REPUBLIC OF SOUTH AFRICA

IN THE SOUTH GAUTENG HIGH COURT
(JOHANNESBURG)

CASE NO: A2010/5046

(1)	REPORTABLE: NO
(2)	OF INTEREST TO OTHER JUDGES: NO
(3)	REVISED. 

12 April  2012                             ………..……………………...

   
In the matter between

LAZAR PARK INDUSTRIAL (PTY) LTD	FIRST APPELLANT

DARIN D’OLIVEIRA NO	SECOND APPELLANT

NICOLENE CARLA D’OLIVEIRA NO	THIRD APPELLANT

THE BEST TRUST COMPANY
(JOHANNESBURG) (PTY) LTD NO	FOURTH APPELLANT
	
and

SEILSKIP ROAD INVESTMENTS CC	RESPONDENT

J U D G M E N T

THE COURT (VAN OOSTEN J, COPPIN J and WEINER J) 
[1] This appeal in essence concerns specific performance, pursuant to an agreement of sale of immovable property. The agreement was concluded between the first appellant (Lazar Park) represented by its director, the second appellant (D’Oliveira), as seller, and the respondent (Seilskip), as purchaser, on 29 April 2003, for the sale of an industrial immovable property for a purchase price of R1 508 875.00 (the first agreement). Seilskip duly paid the deposit provided for in the agreement (the rand equivalent of US$35 000) but failed to deliver the required guarantees in respect of the balance of the purchase price, within 30 days of the date of signature stipulated in the agreement (clause 2.2), or thereafter. On 1 August 2005 Lazar Park, again represented by D’Oliveira, in terms of written agreement, sold the property to the D’Oliviera Investment Trust (the trust), of which the D’Oliveira, the third appellant and the fourth appellant are the trustees (the second agreement). On 8 November 2005 the property was transferred in to the name of the trust. 
[2] In March 2006 Seilskip instituted action against the appellants claiming specific performance in terms of the first agreement, the setting aside of both the second agreement and the subsequent transfer of the property to the trust and in the alternative, against Lazar Park, a refund of the deposit paid, in the sum of R266 700.00.
[3] The defence raised by the appellants in response to the claim for specific performance was that the first agreement had duly been cancelled by way of a written notice of demand followed by a notice of cancellation, both of which were, according to the appellants, delivered by hand to Seilskip’s then director, Mr Peter Lazaruk, who has since passed away. Seilskip denied the cancellation of the first agreement and in particular that the notices had been delivered to Lazaruk.     
[4] The trial of the action proceeded before Tsoka J who decided in favour of Seilskip. We will revert to the order that was made, later. The appeal before us is with leave of the Supreme Court of Appeal.
[5] It is necessary to first deal with the claim and the order of the court a quo for specific performance. In its amended particulars of claim Seilskip pleaded due compliance with all of its obligations in terms of the agreement and in the alternative, tendered compliance in particular with clause 2.2 thereof. In the opening address before Tsoka J, counsel for Seilskip indicated, in no uncertain terms, that the claim for specific performance was based on Seilskip’s compliance with all the terms of the agreement. As the opening address progressed two issues were identified: firstly, whether the first agreement had been correctly cancelled by Lazar Park and secondly, whether the subsequent sale and transfer of the property into the name of the trust, was bona fide. Although counsel for the appellants made it clear that a determination of those issues would not bring an end to the matter, the learned Judge a quo mero motu ruled that the duty to begin with the leading of evidence, was on the appellants to “prove that” ie the two issues.
[6] The appellants, in accordance with the ruling, proceeded to adduce evidence and Seilskip called witnesses in reply, solely directed to these issues. Counsel then addressed the court mainly on those issues. By then Seilskip’s failure to deliver the required guarantees had become common cause. The learned Judge, during the course of argument, expressed reservations in ordering specific performance in the absence of the balance of the purchase price having been paid. Counsel for Seilskip in response said: “M’Lord, I am obviously tendering compliance with the agreement and we have tendered it in the pleadings...” This aspect, however, was left there and the argument proceeded on other aspects. 
[7] In evidence no mention at all was made of a tender nor was a tender made. The tender was simply not dealt with, probably resulting from the ruling concerning the issues. In the order granted at the end of the trial, provision was made for delivery of guarantees: the appellants were ordered to effect transfer of the property into Seilskip’s name “against tender of the guarantees of the balance of the purchase price, within 15 days from service of this order”. 
[8] In our view the ruling as to the duty to begin, was wrongly made. The onus at the commencement of the proceedings, was on Seilskip to prove the allegations in the pleadings. It was clearly the intention of Seilskip to proceed with the trial on the basis of its full compliance with all the terms of the agreement, which, is a requirement for obtaining specific performance (see BK Tooling (Edms) Bpk v Scope Precision Engineering (Edms) Bpk 1979 (1) SA 391 (A)). This issue was clearly overlooked by counsel. Although it became clear that Seilskip was in breach of the agreement, nothing was said concerning the tender made in the pleadings. This was only raised in argument at the conclusion of the trial. The tender accordingly was not properly made and Seilskip, being in breach of the agreement, should have been non-suited for that reason alone. But, it goes further: assuming a proper tender had been made the court was endowed with a discretion, whether or not to order specific performance. In the exercise of that discretion factors such as the lapse of time since conclusion of the agreement and subsequent events would have been relevant. This, however, was not addressed at all in the proceedings in the court a quo and we accordingly need not say anything further on this aspect.  
[9] We do, however, propose to decide this appeal on the issues that were identified by counsel at the commencement of the trial in the court below, which were dealt with in evidence and finally pronounced on by the learned Judge a quo. 
[10] At the conclusion of the trial the learned Judge a quo, in deciding in favour of Seilskip, held that there was no valid cancellation of the first agreement. He further held that the onus was on Lazar Park to prove that the first agreement was cancelled. In regard to the evidence that had been led the learned Judge held that he was unable to find that anyone of the witnesses was lying, but that the version of the appellants was improbable and that they accordingly, had failed to prove, on a balance of probabilities, that the first agreement was cancelled. 
[11] The evidence on behalf of the appellants was that the letters of demand and cancellation were, as had been done in the past with other documents, been delivered by D’Oliveira to Lazaruk, personally at his place of business. It was common cause that they were well known to each other. The appellants’ attorney, Mr Jacobs confirmed that he had prepared both letters in his office and that he had handed them to D’Oliveira. Lazaruk jnr, the son of the late Lazaruk, gave evidence and much by way of inferences, sought to suggest that the documents could not have been delivered to his father as his father would have discussed those, as he had always done, with him. These documents he said were never mentioned or discussed with him. The premise for the inference drawn soon crumbled down in cross-examination when it became clear that the late Lazaruk had not mentioned to, or discussed a number of other important documents and events, with him. His evidence on this score, in our view, was seemingly unsatisfactory. As against this, the evidence of attorney Jacobs cannot be ignored. He was the author of the disputed documents. The court a quo found that the appellants’ version was an “afterthought”. The finding pre-supposes that Jacobs was part of the “afterthought”, which inherently reflects on his honesty as a witness, which flies in the face of the court a quo’s inability to find dishonesty in the version of any of the witnesses. These considerations apply equally to D’Oliviera’s evidence. The suggestion of an afterthought was, moreover, not put to these witnesses. Having carefully considered the probabilities in this matter, it is our finding that the first agreement was properly cancelled. Seilskip is accordingly entitled to a refund of the deposit paid as claimed in the alternative. 
[12] Although, in the view we take of the matter, it is strictly not necessary to decide the correctness of the punitive costs order that was made against the appellants, we consider it necessary to comment thereon. The learned Judge as justification for the ordering punitive costs, found that irrelevant and immaterial criticisms against, as well as unjustified attacks on the integrity of, the late Lazaruk were raised, despite it having been common cause that he was Russian and unable to read or write English. In our view the criticism was unfounded. It is true that cross-examination on behalf of the appellants was directed at the contents of the affidavit filed in the summary judgment proceedings, but there was nothing to show deplorable conduct by any of the appellants. Counsel for Seilskip fairly, and correctly, conceded that a punitive costs order was not justified.      
[13] In the result, the following order is made:
1.	The appeal is upheld, with costs.
2.	The order of the court a quo is set aside and is substituted with the following:
‘1. The plaintiff’s claims in terms of paragraphs 1 to 6 inclusive, of its Amended Particulars of Claim, are dismissed.
2. The first defendant is ordered to pay to the plaintiff the sum of R266 700.00 together with interest thereon at the rate of 15,5% pa from the date of payment of the deposit to the first defendant, to date of payment.
3. The plaintiff is ordered to pay the costs of the action.’

__________________________
FHD VAN OOSTEN
JUDGE OF THE HIGH COURT

___________________________
P COPPIN
JUDGE OF THE HIGH COURT

__________________________
SE WEINER
JUDGE OF THE HIGH COURT

Counsel for appellants	  	Adv DT v R Du Plessis SC
Appellants’ attorneys 		De Haan Inc

Counsel for respondent		Adv (MS) M Van Nieuwenhuizen
Respondent’s attorneys		Neels Engelbrecht & Partners

Date of hearing			 2 March 2012
Date of judgment			12 April 2012