IN
THE COURT OF APPEAL OF SWAZILAND
Appeal
Case No. 6/88
In
the matter between
LANDAGE
INVESTMENTS (PTY)LTD Appellant
and
BARRY
STEPHEN REED Respondent
JUDGMENT
SCHREINER
J.A :
The
Appellant, Landage Investments (Pty) Ltd ("Landage"), is
the owner of two stands in Sidwashini Industrial Township, Mbabane
Extension No. 8. They are lots 978 and 979 ("the property").
One of them is undeveloped and the other has on it a commercial stock
industrial building consisting of two warehouses, one of about 200
square metres and the other of about 100 square metres, and showrooms
and offices covering about 140 square metres.
2
The
shares in Landage are owned by Mr A.E. Evans and his wife who during
most of the events forming the subject matter of this appeal were
living overseas. Mrs Evans was in England and Evans largely in
Uganda.
Mr
Reed, the Respondent, is a citizen of Swaziland who owns a
bottlestore in Mbabane. He had rented a property at Sidwashini for
storing his liquor but wished to purchase his own premises as a
storehouse for liquor and for another enterprise which he was
contemplating. Reed knew Evans and knew also that a Mr Martin, an
estate agent, was leasing property on behalf of Evans. He attempted
via Martin to negotiate for the purchase of the property but nothing
came of it. Then Mr Cooper of the firm of Coopers & Lybrand which
was the auditor of Landage suggested that he might write a letter to
Evans who was then in England.
3
Cooper
did this on the 11th November, 1986, enquiring from Evans as to
whether Martin had been in touch with him and whether he was
interested in disposing of the property and buildings belonging to
Landage. Evans then rang Reed and negotiations started. These
culminated on the 30th November, 1986 when it was telephonically
agreed that the property would be sold for E145 000. Reed was to have
free occupation until the 31st January, 1987 after which he was to
pay occupational rent at some unspecified rate until transfer of the
property had been passed.
Evans
emphasizes in his evidence the fact that he was most anxious that
transfer should be passed without any delay. Reed does recall some
element of urgency and remembers suggesting that Mr Boshoff of
Robinson, Bertram and Company should do the transfer because he was
efficient.
4
On
the day upon which the oral agreement was entered into the directors
of Landage passed a resolution in England the terms of which were
embodied in a minute which was signed by Evans and his wife. It is in
the following terms:-
"The
Company sell to Barry Stephen Reid all that property known as Plot
917, Sidwashini Industrial
Estate together with all improvements thereon and Plot 918 Sidwashini
Industrial Estate
all for the sum of E145, 000 (One hundred and forty-five Thousand
Emalangeni only) nett
to the Company of all costs, fees and charges. It was agreed further
that Mr Reid be allowed
immediate occupation of the property without payment of rent with
such arrangement continuing
until 31 January, 1987 at which time full occupational rent shall
commence if transfer
of ownership has not been completed."
5
It
is common cause between the parties that the stand numbers in this
resolution are incorrect and that the resolution related to the
property.
Also
on the 30th November, 1986 Landage wrote a letter to Cooper. After
thanking him for passing Reed's message on to him, Evans, on behalf
of the Company, wrote:-
"Barry
has requested that you act as go between for us and I am very happy
to go along with this. I have agreed to sell the two plots of land at
Sidwashini, including the warehouse, to Barry or his nominee company
for the sum of E145 000.00 (One hundred and forthy-five thousand
Emalangeni) nett to me. He will be meeting all the costs of transfer
including stamp duties, attorney fees etc. I have agreed that he may
have immediate occupation of the warehouse without any charge or
rent.
6
"This
is subject to all legal formalities having been completed and the
money paid over to the Landage
Investments Account at Standard Bank, Allister Miller Street before
31 January 1987.
If this has not been achieved by that date then the usual
occupational rent should apply."
The
writer of the letter states that, while he is happy for Cooper to act
on his behalf, using the letter as authority, he realizes that for
some matters this will prove difficult and proceeds to give
information as to how he may be reached in Uganda. The letter is
signed by Evans in his capacity as director and it is not disputed
that the signature is that of Landage. There is a difference between
this letter and the resolution in that in terms of the resolution it
seems that occupation of the whole property was to be given to Reed
whereas Cooper is told that he will be given occupation of "the
warehouse" without stipulating which one.
7
The
position as at the 30th November, 1986 therefore was that an oral
agreement of sale had been arrived at and certain arrangements made
for completing the transaction.
Cooper
then wrote to Robinson, Bertram and Company on the 3rd December, 1986
informing them of the agreement and instructing them to draw the
necessary documentation. Since this document has also been relied
upon by Reed as one of the alternative documents going to make up a
written contract I will set out its terms:-
"The
directors of Landage Investments (Proprietary) Limited have agreed to
sell plots 978 and 979
Sidwashini
to Mr Barry Stephen Reed of the Grog Shop Mbabane, for an amount of
E145 000
net to the company. The directors of Landage Investments (Propriety)
Limited and Mr Reed have
8
both
agreed that we should instruct you on their behalf, to draw up the
necessary documentation to effect the aforementioned transfer as soon
as possible. We understand that the title deeds of the property are
in the possession of Standard Chartered Bank Swaziland Limited, Main
Branch, Allister Miller Street, Mbabane. It has been agreed between
the parties that all costs, duties and disbursements in this matter
are for the account of the purchaser and that the net amount to be
paid to Landage Investments (Proprietary) Limited on completion is
E145 000, less any indebtedness on the part of Landage Investments
(Proprietary) Limited, to Standard Chartered Bank Swaziland Limited.
Please let us know if you require any further information to enable
you to proceed in this matter." The letter was signed by Cooper.
It does not contain any provision concerning occupation by Reed of
the property as a whole or of the warehouse.
9
On
the 12th December, 1986 Robinson, Bertram and Company wrote a letter
to Coopers and Lybrand to which were attached for submission to Mrs
Evans a draft directors' resolution of Landage in duplicate and two
copies of a deed of sale already signed by Reed. Cooper then sent the
documents to Mrs Evans in England.
The
draft deed of sale and resolution were not drawn up so as to reflect
the particular arrangements which had been come to between Evans and
Reed. The draft deed of sale contained mainly ordinary clauses which
might be expected in a deed of sale with no unusual provisions.
10
These
were that the price should be payable against transfer with the
lodgement of a building society or bank guarantee on request from the
conveyancers (Clause 1), a voetstoots clause (Clause 2), possession
to be given upon registration of transfer (Clause 4), and a
undertaking to sign any further documents in order to effect transfer
(Clause 5). There was also an inappropriate clause providing for the
remedies of the seller in the event of a failure on the part of the
purchaser to pay monies due under the agreement (Clause 6). These was
no provision for immediate free occupation of the property or the
warehouse by Reed until the 31st January 1987 and the payment of full
occupational rental thereafter until transfer.
11
By
the beginning of January 1987 there had been no further developments
and Reed got into touch with Boshoff of Robinson Bertram and Company
and was told that the return of the signed deed of sale and
resolution was still being awaited. The same answer was given when
Reed got into touch with Cooper at the end of that month. I assume
that Reed took occupation of the property early in December. On the
2nd February 1987 Reed, anticipating that the transaction would go
forward, entered into a written lease with Swaziland Spares and
Equipment in terms of which he let part of the premises which was
known as "Shop No. 1" for a period of 3 years commencing on
the 1st February, 1987.
On
some date which is not specified Reed caused certain work to be done
on the property. It was apparently necessary in order to get the
premises into a lettable condition and the expenditure on maintenance
and preservation of the property was E3 100.
12
The
evidence on this subject which is relevant to the question of the
defence of a right to remain in occupation by reason of an
improvement lien was adduced during re-examination of Reed without
objection. There was no cross examination and no evidence to
contradict it.
The
deed of sale and draft resolution had not arrived in England by the
end of February, 1987. Evans tried to find out from Cooper what was
happening and eventually he travelled to Swaziland on the 7th March.
On the 12th March he purported to withdraw from the sale on behalf of
Landage. He says he wanted Landage to take control of the land. The
reason for his withdrawal became a matter of some dispute at the
trial.
13
Evans
says that he withdrew because nothing was being done to complete the
transaction and he was anxious to sell the property. It was suggested
on behalf of Reed that he did so because he expected to get a better
price if he put the property on the market again. The learned Chief
Justice was inclined to believe that it was the latter reason which
caused Evans to withdraw. For the purposes of this judgment it does
not matter which was correct.
Reed
refused to vacate the property and in June, 1987 a summons was issued
by Landage. The amended Particulars of Claim merely allege that
Landage was the owner of the property and that Reed was in unlawful
occupation and refused to vacate. It was further alleged that
Landage, as from the 1st February, 1987, was suffering damage in the
sum of E2 500.00 a month as a result of the refusal to vacate. The
prayer was for eviction, damages and costs.
14
Landage
applied for summary judgment and this was refused. In his affidavit
in defence of the summary judgement application and in his plea Reed
raised a number of defences not all of which were argued on appeal.
The central issue on appeal was the contention on behalf of Reed that
he was in possession of the property by virtue of a valid contract
constituted by the resolution of the 30th November 1986 or the letter
of Landage to Cooper of the same date or the letter from Cooper to
Robinson, Bertram and Company dated 3rd December 1986, on the one
hand, and the incomplete deed of sale signed by Reed on the 12th
December, 1986 on the other. The plea, having set out the contract on
which reliance was placed, also contained the following :_
15
"It
was further orally agreed between the Plaintiff and the Defendant,
the Plaintiff being represented
by one Allan G. Evans, that the Defendant would take occupation of
the properties
pending the transfer of the properties as aforesaid".
The
Plaintiff then alleged that Reed was entitled to be in occupation by
reason of the agreement of sale or by reason by the alleged oral
agreement concerning occupation until transfer. The last defence was
that Reed was entitled to remain in occupation by virtue of his lien
for improvements and maintenance of the property.
16
It
will be convenient, I think, to deal at the outset with the issue of
whether Reed has established that there were indeed two agreements,
the first being an agreement of sale of property which may or may not
be void because of the failure to comply with the formalities
prescribed by Section 31 of the Transfer Duty Act of 1902 and the
second being an independent oral contract which required no formality
and gave Reed the right to occupy free of charge until the 31st
January, 1987 and, thereafter, at some unspecified rental until
transfer of the property to him.
I
suppose that there may be situations in which it may be found that
when the sale of land has been negotiated that there were two
separate agreements, the one relating to the sale of the property and
the other to occupation pending transfer, but the present facts do
not render this a possibility.
17
The
right to occupy and the date upon which rental would be payable were
part of the negotiations between the parties and appeared in the
documents which were prepared by Evans. Occupation was given to Reed
because it was envisaged that transfer would be passed to him: he
could have no right to occupy if he had no right to insist upon
transfer. The right to occupy was therefore a part of the transaction
of sale. It is true that the draft deed of sale sent by Boshoff to
Mrs Evans did not cover the question of occupation pending transfer,
but it is not suggested that this was so because the agreement
relating to occupation was a separate and independent contract on
this subject.
It
is probable that Boshoff did not know of any such arrangement because
the letter from Cooper to him did not mention it. Alternatively, he
must have considered that the terms of deed of sale were unimportant
because transfer was about to be passed and the transaction
concluded.
18
It
was pointed out in argument that it is not necessary to have a
written document for the purpose of carrying out a transfer. But
apparently Boshoff thought that some written agreement was desirable
and I did not think that the form of the draft deed of sale can be
relied upon to contradict the other evidence which indicates clearly
that there was one agreement covering the sale and occupation until
transfer had been completed.
In
his judgment the learned Chief Justice held that there was a written
contract of sale of the property constituted either by the letter of
the 30th November, 1986 from Landage to Cooper or the letter from
Cooper (presumably authorised in writing by virtue of the letter of
the same date to him) to Robinson Bertram and Company of the 3rd
December, on the one hand, and the uncompleted deed of sale, dated 12
December 1986 signed by Reed, on the other.
The
judgment does not deal with the contention that there were two
separate agreements.
Section
31 of the Transfer Duty Act of 1902 provides:-
"No
contract of sale of fixed property shall be of any force or effect
unless it is in writing and signed
by the parties thereto or by their agents authorised in writing."
This
section is virtually identical to Section 30 of Proclamation 8 of
1902 (Transvaal) and is similar to Section 1 of Act 68 of 1957,
Section 1(1) of Act 71 of 1969 and Section 2(1) of Act No. 68 of 1981
of South Africa. Thus, on the question which arises in the present
case, authorities applying the South African Statutes can safely be
regarded as persuasive authority in this Court.
20
The
contention on behalf of Reed that there was a written contract
complying with the provisions of the Act cannot be sustained.
Firstly, there is a distinction between the recording of the terms of
an earlier oral agreement in signed documents and documents which
purport to be and are intended to be the contract itself. Secondly,
where more than one document is involved what must emerge is a single
contract expressing consensus between the parties and not documents
which exhibit only partial consistency one with the other and with no
indication that a particular term emanating from one party has been
agreed to by the other.
The
only document which might have been intended to have contractual
operation is the deed of sale signed by Reed.
21
In
the form in which it was dispatched to England it constituted an
offer by Reed to Landage which, if it had been signed on behalf of
Landage would have constituted a written contract. It certainly
cannot be related to any of the other three documents relied upon in
the pleadings.
As
the learned Chief Justice pointed out the resolution signed by the
two directors, Mr and Mrs Evans, was merely a record of what the
board of Landage had decided to do. The fact that it sets out the
terms of the agreement which was to be entered into so defining the
ambit of the directors' decision cannot change the nature of the
document. If Reed had become aware of the terms of the resolution it
would not have been open to him to write a signed letter accepting
the terms contained in it and so to have concluded a contract which
was binding between Landage and himself.
22
Landage
would have been entitled to say that no offer had been made and,
until this was done, there was nothing which could be accepted by
Reed.
Having
dealt with the signed resolution in what I consider to be the correct
manner the learned Chief Justice did not approach the letter to Mr
Cooper of 30 November 1986 in the same way.
This
document, like the resolution of directors of the same date, does not
from its terms appear to be part of an offer to Reed. It is true that
it does contain what Evans said were the terms of the oral agreement,
but the purpose of inserting details in the letter to Cooper was
merely to inform him of the history of the matter in order to obtain
his (Cooper's) agreement to act as go between when Evans was not in
Swaziland.
23
It
was not intended that Reed should see it and it reveals no
contracting intention, save to the extent that it contemplates that
Cooper would assist in giving effect to the agreement which had been
concluded. Again Reed could not, had he seen this letter, have
confirmed in writing that he agreed with its terms and so brought
into being a contract complying with the Act.
The
same may be said of the letter of Cooper to Robinson, Bertram and
Company of the 13th December, 1986. Assuming that the letter from
Evans to Cooper of the 30th November, 1986 constituted the necessary
written authority to Cooper to conclude a binding contract in terms
of the Act, this letter was not the exercise by him of that
authority. It was not directed to Reed: it was merely an instruction
to the attorneys to complete the transaction which had already orally
been agreed upon.
24
The
decision of the Full Bench of the Transvaal Provincial Division in
Jackson v Weilbach's/Executrix 1907 TS 212 is apposite. The Court was
concerned with the question of whether the signed statutory
declarations of buyer and seller could constitute a written contract
for the purposes of the Transvaal Transfer Duty Proclamation. Innes
CJ. at 217 emphasises that the statutory declarations were not
intended by the parties to contain a contract. The same is said by
Smith J. at 219 (and see too Raywood v Short 1904 TH 218 at 222; van
Zyl v Potgieter 1944 TPD 294 at 296; Morrison v Hanson 1937 WLD 144
at 146 -147).
Counsel
for Reed in his argument contended that, provided that there were
signed documents from which, taken together, it may be inferred that
consensus had been reached by the parties on the material terms of an
agreement, the requirements of the Act were satisfied.
25
This
ignores the distinction between a contract which is in writing and
documents from which it can be inferred that an oral agreement had
been reached but which were not intended themselves to constitute
that contract. In this latter case the documents merely constitute a
memorandum or note of the oral agreement (See the "memorandum or
note" of Sections 4 and 17 of the English Statute of Frauds,
Section 4 of the Sale of Goods Act, 1893 and Section 40(1) of the Law
of Property Act, 1925).
The
wording of the present Act does not permit of such an approach
because it requires the contract itself to be in writing and not
merely that there should be written evidence of it (see Raywood v
Short (supra) at 222).
26
My
view concerning the nature of the documents relied upon as
constituting the signed writing by or on behalf of Landage makes it
unnecessary to investigate the further question of whether any of
these documents and the draft deed of sale are sufficiently explicit
to enable a court to ascertain the terms of the written contract. The
absence of any condition in the draft deed of sale providing for free
occupation until 31 January, 1987 and thereafter, the payment of
occupational rental and the presence of a voetstoots clause and other
provisions not to be found in the Landage documents , show that they
cannot be integrated into one contract. I do not think that the
matter is made easier for the purchaser merely by reason of the
consideration that the voetstoots clause and other clauses of the
draft deed of sale even for the benefit of Landage. This only mean
that, if put to Landage, it would probably have agreed but certainly
not that it did agree.
27
Clause
6 of the draft deed has no relation to any of the contracts of the
Landage documents and is, indeed, inappropriate in a situation where
the draft deed itself provides for a single payment to be made.
There
was debate at the hearing of the appeal concerning the meaning of the
words "material term(s)" of the contract and "essentialia"
in the judgment of Corbett J.A. in Johnston v Leal 1980 (3) SA
927(A). Having found that all but one of the documents relied upon
could not be part of a written contract between Landage and Reed, it
is not necessary to express any view as to what are "material"
terms and what are "inmaterial" terms in the present case.
It seems to me, however, that all terms which have been orally agreed
upon are "material" terms and the word was not used by the
learned Judge as the equivalent of "essentialia" which
usually means those terms which are necessary to create a binding
contract of a particular kind.
28
Naturally
if, by an error common to both parties, a term has been omitted from
the signed writing it may be inserted by the procedure at
rectification and, in this way, a contract containing only the
essentialia may be a binding contract, but the contract is the
written agreement with all the agreed terms.
I
am therefore of the view that the defence of Reed that he has a
contractual right to occupy fails and, subject to the defence of the
lien, the ejectment order asked for by Landage must be granted.
Logically
the next question would be whether the claim for occupational rental
has a basis in law, but this matter is best disposed of after there
has been a finding on the issue of the existence of a lien.
29
The
evidence, sketchy though it is, is sufficient to establish that Reed
carried out maintenance work on the property to the value of E3 100.
He caused a signboard to be removed, grass to be cut, the driveway to
be cleaned and levelled and certain doors and a toilet to be
replaced. This was done in order to make the premises suitable for
letting and it was not argued that he would not be entitled to be
paid for this.
Until
he is paid he may exercise his lien and remain in possession. Though
the dates when the work was done does not appear in the record, on
the probabilities it took place in December 1986 or January, 1987
because the lease which was concluded is dated 2nd February, 1987.
Counsel for Landage did not advance any reason why the lien should
not be recognized by this Court.
30
Turning
now to the question of the claim for damages, it was argued that a
person in wrongful occupation of property is liable in delict for
damages suffered by the owner of the land as a result of such
wrongful occupation. It is not necessary to deal with the validity of
this submission because in the present case, having found that there
was a valid lien in favour of Reed throughout substantially the whole
period of his occupation, the basis of unlawful occupation which is
fundamental to the claim cannot be established. Counsel for Reed did
not seek to base his argument in favour of compensation for wrongful
occupation upon the ground that there had been some form of unjust
enrichment as a result of it. In this he was probably correct
(Pucjlowski v Johnston's Executors 1946 WLD 1; Vermaak v Van Heerden
1978 (4) SA 348 (W) at 351).
31
It
follows that the court may make an order for ejectment subject to the
payment by Landage of the sum of E3 100.
Lastly,
the question of costs. For Reed it was said that because no tender of
payment for the maintenance of the property had been made by Landage,
he had established his right to occupy which right will remain until
the payment has been made. Reed raised the defence of a lien in the
affidavit in the summary judgment proceedings and in his subsequent
plea. There was no replication so it must be assumed that Landage
denied the validity of that defence. At the trial no evidence was led
by Landage to rebut the defence of lawful occupation under a lien and
it was not dealt with in the judgment of the learned Chief Justice
because he found that Reed was in occupation by virtue of a valid
contract. In these circumstances it is contended that Reed was really
the successful party in the litigation because no right to eject him
had been established.
32
I
do not agree with this argument. The central issue between the
parties was the existence of a binding contract which entitled Reed
to insist on transfer. It is true that the pleadings were in the
form' of a vindicatory claim alleging unlawful occupation by Reed,
but the parties were in fact disputing who was entitled ultimately to
ownership of the property. The right to continue to occupy pending
payment for expenses incurred and the right to occupational damages
were peripheral matters which concerned only the period pending a
final decision on the central issue of who was entitled to the
property. In my view therefore the costs in both courts should be
paid by Reed.
33
It
should be mentioned that at the beginning of the appeal Landage
applied for condonation for the late filing of the record. This was
not opposed by Reed. The delay in filing the record was not due to
any negligence on the part of Landage or its legal representatives.
The costs of the application and of the postponement of the appeal
which occurred during the March session of this Court should
therefore be costs in the cause. It is to be hoped that the necessary
arrangements will be made in the future to enable records to be
available within the times laid down by the Rules.
The
order which I would propose is:-
1)
The
appeal is allowed.
2)
The
order of the learned Chief Justice is set aside and the following
substituted :-
34
A
The
Respondent is ordered to vacate lots 978 and 979 situated in Mbabane
Extension Number
8 (Sidwashini Industrial Township) on payment by the Appellant of the
sum of E3 100.
B
The
Appellant's claim for payment of damages for unlawful occupation is
dismissed.
35
C
The
Respondent is ordered to pay the costs both in the High Court and in
the Court of Appeal,
such costs to include the costs of the application for condonation
for late lodging of the
record and the postponement of the trial in March, 1988 consequent
upon such late filing.
WHR
SCHREINER J.A.
WELSH
J.A. :
I agree and it is so ordered.
LEON
J.A. :
I agree
