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[2013] ZAWCHC 113
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Major v Fick NO (5620/13) [2013] ZAWCHC 113 (20 August 2013)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE HIGH COURT, CAPE
TOWN)
Case
No
5620
/13
In the matter between:
PETER MICHAEL MAJOR
...............................................................
Applicant
and
CHRISTIAAN LUDOLPH NELSON FICK
N.O.
.........................
Respondent
(In
his capacity as Executor of the deceased Estate of
Georg Erich
Bossard)
Court:
Griesel J
Heard:
13 August 2013
Delivered:
20 August 2013
____________________________________________________________________
JUDGMENT
____________________________________________________________________
Griesel J:
The
applicant seeks specific performance of a purchase agreement
concerning a piece of land in Tamboerskloof that he purchased
from
the late Mr Georg Erich Bossard (‘the deceased’) on 1
December 2010. The deceased passed away on 25 January
2013 and is
represented herein by the respondent in his capacity as executor of
the estate. The respondent opposes the relief
sought, contending
that the purchase agreement, together with the addendum
thereto, had lapsed as a result of the non-fulfilment
of a
suspensive condition therein.
Factual background
The
deceased was the owner of a large, undivided tract of land in
Tamboerskloof, known as the Remainder Erf 364, Tamboerskloof
(‘the
parent erf’), situated on the lower slopes of Lion’s
Head. In May 1995, the applicant purchased a neighbouring
property
which is situated directly below the deceased’s property.
Shortly after moving in, the applicant and the deceased
became
friends and remained so until the death of the deceased.
At
some stage, the applicant became interested in buying from the
deceased a portion of the parent erf which constituted the
deceased’s front yard. They entered into negotiations and
eventually concluded the deed of sale in question, which was
prepared by the deceased’s attorney. Because the plot was an
undivided part of the parent erf, it was accordingly necessary
to procure municipal approval of the subdivision of the parent
erf under s 24, read with s 25, of the Land Use
Planning
Ordinance 15 of 1985 (‘LUPO’); and, thereupon, to
procure the creation of the plot as a new erf by
the approval of the
Surveyor-General under s 26 of LUPO of an appropriate
sub-divisional diagram. The need for these approvals
was embodied in
a suspensive condition, contained in clause 8 of the deed of sale,
the relevant portions of which read as follows:
‘
This
agreement is . . . subject to the obtaining of all
necessary consents for the subdivision of the said property
from any
institution statutory or otherwise required, as well as the obtaining
of the necessary subdivisional diagram approved
by the Surveyor
General within 18 (eighteen) months months after date of signature of
this agreement.’
Although
headed ‘Suspensive Condition’, in the singular, it is
apparent that clause 8 in actual fact envisaged two
separate and
distinct approvals. The balance of the clause imposed upon the
deceased the duty to obtain the necessary approvals
in order to
ensure timeous fulfilment of the suspensive condition.
Clause
2.1 of the deed of sale further provided for payment of a deposit of
R100 000 in cash to the deceased’s attorneys
‘upon
fulfilment of the suspensive conditions’, with the balance of
the purchase price payable on registration
of transfer.
On
11 January 2011, and pursuant to the conclusion of the purchase
agreement, application was made to the council on behalf
of the
deceased for the subdivision of the plot. After the intended
subdivision was advertised in terms of s 24(1) of LUPO,
three
objections were lodged by other neighbours of the deceased.
On
19 March 2012 a decision was taken by the relevant body of the
Municipal Council (Sub-Council 16) to overrule the objections
and to
allow the subdivision.
However, this did not mean that
the process had come to an end as this decision was subject to an
appeal in terms of s 44
of LUPO.
Because
the original agreement was signed on 1 December 2010, the date for
fulfilment of the suspensive conditions was 31
May 2012.
Towards the end of May, the Surveyor General had not yet approved
and signed the diagram. According to the applicant
(whose evidence
in this regard was not disputed), this was because the period within
which an appeal against the council’s
approval of the
subdivision could be lodged had not as yet expired. It may be safely
assumed that the Surveyor General did not
want to expend unnecessary
time and effort on signing off on a proposed subdivision, the fate
of which was still in the balance
at that stage.
As
the deadline drew near, the applicant approached the deceased, whose
attitude was that ‘it was not necessary to conclude
an
extension agreement in the form of an addendum as he had sold the
plot to [the applicant] and was not going to change his
mind’.
However, the deceased was advised by his attorney that a formal
extension agreement should be concluded. This gave
rise to an
addendum, which was signed by the applicant on 27 May 2012 and
by the deceased on 28 May 2012. In the preamble,
it is recorded:
‘
1.
Even though there were objections, the subdivision was approved in
terms of s 25 of Ordinance 15 of 1985.
2. The objectors
have a right of appeal in terms of s 44 which they may or may
not exercise.
3.
The subdivisional diagram has already been lodged at the surveyor
general for approval and approval is awaited.’
The
parties thereupon agreed as follows:
‘
1.
The time within which suspensive conditions are to be fulfilled and
the subdivisional diagram is to be approved by the Surveyor
General is hereby extended to 30 June 2012.
2.
The deposit of R100 000 shall be payable upon approval of the
subdivisional diagram by the Surveyor General or upon
waiver of
the right of appeal or rejection of the appeal, whichever event
occurs last.
3.
Neither party shall be entitled to withdraw from the Agreement in the
event of an appeal against the approval of the subdivision
by a third
party.
4.
. . .’
The
appeal that had been envisaged duly materialised when two of the
objectors lodged an appeal on or about 30 May 2012, ie after
the
addendum had been signed. The appeal was finally dismissed by the
responsible Provincial Minister on 15 February 2013 and
the
applicant’s representatives were informed of such decision by
way of a ‘Final Notification Letter’, dated
21 February
2013, recording
inter alia
‘that the decision taken by
the Sub-Council 16 on 2012-03-19 is now final’.
On
the same date, an endorsement was made on the diagram which had
accompanied the subdivision application, recording that ‘[t]his
subdivision plan has been approved in terms of s 25 of
[LUPO] subject to conditions as per decision letter dated
2013/02/21 . . . ’. This decision
thereupon opened the door for the Surveyor General to sign off on
the relevant diagram, which was duly done on 25 March 2013.
In the meantime, however, on 25
January 2013, the deceased had passed away. The respondent was
appointed as executor on 5 March
2013. Shortly afterwards, on 25
March 2013, he requested from the applicant a copy of the extension
of the purchase agreement
with the deceased ‘which lapsed in
June 2012’. In a further email to the applicant’s
attorney, dated 8 April
2013, the respondent expressed the firm
view, having looked at the documentation provided on behalf of the
applicant, that ‘the
agreement, as extended to 30 June 2013,
has lapsed and I will inform the heirs accordingly’.
The
present application was thereupon launched approximately a week
later as a matter of urgency, claiming
inter alia
an order
compelling the respondent to give effect to the purchase
agreement by giving transfer of the plot to the applicant
and that,
pending registration of the plot to the applicant, the respondent be
interdicted and restrained from selling the plot
or transferring it
to any third party.
On
19 April 2013 Dolamo J duly granted interim relief, preserving the
status quo
pending determination of the matter, with an
expedited hearing scheduled for 13 August 2013, when the matter came
to be argued
before me.
Issues
The
parties appear to be
ad idem
that one of the main purposes of
the addendum was to amend clause 8 of the deed of sale by extending
the deadline for fulfilment
of the suspensive condition. This was
necessitated by two considerations which, according to the
respondent, were in the
forefront of their minds, namely (a) the
imminence of the originally imposed deadline for fulfilment of the
suspensive condition
(31 May 2012), and (b) the possibly
dilatory impact of the objectors’ threatened appeal, should it
materialise.
The
respondent’s original stance, as articulated in his opposing
affidavit, was that ‘actual approval of the subdivision
of the
parent erf was granted by the City of Cape Town Municipality only on
21 February 2013’, with the result that ‘neither
of the
approvals necessary to achieve the fulfilment of the suspensive
condition was granted before the extended deadline of
30 June 2012’.
In
argument before me, however, this stance was modified to the extent
that it was conceded on behalf of the respondent, correctly
in my
view, that the council’s decision on 29 March 2012 did indeed
constitute municipal approval of the application for
subdivision, as
required by clause 8.
That
left the second approval, by the Surveyor General of the
subdivisional plan as the only outstanding condition for
fulfilment. As mentioned earlier, such approval was only obtained on
25 March 2013, ie well after the extended deadline, with the
result,
according to the respondent, that the agreement had lapsed on 30
June 2012.
The
respondent’s main argument in support of this stance was that
the parties intended, notwithstanding any appeal, that
the Surveyor
General’s approval would nonetheless have to be obtained
before 30 June 2012 for there to be compliance with
the suspensive
conditions and that it was possible for his approval to be obtained
prior to any appeal having been finalised.
I
find this argument unpersuasive, as it tends to focus exclusively on
the provisions of clause 1 of the addendum, which merely
served to
extend the original deadline by one month. If the respondent’s
interpretation of the addendum is correct,
namely that the
parties intended for the suspensive conditions to be extended to
only 30 June 2013, clause 2 was entirely superfluous
for, had the
conditions been fulfilled by that date, the deposit would have
become immediately payable in terms of clause 2 of
the purchase
agreement.
In
order to try and explain the presence of clause 2 of the addendum,
the respondent argued that it was introduced as the parties
contemplated that the Surveyor General might grant his approval
before
the appeal was waived or rejected. The parties
therefore regulated that the deposit would only become payable once
the appeal
had been waived or had been rejected, allegedly to guard
against a situation where the deposit would have to be refunded if
the
Surveyor General’s approval was given prior to the appeal
being upheld, so it was argued.
In
my view, this construction does not make business sense. First, it
is contrary to s 26 of LUPO
1
as well as the City’s own established practice to require the
Surveyor Generals approval before the Council’s approval
has
both been obtained and confirmed on appeal. It would therefore be
putting the cart before the horse to require the approval
of the
Surveyor General before the fate of a possible appeal was known.
Moreover, why waste effort and money in getting the Surveyor
General’s approval if the council’s approval is
eventually going to be overturned on appeal? Conversely, why would
any objector wish to persist with an appeal against a decision that
has lapsed due to the non-fulfilment of a contractual
condition? It is precisely because of these considerations
that the Surveyor General had deferred his decision in the
first
place, waiting for the deadline for the noting of appeals to expire.
The
further alternative argument advanced on behalf of the respondent
was that not only the Surveyor General’s approval,
but also
the finalisation of any appeal had to occur prior to 30 June 2012. I
find this argument to be equally untenable. It
is apparent from the
surrounding circumstances that the parties intended, when
entering into the addendum, to keep the purchase
agreement alive. It
is common cause, further, that they envisaged that any appeal would
cause delays. I cannot imagine that they
could have intended for the
appeal process to be finalised within a further period of one month.
Having signed the addendum,
it was the perception of the applicant
that this took ‘all “time pressure” from us.’
He would hardly
have written this in his email if the effect of the
addendum was to pile further ‘time pressure’ on the
parties.
To
my mind, the interpretation proposed on behalf of the applicant is
the preferable one, namely that the addendum was intended
to cater
for two scenarios: (a) one in which the objectors did not
appeal, in which event the parties would have one month
(the
extended period) within which to obtain the requisite approval from
the Surveyor General; and (b) the alternative in
which the
objectors did appeal, in which case (i) neither the deceased
nor the applicant would be entitled to withdraw from
the agreement;
(ii) the deposit of R100 000 referred to in the initial
agreement would be payable upon approval of the diagram
by the
Surveyor-General or upon the waiver of the right to appeal or the
rejection of the appeal, whichever event occurred last.
It was
contemplated by the parties that in the absence of an appeal
the approval by the Surveyor General would be a formality,
which
could easily be obtained within the extended period. I accordingly
agree with the applicant that clause 1 of the addendum
must be read
‘subject to the provisions of clauses 2 and 3’ of the
addendum. To my mind, this is the proper interpretation
of the
addendum, read in its context. To the extent that this does not
appear expressly from the wording of the clause as it
stands, I am
in any event satisfied that all the requirements for the importation
of a tacit term to that effect have been satisfied.
In
any event, the respondent has adopted a particular interpretation of
the addendum (to which he was not a party), which interpretation
is
disputed by the applicant, who was a party to such agreement. In
these circumstances, as was held by Lewis JA in
Rane Investments
Trust v CSARS
,
2
‘
There
is ample authority for the proposition that in seeking to establish
the parties’ intentions, when a third person is
questioning the
meaning of a contact, regard may be had to the parties’ conduct
in executing their obligations.’
Having
regard to evidence of the subsequent conduct of the parties after
signature of the addendum, the applicant adopted the view,
as
mentioned earlier, that the addendum removed the time pressure from
the parties. Similarly, the deceased advised his friend
and
confidant, Ms Carolina Burd-Rocchinotti, shortly after the addendum
was signed, that he had signed the ‘paper’
and that this
meant that the applicant need never be concerned about the plot
again.
On
the respondent’s interpretation is correct, the whole deal had
lapsed on 30 June 2012, after which date the deceased
was free to
sell the property to any third party, including one of the
neighbours waiting in the wings. The fact that the deceased
did not
do so, but rather reaffirmed the continued existence of the purchase
agreement, is indicative of only one thing, namely
that in his mind,
the deal was still alive, pending the outcome of the appeal.
Costs
For
the reasons set out above, I am of the view that the respondent is
legally obliged to give effect to the purchase agreement,
with the
result that the application should succeed with costs, save that I
do not regard it necessary to grant the declaratory
relief sought. I
will suffice to direct the respondent to give effect to the purchase
agreement by passing transfer of the plot
to the applicant.
I
have been asked on behalf of the applicant to award the costs of two
counsel, such costs to be paid by the respondent
de bonis
propriis
. I am not prepared to accede to either of these
requests. In my view, neither the complexity of this matter nor the
volume of
paper involved nor the amount at stake was such as to
warrant the employment of two counsel. Furthermore, this is not an
appropriate
matter in which to hold the respondent in his personal
capacity liable for the costs,
3
nor is the applicant the appropriate party to take up the cudgels on
behalf of the estate.
Order
For
the reasons set out above, it is ordered as follows:
(a)
The respondent is directed to give effect to the Purchase Agreement
and the Addendum thereto, entered into between the applicant
and the
deceased, and to do all things and to sign all documents necessary to
transfer the property described in the diagram signed
by the Surveyor
General as ‘
Erf 1574 (portion of Erf 364), Tamboerskloof’
to the applicant against payment of the purchase price, such
transfer to be effected by Werksmans Attorneys at the expense
of the
applicant.
(b)
The respondent in his capacity as executor of the estate of the
deceased is ordered to pay the costs of the application, including
the costs reserved on 19 April 2013 for later determination.
B M Griesel
Judge of
the High Court
FOR
APPLICANT:
Adv ARG Mundell, SC et Adv L Buikman
INSTRUCTED
BY:
Korbers
Attorneys
FOR
RESPONDENT:
Adv
T Tyler
INSTRUCTED
BY:
Chris
Fick & Associates
1
S
26 provides:
‘
If
an application is granted under s 25, the owner of the land
concerned shall submit a general plan or diagram, as indicated
by
the Surveyor General concerned, to that Surveyor General for his
approval.’ (My emphasis)
2
2003
(6) SA 332
(SCA) para 27. See also RH Christie & GB Bradfield
Christie’s The Law of Contract in South Africa
6ed pp
226 227.
3
See
eg Cilliers
Law of Costs
para 10.23 (Service Issue 25), for
the circumstances in which such an order may be awarded.