Wilson v Spitze

• Jurisdiction: South Africa
• Citation: 1989 (3) SA 136 (A)

Wilson v Spitze
1989 (3) SA 136 (A)

1989 (3) SA p136

Citation	1989 (3) SA 136 (A)
Court	Appellate Division
Judge	Hoexter JA, Botha JA, Grosskopf JA, Vivier JA, Eksteen JA
Heard	February 28, 1989
Judgment	March 16, 1989

Flynote : Sleutelwoorde H

Sale — Of land — The contract — Cancellation of — Single erf, to be subdivided into five erven, sold for R11 000 — Purchaser to pay deposit of R1 100 upon conclusion of sale — Purchaser to take transfer of first subdivided erf upon payment of R2 200 and to take I transfer of each of remaining four erven by 1 April of each successive year, on payment of R2 200 in each case — Special condition providing that balance 'to be guaranteed, against transfer' — First erf transferred after long delay caused by purchaser — Seller by letter dated 8 April 1983 requesting purchaser to 'suitably guarantee payment' J of purchase price of second erf by 16 May 1983, failing which sale would be

1989 (3) SA p137

A cancelled — Purchaser failing to do so timeously and seller transferring erven to another person — Purchaser unsuccessfully claiming damages for breach of contract in Court a quo — On appeal, Court finding that wording of deed of sale not supporting trial Court's finding that special advance guarantee required in respect of purchase B price of four remaining plots, which guarantee was to be given when first erf transferred to purchaser, irrespective of whether seller at that stage able to effect transfer in deeds office — Rule of our law that, where no time fixed for payment or transfer, seller not entitled to demand transfer guarantee upon date earlier than that on which he can lodge transfer documents with Registrar of Deeds — Such rule C not complied with in instant case and letter of 8 April 1983 therefore not placing purchaser in mora in respect of furnishing of transfer guarantee for purchase price of second erf to be transferred — Furthermore, neither facts nor pleadings supported finding of repudiation of contract by purchaser, or inference that the latter D unable or unwilling to pay purchase price of second erf — Even if repudiation had occurred, seller had not accepted it and had elected to abide by contract — Seller's (respondent's) cancellation of contract therefore not justified and constituting breach of his contractual obligations — Appeal allowed. E

Headnote : Kopnota

The respondent had sold to the appellant a single erf of land, which was to be subdivided into five erven, for R11 000 in terms of a deed of sale concluded on 10 May 1982. The special conditions in the deed of sale provided, inter alia, that the appellant would take transfer of the first subdivided erf upon payment of R2 200 (the appellant had to pay F a deposit of R1 100 within seven days of the date of the sale), that the balance would 'be guaranteed, against registration of transfer' and that the appellant would take transfer of the remaining equally priced erven by 1 April of each of the following four years against payment of R2 200 in each instance. Interest on the unpaid balance of the purchase price was fixed at 14 % per annum. After much delay, occasioned by the appellant, which necessitated action by the respondent in the magistrate's court, the first of the erven was transferred to him on 7 G April 1983. The respondent, through his attorney, had already called upon the appellant on 14 March 1983 to arrange to take transfer of the second erf and had asked for an assurance that the purchase price would be 'duly guaranteed and paid without any hassles'. After yet further delay, the respondent, in a letter dated 8 April 1983, called upon the appellant to nominate the next erf to be transferred and, simultaneously, to 'suitably guarantee payment of the purchase price (of the second erf)...' by 16 May 1983, failing which he would cancel the sale. The appellant did not provide the guarantee timeously, H whereupon the respondent cancelled the contract and sold and transferred the remaining erven to a third party. The appellant then sued the respondent in a Provincial Division for damages, on the grounds that the respondent could not validly have cancelled the contract because the appellant had complied with all the conditions of the sale, which contention the respondent denied. The Court a quo interpreted the deed of sale as requiring the appellant to furnish two guarantees in respect I of the purchase price: the first one being the standard transfer guarantee that the balance of the purchase price of the first erf to be transferred would be paid against registration of that erf in the appellant's name, and the second being an advance guarantee in respect of the purchase price of R8 800 of all four remaining plots. The Court further held that the latter guarantee had to be given at the time when the first erf was transferred to the appellant, irrespective of whether the respondent was at that stage able to lodge with the Registrar of J Deeds the necessary documents to effect transfer of the remaining

1989 (3) SA p138

A plots and consequently held that, having failed to provide the latter guarantee by the date that the respondent was ready and able to pass transfer of the first erf, the appellant was already in mora even before the letter of 8 April 1983 was written. The Court a quo accordingly held that the respondent had been entitled to cancel the contract as he had done and dismissed appellant's claim.

On appeal, the Court remarked that the provision in the general section of the deed of sale requiring a suitable guarantee to be furnished B for the balance of the plot price clearly referred only to the balance of the purchase price of the first plot, and did not deal with the transfer of the remaining four plots, and that nothing was said in the special condition either about any guarantee in respect of the purchase price of the remaining four plots.

Held, therefore, that the general rule of our law in respect of contracts of sale of land applied, entitling the seller to require C the standard transfer guarantee to be furnished in respect of those plots.

Held, further, that the wording of the deed of sale therefore provided no basis for the finding of the Judge a quo that a special advance guarantee was required in respect of the purchase price of the remaining four plots.

Held, further, that a seller is not entitled, where no time is fixed in the contract for payment or transfer, to demand a transfer guarantee upon a date earlier than that on which he proposes to lodge with D the Registrar of Deeds documents required for transfer and that there was a duty upon the seller, when demanding a transfer guarantee, to inform the purchaser when he proposed to lodge, although this did not have to be an exact date.

Held, further, that in the present case this rule had clearly not been complied with and the letter of 8 April 1983 did not, therefore, serve to place the appellant in mora in respect of his obligation to furnish a transfer guarantee for the purchase price of the second erf to be transferred.

E Held, further, that, as the letter of 8 April 1983 called for one guarantee in respect of the purchase price and transfer costs and since the respondent would not have started preparing the transfer documents without the guarantee which, as was held above, he was not then entitled to, he therefore was not entitled to a guarantee for the transfer costs either.

Held, further, as to the submission on respondent's behalf that the appellant's conduct amounted to a repudiation of the contract F or indicated that he was unable or unwilling to pay the purchase price of the second erf and that the respondent had therefore been justified in cancelling the contract, that it had never been alleged on the pleadings, that the appellant was unable to pay his debts or that he had repudiated the contract and that the facts of the matter also did not support such a finding.

Held, further, that, even if the appellant's attitude did amount to G a repudiation of the contract, such repudiation had not been accepted by the respondent who elected to abide by the contract, thereby keeping it alive.

Held, accordingly, that the respondent's cancellation of the contract was not justified and that he had acted in breach of his obligations under the contract when he sold the four remaining plots to a third party. Appeal allowed.

The decision in the Cape Provincial Division in Wilson v Spitze 1987 (4) SA 118 (C) reversed. H

Case Information

Appeal against a decision in the Cape Provincial Division reported at 1987 (4) SA 118 (Van den Heever J). The facts appear from the judgment of Vivier JA.

J I Immerman SC (with him D A Lenhoff) for the appellant referred to the following authorities: As to the seller's entitlement to a I transfer guarantee, Hammer v Klein and Another 1951 (2) SA 101 (A); Wehr v Botha NO 1965 (3) SA 46 (A); Sterkstroom Belgrave Hotel (Pty) Ltd v Schwulst 1956 (2) SA 154 (E); Schoeman v Botha en 'n Ander 1968 (1) SA 637 (T) at 640. As to whether the letter of 8 April 1983 effectively served as an interpellatio : Linton v Corser 1952 (3) SA 685 (A); African Peach Growers v Bouwer 1973 (4) SA 654 (T); W D Russell (Pty) Ltd v Witwatersrand Gold

1989 (3) SA p139

Mining Co Ltd 1981 (2) SA 216 (W) at 221B; Strauss en 'n Ander v Resca en Andere 1982 (1) SA 279 (N) at 286; West Rand Estates Ltd v New Zealand Insurance Co Ltd 1926 AD 173 at 195. As to the applicability of the contra proferentem rule: Cairns (Pty) Ltd v Playdon & Co Ltd 1948 (3) SA 99 (A) at 124. A

B W G Burger SC (with him C B Prest) for the respondent referred to the following authorities: Hammer v Klein and Another 1951 (2) SA 101 (A); Linton v Corser 1952 (3) SA 685 (A); Wehr v Botha NO 1965 (3) SA 46 (A); Theron v Theron 1973 (3) SA 667 (C). As to whether appellant's conduct amounted to...