JUDGMENT. This is an exception by the plaintiff to the defendant s plea and counterclaim.

Transcription

1 IN THE HIGH COURT OF SOUTH AFRICA (EASTERN CAPE DIVISION) NOT REPORTABLE Case No.: 6104/07 Date delivered: 16 May 2008 In the matter between: GAY BOOYSEN Plaintiff and GEOFFREY LYSTER WARREN SMITH Defendant JUDGMENT JANSEN, J: This is an exception by the plaintiff to the defendant s plea and counterclaim. The plaintiff entered into a written agreement of sale of immovable property in terms of which the plaintiff purchased from the defendant certain immovable property situated at Morgan s Bay within the Great Kei Municipality for a purchase price of R ,00. The plaintiff signed the offer to purchase at Port Elizabeth on 6 May The defendant signed the offer to purchase at Morgan s Bay on 21 April A true copy of the written Deed of Sale is attached to the plaintiff s particulars of claim. The plaintiff s claim as set out in the particulars of claim is based upon the written Deed of Sale requiring specific performance by the defendant with the terms thereof. The defendant does not dispute the agreement nor his

2 2 obligation in terms thereof but raises as a defence thereto an entitlement to rectification. The defendant pleads that the written agreement does not correctly reflect the common intention of the parties as it existed at the time when the agreement was reduced to writing. The defendant further pleads that the failure to record the true agreement between the parties was occasioned by a common error of the parties. The defendant further pleads that the common error which resulted in the failure to insert a condition in the contract was occasioned by the bona fide but mistaken belief that the cordial relationship existing at the time of the signing of the agreement between the plaintiff and her son in law, one Bosazza and the plaintiff s daughter and her husband, Bosazza would remain stable and that all parties and in particular the plaintiff would honour the reciprocal obligations undertaken between them. It was further pleaded that the sale was always intended by the parties to be conditional on the plaintiff transferring the property to Bosazza for development as an agricultural village and cultural tourist attraction for the upliftment of the rural community of Morgan s Bay. It was further pleaded that the attorney who prepared the Deed of Sale was fully informed of the special purpose for the sale of the land to the plaintiff but nevertheless, because of the cordial relationship between the parties, decided not to include that condition in the agreement.

3 3 In his counterclaim the defendant repeats his plea that the failure to record the special purpose for which the property was sold to the plaintiff and the real nature of the transaction between the parties arose as a result of a common error of both parties in that they failed to foresee that the previous trustworthy relationship between the parties involved may deteriorate. The defendant pleads that the Deed of Sale should be rectified so as to conform with the common intention of the parties by the addition of paragraph 22 to the Deed of Sale in the following terms: 22. SPECIAL CONDITION: 22.1 It is specifically recorded that it is the intention of the Purchaser and Seller that the Purchaser will take all necessary steps to transfer the subject property to Mr J Bosazza as soon as practicable after the property has been registered in the name of the Purchaser The parties hereto further record that the said property is sold subject to the following specific conditions: that the Purchaser pass transfer to J Bosazza as aforesaid, and that Mr Bosazza develop the property to the benefit of the local community at Morgan s Bay by concluding a Joint Venture Agreement between himself, the Seller (Mr G L Warren Smith) and the elected representatives of the rural community of Morgan s Bay, for the purposes of establishing a cultural village on the property, tourist accommodation and a centre for natural and sustainable agricultural training, and that Mr J Bosazza subdivide a portion of the property, square metres in extent, which portion will be retained by the

4 4 Purchaser in lieu of repayment of the purchase price and related costs. The defendant therefore claims for an order rectifying the Deed of Sale by the addition of the said paragraph. The plaintiff excepts to the defendant s plea and counterclaim on the basis that the aforementioned pleadings lack averments which are necessary to sustain the defendant s defence and claim respectively. It is well established that a contract of sale of immovable property which is required to be in writing can be rectified to conform a prior verbal agreement, the terms of which it was the intention of the parties to insert in a written document, but which was by common error omitted. However, when regard is had to the allegations set out in the defendant s plea and his counterclaim those facts and allegations do not constitute a common error between the parties. The contrary is true. The defendant relies on a deliberate intention of the parties to exclude reference to the conditions upon which the defendant now seeks to rely. The signed Deed of Sale indeed reflects the common intention of the parties correctly, namely not to include special conditions. There is accordingly no question of any mistake in the drafting of the document. An exception may be taken to a pleading if it is vague and embarrassing or if

5 5 it lacks averments necessary to sustain an action or a defence, as the case may be. In her notice of exception the plaintiff specifically excepts to the defendant s plea and counterclaim only on the basis that the pleadings lack averments which are necessary to sustain the defendant s defence and claim respectively. During argument Mr Ford SC, on behalf of the plaintiff, specifically stated that the exception was not taken on the ground that the pleadings were vague and embarrassing, which would require notice to the defendant, which was not given. For the purpose of deciding an exception it must be assumed that the factual comments made in the relevant pleadings are correct unless they are clearly untrue or so improbable that they cannot be accepted. (See Natal Fresh Produce Growers Association and Others v Agroserv (Pty) Ltd and Others 1990 (4) SA 749 (N) at 754J 755B.) In the present case, to determine the exception it must therefore be assumed that the real purpose for which the Deed of Sale was concluded and the true, real and essential nature of the transaction between the plaintiff and defendant was only to enable the plaintiff to assist her daughter and son in law, Mr Bosazza, to purchase the property for social upliftment of the Morgan s Bay rural community by providing the funding for the purchase price. It must further be assumed that at the time of the signing of the Deed of Sale cordial relationships existed between the plaintiff and Bosazza and the plaintiff s daughter and Bosazza and that the parties mistakenly believed that the cordial relationships would remain stable

6 6 and that all parties, and in particular the plaintiff, would honour the reciprocal obligations undertaken between them. It must further be assumed that the parties orally agreed that the plaintiff, as soon as the property was registered in her name, would pass transfer thereof to Bosazza and that Bosazza would develop the property for the benefit and upliftment of the local community at Morgan s Bay, and that Bosazza would sub divide a portion of square meters of the property, to be retained by the plaintiff in lieu of repayment of the purchase price and all attendant costs. It must furthermore be accepted that the parties and their attorney deliberately decided not to include a clause in the Deed of Sale which stipulates these conditions (the attorney probably advised the parties not to include a clause with these suspensive conditions as he probably realised that these conditions are so vague that it would almost be impossible to fully comply therewith). It must further be assumed that, after the plaintiff s daughter commenced divorce proceedings against Bosazza, and in December 2006, and at Morgan s Bay, the plaintiff called a meeting of all interested parties to advise orally that she had changed her mind, and intended to renege on the common intention of all parties, and intended to disregard the established conditions upon which the Deed of Sale was concluded and upon which the property would have been transferred into her name, and intended to appropriate the property for own benefit. The plaintiff s whole case on exception was based on the fact that in terms of the proposed clause 22 the transfer of the property from the plaintiff to

7 7 Bosazza and a subsequent transfer by Bosazza to the plaintiff of a portion of property would constitute an alienation of land which would be of no force and effect unless contained in a Deed of Alienation signed by the parties. Because the defendant makes no allegation that such Deeds of Alienation have been completed and did not annex such Deeds of Alienation to his plea or counterclaim the Agreement is therefore void and unenforceable by reason of the provisions of the Alienation of Land Act No. 68 of In the alternative, a similar argument regarding possible donations which terms are not embodied in written documents was made by counsel. That, however, on the authorities does not stand in the way of rectification. An action for rectification may be brought where there has been a mistake in the written document as a result of which the document does not correctly reflect the true intention of the parties to such contract. In Tesven CC and Another v South African Bank of Athens 2000 (1) SA 268 (SCA) in paragraph [16] Farlam AJA, as he then was, said the following: To allow the words the parties actually used in the documents to override their prior agreement or the common intention that they intended to record is to enforce what was not agreed and so overthrow the basis on which contracts rest in our law: the application of no contractual theory leads to such a result. In this case Farlam AJA considered whether the remedy of rectification was available in circumstances where the document correctly reflected the words which the parties intended to employ in the construction of the document but where the document did not include the parties prior agreement or common intention which formed a critical part of the overall contract. The learned

8 8 Judge referred to the decision in Mouton v Hanekom 1959 (3) SA 335 (A) where it was held that it was admissible to rectify a written contract, not because of the parties mistake as to what was recorded, but as to its effect, which was to prevent their oral agreement from operating with their written contract. The learned Judge then proceeded in paragraph [18] to say the following: In the present matter also the signatories were not mistaken as to what was contained in the documents signed by second defendant. The mistake which she says she and the plaintiff made was in thinking that, despite the contents of those documents, the preceding oral agreements would still be operative. This mistake was clearly capable of rectification on the strength of the principle affirmed in Mouton v Hanekom. In order to succeed the plaintiff has the duty of persuading the Court that upon every interpretation which the pleading in question can reasonably have no cause of action is disclosed. In my view, the plaintiff failed. The fact that the clause setting out the conditions upon which the Deed of Sale was concluded and the conditions itself may be vague and embarrassing is not relevant at this stage in view of the ground on which this exception was taken. In the result, the exception is dismissed with costs. J C H JANSEN JUDGE OF THE HIGH COURT