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1985
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[1985] ZASCA 22
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Baker v Probert (228/1983) [1985] ZASCA 22; [1985] 2 All SA 263 (A) (7 May 1985)
Case No. 228/1983
IN THE SUPREME COURT OF SOUTH AFRICA
APPELLATE DIVISION
In the matter between:
ALBERT BLACKMORE BAKER
Appellant
and
HILDA MAY PROBERT
Respondent
CORAM
: CORBETT, KOTZé, VILJOEN, HOEXTER
et BOTHA JJA
HEARD
: 4 MARCH 1985
DELIVERED
: 7 MEI
1985
JUDGMENT
/
BOTHA JA
...
2.
BOTHA JA
:-
This is an appeal against a judgment granted against the appellant in favour
of the respondent in the Durban and Coast Local Division,
for payment of the sum
of R17 500, interest and costs. The judgment was the outcome of an action which
had been instituted by the
respondent against the appellant and which was heard
by NIENABER J. His judgment has been reported: see
Probert v Baker
1983
(3) SA 229
; and it has elicited comment from a number of authors: see D J
Joubert, 1983
De Jure
373; A.J. Kerr, 1984 T H R-H R 460; J S McLennan,
1984 S A L J 39; G Lubbe, 1984 S A L J 616; and S W J van der Merwe and M F B
Reinecke,
1984 T S A R 85. In what follows I shall refer to the reported
judgment as "the report", and to the appellant and the respondent
respectively
as "the defendant" and "the plain= tiff."
The facts upon which the appeal falls to be decided are common cause and lie
within a narrow compass.
/The ...
3. The defendant owned a so-called shareblock in a company, Rocca
Marina Ltd. (The exact nature of a shareblock and the rights attaching
thereto
are matters of no con-sequence in this case and need not be discussed.) The
defendant wished to sell the shareblock and gave
a mandate to find a purchaser
for it to a firm of estate agents, York Estate & Investment Co (Pty) Ltd, to
which I shall refer
as "York Estate". York Estate found a purchaser in the
person of the plaintiff. She signed an offer to purchase, bearing the date
18
November 1975. The offer was in the form of a printed document, which was a
standard form of offer used by York Estate, and in
which, in the blank spaces
provided for the purpose, an employee of York Estate had inserted, in
manuscript, the details relating
to this particular transaction, before it was
presented by York Estate to the plaintiff for her signature. At the foot of the
last
page of the document, immediately below the space provided for the offeror
to sign as "purchaser" (where the plaintiff had affixed
her
/signature) ...
4.
signature), there was a printed form of acceptance of the
offer by the offeree. That acceptance was duly signed by the defendant on
21
November 1975, above the printed word,"Sellers". So the document as a whole
became the contract between the parties, and I shall
refer to it as such.
In the top left-hand corner of the first page of the contract the name "York
Estate" appears in large capital letters. Immediately
to the right thereof the
printed words appear: "Acting as AGENTS for:". In the document as printed there
is then a blank space, underneath
which the following words appear: "jointly and
severally (hereinafter referred to as 'the SELLERS')". In the blank space had
been
filled in: "MR. A.B. BAKER"; those are the initials and the surname of the
defendant. Thus, ignoring the inapposite references to
a plurality of sellers,
the contract records that York Estate was acting as "agents" of the defendant,
being the seller.
/The ...
5.
The shareblock which was the subject matter of the sale is
described in the heading of the contract. The body of the contract contains
18
clauses. For the purposes of this judgment it is necessary to refer only to
clauses 1, 2, 3 and 5. In clause 1 the "effective
date" of the sale is fixed as
1 December 1975. Clause 2 provides that the total purchase price to be paid by
the purchaser is the
sum of R17 500. Clause 3 deals with the payment of the
purchase price. In the printed form the clause was designed, in paragraphs
(a),
(b) and (c), to make provision for the payment of a cash deposit, the payment of
a further instalment, and a final payment of
the balance of the purchase price
on the effective date. However, in this case the whole of the purchase price was
inserted in paragraph
(a), and expressed to be payable "on or before the
effective date", with the result that the effect of clause 3 was to provide for
the purchase price of R17 500 to be paid in cash on or
/before ...
6.
before the effective date. Clause 3 concludes with the
following provision, which is of crucial importance in this appeal:
"All payments made in terms of this paragraph shall be made to the AGENTS to be
held by them in trust for payment to the SELLERS
on the EFFECTIVE DATE provided
that the SELLERS have complied with the provisions of paragraph 5
hereof."
Clause 5 provides as follows:
"The SELLERS shall forthwith deliver to the AGENTS, to be held in trust by
them
(a) the Share Certificates in respect of
the
Shareblocks, together with a duly
completed Share Transfer form;
(b) ...."
(The further provisions of clause 5 are not relevant in this case.)
The plaintiff duly paid the purchase price of R17 500 to York Estate on 25
November 1975. The defendant did not deliver the share
certificates, either
before the effective date or thereafter. He remained
/in ...
7.
in default despite numerous demands for performance over a
protracted period. Finally, on 3 March 1977 the plaintiff validly cancelled
the
contract on the ground of the defendant's breach of it. Shortly thereafter, on
11 March 1977, York Estate was placed in liquidation.
The plaintiff proved a
claim for repayment of R17 500 against York Estate, but received no
dividend.
In her particulars of claim the plaintiff originally put forward a main claim
and two alternative claims. The latter claims were both
founded upon alleged
misrepresentations and they were expressly stated to be claims for damages. Both
of them were abandoned in the
course of the proceedings in the Court
a
quo
and nothing further need be said about them. The main claim, by
contrast, did not purport to be a claim for damages. It was plainly
a claim for
repayment of the purchase price, i e for restitution of the plaintiff's
performance, pursuant to the cancellation of
the contract. It was solely on
that
/basis ...
8.
basis that the case was conducted and argued by counsel" on
both sides in the Court
a quo
. In his judgment NIENABER J discussed the
arguments of counsel at some length (see the report at 231 E to 233 D), but
declined to
decide the case on the arguments presented to him (see the report at
233 D). Instead, he found that the claim was capable of being
construed as a
claim for damages for breach of contract (at 233 F - G and 236 F - G), and
decided the case on that footing, holding
that the plaintiff was entitled to
payment of R17 500 by way of damages computed on the basis of her so-called
negative
interesse
(at 233 G to 236 F).
I propose to consider the plaintiff's claim in accordance with the manner in
which it had been formulated in her pleadings. She alleged,
in brief, that in
terms of the contract between the parties, the purchase price of R17 500 was to
be paid by her to York Estate,
"the duly appointed and authorised agents of
the
/defendant ...
9.
defendant"; that the defendant was to deliver to the said
agents
inter alia
the share certificates in respect of the shareblock;
that in terms of her obligations she paid to the agents the amount of R17 500;
that the defendant, in breach of the contract, failed to deliver the share
certificates to the agents or to the plaintiff; that on
3 March 1977 she
cancelled the contract and demanded repayment of the amount of R17 500 and
interest thereon; and that in the premises
the defendant was liable to pay to
the plaintiff R17 500 together with interest thereon from 3 March 1977.
In his plea, the defendant denied that York Estate was "the duly appointed
and authorised agent of the defendant for the purpose of
receiving or holding
the purchase price". He alleged further that in terms of clause 3 of the
contract York Estate was to hold "the
said funds" in trust for payment to the
defendant on the effective date, provided that the defendant had complied
/with ...
10.
with the provisions of clause 5 of the contract; that
"accordingly" the sum of R17 500, when paid to York Estate, was a "species of
deposition seguestrarium
" and that York
Estate "was in the position of
a
sequester
or stakeholder";
that York Estate held the said amount "subject to an implied agreement" that
in the event of the contract being cancelled, it would
repay the amount to the
plaintiff; and that "in fact and in law", once the plaintiff had legally
cancelled the contract as she did,
the only person upon whom she could properly
make demand for repayment of the said sum was York Estate.
The crucial issue raised by the pleadings is whether or not York Estate was
the agent of the defendant for receiving payment of the
purchase price from the
plaintiff. In argument before this Court counsel for the defendant readily
conceded that if this issue were
decided in favour of the plaintiff, the appeal
had to be dismissed. The concession was unavoidable. It is not open to doubt
/that ...
11.
that a purchaser who has validly cancelled a contract of sale
on the ground of the seller's breach of it, is entitled in principle
to claim
repayment of the purchase price, paid to the seller in terms of the contract
prior to its cancellation. The purchaser's
right to claim repayment obviously
exists also where payment of the purchase price was made, not to the seller in
person, but to
his duly authorised agent, since payment to an agent is
equivalent in law to payment to the principal. In this situation the purchaser's
right to claim repayment from the seller is unaffected by the failure or
inability of the agent to pay over the purchase price to
the seller. Although
statements can be found in cases and in textbooks suggesting that the seller's
liability is based on enrichment,
I agree with the view, and the reasons for it,
expressed by De Vos,
Verrykingsaanspreeklikheid in die Suid-Afrikaanse
Reg
(2nd ed) at 141 - 143, that a claim for restitution of performance
following upon
/cancellation ...
12.
cancellation of a contract for breach is not a
condictio
(
cf Landau v City Auction Mart
1940 AD 284
at 292-4 and
Minister
van Landbou-Tegniese Dienste v Scholtz
1971 (3) SA 188
(A) at 198 C - D),
and I agree with NIENABER J (at 233 C of the report) that the claim is to be
regarded as a distinct contractual
remedy (cf S W J van der Merwe and M F B
Reinecke in 1984 T S A R 85 at 86). Whether or not the remedy can aptly be
described as
a claim for
restitutio in integrum
(see the report at 233 B
and A J Kerr in 1984 T H R-H R 460) need not be discussed in this judgment,
although it might be noted in
passing that it would seem to be advisable to
distinguish between the non-technical concept of restitution in the sense of
"restoration"
or "return" and the technical concept of
restitutio in
integrum
as dealt with in the common law authorities (see De Vos
op
cit
at 143-4).
In considering whether York Estate was the agent of the defendant for
receiving payment of the purchase
/price ...
13.
price, it is important at the outset to bear in mind what the
expression "agent of the defendant" means in the present context. It
means no
more than the person authorised by the defendant to accept payment of the
purchase price by the plaintiff. It connotes a
mandate by which the seller
confers authority on the agent (his mandatary) to represent him in the
acceptance of the payment of the
purchase price, with the consequence, in law,
that payment to the agent is equivalent to payment to the seller.
Viewed in this light, the contract between the parties itself shows
prima
facie
that York Estate was the agent of the defendant for receiving the
purchase price. The statement in the heading of the contract that
York Estate
was "acting as agents for" the defendant is inconclusive in this regard, since
it may mean no more than that York Estate
was the estate agent acting for the
seller in procuring the sale, and an estate agent as
/such ...
14.
such is not without more clothed with authority
to receive the purchase price on the seller's behalf. But the provisions of
clause
3, quoted earlier, go further and point to York Estate as being the
defendant's agent for receiving the purchase price. In clause
3 it is expressly
stipulated that all payments made in terms of it, (including, on the facts here,
the payment of the full purchase
price) shall be made to the "agents", being
York Estate. It is clearly implicit that York Estate is authorised by the
defendant to
receive the purchase price, for, were it not so, the purchaser
would have been obliged to pay it to the defendant. York Estate, when
it
received the payment with knowledge of the provisions of clause 3,
prima
facie
accepted the mandate from the defendant to do so as the agent of the
defendant, to whom it was obliged to pay over the money when
he had complied
with his own obligation to deliver the share certificates in terms of clause 5.
Moreover, the parties clearly intended
/that ...
15.
that payment by the plaintiff to York Estate would operate as
a complete discharge of her obligation under the contract, thus equating
payment
to York Estate with payment to the defendant. If, instead of cancelling the
contract, the plaintiff had claimed delivery
of the share certificates from the
defendant, the latter would have had no answer to the claim. In this respect I
agree with the
actual decision arrived at in relation to a similar situation in
the case of
Verbeek v Maher
1978 (1) SA 61
(N) (as opposed to some of the
dicta
in the judgment in that case, on which I shall comment presently).
I agree also with the remarks of NIENABER J at 231 F of the report,
subject to
one qualification. With reference to the fact that the
exceptio non adimpleti
contractus
would not have been available to the defendant as a defence to a
claim for specific performance, the learned Judge observed that the
question of
agency would not arise at all, adding that it was all a matter of performance.
I
/do ...
16.
do not share that view, to the extent that I have difficulty
in visualising a situation (save possibly for an exceptional case) in
which
there could be due performance of the obligation to pay the purchase price, by
paying it to a third party, unless that third
party was appointed and authorised
by the seller to accept the payment, thus constituting him his agent for the
purpose. This is
probably the idea underlying the statement in Wessels,
Law
of Contract in South Africa
Vol II para 2195 -quoted in
Verbeek
's
case,
supra
, at 67 E - that an
adjec
-
tus solutionis gratia
is in a sense the agent of the creditor. However that may be, in the
circumstances of the present case the fact that payment to York
Estate operated
as a discharge of the plaintiff's obligation to my mind carries with it,
prima facie
at least, the notion that York Estate was the defendant's
agent for receiving the price.
The views expressed above are based primarily
/on
...
17.
on the first part of the relevant provisions of clause 3:
"All payments made in terms of this paragraph shall be made to the AGENTS
..."
If the clause had stopped there, the views
expressed above would, I consider, have operated conclusively against the
defendant on
the issue under consideration. The question to be investigated now
is whether those views are affected by the remainder of the clause,
which I
quote again for ease of reference:
".... to be held by them in trust for payment to the SELLERS on the EFFECTIVE
DATE provided that the SELLERS have complied with the
provisions of paragraph 5
hereof."
At first sight there does not appear to me
to be any reason why the second part of the clause should be regarded as
detracting from
the effect of the first part of it. By accepting the payment of
the purchase price from the plaintiff with knowledge of the contents
/of ...
18.
of the clause, York Estate no doubt assumed an obligation
vis-a-vis the plaintiff, arising from an agreement entered into by conduct,
not
to part with the money unless and until the defendant had complied with his
obligation to deliver the share certificates; while
the defendant, as part of
the tripartite arrangement, no doubt had no right to claim payment over of the
money by York Estate to
himself unless and until he had delivered the share
certificates. But this was all part of the mechanism used by the parties to
ensure
pari passu
payment against delivery, which was superimposed on the
fundamental provision that payment was to be made to York Estate, and on
the
face of it I do not consider this mechanism to be in any way inconsistent with
the notion that York Estate was authorised by
the defendant to accept payment on
his behalf, i e as his agent.
The defendant's denial in his plea that York Estate was his agent for
receiving the purchase price
/was ...
19.
was coupled with an allegation (as shown earlier) that the
payment was a species of
depositum sequestrarium
and that York Estate was
in the position of a
sequester
or stakeholder. Much of the argument of
counsel who appeared for the defendant in this Court was devoted to the
contention that York
Estate, being a stakeholder, was for that reason not the
agent of the defendant. It is necessary now to examine that contention.
The concept of a stakeholder is best known in our law in the context of a
person who holds a
res liti
-
giosa
pending the outcome of
litigation between two rival claimants (see
e g
Voet 16.3.12 - 15;
Corrans v Transvaal Government and Coull's Trustee
1909 TS 605
at 621-2,
631-2; and
Kelly v Lombard
1927 AD 182
at 187-8). It is known also in the
context of a person who holds money which is the subject of a wager, to be paid
over to the party
who turns out to be the winner of the bet (see
e g
Voet
11.5.9;
Sloman v Berkovitz
1891 NLR 216
; and
Clarke v Bruning
/1905 ...
20.
1905 TS 295).
In both instances it is of the essence of the
stakeholding that at its inception it is uncertain which of the two parties
involved
will ultimately become entitled to receive what the stakeholder is
holding. The identity of the creditor will only be established
on the happening
of an uncertain future event - the outcome of the litigation or of the wager.
That being so, it can be said in these
instances that the stakeholder holds the
money or the thing on behalf of that one of the two parties involved who will
eventually
become entitled to it, but it cannot be said that the stakeholder,
when he receives the money or the thing, or while he is holding
it pending the
happening of the future event, is acting as the agent of specifically the one or
the other of the two parties.
In the present case the position is substantially different. As between the
plaintiff and the defendant, there can be no doubt but
that the defendant, in
terms
/of ...
21.
of the contract of sale, was the plaintiff's creditor in
respect of the payment of the purchase price. Moreover, his right in respect
of
the plaintiff's payment of the price to York Estate on or before the effective
date was an unconditional one. When the plaintiff
paid the price to York Estate,
the defendant, and the defendant alone, was the creditor in respect of the money
received and held
by York Estate, notwithstanding the fact that he was not
entitled to obtain the money from York Estate unless and until he had complied
with his own obligations under the contract. In these circumstances I can
perceive no difficulty at all in postulating that York
Estate received the
purchase price as the agent of the defendant. There is accordingly a fundamental
difference between the position
of York Estate in this case and the position of
the stakeholder in the two contexts referred to above. It is true, of course,
that
if (as happened in this case) the contract were cancelled because of the
defendant's
/breach ...
22.
breach, the defendant would cease to be a creditor vis-a-vis
both the plaintiff and York Estate, and the plaintiff would possibly
become a
creditor as against York Estate for repayment to her of the purchase price, but
I do not consider that such a possibility
can serve to equate York Estate with
the stakeholder in the instances referred to above. In agreeing on the mechanism
for ensuring
payment against delivery the parties contemplated the performance
of the contract, not a breach of it, and it would be highly artificial
and
unrealistic to regard York Estate from the outset as a person receiving and
holding the purchase price for the benefit of either
the plaintiff or the
defendant, depending upon whether the contract were to be carried to completion
or breached and cancelled. In
any event, the mere possibility of the plaintiff
becoming the creditor of York Estate in the future does not affect the position
that the defendant was the only creditor in the picture at the time when
/the ...
23.
the money was paid to York Estate, and while it was being
held by York Estate prior to the cancellation of the contract, with the
result
that there is no obstacle in the way of finding that York Estate received and
held the money as the agent of the defendant.
It follows from what I have said that I am in respectful disagreement with
the view expressed by MILNE J in
Verbeek
's case
supra
at the top
of page 68, that there did not appear to be any reason in principle for
differentiating the legal position of a stakeholder
in the circumstances of that
case (which were for present purposes in all material respects the same as in
the present case) from
the circumstances where a person acts as a stakeholder
with regard to a
res litigiosa
. As far as I am aware
Verbeek
's
case was the first in this country in which a person in the position of York
Estate in this case was referred to as a stakeholder.
MILNE J quoted two
passages from
Voet
, at 67 G and H of the
/judgment ...
24.
judgment. In the first, 16.3.12
Voet
cites
Paul
's definition of
depositum sequestrarium
, but he does so as a
prelude to a discussion that is devoted exclusively to that legal concept as it
appears in the context of entrusting
a
res litigiosa
to a third party,
the
sequester
. In the second, 19.1.23,
Voet
uses the expressions
"
sequestratio fiat
" and "
sequester
" (translated by
Gane
as
"to be lodged with a stakeholder" and "stakeholder") in a context similar to
that of the present case,
i e
where in relation to a contract of sale
both the purchase price and the thing sold are entrusted to a third party for
payment and
delivery respectively to the seller and the purchaser. It is to be
noted, however, that
Voet
does not enlarge on the rights and duties of
the parties to such an arrangement or the legal position of a stakeholder in
this particular
context. From the mere fact that he uses the same terminology
here as in relation to a
res litigiosa
I do not consider that it is
justified to deduce that he was
/equating ...
25.
equating the two situations in all respects. In particular, I
do not consider
Voet
to be an authority for the proposition that the
"stakeholder" who receives the purchase price in the second situation can never
be
regarded as doing so as the agent of the seller, irrespective of the
contractual setting in which the arrangement appears.
In
Verbeek
's case
supra
reference was made to the decision of
the House of Lords in
Sorrell and Another v Finch
(1976) 2 All ER 371
(HL). In that case a potential purchaser had paid a deposit to an estate agent
employed by the owner of a property, "subject to contract".
No contract of sale
was entered into and the estate agent disappeared with the money. The House of
Lords, overruling a number of
previous decisions by English courts, held that
the would-be purchaser could not claim a refund of his deposit from the owner.
The
ratio decidendi
, in brief, was that on the facts it had not been
shown that the owner had either expressly or impliedly authorised
/the ...
26.
the estate agent to receive a deposit on his behalf; in
taking the deposit the estate agent was not acting as the agent of the owner.
It
is obvious that the facts
Sorrell
's case do not bear comparison with the
facts in the present case. Counsel for the defendant in this Court nevertheless
relied strongly
on two passages in the speech of Lord EDMUND-DAVIES in support
of his contention. The first (quoted in
Verbeek
's case
supra
at 69
E) was a quotation from an earlier unreported decision of Lord EDMUND-DAVIES in
which he said,
inter alia
, that the essence of stakeholding in vendor and
purchaser cases is that a binding contract of sale has been entered into. The
second
(quoted in
Verbeek
's case
supra
at 69 F) was a quotation
from a dissenting judgment of Lord DENNING MR in
Burt v Claude Cousins &
Co
(1971) 2 All ER 611
(where the material facts were on all fours with
those in
Sorrell
's case) in which Lord DENNING MR said,
inter
alia
, that the estate agent, as stakeholder, does
/not ...
27.
not hold the deposit as agent for the vendor, nor as agent
for the purchaser; he holds it as trustee for both to await the event;
and the
purchaser cannot sue the vendor for the return of the deposit, because the
vendor has never received it or become entitled
to receive it. In a further
passage Lord DENNING MR also said (see
Sorrell
's case
supra
at 377
d) that the proper inference is that the estate agent receives the money as
stakeholder and not as agent for the vendor. Counsel
for the defendant conjoined
these passages and argued that they showed that York Estate in the present case
was a stakeholder and
not the agent of the defendant. I do not agree with this
attempt to apply the passages in question to the facts of the present case.
What
was said in those passages cannot be plucked from the context in which it was
said and then be grafted onto a wholly different
set of facts. It is true that
the statements in the passages were couched in very wide terms, but that does
not mean,
/of ...
28.
of course, that they are of universal application in any
situation bearing no more than a remotely superficial resemblance to that
in
relation to which they were made. In my view, therefore,
Sorrell
's case
supra
is of no assistance to the defendant in the present case.
The foregoing discussion of authorities relating to stakeholding leads me to
the conclusion that nothing is to be found in them that
militates against my
view, expressed earlier, that the
prima facie
effect of clause 3 of the
contract between the plaintiff and the defendant was to constitute York Estate
the defendant's agent for
receiving payment of the purchase price. I accordingly
reject the contention on behalf of the defendant that York Estate was a
stakeholder
and not the agent of the defendant, to the extent that I hold that
the second part of the contention is wrong. As to the first part,
it seems to me
that whether or not York Estate can aptly be described as a stakeholder is
perhaps more a question
/of ...
29.
of semantics than a matter of principle. If the word
stakeholder is used in a narrow sense, as being confined to a third party who
receives and holds something not as the agent of either one of the two persons
who have an interest in it, then it would be wrong
to categorise York Estate in
the present case as a stakeholder. On the other hand, if the word stakeholder is
used in a loose sense,
without excluding the notion of agency, there would be no
objection to calling York Estate a stakeholder. My personal preference
is not to
call a person in the position of York Estate in this case a stakeholder, but
there is no need to pronounce a final judgment
on the point.
It is to be observed that in
Verbeek
's case
supra
MILNE J did
not decide that the third party in the position of York Estate here was not the
agent of the seller (that was merely
assumed), nor that it was a stakeholder
(see at 68 D - E). However, in a subsequent case,
/
Sadie
...
30.
Sadie v Carrie's City (Pty) Ltd and Others
1979 (1) SA
363
(T), MARGO J said (at 365 H), with reference to the cases of
Verbeek
,
Sorrell
and
Burt supra
:
"In recent decisions, both in this country and in England, it has been pointed
out that a stakeholder is not the agent of either
of the parties, and it seems
that his position is
sui generis
."
The
contract in that case contained a clause similar in tenor to that in
Verbeek
's case and clause 3 in the present case. To the extent that MARGO
J held that the "stakeholder" receiving the purchase price in terms
of such a
clause is not the agent of the seller, I respectfully disagree, for the reasons
already given. (It may be noted in passing
that in the present case, while York
Estate was the defendant's agent for receiving the purchase price, it was also,
by the same
token, the plaintiff's agent for receiving delivery of the share
certificates.) It follows also that I do not agree with those authors
who, in
commenting on the judgment of NIENABER J in the
/Court ...
31. Court
a quo
, have expressed the view that York Estate had not been
authorised by the defendant to receive payment of the purchase price on his
behalf (see D J Joubert in 1983
De Jure
at 373-4 and 375, and S W J van
der Merwe and M F B Reinecke in 1984 T S A R at 86).
It remains to deal with
one further allegation in the defendant's plea, as summarised earlier. It is
that York Estate held the purchase
price subject to an implied agreement that in
the event of the contract being cancelled, it would repay the amount to the
plaintiff.
I take it that the implied agreement alleged is one between the
plaintiff and York Estate. For the purposes of argument the allegation
may be
accepted as correct (cf Sorrell's case
supra
at 380 e/f - g). But it does
not assist the defendant; it does not go far enough. From the fact that the
plaintiff had a claim against
York Estate, it does not follow that she has no
claim against the defendant. In the realm of implied agreements or implied
terms,
if the defendant
/sought ...
32.
sought to rule out a claim against him, he would have had to
allege an implied term in the contract between him and the plaintiff
that the
latter would have no claim for a refund of the purchase price against him, in
the event of the sale being cancelled by reason
of his breach of contract.
Applying the well-known tests in regard to implied terms, I have no doubt that
there is no room at all
for implying such a term in the contract. Counsel who
appeared for the defendant in this Court (he was not the author of the plea
and
did not appear in the Court
a quo
) disavowed reliance on the implied
agreement pleaded. Instead, he submitted that the plaintiff's claim for
repayment against York
Estate was a
condictio causa data causa non
secuta
. I need not pause to consider whether or not this submission is
sound, for, assuming it to be correct, it once again does not assist
the
defendant, because it does not follow that the plaintiff has no claim against
the defendant.
/NIENABER ...
33.
NIENABER J, following a
dictum
of MILNE J in.
Verbeek
's case
supra
(at 69 A - C), held that after the
cancellation of the sale the risk of insolvency of York Estate fell squarely on
the plaintiff
(see the report at 232 from C to the foot of the page). With
respect, I do not think that an approach based on a shifting risk of
insolvency
of York Estate, resting at first on the defendant and then passing to the
plaintiff, is helpful in considering the question
of the plaintiff's claim
against the defendant. It tends to suggest that, the plaintiff having failed in
her claim against York Estate,
there may be difficulty in finding a basis for
allowing her a claim against the defendant (compare the remarks of the learned
Judge
at the top of page 233 of the report). In my opinion there is no such
difficulty. The plaintiff's assumed claim against York Estate
arises out of her
contractual relationship with York Estate and its fate can in no way affect her
claim against the defendant, which
is based on
/an ...
34.
an entirely independent cause of action. In my view the plaintiff could have
sued the defendant without first pursuing her claim against
York Estate, even if
the latter had not gone insolvent. (On payment to the plaintiff, the defendant
would, of course, have been entitled
to recoupment from York Estate, for the
latter would have had no title to retain the money as against the defendant,
seeing that
the contract had been dissolved and the plaintiff reimbursed.) As I
have shown earlier, the plaintiff by paying the purchase price
to York Estate
fully discharged her contractual obligation vis-a-vis the defendant. The
discharge of her obligation cannot cease
to be such upon the cancellation of the
contract by reason of the defendant's breach. In the contractual relationship
between the
plaintiff and the defendant the cancellation of the contract
resulted in the defendant becoming obliged to make restitution to the
plaintiff
of her performance. That obligation of the defendant is his own and has
nothing
/to ...
35.
to do with the fact that the plaintiff's claim against York Estate turned out
to be abortive (cf_ G Lubbe in 1984 S A L J at 616 note
5).
In my judgment, therefore, the plaintiff's claim against the defendant ought
to have been allowed in the Court a_
quo
on the grounds set out above.
There is accordingly no need to consider whether or not the trial Judge was
justified either in regarding
her claim as one for damages or in allowing it on
that basis.
The appeal is dismissed, with costs.
A.S. BOTHA JA
CORBETT JA
KOTZé JA
CONCUR
HOEXTER JA
IN THE SUPREME COURT OF SOUTH AFRICA
(
APPELLATE DIVISION
)
In the matter between:
ALBERT BLACKMORE BAKER
, APPELLANT
and
HILDA MAY PROBERT
RESPONDENT
Coram
: CORBETT, KOTZé, VILJOEN, HOEXTER, BOTHA JJA
Heard:
4 MARCH 1985
Delivered
:
JUDGMENT
VILJOEN,
JA
Save in one small respect I agree with the reasoning of
my Brother Botha. I agree that the
parties/
2. parties clearly intended that payment by the plaintiff to York Estate
would operate as a complete discharge of her obligation under
the contract, thus
equating payment to York Estate with payment to the defendant. Although York
Estate was not a signatory, the contract
was clearly a tripartite one:
Baker v
Afrikaanse Nasionale Afslaers en Agentskap Maatskappy (Eien
-
doms)
Beperk
1951 (3) SA 371
(A). As a party to the con-tract York Estate assumed
an obligation not to part with the money unless and until the defendant had
performed his obligation to deliver the share
certificates and the completed share transfer form.
This/
3. This was, as my Brother Botha has pointed out, all part of the
mechanism used by the parties to ensure
pari passu
payment against
delivery, which was superimposed on the fundamental provision that payment was
made to York Estate. I do not, however,
even though Botha JA proposes it as a
tentative view only,agree that if (as happened in this case) the contract were
cancelled because
of the defendant's breach, the defendant would cease to be a
creditor of York Estate and
that the plaintiff would possibly become a
creditor as against York Estate.
As I construe the contract York Estate's
only
obligations to the plaintiff were:'
(a) not to
4.
(a) not to pay over the purchase price, or so
much of it as might be due
to the defendant,
before the certificates and duly completed
transfer form were delivered to it and
(b) the purchase price having been paid, to hand
over to the plaintiff, upon
delivery to it
thereof, the share certificates together with
the duly
completed transfer form.
I point out, in this
respect, that because the purchase price had been fully paid, there was no
further cause for York Estate to hold
these items in trust. They could very well
have been delivered by the defendant to the plaintiff direct provided York
Estate were
notified thereof for purposes of paying over the purchase price, or
so much thereof as was due, to the
defendant.
In so far as the allegation in the
defendant's plea is concerned that York Estate
held the purchase price subject to an implied
agreement/
5.
agreement that, in the event of the contract
being cancelled, it would repay the amount to
plaintiff, one cannot, I consider, separate the
obligations as against the plaintiff of York
Estate from those of the defendant. The main
agreement was one of sale between the plaintiff
and the defendant and any implied agreement as
to when or under what circumstances the purchase
price would be repayable
to the purchaser would
of necessity have to embrace the defendant.
That,
upon the defendant defaulting, he would have to
repay the purchase
price to the plaintiff, is a
consequence which would follow as a matter of
law
and is not something to which the defendant needed
to/
6.
to agree. I think counsel for the appellant in this Court wisely did not
press that pro-position.
Save for the obligations referred to above there
was, in my view, no privity of contract between the plaintiff and York Estate.
In
the event of a breach by York Estate of obligation (a) above the plaintiff
would have a claim for damages against York Estate if
she in fact suffered any.
Were York Estate to be in breach of obligation
(b) above, the plaintiff could institute a claim
for specific performance against it.
Upon a breach by the defendant of his
obligation to deliver the share certificates and
completed/
7. completed transfer form to either York Estate or to the plaintiff, the
plaintiff would, in my view, have the ordinary remedies
available to any
purchaser, who has performed, against a seller who has breached the contract. If
whatever judgment sounding in money
the plaintiff obtained against the defendant
were not satisfied by the defendant, the plaintiff would be entitled to execute
upon
such amount as might be due to
the defendant of the sum paid over by the
purchaser
to York Estate because that would be the defendant's
money in the hands of his agent. I do not! consider
that the fact that the defendant has not performed
reverses the roles, as between the plaintiff and
the/
8. the defendant, of being the creditor of York Estate.
Assuming York
Estate had not gone insolvent, a judgment against the defendant for restitution
of the purchase price could have been
satisfied either by the defendant
authorising York Estate to pay the money, or so much of it as would have been
due to the defendant
upon due performance by him, or by the defendant himself
paying back the amount of the purchase price to
the plaintiff and recouping
himself from the money
paid over to York Estate by the plaintiff or so much as
would be due to him. The defendant would be
entitled to recoupment because the cause for York
Estate's/
9. Estate's keeping the money in trust would have lapsed.
I added the
qualification above "or so much as may be due to the defendant" because the
matter is further complicated by the fact
that, in terms of the contract, York
Estate acted as agent for yet another party for receipt of whatever amounts
might be due to
it. I refer to the bondholder. The pro forma contract makes
provision
for the purchaser to take over the obligations of
the seller under the bond which attaches to the particular share block which
he has purchased and to pay the instalments under the
bond to York Estate. In
such a case York Estate would have had to keep the certificates and transfer
form in trust until payment
of the
final/
10. final instalment. In the present case the plaintiff paid in cash.
Consequently the indebtedness of the seller under the bond had
to be redeemed
out of the purchase price before transfer could be effected. It appears from the
contract that at the effective date
there was still an amount of R6 282,00 owing
by the defendant to the bond holder, Rocca Marina (Pty) Ltd, referred to in the
contract
as "The Company." Furthermore, in terms of clause 6, the agent's
commission is payable by the seller. I am not suggesting that because
the
defendant owed the company and York Estate money, that that would
per se
defeat any claim the plaintiff might otherwise
have/
11.
have had against York Estate. I am proceeding from the premiss that the
plaintiff has no claim, save in the restricted sense as stated
above, against
York Estate and that any request or authorisation by the defendant to York
Estate, his agent for receipt of the money,
to repay the plaintiff would be
subject to any debts owed by him (the defendant) under the contract to other
parties.
I agree with the order made by my Brother Botha.
JUDGE OF APPEAL