DISTRIBUTABLE CASE NO : 1198/97

IN THE HIGH COURT OF SOUTH AFRICA (BOPHUTHATSWANA PROVINCIAL DIVISION)

In the matter between:

J M MOTHUSI 1st APPLICANT

LEROTHODI GARAGE (PTY) LTD 2nd APPLICANT

UNCLE JOE’S BAR LOUNGE 3rd APPLICANT

AND RESTAURANT (PTY) LTD and

FEDMARK (PTY) LTD 1st RESPONDENT

DIRK DU PLESSIS SCHOEMAN 2nd RESPONDENT

WHITE RIVER CONSTRUCTION (PTY) LTD 3rd RESPONDENT

SAMUEL DIKOTA 4th RESPONDENT

JACOBUS COENRODUS STRAUSS 5th RESPONDENT

THE DEPUTY SHERIFF, TAUNG AND GANYESA 6th RESPONDENT

THE REGISTRAR OF DEEDS, VRYBURG 7th RESPONDENT

THE STANDARD BANK OF SOUTH AFRICA LTD 8th RESPONDENT

Application Waddington J Mafikeng Date of hearing : 5 February 1998 Date of judgment : 26 February 1998 For the applicants : J H L Scheepers For the first, second and third respondents : K J Kemp SC

Waddington J: This application was the culmination of a number of separate applications which arose out of the sale in execution of a certain property previously registered in the name of the first applicant. The third respondent became the owner of that property via the sale in execution in question at the instance of the first respondent, the first applicant being the judgment debtor.

It was common cause that the nature of the interest of the second and third applicants and of all the respondents save the third respondent is tangential to the essence of the dispute in the present application.

In an effort to recover his lost ownership in the property in question, the first applicant brought an urgent application in this court on 9 May 1997. After a number of postponements of that application, the parties reached agreement which was made an order of court on 11 September 1997. I shall refer to that order as “the settlement.” The meaning of certain portions of the settlement became the subject of further dispute which has resulted in the bringing of the present application which was heard on 5 February 1998.

The hearing was bedevilled by the failure of the respondents’ attorneys to file a copy of the respondents’ answering affidavit until the omission was discovered ten minutes before the hearing. To make matters worse, the applicants’ attorneys had failed to ascertain whether the record was complete and paginated at least four days before the hearing. The result was that the papers were not complete until the answering affidavit was handed up to the bench by Mr Kemp who was embarrassed by the omission of his instructing attorneys. The papers were never paginated. Because counsel for the parties had travelled from afar, argument was heard despite all the difficulties. But for this consideration, the application would have been struck from the roll with no order as to costs as a result of the parties’ failure to comply with the rules of court.

THE SETTLEMENT

It is necessary to set out the relevant portions of the settlement.

“1. Die applikante trek hiermee die aansoek (saaknommer 451/97) terug, en stem toe tot die opheffing van die tussentydse bevele, interdikte en bevele nisi.

1. Die derde respondent betaal aan die prokureurs van die eerste applikant ‘n bydrae tot die koste van die applikante in hierdie aansoek in ‘n bedrag van R30 000,00 welke bedrag as volg betaalbaar is:

2.1 R15 000,00 op of voor 7 Oktober 1997; en

2.2 R15 000,00 op of voor 7 November 1997.

2. Die eerste applikant betaal aan die vyfde respondent (Jacobus Coenradus Strauss) die bedrag van R465 000,00 (Vierhonderd vyf en sestig duisend rand) in volle en finale vereffening van enige gelde wat die eerste applikant aan die eerste en/of derde en/of vyfde respondent verskuldig mag wees uit hoofde van die skuldoorsake voortspruitend uit die voormelde Noor­Kaapse saaknommer 173/1988 en/of enige ander skuldoorsaak van watter aard ookal, en watter bedrag kapitaal, rente en koste insluit.

3. Die voormelde bedrag is betaalbaar in kontant nie later as 31 Desember 1997.

4.1 Die bedrag is betaalbaar aan die vyfde respondent per adres Standard Bank, Vanderbijlpark vir krediet van die vyfde respondent op kredietkaartrekening nommer 5221 2610 9083 5679.

4.2 Die bedrag is betaalbaar in kontant en nie per tjek of per bankwaarborg nie.

......

4. Betaling van die bedrag van R465 000,00 voor of op 31 Desember 1997 sal geskied teen kansellasie van die beslaglegging en verkoping in eksekusie, en registrasie van die onroerende eiendom te wete

Erf nommer 5 ­ Taung (Voorheen Lot 5 van Blok A) Geleë in die Afdeling vanVryburg Groot 4283 vierkante meter

in die naam van die Eerste Applikant

In sodanige geval,

6.1 word die sewende respondent gemagtig en gelas om by wyse van endossement die eiendomsreg in die voormelde eiendom te herstel in die naam van die eerste applikant;

6.2 in soverre dit nodig mag wees dat enige dokumente onderteken moet word ten einde registrasie van die eiendom te herstel in die naam van die eerste applikant, word die sesde respondent gemagtig en gelas om sodanige dokumente te onderteken;

...... 5. Indien die eerste applikant sou versuim om die voormelde bedrag van R465 000,00 aan die vyfde respondent te betaal voor of op 31 Desember 1997,

8.1 sal die applikante geen verdere aanspraak hê op, of enige reg hoegenaamd op die voormelde onroerende eiendom of die verbeterings daarop of die huurgelde betaalbaar ten aansien daarvan nie;

8.2 sal die applikante nie aanspreeklik wees vir betaling van enige gelde insluitende die terugbetalling van die bydrae tot die regskoste aan die eerste, tweede, derde of vyfde respondent voortspruitend uit hierdie aansoek of die voormelde Noor­Kaapse aksie of enige ander moontlik tans bestaande skuldoorsaak nie;

8.3 sal die derde (en/of tweede en/of vyfde) respondente na goeddunke met die aandele in die derde respondent en/of met die voormelde onroerende eiendom kan handel;

8.4 sal die applikante die eiendom onmiddelike ontruim in soverre hulle in okkupasie van gedeeltes daarvan is.”

RELEVANT FACTS AND GENERAL BACKGROUND CONSIDERATIONS WHICH ARE COMMON CAUSE

6. The amount of R465 000,00 referred to in clauses 3 and 8 of the settlement was not paid by the first applicant on or before 31 December 1997.

7. Transfer of the property referred to in clause 8 of the settlement has not been effected to date.

8. A dispute as to the correct meaning of clauses 4, 6 and 8 of the settlement arose between the parties before 31 December 1997 in consequence of which the applicants brought an urgent application on 31 December 1997. An order by consent was then granted postponing the application and an undertaking was given by the respondents the general effect of which was to do nothing which might prejudice the applicants’ interests pending the final determination of the application.

THE RELIEF SOUGHT The applicants, in their amended notice of motion, seek a declaration to the following general effect

That on a proper interpretation of the terms of the settlement ­

(a) The amount of R465 000,00 was payable by the first applicant to the fifth respondent only after the registration of the immovable property in question in the name of the first applicant;

(b) the provisions of clause 8 of the settlement would be of no force and effect if the fifth respondent failed to register the immovable property in question in the name of the first applicant on or before 31 December 1997; Alternatively to paragraphs (a) and (b) above

(1) The amount of R465 000,00 would be payable by first applicant to fifth respondent against registration of the property in the name of the first applicant only on the basis of clause 4 of the settlement;

(2) the amount of R465 000,00 would be payable by first applicant to fifth respondent as contemplated by clause 8 of the settlement after the handing over by the fifth respondent to the first applicant of a certificate issued by the registrar of deeds of the registration of the property in question in the name of the first applicant;

Alternatively to paragraph (2)

(3) in the event of the court finding that the amount of R465 000,00 was not payable by first applicant to fifth respondent only after the handing over of a certificate as described in paragraph (2) above, what procedure was contemplated in clause 4 of the settlement that the first applicant was required to follow in effecting payment against registration of the property in question in order to secure registration;

(4) the provisions of clause 8 of the settlement would be of no force and effect if the fifth respondent failed to register the immovable property in question in the name of first applicant on or before 31 December 1997.

The remainder of the notice of motion was concerned with incidental matters calculated to ensure the position that the respondents would do nothing to prejudice the applicants’ claimed rights pending the final determination of this application. These matters were adequately catered for, as already indicated, in the undertaking provided by the respondents on 31 December 1997.

The response of the respondents who have answered the notice of motion as contained in the answering affidavit is that the object of the settlement was to put an end once and for all to the drawn­out dispute. The crux of the settlement, it was submitted, was that (as revealed by clauses 6 and 8 of the settlement) the first applicant was to pay fifth respondent R465 000,00 on or before 31 December 1997 against transfer of the property to secure the return to him of the property in question. Failing such payment by 31 December 1997, the first applicant would forfeit all expectations of retrieving the property in the manner contemplated in the settlement. Having failed to make the payment timeously, the first applicant could no longer insist upon the performance of any of the incidents of the settlement the effectiveness of which expired at the close of 31 December 1997. The meaning of clauses 4, 6 and 8 of the settlement therefore fall to be determined to resolve the dispute.

THE INTERPRETATION OF AN ORDER OF COURT

The principles which apply to the interpretation of a court’s judgment or order are well settled and have been applied consistently by the Appellate Division. It is necessary to refer to only three decisions of that Court to indicate the principles which bind this Court in reaching its decision. In Firestone South Africa (Pty) Ltd v Genticuro A.G. 1977 (4) SA 298 (A) at 304 D ­ F Trollip J.A. said “First, some general observations about the relevant rules of interpreting a court’s judgment or order. The basic principles applicable to construing documents also apply to the construction of a court’s judgment or order: the court’s intention is to be ascertained primarily from the language of the judgment or order as construed according to the usual, well­known rules. See Garlick v Smartt and Another, 1928 A D 82 at p 87 ; West Rand Estates Ltd v New Zealand Insurance Co Ltd., 1926 A D 173 at p 188. Thus, as in the case of a document, the judgment or order and the court’s reasons for giving it must be read as a whole in order to ascertain its intention. If, on such a reading, the meaning of the judgment or order is clear and unambiguous, no extrensic fact or evidence is admissible to contradict, vary, qualify, or supplement it. Indeed, it was common cause that in such a case not even the court that gave the judgment or order can be asked to state what its subjective intention was in giving it (cf, Postmasburg Motors (Edms) Bpk v Peens en Andere, 1970 (2) SA 35 (N.C) at p 39 F ­ H). Of course, different considerations apply when, not the construction, but the correction of a judgment or order is sought by way of appeal against it or otherwise ­ see infra. But if any uncertainty in meaning does emerge, the extrinsic circumstances surrounding or leading up to the court’s granting the judgment or order may be investigated and regarded in order to clarify it; for example, if the meaning of a judgment or order granted on an appeal is uncertain, the judgment or order of the court a quo and its reasons therefor, can be used to elucidate it. If, despite that, the uncertainty still persists, other relevant extrinsic facts or evidence are admissible to resolve it. See Garlick’s case supra, 1928 A D at p 87, read with Delmas Milling Co Ltd v Du Plessis, 1955 (3) SA 447 (AD) at pp 454F ­ 455A; Thomson v Belco (Pvt) Ltd and Another, 1960 (3) SA 809 (D).”

These principles were confirmed by the same court in Administrator, Cape, and Another v Ntshwaqela and Others 1990 (1) SA 705 (A) at 715 F ­ H and again in Weber­Stephen Products Co. v Alrite Engineering (Pty) Ltd 1992 (2) SA 489 at 494 E ­ G.

In the present case, since no judgment containing reasons exists the settlement having been arrived at by consent, it is only the terms of the settlement itself which can be considered in determining the meaning thereof unless ambiguities exist which would justify the court taking into account any relevant extrinsic circumstances. I have concluded after considering the settlement as a whole that there are no material ambiguities contained in the settlement.

CONCLUSION

The essence of the present dispute which became apparent only during the second half of December 1997 is that the fifth respondent contends that the settlement provides for the payment to have been made on or before 31 December 1997 against transfer. If payment were not to have been made by that date as contemplated by the settlement, the obligation to provide the quid pro quo for payment, namely, simultaneous transfer into the name of the first applicant, would fall away. As no payment was made, there is no obligation to transfer the property. It was contended on behalf of the first applicant on the other hand that the settlement required first the transfer of the property into his name and then only would the need to make payment have arisen. The provisions of clause 8 of the settlement have not come into operation it was further submitted because transfer was not effected on or before 31 December 1998. In support of this contention it is submitted in the original heads of argument filed by counsel for the first applicant that it was always common cause between the parties that the property concerned would be used as security to raise a bond from the proceeds of which payment of R465 000,00 would be made.

Parties to a contract for the sale of land are “­­­­­ of course, free to agree that the price should be paid before or after ­­­­­ registration, [but] the possible disadvantages of that to the purchaser or seller respectively are so serious that clear language manifesting such an intention is required. Those disadvantages are, of course, the inability (due for example, to supervening insolvency) or the unwillingness of one party ultimately to perform his obligation after the other party has performed his ­­­­­­­­”. (Per Trollip J A in AA Farm Sales (Pty) Ltd (t/a AA Farms) v Kirkaldy 1980 (1) SA 13 (A) at 17 A.) The same caveat contained in this quotation must be borne in mind in considering whether the applicants’ contentions as to the meaning of the settlement are correct or not.

I shall consider first whether the settlement is couched in such clear language as to indicate that it was the parties’ intention that the transfer of the property should have preceeded payment so that the property could be bonded to enable the first applicant to raise the funds to make the payment. There is no specific statement to that effect contained in the settlement. If that is so, there must be discernible in the settlement clear language giving rise to an implication to that effect.

The settlement contains no statement, express or implied, that transfer should have been effected giving the first applicant time enough to comply with the obligation to effect payment by 31 December 1997. There is nothing in the settlement which provides for the course to be followed by the first applicant in the event of transfer being left so late as to make it impractical for the first applicant to apply for a bond and thus raise the necessary funds enabling him to comply with the obligation to pay by that date. Had the parties’ intention been that transfer before 31 December 1997 should precede payment, the omission to make clear provision for so obvious a subject is remarkable.

There is no provision in the settlement which refers (even indirectly) to the duty of the first applicant to apply for financing on the security of the property upon transfer being effected and what remedy would have been open to the respondents in the event of the application for financing failing or of the first applicant failing to pay having received transfer. Had the parties intended the settlement to mean that the first applicant would have enjoyed the right to use the property as security, at the very least one would have expected the settlement to have said so in clear and unambiguous terms and possibly to have required the first applicant to have produced a guarantee of payment conditional upon transfer being effected.

The emphasis throughout the settlement when read as a whole is on the first applicant paying by 31 December, how payment must be effected by the first applicant and what the consequences would be in the event of the first applicant failing to make the necessary payment. In my view it is curious in the extreme that if the linch­pin of the settlement was intended to have been the prior transfer of the property, there should have been no clear mention in the settlement of that first priority, no mention of a date by which transfer should have been effected and no mention, as I have said, of any form of protection of the seller’s remedy in the event of the first applicant failing to effect payment for any reason.

Mr Kemp during argument also pointed to a number of other significant considerations inconsistent with the first applicant’s contentions which emerge from a reading of the settlement as a whole which is a requirement in interpreting the settlement. (See for example Swart en ‘n Ander v Cape Fabrix (Pty) Ltd 1979 (1) SA 195 at 202 C).

First, Clause 8.3 provides that the third respondent would be free to deal with the property without let or hindrance if payment were not to have been made by 31 December 1997. Were the property to have been transferred to the first applicant before that date pending payment, Clause 8.3 would be meaningless because the third respondent would not be free to deal with the property..

Second, Clause 7.2 prohibits the third respondent from alienating the property pending payment before 31 December 1997. Were transfer to have been effected before that date, this provision would similarly be without any point.

Third, Clause 7.3 prohibits the transfer of shares in the third respondent by the second and fifth respondents pending payment. This is an important provision because the second and fifth respondents, being signatories to the settlement, are bound by its terms. Any new owner of their shares would not be so bound and could possibly prejudice the first applicant’s interests by taking action inconsistent with the terms of the settlement. Clause 7.3 therefore could only have effect before transfer took place.

Finally, Clause 6.1 empowers and requires the registrar of deeds to register ownership of the property when the conditions precedent to registration mentioned in Clause 6 itself have been satisfied. Those conditions cannot logically include transfer because the act of transfer referred to in Clause 6.1 would constitute mere repetition and surplusage.

All the above­mentioned factors are incompatible with an intention that transfer should precede payment in my view.

By contrast, the settlement in clause 4 makes unambiguous provision for the payment to be made not later than 31 December. Clause 6 refers to the consequences of the payment being made by 31 December 1997 i.e. the cancellation of the attachments and sale in execution and registration i.e. ultimate transfer of the property into the name of the first applicant.

The settlement goes on that when the incidents referred to in Clause 6 occur (“In sodanige geval”), the seventh respondent, i.e. the registrar of deeds, would become obliged to effect the transfer of the property into the name of the first applicant. Clause 6.1 confers upon the first applicant a practical guarantee of the performance of the respondents’ reciprocal duty to transfer after receiving payment by conferring upon the deputy sheriff, so far as might have been necessary, the power to sign whatever documents necessary to effect the registration of ownership of the property in the name of the first applicant. It would appear, therefore, that in the event of the payment having been made even as late as 23 hrs on 31 December 1997, transfer would have ensued at the instance of the first applicant as an ineluctable consequence of the settlement.

Clause 8 lists a number of clearly phrased results which would ensue in the event of payment not having been received on or before 31 December 1997. The effect of these is to deprive the first applicant of any further rights to or interest in the property and to release the third respondent from the restriction in dealing with its ownership in the property.

In the light of all these considerations, I have the gravest doubt whether it can be said that the settlement contains clear language which envisaged that transfer had to be effected into the name of the first applicant before the first applicant became obliged to effect payment.

The same test naturally would have had to have been applied in the case of the respondents had the contention of the respondents been simply the converse of the applicants’. Mr Kemp did not rely on the argument, however, that the first applicant was obliged under the settlement literally to pay R465 000,00 by cash into the bank account of the fifth respondent before 31 December 1997 and then await the respondent’s reaction. He preferred to submit that the true effect of Clause 6 of the settlement was that the first applicant’s obligation was to approach the respondent(s) when he had the funds available, he having had from 11 September 1997 (the date of the settlement) to 31 December 1997 to raise the funds, and to demand transfer against tender of payment in cash simultaneously. In the view I take of the matter, this is the least favourable of the submissions which could have been made confidently on behalf of the respondents and is correct.

The operative words contained in Clause 6 are that “Betaling ­­­­­­­­ sal geskied teen kansellasie van die beslaglegging en verkoping in eksekusie, en registrasie van die onroerende eiendom ­­­­­­­­­­­­­­­­­­­­­­­­­­in die naam van die eerste applikant.” (The emphasis is mine.). “Teen” means “in ruil vir” or, in other words in the context of the settlement, “in ruil vir registrasie”. (Verklarende Handwoordeboek van die Afrikaanse Taal : Odendaal et al.) In short, first applicant’s obligation was to pay on or before 31 December 1997 against registration of transfer. This arrangement resulted in reciprocal obligations requiring simultaneous performance of the reciprocal obligations or as near to that as practicalities allow. (See Hammer v Klein and Another 1951 (2) SA 101 (A)). In Holder v Rovian Trust (Estate) (Pty) Ltd 1975 (3) SA 895 (N) at 899 Leon J, in dealing with the subject of the “simultaneous” performance of obligations created by a contractual provision which read “The purchase price shall be ­­­­­­­­which shall be payable in cash against transfer of the property ­­­­­­­­­­­­” said:

“Where payment of the purchase price of immovable property is to be made pari passu with transfer

“the expedient which is resorted to in South Africa in practice is quite a reasonable one; transfer is seldom or never passed into the name of the purchaser without some sort of guarantee, usually a bank guarantee that the money will be paid” ­ per De Villiers J P in Trichardt v Muller 1915 T P D 175 at p 178, which was expressly approved in Breytenbach v Van Wyk, 1923 A D 541 at p 547 and in Hammer v Klein and Another 1951 (2) SA 101 (AD) at p 105 F ­ G. In such a case payment of the purchase price is ­­­­­­­­ furnished to the seller before transfer but which becomes payable on transfer ­­­­­­­­­­”.

In principle there is no difference between Clause 6 in the present case and the terms of the contract referred to above.

In my view therefore Clause 6 required the first applicant, before 31 December 1997, to inform the fifth respondent that he had paid either (a) by depositing the amount in question in the manner specified in Clause 4 in which event he would have been protected by the provisions of Clause 6.2 which enabled the deputy sheriff to sign the documents required for transfer should that have become necessary; or (b) by paying the amount to the duly appointed conveyancer whose duty it would have been under the settlement to pay the fifth respondent only “against transfer”. The application is accordingly dismissed. There was a suggestion in the respondents’ heads of argument that costs be awarded on the attorney and client scale. This was not pursued in argument. In any event, I am not persuaded that costs should be so awarded. Costs will follow the result and are to be paid by the applicants.

C J WADDINGTON JUDGE OF THE HIGH COURT

Applicants attorneys : Smit & Kotzé Inc Attorneys for respondents : Ackerman and Mulligan