Philmatt (Pty) Ltd. v Mosselbank Developments CC (323/94) [1995] ZASCA 154; 1996 (2) SA 15 (SCA); [1996] 1 All SA 296 (A); [1996] 1 All SA 296 (A) (29 November 1995)

Philmatt (Pty) Ltd. v Mosselbank Developments CC (323/94) [1995] ZASCA 154; 1996 (2) SA 15 (SCA); [1996] 1 All SA 296 (A); [1996] 1 All SA 296 (A) (29 November 1995)

The Supreme Court of Appeal held that the respondent was entitled to introduce extrinsic evidence of a contemporaneous oral suspensive condition, namely that the sale of the 23 erven would only take effect if Wale Street procured the necessary finance. This oral term was material and not incorporated into the written deed of sale, rendering the sale void under s 2(1) of the Alienation of Land Act. The parol evidence rule does not prevent a party from adducing evidence to challenge the validity of a contract, as opposed to altering its terms. The respondent was therefore not obliged to transfer the erven to the appellant, and the application for liquidation was correctly dismissed.

Citation
[1995] ZASCA 154
Parties
Appellant: Philmatt (Pty) Limited; Respondent: Mosselbank Developments CC
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
29 November 1995
Case Number
323/94
Procedural Posture
Civil Appeal / Appeal From Dismissal of Provisional Winding Up Application
Outcome
Appeal dismissed; respondent not obliged to transfer the erven; application for liquidation dismissed with costs.
Judges
Hefer, F H Grosskopf, Van Coller
Legal Topics
Close Corporation Liquidation, Alienation of Land Act, Parol Evidence Rule, Integration Rule
Commercial and Corporate Civil Procedure Close Corporation Liquidation Alienation of Land Act Parol Evidence Rule Integration Rule

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Parties

Philmatt (Pty) Limited

Appellant

Mosselbank Developments CC

Respondent

Procedural Posture

Civil Appeal / Appeal From Dismissal of Provisional Winding Up Application

Legal Issues

  1. 1 Whether the respondent is obliged to transfer 23 erven to the appellant under the deed of sale.
  2. 2 Whether the deed of sale is void for failure to incorporate a material oral suspensive condition as required by s 2(1) of the Alienation of Land Act.
  3. 3 Whether extrinsic evidence of a contemporaneous oral term is admissible to challenge the validity of the deed of sale.

Ratio Decidendi

The Supreme Court of Appeal held that the respondent was entitled to introduce extrinsic evidence of a contemporaneous oral suspensive condition, namely that the sale of the 23 erven would only take effect if Wale Street procured the necessary finance. This oral term was material and not incorporated into the written deed of sale, rendering the sale void under s 2(1) of the Alienation of Land Act. The parol evidence rule does not prevent a party from adducing evidence to challenge the validity of a contract, as opposed to altering its terms. The respondent was therefore not obliged to transfer the erven to the appellant, and the application for liquidation was correctly dismissed.

Court Disposition

Appeal dismissed; respondent not obliged to transfer the erven; application for liquidation dismissed with costs.

Orders

  • The appeal is dismissed with costs.
  • The respondent is not obliged to transfer the 23 erven to the appellant.