Just Names Properties 11 CC and Another v Fourie and Others (04/28922) [2006] ZAGPHC 109; 2007 (3) SA 1 (W) (17 May 2006)

IN THE HIGH COURT OF SOUTH AFRICA

(WITWATERSRAND LOCAL DIVISION)

CASE NO: 04/28922

In the matter between:

JUST NAMES PROPERTIES 11 CC First Plaintiff

ALEXANDER BALADAKIS Second Plaintiff

and

NICOLAAS JACOBUS FOURIE First Defendant

ANNIE SUSAN FOURIE Second Defendant

CHARTRADE 247 CC Third Defendant

SPIROS KOUTROUMANOS Fourth Defendant

KLEANTHIS MAOURIS Fifth Defendant

PLATINUM MILE INVESTMENTS 218 (PTY) LTD Sixth Defendant

THE REGISTRAR OF DEEDS, PRETORIA Seventh Defendant

J U D G M E N T

JAJBHAY, J:

[1] This matter establishes how nefarious motives, greed and inaptitude of estate agents, and a few attorneys can tarnish a perfectly well intentioned transaction; this at the expense of perfectly honest and innocent parties. On 17 January 2003 the second plaintiff, and the first and second defendants entered into a written agreement, in terms of which the first and second defendants sold to the second plaintiff certain holding situated at 26 Kempton Park Agricultural Holdings (“the property”) for a purchase price of R1 800 000,00.

[2] The following inter alia were terms of the agreement:

“Clause 2.1:

‘This agreement is subject to the following suspensive conditions:-

that within six (6) completed calendar months commencing on the first day of the calendar month immediately succeeding acceptance of this offer the purchaser is able to obtain approval in principle by the Ekurhuleni Metropolitan Municipality in terms of section 98 of Ordinance 15 of 1986 to the establishment of a township on the property that is zoned for business with a minimum of 30% coverage and that an exemption be granted from compliance with the Environmental Impact Assessment Regulations (number 1182 and 1183) of the Environmental Conservation Act of 1989; and

that should any objection be lodged which requires a decision by the Development and Planning Tribunal, then, that the objection is rejected by the Tribunal within twelve (12) months of the acceptance of this offer; and…’

Clause 2.6:

‘The suspensive conditions are stipulated for the benefit of the purchaser who may waive them or any of them at any time prior to the expiry of the period within which they are to be fulfilled. Such waiver shall be in writing.’

Clauses 5.1 and 5.3:

‘5.1 Alexander Baladakis acts herein as an agent or a trustee for a corporation not yet formed.

Should the corporation for which he acts not be formed within twenty-one (21) days of the fulfilment of the suspensive conditions or their waiver, as the case may be, or if having been formed, the corporation should fail to ratify or adopt this agreement within the same period, then Alexander Baladakis in his personal capacity shall be deemed to be the purchaser of the property.

If the corporation becomes the purchaser in terms of this agreement, then Alexander Baladakis in his personal capacity binds himself as surety and co-principal debtor in solidum with the corporation for the fulfilment by it of all its obligations as purchaser to the seller.’

Clause 6.1:

‘6.1 If the purchaser fails to make the application referred to in 2.1.1 or to pursue it as provided therein or commit any other breach of this agreement and remains in default for a period of seen (sic) (7) days after receipt of a written notice calling upon him to remedy the breach complained of, then the seller shall be entitled at his sole discretion and without prejudice to any other rights in law to cancel the agreement and to retain as rouwkoop or as pre-estimated damages the deposit paid to the attorney by the purchaser.’”

[3] The particulars of claim set out that on 14 July 2003 the second plaintiff, acting in terms of clause 2.6 of the agreement, waived in writing the fulfilment of the condition set out in clause 2.1 of the agreement. Thereafter, the first plaintiff was formed and registered. The first plaintiff adopted and subsequently ratified the agreement within the period set out in clause 5.2 of the agreement.

[4] The plaintiffs complain that unbeknown to them, and while the agreement was still of full force and effect, on 13 May 2003, at Kempton Park, the first and second defendants and the third defendant entered into a written deed of sale in terms of which the first and second defendants sold to the third defendant the property for a purchase price of R1, 9 million. On 29 May 2003 the property was transferred into the name of the third defendant and simultaneously a mortgage bond was registered over the property in favour of the sixth defendant securing an indebtedness of the third defendant

[5] The following facts are important in understanding the present case. The members of the third defendant, the fourth and fifth defendants own, either directly or indirectly a supermarket in Kempton Park known as Glen Acres Spar; as well as shopping centres known as Glen Acres Shopping Centre and Woodbridge Shopping Centre which would be affected by the acquisition by the second plaintiff of the property and the establishment on the property of a shopping centre and a Pick ‘n Pay Family Supermarket. The second plaintiff entered into the agreement to purchase the property with a view to developing a shopping centre from which a supermarket would be operated. It appeared according to the evidence, as well as the pleadings that the fourth and fifth defendants were determined to acquire the property in order to prevent the second plaintiff or an entity associated with the second plaintiff from establishing a supermarket business on the property to compete with the supermarket operating in Glen Acres.

[6] In the agreement between the first and second defendants as the sellers of the property, and the third defendant represented by the fifth defendant, as the purchasers of the property, the latter furnished the first and second defendants an unusually gratuitous indemnity. This clause is contained as a suspensive condition in the agreement. This clause reads as follows:

“12. SUSPENSIVE CONDITION

The Purchaser declares itself to be aware that the Seller sold the property to ALEXANDER BALADAKIS in terms of an agreement entered into at KEMPTON PARK on 17 January 2003 (‘the first agreement’), which contract is subject to suspensive conditions which in the opinion of the Seller (but not guaranteed by him) are impossible to be fulfilled by said purchaser.

This agreement is subject to the condition that the Purchaser, within 14 (fourteen) days from date of signature hereof, advise the Seller or the attorney in writing that the Purchaser, in its sole and absolute discretion is satisfied that the suspensive condition in the first agreement is incapable of being fulfilled.

Should the suspensive clause in 12.2 be fulfilled as provided for therein, or be waived as provided for in clause 12.4, the Purchaser hereby specifically indemnifies the Seller against any claim of any nature which may be instituted against the Seller in terms of the first agreement referred to in clause 12.1 above, including any costs or expenses which may be incurred in respect thereof.

This suspensive condition is inserted for the benefit of the Purchaser, who may waive it at any time prior to expiry.

Should the suspensive condition set out in clauses 12.3 not be fulfilled before the expiry date or within such extended period as the parties may agree in writing, or be waived by the Purchaser as set out in clause 12.4, this agreement shall lapse and be regarded as null and void and neither party shall have any further claim against the other.”

[7] In terms of the amended plea that was filed towards the end of March 2006, the first to sixth defendants pleaded that:

“4. AD PARAGRAPHS 3.1, 3.2 AND 4

The Defendants admit that the First and the Second Defendant’s initials appear on the first five pages and that their signatures appear on page 6 of the document which forms the subject matter of Annex ‘PPC1’ to the Particulars of Claim (‘the agreement’).

Save as aforesaid the Defendants deny each and every allegation contained in these paragraphs as if specifically traversed.

In amplification of their denial the Defendants state that at the time when the First and Second Defendants placed their initials on, inter alia, page 3 of the agreement, that page was blank.

4.3.1 This occurred in the following circumstances:

4.3.1.1 The First and Second Defendants were unwilling to agree to the terms set out, inter alia, on page 3 of the Offer to Purchase which had been signed by Baladakis and presented to them for their consideration.

4.3.1.2 Baladakis (represented by Ms J. Oosthuizen (‘Oosthuizen’) (of Key Realty) accordingly asked the First and Second Defendants to sign two blank pieces of paper on which Baladakis (represented by Oosthuizen) agreed later to record the terms upon which the First and Second Defendants were willing to contract.

4.4 In the premises the agreement is invalid for lack of compliance with the provisions of Section 2(1) of the Alienation of Land Act 68 of 1981 (as amended).

4.5 The Defendants further state that:

4.5.1 During the course of the negotiations which led to the First and Second Defendants signing the agreement in the manner set out above, Baladakis (represented by Oosthuizen) orally represented to the First and Second Defendants that:

4.5.1.1 the property (ie Plot 26 Kempton Park) would be registered in the name of the purchaser and the First and Second Defendants would be paid the full purchase price for the property within three months from the date upon which they signed the agreement and the agreement contained or would contain a term to that effect; and

4.5.1.2 the First and Second Defendants would have R1.8m in their ‘pocket’ after three months if they accepted the offer (‘the representations’).

4.5.2 At the time when the representations were mere Oosthuizen (acting on behalf of Baladakis) knew that they were false in that:

4.5.2.1 Oosthuizen knew that the agreement contained or would contain the suspensive condition now stipulated for in clause 2.1 of the agreement which condition could not be fulfilled and would not be waived in time to enable the First and Second Defendants to receive the purchase price within the said period of three months; and

4.5.2.2 Oosthuizen knew that the agreement contained a term (ie clause 10 of the agreement) which obliged the First and Second Defendants to pay a commission of R118 000.00 to Key Realty.

4.5.3 Oosthuizen (acting on behalf of Baladakis) made the representations with the intention of inducing the First and Second Defendants to sign the agreement.

4.5.4 The First and Second Defendants believed the representations and were induced thereby to sign the agreement (ie in the manner set out above) which they would not have done but for their belief in the truth of the representations or either one of them.

4.6 In the premises the First and Second Defendants became entitled to cancel the agreement which they did and they orally communicated their cancellation to Baladakis (represented by Oosthuizen) at Benoni on 11 April 2003 and later in writing by letter dated 12 May 2003 which was received by Baladakis on 2 June 2003 alternatively the First and Second Defendants hereby cancel the agreement.”

[8] At the commencement of the trial, and in terms of Rule 33(4) of the Uniform Rules of Court, I was called upon to determine:

whether the agreement entered into between the second plaintiff and the first and second defendants fails to comply with section 2(1) of the Alienation of Land Act; and

whether the first and second defendants are entitled to avoid the agreement by reason of “fraudulent representations”.

[9] The question relating to the formal validity of the agreement gives rise to three questions, namely:

whether, as alleged by the defendants, they signed two blank pieces of paper (which eventually became page 3 of the agreement); and

whether this was done at the request of the plaintiff, represented by Oosthuizen, who thereafter on behalf of the second plaintiff recorded the terms upon which the first and second defendants were willing to contract; and,

if so, whether this gives rise to an invalidity on the part of the agreement in law.

[10] The issue as to the fraudulent representations requires proof by the defendants that:

during the course of the negotiations preceding the signature of the agreement Oosthuizen orally represented to the first and second defendant that:

10.1.1 the property would be registered in the purchaser’s name and the first defendant would be paid the full purchase price for the property within three months from the date upon which they signed the agreement, and the agreement would contain a term to that effect;

the first and second defendants would have the sum of R1,8 million in their “pocket” after three months if they accepted the offer;

in making such representation Oosthuizen was acting on behalf of the second plaintiff;

at the time that Oosthuizen made the representation she knew that they were false in that:

10.1.4.1 she knew that the agreement contained or would contain a suspensive condition as set out in clause 2.1 thereof which could not be fulfilled and would not be waived in time to enable the first and second defendants to receive the purchase price within the period of three months; and

she knew that the agreement contained a clause which obliged the first and second defendants to pay commission in the sum of R118 000,00;

Oosthuizen made the representations with the intention of inducing the first and second defendants to sign the agreement.

10.2 The first and second defendants believed the representations and were thereby induced to sign the agreement which they would not have done but for their belief in the truth thereof.

The factual elements of the two defences are dependent upon an acceptance of the truth of the evidence of the first and second defendants.

Therefore, before I consider the specific issues identified herein, it would be convenient to consider the principal version of the defendants advanced by the testimony of Mr and Mrs Fourie as well as their daughter.

[11] Mrs Fourie’s version in chief amounted to the following. During 1998 and again in 2000 the first and second defendants endeavoured, without any success, to sell the property. After the second of the transactions, during October 2000, had failed to materialise, the first and second defendants did not appoint an estate agent to act on their behalf to sell the property. During 1998, Oosthuizen was tasked as the estate agent to sell the property. The experience with Oosthuizen left a bitter taste. During November 2002, Oosthuizen of Key Realty approached the first and second defendants and intimated that she had a purchaser interested in acquiring the property. Following upon that, and on 17 January 2003, the first and second defendants sold the property to the second plaintiff for a purchase price of R1, 8 million with commission to be paid by the first and second defendants.

[12] The agreement that was signed on 17 January 2003 by the first and second defendants was prepared by the second plaintiff’s attorneys. This agreement provided for a suspensive condition, in terms of which the sale would lapse if the second plaintiff did not acquire the rights to develop the property as contemplated by him or did not waive the conditions; the minimum period by which the condition had to be fulfilled or waived was six months from the first of the month following the signature of the agreement, i.e. 31 July 2003. According to Mr and Mrs Fourie as well as their daughter, the agreement was signed on 17 January 2003 under the following circumstances. Initially, the agreement included an unamended page 3 that was initialled and signed. Oosthuizen then commenced explaining the agreement paragraph by paragraph. Oosthuizen was accompanied by her son Johan. The first and second defendants were not satisfied with the obligation to pay occupational interest. Thereafter, Oosthuizen telephoned the second plaintiff and informed him that the first and second defendants were not willing to make any payment towards occupational rental. The second plaintiff consented to this particular clause being amended to give effect to the first and second defendants’ intentions. Oosthuizen provided two blank pieces of paper to the first and second defendants and requested them to initial the pages: thereafter she would change the clauses, which they did.

[13] During the course of this meeting with Oosthuizen and her son, Oosthuizen stated that transfer would be completed within three months. She said nothing about the first and second defendants paying estate agents commission. In fact the Fouries always understood during the meeting that the second plaintiff would be liable for commission. The Fouries were further adamant that they wanted their money within three months from the date of signature of the agreement. The Fouries as well as their daughter testified that both Oosthuizen as well as her son assured them that they had done their “homework” and they did not anticipate any difficulty in attending to the acquisition of the approval in principle by the Ekurhuleni Metropolitan Municipality.

[14] Thereafter, the testimony continued that this agreement was amended, and returned to the first and second defendants on the next day. The relevant notices advertising the intention to acquire the rights were to be posted outside the property and the first and second defendants were informed thereof. According to the first and second defendants, Oosthuizen did not satisfactorily report to them about the outcome of the second plaintiff’s application for the approval. Following an argument on 11 April 2003 with Oosthuizen, they cancelled the agreement. The first and second defendants then called on the offices of the municipality on 11 April 2003, and established from their own investigation that no application for the approval had been made.

[15] Their daughter referred them to Mariande de Villiers (“de Villiers”) of Estpro, an estate agent. De Villiers in turn introduced them to attorney Madelein Nel. Mrs Fourie explained that she did not open the envelope which contained the agreement that was given to her on 18 January 2003 by Oosthuizen. She simply accepted the closed envelope and placed it into her safe. De Villiers opened the envelope containing the agreement.

[16] Madelein Nel accepted their instruction to cancel the agreement. When de Villiers was subsequently informed that the agreement was to be cancelled, de Villiers advised the Fouries that she had a serious purchaser for the property. Following upon the introduction of that purchaser, an agreement was subsequently concluded upon the terms set out in the agreement of 13 May 2003.

[17] The following facts were extracted during cross-examination. On 2 March 2003 the third defendant made an offer through de Villiers of Estpro to purchase the property for the sum of R2, 3 million (with no commission payable by the sellers) to the first and second defendants who accepted such offer. If the second agreement were to have been implemented the first and second defendants would have received an additional sum of R618 000, 00. (In terms of the second agreement, the Fouries received an additional R100 000,00, and they were not obliged to pay any commission.)

[18] During cross-examination the following facts were highlighted. In the first week of May 2003 the first and second defendants saw Madelein Nel to seek advice on the cancellation of the agreement with the second plaintiff and instructed her to cancel such agreement. On 13 May 2003 the third defendant and the first and second defendants entered into a written agreement, in terms of which the first and second defendants sold to the third defendant the property for a purchase price of R1,9 million without any commission being payable by the first and second defendants. It was a condition of the agreement with the third defendant that the third defendant satisfy itself within fourteen days of the date of the agreement that the condition to which the earlier sale to the second plaintiff was subject was incapable of fulfilment. The third defendant further indemnified the first and second defendants against any claim arising out of the earlier agreement with the second plaintiff. The cross-examination tried to develop the contention that although instructed to take steps to cancel the agreement, the two letters addressed by attorney Madelein Nel on behalf of the first and second defendants to the second plaintiff were dispatched in such a manner as to ensure that they did not reach the second plaintiff until after the property had already been registered in the name of the third defendant.

[19] Mrs Fourie explained that she needed to move from the premises as a result of a traumatic experience that she had encountered. She lost her son during 2000 in a motorcycle collision. During her examination-in-chief, as well as her cross-examination, she explained that this particular incident had engendered great distress and trauma in her life. Subsequent to the demise of her son, she was in and out of hospital. Certain arrangements were being made by their children, to relocate the first and second defendants. However, no estate agents were employed to secure a purchaser for the property for approximately three years.

[20] According to their testimony, the Fouries maintained that Oosthuizen assured them that they would be paid the full purchase price for the property within three months from the date of signature and that they would be paid the full amount of R1, 8 million without any deduction. The evidence established that during the negotiations, Oosthuizen described to the Fouries the purport of each of the clauses of the agreement. This was done clause by clause, and paragraph by paragraph. A reflection of the correspondences, as well as the subsequent agreements that were drawn up, indicate that the period of six months was agreed upon between the parties as manifested in the agreement. At best, for the Fouries it can be stated that certain assurances were afforded to them.

[21] The second plaintiff testified. He could not really assist in the determination of the issues that I was called upon to adjudicate. He was not present at the meeting that ended in finalising the agreement of 17 January 2003. The second plaintiff confirmed that Oosthuizen called him and communicated the first and second defendants’ displeasure about the occupational rental. The second plaintiff immediately responded that Oosthuizen should change the clause. He was not able to state whether the Fouries had signed a blank document or not. Mrs Oosthuizen was not called to testify.

[22] Counsel for the first and second plaintiffs, contended with great vigour, that I should reject the first and second defendants’ versions in its totality. He emphasised that there were significant features which indicated that the version advanced by the first and second defendants and their daughter, was to be rejected because:

there were manifest improbabilities therein;

there were material inconsistencies in those versions; and

there were strong suggestions that they colluded insofar as the material aspects of their evidence was concerned.

[23] Learned senior counsel further advanced the contention that the version tendered by the first and second defendants must be seen against the background of their admission of the agreement and their failure to raise any defence to avoid the agreement until March 2006. Here, it must be remembered that the first and second defendants did not have the benefit of consulting with the present attorneys that were appointed by the third to sixth defendants. In effect, it is the third to the sixth defendants who are contesting the present matter. The Fouries have been indemnified from any costs or consequences that may be placed at their door in respect of the present matter. The Fouries are merely pawns in a larger game between two conglomerates. The Fouries were entirely ignored until March 2006. Therefore I draw no adverse inference in respect of this defence being raised towards the end of March 2006. There are many unanswered questions that arise out of the manner in which attorney Madelein Nel had acted on behalf of the Fouries. Unfortunately without her testimony, these questions will remain unanswered.

[24] I considered the testimony of the Fouries as well as their daughter with great interest and in minute detail. To my mind, whilst there were several contradictions and a few improbabilities, this cannot by itself be taken to discount their testimony in its totality. In fact, my opinion of their testimony remains favourable. The Fouries are simple unsophisticated people who wanted to sell their property. They did not want to remain with the memory of the loss of their son. They were approached by estate agents and subsequently taken to attorneys. They recall with great detail, what had happened on the evening of 17 January 2003. Having observed them, and listened to them with great care, I do not believe that their version was either manufactured or a figment of their collective imaginations. In fact I do not believe that they either made up the events that occurred on the evening of 17 January 2003, or what had happened when Oosthuizen delivered the agreement on 18 January 2003.

[25] I have also carefully considered counsel’s submissions in regard to the features that purportedly rendered the defendants’ version unacceptable. Whilst there may be some merit in this criticism, I personally cannot bring myself to the view that on the totality of the evidence, the defendants’ version is unacceptable. It appears as if the Fouries are persons who do not conscientiously consider documents before signing them. This is clear when they signed the initial agreement on 17 January 2003, and thereafter signed the two blank papers that Oosthuizen presented to them. Again this was followed by an affidavit that Madelein Nel had furnished to the Fouries for the purposes of signing. They once more signed this document without considering in any detail the contents thereof. The transfer documents giving effect to the transfer was not entirely correct. Once more, the Fouries signed these documents without considering the contents thereof. The Fouries rely on the honesty of people that they are transacting with. They further rely on the advice given to them by attorneys. Unfortunately, the estate agents and the attorneys abused this particular confidence shown by the Fouries.

[26] In considering the credibility of the Fouries, one cannot simply judge this item in isolation; such a finding requires that it be considered in the light of proven facts and the probabilities of the matter under consideration. An analysis of the evidence as a whole, including that of the Fouries and their daughter, as well as the evidence of the second plaintiff, read together with the documentary evidence relied upon leads me to the conclusion that the Fouries were not only credible but also honest. Their simplicity and lack of understanding around legal issues should not weigh against this finding. I do not believe that they were motivated by greed. The Fouries’ dislike of Oosthuizen did not dissuade them from entering into a contract with the second plaintiff in the circumstances of the present matter. They were desperate to move from the property. The Fouries relied on Oosthuizen to attend to reporting to them on the progress. Oosthuizen did not attend to her task. I believe that the Fouries genuinely believed Oosthuizen when the latter indicated that the transaction could be finalised within three months.

[27] I do not believe that there are different versions regarding the signing of the agreement of 17 January 2003, as contended for on behalf of the plaintiffs. Mr and Mrs Fourie, as well as their daughter were adamant that Oosthuizen had presented two copies of the agreement for them to sign. Then, while they were signing they were informed about the agreement. Oosthuizen and her son had in no uncertain terms assured the Fouries that they had done their homework, and everything would be resolved within three months. It was when Oosthuizen explained the occupational interest clause, circumstances followed that resulted in them signing the blank pages. The telephone discussion between the second plaintiff and Oosthuizen is confirmed by the second plaintiff. It is correct that the Fouries’ daughter gave an account that mirrored the essential features of both her parents. However, to my mind, nothing untoward can be made of this factor. These are the essential items that she recalled that transpired during the evening of 17 January 2003. Their daughter specifically recalled that Oosthuizen handed two blank pages to the Fouries to sign. She also recalled that nothing was said about the commission.

[28] I do not agree with plaintiffs’ counsel that the similarity of the detail of the version offered and even the use of the word “homework” is strongly suggestive of collusion as to that version.

[29] The Fouries may well be properly criticised as to what transpired at the offices of the municipality on 11 April 2003. However, it cannot be denied that they were there. They wanted to know what was happening, if anything insofar as the transfer of the property was concerned. Thereafter, they testified that they approached Oosthuizen who simply told them to “bugger off”. It is not improbable that the Fouries would not have read the agreement that was placed in the sealed envelope and handed to them on 18 January 2003. The evidence clearly indicates that this is how they operate. They rely on and trust people with whom they are dealing with. I believe that the Fouries were given bad advice from attorney Madelein Nel. De Villiers was also not a pillar of integrity in securing the second agreement. For the above reasons, I believe that the version proffered by the Fouries and materially corroborated by their daughter is manifestly probable. In the circumstances, I determine that their version is in fact the correct version.

[30] On the basis of accepting the version proffered by the Fouries, I must make the finding that they had signed two blank pieces of paper which eventually became page 3 of the agreement. It is common cause that the font on page 3 differs from the rest of the agreement. This would mean that this page was completed some time after the initial offer to purchase was completed. Section 2(1) of the Alienation of Land Act read as follows:

“No alienation of land after the commencement of this section shall, subject to the provisions of section 28 be of any force or effect unless it is contained in a deed of alienation signed by the parties thereto or by their agents acting on their written authority.”

Contracts for the sale of fixed property are, as a rule, transactions of considerable value and importance. The conditions attached are often intricate. The requirement that the alienation of land must be contained in a deed of alienation signed by the parties thereto, would prevent litigation and remove a general temptation of being motivated by greed. See Innes J in Wilken v Kohler 1913 AD at 135; Clements v Simpson 1971 (3) SA 1 (A) at 7; Wendywood Development (Pty) Ltd v Rieger 1971 (3) SA 28 (A) at 38-39. These cases were determined prior to the promulgation of the Alienation of Land Act; however the principles enunciated therein still apply. The object of the section is to leave no doubt as to what the parties had agreed upon. See Johnston v Leal 1980 (3) SA 927 (AD).

[31] Counsel on behalf of the plaintiffs submitted that if an agreement for the sale of land is altered (whether by the change of the existing wording or by the completion of a blank) at the instance of either or both of the parties before it is finally concluded by acceptance thereof, then this would meet the requirement of section 2(1) of the Act. The authority relied upon was Menelaou v Gerber and Others 1988 (3) SA 342 (T). This case dealt with authority in relation to the alienation of land. A purchaser signed a written offer to purchase certain immovable property for a price of R172 000, 00. After ascertaining that the seller would not sell for less than R175 000, 00, he authorised the estate agent to amend his written offer by setting the price at R175 000, 00. Since this authority was not given in writing, the court had to consider whether there was a valid contract of sale after the amended offer had been accepted by the seller. It seems clear that an offeror can sign the offer form first and then insert the details of his offer. In the Menelaou matter, the court held that the agent could be orally authorised to change the offer, and that a written authority was not required. The court held that the facts of the case were not covered by the Statute, since the Statute related only to the signing (i.e. the actual entering into or concluding) of the contract and not to other matters. Unlike in the present matter, the issue in the Menelaou matter was about the requirement whether an agent must be authorised in writing to sign on behalf of a party. In the present matter, this question did not arise. The parties in their personal capacities signed page 3 of the agreement. However, the question that arises in the present matter is whether the signature on the two blank pieces of paper in the circumstances of the present matter, gives rise to invalidity on the part of the agreement, in law. The facts in the Menelaou case are somewhat different from the facts of the present case. The reliance placed by counsel on the Menelaou case is in my opinion misplaced.

[32] In the present case, I believe that Oosthuizen, who was the estate agent, was not an agent of either the seller or the purchaser in the technical sense of the word. She had acted as a mere nuntius between the parties. The conduct of Oosthuizen in the circumstances of the present matter reminds one of the learned article by Prof E Kahn in (1980) 97 SALJ 342 where the learned professor referred to the estate agent as “that legal oddity, the estate agent”; Prof Kahn further states:

“Generally speaking, an estate agent is only entrusted with the task (no obligation) of finding a purchaser of immovable property.

It is rare indeed for him to be an agent stricto sensu, clothed with authority to enter into a contract on behalf of his principal. See Bird v Summerville 1961 (3) SA 194 (AD) at 202C-E.”

[33] It has been held that section 2 of the Alienation of Land Act requires, as did its predecessors, that the essential elements of the transaction, i.e. the identity of the parties, the subject-matter of the transaction and, where the alienation is the sale of land, the price be paid for it, be reflected in writing: Raven Estates v Miller 1984 (1) SA 251 (W) at 254, Hamdulay v Smith NO 1984 (3) SA 308 (C) at 310. In addition, all material terms of the agreement are also required to be reduced to writing: Raven Estates v Miller (supra), Mulder v Van Eyk 1984 (4) SA 204 (SE). There appears to be some uncertainty as to when terms that do not relate to the essentialia of the agreement are to be regarded as material. The learned judges in both Raven Estates v Miller and Mulder v Van Eyk appeared to favour a subjective test in terms of which a provision is to be regarded as material if it was “agreed upon as such and intended to be incorporated in their agreement” (per Smalberger J in Mulder at 208B-C, cf Raven Estates v Miller at 256B-C). To my mind, the question is not whether the parties regarded the term as material and as one to be incorporated in writing. The issue is whether they intended a particular aspect of their relationship to be governed by a special provision agreed upon by themselves rather than by the naturalia of the agreement or the general principles of contract. If so, the term in question is a material one as regards the particular contract and one which, on account of the need to achieve certainty in respect of transactions governed by the formalities legislation is required to be in writing (cf A D J van Rensburg and S H Treisman The Practitioner’s Guide to the Alienation of Land Act 2nd edition (1984) at 39).

[34] The formalities legislation relating to alienations of land does not expressly prescribe a particular procedure regarding the execution of the deed of alienation. The question whether reduction to writing must precede signature was answered in the affirmative in Raven Estates v Miller (supra), reliance was placed on Fourlamel (Pty) Ltd v Maddison 1977 (1) SA 333 (A) – a decision relating to the formalities required for contracts of suretyship imposed by section 6 of the General Law Amendment Act 50 of 1956. A similar conclusion with regard to section 4 of the Hire Purchase Act 36 of 1942 was reached in Van Rooyen v Hume Melville Motors (Edms) Bpk 1964 (2) SA 68 (C). The argument that the legislative purpose with the formalities legislation requires that a completed document be signed is a cogent one when applied to measures aimed primarily at the protection of consumers by the provision of precise information regarding the terms of the contract before its conclusion but perhaps less so in relation to alienations of land. The emphasis in this regard is, with the notable exception of transactions falling within the scope of Chapter II of the Alienation of Land Act, not particularly on the protection of the consumer, but more generally on the need to achieve certainty in regard to the often intricate terms of contracts of considerable value and to reduce the danger of unnecessary litigation.

[35] The issue in Fourlamel (Pty) Ltd v Maddison (supra) was whether, if a printed document had been in blank as to the names of the principal debtor, creditor and co-surety at the same time of the signature, the unilateral insertion of the necessary details thereafter by another was sufficient compliance with section 6 of the General Law Amendment Act 50 of 1956. The Appellate Division held that it was not. Muller JA stated that it might be that, where an agreement is not required by Statute to be in writing, a document signed by a party before the terms of the contract were embodied therein would bind the party in the absence of fraud or error. In that case however a Statute required the terms of the contract to be embodied in a document signed by the party as a manifestation of his assent. There were notional and practical difficulties in the way of the acceptance of insertion by another of the terms of the contract after signature as compliance with such a statute. The learned Judge of Appeal went on and stated that:

“Where the terms of the contract are required by statute to be embodied in a document and signed by a particular party as a manifestation of his assent to such terms, there are considerable difficulties both notionally and practically, in the way of acceptance that insertion by another of the terms of the agreement after the party has appended his signature to a blank piece of paper, constitutes compliance with such statute.”

[36] With respect, the same can be said in the circumstances of the present matter. On this approach, by virtue of the signature on a blank document, the document is then for all intents and purposes a nullity.

[37] During the course of the submissions, I was referred to the case of Jurgens and Others v Volkskas Bank Ltd [1992] ZASCA 152; 1993 (1) SA 214 (A).In that matter among the defences raised by the appellants in the court a quo when an application for summary judgment was brought against them was that the suretyships upon which respondent’s action was founded failed to comply with section 6 of the General Law Amendment Act 50 of 1956. The appellants alleged that printed blank suretyship forms were occasionally furnished to them by the respondent when it required them to undertake liability as sureties. The individual appellants would sign the forms in blank when convenient. Only after the last appellant had signed the form would it be given to a secretary who would then enter the relevant particulars into the blank spaces. When complete, the forms were delivered to the respondent. The court distinguished between the situations where a deed of suretyship is signed in blank by the surety and delivered to the creditor for completion and where the surety signs the form in blank, after which it is completed by or on behalf of the surety, prior to being delivered to the creditor, as appellants had done. It was found that Fourlamel (Pty) Ltd v Maddison (supra) was distinguishable as it dealt only with the first situation when it held that a deed of suretyship will lack formal validity if it is signed by a surety in blank and subsequently completed by another acting without the surety’s authorisation.

[38] The object of section 2(1) of the Act is clearly directed against uncertainty, disputes and possible malpractices. Therefore, all the terms as are essential to the creation of a valid contract of sale, being the parties, the price, the land sold and the nature of the transaction must be in writing: see Coronel v Kaufman 1920 TPD at 219; Van Wyk v Rottcher’s Saw Mills (Pty) Ltd 1948 (1) SA 998; Patel v Adam 1977 (2) SA at 655H. The clause relating to occupational rental was very important in the eyes of the Fouries. They insisted that this clause be deleted. To my mind, it was imperative that they have sight of the clause that was incorporated into the agreement before appending their respective signatures to the agreement. Having observed the second plaintiff, I have no doubt that he would not have signed this agreement had any portion thereof been presented to him in blank. This was an important part of the transaction and should have been reduced to writing before the parties appended their signatures thereto. This did not happen.

[39] It is correct that the end product ostensibly complies with the requisite formalities however – the facts as revealed prove non-compliance. The non-compliance in the present case is of a type which the provisions of the Alienation of Land Act were specifically promulgated to avoid (see Hirschowitz v Moolman and Others 1985 (3) SA 739 (A) at 757I-758B.

[40] The plaintiffs further sought to avoid the consequences of non-compliance by presenting the facts somewhat differently. It was argued on their behalf that the agreement, with the old page 3 replaced by the new page 3, was presented to the second plaintiff as a counter-offer, which the second plaintiff accepted. According to this argument, the second plaintiff’s acceptance was signified by his initial of the new page 3 which, at the time he initialled, contained the terms which now appeared on it. Although

this argument is interesting, it is based on no evidence at all. Mr and Mrs Fourie, as well as their daughter testified convincingly that two blank pages were given to them by Oosthuizen to sign. Oosthuizen did not assist the cause of the plaintiffs in having chosen not to testify. Counsel for the plaintiffs referred me to the case of Webranchek v Elke Jacobs and Co, Ltd 1948 (AD) 671. In that case, Van den Heever JA set out that:

“Moreover a litigant who calls a witness vouches, as it were, on pain of being discredited himself, for his probity and truthfulness. The potential witness may be untruthfully hostile; he may have a bad memory or an unfortunate presence. After all, plaintiff was entitled to rest his case upon evidence which he considered adequate to discharge the onus which lay upon him.”

In the present matter, I am not persuaded that an inference against the defendants should not be drawn from the fact that they did not call Oosthuizen as a witness. There were many issues that called out for her testimony. This was not forthcoming. I was not informed as to what the reason for her non-appearance was. Strictly speaking I am not entitled to an explanation, however at the end of the day I must draw certain reasonable inferences from such a decision. There were allegations against Oosthuizen when she had submitted that certain officials in the municipality can be “bribed”. These allegations went unchallenged. Oosthuizen was in the best position to inform me as to when and where the document was completed if the Fouries were not speaking the truth. This again was not forthcoming. The credibility of the Fouries could have been placed in issue if this was disputed by Oosthuizen. This was not done. The defendants presented a strong, credible and probable case. These factors called for the testimony of Oosthuizen. The plaintiffs elected not to call her, in my mind to their detriment.

[41] As a result of the conclusion that I have arrived at, I do not think it necessary to deal with the second issue before me i.e. whether the agreement can be avoided on the basis that the Fouries were induced to conclude the agreement by certain misrepresentations fraudulently made by Oosthuizen acting on behalf of Mr Baladakis.

[42] The conclusion that I have arrived at after a proper evaluation of all of the evidence, and for the reasons that I have set out hereinbefore, is that the agreement entered into between the second plaintiff and the first and second defendants dated 17 January, 2003 is invalid for want of compliance with the provisions of section 2(1) of the Alienation of Land Act. In the circumstances, the plaintiffs’ action is dismissed with costs.

_________________________

M JAJBHAY

JUDGE OF THE HIGH COURT

ON BEHALF OF PLAINTIFFS ADV P J VAN BLERK SC WITH

B M SLON

INSTRUCTED BY ATTORNEY SOLON PHITIDIS

ON BEHALF OF DEFENDANTS ADV McNALLY

INSTRUCTED BY CHRISTELIS ARTEMIDES

DATE OF HEARING 26 APRIL; 2, 3, 4 MAY 2006

DATE OF JUDGMENT 17 MAY 2006.