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[2019] ZASCA 105
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Goldex 16 (Pty) Ltd v Capper NO and Others (543/2018) [2019] ZASCA 105 (4 September 2019)
THE
SUPREME COURT OF APPEAL
OF SOUTH AFRICA
JUDGMENT
Not Reportable
Case
No: 543/2018
In
the matter between:
GOLDEX
16 (PTY) LTD
APPELLANT
And
DENE
CAPPER NO
FIRST
RESPONDENT
DENE
CAPPER SECOND
RESPONDENT
IPROTECT
TRUSTEES (PTY) LTD
THIRD RESPONDENT
Neutral
citation:
Goldex 16 (Pty) Ltd v Capper NO & others
(543/2018)
[2019] ZASCA 105
(4 September 2019)
Coram:
Leach, Saldulker JJA and Tsoka AJA
Heard:
29 August 2019
Delivered:
4 September 2019
Summary:
Invalid written agreement of sale of immovable property –
respondent signing agreement on behalf of a trust without necessary
authority – seller abandoning claim for specific performance
against the trust but seeking to hold respondent liable for
payment
of the purchase price, tendering to transfer the immovable property
to him – claim dismissed.
ORDER
On
appeal from:
Gauteng Local Division
of the High Court, Johannesburg (Van der Nest AJ sitting as court of
first
instance):
The
appeal is dismissed with costs.
JUDGMENT
Leach
JA (Saldulker JA and Tsoka AJA concurring)
[1]
On 24 January 2013, the appellant and an entity described as the Des
Property Trust,
represented at the time by the Mr Dene Capper, cited
as the second respondent in this appeal, signed a written agreement
of sale
in which the trust purported to purchase a real right of
extension reserved in terms of s 25(1) of the Sectional Titles
Act
95 of 1986 (the Act) in respect of a sectional title scheme,
against payment of a purchase price of R1.45 million. It is common
cause that the agreement was obliged to comply with the provisions of
the
Alienation of Land Act 68 of 1981
, that it did not do so, and
that it was therefore void
ab initio
.
[2]
The appellant subsequently instituted action against the trust
represented by both
its trustees, Mr Capper and his co-trustee,
iProtect Trustees (Pty) Ltd, seeking, inter alia, payment of the
purchase price. It
also sued Mr Capper in his personal capacity. At
the commencement of the proceedings in the court a quo, the appellant
abandoned
its claim against the trustees, conceding that the alleged
sale had not complied with the Act and was therefore unenforceable.
However the proceedings continued against Mr Dene Capper in his
personal capacity. At the conclusion of the hearing the claims
against both the trust and Mr Capper were dismissed but, with leave
of the court a quo, the appellant appeals to this court.
[3]
The appellant never sought to appeal against the dismissal of its
claim against the
trust and restricted itself to appealing against
the dismissal of its claim against Mr Capper in his personal
capacity. Thus despite
the papers indicating that the parties to the
appeal are those a quo, in truth the trust plays no part in these
proceedings. Accordingly
I shall from now on refer to Mr Capper
simply as ‘the respondent’.
[4]
As mentioned at the outset, the written agreement upon which the
appellant founded
its claim was purportedly concluded on 24 January
2013, the respondent having signed the agreement on behalf of the
trust. Of material
relevance are the provisions of clause 12.1 of the
agreement which read as follows:
‘
12.
CAPACITY OF
PURCHASER
12.1
Should the purchaser be a company, a close corporation, or an
existing trust, the signatory hereto warrants
and binds himself in
his personal capacity by virtue of his signature hereto –
12.1.1 that he is duly
authorised to enter into this agreement on behalf of the company,
close corporation or trust;
12.1.2 that the company,
close corporation or trust is lawfully entitled to acquire and take
transfer of the property;
12.1.3 that all
conditions have been complied with in order to make this agreement
binding on the company, close corporation or
trust; and
12.1.4 that the company,
close corporation or trust will duly and punctually comply with all
its obligations in terms of this agreement.’
[5]
The fact of the matter is that the respondent was not duly authorised
to enter into
the agreement on behalf of the trust as set out in
12.1.1. Nor for that matter had all conditions been complied with in
order to
make the agreement binding upon the trust as set out in
12.1.3, nor did the trust duly and punctually comply with its
obligations
in terms of clause 12.1.4. This was because there was
another trustee who had not authorised the sale and refused to do so.
For
this reason the agreement was void.
[6]
Despite the invalidity of the sale, the appellant contended that the
respondent, as
the person who signed the agreement on behalf of the
trust, should be compelled to pay the purchase price, and tendered to
transfer
the property to him if he did so. This, counsel for the
appellant argued, was due to the respondent having breached the
warranty
he had given, that such warranty was severable from the sale
itself, and that as it had been breached, the appellant should be put
into the same position it would have been in had the warranty not
been breached. To do this, so it was contended, required the
respondent as guilty party to pay the R1.45 million the trust would
have paid against transfer of the property. The argument is,
then,
that the claim is not one for specific performance of the invalid
sale, but flows from the breach of the warranty when that
sale could
not be enforced.
[7]
The ingenuity of this argument is surpassed only by its lack of
substance. Despite
appellant’s counsel’s contrary
protestations, what the appellant is essentially seeking is specific
performance of
a void and invalid contract against the person who
signed that contract but was not a party to it – this on the
basis that
if he’d had the authority to sign, which he had not,
the property would have been sold to another. This merely had to be
stated to be rejected.
[8]
In an attempt to overcome this problem, the appellant argued that it
was a tacit or
implied condition of the warranties I have set out
above that ‘if the purchaser was not bound by the agreement as
a consequence
of the non-fulfilment of one or more of such
warranties, then the [respondent] would be liable to fulfil or to
ensure the fulfilment
of all and any obligations that would have
rested on the purchaser had it been bound by the agreement’.
[1]
[9]
Appellant’s counsel was unable to point to any authority from
which such a term
was to be implied as a matter of law. He fell back
on an argument that the officious bystander, if asked, would have
immediately
replied that such a clause must have been within the
contemplation of the parties when they contracted. No circumstances
from which
this so-called tacit condition could be implied appear
from the evidence. I understood counsel to base his argument in this
regard
solely upon the terms of clause 12.3 of the sale agreement.
[10]
That clause provided that in the event of clause 12.2 not being
fulfilled, the signatory ‘shall
be deemed to have acted in his
personal capacity and shall be deemed to be the purchaser in terms of
this agreement’. Clause
12.2, however, provided that in the
event of the signatory acting as trustee for a company or close
corporation to be formed (not
a trust such as is here the case) he or
she undertook to procure that the company or close corporation would
be duly incorporated
within three months and would adopt and ratify
the agreement, and would be bound as surety and co-principal debtor
with such company
or close corporation for the due and punctual
performance of all its obligations under the agreement.
[11]
Those provisions related solely to the event of the signatory, at the
time the agreement, purporting
to act on behalf of a company or close
corporation still to be formed. That is not the case here. As the
court a quo correctly
observed in this regard, the argument:
‘
. . . confuses and
conflates the rights against a signatory of the sale agreement under
12.1 with the rights against such signatory
under clauses 12.2 and
12.3. Had the [respondent] signed as trustee for a company or close
corporation to be formed then, in accordance
with 12.3, [he] could
have been “deemed to be the purchaser in terms of this
agreement”. No equivalent right exists
where the signatory
represents an existing trust and there is no basis upon which the
[respondent] can be deemed to be the purchaser
or . . . regarded “as
if [he] was the purchaser of the real right”.’
[12]
There is therefore no room to import the tacit term contended for by
the appellant. At one stage
during his address, counsel for the
appellant conceded that should we find against the appellant on this
issue, the claim had to
fail and abandoned any reliance upon a claim
for damages. In reply, however, he changed his stance, resurrected an
argument that
the claim as pleaded was susceptible to be understood
as a claim for damages, and argued that the measure of those damages
would
be the amount of the purchase price; but that, to avoid
injustice, his client would then tender transfer of the immovable
property.
This, once more, would have been no more than an order for
specific performance of the invalid sale under the ruse of such an
order
being one for damages.
[13]
I am satisfied that theoretically the respondent could be held liable
to the appellant for damages
flowing from his breach of warranty –
see
Claude Neon Lights (SA) Ltd v Daniel
1976 (4) SA 403
(A)
at 408E-409F and the authority there cited. However, no claim for
damages is formulated in the appellant’s claim and,
most
importantly, no evidence relevant to the quantum of damages was led.
In the light of the offer to transfer, one must presume
that the
property is still in the possession of the appellant; but one has no
idea as to whether its value is more or less than
the agreed purchase
price.
[14]
As this court observed in
Katzenellenbogen Ltd v Mullin
1977
(4) SA 855
(A) where a contract of purchase and sale of a marketable
commodity is breached by non-performance, the extent of the innocent
party’s loss is generally established by measuring the
difference between the price sold and the market value – and
that if a claimant seeks to avail itself of a different measure it is
necessary to satisfy the court that the measure it contends
for is
appropriate in all the circumstances. None of this was done in the
present case. Consequently, even if one was to be extremely
charitable by regarding the pleadings as containing a claim for
damages, such damages have not been proved.
[15]
For all these reasons the court a quo correctly dismissed the
appellant’s claim. The only
mistake it made was to conclude
that there was a reasonable prospect of success when it granted leave
to appeal. This appeal was
inevitably doomed to failure.
[16]
The appeal is dismissed with costs.
_____________
L
E Leach
Judge of Appeal
Appearances
For
the Appellant: G
F Porteous
Instructed
by: Jordaan
& Wolberg
Attorneys, Johannesburg
A
P Pretorius & Vennote, Bloemfontein
For
the Respondent: N P G Redman SC
Instructed
by: Le
Roux Vivier
Attorneys, Johannesburg
Lovius
Block, Bloemfontein
[1]
I quote the clause alleged in the appellant’s amended
particulars of claim.