Park 2000 Development (Pty) Ltd v Page

• Jurisdiction: South Africa
• Judge: Brand JA, Maya JA, Mhlantla JA, Malan JA and Theron JA
• Judgment Date: 29 November 2011
• Docket Number: 905/2010
• Court: Supreme Court of Appeal
• Hearing Date: 16 November 2011
• Citation: 2011 JDR 1630 (SCA)

Malan JA (Brand, Maya, Mhlantla and Theron JJA concurring):

[1]

In terms of a written agreement entered into on 12 November 2003, the appellant, Park 2000 Development (Pty) Ltd, sold to the respondent, Mr R W Page, 14 undeveloped stands in Klappersingel, Strandloperkruin for a consideration of R990 000. In 2006 Mr Page instituted action in the Western Cape High Court for transfer of the stands into his name, tendering payment of the balance of the purchase price. On 22 October 2010 Smit AJ gave judgment in favour of the purchaser, Mr Page. This appeal is with his leave.

[2]

This appeal concerns the meaning of clause 10 of the agreement. It provides as follows:

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Malan JA (Brand, Maya, Mhlantla and Theron JJA concurring)

'This sale is subject to the purchaser(s) obtaining a bond of 80% of the purchase price. Should such a bond not be granted within 7 (seven) days of signature of this agreement, the seller(s) will have the right, but will not be obliged, to cancel the sale, in which case any deposit already paid, with interest, will be paid back to the purchaser(s) and no one party will have a claim for damages due to such cancellation against the other.'

[3]

Mr Page paid the agreed deposit of R99 000. It is common cause that he did not apply for a bond. In his particulars of claim he alleged that, following the seven day period provided for in the second part of clause 10, Park 2000 became entitled to either cancel the sale or enforce it. He alleged that Park 2000 elected not to cancel the sale but to proceed with it. Park 2000, on the other hand, pleaded that clause 10 contained a suspensive condition that was not fulfilled and that the agreement had therefore lapsed. It pleaded, as an alternative that, in the event of the agreement not having lapsed due to non-fulfilment of the condition, its conduct after becoming aware that a bond had not been granted to Mr Page, displayed a clear intention to cancel the agreement; alternatively, it cancelled the agreement by notice in the plea.

[4]

The court below held that because the parties had expressly agreed that the seller, Park 2000, would have the right to cancel the agreement on non-fulfilment of the condition, the agreement did not lapse when the condition was not fulfilled. It found that, on the facts, Park 2000 had elected to affirm the agreement. It followed that, because it had done so, it could not thereafter cancel it and was bound by the agreement.

[5]

It was contended by Park 2000 that the condition referred to in clause 10 was suspensive resulting in the agreement lapsing upon its non-fulfilment. In advancing these contentions it relied upon the judgments of Fannin J in Florida Road Shopping Centre (Pty) Ltd v Caine [1] and Davis J in Paradyskloof Golf Estate (Pty) Ltd v Municipality of Stellenbosch, [2] which suggest that the second part of clause 10 was inserted ex abundanti cautela. In the alternative, it was submitted that the second part of clause 10 provided for the situation where the purchaser waived the

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Malan JA (Brand, Maya, Mhlantla and Theron JJA concurring)

suspensive condition before expiry of the limitation period of seven days. In the event of a waiver, the seller would have the right to cancel the agreement unilaterally.

[6]

It was argued on behalf of Mr Page that the only possible interpretation of clause 10 was that the parties did not intend that the agreement would lapse after the seven day period in the event of a bond not being granted but that the seller will 'have the right, but will not be obliged, to cancel the sale'. This construction, it was suggested, would be in accordance with the rule of interpretation requiring the language used to be given its grammatical and ordinary meaning. [3] The first part of clause 10 therefore contained not a true condition but a term of the agreement imposing on the purchaser the obligation to obtain a bond. Should he fail to do so, the seller may exercise its remedies in terms of clause 7 by placing the purchaser on terms and, failing compliance within ten days of giving notice of the breach, cancel the agreement and reclaim the property, in which event the purchaser would forfeit all monies paid, and claim further damages from the purchaser it may have suffered.

[7]

An agreement of purchase and sale subject to a suspensive condition is not a sale pending fulfilment of the condition 'but there is nevertheless created "a very real and definite contractual relationship" which, on fulfilment of the condition, develops into the relationship of seller and purchaser.' [4] Non-fulfilment of the suspensive condition, however, renders the agreement void from inception, unless the parties have agreed otherwise.

[8]

I have not been persuaded that the two judgments relied upon by Park 2000 in constructing clause 10 are of particular assistance. They concern specific clauses which had to be construed in the context of the other terms of those agreements.

[9]

Clause 10 is worded in different terms. It must be interpreted according to the accepted canons of construction. The language used must be given its grammatical

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Malan JA (Brand, Maya, Mhlantla and Theron JJA concurring)

and ordinary meaning in the context of the whole agreement. [5] Every word used and, it follows, both sentences of clause 10 must be given meaning. [6]

[10]

Clause 10 does not contain the heading...