SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
in compliance with the law and SAFLII Policy
HIGH COURT OF SOUTH AFRICA, GAUTENG DIVISION, PRETORIA
Case No.: 23145/21
In the matter between:
SHEFFIELD INDUSTRIES CC Plaintiff
And
CAROL COETZEE AND ASSOCIATES INC First Defendant
MOUNT COURT
DEVELOPMENT(PTY)LTD Second Defendant
JUDGMENT
NHARMURAVATE AJ:
DELETE WHICHEVER IS NOT APPLICABLE
(1) REPORTABLE: YES/NO
(2) OF INTEREST TO OTHER JUDGES: YES/NO
(3) REVISED
_________________ ________________________
DATE SIGNATURE
Page 2 of 13
Introduction
[1] The trial does not raise any real complicated issues. The P laintiff seeks an
order for the repayment of its deposit paid pursuant to a sale and purchase
agreement concluded between the P laintiff and the Second Defendant (“the mount
court agreement”) in respect of a proposed sub- divided property situated in
Bryanston subscribed as proposed portion 5 and proposed portion 6 of portion 6 of
Erf 1[…], Brynston (“the property”). In terms of the mount court agreement, the
Plaintiff had a first right of refusal option to acquire the proposed portion 7.
[2] At the commencement of the trial the S econd Defendant brought an
application for separation of the question of merits and quantum in terms of rule
33(4). The application was opposed by the Plaintiff, ultimately the parties reached an
agreement in this regard.
[3] In essence, it was agreed that the issue of quantum and the counter -claim be
separated and will only be determined in the event that the Court finds in favour of
the Second Defendant. Therefore, if this Court finds in favour of the P laintiff on the
merits, this Court may grant an order for the amount claimed by the P laintiff
(R500 000 plus interest) and dismiss the Second Defendant’s counterclaim.
[4] The Plaintiff led evidence of Mr. Shi who was representing Sheffield Industries
and the Second Defendant led evidence from Ms. Car rel who at the time was the
secretary of the Mount Court Development.
BACKGROUND FACTS
[5] The parties concluded an agreement known as the Mount Court Agreement
on the 19 December 2016 .The Plaintiff was represented by Sheldon S hi and the
Second Defendant was represented by Hugh Stephen Courtney . In ter ms of th is
agreement the Plaintiff offered to purchase the immovable property described as
portion 5 (which was a portion of portion 6) and the proposed portion 6 (which was a
a portion of portion 6) both situated at ERF1[ …] ,6[…] M[…] Street B […]. The
Page 3 of 13
Second Defendant in terms of the agreement accepted the offer whith a purchase
price of 9 million which was payable in the following manner:
• A deposit of R500,000.00 to be paid to the First Defendant the
conveyancer.
• Secondly, the balance of R 8.5 million was payable in cash against
transfer of the mount court property into the Plaintiff’s name.
[6] In line with the agreement the deposit was to be kept by the First Defendant in
their trust account in an interest bearing account. Further to the agreement , the
Plaintiff required the mount court property to be registered as one stand. This
property was to be transferred to the P laintiff as a single stand. Further , both parties
agreed that access to the mount court property will form part of the Eccleston
Crescent.All costs associated with the services and obtaining the subdivision
inclusive of the right s and regulations 38 endorsement, would be for the S econd
Defendants account .
[7] This offer had a suspensive condition that the Second Defendant would obtain
the regulation 38 endorsement within five years from the date of acceptance of the
offer. Failing which the offer shall lapse and be of no further force or effect.
[8] The Plaintiff further alleges that it was also a suspensive condition that the
required approval be received for the right of access road servitude in respect of the
Eccleston property being successfully registered in the relevant deeds office as
provided for in clause 6 of the 81 Eccleston agreement. The servitude provided, was
specifically required to ensure that the Plaintiff and the Second Defendant would
have sufficient privacy .
[9] The Second Defendant agreed that at all material times prior to the disposal
and sale of the proposed portion 7 that is ( a portion of portion 6 )he was to provide
the Plaintiff with the first right of option to acquire the said property. Simply because
at the time the parties entered into an agreement the Second Defendant did not wish
to sell the proposed portion 7.
Page 4 of 13
[10] Subsequent to the agreement , the Second Defendant sold the proposed
portion 7 to a third party known as Flamewood investments in November 2020. The
Plaintiff alleges that the selling of this property by conduct of the Second Defendant
constitutes a repudiation of the mount court agreement as a result thereof the
Plaintiff seeks repayment of his deposit together with the interest that has accrued
on such a deposit.
[11] Claim B, the Plaintiff alleges that the failure by the Second Defendant to
register the servitude as agreed in terms of the Eccles ton agreement meant that the
mount court agreement lapsed. Therefore, the Plaintiff is entitled to the repayment of
the deposit paid which is R500 000.00 together with interest accrued.
[12] The Defendant in line with the pleadings filed alleges that the Second
Defendant did offer the P laintiff the property on the 20th of August 2018 for a
purchase price of 40 million which was not accepted by the P laintiff. This constituted
a repudiation.
[13] Further, it alleges that the Plaintiff attempted to repudiate the agreement on
invalid grounds by failing and or refusing to make payment of the amount of R
500 000.00. Alternatively, claiming repayment of such an amount from the Second
Defendant despite the amount being forfeited in terms of clause 9.1.3. of the mount
court agreement in line with the repudiation alleged.
[14] The Second Defendant further alleged that it was the P laintiff who was
obliged to register the servitude in terms of cl ause 21 of the mount court agreement
as referred to in their particulars of claim.
ISSUE/S FOR DETERMINATION
[15] The only issue for determination is, whether the P laintiff validly cancelled the
mount court agreement due to a repudiation by the Second Defendant, alternatively,
(as provided by the Plaintiff) whether the Mount Court Agreement lapsed due to the
non-fulfillment of the suspensive condition.
Page 5 of 13
LEGAL ANALYSIS
[16] It is common cause that the parties entered into a mount court agreement.
One of the terms and condition specifically clause 26 of the agreement denotes as
follows that : “ the seller shall at all times prior to the disposal and sale of proposed
PTN 7 as depicted on annexure B ( a portion of portion 6 ) of Erf 1[…] B[…], provides
the purchaser herein with a first write of option to acquire the said property, under
terms and conditions acceptable to the Seller. Should the Purchaser herein not
timeously or positively reply to the Seller’s written notification within 10 calendar days
from the date of dispatch of the Purchaser (via e- mail) advising the Purchaser of the
terms and condition under which the Seller will accept a sale, it shall be deemed that
the Purchaser revokes its right herein and the seller shall be able to sell the property
to a third party Purchaser. It is noted that the seller at the time of entering into this
agreement does not wish to alienate the said proposed potion 7.”
[17] This contract was binding on the parties . The privity and sanctity of the
contract denotes that contractual obligations must be honoured when the parties
have entered into a contract freely and voluntarily
1.Clause 26 sealed the Plaintiff
right of being the first in line should the Second Defendant wish to sell the proposed
portion 7.
[18] It was not in dispute that the parties enter ed into this contract freely and
decided on its terms at will. This cannot be renaged by the Second Defendant. In
Wells v South African Alumenite Company2 the Court stated as follows that : “If there
is one thing which, more than another, public policy requires, it is that men of full age
and competent understanding shall have the utmost liberty of contracting, and that
their contracts, when entered into freely and voluntarily, shall be held sacred and
enforced by the courts of justice.”
[19] Therefore in absence of any amendment regard being heard to clause 26 the
contract was binding on the parties.
1 Mohabed’s Leisure Holdings (Pty) LTD v Southern sun Hotel Interest [2017] ZASCA 176
2 1927 AD 69 at 73
Page 6 of 13
[20] Mr Shi evidence was that somewhere around October or November 2019 he
discovered that the existing house on the wedge (which included proposed portion 5,
6 and 7) was advertised as sold. He saw the sold sign on a notice board he was
surprised as he had not received any prior invite as per the agreement to buy the
proposed portion 7. In support of his contention the advertisement was placed before
the court showing a clear picture with a sold sign this was also adverstised on the
website of Hamiltons Property Portfolio which also indicated that the property was
sold.He also did a winde ed search which also proved that the property was sold to
Flamewood.
[21] Mr Shi’s legal representatives then wrote a correspondence to the S econd
Defendants attorneys alluding to the sale and further setting out failures by the
Second Defendant to adhere to their agreements regard being heard to the
servitude. This letter was date d the 5
th of November 2019. In line with this
correspondence the Plaintiff requested that the amount of R500,000.00 which was
paid as a deposit be repayed . The Second Defendants attorneys answered that the
property had not been sold in a correspondence dated the 8th of November 2019.
[22] Ms Colley the witness for the Second Defendant could not refute the Plaintiff’s
evidence that the propert was sold under cross examination she conceded that she
had no knowledge at the time that the property was sold.
[23] The Plaintiff’s Counsel Ms Acker rightfully argued that , the Second Defendant
sold the wedge (including portion 7) to a third party ,Flamewood investments without
first offering it to the Plaintiff as agreed. This was also conceded by the Ms Colley
that she had no knowledge of the offer being made to Mr Shi in relation to the
proposed portion 7 in line with clause 26
[24] Mr Ellis for the Second Defendant in rebuttal argued that the Second
Defendant sold the remaining extent of portion 6 of Erf 1[ …]” and not the proposed
portion 7. This was contrary to the evidence led from both witnesses (Mr. Shi and Ms
Colley) who were unanimous that the sale of Flamewood investments included the
proposed portion 7 which was part of the mount court agreement. Therefore, this
Page 7 of 13
defense raised is flawed as there is no dispute in this regard. This wa s also
supported by the records of the deeds office which confirms that the entire w edge
was registered in the name of Flamewood investments. This could not be rebutted
by the Second Defendant.
[25] Therefore by the time Mr Shi saw the sold sign indeed the property was sold
as confirmed by the winded search without it being first offered to him which
amounts to a repudiation of the contract by the Second Defendant.
[26] The second argument raised by the Second Defendant is that the Plaintiff was
offered the proposed portion 7 sometime in August 2018 by way of email and he
refused the offer. The defence raised by the Second Defendant can only be
described as contrived. It is simply comprised of denials and lacks positive contrary
allegations or facts. This is so simply because, it was put to Mr. Shi that he was
offered portion 7 in 2018 August for a purchase price of 40 million. This he refutted
as he testified that the conversation had nothing to do with the sale of portion 7 and
the Defendant could not adduce any proof to the satisfactory of the court that indeed
this was an offer regarding the sale of portion 7 as agreed in the mount court
agreement. Let alone call upon the author /s or the person cc ed on the emai l as
witnesses to confirm that indeed that was an offer pertaining to portion 7 in line with
clause 26 of the agreement. Ms Colley could not give evidence in this regard she did
not draft the email and she was not party or cc -ed on the email. Therefore she was
not the relevant person to testify in that regard.
[27] In my opinion, this argument is flawed as there was no offer made regard
being hard to the mount court agreement portion 7 sought . The Paintiff’s Counsel
rightfully argued that the email did not relate to the mount court agreement, as
evidenced by Mr.Shi reference was made to the following passage which clearly
stated that “ the new purchase agreement will constitute a br each in respect of
agents Commission in respect of proposed portions 5 and 6. ”Furthermore,the
Second Defendant wrote to Mr. Shi, stating that they will proceed with the
subdivision process and keep him up to speed on the progress .However, nothing
seems to have occurred thereafter instead the Second Defendant sold the entire
Page 8 of 13
wedge, to a third party during or about October/November 2019 without any
notification to the Plaintiff.
[28] Mr Ellis for the Second Defendant further argued that since the Plaintiff was
relying on the sale of the property that he needs to prove the sale. In my opinion, Mr
Shi was able to prove this sale in that he first saw the board alluding to the sale and
also confirmed this through the Second Defendant agent’s website (Hamiltons) that
the property was sold. In my opinion the Second D efendant does not have probable
defense it should have adduced proof that there was no sold sign advertised by it s
agent and should have also called upon the relevant witness es to testify that at the
time the property was not sold for an example the Estate Agent ( Regan Harris) .
Additionally, show the offer which was made and refused by the Plaintiff.
[29] In Tumileng Trading, the court further stated that:
‘The assessment of whether a defence is bona fide is made with regard to the
manner in which it has been substantiated in the opposing affidavit, viz upon a
consideration of the extent to which 'the nature and grounds of the defence
and the material facts relied upon therefor' have been canvassed by the
deponent. That was the method by which the court traditionally tested, insofar
as it was possible on paper, whether the defence described by the defendant
was 'contrived', in other words, not bona fide
3.’
[30] In my opinion, when the Plaintiff saw the sold sign on the property it had
already been months when this property had been sold simply because the process
of registration and transferring the property in our country is a process that at least
takes three to six months. The date as reflected on the title deed of the propery sold
shows the date of transfer as 19 November 2019. The answer written on the letter
dated the 8
th of November simply said that the property was not sold the
correspondence did not allued to the fact that the Plaintiff refused an initial offer
made to him in line with clause 26. This is sign that there was no offer in that regard
to the Plaintiff.
3 2020(6) SA 624(WCC)
Page 9 of 13
[31] The contention raised by various correspondences to the P laintiff was that the
servitude was in the process of being registered and the parties had agreed that the
Second Defendant at least had a period of five years to ensure that same was
registered to a nd the request that had been made by the P laintiff to receive his
deposit back was done so prematurely . There was no relevant evidence led in this
regard as Miss Colley admitted that even when this matter was heard the servitude
was still not registered.
[32] The Plaintiff also established its case that the Second Defendant repudiated
the Mount Court Agreement, which repudiation was accepted by the P laintiff and the
agreement validly cancelled based on the sale of the proper ty to the Third Party
without adhering to the agreememt. The true question is whether the act ions or
conduct of the Second Defendant evinced an intention to no longer be bound by the
Mount Court Agreement. It cannot be denied by the Second Defendant that the
contract entered into at the time in December 2016 was valid and it was still valid
when the property was sold to the Third Party.
[33] On that strength alone the S econd Defendant committed a breach of contract
which amounted to a repudiation of the contract. The Second Defendant intentionally
sold the property at the face of a binding contract . The action of selling the entire
wedge was a clear repudiation of the agreement entered into between the parties as
far back as the 19th of December 2016. It is therefore unjustifiable for the F irst
Defendant to hold on to a deposit of the P laintiff on the face of a repudiation
committed by the Second Defendant. The Second Defendant cannot be enriched
twice firstly by the proceeds from the sale of the entire wedge by the Third Party and
the Plaintifffs deposit.
[34] In light of the above finding this court does not even need to go through Claim
B,that is the failure to fulfill the suspensive condition.Simply because even when the
matter was heard the S econd Defendant could not refute the evidence that the
servitude was still not registered. In light of the agreement between the parties this
was supposed to be registered within five years that is from December 2016 would
have expired in December 2021.
Page 10 of 13
[35] Clause 23 of the mount court agreement clearly states that : “Should any of
the suspensive conditions provided for in this agreement however not be fulfilled or
waived timeousl y then this agreement , excluding the clauses stated in cl ause 22
above, shall not become of any force and effect. The parties will be restored, as
closely as may be reasonably and practically possible to the position in which they
were prior to the date of signature hereof.”
[36] In Mohabed’s Leisure Holdings (Pty) Ltd v Southern Sun Hotel Interests (Pty)
Ltd
4 the Supreme Court of Appeal reaffirmed the principle of the privity and sanctity
of contracts and stated the following: “[23] The privity and sanctity of contract entails
that contractual obligations must be honoured when the parties have entered into the
contractual agreement freely and voluntarily. The notion of the privity and sanctity of
contracts goes hand in hand with the freedom to contract, taking into considerations
the
[37] The position that the Plaintiff was in prior to the signature of the contract was
that he was in possession of the amount of R500,000 which he paid a s deposit. The
Second Defendant repudiated the contract when it accepted the offer from a third
party without first offering it to the Plaintiff. T he Plaintiff is entitled to the money paid
as deposit as the repudiation resulted in the purpoted cancellation of the contract
under the circumstances.
[38] The object of reducing a contract to writing (whether voluntarily or required by
statute) is normally to achieve certainty and to facilitate proof ( Woods v Walters
1921 AD 303, Van Wyk v Rottcher’s Saw Mills (Pty) Ltd 1948 (1) SA 983 (A) ). The
contract in this regard represented an intention to conclude a written agreement that
each party will perform its duties accordingly . Therefore the parties are bound to
respect the agreement they have entered into. Contracts provide legal certainty
regarding each party’s rights and obligations. Commonly referred to as the doctrine
of pacta sunt servanda, parties are to honour contracts entered into freely and
voluntarily.
4 2018(2) SA314(SCA)
Page 11 of 13
[39] In Barkhuizen v Napie 5r, the Constitutional Court stated that this doctrine is
universally recognized and reinforced by our Courts; it is a profoundly moral
principle. With this doctrine in mind, if either party, by an act or omission and without
lawful excuse, fails in any way to honour a contractual obligation, a breach is
committed.
[40] In SA Forestry Co Ltd v York Timber Ltd,
6 the Supreme Court of Appeal
(SCA) stated as follows: ‘Repudiation occurs where one party, without lawful
grounds, indicates to the other party, by word or conduct, a deliberate and
unequivocal intention that all or some of the obligations arising from the contract will
not be performed in accordance with its true tenor .
[41] The two acts comprising of a repudiation as identified are first ly, the
unequivocal conduct of the defaulting party displaying an intention to no longer be
bound by the contract and secondly , the conduct of the innocent party displaying a
clear election to cancel the contract. A repudiation is determined objectively, the
emphasis being on the innocent’s party’s perception of the conduct of the defaulting
party. The Court determining repudiation needs to assess what a reasonable person
in the position of the innocent party perceived of the defaulter’s conduct regarding
his or its decision to no longer be bound by the terms of the contract. The sale of the
entire wedge by the Second Defendant objectively viewed display ed the intetion to
no longer be boung by the contract the Plaintiff made his inten tion known that they
no longer wished to be parties to the contract in light of the sale made to the T hird
Party and the unfulfilled suspensive conditions.
[42] Accordingly, the Plaintiff was able to prove its case successfully on the
probabilities . The Plaintiff’s witness was credible and he was able to prove that
indeed the property was in indeed sold inclusive of portion 7 which he had a first
right of of option to acquire without same being offered to him. Whereas the witness
for the Second Defendant Ms Colley , was irrelevant to the case at hand as she had
no first hand information on the case at hand.She was made to testify on documents
5 2007(7) BCLR 691(CC)
6 2004(4) ALL SA 168 (SCA) para 38
Page 12 of 13
and emails which she was either not the author thereof or not party thereto. It was
not clear in my view why she was even called as a witness.
[43] Additionally, it was common cause that the Plaintiff indeed paid the
R500 000.00 as deposit and there was no evidence lead otherwise by Ms Colley .
Therefore it is not clear why non -payment or the refusal to pay the R500 000.00 was
used as a basis for defense by the Second Defendent .The Plaintiff is entitled to the
repayment of his deposit inclusive of the interest therein as the contract was
repudiated by the Second Defendant which led to the cancelation of the agreement.
The Second Defendant failed to make out a case why the Plaintiff must forfeit the
deposit in light of the evidence led.
[44] In the result I make the following order:
1. The Plaintiff lawfully cancelled the mount court agreement.
2. The First Defendant is directed to release the deposit of R500 000.00
with interest thereon to the Plaintiff forthwith.
3. The Second Defendant is order to pay the costs on a party and party
scale, including the costs of Counsel on scale “B”.
NHARMURAVATE AJ
JUDGE OF HIGH COURT
Counsel for the Plaintiff: Adv Acker
Counsel for the Second Defendant : Adv R Ellis
Attorneys for the Plaintiff: Russo Munro Attorneys
Attorneys for the Second Defendant: RN Incoporated
Date of hearing 21 to 22 May 2024
Date of judgment: 12
th August 2024
Page 13 of 13