THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Reportable
Case no: 555/03
In the matter between:
NAZEER NOORMOHAMED Appellant
and
ALEC JOHANNES VISSER NO First Respondent
ROBERT SCHILZ NO Second Respondent
Coram : SCOTT, MTHIYANE, BRAND JJA,
C O M R I E et PATEL AJJA
Date of Hearing : 3 NOVEMBER 2004
Date of delivery : 19 NOVEMBER 2004
Summary: A purchaser who assigns right s and obligations arising from sale
at public auction not a ‘nominee’ or ‘trustee’ in terms of Conditions of Sale
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JUDGMENT
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S C O T T J A
/…
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SCOTT JA:
[1] This appeal conc erns a sale in execution of certain
immovable property by public auction on 21 August 2001. At the
time of the sale the property fell within the area of jurisdiction of the
second respondent who wa s then the acting sher iff for the district
of Pretoria Central. In July 20 02 the first resp ondent, who is the
sheriff for the district of Pretoria North-Eas t, assumed jurisdiction
over the area in which the proper ty is situated. Nothing turns on
this; I mention it only to expl ain why the resp ondents, being the
sheriffs for Pretoria Ce ntral and Pretoria Nort h-East respectively,
instituted jointly the proceedings which give rise to the present
appeal.
[2] It is common cause that th e auction was conducted by Mr
Eugene Schilz (‘Schilz’), th e second respondent’s deputy. (The
latter is Mr Robert Schilz.) It is also common cause that the
appellant’s bid of R1 250 000 was the highest and that the
property was knocked down to hi m. The appellant di d not sign the
Conditions of Sale, the terms of which had been read out before
the auction. Instead, later th e same day, the document was
completed by the insertion of the words ‘S Moosa or nominee’ as
purchaser and was signed both by Mr David Ni cholas, another of
the second respondent’s deputies on behalf of the latter, and by Mr
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S Moosa as purchaser. At the same time Moosa handed Nicholas
a cheque payable to the sheri ff Pretoria Central, in the sum of
R132 980. This amount represented a deposit of R125 000 on the
purchase price plus commi ssion and VAT. Th e cheque was
subsequently dishonoured.
[3] Some 15 months later the respondents instituted motion
proceedings in the Pretoria High Court against both the appellant
and Moosa. The order sought agai nst the appellant was first an
order declaring that he had purchas ed the property and directing
him to sign the ‘duly completed conditions of sale’, together with
ancillary relief. In the alternative, an order was s ought declaring
that the appellant had ‘a cted in his capacity as nominee for a
purchaser to be nominated by him at the sale’ and directing him to
sign the Conditions of Sale. An order was also sought against
Moosa, who was cited as the seco nd respondent, declaring him to
have accepted the nomi nation by the appellant and directing him
to fulfil his obligations in ter ms of the Conditions of Sale.
(Proceedings had previously been instituted against Moosa for the
same or similar relief but subsequently withdrawn.)
[4] In the court below the respon dents abandoned their claim to
have the appellant declared the purchaser of the property and
relied solely on their alternative cl aim. In other word s, they sought
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an order directing him to sign the Conditions of Sale by reason of
his having acted ‘in his capacity as nominee for a purchaser to be
nominated by him . . . .’ The ob ject of this relief, whatever the
meaning of the words quoted may be, was to bring the appellant
within the purview of clause 16 of the Conditions of Sale and so
render him liable as surety an d co-principal debtor for the
obligations of Moosa as purchaser. The clause reads:
’16. In the event of the Purchaser being a company, a corporation or a
partnership, or in the event of the Purchaser signing as a nominee or a trustee
then and in all such events the person signing these conditions shall be
deemed to have bound himself as surety and co-principal debtor for all the
obligations of the Purchaser and, if applicable, jointly and severally with any
other person signing these conditions on behalf of the Purchaser and hereby
renounces the benefits of excussion and division, no value received and
errors in calculation, the effect of which he acknowledges to be aware.’
The respondents we re successful in the court a quo and their
alternative claim against the appe llant was upheld . The present
appeal is with the leave of tha t court. The relief sought against
Moosa was also granted. There is, however, no appeal against
that order and nothing further need be said about it.
[5] The circumstances in which th e appellant participated in the
bidding at the auction and in which Moosa came to sign the
Conditions of Sale as purchaser are largely common cause.
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Schilz’s version, as set out in his founding affidavit and amplified in
his replying affidavit, is briefly th e following. He sa id that shortly
before the auction the appella nt approached him and asked
whether he could bid and thereafter (in the ev ent of his bid being
successful) nominate another ‘entity’ as purchaser of the property.
Schilz explained that this was not an uncommon prac tice and that
he was agreeable to the appellant’s proposal. His understanding of
what was proposed was clearly that the appellant would in the first
instance be the purcha ser of the property but would have the right
to nominate another in hi s stead. In this rega rd he pointed to the
fact that immediately after the property had been knocked down to
the appellant he, Schilz, compl eted a document headed ‘Proof of
Sale’ in which he recorded the purchaser as being ‘N
Noormohamed or nominee’. He also contended that the same
description of the purchaser should have been recorded in the
Conditions of Sale before being signed by the appellant.
[6] The appellant’s version of what was agreed before the
auction is recorded in his answering affidavit as follows:
‘Two commercial properties were put up for auction by the Sheriff on
21 August 2001. The one property being at the premises of 335 Bloed Street,
Pretoria [the subject property] and the other one nearby around the corner.
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I and a number of my friends, family and business colleagues decided
to attend both auctions as we were interested in buying the properties.
The auction of the property situated at 335 Bloed Street was to be
conducted first.
Prior to the start of the bidding it was agreed upon amongst our
contingent that I would do the bidding on the property first to be auctioned and
if successful, and depending on the price, agreement would thereafter be
reached as to who would be nominated to be the purchaser of the property.
. . .
Prior to the start of the auction, which took place at approximately
13:00, I approached Mr Eugene Schilz, who was to conduct the auction, and
informed him of the aforementioned arrangements. He accepted it and
indicated that it would be no problem.’
[7] It is not in dispu te that the sale of the property was subject to
the terms of the Conditions of Sale which, as I have said, were
read out to those present before the sale. (Cf Clarke v C P Perks &
Son 1965 (3) SA 397 (E ) at 400C.) Clause 16 is quoted above.
The only other clause relevant for pres ent purposes is clause 6. It
reads:
‘The Purchaser shall as soon as possible after the sale and immediately upon
request by the sheriff, sign these conditions.’
[8] It is common c ause that the appellant was not required to
sign the Conditions of Sale. Afte r the property h ad been knocked
down to the appellant, the latter approached Schilz and asked for
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time to decide whic h of the group would be the purchaser. Schilz
agreed. Some while later the same afternoon the appellant, Moosa
and others returned to the s heriff’s office w here the appellant
informed Nicholas that he, the appellant, had nominated Moosa as
the purchaser. Moosa was acceptable to Nicholas who, as I have
said, inserted the words ‘Moosa or nominee’ on the last page of
the Conditions of Sale which was then signed by Moosa as
purchaser.
[9] The respondents’ contention, upheld in the court below, was
that on these facts the appellant was obliged by reason of clause 6
to sign the Conditions of Sale an d that once having done so he
would, in terms of clau se 16, be liable as sur ety and co-principal
debtor to the responde nts for Moosa’s obligations in terms of the
sale.
[10] The starting point in deci ding whether this contention was
correctly upheld or not is to deter mine the true nature of the oral
agreement between the appellant and Schilz prior to the auction.
Counsel for the respondents argued that the agreement was to the
effect that the appella nt would act as a ‘nom inee’ of the group of
friends, family members and colleagu es (including himself) and in
that capacity he would, in turn, be afforded the right to ‘nominate’ a
purchaser. I pause to observe that the order sought in the Notice
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of Motion and granted by the court a quo was an order declaring
the appellant to be a nominee not of the gr oup but of the person to
be nominated. In the alternative, counsel argued that it was agreed
that the appellant would purchase the property as a trustee for the
benefit of the th ird party, ie the purchas e would constitute a
stipulatio alteri . Accordingly, so coun sel contended, the appellant
was either a ‘nominee’ or a ‘trustee’ within the meaning of clause
16 and hence bound by its provisions. In my view this contention
cannot be upheld. It is founded upon a version which is not only
inconsistent with the re spondent’s own case as reflected in the
evidence of Schilz but is in any event not justified on the papers.
[11] It is necessary at the outset to make two observations. The
first is that by reason of the provisions of s 3 of the Alienation of
Land Act 68 of 1981 the sale of the property in the present case
was not required to be in writin g and signed by the parties. The
second is that it is now well-established th at a sale by public
auction without reserve is conclu ded as soon as the bidding
closes. (See eg Schuurman v Davey 1908 TS 664 at 668; De
Villiers v Parys Town Council 1910 OPD 55 at 58; Clarke v C P
Perks & Son, supra, at 400D; Nicolau v Navarone Investments
(Pty) Ltd 1971 (3) SA 883 (W) at 884H .) Against this background,
it seems to me that th e most probable inference arising from the
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appellant’s brief description of what passed between himself and
Schilz prior to the auct ion (quoted in para 6 above), or at the least
one which is wholly consistent with that description, is that the
agreement was simply that if the appellant purchased the property
at the auction he would be perm itted, if he so wished, to cede his
rights and delegate his obligations as purchaser to another in his
stead. Significantly, this coincides with Schilz ’s own understanding
of what was agreed. In this regar d, it will be recalled that he
described the purchaser as ‘N Noormohamed or nominee’ in the
‘Proof of Sale’ which he completed immediately after the auction.
As far as he was concerned there was no question of the appellant
having purchased the property in any capac ity other than in his
ordinary personal capacity. The or dinary meaning of ‘nominee’ is,
of course, simply a person who is nominated or appointed. But it is
a word that is frequently us ed in commerce to mean different
things in the legal s ense depending on the co ntext. In the context
in which it was used by Schilz in his return of service it clearly
means ‘assignee’ or, in other words, a person to whom rights may
be ceded and obligations delegated. (See eg Elkam (Pty) Ltd v
Jackwall (Pty) Ltd and another 1968 (1) SA 554 (W) at 559F-G.)
The practice of af fording such a right to a party to a contract, as
pointed out by Greenberg JA in Hughes v Rademeyer 1947 (3)
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133 (A) at 139, is both commonplace and in accordance with
established legal principle. It follows that applying the rule in
Plascon-Evans Paints Ltd v V an Riebeeck Paints (Pty) Ltd 1984
(3) SA 623 (A) it must be accep ted that what was agreed between
Schilz and the appellant was no more than that in the event of the
latter purchasing the property at the auction he would be entitled, if
he wished, to assign his rights and obligations to someone else.
[12] Had the appellant been requested to sign the Conditions of
Sale immediately after the auction he would have been obliged to
do so by reason of the provisions of clause 6. But without first
doing so, the appellant ceded his rights and delegated his
obligations under the sale to Mo osa who was accepted as the
purchaser in his place by Nichol as acting on behalf of the second
respondent. In the result, the appellant was released from his
obligations under t he sale and the vinculum iuris between the
appellant and the second respondent ceased to exist. He could not
subsequently be required to sign the Conditions of Sale.
[13] Even if the appella nt had signed the Cond itions of Sale the
position, I think, would have been no different. Clause 16 provides
that a ‘purchaser’ signing the Conditions of Sale ‘shall be deemed
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to have bound himself as a surety and co-principal debtor’ in three
situations. The first is where he signs for and on behalf of ‘a
company, a corporation or partnership’, the second where he signs
as a ‘nominee’ and third where he signs as a ‘trustee’. A
purchaser who purchases property in his ordina ry personal
capacity but who is af forded the right to assign his rights and
obligation under the sale falls into none of these categories.
[14] It follows that in my vi ew the appeal must succeed.
[15] The followi ng order is made:
(a) The appeal is upheld with costs.
(b) The order of the court a quo is altered as follows:
(i) Paragraphs 1.1 an d 1.2 are deleted and the
following is subs tituted in their place:
‘The application agains t the first re spondent is
dismissed.’
(ii) Paragraph 2 is delet ed and the following is
substituted in its place:
‘The first and second appl icants are jointly and
severally liable for the first responde nt’s costs.
The second resp ondent is to pay the applicants’
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costs on an unopposed sca le.’
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D G S C O T T
J U D G E O F A P P E A L
CONCUR
:
MTHIYANE JA
BRAND JA
COMRIE JA
PATEL AJA