufferer by such a
breach should be placed in the position he would have occupied had
the contract been performed, so far as
that can be done by the
payment of money,
and
without undue hardship to the defaulting party
.”
(My emphasis).
The Magistrate further misdirected
herself when she found th`at the plaintiff led hearsay evidence to
prove that the defendant
defaulted in signing the documentation to
effect transfer. It is a rule of evidence that no evidence need be
adduced to prove
an admitted fact. The defendant, as already stated,
admitted in his plea that he failed or refused to sign the transfer
documentation.
At that stage the purchase price had already been
paid by the plaintiff, which means that the plaintiff complied with
all the
terms of the agreement. The defendant also could not change
the purchase price unilaterally.
The court a quo further committed a
misdirection in having stated that the plaintiff failed to comply
with the terms of the agreement
in that he paid the R16 000-00 to
the defendant’s “guardian” instead of the
municipality. The place where and
to whom the purchase price was to
be paid is not an essentialia of a contract of sale of immovable
property. See
RH CHRISTIE THE LAW OF CONTRACT IN SOUTH AFRICA,
5th edition
supra at pp111 to 123. The Sol Plaatjie Municipality
was not a party to the agreement and there was nothing the appellant
could
have done when Mr Majinja refused to accept the purchase
price. In
BREYTENBACH v VAN WIJK
1923 AD 541
at 547
Wessels JA had this to say:
“
The purchaser cannot know
at what exact moment the registration is effected in the Deeds Office
and therefore he cannot be in attendance
with his money. Now in
theory it is his duty to tender the purchase price at the moment that
delivery of the immovable is given
to him and that delivery occurs at
the moment his name is entered on the register as the new dominus of
the property. In practice,
however, this is impossible and therefore
the law requires that the purchaser should satisfy the seller, at the
latest, when the
deeds are ready and handed in at the Deeds Office
that he will receive the purchase price when the transfer is
effected.
It is not
enough for the purchaser to say that he has money and that he is in a
position to pay: he must either pay the money over
or hand it to a
party agreed upon or else he must give some satisfactory guarantee
.”
(My emphasis)
The record shows that Ms Du Toit
obtained the interdict against the defendant on 09 June 2004, nine
months after the contract
was signed. Ms Du Toit said in her
testimony:
“
Mr Visser informed us that
he was in the process of selling his house. But as that was not
finalised, he undertook – we requested
him to provide us with
some form of security that in the event that his house is not sold,
that we will be in a position to act
on his behalf and sell the house
then and that – and he agreed to that and that is when he
signed the Special Power of Attorney.
Mr Visser was well aware of the
fees. It was quoted to him. An estimate was provided to him and there
was no misunderstanding about
that.”
Ms Du Toit intimated that she was
aware that there was a Deed of Sale concluded by the parties and
that her firm was going to
be paid out of the proceeds of the sale.
When she was asked whether she had contact with the attorneys Van de
Wall and Partners
who prepared the transfer documents she said:
“
Yes, I was in contact with
them as we had an interdict registered against the property. So they
were not in a position to continue
without us uplifting the
interdict.”
This means that Van de Wall and
Partners were not in a position to register transfer of the property
without Robertson and Du
Toit Attorneys lifting the interdict they
had imposed against the property at that stage. Mr Fletcher, the
attorney for the plaintiff
in the court a quo, asked this of Ms Du
Toit:
“
Question: Would you agree
or – just give me your opinion on what I am going to say now.
Is that, in fact, as a conveyancer,
there was a Deed of Sale that had
been signed and that if Mr Visser had signed such Deed of Sale, the
transaction would have gone
through for R21 000-00 and with the
interdict that you had against the property, Van de Wall would not
have been able to register
that property unless you had been paid the
monies that were due and payable to you and normal transfer would
have been effected?
Answer: That is correct.”
The facts of the case show that the
plaintiff discharged his obligation in terms of the contract by
paying the purchase price
as agreed between the parties. The
plaintiff alleged that he suffered damages in the sum of R25 000-00
being the adverse difference
between the agreed value, being the
value of the house had there been no breach of contract, and the
selling price of the house
of the sale in execution.
SILBERBERG
AND SCHOEMAN’S THE LAW OF PROPERTY 5th edition
at p267
para 11.2.1.6 comments as follows:
“
The requirements are that
the defendant must be enriched, the plaintiff must be impoverished,
the defendant’s enrichment must
be at the expense of the
plaintiff and the enrichment must be unjustified.”
In the instant case the defendant
breached the contract by not signing the transfer documents and the
plaintiff was impoverished
as he had to buy the property at a price
much higher than the agreed price. Had the defendant performed in
terms of the contract
no enrichment problem would have arisen. The
defendant’s enrichment was at the plaintiff’s expense.
It must be borne
in mind that the property fetched the higher price
because of the improvements that the plaintiff had effected. He
therefore
paid twice for the improvements and was therefore
impoverished. The written contract permitted the plaintiff to occupy
the property
as soon as the purchase price was paid. He was
therefore not an unlawful occupier when he enhanced the value of the
property
by making the necessary improvements.
To sum up. The valid and binding
written agreement between the parties was for R21 000-00. The house
was sold to the plaintiff
for R46 000-00 at the sale in execution.
If the defendant discharged all his obligation the plaintiff would
not have been out
of pocket by R25 000-00. The appeal must therefore
succeed with costs. I also endorse the comments of Kgomo JP.
In the result the following order
is made:
ORDER
1. The appeal is upheld with costs
on a party and party scale.
2. The order of the Court below is
set aside and replaced with the following order:
2.1 The defendant is ordered to pay
the plaintiff damages in the amount of R25 000.00.
2.2 The defendant is ordered to pay
interest on the R25 000.00 at the rate of 15% from the date of this
order to the date of payment.
2.3 The Cape Law Society is
requested to investigate whether the firm of attorneys Robertson Du
Toit attorneys acted ethically by
interdicting the transfer of Stand
No 9400, House No 6005, Seleke Street, Mankurwane, Kimberley, from
the name of the defendant
(Andrew Mosekimang Visser) into the name of
the plaintiff (Reginald Moseki Merementsi); and what has happened to
the amount of
R11 421-00 that has not been accounted for; and to
ascertain to whom the amount of R16 270-00 lodged with attorney Van
Vuuren should
be paid; and to ensure further that it is done. The
Cape Law Society is requested to report back their findings to the
Judge President
through the Registrar of the High court, not later
than 27 June 2013.
_______________________________
BM PAKATI
JUDGE
NORTHERN CAPE HIGH COURT, KIMBERLEY
I concur.
_________________________
F DIALE KGOMO
JUDGE PRESIDENT
NORTHERN CAPE HIGH COURT, KIMBERLEY
WILLIAMS J
(MINORITY
JUDGMENT)
I have read the judgment of Pakati
J in which Kgomo JP concurs. I agree with the basic background
information as set out therein
but respectfully disagree with the
conclusions reached.
The plaintiff’s claim is not
based on enrichment and all references in the main judgment to the
plaintiff’s impoverishment
on the one hand and the defendant’s
enrichment on the other are unfounded and not informed at all by
either the pleadings
or the evidence for that matter. It is also
quite understandable why enrichment was not pleaded - and that is
that the defendant’s
liability would then be confined to the
amount by which he was enriched at the time of the action. In this
unique set of circumstances
this would have created a dilemma for
the plaintiff in that the purchase price fetched at the sale in
execution was utilized
firstly to defray the auctioneer’s
fees, thereafter the judgment debt and outstanding municipal
charges, which according
to attorney Ms Du Toit totalled close to
R3000, 00, whereafter the balance of about R16 000, 00 was paid over
to the defendant’s
attorney at the time, Mr Janse Van Vuuren.
It would appear from the record of the proceedings that the
defendant, at the time
of the trial, had no knowledge of the
whereabouts or the amount of the balance of the purchase price after
expenses had been
met. Mr Fletcher, the attorney for the plaintiff
however, in passing during cross-examination of Ms Du Toit, made
mention that
he had received the balance from Mr Janse Van Vuuren
and was holding the money in his trust account. This state of
affairs is
what prompted the magistrate to order, in addition to
dismissing the plaintiff’s claim with costs, that the Law
Society
of the Cape of Good Hope and the South African Board for
Sheriffs investigate the transfer of the funds in trust.
The plaintiffs’ claim is
simply for damages suffered as a result of the defendant’s
breach of contract and the matter
should be adjudicated purely on
this basis.
It, had, or should have, become
clear to the plaintiff very soon after the agreement of sale was
entered into, that performance
in terms of the agreement would be
problematic. Firstly, on the plaintiff's own version the municipal
official, Mr Majinja who
is referred to in the agreement, refused to
accept the R16 000, 00 payment earmarked for the Sol Plaatjie
Municipality as stipulated
in the contract. As a result thereof the
full purchase price of R21 000, 00 was handed to the defendant’s
guardian, Mr
Maropong. Hereafter the defendant approached the
plaintiff with a request to increase the purchase price by R4000, 00
bringing
the total purchase price to R25 000, 00, in order for the
defendant to discharge his increased financial obligation towards
the
municipality. The plaintiff refused to pay the additional amount
requested, which in turn led to the defendant’s refusal,
despite numerous requests, to sign the transfer documents.
This situation persisted until
January 2005, some 16 months later, when the property was auctioned
off. In the meantime the plaintiff
had renovated the property –
the costs of the renovations are not disclosed – without the
permission of the defendant
and with the knowledge that the
defendant was refusing to sign the transfer documents.
There can be no doubt that the
defendant’s refusal to sign the transfer documents constituted
a fundamental breach of the
contract which entitled the plaintiff to
either claim specific performance or cancel the contract and claim
damages in lieu of
performance. In
Holmdene Brickworks
(Pty) Ltd v Roberts Constructions Co Ltd
1977 (3) SA 670
(A) at 687 C-F, Corbett JA states the fundamental rule in regard to
the award of damages for breach of contract as such:
“
. . . . that the sufferer
should be placed in the position he would have occupied had the
contract been properly performed, so far
as this can be done by the
payment of money and without undue hardship to the defaulting party
(see Victoria Falls & Transvaal
Power Co. Ltd v Consolidated
Langlaagte Mines Ltd.,
1915 A.D. 1
at p 22; Novick v Benjamin,
1972(2) S.A. 842 (A.D) at p. 860). To ensure that undue hardship is
not imposed on the defaulting party
the sufferer is obliged to take
reasonable steps to mitigate his loss or damage (ibid.) and, in
addition, the defaulting party’s
liability is limited in terms
of broad principles of causation and remoteness, to (a) those damages
that flow naturally and generally
from the kind of breach of contract
in question and which the law presumes the parties contemplated as a
probable result of the
breach, and (b) those damages that, although
caused by the breach of contract, are ordinarily regarded in law as
being too remote
to be recoverable unless, in the special
circumstances attending the conclusion of the contract, the parties
actually or presumptively
contemplated that they would probably
result from its breach (Shatz Investments (Pty.) Ltd. V Kalovyrnas,
1976 (2) S.A.545 (A.D.)
at p. 550).”
It is clear from the above extract
that the determination of damages is not merely a simple
arithmetical exercise. The plaintiff
in a claim for damages has to
prove a causal link between the breach and the damages, that the
damages claimed are reasonable
in the circumstances and that the
loss is not too remote to recover.
In my view the plaintiff has failed
to prove his damages on all levels. As far as causation is concerned
the question to be asked
is whether it was the failure or refusal of
the defendant to sign the transfer documents which resulted in the
plaintiff having
to pay the higher purchase price at the auction or
whether it was in fact the improvement of the property by the
plaintiff which
caused the increased auction price on which he bases
his claim for damages. Although the plaintiff has not given any
evidence
as to the costs incurred by him in effecting the
improvements it can be gleaned from his evidence that the
improvements were
not insubstantial. His evidence in this regard was
that “
I repaired the floors because there were cracks on
the floors, the walls were – had cracks. I changed the window
frames.
I put on ceramic tiles. I plastered the house and painted
the whole house.”
It is in fact the plaintiff’s
case in his particulars of claim that “
having regard to
extras and additions that he had done to the property (he) was
compelled to purchase the property on the particular
sale.”
The converse of this contention is
that he would not have been compelled to buy the property at the
auction if he had not made renovations
to the property. The
plaintiff’s own actions being one of the major factors
contributing to his loss, he cannot expect the
defendant to pay for
it.
Even if I am wrong in the above
regard, the next question that can be asked is whether the
plaintiff, in the circumstances of
this case, had acted reasonably
in bringing about the renovations to the property. As outlined
herein-above, it became clear
shortly after entering into the
agreement, that the defendant was demanding a higher purchase price
and was steadfast in his
refusal to sign the transfer documents
unless the plaintiff complied, thus clearly evincing an intention
not to be bound by the
contract. The plaintiff’s obvious
course was to cancel the contract and mitigate his loss. He cannot
recover a loss which
results from his failure to take such steps as
were reasonable in the circumstances in which he found himself.
The next question is whether it
could ever have been in the contemplation of the parties, at the
time the contract was entered
into, that a breach of the agreement
would lead to the particular loss suffered by the plaintiff. The
contract makes provision
for the plaintiff to take occupation
immediately upon payment of R16000, 00 to the municipality. This not
having been possible
but accepting that the appellant was entitled
to take occupation after handing over the full contract price to Mr.
Maropong,
it can never be said that the defendant should have
foreseen that the plaintiff would feel himself compelled, as a
result of
his renovations, to buy the property at the auction, at
the price that he did. The risk of these damages could not
reasonably
have been foreseen and the defendant should therefore not
be answerable for it. See
Lavery & Co Ltd v Jungjeinrich
1931
AD 156.
In my view the plaintiff would at
best for him, have been entitled to damages in the amount of his
expenses incurred in renovating
the property, that being the damages
suffered at the time when he accepted the defendant’s
repudiation of the contract
by claiming back the contract price from
the defendant’s guardian. Unfortunately for the plaintiff he
failed to prove even
these expenses.
For the above reasons I would have
dismissed the appeal
.
_____________________
C
C WILLIAMS
JUDGE
NORTHERN
CAPE HIGH COURT, KIMBERLEY
On behalf of the Appellant
:
ADV A. STANTON
Instructed by Fletcher Attorneys
On behalf of the Respondent
:
IN PERSON