Tuckers Land and Development Corporation (Pty) Ltd v Hovis

• Jurisdiction: South Africa
• Judge: Jansen JA, Muller JA, Kotzé JA, Joubert JA and Viljoen AJA
• Judgment Date: 19 November 1979
• Citation: 1980 (1) SA 645 (A)
• Hearing Date: 19 March 1979
• Court: Appellate Division

Tuckers Land and Development Corporation (Pty) Ltd v Hovis
1980 (1) SA 645 (A)

1980 (1) SA p645

Citation	1980 (1) SA 645 (A)
Court	Appellate Division
Judge	Jansen JA, Muller JA, Kotzé JA, Joubert JA and Viljoen AJA
Heard	March 19, 1979
Judgment	November 19, 1979

Flynote : Sleutelwoorde

B Contract — Breach of — Anticipatory breach — Duty on promisor not to commit such — Nature of such breach — Creditor's decision to act upon an anticipatory breach not an 'acceptance' of an offer but an election — Repudiation of contract as an anticipatory breach — Test is whether C promisor acted in such a way as to lead a reasonable person to the conclusion that he did not intend to fulfil his part of the contract.

Sale — Of erven in a proposed township — Seller, as a result of difficulties in obtaining proclamation of township, preparing new plan D thereof on which purchaser's erven no longer appeared — Such amounting to an anticipatory breach of contract — Purchaser entitled to rescind and claim back what he had paid under the contract.

Headnote : Kopnota

It could be said that it is now, and has been for some time, felt in our domain, no doubt under the influence of the English law, that in all E fairness there should be a duty upon a promisor not to commit an anticipatory breach of contract, and such duty has in fact often been enforced by our Courts. It would be consonant with the history of our law, and also legal principle, to construe this as an application of the wide jurisdiction to imply terms conferred upon a court by the Roman law in respect of the judicia bonae fidei. It should therefore be accepted that in our law an anticipatory breach is constituted by the violation of an obligation ex lege, flowing from the requirement of bona fides which underlies our law of contract. It would also be desirable, in order to obtain clarity of thought, to jettison the terminology of offer and acceptance in this regard, and to denote a creditor's decision to act upon an anticipatory breach not as an 'acceptance' but as an election.

1980 (1) SA p646

In terms of a written contract of sale appellant had sold two erven in a proposed township to the respondent. After paying a considerable sum in terms of the contract, respondent became aware that appellant, who was A also the township developer, had run into difficulties in obtaining proclamation and as a result thereof had prepared a new plan for submission to the proper authorities and on which plan respondent's erven had disappeared, being superseded by a school site. Respondent successfully sued the appellant in a Local Division for the repayment of the money he had paid in terms of the contract. In an appeal,

B Held, that, in regard to the question as to whether appellant had committed an anticipatory breach of the contract, the inquiry was whether appellant had repudiated the contract; it being unnecessary to decide whether there were other ways of committing an anticipatory breach.

Held, further, approving the dictum of DEVLIN J in Universal Cargo Carriers Corporation v Citati(1957) 2 QB 401 at 436, that the question was whether the appellant had acted in such a way as to lead a reasonable person to the conclusion that he did not intend to fulfil his part of the contract.

C Held, further, that the 'reasonable person' had to be placed in the position of the respondent.

Held, further, that it would have been obvious to such a person that, in an attempt to obtain proclamation of the township by submitting the new plan for approval, the appellant was sacrificing the respondent's rights to transfer of the erven.

D Held, further, that it followed that appellant did commit an anticipatory breach of the contract.

Held, accordingly, as such breach related to the whole of the contract, that the respondent was entitled to rescind and to claim back what he had paid. Appeal dismissed.

The decision in the Witwatersrand Local Division in Hovis v Tuckers Land and Development Corporation (Pty) Ltd confirmed. E

Case Information

Appeal from a decision in the Witwatersrand Local Division (COETZEE J). The facts appear from the judgment of JANSEN JA.

W P Schutz SC (with him B K Pincus) for the appellant: A breach may arise where the promisor disables himself from performance before the time fixed F for performance has arrived or where the promisor absolutely renounces his intention to perform the contract or repudiates it before the time for performance. Wessels The Law of Contract in South Africa 2nd ed para 2925 at 791. A repudiation occurs where a party indicates by words or conduct that he is unable or unwilling to perform his side of the contract. Cheshire and Fifoot Law of Contract 7th ed at 531. Repudiation has been G authoritively defined as an absolute refusal to proceed with the contract. Cheshire and Fifoot (supra at 532, 8th ed at 565). An act amounts to a repudiation when it 'evinces an intention on the part of the defaulter no longer to be bound by the terms of the contract for the future...' Vide, Aucamp v Morton 1949 (3) SA at 619; Schlinkmann v Van der Walt and Others 1947 (2) SA at 919; Van Rooyen v Minister van Openbare H Werke en Gemeenskapsbou 1978 (2) SA at 845A - C and G-H. The test as to whether conduct amounts to a repudiation is whether fairly interpreted it exhibits a deliberate an unequivocal intention no longer to be bound. Vide, Street v Dublin 1961 (2) SA at 10B - C; Mackeurtan Law of Sale of Goods in South Africa 3rd ed at 278, 4th ed at 302; Wille Principles of South African Law 2nd ed at 349; Wessels (supra at paras 2940, 2941, 2942); Inry Belange (Edms) Bpk v Pretorius en 'n Ander 1966 (2) SA at 427A - B. A repudiation can be by words or conduct and the test of whether an intention is sufficiently evinced by conduct is whether the party renunciating has acted in such a way as to lead a reasonable person

1980 (1) SA p647

to the conclusion that he does not intend to fulfil his part of the contract. Vide, Ponisamy and Another v Versailles Estate (Pty) Ltd 1973 (1) SA at 387B - C. If the conduct of one party is such as would lead any A reasonable man to conclude that he does not intend to fulfil his part, the other party may treat such conduct as a repudiation. Wessels (supra at para 2923); Van Schalkwyk v Griessel 1948 (1) SA at 473. The renunciation or repudiation must be an absolute and unequivocal refusing to perform the contract. Wessels (supra at para 2940). If the renunciation is not a clear refusal to perform then it does not amount to a breach. Wessels (supra at B para 2941); Cheshire and Fifoot (supra at 532). It depends very largely on the nature of the contract whether a court will regard a repudiation, before the date for performance arrives, as a refusal which constitutes a breach. Wessels (supra at para 2949); Schlinkmann v Van der Walt and Others (supra at 919). The question of repudiation must depend on the character of the contract and the general circumstances of the case. Kerr C The Principles of the Law of Contract Ist ed at 189; 2nd ed at 286. One must look at the actual circumstances of a case in order to see whether one party is relieved from future performance by the conduct of the other. Cheshire and Fifoot (supra at 532). The onus of establishing an anticipatory repudiation is on the party who asserts it. Schlinkmann v Van der Walt and Others (supra at 919). The doctrine of repudiation must be D applied in a just and reasonable manner. Schlinkmann v Van der Walt and Others (supra). Having regard to the nature of the obligations of the appellant, the appellant should be given a proper opportunity to ascertain whether it can perform its part of the bargain. Wessels (supra at para 2932A). At this point in time the appellant has not put it out of its E power to perform what it agreed to perform. Vide, McCabe v Burisch 1930 TPD at 267. At this point in time the matter rests 'in limbo' until final approval of the plan in question. Accordingly, the respondent's action was premature. If an act is to be performed at a future time specified, the contract is not broken by something which may merely prevent the performance in the meantime. McCabe v Burisch (supra at 267). The F appellant has not disabled itself from performance at this point in time. It is conceded that, if the Board approves the substituted plan, that would amount to an anticipatory repudiation. There was evidence before the Court a quo that the position might be reversed. Stern v Vesta Industries (Pty) Ltd and Another 1976 (1) SA at 85B - E. Nothing has yet been done by G the appellant which made the enjoyment of the rights of the respondent incompatible with his original rights. If it be found that the conduct of the appellant amounts to an anticipatory repudiation, this would amount to a commercial absurdity because in theory each time the plan is amended a purchaser whose erven had been interfered with could cancel his contract. H Because of the provisions of clause 5 of the agreements the jurisdiction of a Court has been ousted. The Judge a quo could not rely on the conduct by the appellant which took place after the institution of the action during November 1976 by the respondent against the appellant, as constituting the repudiation. In...