NOT REPORTABLE
IN THE HIGH COURT OF SOUTH AFRICA 
(NORTH AND SOUTH GAUTENG HIGH COURT, PRETORIA)

DATE: 23 SEPTEMBER 2010 
CASE NO: 44572/2009
In the matter between:

and

JUDGMENT

PHATUDI, J

[1] The plaintiff instituted this action to claim back the amount paid to the defendant towards the reduction of purchase price as agreed in terms of the agreement of sale.

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[9] The property was valuated during the time when the country was experiencing a recession. He says the market did not decline but the demand did. In short, the price of the market did not drop but the demand did.

[10] It transpired during cross-examination that the municipality valuates the property in the amount of R5, 200,000.00. He could not say why the municipal valuation differed from his save to mention the method he used. He could not provide the municipal valuation of properties he used in comparison.

[11] The plaintiff closed his case. The defendant applies for absolution from the instance. I dismissed the application.

[12] Petrus Nel, who testifies for the defendants, says that he is a developer and a neighbour to the defendants' property. He intended to buy the property. He approached the defendant in 2006 and made an oral offer to purchase the property in the amount of R8, 5 million. He did not pursue the offer because the defendant concluded an agreement with the plaintiff.

[13] He says there was no "bulk services" on the premises at the time. He describes the bulk services as:

[14] In order for these services to be in place, a section 101 agreement must be concluded with the municipality. Section 101 Certificate is described as the right to open township register at the deeds office.

[15] He further testifies that section 101 certificate cannot be issued before the bulk services are in place. He says he knows that the property was not "serviced" at the time he made an offer. He advised the defendant to "service" the property.

[16] He concedes under cross- examination that he did not know if the property was "serviced" at the time the plaintiff concluded the deed of sale with the defendants.

[17] Mr Swart submits that the only issue to determine is whether R3, 600,000.00 paid by the plaintiff to the defendant towards reducing the purchase price falls within the ambit of the Conventional Penalties Act and if so, whether the penalty amount should be reduced by the court in the exercise of its discretion afforded to it by the Act.

[18] He submits further that the onus is indeed on the plaintiff to prove that there is a breach of its contractual obligation that renders the amount paid towards the reduction of the purchase price fall within the ambit of the Act. He further submits that the plaintiff has the onus of proving that the penalty is out of proportion to the prejudice suffered by the defendants.

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Indien die Koper na verstryking van genoemde tydperk volhard in sy versuim, sal die Verkoper geregtig wees om die ooreenkoms summier as gekanselleer te beskou en
alle gelde wat reeds deur die Koper aan die Verkoper betaal is, verbeur word as rou koop en 'n ware vooruitberekening van skade wat deur die Verkoper gely is sonder benadeilling van die Verkoper se regte egter om verdure skadevergoeding tee is.'

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[24] He further submits that there is no evidence that the plaintiff did service the property after the agreement was concluded. He says the only evidence to that effect is that of Mr Nel.

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[30] The parties concluded an agreement with the proviso that obligates the plaintiff to deliver the guarantees by the 20 June 2008 before 16h30. It is common cause that the plaintiff failed to deliver within the stipulated time.

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[35] In my evaluation of this authority coupled with the evidence and arguments tendered, I find the defendants position a "better position" in that the property would have been sold at a price higher than the municipal value with R8, 5million as the lowest. The defendants would not have suffered damage in accepting the said offer. They will not suffer any damage as the property still stands vacant. The property may still be sold at what ever the value they deem appropriate. The price of the market did not drop. The defendants have, as a result, suffered no prejudice due to plaintiff's breach of contract. There exists no reason why I should not order the defendants to repay to the plaintiff the full amount as claimed.

[37] In my analysis of the wording of paragraph 1.4 and the letter of demand, I find the plaintiff having demanded a higher amount than the amount claimed in the summons. I thus find granting interest calculable from 15 January 2009 unjustifiable and the claim stands to be dismissed.

[38] It is trite that costs follow the event. Both counsel submit that the party succeeding be entitled to the costs including the costs occasioned by the abandoned application to amend and the defendants application for absolution from the instance. Mr Swart claims the qualifying fees and costs of senior counsel.

[39]  I thus make the following order.

AML PHATUDI 
JUDGE OF THE NORTH GAUTENG HIGH COURT