Wild Wind Investmnets v Styleprops 181 (Pty) Ltd and Another (A181/2008) [2009] ZAFSHC 59 (14 May 2009)

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[2009] ZAFSHC 59
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Wild Wind Investmnets v Styleprops 181 (Pty) Ltd and Another (A181/2008) [2009] ZAFSHC 59 (14 May 2009)

FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Appeal No.: A181/2008
In the case between:
WILD WIND
INVESTMENTS
Appellant
and
STYLEPROPS 181
(PTY) LTD
First Respondent
THE REGISTRAR OF
DEEDS
Second
Respondent
_____________________________________________________
CORAM:
HANCKE, AJP
et
VAN DER MERWE, J
et
VAN ZYL, J
JUDGMENT:
HANCKE, AJP
_____________________________________________________
HEARD ON:
4 MAY 2009
_____________________________________________________
DELIVERED ON:
14 MAY 2009
_____________________________________________________
[1] This is an appeal
against a decision by Cillié J dismissing the appellant’s
application for an order of specific performance
compelling the first
respondent to take all necessary steps to pass transfer of the
property being Portion 9 of the farm Rietfontein
number 251, district
Parys, Free State, to the appellant.
[2] In its founding
affidavit the appellant alleged the conclusion of a written agreement
of sale in respect of the said property
and compliance therewith by
the appellant and that despite demand the first respondent has
refused to take all the necessary steps
to pass transfer of the
property.
[3] In its opposing
affidavit the first respondent admitted the conclusion of the
agreement but raised two defences, the first being
that the appellant
had repudiated the agreement, which repudiation the first respondent
accepted, and the second being that the
guarantees supplied by the
appellant did not comply with the provisions of the contract and that
the first respondent’s refusal
to accept such guarantees was not
unreasonable.
[4] The appellant now
appeals, with leave of the Court
a
quo
, to
this Court against the whole of the judgment and costs order of the
Court
a
quo
on
the grounds stated in the appellant’s notice of appeal. In
addition, the appellant seeks leave to adduce further evidence
on
appeal on the grounds set out in the appellant’s affidavit in
support of the said application. The appellant tendered to
pay all
the wasted costs occasioned by its failure to place the evidence
contained in the affidavit before the Court
a
quo
and
further tendered to pay the costs of this application and the appeal
irrespective of the outcome thereof.
NEW EVIDENCE ON
APPEAL
[5] It was submitted on
behalf of the appellant that the evidence in the affidavit was clear
and demonstrates amply that the appellant
itself was not remiss in
any way whatsoever but was, on the probabilities, ill advised and
that the interests of justice will certainly
not be furthered if an
appellant is deprived of the opportunity to place material evidence
before a Court of Appeal which, had
it been placed before the Court
a
quo
,
would have led to a different result in the outcome of the
application.
[6] A Court of Appeal is
entitled to hear further evidence provided certain strict
requirements are met. In
SHEIN
v EXCESS INSURANCE COMPANY LTD
1912 AD 418
Innes ACJ stated the following at 428 - 9:
“
But it is clear that the Court
should be very chary of admitting fresh evidence after a case has
been tried, more especially upon
points which have been contested and
decided at the trial. The danger of sanctioning such a course, save
under exceptional circumstances,
is manifest. … It seems desirable
therefore that we should adopt as a matter of precautionary practice
the express qualification
contained in the English rule, and hold
that special application by either party for leave to adduce fresh
evidence in appeals
should only be granted where special grounds
exist, and where it is clear that such a course would not unfairly
prejudice the other
side and would enable the Court to do justice
between the parties.”
See also
Harms,
Civil Procedure in the Supreme Court
,
C21.
[7] In
COLMAN
v DUNBAR
1933 AD 141
Wessels CJ stated the following at 161-2:
“
It is impossible to lay down
definite rules when such an application will be allowed, and when
not, but we may adopt certain guiding
principles upon which such
applications may be granted.
1. It is essential that there should
be finality to a trial, and therefore if a suitor elects to stand by
the evidence which he
adduces, he should not be allowed to adduce
further evidence except in exceptional circumstances. …
2. The party who makes the application
‘must show that the fact that he had not brought it forward was not
owing to any remissness
on his part (per Collins, L. J. in
Young
V Kershaw,
16 T.L.R. 52
,54)
.
He must satisfy the Court that he could not have got this evidence if
he had used reasonable diligence.’
…
3. The evidence tendered must be
weighty and material and presumably to be believed, and must be such
that if adduced it would be
practically conclusive, for if not, it
would still leave the issue in doubt and the matter would still lack
finality. It is not
enough that the fresh evidence merely
corroborates evidence which has been investigated and rejected. …
4. If the conditions have so changed
that the fresh evidence will prejudice the opposite party, the Court
will not grant the application.”
[8] In its application to
adduce further evidence the appellant stated that “this evidence
has always been available to the applicant
but that the applicant’s
attorney, Mr Francois du Plessis of the firm A W Theron and Swanepoel
was advised by the applicant’s
previous counsel, that there was no
need to deliver a replying affidavit. Mr Du Plessis accepted the
counsel’s advice and a
replying affidavit was not delivered and the
matter was argued”.
[9] It is clear from the
appellant’s explanation that the evidence it wanted to adduce was
in fact available; therefore it does
not satisfy the second
requirement of
COLMAN
v DUNBAR
.
[10] As far as the
appellant’s counsel’s advice is concerned, the following is
stated in
SOS
KINDERDORF INTERNATIONAL v EFFIE LENTIN ARCHITECTS
1993
(2) SA 481
(Nm) at 490C – D:
“
Deyerling’s complaint is that he
acted on legal advice. This is of no assistance to him and to
applicant whatsoever.
Where a case is conducted by a
client’s legal representative, such representatives are in charge
of proceedings. A litigant is
bound in the conduct of its case by
counsel (within the limits of counsel’s brief) and by admissions
which the legal representatives
may make in pleadings or in the
drafting of affidavits, unless satisfactory reasons are given to show
that such persons had no
right to make such admissions.”
[11] In
BANK
OF LISBON AND SOUTH AFRICA LTD v TANDRIEN BELEGGINGS (PTY) LTD AND
OTHERS (2)
1983 (2) SA 626
(W) the following is stated at 627G:
“
Where the case is conducted by the
client’s legal representatives, they are in charge of the
proceedings. A client is bound by
the conduct of the case by counsel
within the limits of his brief and subject to such specific
instructions as he may have accepted.”
See also the authorities
referred to.
[12] Appellant does not
suggest that the advice of counsel was not within the limits of the
counsel’s brief and indeed it is evident
that the appellant in fact
sought such advice. The appellant and his attorney obviously
considered the advice and accepted it
as a consequence whereof they
decided not to deliver a replying affidavit. The appellant is bound
by such an election. It is
therefore clear that the appellant has
not satisfied the requirements as set out in
COLMAN
v DUNBAR
supra
.
Consequently the application for leave to adduce further evidence
cannot succeed.
MERITS
[13] As far as the merits
are concerned I deem it necessary to first deal with the
guarantee
issue
namely the question whether appellant has complied with its
obligation in accordance with their agreement, to provide cash or a

bank guarantee payable against registration of transfer in order to
secure the purchase price.
[14] In order for the
appellant to succeed with its claim for specific performance of the
agreement, it must allege and prove that
it has complied with its
antecedent or reciprocal obligations in terms of the said agreement.
CRISPETTE
AND CANDY CO LTD v OSCAR MICHAELIS NO & OTHERS
1947 (4) SA 521
(A) at 537;
THERON
v THERON
1973 (3) SA 667
(C) at 673C – E;
MILLMAN
NO v GOOSEN
1975 (3) SA 141
(O) at 142H.
[15] Clause 3.2 of the
agreement provides that the:
“
purchase price shall be secured by
cash or a bank guarantee or bank guarantees or a combination thereof
payable against registration
of transfer, which cash or bank
guarantee or bank guarantees shall be furnished to the Seller’s
conveyancers within 60 (sixty)
days of signature of this agreement,
and which guarantees shall be issued in accordance with the
reasonable instructions of the
seller’s conveyancer.”
[16] The agreement was
signed on 8 March 2006 and the cash or bank guarantees were therefore
to be furnished by no later than 8
May 2006. The appellant however
furnished a guarantee dated 24
th
August 2006 by Nedcor Bank Ltd for an amount of R4 750 000.00 and not
for the full purchase price of R9,5 million as set out in
clause 3.1
of the agreement. The appellant then furnished a guarantee dated
23
rd
October 2006 from Absa Bank for an amount of R4 750 000,00 which was
conditional upon the simultaneous registration of
inter
alia
a
first mortgage bond by the appellant in favour of Absa over the
property for R15 million.
[17] On behalf of first
respondent it was submitted that the Absa guarantee by imposing the
bond condition, effectively negated
the Nedcor guarantee since the
Absa guarantee is conditional upon the registration of an Absa bond
over the property and the Nedcor
guarantee is conditional upon the
simultaneous cancellation of all mortgage bonds over the property;
therefore the two guarantees
had mutually destructive clauses, namely
one requiring cancellation of all existing bonds and the other
requiring the registration
of a bond in such bank’s favour.
[18] The question is
whether the first respondent was entitled to reject the Absa
guarantee. In
KOUMANTARAKIS
GROUP CC v MYSTIC RIVER INVESTMENT 45 (PTY) LTD AND ANOTHER
[2008] ZASCA 53
;
2008 (5) SA 159
(SCA) the following is stated by Mhlantla AJA at
paragraph [39]:
“
[39] The final issue to be
determined is whether the seller acted reasonably when it rejected
the guarantee. Put simply, what is
at the heart of this part of the
case, is the so-called 'whimsical revocability' of the guarantee. In
order to determine this issue,
the court must consider the grounds
expressed by the seller and apply a double requirement. First, a
seller must exercise an honest
judgment in deciding whether to accept
or reject a guarantee. (Honesty was not in issue here.) Second, the
seller's decision to
reject must objectively viewed, be based on
reasonable grounds.”
[19] In
DAVIS
v BRAATVEDT
1989 (3) SA 327
(N) Bristowe J, said the following at 328J – 329B:
“
It is common cause, first, that the
purchase price was payable in cash against transfer. That is because
no other provision was
made. Secondly, the sale was unconditional;
there was in particular no reference to the plaintiff's need (if
there was one) to
borrow money on the security of the property in
order to pay the purchase price. Thirdly, the plaintiff was obliged
to provide
'bank or equivalent guarantees' before 31 March 1987. This
meant, counsel were agreed, a guarantee or guarantees that the full
sum of R220 000 would be paid on registration of transfer in
accordance with the practice that has been recognised for many
years.”
[20] The facts in the
present matter are similar. The sale was unconditional and the
purchase price was payable in cash against
transfer. There was
similarly no reference in the Deed of Sale to the appellant’s need
to borrow money on security of the property
in order to pay the
purchase price. At 332B – H of the aforesaid judgment, the
following is stated:
“
Mr Combrinck's answer can be stated
shortly. The guarantee, he submitted, is objectionable because both
the liability to make payment
and the right to withdraw are linked,
not merely to the registration of transfer, but also to the
registration of the bond. The
seller, he pointed out, has no control
over the registration of the latter and there may be any number of
reasons why it cannot
be registered at all or why its registration
may be unduly delayed.
What
the seller stipulated for and the buyer agreed to ensure was payment
against transfer, not payment against registration of
a bond
.
So far as transfer was concerned, the matter was straightforward from
the seller's point of view.
Registration
of a bond introduced potential complications for which the seller had
not bargained.
In my view
Mr Combrinck's contentions are sound. … The seller would not, in
short, have received a guarantee of the type contemplated
by the
parties. It follows, in my view, that the defendant was entitled to
reject the document tendered by the plaintiff.”
(my
underlining)
(As to the potential
complications, see p. 332D – G of the judgment.)
[21] In the present
matter the seller was entitled to reject the guarantees because they
introduced mutually destructive clauses
as to the cancellation and
registration of bonds respectively. The seller was also entitled to
reject the guarantees because the
Absa guarantee introduced a bond
clause, which was not stipulated in the contract.
[22] A further
complication is created by clause 9 of the agreement which provides
for a subdivision and retransfer of a portion
of the property to the
first respondent, alternatively the conclusion of a long-term lease
in favour of the first respondent.
It is clear that a bond over the
property by a bank would not be in accordance with what the parties
envisaged by the subdivision
and retransfer of a portion of the
property or a long-term lease, since the parties would inevitably
have to seek the consent of
the bondholder in order to proceed with
the provisions of clause 9. The registration of a bond would
therefore potentially create
difficulties and particularly if the
bondholder withheld such consent. It is therefore inconceivable that
the parties contemplated
a guarantee subject to a bond over the
property in such circumstances.
[23] It follows therefore
that the seller’s decision not to accept the Absa guarantee is
objectively viewed based on reasonable
grounds. It is therefore
clear that the first respondent was not getting what he asked for or
what was contemplated by the parties.
The appellant’s application
can therefore on this ground alone not succeed.
[24] In view of the
conclusion reached by me it is not necessary to deal with the other
defence raised by first respondent.
[25] Consequently the
following orders are made:
1. The application for
leave to adduce further evidence is refused with costs.
2. The appeal is
dismissed with costs.
___________________
S. P. B. HANCKE, AJP
I agree.
_________________________
C. H. G. VAN DER
MERWE, J
I agree.
_______________
C. VAN ZYL, J
On
behalf of the appellant: Adv. F. H. Terblanche SC
Instructed
by:
Kramer
Weihmann & Joubert Inc.
BLOEMFONTEIN
On
behalf of the first
respondent: Adv.
G. Kairinos
Instructed
by:
Honey
Attorneys
BLOEMFONTEIN
/em