Eloff and Another v Dekker (2197/2006) [2007] ZAWCHC 71 (28 November 2007)

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[2007] ZAWCHC 71
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Eloff and Another v Dekker (2197/2006) [2007] ZAWCHC 71 (28 November 2007)

IN THE CAPE HIGH
COURT OF SOUTH AFRICA
(CAPE OF GOOD
HOPE PROVINCIAL DIVISION)
CASE NO:
1461/2006
In the matter
between:
SHIRLEY ELOFF
1
st
Plaintiff
MAUREEN
ELOFF
2
nd
Plaintiff
vs
DANIEL HENDRIK DEKKER Defendant
JUDGMENT: 28 NOVEMBER
2007
Meer, J:
Introduction.
[1] The Plaintiffs claim repayment of the sum of R300
000.00 (three hundred thousand rand), being a deposit paid to
Defendant pursuant
to an offer by Plaintiffs to purchase a property
owned by Defendant in Gordon’s Bay. Plaintiffs allege that a
suspensive condition
of the offer to purchase agreement concluded
between the parties in October 2005 was not fulfilled, and the
deposit is accordingly
repayable.
[2] Defendant
admits that the suspensive condition was not fulfilled but pleads
that Plaintiffs waived such condition and in addition
repudiated the
offer to purchase agreement, as a consequence whereof Defendant is
entitled to retain the deposit paid.
Background
Facts
[3] The First and Second Plaintiffs are mother and
daughter respectively. In October 2005, shortly after the death of
her husband,
the First Plaintiff, a widow of 73, stayed for a short
while with the Second Plaintiff in Gordon’s Bay, whereafter she
returned
to her home in Louis Trichardt. Her intention was to
eventually move from Louis Trichardt to live with her daughter in the
Cape.
With this in mind, whilst visiting the Second Plaintiff, the
First Plaintiff signed an option to purchase Defendant’s house
situated
at erf 4831, 67 Lancaster, in Gordon’s Bay (“the subject
property”). The option to purchase, dated 13 October 2005,
stipulated
the purchase price as R918 000.00, payable by way of a
deposit of R300 000.00 and a bond of R618 000.00, to be approved by
the end
of February 2006. At the time the option to purchase was
signed, Defendant had a competing and pre-existing offer to purchase
the
property which subsequently fell away due to the non-approval of
a bond.
[4] Thereafter on 16 October 2005 Plaintiffs and
Defendant concluded a written offer to purchase agreement (“the
agreement”).
The First Plaintiff at the time owned a property known
as “Hunter’s Rest” in Louis Tichardt, which she intended
selling. Her
deceased husband’s estate had at that stage not been
finalized. The relevant sections of the offer to purchase agreement
are contained
in the following extracts from clauses of the
agreement:
“
1. Purchase Price: R900 000.00
(
Nege Honderd Duisend Rand).
1.1 Deposit: R300 000.00
(Drie Honderd Duisend Rand).
in cash at the transferring
attorneys, which deposit will be held in an interest bearing account
in the said attorney’s trust account
until date of registration,
interest to accrue to the Purchaser on or before the 21 October 2005.
1.2 R350 000.00 THE BALANCE OF
THE PURCHASE PRICE in cash at date of registration. For which payment
the purchaser must provide on
demand a suitable bank guarantee, as
requested by the Seller.
2. Agent’s
Commission: R60 000.00. (Sestig Duisend Rand)
……………………..
……………………..
7. Bond:
The parties agree that this Deed of Sale shall be subject to the
suspensive condition that the Purchaser obtain written confirmation
from a Bank or Building Society or Financial Institution, that a loan
in the amount of not less than R250 000.00
(Two Hundred and Fifty
Thousand Rand)
has been approved in principle
upon the relevant institution’s normal terms and conditions,
including the security of a first mortgage
bond over the said
property, within a period of 15 days from the date hereof. In the
event of the approval not being obtained within
the stipulated
period, the Seller may, however, unilaterally extend the aforesaid
period for a further 15 days. In the event of this
clause not being
fulfilled, this Deed of Sale shall lapse and that no duty to take
transfer of the property shall rest upon the Purchaser.
All other
obligations will however remain until discharged by the Purchaser.
11. Breach. Should the purchaser
fail to make any payments provided for herein, or otherwise commit a
breach of any of the conditions
hereof, the Seller shall be entitled
to forthwith, and without prejudice to any other rights available at
Law.
11.1 …
11.2 Cancel this Deed of Sale and retain all amounts paid by the
Purchaser as rouwkoop or a genuine pre-estimate of damages suffered
by the Seller, and furthermore the Purchaser shall not be entitled to
compensation from the Seller for any improvements of whatsoever
nature he may have caused on the property, whether with or without
the Seller’s consent.
11.3 …
11.4 …
13. Special conditions:
This contract is subject to the
sale of Hunter Rest Plot or the finalation of the deceased estate of
M A Eloff.”
[5] On 18 October 2005 the Plaintiffs paid an amount of
R300 000.00 to Defendant’s conveyancing attorneys, in lieu of the
deposit
as specified at paragraph 1.1 of the contract.
[6] Thereafter the Second Plaintiff applied for a bond
of R250 000.00 to comply with the suspensive condition specified at
paragraph
7 of the agreement. On 21 October 2005 a bond in the sum of
R238 700.00 only was approved by ABSA Bank Limited. The suspensive
condition
at clause 7 remained unfulfilled by 31 October 2005, the
date specified in the clause.
[7] On 14 November 2005, First Plaintiff’s son
notified estate agent Alice Joubert who negotiated the contract, that
as the requisite
bond as specified at clause 7 of the agreement had
not been approved, the suspensive condition had not been fulfilled
and accordingly
the deed of sale had lapsed. He stated that under the
circumstances the Plaintiffs would not be continuing with the
transfer of the
property and requested the return of the deposit of
R300 000.00 with accrued interest. Defendant refused to return the
deposit which
continues to be held in trust by his attorney.
[8] Thereafter,
a re-application for a bond of R250 000.00 was submitted on the
instruction of Defendant’s attorney and as a result
approval of a
bond in the sum of R250 000.00 was obtained on 5 December 2005.
According to Dirk Joubert the credit manager at ABSA
the first bond
application had incorrectly recorded First Plaintiff’s income,
hence the earlier refusal.
[9] The sale of the subject property to Plaintiffs did
not go through. Defendant continued residing on the property until
December
2006 when he moved into a retirement village in Gordon’s
Bay and rented out the subject property. First Plaintiff sold her
house
in Louis Trichardt in July 2007
Pleadings
[10] Whilst the Defendant admitted that the suspensive
condition at paragraph 7 of the agreement was not fulfilled, he
pleaded that
Plaintiffs waived such condition by accepting the lesser
bond, approved in the sum of R238 700.00. In the alternative he
pleaded
that Plaintiffs, with the intention to frustrate fulfillment
of the suspensive condition, did not endeavor to obtain fulfillment
thereof. Defendant pleaded moreover that in November 2005 Plaintiffs
repudiated the agreement by informing Defendant in writing that
they
were no longer interested in proceeding with the sale. Defendant
accepted the repudiation and pursuant to the penalty clause
at
paragraph 11.2 of the agreement, he is entitled to retain all amounts
paid by Plaintiffs as rouwkoop or a genuine pre-estimate
of damages.
In a reply to a request of further particulars, Defendant detailed
the extent to which he was prejudiced by the repudiation.
[11] By way of replication Plaintiffs pleaded that:
11.1 In the event that the suspensive condition at
clause 7 is held to have been inserted solely for their benefit and
waived by them,
the agreement is void as it does not comply with the
provisions of the
Alienation of Land Act 68 of 1981
, in that it does
not contain a recordal of the time and manner in which the purchase
price was paid. Pursuant to
Section 28
of the aforementioned Act
Plaintiffs are entitled to recover from Defendant the amount of R300
000.00;
11.2 Clause 11.2 of the offer to purchase agreement is a
penalty stipulation in terms of Sections 3 and 4 of the Conventions
Penalties
Act No. 15 of 1962, the Defendant has remained in
possession of the property valued not less than R900 000.00, and the
retention
of the deposit of R300 000.00 is out of proportion to the
prejudice suffered by Defendant by reason of the alleged conduct of
the
Plaintiffs. Defendant has accordingly suffered no prejudice and
consequently the penalty should be reduced to zero. Alternatively,
in
the event of it being found there is prejudice to Defendant, the
amount of R300 000.00 should be reduced to such extent as a court
may
consider equitable;
11.3 That on a proper construction of clause 13, the
agreement, alternatively transfer of the property to the Plaintiffs
and payment
of any amount to the Defendant, was subject to the sale
of the “Hunter’s Rest” property and the finalization of the
deceased
estate of M A Eloff, both occurring. In the result, clause
13 of the agreement falls to be rectified to read;
“
This contract is subject to
sale of Hunters Rest plot and the finalization of the deceased estate
of M A Eloff; alternatively this
contract is subject to the sale of
Hunters Rest plot or the finalization of the deceased estate of M A
Eloff, whichever occurs last”.
Evidence
.
Testimony on the Value of the Subject Property
[12] Mr Ian Howcroft an appraiser and registered
professional valuer of thirty years experience testified on behalf of
Plaintiffs
that, based on comparable sales, the replacement value
less depreciation of the subject property as at 16 October 2005, when
the
offer to purchase was signed, was R850 000.00. He placed the
value thereof as of 8 March 2007, at R900 000.00 Howcroft described
his valuations as conservative.
[13] Howcroft expressed surprise that the only offer
Defendant had received for the subject property since December 2005
had been
a verbal one of R800 000.00. He suggested the subject
property may not have been properly marketed.
[14] In contrast, estate agent Andries Basson
instructed by Defendant to sell the subject property in January 2006
on an open mandate,
testified it had been advertised on the Internet,
in Die Burger and the District Mail, a Helderburg weekly paper, from
January to
June 2006. There had also been a showhouse and Basson had
taken 5 clients to the property and received an oral offer only for
R800
000.00 in cash, which was rejected. The proximity of the
property to low income groups as well as to developments could have
adversely
affected the sale of the property. Basson was of the view
that the asking price was not high for the location.
Testimony
of First Plaintiff
[15] First Plaintiff testified that in October 2005,
soon after her husband’s funeral, when she signed the option to
purchase, dated
13 October 2005, she had informed Defendant, his wife
and the estate agents present that the conditions precedent to her
purchasing
the property would be both the sale of her property,
“Hunter’s Rest” in Louis Trichardt, and the receipt of funds
from her
husband’s estate. This was understood by all present
including Defendant, estate agent Ms Knierin, who introduced her to
the subject
property, and her principal, Alice Joubert.
[16] Estate agent Alice Joubert had however incorrectly
inserted these two preconditions into the offer to purchase
agreement, by
recording at clause 13, that either of the two
conditions would suffice, and inserting the word ‘or’ as opposed
to ‘and’
at the clause. First Plaintiff was adamant that she
would not have been able to buy the property without both the
finalization of
the estate and the sale of the Hunter’s Rest
property and that this had been made clear to all concerned.
[17] The
large deposit of R300 000.00, had been at Defendant’s behest, a sum
which First Plaintiff had borrowed from her son. It
was First
Plaintiff’s intention to pay the remaining R600 000.00 of the
purchase price from the proceeds both of the sale of her
property in
Louis Trichardt and from the estate of her late husband.
[18] First Plaintiff explained with reference to the
suspensive condition at clause 7 of the agreement, that the bond of
R250 000.00
was to be obtained by her daughter, the Second Plaintiff,
and used to fund transfer fees and further building on the property.
The
Second Plaintiff and estate agent Delmarie Knierin had attended
to the bond application and First Plaintiff had not been involved
in
that aspect. She had left the Cape shortly after concluding the
agreement and had not spoken to Ms Knierin again after leaving.
[19] Whilst back in Louis Trichardt she had received a
telephone call from Second Plaintiff who said she had not obtained a
bond
for R250 000, but a bond in the lesser amount of R238
700.00, as her salary did not qualify her for a R250 000 bond. First
Plaintiff’s response had been “Well if you can’t you can’t,
that’s it”. They had not discussed the matter further, she
said.
Under cross examination First plaintiff denied that Ms Knierin had
also phoned her with news of the bond. She moreover denied
that she
had telephonically told Ms Knierin that it was alright to go ahead
with the sale with the lesser bond. Thereafter her son
advised that
the property was unsafe and he had notified the estate agent in an
e-mail dated 14 November 2005, of the decision not
to proceed with
the sale.
[20] First Plaintiff had put her Louis Trichardt
property on the market at the end of November 2005. She was however
unable to sell
it during 2005 and 2006 because a land claim had been
registered against it. It was only in May 2007 that she was given the
go ahead
to sell, which she did in June 2007. In July 2007 she had
moved to Cape Town. Her husband’s estate was wound up in June 2006
and
she was paid R45 000.00.
[21] First Plaintiff denied that she had an offer of
R900 000.00 on the Louis Trichardt property at the time she signed
the offer
to purchase the subject property. She did not know of any
dealings that estate agent Knierin had with the agent engaged to sell
her
Louis Trichardt property.
Testimony of
Defendant
[22] Defendant is a retired teacher from Gauteng, living
in Gordon’s Bay, who is currently employed at Acutts Estate Agency.
Since
his retirement to the Cape Defendant has attempted to
supplement his income by teaching and engaging in property
investments on a
small scale. Defendant testified about those
property investments which he thought had a bearing on this claim, as
well as the damages
he alleged he suffered as a result of Plaintiffs’
failure to purchase the subject property.
[23] Defendant bought the subject property in 2001 for
R330 000.00 on a ‘plot and plan’ basis after his retirement. A
bond on
the purchase price was paid off when he received his pension.
[24] In 2004 Defendant bought another property on a plot
and plan basis in Kraaifontein for R250 000.00, raising a bond of
that amount.
The property later sold for R420 000.00 and some of the
profit was used towards the purchase of another “plot and plan”
property
in a retirement village in Gordon’s Bay, for R591 000.00.
A deposit of R20 000.00 was paid towards this, the balance to be paid
when building commenced. A second bond was taken in the amount of
R474 993.64 on the subject property to pay the balance. The monthly
repayments on the bond were R4 400.00 payable from August 2005.
[25] Thereafter in August 2005 Defendant put the subject
property on the market for R920 000.00 because, he explained, he
needed to
raise R472 000.00 for the retirement property. He planned
also to partly finance another property he had purchased for R595
000.00
in Kraaifontein from the proceeds of the sale of the subject
property. He had bought the latter property before the subject
property
was put on the market, with the intention that it would give
him a monthly rental income.
[26] In September 2005 Defendant received a conditional
offer for R900 000.00. Thereafter the option to purchase for R918
000.00
was signed by First Plaintiff whom he said had informed him
that she herself had an offer to purchase on her Louis Trichardt
property.
He gained the impression her property would be sold quite
quickly and he expected to have his money by the end of February
2006.
He conceded she did not know when her husband’s estate would
be wound up.
[27] When the prior offer of R900 000.00 lapsed,
Defendant entered into the offer to purchase agreement with
Plaintiffs for the
sum of R900 000.00. Defendant explained he had
insisted on the large deposit of R300 000.00 as a guarantee that
Plaintiff
would buy the property.
[28] Defendant denied that the special condition at
paragraph 13 of the agreement was subject both to the sale of the
Hunter’s Rest
property owned by First Plaintiff and the
finalization of her husband’s estate. The sale, he said was subject
to the sale of the
Hunter’s Rest property or the finalization of
the estate, whichever event occurred first.
[29] After signing the offer to purchase Defendant had
been informed by Ms Knierin that the bond had been approved. He also
received
a letter from his attorney, Mr Nortjie stating that the
deposit of R300 000.00 had been paid. He showed the letter to the
developers
of the retirement village property he had bought and
instructed them to proceed with the building of his house there, and
the bond
raised for that purpose commenced being drawn against.
[30] Thereafter Defendant received a telephone call
from First Plaintiff’s son, informing him that she no longer wished
to proceed
with the sale, and requesting that the contract be
cancelled. Defendant refused, indicating that a breach of contract on
his part
would result in his being liable for agent’s commission.
An e-mail from First Plaintiff’s son dated 14 November 2005,
cancelling
the sale, was thereafter shown to Defendant by the estate
agent.
[31] Defendant put the subject property on the market
again in December 2005 but to date he has received an oral offer
only, of
R800 000.00 in mid 2006. Defendant denied that he did
not actively attempt to sell the subject property because he knew
that
a sale would affect his ability to retain the deposit of R300
000.00 paid by Plaintiffs. He denied that his intransigence in
reducing
the purchase price of R900 000.00 indicated a
reluctance to sell.
[32] Defendant moved out of the subject property on 15
December 2006 whereafter it was rented for a monthly rental of R4
500.00. Had
the subject property been purchased by Plaintiffs for
R900 000.00 he said he would have used 472 000.00 to pay off its
bond, R290
000.00 to pay towards the Kraaifontein property and R60
000.00 for agent’s commission on the sale. He believed that he was
entitled
to the deposit of R300 000.00 irrespective of the damage he
had sustained, as soon as Plaintiffs had breached the contract.
[33] Whilst Defendant listed in a reply to Plaintiff’s
request for further particulars to trial, details pertaining to his
prejudice
as a result of Plaintiffs’ alleged repudiation, and lead
evidence thereon, he did not provide all the requisite documentation
against
which his testimony on this aspect could be tested. He
conceded he had not made discovery of all the documents relevant to
his financial
position over the period in question. At the time of
making discovery his view seemed to be that his financial affairs
were not relevant
as he was entitled to the full amount of R300
000.00 irrespective thereof.
[34] A schedule prepared by Mr Grobbelaar specifying
Defendant’s prejudice totalled his damages as R220 785 13. Included
in the
items specified were estate agents commission, occupational
rental, bond repayments on the subject property, insurance thereon, a
savings plan for his granchild, and losses in repect of two insurance
policies. A causal link between many of these items and the
non
fulfillment of the sale agreement did not clearly emerge from
Defendant’s testimony. Defendant appeared to suggest that by
way of
a ripple effect Plaintiffs were to blame for his costs and expenses
right up until September 2007.
[35] Defendant conceded that he had not given the First
Plaintiff a further 15 days at the end of October to obtain a bond of
R250
000.00 in accordance with the suspensive condition at clause 7.
Instead, on the advice of his attorney a bond for R250 000.00 was
reapplied for and approved on 5 December 2005. Defendant thought the
Plaintiffs were bound to the agreement once that approval had
occurred.
Testimony of Delmarie Knierin.
[36] Delmarie Knierin an estate agent employed by Action
Estates in 2005, and a close personal friend of the Plaintiffs, had
introduced
them to the subject property in October 2005. Ms Knierin
was present when both the option to purchase as well as the offer to
purchase
agreement were signed.
[37] She explained that both documents provided for a
high deposit of R300 000.00 because the Defendant was prepared to
wait for the
sale of First Plaintiff’s Louis Trichardt property or
the finalization of the estate, for the contract to go through.
[38] The offer to purchase agreement had been filled in
by Ms Knierin’s principle, Alice Joubert, as, at the time Ms
Knierin had
been an estate agent for only 2 months and the contract
involved the winding up of the estate. When cross examined about the
special
conditions at clause 13 of the offer to purchase and probed
about the reasons for the inclusion of such conditions, Ms Knierin
conceded
that clause 13 meant that the contract was subject to the
sale of Hunter’s Rest plot or the finalization of the deceased
estate
whichever happened last, or whichever gave the money for the
purchase price.
[39] After the offer to purchase agreement was signed Ms
Knierin arranged for a company, Bond Choice, to assist the Second
Plaintiff
with obtaining the R250 000.00 bond in compliance with the
suspensive condition at clause 7. On 24 October 2005 she telephoned
Second
Plaintiff and informed her that a bond only in the sum of R238
700.00 had been approved. They had a discussion during which Ms
Knierin
advised Second Plaintiff about the amount she would need for
transfer and building costs, whereafter they had decided that a bond
as approved would be enough. Consequently Second Plaintiff had
accepted the R238 700.00 bond. Ms Knierin had recorded her
telephone
discussion with Second Plaintiff on a notepad on which she
kept notes of important matters.
[40] Ms Knierin said that she had phoned the First
Plaintiff on her cell phone directly after phoning Second Plaintiff
and also
informed her that a bond of R238 700.00 had been approved.
First Plaintiff had accepted this amount. When probed about this
phone
call during cross examination Ms Knierin initially said First
Plaintiff told her she was at Second Plaintiff’s flat when she was
phoned. However when confronted with First Plaintiff’s evidence
that she was back in Louis Trichardt when her daughter phoned to
tell
her about the bond, Ms Knierin said she could have been, but then
later reverted to her earlier suggestion that First Plaintiff
was at
her daughter’s flat at the time. She referred to a fax that she had
arranged to send to First Plaintiff at her daughter’s
flat. When
asked to read out the fax, it emerged that Knierin had recorded First
Plaintiff’s cell number as being that of Second
Plaintiff’s.
[41] Ms Knierin attempted to explain this discrepancy by
saying that First Plaintiff had been using her daughter’s cell
phone as
she did not have a cell phone with her in October 2005. This
contradiction with her evidence in chief that she had phoned First
Plaintiff
on her cell phone after speaking to Second Defendant, was
pointed out. Ms Knierin had not recorded on her notepad that she had
phoned
First Plaintiff to inform her about the bond, and she conceded
as much.
[42] Ms Knierin had tried unsuccessfully on 24 October
to phone Defendant and eventually sent him an SMS message that the
bond had
been approved. She had recorded this on her notepad. Ms
Knierin had thereafter telephoned the person at Bond Choice who had
facilitated
the bond application, and informed her that Second
Plaintiff had accepted the bond of R238 700.00.
[43] Ms Knierin said she had also been involved with an
estate agent in Louis Trichardt who was negotiating the sale of the
Hunter’s
Rest property owned by First Plaintiff. She had faxed
documents to the estate agent for First Plaintiff in this regard. She
had seen
an offer on the Hunter’s Rest property around 28 October
2005.
[44] Ms Knierin had been shocked at the e-mail from
First Plaintiff’s son dated 14 November 2005 instructing the
cancellation
of the sale. She had notified the Second Plaintiff about
this and the latter, she said, was very upset. On 16 November 2005 Ms
Knierin
had written a letter on the instruction of Defendant to the
First Plaintiff and her son in connection with the cancellation.
[45] Thereafter, according to her, the First Plaintiff
had telephoned her to enquire if the Defendant would be willing to
rent the
house to the Plaintiffs and deduct the rental from the R300
000.00 deposit. Ms Knierin had not forwarded that request to the
Defendant.
The commission for the sale has not been received, nor has
the estate agency pursued the commission, due to the current
litigation.
[46] Ms Knierin conceded that a bond for less than R250
000.00 would have reduced the purchase price on the contract.
Testimony
of Alice Joubert.
[47] Alice Joubert, the principle estate agent at Action
Estates, who filled in the offer to purchase agreement, testified
that in
terms of the special conditions at clause 13, the contract
was subject either to the sale of Hunter’s Rest or the finalization
of the estate, and that the purchase price would be paid whichever
event occurred first. This was in contrast to the testimony of
her
employee, Ms Knierin who conceded the clause was to be understood in
the context of whichever event occurred last.
[48] Also, in contrast with the testimony of Knierin to
the effect that she had notified Defendant by SMS of the approval of
a bond
of R238 700.00, Joubert testified that this was
conveyed telephonically to Defendant whom Knierin had telephoned in
her presence. She also said that Knierin had telephoned First and
Second Plaintiffs in her presence, a detail which Knierin herself
had
not alluded to, and informed them about the bond approval of R238
700.
[49] Furthermore, in contrast with the testimony of
Defendant that the subject property was first put on the market in
August 2005,
2 months before Plaintiffs’ offer, Ms Joubert said she
had the house on her books for about 10 months before Plaintiffs made
the
offer. When faced with these discrepancies, Ms Joubert stated
that these events had occurred a long time ago, she has a lot of
stock
and could not remember everything.
[50] Ms Joubert stated it had not been explained to her
that the First Plaintiff needed to sell her house in order to
purchase the
subject property. She however accepted that Ms Knierin
was closest to the transaction, and knew why clause 13 had been
inserted.
Joubert could not say if either of the conditions specified
at clause 13 had occurred.
[51] According to Ms Joubert, First Plaintiff’s son
had informed her telephonically on 9 November 2005 that he wished the
sale
to be cancelled because the house was in a Coloured
neighbourhood and not suitable for his mother. He said he had found a
loophole,
as the contract at clause 7 stipulated for a bond of R250
000 and this had not been granted. The e-mail to her dated 11
November
2005, stating the sale had lapsed, due to the non
fulfillment of the suspensive condition, had followed.
Argument.
[52] Both Mr Turner for Plaintiffs and Mr Grobbelaar for
Defendant agreed that if the Defendant did not discharge the onus to
prove
the alleged waiver of the suspensive condition at Clause 7 of
the agreement, the Plaintiffs must succeed in recovering the full
deposit
of R300 000.00 plus interest and costs.
[53] In the event of a waiver being found, Defendant
would be required to prove a repudiation on the part of Plaintiffs,
which he
accepted, as well as his entitlement to withhold the deposit
as a genuine pre-estimate of damages pursuant to the provisions of
the
penalty sub clause at 11.2 of the agreement. The provisions of
the Conventional Penalties Act would apply to clause 11.2 and the
onus would be on Plaintiff to show
prima facie
that the Defendant did not suffer prejudice or that the amount
claimed, should be reduced. If they did, the Defendant would have
to
lead evidence to show the prejudice he alleged he suffered.
[54] Mr Turner submitted in addition, that in the event
that the Defendant was successful in either of the defences raised
and it
was found that the suspensive condition was waived, there are
two further suspensive conditions at Clause 13 that suspend the
agreement,
neither of which had been fulfilled by the time the
Defendant purported to cancel.
Waiver
[55] In order to prove a waiver the Defendant must show
that the Plaintiffs had a right under the contract, conferred solely
for their
benefit, which they both waived. See
Barnard
v Barnard
2000(3) SA 741C at paragraph 18 and
19.
[56] There was some debate as to whether the suspensive
condition at clause 7 constituted a right conferred solely for the
benefit
of Plaintiffs. Mr Turner submitted that the clause viewed in
the context of the agreement was for the benefit of both parties, did
not bestow a right on Plaintiffs only, but merely created a
suspensive condition for the implementation of their agreement, and
accordingly could not be waived. The exclusion of the sum of R250
000.00 which made up the purchase price, he argued, would render
the
contract inchoate. Mr Grobbelaar in contrast, argued that clause 7
was capable of being waived, the effect whereof would not
render the
contract inchoate but would require it to be looked at as it stood.
[57] It
is settled law that a bond clause akin to the suspensive condition at
clause 7 of the agreement, is for the exclusive benefit
of the
purchaser and is capable of unilateral waiver provided that such
waiver takes place before the date for fulfillment of the
condition.
See
Manna v Lotter
and Another
2007(4) SA 315 (C) at 324I-325E;
Mia v D J L Properties (Waltloo) (Pty) Ltd and
Another
2000 (4) SA 220
(T) at 228 H-I;
Westmore v Crestanello and Others
1995
(2) SA 733(W)
at 739 B-C;
Alessandrello v
Hewitt
1981 (4) S A 97
(W). I do not accept
that clause 7 is for the benefit of both parties, or that the clause
viewed in the context of the agreement
provides a basis for deviation
from settled law.
[58]
Defendant,
in order to succeed in his waiver defence must also discharge the
further onus of proving that both Plaintiffs waived
their right to
accept a bond of R250 000.00, conferred at clause 7, by accepting a
bond in the lesser amount of R237 800,00. A
s
co-creditors / co-debtors to the agreement
the right must have been waived by both of them.
See
Barnett v Glantz
(1908) 25 SC 967
;
Prinsloo v Roets
1962 (3) SA 91
(O);
Segal v Segal
1977(3) SA 247 (C) at 252-254. A waiver by one of them only, would
not suffice to discharge the onus.
[59] There exists in our law a strong presumption
against waiver and the onus of proving a waiver is not easily
discharged
1
.
Innes CJ in
Laws V Rutherford
1924 AD 261
at 263 stated:
“…
The
onus is strictly on the appellant. He must show that the respondent,
with full knowledge of her right, decided to abandon it,
whether
expressly or by conduct plainly inconsistent with an intention to
enforce it.”
See also
Hepner v
Roodepoort-Maraisburg Town Council
1962(4) SA
772 (A).
Clear
proof is required especially of a tacit as opposed to an express
waiver
2
See
Borstlap v Spangenberg
1974(3) SA 695 A at 704,
Road Accident Fund v
Mathopi
2000 (4) SA 38
A paras 16-17. The
conduct from which waiver is inferred, it has frequently been stated,
must be unequivocal. See
Road Accident Fund v
Mothupi
2000(4) SA 38 (SCA) at para 19 or the
conduct must evince an unequivocal intention to waive a particular
right. This determination
has been said to be one of fact and a
statement of attitude or understanding is not sufficient. (See
Barclays Bank of Zimbabwe Limited v Binga
Products Pty Limited
1983(3) SA 1041 (ZS).
[60] Against the backdrop of the
evidential standard pertaining to waiver, I set out to consider in
the light of the relevant evidence
whether both Plaintiffs waived the
right conferred at clause 7. An evaluation of the testimony of Ms
Knierin to whom on Defendant’s
version both Plaintiff’s conveyed
their acceptance of the lesser bond, and who in turn accepted their
waiver on Defendant’s behalf,
as well as that of First Plaintiff,
is relevant to this enquiry
.
[61] It was apparent from Ms Knierin’s testimony in
chief that during her telephone call to the Second Plaintiff on 24
October,
informing her about the approval of the bond of R238 700.00,
that prior to the Second Plaintiff’s acceptance thereof, Ms Knierin
had advised her that this amount would be sufficient to cover
transfer fees and building costs. It would appear that having been
convinced by Ms Knierin that the greater sum of R250 000.00 was not
really required, the Second Plaintiff accepted the bond in the
lesser
amount. I note that Ms Knierin recorded her conversation with Second
Plaintiff on a notepad used to jot down important matters,
and
recorded there also the SMS she sent to Defendant notifying him of
the bond approval.
[62] Knierin’s evidence in chief that she had phoned
First Plaintiff on her cell phone in a separate call immediately
after phoning
Second Plaintiff contrasts sharply with her testimony
under cross examination that First Plaintiff did not have a cell
phone in October,
and was using the cell phone of Second Plaintiff.
It leads one to speculate whether Knierin offered the latter
testimony conveniently
to cover her tracks, when it emerged during
cross examination that the cell number Knierin had for First
Plaintiff was that of Second
Plaintiff. This, and the fact that she
did not record the phone call to First Plaintiff as she did in
respect of that to Second Plaintiff
and the message to Defendant that
day, poses the question as to whether the call to Plaintiff was in
fact made, and in my view, impugns
her credibility.
[63] Her prevarication during cross examination as to
where First Plaintiff was when she phoned her, also does not assist
her. The
only corroboration of Knierin’s testimony that she phoned
First Plaintiff, is provided by Alice Joubert, but given the latter’s
contradictory evidence as juxtaposed against that of Knierin’s,
and Defendant’s as alluded to above, great store cannot in my
view
be placed on the testimony of Joubert.
[64] The First Plaintiff in contrast was consistent in
her testimony both in chief and under cross examination, that Ms
Knierin had
not phoned her and in her denial that she had
communicated acceptance of the lesser bond to Knierin. In the
circumstances I come
to the view that the probabilities favor the
acceptance of First Plaintiff’s evidence over that of Ms Knierin.
The probabilities
moreover, are that if a communication with first
Plaintiff about the bond had occurred telephonically or at all as
attested to by
Ms Knierin, she would have recorded such a
communication on her note pad as she had done in respect of her
communication with the
Second Plaintiff and the Defendant.
[65] I accept also as was contended by Mr Turner that
the conduct of Defendant and indeed his agents after 14 November 2005
is inconsistent
with that of a party who has accepted a waiver or at
least received communication thereof. The waiver was not raised in Ms
Knierin’s
letter of 16 November written on Defendant’s
instructions or in the Defendant’s attorney’s letter of 8
December. Further the
attempt to get a bond for R250 000.00 approved
on 5 December 2005 indicates that they were trying to revive the
agreement, and is
an act inconsistent with a belief that the
condition had been waived.
[66] I am accordingly unable to find there to have been
proof of an unequivocal intention on the part of First Plaintiff to
waive
the right conferred at clause 7. Defendant has accordingly not
discharged the requisite onus of proof, namely that both Plaintiffs
waived the right conferred at clause 7. I note in passing that from
the evidence there is possibly also scope for debate as to whether
an
unequivocal intention to waive was evinced on the part of Second
Plaintiff. I however make no finding in this regard, as indeed
I am
not required to, in the light of my finding in respect of First
Plaintiff.
[67] I note moreover that there was no evidence of a
waiver being communicated or accepted on 19 October 2005 as stated in
Defendant’s
amended further particulars. I however accept the
incorrect date reference, in all likelihood, to have been a mistake
in the light
of the evidence.
[68] In the light of my finding it is not necessary for
me to make any determination in respect of the damages alleged to
have been
suffered by Defendant nor indeed in respect of the special
conditions at clause 13 of the agreement. I mention in passing
however,
that had Defendant succeeded with the waiver defence, he may
well have had difficulty in proving, in light of the evidence
presented,
some of the damages he alleged he suffered. He would also
have faced the challenge of proving his stance in respect of the two
further
special conditions at Clause 13, neither of which had been
fulfilled by the time Defendant purported to cancel the agreement.
[69] In the light of all of the above I find that the
Defendant has not succeeded in proving the waiver he relies on.
Plaintiffs’
claim must accordingly succeed in its entirety.
[70] I order as follows:
The
Plaintiffs are granted judgment against the Defendant for:
1. Payment
of the sum of R300 000.00;
2. Interest
thereon at the rate of 15.5% per annum from 24 November 2005 to date
of payment.
MEER, J
1
See
Christie, The law of Contract in South Africa 5
th
edition, Butterworths at 441
2
Christie
ibid