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[1995] ZASCA 113
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Desai NO v Desai NNO and Others (718/93) [1995] ZASCA 113; 1996 (1) SA 141 (SCA); (22 September 1995)
Case no: 718/93
IN THE: SUPREME COURT OF SOUTH AFRICA (APPELLATE
DIVISION)
In the matter between:
JAYANTILAL VARJIVANDAS DESAI
NO
Appellant
and
RAJENDRA DESAI, NAGIN
DESAI AND
RAMOLA DESAI N N O
First Respondent
RAJENDRA DESAI AND
RAMOLA DESAI N N O
Second Respondent
KANTILAL DESAI
Third Respondent
RAMESH PURSHOTTAMDAS DESAI
Fourth Respondent
PRAVIN PURSHOTTAMDAS DESAI
Fifth Respondent
MANILAL DESAI
Sixth Respondent
Coram:
CORBETT CJ, JOUBERT, F H GROSSKOPF
HARMS JJA et VAN COLLER AJA
Heard:
25 August 1995
Delivered:
22 September 1995
2
JUDGMENT F H GROSSKOPF JA:
The first five respondents
were the applicants in an application launched in the Durban and Coast Local
Division. According to the
notice of motion they sought an order directing the
appellant (then first respondent) to take all steps and sign all documents
necessary
to effect transfer to them and the sixth respondent (then second
respondent) of a one-seventh share in each of the following two
immovable
properties:
(a) Sub 424 of lot 49, no 862 situate in the County of Victoria, Province of
Natal, in extent 7,1566 hectares ("sub 424 of lot 49");
(b) Remainder of lot 661 Tongaat, situate in the Township of Tongaat and in
the North Coast Regional Water Services Area, Administrative
District of Natal,
in extent 6,8248 hectares ("remainder of lot
661").
The one-seventh share
in both these properties were
3
registered in the name of the late Varjivandas Purshottamdas Desai ("the
deceased") who died on 12 June 1979. The appellant is the
deceased's son and the
executor in his estate. The six respondents are either brothers of the deceased
or executors of those brothers
who have passed away. Although some of the
respondents are now indeed executors, I shall also refer to the six brothers as
respondents.
Until 1978 the deceased and the six respondents carried
on business and owned certain properties as partners in two partnerships called
Desai Brothers and Desai Investment Company. These partnerships were dissolved
in 1978, and on 23 October 1978 all seven partners
signed an agreement ("the
agreement") to give effect to the dissolution, to settle certain pending court
actions and to resolve other
disputes between the deceased on the one hand and
the six respondents on the other. The agreement was couched in the form of an
"offer
to purchase" addressed by the six respondents to the deceased, who
accepted the offer.
4
Clause 13(d) of the agreement ("clause 13(d)") reads
as
follows:
"Upon discharge of the winding up order in respect of the partnerships, you
will:
(a)
(b)
(c)
(d) Procure
registration of transfer of the cessation of your interests in the partnerships'
immovable properties, such registration
to be effected at our expense by our
conveyancers."
The outcome of this case depends largely on the interpretation and effect
of clause 13(d).
During October 1979, and pursuant to the provisions of clause 13(d), the
appellant in his capacity as executor signed powers of attorney
to effect the
registration of transfer of the deceased's one-seventh share in the two
properties. These powers of attorney were furnished
to the conveyancers
nominated by the respondents in terms of clause 13(d). It appears to be common
cause that the appellant at the
same time also
5
provided the conveyancers with all the other documentation which they
required for registration of transfer of the two properties.
Despite being duly
authorized by the appellant to pass transfer of the two properties, the
conveyancers failed to proceed in terms
of the authorization.
On 24
July 1984, and after the death of two of the deceased's brothers, the appellant
signed a fresh power of attorney authorizing
the passing of transfer of the
deceased's one-seventh share in the remainder of lot 661. The papers do not
disclose whether the appellant
also signed a fresh power of attorney regarding
the deceased's share in sub 424 of lot 49. Thereafter many years went by without
transfer being passed. The appellant eventually wrote to the respondents'
attorneys on 20 November 1990 claiming that his obligation
to pass transfer "has
long since become prescribed". He further informed the respondents that he was
cancelling and withdrawing the
powers of attorney authorizing such transfer.
This gave rise to the application in April 1991.
6
Hugo J dismissed the application on two bases in the court of first
instance. First, on the ground that the agreement was one of sale,
and insofar
as it purported to be a "contract of sale of land or any interest in land", it
did not comply with the provisions of
s 1(1) of the Formalities in respect of
Contracts of Sale of Land Act 71 of 1969, which was the applicable statutory
enactment in
force at the relevant time. The learned judge held that the
description of the immovable property referred to in clause 13(d) was
insufficient to identify the property, and that the contract of sale in respect
thereof was accordingly of no force or effect in
terms of s 1(1). Secondly, the
application was dismissed on the ground that the appellant's obligation to pass
transfer was a "debt"
which had been extinguished by prescription.
The first five respondents thereupon appealed with the leave of the court
of first instance to the full bench of the Natal Provincial
Division. The
judgment of the full bench has been reported sub nom
Desai and Others v Desai
and Another
1993(3) SA 874(N). The full
7
terms of the agreement have been set out in the reported judgment and I
do not propose to do so once again. The full bench came to
the conclusion that
clause 13(d), read with certain other provisions of the agreement, was never
intended to be a contract of sale
of land or any interest in land within the
meaning of s 1(1) of Act 71 of 1969. In view of that finding the question
whether there
was an adequate description of the immovable property in clause
13(d) became irrelevant.
With regard to the question of prescription the full bench concluded at
882B that the appellant's only obligation in terms of clause
13(d) was "to
deliver to the purchasers the documentation required to effect transfer in terms
of the relevant requirements of the
Deeds Registries Act and the regulations
thereunder." Following upon that conclusion the full bench held at 882J-883A
that once delivery
of the documentation had been accomplished, the appellant's
obligation was duly performed and therefore discharged. In the result
there
remained no debt which could be extinguished by prescription. However, when
the
8
appellant withdrew the powers of attorney in November 1990 it had to be
implied that a new obligation to deliver the requisite documentation
arose
(883D-G). This new obligation had not yet prescribed when the notice of motion
in the court of first instance was served on
the appellant in April 1991. A
similar argument was addressed to us on behalf of the respondents. I shall deal
with it more fully
hereunder.
In the result the full bench upheld the appeal and granted the relief
sought in the notice of motion. The appellant appeals to this
court against the
judgment and order of the full bench with leave of the Chief Justice. The
appellant appeared in person, while the
respondents were represented by
counsel.
For the reasons which follow I am of the opinion that the appellant's
"debt", i.e. the obligation to procure registration of transfer
in terms of
clause 13(d), was indeed extinguished by prescription. Seeing that this finding
is decisive of the case, it is unnecessary
to consider the other aspects raised
in argument, including the submissions relating to the
9
true nature of the agreement and the applicability of s 1(1) of Act 71 of
1969.
S 10(1)
of the
Prescription Act 68 of 1969
("the
Act") lays
down that a "debt" shall be extinguished after the lapse of the relevant
prescriptive period, which in the instant case was three
years (see
s 11(d)).
The term "debt" is not defined in the
Act, but
in the context of
s 10(1)
it has
a wide and general meaning, and includes an obligation to do something or
refrain from doing something. (See
Electricity Supp
ly
Commission v
Stewarts and Lloyds of SA (Pty) Ltd
1981(3) SA 340(A) at 344F-G;
Oertel
en Andere NNO v Direkteur van Plaaslike Bestuur en Andere
1983(1) SA 354(A)
at 370B.) It follows that the undertaking in clause 13(d) to procure
registration of transfer was a "debt" as envisaged
in
s 10(1).
One should also
bear in mind that the
Act now provides
for a so-called strong prescriptive
regime whereby the prescribed debt is in fact extinguished, as opposed to the
so-called weak
prescription under the old 1943
Prescription Act which
merely
provided
10
for the corresponding right to become unenforceable, while the debt
itself
was only extinguished after 30 years. (See
Oertel's
case,
supra
, at
366F-H;
Cape Town Municipality &
Another v Allianz Insurance Co
LM 1990(1) SA 311(C) at 329F-G.)
S 12(1)
of the
Act provides
that "prescription
shall
commence to run as soon as the debt is due". This court held in
Deloitte
Haskins & Sells Consultants (Pty) Ltd v Bowthorpe
Hellerman
Deutsch (Pty) Ltd
1991(1) SA 525(A) at 532H that for prescription
to
commence running -
"there has to be a debt immediately claimable by the creditor or, stated
in another way, that there has to be a debt in respect of
which the debtor is
under an obligation to perform immediately."
(See also
Benson and Another v Walters and Others
1984(1) SA 73(A)
at 82B-E.)
The appellant, as debtor in terms of clause 13 of the agreement, was not
obliged to perform immediately, but only "upon
11
discharge of the winding up order in respect of the partnerships". The
debt was therefore not immediately due. It does not appear
from the papers
exactly when the winding up order was discharged, but it is common cause that
this requirement was in fact satisfied
while the deceased was still alive. It
follows that the debt became due, and prescription commenced running by not
later than the
date of death of the deceased, which was 12 June 1979.
The subsequent furnishing of the two powers of attorney by the appellant
in October 1979 can be regarded as a "tacit acknowledgment
of liability" on his
part whereby the running of prescription was interrupted in accordance with the
provisions of
s 14(1)
of the
Act. However
, prescription commenced to run afresh
in terms of
s 14(2)
from the day on which the interruption took place. There is
no evidence of any further interruptions after October 1979. It is true
that the
appellant signed a fresh power of attorney on 24 July 1984 in respect of at
least one of the two properties, but by that
time the three year
12
prescriptive period had already lapsed and the debt had accordingly been
extinguished by prescription. There was in any event no further
acknowledgment
of liability by the appellant which could have interrupted the running of
prescription after 24 July 1984. When the
respondents eventually commenced legal
proceedings in April 1991 the debt had clearly been extinguished by
prescription. Those legal
proceedings could then no longer bring about any
judicial interruption of prescription in terms of
s 15
of the
Act.
>
The argument advanced by the respondents in support of their contention
that prescription did not extinguish the debt, can be summarized
as follows. The
only obligation owed by the appellant in terms of clause 13(d) was to provide
the conveyancers, nominated by the
respondents, with all the necessary
documentation required to effect transfer of the relevant immovable property
into the names of
the respondents. Once that had been done the appellant's debt
was discharged by performance and there no longer remained any debt
due
13
by the appellant to the respondents under clause 13(d). In the result
prescription could not even begin to run in terms of
s 12(1)
of the
Act. When
the appellant subsequently withdrew or cancelled the powers of attorney he
committed a breach of his contractual obligation under
clause 13(d), thereby
entitling the respondents to claim specific performance, which they did by means
of their application.
I have difficulty in understanding how the appellant's contractual
obligation could suddenly have revived, by way of implied term
or otherwise,
many years after the alleged performance thereof. My main problem with the
respondents' argument, however, is their
interpretation of clause 13(d), and
more particularly their construction of the nature of the debt owed in terms
thereof. Clause
13(d) may not have been very happily worded, but it is
reasonably clear in my judgment that it placed an obligation on the appellant
to
"procure registration of transfer" of certain immovable properties. The
obligation was to pass transfer and not merely to sign
and deliver documents.
Although clause
14
13(d) provided that registration of transfer had to be effected at
the
respondents' expense by their conveyancers, the appellant was
the only
person who could authorize the passing of
transfer.
S 20
of the
Deeds Registries Act 47 of 1937
reads
as
follows:
"Deeds of transfer .... shall be executed in the presence of the registrar
by the owner of the land described therein, or by a conveyancer
authorized by
power of attorney to act on behalf of the owner, and shall be attested by the
registrar."
An executor in the estate of a
deceased owner falls within the definition of "owner" in
s 102(1)
of Act 47 of
1937, while "land" includes "a share in land" in terms of that section. The
appellant as "owner of the land" was the
only person therefore who could execute
the deeds of transfer in the presence of the registrar. He could act in person
or through
a conveyancer authorized by power of attorney to act on his behalf.
Innes
15
CJ held as follows in
Tames v Liquidators of the
Amsterdam
Township Co
1903 TS 653
at 656:
"Both by the common law and by statute the seller is bound to pass
transfer; as a matter of fact he is the only person who can do
so. If we look at
the manner in which transfer was originally passed in Holland, we find that both
parties used to appear in person
before the Scheepenen; at a later period, and
as a matter of convenience, conveyancers were employed to do the work. But I
take it
that even now if a seller wished to pass his own transfer, and had
sufficient legal knowledge, he could go to the Registrar and put
the deed
through. It is still the seller who gives transfer, even though he has executed
a power of attorney and appointed an agent
to act for him."
(See also
Blundell v McCawley
1948(4) SA 473(W) at 478;
York
& Co (Pvt) Ltd v Tones NO (1)
1962(1) SA 65 (SR) at 66G.)
A seller and a purchaser of immovable property may of course agree, as
was done by the parties in the present case, that the
16
buyer will nominate the conveyancer. That does not mean that in passing
transfer such conveyancer is now acting on behalf of the buyer,
and no longer as
the representative of the seller who signed the power of attorney authorizing
him to pass transfer. If registration
of transfer is not duly effected the buyer
must demand performance from the seller. The latter, and not the conveyancer, is
legally
bound to pass transfer. The same principles would obviously apply in the
present case, even on the supposition that the agreement
was not one of purchase
and sale.
One may ask what possible defence the appellant in the
present case could have raised if the respondents had timeously taken legal
action against him to procure registration of transfer. In my judgment it would
certainly not have availed the appellant to have
pleaded that once the required
documentation had been handed to the
17
conveyancers he had fully performed his obligation in terms of clause
13(d). The conclusion that the appellant's contractual obligation
could not have
been discharged simply by the delivery of the necessary documentation, is borne
out by the fact that a subsequent
revocation of the powers of attorney (which
the respondents conceded could be done before they were acted upon) would have
amounted
to a breach of the appellant's contractual obligation, had it not been
for the running of prescription. Such a breach of course presupposes
the
existence of a contractual obligation which has not yet been
discharged.
In my judgment the respondents' submissions cannot, therefore, be
sustained, and the appellant's contention that his debt in terms
of clause 13(d)
has been extinguished by prescription should be
18
upheld.
There remains the appellant's application for
condonation of the late filing of the record. The appellant was required to
furnish
security by the order granting him leave to appeal to this court. His
failure to provide security timeously caused the late filing
of the record. The
respondents filed an affidavit opposing the granting of condonation, but when
the appellant's application for
condonation was heard, counsel appearing for the
respondents no longer opposed the application, but simply left it for the court
to decide. The appellant's failure to comply with the time limits did not in my
opinion constitute a major infraction of the rules,
and having regard to the
finding on the merits 1 am of the view that condonation should be granted. But
seeing that the opposition
of the respondents was not unreasonable in the
circumstances the
19
appellant should bear all the costs of the application for condonation. The
following order is made:
1. The appellant's application for condonation is granted, but the appellant
is ordered to pay all the costs consequent upon such
application.
2.
The
appeal is allowed with costs.
3. The order of the full bench of the Natal Provincial Division is set aside
and replaced with the following order:
"The appeal is
dismissed with costs".
F H GROSSKOPF
Judge of Appeal
Corbett CJ
Joubert JA Harms JA Van Coller AJA Concur