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IN THE HIGH COURT OF SOUTH AFRICA
DURBAN AND COAST LOCAL DIVISION
CASE NO:
4904/2005
In the matter between:
BASFOUR 170 (PTY) LIMITED
t.a. FAIRFIELD DEVELOPMENTS
Applicant
ERNEST DANCA
Applicant
First
Second
and
PETER LOMAX
DERECK RIDGWAY
Respondent
LEE FAHEY
Respondent
STANDARD BANK OF SOUTH AFRICA LIMITED
Respondent
THE SHERIFF OF THE ABOVE HONOURABLE COURT
STRAUSS DALY INCORPORATED
Respondent
First Respondent
Second
Third
Fourth
Fifth Respondent
Sixth
REGISTRAR OF DEEDS, KWAZULU-NATAL
Seventh
Respondent
(heard at Durban on 28 June 2005)
___________________________________________________________________
JUDGMENT
(delivered on 23 August 2005)
___________________________________________________________________
BALTON J:
The applicants brought an application on 18 March 2005 for:
(1)
A rule nisi in the following terms:
i.
the sale in execution concluded between the fifth respondent, on the
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one hand, and the first, second and third respondents, on the other
hand, under case number 11470/03, on 25 November 2004, be and is
hereby declared as having no further force or effect;
ii.
the first, second and third respondents pay the costs hereof, together with any
other respondents opposing the relief sought, jointly and severally;
iii.
further and/or alternative relief.
(2)
Pending the outcome of this application, the fifth, sixth and seventh
respondents be and are hereby interdicted from registering transfer of the
immovable property situated at 23 Larwood Place, Mobeni, more fully
described as Erf 3092, Mobeni, Registration Division FT, Provision of
KwaZulu-Natal, in extent 786 square metres, held under Deed of Transfer No
T50704/2001 to the first, second and third respondents.
The rule nisi and interdict was granted on 18 March 2005 and on 16 May 2005 an
order was granted adjourning the application for the hearing of oral evidence on the
issue as to whether or not the suspensive condition in the agreement concluded
between the applicants and the first, second and third respondents on 3 December
2004 was fulfilled. I ruled that the suspensive condition was fulfilled. My reasons
are set out hereinafter.
The second applicant is an employee of the first applicant. The second applicant
was indebted to the fourth respondent in respect of a bond on immovable property
situated at 23 Lawood Place, Woodlands (“the property”) purchased by the second
applicant. The second applicant fell into arrears with his payments in an amount of
approximately R17 000,00. On or about 29 January 2004 the fourth respondent
obtained default judgment against the second applicant under case number 1470/03
in this court for an amount of R142 893,00 being the full amount outstanding to the
fourth respondent in terms of mortgage and loan agreements.
Pursuant to the judgment the property was sold in execution to the first, second and
third respondents on 25 November 2004. The first and/or second applicants
concluded a written agreement with the first, second and third respondents on 3
December 2004 in terms of which the first, second and third respondents agreed to
the cancellation of the sale in execution in return for payment of the sum of
R30 000,00 and on condition that:
(i)
the first, second and third respondents would deal with the sheriff in
order to secure a refund of the deposit paid;
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(ii)
“in the event that we are unable to proceed with the recovery of the
property in Ernest’s name for any reason whatsoever, then our agreement will be
cancelled and you will immediately refund the sum of R30 000. Obviously, we
understand that you cannot be ‘on the hook’ for this indefinitely and we will be
prepared to accept that Merle Naidoo from Strauss Daly act as an independent
authority in this regard. I think that it would be fair if we requested that in order to
declare the transaction as finally concluded that Merle Naidoo from Strauss Daly
must confirm one way or the other by no later than 20 December 2004 that she has
accepted your cancellation and therefore recognizes that Ernest still owns the
property. In other words if there are no problems between now and the 20 th
December 2004 you will have a concluded deal.”
The evidence establishes that in November 2004 Naidoo suggested to the first
applicant that he approach the first, second and third respondents with the view of
having the sale cancelled.
She explained to him that if the purchasers were in
breach they would be given time to rectify, failing which the sheriff would be informed
to do the necessary to set the sale aside.
According to Naidoo the fourth and fifth
respondents had no problem with the events taking that course as that had
happened in the past.
She gave the first applicant the phone number of one of the respondents and said
that she did not want to get involved in the transaction. He then phoned the first
respondent and subsequently the agreement at pages 23 to 24 of the papers was
drawn up by the first applicant. The first, second and third respondents requested
a “cut off” date and he worded paragraph 2 of the letter accordingly. They signed
the agreement and he paid the R30 000,00.
On 15 December 2004 the first applicant phoned Naidoo and advised her that he
had concluded a deal with the purchasers and tendered to make a payment of the
arrears on that day. She told him that it would take about six weeks to cancel the
sale and advised him that it was not necessary to pay the arrears until the sale had
been cancelled.
Naidoo testified and confirmed that the first applicant telephoned her on 15
December 2004 and advised her that they had agreed to cancel the sale. She
understood the agreement concluded with the first, second and third respondents to
be that they would not abide and that the sixth respondent would compel them to
abide and then take the necessary steps to cancel the agreement. She played a
vital role in explaining to the first applicant how the sale should be cancelled. If she
or the fourth respondent had a problem she would have said that she could not do
anything further.
Naidoo further testified that the attitude of the fourth respondent is usually to
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rehabilitate an account. Whilst she made it clear to the first applicant that she had
no authority to cancel the sale she did not indicate to him that she or the fourth
respondent had any objection to the cancellation. Her evidence was clear that the
sixth respondent would be involved to place the purchasers on terms and would play
a vital part in the cancellation process. Furthermore, the sixth respondent would
start the procedure for cancellation. A lady from the conveyancing department of
the sixth respondent would attend to the cancellation and she checked with her to
see if there was any breach.
All of the above clearly show an acceptance of the agreement to cancel by Naidoo.
The condition at page 24 states that “if there are no problems between now and the
20th December 2004 you will have concluded a deal”. It does not provide that the
first applicant should respond to the first, second and third respondents. Various
interpretations can be inferred from this specific sentence, one being that if there are
any problems with regard to Naidoo then there will be no agreement. She
accepted that the events would take its course in terms of the procedure which she
outlined to the first applicant. She at no stage indicated to the first applicant that
there would be a problem with the agreement reached.
In argument on behalf of the first, second and third respondents it was submitted that
the condition was not fulfilled. Naidoo’s evidence on behalf of the first, second and
third respondents was that she had suggested the procedure to the first applicant
and when he phoned her on 15 December 2004 she was of the view that her
suggestion would be followed and that the sixth respondent would do the necessary.
This does not assist the first, second and third respondents in their submission.
From Naidoo’s evidence it is clear that when the first applicant called her on 15
December 2004 she understood it to mean that the first, second and third
respondents had agreed to cancel the sale and that she would do the necessary.
The fourth respondent had no problem with that.
I am accordingly satisfied that the suspensive condition was fulfilled.
The next issue to be decided is whether the sale in execution between the fifth
respondent and the first, second and third respondents should be declared as having
no force and effect.
The agreement entered into between the first applicant and the first, second and
third respondents needs to be analysed. The purpose of the agreement is to
cancel the sale in execution upon payment of the sum of R30 000 by the first
applicant to the second, third and fourth respondents. The agreement which was
drafted by the first applicant, a layman, is vague and open to various interpretations.
In LEVENSTEIN v LEVENSTEIN 1955 (3) SA (SR) 619 Quénet J classified the “void
for vagueness” cases into four classes:
“Firstly, those cases which exemplify the maxim nulla promissio potest consistere,
quae ex voluntate promittentis statum capit; in such cases the so-called contract is not
enforceable because the promise is ‘dependent on a condition which in fact reserves an
unlimited option to the promissor’ … Secondly, where the vague and uncertain language
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justifies the implication that the parties were never ad idem … Thirdly, where there is no
concluded contract as in the case ‘… of continuing negotiations broken off in medio’ … In all
these cases the element of uncertainty is fatal to the existence of the so-called contract; in the
first class because there is uncertainty as to whether the promissor will ever acknowledge the
existence of an obligation; in the second, there is uncertainty as to what he has acknowledged
as being his obligation, and in the third class there is uncertainty as to the subject matter which
has still to be agreed. The fourth class concerns those cases where the unspecified details of
the contract are questions of fact capable of determination by evidence.”
This passage was approved in GANDHI v SMP PROPERTIES (PTY) LTD 1983 (1)
SA 1154 (D) 1156E – F by Broome J, who added
“It is notorious that the confusion experienced by, or the host of possible alternatives foreseen
by, a party seeking to resile from an agreement can at times be exaggerated and unreal.”
The general approach of the courts to questions of vagueness is to seek for reasons
to uphold a contract rather than to destroy it. This was expressed by Price J in
HOFFMANN AND CARVALHO v MINISTER OF AGRICULTURE 1947 (2) SA 855
(T) 860:
“Where parties intend to conclude a contract, think they have concluded a contract, and
proceed to act as if the contract were binding and complete, I think the Court ought rather to try
to help the parties towards what they both intended rather than obstruct them by legal subtleties
and assist one of the parties to escape the consequences of all that he has done and all that he
has intended.”
In CONE TEXTILES (PTY) LTD v TRIBAL TRUST LAND DEVELOPMENT
CORPORATION LTD 1979 (2) SA 1051 (RA) the court took into account the
subsequent conduct of the parties.
Paragraphs 33 to 35 of the applicant’s affidavit refers to a conversation between the
fifth respondent and the second respondent concerning the agreement between the
applicants and the first, second and third respondent. The second respondent in
his answering affidavit remembers the call from the fifth respondent but cannot recall
the contents. It is important to note that the fifth respondent has not filed an
affidavit denying the contents in so far as it relates to him. Clearly the events
indicate that in March 2005 discussion concerning the agreement entered into was
still in progress.
The first, second and third respondents did not abide by the agreement. In terms
of the agreement the first, second and third respondents agreed to cancel the sale in
execution and to deal with the Sheriff for a refund of their deposit and for any
commission that may be due to the Sheriff. This presupposes that the first, second
and third respondents would do the necessary to cancel the sale as only they are
entitled to recover any money paid by the sale in execution being set aside.
Having found that the suspensive condition was fulfilled it is clear that the first,
second and third respondents had to fulfil their portion of the agreement. They did
not take any steps towards the cancellation of the sale. The agreement was valid
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and the first, second and third respondents are obliged to fulfil their obligation in
terms of the agreement.
The first, second and third respondents were placed in mora by the sixth respondent
and upon receipt of the letter they became concerned. The agreement entered
into is valid and the first, second and third respondents are ordered to comply with
their obligations in terms of the agreement.
The first, second and third respondents were aware of the procedure to be followed
as the first applicant had discussed this with them. On 25 February 2005 the first
applicant approached the fifth respondent who contacted the second respondent and
assured him that the fifth respondent would not blacklist the respondents for
canceling the sale. He advised the second respondent that in order to achieve the
cancellation of the sale, he would call upon the first, second and third respondents in
writing to perform in terms of the conditions of the sale and that they should in turn
notify him that they did not intend to so perform. The fifth respondent would then
apply to the High Court for the sale to be cancelled. The fifth respondent has not
opposed these allegations. The concern of the first, second and third respondents
that they would be blacklisted was accordingly addressed.
There are accordingly no compelling reasons for the first, second and third
respondents not to comply with the agreement entered into.
The rule is accordingly confirmed with costs.