IN
THE HIGH COURT OF SWAZILAND
HELD
AT MBABANE
Civil
Case No. 654/2011
In
the matter between:
ALI
KHAN
…........................................................................................APPLICANT
AND
NJABULO
MABUZA
…..............................................................First
RESPONDENT
NQABA
MZIKAYISE DLAMINI …...........................................Second
RESPONDENT
NTOMBI
DLAMINI
…..............................................................Third
RESPONDENT
BUSISIWE
NGCAMPHALALA ….............................................Fourth
RESPONDENT
THE
REGISTRAR OF DEEDS
…...............................................Fifth
RESPONDENT
THE
ATTORNEY GENERAL
….................................................Sixth
RESPONDENT
CORAM
MCB MAPHALALA, J
FOR
APPLICANT N. Fakudze
FOR
RESPONDENTS L. Mzizi
Summary
Civil
Procedure - Contract for the sale of immovable property - Purchaser
complies with terms of contract inclusive of purchase price and
transfer costs -Seller concludes another sale in respect of same
property with Third Party and effect transfer - Purchaser seeks order
for Specific Performance For transfer of property - Seller pleads
impossibility of performance.
JUDGMENT
6th
APRIL 2011
[1]
An urgent application was instituted for an order directing that the
purported sale of Lot No. 1216 situate at Madoda Township in Manzini
by the First Respondent to the Bhubhudla Family Trust is null and
void; he further asked for an order directing the First Respondent to
transfer or cause to be transferred the said property to the
Applicant. In addition, he asked for an order directing the Fifth
Respondent to cause the deregistration of the property in the name of
Bhubhudla Family Trust and have same registered in the name of the
Applicant.
[2]
The applicant and the First Respondent concluded a written contract
for the sale of Lot No. 1216 situate at Madoda Township in Manzini on
the 27th
September 2010 for a purchase
price of E320 000.00 (Three hundred and twenty thousand Emalangeni).
In terms of the contract, the parties acknowledged that an initial
payment of E25 000.00 (Twenty five thousand Emalangeni) as well as a
deposit of E75 000.00
(Seventy five
thousand Emalangeni) had been paid. The balance of E220 000.00 (Two
hundred and twenty thousand Emalangeni) was payable in two equal
instalments; the first instalment was payable on the 30th
October 2010 and the balance was
payable upon the transfer of the property into the name of the
purchaser.
[3]
The applicant alleges that on the 4th
November 2010, the First
Respondent was paid an amount of E99 900.00 (Ninety nine thousand
nine hundred Emalangeni) by cheque being the first portion of the
balance of the purchase price. At the end of November 2010 the
applicant gave his Attorney a cheque of E120 000.00 (One hundred and
twenty thousand Emalangeni) for payment to the First Respondent upon
registration of transfer of the property into his name; furthermore,
he paid to his conveyancers E23 107.68 (Twenty three thousand one
hundred and seven Emalangeni sixty eight cents) being transfer costs.
He further signed all transfer documents and handed them to the
conveyancers in respect of the transfer.
[4]
The applicant further alleges that the First Respondent requested his
Attorneys to pay an amount of E9 885.71 (Nine thousand eight hundred
and eighty five Emalangeni seventy one cents) to the Swazi Bank in
respect of a loan account held with the bank. This money was paid
from the moneys held by the Applicant's Attorneys in trust pending
transfer. In addition, the First Respondent requested Applicant's
Attorneys to pay E10 918.75 (Ten thousand nine hundred and eighteen
Emalangeni seventy five cent) to the Manzini Municipal Council in
respect of rates owed; again, this money came from the money
held by the Applicant's Attorneys in trust pending transfer.
Furthermore, the First Respondent requested Applicant's Attorneys to
pay him E20 000.00 (Twenty thousand Emalangeni) from the money held
by his Attorneys in trust since he had pressing financial
commitments.
[5]
The Applicant also alleges that he was advised by the Conveyencer
that the First Respondent was duly given transfer documents to sign
and return -them to him; however, he did not return the documents as
advised. The First Respondent is alleged to have taken the Rates
Clearance Certificate from the Applicant's Attorneys on the pretext
that he wanted to use it to obtain a Tax Clearance Certificate from
the Department of Income Tax; however, he did not give any of these
documents to the Conveyancer.
[6]
The Applicant further alleges that on the 16th
February
2011, he was advised by his Attorney that the First Respondent had
sold the property to, the Bhubhudla Family Trust for a purchase price
of E360 000.00 (Three hundred and sixty thousand Emalangeni). He
argued that the First Respondent did not have the right to sell the
property to a Third Party since he had sold the property to him. On
the 10th
February
2011, the First Respondent
delivered to Applicant's Attorney a cheque of El65 855.46 (One
hundred and sixty five Thousand eight hundred and fifty five
Emalangeni forty six cents) being a refund of all monies paid to him
by the Applicant in respect of the purchase price of the property;
the applicant refused to take the cheque and demanded that the
property should be transferred to him.
[7]
The applicant's Attorney Zonke Magagula has deposed to a Confirmatory
Affidavit in support of the allegations made by the Applicant in his
Founding Affidavit. In addition, he confirmed that the First
Respondent took the Rates Clearance Certificate from his office, and
that he did not return it despite repeated calls to do so; and, that
he only resurfaced in January 2011 with the refund cheque saying that
he had sold the property to a Third Party. The Applicant demanded the
enforcement of the agreement.
[8]
The First Respondent opposes the application and he has filed
opposing papers. In limine
he has raised two
points: First, that the matter is not urgent because he sold the
property to a Third Party in January 2011, and, that the Applicant
was aware of the sale. Secondly, that there are material disputes of
fact which cannot be resolved through Motion Proceedings. In
particular, he stated that the Applicant was aware that he was no
longer the owner of the property, and that the applicant had agreed
that he could sell the property and refund him of the purchase price.
He further argued that the Applicant had failed to pay the purchase
price timeously when it fell due; in addition, he alleged that the
applicant had failed to sign the agreement of sale. However, during
the hearing, the First Respondent did not pursue the Points
in
Limine, but,
he proceeded to make submissions on the merits. -;
[9]
The applicant had lent and advanced E25 000.00 (Twenty five thousand
Emalangeni) to the First Respondent which, and, he failed to repay on
the agreed date. They agreed that the applicant could use the loan
amount as part of the purchase price. The applicant further sold him
a Land Rover import motor vehicle at a purchase price of E75 000.00
(Seventy five thousand Emalangeni); it was agreed that this amount
would be set-off from the purchase price of the property. The First
Respondent conceded taking the motor vehicle; however, he alleges
that he returned it after a week because it had mechanical problems.
[10]
The First Respondent conceded to signing the Deed of Sale in respect
of the property at the offices of the Applicant's Attorney; and that
he did this in the absence of the applicant. He further conceded:
that he received payment of E99
900.00 (Ninety nine thousand nine hundred Emalangeni) and E20 000.00
(Twenty thousand Emalangeni) respectively as alleged by the
Applicant. The First Respondent also alleged that he returned the
motor vehicle to the Applicant and demanded a refund of the purchase
price but the Applicant failed to pay him. He conceded selling the
property on the 11th
December 2010 for a purchase
price of E360 000.00 (Three hundred and sixty thousand Emalangeni),
and, that prior to the sale he verified from Applicant's Attorneys if
the balance of the purchase price had been paid; and, that he was
informed by Siceliwe Magagula, an accountant employed by Applicant's
Attorneys that the final payment had not been made. The accountant
further informed him that the Applicant had not signed the Deed of
Sale.
[11]
It is not in dispute that on the 10th
February 2010, the First
Respondent delivered to Applicant's Attorneys the refund cheque of
E165 855.46 (One hundred and sixty five Thousand eight hundred and
fifty five Emalangeni forty six cents). The Applicant rejected the
refund cheque and demanded the transfer of the property.
[12]
The First Respondent denies concluding the contract with the
Applicant on the 27th
September 2010 as reflected in
the Deed of Sale; he alleges that on the 10th
December 2010, the
applicant had not yet signed the contract. He further argued that the
applicant's signature appearing on the Deed of Sale was different
from the one appearing on the Founding Affidavit; he suspected that
the Deed of Sale was signed by a person other than the Applicant in
order to cover up the fact that the applicant had not signed the
agreement.
[13]
He denied that the Applicant had complied with the agreement, and
argued that the applicant had paid E99 900.00 (Ninety nine thousand
nine hundred Emalangeni) and not El 10
000.00 (One hundred and ten thousand Emalangeni) as reflected in the
contract; and, that the said payment was made after the due date of
30th
October 2010. He argued that the
Applicant was acting in breach of the contract by failing to make the
payment timeously. The First Respondent further denied that the
Applicant had paid the balance of El20 000.00
(One hundred and twenty thousand Emalangeni) to his Attorneys pending
transfer on the basis that no proof was annexed to the application.
[14]
The First Respondent further alleged that on the 9th
February 2011, he
informed the Applicant that he had sold the property to a Third
Party; and, that he would pay the refund of the purchase price. The
First Respondent further alleged that the applicant had consented to
the sale. This is denied by the Applicant.
[15]
The First Respondent conceded that Applicant's Attorneys paid E9
895.71 (Nine thousand eight hundred and ninety five Emalangeni
seventy one cents) to the Swazi Bank on his behalf. Furthermore, he
conceded that Applicant's Attorneys paid arrear rates at the Manzini
Municipal Council on his behalf. He further conceded receipt of E20
000.00 (Twenty thousand Emalangeni) from Applicant's Attorneys.
[16]
The First Respondent further denied that he took transfer documents
from applicant's Attorneys; however, he conceded taking the Rates
Clearance Certificate from Applicant's Attorneys. He said he could
not have taken the transfer documents because he had not been paid
the balance of the purchase price. This argument is misleading and
incorrect because the balance was only payable on registration of
transfer.
[17]
The First Respondent further argued that he was entitled to sell the
property because the applicant had breached the contract by failing
to pay the agreed purchase price timeously. He further argued that as
at the 10th December
2010, the applicant had not signed the Deed of Sale; he denied that
the Agreement was signed by the applicant on the 27th
September 2010 as reflected in
the agreement. He further justified selling the property on the basis
that the applicant had verbally told him that he should sell the
property to a Third Party and refund him the purchase price paid.
[18]
The First Respondent also argued that the property was sold to an
innocent Third Party who has already taken transfer of the property;
and, that it was impossible for him to transfer the property to the
Applicant because it does not belong to him anymore.
[19]
Sandile Mabuza deposed to a Confirmatory Affidavit in which he
confirmed the allegations made by the First Respondent in his
Answering Affidavit. In particular, he confirmed that he went to the
offices of the Applicant's Attorneys with the First Respondent on the
10th December
2010, and, that they were attended by an accountant employed by the
Applicant's Attorneys. The latter had told the First Respondent that
the Applicant had not yet paid the balance due; she further confirmed
that she was not in a position to give the First Respondent a copy of
the Deed of Sale because the applicant had not signed it.
[20]
In his replying affidavit, the applicant denied the existence of a
material dispute of fact, and re-iterated that the contract was
concluded on the 27th
September 2010; and, that the
first payment was made on the 4th
- November 2010 in
the sum of E99 900.00 (Ninety nine thousand nine hundred Emalangeni).
He admitted knowledge that the property was sold to a Third Party but
denied that the First Respondent had the right to do so on the basis
that he had sold the property to him. He denied giving the First
Respondent permission to sell the property, and argued that he could
not do so since he had paid for the property in full.
[21]
The applicant denied that the First Respondent kept the motor vehicle
for a week but alleged that he kept it for two months; thereafter, he
brought it to his workshop alleging that the sun-roof was
malfunctioning. He further denied that his mechanics had failed to
repair the motor vehicle but that they were awaiting delivery of
parts from Japan; furthermore, he alleged that the First Respondent
said he did not need the motor vehicle immediately, and that he would
collect it once the repairs had been completed. He further conceded
that the First Respondent signed the Deed of Sale in his absence, but
argued that his presence was not necessary for the validity of the
contract as long as there were witnesses who were present when he
signed the document. He further alleged that sometime in December
2010 the First Respondent came to his workshop to check if the motor
vehicle had been repaired; he found that the parts were now available
and ready to be fitted into the motor vehicle.
[22]
The Applicant further alleged that the First Respondent had mentioned
to him immediately after the conclusion of the contract that there
was a Person who was interested in purchasing the property, and, he
had told him that the said person should get in touch with him; he
denied consenting to the sale of the property to the Third Party or
demanding a refund of the purchase price.
[23]
The applicant denied that he had not made payment of the balance of
the purchase price at the time when the First Respondent went to the
offices of his Attorneys in December 2010 to check if payment had
been made; according to him, his Attorneys had already deposited the
cheque in their Trust Account awaiting clearance. He further argued
that the balance of the purchase price was payable to the First
Respondent upon registration of transfer.
[24]
Furthermore, the Applicant conceded that the First Respondent did ask
for a copy of the Deed of Sale from the Accountant; however, she
advised him that she could not find it in the office of his Attorney.
He denied that the Accountant told the First Respondent that he had
not
yet signed the contract of sale.
[25]
The applicant further argued that he could not have paid the cheque
of E99 900.00 (Ninety nine thousand nine hundred Emalangeni) on the
4th
November 2010 if he had not
signed the Deed of Sale. He confirmed signing the Deed of Sale in the
presence of witnesses on the 27th
September 2010 as
well as the Founding Affidavit before a Commissioner of Oaths; he
denied that the signatures were not similar.
[26]
The applicant denied that he acted in breach of the contract as
alleged or at all and argued that if he had done so, it was open to
the First Respondent to cancel the contract formally in accordance
with the prodedure laid down in the contract. He argued that the
First Respondent continued after the 10th
December 2010 and instructed his
Attorneys to make payments on his behalf to Swazibank and the Manzini
Municipal Council; and according to the applicant, such conduct is
inconsistent with an intention of cancelling the contract. He
attached copies of cheques drawn in favour of his Attorneys with a
Nedbank stamp dated 30th
October 2010 in the sum of El00
000.00 (One hundred thousand
Emalangeni), 30th
November 2010 in
the sum of E100 000.00 (One hundred thousand Emalangeni), 4th
December 2010 in the - amount of
E20 000.00 (Twenty thousand Emalangeni), and 7th
December 2010 in the amount of
E23 107.00 (Twenty three thousand one hundred and seven Emalangeni).
According to him, the said payments proved that he complied with the
contract, paid the purchase price in full as well as transfer costs.
[27]
The Applicant further argued that after payment of the transfer
costs, his Attorneys asked the First Respondent to give them the
Rates Clearance Certificate but he told them that he owed Rates;
hence, he requested his Attorneys to pay the rates on his behalf.
Furthermore, the First Respondent did not have the original Title
Deed because of his loan account with Swazibank; again, he requested
Applicant's Attorneys to pay the bank on his behalf in order to have
the original Title Deed released. He argued that without the Title
Deed and the Rates Clearance Certificate he could not take transfer
of the property. He re-iterated that the First Respondent had taken
the Transfer Documents for his signature but did not return them.
[28]
The applicant further denied that the First Respondent told him that
he had sold the property. He further denied that there was an
agreement that he would pay E75 000.00 (Seventy five thousand
Emalangeni) to the First Respondent after the motor vehicle had been
returned; He further argued that the First Respondent was not
entitled to be given the balance of the purchase price prior to the
transfer of the property; the money had to be kept by the
conveyancers pending transfer. Again, he re-iterated the fact that
the balance of the purchase price was paid and kept in Trust by his
Attorneys pending transfer. He argued that the First Respondent was
not entitled to sell the property before he had cancelled their
agreement.
[29]
The Accountant in the office of Applicant's Attorney deposed to an
affidavit in which she conceded that the First Respondent came to her
office and asked for a copy of the Deed of Sale; he was in the
company of another person she did not know. She looked for the copy
in the office of Attorney Zonke Magagula but could not find it; she
denied telling the First Respondent that the Deed of Sale had not
been signed by the Applicant. She further denied telling the First
Respondent that the applicant had not paid the balance of the
purchase price. She confirmed that the applicant had paid two cheques
of El00 000.00 (One hundred thousand Emalangeni) each; the first
cheque was dated 30th
October 2010 and the second
cheque was dated 30th
November 2010. The first cheque
was deposited in their Trust Account on the 1st
Ndvember 2010 at
the instance of the First Respondent who pleaded that he needed money
urgently; hence, a special clearance of the cheque was requested from
the bank notwithstanding advice given to him that a special clearance
attracts high bank charges. The First Respondent asked to be paid E99
900.00 (Ninety
nine thousand nine hundred Emalangeni), and he was duly paid the said
amount on the 4th
November 2010; again he
requested a special clearance for the said cheque, and, it was
granted.
[30]
The Accountant further stated that on the 1st
December 2010, she deposited the
second cheque of El00 000.00 (One hundred thousand Emalangeni); and,
that she did not ask the bank for a special clearance for two
reasons: First, the First Respondent did not ask for money; Secondly,
Attorney Zonke Magagula had told her that the money would only become
payable to the First Respondent upon transfer of the property to the
Applicant. She conceded that at the beginning of December 2010, the
First Respondent enquired if the second cheque had been cleared by
the bank, and, she told him that it had not yet been cleared; but she
told him that payment to him of this amount would only be made upon
transfer of the property to the applicant. The First Respondent was
accompanied by another person she did - not know; and, that it was
during the same, occasion that he asked for a copy of the Deed of
Sale.
[31]
The Accountant confirmed that she advised the First Respondent to
furnish a Tax Clearance Certificate, a Rates Clearance Certificate as
well as the original Title Deed for purposes of the transfer.
However, he indicated that he was unable to produce these documents;
and, he asked to speak with Attorney Zonke Magagula but he was not in
the office that day. The First Respondent had to come back on another
day where he spoke with him. She doesn't know what was discussed
between them. Mr. Magagula later instructed her to draft the Power of
Attorney, the Seller's Declaration as well as the Purchaser's
Declaration; he further instructed her to prepare cheques for payment
to the City Council in respect of rates and the Swazibank in respect
of the bond settlement. The First Respondent gave her the figures to
write on the cheques; and, the cheques were later dispatched by the
office messenger. It was on the same day that the First Respondent
told her that the purchase price paid by the Applicant had a
shortfall of E20 000.00 (Twenty thousand Emalangeni); thereafter, she
telephoned Applicant's Business Manager, Lindiwe Dlamini, and asked
her to report this shortfall to the applicant. On the 14th
December 2010, the applicant
paid the cheque of E20 000.00 (Twenty thousand. Emalangeni) to her
office as requested.
[32]
After she had paid for the rates and the bond, the First Respondent
asked her for an amount of E20 000.00 (Twenty thousand Emalangeni) as
he was financially embarrassed. She informed Applicant's Attorney of
the request by the First Respondent; and, he instructed her to
prepare the cheque of E20 000.00 (Twenty thousand Emalangeni) and
give it to the First Respondent.
[33]
Subsequently, the First Respondent informed her that he was unable to
obtain the Tax Clearance Certificate and that she should give him the
Rates Clearance Certificate for the attention of the Income Tax
Department in order to convince them that he needed the Tax Clearance
Certificate to transfer property and nothing more; the accountant was
aware that what the First Respondent was saying was unusual, but she
did not suspect any foul play because the First Respondent was a
respected person in the country. The First Respondent did not return
to her until February 2011 when he gave her a refund cheque of El65
855.46 (One hundred and sixty five thousand eight hundred and fifty
five Emalangeni forty six cents); and, he told her to deposit it
immediately. The Applicant's Attorney instructed her not to deposit
the cheque pending receipt of further instructions from the
Applicant. She further pointed out that when the First Respondent
took the Rates Clearance Certificate, he did not tell her that he had
sold the property or that he would use it in transferring the
property to a Third party. She further confirmed that the First
Respondent had on numerous occasions been reminded on his mobile
phone to return the transfer documents; however, he did not do so
despite promises to bring them. She further denied that the contents
of the Confirmatory Affidavit of Sandile Mabuza are true and correct.
[34]
Attorney Zonke Magagula also deposed to a Confirmatory Affidavit in
which he disputed the allegations made by the First Respondent that
he never met him; and, he alleged that the First Respondent had met
him on a number of occasions pertaining to this matter. On the 19th
February 2011 he came to his
residence on a Saturday and persuaded him to mislead the applicant.
He further stated that it was the First Respondent who requested him
to pay rates as well as the Loan Account with Swazibank. He denied
telling the First Respondent that the applicant was dishonest or that
he had compelled him to purchase a motor vehicle from him; he had
told the First Respondent that the applicant had borrowed him a motor
vehicle which later broke down, and that-he had-to pay for repairs
because he- was using it at the time. He had assured the First
Respondent that his Land Rover would be repaired because the
applicant had good mechanics.
[35]
He confirmed that he learnt of the sale of the property in February
2011; and, that the date appearing in his Confirmatory Affidavit
attached to the Founding Affidavit as January 2011 was in fact a
typing error. He confirmed payments to the First Respondent because
he pleaded that he had urgent financial commitments; and, that the
balance of the purchase price was payable on transfer of the
property.
[36]
The Replying Affidavit deposed by the Applicant and supported by the
Confirmatory Affidavit of Attorney Magagula and his Accountant
dispute the defences raised by the First Respondent. In particular,
they dispute that the contract was not signed by the Applicant on the
27th
September 2010 as reflected in
the contract. They reject the evidence of the First Respondent that
he returned the motor vehicle to the Applicant because it could not
be repaired; they allege that the First Respondent was advised that
they were awaiting delivery of parts of the motor vehicle from Japan.
They denied that the Applicant had told the First Respondent to sell
the property- to a Third Party and refund him his money. They denied
that the Applicant had breached the contract by failing to pay the
purchase price timeously; they annexed copies of chaques showing that
the Applicant had paid the purchase price in full as well as transfer
costs. They confirmed giving the First Respondent Transfer documents
to sign, and, that he never returned them. They confirmed paying his
outstanding rates and loan account for the bond. They insisted that
the First Respondent never demanded payment of the E75 000.00
(Seventy five thousand Emalangeni) in respect of the value of the
motor vehicle, but, in any event the motor vehicle was repaired after
the parts had arrived from Japan. The First Respondent did not apply
to court for leave to file a further Affidavit in response to the
Replying Affidavit; hence, the allegations of fact in the Replying
Affidavit remain uncontroverted.
[37]
The allegation by the First Respondent that there was an oral
variation of the terms of the contract is inconceivable; and, if it
did occur, it is legally unenforceable. The First Respondent alleged
that the Applicant had verbally agreed that he should sell the
Property to a Third Party, then refund him of the purchase price.
Clause 8 of the Deed of Sale provides the following:
.v
"This agreement
contains all the terms and conditions-of the sale of the property to
the purchaser hereunder. No variations, additions to or amendments to
this agreement either written or verbal shall be of any further force
or effect unless it is reduced into writing, agreed to and signed for
by both parties."
37.1
In the case of Soar v.
Mabuza 1982-1986 SLR
1 at 29, His Lordship
Justice Nathan said
the following:
"...this
was a contract for the sale of immovable property which has by
statute to be in writing. It is well-settled law that extrinsic
evidence, whether oral or contained in writing such as preliminary
drafts or correspondence, instruments or the like is inadmissible to
add to, vary, modify or contradict a written instrument."
37.2
In the case of Carmichael
v. Oswin 1982-1986
SLR (2) 421 at 422 Hannah
CJ said the
following:
"...
Section 31 of the Transfer Duty Act No. 8 of 1902...reads: "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 duly authorized in writing. It is trite law that the effect of
this provision is that all the essential elements of the contract
must be set out in writing and that one such - essential is a
description of the property sold."
[38]
Clause 6 of the contract provides the following:
"The
parties hereto undertake and agree to sign and execute all such
further papers and documents and to do all such other acts and things
when called upon to do so in order to give full force and effect to
this Deed of Sale."
38.1
It is apparent from the evidence before Court that the First
Respondent breached the contract by failing to sign the transfer
documents in order to effect transfer of the property to the
Applicant; furthermore, it is apparent from the evidence that the
Applicant complied with the terms of the contract including payment
of the purchase price as well as transfer costs.
[39]
Clause 5 of the contract provides the following:
"Should
the purchaser fail to pay the purchase price or provide the bank
guarantee within the period referred to in clause 2 or pay transfer
costs within a reasonable time after demand has been made for the
same, then the Seller shall be entitled to cancel this Deed of Sale
upon giving 7 days written notice."
39.1
Clause 5 of the contract lays down the circumstances which could
entitle the First Respondent to cancel the contract as well as the
procedure for terminating the contract in the event the Applicant
acts in breach thereof. The evidence shows that the First Respondent
did not follow the procedure laid down in Clause 5 when cancelling
the contract for the following reasons: First, he cancelled the
contract in the absence of a breach thereof by the Applicant;
Secondly, he did not make any written demand as contemplated by the
contract. Thirdly, he did not give a written notice to the Applicant
of his intention to cancel the contract within a period of seven days
as required by the provisions of clause 5. Notwithstanding
noncompliance with Clause 5 hereof, he proceeded and sold the
property to Bhubhudla Investments (PTY) Ltd at a relatively higher
price.
[40]
The next enquiry relates to the enforcement by the Applicant of an
order for specific performance. The applicant in his Founding
Affidavit argued that the First Respondent was not entitled in law to
sell the property on the basis that he had already sold the property
to him; furthermore, be argued that he had complied with the terms of
the contract and paid both the purchase price as well as transfer
costs. The First Respondent argued that it is impossible for him to
transfer the property to the applicant on the basis that it is now
owned by a Third Party.
[41]
During the hearing, the applicant submitted that the trustees of the
"new owner" were cited and served with the present
application; however, they did not file papers opposing the
application. He further argued that the relief sought by the
applicant was capable of performance; and, that the court could
declare the sale unlawful, null and void and order the First
Respondent to transfer the property to the applicant.
[42]
In the case of Benson
v. S.A. Mutual Life Assurance Society 1986
(1) SA 776 (A) at 781-782 Hefer
JA stated the law as
follows:
"It
is settled law that the grant or refusal of such an order is entirely
a matter for the discretion of the court.... In Haynes
v. King William's Town Municipality (supra
at 378) De Villiers
AJA dealt with the
matter in the following terms:... that in our law a plaintiff has the
right of election whether to hold a defendant to his contract and
claim performance by him of precisely what he had bound himself to
do, or to claim damages for the breach....This right of choice a
defendant does not enjoy; he cannot claim to be allowed to pay
damages instead of having an order for specific performance entered
against him.
It
is, however, equally settled law with us that although the court will
as far as possible give effect to a plaintiffs choice to claim
specific performance, it has a discretion in a fitting case to refuse
to decree specific performance and leave the plaintiff to claim and
prove his id quod
interest. The
discretion which a court enjoys, although it must be exercised
judicially, is not confined to specific types of cases nor is it
circumscribed by rigid rules. Each case must be judged in the light
of its own circumstances."
[43]
At page 783 Hefer JA
continued and said
the following:
"This
does not mean that the discretion is in all respects completely
unfettered. It remains after all a judicial discretion and from its
very nature arises the requirement that it is not to be exercised
capriciously. Nor upon a wrong principle. It is aimed at preventing
an injustice - for cases do arise where justice demands that a
plaintiff be denied his right to performance and the basic principle
thus is that the order which the court makes should not produce an
unjust result...: Another principle is that the remedy of specific
performance should always be granted or withheld in accordance with
legal and public policy."
[44]
In Haynes v. King
Williams Town Municipality 1951
(2) SA 317 (A) 371 at 378, De
Villiers AJA
"As
examples of the grounds on which the courts have exercised their
discretion in refusing to order specific performance, although
performance was not impossible, may be mentioned: (a) where damages
would adequately compensate the plaintiff; (b) where it would be
difficult for the court to enforce its decree, (c) where the thing
claimed can readily be bought anywhere; (d) where specific
performance entails the rendering of services of a personal
nature.... (e) where it would operate unreasonably hard on the
defendant, or where the agreement giving rise to the claim is
unreasonable or where the decree would produce injustice, or would be
inequitable under all the cir cu m stance s..."
[45]
The legal position is clear that a party to a contract is always
entitled to claim specific performance subject to the discretion of
the court. In the case of Farmers'
Co-op Society v. Berny 1912
AD 343 at 350 Innes CJ
said the following:
"Prima
facie every party to
a binding agreement who is ready to carry out his own obligation
under it has a right to demand from the other party, so far as it is
possible a performance of his undertaking in terms of the
contract.... The right of a plaintiff to the specific performance of
a contract where the defendant is in a position to do so is beyond
all doubt. It is true that courts will exercise discretion in
determining whether or not decrees of specific performance will be
made. They will not, of course be issued where it is impossible for
the defendant to comply with them. And there are many case in which
justice between the parties can be fully and conveniently done by an
award of damages.... The election is rather with the injured party,
subject to the discretion of the court."
[46]
The First Respondent argued that specific performance is in the
circumstances impossible because he has already sold the property to
an innocent Third party; furthermore, that he has transferred the
property to the Third party by registration in the Deeds Registry.
The onus is on the First Respondent to show that specific performance
is impossible. Miller
JA in the case of
Tamarrilo (PTY) Ltd v.
B.N. Aitken (PTY) Ltd 1982
(1) SA 398 at 442 stated that it is the defendant who is called upon
to perform and who has peculiar knowledge concerning his ability to
do what is required of him, and that the defendant bore the burden of
alleging impossibility in his pleadings and adducing evidence of
facts or circumstances upon which the court is to exercise its
discretion against the grant of the order.
[47]
The property in dispute has not been developed; it is a vacant piece
of land. The First Respondent has not adduced any evidence or facts
or circumstances of the impossibility. All that he alleges is that he
sold and transferred the property. An order for specific performance
could be enforceable and no hardship could be experienced by the
First Respondent. The circumstances of this case are such that more
injustice would be exerted on the Applicant if the order is not
issued in view of the conduct of the First Respondent; he sold the
property to a Third Party when both the purchase price and transfer
costs had been paid. The Applicant had not acted in breach of the
contract. Furthermore, the Third Party through its Trustees was
served with the application but it elected not to oppose the
application. The application is granted with costs on the ordinary
scale.
M.C.B.
MAPHALALA
JUDGE
OF THE HIGH COURT
