Case Law[2024] ZASCA 136South Africa
Maria Luisa Palma Codevilla v Paula Jane Kennedy-Smith NO and Others (494/2023) [2024] ZASCA 136; [2024] 4 All SA 637 (SCA); 2025 (2) SA 42 (SCA) (10 October 2024)
Supreme Court of Appeal of South Africa
10 October 2024
Headnotes
Summary: Agreement of sale of immovable property – lapsing of suspensive condition – whether revival of agreement thereafter is competent.
Judgment
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## Maria Luisa Palma Codevilla v Paula Jane Kennedy-Smith NO and Others (494/2023) [2024] ZASCA 136; [2024] 4 All SA 637 (SCA); 2025 (2) SA 42 (SCA) (10 October 2024)
Maria Luisa Palma Codevilla v Paula Jane Kennedy-Smith NO and Others (494/2023) [2024] ZASCA 136; [2024] 4 All SA 637 (SCA); 2025 (2) SA 42 (SCA) (10 October 2024)
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sino date 10 October 2024
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
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SAFLII
Policy
FLYNOTES:
PROPERTY – Agreement of sale –
Suspensive
condition
–
Lapsing
– Whether revival of agreement thereafter is competent –
Parties intended to revive offer to purchase
– Respondents
laboured under erroneous impression that they could extend time
fixed for fulfilment of suspensive condition
– Did not
appreciate that new contract had to be concluded – Purported
revival and extension after expiry date
is legally incompetent –
Offer to purchase invalid and unenforceable – Appeal
succeeds.
THE SUPREME COURT OF
APPEAL OF SOUTH AFRICA
### JUDGMENT
JUDGMENT
Reportable
Case no: 494/2023
In
the matter between:
MARIA LUISA PALMA
CODEVILLA
APPELLANT
and
PAULA
JANE KENNEDY-SMITH NO
FIRST RESPONDENT
DINGLEY
MARSHALL INCORPORATED
SECOND RESPONDENT
CARL
FREDERICH WESSEL
THIRD RESPONDENT
SIMONE
DANIELLE BORCHERDING
FOURTH RESPONDENT
Neutral
citation:
Maria
Luisa Palma Codevilla v Paula Jane Kennedy-Smith NO and Others
(494/2023)
[2024] ZASCA 136
(10 October
2024)
Coram:
SCHIPPERS, WEINER and KGOELE JJA and BAARTMAN and
TOLMAY AJJA
Heard:
16 May 2024
Delivered:
This judgment was handed down
electronically by circulation to the parties’ representatives
by email; publication on the Supreme
Court of Appeal website and
released to SAFLII. The time and date for hand-down is deemed to be
10 October at 11h00.
Summary:
Agreement of sale of immovable
property – lapsing of suspensive condition – whether
revival of agreement thereafter
is competent.
ORDER
On
appeal from:
Western Cape Division of
the High Court, Cape Town (Allie, Wille and Lekhuleni JJ sitting as
court of appeal):
1
The appeal is upheld with costs. Such costs shall
include the costs of only one counsel.
2
The order of the full court of the Western Cape
Division of the High Court, Cape Town, is set aside and replaced with
the following
order:
‘
1.
The appeal succeeds with costs.
2.
The order of the court a quo dated 4 March 2022, is set aside and
replaced with the following order:
2.1 It is
declared that:
(a)
the Offer to Purchase Erf 1[...], Kenilworth
Upper, Cape Town, located at 8[...] S[...] Road, Kenilworth, Western
Cape (the property),
concluded on 4 February 2020 between the first
respondent as seller, and the third and fourth respondents as
purchasers (the Offer
to Purchase); and
(b)
the Addendum to Agreement of Sale, concluded
between the seller and the purchasers on 20 February 2020,
purportedly to extend the
suspensive condition in clause 7.2 of the
Offer to Purchase, after the expiry date for the fulfilment of that
condition, are invalid
and unenforceable.
3. The first
and second respondents shall pay to the applicant the sum of
R1 950 000, which she paid to them
on behalf of the third
and fourth respondents in respect of the purchase price of the
property, together with the interest on that
amount to which the
applicant is entitled.
4. The first
and second respondents shall pay the costs of the application,
jointly and severally, the one paying the
other to be absolved.’
JUDGMENT
Weiner
JA (Tolmay AJA concurring):
[1]
The issue in this appeal is whether an agreement
for the purchase and sale of an immovable property, can be revived,
subsequent
to the lapse of a suspensive condition contained therein.
The issue arose under the following circumstances.
[2]
On 4 February 2020, the third and fourth
respondents (the purchasers), the son-in-law and daughter of the
appellant, made an offer
to purchase a residential property situated
at Erf 1[...], 8[...] S[...] Road, Kenilworth Upper, in the City of
Cape Town, Cape
Division, Province of the Western Cape (the property)
from the first respondent (the seller), the executrix of the estates
of her
late parents. The second respondent is a firm of attorneys who
acted on behalf of the seller and were also appointed as the
conveyancer
for the transfer of the property (DM Inc).
[3]
The
Offer to Purchase (OTP)
[1]
was
accepted by the seller on 4 February 2020. The purchase price of the
property was R5 150 000 and a deposit of R200 000
was
required by 10 February 2020. In terms of clause 7 of the OTP, the
sale was subject to the approval, in writing, by a financial
institution, on its usual terms and conditions, of a mortgage bond in
an amount R4 950 000 against security of the property.
Clause 7.2 provided that:
‘
Confirmation
of approval in writing is to be given by no later than 14/02/2020
whereupon this suspensive condition shall be deemed
to have been
fulfilled, failing which the aforesaid date shall be extended for a
further thirty (30) days with the written consent
of the Seller….’
[4]
The deposit was timeously paid on 10 February
2020. On 11 February 2020, prior to the date set out in paragraph 7.2
of the OTP,
the seller and the purchasers entered into an Addendum to
the OTP in terms of which it was agreed that the date provided in
clause
7.2, for the approval of the mortgage loan, would be extended
until 19 February 2020 (the first addendum). This addendum also
reflected the parties’ agreement that all other terms and
conditions of the OTP remained in full force and effect.
[5]
As the purchasers were having problems in
obtaining finance, the appellant agreed that
she
would provide them with the funds necessary to enable them to acquire
the property.
As the appellant needed time
to obtain the funds, she requested the third respondent to address a
letter to DM Inc stating that
time was needed to have the funds
released. DM Inc advised that the seller required a bank guarantee,
alternatively, the funds
had to be paid into DM Inc’s trust
account by 19 February 2020. Despite
valiant
attempts to get the guarantee and/or the funds provided on time, they
were not provided by midnight on 19 February 2020.
It is common cause
that the OTP, as amended by the first addendum, accordingly lapsed.
[6]
On 20 February 2020, the appellant requested a
further extension to provide the funds. The seller agreed that a
second addendum
to the OTP could be concluded (the second addendum).
DM Inc advised that the ‘sale would have to be revived by means
of a
formal, written addendum’. That was the basis of the
conclusion of the second addendum, which was signed on 20 February
2020.
In terms thereof, inter alia, the provisions in respect of the
bond approval was amended and the provision of the bank guarantee
for
the cash portion of the purchase price, had to be provided by 09h00
on 25 February 2020.
[7]
The second addendum provided as follows:
‘
WHEREAS
the Seller and the Purchaser entered into the OTP dated 4 February
2020, for the purchase of Erf 1[...] K[…]. Transfer is
Intended to take place on or about 30 April 2020.
AND
WHEREAS
in terms of clause 7 of the OTP, the purchaser must have
bond approval in writing in the sum of R4 950 000.00 (Four Million
Nine
Hundred and Fifty Thousand Rand) by close of business on 14
February 2020, which date was extended in writing by the seller to
close of business, 19 February 2020.
AND
WHEREAS
the Purchaser has requested the above to be amended to:
1.
Bond approval in writing from a by a financial institution in the sum
of R1 500 000.00 (One Million Five Hundred Thousand Rand)
over the
property being purchased, being erf 1[...](
sic
);
2.
Bond approval in writing from a financial institution in the sum of
R1 500 000.00 (One Million Five Hundred Thousand Rand) over
erf
9[...], namely 1[...] B[...] Street, Gardens, being property that the
purchasers currently own, to be registered simultaneously
with this
transfer and a bank guarantee to be issued on request by Dingley
Marshall Inc for the full sum of the bond; and
3.
A bank guarantee for the cash portion of the purchase price, being R1
950 000.00 (One Million Nine Hundred and Fifty Thousand
Rand) to be
issued and supplied to Dingley Marshall Inc by 9am on Tuesday, 25
February 2020.
NOW
THEREFORE
the Seller and the Purchasers have agreed to the above,
failing which the OTP and the Addendum will expire and be of no
further
force or effect.
Aside
from the above amendments to the OTP, the Seller and Purchaser
confirm and agree that all other terms and conditions of the
Agreement are to remain the same.’
[8]
The requisite bond approvals were obtained. The
appellant, instead of providing a bank guarantee, made payment of the
sum of
R1 950 000
into DM Inc’s
trust account on 21 February 2020. The seller was requested to
‘desist from marketing the property as
all the suspensive
conditions of sale have been fulfilled’. Problems arose in May
2020, when the purchasers, facing financial
problems as a result of
the COVID-19 pandemic, found themselves unable to meet their
financial obligations and thus sought to cancel
the agreement. They
requested Standard Bank, which had approved the mortgage loan, to
withdraw such approval.
[9]
The appellant, having taken cession of the
purchasers’ claim, sought to recover the amount she had paid to
the seller. She
sought legal advice. The advice was that there was no
valid agreement, as it had lapsed on failure of the suspensive
condition,
contained in the first addendum on 19 February 2020; and
that it was not revived by the second addendum. She thus demanded
repayment
of the amount of
R1 950 000.
The
seller did not accept that the OTP had lapsed and elected to uphold
the contract and demand specific performance of its terms.
DM Inc,
acting on behalf of the seller, was of the view that the second
addendum ‘records their joint intention in crystal
clear terms;
the sale of the property was to proceed, save that amended financing
arrangements were stipulated with express reference
to paragraph 7 of
the OTP’. It was contended by the seller that the suspensive
conditions in the second addendum had been
fulfilled, as instead of
providing a bank guarantee for the balance, the purchasers had
timeously provided even better security
for the balance:
R1
950 000
by way of cash transfer, and the bond
approvals had been received on 24 February 2020.
[10]
On 24 June 2020, DM Inc demanded that the
purchasers remedy their breach of the agreement. The breach relied
upon was the purchasers’
conduct in procuring the withdrawal of
the Standard Bank bond and their intention not to proceed with the
sale. On 8 July 2020,
DM Inc, acting on behalf of the seller,
purported to cancel the OTP as amended, on the basis that the
purchasers had failed and/or
refused to remedy the breach of the
agreement as demanded.
[11]
On 31 July 2020, the appellant applied to the high
court for the following relief:
1.
‘
Declaring that:
1.1
The Offer to Purchase which was concluded on or
about 4 February 2020 between the First Respondent as seller, and the
Third and
Fourth Respondents as purchasers, in respect of Erf 1[...]
K[...] Upper, Cape Town (“the Offer to Purchase”) was
subject
to a suspensive condition, namely the written approval of a
mortgage loan (“the Suspensive Condition”) – which
had to be fulfilled by 14 February 2020;
1.2
The time for the fulfilment of the Suspensive
Condition was validly extended to 19 February 2020 by the Addendum to
the Offer to
Purchase dated 11 February 2020;
1.3
The mortgage loan contemplated by the Suspensive
Condition was not provided by 19 February 2020 with the result that
the Offer to
Purchase failed;
1.4
The Addendum to Agreement of Sale which was
concluded on 20 February 2020 did not revive the Offer to Purchase
and the purported
extension of the period of time for the fulfilment
of the Offer to Purchase was invalid;
1.5
The Offer to Purchase is null and void
ab
initio
and the Applicant is entitled to
the repayment of the monies which she paid to the First and Second
Respondents in furtherance of
the transaction contemplated by the
Offer to Purchase.
2.
Directing the First and/or Second Respondents to:
2.1
Repay to the Applicant the amount of R1,950,000.00
which she had paid to them on behalf of the Third and Fourth
Respondents in respect
of the purchase price of the Property;
2.2
Pay to the Applicant any and all interest which
has accrued on the said R1,950,000.00.
3.
Directing the First Respondent and any other
person who opposes this application to pay costs jointly and
severally, the one paying
the others to be absolved, on a scale as
between attorney and client. . .’
[12]
The issue before the high court was whether the
further agreement revived or reinstated the OTP which had lapsed on
19 February
2020 as a result of the suspensive condition not being
fulfilled. This involved a decision on:
(a)
whether the parties had intended to conclude a
fresh agreement when they signed the second addendum;
(b)
whether the second addendum complied with the
Alienation of the Land Act 68 of 1981 (the Act);
(c)
whether the second addendum could be read as
incorporating all the terms of the OTP, including the purchase price;
and
(d)
whether a valid contract could arise if all the
terms of the OTP were incorporated.
[13]
The high court found that the parties had intended
to revive the agreement and that the second addendum had that effect.
It held
that the second addendum amounted to a ‘fresh
agreement’ incorporating the terms of the OTP, as amended by
the first
addendum. Leave to appeal was granted to a full court of
the high court (the full court), which dismissed the appeal on 24
January
2023.
[14]
The
full court’s dismissal of the appeal was based on different
grounds to those relied upon by the high court, in upholding
the
agreement. The full court found that a new agreement was not
concluded, but that in terms of clause 7.2, the offer was validly
extended for the 30-day period contained in the clause. The first
extension was in terms of the first addendum. The second addendum
was
concluded within the 30-day period and amounted to a further
extension of the date for the fulfilment of the suspensive condition.
The agreement was thus valid. This point was not part of the seller’s
case neither in the high court, nor the full court.
It appears that
the full court raised the issue of the 30-day extension
mero
motu
(of
its own accord) and the seller now relies upon it for the first time
in this Court.
[2]
This course of
action is not permitted.
[3]
Special leave to appeal was granted by this Court.
[15]
The
seller contends that it is clear from the correspondence exchanged on
19 February 2020, that the parties knew that the suspensive
condition
would lapse that day. This is why the appellant desperately tried to
procure the funds or a guarantee before midnight.
Although the
appellant stated in her affidavits that she was unaware that the sale
had lapsed, it seems clear that she was aware
of that fact. She was
perhaps not fully aware of the consequences thereof. It is trite
that, upon the failure of a suspensive condition,
the contract lapses
and is of no force or effect.
[4]
What happens thereafter is the issue with which this Court is
concerned.
[16]
It is
common cause that the appellant requested an extension for the
payment of the outstanding amount on 20 February 2020. This
led to
the signing of the second addendum, which the seller contends
demonstrated both parties’ intention to revive the OTP.
Although the document refers to an amendment to clause 7.2, the
seller submits that the second addendum had the effect of either
reviving the OTP; alternatively, it amounted to a new agreement which
complied with the formalities of the Act, by incorporating
and
‘reviving’ the terms of the OTP. The submission was that
the second addendum clearly shows that the parties intended
to
continue with the sale; it contains an amended date for the
suspensive condition to be fulfilled; and with the incorporation
of
the OTP, and by reference thereto, it complies with the formalities
of the Act.
[5]
[17]
The appellant contends that the second addendum
did not revive the OTP, nor was it a fresh agreement. After the OTP
lapsed on 19
February 2020, there was no longer any agreement to
revive. She points to the wording of the second addendum that ‘
all
other terms and conditions of the Agreement are to remain the same’
and submits that
that the word ‘Agreement’
refers to the second addendum itself, as opposed to the OTP.
The seller, on the other hand, submits that
the
intention of the parties to continue with the sale is clear from the
wording of the second addendum.
[18]
The
interpretation contended for by the appellant on the meaning of the
‘Agreement’, would, in my view lead to an absurd
result,
and it would not reflect the actual intention of the parties.
[6]
In interpreting the second addendum, it is apposite to have regard to
the oft-cited case of
Natal
Joint Municipal Pension Fund v Endumeni Municipality
(
Endumeni
)
,
where
Wallis
JA stated the following:
‘
The
trial judge said that the general rule is that the words used in a
statute are to be given their ordinary grammatical meaning
unless
they lead to absurdity. He referred to authorities that stress the
importance of context in the process of interpretation
and concluded
that:
“
A
court must interpret the words in issue according to their ordinary
meaning in the context of the regulations as a whole, as well
as
background material, which reveals the purpose of the Regulation, in
order to arrive at the true intention of the draftsman
of the rules.”
.
. .
.
. .where the context makes it plain that adhering to the meaning
suggested by apparently plain language would lead to glaring
absurdity, the court will ascribe a meaning to the language that
avoids the absurdity. This is said to involve a departure from
the
plain meaning of the words used. More accurately it is either a
restriction or extension of the language used by the adoption
of a
narrow or broad meaning of the words, the selection of a less
immediately apparent meaning or sometimes the correction of
an
apparent error in the language in order to avoid the identified
absurdity.’
[7]
(Footnotes
omitted.)
[19]
Relying on
Endumeni,
the interpretation suggested by the
appellant would clearly lead to an absurdity. The Court is thus
obliged to ascribe a meaning
to the language that avoids the
absurdity. It becomes clear, in such circumstance that the word
‘Agreement’ in the
addendum can only be a reference to
the OTP. This interpretation would also be in line with establishing
the true intention of
the parties.
[20]
The appellant relies upon
various authorities where the failure of a suspensive condition led
to the contract lapsing and not being
revived by a subsequent
agreement or addendum. In
Pangbourne
Properties
Ltd v Basinview Properties (Pty) Ltd
,
[8]
the suspensive condition provided for the approval by
Pangbourne’s
board of directors by a
certain date. The condition was not fulfilled and the contract
lapsed. Thereafter, the parties concluded
an addendum, which dealt
with an ancillary, non-material term of the contract – that the
management of the project would
be conducted by a different entity to
that contained in the original contract. The high court found that
although
the agreement had lapsed, it had been ‘revived’ in the
addendum. It held that this was the implication of a
written addendum
to the agreement concluded after the date for fulfilment of a
suspensive condition had occurred. This Court, however,
found that:
‘…
Accordingly,
the factual matrix indicates that the addendum was just that: an
alteration in one minor respect of what was assumed
to be a valid
contract. And that is confirmed by the words at the end that state
that the agreement remained of full force and
effect.
The
high court was thus wrong in finding that the addendum “revived”
the agreement for the sale of the property by Basinview
to
Pangbourne, with tacit terms read in as to the dates of signature,
and dates for the fulfilment of the conditions. And Basinview’s
argument that it actually constituted a new agreement on the same
terms (more or less) likewise is untenable.’
[9]
[21]
The
appellant also relied upon
Abrinah
7804 (Pty) Ltd v Kapa Koni Investments CC
(
Abrinah
).
[10]
The issue in
Abrinah
was
whether, after an agreement had lapsed due to the failure of a
suspensive condition, the party for whose benefit the condition
had
been inserted, could waive compliance therewith after the contract
had lapsed. In other words, could such
ex
post facto
waiver
revive the agreement?
[22]
The
court in
Abrinah
found
that the issue had been subject to some conflicting judgments.
[11]
It went on to state:
‘
In
Mekwa
Nominees v Roberts
it
was however held, with reference to
Phillips
v Townsend
and
Meyer
v Barnardo
,
that a contract that had lapsed due to the non-fulfilment of a
suspensive condition could not be revived by waiving the suspensive
condition at that stage.
This
controversy was effectively settled in
Trans-Natal
Steenkoolkorporasie Beperk v Lombaard en ‘n Ander
, where
the
Phillips
and
Mekwa
judgments, as well as the
judgment to the same effect in
Meyer v Barnardo
, were
approved.
. .
.
Thereafter
the appellant, just like the respondent, and for the same reasons,
would not have been able to waive any right that it
may earlier have
had in respect of the contract.
“
The
condition…was clearly a condition inserted for the benefit of
the purchaser. When it was not fulfilled the agreement
lapsed. The
lapsing of the agreement could not possibly have given rise to a
right on the part of the seller which could unilaterally
be waived by
the seller, thereby resurrecting the agreement, …”
“
An
agreement subject to a suspensive condition automatically falls away
if the condition is not fulfilled by the date fixed by the
parties
for its fulfilment (Meyer v Barnardo and Another). It follows,
therefore, that nothing which is done after the date
fixed for the
fulfilment of the condition can affect the position. If the condition
is held to have been fulfilled by the relevant
date, the contract is
good and enforceable; if not, there is no binding contract between
the parties thereto. No question of fictional
fulfilment can
therefore arise by reason of the conduct of one of the parties to a
contract after the date fixed for the fulfilment
of the
condition
.”.’
[12]
(Footnotes omitted.) (Original emphasis.)
[23]
Similarly,
in
Cronje
v Tuckers Land and Development Cooperation (Pty) Limited
(
Cronje
),
[13]
the question was whether a subsequent agreement to revive an
agreement that was subject to a suspensive condition after the
suspensive
condition had failed, could have any validity. The court
held that:
‘
Here,
however, the defendant is confronted by this difficulty: A revival of
the whole of the written agreement, including the reference
to 24
months (from the date of signature of the original contract), would
again bring the condition in clause 4 into effect and
cause the
termination (or self-destruction) of the agreement immediately on
revival. This could obviously not have been, or ever
be, intended by
the parties seeking to “revive” the written agreement.
Thus, the parties to a written agreement containing
a clause such as
clause 4 of the agreement in this case, who seek to revive the lapsed
agreement, will, in addition to agreeing
to revive the agreement,
also have to eliminate the operation of such clause in the “revived”
agreement . . .[T]he
parties would agree to revive their agreement
without the condition in clause 4 in its original form. If a new date
for the coming
into operation of the condition were to be orally
agreed upon at the time of the “revival” this could
presumably amount
to an attempted revival and simultaneous variation
of a material term of the old written agreement – which attempt
would
be ineffective because of the provisions of s 1 (1) of Act 71
of 1969. Even if the parties agreed to “revive” the old
written agreement with exception of the whole of clause 4, the
simplicity of the situation in Neethling v Klopper (supra) no longer
pertains: it is no longer a question simply whether the original
agreement (at least as to its material terms) has again become
effective or not; it becomes necessary to look at the consensus of
the reviving agreement to determine which clause or clauses
of the
original agreement would not be revived.’
[24]
In
McPherson
v Khanyise Capital (Pty) Ltd,
[14]
the
court analysed the various authorities and concluded as follows:
‘
In
this respect the respondents’ case falls foul of the doctrine
enunciated by the Coetzee J in
Mekwa Nominees v Roberts
.
In that case Coetzee J enunciated the proposition that, after a
contract has lapsed by reason of the failure of a suspensive
condition, it is too late for the parties to revive their agreement
by waiving the suspensive condition, even if they have the
power to
waive the suspensive condition under their agreement. . .
Mekwa Nominees
,
insofar as it followed the reasoning of
Phillips v Townsend,
departed
from a line of previous Transvaal cases, starting
with
Wacks v Goldman
,
1965 (4) SA 386 (W) which held to the contrary.
Fortunately
for us the controversy has since been laid to rest by the judgment of
Van Heerden JA in the Appellate Division
in
Trans-Natal
Steenkoolkorperasie Beperk
v
Lombaard
en
ʼn
Ander
,
1988 (3) SA 625 (A) 640,
in
which the learned Judge held;
“
ʼn
Analogiese posisie geld indien ʼn kontrak onderhewig gestel word
aan ʼn opskortende voorwaarde dat iets voor of op
ʼn bepaalde
datum moet plaasvind; soos bv dat die koper ʼn lening moet bekom.
In ʼn aantal Transvaalse gewysdes is
die houding ingeneem dat
indien so ʼn bepaling ten gunste van slegs een party verlei is,
hy ook na die sperdatum van die voordeel
daarvan afstand kan doen. In
die tagtiger jare is egter in drie uitsprake bevind dat ʼn latere
afstand doening nie tot herlewing
van die kontrak kan lei nie;
Phillips
v Townsend
,
1983 (3) SA 403
(K);
Meyer
v Barnardo and Another
,
1984 (2) SA 518
(N);
Mekwa
Nominees v Roberts
,
1985 (2) SA 498
(W). Ek hoef slegs te sê dat ek ten volle
saamstem met die gevolgtrekkings wat in hierdie drie sake bereik
is.”.’
[15]
[25]
The court, in
McPherson
,
summarised the position as follows:
‘
A
suspensive condition cannot be waived or extended after the time for
fulfilment of the condition has passed.
An
agreement that has “
lapsed
” by virtue of the
non-fulfilment of a suspensive condition or the failure of a
resolutive condition cannot be “
revived
”. It is
necessary for the parties to enter into an entirely new agreement.
The new agreement can of course be on the same
terms and conditions
as the old.
If
the new agreement is concluded on the same terms and conditions as
the old, but the suspensive conditions are not excised, or
extended,
the new agreement “
self-destructs
”
.
This is because the agreement is by its terms subject to a suspensive
condition that has failed.’
[16]
(Emphasis added.)
[26]
In
McPherson
,
as opposed to this case, the attempted revival of the contract was
not
in writing signed by both of the parties. It thus failed to comply
with the formalities of the Act. Secondly, the language in
the
correspondence relied upon, for the revival, did not denote an
intention to ‘revive’ the old agreement by the conclusion
of a new agreement on the same terms and conditions. Thirdly, even if
the agreement were somehow revived, it would immediately
self-destruct because there the date for the fulfilment of the
condition was not extended.
[17]
[27]
The
intention of the parties in similar situations to the present case,
was considered in
Neethling
v Klopper en Andere
(
Neethling
).
[18]
The facts and conclusions in
Neethling
,
were analysed by Streicher JA in
Fairoaks
where
he stated:
‘
Steyn
CJ concluded [in Neethling] that for these reasons the revival of a
cancelled contract in respect of land by waiver of the
rights arising
from the cancellation of the contract need not comply with the
formalities prescribed in respect of agreements for
the sale of
land. Referring to this passage in the judgment counsel for the
appellant submitted that this court decided
that whenever
parties agree to the revival of a contract of sale of land by way of
a withdrawal of a cancellation of the contract,
compliance with the
formalities is not required.
I do not think that Steyn
CJ's concluding words were intended to be read in isolation. It is in
my view clear from his reasoning
that in order to determine
whether an agreement should comply with the prescribed formalities
one has to determine what the
intention of the parties was. In that
case there was a valid cancellation (so he assumed). But, the
validity of the cancellation
was disputed by Klopper. There was,
therefore, a dispute as to whether the contract had been validly
cancelled and that dispute
was settled on the basis that Neethling
would waive his claim to have validly cancelled the contract. In
those circumstances he
found that there was no intention to
enter into a new contract of purchase and sale. It does not follow
that an agreed waiver
of a cancellation of an agreement of sale would
not constitute a new agreement of sale where the parties were agreed
that the contract
had been validly cancelled. In each case the true
nature of the transaction will have to be investigated in order
to determine
whether it constitutes an agreement of purchase and
sale. If the intention was to buy and sell ie to enter into a new
contract
on the same terms as the cancelled contract, the agreement
will have to comply with the prescribed formalities even though the
mechanism employed to give effect to that intention was the
withdrawal of the cancellation.
. . .
Not
only is it alleged that the parties by way of the letters B1 and C1
“agreed in writing . . . to revive the lapsed agreement
of
sale” it is alleged that it was an express term of the revived
agreement that clause 13.2 thereof be amended to the
effect that
compliance therewith was to occur upon or before transfer of the
property. The amendment is material as the time allowed
in clause
13.2 for the fulfilment of the condition was inserted in order to
create certainty as to the fate of the contract and
affected both
parties. The contract which had lapsed because of the non-fulfilment
of the condition had become, as a result
of the amendment,
subject to a new material condition, the time for fulfilment of which
had not been stipulated. It follows that
the parties by agreeing to
revive the lapsed agreement with amendments, entered into an
agreement to buy and sell on terms different
from the terms
previously agreed to. Such an agreement has to comply with the
provisions of s 2(1) of the Act.’
[19]
[28]
The appellant’s reliance on
Pangbourne
,
Abrinah, McPherson, Cronje
and
Fairoaks
is
flawed because those authorities are distinguishable. Firstly, they
dealt with different issues, namely: in
Abrinah
,
whether a condition could be waived after the contract had lapsed;
secondly, in
McPherson
and
Cronje
,
whether a contract which the parties sought to revive, would
self-destruct as the date for fulfilment of the suspensive condition
was not amended, and had already passed; and thirdly, in
Fairoaks
,
whether the ‘revived’ agreement required compliance with
the formalities of the Act. All three of these issues are
adequately
dealt with in the present case.
[29]
In contrast to the position in
Fairoaks
,
the second addendum, by incorporating the terms of the OTP, complied
with the formalities required by the Act. And, contrary to
the other
authorities relied upon by the appellant, the imputed clause (which
would self-destruct, without an amendment), was expressly
amended to
provide for a later date for fulfilment. The second addendum and the
revival of the sale do not fall foul of the Act.
The purpose of the
Act is to avoid uncertainty and disputes. The essential terms and
conditions on which the parties agreed to
sell the property
(including the purchase price) are clearly ascertainable from the
second addendum read together with the OTP,
to which it expressly
refers. The seller contends further that the parties’
subsequent conduct affirms the fact that it was
at all times their
intention to revive the sale and to procure the transfer of the
property.
[30]
The
facts in present case are similar to those in
Benkenstein
v Neisius and Others
,
[20]
where the court dealt with a situation where, as in the present case,
the addendum clearly provided for a new date for the fulfilment
of a
suspensive condition. Thus, in contrast to
Abrinah
and
Pangbourne,
there
was no question of the addendum self-destructing due to the date of
the suspensive condition not being extended.
[21]
The court thus found that ‘the consensus of the parties was
complete’.
[22]
[31]
The
position was also explained by Nicholas J in
DS
Enterprises (Pty) Ltd v Northcliff Townships (Pty) Ltd
,
[23]
where, in referring to
Neethling,
it was
held that the conduct of the parties ‘makes it clear that all
the parties intended to do was continue with their written
contract
of sale’.
[24]
In
Fairoaks,
Streicher
JA stated that:
‘…
In
each case the true nature of the transaction will have to be
investigated in order to determine whether it constitutes an
agreement
of purchase and sale. If the intention was to buy and sell
ie to enter into a new contract on the same terms as the cancelled
contract,
the agreement will have to comply with the prescribed
formalities even though the mechanism employed to give effect to that
intention
was the withdrawal of the cancellation.’
[25]
[32]
In this matter, at the time that the second
addendum was concluded, there was no dispute between the parties as
to their intention.
The second addendum expresses clearly the
parties’ intention to continue with the sale of the property.
The preamble of the
second addendum expressly records the parties’
shared intention that ‘transfer [of the property] is intended
to take
place on or about 30 April 2020’.
[33]
This intention is borne out by various instances.
The Standard Bank bond was already in place from 14 February 2020,
days before
the second addendum was concluded. The appellant’s
reasoning that the approval of the Standard Bank bond ‘fell
away’
because it was provided prior to conclusion of the second
addendum, is ill-conceived. Standard Bank, in fact, issued a
guarantee
of payment on or about 5 March 2020 pursuant to the bond
approval. They would obviously not have done so if the bond had
‘fallen
away’.
[34]
The FNB bond was a further advance under an
already existing bond over the purchasers’ Buitenkant Street
property. That bond
approval was timeously provided and the guarantee
was also issued on the strength thereof. In addition, the appellant
timeously
deposited the balance of the purchase price into the DM
Inc’s trust account. Thus, both parties were aware and accepted
that
the suspensive conditions had been fulfilled and their intention
was that the second addendum revived and incorporated the terms
of
the lapsed OTP.
[35]
Subsequent to the signing of the second addendum,
the appellant made payment of
R1 950 000; she indicated to the
seller that she should ‘desist from marketing the property’
as all the suspensive conditions
had been fulfilled;
bond
attorneys were appointed to attend to the registration of the
purchasers’ two bonds; Standard Bank issued their guarantee
under their approved bond, to secure payment of R1 500 000
of the purchase price; First National Bank issued their guarantee
under their approved bond, to secure payment of R1 500 000 of the
purchase price; the parties signed the transfer documents, which
included the purchasers’ signing powers of attorney to
authorise the conveyancer to effect transfer;
rates
clearance and other certificates were applied for in respect of the
property;
the parties
concluded a separate agreement in terms of which the purchasers
purchased furniture and other items situated in the
home on the
property from the seller; on multiple occasions the purchasers
requested early occupation of the property;
even
after the declaration of the state of disaster, as a result of the
COVID-19 pandemic, the transfer process continued with regular
updates and correspondence between the parties and the conveyancer;
and, on 12 May 2020, the parties agreed that the purchasers
could
take occupation of the property during the first week of June. On 21
May 2020, when the purchasers sought to cancel the sale,
the
appellant did not contend that the sale had ‘failed’, as
she did in her founding papers. The reason she gave then
was the
purchasers’ changed financial circumstances.
[36]
Although the subsequent conduct of the parties
would not assist if the second addendum did not revive the sale,
and/or if the formalities
in terms of the Act were not complied with,
the purchasers’ conduct goes towards demonstrating the
intention at the time
of signing the addendum. Such intention is
manifest from the state of mind of the parties, before and after the
signing of the
second addendum.
[37]
The seller submits, correctly, in my view that
‘the Court, with respect, need not be “too astute”
to label the
conduct of the parties as being to “revive”
or “reinstate” the sale agreement, or even whether the
parties
concluded an entirely fresh agreement of sale. What is
abundantly clear from the second addendum is the parties’
intention
to procure the sale and transfer of the property.’
Such intention is borne out by the signing of the second addendum,
which
passes muster in relation to each element required to render
the addendum, incorporating the OTP, as valid and compliant with the
Act.
[38]
Accordingly, I am of the view that the agreement
of sale, embodied in the OTP, was validly revived by the second
addendum and the
appeal must therefore fail, but on different grounds
to that of the full court.
[39]
Accordingly, I would make the following order:
The appeal is dismissed
with costs.
S
E WEINER
JUDGE
OF APPEAL
Schippers
JA (Kgoele JA and Baartman AJA concurring)
[40]
I have had the advantage of reading the judgment
of my colleague, Weiner JA (the first judgment). I gratefully adopt
her setting
out of the factual background to the appeal, the
litigation history, and the abbreviations used.
[41]
I agree that the issue raised by the full court of
its own accord, namely that the OTP does not contain an express nor
implied term
that the seller can extend the date for compliance with
clause 7.2 of the OTP only once, is impermissible, for the reasons
stated
in the first judgment. I would merely add that there is no
evidence that the parties, when concluding the second addendum,
considered
that the right to extend the expiry date in clause 7.2,
was being exercised for a second time. On the contrary, the first
respondent
states that she thought that the OTP had lapsed.
[42]
The first judgment states that the appellant’s
contention that the second addendum did not revive the OTP and that
it was
not a fresh agreement would lead to an absurd result, and
would not reflect the actual intention of the parties. The first
judgment
concludes that ‘the agreement of sale, embodied in the
OTP, was validly revived by the second addendum and the appeal must
therefore fail’. With respect, I am unable to agree with the
first judgment in the result or in principle.
[43]
There
is a long line of authority which establishes the principle that a
suspensive condition in a contract suspends in whole or
in part, the
operation of the obligations flowing from the contract, pending the
occurrence or non-occurrence of a specific uncertain
future event. If
the condition is fulfilled, the obligations under the contract become
enforceable. If the condition is not fulfilled,
the contract becomes
unenforceable.
[26]
[44]
It is common ground that the contract for the sale
of the property lapsed due to the non-fulfilment of a suspensive
condition in
clause 7.2 of the OTP, namely that the purchasers were
required by 19 February 2020, to provide written approval of a
mortgage
bond in the sum of R4 950 000, by a financial
institution (the suspensive condition). Consequently, the sole issue
in
this appeal is whether the second addendum could revive or
reinstate the OTP, which had lapsed on 19 February 2020.
[45]
The second addendum, entitled, ‘ADDENDUM TO
AGREEMENT OF SALE’, and concluded on 20 February 2020 after the
non-fulfilment
of the suspensive condition, is quoted in paragraph 7
above. It records the following. The seller and the purchasers
concluded
the OTP on 4 February 2020. Transfer should take place on
30 April 2020. Clause 7 of the OTP required the purchasers to have
bond
approval in the sum of R4 950 000 by 14 February 2020,
which was extended by the seller to 19 February 2020. The addendum
further records that the purchasers requested an amendment (to the
OTP) that written approval be obtained from a financial institution,
for the registration of two mortgage bonds in the sum of R1 500 000
each, over (a) the property, and (b) the property
currently owned by
the purchasers; and that they should provide a bank guarantee in the
sum of R1 950 000 to DM Inc, by 25
February 2020, for the cash
portion of the purchase price.
[46]
The second addendum then states that the seller
and purchasers have agreed to the above amendments, ‘failing
which the OTP
and Addendum will expire and be of no further force or
effect’; and that ‘[a]side from the above amendments to
the
OTP, the Seller and Purchaser confirm and agree that all other
terms and conditions of the Agreement are to remain the same’.
[47]
The appellant submits that the second addendum
makes it clear that the parties were oblivious to the fact that a
whole new contract
was required. They were under the erroneous
impression that they could simply extend the time period within which
the suspensive
condition had to be fulfilled. This, the appellant
says, could not be done.
[48]
The appellant contends that even if it were
possible to read the Agreement as a reference to the OTP, this would
cause both agreements
to self-destruct on account of clause 19 of the
OTP, which, in relevant part, provides:
‘
19.
EXPIRY
The first signature to
this Agreement shall constitute an irrevocable offer, which may not
be withdrawn prior to presentation to
the Seller of the Purchaser,
whichever the case may be, and which thereafter shall remain
available for acceptance until 15h00
on 04/02/2020 whereafter it
shall lapse and be of no further force or effect.
[49]
The respondents submit that the purpose of the
second addendum was simply to record the different funding
arrangements preferred
by the purchasers; to provide a deadline of 9
am on 25 February 2024 for the provision of a bank guarantee, and ‘to
revive
the sale’. They contend that the parties’
intention to revive the sale is apparent from the wording of the
second addendum.
It states, inter alia, that transfer was to take
place on 30 April 2020; that the sale will remain in force and effect
but would
expire if the bank guarantee is not timeously provided; and
that ‘all other terms and conditions of the Agreement are to
remain the same’. This, so it is submitted, shows that the
parties intended the second addendum to have the effect of
implementing
the sale of the property, which is ‘nothing more
than the revival or reinstatement of the sale’.
[50]
That the parties intended to ‘revive’
the OTP is clear from the evidence. The wording of that document
makes it clear
that the parties intended to ‘amend’ the
OTP. Indeed, the second addendum records that it is an ‘addendum’
to a sale agreement. It purports to amend clause 7 of the OTP by
replacing the suspensive condition and extending the period for
payment of the purchase price to 25 February 2020, ‘failing
which the OTP and the Addendum will expire and be of no
further force
or effect’. And the second addendum states that the parties
agree that all other terms and conditions of the
‘Agreement’
(apparently an error, the parties intended to refer to the OTP) would
remain the same.
[51]
The appellant is thus correct that the respondents
laboured under the erroneous impression that they could simply extend
the time
fixed for the fulfilment of the suspensive condition, and
did not appreciate that a new contract had to be concluded. This is
reinforced
by the context in which the addendum was concluded and its
purpose. The seller, in her affidavit, states that the second
addendum
is not ‘intended to be read on its own’; that
‘it incorporates the sale agreement [the OTP]’; that
‘[her]
intention in signing the second addendum was to revive
and keep the property sale transaction “alive”, by
providing
additional time for the purchasers to furnish the guarantee
for the balance of the purchase price’; and that the intention
of the parties was to proceed with the sale ‘on the terms set
out in the sale agreement as amended by the second addendum’.
[52]
However, the purported revival of the OTP and
extension of the time fixed for the fulfilment of the suspensive
condition, after
the expiry date for its fulfilment, is legally
incompetent. The OTP lapsed on 19 February 2020 by the operation of
law, and with
it, the suspensive condition. Indeed, this is conceded
in the respondents’ written submissions, which state that ‘in
terms of the first addendum, the ‘sale lapsed . . . because the
deadline had come and gone’.
[53]
Consequently,
there was nothing to revive, and the OTP and all its terms became
unenforceable.
[27]
In
Fairoaks
,
[28]
Streicher JA summarised the position as follows:
‘
The
condition . . . was clearly a condition inserted for the benefit of
the purchaser. When it was not fulfilled the agreement lapsed.
The
lapsing of the agreement could not possibly have given rise to a
right on the part of the seller which could unilaterally be
waived by
the seller, thereby resurrecting the agreement . . .’
[54]
This
principle was applied in
Pangbourne
.
[29]
It has consistently been followed by this Court, and affirmed by the
Constitutional Court.
[30]
That
a contract which has lapsed due to non-fulfilment of a suspensive
condition cannot be revived, because there is no right that
can be
waived, was settled in
Trans-Natal
Steenkoolkorporasie
.
[31]
Van Heerden JA said:
‘
An
analogous position applies if a contract is rendered subject to a
suspensive condition that something must occur on or before
a
specific date; as for example, that the buyer must obtain a loan. In
a number of Transvaal cases the approach has been adopted
that if
such a provision is introduced in favour of only one party, he can
also after the expiry date, waive the benefit. In the
80s, however,
it was held in three cases that a subsequent waiver cannot result in
the revival of the contract:
Phillips
v Townsend
1983
(3) SA 403
(K);
Meyer
v Barnardo and Another
1984
(2) SA 580 (N)
; and
Mekwa
Nominees v Roberts
1985
(2) SA 498
(W). I need to say only that I fully agree with the
conclusions reached in these three cases.’
[32]
(own translation.)
[55]
The full court erred in disregarding this
principle, despite referring to
Fairoaks
.
It held that the appellant, by signing the second addendum, gave
expression to the intention of the parties, substantially on
the same
terms and conditions in the OTP, save that clauses 7.1 and 7.2 were
varied. But clause 7.2 could not be varied after the
expiry date for
the fulfilment of the suspensive condition.
[56]
Neither could the parties to the OTP extend its
validity in accordance with the terms of the second addendum –
the OTP was
invalid and unenforceable on 20 February 2020. For this
reason, the respondents’ argument that the purchasers sought
‘to
provide additional time for fulfilment of the suspensive
condition’, is unsustainable.
[57]
The
above passage in
Trans-Natal
Steenkoolkorporasie
[33]
is also quoted in the first judgment,
[34]
with reference to
McPherson
.
[35]
The first judgment states that
McPherson
can be
distinguished from this case, because the attempted revival of the
contract in
McPherson
was
not in writing and signed by both parties’;
[36]
and that the issue in
McPherson
,
was ‘whether a contract would self-destruct as the date for
fulfilment of the suspensive condition was not amended, and
had
already passed’.
[37]
[58]
But
that is not so. The court in
McPherson
held
that a suspensive condition cannot be waived or extended after the
time for the fulfilment of the condition has passed; that
an
agreement which has lapsed because of the non-fulfilment of the
condition cannot be ‘revived’; and that the parties
are
required to enter into an entirely new agreement, which can be on the
same terms and conditions as the old.
[38]
This is consistent with the holding in
Fairoaks
,
[39]
Pangbourne
,
[40]
and
Abrinah
.
[41]
[59]
In
support of their contention that by signing the second addendum, the
seller and the purchasers intended to revive or reinstate
the OTP,
which rendered it enforceable, the respondents rely on
Benkenstein.
[42]
In that case the parties concluded an agreement for the sale of a
farm on 28 June 1996. The offer to purchase was subject to a
suspensive condition in clause 19 thereof, namely the sale of the
purchaser’s property by 6 August 1996 or such extended
period
as the sellers may allow in their sole discretion. On 16 July 1996
the sellers signed an addendum to the offer to purchase,
in which
they amended the offer to purchase and agreed that the sale of the
purchaser’s property had to take place by 6 September
1996
or such extended period as the sellers would allow. The purchaser’s
property was not sold by 6 September 1996. On 13
September 1996 the
parties signed a further addendum to the offer to purchase, in terms
of which they agreed to ‘waive’
the suspensive condition.
[60]
Despite
its attention having been drawn to both
Phillips
[43]
and
Mekwa
,
[44]
the court in
Benkenstein
held
that the offer to purchase was enforceable. It stated that by signing
the addendum on 13 September 1996, the parties,
‘
effectively
reaffirmed their intention to sell the property on the terms set out
in the offer to purchase with the deletion of clause
19 thereof.
Notwithstanding that they referred to clause 19 as having been
“waived”, the parties clearly evinced an
intention to
give effect to the original decision to sell the property to
applicant.’
[45]
[61]
This conclusion is at odds with the decision in
Phillips
,
in which Schock J held that even where a suspensive condition is
inserted solely for the benefit of one party that he might waive
it,
he may not do so after the expiry of the time limit for the
fulfilment of the condition. The reasoning of Schock J is compelling:
‘
Subject
to what follows I am prepared to assume for the purposes of this
judgment that the condition in question was exclusively
for the
benefit of the plaintiff. However, in my judgment this cannot avail
plaintiff because of the time limitation in the condition
which
admittedly was inserted at the instance of defendant.
If
the contract remained valid despite the lapse of the time there
provided, without a bond having been obtained and without the
plaintiff having waived it during that time, it would render the time
limitation entirely without content or purpose.
Defendant
would then be in no different position than she would have been had
there been no time limitation.
Clearly,
defendant had a purpose in requiring the time limitation. The
manifest object of the time limitation was to ensure
certainty
so that the defendant would know at an early date whether she had a
firm buyer or not . . . If during this period [when
the plaintiff was
seeking to obtain a bond] defendant tried to hold him to the contract
he clearly would have pleaded the condition,
namely that he had not
succeeded in getting the money and defendant could in those
circumstances certainly not have held him to
the contract
.
It would have been most unreasonable and contrary to the manifest
intentions of the parties in this case that, after the 10-day
period,
defendant should be bound by the contract and plaintiff not, and yet
that would be the position if in fact there could
be a waiver by
plaintiff at some stage after the lapse of the 10-day period
…
.’
[46]
(Emphasis added.)
[62]
Similarly,
in
Mekwa
[47]
Coetzee J said:
‘
It
seems to me that, even if the instant condition is exclusively for
the benefit of the purchaser, it necessarily follows from
the
stipulation of the time limit for obtaining the bond that that is
also the time limit for the exercise of the purchaser’s
right
of waiver of the condition and communication of his decision. The
reasoning of Schock J [
Phillips
]
and Kumleben JA [
Nel
v Barnado
],
with respect, is impeccable
.
If
they are not correct, what is the point of stipulating a time limit
at all?’
[63]
Little
wonder then, that Van Heerden JA in
Trans-Natal
Steenkoolkorporasie
,
confirmed these decisions as being correct.
[48]
It goes without saying that
Benkenstein
runs
counter to
Phillips
and
Mekwa
,
as well as
Fairoaks
and
Pangbourne
.
It was wrongly decided and should not be followed.
[64]
The full court, however, held that
Pangbourne
differs
materially from the facts in this case. Although the suspensive
condition in the two cases is different,
Pangbourne
is on all fours with this case. The relevant facts
in
Pangbourne
are
briefly the following. The appellant purchased the respondents’
business of letting immovable property. The agreement
was subject to
three suspensive conditions, one of which was that the boards of
directors of the purchaser and the seller, were
required to approve
the purchase and sale by written resolution. The suspensive
conditions were for the benefit of all parties
and could not be
waived. Clause 4.4.2 of the relevant agreement provided that the
condition relating to board approval had to be
fulfilled within 14
days of the signature date; and clause 4.5, that the parties could in
writing extend the dates of fulfilment,
prior to those dates, by
mutual agreement. Clause 4.6 stated that in the absence of such
extension, if the conditions were not
fulfilled, the agreement would
become unenforceable, and that ‘the parties shall be restored
to the status quo ante’.
[65]
Pangbourne’s
board
of directors did not pass the resolution within the 14-day period
stipulated.
Pangbourne
argued
that the contract had lapsed because the suspensive condition was not
fulfilled. The court of first instance, however, found
that the
agreement had been ‘revived’ by a written addendum
concluded after the expiry date of the suspensive condition.
That
finding, this Court held, was wrong: the parties could not waive the
fulfilment of the condition. Lewis JA stated that ‘the
alleged
waiver was not only precluded by the express terms of the agreement
but also occurred after the date by which the condition
should have
been fulfilled’; and that ‘there was no basis on which to
find that the agreement was enforceable’.
[49]
[66]
Further, contrary to the finding by the full court
that
Pangbourne
is
distinguishable because clause 4.6 provided that the entire agreement
would become of no force and effect upon the non-fulfilment
of the
relevant suspensive condition, clause 4.6 does no more than confirm
the common-law principle: it is a belt-and-braces approach.
In
addition, the court’s finding that in the present case, ‘the
suspensive condition provided expressly for the grant
of a 30-day
extension of time in writing’, which was granted by the seller,
is apparently based on its erroneous conclusion
that the seller had
exercised the right to extend the date for the fulfilment of the
suspensive condition, on two occasions. As
stated, the OTP lapsed on
19 February 2020.
[67]
It
follows that the full court’s reliance on
Endumeni
for
its conclusion that the second addendum should be interpreted in a
manner that makes commercial sense and does not lead to absurd
results, is misplaced. The unitary exercise of interpretation
enunciated in
Endumeni
applies
to a valid contract:
[50]
not
to an unenforceable contract that is purportedly ‘revived’
or ‘extended’ in terms of a right that does
not exist.
[68]
For the above reasons, it is unnecessary to
consider whether the second addendum constitutes a new agreement, or
the appellant’s
argument that the addendum brings about the
self-destruction of the OTP. On the evidence, the second addendum is
not a new agreement.
The respondents’ case is that the purpose
of the second addendum was to ‘revive’ the transaction,
and that the
purchasers signed it on that basis. What is more, DM
Inc’s conveyancer was of the view that the OTP did not lapse,
but even
if it did, the second addendum had ‘revived and
amended’ the OTP.
[69]
In the draft order contained in the appellant’s
heads of argument, an order is sought that the first and second
respondents
should pay the appellant all amounts paid to them to give
effect to the transfer of the property. However, this was not part of
the relief sought in the notice of motion, and no case for such
relief was made out in the founding papers. Consequently, the order
sought cannot be granted.
[70]
What remains is the question of costs. The parties
were throughout represented by junior counsel, save that the
appellant was represented
in this appeal by senior and junior
counsel. Given the narrow issue in the appeal, the costs of senior
counsel are not justified.
[71]
It follows that the appeal must succeed. I make
the following order:
1
The appeal is upheld with costs. Such costs shall
include the costs of only one counsel.
2
The order of the full court of the Western Cape
Division of the High Court, Cape Town, is set aside and replaced with
the following
order:
‘
1.
The appeal succeeds with costs.
2.
The order of the court a quo dated 4 March 2022, is set aside and
replaced with the following order:
2.1 It is
declared that:
(a) the
Offer to Purchase Erf 1[...], K[...] Upper, Cape Town, located at
8[...] S[...] Road, Kenilworth, Western
Cape (the property),
concluded on 4 February 2020 between the first respondent as seller,
and the third and fourth respondents
as purchasers (the Offer to
Purchase); and
(b) the
Addendum to Agreement of Sale, concluded between the seller and the
purchasers on 20 February 2020, purportedly
to extend the suspensive
condition in clause 7.2 of the Offer to Purchase, after the expiry
date for the fulfilment of that condition,
are invalid and
unenforceable.
3. The first
and second respondents shall pay to the applicant the sum of
R1 950 000, which she paid to them
on behalf of the third
and fourth respondents in respect of the purchase price of the
property, together with the interest on that
amount to which the
applicant is entitled.
4. The first
and second respondents shall pay the costs of the application,
jointly and severally, the one paying the
other to be absolved.’
A SCHIPPERS
JUDGE OF APPEAL
Appearances
For
the appellant:
R
S Van Riet SC with P Tredoux
Instructed
by:
De
Waal Grobbelaar Fisher Inc, Cape Town
JL
Jordaan Attorneys, Bloemfontein
For
the first and second respondents:
N
C De Jager
Instructed
by:
DML
Inc, Cape Town
Phatshoane
Henny Inc, Bloemfontein.
[1]
The
OTP was also referred to as the agreement by the parties.
[2]
The
first and second respondents did not pursue this aspect with
enthusiasm, accepting that such course of action would be contrary
to legal principles established in the cases referred to hereunder.
## [3]Fischer
and Another v Ramahlele and Others[2014]
ZASCA 88; 2014 (4) SA 614 (SCA); [2014] 3 All SA 395 para 13, in
which it was held:
[3]
Fischer
and Another v Ramahlele and Others
[2014]
ZASCA 88; 2014 (4) SA 614 (SCA); [2014] 3 All SA 395 para 13, in
which it was held:
‘
Turning
then to the nature of civil litigation in our adversarial system, it
is for the parties, either in the pleadings or affidavits
(which
serve the function of both pleadings and evidence), to set out and
define the nature of their dispute, and it is for the
court to
adjudicate upon those issues. That is so even where the dispute
involves an issue pertaining to the basic human rights
guaranteed by
our Constitution, for “it is impermissible for a party to rely
on a constitutional complaint that was not
pleaded”.’
This
dictum
was
confirmed by the Constitutional Court on several occasions. See
South
African Police Service v Solidarity Obo Barnard
[2014]
ZACC 23
;
2014 (6) SA 123
(CC);
[2014] 11 BLLR 1025
(CC);
2014 (10)
BCLR 1195
(CC); (2014) 35 ILJ 2981 (CC) paras 210, 220 and 233. See
also
Molusi
and Others v Voges NO and Others
[2016]
ZACC 6
;
2016 (3) SA 370
(CC);
2016 (7) BCLR 839
(CC) para 28.
[4]
Fairoaks
Investment Holdings (Pty) Ltd and Another v Oliver and Others
[2008]
ZASCA 41
;
[2008] 3 All SA 365
(SCA);
2008 (4) SA 302
(SCA)
(
Fairoaks
);
Pangbourne
Properties Ltd v Basinview Properties (Pty) Ltd
[2011]
ZASCA 20
(
Pangbourne
);
see also
Command
Protection Services (Gauteng) (Pty) Ltd t/a Maxi Security v SA Post
Office Ltd
[2012]
ZASCA 160
;
[2013] 1 All SA 266
(SCA);
2013 (2) SA 133
(SCA) (
Command
Protection Services
)
para
21.
[5]
Section
2(1)
of the
Alienation of Land Act 68 of 1981
requires the whole
contract of sale – its material terms – to be reduced to
writing signed by or on behalf of the
parties. The material terms
include the description of the parties to the sale agreement, the
purchase price, and the description
of the property being
transferred
.
See
Tamryn
Manor v Stand 1192 Johannesburg
(785/2015)
[2016] ZASCA 147
(30 September 2016); see also
Cooper
N O and Another v Curro Heights Properties (Pty) Ltd
[2023]
ZASCA 66; 2023 (5) SA 402 (SCA).
[6]
Natal Joint Municipal
Pension Fund v Endumeni Municipality
[2012]
ZASCA 13
;
[2012] 2 All SA 262
(SCA);
2012 (4) SA 593
(SCA)
(
Endumeni
);
see also
AmaBhungane
Centre for Investigative Journalism NPC v President of the Republic
of South Africa
[2022]
ZACC 31
;
2023 (2) SA 1
(CC);
2023 (5) BCLR 499
(CC) para 36.
[7]
Endumeni
para
17 and 25.
[8]
Pangbourne
Properties
Ltd v Basinview Properties (Pty) Ltd
(381/10)
[2011] ZASCA 20
(17 March 2011).
[9]
Ibid
para 23 and 24.
[10]
Abrinah
7804
(Pty) Ltd v Kapa Koni Investments CC
[2017]
ZANCHC 63
;
2018 (3) SA 108
(NCK) para 66 (
Abrinah
).
[11]
Wacks
v Goldman
1965
(4) SA 386
W;
Mekwa
Nominees v Roberts
1985
(2) SA 498
(W)
;
Phillips
v Townsend
1983
(3) SA 403
(C) and
Meyer
v Barnardo and Another
1984
(2) SA 580 (N).
[12]
Abrinah
paras
35-37 and 47; see also
Trans-
Natal Steenkoolkorporasie Bpk v Lombaard en 'n Ander
1988
(3) SA 625
(A).
[13]
Cronje v Tuckers
Land and Development Corporation (Pty) Ltd
1981 (1) SA 256
(W) at 259G-260.
[14]
McPherson
v Khanyise Capital (Pty) Ltd
[2009]
ZAGPHC 57
(
McPherson
)
paras
21-23
.
[15]
Translation:
‘
An
analogous position applies if a contract is made subject to a
suspensive condition that something must take place on or before
a
specified date, e.g. that the purchaser must obtain a loan. In a
number of Transvaal cases, the attitude was taken that if
such a
provision was included in favour of only one party, he could also
waive its benefit after the deadline. In the eighties,
however, it
was found in three judgments that a later waiver could not lead to
revival of the contract…I fully agree with
the conclusion
arrived at in these cases
.’
[16]
McPherson
para
28.
[17]
McPherson
para
28.
[18]
Neethling
v Klopper en Andere
1967
(4) SA 459 (A).
[19]
Fairoaks
para
18-19 and 21.
[20]
Benkenstein
v Neisius and others
1997
(4) SA 835
C.
[21]
Ibid
at 842I-J.
[22]
Ibid
at 847F-G.
[23]
DS
Enterprises (Pty) Ltd v Northcliff Townships (Pty) Ltd
1972
(4) SA 22
(W).
[24]
Ibid
at 28E-F.
[25]
Fairoaks
para
19.
[26]
Command
Protection Services
fn
4 para 10;
Swart
v Starbuck and Others
[
2017]
ZACC 23
;
2017
(10) BCLR 1325
;
2017 (5) SA 370
(CC) (
Swart
)
para 6; G B Bradfield
R
H Christie’s Law of Contract
8
ed (2022) at 183.
[27]
Trans-Natal
Steenkoolkorporasie Bpk
fn
12;
Fairoaks
fn
4 para 22;
Pangbourne
fn
4 para 6;
Command
Protection Services
fn
4 para 10;
Swart
fn
26 para 6.
[28]
Fairoaks
fn
4 para 22.
[29]
Pangbourne
fn 4
paras 6 and 24.
[30]
See
the authorities cited in fn 4.
[31]
1988
(3) SA 625
(A) at 640B-C.
[32]
The
original text is quoted in para 24 of the first judgment.
[33]
1988
(3) SA 625
(A) at 640B-C.
[34]
See
para 24 above.
[35]
McPherson
fn
14.
[36]
See
para 26 above.
[37]
See
para 28 above.
[38]
McPherson
fn
14 para 28.
[39]
Fairoaks
fn 4
para 22.
[40]
Pangbourne
fn 4
para 24.
[41]
Abrinah
fn 10
para 47.
[42]
Benkenstein
fn
19.
[43]
Phillips
fn
11.
[44]
Mekwa
fn
11.
[45]
Benkenstein
fn 19
at 841D-E.
[46]
Phillips
fn
11 at 408E-H.
[47]
Mekwa
fn
11 at 501J-502B.
[48]
Trans-Natal
Steenkoolkorporasie
fn
12 at 640B-C.
[49]
Pangbourne
fn 4
paras 24 and 25.
[50]
Endumeni
fn 6 para 18;
Capitec
Bank Holdings Ltd and Another v Coral Lagoon Investments 194 (Pty)
Ltd and Others
[2021]
ZASCA 99
;
[2021] 3 All SA 647
(SCA);
2022 (1) SA 100
(SCA) para 25.
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