Rockbreakers and Parts (Pty) Ltd v Rolag Property Trading (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Heher JA, Ponnan JA, Hurt AJA, Tshiqi AJA and Wallis AJA
• Judgment Date: 18 September 2009
• Citation: 2010 (2) SA 400 (SCA)
• Docket Number: 498/08
• Hearing Date: 25 August 2009
• Counsel: A Horwitz SC (with J Kaplan) for the appellant. MW Verster for the respondent.
• Court: Supreme Court of Appeal

Rockbreakers and Parts (Pty) Ltd v Rolag Property Trading (Pty) Ltd
2010 (2) SA 400 (SCA)

2010 (2) SA p400

Citation	2010 (2) SA 400 (SCA)
Case No	498/08
Court	Supreme Court of Appeal
Judge	Heher JA, Ponnan JA, Hurt AJA, Tshiqi AJA and Wallis AJA
Heard	August 25, 2009
Judgment	September 18, 2009
Counsel	A Horwitz SC (with J Kaplan) for the appellant.; MW Verster for the respondent.

Flynote : Sleutelwoorde B

Sale — Land — Contract — Formalities — Writing — Tacit term — Tacit suspensive condition — Party including suspensive clause in contract relating to subdivision — Other party not countersigning — Both parties aware that C subdivision necessary — Failure by parties to agree that sale conditional upon seller obtaining subdivision prior to signing — Such amounting to counter-offer and not tacit term — Failure to accept in writing rendering contract unenforceable — Alienation of Land Act 68 of 1981, s 2(1).

Sale — Land — Contract — Formalities — Writing — Party including suspensive clause in contract relating to subdivision — Other party not countersigning D — Clause in manuscript serving to protect seller from action for damages in event of subdivision not materialising — Insertion amounting to material alteration — Accordingly amounting to counter-offer — Failure to accept in writing rendering contract unenforceable — Alienation of Land Act 68 of 1981, s 2(1).

E Contract — Terms — Implied and tacit terms — Specific instances — Sale of land — Suspensive condition that land to be subdivided — One party including suspensive clause in contract — Other party not countersigning — Both parties aware that subdivision necessary — Failure by parties to agree prior to signing that sale conditional upon seller obtaining subdivision — Insertion amounting to material alteration — Such amounting to counter-offer F and not tacit term — Failure to accept in writing rendering contract unenforceable — Alienation of Land Act 68 of 1981, s 2(1).

Headnote : Kopnota

A written offer to purchase property was signed on behalf of the respondent, the purchaser, on 20 October 2005 and by a representative of the appellant, the property owner, on 25 October 2005. The representative added the G following words in manuscript: 'This offer is accepted subject to the seller obtaining registration of the subdivision of the property.' The manuscript insertion was neither initialled nor countersigned by the respondent. Apart from the manuscript insertion there was no reference to a subdivision of the property in the agreement, although the evidence showed that both parties were aware of the need for the property to be subdivided in order to give H effect to the sale. After the seller failed to ensure transfer and registration the purchaser applied for an order for specific performance. The appellant's defences were rejected by the court a quo. On appeal one defence was dealt with: The defence was that the manuscript insertion was material to any agreement and constituted a counter-offer which had to be in writing and signed by or on behalf of the parties in compliance with s 2(1) of the I Alienation of Land Act 68 of 1981 (the Act), and that the failure by the respondent to accept it or signal its acceptance in writing rendered the contract unenforceable. The respondent disputed that the manuscript insertion amounted to a counter-offer and contended that it was surplusage, amounting to no more than what was the common intention of the parties. The basis for this contention was that both parties knew that the property J had to be subdivided in order to give effect to the agreement. On appeal,

2010 (2) SA p401

Held, that, in order to determine whether the defence raised could be sustained, A it was necessary to determine the effect of the manuscript insertion on the rights and obligations of both parties. It followed from the authorities that, if the manuscript insertion embodied a material alteration to the contractual terms and thus constituted a counter-offer that was never accepted in writing, then the contract would be unenforceable. (Paragraph [8] at 404F/G - H.) B

Held, further, that the insertion of the clause in manuscript served to protect the appellant from an action for damages in the event that the subdivision did not materialise. There was therefore no doubt in the circumstances of the case that the manuscript insertion was material and amounted to a counter-offer. (Paragraph [9] at 404I - 405A.) C

Held, further, that the case was distinguishable from that in Stalwo (Pty) Ltd v Wary Holdings (Pty) Ltd and Another2008 (1) SA 654 (SCA) because 'the proposed subdivision' in Stalwo was expressly incorporated in the agreement and it was agreed that a suspensive condition, although omitted from the written agreement, was indeed a term of the agreement between the parties. (Paragraph [10] at 405A/B - C.) Appeal dismissed. D

Cases Considered

Annotations:

Reported cases

Southern Africa E

Abdullha v Long 1931 CPD 305: referred to

Admin Estate Agents (Pty) Ltd t/a Larry Lambrou v Brennan1997 (2) SA 922 (E): referred to

Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration1974 (3) SA 506 (A): referred to

Corondimas v Badat1946 AD 548: referred to F

Delfs v Kuehne & Nagel (Pty) Ltd1990 (1) SA 822 (A): referred to

Jackson v Weilbach's Executrix 1907 TS 212: referred to

Johnston v Leal1980 (3) SA 927 (A): dictum at 937G - 938C approved

Odendaalsrust Municipality v New Nigel Estate Gold Mining Co Ltd1948 (2) SA 656 (O): referred to

Palm Fifteen (Pty) Ltd v Cotton Tail Homes (Pty) Ltd1978 (2) SA 872 (A): referred to G

Sauerlander v Townsend 1930 CPD 55: referred to

Stalwo (Pty) Ltd v Wary Holdings (Pty) Ltd and Another2008 (1) SA 654 (SCA): distinguished

Van Leeuwen Pipe and Tube (Pty) Ltd v Mulroy and Another1985 (3) SA 396 (D): dictum at 400F - I approved H

Wilkins NO v Voges1994 (3) SA 130 (A): referred to.

England

Bentworth Finance Ltd v Lubert and Another[1967] 2 All ER 810 (CA): referred to I

Brauer & Co (Great Britain) Ltd v James Clark (Brush Materials) Ltd[1952] 2 All ER 497 (CA): referred to

Charles H Windschuegl Ltd v Alexander Pickering & Co Ltd[1950] 84 Lloyd's Rep 89 (KB): referred to

KC Sethia (1944) Ltd v Partabmull Rameshwar[1950] 1 All ER 51 (CA): referred to. J

2010 (2) SA p402

Statutes Considered

Statutes A

The Alienation of Land Act 68 of 1981, s 2(1): see Juta's Statutes of South Africa 2008/9 vol 2 at 1-723.

Case Information

Appeal against a decision of the Witwatersrand Local Divison (Van B Oosten J) ordering specific performance. The facts appear from the judgment of Tshiqi AJA.

A Horwitz SC (with JL Kaplan) for the appellant.

MW Verster for the respondent.

Cur adv vult. C

Postea (September 18).

Judgment

Tshiqi AJA:

[1] This appeal concerns the validity of a purchase-and-sale agreement D in respect of immovable property, owned by the appellant, Rockbreakers and Parts (Pty) Ltd, and known to both parties as 'Portion 54 of the Farm Roodekop No 139 IR measuring 49 408m2'. A written offer to purchase the property was signed on behalf of the respondent, Rolag Property Trading (Pty) Ltd, on 20 October 2005 and by a representative of the appellant on 25 October 2005. This case arises because in so doing E he added the following words in manuscript:

'This offer is accepted subject to the seller obtaining registration of the subdivision of the property.'

The manuscript insertion was neither initialled nor countersigned by the F respondent. Apart from the manuscript insertion there is no reference to a subdivision of the property in the agreement, although the evidence shows that both parties were aware of the need for the property to be subdivided in order to give effect to the sale.

[2] The requisite deposit was paid by the respondent and the necessary G guarantees were furnished for the payment of the balance of the purchase price. A conveyancer was nominated to attend to the subdivision and transfer of the property. The application for subdivision was approved by the local authority and the property to be subdivided was then described as 'Portion 124 (a portion of 29) of the Farm Roodekop No 139 IR' now measuring 37 507m2. The letter of approval was dated 16 May 2006 and H imposed certain conditions. The one that gave rise to controversy is contained in para 3 and states:

'That a township be established on proposed Portion 54 and that no development of any nature whatsoever takes place on the property I before the township has been promulgated.'

The appellant did not thereafter proceed with further steps to ensure finality to the registration and transfer process. From the correspondence exchanged between the parties it became clear that the appellant took the stance that the quoted condition imposed burdensome obligations and 'the offer to purchase which was signed on 20 October 2005, was not J accepted unconditionally by the sellers, Rockbreakers and Parts (Pty)

2010 (2) SA p403

Tshiqi AJA

Ltd on 25 October 2005 as the acceptance was made subject to the seller A obtaining registration of the subdivision of the property'. [1] That clearly conveyed the appellant's intention not to regard itself as bound by the agreement.

[3] When the attitude of the appellant became clear to the respondent, it applied to the Johannesburg High Court for an order for specific B ...