Holtzhausen and Another v Gore NO and Others

• Jurisdiction: South Africa
• Judge: Thring J
• Judgment Date: 09 November 2001
• Citation: 2002 (2) SA 141 (C)
• Docket Number: 6598/2001
• Counsel: P Tredoux (with him J L Vismer) for the applicants. M J Fitzgerald SC (with him B J Manca) for the respondents.
• Court: Cape Provincial Division

Thring J:

The first applicant is the sole E trustee of the second applicant, an inter vivos trust duly registered with the Master. Whether or not the second applicant has legal personality or the capacity to litigate in its own name need not be considered, as the point has not been taken: I shall assume for the purposes of this matter, without deciding, that it has such personality and capacity. The first applicant and certain other members of his F family live on a farm called 'Orange Grove' in the district of George, to which I shall refer as 'the farm'. The farm is apparently owned by another trust called the Groengoud Trust. The estate of the latter trust was finally sequestrated by order of this Court on 18 March 1999. The first respondent was appointed as its trustee on 14 July 1999. The second respondent is the mortgagee of the farm. On 23 June 2000 the farm was put up for public auction by G the first respondent. Included in the auction were certain movables on the farm, being items of irrigation equipment. I shall refer to this auction as 'the first auction'. The first applicant attended the first auction and bid on behalf of the second applicant. The farm and the movables were knocked down to the second applicant for a purchase H price of R860 000. Clauses 2, 3 and 4 of the applicable conditions of sale read:

'2.

Die koopprys sal betaal word by wyse van 'n deposito van 10% daarvan aan die afslaer teen ondertekening van hierdie verkoopvoorwaardes, welke bedrag die afslaer onmiddellik na ontvangs, in sy trustrekening moet inbetaal en dit so gou as moontlik daarna weer I in 'n aparte rentedraende rekening moet belê. Alle rente wat op hierdie bedrag verdien word, sal die koper toekom.

Die balans is betaalbaar teen registrasie van transport op die naam van die koper en die koper sal verplig wees om 'n bank of ander goedgekeurde waarborg op aanvraag te verskaf. Die koper sal verplig wees om onmiddellik na afloop van die veiling hierdie verkoopvoorwaardes te onderteken. J

Thring J

3.

Die koper sal op aanvraag betaal: A

3.1

Alle transportkoste insluitende herereg (en/of BTW indien van toepassing) en alle koste en fooie ten einde oordrag in sy naam te registreer.

3.2

Die koste ten einde die bakens van die eiendom te bepaal en te plaas.

3.3

Die opmetingskoste indien 'n onderverdeling, heropmeting of konsolidasie nodig is.

3.4

Die afslaer se kommissie bereken teen die koers van 7% van die koopprys as ook BTW daarop. B

4.

Oordrag sal registreer word deur die verkoper se prokureurs so spoedig moontlik na voldoening deur die koper aan sy verpligtings hierkragtens.'

The first applicant duly signed the conditions of sale, apparently on behalf of the second applicant, which is recorded therein as being the purchaser. Clause 10 of the conditions provided that: C

'10. Die verkoping is onderhewig aan die goedkeuring van die verkoper binne 14 dae van datum van veiling en totdat sodanige goedkeuring geweier is, bly die koper gebonde aan hierdie verkoopvoorwaardes.'

The 10% deposit provided for in clause 2 was duly paid. On 7 July 2000 the first respondent approved the sale. A binding sale D thus came into being between the first respondent as seller and the second applicant as purchaser. On the same day the first respondent demanded that the purchaser immediately furnish a guarantee for the balance of the purchase price, being R774 000, purportedly acting in terms of clause 2 of the conditions of sale. The guarantee was not forthcoming. The demand was repeated on 18 August 2000. At no time E did the first respondent tender transfer of the farm. Nor was there ever an indication that transfer was imminent or even that the first respondent was in a position to pass transfer. Apparently there are, or were then, endorsements against the title deeds of the farm as a result of certain interdicts and an unresolved application in this Court under case No 15845/97 which would have been obstacles to F transfer. However, the attitude of the first respondent was that he was entitled to be furnished with the guarantee forthwith and independently of any reciprocal obligation to pass transfer or to lodge the transfer documents with the Deeds Office so that transfer could be effected. As a result of the applicants' failure to furnish G the guarantee the first respondent cancelled the sale on 13 September 2000. He purported to act in terms of the provisions of clause 11.2 of the conditions of sale, which read:

'11. Indien die koper versuim om aan enige van hierdie voorwaardes te voldoen, sal die verkoper die reg hê om

11.1

. . . H

11.2

Of om die verkoping te kanselleer in welke geval alle bedrae deur koper reeds inbetaal ingevolge hierdie ooreenkoms, aan die verkoper sal verval as vooruitberaamde skadevergoeding soos ooreengekom, welke berdrag die afslaer aan die verkoper kan oorbetaal na aftrekking van hul kommissie of, in die alternatief, om die verkoping te kanselleer en om skadevergoeding van die koper te eis.' I

A second public auction of the farm was arranged by the first respondent for 7 March 2001. I shall refer to it as 'the second auction'. On 5 March 2001 the first applicant, acting in his capacity as the second applicant's sole trustee, launched an urgent application in this Court in which he sought, inter alia, an interim interdict restraining the first respondent J

Thring J

from proceeding with the second auction pending the outcome of an A action which the first applicant proposed to institute against the first respondent for specific performance of the sale to the second applicant pursuant to the first auction. In his affidavit deposed to in support of this application the first applicant said:

'9. Applikant voer eerbiedig aan dat eerste en tweede respondent nie geregtig is om met hierdie veiling voort te gaan nie B en wel, teen die agtergrond hierintevore uiteengesit, onder meer, op grond van die volgende:

9.1

'n onbillike tyd, in aggenome die feite hierbo, is aan applikant gegee om 'n waarborg vir betaling van die balans koopsom, te verskaf;

9.2

in die lig van die interdikte wat teen die eiendomme aangeteken is, en die onafgehandelde Hooggeregshof Saaknr 15845/97 en C gepaardgaande Hofbevel daaromtrent (aanhangsels HDH III tot VI) was eerste respondent nog nooit in 'n posisie om vrye en onbeswaarde registrasie van oordrag aan applikant te gee nie;

9.3

eerste respondent het applikant op geen stadium ingelig wanneer hy van voorneme was om in te dien vir registrasie van oordrag nie - die betaling van die balans koopsom synde, in terme van para 2 van aanhangsel HDH VIII eers betaalbaar teen registrasie van D oordrag;

9.4

eerste respondent het in elk geval, op geen stadium, effektiewelik, registrasie van oordrag getender nie;

9.5

applikant voer derhalwe eerbiedig aan dat eerste respondent nie die vorige koopkontrak onder die omstandighede, regsgeldiglik kon kanselleer nie;

9.6

applikant tender steeds om sy verpligtinge kragtens die koopkontrak van 23 Junie '00 soos later bekragtig, na te kom; E

. . .'

The application was argued on 6 March 2001 before Pincus AJ. On the following day, 7 March 2001 the learned Acting Judge gave judgment. He dismissed the application with costs. He found that the F applicant had failed to establish a prima facie right to the farm or the movables. He said:

'It must be remembered that in the present case the conditions of sale provide that:

1.

The balance of the purchase price is payable against registration of transfer.

2.

The purchaser is obliged to furnish a guarantee (for such balance) on demand (expressing itself to be payable against registration of transfer). G

3.

The purchaser is obliged to pay on demand various costs including costs of transfer.

4.

Transfer will be given as soon as the purchaser has complied with his aforesaid obligations (vide clause 4).

The agreement accordingly contemplated that the purchaser was obliged to furnish the guarantee on demand, pay various costs on demand and once having done those things transfer would then be given to him. Mr H Tredoux invited me to read the two sentences of the second para of clause 2 of the conditions of sale together. I accept the invitation. What it means is that the purchaser must furnish the guarantee on demand, that is for the balance of the purchase price and which will express itself as only being payable on registration of transfer.' I

The learned Acting Judge referred in his judgment to three reported decisions which were relied on by the applicant, viz Theron v Theron 1973 (3) SA 667 (C), Wehr v Botha NO 1965 (3) SA 46 (A) and Wilson v Spitze 1989 (3) SA 136 (A). He found them all to be distinguishable. He said:

'Mr Tredoux relied on these cases as support for his legal argument. His argument loses sight of the fact that: J

Thring J

(1)

the agreement in casu does fix a time for the furnishing of the guarantee and A

(2)

the agreement contemplates that the guarantee first be furnished and then will follow registration of transfer (vide clause 4).'

He went on to say:

'There was, in my view, no necessity in the letters calling for the furnishing of the guarantee to tender transfer - that would come later as I have already indicated.' B

The applicants did not take any steps to appeal against this judgment despite the fact that it may have had final effect and been appealable: see Cronshaw and Another v Coin Security Group (Pty) Ltd 1996 (3) SA 686 (A) at 690C, and Zweni v Minister of Law and Order 1993 (1) SA 523 (A) at 532I - 533B and 536B. In favour of the first and second respondents I shall assume, without deciding, C that the order was final in its effect, and was appealable.

The second auction was duly held on 7 March 2001. The first applicant attended it. He...