FORM A
FILING SHEET FOR EASTERN CAPE JUDGMENT
 
                                                                                       ECJ NO: 
 
IN THE HIGH COURT OF SOUTH AFRICA
(SOUTH EASTERN CAPE LOCAL DIVISION)

PARTIES: MARTHINUS JACOBUS JANSE VAN VUUREN          Applicant
 
               And

 	    ANDREW FRENSCH BOSHOFF                                    1st Respondent
              THE REGISTRAR OF DEEDS                                        2nd Respondent
               LISA NATALIE BOSHOFF                                            3rd Respondent
            	ANDRE BLOM                                                               4th Respondent
 
REFERENCE NUMBERS -
•	Registrar:  3439/2004 

DATE HEARD: 16 November 2004
 
DATE DELIVERED: 26 November 2004   
 
JUDGE(S): SANDI J  
 
LEGAL REPRESENTATIVES -
Appearances:
•	for the Appellant:      A BEYLEVELD   
•	for the Respondent:   EAS FORD SC                 

Instructing attorneys:
•	Applicant:       OOSTHUIZEN, HAZELL AND WILMOT                      
•	Respondents: RUSHMERE NOACH AND PARTNERS 

IN THE HIGH COURT OF SOUTH AFRICA
(SOUTH-EASTERN CAPE LOCAL DIVISION)
CASE NO: 3439/2004
In the matter between:

MARTHINUS JACOBUS JANSE VAN VUUREN	Applicant
And
ANDREW FRENSCH BOSHOFF				First Respondent
THE REGISTRAR OF DEEDS				Second Respondent
LISA NATALIE BOSHOFF				Third Respondent
ANDRe BLOM						Fourth Respondent

JUDGMENT

SANDI, J:

1)	In this matter the applicant seeks an interim interdict prohibiting the first, second and third respondents from alienating the property known as 16 Kromme River Estate to any person other than the applicant, pending an action for specific performance of the terms of the deed of sale, to be instituted by the applicant. 
   
2)	The application is opposed by the first and third respondents. The fourth respondent abides the decision of the Court. There is no opposition from the second respondent.

3)	The first and third respondents are husband and wife and are the only trustees of the Boshoff Family Trust which owns the immovable property known as 16 Kromme River Estate, St Francis Bay.

4)	On 14 September 2004 the first and third respondents, acting in their personal capacities, offered to purchase immovable property known as 1184 Esmaralda Street, belonging to one Bowker. The following was made a condition of that sale agreement:
“This sale is subject to the sale of no. 16 Kromme River Estate by no later than 30/10/2004.”

The deed of sale was signed by the first respondent above the words “the purchaser” and by the third respondent above the words “the purchaser’s spouse”.

5)	On 24 September 2004 the applicant and the first respondent, AF Boshoff, acting in his personal capacity, entered into a deed of sale in terms of which the first respondent sold the immovable property known as 16 Kromme River Estate, St Francis Bay to the applicant subject to the following conditions:

“8.1 This offer is subject to the suspensive condition that the purchaser is able to raise a loan of R800 000-00 (eight hundred thousand rand) upon security of a first mortgage over the property at prevailing bank rates and conditions.

8.2 Should such loan not be granted on or before 4 October 2004 or such extended period as the seller in his sole discretion may in writing allow, then this agreement shall be of no force and effect. The parties agree that this provision is inserted for the benefit of the purchaser only who shall be entitled at any time prior to the expiry of the aforesaid period by notice in writing to the seller, to declare this sale unconditional and as having taken effect on the terms herein contained.”

6)	On 1 October 2004 ABSA Bank sent a facsimile transmission to the applicant in  which the following is stated:
“We are pleased to advise that your application for a home loan on the above mentioned property has been approved in principle. 

---

It is important to note that should any circumstances subsequently arise which could prejudice this agreement and our security prior to registration we reserve the right to reconsider our decision.

The above mortgage finance has been approved subject to our normal lending criteria which will follow in due course as well as the following conditions: --- satisfactory bank valuation of R820 000.”

7)	On 6 October 2004 ABSA Bank sent to the applicant a communication titled “letter of final grant” in which it advised that the bond had been approved.

8)	On 6 October 2004 the first respondent’s attorney addressed a letter to the applicant advising that the agreement of sale entered into between the applicant as purchaser and A F Boshoff as seller had lapsed in that the suspensive condition had not been complied with by the applicant inasmuch as the loan referred to in paragraph 8.2 of the deed of sale had not been granted on or before 4 October 2004 and that the approval of the loan in principle was not in compliance with the suspensive condition. 

9)	In reply to the above letter the applicant’s attorney advised that “the suspensive condition was fulfilled in that the bond applied for by the purchaser in terms of the relevant clause, which is for the benefit of the purchaser and not the seller, was granted timeously”.

10)	 Thereafter the applicant launched the present proceedings against the first respondent in his personal capacity.

11)	 On 2 November 2004 the applicant sought and was granted leave as a matter of urgency to join, inter alia, the first and third respondents in this application in their capacities as trustees of the Boshoff Family Trust.

12)	 It is common cause that the applicant was never told by the first respondent that the property in question belonged to the trust.

13)	 In opposition to the present application the first respondent has filed a detailed affidavit in which his defence is set out. The third respondent has filed a short affidavit confirming the correctness of the first respondent’s affidavit insofar as it relates to her.
14)	 The first issue raised by the first and third respondents’ Counsel, Mr Ford SC, is that the two trustees had to act jointly in concluding the sale agreement unless the trust deed provided otherwise.

15)	 In the present matter the third respondent appended her signature on the deed of sale as a witness to the signature of the third respondent (described therein as “seller”). She did so even though below the seller’s signature provision is made for the seller’s spouse to sign. Above the space provided for the signature of the seller’s spouse the following printed words appear: “I, the spouse of the seller, hereby consent to the aforegoing terms and conditions and by my signature agree to be personally bound hereto”. As already stated the third respondent left the space below these words blank.

16)	 In D’Arcy v Blackburn, Jeffereys & Thorp Estate Agency 1985 (2) SA 178 (E) at 181D one of the purchasers of immovable property did not append his signature in the space provided for in the deed of sale but did so elsewhere in the document. The Court held that:

“This section (referring to s 2 (1) of Act 68 of 1981) requires that any deed of alienation must be signed by the parties thereto or by their agents acting on their written authority. It is however clear from cases such as Brack v Citystate Townhouses (Pty) Ltd 1982 (3) SA 364 (W) that not every signature of the parties appearing on such a document would satisfy the provisions of the statute. In order to comply with the statute it must appear from the document itself that the parties thereto appended their signatures in such a way and at such a place as to indicate that they did so as a token of execution.”

17)	 There is no suggestion in the papers by the applicant or any of the  parties, including the third respondent, that the third respondent appended her signature in any other capacity than as a witness. Had she intended to do so, she would in all likelihood have signed in the blank space above the words “seller’s spouse”. That being so there is no evidence that she intended to append her signature on the deed of sale as a “token of execution”.

18)	 In Niewoudt and Another NNO v Vrystaat Mielies (Edms) Bpk 2004 (3) SA 486 (SCA) at 494D it was held that trustees have to act jointly and  that the ambit of authority conferred by a trust deed is not a matter of “internal management” but is a matter of substance.

At 494G the judgment goes on to say that:
“What does need to be emphasised is that even if the Turquand rule is extended to business trusts, and even if a trust deed were to provide that the trustees could delegate their powers to one of their number, the Turquand rule would without more be of no assistance to third parties. This is because a third party would not be entitled to assume, merely from the fact that one trustee can be authorised to exercise the powers of all of them, that such authorisation has in fact been given.”

19)	 In the absence of the signature of the third respondent in her capacity as trustee and as a token of execution of the deed of sale the first respondent would, at best for applicant, have been acting as agent for the trust. In that event section 2 (1) of the Alienation of Land Act no. 68 of 1981 would require written authority to act as such agent. No such written authority exists, nor has it been contended on behalf of the applicant that it does.

20)	 In Pretoria East Builders CC and Another v Basson 2004 (6) SA 15 (SCA) the second appellant, Infogold Investments 56 CC, was the registered owner of the immovable property on which Pretoria East Builders CC (the first appellant) built a house. One Mr Van Schalkwyk was the sole member of both Close Corporations. Mr Van Schalkwyk, acting in his capacity as member of Pretoria East Builders CC, appointed his sister, Ms Badenhorst, as the project manager to oversee the development. It was part of Ms Badenhorst’s mandate to make arrangements to market the property in question. Ms Badenhorst, acting on behalf of Pretoria East Builders CC sold the property in question to the respondent.

21)	 In that matter it was argued that Van Schalkwyk, as sole member of the two Close Corporations, knew that Badenhorst sold Infogold’s property and that Infogold must be taken to have known all along that Pretoria East Builders sold its property to the respondent.

The Court held, with reference to Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 634E – 635C that because it was dealing with motion proceedings, it was not permissible on the papers to go behind the evidence of Van Schalkwyk and Ms Badenhorst that at no stage was Ms Badenhorst authorised to act on behalf of Infogold.

Further the Court held that the Court a quo should not have issued an order for specific performance because such an order could not be carried out.

22)	 In the present matter the trust’s name is reflected nowhere in the deed of   sale to indicate its involvement in the contract. And the evidence of first and third respondents, which has to be accepted for the purpose of this application, is that the first respondent was not authorised by the trust to sell its property and to sign the deed of sale. 

23)	 On the face of the deed of sale the offer to purchase was made to the first respondent in his personal capacity and not to the trust and the identity of the trust does not appear ex facie the deed of sale.

24)	On this aspect of the case therefor the applicant cannot succeed.

25)	 The second leg of Mr Ford’s argument is that the applicant did not comply with the suspensive condition of the deed of sale.

26)	 On 1 October 2004 ABSA Bank advised the applicant that the loan had been approved in principle. Thereafter the property was valued and a final approval of the loan was granted after the cut-off date, i.e. 4 October 2004. On the other hand the contract is subject to the suspensive condition that “the purchaser is able to raise a loan”.

27)	 In Firstrand Bank Limited v Jaypee Properties (Pty) Ltd 2002 (2) SA 384 (W) at 390B it was held that the words “in principle” have a “--- clear connotation in law and, in their primary sense, they import no more than a ‘statement of policy, the implementation of which is left, over for later decision’ “. See too the cases referred to therein.

28)	 In Gallic Living (Pty) Ltd v Belo 1980 (1) SA 366 at 371C the following was said:
“It must be remembered that the effect of the suspensive condition in the deed of sale was that the sale of the property was not made subject to the granting of a bond by the building society, but only to its approval in principle. That distinction should not be overlooked. The condition is not concerned with the question whether or not a binding contract came into being between the building society and the respondent. It is concerned only with the stage at which the contract of sale between the first applicant and the respondent became effective.”

29)	 In this matter it was required of the purchaser to be able to raise a loan before the cut-off date. 

30)	 It is clear from cases such as De Wet v Zeeman 1989 (2) SA 433 (NKA) at 437E-G; Remini v Basson 1993 (3) SA 204 (N) at 210D-F; and Property Girl BK v Joubert NO en andere [1999] 1 All SA 18 (T) that what was required of the applicant was the actual obtaining of a loan (“verkryging daarvan”) and not only an approval in principle. In other words a loan agreement had to be entered into between ABSA Bank and the applicant. This had not happened by 4 October 2004.

31)	 The case of Dharsey v Shelly 1995 (2) SA 58 (C) on which applicant’s counsel relies is distinguishable from the present matter. In that matter the Court found as a fact that the suspensive condition was timeously fulfilled. The date on which the loan had to be granted was extended to 3 April 1992 and a valuation of the property was done on 30 March 1992.

32)	 In this matter the approval of the loan in principle was subject to the requirement that the property be valued. The approval of the loan in these terms does not constitute a loan as envisaged in the deed of sale. The prior requirement of the valuation of the property had to be fulfilled. See Graham NO v Trackstar Trading 363 (Pty) Ltd [2003] 1 All SA 181 (SECLD) at 205 para.8.

33)	 The letter from ABSA Bank dated 1 October 2004 and approving the loan in principle states clearly that the “TOB (meaning “terms of business”) must be accepted within 24 hours at above mentioned address please”. In his affidavit Michael Edward Alphen, the Home Loans Regional Manager of ABSA Bank, says that “the bank requires the terms of business to be accepted expeditiously before it will commence incurring costs with regard to the enquiries to be made in order to provide final approval for the loan finance.”
Alphen states further that the approval of the loan in principle is not binding on the bank to grant a loan, the granting of which is in its entire discretion after all the information required, including a satisfactory valuation, have been provided. Indeed in the letter dated 1 October 2004 the bank specifically reserved the right to reconsider its decision in certain circumstances.

34)	 There is no indication on the papers that the terms of business were ever accepted by the applicant prior to the expiry of the relevant time period. In my view the applicant has failed to establish the fulfilment of the suspensive condition.

35)	 In dealing with the issue of an interim interdict pending the outcome of an action the correct approach is that stated in Spur Steak Ranches Ltd v Saddles Steak Ranch 1996 (3) SA 706 (C) at 714E as follows:

“The proper approach is to take the facts set out by the applicants together with the facts set out by the respondents, which the applicants cannot dispute, and to consider whether having regard to the inherent probabilities the applicants should, not could, on those facts obtain final relief at the trial.

It is also necessary to repeat that although normally stated as a single requirement, the requirement for a right prima facie established, though open to some doubt, involves two stages. Once the prima facie right has been assessed, that part of the requirement which refers to the doubt involves a further enquiry in terms whereof the Court looks at the facts set up by the respondent in contradiction of the applicant’s case in order to see whether serious doubt is thrown on the applicant’s case and if there is a mere contradiction or unconvincing explanation, then the right will be protected. Where, however, there is serious doubt then the applicant cannot succeed.”

36)	 Applying this approach to the facts of the present matter it is quite clear that no prima facie right to claim transfer of the property on the basis of a valid deed of sale has been established and the applicant has failed to show that the suspensive condition has been fulfilled.

37)	 In the circumstances the application is dismissed with costs.    

_______________
B. SANDI
JUDGE OF THE HIGH COURT