THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Case no:   522/08

In the matter between:

SAYED HOOSEN MIA

Appellant
and
VERIMARK HOLDINGS (PTY) LTD

Respondent

Neutral citation: Mia v Verimark Holdings (Pty) Ltd (522/08) [2009]
ZASCA 99 (18 September 2009)
Coram:
STREICHER,
MLAMBO
and
SNYDERS
JJA
and
GRIESEL and WALLIS AJJA
Heard:
24 August 2009
Delivered: 18 September 2009
Summary: Damages – Non-fulfilment of suspensive condition in
written agreement – Whether the respondent has proved
a claim for damages as contemplated in the agreement.

ORDER

On appeal from: Johannesburg High Court (Moshidi J sitting as court
of first instance).
The following order is made:
1.
The appeal is upheld with costs such costs to include those
consequent upon the employment of two counsel.
2.
The order of the court a quo is altered to read as follows;
‘(a)
On claim 1 judgment is granted in favour of the plaintiff for R13
160 together with interest thereon at the rate of 15,5% per annum from
date of demand, being 24 February 2003, to date of payment.
(b)
Claim 2 is dismissed.
(c)
The defendant is to pay the plaintiff’s costs of suit on the
appropriate magistrates’ court scale from the commencement of the
action until the end of the first day of the trial, such costs to exclude the
costs of making discovery and the costs attendant upon the preparation
and copying of the trial bundle.
(d)
The plaintiff is to pay the defendant’s costs, including the costs of
two counsel, from the second day of the trial until the completion of
proceedings, as well as the costs excluded in paragraph (c).’

JUDGMENT

WALLIS AJA (STREICHER, MLAMBO and SNYDERS JJA
and GRIESEL AJA concurring).

[1] Suspensive conditions are commonly encountered in contracts for
the sale of immovable property. Their legal effect is well settled. The
conclusion of a contract subject to a suspensive condition creates ‘a very
real and definite contractual relationship’ between the parties.1 Pending
fulfilment of the suspensive condition the exigible content of the contract
is suspended.2 On fulfilment of the condition the contract becomes of full
force and effect and enforceable by the parties in accordance with its
terms. No action lies to compel a party to fulfil a suspensive condition. If
it is not fulfilled the contract falls away and no claim for damages flows
from its failure.3 In the absence of a stipulation to the contrary in the
contract itself, the only exception to that is where the one party has
designedly prevented the fulfilment of the condition. In that event, unless
the circumstances show an absence of dolus on the part of that party, the
condition will be deemed to be fulfilled as against that party and a claim
for damages for breach of the contract is possible.4

1 Corondimas v Badat 1946 AD 548 at 551, 558-559; Palm Fifteen (Pty) Limited v Cotton Tail Homes
(Pty) Ltd 1978 (2) SA 872 (A) at 887.
2 Odendaalsrust Municipality v New Nigel Estate Gold Mining Co Ltd 1948 (2) SA 656 (O) at 665-667.
3 Design and Planning Service v Kruger 1974 (1) SA 689 (T) at 695C-F; Jurgens Eiendomsagente v
Share 1990 (4) SA 664 (A) at 674D-675B.
4 Macduff & Co Ltd (in liquidation) v Johannesburg Consolidated Investment Co Ltd 1924 AD 573 at
590-591.

[2] In the present case the parties entered into a contract on 2 July
2002 in terms of which the appellant, Mr Mia, purchased from the
respondent, Verimark Holdings (Pty) Ltd, an immovable property
situated in Sandton on which Verimark’s office premises were situated.
The purchase price was R13,5 million payable against transfer and had to
be secured by the provision of a suitable, unconditional and irrevocable
guarantee within seven days of the conclusion of the agreement. The
contract contained a suspensive condition making it subject to the
guarantee being obtained within seven days failing which it would be
deemed to be of no force and effect. It is common cause that the
guarantee was not furnished by 10 July 2002 and that as a result the
agreement fell away. Verimark does not allege that Mia brought about the
failure of the suspensive condition by any default on his part so no
question of fictional fulfilment arises. Nonetheless Verimark successfully
sued Mia for damages in the amounts of R13 160 and R2 248 964.49 in
the Johannesburg High Court. Leave to appeal having been refused by the
trial court but granted by this Court, Mia now appeals against that
judgment.

[3] The foundation for Verimark’s claim is found in the terms of the
suspensive condition. The material parts of the clause read as follows:
‘7.1
The operation of the whole of this Agreement (except for the obligation of the
Purchaser to timeously obtain fulfilment of the suspensive condition) is suspended
pending the presentation of the guarantee, as contemplated in 3.2, by no later than 7
days after the effective date.
7.2
...
7.3
In the event that the suspensive condition is not timeously fulfilled ... this
Agreement shall from the date referred to in 7.1 ... be deemed to be of no force or
effect provided that the Purchaser shall be liable to the Seller for the costs incurred by

the Seller in respect of the drafting, negotiation and signature of this Agreement and
any other damages suffered by the Seller as a result of such non-fulfilment.’
In terms of the particulars of claim Verimark’s claims were brought under
clause 7.3 as claims in terms of the contractual undertaking contained in
the proviso to that clause. Therefore the claims were couched as
contractual claims, not conventional claims for damages arising from a
breach of contract. The first claim is for the costs amounting to R13 160
in respect of the drafting, negotiating and signature of the agreement.
That claim is now conceded and we are told has been paid together with
interest. Its only relevance for present purposes is therefore in relation to
the costs incurred in pursuing the claim. The appeal concerns the merits
of the second claim. The nature of that claim and the circumstances
giving rise thereto require some explanation.

[4] As mentioned, Verimark’s offices were situated in the building
standing on the property that was the subject of the sale. In addition to
that property it leased warehouse premises in Midrand where it stored the
goods that are its stock in trade. At the time its financial position was not
entirely satisfactory and it decided to consolidate the office and
warehouse in new premises as a measure to save costs and improve its
financial circumstances. The lease of the warehouse was nearing an end
and so the office property was placed on the market, it being the intention
once it had been sold to terminate the warehouse lease and move to new
consolidated premises. Verimark claimed that if Mia had provided the
guarantee as contemplated within the seven day period stipulated in the
agreement it would have been able to pass transfer of the office property
by no later than 31 October 2002 and would have been able to relocate to
new premises on 1 November 2002. Instead, so it alleged, it was only
able to secure new premises in terms of a lease concluded on 20 October

2002 under which new premises were to be constructed for it. This lease
provided for the warehouse portion of the new premises to be available
by 1 May 2003 and the balance on a later date by arrangement with
Verimark. That eventually turned out to be 1 October 2003, the office
property having been sold by public auction in June 2003.

[5] Verimark’s second claim is for the additional costs that it incurred
between 1 November 2002 and 1 May 2003 in the case of the warehouse,
and between 1 November 2002 and 1 October 2003 in the case of the
office premises, in consequence of its inability to move from its old
warehouse and office premises to the proposed new premises. It claims
these costs under the following headings:
(a) R1 525 646.66 being the interest on its bond over the office premises
during the relevant period;
(b) R199 320.20 being the costs of providing security at its office
premises from 1 November 2002 to 30 September 2003;
(c) R253 080.76 being the rates and taxes paid in respect of the office
premises from 1 November 2002 to 30 September 2003;
(d) R114 894.18 being the cost of maintenance for the office premises in
the form of building repairs, plumbing, cleaning and sanitation, pest
control and garden services from 1 November 2002 to 30 September
2003;
(e) R13 485.26 being insurance for the office building from 1 November
2002 to 30 September 2003;
(f) R1 017 409.75 being rental in respect of the warehouse from 1
December 2002 to 30 April 2003;
(g) R167 622.76 being additional rates and taxes in respect of the
warehouse for the same period.
(h) R90 406.14 being the cost of advertising the immovable property for

sale.
In calculating its claim for damages Verimark gives credit for an amount
of R1 132 901.22 as the rental it calculates it saved as a result of not
moving premises earlier. Making this allowance gives the figure of
R2 248 964.49 for which the court below held Mia to be liable to
compensate Verimark.

[6] In its pleadings Verimark based its claim for damages solely on the
provisions of clause 7.3 of the agreement and not on any alleged breach
of contract. The relevant paragraphs in the particulars of claim dealing
with the terms of the contract read as follows:
‘4.7
The provision of the bank guarantee by the Defendant to the Plaintiff would
operate as a suspensive condition.
4.8
…
4.9
In the event of the Defendant failing to deliver the bank guarantee to the
Plaintiff by 9 July 2002, or within the extended period, the agreement would be
deemed to be of no further effect.
4.10
In the event of the agreement becoming of no further force or effect, as a
result of the Defendant failing to deliver the bank guarantee, the Defendant would be
liable to the Plaintiff for the costs incurred by the Plaintiff in respect of the drafting,
negotiation and signature of the agreement, as well as any other damages suffered by
the Plaintiff.’
In pleading the second claim Verimark alleged that there had been a
failure to fulfil the suspensive condition; that the contract became of no
force and effect and that ‘in terms of the written agreement’ Mia was
liable for any damages suffered by Verimark in the event of Mia’s failure
to deliver a bank guarantee timeously. It then formulated its claim in the
fashion already described.

[7] In formulating its claim in this manner Verimark did not challenge

any of the basic principles in relation to suspensive conditions set out in
paragraph 1 of this judgment, but accepted that clause 7.1 was a
conventional suspensive condition the failure of which would not give
rise to any claim for damages. Its claim was accordingly a contractual one
based on the undertaking in clause 7.3. No question of breach of contract
came into the picture. On that basis the outcome of the case would have
depended upon the construction of the words ‘any other damages suffered
by the Seller as a result of such non-fulfilment’ and in particular on the
meaning to be assigned to the word ‘damages’ in clause 7.3. Ascertaining
the meaning of this word would involve a conventional exercise in
contractual interpretation in accordance with well-established rules.5 The
language used by the parties must be considered in its particular context
and in the light of the relevant surrounding circumstances. In general
terms, what needs to be determined is what type of financial loss or
detriment is encompassed by the expression ‘any other damages’.
Expressed more narrowly the question is whether any of the heads of
claim advanced by Verimark fall within that expression.

[8] In arguing its case in this Court Verimark shifted its ground and
contended that the failure by Mia to provide the guarantee timeously
constituted a breach of contract. Its case as now presented can be
summarised as follows. It submits that under clause 3.2 Mia was obliged
to pay the purchase price on transfer and in the interim it was to be
secured by a suitable, unconditional and irrevocable bank guarantee
which was to be delivered to the seller no later than seven days after the
effective date, being the date of signature of the agreement. It says that
the words, ‘except for the obligation of the Purchaser to timeously obtain
fulfilment of the suspensive condition’ in parentheses in clause 7.1, mean

5 Coopers & Lybrand & others v Bryant 1995 (3) SA 761 (A) at 767E - 768E.

that this obligation was untouched by the suspension of the ‘whole of this
Agreement’ in clause 7.1. Accordingly when Mia failed to provide the
guarantee he was in breach of his obligations under the agreement and
liable to pay damages. That liability is recorded in clause 7.3 of the
agreement, but is a liability arising from the alleged breach of contract
rather than one created by the contract itself. It is not dependent upon
notice being given in terms of the breach clause (clause 14) because the
operation of that clause is suspended by clause 7.1. The damages
recoverable as a result are those that would ordinarily be recoverable for a
breach of contract.

[9] Mia disputes this construction of clause 7.1. He contends that the
suspension of the whole of the agreement in clause 7.1 extends to the
obligation to provide the guarantee and that the words in parentheses
apply only to the more limited obligation resting upon him to do all
things necessary and within his power to secure the fulfilment of the
condition. He accordingly disputes the suggestion that the mere failure to
provide the guarantee was a breach of contract, but accepts that as a result
of the contract becoming of no force and effect he is liable in terms of
clause 7.3 to pay the costs incurred in drafting, negotiating and signing
the agreement and any other damages suffered by Verimark as a result of
the non-fulfilment of the suspensive condition. His liability is one arising
by virtue of the contractual stipulation and it is accordingly necessary to
construe the clause in order to determine the meaning to be ascribed to
the word ‘damages’ and hence the scope of his undertaking. He contends
that properly understood the ‘damages’ referred to in clause 7.3 are
restricted to those costs and expenses, if any, incurred by Verimark that
were wasted as a result of the non-fulfilment of the condition and the
agreement lapsing and do not extend to other damages that would

ordinarily flow from a breach of the agreement. If that is incorrect he
contends that the requirements for a successful claim for special damages
are absent and that the evidence does not support these claims. In addition
he challenges the order made by the court below that he pay the costs of
the action on the attorney and client scale.

[10] Assuming it is open to Verimark on these pleadings to contend that
the failure to provide a guarantee, without more, constitutes a breach of a
contractual obligation by Mia, that is clearly relevant to a proper
understanding of the nature of the ‘damages’ referred to in clause 7.3. If
the contention is correct the inevitable conclusion would be that clause
7.3 is referring to damages in the broad sense of whatever damages flow
from that breach of contract calculated on whatever basis may be
permissible. However, even on that basis, Mr Joubert SC, who appeared
for Mia, submitted that Verimark had failed to prove its entitlement to the
damages claimed by it. As in my view that contention is correct, it is
unnecessary to address the issues of construction raised by the parties’
conflicting arguments.

[11] Approaching the matter on the basis that Mia was in breach of a
contractual obligation to provide the guarantee needed to secure payment
of the price, the agreement that in that event the contract would be
regarded as of no force or effect must be treated in the same way as if
Verimark had cancelled the contract as a result of Mia’s breach and
become entitled to claim damages as a result. On Verimark’s contentions
it is entitled to be put in the same position as it would have been in if the
contract had been performed, insofar as that can be done by the payment
of money and without undue hardship to the wrongdoer. Two types of
damages are recoverable on this basis, namely, those that flow naturally

and generally from the kind of breach in question and that the law
regards as a probable result of the breach (usually referred to as general
damages) and those that, although caused by the breach, would ordinarily
be regarded as too remote to be recoverable, but that in the special
circumstances attending the conclusion of the contract, the parties
actually or presumptively contemplated would result from its breach
(usually called special damages).6 Where damages of the latter kind are
claimed the special circumstances, on the basis of which the parties are to
be presumed to have formed their contemplation, must be proved by
evidence in the usual way.7  The contemplation of those circumstances
must be ascertained at the time the contract is concluded.8 At present our
law adheres to the principle that it is not only necessary that the damage
was within the contemplation of the parties, but also that the contract was
concluded on that basis (the ‘convention’ principle), although that may
be the subject of reconsideration on some other appropriate occasion.9

[12] The damages that flow naturally from the failure of a contract of
purchase and sale are ordinarily calculated as the adverse difference
between the nett price that would have been paid under the failed
transaction and the market value of the property at the time for
performance.10 In many cases the calculation will be based on the nett
price actually achieved on resale provided there is no reason to think that
market circumstances have materially altered in the interim.11 Those are
the damages that a purchaser would reasonably anticipate as flowing

6 Holmdene Brickworks (Pty) Ltd v Roberts Construction Co Ltd 1977 (3) SA 670 (A) at 687C-F.
7 Shatz Investments (Pty) Ltd v Kalovyrnas 1976 (2) SA 545 (A) at 552A-B.
8 Shatz Investments at 551D-H.
9Shatz Investments at 552A-554F. The controversy remains unresolved. Thoroughbred Breeders'
Association v Price Waterhouse 2001 (4) SA 551 (SCA) para 47.
10 Novick v Benjamin 1972 (2) SA 842 (A) at 860B-D; Katzenellenbogen Ltd v Mullin 1977 (4) SA 855
(A) at 879H-880B.
11 Culverwell & another v Brown 1990 (1) SA 7 (A) at 30I-31F.

from a default in paying the purchase price and a subsequent
cancellation. As damages will probably flow from a particular breach if
the party in default would have anticipated their occurrence as a realistic
possibility in the circumstances,12 are any of the heads of damages
claimed by Verimark in this category?

[13] The only items that it was suggested in argument fall under this
head were the interest on the mortgage over the office property and the
additional costs of security guards, rates and taxes, maintenance and
insurance in respect of that property. In my view these do not flow
naturally from the failure to bring about the fulfilment of the suspensive
condition. Had the condition been fulfilled then in due course Verimark
would have received the purchase price less estate agent’s commission. If
the property had been sold for less than the agreed price, after taking
account of additional sale costs such as the advertising costs in relation to
the auction ultimately conducted, there would have been a loss suffered.
If Verimark had changed its mind about moving to new premises and
remained in its old offices then it could have claimed the difference
between the price offered by Mia and the market value of the property.
That was foreseeable and a reasonable possibility in all the
circumstances. However that is not the basis of the claim because
Verimark in fact sold the building the following year for more than the
price offered by Mia, even after taking account of the additional
advertising costs.

[14] The expense items referred to above stand on an entirely different
footing. If the sale had proceeded they would have ceased in respect of
this building but would have been incurred or replaced by equivalent

12 Thoroughbred Breeders para 49.

expenses in premises elsewhere, or the rental in respect of new premises
would have taken account of such expenses. Neither Verimark nor Mia
could foresee what would happen in this regard. Much would depend on
how quickly a new purchaser would be found. That in turn would depend
upon the state of the property market. If a new purchaser were found
fairly quickly then Verimark would move to new premises. Whether it
would need to incur similar expenses in new premises would depend on
the terms on which it occupied those premises. The costs incurred would
depend on whether these were more luxurious or more Spartan than the
existing offices. If it was compelled to stay in the existing premises for a
period the expenses would continue to be incurred but Verimark would
obtain benefits from them in the form of security, maintenance of the
property, insurance cover and the payment of interest on its bond rather
than rental. The expenses would maintain the value of its asset and
thereby contribute to its obtaining the higher price that was obtained
when it was sold the following year. No doubt the costs incurred would
have been deductible as expenses in the production of income for income
tax purposes and the VAT payable would have been deducted as an input
credit. No-one in the position of Mia could have any insight into these
matters of internal administration of Verimark’s business much less
foresee as a realistic possibility that if he failed to provide the guarantee
Verimark would suffer loss in relation to them. All in all the situation is
far too beset with uncertainty for it to be said that these were costs that
were foreseeable as a realistic possibility flowing naturally from the
failure to provide a guarantee for payment of the purchase price.

[15] I turn then to consider the claim on the basis that it is recoverable
as special damages. In order to assess that claim it is necessary to have
regard to the special circumstances on which Verimark relied in

advancing this claim as it is those circumstances that must be proved in
order to advance the claim at all. The special circumstances on which
Verimark relied as set out in its pleadings were limited to ‘the
Defendant’s knowledge of the Plaintiff’s intention to vacate the
immovable property and occupy alternative business and warehouse
premises’. No allegations were made in regard to knowledge of
Verimark’s desire to reduce costs nor were any details alleged in regard
to the nature or location of the proposed new premises and the basis upon
which the move to such premises would result in a cost saving. It is
unclear in those circumstances on what basis Verimark then contended
that the damages it was claiming were within the contemplation of the
parties at the time of entering into the written agreement, but it is
unnecessary to go into this as there is a prior insurmountable difficulty
with its case.

[16] The claim advanced on the basis of special damages founders
because the evidence does not support even the limited pleaded
proposition on which it is based. Britz, who was the principal witness for
Verimark in this regard, said that Blair, the agent acting for Verimark in
looking for a purchaser, knew of its plans in regard to selling the office
premises and consolidating new office premises with new warehouse
facilities. However Blair was Verimark’s agent and his knowledge could
not be attributed to Mia. The fact that at the same time he was also
employed by Mia to find a tenant for the building that he was buying
from Verimark cannot alter this. It certainly forms no basis for the
submission advanced to us that Blair must have told Mia about
Verimark’s plans. That is pure speculation. As regards the knowledge of
Mia there is no evidence that he was aware of Verimark’s plans. Britz
merely testified to some limited and irrelevant conversations when Mia

visited the premises. It was suggested that the absence of evidence could
be overcome by drawing an inference against Mia from his failure to
testify, but the cases are clear that such an inference can only be drawn
when there is at least some evidence that prima facie supports the
proposition sought to be proved.13 Here the evidence provided no basis at
all for attributing to Mia knowledge of Verimark’s plans so that his
failure to give evidence is a neutral factor.

[17] Even if the claim for special damages is limited to the additional
costs in respect of the office premises the same problems of lack of
knowledge and absence of foreseeability confront Verimark. Not only
was Mia not made aware of the existence of the warehouse and the plan
to consolidate it with the office, he did not know that Verimark was
disposing of the office premises in order to cut its costs by reducing its
overheads. As was put to its counsel in argument, Mia did not know if
Verimark intended to move to Pofadder or to more palatial premises in
Sandton. He could not then have known the underlying facts on which
the claim is based and could not have foreseen that Verimark would
suffer the damages it now seeks to recover as a result of the failure to
provide the guarantee for the purchase price.

[18] What is more, a claim for special damages requires that, in the light
of the relevant special circumstances, the damages claimed must have
been in the contemplation of the parties when the contract was
concluded. However, when Verimark’s attorneys formulated its claim in
correspondence, in letters dated 14 February 2003 and 4 August 2003,
(the latter after the property had been sold) they did so on a wholly

13 Titus v Shield Insurance Co Ltd 1980 (3) SA 119 (A) at 133D-134B; Raliphaswa v Mugivhi & others
2008 (4) SA 154 (SCA) para 15.

different basis to that advanced at the trial. The letters contain no
suggestion that the contract had been concluded in the light of knowledge
of special circumstances or that the damages now claimed (which were
not the damages claimed in the letters) were foreseeable when the
contract was concluded. As knowledge of the special circumstances on
which Verimark relies in support of its claim for special damages is
crucial to establish foreseeability, which in turn is necessary for them to
be in the contemplation of the parties when they contracted, the letters
are a clear indication that the parties did not have the requisite knowledge
or foresight.

[19] For those reasons the appeal must succeed and the judgment in
favour of Verimark be set aside. In the court below an order for attorney
and client costs was made against Mia. In arguing the appeal Mr du
Toit SC submitted that if the appeal succeeded that success should not
carry with it an order for costs in favour of Mia and similarly no order for
costs should be made in Mia’s favour in respect of the trial. He based this
on allegations of dishonesty that he founded on amendments made to
Mia’s plea, the late abandonment of the defence of rectification and
Mia’s failure to give evidence. He added in regard to the appeal that Mia
had falsely stated in his application for leave to appeal that he had been
refused a loan whereas this was not true.

[20] It is correct that Mia amended his pleadings several times and
abandoned certain defences, but the same point can be made against
Verimark. The claim it formulated in correspondence prior to
commencing proceedings and its initially pleaded claim were
significantly different from the claim finally advanced. It is not possible
for us to discern whether these changes of stance were, as suggested to us

by Mr Joubert SC, a result of counsel’s advice as to the law and the
proper conduct of the case or for some other reason. They do not appear
to have prolonged the proceedings unnecessarily or resulted in a
significant waste of costs. In making its order the trial court should have
borne in mind, as I do, the words of Trollip JA in the Shatz Invesments
case14 that:
‘But generally, in regard to that complaint and others by plaintiff about the manner in
which the trial was conducted on defendant's behalf, one should bear in mind that
usually a wide latitude should be afforded a defendant in presenting his defence,
especially when he is confronted with a substantial claim for damages. In such a case,
I think, the defendant is usually entitled
'to put his back against the wall and to fight from any available point of advantage'
(cf KEKEWICH J in Blank v Footman, Pretty & Co 39 Ch D 678 at p. 685, quoted
with approval in Nel v Nel 1943 AD 280 at p. 288).’

[21] As regards Mia’s failure to give evidence, if there was, as I have
found, no case for him to meet there was no reason for him to do so and
no criticism can be addressed against him for not doing so. That leaves
only the point about the falsehood in the application for leave to appeal.
That cannot affect the costs of the trial and did not affect either the grant
of leave to appeal or the outcome of the appeal. Whilst it is deprecated it
does not warrant an adverse order for costs.

[22] The appeal therefore succeeds with costs including those of two
counsel. However, in regard to the costs in the court below it must be
borne in mind that the claim to recover the costs of negotiating, drafting
and signing the sale agreement was resisted to the end although no part of
the trial was spent on it. Verimark is entitled to some costs in regard to its
successful pursuit of that claim. Mr Joubert SC suggested that the

14 At 560D-F.

appropriate order would be one in which the first claim was upheld with
costs on the appropriate Magistrates’ Court scale and the second claim
should be dismissed with costs including those of two counsel. However
that may create unnecessary complexity in taxing the rival bills of costs.
It seems to me preferable for Verimark to have its costs on the
appropriate magistrates’ court tariff up to the first day of the trial and for
Mia to have his costs thereafter including the costs of two counsel. An
adjustment is made in respect of the costs of discovery and the
preparation of the trial bundle as these costs related almost exclusively to
the second claim.

[23] In the result the following order is made:

(a)
The appeal is upheld with costs such costs to include those
consequent upon the employment of two counsel.

(b)
The order of the court a quo is altered to read as follows:
‘(i)  On claim 1 there will be judgment for the plaintiff for R13 160
together with interest thereon at the rate of 15,5% per annum from date of
demand, being 24 February 2003, to date of payment.

(ii)
Claim 2 is dismissed.

(iii) The defendant is to pay the plaintiff’s costs of suit on the
appropriate magistrates’ court scale from the commencement of the
action until the end of the first day of the trial such costs to exclude the
costs of making discovery and the costs attendant upon the preparation
and copying of the trial bundle.

(iv)
The plaintiff is to pay the defendant’s costs, including the costs of
two counsel, from the second day of the trial until the completion of
proceedings, as well as the costs excluded in paragraph (c).’

M J D WALLIS
ACTING JUDGE OF APPEAL

APPEARANCES

FOR APPELLANT:
A P JOUBERT SC (with him D H WIJNBEEK)
the heads of argument having been prepared by
A P JOUBERT SC (with him M M SMIT).
Instructed by
Melamed
&
Hurwitz
Inc,
Johannesburg
Rosendorff, Reitz and Barry, Bloemfontein

FOR RESPONDENT:
S DU TOIT SC (with him G NEL).
Instructed by
Bell, Dewar and Hall Inc, Johannesburg
Webbers, Bloemfontein.
Supreme Court of Appeal of South Africa

MEDIA SUMMARY– JUDGMENT DELIVERED IN THE SUPREME COURT OF
APPEAL

From:   The Registrar, Supreme Court of Appeal

Date:  Friday 18 September 2009

Status:  Immediate

Please note that the media summary is intended for the benefit of the media and does
not form part of the judgment of the Supreme Court of Appeal.

SAYED HOOSEN MIA v VERIMARK HOLDINGS (PTY) LTD

In a judgment delivered today the Supreme Court of Appeal upheld an appeal
against a judgment of the Johannesburg High Court awarding damages of
R2 248 964.49 to Verimark consequent upon the failure of an agreement of purchase
and sale of immovable property due to the non-fulfilment of a suspensive condition.
On 2 July 2002 the parties entered into an agreement in terms of which the
appellant, Mr Mia, purchased from Verimark, an immovable property situated in
Sandton on which Verimark’s office premises were situated. The purchase price was
R13,5 million payable against transfer and had to be secured by the provision of a
suitable, unconditional and irrevocable guarantee within seven days of the conclusion
of the agreement. The contract contained a suspensive condition making it subject to
the guarantee being obtained within seven days failing which it would be deemed to
be of no force and effect. The guarantee was not furnished by 10 July 2002 and as a
result the agreement fell away.
Verimark claimed damages in terms of a clause in the agreement dealing with
the consequences of non-fulfilment of the suspensive condition. It had succeeded in
selling the property at an enhanced price nearly a year later and accordingly it had not
suffered a loss on resale. Instead it claimed as special damages the costs of preparing
the agreement and the costs it had incurred in continuing to occupy for a further
period both the office premises and a warehouse that it had intended to consolidate
with its offices in a new building. The Court held that there was no evidence that Mr
Mia was aware of Verimark’s plans so that the damages claimed were not foreseeable
or recoverable. In the result the only damages that Verimark was entitled to were the

costs of preparing the agreement, which had been paid prior to the appeal.
Accordingly the judgment of the Johannesburg High Court was set aside subject to an
appropriate order of costs.