Steve Tshwete Local Municipality v Steve Tshwete Housing Association

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: TV Ratshibvumo J and SS Mphahlele DJP and MT Mankge J
• Judgment Date: 06 October 2021
• Docket Number: A13/2021
• Hearing Date: 10 September 2021
• Citation: 2021 JDR 2981 (MN)

Ratshibvumo J:

[1] Background.

This is an appeal against a High Court judgment ordering specific performance against the Appellant in favour of the Respondent based on a contract entered between the two in 2012. The appellant is Steve Tshwete Local Municipality established in terms of Local; Government: Municipal Systems Act, no. 32 of 2000 (the Act). The respondent is a housing association established by erstwhile Greater Middleburg Municipality (the appellant's predecessor) in terms of section 86 of the Act. The High Court judgment was handed down by Barnardt AJ, of this Division on 02 February 2021. In terms of that judgment,

"1. The [Appellant] was directed sign the certificate of consolidation within 30 days of [the] order;

2. The [Appellant] was directed to sign all the necessary documents, including transfer documents and to take all the necessary steps, including but not limited to ensure that the property known as portion 9-18, 20-37, 39-47, 49 and 50 of Erf 12941 Mhluzi Ext 4 (the property), is registered into the name of the [Respondent] within 30 days of this order, on condition that the [Respondent] has complied with all its obligations in respect of the consolidation of the properties;

3. In the event that the Appellant fails and/or neglects to, and/or refuses to timeously sign the certificate of consolidation and to cause transfer and registration of the property, the Sheriff of this Honourable Court be authorised to take all necessary steps to give effect to the registration and transfer of the property.

4. The [Appellant] is ordered to pay the costs of the application."

[2]

This appeal is with the leave of the court a quo.

[3] Applicable law:

2021 JDR 2981 p3

Ratshibvumo J

Requirements for a successful claim in specific performance can be gleaned from Farmers'Co-operative Society (Reg) v Berry [1] as follows:

a)

The plaintiff/applicant must prove the existence of a valid contract between him/her and the defendant/respondent, the terms of which should also be clear from its reading.

b)

The plaintiff/applicant must have performed or be ready to carry out his or her own contractual obligations – that is, must tender performance in terms of the principle of reciprocity; and

c)

Not only must the plaintiff/applicant prove that the defendant/respondent failed to perform his/her part of the agreement, but he/she must be in a position to perform – that is, performance must be objectively and subjectively possible.

[4]

As Zondi JA held in Basson and Others v Hanna [2] , there are many cases in which it was held that, if one party to the agreement repudiates the agreement, the other party at his election may claim specific performance of the agreement or damages in lieu of specific performance and that his claim will in general be granted, subject to the court's discretion. The learned judge of appeal referred to a famous passage by Innes CJ from Farmers'Co-operative Society (Reg) v Berry [3] with approval in which the following was said,

"It is true that Courts will exercise a discretion in determining whether or not decrees of specific performance should be made. They will not, of course, be issued where it is impossible for the defendant to comply with them. And there are many cases in which justice between the parties can be fully and conveniently done by an award of damages."

2021 JDR 2981 p4

Ratshibvumo J

The contract.

It is common cause that an application for social housing development by the respondent was approved by the appellant in 2010. The application was meant to address the need for rental housing. In January 2012 [4] , the two entered into a written sale agreement over the property, the material and relevant terms of which provided the following: [5]

a)

The purchase price for the property was R650 000.00 plus R91 000.00 (VAT), which amount had already been paid at the time the contract was signed. [6]

b)

Occupation of the property will be given to the purchaser (respondent) on the date of sale. The "date of sale shall be the date of signature by the last party to this agreement."

c)

Transfer of the property shall be registered in the purchaser's name by the seller's (appellant's) attorney Messrs Johan Alberts Attorneys, as soon as the purchase price has been paid and or documentation has been duly signed.

d)

Should the purchaser fail to comply to the stipulation contained in the agreement, and fail to rectify his default after having been notified by the seller, the seller will be entitled without prejudice of any of his other rights (i) to cancel the agreement, to take possession of the property and to retain all monies paid as pre-estimated damage and institute action for any damages suffered; (ii) to claim the full purchase price still due.

[6]

Under Special Conditions' clause, the contract further provided the following special and suspensive conditions: [7]

a)

It is an express condition of this sale that the purchaser shall be obliged to erect and complete a building which will comply with and be permissible in terms of the Conditions of Establishment and Conditions of Title of the township, as well as the Town Planning Scheme and any applicable municipal by-laws within 24 months from the date of sale, with a business building of at least twice the purchase price of the erf or property, failing which the property, is to be

2021 JDR 2981 p5

Ratshibvumo J

transferred to the seller for then original purchase price at the cost of the purchaser.

b)

The purchaser of the property may not dispose of it within the period of three years from the date of registration of the property unless it is developed.

c)

The development and building plans are subject to the approval of the seller's Department of Technical and Facilities Services.

d)

The seller may, upon written application by the purchaser received within three months before the expiry of the 24 months' period, grant an extension of a period by a maximum of a further one-year period.

[7] Events leading to litigation.

As of 2020 when the respondent approached the court, there had been no developments in as far as the registration of the property into the names of the respondent and the building in the property. The property was still in the names of the appellant while no building was erected. The respondent, through the affidavit by its Executive Director and Chief Executive Officer, pointed to several meetings he held with the appellant's legal department in 2019, with a view to have the appellant sign the necessary documentation to give effect to the consolidation of the property in order to have the property transferred into the respondent's name. Nothing materialised from these meetings. This culminated in the respondent...