Vogel, NO v Volkersz

• Judge: Botha J, Franklin J and Melamet J
• Judgment Date: 18 November 1976
• Hearing Date: 03 September 1976
• Court: Transvaal Provincial Division

Vogel, NO v Volkersz
1977 (1) SA 537 (T)

1977 (1) SA p537

Citation	1977 (1) SA 537 (T)
Court	Transvaal Provincial Division
Judge	Botha J, Franklin J and Melamet J
Heard	September 3, 1976
Judgment	November 18, 1976

Flynote : Sleutelwoorde A

Sale — Of immovable property — Purchaser entitled under an agreement to possession forthwith against payment of portion of price, balance in instalments — Purchaser required by clause 26 to take transfer within one year but clause 34 obliging seller to grant a mortgage bond — Clause 34 on face of it void for lack of B particulars — Seller not entitled to enforce clause 26 without tendering bond — Seller prima facie entitled to vindication on basis that contract void from his point of view — Purchaser not entitled to claim repayment of interest payments — Seller C obliged to repay portion of purchase price paid by purchaser — But contract capable of being enforced by purchaser without recourse to clause 34 — Purchaser making out a prima facie case for rectification of clause 34 — Contract not void from his point of view — Court of appeal referring seller's application for repossession on basis of vindication for hearing of issue of rectification under Rule of Court 6 (5) (g) — Costs — Seller D entitled to costs of appeal from single Judge dismissing his application — Seller not obliged to tender repayment of paid part of purchase price, but, if seller successful, he must be ordered to refund it.

Headnote : Kopnota

With regard to sales of immovable property, it is true that, on E the grounds of public policy, the object of the Legislature is as far as possible to prevent uncertainty, disputes and malpractices, and to that end it is required that all terms agreed upon should be reduced to writing. But it is also public policy to allow mistakes in such a contract to be rectified, upon equitable grounds, and to prevent one party from deriving a benefit from a mistake to the detriment of the other. Opening the door to rectification necessarily lets in a measure of F uncertainty and disputes, but it is the policy of the law to allow that, at least where the contract as a whole is not a nullity. If the contract on the face of it complies with the statutory requirements, rectification will be allowed even to the extent of introducing an entirely new provision which had been omitted in error.

Clause 2 of a deed of sale of immovable property concluded on 30 November 1973 provided that the purchase price was R45 000 of which R3 500 was payable iii cash and R293,95 monthly in G respect of "interest on interest". The balances owing by the purchaser from time to time were to bear interest at the rate of 81/2 per cent per annum, subject to clause 25. In terms of clause 3 possession was to be given to the purchaser forthwith. In terms of clause 5 transfer had to be given directly the purchase price had been paid. Clause 9 provided that the deed of sale constituted the entire contract between the parties and included all terms and conditions agreed upon between the parties and could not be varied except in writing. Clause 13 H entitled the purchaser at any time to pay the balance of the purchase price, together with interest thereon to date of payment, or make larger payments than the periodical instalments provided for. Clause 16, the forfeiture clause, was couched in the widest terms, but the sale was subject to section 13 of the Sale of Land on Instalments Act, 72 of 1971. Clause 21 provided that payments should be allocated first to rates and taxes, etc., then to interest and lastly to payment of the capital. Clause 25 provided for the increase of the rate of interest in direct relation to that of a specified building society. Clause 26 provided that the purchaser would be obliged to take transfer on or before 1 December 1974. Clause 33 provided that the purchaser

1977 (1) SA p538

had to pay a further R7 750 within a year. Clause 34 read: "The seller hereby undertakes to grant the purchaser a first mortgage bond for 75 per cent of the purchase price bearing interest at 81/2 per cent from the date of registration. Such interest to be calculated and paid monthly in advance from the A date of registration... The said mortgage bond shall be registered on the standard form used by Leventhal and Kantor and the purchaser acknowledges that such form has been exhibited to him." Such form had been left blank and not even the manner of payment of the capital and interest under the bond had been filled in. The purchaser complied with the terms of the contract up to the end of November 1970, but had asked for time in which to pay the R7 750 due on that date. This was B refused and the purchaser was given 30 days' notice in terms of section 13 of the Act within which to comply, alternatively the seller would cancel the contract. The purchaser agreed to make arrangements to pay this amount timeously and tendered to take transfer of the property but stated that he required the seller to grant him a first mortgage bond over the property in terms of clause 34. This the seller refused on the ground that absence of agreement on the C material points rendered clause 34 unenforceable. After the seller's death his executor then applied in a Local Division for an order declaring the deed of sale to be cancelled by virtue of the purchaser's default, or, alternatively, for an order declaring that the deed of sale was of no force or effect, both with ancillary relief. The Local Division held that the deed of sale contained the whole of the contemplated contract and that detailed provisions relating to the bond and the period of the bond could not be said to have been essential D to the sale. It accordingly dismissed the application with costs. In an appeal, the Court dealt first with the case as argued in the Court a quo.

Held, that, on a proper construction of the contract, clause 34 was inchoate, because the period or manner of redemption of the bond was not provided for: the contract, in so far as clause 34 was concerned, did not comply with section 1 (1) of the Act; accordingly that clause, at least, was void and unenforceable.

E Held, further, as to severability, as clause 34 had been inserted for the purchaser's benefit, that he would be entitled to enforce the contract against the seller independently of the provisions of clause 34.

Held, further, however, as the seller's undertaking under clause 34 to grant a bond was in the nature of a quid pro quo for the purchaser's undertaking in clause 26 to take transfer in a year's time, that, from the point of view of enforcement of the contract by the seller against the purchaser, clause 34 F was not severable from the rest of the contract: from the seller's point of view, the contract as a whole was void and unenforceable against the purchaser.

Held, therefore, that appellant was not entitled to the relief claimed in the main prayers of his notice of motion and that in the result (though for different reasons) the dismissal by the Court a quo of the appellant's main claims was correct and could not be disturbed

G Held, further, however, that, on the basis on which the case bad been conducted in the Court a quo (i.e. without reference to the possibility of a rectification of clause 34), the Court a quo should have granted appellant's alternative prayer based on his contention that the contract was void, and applying for recovery of possession of the property: the principles relating to condiction and unjust enrichment were not relevant and consequently it was no answer to the owner's rei vindicatio H to say that the respondent was willing and able to carry out the agreement by reason of which he claimed possession, but which was inchoate, void and unenforceable and the seller under an invalid agreement was not obliged to restore to the purchaser the interest paid by the latter on the unpaid balance of the purchase price, against recovery of possession of the property.

Held, further, that the "rough and ready manner" in which the Courts seek "to adjust a shifting of assets pursuant to any invalid contract" did not justify a claim by the respondent that his interest payments should be refunded to him by the appellant.

Held, further, an the other hand, that if a contract of sale is null and void, it is a legal impossibility to allow the seller to enforce the contract pro tanto by relying

1977 (1) SA p539

on a forfeiture clause contained in it in order to resist a claim by the purchaser for a refund of the purchase price paid by him: therefore the appellant could not avoid the obligation to restore the R3 500 to the respondent by virtue of the provisions of clause 16 of the contract.

Held, further, as to a contention by respondent that the A appellant had been obliged to tender repayment of the sum of R3 500 as a prerequisite to his claim to recover possession of the property, that the principle was that the seller of property under an invalid contract of sale has a claim to possession based only on his ownership and the purchaser's possession of the property.

Held, therefore, that the Court a quo should have granted the appellant's claim for an order directing the respondent to restore occupation and possession of the property to the appellant, subject to the repayment by the appellant to the B respondent of the sum of R3 500 against such restoration.

Held, further, as to the issue now raised on appeal as to whether, as the deed of sale was not a nullity for all purposes, and as the respondent was entitled to enforce the contract against the appellant without reference to the offending clause 34, the respondent was not entitled to rectification of clause 34, that the rest of the contract afforded him a sound platform from which to launch a claim for C rectification of clause 34.

Held, therefore, as the respondent was...