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[1985] ZASCA 118
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Pereira v Landman (318/84) [1985] ZASCA 118 (15 November 1985)
J DA C PEREIRA
and
H LANDMAN
Case No
: 318/84
mp
IN THE SUPREME COURT OF SOUTH AFRICA
(
APPELLATE
DIVISION)
In the matter between:
J DA C PEREIRA
Appellant
(Defendant
a quo
)
and
H LANDMAN
Respondent
(Plaintiff
a quo
)
CORAM
: KOTZé, HOEXTER, VAN HEERDEN, GROSSKOPF, JJA
et
NICHOLAS, AJA
HEARD
: 1 November 1985
DELIVERED:
15 November 1985
JUDGMENT
HOEXTER, JA
....
2.
HOEXTER, JA
On 2 April 1980, and at Boksburg, the appellant sold a stand in that town to
the respondent. The deed of sale ("the contract") was
embodied in a standard
printed document consisting of three pages. The printed document was completed
in manuscript by the appellant's
attorney and then signed by the parties. The
printed contract falls into two parts, the first of which is on page 1 of the
document
under the heading of "Preamble". Adjacent to printed matter on the
left-hand side of page 1 the preamble provided blank spaces for
completion
before signature by the parties. Here were to be inscribed, for example, the
names of the seller and the purchaser respectively;
a description of the
property sold; details of the amount of the purchase price and how it was to be
paid; and the dates whereon
transfer, possession and occupation of the
property
3. property sold were to be given.
In the preamble, and against the printed words "Purchase Price", there was
written by hand:-
"R24 000,00 TWENTY FOUR THOUSAND RAND ONLY. R7 000,00 ON 2.4.80 TO BE
RELEASED TO SELLER IMMEDIATELY AND R7 000,00 ON 2.6.80.
IF NOT PAID DEED OF
SALE AUTOMATICALLY CANCELLED.
"
(My underlining)
In what follows I shall refer to the provisions underlined by me in the above
quotation as "the hand-written cancella= tion clause".
Other blank spaces
provided in the preamble were filled up in handwriting to provide that transfer
of the property sold was to be
taken and possession thereof was to be given on 2
June 1980, but that the purchaser would occupy the property sold from 2 April
1980
at a monthly rental of R150; that the costs of the deed of sale and the
costs of transfer would be paid by the purchaser, and that
guarantees
4.
guarantees would be furnished by 2 June 1980.
The second part of the contract was prefaced, at the top of page 2, by the
following printed heading:-
"Subject to the terms incorporated in the Preamble, the Purchaser and Seller
agree that the Contract of Sale between them shall be
subject to the following
further provisions:-"
whereupon followed, on pages 2 and 3 of the document, fifteen
printed
clauses. Thereafter, and at the foot of page 3,
blank spaces were provided
for the signature of the seller
and the purchaser respectively, together with
the inscrip=
tion of details affecting the date and place of signature
in
each case. I quote hereunder the provisions of the
printed clauses 12 and 15:-
"12. Subject to the right of the Seller to
take necessary steps at all times to protect the land and improvements
thereon, the Seller shall on non-compliance by the Purchaser
of any of the
provisions of this agreement,
send
5.
send by prepaid registered post a notice to the Purchaser at
his last known business or residential address, calling upon the Purchaser
to
remedy such non-compliance within 30 (thirty) calendar days, failing which the
Seller shall be entitled to:
(a)
cancel this agreement
between the parties;
(b)
retake possession of
the property sold immediately after the lapse of the said
period;
(c) retain as rouwkoop or as a pre-estimate
of
the Seller's liquidated damages all monies
paid by the Purchaser;
(d) sue the Purchaser for any other loss or
damage sustained by him as a
result of such
breach;
or alternatively:
(a) Claim the balance of the purchase price and interest and any other costs
or charges forthwith on tender of transfer of the property
to the same address
by prepaid registered post, for which amounts the Purchaser shall supply the
Seller with acceptable guarantees
within ten (10) days of such notice.
15. Should the Purchaser
(a) take steps to surrender his estate, or
(b)
have a provisional order of
Sequestration against him initiated or
(c)
attempt to arrange a compromise or settlement of his debts with his
creditors, or
(d) become ...
6.
(d) become insolvent, the Seller shall be entitled to accept such action as a
material breach of this contract and may, without notice
to the Purchaser take
the action referred to in paragraph 12(a), (b), (c) and (d)."
The respondent breached the terms of the contract governing the payment of
the purchase price stated in the preamble. Having duly
paid R7 000 on 2 April
1980 the respondent failed to make the second payment of R7 000 on or before 2
June 1980. By reason of this
breach, and during July 1980, the appellant elected
to cancel the contract and communicated this fact to the respondent. During
August
1980 the appellant sent to the respondent a cheque for R6 780 in
repayment of the respondent's initial payment of R7 000 less a deduction
of R220
in respect of
occupational interest. The respondent refused to accept
the appellant's aforesaid cancellation of the contract.
During September 1980 the respondent sought to enforce
performance of the
contract by instituting an action against
the
7. the appellant in the Witwatersrand Local Division. The
appellant resisted the action and filed a counterclaim for
ejectment of the respondent from the property sold.
The essential facts of the matter are common cause and they fall within a
small compass. A minute of a pre-trial conference recorded,
inter alia
,
the following:-
"3.5 Dit is gemeensaak dat verweerder geen kennisgewing ingevolge die
bepalings van klousule 12 van die ooreenkoms aan die eiser gegee
het nie.
3.6 Verweerder het sy keuse om die ooreen=
koms te kanselleer voor 17
Julie 1980
uitgeoefen en eiser so meegedeel "
The sole issue at the trial (I quote again from the minute) was confined to
the following narrow limits:-
"2.1 Of die skriftelike ooreenkoms van
2 April 1980 (bundel bladsy 5) outomaties gekanselleer kon word weens eiser
se versuim om die bedrag van R7 000,00 op 2 Junie 1980
te betaal en daardeur
gekanselleer is en of verweerder aan eiser 'n skriftelike kennisgewing moes
gegee het ooreenkomstig die bepalings
van klousule 12 van die ooreenkoms
alvorens dit gekanselleer kon word."
The
8.
The said minute further noted an agreement that should the
trial Court decide the sole issue in favour of the respondent the Court
would
order registration of transfer of the property sold in the name of the
respondent, with costs, against payment of R10 000 by
the respondent to the
appellant; whereas if the issue were resolved adversely to the respon= dent the
appellant would be entitled
to an order, with costs, ejecting the respondent
from the property sold.
The trial came before WEYERS, J. No witnesses were called and the trial Court
was invited to decide the issue on the basis of the
agreed facts. The learned
Judge decided that the appellant had been legally obliged to give the respondent
written notice in terms
of clause 12 before cancelling the contract. Accordingly
judgment was entered in favour of the respondent. With leave of the trial
Court
the appellant appeals to this Court against the whole of the judgment of the
Court below.
I
9. I proceed to examine the reasons underlying the decision of the Court
a
quo
. Upon a comparison of the provisions of the hand-written cancellation
clause with the provisions of the printed clause 12 the trial
Court arrived at
the following conclusion:-
"It is clear that there is a contradiction
between the two the first purporting to
deal with an automatic event without notice, and the second giving the option
to purge his default."
Having regard to the contradiction found by it, and on the authority of
decided cases such as
Simmons v Hurwitz
1940 WLD 20
;
Bull v Executrix
Estate Bull and Another
1940 WLD 133
;
Hayne & Co Ltd v Central Agency
for Co-operative Societies (In Liquidation)
1938 AD 352
the trial Court
accepted as "settled law" that:-
" in such cases the handwritten clause
carries more weight than the printed wording."
The above observation
notwithstanding the learned Judge
shrank
10. shrank from applying the relevant principle. Immediately after the
passage of the judgment quoted above the learned Judge went
on to say this:-
"However, the fact that the written word carries more weight than the printed
word does not mean that clause 12 disappears or falls
away."
To overcome the deadlock the Court
a quo
felt impelled, as a last
resort in the process of interpretation, to invoke against the appellant the
maxim
verba fortius accipiuntur contra proferentem.
By this path the
trial Court finally arrived at the conclusion that the contract:-
" envisages notice by registered post
to the purchaser in all instances where it has not been specifically excluded
as was done in clause 15, as was not done in the
clause dealing with automatic cancellation."
Had the Court below in fact applied the principle governing the construction
of contracts containing irreconcilable hand-written and
printed provisions, it
would
have
11.
have been obliged to give full rein to the provisions of the hand-written
cancellation clause; and there would have been neither need
nor room for an
invocation of the
contra proferentem
rule. It is unnecessary, however, to
say anything further in this regard for the reason that I find myself unable to
share the opinion
of the learned Judge that the hand-written cancellation clause
and clause 12 stand in opposition to one another. It is an established
principle
of interpretation that a written agreement ought to be so construed that effect
is given to every clause in it; and that
apparent inconsistencies should, so far
as possible, be reconciled. In my judgment the hand-written . cancellation
clause and clause
12 are not so inconsonant as to be incapable of standing
together in the same agreement.
Indeed, for the reasons hereunder mentioned it seems to me
that these two clauses may be quite naturally and satis=
factorily reconciled.
From
12.
From a passage in the judgment of the Court below to which reference has
already been made it appears that the learned Judge found
a contradiction
between the hand-written cancellation clause and clause 12, such contra= diction
residing in the feature that while
the latter clause gives the purchaser an
opportunity of purging his default before the seller is legally entitled to
cancel, the
hand-written cancellation clause purports -
"... to deal with an automatic event without notice...."
Now it is clear that, in the absence of any agreement to the
contrary, a party to a contract who wishes to exercise his
right to cancel the contract must convey his decision to
the mind of the defaulting party; and that cancellation
does not take
place until such communication is made. See:
Swart v Vosloo
1965(1) SA
100 (A) at 105G. If I understand
his judgment correctly the learned Judge
seems to have
construed
13.
construed the hand-written cancellation clause to be self-acting in the sense
that the purchaser's failure to pay would result,
ipso facto
, and without
any communication by the seller to the purchaser that the former had elected to
cancel, in the termination of the contract.
In my opinion the hand-written
cancellation clause cannot be so construed. Despite the forcible language in
which this clause is
couched it is clear, I think, that the purchaser's failure
to pay does not by itself, and without more, render the contract null
and void.
Upon non-payment by the purchaser the seller may elect whether to cancel the
contract or to keep it alive and to insist
upon its performance by the
purchaser. See:
Associated Manganese Mines of S A Ltd v Claassens
1954(3)
SA 768 (A) at 774 A/B. Accordingly in the present matter the appellant was
obliged to convey to the mind of the respondent
(as in fact the appellant did)
his decision to cancel. It follows that the trial Court
erred
14. erred in construing the hand-written cancellation clause as it
did; and that the contradiction between the two clauses apprehended
by the trial
Court was more apparent than real. In arriving at its final conclusion the Court
below sought further to rely on the
feature that while clause 15
specifically
dispenses with the need for prior notice to the purchaser, the hand-written
cancellation clause does not. This feature
of the contract does not, I consider,
provide support for the construction which the Court below put upon it. Since
paragraphs (a),
(b) and (c) of clause 15 relate to the financial status and
stability of the purchaser and not to non-compliance by the purchaser
with any
of the terms of the contract, it is tolerably clear, in my opinion, that the
"notice" dispensed with in clause 15 can hardly
be the same "notice" prescribed
by clause 12. The latter notice calls upon the purchaser to remedy some or other
breach by him of
the contract's terms.
In
15.
In my view a scrutiny of the hand-written cancellation clause and clause 12,
in their full contextual setting, yields no real incongruity
between their
respective provisions. The scope and function of these two clauses are not the
same, and they are designed to provide
different and separate remedies. First,
the hand-written cancellation clause may be invoked by the seller only in the
event of a
particular breach of the contract, namely, the purchaser's failure to
pay an instalment of the purchase price. Clause 12, on the
other hand,
encompasses a breach of any of the terms of the contract. The last-mentioned
breaches would include, for example, the
purchaser's failure to pay the costs of
the deed of sale or the costs of transfer; the purchaser's failure to pay a
monthly rental
in respect of occupation enjoyed by him prior to transfer; or the
purchaser's failure to furnish acceptable guarantees within the
stipulated
period. Second, the event which entitles the
seller
16.
seller to cancel pursuant to the hand-written cancellation clause is the mere
breach of the contract therein described; what on the
other hand entitles the
seller to cancel pursuant to clause 12 is not simply the breach of some term of
the contract by the purchaser
but the latter's subsequent failure, after the
seller has sent him a notice by registered post, to remedy the particular
breach.
Third, the nature of the relief available to the seller under clause 12
differs radically from that provided by the hand-written
cancellation clause.
The ordinary rule is that a party repudiating a contract and seeking restitution
must himself make restitution.
It is therefore incumbent upon a seller who
cancels a contract of sale to restore to the purchaser any part of the purchase
price
already paid him, unless it is part of the agreement that such should be
forfeited upon the purchaser's default. Whereas the hand-written
cancellation
clause provides merely for cancellation (albeit a cancellation
taking
17.
taking effect immediately upon communication of his election to cancel by the
seller to the purchaser), clause 12 provides that if
the defaulting purchaser
ignores the seller's notice and remains in default the seller may claim, in
addition to cancellation, forfeiture
of the monies already paid by the purchaser
as rouwkoop or as a pre-estimate of liquidated damages. To sum up, therefore,
upon the
purchaser's failure to pay an instalment of the purchase price the
seller, should he wish to cancel, has to decide whether he desires
either (1)
prompt and certain cancellation, with each party restoring to the other what has
been given and received under the contract
or (2) cancellation delayed by a
period of thirty days in terms of the registered notice prescribed by clause 12,
and further contingent
upon the purchaser's failure to remedy his default; but
which cancellation may be coupled with additional relief in the form of
forfeiture
of monies already paid by the purchaser.
For
18. For the reasons aforegoing it seems to me that, so far from
being discordant, the two clauses in question harmonise; and that
it is
possible, without any real difficulty, to give effect both to the written words
of the hand-written cancellation clause and
the printed words of clause 12 in a
fashion which lends practical efficacy to the contract. It follows that the
trial Court should
have resolved the issue before it in favour of the appellant
and that its judgment cannot stand. In this Court the appellant was
represented
by both senior and junior counsel, but on behalf of the appellant it was fairly
conceded that the problem of interpretation
involved was not one of substantial
difficulty and that an order allowing the costs of two counsel would hardly be
appropriate.
In the result the appeal succeeds with costs, such costs to include the costs
of the application to the
trial
19.
trial Court for leave to appeal. The judgment of the trial Court is altered
to read:-
"Judgment with costs is entered in favour of the defendant and by agreement
an order will issue ejecting the plaintiff, and all those
claiming any right of
occupation through him, from the property, being stand no 1456, known as
Leeupoort Street, Boksburg."
G G HOEXTER, JA
KOTZé, JA )
VAN HEERDEN, JA )
Concur
GROSSKOPF, JA ) NICHOLAS, AJA)