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SWAZILAND
HIGH COURT
KIRK
Thomas
Applicant
vs
DUNN
Farrel Respondent
Civ.
Case No. 1180/2002
Coram SAPIRE,
CJ
For
Applicant Mr Flynn
For
Respondent Mr. Rodrigues
JUDGMENT
18th
June 2002
The
applicant applied for an order directing the respondent to deliver to
the applicant a 1998 Toyota HINO Truck SD 927 GS.
The
Applicant in his founding affidavit alleges that the respondent sold
the vehicle to the applicant in terms of a written agreement entered
into between the parties on the 6th April 2002. A copy of the
agreement is annexed to the papers and it reads as follows: -
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"6th
April 2002-05-22
FULL
AND FINAL DEED OF SALE
BETWEEN
FARREL
DUNN Representing D&O MARKETING
AND
THOMAS
KIRK
One
1988 Toyota H1N0 Truck SD 927 GS
Full
purchase price = E30, 000.00 (thirty thousand
Emalangeni)
Paid
in full cheque Number 0139.
Conditions
of Sales.
This
sale is subject to an expressed 14 days buy back period agreement
between both parties. Payment to be effected in full on signature of
this agreement. This truck must be insured:
As
excess or uncovered damages.
Farrel
Dunn pledges his NISSAN LDV SD 785 PM for all full costs.
Purchaser's
Signature Seller's Signature
Witnesses Witnesses
1.__________________ 1.____________________
2.__________________ 2.____________________
The
terms of the agreement are repeated on page 6 of the founding
affidavit.
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The
applicant claims to have performed his obligations in terms of the
agreement by payment in full to the Respondent of the purchase price
namely the sum of E30 000.00. This is not in dispute.
The
applicant thereafter alleges that the respondent has failed to
exercise the "purchase back" option within the stipulated
time period and the applicant is accordingly entitled to delivery of
the truck in question. The question of the "purchase back "
stipulation and whether it was exercised is a disputed issue. The
applicant has demanded delivery but the respondent has not complied
therewith.
The
application is brought by way of urgency. It is difficult, if not
impossible to justify this procedure in the instant case.
The
respondent has filed an affidavit in which the circumstances in which
the agreement was entered into are described in greater detail. There
is much to support his contention that the "sale" was
really a loan of money, which was to have been paid back within 14
days. No sinister implication is alleged to arise from the disguise
of the transaction, but what is of importance is that if the
circumstances are as alleged by the respondent, the court might well
not be disposed to exercise its discretion to decree specific
performance. Specific performance remains a discretionary matter and
in the present case there are a number of factors that militate the
granting of this relief.
Before
however the granting of relief can be considered the agreement upon
which the applicant relies requires further examination. The
document, "TK1" is clearly a do-it-yourself effort. By that
I mean it was obviously not professionally drafted. The heading "Full
and Final Deed of Sale" is in itself not the way in which
agreements of this nature are normally described. What the meaning of
the word "Full and Final" is, in this connection is not at
all clear.
The
agreement also records that it is between Farrel Dunn representing D
& O Marketing and Thomas Kirk. Farrel Dunn is the respondent and
Thomas Kirk is the applicant. The word "representing" when
applying to Farrel Dunn is somewhat misleading and has given rise to
the first point that was raised by the respondent. The respondent has
claimed that D & O Marketing is in fact a company and that he,
Farrel Dunn, is not a party to the agreement. The use of the word
"representing" might strongly suggests that the Respondent
may not have been acting in personally on his
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own
behalf. If D&O Marketing is an entity apart and distinct from the
respondent himself this point may have some weight but it is not
necessary to decide the case on this issue.
The
document goes on to state what the merx, or subject matter is. It is
the Toyota Truck to which reference has been previously made.
The
full purchase price is said to be E30 000.00 and it is recorded that
cheque number 0139 pays it in full.
The
fact that the vehicle was not delivered to the applicant at that time
suggests that the respondent's explanation of the agreement may well
be correct.
This
version receives further support in what is referred to as a
condition of the sale. The agreement states: -
"This
sale is subject to an expressed 14 days buy back period agreement
between both parties".
The
words.
"Payment
to be effected in full on signature of this agreement. " then
appear.
If
this refers to the original sale it seems redundant as the agreement
already reveals that payment had been made. It is meaningless in
relation to the "buy back" agreement
The
agreement further records that the truck must be insured. The
obligation to effect insurance is not cast on either of the parties.
A further term is expressed in these words: -
"As
excess or uncovered damages Farrel Dunn pledges his NISSAN LDV SD 785
pm for all full costs."
The
meaning of these words is again unclear. It is not necessary for the
purpose of this case to try and discover what is intended. I may
however observe that the pledge of movable requires delivery, to be
effective and in the absence of delivery the pledge confers no
security.
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The
real problem however is the meaning of the provision relating to the
14-day buy back agreement. One wonders why the applicant would have
bought the vehicle and paid cash for it if there was the possibility
that the transaction would be reversed within 14 days. This
consideration could militate against the court exercising its
discretion to grant an order of specific performance in this case.
The
contention however is, that
a) The
"retro purchase" is unenforceable, because no price is
stated at which the it may take place.
b) The
period of 14 days is moreover meaningless unless a commencement day
is stipulated.
This
seems to be a sound argument, but Mr Flynn, who appeared for the
applicant argued that a meaning can be given to the retro sale
provision, namely that the vehicle could be bought back at any price
that the applicant was willing to accept.. This is contrary to
principle, and does not find support in the authority or
persuasiveness of decided cases either in this jurisdiction or in
South Africa. Contracts, which leave the determination of the
consideration in the discretion of one of the parties, are not
binding agreements. The Supreme Court of South Africa has not yet
accepted that there can be a valid sale at an implied "reasonable
price" One of the essential terms is and remains undecided and
indeterminable. In this case there is no agreement as to price and I
find that the condition is in fact incapable of being enforced.
Mr
Flynn relied on Genac Properties Jhb (Pty) Ltd v NBC Administrators
CC 1 to bolster his argument. The judgment of Nicholas AJA,
especially at page 576 make it clear that there are distinguishing
features of that case which are not to be found in the present
instance. The judgment quotes with approval the general principle
that.
"contractual
obligations must be defined or ascertainable not vague and uncertain.
More specifically, there can be no valid contract of sale unless the
parties have agreed, expressly or by implication upon a purchase
price" and citing the words of the judgment in Westinghouse
Brake & Equipment (Pty) Ltd. V Bilger Engineering (Pty) Ltd.
1986(2) SA 555 A , "There can be no valid contract of sale if
the parties have agreed that the price is to b fixed in the future by
one of them."
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1992(1) SA 566(A) at 576
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Nicholas
J further observed that it has been held2 that a contract to sell for
a reasonable price is invalid. There is he concedes no unanimity on
the point which remains undecided in the Appellate Division, (now the
Supreme Court of Appeal). I am persuaded that the full bench decision
in the Transvaal, with which I am in agreement, should be followed.
The
next question that arises is whether if this condition is
unenforceable, the remaining provisions of the agreement are binding.
I bear in mind that part performance of the sale has by payment of
the purchase price, taken place. That does not mean that the
agreement is to be enforced.
The
question to be asked is would the parties, and the seller in
particular have entered into the agreement if there had not been
provision for the retro purchase. In the circumstances as stated in
the affidavit the answer to this question must be clearly no. The
purpose of the transaction was clearly to afford the respondent
temporary finance and that the transaction would or could be reversed
once the finance furnished by the applicant had been repaid. It
follows that the agreement as a whole because of the uncertainty of
its terms cannot be enforced and the applicant cannot succeed in the
application.
The
Respondent has tendered return of the purchase price.
The
application is dismissed with costs.
SAPIRE,
CJ
2
full bench TPD Erasmus v Arcade Electric 1962 (3) SA 418 (T)
