Vorster NO v Settlers Park Association (866/2009) [2009] ZAECGHC 45 (2 July 2009)

6

FORM A

FILING SHEET FOR EASTERN CAPE HIGH COURT, GRAHAMSTOWN JUDGMENT

PARTIES:

LOUIS VORSTER N.O. APPLICANT

and

SETTLERS PARK ASSOCIATION RESPONDENT

Registrar: CASE NO: 866/2009

Magistrate:

High Court: EASTERN CAPE HIGH COURT, GRAHAMSTOWN

DATE HEARD: 25/6/2009

DATE DELIVERED: 2/7/09

JUDGE(S): Plasket

J

LEGAL REPRESENTATIVES –

Appearances:

for the Appellant(s); Applicant: Mr L Schubart

for the Respondent(s): Mr J Koekemoer

Instructing attorneys:

Appellant(s): Goldberg and De Villiers Inc, Port Elizabeth and Netteltons,

Respondent(s): Whitesides

CASE INFORMATION -

Nature of proceedings :

IN THE HIGH COURT OF SOUTH AFRICA

(EASTERN CAPE -- GRAHAMSTOWN)

CASE NO: 866/2009

DATE HEARD: 25/6/2009

DATE DELIVERED:2/7/09

NOT REPORTABLE

In the matter between:

LOUIS VORSTER N.O. APPLICANT

SETTLERS PARK

ASSOCIATION RESPONDENT

The applicant applied for summary judgment based on a contract in terms of which a retired couple, JM and MM, had purchased a life time right to occupy premises in the respondent’s retirement village. The contract

provided that on the death of the last living of the couple the respondent would refund to that person’s estate 75 percent of the purchase price. The respondent never paid the refund to the estate of the last living, MM. It argued that, as JM had died before he took occupation, the contract had been discharged and was unenforceable against the respondent and that an oral agreement had been entered into by the respondent, MM and the estate of JM to the effect that the estate of JM would pay the purchase price and, on the death of MM, would be paid the refund. It paid the refund to the estate of JM on the death of MM. It was held that the contract was not discharged by the death of JM, that the oral agreement could not vary the written agreement because the latter contained a provision to the effect that no variation of it would be of any force or effect unless reduced to writing and that the Housing Development Schemes for Retired Persons Act 65 of 1988 required contracts to alienate housing interests to retired people to be in writing. Summary judgment was granted with costs.

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JUDGMENT

PLASKET J

[1] The applicant is the executor of the estate of the late Maureen Myburgh. She died on 5 August 2008 while living in a retirement village run by the respondent, a non-profit organisation. The applicant applies for summary judgment against the respondent in the amount of R472 043.25, interest thereon and costs of suit.

[2] The basis of the applicant’s claim against the respondent is a contract entered into between the late Maureen Myburgh and her late husband, John Myburgh, on the one hand, and the respondent, on the other. In terms of that contract the Myburghs acquired the right to occupy, for their lifetimes, a housing unit on the property of the respondent for a consideration of R629 391.00.

[3] Clause 6 of the agreement deals with the termination of the right of occupation. Clause 6.1 provides:

‘On the death of the last living or should the last living or the purchaser/s permanently vacate the dwelling, the right of occupancy shall revert to the Association and the life right shall terminate. The Association shall then refund to the estate or to the last living as the case may be, 75 percent of the original purchase price or 75 percent of such lower figure as may be obtained, subject to the Association being able to find a new purchaser of a life right of occupation of the said dwelling.’

[4] Clause 19.1 provides that ‘[t]his document, contains the entire agreement between the parties’ and clause 19.4 provides that ‘[n]o agreement to vary, add or cancel this agreement shall be of any force unless reduced to writing and signed by or on behalf of the parties to this agreement’.

[5] The applicant’s case is that upon the death of Maureen Myburgh, she having survived her husband, 75 percent of the purchase price was to be paid by the respondent to her estate. In breach of his obligation, the respondent failed, refused or neglected to pay.

[6] In resisting the applications for summary judgment the respondent states that after signing the agreement but before taking occupation or paying the purchase price, John Myburgh died. When the respondent sought payment, Maureen Myburgh suggested that it should obtain

payment from the estate of her late husband. The executor of the estate agreed to pay on condition that the refund would, in due

course, be paid back to the estate. In June 2007, an oral agreement was concluded by the respondent, Maureen Myburgh and the estate of the late John Myburgh in terms of which the estate would pay the purchase price, Maureen Myburgh would occupy the premises for her lifetime and, on her death, the refund would be paid to the estate of the late John Myburgh. The purchase price was duly paid, Maureen Myburgh occupied the premises until her death and, thereafter, the respondent paid the refund to the John Myburgh Testamentary Trust.

[7] From these facts, the respondent makes the following conclusion:

‘I have been advised by the defendant’s legal advisers and believe it to be correct that the agreement … is not enforceable by the estate of Maureen Myburgh … against the defendant in that the agreement was discharged by the death of John Myburgh on 15 February 2007 and by the oral agreement entered into between the late Maureen Myburgh, the estate of the late John Myburgh and the defendant. The obligations in terms of the agreement … were discharged by the death of the late John Myburgh which occurred before Mr and Mrs Myburgh took occupancy of the housing unit and before payment of the price for the lifetime right to such housing unit.’

[8] While it is so that John Myburgh died before he was able to occupy the premises, I cannot see the basis upon which it is argued that the agreement was discharged by his death and is hence unenforceable against the defendant. In my view the agreement continued after his death: it provides expressly that it continues until the death of the ‘last living’ and Maureen Myburgh lived in the premises in terms of the agreement until her death.

[9] Secondly, the oral agreement could not have varied the written agreement: clause 19 provides that ‘[n]o agreement to vary, add or cancel this agreement shall be of any force unless reduced to writing and signed by or on behalf of the parties to this agreement’. Furthermore, the oral agreement does not comply with s 2(1) of Housing Development Schemes for Retired Persons Act 65 of 1988 which provides that agreements to alienate housing interests to retired people are of no force or effect unless they are contained ‘in a contract signed by the parties thereto …’.

[10] In the result, the respondent has not succeeded in establishing a bona fide defence to the applicant’s claim and the application for summary judgment must succeed.

[11] I make the following order.

(a) The respondent is directed to pay to the application the amount of R472 043.25 together with interest on that amount at the rate of 15.5 percent per annum a tempore morae.

(b) The respondent is directed to pay the applicant’s costs of suit together with interest thereon at the rate of 15.5 percent per annum payable as from a date 14 days after taxation, such costs to include the costs of the application for summary judgment.

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C. PLASKET

JUDGE OF THE HIGH COURT

APPEARANCES:

For the applicant: Mr L Schubart instructed by Goldberg and De Villiers Inc, Port Elizabeth and Netteltons, Grahamstown.

For the respondent: Mr J Koekemoer instructed by Whitesides, Grahamstown.