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[2013] ZAKZPHC 37
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Govender v Blythedale Coastal Resort (Pty) Ltd, Walsh v Blythedale Coastal Resort (Pty) Ltd (8442/12, 8443/12) [2013] ZAKZPHC 37 (12 June 2013)
IN THE KWAZULU-NATAL
HIGH COURT, PIETERMARITZBURG
REPUBLIC OF SOUTH
AFRICA
In the matter between:
CASE NO. 8442/12
LOGANDRI GOVENDER
...............................................
Applicant/Plaintiff
and
BLYTHEDALE
COASTAL RESORT
(PTY) LTD
.............................................................
Respondent/Defendant
and in the matter
between:
CASE NO. 8443/12
ANDREW
STEVEN WALSH
..........................................
Applicant/Plaintiff
and
BLYTHEDALE
COASTAL RESORT
(PTY)
LTD
.............................................................
Respondent/Defendant
________________________________________________________
JUDGMENT
Delivered
on 12 June 2013
STRETCH AJ:
[1] The plaintiff
applicants in these two cases (Govender and Walsh) both seek summary
judgment against the defendant for payment
of R632 500,00 and R522
500,00 respectively.
[2] It is common cause
that these claims are based on agreements
of loan and options to
purchase which the defendant entered into with Govender and Walsh
respectively on 18 January 2010. With the
exception of the amounts of
the loans and the description of the immovable properties forming the
subject matter of the options
to purchase, these two agreements are
identical, and the parties have agreed that the facts of both cases
(being identical) can
be dealt with in one judgment. Accordingly all
references hereinafter (although made in the singular) must be read
as applying
to both cases with the exception of the following:
Govender undertook to
lend the defendant R522 500,00 whereas Walsh undertook to lend the
defendant R632 500,00;
(b) The defendant agreed
to grant Govender an option to purchase fixed property at erf 714 New
Guelderland, whereas he granted Walsh
an option to purchase fixed
property at erf 702 New Guelderland.
[3] Having identified
these two differences, I shall now refer to the balance of the
agreement (hereinafter referred to as “the
first agreement”)
and the surrounding facts in the singular, as the one set of facts is
a duplication of the other.
[4] Further material
terms and conditions of the first agreement are:
that the parties would
settle the aforesaid loan by procuring the transfer of the property
into that plaintiff’s name, subject
to that plaintiff
exercising the aforesaid option;
that should transfer of
the property not be effected within 24 months from the date of the
signature of the agreement, the plaintiff
would be entitled to
repayment of the capital sum advanced plus interest in full and
final settlement of all amounts owing, on
not less than 30 days’
notice.
[5] Transfer of the
property was not effected within 24 months from date of signature,
the relevant period having expired on or
about 19 January 2012.
[6] On 8 February 2012
Walsh signed an agreement of cancellation (“the second
agreement”) and on 16 April 2012 Govender
did the same. With
respect to Govender, the defendant’s chief executive officer
responded the next day indicating that it
had received the second
agreement and that the document would be signed and returned to
Govender and that Govender would be kept
posted on “progress of
payment and reimbursement.” It transpires that the second
agreement was not however signed by
the defendant. Needless to say,
there were also no payments or reimbursements forthcoming.
[7] The plaintiff
unsuccessfully demanded repayment of the loan on 2 August 2012, and
accordingly instituted action on 27 September
2012.
[8] The defendant
conveyed his intention to defend, whereafter the
plaintiff launched an
application for summary judgment, being the application currently
before me.
[9] The defendant, in
opposing the application, contends that:
The second agreement was
prepared in error by the conveyancers’ administrative staff
and that it was in any event not signed
by the defendant and is
accordingly not binding on him (in this regard the defendant’s
director contradicts himself in
his affidavit as he elsewhere avers
that the agreement had been prepared by the plaintiff and not the
conveyancers);
After the second
agreement had been drafted and signed by the plaintiff, the
defendant entered into an agreement with the plaintiff
(“the
third agreement”), to the effect that:
The original loan and
capitalized interest would remain with the defendant and the loan
would effectively be extended;
The plaintiff would
continue to earn interest as before;
The loan would be
repayable when another lender (and potential purchaser) had been
found to replace the plaintiff;
(iv) The plaintiff would
in the interim retain the option to purchase if and when the fixed
property was in a position to be transferred.
[10] It is not in dispute
that the plaintiff’s claim is for payment of a liquidated
amount in money together with interest
and costs as envisaged in rule
32(1) of the uniform rules of this court. It is accordingly incumbent
on the defendant to satisfy
this court, in order to successfully
resist the granting of such a judgment, that he has a
bona
fide
defence. It will be sufficient if the
defendant swears to a defence, which is good in law, in a manner
which is not inherently or
seriously unconvincing. If the defendant’s
affidavit shows that there is a reasonable possibility that the
defence which
he advances may succeed at the trial, he is entitled to
leave to defend.
[11] Clause 10.1 of the
first agreement contains a standard non-variation clause which reads
as follows:
‘
No
alteration, cancellation, variation of, or addition hereto shall be
of any force or effect unless reduced to writing and signed
by both
Parties to this Agreement or their duly authorised representatives.’
[12] It is contended on
the defendant’s behalf that the alleged third agreement is a
new agreement and not a variation of
the first agreement as envisaged
in clause 10.1 and as such, does not need to be reduced to writing
and signed by the parties.
I must assume, in the light of this
argument, that the defendant is accordingly relying on an oral
agreement, as it would undoubtedly
have incorporated the
ipissima
verba
of the third agreement in the body of
its affidavit, had this agreement been in writing.
[13] Counsel for the
plaintiff has urged me to find that there was no third agreement;
alternatively, that if there was, it ought
to have been reduced to
writing for at least one of two reasons:
The effect thereof is to
vary the first agreement and it must therefore be reduced to writing
to comply with the non-variation
clause;
(b) Alternatively, if it
is an entirely new agreement, it must be reduced to writing in order
to comply with the provisions of
section 2(1)
of the
Alienation of
Land Act 68 of 1981
, because this third agreement refers to an option
to purchase immovable property.
[14]
Rule 32(3)(b)
, in
referring to the defendant’s affidavit or evidence resisting
summary judgment, reads as follows:
‘
such
affidavit or evidence
shall
disclose
fully
the
nature
and
grounds
of
the defence
and
the
material
facts
relied
upon therefor’
(emphasis
added).
[15] From what I have
managed to glean from the defendant’s cursory affidavit is that
the nature of its defence is that the
plaintiff, after having
forwarded to its director the second agreement specifically
cancelling the first one (not that it was in
any way compelled to
cancel in writing before demanding performance in terms of the
contract), and after the defendant’s
representative had agreed
to sign the second agreement and to keep the plaintiff posted on the
progress of “payment and reimbursement”
(at least in
Govender’s case), made an about turn against its own interests
and entered into an extremely vague and open-ended
oral agreement
with the defendant, which agreement happens to be diametrically
opposed to and potentially destructive of the plaintiff’s
claim
before me.
[16] Not only is this
defence far too vague to comply with the requirements of the rule,
but it is also improbable.
[17] Even if I am wrong
in this regard, and even if there was a third agreement as contended
for by the defendant, it is clearly
a variation of the first
agreement and must accordingly be reduced to writing. I say so for
the following reasons:
(a) Clause 6.3 of the
first agreement sets forth what is referred to
ex
facie
the document as a “re-payment
term”. It reads as follows:
‘
Should
Blythedale be unable, for whatever reason, to effect transfer of the
Property to the Lender within 24 (twenty four) months
of the
Signature Date and provided that such delay in transfer is not due to
any act or omission on the part of the Lender and
provided that the
Lender is not in breach of this Agreement or the Agreement of Sale,
then the Lender shall be entitled to require
repayment of the Capital
Sum (plus interest thereon calculated at the Prime Rate from the
Signature Date to date of repayment)
on not less than 30 (thirty)
days prior written notice to Blythedale. Should the Lender give
Blythedale notice as aforesaid, the
Lender shall no longer be
entitled to exercise the Option.’
(b) The defendant (with
reference to the 24 month period set forth as part of the re-payment
terms), avers that the alleged third
agreement specifically allowed
for an extension of the loan which would then only become repayable
when another lender (and potential
purchaser) was found, and that in
the interim the plaintiff would retain the option to purchase when
the property could be transferred.
This is in sharp contradiction to
the aforesaid re-payment term at clause 6.3, which makes it clear
that the same option to purchase
the same property would no longer be
available once the plaintiff had given notice.
[18] The law is clear in
this regard. Any attempt of this nature to agree informally on a
topic covered by a non-variation clause
or to vary informally a
contract containing a non-variation clause must fail. See:
SA Sentrale Ko-op
Graanmpy Bpk v Shifren
1964 (4) SA 760
(A);
Brisley v Drotsky
2002 (4) SA 1
(SCA);
De Villiers v BOE
Bank Ltd
2004 (3) SA 1
(SCA) 17-18;
HNR Properties CC v
Standard Bank of SA Ltd
2004 4 SA 471
(SCA)
477-480;
Affirmative
Portfolios CC v Transnet Ltd t/a Metrorail
2009 1 SA 196
(SCA)
[18];
Kovas Investments
724 (Pty) Ltd v Marais
2009 6 SA 560
(SCA)
[22-23]
[19] This applies
particularly to an extension of time for payment as is alleged in the
case before me. See:
Van Tonder v Van
der Merwe
1993 2 SA 552
(W)
[20] In my view then, the
alleged third agreement is clearly a variation of the first one. What
it is clearly not, is a novation.
A novating contract must be a valid
and enforceable one if it is to have the effect of novating the old
contract. See R H Christie
The Law of Contract in South Africa 6ed
(2011) at 468.
[21] The alleged third
agreement is so vague, biased and open-ended that I fail to
comprehend how it could ever be effectively enforced.
[22] There is in any
event a presumption against novation because it involves a waiver of
existing rights. See:
Proflour
(Pty) Ltd v Grindrod Trading (Pty) Ltd
t/a
Atlas Trading and
Shipping
[2010] 2 ALL SA 510
(KZD) [23]
[23] A creditor who has
rights under an existing contract and then enters into another
contract will be presumed to intend rather
to strengthen and to
confirm his existing rights than to waive them and accept dubious,
ill-defined and vague rights (which in
the alleged third agreement
before me seem to rely on suspensive conditions which are in
themselves vague) under the new contract
in substitution. See:
Proflour
supra
at [10])
[24] In my view, the
plaintiff’s cause of action (as pleaded for in the summons) is
for payment of a loan which has become
due by virtue of a re-payment
term in a written agreement which has not been lawfully varied. Any
contention by the defendant that
a new verbal agreement has been
entered into is not
bona fide
and has been raised solely for
the purpose of delay.
[25] On the question of
the costs of this application, it seems to me that the first
agreement only caters for attorney and client
costs in the event of
the defendant instituting legal proceedings against the plaintiff,
and not the other way around. I am not
persuaded that there are any
special grounds to justify a punitive costs order against the
defendant.
In the premises I make
the following orders:
ORDERS:
1. In the matter of
Govender v Blythedale Coastal
Resort
(Pty) Ltd
(KZP case no 8442/12) judgment is granted in the plaintiff’s
favour for payment of:
(a) the sum of R522
500,00;
(b) interest on the sum
of R522 500,00 at the prime interest rate calculated from 18 January
2010 to date of payment;
(c) the costs of this
application.
2. In the matter of
Walsh
v Blythedale Coastal Resort (Pty) Ltd
(KZP case no 8443/12
judgment is granted in the plaintiff’s favour for payment of:
(a) the sum of R632
500,00;
(b) interest on the sum
of R632 500,00 at the prime interest rate calculated from 18 January
2010 to date of payment;
(c) the costs of this
application.
____________
STRETCH
AJ
Appearances /…
Appearances:
For the
Applicant/Plaintiff
: Mr L. Combrinck
Instructed
by
: Tomlinson Mnguni James
Pietermaritzburg
F
or the
Respondent/Defendant
: Mr W.J. Pietersen
Instructed
by
: Francois Medalie & Co.
Pinetown
C/o
Messenger King
Pietermaritzburg
Date of Hearing
:
30 January 2013
Date of Filing of
Judgment
: 12 June 2013