IN THE HIGH COURT OF SOUTH AFRICA (WESTERN CAPE HIGH COURT, CAPE TOWN)

In the matter between:

and

JUDGMENT:  20 MAY 2010

This is an application in terms of Rule 32 of the Uniform Rules of Court for summary judgment by the Plaintiffs (Applicants in this matter) against the Defendants (Respondents in this matter) for the relief sought in the particulars of claim being:
a)	payment of the amount of R32 500.00
b)	payment of the amount of R272 062.50
c)	
d)     costs of the suit.

For the sake of convenience I will cite the parties as they appear in the main action.

Summons was served on 15 September 2009 and the Defendants delivered a notice of intention to defend on 17 September 2009.

The application is opposed by the Defendants on a number of grounds and the Defendants have filed an affidavit in this regard.

Due to the nature of the numerous objections raised by the Defendants to the application for summary judgment it is appropriate to indicate in detail the provisions of Rule 32 which are relevant. Rule 32 reads as follows:

"(1) Where the defendant has delivered notice of intention to defend, the plaintiff may apply to court for summary judgment on each of such claims in the summons as is only-
a) 	on a liquid document;
b) 	for a liquidated amount in money;

together with any claim for interest and costs.
(2) ...
(3) Upon the hearing of an application for summary judgment the defendant may -

(a) give security to the plaintiff to the satisfaction of the registrar for any judgment including costs which may be given, or

Facts upon which the Plaintiff's claims are based

For purposes of this judgment I shall refrain from dealing in detail with the facts of the matter which are set out in the particulars of claim and in Counsel's heads of argument. The Plaintiffs who are estate agents entered into a written agreement of sale on 19 January 2009 with the Defendants for the sale of the Defendants' property for an amount of R512 000,00.

The Defendants were under threat of losing the property due to the fact that they were in arrears with the monthly mortgage payments in the amount of R32 500.00. As a result there was a sale in execution by ABSA Bank scheduled to take place on 19 January 2009. In an addendum to the deed of sale certain special conditions were attached to the sale as follows:

"The transaction between the parties shall be a two-fold process based on the following terms:
(a) The Purchasers shall purchase the property from the Sellers on the agreed price; and
(b) The Purchasers have purchased the property with the intention to stay the sale in execution against the Sellers while intending to resell the property;
(c) It is intended that the above shall take place simultaneously as a simultaneous action."

The Defendants were required to sign all necessary documentation upon request by the conveyancer.

The contract in the event of cancellation by the Defendants provided for:

As indicated previously a number of disputes concerning various facts has arisen and a number of defences were raised by the Defendants. I will deal with each one individually and will refer to the relevant facts at that stage.

The nature of an application for summary judgment

Defences raised
The defences raised by the Defendants, some of which may overlap are that:
(a) the claims are not for a liquidated amount in money;
(b) the particulars of claim are excipiable for being vague and embarrassing and not disclosing a cause of action;

(d) the Defendants have a counterclaim against the Plaintiffs;
(e) the Defendants in signing the agreement acted due to undue influence or under duress.

The claims are based on clauses 3 and 4 of the "Addendum to offer to purchase" which the parties signed and which reads:

"3. All/any funds paid by the Purchasers for the purposes of staying the sale in execution of the Seller's property, up until signature hereof, shall form the deposit portion in relation to the purchase price as agreed between the parties. These amounts shall therefore be deducted from the agreed purchase price with the exception of any funds paid by the Purchasers on or after 1 February 2009.

4. In the event that the Sellers cancel this transaction for any reason whatsoever, the Sellers shall be liable to the Purchasers in the following terms:

The Plaintiffs are relying on contractual damages as stipulated in the agreement between the parties. It is not in dispute that Plaintiffs in fact paid the amount of R32 500.00 and it is clear that it would not be difficult to ascertain this amount. The problem lies with the claim for R272 062.50.

The events leading up to the last mentioned claim which the Plaintiffs have elected to base on an alleged actual transaction are as follows:
1) After concluding the agreement the Plaintiffs mandated one HAROON DAYA, an estate agent to sell the property on their behalf.
2) DAYA subsequently obtained an oral offer to purchase for R795 000.00 from an unnamed buyer on condition that the prospective buyer would be satisfied with the condition of the property.
3) The prospective buyer as it turned out was unable to view the property due to the fact that the Defendants would not allow this and subsequently indicated that they no longer wished to sell the property. They refused DAYA and any prospective buyer access to the property.
4) The Plaintiffs therefore allege that had the Defendants complied with the terms of the contract they would have made a profit of R272 062.50, being the amount for which the property would have been sold minus the contract price minus the agreed estate agents commission.

It would appear that on this basis it becomes increasingly difficult to ascertain the amount. It is clear in my view from the papers that the fact than an unnamed prospective buyer was interested in the property and would have been willing to pay an amount of R795 000.00 for it, is not a fact which is within the personal knowledge of Mr. NOMAN KHAN who made the verifying affidavit. The oral offer to purchase was also subject to a condition that "the prospective buyer was satisfied with the condition of the property after inspection." The fact is that he never conducted such an inspection and there remains on the papers some uncertainty as to whether it would have met his expectations.

The determination of any loss which the Plaintiffs rely upon is dependant in my view on evidence of the offer, the amount and the probability that this would have formed the basis of a sale and therefore accurately reflects the loss sustained by the Plaintiffs due to the cancellation of the agreement between the Plaintiffs and the Defendants.

In my view the claim for R272 062.50 for all practical purposes in terms of Rule 32 is not capable of a speedy and prompt ascertainment and the application is not accompanied by a statement which can verify the claim in the manner required by Rule 32. I therefore conclude that it is not a liquidated amount of money for the purposes of Rule 32 (1).

The particulars of claim are vague and embarrassing and no cause of action is disclosed

The Defendants rely on paragraph 21 of the particulars of claim together with paragraph 27 thereof to illustrate that there is a direct contradiction relating to agent's commission. I am inclined to agree with the Plaintiffs view that paragraph 21 indicates the normal position whilst paragraph 27 indicates the terms of an actual agreement between the Plaintiffs and their agent.

As a result it is alleged that the Plaintiffs are not entitled to the relief based on breach of contract because a valid cause of action is not disclosed.

At the same time it does not appear that there is any doubt on the part of the Defendants as to what they are being sued for, and there does not appear to be any prejudice. Following practice in this regard it is highly probable that leave will be granted to amend the pleadings. For other reasons given in this judgment I do not deem it necessary to take this issue any further or to make any further pronouncement in this regard.

As far as the merits are concerned the Defendants raise two defences which I have decided to deal with jointly. The first is based on a fraudulent misrepresentation made by the Plaintiffs to the Defendants shortly before the agreement was entered into and the second based on the same facts is that the Defendant was unduly influenced or placed under duress.

It is important to consider all the facts leading up to the agreement in order to assess the defence raised by the Defendants. Their desperate situation would most certainly have played a role but is in my view according to the papers merely a factor which requires consideration.
I do not intend for purposes of this judgment to repeat the facts on which the Defendants allege that a fraudulent misrepresentation, undue influence and duress took place except to highlight the following aspects:
a) The Defendants describe the history of their dealings with the First Plaintiff, who is an estate agent and allege a relationship based on trust.
b) The circumstances in which the Defendants found themselves when deciding to enter into the agreement are documented in the affidavits. The allegations are made that the Defendants were reluctant to sell the property at the price offered by the Plaintiffs but did so because the Plaintiff indicated that they would be evicted on the day following the sale in execution. It is alleged that this fact in false and not in accordance with the law and that the Plaintiffs knew it to be false.
c) It is furthermore alleged that the fear of eviction as a result of Plaintiff's misrepresentation was the sole reason for the agreement on the terms set out therein.
d) It is alleged that when the Defendants' received proper advice from family and later an attorney they elected to cancel the contract.

It is furthermore argued that the Defendants were not induced to enter into the contract by the advice given by the Plaintiffs and that no reasonable person would have been induced to contract on the advice given.

As far as the principle that the misrepresentation must be material is concerned, there appears to be agreement in all authorities. In essence the misrepresentation must be of such a nature that it induces the Defendant to enter into the agreement.

"To entitle her to succeed on the issue now being examined it is necessary that the misrepresentation must be of a material fact, that is to say, that the misrepresentation must be of a nature as would be likely - regarding the question from a common sense point of view - to induce a person of intelligence and in the position of the Plaintiff to enter into the contract."

The Defendant's counterclaim

The issue of security

The Defendants did not base their opposition to the application on the basis of giving security in terms of Rule 32 (3)(a).

The issue of costs

Counsel for the Defendants have requested that I consider awarding punitive costs against the Plaintiffs because the Plaintiffs were aware of the exact grounds of the Defendants' defence well before the application for summary judgment was made and even before the action was instituted.

The following order is made: