Pretoria East Builders CC and Another v Basson

• Jurisdiction: South Africa
• Judgment Date: 29 March 2004
• Citation: 2004 (6) SA 15 (SCA)

Pretoria East Builders CC and Another v Basson
2004 (6) SA 15 (SCA)

2004 (6) SA p15

Citation	2004 (6) SA 15 (SCA)
Case No	574/02
Court	Supreme Court of Appeal
Judge	Brand JA, Jones AJA and Southwood AJA
Heard	February 15, 2004
Judgment	March 29, 2004
Counsel	S D Wagener for the appellants. (Heads of argument by J C W van Rooyen SC.); F du Toit SC (with him C de W van der Merwe) for the respondent.

Flynote : Sleutelwoorde B

Contract — Formalities — Statutory requirement that contract to be in writing — Sale of land — Counter-offer not accepted in writing — No enforceable contract.

Contract — Specific C contracts — Sale — Sale of res aliena — Written agreement for sale of land belonging to another — Owner not willing to perform sellers' contract with buyer, nor to sell to buyer — Order for specific performance against seller inappropriate where he cannot perform.

Sale — Of land — Res aliena — Written agreement for sale of land belonging to another — No proof that owner authorised seller to sell on its behalf — Owner not bound. D

Headnote : Kopnota

This was an appeal against a final interdict prohibiting the appellants from alienating certain immovable property to anybody other than the respondent, and ordering them to give effect to a written agreement between the parties (1) by permitting the respondent to E occupy the property forthwith, and (2) by registering the property in the respondent's name. The second appellant, G CC, was the registered owner of certain immovable property (erf X). The first appellant, P CC, was the developer of the property, charged with building a house on it. One V was the sole member of G CC and P CC. Acting in his capacity as member of P CC he appointed his sister, one F B, as the project manager to oversee the development. It was part of her mandate to make arrangements for marketing the property. At a stage when the building work was under way but not yet completed, an estate agent introduced the respondent to B. The respondent submitted a written offer to purchase erf X. The offer was made to P CC. It was signed and accepted on its behalf by B. The offer was in printed form with blank spaces to be filled in. It contained a para 18, headed G 'other conditions', which had been left blank. B caused the following to be inserted in the blank space: 'This offer is subject to the presentation of a specification list and the signing of a building contract with (P) CC.' After making this addition she placed her signature at the end of the document and she initialled the insertion of para 18. When the document was returned to the respondent he H noted the addition of clause 18, but he did not initial or sign it. At no stage did the parties enter into the written building agreement contemplated by para 18, but building nevertheless proceeded. Shortly before the proposed occupation date, the respondent heard that the agreement had been cancelled. The respondent's attorneys wrote to P CC, calling for its assurance that it would honour the agreement, and advising that failing such assurance the respondent intended to I bring an urgent application. G CC's attorneys replied to the respondent's attorneys, stating that V, being the only member of G CC, did not sign any agreement with the respondent, nor did he give any authority for the conclusion of a deed of sale. It was common cause that B had at no stage disclosed to the respondent that G CC was not the registered owner of the said property. J

2004 (6) SA p16

Headnote : Kopnota

It was argued on behalf of G CC that it was the owner of the A property; that it was not a party to the sale; that it was not bound by the sale; and that it did not authorise B to act for it as its agent, whether in the sale or for any other purpose. On behalf of the respondent it was argued that V, as sole member of P CC, had authorised B to act as project manager to build the house on erf X and to enter into the agreement of sale in terms of which P sold erf X to B the respondent. He had therefore known, in his capacity as sole member of P CC, that B had sold G CC's property to the respondent. This knowledge had to be imputed to V in his capacity as sole member of G CC, and therefore G CC had to be taken to have been aware all along that P had sold its property to the respondent despite V's denial of this in his affidavit on behalf of G CC. This knowledge, and its failure to object to P CC's actions in selling its C property, it was argued, gave rise to an inference that it went along with the arrangement and must have authorised P CC to act as its agent.

Held, that G CC's knowledge, if it had such knowledge, that somebody else had sold its property would not be sufficient for an inference that G CC must have authorised the sale. This meant that whether or not it was permissible to hold an undisclosed principal to D an agreement for the sale of land, there was no evidence to show that the seller had acted or had been authorised to act on behalf of the alleged undisclosed principal. This being so, there was no basis on which to hold that G CC was liable to the respondent under the agreement of sale. (Paragraph [8] at 20D - E.)

Held, further, on the argument that on the facts there was no enforceable contract between the respondent and P CC, that the E insertion of para 18 in the offer made by the respondent and submitted to B on behalf of P CC amounted to a counter-offer which was not accepted by him in writing. This meant that the provisions of s 2(1) of the Alienation of Land Act 68 of 1981 were not complied with, and that no enforceable contract had come into being. (Paragraph [9] at 20F - G.)

Held, further, on the argument that the Court should not F have issued an order for specific performance because, in the circumstances of this case, it could not be carried out, that an order for specific performance against P CC was futile and it should not have been granted. The owner of the property, G CC, had made its attitude perfectly clear that it had no intention of performing P CC's contract with the respondent, and that it had no intention of itself selling to the respondent. (Paragraph [10] at 21C - D/E.) Appeal upheld. G

The decision in the Transvaal Provincial Division in Basson v Pretoria East Builders CC and Another reversed on appeal.

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