Dharsey v Shelly

• Jurisdiction: South Africa
• Citation: 1995 (2) SA 58 (C)

Dharsey v Shelly
1995 (2) SA 58 (C)

1995 (2) SA p58

Citation	1995 (2) SA 58 (C)
Case No	8712/92
Court	Cape Provincial Division
Judge	Mitchell AJ
Heard	September 13, 1994; September 14, 1994; September 15, 1994
Judgment	September 29, 1994

Flynote : Sleutelwoorde

H Sale — Of land — The contract — Suspensive condition — Fulfilment of — Sale made conditional upon purchaser (plaintiff) being granted a bond by a certain date — Contract good and enforceable if condition fulfilled — Plaintiff claiming return of deposit on grounds that suspensive condition I not timeously fulfilled — Application for a loan submitted to bank which approved the loan subject to normal conditions — Adequate valuation of the property concerned was 'normal condition' and such valuation was indeed obtained, although only communicated to the bank after the expiry of the relevant date, a factor held not to affect the position — Subsequent to J loan being granted, plaintiff's tax liabilities disclosed to

1995 (2) SA p59

A bank — Such approval subsequently withdrawn — However, fulfilment of suspensive condition causes contract to become enforceable retrospectively to date of conclusion thereof — Held that the condition fulfilled within the relevant period.

Headnote : Kopnota

B In terms of a written deed of sale, defendant sold to plaintiff a property for a given purchase price, ie R550 000, payable by way of a deposit and the balance to be secured by way of a banker's or building society loan. The agreement was made subject to a suspensive condition that 'the purchaser (be) granted a loan by a building society or recognised financial institution on its normal terms and conditions . . . against security of the property'. Plaintiff, after paying a deposit to defendant's estate agent, claimed that the suspensive condition had not been fulfilled timeously, with the result that the sale had fallen away, and claimed return of the deposit. The defendant denied that the contract C had failed for want of fulfilment of the condition.

On 2 April 1992, within the extended period allowed for the fulfilment of the suspensive condition, the plaintiff's loan was approved subject to normal conditions. However, after the conclusion of the deed of sale, the plaintiff received income tax assessments from the Department of Inland Revenue. Whether it was as a result of the assessments or buyer's remorse, the plaintiff wanted to extricate himself from the agreement D without breaching same and therefore forwarded to the bank information regarding his tax liabilities. Eventually the loan offer was withdrawn on 10 April 1992. The Court

Held, that the 'normal condition' required, being the adequate valuation of the property, had indeed been obtained (at 63I/J), although only communicated to the bank after the expiry of the relevant date, a factor that did not affect the position. (At 63J and 64C.)

E Held, further, that the letter of grant sent to plaintiff for signature constituted fulfilment of the suspensive condition of the deed of sale. (At 63H/I.)

Held, further, that the effect of the fulfilment of the suspensive condition was that the contract became enforceable retrospectively to the date of conclusion thereof. (At 64B.)

Held, further, that should the loan have been granted within the meaning of the deed of sale, then any subsequent occurring event which might have F rendered plaintiff unable to take up the loan did not affect the defendant, but constituted a risk which plaintiff bore. (At 64F/G-G.)

Held, accordingly, that the suspensive condition had been fulfilled within the relevant time period and that plaintiff's claim thus had to be dismissed. (At 65A and B.)

Case Information

Civil trial in an action for the repayment of a deposit paid in terms of a G deed of sale. The facts appear from the reasons for judgment.

R D McDougall for the plaintiff.

L M Olivier for the defendant.

Cur adv vult.

Postea (September 29). H

Judgment

Mitchell AJ:

On 20 February 1992, plaintiff and defendant concluded a written deed of sale in terms whereof plaintiff purchased defendant's immovable property in Constantia for R550 000. A deposit of R55 000 was paid to defendant's estate agent, Constantiaberg Estates CC, represented I by Mr D Gough.

The sale was subject to a suspensive condition relating to a loan to be obtained by plaintiff upon security of the property. The relevant clause of the agreement reads as follows:

'This offer is subject to the purchaser being granted a loan by a building society or recognised financial institution on its normal terms and J conditions for the sum

1995 (2) SA p60

Mitchell AJ

A of R500 000 or less against security of the property. Such bond is to be applied for forthwith and to be confirmed on or before 20 March 1992 or such extended period as the seller in his sole discretion may allow. For the purpose of obtaining the loan requested by the purchaser, Constantiaberg Estates is hereby irrevocably appointed as the purchaser's agent. The purchaser may at his discretion reduce the above amount.'

B By the commencement of the trial, it was common cause that plaintiff had agreed to reduce the loan which he required to R495 000 (being the difference between the purchase price and the deposit paid) and that defendant had extended the period within which the loan should be granted initially to 27 March and subsequently to 3 April 1992.

C Upon the allegation that the suspensive condition had not been fulfilled timeously, thereby resulting in the sale falling away, plaintiff claims return of the deposit, interest and costs. Defendant, in his plea, denies that the contract failed for want of fulfilment of the condition and relies in the alternative on a fictional fulfilment thereof. The latter defence was not established by the evidence and was not advanced before me D in argument by Mr Olivier, who appeared for defendant.

The...