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Fismaa Finance CC v Nanotrade (Pty) Limited (6572/2006) [2007] ZAKZHC 2 (23 February 2007)

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REPORTABLE


IN THE HIGH COURT OF SOUTH AFRICA


DURBAN AND COAST LOCAL DIVISION


CASE NO 6572/2006



In the matter between



FISMAA FINANCE CC Applicant


and


NANOTRADE (PTY) LTD Respondent


_______________________________________________________________________


JUDGMENT

delivered on 23 February 2007

_______________________________________________________________________




MOOLA AJ



This is an application to compel transfer of certain land. The issue is whether the contract of sale complies with the provisions of section 2(1) of the Alienation of Land Act, No 68 of 1981 (“the Act”). More specifically the question is whether the property is sufficiently described in the contract to be identified without recourse to evidence from the parties as to their negotiations and consensus.


The approach to be followed and the applicable principles (dealing with section 1(1) of Act 62 of 1957) are set out by Holmes JA in Clements v Simpson 1971 (3) SA 1 (A) at 7A-8B:

1. The section is directed against uncertainty, disputes and possible malpractices. …


2. Meticulous accuracy in the description of the res vendita is not required. Certum est quod certum reddi potest. In construing an earlier corresponding enactment, Watermeyer, C.J., said –


“Clearly, if sec. 30 be construed so as to require a written contract of sale to contain, under pain of nullity, a faultless description of the property sold couched in meticulously accurate terms, then such a construction would merely be an encouragement to a dishonest purchaser to escape from his bargain on a technical defect in the description of the property, even in cases where there was no dispute at all between the parties. Such construction would be an encouragement to dishonesty and cause loss of revenue to the State, and it should be avoided if possible.”


See Van Wyk v Rottcher’s Saw Mills (Pty) Ltd 1948 (1) SA 983 (A) at p. 989.


3. The foregoing does not mean that the Court is to make a contract for the parties where their intention cannot be ascertained with a reasonable degree of certainty. It means that


“inelegance, clumsy draftsmanship or loose use of language in a commercial document purporting to be a contract, will not impair its validity as long as one can find therein, with reasonable certainty, the terms necessary to constitute a valid contract


Per Coleman, J., in Burroughs Machines Ltd v Chenile Corporation of SA (Pty) Ltd., 1964 (1) SA 669 (W) at p. 670G-H.


4. The test for compliance with the statute, in regard to the res vendita, is whether the land sold can be identified on the ground by reference to the provisions of the contract, without recourse to evidence from the parties as to their negotiations and consensus.


5. In the foregoing regard there are, broadly, two categories of contract. The first is where the document itself sufficiently describes the property to enable identification on the ground. There is no fixed rule about this. For example, a house may be identifiable if the contract gives its address, such as its number, street and city; or a farm may be identifiable if the document mentions its name. The second category is where it appears from the contract that the parties intended that someone, whether buyer, seller or third party, should select the res vendita from a genus or class. For example, if a dog breeder says to a prospective purchaser, ‘I offer you the pick of this litter for R100’, and the buyer accepts, no further consensus is required. There is a valid sale; and the buyer may choose his pup. Or, in regard to land, a prospective buyer might offer in writing to buy, at a specified price, one out of several sites in a township, the buyer to select the particular site. The seller accepts in writing. That is a valid sale as far as the res vendita is concerned, for the res is ascertainable or identifiable on the unilateral selection of the buyer. As indicated by Van den Heever, J., in Odendaalsrus Municipality v New Nigel Estate Gold Mining Co. Ltd. 1948 (2) S.A. 656 (O) at p. 665, such a contract places the res vendita and the fact of consensus out of range of the clash of will of the parties. See also Van der Merwe v Cloete and Another, 1950 (3) S.A. 228 (T).


6, Whether the parties intend their sale to fall within the first category or the second category, depends upon their language in the contract. If it appears therefrom that they intend the first category, and their description of the property is deficient in that it does not enable identification on the ground, the sale is invalid for want of compliance with the statute; see Botha v Niddrie and Another, 1958 (4) S.A. 446 (A.D.)”


This approach has been applied and affirmed on a number of occasions when dealing with section 2(1) of the Act. See, for example, Kriel & Another v Le Roux [2000] 2 All SA 65 (O) and Vermeulen v Goose Valley Investments 2001 (3) SA 986 (A)


It is common cause that the applicant and the respondent concluded a written agreement of purchase and sale of immovable property on 17 August 2005. The agreement was prepared by one Naicker, an estate agent employed by the respondent and took the form of an offer to purchase and for the most part comprises printed matter.


The immovable property is described in the agreement as:


“ ‘the PROPERTY’ the immovable property described as portion of

ERF 246 OF WENTWORTH IN EXTENT 907m2

ERF 250 OF WENTWORTH IN EXTENT 1495 m2

ERF 289 OF WENTWORTH IN EXTENT 1188 m2

ERF 290 OF WENTWORTH IN EXTENT 907 m2

situated at 287 Balfour Road, Jacobs (subject to a subdivision being carried out by Nanotrade.)”


For convenience I will refer to the aforesaid description as the “property clause”.


Counsel informed me that the parties are agreed that the extent of each of the erven reflected in the property clause does not relate to the extent of the property purchased but rather to the existing extent of each erf. The parties approached the matter on the papers on the basis that the property clause standing on its own does not adequately identify the res vendita. I am not convinced that this is so but, before dealing any further with this aspect, it is necessary to deal with the evidence.


One Abdul Aleem Khan (“Khan”) deposed to the founding affidavit in support of the application. Khan deposes, inter alia, to the following:

1. According to Naicker, he (Naicker) was employed by the respondent to sell the property on which a warehouse, which was vacant, was built. The other section of the property was going to be sold to an existing tenant;


2 He had discussions with Naicker because the applicant required a warehouse and he met Naicker on site when he viewed the warehouse;


3. He had further discussions on site, with his mother and brother present, with Naicker when Naicker was asked to prepare an offer to purchase the warehouse.


4. There can be no doubt that the property upon which the warehouse is situate is the one that was sold by the respondent to the applicant;


5. According to Naicker, the property description was given to him by one Chalupsky, the representative of the respondent. According to Naicker it is Chalupsky who wrote the words “portion of” in manuscript in the property clause.


6. He refers to an aerial photograph which he attached to his affidavit, which depicts the area where the erven are situated being in a block between Balfour Road and Chamberlain Road, Jacobs, and points out that the erf numbers and street numbers appear thereon;


7. He contends that by reference to the aerial photograph the property purchased, namely, the warehouse property, can be identified, as the roof of the warehouse can be seen thereon;


8. He contends further that a visual inspection will show that there is a wall across erven 289 and 246 and the wall separates the warehouse from the other buildings on erven 289 and 246 and that the back of the warehouse is against the wall;


9. The respondent had instructed land surveyors to prepare a layout plan for the proposed subdivision. The land surveyors had been instructed on 1 July 2005 and Khan attached a copy of the instruction to the land surveyors;


10. He refers to a layout plan prepared by the land surveyors, which he attached, and points out that the property (after consolidation of the four erven) was to be divided into two, being “Prop Rem of X 2918m2” (having the warehouse on it) and “Prop Ptn 1 of X 1233m2”;


11. He submits that bearing in mind that purchase of the warehouse was what was discussed and if one had regard to the aerial photograph, the instruction to the land surveyor and the layout plan prepared by the land surveyor and to the fact that the address of the property purchased is 287 Balfour Road, there can be no doubt that the res vendita can be identified as being “Prop Rem of X” as reflected on the layout plan.


One Herman Frans Chalupsky (“Chalupsky”) deposed to an affidavit on behalf of the respondent and conceded that he inserted the manuscript words “portion of” to indicate that the actual property sold is something less than the typed property description in the agreement. He did not deal with the other allegations in the affidavit of Khan referred to by me supra on the basis that he is advised that what is stated therein is inadmissible evidence.


I now revert to the question of whether the property clause adequately identifies the res vendita. If one ignores the uncertain/objectionable portions of the property clause, it would read as follows:


The immovable property situated at 287 Balfour Road, Jacobs.”


This approach, to my mind, is justifiable as the further details in the property clause, by reason of its imprecision, is mere surplusage.


In a passage quoted herein (paragraph 5) from the judgment of Holmes J in Clement’s case the learned judge points out that there is no fixed rule relating to the identification of the property on the ground and gives examples of where an address may be adequate or a farm name may suffice to enable identification on the ground.


If one has regard to the aerial photograph referred to above, it is clear that the res vendita is identifiable on the ground by its address. This is so because the street number, namely “287”, appears on the Balfour side of the said “block” comprising the four erven whilst the number “294” appears on the Chamberlain side of the said “block”. If one has regard to the fact that a visual inspection will reveal that there is a wall extending across the block, it follows that 287 Balfour Road, i.e. the res vendita, is identifiable on the ground as that part of the “block” commencing from the dividing wall and extending to Balfour Road.


However, lest I be mistaken in my assessment of the issue on the aforementioned simple basis, it would be prudent for me to evaluate the issue on the approach set out in the papers.


The applicant contends that the res vendita is capable of being identified when the property clause is related to other objective evidence on the ground. The respondent contends otherwise.


As to what evidence may be had regard to, the approach to be adopted is the following:


There must, of course, be set out in the written contract the essential elements of the contract. One of such essential elements is a description of the property sold and, provided it is described in such a way that it can be identified by applying the ordinary rules for the construction of contracts and admitting such evidence to interpret the contract as is admissible under the parol evidence rule (see Rand Rietfontein Estates Ltd v. Cohn (1937, A.D. 317)) the provisions of the law are satisfied. This statement must be taken subject to one caution or qualification which I wish to emphasise.


In a simple written contract which need not by law be in writing it is possible to describe a piece of land by reference, e.g. the land agreed upon between the parties, and in that case testimony as to the making of the oral agreement may be admissible to identify the land, but when a contract of sale of land is by law invalid unless it is in writing, then it is not permissible to describe the land sold as the land agreed upon between the parties. Consequently testimony to prove an oral consensus between the parties which is not embodied in the writing is not admissible for any purpose, not even to identify the land sold.”


per Watermeyer CJ in Van Wyk v Rottcher’s Saw Mills (Pty) Ltd 1948 (1) SA 983 (A) at 989.


It follows that the evidence by Khan of his discussions with Naicker, and more particularly his evidence to the effect that what was intended to be sold was the property with the warehouse on it, is inadmissible as it constitutes evidence to prove an oral consensus between the parties as to the identity of the land.


However, the question remains whether the other objective evidence relied on by the applicant, when related to the property clause, is sufficient to identify the res vendita.


The property clause properly construed amounts to the following:


1. The res vendita comprises portions of each of the four erven;


2. The res vendita is situate at 287 Balfour Road, Jacobs;


3. The res vendita is identifiable by reference to a subdivision being carried out by the respondent.


The other objective evidence relied on by the applicant is as follows:


1. The aerial photograph;


2. The instruction to the surveyor to prepare the subdivision;


3 The layout plan prepared by the surveyor.


As mentioned, the property clause refers to a subdivision being carried out by Nanotrade. It is not disputed that the instruction by the respondent to the surveyor (and relied upon by the applicant) is in respect of the subdivision referred to in the property clause. Furthermore, it is not disputed by the respondent that the layout plan prepared by the surveyors (and relied upon by the applicant) showing the proposed subdivision (after consolidation of the four erven) relates to the property clause. There can be no objection to referring to the aerial photograph. All that the respondent has said with regard to the evidence aforementioned, is that it is inadmissible. Having resort to such evidence, to my mind, is permissible as it neither relates to the negotiations between the parties nor is it an ex post facto attempt to discover the consensus and does not breach the parol evidence rule. Indeed, Marais JA in Vermeulen’s case (supra) at 999H refers to numerous instances in the law reports of Courts having had regard to objectively existing facts dehors the agreement in order to decide whether the description of the res vendita contained in the written agreement does indeed enable it to be ascertained “on the ground”. For example, in Kriel’s case (supra) the Court found that resort could be had to a deeds office search and to the position of an existing wall to identify the property. I am not unmindful of the fact that ex facie the layout plan reflecting the consolidation of the erven and the proposed subdivision, same was prepared after the conclusion of the agreement. The fact that it did not exist at the time of the conclusion of the agreement is not significant as the parties had envisaged that this would be done at a later stage and the uncontradicted evidence establishes that the preparation of the layout plan was part of the process of giving effect to “a subdivision being carried out by Nanotrade”. The point is, at the time of the conclusion of the agreement, the parties had agreed on the manner in which the res vendita is to be identified.


If one has regard to the aerial photograph, the instruction to the land surveyors together with the diagram attached thereto and the layout plan prepared by the land surveyors, the following emerges:


1. The erven referred to in the property clause extend in a block between Balfour Road and Chamberlain Road;


2 Erf 250 and erf 290 front onto Balfour Road whilst erf 246 and erf 289 front onto Chamberlain Road;


3. The proposed subdivision envisages the consolidation of all the erven and the subdivision of the consolidated property into two, namely, Prop Rem of X 2918m2 and Prop Ptn 1 of X 1233m2;


4, Prop Rem of X fronts on Balfour Road;


5. Prop Ptn 1 of X fronts on Chamberlain Road;


6. An existing wall separates the two subdivisions;


7. The aerial photograph confirms the existence of a building fronting on Balfour Road and building/s fronting on Chamberlain Road.


As the situation of the res vendita is reflected in the property clause as “287 Balfour Road”, it follows that Prop Rem of X 2918m2 can be identified as the res vendita whilst Prop Ptn 1 of X 1233m2, which fronts on Chamberlain Road, cannot be identified as the res vendita. Clearly the building/s fronting on Chamberlain Road would bear that address (a Chamberlain Road address). If the portion sold was Prop Ptn 1 of X it follows that the agreement would have described the property as being situate at Chamberlain Road.


Mr Kemp, who appeared for the respondent, submitted that the words “Portion of” in the property clause equates to “Prop Ptn 1” on the layout plan and accordingly what was purchased was “Prop Ptn 1”. I agree with Mr Olsen, who appeared for the applicant, that this cannot be so as “Portion of” is different from “Portion 1”. Furthermore, the identification of “Prop Ptn 1” as the res vendita would be in conflict to the address reflected in the property clause.


To conclude: for the reasons stated above I consider that the res vendita is adequately identifiable as being Prop Rem of X 2918m2 as reflected on the layout plan and accordingly the agreement of sale complies with the requirements of the Act.


The parties did not suggest that the costs should not follow the result and agreed that any costs award should include the costs consequent upon the employment of two counsel.


Accordingly, I grant an order in terms of paragraph 1, 2 and 3 of the Notice of Motion.




………………………

DATE OF HEARING : 13 February 2007


DATE OF JUDGMENT : 23 February 2007


COUNSEL FOR APPLICANT : Mr P J Olsen, SC

with Mr A V Voormolen



INSTRUCTED BY : Cox Yeats Attorneys

13th Floor

Victoria Maine

71 Victoria Embankment

DURBAN




COUNSEL FOR RESPONDENT: Mr K J Kemp, SC

with Mr P J Combrinck



INSTRUCTED BY : Beall Chaplin and Hathorn

121 Clarence Road

DURBAN