Fairoaks Investment Holdings (Pty) Ltd and Another v Olivier and Others (9858/2005) [2007] ZAGPHC 77 (2 February 2007)

IN THE HIGH COURT OF SOUTH AFRICA

TRANSVAAL

PROVINCIAL DIVISION

Date: 02/02/2007 Case no: 9858/2005

UNREPORTABLE

Case no: 9858/2005

In the matter between:

FAIROAKS INVESTMENT HOLDI GS (PTY) LTD First Plaintiff

WILLOW FALLS ESTATE Second Respondent

en

SUZETTE OLlVIER

HIGHLAND KNIGHT INVESTMENTS 140 (PTY) LIMITED

First Defendant Second Defendant

T L JANSE VAN RENSBURG INCORPORATED REGISTRAR OF DEEDS, PRETORIA

Third Defendant Fourth Defendant

JUDGMENT

JOOSTE, AJ:

INTRODUCTION:

[1 ]

In this action the first, alternatively the second plaintiff prays for an

order in the following terms:

1.1

Interdicting the First Defendant from transferring or taking steps

to transfer the property described as the Remaining Extent of

[3]

2

Portion 171, Wilgespruit 190 IQ ("the property") into the name

of any person or entity other than the first, alternatively the

second plaintiff.

1.2

Directing the First Defendant to sign all necessary documents

and to take all necessary steps in order to procure transfer of

the property into the name of the First, alternatively the Second

Plaintiff.

[2]

The First, alternatively Second Plaintiff's entitlement to the prohibitory

interdict and the mandatory interdict is premised on the alleged

existence of a clear right to the transfer of the property into the name

of the First, alternatively the Second Plaintiff.

The clear right is

alleged to arise from the existence of a valid and enforceable contract

of sale between the First Defendant and the First, alternatively Second

Plaintiff in regard to the property.

On or about 9 April 2002 a contract of sale was concluded between

the first defendant and the second plaintiff, who was subsequently

substituted by the first plaintiff.

A copy of the contract of sale is

annexed to the particulars of claim as annexure "A", The contract of

sale was subject to the fulfilment of the conditions set out in clause

3

13 thereof, including the condition that the property be rezoned and

that the approval by the relevant town planning authority of the site

development plan for a residential development of at least 1 5 housing

units per hectare be obtained on or before 9 April 2003, failing which

the entire contract of sale would automatically lapse and be of no

force and effect.

The condition was not fulfilled on or before 9 April

2003 in consequence whereof the contract of sale lapsed and was of

no force or effect from 10 April 2003.

[4]

Notwithstanding the lapsing of the contract, the plaintiffs allege that

the contract of sale is valid and enforceable at the instance of the first,

alternatively the second plaintiff on the basis that:

4.1

The first defendant and the second plaintiff agreed in writing to

revive the contract of sale on the same terms and conditions as

set out in annexure "A" to the particulars of claim, excluding

those contained in clause 1 3 ("the main claim"); alternatively

4.2

The first defendant waived her right to rely on the failure of the

conditions contained in clause 13 and the contract of sale as

set out in annexure" A" to the particulars of claim extant ("the

alternative claim").

[6]

4

[5]

The first defendant has taken exception to the particulars of claim on

the basis that no cause of action is disclosed for several reasons.

Central to the exceptions raised by the first defendant is the

acknowledgement by the plaintiffs that the contract of sale lapsed on

10 April 2003 because of non fulfilment of the condition contained in

clause 13.2. The latter condition reads as follows:

"13. Suspensive conditions:

This agreement is subject to:

13.1 ...

13.2 The rezoning of the property as residential 1, 2 or 3 and

the approval by the relevant town planning authorities of

a site development plan (to be submitted by the

purchaser) for a residential development of at least 15

housing units per hectare within 12 months after date of

signature of this contract.

Such rezoning application to

be submitted at the cost of the Purchaser".

6.1

As to the nature of the condition, Mr Lane, who appeared for

6.2

5

the excipient, referred to it in argument as being a resolutive

condition, whilst Mr Du Plessis, on behalf of the first and

second plaintiffs referred to it as being a suspensive condition,

more so having regard to the heading of clause 13.

The effect in our law of the non fulfilment of a resolutive

condition was stated as follows by Coetzee, J (quoting from

Wessels on Contracts): in Amoretti v Tuckers Land and

Development Corporation 1980(2) SA 330 at 332H:

"If the resolutive conditions is fulfilled, the law regards the

whole transaction inter partes as if the absolute contract had

never existed and the parties must therefore be restored to their

formal position. Abigatio resolvitur nunc ex tunc. Thus, in the

case of a sale subject to resolutive condition, the Romans said

that, when the condition was fulfilled, the subject matter of the

sale was to be regarded as if it had never been bought or sold.

The resolutive condition therefore has a retrospective effect".

(emphasis added).

[8]

6

6.3

In law the non fulfilment of a suspensive condition has the same

effect and the contract terminates automatically and is void ab

initio.

Dirk Fourie Trust v Gerber 1986 (1) SA 763 (A);

Benkenstein v Neisius & Others1997 (4) SA 835 (CPD).

[7]

As far as the main claim is concerned, Mr Du Plessis, correctly in my

view, conceded that on the papers he could not argue that a written

agreement was established.

Accordingly the only issues to be

determined in deciding whether the pleading discloses a cause of

action, are whether there has been a consensual revival of the

agreement with written amendments or whether the first defendant

waived any right to rely on the failure of his suspensive conditions

recorded in clause 13 of the agreement of sale, annexure "A" to the

particulars of claim.

Mr Du Plessis submitted that even in the absence of a new contract,

the informal consensual revival of the lapsed agreement was possible

in law in that the parties could by informal consent nullify the

"dissolutive facts".

He relied on the decision of Nicholas, J in D.S.

Enterprises Limited v Northcliff Townships Limited 1972 (4) SA 22

7

(WLD) at 28 E-F where it was held that the parties could by

agreement nullify the dissolutive facts.

[9]

Mr lane argued that apart from being distinguishable from the present

matter, that the decision in the D.S Enterprises-matter was clearly

wrong. To this end he pointed out that Nicholas, J relied on Neethling

v Klopper & Andere 1967 (4) SA 459 (AD) as authority for the

principal expounded by the learned Judge.

I agree with the

submission by Mr lane that the Neethling-case, on closer examination,

is no authority for the principal. In that case the court was concerned

with the question whether a contract for the sale of land which had

been validly cancelled, could be reinstated by an agreement which

failed to conform with the requisites of section 1 (1) of Act 68 of 1957

(the precursor of section 1 (1) of Act 71 of 1969).

After referring to

the correspondence which had passed after the lawful cancellation by

the appellant, Steyn, CJ at 467G stated the following"

"Vir sover hier ter sake kom die briewe eerder neer op ‘n verweë

versoek dat die appellant afstand van sy aanspraak op geldige

opsegging en ‘n aanvaarding van die versoek deur die appellant.

Daaruit sou volg dat die appellant die gevolge van sy terugtrede, in ag

genome dat dit 'n geldige terugtrede was, met die goedkeuring of

[10]

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instemming van die respondente, waarvan hul verswee versoek getuig,

tot niet gemaak het met die gevolg dat die kontrak herleef. Daarmee

is egter geen nuwe koopkontrak gesluit nie. Die kontrak wat herleef

het is die kontrak van 23 Junie 1962 soos vervat in die geskrif".

And on 468C:

“Om genoemde redes wil dit my voorkom dat 'n herinstelling van 'n

opgesegde koopkontrak ten opsigte van grand deur afstanddoening

van die regte wat uit die opsegging van die kontrak onstaan het, nie

aan die voorskrifte van die onderhawige artikel hoef te voldoen nie, en

dat die herlewing van die kontrak in hierdie geval nie uit hoofde van

bedoelde voorskrifte verwerp kan word nie".

In Cronje v Tuckers Land and Development Corporation 1981 (1) SA

256 at 259 B-F, Cilliers, AJ also dealt with the Neethling-decision and

the reliance thereon by Nicholas, J in the DS Enterprises-decision and

stated the following:

“..., it is apparent that the decision in Neethling v Klopper (supra)

went no further than to recognise the valid revival of an already

terminated contract in the following limited circumstances. Firstly, the

9

revival was brought about by the withdrawal of the earlier (valid) act

of cancellation and its consequences and this withdrawal related to

matters extraneous to the writing of the contract.

Secondly, the

revival of the contract in no way affected its terms, or if it did, the

variation resulting from the revival did not relate to a material term of

the contract.

The decision in Neethling v Klopper (supra) is therefore not authority

for the proposition that contracts in respect of a sale of land, which

have come to an end, because of the fulfilment or non fulfilment of a

condition, whether suspensive or resolutive, embodied in the written

contract itself, can be revived without complying with the provisions

of section 1 (1) of Act 71 of 1969, in any event not where the

continued presence in the writing of the condition which caused the

agreement to terminate which, if the writing were effectively revived

in toto, again caused the agreement to terminate (or, as counsel

graphically put it, to "self destruct").

Neethling v Klopper (supra) is

more over authority against the proposition that such a revival process

can effect any changes to the material terms of the written agreement,

unless, of course, the requisites of section 1 (1) of Act 71 of 1969 are

met",

[11 ]

[12]

- -- -- -- ---­

10

Similarly, Coetzee, J in the Amoretti-case (supra) at 233 D-G stated:

"Tacit revival is apposite where there has been a lawful cancellation of

the contract by one of the parties and it is therefore revived ...

In

such cases, unlike in the former class, the contract expires at the date

of cancellation. There is indeed something which can be "revived".

If in Neethling's case (supra) the position were not that one of the

parties had lawfully resiled from the contract and if it had indeed been

a case like the present where a resolutive condition was fulfilled as a

result whereof in law the position was to be regarded is if there never

had been an agreement at all, I incline to the view that the result

would have been different and that the Appellant Division would

probably have held that it was necessary for the parties, in such event

to re-enter into a contract for the sale of the land in writing before

there would be a valid and enforceable contract at all".

In short, a distinction is to be drawn in the "revival" of a contract that

came to an end due to one of the parties exercising the right in terms

of the contract and the instance where a contract comes to an end

due to the operation of law, i.e. the non fulfilment of a resolutive or

suspensive condition. By the "revival" in the first instance, the act of

[13]

[14]

11

one of the parties is undone by agreement, which is not the case

where a contract comes to an end because of the operation of law.

In all the authorities cited, it is clear that what ought to have

happened was that a written agreement complying with the provisions

of section 2( 1) of the Alienation of Land Act, 68 of 1981 ought to

have been signed by the parties which could have incorporated terms

of the lapsed agreement and varied those terms as necessary, such as

those contained in clause 13.2, which, if left unamended would have

resulted in the automatic self destruction thereof.

This is what the

parties did in Benkenstein v Neisius & Others (supra).

As far as the waiver is concerned, the plaintiffs' first alternative is a

complete alternative to the pleaded revival of the agreement of sale.

It presupposes that annexure "A" remained extant and is not

influenced by annexures "81" and "C1" to the particulars of claim. In

his heads of argument Mr Du Plessis stated that the essence of the

waiver, was not a waiver of a contractual right, but a waiver of the

rights arising from the termination of the contract and that the waiver

revives the contract.

This is contrary to the pleaded case.

In this

regard it is important to also recognise that the alternative claim

presupposes that annexure "A" remained extant. In other words, that

[15]

12

the contract of sale between the parties as contained in annexure "A"

is not influenced or represented at all by annexures "B" and "C" to the

particulars of claim. Because of the non fulfilment of the condition the

sale lapsed by operation of law and was deemed void ab initio. The

events pleaded in paragraph 15 of the particulars of claim allegedly

substantiating the waiver, took place under the contract of sale had

already lapsed and was void ab initio.

Consequently there were no

rights or obligations flowing from the contract of sale which were

capable of being waived by the first defendant.

It follows that the

argument advanced by Mr Du Plessis cannot be sustained.

15.1

Furthermore the plaintiffs pleaded case ignores the provisions

of

clause 11.1 of the agreement of sale, which reads as follows:

"Any latitude or extension of time which may be allowed by the

Seller to the Purchaser in respect of any payment provided for

herein, or any matter or thing which the Purchaser is bound to

perform,

or observe in

terms hereof shall not in any

circumstances be deemed to be a waiver of the Seller's right at

the time, to require strict and punctual compliance with each

and every provision or term hereof".

[16]

[17]

13

15.2 On the basis as pleaded, namely that the agreement remained

extant then such clause expressly prohibits the waiver of the

first defendant's rights, which includes the right to rely on the

non fulfilment of the conditions contained I clause 13. It is thus

legally untenable for the plaintiffs to advance a case which is

inconsistent with the express provisions of the contract of sale

as pleaded by them.

As far as the first plaintiff is concerned, it is alleged that pursuant to

clause 21 of the agreement of sale, the first plaintiff was substituted

for the second plaintiff as the purchaser to the contract of sale. This

substitution is alleged to have occurred on or about 22 October 2004,

that is on a date after the contract of sale lapsed by operation of law

and was deemed void ab initio.

I have already found that the

contract of sale was not revived and that the first defendant did not

waive any of her rights.

The substitution of the first plaintiff was

therefore of no force and effect. It follows that the first plaintiff is not

entitled to any relief by virtue of the alleged substitution of the first

plaintiff as the purchaser in terms of the contract of sale.

The individual exceptions raised by the first defendant were not dealt

separately in view of the approach and the conclusions as appear from

[18]

14

the above. It is clear that the plaintiffs' particulars of claim does not

disclose a cause of action, entitling them to the interdicts claimed.

In the premises, the following order is made:

18.1 The exceptions are upheld with costs, such costs to include the

costs of two counsel payable by the plaintiffs jointly and

severally, the one paying the other to be absolved;

18.2 Paragraphs 11 to 14 and 15 to 17 of the particulars of claim

are struck out;

18.2 The plaintiffs are afforded an opportunity to amend their

particulars of claim within 10 days of the service of this order

on them.

F J JOOSTE

ACTING

JUDGE OF THE HIGH COURT

Plaintiff's counsel:

Instructed by:

First defendant's counsel:

Instructed by:

15

S J du Plessis, se P Sieberhagen

Izak Minnie Attorneys clo Hack Stupel & Ross, Pretoria

P M N Lane, se e J McAslin

Singer Horwitz Attorneysclo S Gerber Attorneys, Pretoria