Kragga Kamma Estates CC and Another v Flanagan

• Jurisdiction: South Africa
• Judge: E M Grosskopf JA, Nestadt JA, Kumleben JA, Howie JA and Nicholas AJA
• Judgment Date: 29 September 1994
• Docket Number: 720/93
• Court: Appellate Division
• Hearing Date: 19 August 1994
• Citation: 1995 (2) SA 367 (A)

Kragga Kamma Estates CC and Another v Flanagan
1995 (2) SA 367 (A)

1995 (2) SA p367

Citation	1995 (2) SA 367 (A)
Case No	720/93
Court	Appellate Division
Judge	E M Grosskopf JA, Nestadt JA, Kumleben JA, Howie JA and Nicholas AJA
Heard	August 19, 1994
Judgment	September 29, 1994

Flynote : Sleutelwoorde B

Contract — Remedies on breach — Repudiation — Cancellation — Purchaser having failed to pay portion of purchase price in terms of deed of sale — C Seller alleging that non-payment constituted repudiation, accepted by seller — Failure to pay obviously constituting breach of contract in light of requirement in contract that payment had to be made on signature of agreement — Court assuming such breach constituting repudiation — Seller, however, only purporting to cancel contract more than two years after conclusion of agreement and after having accepted monthly payments on D balance of purchase price — In such circumstances seller not summarily entitled to accept repudiation and cancel contract.

Contract — Performance — Time for — When party in mora — Mora ex persona — Demand for payment contained in pleadings in case — This amounting to E interpellatio iudicialis and not per se impermissible — Demand, however, specifying that payment to be made 'within a reasonable period of time' and preceded by words 'in the event that the . . . Court should find that the (seller) intended to sell the property to the (purchaser)' — Demand, being subject to an uncertain future event, plainly conditional and not F capable of placing purchaser in mora.

Headnote : Kopnota

The respondent ('the plaintiff') had sold and caused to be transferred certain fixed property to the first appellant ('the first defendant', a close corporation). The second appellant ('the second defendant') was one of the members of the first defendant. The plaintiff instituted an action in a Local Division claiming retransfer. The claim was upheld on the G ground that the plaintiff subsequently cancelled the sale. The agreement of sale, which was entered into in April 1991, provided for a purchase price of R120 000 payable as to R70 000 'on signature hereof' and as to the balance of R50 000 at the rate of R500 per month. Although the plaintiff's claim was initially based on an alleged misrepresentation by the second defendant, the plaintiff had during the course of the trial several times amended her particulars of claim, eventually claiming retransfer only on the following bases: (1) that the first defendant had H repudiated the contract by refusing to pay the amount of R70 000 and that the plaintiff had accepted such repudiation (para 7.7 of the plaintiff's particulars of claim as amended in terms of notice of motion dated 6 May 1993); and (2) that the plaintiff had cancelled the agreement as a consequence of the first defendant's failure to pay the R70 000 (para 7.8 of the plaintiff's particulars of claim as amended in terms of notices of intention to amend dated 6 May 1993 and 11 October 1993 (a second notice of intention dated 30 September 1993 was not granted)). In its final form I para 7.8 stated that the cancellation was effected by the notice of 30 September and by way of a letter addressed to the first defendant's attorneys dated 5 October 1993, despite demand having been made upon the first defendant by way of the notice of intention to amend of 6 May 1993, and despite the lapse of a reasonable time. The plaintiff also tendered repayment of the monthly payments of R500. On appeal,

Held, as to (1) above, that the first defendant's failure to pay the R70 000 had obviously constituted a breach of the contract (it was, in the J light of the fact that payment had

1995 (2) SA p368

A to be made on signature of the agreement, a case of mora ex re), and that the Court would assume that the breach constituted repudiation, which was what was required in terms of the plaintiff's cause of action as framed in para 7.7. (At 373A/B-B/C.)

Held, further, that, although there was much to be said for the conclusion that by asserting that the amount had been paid, the first defendant was refusing to pay and that the plaintiff should be entitled to cancel on B this ground, the fact remained that the plaintiff did not purport to do so until May 1993, more than two years after the conclusion of the agreement, and after having accepted the monthly payments of R500 which the first defendant had regularly been making on account of the balance of the purchase price: in such circumstances the plaintiff could not summarily accept the repudiation and cancel the agreement. (At 373B/C-D/E.)

In support of the above conclusion the Court cited a passage from an C American judgment quoted in Williston on Contracts 3rd ed vol 6 s 856 at 232 to the effect that '(w)here time of perfomance is of the essence of the contract, a party who does any act inconsistent with the supposition that he continues to hold the other party to his part of the agreement will be taken to have waived it altogether. When a specific time is fixed for the performance of a contract and is of the essence of the contract and it is not performed by that time, but the parties proceed with the performance of it after the time, the right to suddenly insist upon a forfeiture for failure to perform within the specified time will be deemed D to have been waived and the time for performance will be deemed to have been extended for a reasonable time.' (At 373D/E-F/G.)

Held, further, that it followed that the first ground on which the plaintiff relied for her right to cancel, namely that she in May 1993 accepted the alleged repudiation of the contract by the first defendant, was bad. (At 373G.)

Held, further, as to (2) above, ie the plaintiff's purported cancellation E of the contract some five months later, that, on the assumption that the first defendant had to be placed in mora (ex persona), the question for decision was whether this was done: if the demand for payment did not have this effect, an essential prerequisite to the plaintiff's right to cancel would be missing. (At 374D-D/E.)

Held, further, that there was nothing per se impermissible about the demand being contained in the pleadings: it was a case of interpellatio iudicialis. (At 374E.)

Held, further, that whatever its form, the demand inter alia had to be F unambiguous and indicate a fixed date, reasonable in the circumstances, for performance. (At 374E-E/F.)

Held, further, that the plaintiff's demand merely specified that payment be made 'within a reasonable time'; in addition, it was preceded by the statement that it only operated 'in the event that the . . . Court should find that the plaintiff intended to sell the property to the first defendant': it was thus plainly a conditional demand, subject to an uncertain future event, and incapable of placing the defendant in mora. G (At 374G/H-H/I and 374I/J-375A.) It followed that the second ground on which the plaintiff relied was also bad.

Held, further, that the agreement was therefore not validly cancelled, and that the Court a quo accordingly should have dismissed the plaintiff's claim for retransfer of the property. (At 375B-B/C.)

Held, further, that, even if there was no need for the first defendant to have been placed in mora, the appeal nevertheless had to succeed because the contract was not validly cancelled for other reasons: in order to be H effective a notice of intention to cancel as well as the notice of termination itself had to be clear and unequivocal, and this was not the case in the instant matter. They therefore suffered from substantially the same defects as the demand for payment. (At 375C-F/G, paraphrased.) Appeal upheld.

The decision in the South Eastern Cape Local Division in Flanagan v Kragga I Kamma Estates and Another reversed.

Case Information

Appeal from a decision in the South Eastern Cape Local Division (Jansen J). The facts appear from the judgment of Nestadt JA.

H J van der Linde (with him M P Q Spruyt) for the appellants (defendants).

R G Buchanan SC for the respondent (plaintiff). J

1995 (2) SA p369

A The following authorities were cited by counsel for both parties:

Allen v Allen 1951 (3) SA 320 (A) at 330;

Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1977 (4) SA 310 (T) at 323;

Anglia & Co v Palatine Insurance Co Ltd 32 NLR 293;

Barnies Motors v Dimond 1977 (2) SA 721 (E);

Bonne Fortuin Beleggings Bpk v Kalahari Sandworks (Pty) Ltd 1974 (1) SA 414 (NC) at 424H-426C; B

Culverwell and Another v Brown 1990 (1) SA 7 (A) at 17F-J, 28E, 28F;

Custom Credit Corporation (Pty) Ltd v Shembe 1972 (3) SA 462 (A) at 470C;

Erasmus v Pienaar 1984 (4) SA 9 (T) at 23D-25B, 28-9;

Ganief v Hoosen 1977 (4) SA 458 (C) at 460B-C; C

Gouws v Kriel 10 HC 54;

Landau v City Auction Mart 1940 AD 284 at 292;

Lebedina v Scheckter and Haskell 1931 WLD 247;

Machanick v Bernstein 1920 CPD 380 at 381;

Mahabeer v Sharma NO and Another 1983 (4) SA 419 (N) at 422B-425D;

Mahabeer v Sharma NO and Another 1985 (3) SA 729 (A) at 736E-I; D

Marks Ltd v Loughton 1920 AD 12 at 21;

Middelburgse Stadsraad v Trans-Natal Steenkool Korporasie Bpk 1985 (2) SA 524 (T) at 538D-E;

Middelburgse Stadsraad v Trans-Natal Steenkool Korporasie Bpk 1987 (2) SA 244 (T); E

Moodley v Moodley 1990 (1) SA 427 (D) at 430J-431I;

Palmer v Poulter 1983 (4) SA 11 (T) at 18H-19F;

Pillai v Pillai 1962 (3) SA 867 (D) at 870;

Radiotronics (Pty) Ltd v Scott Lindberg and Co Ltd 1951 (1) SA 312 (C);

Roos v Stone 7 HCG 95;

SA Oil and Fat Industries Ltd v Park Rynie Whaling Co Ltd 1916 AD 400 at 412; F

Stapleford Estates (Pty) Ltd v Wright 1968 (1) SA 1 (E);

Swart v Vosloo 1965 (1) SA 100 (A)...