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[2013] ZAWCHC 84
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Osborne and Another v West Dunes Properties 167 (Edms) Bpk and Others (21985/12) [2013] ZAWCHC 84; 2013 (6) SA 105 (WCC) (6 June 2013)
REPORTABLE
IN THE HIGH COURT OF
SOUTH AFRICA
WESTERN CAPE HIGH
COURT, CAPE TOWN
Case No 21985/12
In the matter between:
PIETER JACOBUS OSBORNE
.......................................................................
First
plaintiff
P J OSBORNE (EDMS) BPK
.....................................................................
Second
plaintiff
en
WEST DUNES PROPERTIES
176 (EDMS) BEPERK
................................
First
defendant
KLEINEVALLEIJ
RESTAURANT (EDMS) BEPERK
............................
Second
defendant
KLEINEVALLEIJ WEDDING
AND CONFERENCE
ESTATE (EDMS) BEPERK
........................................................................
Third
defendant
LOUIS PIETER LE ROUX
.......................................................................
Fourth
defendant
___________________________________________________________________
JUDGMENT DELIVERED ON
6 JUNE 2013
___________________________________________________________________
BLIGNAULT J
:
Introduction
[1] This judgment deals
with exceptions to plaintiffs’ particulars of claim on the
grounds that they are vague and embarrassing
alternatively lack
averments which are necessary to sustain the action.
Plaintiff’s
particulars of claim
[2] The action was
instituted by two plaintiffs. First plaintiff is described as Pieter
Jacobus Osborne (‘Osborne’),
an adult male residing at 42
Harpuisbos Street, Langebaan, Western Cape Province. Second plaintiff
is described as P J Osborne
(Edms) Beperk, a registered company with
registration no 2012/036410/07.
[3] Plaintiffs sued four
defendants. First defendant is described as West Dunes Properties 176
(Edms) Beperk, a company with registration
no 2004/02275/07. Second
defendant is Kleinevalleij Restaurant (Edms) Beperk, a company with
registration no 2009/023374/07. Third
defendantis Kleinevalleij
Wedding and Conference Estate (Edms) Beperk, a company with
registration no 2007/010310/078. Fourth defendant
isLouis Pieter le
Roux, a businessman on the farm Krommerivier, Wellington, Western
Cape Province (‘le Roux’).
[4] Plaintiffs’
particulars of claim are based on a written agreement of salesigned
on 4 July 2012 by Osborne and le Roux.
A copy is attached to the
particulars of claim.
[5] In the agreement of
sale the seller is described as first defendant, duly represented by
le Roux in his capacity as director
and duly authorised thereto. The
description reads as follows:
‘
WEST
DUNES PROPERTIES 176 (PTY) LTD
Registrasienommer:
2004/022755/07
De Kromme Rivier
Plaas, Wellington
Kontaknommer: 083 232
8519
Hierin wettiglik
verteenwoordig deur Louis Pieter le Roux in sy hoedanigheid as
Direkteur en behoorlik daartoe gemagtig.’
[6] The purchaser is
described as P J Osborne (Pty) Ltd, duly represented by Osborne in
his capacity as director and duly authorised
thereto. It reads as
follows:
‘
P
J OSBORNE (PTY) LTD
Registrasienommer:
2012/036410/07
Harpuisbos Straat 42,
Langebaan
Kontaknommer: 082 565
5515
Hierin wettiglik
verteenwoordig deur Pieter Jacobus Osborne in sy hoedanigheid as
Direkteur en behoorlik daartoe gemagtig.’
[7] In plaintiffs’
particulars of claim they seek rectification of the agreement of sale
by deleting the desription of the
purchaser and replacing it with a
description to the following effect:The purchaser is represented by
Osborne. A registered shelf
company (‘the shelf company’)
would be purchased for this purpose after which its name would be
duly changed and inserted
in the agreement of sale next to the
initials of le Roux and Osborne. The description of the purchaser as
amended would read as
follows:
‘
Die
Koper word verteenwoordig deur Pieter Jacobus Osborne. ’n
Geregistreerde rakmaatskappy sal vir die doel van die koop as
Koper
aangekoop waarna ’n gepaste beskikbare naamsverandering en
reservering tot die Registrateur van Maatskappye gerig sal
word.
Sodanige maatskappy se naam wat goedgekeur word deur die Registrateur
van Maatskappye, sal daarna op hierdie kontrak aangebring
word
teenoor die parawe van Le Roux en Osborne.’
[8] The property sold is
described in the particulars of claim as Farm 1581 Paarl, in the
Drakenstein Municipality on which second
defendant conducted a
restaurant business and third defendant a separate wedding and
conference facility.
[9] The purchase price of
the property is R17 500 000,00. In terms of clause 4.6 of
the agreement of sale an amount of
R2 500 000,00 was
payable at the time of the signing of the agreement.
[10] Plaintiffs allege
that the amount of R2 500 000,00 was paid on 9 July 2012 by
Osborne to third defendant on the instructions
of Le Roux.
[11] In para 8 of the
particulars of claim plaintiffs allege that during the negotiations
preceding and at the conclusion of the
agreement of salele Roux, on
behalf of the defendants, fraudulently failed to disclose certain
material facts which had a bearing
on the property sold. The facts
are set out in seven sub-paras of para 8.
[12] Plaintiffs allege
that they acquired knowledge of le Roux’s fraudulent conduct on
28 August 2012 and shortly thereafter.
On 31 August 2012 plaintiffs’
attorney,purporting to act on behalf of P J Osborne (Edms) Beperk,
cancelled the agreement
of sale by way of a lettersent to first
defendant.
[13] In para 11.1 of the
particulars of claimplaintiffs allege that by reason of le Roux’s
conduct on behalf of the defendants,
they are jointly and severally
liable to plaintiffs in the amount of R2,5 million plus interest
thereon at the rate of 15,5% per
annum from 9 July 2012 to date of
payment.
[14] In para 11.2 of the
particulars of claim plaintiffs also allege that third defendant was
enriched at the expense of Osborne
in the amount of R2,5 million
sine
causa
.
[15] Plaintiffs claim the
amounts set out in para [13] above,from defendants jointly and
severally.
[16] Defendants gave
notice toplaintiffs in terms of Rule 22.1 in which they raised
certain objections to plaintiffs’ particulars
of claim and
afforded them the opportunity to removethe causes of the objections.
Plaintiffs did not amend their particulars of
claim pursuant to the
notice and defendants then noted the exceptions to them.
[17] Defendants
originally noted six separate exceptions. At the hearing of the
matter, their advocate abandoned exceptions nos
3 and 5. I will refer
to the remaining exceptions by their numbers, namely nos 1, 2, 4 and
6.
[18] The four exceptions
may be summarised as follows:
No 1: The first exception
is that plaintiffs rely on a fraudulent misrepresentation by
defendants but they do not allege any facts
from which a duty of care
to plaintiffs can be inferred.
No 2: Defendants’
second exception is that plaintiffs’ particulars of claim are
based on an agreement of sale but second,
third and fourth defendants
are not parties to that agreement. There is no basis, it is
submitted, on which second, third and fourth
defendants can be
liable, jointly and severally, to plaintiffs.
No 4: The fourth
exception is that plaintiffs do not allege on what basis they are
entitled to reclaim the deposit of R2,5 million.
If it is
restitution, they should have tendered to return the benefits that
they received in terms of the agreement, which they
did not do. If
the claim is for contractual damages they should have pleaded that
the damage was in the contemplation of the parties
which they did not
do. If delictual damages plaintiffs should have described it as such
in the particulars of claim.
No 6: The sixth exception
is that para 16.2 of plaintiffs’ particulars of claim purports
to be an enrichment claim in the
form of the
conditio sine causa
.
Plaintiffs did not however make the necessary allegations to support
such claim.
[19] At the commencement
of the hearing counsel for plaintiff made it clear that
plaintiffs’claim is founded on delict. I
propose to consider
the particulars of claim on that basis.Before I deal with the
individual exceptions it is necessary to point
out that there
arecertainbasic defects in plaintiffs’ particulars of claim.
Although not directly subject to defendants’
exceptions I
intend to deal with the defects first as they affect the validity of
plaintiffs’ particulars of claim as a whole.
For purposes of
this discussion I propose to use word
formal
when I refer to
the agreement of sale as it was recorded in writing and to the
partiesnamed therein. When using the term
true
I shall refer
to the agreement ofsale as it is sought to be rectified by plaintiffs
and to the partiesnamed therein.
[20]
The first defect is that le Roux (first plaintiff)
has no
locus standi
in
these proceedings. The second is that the formal agreement of saleis
void for vagueness as the alleged true purchaser (the shelf
company)
has not been identified. The third defect is that the agreement of
sale is invalid for non-compliance with the provisions
of
section
2(1)
of the
Alienation of Land Act 68 of 1981
as the true purchaser
has not been identified in the formal agreement of sale. The fourth
defect is that both the true and formal
agreements of sale are
invalid for non-compliance with the same statutory
provision
as neither was signed by the true purchaser.
The
locus
standi
of Osborne (first plaintiff)
[21]
Locus standi
is
an abbreviation of the Latin phrase
locus standi in judicio
.
In English the term is standing. In the present context it refers to
a claimant’s right to claim the relief which he or
she seeks.
[22] Osborne personally
is not the formal purchaser of the property in terms of the formal
agreementof sale, nor is he the true
purchaser described in clause
2.1 of the true agreement. In both instances he is alleged to have
acted as the representative of
the purchaser.
It is
trite law, however, that a personwho concludes an agreement as a
representative of another person (the principal),does not
in his
personal capacity acquire any rights or incurany liabilities in terms
of the agreement. The rights and liabilties arising
from the
agreement enure to the principal and not to the representative. See
LAWSA
Vol
1 2nd edition para176.
[23] In para 7 of
plaintiffs’ particulars of claim it is alleged that the deposit
of R2,5 million was paid by Osborne to third
defendant on the
instructions of le Roux. It might be suggested that this payment
created a right or rights for Osborne.
[24] I my view it did
not. It appears from the provisions of the agreement of sale that
Osborne effected this payment as representative
of the seller (second
plaintiff) who became liable do soin terms of the agreement.Payment
by a representative on behalf of his
principal is regarded in law as
payment by the principal. See the following passage in Pothier
Obligations 111.1.1, quoted by Corbett
AJA in
Froman v Robertson
1971 (1) SA 115
(A) at 124GH:
"It is not
essential to the validity of the payment that it be made by the
debtor, or any person authorised by him; it may
be made by any person
without such authority, or even in opposition to his orders, provided
it is made in his name, and in his
discharge, and the property is
effectually transferred; it is a valid payment, it induces the
extinction of the obligation, and
the debtor is discharged even
against his will."
[25] One of essential
requirements for delictual liabililty is wrongfulness, ie the
infringement of a legal interest. A second is
damage. Plaintiffs do
not allege, expressly or impliedly, that any legal interest of
Osborne has been infringed, nor that he suffered
any damage.
[26] I am accordingly of
the view that plaintiffs failed to make the necessary averments to
sustain the
locus standi
of Osborne.
The identity of the
purchaser in terms of the common law
[27] It is a trite common
law principle that the material terms of an agreement must be
identified with sufficient certainty. Failing
certainty the agreement
is void for vagueness. See, for example,
Genac Properties Jhb (Pty)
Ltd v NBC Administrators CC (previously NBC Administrators (Pty) Ltd)
[1991] ZASCA 188
;
1992 (1) SA 566
(A) at 576 IJ:
‘
It
is a general principle of the law of contract that contractual
obligations must be defined or ascertainable, not vague and
uncertain.
Cf Westinghouse Brake & Equipment (Pty) Ltd v Bilger
Engineering (Pty) Ltd
1986 (2) SA 555
(A) at 574D-E.’
[28] It has often been
said that the identity of the parties is one of the essential terms
of an agreement. See
Levin v Dieprok Properties (Pty) Ltd
1975
(2) SA 397
(A) at 408A:
‘
....where
the written offer relates to a sale of land to which the provisions
of [the similarly worded predecessors of
section 2(1)]
apply, the
requirement that the essential terms of the sale, including the
identity of the parties, must appear ex facie the writing
may also
limit the admissible evidence.’
[29] In the present case
theformal purchaseris adequately identified in the formal agreement
of sale. It is second plaintiff, a
company with a particular
name.This does not, however, assist plaintiffs. The formal purchaser
is, on plaintiffs’ own version,not
the true purchaser of the
land.The true purchaser is the shelf company. Its description is,
however, so vague that it cannot be
identified at all.I say so for
the following reasons. The concept of a shelf company is not defined
or described. The description
furthermore does not identify the shelf
company by name or by registration number or in any other way. It
provides that the shelf
company would be purchased at some stage in
the future but itdoes not identify the proposed purchaser or the
proposed seller thereof.
[30] In terms of common
law principles the alleged true agreement of sale is therefore void
for vagueness.
Section 2(1)
of the
Alienation of Land Act
[31
] Even if I assume
that the identity of the true purchaser is capable of being
determinedwith sufficient certainty in terms of common
law
principles, plaintiffs face two difficulties which flow from the
application of the provisions of section 2(1) of the Alienation
of
Land Act 68 of 1981 (‘section 2(1) of Act 68 of 1981’).
The section reads, insofar relevant, as follows:
'No alienation of land
after the commencement of this section shall... ... ... be of any
force or effect unless it is contained
in a deed of alienation signed
by the parties thereto or by their agents acting on their written
authority.'
The identity of the
purchaser
[32] For presentpurposes
the phrase ‘
signed by the parties thereto’
is
relevant. Although the identity of theparties to an agreement is
often desribed as an essential term of an agreement, as stated
above,
its real nature differs to some extent from that of an ordinary term
of the agreement. The ‘
parties’
arethe persons that
create the legal bond (
vinculum iuris)
between them which is
the foundation of the agreement. It is based on the parties’
common intention (or, where applicable,
the apparent intention of one
of them) regarding the contents of the agreement. For this reason the
identity of the parties has
on occasionbeen described as an
‘
essential part’
rather than an essential term of
an agreement. See the following statement of Caney J in
Godfrey v
Paruk
1965 (2) SA 738
(D) at739 G-H:
‘
In
Fram v Rimer,
1935 W.L.D. 5
at p. 8, BARRY, J., said that the
identity of the parties 'is as much an essential term of the contract
as the subject matter',
and this has been repeated more than once,
but with the greatest respect to those who have used the expression
'essential term'
it appears to me more appropriate to say that the
identity of the parties is an 'essential part' of the contract, as
HORWITZ, A.J.,
said in Rademeyer v Hughes,
1946 OPD 430
at p. 434;
they are the parties between whom the terms of the contract have been
agreed.’
[33] The distinction
between the description of the identity of the parties as an
essential part of an agreement, as opposed to
an essential term, is
normally not of great moment. In the application of section 2(1) of
Act 68 of 1981 to a claim for the rectification
of an agreement it
is, however,useful to focus on this distinction. The reason for this
is that the statute itself uses the term
‘
parties'
as
opposed to the term ‘
alienation’.
The latter,I
would suggest, encompasses the ordinary terms of the agreement.
[34] It is trite law that
the written record of an agreement may be rectified if it does not
accurately reflect the parties’
real intention. It is not,
however, competent to have it rectified if it is invalid, unless the
formal agreement is valid e
x facie
the document. See
Magwaza
v Heenan
1979 (2) SA 1019
(A) and
Intercontinental Exports
(Pty) Ltd v Fowles
1999 (2) SA 1045
(SCA) paras [9] and [10].It
stands to reason, further, that an agreement cannot be rectified if
that would result in an invalid
agreement.
[35] Section 2(1) of Act
68 of 1981 requires that the agreement be signed by ‘
the
parties thereto’.
Upon a proper interpretation of this
provision it obviously refers to the true parties to the agreement.
It would be absurd to construe
it as relating to the formal parties
because there is no legal bond between them. It is therefore
essential that the true parties
be identified in the written
agreement. In the present case the formal agreement of sale purports
to record an agreement between
second plaintiff as purchaser and
first defendant as seller.According to the allegations supporting
plaintiffs’claim for
rectification, however, no such agreement
exists. The legal bond, in terms of plaintiffs’ version, exists
between first defendant
and the shelf company. The formal agreement
thus fails to identifythe purchaser in terms of the true agreement of
sale.
[36] I
agree in this regard with the views expressed by P M Nienaberin an
article ‘
Oor
die beskrywing van partye in ’n koopkontrak van grond’
in
the
Huldigingsbundel
Prof Daniel Pont
(1970)
250 at 258.I quote the relevant passage hereunder. It may
besummarised as follows: In terms of section 2(1) of Act 68 of
1986
an alienation of land must be signed
‘
by
the parties thereto’.
On
a proper interpretation of this phrase it necessarilyrelates to the
parties to the true agreement and not to the parties to the
formal
document. As the formal document does not identify the true purchaser
it is invalid and therefore not capable of rectification.
The
passage reads as follows:
‘
...die
koopkontrak moet geteken word deur die partye daarby en gevolglik
moet die identiteit en hoedanigheid van die partye "daarby"
blyk. "Daarby" slaan kennelik op die werklike koopkontrak
en nie maar net op die formele dokument wat die werklike koopkontrak
dalk nie korrek weergee nie. In die voorbeelde genoem is die partye
bes moontlik partye tot die dokument maar hulle is nie partye
(in die
tegniese sin hierbo genoem) tot die werklike koopkontrak nie. En
omdat die identiteit van die ware partye nie in die kontrak
self
vervat is nie, is die kontrak formeel nietig.’
[37] My conclusion is
therefore that the formal agreement of sale does not comply with the
requirement of section 2(1) of Act 68
of 1981in that it does not
identify the parties to the agreeement. The legal bond which the
formal agreement purports to record,
in fact does not exist. For that
reason it is not capable of being rectified.
The parties’
signatures
[38] Similar reasoning
applies to the statutory requirement that the agreement must be
‘
signed by’
the parties. Upon a proper
interpretation of these words they refer to the signatures of the
true parties to the agreement. It would
be absurd to interpret them
as referring to the signatures of persons that do not enter into the
true agreement.In the present
case the absence of the signature of
the true purchaser (theshelf company) the formal agreement is invalid
and therefore incapable
of being rectified. The true agreement, I may
add, was also not signed by the true purchaser and is therefore
equally invalid.
[39] A similar view is
found in Wulfsohn
Formalities in Respect of Contracts of Sale of
Land Act
(1980)223. He was dealing with certain issues concerning
the rectification of agreements for the sale of land and said that
the
rectification in respect of a party to such an agreement
presented a special class of problem because the signatures of the
parties
are required. The author expressed one of his views as
follows:
‘
Thus
B may sign as the purchaser. But the prior oral agreement may have
been... ... that A and not B be the purchaser... ... A should
thus
have signed the writing. The Court will not order A to sign, and A
will not be the purchaser, due to the absence of his signature.’
[40] My conclusion is
therefore that the formal agreement of sale does not comply with the
requirements of section 2(1) of Act 68
of 1981 as it was not signed
by the parties. This is a secondreason why it is not capable of being
rectified.
Conclusion
[41] It follows that
plaintiffs’ claim for the rectification of the agreement of
sale lacks averments to sustain it. It falls
to be set aside.
[42]
In the light of my conclusion that Osborne has no
locus
standi
in these proceedings and that
the formal agreement of sale is not capable of being rectified, it
wouldbe a futile exercise to attempt
to deal with defendants’
individual exceptions.
The exceptions were taken against
elements of the particulars of claim which were formulated on the
supposition that there is a
valid agreement in existence and that
Osborne has
locus standi.
I have concluded that both
assumptions are unfounded.
[43] In the result, I
grant the following orders:
(1) Plaintiffs’
particulars of claim are set aside.
(2) First plaintiff
(Osborne) and second plaintiff (P J Osborne (Edms) Beperk) are
ordered, jointly and severally, to pay defendants’
costs.
(3) Leave is granted to
plaintiffs to apply for the amendment of their particulars of claim
in terms of the provisions of the rules
of court.
________________________
A P BLIGNAULT