IN THE HIGH COURT OF SOUTH AFRICA (WITWATERSRAND LOCAL DIVISION)

Transcription

1 1 SMELLER VERBATIM JHB/LKS IN THE HIGH COURT OF SOUTH AFRICA (WITWATERSRAND LOCAL DIVISION) JOHANNESBURG CASE NO. 00/6849 DATE: (1) REPORT/CLE VCE'MC (2) Or INTEREST -TO CfKIri JUDGES *53/ (3) REVISED 10 DATE *~S!3NATUR3 In the matter of: CORPORATE OPTIONS CC t/a RITE SITE Applicant and TRANSVAAL ASSOCIATION FOR CARE OF CEREBRAL PALSY Respondent 20 JUDGMENT WILLIS, J: This is an application for leave to appeal against the judgment and order which I granted on 9 November The main thrust of the argument of Mr van Blerk, who appears for the respondent in the original application (i.e. the applicant in this application for leave to appeal), was as follows: the applicable agreement between the parties did not provide a time within which the respondent was to obtain/.. 3 0

2 CI/ JUDGMENT obtain the necessary permission and licence. Accordingly, so the argument ran, the time for f ul f i lment of the condition would be a reasonable one. He referred to the case of Cardosa v Tuckers Land and Development Corporation (Ptv) Ltd 1931 (3) SA 54 (W) at 61G-H. Although the Municipal Council had declined to give permission for the erection of a sign having the proportions specified in the agreement, the respondent has appealed within the relevant municipal authority for a reconsideration of that decision. Clearly, so the argument 10 ran, a reasonable time would allow time for the municipality to reconsider its original decision. We do not know obviously when the appeal for want of a better description will be decided upon, nor do we know what that decision will be. It is interesting to note, however, that the Eastern Metropolitan Transition Council has objected to the erection of the particular sign that has been placed on the site. This sign is of the size envisaged in the agreement between the parties and not of the size for which permission was granted. This fact of course is not 20 directly relevant but it does provide a certain degree of illumination by way of background. Mr van Blerk vigorously argued that he was not contending that there was a tacit term that allowed for the consideration of an appeal internally within the relevant municipal authority. He submitted that he was relying simply upon the clause which provided that this agreement "is conditional upon the necessary permission and licence being obtained by the lessee from the municipal authority for the erection, installation and operation of advertising 30 signs/..

3 Cl/ JUDGMENT signs on the site" and that a reasonable time would read into this clause an allowance, inter alia, of time for the consideration of the appeal. It seems to me, however, that necessarily the respondent is contending for a tacit term or a term implied from the facts which would allow for the consideration of an appeal after the municipality had declined to give permission in terms. A tacit term or term implied from the facts was described by Corbett AJA {as he then was) in Alfred McAlpine & Son (Pty) Ltd, v Transvaal Provincial 10 Administration 1974 (3) SA 506 (A) at as - "... an unexpressed provision of the contract which derives from the common intention of the parties, as inferred by the Court from the express terms of the cont rac t and the surrounding ci rcums tance s. in supplying such an implied term, the Court in truth declares the whole contract entered into by the parties." As was said by Rumpff JA (as he then was) in Pan American World Airways Inc v S A Fire & Accidents Insurance Co Ltd (3) SA 150 (A) at 175C: "When dealing with the problem of an implied term, the first enquiry is, of course, whether, regard being had to the express terms of the agreement, there is any room for importing the alleged implied terra," In the English Privy Council decision of Douglas v Baynes 1908 TS 1207 at 1210 the following was said: "The principle on which terms are to be implied in a contract is stated by Kay LJ in Hamlyn & Co v Wood & Co [1891] 2QB P494 in the following words: 30 'The/..

4 CI/ JUDGMENT 'The court ought not to imply a tern in a contract unless there arises from the language of the contract itself, and the circumstances under which it is entered into, such an inference that the parties must have intended the stipulation in question that the court is necessarily driven to the conclusion that it must be implied'." As Christie observes in his Law of Contract in South Africa 3rd ed at 18 9 a great favourite of our courts is this passage from the judgment of Scrutton LJ in Reicate v Union 10 Manufacturing Co. (Ramsbottom) [ KB 592 at 60S: "A term can only be implied if it is necessary in the business sense to give efficacy to the contract, i.e. if it is such a term that it can confidently be said that if at the time the contract was being negotiated someone had said to the parties: 'What will happen in such a case?' they would both have replied 'Of course so and so will happen, we did not trouble to say that, that too is clear'." Lord Esher in the case of Hamlyn & Co v Wood & Co said as 20 follows: "I have for a long time understood that rule to be that a court has no right to imply in a written contract any such stipulation, unless, on considering the terms of the contract in a reasonable and business manner, an implication necessarily arises that the parties must have intended that the suggested stipulation should exist. It is not enough to say that it would be a reasonable thing to make such an implication, it must be a necessary implication in the sense that I have 3 0 mentioned." This/..

5 Cl/ JUDGMENT This quote has been referred to with approval in the case of Union Government (Minister of Railways) v Faux 1916 AD 105 at 112 and Mullin (Pty) Ltd v Benade Ltd 1952 (1) SA 211 (A) at 214. In the case of Rapp and Maister y Aronovsky 1943 WLD 68 at 74-5 Millin J said as follows: "It has often been pointed out that it is not sufficient to show that the term would be highly reasonable or convenient to one or other or even both the parties. The cases show that the court has to be 10 continually on its guard against being persuaded to introduce a term which, on analysis of the argument, appears to be no more than a term which would make the carrying out of a contract more convenient to one of the parties or to both of the parties and might have been included if the parties had'thought of it and if they had both been reasonable. You are not to imply a term merely because if one of the parties or a bystander had suggested you think only an unreasonable person would have disagreed. You have to be satisfied 20 that both parties did agree. It is quite a different proposition, if in a hypothetical case Scrutton LJ puts it, you feel the parties might say: 'You have called our minds to something we have not thought of and what you say is not unreasonable, let us discuss it.' If that is all that the Court feels might have happened, then the court is not entitled to imply the term. 11 The second part of Scrutton LJ's test, the bystander test, is also known as the "officious bystander" test from its formulation by MacKinnon LJ in Shir law v Southern 3 0 Foundries (1926) Ltd [1939] 2 KB 206 at 227. 'Prima/..

6 Cl/ JUDGMENT 'Prima facie that which in any contract is left to be implied and need not be expressed is something so obvious that it goes without saying; so that, if, while the parties were making their bargain, an officious bystander were to suggest some express provision for it in their agreement, they would testily suppress him with a common 'Oh, of course'." In the case of Wilkins v Voges 1994 (3) SA 130 (A) at 1361, Nienaber JA said: 10 "A tacit term, one so self-evident as to go without saying, can be actual or imputed. It is actual if both parties thought about a matter which is pertinent but did not bother to declare their assent. It is imputed if they would have assented about such a matter if only they had thought about it which they did not do because they overlooked a present fact or failed to anticipate a future one." The entire tone of the agreement concluded between the parties suggests a degree of urgency with regard to the 2 0 obtaining of the licence. Indeed, in clause 2.2 it is provided - 11 that the lessee shall forthwith at its sole cost make application to the municipal authority for the requisite permission and licence." (my emphasis) In my view the law is clear and well settled with regard to implied terms. Furthermore, it is quite clear from a perusal of the agreement between the parties, as well as the background facts, that it cannot be imputed into this agreement, as a tacit term, that both parties had concurred 3 0 at the time when they entered into the agreement that in the event/..

7 Cl/ JUDGMENT event that the application to the municipal authority failed, it would nevertheless be open for the respondent to pursue the route of seeking to have this decision reversed by the municipality. Accordingly, it is my view that there are no reasonable prospects of success on appeal on this matter. On the other bases upon which I decided the case originally I see no reason to elaborate further on the reasons which I gave in that judgment and indeed Mr van Blerk faintly argued that I was wrong with regard to these other reasons. Accordingly the application, for leave to appeal is dismissed with costs, which costs are to include the costs of two counsel.