Corondimas and Another v Badat

• Jurisdiction: South Africa
• Judge: Watermeyer CJ, Tindall JA, Greenberg JA, Schreiner JA and Feetham AJA
• Judgment Date: 04 June 1946
• Hearing Date: 13 March 1946
• Court: Appellate Division

Watermeyer, C.J.:

The facts of the case and the terms of the so-called "pegging" Act are set out in the judgment of my brother FEETHAM, so it is unnecessary for me to repeat them. I agree with him that the words "acquires or purports to acquire any land" must be given an extended interpretation so as to include an agreement whereby one of the parties to it acquires or purports to acquire a legal right to claim transfer of land from the other and the other incurs an obligation to give such transfer, Examples of such agreements are agreements to buy and sell or to exchange or to donate land. The words "purport to acquire" were, in my opinion, added merely ex majore cautela to meet the possible contention that because agreements to "acquire land" made without the permission of the Minister were declared to be invalid, therefore, by such an agreement no one could do more than purport to "acquire land"; he could not "acquire land". Such agreements, whether of sale, exchange or donation, are, by the terms of sec. 5 (2) of the Act, declared to be null and void, unless they are concluded under the authority of a permit issued by the Minister under sec. 7.

The question raised in this case is whether an agreement of sale

Watermeyer, C.J.

which is entered into "subject to permission being given under the pegging Act", is an agreement which is null and void on the ground that it is an agreement whereby a party to it "acquires or purports to acquire land" within the meaning which I have given above to those words.

Such an agreement is clearly subject to a true suspensive condition. It is an agreement to buy and sell if the Minister grants a permit to the parties to enter into it. According to the decision of this Court in the case of Provident Land Trust v Union Government (1911 AD 615), when a contract of sale is subject to a true suspensive condition, there exists no contract of sale unless and until the condition is fulfilled. In other words, the prohibited contract (e.g., a contract of sale), which is declared null and void by sec. 5 (2) of the Act unless the Minister consents to it, cannot come into existence unless and until that condition is fulfilled. Until that moment, in the case of a sale subject to a true suspensive condition, such as this is, it is entirely uncertain whether or not a contract of sale will come into existence at some future time. Until that moment there is certainly a legal relationship, contractual maybe (see Goudsmit, par. 61; Voet, 18.1.24; Leo v Loots (1909, T.S. 366)), existing between the parties, which may ripen into a contract of sale, but, in the particular case in which the coming into existence of a contract of sale is made, by agreement between the parties, to depend upon consent to it having been given by the Minister, that relationship is not one which is forbidden by the Act or declared by it to be of no force and effect. (In this respect this case differs from some of those quoted in argument.) It is not forbidden, because, unless and until the, Minister gives his consent no contract "whereby one party acquires or purports to acquire land" comes into existence and so soon as he has given his consent, thereby bringing into existence a contract of that nature, the condition required by the Act for its validity (viz., the consent of the Minister) has been fulfilled.

The position which would arise, if the suspensive condition does not relate to the consent of the Minister and no consent is given, is not raised in the present case, but in that event a contract of sale would come into existence if the condition is fulfilled, and, if the condition is fulfilled, the contract which comes into existence must necessarily be an illegal contract because the Minister has not consented to it.

Feetham, A.J.A.

Consequently, it would seem that a sale subject solely to a suspensive condition of any other sort would necessarily be null and void.

For these reasons I came to the conclusion that the appeal should be dismissed with costs.

Judgment

Feetham, A.J.A.:

This is an appeal from a decision dismissing an exception to a declaration in an action brought by the respondent against I the appellants, in which the respondent claimed specific performance of an agreement alleged to have been entered into between appellants, as sellers, and respondent, as purchaser, for the sale of land in Durban. It will be convenient in this judgment to refer to the respondent and the appellants respectively in their original, capacities as plaintiff and defendants. The declaration contains no allegations as to the races to which the parties respectively belong, but it was admitted in the Court a quo that the plaintiff is an Asiatic, and that the defendants are Europeans.

The relevant allegations in the declaration may be summarised as follows: The defendants, who are owners in equal undivided shares of two immovable properties known as 29 and 29a Garnet Road, Durban, gave, on the 16th February 1944, authority to the firm George Singh & Co to sell the said properties in terms of the following letter:-

	Durban,; 16th February, 1944,; 'S. Corondimas",; 16.2.44.
"Messrs. Geo. Singh & Co.,; Durban.
Dear Sirs,
Re 29 AND 29A GARNET ROAD, DURBAN: TWO PROPERTIES.
I hereby give you the sole and irrevocable authority to sell my property for the sum of three thousand seven, hundred and fifty pounds (£3,750) payable cash against transfer. (i) All adjustments such as rates, rents, insurance, etc., as and from date of transfer. (ii) Purchaser pays all transfer expenses. (iii) Conveyancers to be appointed by agents or sellers. (iv) Subject to removal of AA clause at expense of seller. This authority holds good for one month from the date hereof.
	Yours faithfully,

Feetham, A.J.A.

(v) Seller pays Tariff Sales commission. (vi) Also subject to permission under Pegging Act.
	'S. Corondimas'"

On the 21st February, 1944, the plaintiff made to the said firm through its sub-agents, H. N. M. Khan & Co., the following offer to purchase the said properties:-

"Messrs. H. N. M. Khan & Co.,	Durban,
Estate Agents, 83a Victoria Street,; Durban.	21st February, 1944.
Dear Sirs,
Re PURCHASE 29 AND 29A GARNET ROAD, DURBAN: TWO PROPERTIES.
I hereby give you a firm offer to purchase the above properties together with whatever improvements thereon for the sum of three thousand seven hundred and fifty pounds (£3,750) payable cash against registration of transfer. (i) All adjustments, such as rents, rates, insurance, etc., as and from date of transfer. (ii) Purchaser pays all costs of transfer. (iii) Conveyancers to be appointed by Agents. (iv) Seller pays Tariff Sales commission. (v) Subject to removal of AA clause at expense of seller. (vi) Also subject to permission under Pegging Act. (vii) On acceptance of this offer I agree to pay a deposit of £100 against purchase price, pending transfer, such deposit to be held in trust. This offer holds good for seven days (7) from date hereof.
	Yours faithfully (sgd.) G. H. M. Badat, Purchaser."

On the 26th February, 1944, George Singh & Co wrote to the plaintiff accepting the above offer, including in their letter of acceptance the following paragraphs:-

"In terms of your offer kindly let us have your cheque for £100 which will be held by us in trust pending transfer.

"In the meantime we are proceeding with the application for the removal of the A.A. Clause on the property. We will advise you from time to time of developments."

The £100 referred to in the last-mentioned letter was duly paid; the defendants applied for and obtained an order of court...