1

REPUBLIC OF NAMIBIA

HIGH COURT OF NAMIBIA MAIN DIVISION, WINDHOEK

JUDGMENT

In the matter between: Case no: I1048/2011

ANTON ERIK VAN SCHALKWYKPLAINTIFF

and

DAVID EMMANUEL FREITAS DIASFIRST DEFENDANT

RENARD HATTINGHSECOND DEFENDANT

Neutral citation:Van Schalkwykv Dias (I1048-2011) [2016] NAHCMD 226 (29July2016)

Coram:NARIBAJ

Heard:18 - 21July 2016

Delivered:29July 2016

Flynote: Action – Absolution from the instance – In a claim for specific performance based on a written deed of sale which has a suspensive condition, plaintiff required to present some evidence on the basis of which a court, applying its mind reasonably to such evidence could or might (not should or ought to) find for the plaintiff. Plaintiff further having failed to set out material facts on which his claim for refund of the “purchase price” is based, absolution from the instance granted to the defendants with costs.

Summary: Plaintiff instituted action against the defendants in a claim of specific performance, that is, transfer and registration of certain unmovable property which is presently registered in the name of the second defendant. Plaintiff alleged in his particulars of claim that the said immovable property had been sold to him by the first defendant, and that he had paid the purchase price in full or tenders whatever amount of the purchase price remains outstanding against transfer of the said property to plaintiff. Plaintiff alleges further that subsequent to the purchase and sale agreement having been concluded between him and the first defendant, the first defendant entered into a further purchase and sale agreement with the second defendant in respect of the same immovable property and then gave transfer to the second defendant. Plaintiff then alleges that the defendants entered into that agreement, in order to frustrate the transfer of the property to the plaintiff, that is, they unlawfully colluded and acted fraudulently. Plaintiff thus prays for retransfer of the property from the second defendant to first defendant and a further transfer thereof to plaintiff, subject to refund by the first defendant to the second defendant of the purchase price, and costs associated with transfer and retransfer.

Without setting out material facts on the basis of which he claims, plaintiff, included a further prayer for refund of all the amounts he has paid or which were paid on his behalf by a third party towards the reduction of the purchase price.

At the closure of the plaintiff’s case, both defendants have applied for absolution from the instance, with costs.

Held that plaintiff was required, but failed to provide some evidence on the basis of which a court acting reasonably might or could find that he has elected to waive the suspensive condition in the deed of sale requiring that a loan, to be secured by a mortgage bond to be registered against the property be obtained and that he has communicated that election prior to the expiry of the date on which the contract would lapse.

Held further that plaintiff has failed to provide evidence on the basis of which a reasonable court looking at such evidence might find that second defendant had knowledge or ought to have had knowledge of the purchase and sale agreement between plaintiff and the first defendant, on or prior to the date on which he took transfer of the property.

Held further that plaintiff has failed to alleged material facts on which his cause of action for the relief claimed for the refund of the monies paid to the first defendant toward the reduction of the purchase price is founded and further failed to demonstrate that such payments where indeed made in terms of the specific deed of sale.

Held accordingly that both defendants are absolved from the instance with costs.

ORDER

The defendants are absolved from the instance with costs, such costs to include the costs of one instructed- and one instructing counsel in respect of each of the defendants.

JUDGMENT

NARIBAJ:

[1]The plaintiff in this matter instituted an action against the defendants claiming in the main, specific performance in the form of transfer to the plaintiff of certain Erf 1582, Tutungeni residential township, Rundu (the property) against payment of the purchase price. In the alternative, plaintiff claimed against the first defendant an amount of N$422050, being the amount, plaintiff alleges, represents the extent of the first defendant’s enrichment, in that plaintiff has allegedly effected improvements to that value or costing as much, on the property.

[2]Plaintiff has closed his case and both defendants have now applied for absolution from the instance with costs.

The Pleadings

[3]Plaintiff alleges, and this is not disputed, that on 29 September 2005, he and the first defendant entered into a written deed of sale in terms whereof the first defendant sold the property to the plaintiff for an amount of N$600000. A copy of the said deed of sale was received into evidence as exhibit “B”, and I shall henceforth refer to it as such, or as the deed of sale. Plaintiff alleges further that paragraph 12 of exhibit “B” provides that the deed of sale is subject to a suspensive condition that a loan of N$600000 is secured by a mortgage bond to be registered over the property and obtained by the Plaintiff.

[4]The first defendant pleads that exhibit “B” was subject to the suspensive condition, as per paragraph 12 thereof, requiring that plaintiff had to obtain a loan to be secured by a mortgage bond over the property, of N$600000 from any registered commercial bank, by 30 September 2005, failing which the deed of sale would automatically lapse and be of no force or effect. First defendant pleads further that the suspensive condition was not met and that the deed of sale had accordingly lapsed and is of no force or effect.

[5]First defendant further denies the allegation in the plaintiff’s amended particulars of claim, that the above suspensive condition was for the exclusive benefit of the plaintiff and that plaintiff has waived same. First defendant pleads that the above suspensive condition was also for his benefit and that he has not waived same.

[6]Plaintiff alleges further that he has paid the purchase price of N$600000 to the first defendant and in the alternative tenders to pay whatever balance of the purchase price still remains outstanding, against registration of the property into his name. Towards this end, plaintiff alleges that the first defendant should, if he asserts that some balance still remains outstanding and owing, draw up a statement setting out the payments (and the dates thereof) he admits having received and the balance owing. These allegations are denied by the first defendant and the first defendant pleads that he refuses the tender firstly due to what he pleads and alternatively because it is incompetent according to the first defendant, in the prevailing circumstances.

[7]Plaintiff alleges further that on or about 30 April 2008 “the parties” entered into a written agreement in terms of which the first defendant agreed to transfer the property to the Angolan Consulate in Rundu, against payment of a further amount of N$260000 in a period of 6 months. According to the plaintiff, as per his particulars of claim, both the plaintiff and the first defendant were, at that stage ignorant of the fact that the law requires that transfers of immovable property must follow the succession of the respective sales of the property, therefore, transfer first had to be effected to the plaintiff (before it could be given to the Angolan Consulate in Rundu).

[8]Plaintiff then alleges that he has paid to the first defendant the amount of N$260000 alternatively tenders payment thereof or any balance (still owing) against registration of transfer of the property into plaintiff’s name.

[9]A copy of the agreement of 30 April 2008 was received into evidence as exhibit “E”.

[10]The first defendant admits that exhibit “E” was in fact entered into, but denies that the amount of N$260000 was in fact paid. First defendant further pleads that a further written agreement was also concluded between the plaintiff and the first defendant on 30 April 2008, and pleads that a copy of that agreement is annexed to the plea marked “DD1” and should be read together with “annexure B” to the plaintiff’s amended particulars of claim. No such copy appears to be attached to the first defendant’s plea. Furthermore “annexure B” to the plaintiff’s particulars of claim is the same document a copy of which was received into evidence as exhibit “E”, thethat is, the agreement of 30 April 2008, referred to above.

[11]The first defendant pleads further that the agreement evidenced by exhibit “E” was subsequently cancelled due to plaintiff’s breach thereof, alternatively is unenforceable in law and of no force and effect.

[12]Finally,plaintiff alleges in the alternative to his main claim for specific performance, that is, registration of the property in his name against payment of the purchase price, that he “is entitled to be reimbursed by the first defendant for all costs of improvements reflected in annexure “D” as in that event first defendant would be unjustifiably enriched by the increase in value of the property due to improvements. The amount claimed under this head is N$422050, which the plaintiff alleges to be the costs of the improvements to the buildings and premises on the property. Annexure “D” to the plaintiff’s particulars of claim purports to be a quotation for the alleged improvements and the value of the property, addressed by Rundu Welding & Construction, (that is, the name under which the plaintiff previously traded), to the Consulate of the People’s Republic of Angola, Rundu. This claim was expressly abandoned on behalf of the plaintiff during argument on absolution, and nothing more needs to be said about it, except perhaps in so far as it may be relevant to costs.

The Pre-trial order

[13]On 18 July 2014 a joint proposed pre-trial order, in terms of Rule 26 was filed.It was signed both on behalf of the plaintiff and the first defendant, but was also delivered to the second defendant on the same date of signature, even though it appears not to have been signed on behalf of the second defendant. This proposed pre-trial order was made an order of court by an order dated 23 September 2014. The court order indicates that all the parties were represented during the proceedings of 23 September 2014, when it was made.

[14]The parties were directed to trial on the issues of fact and law as set out in the proposed pre-trial order. I do not, for reasons that will be apparent herein, need to set out in full all the issues of fact and law, sought to be resolved as per the pre-trial order. I will only refer to what I consider to be pivotal for purposes of the judgment on absolution.

[15]The first issue of fact to be resolved is whether plaintiff and the first defendant decided to waive the provisions of paragraph 12 of exhibit “B” (the deed of sale) and further agreed to make other provisions for payment of the purchase price.

[16]As is clear from the summary of the pleadings set out above, this is a contentious issue between the parties. The first defendant alleged that the suspensive condition was for the benefit of both parties and that he has not waived same. However, the manner in which the issue is formulated, as per the pre-trial order is difficult to comprehend, in view of the respective pleadings of the plaintiff and the first defendant. Whereas waiver by the first defendant is not raised by the plaintiff in the particulars of claim (as plaintiff appears to have been of the view that the relevant paragraph was for his exclusive benefit), it seems to me that there is acceptance on the part of the first defendant that it is one of the issues to be decided. This, perhaps because the first defendant has pleaded that the suspensive condition was also for his benefit and that he has not waived same.

[17]The next issue of fact to be resolved is whether plaintiff has paid the purchase price in full, be it directly or indirectly through payments made by the Angolan Consulate, Rundu. A further issue arising from this is, if full payment was not made, how much must still be paid in terms of the plaintiff’s tender. Once again, in view of the first defendant’s refusal of the tender, as per the pleadings, this is a curious formulation of the issue. In any event, this issue only stands to be decided at this stage, if it is found that the agreement evidenced by exhibit “B” did not lapse and remains valid and enforceable.

[18]A further issue linked to the one set out immediately above, is whether the various sums totaling N$260000 (which, according to the plaintiff, were paid to the first defendant by the Angolan Consulate)were in effect payments by the plaintiff towards the reduction of the balance owed in respect of the purchase price or whether these were payments for rental by the Angolan Consulate, Rundu, for its occupation of the property.

[19]To my mind, the question raised by payment of N$260000 is closely linked to the question of waiver and the question whether the deed of sale (exhibit “B”) was still valid and enforceable or had lapsed by the time exhibit “E” was entered into. This also raises the question whether exhibit “E”, if it related to the sale of property, was a valid agreement.

[20]A further question of fact to be resolved, is whether the second defendant knew (at the time he took transfer of the property) that the property had been sold to the first defendant and that there was a court case pending between the plaintiff and the first defendant for the transfer of the property. Connected to this question is the question whether the first and second defendantsunlawfully and fraudulently conspired with the intention thereby to make transfer of the property to the plaintiff impossible. Plaintiff alleges that they did this by entering into a purported deed of sale and transfer of the property to the second defendant.

[21]These questions, to my mind, invoke, what it known in our law as the doctrine of notice, to which I shall turn when dealing herein below with the applicable legal principles.

[22]Based on the above questions of fact, the parties raise the following questions of law, as per the pre-trial order. I shall limit myself to the questions which are, relevant for purposes of the decision at this stage of absolution. These are:

  1. Is exhibit “B” still valid and binding and as such enforceable or did it lapse and is of no force or effect, in view of the fact that plaintiff did not obtain a loan of N$600000 from a commercial bank in terms of paragraph 12(1) and 12(2) thereof?
  1. Must clause 12 of exhibit “B” be interpreted as a term of the contract inserted exclusively for the benefit of the plaintiff, so that the fact that he did not make use of it would not invalidate the agreement, provided that the plaintiff finds the required finances in a different manner and pays the purchase price? Connected to this is the question whether the parties could orally or impliedly (by making and accepting other financial arrangement) waive the provisions of paragraph 12 of exhibit “B” and thereby keep the agreement intact.
  1. If the court finds that the agreement (exhibit “B”) had lapsed and is unenforceable, whether first defendant must refund to plaintiff all payments received from the plaintiff as payment of the purchase price together with interest thereon at the rate of 20% (or any other rate) calculated from the date of payment to the date of refund.

[23]The remainder of the issues of law as formulated in terms of the pre-trial order will, to my mind, only arise if absolution from the instance is not granted and the trial should proceed.

Facts which are not in dispute

[24]The parties agreed as per the pre-trial order that the following fact are not in dispute:

‘3.1That on the 29th of September 2005 Plaintiff and First Defendant signed a written agreement in terms of which First Defendant sold to Plaintiff Erf 1582 Rundu for a purchase price of N$600 000,00 and that that agreement is the agreement described as “second agreement” and is annexed as Annexure “A” to Plaintiff’s Declaration (as per Para 2 of the notice of intention to amend it replaced the “first agreement” as Annexure “A”);[1]

3.2That the signatures to the sales agreement as purchaser and seller are those of Plaintiff and First Defendant;

3.3That Plaintiff did not make use for his benefit of the provisions of paragraph 12 of the agreement, but made other arrangements for the payment of the purchase price.

3.4That on the 30th of April 2008 Plaintiff and First Defendant entered into a written agreement in terms of which:

a)Plaintiff agreed to pay to First Defendant a further amount of N$260000,00 in a period of 6 months;

b)First Defendant agreed to transfer Erf 1582 Tutungeni, Rundu, to the Angolan Consulate in Rundu, a copy of the said agreement is annexed hereto marked Annexure “B”[2];

c)The parties were ignorant that the law requires that transfers of immovable property must follow the succession of the respective sale of the property and thus transfer had first to be effected to the Plaintiff after the agreed sum of N$260000,00 was paid.