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Leib v 18 Bezuidenhout Street, Bellevue CC [2006] ZAGPHC 247; 21493/04 (9 February 2006)

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NOT REPORTABLE

IN THE HIGH COURT OF SOUTH AFRICA

(WITWATERSRAND LOCAL DIVISION)

JOHANNESBURG


CASE NO: 21493/04

DATE:2006-02-09



In the matter between

LEIB, L B..................................................................................................... Plaintiff/Respondent

and

18 BEZUIDENHOUT STREET, BELLEVUE CC.................................First Defendant/Applicant


JUDGMENT


WILLIS, J: This is an application for leave to appeal against the somewhat terse judgment which I gave in this matter in a busy Motion Court on 17 February 2005. The argument on the application for leave to appeal took longer than the argument on the substantive application. I shall, therefore, take the unusual step of dealing in rather more detail with the judgment for application for leave to appeal than is ordinarily the case.


As was noted in my judgment in the substantive application, the case turns on the following clause which appears in the relevant agreement between the parties;-

"2.2 This agreement is subject to the suspensive condition that the purchaser is able to raise a loan of at least R460 000 (Four Hundred and Sixty Thousand Rand), upon the security of a first mortgage bond to be registered over the property in favour of a bank or other financial institution to the seller's reasonable satisfaction within 21 days of date hereof. This condition shall be deemed to be fulfilled if advice is given by the mortgagee approving the loan in principle." There Is no clause in the agreement that provides as follows (or has words to similar effect):-

"If this condition is not fulfilled by the effective date this agreement shall be deemed of no further force and effect". Mr Segal, who appears for the applicant in the application for leave to appeal and who appeared for the respondent in the substantive application, concedes that this clause was inserted in the agreement for the sole benefit of the applicant as the purchaser. Mr Segal has contended that the critical issue is that the waiver of this clause for the benefit of the purchaser occurred after the period of 21 days provided for in clause 2.2. Accordingly, so he submitted, the waiver was of no force and effect and it was open to the seller to rely was a division of legal opinion in the country on the effect of a purchaser's non-compliance with a clause such as this inserted for his sole benefit, more particularly, where the waiver arises after the expiry of the time period that appears therein. Mr Segal has submitted that precisely because of this division of opinion, there would obviously be reasonable prospects that another court could come to a different conclusion. This argument is attractive as far as it goes. Nevertheless, each case must be decided on its own merits and its own particular facts.


I am prepared to accept, for purposes of this judgment, that a waiver by a party of a clause inserted for his sole benefit after the expiry period, may in certain instances result in the agreement being rendered of no force and effect, particularly if this would result in the agreement being inchoate or resulting in real prejudice to the other party. Nevertheless, as I have said, each case must be decided on its own merits.

In this particular case clause 2.1.2 of the agreement provides as follows:-

"The purchaser shall furnish a guarantee by registered bank or other financial institution, to the seller's reasonable satisfaction for the balance of R460 000 (Four Hundred and Sixty Thousand Rand) within 30 days of signature hereof, payable against registration of transfer of the property into his name." Clause 6 of the same agreement provides as follows:-

"Should the purchaser fail to furnish the guarantee to be provided hereunder or fail to pay any amount in terms hereof on due date or commit any other breach of this agreement and fail to remedy such failure or breach within 14 days after the delivery of a notice by the seller or his attorneys to the purchaser requiring the purchaser to do so, the seller shall have the right, without prejudice to any other rights which he may have under this agreement or at law, either to cancel the sale forthwith or to take action to compel immediate performance by the purchaser of all his obligations under this agreement." In this particular case the applicant has asserted that the guarantee was indeed accepted on behalf of the respondent on 8 March 2004. This allegation was not denied by the respondent.

Furthermore, the following facts are relevant. On 10 February 2004 the applicant paid the deposit of R1 15 000 in terms of the contract and the first respondent accepted the deposit; the applicant and one Segal (acting on behalf of the first respondent) discussed the late payment of the deposit and Segal led the applicant to believe that the late payment of the deposit would not jeopardise the transaction; the applicant would have paid the deposit in time if requested by the first respondent; during the time when the applicant advised Segal that the loan was granted: (i) Segal expressed his satisfaction with the way in which the transaction was proceeding; Segal told the applicant that the first respondent's sole member (Jacobs] was satisfied with the progress of the transaction and Segal advised the applicant that Jacobs was pleased that the loan was granted; the first respondent allowed and assisted the applicant to view the building on the property an or about 23 February; an electrical compliance certificate was discussed between the applicant and the first respondent and both parties participated in the process of obtaining such a certificate.

Furthermore, it is clear that Segal prepared various documents on behalf of respondent to effect the transfer of the property and that Segal indeed informed the applicant (in the main application) that he needed to sign the documents drawn by him to effect transfer of the property.

The following immediately needs to be noted. By reason of the clauses 2.1.2 and 6 in the applicable agreement between the parties, the failure of the purchaser to secure the first mortgage bond within 21 days does not render the agreement inchoate, neither does it result in any real prejudice to the first respondent in the main application. The purchaser, is obliged in terms of this agreement to furnish the relevant guarantee within 30 days of signature of the agreement which would be payable against registration of transfer on the property into his name. The failure of the purchaser to comply with this requirement, gives the seller the right to cancel the agreement (and to take other action) upon calling the purchaser to comply therewith. It seems to me upon a reading of the agreement as a whole, that clause 2.2 is open to the purchaser as a defence when called upon to furnish the relevant guarantee. It is not a clause which is open to the seller to rely upon in order to avoid his obligations in terms of the agreement. Moreover, if regard is had to the various other factors and facts which I have enumerated above, it is quite clear that the seller did not purport to rely on the failure of the purchaser to comply with 2.2 prior to the requirement that it furnished a guarantee.

I have derived considerable comfort in this case by reference to the case of Van Jaarsveldt v Coetzee 1973 (3) SA 241 (A) where Van Blerk JA, delivering the unanimous judgment of the Court, says as follows at 244C-G:-

"Daar kan nie bespiegel word oor wat die partye beoog het nie; hul bedoeling moet blyk uit die woorde wat hul gebruik het en die kontrak moet as 'n geheel gelees word. En die woorde moet nie net so opgevat word dat dit 'n bedoeling behels wat tot absurde lei nie, soos die waar die verweerder die reg sou he om kontantbetaling deur eiseres te weier, en boonop die kontrak nietig te verklaar bloot omrede daar nie 'n eerste Landbankverband oor die eiendom geregistreer word nie. 'n Ooreenkoms moet so uitgel§ word dat dit by voorkeur staande gehou word.

Die voorwaarde is duidelik genoeg bedoel om slegs ten voordeel van die eiseres te strek. Die eksepsie kan nie staande gehou word nie. (my emphasis) Therefore, although there may be a division of opinion and an arguable case in certain instances where a purchaser has waived his rights in terms of a clause contained in an agreement purely for his own benefit after the time period stipulated therein, if one has regard to the facts in this particular case, even if another court were to follow a different line of reasoning from my own, in my opinion there is no reasonable prospect that another court would come to a different conclusion from mine.


Accordingly, the following order is made:


The application for leave to appeal is dismissed with costs.


ON BEHALF OF THE APPLICANT: ADV SEGAL

Instructed by:

ON BEHALF OF SECOND RESPONDENT: ADV VAN DER MERWE

Instructed by:


DATE OF JUDGMENT: 9 FEBRUARY 2006