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[2013] ZAECELLC 9
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Billion Group (Pty) Ltd v Gobile (EL759/08, ECD 3059/08) [2013] ZAECELLC 9 (2 October 2013)
NOT
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
(EAST
LONDON CIRCUIT LOCAL DIVISION)
CASE
NO.: EL759/08
ECD 3059/08
In
the matter between
BILLION
GROUP (PTY) LTD
Plaintiff
and
SIBONGILE
GOBILE
Defendant
JUDGMENT
HARTLE
J
1.
Both
the plaintiff and the defendant claim rectification of a building
agreement (and the plaintiff payment consequent thereon)
[1]
,
but for present purposes I need concern myself only with the parties’
competing claims for rectification of the original
agreement.
2.
Pursuant to the parties’ agreement I issued an order in terms
of Rule 33(4) at the commencement of the hearing that the
following
issues be determined separately:
“
1.1
Whether the building agreement, attached as annexure “A’
to the particulars of claim, constitutes a
valid and binding contract
between the parties, ALTERNATIVELY whether the Defendant is estopped
from denying that there was consensus
between the parties in respect
of the building agreement.
[2]
1.2
Whether the said building agreement stands to be rectified as alleged
in the particulars
of claim, alternatively as alleged in the plea.
1.3
What is the legal effect, if any, of the measurement of 150 m2 as
reflected in clause 1 of the
building agreement?”
3.
The relevant provisions of the agreement (annexure “A”)
which have a bearing on the narrow issues in dispute
and in terms of
which the parties purported to agree with each other are the
following:
“
1.
The builder will erect for the Owner a building in accordance with
the plans and specifications
attached hereto marked Plan No. 8 and in
the construction of the building situate at Erf 5752 (No. 16)
(measuring 150 metres…),
will comply with the said detailed
plans and the specifications contained thereon.
2.
The total consideration payable by the Owner to the Builder for the
construction
of the building specified in paragraph 1 hereof shall be
the sum of R900 000-00 (VAT inclusive)…
3
-16 …
17.
CONDITION – SUBJECT TO PC SUM SCHEDULE OF FINISHES …..
ATTACHED.”
4.
The plaintiff pleads as follows concerning the putative agreement in
support of its claim for rectification:
“
4.
During or about November 2006 and at or about East London the
Plaintiff, duly represented by Mr Sisa Michael Ngebulana, and the
Defendant, duly representing himself, entered into a written
contract. A copy of the said building contract is attached
hereto as Annexure “A”.
5.
The written building contract provides that :
5.1
The Plaintiff will build a 150 m² house for the Defendant
on Erf 5752 Gonubie (hereafter referred to as “the property”)
in accordance with the plans and specifications marked Plan no. 8.
5.2
The Defendant will pay the amount of R900 000.00 to the
Plaintiff as remuneration for building the said house (hereafter the
“Building
price”); and
5.3
...
5.4
…
6.
Due to a common error in
good faith by the parties, clause 1 of the
said written contract (quoted above in paragraph 5.1) does not
correctly reflect the
common intention of the parties in that it was
the common intention of the parties that the house would be built in
accordance
with the plan attached hereto as Annexure “B”
(titled “Option [5 ?????? m²]”
).
7.
In the premises the Plaintiff
seeks a rectification of clause 1 of
the written agreement as prayed for below.”
5.
It subsequently prays for an order in respect of the rectification
claim in the following terms:
“
(1)
The written agreement attached as Annexure “A” to the
particulars of claim is rectified
to read as follows: “The
Builder will erect for the Owner a building in accordance with the
plan marked “Option [5
?????? m²]” and in the
construction of the building situated at Erf 5752 (nr 16) (measuring
150 m²
).
6.
The defendant pleads as follows to the averments set out in paragraph
4 above:
“
5.
AD PARAGRAPHS 4 and 5
5.1
The Defendant admits only that he signed the document, annexure “A”;
5.2
The Defendant denies that a binding Agreement came into existence
upon the Plaintiff and
the Defendant signing Annexure “A”,
more particularly as Annexure “A” records, in clause 1
thereof, that
the Plaintiff would erect for the Defendant a building
in accordance with plans and specifications purportedly annexed to
the Agreement
(Annexure “A”) and identified as Plan No.
8;
5.3
No Plan No 8 was ever attached (nor did such plan ever exist) to the
Agreement and accordingly
there was no consensus between the parties
as to the subject matter of the building contract:
[3]
5.4
In the event of the above Honourable Court finding that a valid
contract was concluded between
the Plaintiff and the Defendant in
accordance with Annexure “A”, the Defendant pleads as
follows:
5.4.1
At all material times it was the common intention of the parties that
the Plaintiff would build a house
in accordance with the plan
prepared by the Plaintiff’s Architects, a copy whereof is
annexed hereto, marked “DEF1”;
5.4.2
Due to an error common to the parties, Annexure “A” to
the Particulars of Claim incorrectly
refers to Plan No 8, whereas it
should have referred to Plan Option No 5:
5.4.2.1
Plan Option No 5 is the plan annexed as Annexure “DEF1”
hereto;
5.4.2.2
In addition, Annexure “A”, due to an error common to the
parties, records that the building to be constructed
on Erf 5752
measures 150 square metres, whereas in reality it should have
recorded the size as being 191.86 square metres;
5.4.2.3
The measurement of 150 square metres in “DEF1” is a
reference to the internal measurement. The external
measurement
is 191.96 square metres;
5.4.2.4
In order to give effect to the common intention of the parties,
clause 1 of Annexure “A” should read:
“
The
Builder will erect for the owner of a building in accordance with the
Plans and specifications attached hereto, marked plan
option no 5 and
in the construction of the building situated on Erf 5752 (internally
measuring 150 square metres and externally
measuring 191.86 square
metres), will comply with the said detailed plans and the
specifications contained therein.”
6.
AD PARAGRAPH 6
The
Defendant admits that at the time of conclusion of the written
Agreement, it was the common intention of the parties that the
house
would be built in accordance with the Plan marked Annexure DEF 1
(Annexure B not being complete).
[4]
7.
AD PARAGRAPH 7
The
Defendant notes the claim for rectification, pleading that
rectification should be granted in accordance with paragraph 5.4.2
above.”
7.
The plaintiff pleads further that flowing
from the correct plan (annexure “B”), the appointed
architect (Ikamva Architects
CC) submitted building plans to the
local municipality for approval to build a 207
m² house on
the property, which building plans contained “
a phase one
”
– corresponding with annexure “B”, and a “
phase
two
” which reflected future contemplated construction of
the house, namely an additional area on top of the garage comprising
the master bedroom with an en suite bathroom. This plan was
ultimately approved. (Later, as it turned out, the additional
area - the size of which is in dispute,
was built
all at once rather than in two phases as was the arrangement and this
is both the source and area of contention between
the parties in the
main trial.)
8.
To
all of this the defendant pleads that he agreed orally with the
architect representing the plaintiff, subsequent to the conclusion
of
the building agreement (
sans
annexure “B”),
[5]
that the architect would prepare plans for submission to the
municipality in “
an
amended form
”,
such amendments to exclude the bedroom and en suite area on the
ground floor and the bedroom “
11
square metres
”
on the first floor and to “
substitute
therefor a master bedroom on top of the garage.
”
It was expressly agreed, so pleads the defendant, that the variations
to the “
initial
contemplated Building Plan
”
[6]
would not affect the construction price of R900 000.00. He
admits that the plans were approved and represent the “
as
built
”
plans of the house. However he does not admit that the size is
207
m²
(or
that the plaintiff ultimately built a 207
m²
house).
9.
Concerning paragraph 1.3 of the order in terms of Rule 33(4)
the defendant alleges in his plea that the measurement of 150m²
in the building agreement refers to the internal measurement of the
house, which allegation the plaintiff disputes in its replication.
The plaintiff contends, contrariwise, that the reference in the
building agreement to square meterage is a reference to the gross
building area.
10.
The
plaintiff called four witnesses in respect of the separated issues
whereas the defendant, rather surprisingly, closed his case
without
leading any evidence.
[7]
11.
Anne Marie
Coetzee
, a real estate agent in the
employ of Homenet testified that her agency was exclusively mandated
by the plaintiff to market and
sell plots in a development styled
Estuary View in Gonubie on the basis of so called “
plot
and plan
” package deals. A
prospective purchaser had to purchase an erf (which came standard at
a cost of R420 000.00)
and conclude a separate agreement to
build on the property at a fixed rate of R6 000, 00 per
m²
.
She met with the defendant to negotiate such a deal once he had shown
an interest in acquiring site no. 16 in the development.
He was
well aware of the costing which she explained to him. She at
first offered him plan no 8, which was affordable
to him. This
entailed a 130
m² -
single story house,
but he preferred a double storey unit. She showed him a
standard plan no 4 depicting a 150
m²
unit
including a ground and first floor, but which only had 2 bedrooms.
This was affordable at a cost of R900 000.00
but the defendant
wanted even bigger, four rooms in fact. A plan 5 appealed to
him but the square meterage was 207m²
which was beyond his
affordability at the quoted rate.
12.
At this point Ms
Coetzee
consulted
Gerhard
Scheepers
,
a registered architecht and employee of Ikamva Architects, which firm
had been appointed by the plaintiff to prepare the site
development
plan, to draw up construction plans, to engage with purchasers if
they required adjustments to the standard plans and
to attend
ultimately to the registration of the municipal plan. Being
eager to meet the defendant’s needs Mr
Scheepers
proposed a two phase building, the first phase of which would
not exceed 150m² at a cost of R900 000.00 (which
was within
the defendant’s budget), and a so called “
ghost
plan
” for future development. The
defendant was happy to go along with this. The plan ultimately
settled upon was styled on option
5 but with certain changes which
were coarsely endorsed on the concept plan. Bedroom 4 and the
en suite bathroom on the ground
floor were crossed out and on the
first floor the second bedroom was scratched through and changes made
to the sizes of the remaining
bedrooms. The addition of a main
bedroom with an en suite bathroom was also marked out above the
garage. The main bedroom
and the crossed out bits were intended
to be pursued in the future development (phase 2).
13.
It is this plan marked
“
Option
5 [??????
m²
]
”
which the plaintiff’s witnesses say was agreed upon and ought
to have been substituted as the plan referred to in
paragraph 1 in
Annexure “A”. The standard plan 5 before the
changes (and which was used by Mr
Scheepers
as a basis to
prepare the plan marked “
Option 5 [??????
m²
]
”)
is the plan which the defendant however refers to in his pleadings as
annexure “DEF 1” and which he pleads
should have been
annexed to the building agreement as representing the basis upon
which agreement was reached. It is common
cause that this plan
on the face of it reads “
option 5
[150m²]
ERF 5752
”. (Emphasis added.) Mr
Scheepers
testified that this was wrong and should have depicted the true size
of the completed house as 207m² but that his office
unfortunately failed to change the reference to the size when plan 4
– which depicts a 150m² house, was used as a template
to
prepare the later plan 5.
14.
Approval for the departure from the standard plan 5 on the basis
indicated by Mr
Scheepers
on “
option 5 [??????
m²]
”
and permission to implement the building over two
phases was obtained telephonically from Mr
Sisa
Ngebulana
, the executive chairmain of
the plaintiff. (Ms
Coetzee
called him on the telephone in the presence of both the defendant and
Mr
Scheepers
for
these purposes.) He agreed that Mr
Scheepers
could prepare a municipal building plan reflecting the entire house
with its future developments, but that the plaintiff would
only build
that portion of the house at that stage which the defendant
could afford, namely a 150m² house.
15.
The plaintiff had signed annexure “A”
on 26 November 2006 on the basis of a plan 8, but Mr
Ngebulana
had endorsed changes to it to accommodate the defendant’s
subsequent request regarding the two phase development. When
he
received the document (annexure “A”) in Johannesburg he
made the changes to reflect the agreed upon size of 150m²
at a
contract price of R 900 000.00 and changed Clause 17 to read
that the agreement was subject to the PC sum schedule of
finishes.
He testified that at the time he was not focused on a plan as such
but on the “
direct relationship
”
between the agreed upon size of the house at 150 m² and the R900
000.00, which price he had been informed by Mr
Coetzee
the defendant could afford. The detail in the plan he left to
the architect.
16.
As for the specifications (the schedule of
finishes), he was aware that a signed copy could not be found, but
submitted that it
was unlikely that such a document was not attached
to annexure “A” when he signed off on it. (Ms
Coetzee
testified that it
was
attached to the agreement.) He adverted to the printed copy in
the plaintiff’s bundle dated 13 March 2006 which he
identified
as the applicable schedule.
17.
When the document was returned to her Ms
Coetzee
said that the defendant countersigned annexure “A” to
reflect that he was happy with these changes and thus the building
agreement (on the basis of the accepted counter offer of the
plaintiff in effect) was birthed. The final date of the
agreement
(when the defendant signed the counter offer of Mr
Ngebulana
)
is 5 December 2006.
18.
Both Ms
Coetzee
and Mr
Scheepers
were adamant that the defendant knew what he would be getting for
R900 000.00 (phase 1 in extent 150m²) with future development
prospects when he could afford it and could not have been mistaken in
this regard neither concerning the fact that the square meterage
related to the gross building area from the outside.
19.
Importantly, Ms
Coetzee
made contemporaneous notes of her and Mr
Scheepers’
meeting with the defendant which is consistent with the changes
reflected on
“
Option 5 [??????
m²]
”.
In it she refers to,
inter alia
, a quote for a slab on the
garage “
for further rooms
” and notes the
plaintiff’s agreement to incorporate the phase 2 development
into the present plan but on a future build.
In addition, after
their meeting the defendant wrote a letter to her dated 6 December
2006 to confirm what had been discussed in
the following terms:
“
Thank
you for the effort you are putting in assisting me in the process of
acquiring a house … I also acknowledge the stage
in which we
have reached so far.
This is also
confirmation of the offer to purchase which we have signed yesterday
for an amount of R1.320 mil. This is in
relation to the plan as
we have discussed which will include “Ghost Plan”.
The Ghost plan will reflect future
plans on development outlined
below:
·
Room on top of the garage
·
Another room downstairs at the back of the
garage with en suite.
I
hope I am capturing our discussion and understanding correctly
Ann.”
20.
Ms
Coetzee
agreed that this letter correctly recorded the future developments,
but she lamented the fact that no one picked up on the incorrect
reference in paragraph 1 of Annexure “A” to a “
Plan
8
”. It is this mistake, she
explained, which the plaintiff seeks to have rectified.
21.
Concerning the agreed upon sketch plan
itself she could not recall if, when annexure “A” went to
Mr
Ngebulana
to sign it, an attached plan was included but she was in any event
adamant that the plan upon which the defendant settled existed
and
that he would have received a copy as well as the bank and the
attorneys. In response to the suggestion under cross
examination that she never ever attached a plan (any plan) she
asserted: “
No we did because you
can’t, the bank won’t approve a bond without a plan and
all the necessary documents attached
”.
22.
Therafter Mr
Scheepers
prepared the municipal building plan which evolved from plan “
option
5 [?????? m²]
” and submitted
it for approval to the municipality. It was passed on 20 July
2007. He noted however that for a reason
he could not explain the
bottom bedroom 4 and en suite bathroom had been left off the
construction plan even though it was supposed
to have been included
in the second phase of development.
23.
Mr
Scheepers
denied most emphatically the defendant’s version put to him
that after DEF1 (on his version) was agreed upon, he subsequently
told him that it was impossible to do the building in two phases and
that as a consequence he (Mr
Scheepers
)
fiddled with the plans and compromised here and there so that the
defendant could still get the main bedroom and en suite bathroom
plus
the slab above the garage built at the same price of R900 000.00.
24.
No
doubt on the back of paragraph 5.6 of the defendant’s rejoinder
(filed of record on 3 February 2011),
[8]
Mr
Friedman
who appeared for the defendant in argument made much of the
provisions of section 13(1) of the Housing Consumers Protection
Measures
Act, No. 95 of 1998 (“the act”) in support of
his claim to the invalidity of the building agreement, whereas in his
plea the defendant had, quite belatedly, only alleged a lack of
consensus due to the fact that the parties had not agreed on the
subject matter of the building to be constructed – or at least
could not have because the wrong plan was referenced.
His
secondary argument is that there is no agreement therefore that is
capable of being rectified on either party’s version.
As
such, so it was suggested to me, rectification does not come into
play.
25.
The
general principle is that an agreement, invalid for want of
compliance with formalities prescribed by statute cannot be validated
by rectification.
[9]
However vagueness in an agreement between the parties (not voided per
se
by the failure to comply with a statutory prescript) is not a bar to
rectification. The question which arises therefore is
whether
the failure to meet the statutory requirements of form applicable to
building contracts in terms of the act renders annexure
“A”
void. If it does, then the agreement cannot be rectified.
26.
In
Hubbard
v Cool Ideas 1186 CC
[10]
the Supreme Court of Appeal was confronted with the question what
consequence follows upon a home builder failing to register in
terms
of the act, required by the provisions of section 10(1) and (2),
[11]
but who nonetheless undertakes a building project. In
considering the contractual illegality posed by that homebuilder’s
failure to have so registered to carry on business
Ponnan
JA, writing the majority judgment, adverted to the correct approach
to be adopted in that regard as follows:
“
[10] One
of the earliest cases that had to consider the consequence for the
validity of an act that has taken place in
conflict with a statutory
prohibition was
Schierhout v Minister
of Justice
1926 AD 99
at 109 in
which Innes CJ said:
"It
is a fundamental principle of our law that a thing done contrary to
the direct prohibition of the law is void and of no
effect."
But
as Nugent JA pointed out in
Lupacchini NO v Minister of Safety and
Security
2010 (6) SA 457 (SCA) at paragraph [8]:
". . .
[T]hat will not always be the case. Later cases have made it clear
that whether that is so will depend upon
the proper construction of
the particular legislation. What has emerged from those cases was
articulated by Corbett AJA in
Swart v Smuts
[1971 (1) SA 819
(A) at 829C–G].
'Die
regsbeginsels wat van toepassing is by beoordeling van die geldigheid
of nietigheid van 'n transaksie wat aangegaan is, of
'n handeling wat
verrig is, in stryd met 'n statutêre bepaling of met
verontagsaming van 'n statutêre vereiste, is
welbekend en is
alreeds dikwels deur hierdie Hof gekonstateer (sien
Standard Bank
v Estate Van Rhyn
1925 AD 266
;
Sutter v Scheepers
1932 AD
165
;
Leibbrandt v South African Railways
1941 AD 9
;
Messenger
of the Magistrate
'
s Court
,
Durban v Pillay
1952 (3) SA 678 (AD);
Pottie v Kotze
1954 (3) SA 719 (AD),
Jefferies v Komgha
Divisional Council
1958 (1) SA 233 (AD);
Maharaj
and Others v Rampersad
1964 (4) SA 638 (AD)).
Dit
blyk uit hierdie en ander tersaaklike gewysdes dat wanneer die
onderhawige wetsbepaling self nie uitdruklik verklaar dat sodanige
transaksie of handeling van nul en gener waarde is nie, die
geldigheid daarvan uiteindelik van die bedoeling van die Wetgewer
afhang. In die algemeen word 'n handeling wat in stryd met 'n
statutêre bepaling verrig is, as 'n nietigheid beskou, maar
hierdie is nie 'n vaste of onbuigsame reël nie. Deeglike
oorweging van die bewoording van die statuut en van sy doel en
strekking
kan tot die gevolgtrekking lei dat die Wetgewer geen
nietigheidsbedoeling gehad het nie.'"
27.
He held, with regard to the construction of
the relevant sections of the act, that the home builder’s
failure to have registered
in that instance did not invalidate the
agreement in question between the home builder and the housing
consumer. On the contrary,
so he held, a failure to comply with
these provisions simply disentitles home builders who are not
registered from receiving any
consideration. Any such claims for
payment “
without exception
”
are hit by the prohibition.
28.
Section
13(1) of the act, which applies by virtue of the fact that the
plaintiff is a home builder and was concerned in this instance
with
the building of a new home,
[12]
provides that:
“
(1)
A home builder shall ensure that the agreement concluded between the
home builder and a housing consumer
for the construction or sale of a
home by that home builder—
(
a
)
shall be in writing and signed by the parties;
(
b
)
shall set out all material terms, including the financial obligations
of the housing consumer; and
(
c
)
shall have attached to the written agreement as annexures, the
specifications pertaining to materials to be used in construction
of
the home and the plans reflecting the dimensions and measurements of
the home, as approved by the local government body: Provided
that
provision may be made for amendments to the plans as required by the
local government body.
29.
The provisions of subsection 2 are also
relevant to the point which I make below:
(2)
The agreement between a home builder and a housing consumer for the
construction or
sale of a home shall be deemed to include warranties
enforceable by the housing consumer against the home builder in any
court,
that—
(
a
)
the home, depending on whether it has been constructed or is to be
constructed … is or shall be constructed in accordance
with -
(i)
…
(ii)
…
(iii)
…
(
bb
)
the terms, plans and specifications of the agreement concluded with
the housing consumer as contemplated in
subsection
(1)
.”
[13]
30.
Although not pleaded with any
specificity (section 13(1) of the act was not directly relied upon by
the defendant in his rejoinder),
Mr
Friedman
submitted that it was “
common
cause
” that in
all
respects
subsection
(c) has not been complied with since there are no specifications
pertaining to the materials, or plans reflecting the
dimensions and
measurements of the home. He added that there were no approved
plans by the municipality but I cannot see
how that can be
contended. Not only did the defendant admit as much on the
pleadings, but the evidence established that a
plan (even on the
defendant’s version) was approved.
31.
That being the case, so he argued, the
agreement was invalidated.
32.
Section
18(3) provides that “(t)
he
failure to comply with a provision of
subsection
(1) (a)
and
(c)
shall
not render an agreement referred to in that subsection invalid
”.
Mr
Friedman
submitted however that the “
escape
provision
”
provided by this subsection does not afford protection to a home
builder where he has failed to comply with the
entire
subsection, rather than just “
a
provision thereof
”.
The failure “
in
all respects
”
to comply with section 13(1)(c) renders the agreement hopelessly
invalid.
33.
He
added further (yet another string to the defence which did not form
part of the defendant’s pleaded case) that having regard
to the
provisions of the Code of Conduct promulgated under the act, albeit
that this was published some four months after the agreement
was
concluded, the parties’ own agreement fell short from the
perspective of what the material terms are referred to therein.
[14]
If I understood his argument correctly this deficiency cannot be
saved by the provisions of subsection (3) which deliberately
omits
any reference to a failure to comply with subsection (1)(b).
34.
I am not persuaded , having regard to the
unchallenged evidence, that the sketch plan agreed upon (“
option
5 [?????? m²]
”) did not form
part of annexure “A”. Once the parties had put
their minds to it on 5 December 2006 the
defendant confirmed by way
of his email to Ms Co
e
tzee
that “
a plan
”,
which was to include a ghost plan, was bespoke when he signed the
agreement. Even if some criticism can be levelled
at the
witness’ clear lack of recall in this regard it is in my view
improbable that the agreement embodied in Annexure A
(after
acceptance on 5 December 2006) was unaccompanied by any drawing
whatsoever as this was a necessary document to generate
the finances
and to move the construction forward. The bank would have
sought it as well as the conveyancer attending to
registration of
transfer of the land to the defendant. Indeed, the land sale
agreement stipulates that the house plan is
deemed to form “
an
integral part
” of the deed of
alienation. The situation was not helped by the long lapse of
time which passed between the agreement
being finally concluded and
the defendant’s belated plea (on 4 May 2009) as to the
invalidity thereof. Reliance in
the plaintiff’s pleadings
was understandably placed on “
a
copy
” of annexure “A”.
35.
Further,
upon a clear reading of the provisions of section 13(1)(c) of the
act, what is required to be attached - no doubt for purposes
of the
warranty envisaged by subsection 2
[15]
is the plan “
as
approved by the local governing body
”.
Evidently this is not a reference to a provisional drawing but the
final approved plan which is unlikely in my view
to exist at the
earliest stages of offer and acceptance of a building agreement.
In this instance a plan exists and was approved
by the municipality
(with revisions). The approved final plan constitutes the
“annexure” which conforms to the
statutory requirement
specified in subsection 1(c) even if it may not physically have been
attached to the agreement. Indeed in
my view it would not have
existed at the time of the conclusion of the agreement in order to be
“attached”. The
value lies in my view not in the
physical attachment of the plan as an annexure, but the assurance
that the home build will conform
to the plan as approved which is the
blue print for the building. As Mr
Scheepers
testified the value of the plan in the early stages is only to give a
person an idea as to the size of the rooms and the building
as a
whole, but it is merely a sketch plan. It has no measurements
or dimensions and one cannot build according to it.
It is not a
construction plan.
36.
Regarding the specifications pertaining to
the materials to be used in the construction of the house Ms
Coetzee
and Mr
Ngebulana
were more clearer in this regard that this was an attachment to
annexure “A” and that the defendant had probably signed
this.
37.
Regarding the provisions of section
13(1)(b) which require the material terms to be set out in the
parties’ agreement, the
essentialia
of a fixed cost building contract are to my mind the work to be
performed (i.e. the construction of a particular home) and the
remuneration therefor. In this instance the plaintiff agreed to
construct a 150
m² house for the defendant for a fixed
contract price of R900 000.00. These constitute the only
necessary terms in my
view in compliance with subsection 1(b) even
absent a sketch plan. This is not a vague summary of the
conditions but contain
the crux of such a building contract.
The “
financial obligations
” of the housing
consumer referred to in this subsection can further be nothing other
than to pay the fixed contract price
agreed upon. If more
detail is supposed to be reflected than that then the legislature
should have said so more clearly.
In any event however clause 2
of the agreement in this instance refers in some detail to the manner
of payment and it is not understood
in what regard the agreement
lacks for want of compliance as was suggested by Mr
Friedman
.
Again this was not an issue raised by the defendant on his pleadings.
38.
If
I am mistaken in my view that the plaintiff has substantively
complied with the provisions of section 13(1)(c) of the act, I
return
to the approach to be adopted as set out in H
ubbard
v Cool Ideas 1186 CC, supra
.
By parity of the reasoning a failure to comply strictly with the
provisions of section 13(1)(a) and (c) (whether by failing
to
physically attach the specifications or the plan or both) do not in
my view invalidate the agreement. This is because
not only do
the provisions of subsection 3 says so in clear terms, but also
because the home consumer will otherwise be without
the protection
afforded by subsection (2) to enforce the warranties deemed to be
included and without the remedy afforded by section
13(2)(b), as will
the succeeding housing consumer who is the beneficiary of the
provisions of section 13(4), all of which
is against the
express purpose of the act, namely to afford protection to housing
consumers. Ostensibly the only offence
against a building
contract which is to be visited with nullity is a provision in it
“
that
excludes or waives any provision (
of
section 13
)
”.
[16]
It is counter intuitive for the defendant to argue against the
validity of annexure “A” when, based on these
bulwarks in
the act, he relies for his defences and counterclaim on its force.
39.
Further
and in any event the prohibition is not directed at the validity of
the agreement but at the home builder who will in the
event of an
agreement not being concluded in terms of subsections (1) and (2) not
be entitled to “
demand
or receive from (the) housing consumer any deposit for the
construction
”
or to “
receive
any other consideration unless the provisions of section 14(1) or
(2), as the case may be, have been complied with
”.
[17]
Section 14 deals with the enrolment of a building project.
Subsection 1 of that section precludes the home builder
from
commencing the construction of certain categories of homes before the
council has issued a certificate of enrolment in respect
of it.
40.
In this instance both stages, deposit and
enrolment, have long since passed and in a sense serve to confirm
that the council had
no problem with the form or substance of the
agreement.
41.
Consequently I find that the agreement is
not invalid for want of compliance with any of the provisions of
section 13(1).
On the contrary the complained of failure (even
assuming there to be any) is saved by the provisions of section
13(3). Nothing
therefore stands in the way of rectifying the
agreement which the plaintiff needs to do in order to enforce its
claim against the
defendant.
42.
In
respect of the plaintiff’s claim for rectification it bears the
onus to prove in essence that the written agreement (annexure
“A”)
does not correctly express what the parties had intended to set out
therein.
[18]
In this
regard there is no dispute that annexure “A” mistakenly
referred to plan 8 which did not reflect the
common intention of the
parties on 5 December 2006 when the defendant accepted the
plaintiff’s counter offer per Mr
Ngebulana
.
43.
The unchallenged evidence is that the
parties settled upon plan “
option
5 [?????? m²].”
with the
coarse deviations and or additions indicated thereon which proposed a
two phase build to assist the defendant who could
not afford a 207m²
house at the fixed building rate at the time.
44.
Regarding the final issue I was called upon
to decide, the evidence also establishes in the plaintiff’s
favour that a reference
to the square meterage is a reference to the
finished building so to speak, from external wall to external wall.
This is
the standard basis of referral in the industry and was also
the basis explained to the defendant in the negotiations leading up
to the conclusion of the building agreement.
45.
Accordingly the plaintiff succeeds in
respect of the three separated issues.
46.
Concerning
the costs of the hearing Mr
Ebersohn
who appeared for the plaintiff argued that these should follow the
result. The courts have, in appropriate cases, issued
a costs
order in favour of a plaintiff who succeeds on the merits, but this
is not an inflexible rule and the facts of each case
must be taken
into account to consider whether such an order should follow at this
stage.
[19]
Whilst the
declarator which I intend to issue resolves at least the aspect of
the validity of annexure “A” (i.e.
the common intention
of the parties at least as at 5 December 2006) and the basis upon
which the reference to the size of the house
is to be considered,
there yet appears to be a number of issues which remain for
determination upon trial, for example, how the
additional area came
to be built (upon what basis or whose authority); the size of the
additional area; whether the defendant is
liable on one or other of
the numerous basis pleaded by the plaintiff to remunerate it and,
ultimately quantum, if any. Allied
to the latter aspect is the
question whether the work was incomplete or sub-standard. The
answer to these remaining issues
will not flow naturally from the
declaratory which deals with the least of these. As an aside I
venture the suggestion that
the issue of the validity of the
agreement was just a storm in a teacup when regard is had to the
evidence which Mr
Friedman
suggested the defendant would adduce and his pleaded case that
whatever agreement was reached in the first instance was later
varied. It appears in my view therefore to be prudent to
reserve the issue of costs.
47.
At the close of the plaintiff’s case
the defendant withdrew its counterclaim (in essence a claim for
damages consequent upon
the plaintiff’s alleged failure to
build without delay) which was conditional upon the court finding
that a valid building
agreement had been entered into. Mr
Friedman
recorded at the hearing that what the defendant meant is that he was
no longer confident concerning this claim. Mr
Ebersohn
submitted that in the result the plaintiff was entitled to absolution
from the instance in this respect together with an order
for costs in
the plaintiff’s favour. I made no decision in this regard at
the time, but upon reflection this request concerns
a development
having no bearing on the separated issues. Therefore I decline
to make any order thereanent.
48.
In the result I issue the following order:
(1)
It is declared that annexure “A”
to the plaintiff ‘s particulars of claim constitutes a valid
and binding agreement
capable of being rectified;
(2)
Paragraph 1 of annexure “A” is
rectified to read as follows: “
The
builder will erect for the Owner a building in accordance with the
plans and specifications hereto marked plan
“
Option
5 [??????
m²]
” and
in the construction of the building situated on Erf 5727 (No. 16)
(measuring 150m²), will comply with the said
detailed plans and
the specifications contained thereon.
”
(3)
The effect of the measurement of 150m², stated in
paragraph 1 of annexure “A” to the plaintiff’s
particulars
of claim, is that the house which the plaintiff will
construct for the defendant will have a gross building area of 150m².
(4)
The costs are reserved.
_________________
B
C HARTLE
JUDGE
OF THE HIGH COURT
Date of
hearing
: 3 & 4 December
2012 (last heads of argument filed on 4 April
2013)
Date
of Judgment
: 2 October 2013
APPEARANCES:
FOR
THE PLAINTIFF : Mr Ebersohn of Ebersohn Attorneys care of Bate
Chubb & Dickson Inc., Suite 3, Norvia House, 34 Western
Avenue,
Vincent, East London, ref. Jason Chambers/B127/W6887.
FOR
THE DEFENDANT : Mr Friedman of Friedman Scheckter
Attorneys care of Don Maree Attorneys, 19 Tecoma Road, Berea,
East
London, ref. Don Maree.
[1]
The
plaintiff claims that the defendant got more than he bargained for
when a building of 207m
²
was
constructed instead of a building measuring 150 m
²
which
was contracted for. The defendant says however that he got
exactly what he agreed to pay R900 000.00 for.
[2]
Evidently
the chief dispute between the parties, which I was informed from the
bar would curtail the other issues on the pleadings,
was whether a
valid agreement exists (because it was not the common intention of
the parties that the house would be built in
accordance with Plan 8
referred to in paragraph 1 of Annexure “A”) and whether
that agreement stood to be rectified
on either of the parties’
versions. I was informed that both agreed that there was a
need to rectify the agreement;
the question was just which plan
represented their common intention or, to put it differently, what
building was the defendant
supposed to have received for the
R900 000. 00 lump sum. Although the plaintiff pleaded
estoppel in its replication
to the defendant’s plea it is
unnecessary by virtue of the decision which I make herein for me to
determine whether the
defendant is estopped in law from denying that
there was consensus on the specific basis as pleaded by it.
The estoppel
plea was intended to be conditional upon the claim for
rectification not succeeding.
[3]
In
the defendant’s original plea delivered on 4 May 2009 he
admitted that a valid and binding agreement had been concluded.
An absence of consensus in respect of the agreement was not relied
upon until much later.
[4]
Perhaps the defendant meant to refer to annexure “A” in
this respect but it could also be a reference to the plan
the
plaintiff purports to rely on.
[5]
This could be a reference to the original agreement (annexure “A”),
or to the plan the plaintiff relies on (which
it also refers to as
annexure “B” in its pleadings).
[6]
The manner in which the defendant has pleaded is confusing. He
could mean the putative agreement in annexure “A”
(which
lacks because it refers to a plan 8 which does not represent the
common intention of the parties) or the plan DEF1.
He appears
to mean that the agreement which should have come into effect, on
his version, is the one which was subsequently varied.
This
might be an attempt to explain why on his version the plan approved
by the municipality differs from DEF1.
[7]
He bears the onus after all in respect of his competing claim for
rectification. See
Lawsa
,
Second Edition, Vol 5(1), par 147 (p 233 – 234).
[8]
This paragraph reads as follows:
“
In
addition, the defendant repeats the contention that in any event the
agreement, besides lack of consensus, is null and void
as a result
of there being no terms, plans and specifications as contemplated in
terms of section 113(2)(a)(iii)(bb)
(of the
Housing Consumers
Protection Measures Act, No. 95 of 1998
”. (sic).
[9]
Magwaza
v Heenan
1979 (2) SA 1019
(A);
Headermans
(Vryburg) (Pty) Ltd v Ping Bai
[1997] ZASCA 33
;
[1997] 2 All SA 371
(SCA_;
1997 (3) SA 1004
(SCA);
Intercontinental
Exports (Pty) Ltd v Fowles
[1999] 2 All SA 304
(A);
1999 (2) SA 1045
(SCA);
Greathead
v SA Commercial Catering & Allied Workers Union
[2000] ZASCA 142
;
2001 (3) SA 464
(SCA).
[10]
[2013] JOL 30478 (SCA).
[11]
"10
Registration
of home builders
(1)
No person shall–
(a)
carry on the business of a home builder; or
(b)
receive any consideration in terms of any agreement with a housing
consumer in respect of the sale or construction
of a home, unless
that person is a registered home builder.
(2)
No home builder shall construct a home unless that home builder is a
registered home builder."
[12]
See
Maurice
Leas t/a Build 4 You and Van Kerckhoven & Another
[2008] JOL 21875
(W) in which the court remarked that the
liabilities of home builders are restricted to the construction of a
new
home
only.
[13]
See also
section 13(2)(b)
regarding the home builder’s
obligations and subsection (4) regarding the housing consumer’s
rights which it cedes
to a subsequent housing consumer if the house
built is in turn sold or disposed of.
[14]
See in this regard the old Code of Conduct published in Government
Gazette 29689, dated 16 March 2007 and in particular the provisions
of
section 16.8.
Mr
Friedman
also referred to the provisions of
section 17.1
, but these relate to
“
additional
costs
”,
defined in
section 1
as meaning “…
any
costs not included in the contract price and which are or may be
payable under a
fixed
cost building contract
or sale agreement, such as costs for: Soil testing Engineer’s
service Plan drawing Plan approval Transfer (including transfer
duty
and bond registration) Inspections Electrical cable connection
Sewerage connection and other service connections.
”
These are clearly not in contention
in
casu
.
[15]
As well as the direct, the home builder’s liability referred
to in
section 13(2)(b).
[16]
Section 13(6).
[17]
Section 13(7)(a)
and (b).
[18]
Soil
Fumigation Services Lowveld CC v Chemfit Technical Products (Pty)
Ltd
[2004] JOL 12593
(SCA) at para [21].
[19]
See
Van
Der Spuy v Minister of Correctional Services
2004 (2) SA 463
, at pages 477 F – 478 C and the cases cited
therein.