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[1994] ZASCA 30
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Twenty Seven Bellevue CC v Hilcove (494/92) [1994] ZASCA 30; 1994 (3) SA 108 (AD); [1994] 2 All SA 293 (A) (24 March 1994)
CG CASE NUMBER: 494/92
IN THE SUPREME COURT OF SOUTH AFRICA (APPELLATE DIVISION)
In the matter between:
TWENTY SEVEN BELLEVUE
CC
Appellant
and
STUART JOHN HILCOVE
Respondent
CORAM
: JOUBERT, SMALBERGER, EKSTEEN, VAN DEN HEEVER JJA
et
MAHOMED AJA
HEARD ON
: 3 MARCH 1994
DELIVERED ON
: 24 MARCH 1994
JUDGMENT VAN DEN HEEVER JA
2
Appellant applied on notice of motion in the Natal Provincial Division for an
order declaring that respondent is personally liable
as purchaser in terms of an
agreement of sale of fixed property known as Bellevue of which appellant is the
seller. The application
was unsuccessful, but appellant obtained leave to appeal
to this court. The Natal judgment is reported in 1992 (4) SA at 523.
The
founding affidavit records that appellant is the registered owner of the
property in question. It was leased to respondent for
farming purposes. The
lease is annexed marked A. On 6 March 1989 the property was sold by appellant on
the terms set out in a written
document, annexed as B. During February 1990
respondent, wanting to develop the land as a free settlement area, asked
appellant for
its consent to his dealing with the property as if he were already
the registered owner. Appellant on 23 March signed a written consent
(annexure
C) to respondent's making such
3 application. Respondent by his signature
signified his acceptance of the benefits conferred in the document. His power of
attorney
authorising a firm of town and regional planning consultants to take
the matter further, is annexure D. Their letter to the Secretary
of the Free
Settlement Board in Pretoria constitutes annexure E to the founding affidavit.
The last annexure, F, is a letter to appellant
from a firm of attorneys dated 4
September 1991, on behalf of a close corporation registered on 13 August 1991
under the name of
Bellevue Extension Development CC. This letter states that the
deed of sale, B, was signed by respondent as trustee for a close corporation
or
company to be formed; Bellevue Extension Development CC at its inaugural meeting
on 21 August 1991 decided not to adopt the agreement
of sale; and respondent (to
whom I refer in what follows by his surname, Hilcove) is not personally liable
under the agreement of
sale.
Paragraph 8 of the founding affidavit
4
complains that "respondent's attitude towards the
property has, until this
year, been that of a buyer who
intends exercising as many of the rights of an owner as
possible while
delaying as long as possible the
inconvenience, risk and expense of acquiring ownership".
The only additional fact set out in the brief affidavit,
is that the repeal of the Group Areas Act on 30 June of
1991, rendered the Free Settlement Areas Act No 102 of
1988, which was repealed on the same date, a dead
letter.
The agreement of sale reads as follows:
"MEMORANDUM OF
AGREEMENT OF SALE BY AND BETWEEN
Twenty Seven Bellevue C.C.
(No.CK 86-20928-23)
(hereinafter together with its
heirs, Administrators or
assigns
refered to as the SELLER)
and
Stuart John Hilcove, (as trustee for
a company or Close
Corporation to be
formed), born 22nd February 1949,
(hereinafter together
with his
heirs, Executors, Administrators and
assigns refered to as the
PURCHASER)
Identity Number 49 0222 5091 001
5
Whereas the SELLER is the registered owner of a farm commonly known as
'Bellevue' and officially described as
The Farm Bellevue No.14681 situate in the
County of
Pietermaritzburg,
Administrative District of Natal in
extent 379,7061
hectares
and agrees to sell it to the PURCHASER who
agrees to purchase it
under the following
terms and conditions;
now Therefore witnesseth
1.
The purchase price shall be payable in cash against registration of Transfer
of the property into the name of the Purchaser. The Purchaser
shall make payment
of the purchase price by not later than the 1st day of April 1992 and the amount
of the Purchase Price shall be
If paid before 1st April 1990, the sum of R5,000,000
(Five
Million Rand) If paid after 1st April 1990, but before 1st April 1991, the sum
of R5,250,000
(Five Million Two Hundred and Fifty Thousand Rand) If paid after 1st April
1991 but before the 1st April 1992 the sum of R5,500,000
(Five Million Five
Hundred Thousand Rand)
2.
It is acknowledged that the Purchaser at present occupies and farms the
property bought and sold under this agreement and pending
6
transfer of the property into his name it is agreed that he shall continue to
occupy it under the same terms and conditions at present
applicable under an
agreement between the parties hereto, dated 22nd December 1987.
3.
All conveyancing costs and transfer duty incurred in transferring the farm
into the name of the Purchaser shall be borne by the Purchaser
who shall
nominate the conveyancers.
4.
The Purchase Price and any other payments payable hereunder shall be paid
without deduction to the Seller in Pietermaritzburg in the
currency of the
Republic of South Africa.
5.
In the event of any payments in respect of the Purchase Price or other
charges for which the Purchaser is liable herein, remaining
unpaid for a period
of fourteen days after due notice demanding payment in writing has been given by
the SELLER or his agent to the
Purchaser, the SELLER shall have the option of
either enforcing at law the terms of the contract or of cancelling the contract
and
re-entering into possession of the property without further notice to the
Purchaser, and, in the event of the SELLER cancelling the
contract and re-taking
possession of the property, any and all improvements made to the property herein
shall become the property
of the Seller
7
without compensation to the Purchaser.
The notice in writing above referred to shall be validly given to the Purchaser
by posting same in a prepaid envelope addressed to
the Purchaser at 187 Boshoff
Street, Pietermaritzburg which address the Purchaser declares to be his
domicilium citandi et executandi."
It was signed by
Cyril James Pettit (who also deposed to the founding affidavit), and Hilcove.
The document records that Pettit did
so "for Twenty Seven Bellevue C.C. (No CK
86-20928-23)". Hilcove's signature is unqualified.
In his opposing affidavit Hilcove admits the identity of the parties, the
lease, and the sale, contends that annexure B is unambiguous
in reflecting his
capacity therein as that of a trustee for a close corporation or company to be
formed, and submits that the extraneous
evidence of subsequent events tendered
to interpret or contradict B, is inadmissible. Alternatively, should it be held
to be admissible,
then what Hilcove did in the course of those subsequent
8
events was done in his capacity as trustee, not personally. In so far as
annexures C and D conflict with B, "such conflicts are
merely incorrect
statements of the factual or legal position". And the "inconvenience, risk and
expense of acquiring ownership were
delayed because there was no obligation
under the contract for the close corporation or company to be formed to acquire
ownership
prior to April 1992". Hilcove concedes that "to be strictly correct",
clause 2 of the contract should be rectified "to accord with
both parties'
common intention at the time (which inadvertently and bona fide by mistake was
not recorded strictly correctly)" so
that
purchaser
in the first line
becomes
Stuart John Hilcove
and the pronoun in the phrase "pending
transfer ... into
his
name" becomes
the purchaser's
. Hilcove
accordingly asks that the application be dismissed with costs.
The court a quo held that B is not ambiguous, that clause 2 is simply the
result of "clumsy and
9 inelegant draftsmanship" and that annexures C and D
are
therefore inadmissible.
The contract undoubtedly has flaws. The
identificatory heading includes inappropriate
descriptions of both
parties. The phrase in brackets
after appellant's name and registration
number is not
suitable to an abstract entity; but the phrase at least
does
reveal that the draftsman was aware that a neuter
genitive, "
its
heirs" is appropriate in relation to such
an abstraction, though ignoring the
impossibility of
that abstraction having heirs. It is appropriate to
record the date of birth and identity number as
identifying features of a human purchaser, for Deeds
Office purposes. What function that information serves
when the
contracting party is not to take transfer
himself, escapes me. That merely by the way. Clause 2
constitutes a far more serious obstacle to accepting
Hilcove's contention that the contract is unambiguous,
though requiring a little tinkering. It incorporates by
10 reference the
prior lease between appellant and Hilcove, and says that the parties to that are
also the parties to this. The masculine
pronouns in the phrase "pending transfer
into
his
name it is agreed that he shall continue to occupy" the
property, refer to one and the same man, not to both a man and an abstract
entity. To make clause 2 compatible with a purchaser who is not Hilcove
personally, but a third party not yet in existence, the tinkering
suggested by
Hilcove does not go nearly far enough. The clause would have to be rewritten to
read something like this:
"It is acknowledged that Hilcove at present occupies and farms the property
bought and sold under this agreement and pending transfer
of the property into
the name of the purchaser it is agreed that Hilcove shall continue to occupy it
under the same terms and conditions
as are at present applicable under an
agreement between himself and the seller, dated 22nd December 1987."
Those terms and conditions are set out in a letter by
the estate agent who negotiated its terms (the same
agent on whose letterhead B was typed). Both parties
11
signed to record their "confirmation and acceptance" of those. (There is no
question in Hilcove being' a tenant in any other capacity
than personally.) They
relate to rental, the use to which the property may be put, and so on, but also
provide that either party
may terminate the lease cm six months written notice
(clause (1)), that Hilcove may make improvements but will not be compensated
for
them, and that he has a right of preemption should an offer be made for the
property. Failure to exercise that right "shall not
alter the terms of
termination of this agreement as set forth in paragraph (1) of this letter".
Rewriting clause 2 of B as suggested
causes a further ambiguity, read with the
lease. Since according to B, Hilcove "shall continue" in occupation until
transfer is passed,
clause 2 is incompatible with the lease the terms of which
it purports to preserve.
If clause 5 intends to refer not to Hilcove personally as purchaser but to a
third party who is to
12 benefit under the agreement between appellant and
the trustee, it makes provision for eventualities that cannot occur. In what
follows I refer for convenience to the notional entity that was to be created
according to Hilcove's contention, as "the company".
Clause 5 contemplates only
one situation, namely that a buyer
is liable
, (not "may become liable
should it adopt the contract") . For clause 5 to have any purpose at all, the
company would have had to
accept the benefit conferred on it by Hilcove as
trustee, to become liable to appellant for the purchase price and transfer duty.
(Conveyancer's fees are a matter between the conveyancer and the buyer.) But the
company can only forfeit improvements if it has
been given occupation of the
property to be able to make improvements at all. since in terms of clause 2
Hilcove stays on until registration,
which is to be effected pari passu with
payment by the company of the purchase price, no cause for cancellation for
failure to pay
that could arise.
13 And the pronoun,
his
, is again
wrong in the sentence dealing with the present selection of a domicilium citandi
et executandi for a presently non-existant
entity. Were it accepted that both
parties regarded Hilcove personally as the buyer, all these problems fall away,
the choice of
domicilium would be sensible as well as grammatical, and clause 2
could stay as it is.
While that part of the initial description of the purchaser consisting of the
phrase, "(as trustee ... etc)" stands, the contract
is ambiguous and
contradictory. In so far as it may be necessary, it is therefore permissible to
have regard to the subsequent conduct
of the parties to identify the purchaser
intended in the contract: Hilcove himself, or Hilcove-as-trustee. (
MARTIAN
ENTERTAINMENTS (PTY) LTD v BERGER
1949 (4) SA 583
, (EDL) 616, 618;
WOODBURN MANSIONS (PTY) LTD v POWELL
1961 (3) SA 893
(D) at 899;
MTK
SAAGMEULE (PTY) LTD v KILLYMAN ESTATES (PTY) LTD
1980 (3) SA 1
(A)
12F-13B.)
14 Annexure C, signed by both parties, sets out in its preamble
that appellant sold the property to Stuart John Hilcove; that "the
said Hilcove"
was then already in occupation and farming it and continues to do so; that
Hilcove "has not, as yet, taken formal transfer
of the property but will do so
in terms of the Agreement of Sale on or before the 1 April 1992"; and that
Hilcove has asked for permission
to deal with the property in the period before
formal transfer is registered as if he were already the registered owner.
Appellant
then consents to Hilcove's applying to have the farm declared a free
settlement area, but "Hilcove shall use the property for farming
purposes only,
until transfer thereof is registered in his name". The consent again
specifically records that appellant sold the
property "to Hilcove as a farm and
for no other purpose". And Hilcove signed at the foot of this document in his
personal capacity
since he added no qualification to his signature, below the
sentence: "I
15
accept the benefits conferred upon me in terms of this Consent subject to the
conditions contained therein".
The power of attorney he signed also describes
him, without qualification, as the purchaser of the property from the appellant.
The
letter to the Free Settlement Board that flowed from this describes him,
proleptically and in the plural, as "the registered owners"
who wish to develop
the property into a township once it has been declared. (Only as owner would he
have had locus standi, in terms
of sec 7 (3) (a) (ii) of the Free Settlement Act
No 102 of 1988, read with sec 1 of the Town Planning Ordinance No 27 of 1949
(Natal),
to make such application.)
The suggestion in Hilcove's opposing affidavit of a "mutual error" in regard
to clause 2 of the deed of sale, has no merit. Analysis
of the agreement itself
weighs against accepting that appellant intended to contract with Hilcove for
the benefit of a third party
not yet in existence. Moreover the lease
directly
16
contradicts any suggestion that appellant was not perfectly content with
clause 2 as it stands. The lease namely records that "Your
CC and Hilcove
acknowledge that the farm Bellevue is for sale which is the prime reason for the
uncertain period of this agreement".
The last clause of the lease, giving
Hilcove a right of preemption - moreover, to be exercised within forty-eight
hours - should
another buyer make an offer during his tenancy though
safeguarding his position in regard to notice should he not do so, negates
any
suggestion that appellant was in agreement that Hilcove should in effect be
given a lengthy option which would keep other buyers
at bay until Hilcove
decided what he wanted to do.
The last straw grasped by Hilcove, that the matter cannot be decided against
him on the papers because of a dispute of fact necessitating
that his version be
accepted, on the grounds of decisions such as
PLASCON-EVANS PAINTS LTD v VAN
RIEBEECK PAINTS (PTY) LTD
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 634E-635C, has even less
merit.
17
The dispute is alleged to have been raised by Hilcove's denial of the
subsequent facts set out by appellant, supplemented by his statement
that
whatever he did, he did as trustee and not in his personal capacity. The fact
that Hilcove says so does not mean that he is
telling the truth. (Cf
DA MATA
v OTTO, NO
1972 (3) SA 858
(A) 868G-869E.) There is no suggestion that there
is any thing apart from his alleged reservatio mentalis to contradict the
objective
evidence of annexures c and D, that he accepted that he was a party to
B in his personal capacity.
Once the phrase "(as trustee for a company or Close Corporation to be
formed)" is excised from the description of the purchaser in
the deed of sale as
being unintended surplusage, that contract forms a coherent and logical whole. I
am satisfied that appellant
intended by annexure B to bind Hilcove personally as
purchaser of the property and that Hilcove intended to be so bound.
18
The appeal is allowed with costs, including the costs of two counsel. The
order of the court below is altered to read -
"1. It is declared that the respondent, John Stuart Hilcove, is liable
personally as purchaser in terms of the agreement of sale of
the property
described as the Farm Bellevue No 14681 situate in the County of
Pietermaritzburg, Administrative District of Natal,
in extent 379,7061 hectares,
of which the applicant is the seller.
2. Respondent is to pay the costs of the application, including the costs of
two counsel."
L VAN DEN HEEVER JA
CONCUR:
JOUBERT JA) SMALBERGER JA) EKSTEEN JA) MAHOMED AJA)