Heathfield v Maqelepo

• Jurisdiction: South Africa
• Citation: 2004 (2) SA 636 (SCA)

Heathfield v Maqelepo
2004 (2) SA 636 (SCA)

2004 (2) SA p636

Citation	2004 (2) SA 636 (SCA)
Case No	430/2002
Court	Supreme Court of Appeal
Judge	Scott JA, Mthiyane JA and Southwood AJA
Heard	November 14, 2003
Judgment	November 27, 2003
Counsel	S J van Niekerk for the appellant. (Heads of argument by A P den Hartog.); A P Bruwer for the respondent.

Flynote : Sleutelwoorde B

Contract — Interpretation of — Written agreement — Sale of immovable property — Purchaser or surety — Respondent signing offer to purchase for and on behalf of non-existent company — Respondent signing as purchaser without qualifying signature — Further clause purportedly binding respondent as surety and co-principal debtor in event of failure by company and he undertakes 'to take transfer in my own name' — Company never registered and respondent C seeking transfere of property — Appellant contending that contract null and void because company never registered and that respondent no more than surety and therefore having no right to enforce agreement — Use of word 'surety' to be read in context — Intention of parties clearly that respondent would step in shoes of company if it failed to comply with D obligations — Surety not liable unless there is principal debtor, as surety liable for debt or obligations of another — Agreement that respondent take transfer of property in own name inconsistent with position of surety — Parties intending respondent to be purchaser and not surety — Respondent as purchaser able to enforce agreement. E

Headnote : Kopnota

The respondent had signed a written offer to purchase from the appellant her immovable property, subject to certain conditions. The appellant accepted the offer. The agreement consisted of a printed form containing standard terms and conditions into which the purchaser and seller's transaction details had been inserted. It had incorporated an additional page on which the relevant information pertaining to the F purchaser and seller was to be inserted. The purchaser was described in the form as 'Lijane Maqelepo [the respondent] for and on behalf of the above co'. The 'above co' was obviously a reference to New Heights (Pty) Ltd as the name, New Heights Pty Ltd, had been inserted above that of the respondent. In the additional page the respondent was reflected as the purchaser and all his relevant G details inserted. No reference was made therein to New Heights. Clause 21 of the offer to purchase has been inserted in manuscript and read as follows: 'Should the PTY LTD NEW HEIGHTS not be able to take transfer and or ratify this agreement I LIJANE MAQELEPO HEREBY holds (sic) myself surety and co-principal debtor for all the obligations of this offer towards the seller and irrevocably hereby undertake to take transfer in my own name.' The respondent had H signed the offer to purchase as purchaser without qualifying his signature. A company called New Heights (Pty) Ltd (New Heights) had never been registered and accordingly had never existed. The respondent had fulfilled all the conditions of the agreement, but the appellant repudiated the contract. The respondent had approached a Local Division where the appellant had contended that as New Heights did not exist, the agreement was null and void. I Furthermore, she averred that the respondent was no more than a surety and therefore had no right to enforce the agreement. The respondent had obtained an order for the appellant to give transfer of the property to him, such giving rise to this appeal.

Held, that the essential question was whether the parties intended that the respondent be a purchaser in his own right or as surety for New Heights. J

2004 (2) SA p637

This depended upon the proper construction of the agreement and in particular whether the alteration to the A description of the purchaser and the insertion of clause 21 changed the intention that the respondent be the purchaser. (Paragraph [12] at 640G - H.)

Held, further, that clause 21 was inelegantly worded. When read together with the description of the purchaser it showed that the respondent was purporting to act on behalf of New Heights when he did not have authority to do so and that the parties knew that the B company would have to ratify the agreement to become bound. The parties clearly contemplated that the company might fail to do so, in which event there would be no binding agreement between the appellant and the company. They sought to regulate what would happen in such an eventuality. They accordingly agreed that in the event of the company not being bound the respondent would perform all the obligations of C the purchaser in terms of the agreement and that he would take transfer of the property in his own name. They provided that in so doing the respondent would act as 'surety and co-principal debtor'. (Paragraph [15] at 641G - I/J.)

Held, further, that the agreement that the respondent would perform all the obligations of the purchaser in terms of the agreement in the event of the company not being bound was not D consistent with the obligations of a surety in two crucial respects. First, a surety could not be liable unless there was a principal debtor who was or became liable. The liability of a surety was entirely dependent upon the liability of the principal debtor, ie it was accessory to that of the principal debtor. Secondly, a surety was liable for the debt or obligations of another. The agreement that the respondent would take transfer of the property into his own name is E also inconsistent with the position of a surety. If a surety was called upon to perform the purchaser's obligations and did so, the agreement between the purchaser and the seller remained in force and the seller would be obliged to transfer the property into the name of the purchaser, not that of the surety. Performance of the purchaser's obligations and taking transfer of the property were consistent with F the respondent being the purchaser. (Paragraph [16] at 641I/J - 642C/D.)

The decision in the Witwatersrand Local Division in Maqelepo v Heathfield confirmed.

Cases Considered

Annotations

Reported cases G

African Organic Fertilizers and Associated Industries Ltd v Premier Fertilizers Ltd 1948 (3) SA 233 (N): referred to

Aktiebolaget Hässle and Another v Triomed (Pty) Ltd 2003 (1) SA 155 (SCA): referred to

Burroughs Machines Ltd v Chenille Corporation of SA (Pty) Ltd 1964 (1) SA 669 (W): dictum at 670G - H applied H

Coopers & Lybrand and Others v Bryant 1995 (3) SA 761 (A): referred to

Hillas &...