Shoprite Checkers (PTY) Ltd v Bumpers Schwarmas cc and Others (C) [2002] ZAWCHC 3; [2002] 2 All SA 588 (C) (8 February 2002)

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[2002] ZAWCHC 3
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Shoprite Checkers (PTY) Ltd v Bumpers Schwarmas cc and Others (C) [2002] ZAWCHC 3; [2002] 2 All SA 588 (C); 2002 (6) SA 202 (C) (8 February 2002)

IN THE HIGH COURT OF SOUTH AFRICA
REPORTABLE
(Cape of
Good Hope Provincial Division)
Case Number 393/2000
In the matter
between:
SHOPRITE
CHECKERS (PTY) LTD.
Plaintiff
and
BUMPERS
SCHWARMAS CC
1
st
Defendant
RUDOLF
JAKOBUS KLOPPER
2
nd
Defendant
MADELEIN
JOHANNA KLOPPER
3
rd
Defendant
JUDGMENT: 8 FEBRUARY 2002
DAVIS J:
Introduction:
Plaintiff
instituted action against defendants during January 2001 in terms of
which it claimed an amount of R203 488,10 for goods
delivered by
plaintiff to first defendant during 1999 in terms of a written
agreement entered into between the parties.
Defendants
filed a claim in reconvention claiming,
inter alia
,
rectification of agreement entered into between plaintiff and first
defendant. The essence of defendants claim in reconvention
is set
out in paragraph 3 of his counterclaim as follows:
‘Voor en tydens die sluiting van die vermelde
koopkontrak het eiser en eerste verweeerder ooreengekom dat die
koopkontrak onderhewig
gestel sou word aan ‘n voorwaarde dat eiser
sou toesien dat eerste verweerder ‘n skriftelike huurkontrak vir
die huur van die
perseel waarin die sakeonderneming bedryf word, sou
bekom van die verhuurder op dieselfde terme en voorwaardes as die wat
ooreengekom
is tussen SH Strand Bk, as verhuurder en D W Palmer as
huurder gedateer 15 Julie 1996….vir ‘n periode van vyf jaar
gereken vanaf
1 Oktober 1998 met ‘n opsie om die vermelde
huurkontrakte te hernu vir ‘n verdere vyf jaar na verstryking van
die eerste vyf-
jaar periode.’
Plaintiff denied that the so- called Palmer
agreement had any application to the contractual relationship between
first defendant
and plaintiff.
At a Rule 37 conference the parties agreed to
request the court to make an order in terms of Rule 33(4)of the
Uniform Rules, namely
that the dispute relating to rectification be
adjudicated in the first instance and that the remaining disputes
between the parties
stand over for later determination. It was also
agreed that defendants would have the duty to begin and that the onus
to prove
rectification was borne by defendants. An order in these
terms was granted pursuant to Rule 33 (4) and the trial proceeded
on
this basis.
Defendants Case.
It was common cause that on 2 October 1998 a
written agreement of sale was entered into between plaintiff and
first defendant, first
defendant being represented by second
defendant and plaintiff by Mr C. E. van Tonder. In terms of the
agreement plaintiff sold
a business undertaking styled Eight Till
Late, being a superette situated at 143 Kusweg Strand as a going
concern for a purchase
price of R600 000. According to defendants
this agreement of sale was made subject to a condition that
plaintiff would ensure that
first defendant concluded a written
agreement for the lease of the property wherein the superette was
located on the same terms
and conditions as had been obtained by the
previous owner of the superette, Mr D W Palmer and which had been
concluded between Palmer
and the owners of the property, being SH
Strand CC.
The precise
terms of the rectification claimed by defendants read as follows:
‘Dit
word spesifiek tussen die partye ooreengekom dat Eight Till Late
(Shoprite Checkers (Edms) BPK onderneem om ‘n huurkontrak
vir die
huur van die perseel geleë te Kusweg 143, Strand, Wes Kaap en waarin
die sakeonderneming bedryf word vir en namens Bumpers
Schwarmas Bk.
te beding met SH Strand BK as verhuurder, op dieselfde terms en
voorwaardes as die huurooreenkoms ten aansien van die
perseel tussen
SH Strand Bk as verhuurder en D.W. Palmer as huurder gedateer 15
Julie 1996 hierby aangeheg as bylaag “B” dog
met die voorbehoud
dat:
Die
vermelde huurkontrak ‘n aanvang sal neem op 1 Oktober 1998 en
sal strek vir ‘n periode van vyf jaar en wat aan Bumpers
Schwarmas Bk as huurder, die opsie verleen om die vermelde
huurkontrak na verstryking van die vyf- jaar periode gereken vanaf
1 Oktober 1998 te hernuwe vir ‘n verdere periode van vyf jaar;
Dat
die bedrag van die huurgelde betaalbaar onderling tussen die
verhuurder en Bumpers Schwarmas Bk. ooreengekom sal word.’
The
initial formulation of the condition as appeared in the claim for
reconvention did not include para 1.5.2 but by agreement between
the
parties defendants obtained an amendment to the rectification as
initially framed in the claim for reconvention ; hence the inclusion
of para 1.5.2.
Second defendant testified that during 1998 he
became interested in acquiring the business which operated under the
name Eight
Till Late and which was located in the Strand. He
approached Abbanis Business Brokers who had advertised the possible
sale of the
business and he concluded an agreement with Abbanis on
31 August 1998 to acquire the business. The agreement entered into
with
Abbanis, included a suspensive condition which made the deed of
sale subject to the granting of a right ‘to a sublease or an
assignment
of the existing lease or a new lease on similar terms and
conditions as the existing lease’.
It
appeared from the evidence that Abbanis was acting on behalf of
Palmer who ,at that time, owned the business. Thereafter Palmer
experienced certain financial problems and plaintiff took over the
ownership of the business. Shortly thereafter, on 2 October 1998
,
second defendant was contacted by Mr van Tonder of plaintiff who
informed him that plaintiff was interested in selling the business
and that he should submit an offer for the purchase thereof. During
the negotiations the issue of a lease agreement was raised
as
second defendant realised that the business was situated in a
property owned by a third party , namely SH Strand CC. According
to
second defendant’s evidence ‘Mnr van Tonder het vir my daar gesê
hy het ‘n huurooreenkoms van vyf jaar vir vyf jaar, hy
het een
daar…dit is ‘n vyf jaar kontrak, na vyf jaar opsie om dinges weer
te hernu het hy gesê en op dieselfde voorwaardes as
wat Mnr Palmer
dit gehad het’.
Van Tonder
then prepared an offer to purchase. Certain additions were made to
the initial draft and the document was then signed
on 5 October 1998
When asked as to why the offer to purchase did not contain any
reference to a contract of lease, second defendant
said ‘omdat Mnr
van Tonder vir my daai ding – nou gesê het daardie dag daar is
reeds ‘n huur dinges, wat se naam kontrak op
Eight Till Late se
naam en dit is vyf jaar vir vyf jaar en ek het aanvaar dit is ‘n
plek’.
Second
defendant then testified that ,on 12 October 1998 , he was informed
by Mr van Tonder that his offer had been successful and
that he was
to provide Mr van Tonder with a cheque for R300 000 and enter into an
agreement of sale. When second defendant met with
van Tonder he
questioned the latter about the existence of the lease agreement and,
according to his testimony , he suggested that
he would only sign
the contract of purchase and sale when he was certain that a lease
agreement was in place. Second defendant testified
that van Tonder
then phoned a Mr Selwyn Hirschfield who represented the owner of the
property, SH Strand CC. Sercond defendant
and Van Tonder than met
with Hirschfield, whereupon van Tonder told Hirschfield that second
defendant required a five year lease
with an option to renew
thereafter for a further five years , effective from 1 October 1998.
Hirschfield informed second defendant
and van Tonder that the rent
payable would be higher than which had been paid by Palmer.
Hirschfield then said that he could
not supply a lease agreement
immediately as he was leaving for overseas. Upon return to van
Tonder’s office second defendant expressed
his dissatisfaction with
the position whereupon he was assured by van Tonder that arrangements
would be made for the conclusion of
a lease in his own name and not
in the name of Eight Till Late.
Second
defendant then signed the sale agreement and paid the deposit of R300
000. The agreement was dated 2 October 1998. According
to second
defendant he did not notice that the lease agreement had not been
incorporated into the sale agreement. The signing ceremony
had taken
place with great haste and in any event he had the assurance from van
Tonder that the latter would ensure that the necessary
agreement of
lease was concluded.
Three weeks
later second defendant telephoned van Tonder to enquire about the
lease agreement. Van Tonder then requested that second
defendant
contact Hirschfield directlywho proved to be unavailable. He then
contacted both van Tonder and a Mr Kobus Barnard ,an
executive
employed by plaintiff. He was informed that they were in the process
of negotiations and that the lease agreement would
be forthcoming.
He made a
number of further phone calls to Barnard without any success. He
then addressed a memorandum to Mr Andre Rossouw ,the executive
officer in overall charge of the Eight Till Late franchise on 23
February 1999 in which he said ‘Na vele oproepe en gespreke
met
Mnr C van Tonder en K Barnard is ek nog nie in besit van ‘n
getekende huurooreenkoms nie. Graag word verneem wanneer die
ooreenkoms
geteken gaan word….’
Upon Mr
Rossouw’s failure to react to this enquiry, second defendant
approached his attorney who on 2 March 1999 addressed a letter
to Mr
Martinengo , a director of plaintiff in which he requested a copy
of the signed sale agreement . On 23 March 1999 Mr Barnard
faxed a
copy of the deed of sale to second defendant’s attorney, Mr Maree.
On 15 April 1999 Mr Maree addressed a further letter
to plaintiff
requesting the lease agreement. A further letter of request was also
sent on 7 June 1999. Finally an envelope which
contained an
agreement of lease was delivered( apparently by Hirschfield ) to
the business of first defendant in July 1999. This
agreement
contained a renovation clause which entitled the lessor , at its sole
discretion, to terminate the agreement of lease on
twelve months’
notice to the lessee .It provided for lease payments of R6 500.00
per month, which represented a considerable
increase from the R4
800.00 which had been paid by first defendant to SH Strand .
Second
defendant testified that as a result of his dissatisfaction with this
agreement a meeting was held on 28 July 1999 attended
by second
defendant , Barnard , Rossouw , third defendant and Mr Maree. The
contents of that meeting were reflected in a document
prepared by
second defendant which on 3 August 1999 he submitted to Rossouw and
Barnard. In that summary he confirmed the following:
‘U siening
korrek is dat die voorwaarde waaronder ek die winkel gekoop het mb.t.
die huurkontrak verwys na die huurkontrak en voorwaardes
soos van
toepassing was op die huurkontrak soos bestaan het tussen Mnr Palmer
en die eienaar van die gebou….Ek vestig u aandag
daarop dat totdat
die probleme rakende die huurkontrak suksesvol opgelos word,
ooreenkomstig my ooreenkoms met u op of ongeveer 5
Oktober 1998
afgehandel is, behou ek al my regte’.
Third
defendant testified that she had contacted Barnard telephonically in
order to enquire about the lease agreement and that Barnard
had
informed her that they were in the process of negotiating such
agreement with SH Strand CC. She was somewhat suspicious of the
veracity of this version and accordingly telephoned Hirschfield who
referred her to Mr Arthur Fine who was dealing with the matter.

Acccording to third defendant Mr Fine was extremely curt on the
telephone, told her not to telephone him again and that he was in
the
process of negotiating a lease agreement with plaintiff. She also
testified that she had attended the meeting of 28 July 1999
and
confirmed the accuracy of the version of that meeting which second
defendant had set out in his memorandum.
Although Mr
Arthur Fine was called to give evidence on behalf of plaintiff, the
nature of his evidence is relevant to an understanding
of defendant’s
case. Fine testified that he was requested to arrange for the
conclusion of a contract of lease for the premises
occupied by first
defendant. He discussed the matter with Hirschfield who provided him
with the necessary details and which he then
confirmed with second
defendant. He arranged for attorneys representing SH Strand CC to
draft the necessary lease. After this was
done, he testified that
[he] kept ‘asking Mr Hirschfield when the signed document would be
returned to me because it had to be
signed by ourselves and had to be
stamped. There seemed to be some problem in getting it back from Mr
Klopper’.
At this stage
Fine considered that he was negotiating with second defendant as
opposed to plaintiff. He then testified that ‘because
of the new
allegation that there was still an old lease applicable’ a meeting
took place between himself and Hirschfield as well
as ‘three
gentlemen of Shoprite Checkers at their head office’. At that
meeting ‘we were shown the Palmer lease which was
quite an involved
lease because it had other details in it which we weren’t aware of
and once we were shown this lease and Shoprite
Checkers advised us
that they had the right to cede that lease to a new owner of the
franchise Eight Till Late, that was the end
of the discussions, that
was the end of any negotiations to try and get the new lease signed.
We then abide by the Palmer lease’.
Subsequently Fine obtained an
opinion from an attorney who concluded that plaintiff had no right
to cede the lease.
Fine also
confirmed that he had been surprised by aspects of the Palmer lease ,
in particular the obligation imposed upon the lessor
that, in the
event of redevelopment, the lessee would have the right to occupy ‘a
new shop…because at that point in time we
weren’t really thinking
of redevelopment encompassing business premises’.
Mr
Hirschfield was also called to testify on behalf of plaintiff. Mr
Hirschfield confirmed that ‘it was always the franchisee
himself
or (h)is company….it was never in any way surmised or indicated
that Shoprite Checkers was desirous to have a relationship
with us
directly’. In short the lease agreement was to be concluded
between SH Strand CC, being the owner of the property and
the
franchisee. He also testified that when he met ,albeit briefly ,
with second defendant and van Tonder he indicated that there
would be
two new aspects introduced into a lease agreement, as compared to the
Palmer agreement , namely a redevelopment clause and
an increase in
the monthly rental.
Hirschfield
testified that plaintiff had never at any of the meetings attempted
to become the ‘landlord’ although ‘they tried
to do it by way
of that cession apparently they had in terms of their franchise
agreement and they tried to do that and say did we
want the same
terms that Palmer had. That was, as far as we were concerned, a
commercial ploy to negotiate better terms and conditions
for
themselves, that’s the way we looked at it we didn’t understand,
certainly the way Arthur and myself interpreted Shoprite’s
intervention was not as now they themselves were trying to come and
negotiate a lease agreement with us.’
On being
asked as to his interpretation of the validity of the Palmer
agreement which had not been signed by the lessor, Hirschfield
testified that they had never adopted the approach that the agreement
was void as a result of the lack of a signature by the lessor
but
rather ‘we interpreted that death of the business as being the end
of this or any other agreement, written or verbal. The
sequestration
of Palmer’s business I mean ended any agreement there could have
been between us and him.’
Asked about
his interpretation of the meeting that took place between van Tonder,
second defendant and himself ,Hirschfield conceded
that no
negotiations had taken place between himself and second defendant but
that ‘I certainly understood Dolf to accept and understand
that day
when they walked in and out of my office that if he comes on board as
a franchisee that he would come into a lease agreement
that would
consist of the following which I explained to him that day’.
Plaintiff’s
Case
Mr
Raubenheimer, who appeared on behalf of plaintiff , attacked the
version offered in testimony by second defendant and in particular
the version that plaintiff was to play an important role in the
conclusion of the contract of lease. In particular he emphasized
the
testimony of Mr Fine who had sought to negotiate with second
defendant with regard to the applicable terms of the contract of
lease as well as Mr Hirschfield’s evidence that second defendant
wished to conclude the contract of lease on behalf of first defendant
rather than having plaintiff as a party thereto.
Mr
Raubenheimer also emphasized the testimony of both Mr van Tonder and
Mr Rossouw that it was the clear policy of plaintiff not to
be
involved in a lease agreement in respect of premises occupied by an
Eight Till Late franchisee. In short he submitted that
the express
policy of plaintiff ran counter to the versions offered to the court
by second and third defendant.
Mr
Raubenheimer also placed considerable emphasis upon the written offer
to purchase which was signed by second defendant on 5 October
1998
in Stellenbosch. Mr Raubenheimer submitted that second defendant’s
explanation , namely that the offer to purchase was signed
at Mr van
Tonder’s office in Brackenfell and that the word ‘Stellenbosch’
was included because it constituted the business
location of
defendant should be rejected. He referred to the offer to
purchase which was signed in Stellenbosch on 5 October
1998 and
contended that this was indicative that defendants had a
considerable opportunity to consider the offer to purchase before
it
was signed . Consequently , defendants had time to realise that no
suspensive condition had been included to the effect that
a contract
of lease had to be concluded prior to defendant purchasing the
business from plaintiff. Given that second defendant
was an
experienced business man and that he was prepared to expend a
considerable sum of money , by way of deposit of R300 000,
his
version that the agreements had been signed in haste without a
consideration of the effect of an omission to include a suspensive
condition should be rejected.
Mr
Raubenheimer drew attention to the evidence of Rossouw who rejected
the… contents of the memorandum which had been prepared
by second
defendant after their meeting on 28 July 1999. In particular,
Rossouw rejected the statement contained in the memorandum
to the
effect ‘U siening korrek is dat die voorwaarde waaronder ek die
winkel gekoop het met betrekking tot die huurkontrak verwys
na die
huurkontrak en voorwaardes soos van toepassing was op die
huurkontrak, soos bestaan het tussen Mnr Palmer en die eienaar van
die gebou’.
Rossouw
explained in his evidence that the meeting had been called so that
‘ek en Klopper het nog gesels oor sy roomys kaste en
sovoorts, toe
het hy ‘n afspraak met my gemaak. Toe sê hy, hy wil my kom sien
toe kom hy en sy vrou daar en die volgende oomblik
toe kom die
prokureur in . Omrede ek geen regs agtergrond het nie, is ek - wil ek
my nie inmeng met sake wat ek nie weet van nie…..Ek
het nooit
betrokke …by die oorspronklike onderhandelings nie. So ek kon nie
erken het …dat die huurkontrakte gesluit is. Ek
weet nie daarvan’.
Mr
Raubenheimer suggested on the basis of the evidence of Mr van Tonder,
who claimed to have had a lengthy friendship with second
defendant
and had indeed been second defendant’s best man at his wedding in
1977, that the reason for second defendant insisting
that plaintiff
had an obligation with regard to the conclusion of a lease agreement
was that the franchise business had not proceeded
in line with
second defendant’s expectation and second defendant ‘gaan ‘n
gap soek om uit te kom’.
Evaluation.
When he
gave testimony Mr Barnard was asked a number of questions with regard
to the contents of the membership agreement which had
been entered
into between plaintiff and first defendant in terms of which first
defendant became a franchisee. In particular he
was asked about
paragraph 4.3 of the agreement which provided that a member must
‘cede all its rights, title and interest in and
to the right
occupation of the premises to Eight Till Late or its nominee’.
Mr Barnard confirmed that the printed membership
contract had
certainly been used by plaintiff in 1998. He was unable to explain,
notwithstanding a number of evasive answers,
how it could be
suggested that plaintiff’s practice at the time of this dispute was
not to become involved in contracts of lease
when the standard form
in terms of which a franchise agreement was entered into between
plaintiff and a third party contained a cession
of rights of
occupation to plaintiff as provided in paragraph 4.13. He was
unable to explain the letter addressed to SH Strand
CC by Dr T G
Wiese on behalf of plaintiff in which the following paragraph
appears:
‘1.U is
bewus daarvan dat die besigheid verkoop is gedurende Oktober 1998 aan
Klopper Take Away CC.
2. As sulks
het die regte verpligtinge van die Huurder in terme van die
Huurooreenkoms aan die Koper oor gegaan in terme van klousules
8 en
10 van die Huurooreenkoms.
3. Die opsie
om die perseel vir ‘n verdere periode van 5 jaar te huur vanaf 1
Maart 1999 is uitgeoefen en is huurgelde intussen
diensooreenkomstig
oorbetaal’.
On the basis that clause 4.13 constituted a standard practice
whereby plaintiff ensured that the departing franchisee ceded its
rights to plaintiff, Barnard was asked why this particular practice
had not triggered a response from plaintiff in terms of which
it
would have provided defendants with the necessary lease. Barnard was
extremely vague in his reply .He said ‘It’s difficult
to
say….because like I’ve mentioned previously at that stage I
didn’t work closely with regards to the contract so I can’t
tell
you exactly what was the set up with the contracts then. I’ve also
mentioned that there could have been differences in the
context of
these clauses might have been brought in, but at that stage the
franchisees that was in our operation be it two or three
with regards
to Eight Till Late that was and I think this is the only contract
whereby this appears is in the Eight Till Late contract
specifically
but be that as it may I doubt it. I mean that specific franchisees
were then still members of ours at that time. So
if they would have
parted which they didn’t we would have known about it’.
This answer
which is somewhat difficult to understand typifies the evidence
which Barnard gave to the court. He was unable to provide
any
logical explanation as to the effect of a practice contained in a
printed standard form contract prepared by plaintiff and in
particular the implications of clause 4.13 thereof. He was unable
to provide any cogent explanation as to why plaintiff insisted
that
it had no rights to the lease agreement yet when three members of
plaintiff met with Hirschfield and Fine to discuss the lease
, it
appeared that they had informed the latter that plaintiff had
obtained a cession of all rights to the Palmer lease.
Of particular
relevance to the credibility of Barnard was a letter of 16 April
1999 which was addressed by Mr Maree on behalf of
defendants to Mr
Martinengo in which Mr Maree asked ‘Geliewe ons asseblief vir die
huurkontrak soos nou verwys te voorsien teen
einde ons rekords
volledig te kry.’ Appended to this letter were the following
comments: ‘Cobus presumably they need a copy
of the original rather
than the fax….17/4 Sergio. A copy of the purchase and prev. lease
agreement was send to them. I have made
copies of same and will have
it sent down to them. Ta Cobus.’
Barnard was
asked a series of questions as to how it was that if these copies had
been sent prior to 17 April 1999 Mr Maree had then
cause to write
again on 7 June 1999 in which he claimed that he had received nothing
from plaintiff. In argument Mr Grobler, who
appeared on behalf of
defendants ,submitted that these handwritten annotations to the
letter of 16 April 1999 might have been done
ex post
facto
in an attempt to bolster plaintiff’s case. In the absence of any
other explanation ,this may be the most plausible reason as
to how
these notes came to be made; itself a very serious allegation which
Mr Grobler leveled against Barnard.
Barnard
proved to be an evasive arrogant witness who showed as little
courtesy to defendants as he did to the court during the proceedings.
It is difficult to capture in words the extent to which Barnard
exhibited a cavalier attitude to the entire proceedings before
this
court .All too often he simply refused to provide a coherent answer
to questions under cross examination .
Dr Wiese
who gave evidence in part on behalf of plaintiff, testified in a far
more dignified , careful and truthful manner. Nonetheless
he had
considerable difficulty in explaining how it was that he came to
write a letter on 19 October 1999 to Mr Maree in which he
said the
following:. ‘Ons let uit die lêer dat geen formele sessie
aangegaan is nie maar bevestig die volgende –
Ons
het die besigheid oorgeneem van Mnr Palmer in terme van ons
Ooreenkomste en Sekuriteite.
Ons
het die besigheid weer verkoop aan die kliënt en die Huurkontrak
aan hom oorgedra gedurende Oktober 1998 soos ons geregtig
was in
terme van die Huurooreenkoms.
Die
Huurkontrak gaan voort tot 28 Februarie 2004.
Ons glo
nie dit is nodig om ‘n skriftelike Sessie dokument op te stel nie,
maar ontvang graag ‘n konsep vir oorweging.’
Earlier in
his testimony , Dr Wiese confirmed that he had been at a meeting in
either September or October 1999 with Messrs Rossouw
and Martinengo
as well as Mr Fine and Mr Hirschfield to discuss the question of the
lease. He was asked about Mr Hirschfield’s
testimony that during
that meeting ‘we were commercially bullied’. To this Dr Wiese
said, ‘Ek het die indruk probeer skep,
u weet, dat dit – om dit
in ‘n eenvoudig taal te sê, ek weet nie of daar ‘n goeie
Afrikaanse terme is nie, ek wou die verhuurder
‘bull shit’ om te
glo dat die franchisee het die Palmer ooreenkoms oorgekom’. Later
when confronted with the letter of 19
October the following passage
of evidence followed:
‘Was u
voornemens om ook vir Maree, hierdie prokureur wat vir u irriteer
te, vergun my, te bull shit – Ek het, op daardie stadium
was dit
die konstruksie wat ek aanvaar het is nou – is die geldige een.
Toe u die oorspronklike opsie uitoefen aan SH Strand toe
was u
daarvan oortuig dat u dit geldig regs geldelik kon doen;? Ek was nie
seker nie. So u getuienis vroeër van u voorneme om hulle
maar
doodeenvoudig maar net te bull shit in die ding in as syne Shoprite
Checkers is nie werklik op daardie stadium gewees dat u
onder daardie
indruk was nie? Nee ek was nie seker nie .Hoekom ek so sê ek was
nie seker, op watter basis ons Palmer se besigheid
bekom het nie,
want daar was geen aanduiding in die leêr of ons in ‘notariêle
verband – want ek het net die Klopper lêer gehad,
ek het nie die
Palmer lêer gehad nie’.
Later he was
asked by Mr Grobler ‘Ek het nou u verstaan dat u reg van die begin
af, probeer het om bewustelik die verhuurder te
bull shit – dit is
korrek maar daar was geen aanduiding uit die lêer dat dit of die
sessie uitgeoefen is of die opsie uitgeoefen
is nie’. Later the
following proposition was put to Dr Wiese by Mr Grobler…’Nou die
punt wat ek maak uit hierdie skrywe uit
is dat u dra ook hieroor aan
Maree, man hoekom vra jy vir ‘n huurkontrak. Ons het vir jou ‘n
huurkontrak. Ons het die besigheid
verkoop en hom oorgedra saam met
die huurkontrak. Was dit deel van die bull shit of was dit u werklike
siening op daardie stadium?
Ek het nie geweet wat die werklike
situasie was nie. Soos ek sê daar was eintlik te min inligting
in die lêer’.
Dr Wiese was
thus rather vague as to his purpose in penning the letter of 19
October or as to the exact meaning thereof. He did
however testify
that when he examined the file relating to defendants , ‘ek onthou
spesifiek drie dokumente wat ek gekyk het na,
Dit was die Palmer
ooreenkoms .Dan was ‘n aanbod om te koop van Klopper en dan was
daar die koopkontrak self. Dit was die dokument.
Dan was daar vele
korrespondensie tussen verskeie partye wat vir my egter opmerklik
was, was dat daar ‘n lêer - aantekening was
deur Mnr Martinengo
dat hy die verhuurders gebel het op ‘n stadium , ek dink in Maart
om te vra na aanleiding van ‘n huurkontrak.
Ek onthou ook ‘n
skrywe van die Barnard waarin hy vir die verhuurder vra vir ‘n
huurkontrak vir die franchisee’.
This
evidence makes clear that executives of plaintiff played a
considerable role in the negotiations relating to the contract
of
lease. Numerous letters were written to SH Strand CC, correspondence
was entered into with defendants’ attorneys including
promises
relating to sending them a contract of lease, representations were
made to Fine and Hirschfield that plaintiff had taken
cession had
been obtained .All of this action took place within the context of a
standard contract prepared by plaintiff which
related to the
franchise of Eight Till Late and included plaintiff’s right to
have a lease agreement ceded to it in circumstances
where the
franchisee ceased business.
Rossouw
suggested that all of this was merely representative of the
considerable effort which plaintiff made in order to ensure the
success of its franchisees.
van Tonder
gave generally irrelevant testimony and to a large extent performed
even more poorly as a witness than did Barnard. He
suggested that
second defendant was seeking a reason to extract first defendant from
a disastrous franchise agreement. This claim
must be weighed
against the numerous phone calls made by Mr Martinengo to Hirschfield
and Fine with regard to the rental agreement,
the reactions of
plaintiff to second defendant pursuant to the latter’s enquiries
regarding the lease agreement ; in other words
the considerable
efforts made by a number of executives including r van Tonder to
ensure that defendants obtained a contract of lease.
As Mr
Grobler submitted, the business was sold as a going concern which
would hardly have been a realistic transaction without premises.

Furthermore the question was never satisfactorily answered by any of
plaintiff’s witnesses to why second defendant who was so
tenacious
in his conduct to procure a lease agreement continued to deal
directly with plaintiff in order to obtain such an agreement
but
never had into contract with SH Strand CC after he addressed a
detailed memorandum to plaintiff complaining about the absence
of a
lease. No similar correspondence was ever addressed to SH Strand CC.
Mr
Raubenheimer made much of the fact that second defendant wanted to be
the lessee rather than the sub-lessee thereby operating through
plaintiff. Mr Grobler submitted that this particular approach was c
not at all fatal to defend its case. To the contrary, defendant’s
case amounted to the following:
Plaintiff
undertook to negotiate a contract of lease for the lease of the
premises located at 143 Kusweg, Strand, in which the business
undertaking to be acquired by first defendant was situate. That
defendants preferred to be the lessee rather than the sub-lessee
does
not run counter to this particular argument. The crisp of the
dispute did not concern the identity of the lessee but rather
whether plaintiff was contractually obliged to ensure that a lease
agreement would be concluded.
Principles
Relating to Rectification.
Since the
decision in
Weinerlein v Goch Building Ltd
1925 AD 282
our
law has recognised that an action for rectification may be brought
where there has been a mistake in the written document
as a result of
which the document does not correctly reflect the true intention of
the parties to such contract. As Farlam AJA (as
he then was) said in
Tesven CC v South African Bank of Athens
[1999] 4 ALL SA
396(A)
401 at para 16 ‘To allow the words the parties actually used
in the documents to override their prior agreement or the common
intention
that they intended to record is to enforce what was not
agreed and so overthrow the basis on which contracts rest in our law:
the
application of no contractual theory leads to such a result’.
In
Tesven,
supra, the court considered whether the remedy of
rectification was available in circumstances where the document
correctly reflected
the words which the parties intended to employ in
the construction of the document but the document did not include the
parties’
prior agreement or common intention which formed a
critical part of the overall contract. In dealing with the court
a
quo’s
decision that the parole evidence rule precluded a
consideration of the prior oral agreement,
Farlam AJA
referred
to the decision in
Mouton v Hanekom
1959(3) SA 335 (A) it was
held that it was admissible to rectify a written contract not because
of the parties mistake as to what
was recorded ‘but as to its
effect, which was to prevent their oral agreement from operating with
their written contract’ (
Tesven
at para 17).
Farlam AJA
then went on to say ‘In the present matter also the signatories
were mistaken as to what was contained in the documents signed
by
second defendant. The mistake which she says she and the plaintiff
made wasn’t thinking that, despite the contents of those
documents, the preceding oral agreements would still be operative.
This mistake was clearly capable of rectification on the strength
of
the principle affirmed in
Mouton v Hanekom’
(at para 18).
In a careful
and incisive analysis of this area of law
Knoll J
said in
Brits v Van Heerden
2001( 3) SA 257
(C) at 283 B raised the
question of equity within this area of law. She then said ‘[i]t is
my view that, although this Court may
have no broad general equitable
jurisdiction and cases must be decided on general principles of law,
the equity is to be found in
the remedy of rectification which has
been expanded over the years to give full meaning to the basic
principle on which it operates
and that is that rectification may be
granted where the written memorial of an agreement does not reflect
the true
consensus
of the parties.’
I am somewhat
uncertain as to the need for recourse to considerations of equity
in such a case. The crisp question turns on the
nature of that
which was agreed between the parties . An examination of the content
of the consensus prompts a consideration
of the concept of
bona
fides
which underpins contractual relationships. The concept of
bona fides
has proved to be somewhat illusive with regard to
its definition and scope. See in particular
Lubbe
‘Bona
Fides, Billikheid en die Openbare Belang in die Suid Afrikaanse
Kontrakte Reg’
1990
Stellenbosch Law Review
7.
Whatever the
uncertainty , the principle of good faith must require that the
parties act honestly in their commercial dealings .
Where one party
promotes its own interests at the expense of another in so
unreasonable manner so a s to destroy the very basis of
consensus
between the two parties, the principle of good faith can be employed
to trump the public interest inherent in the principle
of the
enforcement of a contract.
This concept
of good faith congruent with the underlying vision of our
Constitution to the extent that our Constitution seeks to transform
our society from its past, it is self evident that apartheid
represented the very opposite of good faith. Concepts which were
employed
during apartheid lacked any form of integrity .Our
Constitution seeks to develop a community where each will have
respect for the
other and in which integrity in government as well
as in the exercise of power will be of paramount concern. To rely
on the
strict written words of a contract and to ignore an
underlying oral agreement which not only shaped the written
agreement but
which forms part of the essential consensus would
be to enforce the very antithesis of integrity and good faith in
contractual
arrangements.
The onus lies
on defendants to prove, on a balance of probabilities, that the
conditions which they to have inserted into the
contract formed
part of the agreement into which they entered with plaintiff , in
terms of which the business was acquired.
Within this
context it is now possible to turn to the evidence of second and
third defendants. In general , they testified
in an honest manner.
Second defendant did struggle to explain why he had signed the
offer to purchase in such haste so that he
omitted to ensure the
inclusion of the condition regarding the lease agreement.
Nonetheless, as Mr Grobler submitted, there was
significant
evidence to support second defendants version that plaintiff
undertook to obtain a lease in terms contained in defendant’s
the
prayer for rectification. The correspondence generated by defendants
and which formed part of the record ,reflects a consistent
theme of
second defendant pestering plaintiff for a lease agreement. Very
little if any contact took place between the representatives
of SH
Strand CC and defendants. By contrast , numerous letters and
telephone calls were directed towards plaintiff in order to ensure
that defendants obtained a lease agreement. When confronted with
this documentation plaintiff’s witnesses either equivocated
or
were unable to provide any satisfactory explanation as to their
purpose in attempting.to obtain the lease agreement or why defendant
sought only to negotiate with plaintiff. For example ,second
defendant sent a handwritten fax on 23 February 1999 to Mr Rossouw
which read as follows ‘Na vele oproepe en gespreke met Mnr C van
Tonder en K Barnard is ek nog nie in besit van ‘n getekende
huurooreenkoms nie. Graag word verneem wanneer die ooreenkoms
geteken gaan word aangesien dit reeds vyf maande laat’. The
addressee
of this fax , Mr Rossouw denied that he had seen it ,
albeit that he accepted that it had been sent. The best that Rossouw
could
offer in evidence was that Barnard, whose office was adjacent
to his, had taken the fax. This explanation still begs the question
as to why second defendant faxed Mr Rossouw with regard to a lease
agreement if the agreement between plaintiff and defendants
never
envisaged any involvement of plaintiff with regard to the conclusion
of such lease agreement. The high water mark of plaintiff’s
explanation was that it sought t o assist its franchisees . This
explanation might have passes muster had no meeting taken
place
between representatives of plaintiff with Hirschfield and Fine in
which the latter were informed of the former’s rights
in terms of
the Palmer lease or the correspondence generated between second
defendant , Maree and Barnard or the letters written
by Wiese .
In keeping
with the manner in which they testified ,Messrs Barnard and Rossouw
were extraordinarily vague as to the memorandum prepared
by second
defendant and faxed to the two executives of plaintiff on 3 August
1999 in which the issue of the lease agreement was raised.
Rossouw
denied that he had followed up on the question of the lease
agreement although he said ‘my groot punt was net oor die
roomys
kas wat ek vir hom moet uitsorteer het. Volgens my die huurkontrak
en goed is nie beding ons nie, dit is nie deel van ons
goed nie’.
In his
testimony, Barnard acknowledged that he had receipt of this document
but that he did not discuss the matter with Rossouw neither
did he
attempt to reply to second defendant.
Although
both men strenuously denied the veracity of the statements contained
in second defendant’s memorandum neither appeared
to had considered
it necessary to contradict the document upon receipt thereof, nor
did they deem it important to discuss the issue.
Whatever the
status of the lease , plaintiff did consider it necessary to deal
with the matter. In a letter of 8 March 1999 written
by Barnard to
Fine Brothers (Pty) Ltd regarding the rental agreement , he wrote
‘We refer to the above as well as numerous telephone
calls by a Mr
Sergio Martinengo. This matter is of great concern to us as well as
Mr Klopper who is currently occupying the premises.
We would
appreciate it if you could inform us on the current situation and
if you are prepared to negotiate a lease with our
Franchisee. We
wish to highlight the fact that Mr Klopper stands to loose (sic) his
operation should he not enter into a lease agreement
with the
Landlord. ‘Notwithstanding the proclaimed policy of plaintiff not
to get involved in the negotiation of lease agreements
, it appears
from this letter that the executive in charge of the entire franchise
operation was concerned himself on ‘numerous’
occasions to
telephone the owner of the property in order to secure the lease.
This
approach is congruent with the attitude adopted by plaintiff at the
meeting with Hirschfield and Fine that it had acquired
the right to
the Palmer lease by way of cession as well as the letter of 6
September 1999 in which Dr Wiese wrote to SH Strand CC
and claimed
‘[d]ie regte en verpligtinge van die Huurder in terme van die
huurooreenkoms aan die Koper oorgegaan in terme van
klousules 8 en 10
van Huurooreenkoms’.
Mr van Tonder
insisted that second defendant wished to negotiate without the
assistance of plaintiff. When he was asked how it could
be that
second defendant would have been prepared to pay R600 000 on behalf
of first defendant for a business without any contract
of lease, Mr
van Tonder said 'Mnr Klopper het vir my gevra dat daar onder geen
omstandighede ons die landlords alleen moet besoek
nie....Hy het dit
baie duidelik gestel dat hy saam met ons die landlords wil ontmoet en
hy die onderhandelinge wil doen en as hy
dan – Shoprite Checkers
is nie ‘n mens wat sekere dinge – as hy na ‘n maand of twee
maande terug gekom het en gesê het,
kerels ,ek het ‘n probleem,
ek kry nie die huurkontrak nie, sou ons dadelik toegetree het hetsy
om hom sy geld terug te gee of
om vir hom ‘n huurkontrak te
beding’.
By contrast
the evidence reveals that, save for the initial meeting between
Messrs Hirschfield, Van Tonder and second defendant,
second defendant
directed all his energies to plaintiff in order to secure a contract
of lease.
In assessing
the veracity of evidence, particularly that offered by plaintiff it
is important to take account of the essential question
raised in this
dispute ,namely which party was obliged to arrange for the conclusion
of the lease. Defendants’ case is based
on the premise that
plaintiff undertook to obtain a lease under which first defendant’s
right of occupation at 143 Kusweg, Strand
would be secured.
The issue is
not whether plaintiff or first defendant should be the lessee. The
issue was whether there was an obligation on the
part of plaintiff to
secure a lease on behalf of defendants. Much of the argument raised
by Mr Raubenheimer on behalf of plaintiff
misconstrued this
essential nature of the dispute in that it was based upon the
contention that plaintiff had no intention of becoming
a lessee. But
that was not the basis upon which defendants’ case rested. The
case as presented in evidence of defendants together
with the
uncontested correspondence is indicative that, on the probabilities,
plaintiff and defendant had agreed to contract for
the sale of the
Eight Till Late business on the basis that plaintiff would secure
the necessary lease.
Not only is
this version congruent with the facts but it is also in keeping with
ordinary commercial sense, namely the likelihood
that a person would
only spend R600 000 on such a business in circumstances where it
was secure in the knowledge that it could
continue to operate the
business as a going concern in premises in which the business was
housed. The alternative , that no such
undertaking formed part of
the agreement between plaintiff and defendants requires a reading
of the correspondence generated
by plaintiff which explains the
extraordinary effort on its behalf to secure the lease as the
actions of a generous Samaritan
.It also requires an acceptance of
evidence of van Tonder and Barnard both of whom proved to unreliable
witnesses for the reasons
already set out above.
Once the
dispute is so framed , the argument advanced by Mr Raubenheimer that
rectification will not be granted if it would adversely
affect
the rights of innocent third parties , becomes inapplicable.
Whatever terms may have been acceptable to SH Strand
CC , the
contractual relationship between plaintiff and defendants was
predicated upon the conclusion of a lease agreement of
the kind
as set out in defendants’ claim for rectification .
For these
reasons the following order is made:
1. The written agreement in the Annexure A to defendants’ counter
claim is rectified as follows -
‘Dit word spesifiek tussen die partye ooreengekom dat 8 Till Late
(Shoprite Checkers (Edms)BPK) onderneem om ‘n huurkontrak vir
die
huur van die perseel geleë te Kusweg 143, Strand, Wes Kaap en waarin
die sake onderneming bedryf word vir en namens Bumpers
Schwarmas Bk.
te beding met SH Strand Bk. as verhuurder, op dieselfde terme en
voorwaardes as die huurooreenkoms ten aansien van
die perseel tussen
SH Strand Bk. as verhuurder en D W Palmer as huurder gedateer 15
Julie 1996 hierby aangeheg as bylaag “B”
dog met die voorebehoud
dat:
1. Die vermelde huurkontrak ‘n
aanvang sal neem op 1 Oktober 1998 en sal strek vir ‘n periode van
vyf jaar en wat aan Bumpers
Schwarmas Bk. as huurder, die opsie
verleen om die vermelde huurkontrak na verstryking van die vyf jaar
periode gereken vanaf 1 Oktober
1998 te hernuwe vir ‘n verdere
periode van vyf jaar;
2. Dat die bedrag van die huurgelde betaalbaar onderling tussen die
verhuurder en Bumpers Schwarmas Bk. ooreengekom sal word.’
Plaintiff
is ordered to pay defendants costs.
________________
DAVIS
J