THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Case no:  664/07

In the matter between:

WITHOK SMALL FARMS (PTY) LTD

1ST APPELLANT
BOULEIGH 113 (PTY) LTD

2ND  APPELLANT
AUCOR SANDTON (PTY) LTD

3RD APPELLANT

and

AMBER SUNRISE PROPERTIES 5 (PTY) LTD

RESPONDENT

Neutral citation: Withok Small Farms (Pty) Ltd v Amber Sunrise Properties Ltd
(664/07) [2008] ZASCA 131  (21 November 2008)

______________________________________________________________

Coram

SCOTT, LEWIS JJA et GRIESEL AJA
Date of hearing
:
7 NOVEMBER 2008
Date of delivery
:
21 NOVEMBER 2008

Summary: Sale by public auction – 'Agreement and Conditions of Sale'
signed by purchaser – seller given 7 days to 'confirm' sale – not a sale
subject to a condition but an offer to purchase open for 7 days –
'Agreement and Conditions of Sale' making provision for seller to sign
on date to be specified – contract coming into existence when seller
signs – no need for acceptance to be communicated to purchaser.

______________________________________________________________

ORDER

______________________________________________________________

On appeal from: the High Court, Pretoria (RABIE J  sitting  as court of first
instance):

The following order is made:

[A]
The appeal is upheld. The respondent is to pay the costs of appeal of
the first and second appellants and those of the third appellant.

[B]
The order of the court a quo is set aside and the following substituted
in its place:

'(a)
The application is dismissed with costs.
(b)      The counter application is upheld and the following order is made:

The agreement and conditions of sale, signed by the applicant on 13
June 2006 and the first and second respondents on 20 June 2006, in terms of
which the applicant purchased Holdings 380, 381 and 387 Withok Estates
Agricultural Holdings from the first and second respondents respectively, is
declared to be of full force and effect;

The applicant is ordered to furnish the first and second respondents
with a bank guarantee or such other irrevocable guarantee acceptable to the
first and second respondents for the balance of the purchase price within 30
(thirty) days of the granting of this order or alternatively to pay such balance
to the first and second respondents' conveyancers as identified in the
agreement within 30 (thirty) days of the granting of this order, such amount to
be held in trust by the said conveyancers pending transfer of the properties
as provided for in paragraph 3 below;

The first and second respondents are ordered, through their
conveyancers as appointed in the agreement, to effect transfer of the
properties to the applicant upon receipt of payment from the applicant of all
costs and amounts referred to in clauses 9, 10 and 12 of the agreement and
the rendering of a guarantee or alternatively payment as referred to in
paragraph 2 hereinabove;

The applicant is ordered to pay interest a tempore morae to the first
and second respondents on the amount of R3 550 010,00 at a rate of 15,5%
calculated from 20 June 2006 to the date of payment and to pay  any
collection charges on the amounts stipulated herein and in paragraphs 2 and
3 above duly levied by the first and second respondents' conveyancers in
accordance with the applicable guidelines and rules;

The applicant is ordered to pay the costs of this counter application on
a scale as between attorney and client.'

______________________________________________________________

JUDGMENT

SCOTT JA (Lewis JA and Griesel AJA concurring):

[1] The first and second appellants are the registered owners of certain
immovable property situated in Gauteng ('the Withoek properties'). The third
appellant is Aucor Sandton (Pty) Ltd, which carries on business as
auctioneers in Johannesburg. On 13 June 2006 the Withoek properties were
put up for sale at a public auction held by Aucor. The auction was attended by
Dr Mohamed Adam who represented the respondent. His bid for the
properties, being the highest, was accepted by Aucor. At the conclusion of the
auction, Adam signed the 'Agreement and Conditions of Sale' to which the

auction was subject, as did Mr Paul Winterstein on behalf of Aucor. I shall
refer to this document as 'the conditions of sale', as the parties have done,
although strictly speaking the provisions for the most part constitute terms and
not conditions.

[2] Clause 1 reads as follows:
'The Properties shall be provisionally sold to the highest bidder subject to
confirmation of the sale by the Seller within seven (7) days and the highest bidder
shall be bound by his bid for seven (7) days from date of signature of these
conditions by the Purchaser.'
On the morning of 20 June 2006 (being a date within seven days of the date
of the respondent's signature) Mr Marthinus van Rensburg, acting for and on
behalf of the first and second appellants (to whom I shall refer as 'the sellers')
completed the latter's details and confirmed the sale in writing by adding his
signature, as depicted on the final page of the conditions of sale. It is common
cause that the confirmation of the sale was not communicated to the
respondent within the time contemplated in clause 1. It appears that the
respondent did not receive notice of the confirmation until some time early in
July 2006.

[3] The respondent subsequently applied in the High Court, Pretoria, for
an order declaring the agreement to be of no force and effect and for the
repayment of the deposit of R454 290 which it had paid to Aucor, together
with interest and costs. The sellers and Aucor –  the latter had been cited as
the third respondent – opposed the application and contended that
notwithstanding the failure to communicate the confirmation of the sale to the
respondent within the seven-day period, the agreement nonetheless became
of full force and effect on 20 June 2006 when it was confirmed by Van
Rensburg. In addition, the sellers – but not Aucor – brought a counter
application for an order declaring the agreement to be of full force and effect
and for an order directing the respondent to pay the balance of the purchase
price and to take various steps to enable transfer to be given. The matter
came before Rabie J who upheld the respondent's application and dismissed
the counter application, with costs. The appeal is with the leave of the court a

quo.

[4] It was common cause between the parties in this court, as it was in the
court below, that the only issue in dispute was whether the 'confirmation' of
the sale had to be communicated to the respondent within the seven-day
period.

[5] I have previously quoted clause 1 of the conditions of sale. It is
necessary to refer to certain other provisions. Clause 11 requires the
purchaser to pay a deposit and provides further that:
'the Purchaser shall within thirty days after confirmation of these conditions by the
Seller furnish the Seller with a bank guarantee . . . .'
and that:
'In the event of the sale not being confirmed by the Seller, the amount paid by the
Purchaser will be refunded . . . .'
Clause 12 renders the purchaser liable for the auctioneer's commission and
affords the auctioneer:
'the right, on confirmation, to deduct such commission (plus VAT) and costs from the
deposit paid in terms hereof . . . .'
Clause 16 reads:
'In the event of the Seller declining to sign these conditions of sale, he/they shall not
be called upon to furnish reasons therefor.'
Clause 20 reads:
'The highest bidder shall, immediately after the sale, sign these conditions and if the
Purchaser purchases on behalf of a principal, he shall divulge the name of such
principal upon signature hereof at the foot of this agreement. The Seller however,
shall sign the conditions only upon confirmation of the sale.'

[6] It
was
contended
on
behalf
of
the
sellers
and
Aucor, both in this court and the court below, that the conditions of sale,
signed by the respondent and Aucor at the time of the auction, constituted an
agreement of sale subject to a suspensive condition, being the confirmation of
the sale by the sellers, and that the condition was fulfilled immediately upon
the confirmation and without the need for it to be communicated to the
respondent. The contention was rejected by Rabie J who held that no

agreement of sale was concluded at the time of the auction and that the only
consequence of the agreement concluded at that stage was to bind the
respondent to its bid for a period of seven days. The learned judge held that
the reference in the conditions of sale to the 'confirmation' of the sale
accordingly had to be construed as a reference to the acceptance of an offer.
The judge proceeded to examine the provisions of the conditions of sale
(which he construed as being an offer) to determine whether it expressly or
impliedly indicated a mode of acceptance other than that required by common
law, namely that it be communicated to the offeror. He found that there was
insufficient to indicate that the common law rule was not to apply and, as the
sellers' acceptance had not been communicated to the respondent within the
seven-day period, the respondent had to succeed and the counter application
be dismissed.

[7] The document is poorly drafted. It is couched in language suggestive of
a sale subject to a suspensive condition. Thus, clause 1 speaks of the
properties being 'provisionally' sold 'subject to confirmation by the seller'.
There are numerous other references to the sellers being required to 'confirm'
the sale. But as pointed out by this court in Benlou Properties (Pty) Ltd v
Vector Graphics (Pty) Ltd 1993 (1) SA 179 (A) at 186F-J a distinction is drawn
in our law between a pure and a mixed potestative condition. The former is
invalid because its fulfilment depends entirely upon the unfettered will of the
promissor. A typical example, and the one given in the Benlou case, is: 'I will
pay you R500 if I wish to do so'. In the present case, the conditions of sale
reserved to the sellers an unlimited choice whether to sell or not. It gave rise
to no obligation on their part whatsoever and accordingly no agreement of
sale came into existence at the time of the auction.

[8] I interpose that by reason of the provisions of s 3 of the Alienation of
Land Act 68 of 1981 the sale of the properties in the present case was not
required to be in writing and signed by the parties. The mere fact that the
sellers were to sign at some later date would not on that account have
precluded a contract of sale from coming into existence.

[9] In terms of clause 1 of the conditions of sale the respondent bound
itself to keep its bid open for a period of seven days. To that limited extent a
binding contract came into existence. The true nature of that contract was an
option granted by the respondent to the sellers to sell the properties on the
terms and conditions set out in the document. I accordingly agree with the
court a quo that on a proper construction the reference in the conditions of
sale to the confirmation of the sale had to be construed as a reference to the
acceptance of an offer.

[10] I turn now to the question whether the offer was accepted within the
seven-day period. It is a trite principle of the common law that, unless the
contrary is established, a contract comes into being when the acceptance of
the offer is brought to the notice of the offeror. It is also trite that an offeror
may indicate, whether expressly or impliedly, the mode of acceptance by
which a vinculum juris will be created. If there is doubt it will be presumed that
the contract will be completed only when the acceptance of the offer is
communicated to the offeror. See Driftwood Properties (Pty) Ltd v McLean
1971 (3) SA 591 (A) at 597C-G. This was a case in which the court was
similarly concerned with an offer that was open for a limited period. The
contract, which took the form of an offer to purchase, contained a clause that
read:
'7  That this offer is open and binding upon both parties until signature by both parties
on or before the 17th May 1969, failing which it shall lapse if only signed by one
party.'
The unsigned offer was presented to the seller who signed it and thus
became the offeror. The court concluded that although clause 7 was badly
phrased it prescribed the manner in which the contract was to be concluded. It
was accordingly enough that the purchaser had signed before 17 May 1969
and there was no need for that fact to be communicated to the seller.

[11] In each case it will be necessary to consider the terms of the offer to
determine the mode of acceptance required. Where, however, the offer takes
the form of a written contract signed by the offeror, the inference will more
readily arise in the absence of any indication to the contrary that the mode of

acceptance required is no more than the offeree's signature. This is
particularly so where provision is made in the written contract for the offeree
to specify the date on which he or she signs the contract. In Reid v Jeffreys
Bay Property Holdings (Pty) Ltd 1976 (3) SA 134 (C) at 137D-G E M
Grosskopf AJ (as he then was) said the following (my translation):
'However, even when writing is not a formal requirement, written contracts are an
everyday occurrence in the commercial world. The object of reducing a contract to
writing (whether voluntarily or required by statute) is normally to achieve certainty
and to facilitate proof (cf, eg, Woods v Walters, 1921 AD 303, Van Wyk v Rottcher's
Saw Mills (Pty) Ltd 1948 (1) SA 983 (A)). It is presumably for the same reason that
the date and place of signature is normally specified in written contracts. The signing
of a written contract is the usual manner in which parties indicate their agreement to
its terms and certainty as to the place and date of the conclusion of the contract can
be equally as important for the parties to the contract as certainty as to its content.
Consequently it is inherently improbable that any of the parties to such a contract
would intend that the time and place of the conclusion of the contract would be
determined not from the document itself but by way of evidence aliunde.'
I readily endorse the views expressed by the learned judge which accord with
common sense and commercial practicalities. Indeed, if the position were
otherwise, the consequence would be to defeat the very object of reducing the
contract to writing. Quite apart from certainty as to the terms of the contract,
that object in a case such as the present would be to avoid disputes as to the
date upon which the offer was accepted.

[12] I return to the facts of the present case. When Adam signed the
conditions of sale, the final page of that document (which had not yet been
completed and signed by the sellers) would have read:
'I/we
___________________________________________________________________
in my/our capacity as the Seller:

HEREBY  CONFIRM  THIS  SALE  ON  THE  CONDITIONS  AS  HEREIN SET OUT
DATED AT ____________________________ ON THIS ______________  DAY OF
_________________   2006

AS WITNESSES:
1.______________________
2. ______________________

___________________

SELLER
SELLERS TELEPHONE NUMBER: _______________________________
SELLERS FAX NUMBER  ______________________________________ '

Once completed and signed by the sellers, the document would have served
as a recordal of the date and place of the 'confirmation'. This to my mind
constitutes the clearest indication that the mode of acceptance was to be the
signature of the sellers.

[13] Some reliance was placed on the second sentence in clause 20
(quoted in para 5 above) in support of a contrary construction. It reads:
'The Seller, however, shall sign the conditions only upon confirmation of the sale.'
Commenting on the clause, Rabie J said:
'In my view, the proper interpretation of this last sentence of the clause is that it
allows for confirmation of the sale in another manner than by signing the agreement.
In other words that the seller can confirm the sale but once he has done that, he
must sign the agreement.'
Based on this construction of clause 20 the learned judge reasoned that the
sellers' signature could not be equated with the acceptance of the offer; that
the agreement was silent on the manner in which the sellers were to accept
the offer and accordingly the ordinary common law rule that requires the
offeror to be notified of the acceptance had to be applied.

[14] With respect to the judge, I think he reads into the clause what is not
there. The second sentence in clause 20 must be read in context. The first
sentence provides for when the bidder is to sign the conditions of sale,
namely 'immediately after the sale'. The second sentence provides for when
the seller is to sign. It says in effect that he will sign only when he confirms the
sale (ie accepts the offer), not before. The implication is clear: the sale will be
confirmed when he signs. Anyone reading the contract would see that it was
'confirmed' on 20 June 2006 and that is how the parties would have known

the contract would be understood. It is also of some significance that clause
16 deals with the consequences of the seller 'declining to sign these
conditions'. The implication is that failing to sign is the equivalent of failing to
confirm.

[15] It was not in dispute that Van Rensburg signed the conditions of sale
on the morning of 20 June 2006, ie within the seven-day period referred to in
clause 1. It follows that in my view a valid sale came into existence on that
date and that the appeal must succeed.

[16] The following order is made:

[A]
The appeal is upheld. The respondent is to pay the costs of appeal of
the first and second appellants and those of the third appellant.

[B]
The order of the court a quo is set aside and the following substituted
in its place:

'(a) The application is dismissed with costs.
(b)    The counter application is upheld and the following order is made:

The agreement and conditions of sale, signed by the applicant on 13
June 2006 and the first and second respondents on 20 June 2006, in terms of
which the applicant purchased Holdings 380, 381 and 387 Withok Estates
Agricultural Holdings from the first and second respondents respectively, is
declared to be of full force and effect;

The  applicant  is  ordered  to  furnish the first and second respondents
with a bank guarantee or such other irrevocable guarantee acceptable to the
first and second respondents for the balance of the purchase price within 30
(thirty) days of the granting of this order or alternatively to pay such balance
to the first and second respondents' conveyancers as identified in the
agreement within 30 (thirty) days of the granting of this order, such amount to
be held in trust by the said conveyancers pending transfer of the properties

as provided for in paragraph 3 below;

The first and second respondents are ordered, through their
conveyancers as appointed in the agreement, to effect transfer of the
properties to the applicant upon receipt of payment from the applicant of all
costs and amounts referred to in clauses 9, 10 and 12 of the agreement and
the rendering of a guarantee or alternatively payment as referred to in
paragraph 2 hereinabove;

The applicant be ordered to pay interest a tempore morae to the first
and second respondents on the amount of R3 550 010,00 at a rate of 15,5%
calculated from 20 June 2006 to the date of payment and to pay any
collection charges on the amounts stipulated herein and in paragraphs 2 and
3 above duly levied by the first and second respondents' conveyancers in
accordance with the applicable guidelines and rules;

The applicant be ordered to pay the costs of this counter application on
a scale as between attorney and client.'

_________

D G SCOTT

JUDGE OF APPEAL

Appearances:

For First and Second Appellant:
JC Uys
For Third Appellant:

KW Lüderitz

Instructed by:

For 1st and 2nd  Appellant:
Van Rensburg Schoon & Cronjé Inc,
Pretoria

Naudes, Bloemfontein

For 3rd Appellant:

Cyril Ziman Attorneys

c/o Jacobson & Levy, Pretoria

E
G
Cooper
&
Sons
Inc,
Bloemfontein

For Respondent:

F H Terblanche SC

H R Fourie

Instructed by:
Solomon
Nicolson
Attorneys,
Pretoria

Hill McHardy & Herbst Inc,

Bloemfontein
THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

Case no:  664/07

In the matter between:

WITHOK SMALL FARMS (PTY) LTD

1ST APPELLANT
BOULEIGH 113 (PTY) LTD

2ND  APPELLANT
AUCOR SANDTON (PTY) LTD

3RD APPELLANT

and

AMBER SUNRISE PROPERTIES 5 (PTY) LTD
RESPONDENT

From :
The Registrar, Supreme Court of Appeal
Date:
21 November 2008
Status:
Immediate

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

Property owned by the first and second appellants was sold at a public auction to the
respondent. In terms of the conditions of sale the appellants, being the sellers, had seven
days to confirm the sale. The High Court, Pretoria, held that no agreement of sale was
concluded on the date of the auction; all that happened was that the respondent bound itself
to keep its offer open for seen days. The SCA agreed with the High Court on this issue. The
SCA, however, overruled the High Court's decision that a sale would only come into existence
when the sellers' confirmation of the sale was communicated to the respondent. The SCA held
that having regard to the terms of the conditions of sale it was clear that the sale was
confirmed, ie a sale came into existence, the moment the Sellers signed the conditions of sale.

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