Tangney and Others v Zive's Trustee

• Jurisdiction: South Africa
• Judge: Kuper J
• Judgment Date: 31 October 1960
• Citation: 1961 (1) SA 449 (W)
• Hearing Date: 11 October 1960
• Court: Witwatersrand Local Division

Tangney and Others v Zive's Trustee
1961 (1) SA 449 (W)

1961 (1) SA p449

Citation	1961 (1) SA 449 (W)
Court	Witwatersrand Local Division
Judge	Kuper J
Heard	October 11, 1960
Judgment	October 31, 1960

Flynote : Sleutelwoorde

Insolvency — The trustee — Sales — Act 24 of 1936, sec. 35 — Scope of — Insolvent having purchased a hotel — Purchase price payable in instalments — Breach by insolvent of obligations — Sellers relying on forfeiture clause — Trustee relying on sec. 35 — Sec. 35 having no application to such a composite contract — Trustee having made no indication of a desire to abide by contract — Sellers entitled to rely on forfeiture clause — Sellers having given adequate notice in terms thereof, although inadequate period specified. A

Headnote : Kopnota

The applicants had sold to one Mrs. Z, now insolvent, an hotel consisting of three stands 'together with the assets, liquor licence, goodwill and stock'. The purchase price was apportioned between the immovable property, on the one hand, and the assets, goodwill and stock C on the other, and was payable in instalments. The sale was conditional on transfer of the liquor licence. The agreement also contained a forfeiture clause which entitled the applicants, in the event of breach of her obligations by the insolvent, either (a) to require payment forthwith of the whole of the purchase price or (b) to cancel the deed of sale and either retain all monies paid by the purchaser as their own property or to claim from the purchaser whatsoever damage they might D have suffered. The licence had been transferred and Z had entered into occupation. After the final order of sequestration had been granted against Z, the applicant launched motion proceedings against the respondent, as trustee of Z's insolvent estate, for his ejectment in terms of the forfeiture clause. The respondent relied upon section 35 of the Insolvency Act, 24 of 1936, despite the breach by Z of her obligations to make certain payments.

Held, that section 35 of Act 24 of 1936 was of application to an ordinary contract for the sale of immovable property and not to a E composite contract, as that in issue.

Held, further, as the respondent had given no indication that he wished to abide by the contract and had made no tender to pay the arrears, that the applicants were entitled to invoke the forfeiture clause.

Held, further, that valid notice had been given in terms of the forfeiture clause, despite the fact that an inadequate period had been specified therein. F

Case Information

Application for an order of ejectment and other relief. The facts appear from the reasons for judgment.

W. Lane, for the applicants.

B. Merber, for the respondent.

Cur. adv. vult.

Postea (October 31st). G

Judgment

Kuper, J.:

The applicants are the registered owners of three stands in H Buitenkant Street, Boksburg, on which is erected the hotel called the Transvaal Hotel. On the 5th day of August, 1957, the applicants entered into a written agreement with Mrs. S. Zive (to whom I will hereinafter refer as the insolvent) in terms of which the applicants sold her the three stands

'together with the assets, liquor licence, goodwill and stock of the Transvaal Hotel situate on the aforesaid property upon and subject to all the conditions and servitudes in the sellers' title deeds contained, which immovable property

1961 (1) SA p450

Kuper J

and other assets are hereinafter also referred to as 'the property sold''.

The purchase price was £20,500 expressed as being £18,000 for the immovable property and £2,500 for the assets, goodwill and stock, and the agreement provided for the payment of the price in instalments into the details of which it is not necessary to enter for the purposes of A this judgment. In addition however to the instalments the insolvent under-took to pay all the rates and taxes levied in respect of the property sold as from the 15th June, 1957, as well as all the insurance premiums payable in respect of an insurance policy which the parties agreed to effect in respect of the property. The sale was expressed to be conditional upon the transfer of the liquor licence and any trading B licences into the name of the purchaser in terms of sec. 42 of the Liquor Act, 30 of 1928 as amended, or any other law, and in the event of the transfer of either licence being refused the sale would become null and void and of no further force or effect and all amounts paid by the purchaser were to be refunded by the sellers.

C The agreement contained a forfeiture clause which provided as follows:

'16. In the event of the purchaser committing a breach of her obligations under this deed of sale and in the event of her failing to remedy such breach within 14 days after notice in writing given by the sellers calling upon the purchaser to remedy such breach, then and in such event the sellers shall be entitled without further notice and D without prejudice to any other rights they may have, either -

(a)

to require payment forthwith of the whole of the purchase price, or

(b)

to cancel this deed of sale and either retain all monies paid by the purchaser as their own property or to claim from the purchaser whatsoever damage they may have suffered, in which case they shall be entitled to retain all monies paid by the purchaser until such damage shall have been assessed.'

E The insolvent duly took occupation of the hotel and possession of all the assets sold and obtained transfer of the liquor and other licences. On the 4th March, 1960, the applicants wrote to the insolvent claiming payment of the current month's instalment of the purchase price as well as of a sum of £113 12s. due in respect of rates and taxes and insurance F premiums. The estate of the insolvent was placed under provisional sequestration on the 8th March, 1960, the order being made final on the 26th July, 1960, and the respondent was duly appointed the trustee of the insolvent estate. The applicants were, however, unaware of the grant of the provisional order and on the 11th March, 1960, and again on the G 19th April, 1960, they...