Court name
High Court
Case number
2609 of 2011
Title

Hamutenya and Another v Kuvare and Another (2609 of 2011) [2012] NAHC 218 (03 August 2012);

Media neutral citation
[2012] NAHC 218
Coram
Ueitele AJ













CASE NO: I
2609/2011








IN THE HIGH COURT OF NAMIBIA













In the matter between:











LAZARUS NGHIFENGALI
HAMUTENYA
….............................1ST
PLAINTIFF



MAGRIETA SAKARIA
….......................................................2ND
PLAINTIFF








and



JASUVA KUVARE
…..........................................................1ST
DEFENDANT



NATIONAL HOUSING ENTERPRISE
…...............................2ND
DEFENDANT










CORAM:
UEITELE, J










Heard:
12 & 13 JULY 2012


Delivered:
3 AUGUST 2012


___________________________________________________________________


JUDGMENT:


UEITELE,
J.:



A INTRODUCTION AND
BACKGROUND


[1]
In thisaction the plaintiffs, who are married in community of
property to each other, claimspecific performance of a sale agreement
in respect of immovable property situated in Katutura, Windhoek (Erf
15160, Katutura) from the defendant
1.
The property was
and is still not registered in the defendant’s name, it is
still registered in NHE’s name.







[2] I will briefly set out the
background of the case before I go into the issue which this Court is
called upon to determine.







[3] On 30 October 2010 the
plaintiffs learned that first defendant intends to sell a property of
his, which is Erf 15160, Katutura. The plaintiffs engaged the
defendant and after a discussion and viewing of the property they
agreed that they will purchase the property for an amount of N$ 50
000-00. The plaintiffs then paid the defendant an advance amount of
N$5000, 00.






[4]
On 02 November
2010 the plaintiffs paid the amount of N$50 000, 00; (in respect of
the purchase price) into the Trust Account of BD Basson Legal
Practitioners, which amount was for the benefit of the defendant.






[5]
On 3 November 2010 the plaintiffs and the
defendant signed a deed of sale. The deed of sale amongst others
provides that:








  1. The purchase is the amount of
    N$50 000,00 which must be paid as follows:









  1. A deposit of N$10 375,00 was
    to be paid on the date the parties sign the agreement;



  2. The balance of the purchase
    price was to be paid in cash against the registration of the
    property into the names of the plaintiff.










  1. The plaintiffs were liable to
    pay the transfer costs and the balance that was outstanding with the
    National Housing Enterprise (defendant);



  2. The defendant was liable to
    pay for all municipal services and the rates and taxes.








[6]
On 12 July 2011 the first defendant through his legal practitioners
of record, wrote to Sauls & Company Law Chambers informing them
that the defendant is cancelling the deed of sale concluded between
the plaintiffs and him, on the basis that the plaintiffs allegedly
breached the terms of thedeed of sale.






[7]
On 10 August 2011, the plaintiffs’ legal practitioners of
record addressed a letter to the defendant’s legal
practitioners of record denying that their clients (i.e. the
plaintiffs) breached any term of the deed of sale and demanding that
the defendant must comply with the terms of the deed of sale. The
plaintiffs received no response to their demand and on 23 August 2011
they (plaintiffs) issued summons out of this Court in which summons
they claimed specific performance from the defendant. NHE did not
participate in the proceedings.


[8]
The case was set down for trial on 12 and 13 July 2012 and on 12 July
2012 the case was called before me. As I have indicated above, the
plaintiffs are claiming specific performance, in terms of the
agreement signed on 3 November 2010. The defendant is resisting the
plaintiffs claim on the basis that he had cancelled the deed of sale,
as a result of breaches committed by the plaintiffs.






B
ISSUE FOR DECISION


[9]
The issue which I am called upon to decide is a reasonably confined
one, namely whether the plaintiffs breached the agreement thus
entitling the defendant to cancel the agreement.






C
SUMMARY OF THE EVIDENCE


Summary
of plaintiffs’ evidence


[10]
At the hearing of this matter, the plaintiffs testified in support of
their claim and also called Ms Elmarie Thompson. The defendant
testified in his case. I will thus in the next paragraphs summarize
the evidence placed before me.






[11]
The second plaintiff was the first to testify. Her evidence was to
the effect that on 30 October 2010, a person who was employed by the
defendant informed them (first & second plaintiff) that the
defendant wants to sell his property. She then indicated her interest
and they went to view the property. After viewing the property she
indicated that she will wait for her husband (the first plaintiff).
When the first plaintiff arrived home, they discussed the sale and
agreed that they will purchase the property. They then had a
discussion with the defendant and after that discussion, they agreed
that they will purchase the property for an amount of N$50 000, 00
and that they will also pay the balance of the amount (in respect of
the loan taken by defendant) still owing to NHE.She testified that at
that point in time the amount was approximately N$ 14 000-00.






[12]
After they reached the agreement, the defendant indicated that he was
in urgent need of money and requested the plaintiffs to pay him
N$5000, 00. On 30 October 2010, the plaintiffs paid the amount of
N$5000, 00 to the defendant. On 2 November 2010, the plaintiffs
requested thedefendant to accompany them to BD Basson Legal
Practitioners for purposes of finalizing the deed of sale. BD Basson
Legal Practitioners indicated that they were busy renovating their
offices and did also not have a conveyancer in their services and
could thus not help them. The plaintiffs paid the amount of N$50 000,
00 (in respect of the purchase price) into the Trust Account of BD
Basson Legal Practitioners. BD Basson Legal Practitioners then
referred the parties to Sauls Metcalfe Attorneys.






[13]
The parties then went to Sauls Metcalfe Attorneys where the deed of
sale was drafted and explained to them. Second plaintiff testified
and this was confirmed by first plaintiff, that the defendant was
accompanied by a person whom he (defendant) said is his brother’s
son and that person also acted as the interpreter for him. After deed
of sale was explained to them they signed the agreement. After they
signed the agreement, BD Basson Legal Practitioners transferred the
money (i.e. the N$50 000, 00) by means of Electronic Funds Transfer
to Sauls Metcalfe Legal Attorneys.


[14]
On 5 November 2010, the defendant requested that the plaintiffs pay
him an amount of N$5 375, 00. The plaintiffs then instructed Sauls
Metcalfe Attorneys to pay the defendant an amount of N$5 375, 00 for
which amount the defendant received a trust cheque from Sauls
Metcalfe Legal Practitioners.






[15]
On 21 January 2011, the defendant went to Sauls Metcalfe Attorneys
and requested an amount of N$10 000, 00, Sauls Metcalfe Attorneys
then called the first plaintiff, she went there and authorized Sauls
Metcalfe Attorneys to pay the defendant an amount of N$10 000, 00,
but on condition that the N$10 000, 00 would be deducted from the
purchase price once the property is registered in the names of the
plaintiffs. She further testified that on that same day Sauls
Metcalfe Attorneys issued a letter of undertaking to NHE. In the
letter of undertaking, Sauls Metcalfe Attorneys advisedNHE that: “At
the request ofLASARUS AND MAGRIETA HAMUTENYA we
[Sauls Metcalfe
Attorneys] hold at your disposal the sum of N$14 328, 83 (forteen
thousand and three hundred and twenty eight dollars and eighty three
cents) plus ……. which amounts will be payable to you
upon the simultaneous registration of the following transaction:




  1. Registration of a transfer
    from NHE to JASUVA KUVARE of Erf 60 KATUTURA;









  1. Registration of a transfer
    from JASUVA KUVARE to LASARUS AND MAGRIETA HAMUTENYA of ERF 60
    KATUTURA
    .” {My insertions}.







[16]
On 9 June 2011 the defendant again went to Sauls & Company Law
Chambers (the successor of Sauls Metcalfe Attorneys) requesting an
amount of N$7 000, 00. On this occasion Sauls & Company Law
Chambers refused to make any advance payment to the defendant. The
plaintiff was called to the offices of Sauls & Company Law
Chambers and there the defendant pleaded with her for the money. She
called her husband who was at the Hosea Kutako International Airport
at the time. He came and they paid an amount of N$7 000, 00 to the
defendant. The defendant acknowledged receipt of the money and
indicated that the money will be deducted from the purchase price
once the property is registered into the names of the plaintiffs.






[17]
On 24 June 2011 the plaintiffs were informed that the balance of the
loan owed by defendant to NHE was N$16 483, 93. On 27 June 2011 they
paid that amount into the trust account of Sauls & Company Law
Chambers.






[18]
On or about the 9 July 2011, the defendant approached the plaintiffs
and indicated that he wanted more money or that the purchase price be
increased. When the plaintiffs refused to give him more money or to
agree to the increase in the purchase price defendant threatened to
cancel the deed of sale. She further testified that the threat to
cancel the agreement were actually carried out on 12 July 2011, when
the defendant through his legal practitioners of record, wrote to
Sauls & Company Law Chambers (the legal practitioners then
attending to the transfer of the property to the plaintiffs)
informing them that the defendant is cancelling the deed of sale
concluded between the plaintiffs and the first defendant, on the
basis that the plaintiffs allegedly breached the terms of the deed of
sale.






Summary
of defendant’s evidence


[19]
The defendant testified in this own defense and in his evidence he
confirmed that he signed the deed of sale with the plaintiffs on 3
November 2010, he also admitted that he received the amounts of N$5
000, 00, N$5 375, 00, N$10 000, 00 and N$7 000, 00 respectively. He,
however, testified that the plaintiffs failed to pay him the deposit
of N$10 375, 00 upon signing of the deed of sale as envisaged in
paragraph 1.1 of that deed of sale.






[20]
The defendant testified that,during December 2010, he concluded an
oral agreement for occupation of the property by the plaintiffs prior
to it being registered in the plaintiffs’ names. But in
cross-examination, he claimed that the oral agreement was entered
into at the time when they negotiated the sale and purchase of the
property, (which would have been on 30 October 2010), and the money
he received in cash on 30 October 2010, was for the rent. He could
however, in cross-examination, not explain why he would receive
N$5,000.00 for rent on 30 October 2010 when the rental agreement was
only entered into in December 2010.






[21]
The defendant further testified that he has no knowledge of the
payment of 2 November 2010, although he did testify that he and the
Plaintiffs did attend to the offices of BD Basson Legal
Practitionerssoon after they negotiated the sale and purchase of the
immovable property. He also acknowledged accompanying the second
plaintiff to the Bank after they left the offices of BD Basson Legal
Practitioners.






[22]
He further testified that on 12 July 2011, he cancelled the deed of
sale with the plaintiff because the plaintiffs were in breach of the
terms of the deed of sale in that they (the plaintiffs) took
unreasonably long to transfer the property into their names and they
failed to pay the N$10 375,00 deposit as agreed upon. The defendant
further denied that Sauls & Company Law Chambers represented him.
The defendant’s attitude was furthermore simply that he had
cancelled the deed of sale and he thus did not see the necessity of
him being in court in respect of anagreement which was no longer
existing.






D
ANALYSIS OF THE EVIDENCE AND APPLICATION OF THE LAW


[23]
I have indicated above that the issue which I am called upon to
decide is confined and is whether on the evidence before me, the
plaintiffs were in breach of the terms of the deed of sale, entitling
the defendant to cancel the agreement?








[24] The evidence is:





    1. that the parties agreed to
      sell and purchase an immovable property for an amount of N$ 50
      000-00 and the plaintiff had to pay the balance of the loan amount
      outstanding at NHE;



    2. that the parties agreed that
      the purchase price was to be paid in two phases, a deposit of N$10
      375 00 on the date the parties sign the deed of sale and the
      balance on the date the property is registered in the names of the
      plaintiffs;



    3. that the plaintiffs paid the
      defendant N$ 5 000-00 on 30 October 2010 and paid N$ 50 000-00 on
      02 November 2010 (the deed of sale was signed on 03 November
      2010)into the trust account ofBD Basson Legal Practitioners;



    4. that Sauls & Company
      Attorneys issued a guarantee for the purchase price to NHE;



    5. that on the 08th
      June 2011, the first defendant signed a power of attorney
      authorizing Sauls & Company to Attorneys effect transfer of the
      property in to the plaintiff’s names.










[25] The defendant is resisting
the claim for specific performance on the basis that the plaintiff
failed to pay the N$ 10 375-00 deposit as agreed and that the
plaintiffs took too long to transfer the property into their names.








[26] I find the defendant’s
version that plaintiffs breached the terms of the deed of sale, to
beimplausible. I say so for the following reasons: The defendant
acknowledged that the purchase price was N$ 50 000-00 and that on 30
October 2010 he already received an amount of N$ 5 000-00. The
defendant alleges that he was not aware that the plaintiff paid
theamount of N$ 50 000-00 to the trust account of BD Basson Legal
Practitioners., which amount was transferred to Sauls & Company
Attorneys. But on 05 November 2010, two days after the deed of sale
was signed the defendant approached Sauls & Company Attorneys and
requested an advance of N$ 5 375-00 from the purchase price, which he
was paid with consent of the plaintiffs and he also agreed that that
amount be deducted from the purchase price once the property was
registered in the names of the plaintiffs. If he was not aware that
the purchase price was deposited at Sauls & Company Law Chambers
the question is who told him to go to Sauls & Company Law
Chambers and request for an advance on the purchase price? The
inevitable conclusion is that the first defendant was fully aware
that the purchase price was deposited in the trust account of Sauls &
Company Law Chambers. There is thus no merit in the first defendant’s
assertion that the plaintiffs were in breach of clause 1.1 of the
deed of sale.








[27] The second basis on which
the defendant is opposing the plaintiffs’ claim is the
allegation that the plaintiffs took too long to transfer the property
into their names.








[28] It is common cause that
the property was, as on 03 November 2010, when the deed of sale was
signed still registered in the name of NHE. Sections 14(1)(a) and (b)
of the Deeds Registries Act, Act 47 of 1937 (“the Deeds
Registries Act”), in material parts read as follows:



(1) Save as otherwise
provided in this Act or in any other law or as directed by the court-



(a)
transfers of land and cessions of real rights therein
shall
follow the sequence of the successive transactions in pursuance of
which they are made
;



(b)
it
shall not be lawful to depart from any such sequence in recording in
any deeds registry any change in the ownership in such land or of
such real right…”

{My
emphasis}








[29] The effect of section
14(1)(a) & (b) of the Deeds Registries Act, 1937 is that the
property must first be transferred from NHE to the defendant, and
thereafter from the defendant to the plaintiffs. In cross
examination, the first defendant was asked as to what he had done to
take transfer of the property into his name and he gave no answer to
that question. He was also asked whether he had complied with his
obligations to pay for the municipal service and the rates and taxes,
he admitted that he had not done so.








[30] It is the owner of
immovable property who must transfer ownership in the immovable
property to the purchaser. The defendant did not adduce any evidence
to indicate what he has done to transfer the property into the names
of the plaintiffs. The Plaintiffs are not the registered owners of
the property, it is thus impossible for them to transfer the property
in their names, as a non-owner cannot pass transfer onto him- or
herself.








[31] I am accordingly satisfied
that the delay to transfer and registration of the property into the
names of the plaintiffs cannot be blamed on the plaintiffs, but must
be laid squarely at the defendant’s door steps. I furthermore
find that the plaintiffs have complied with all their obligations in
terms of the deed of sale and are the innocent parties.








[32] The defendant’s
attitude was that he has cancelled the agreement and he can thus not
be compelled to perform in respect of an agreement that does not
exist. The question is thus whether there is any justification in the
defendant’s attitude?








[33] Christie2
argues that the termination of
a contract is a process started off by breach or repudiation …
and the choice whether to terminate an agreement or not lies with the
innocent party. In the South African case of
Myers
v Abramson
3
Van Winsen J held that:



As a general rule a
contract cannot be rescinded except by consent of both parties
thereto or by order of a competent Court, on a ground recognized by
law as one on which rescission can be claimed. See Wessels, Contract,
vol. 1, paras. 1991 - 1996, vol. 2, para. 2917; Bacon v Hartshorne,
16 S.C. 230; Delany v Medefindt, 1908 E.D.C. 200 at p. 205. Where one
party to the contract had unjustifiably repudiated it the injured
party has as a general rule, the right to elect to accept the
repudiation - and so by consent to put an end to the contract and sue
for damages, or he is entitled to ignore the repudiation and hold the
other party to the contract and claim specific performance.”








[34] In this matter, I found
that the plaintiffs had duly performed in terms of the agreement. It
is further common cause that the plaintiffs have rejected the
cancellation of the agreement by the defendant.The question which
thus arises is whether the plaintiffs are entitled to specific
performance?








[35] Our law is clear that a
plaintiff is always entitled to claim specific performance subject
only to the Court’s discretion
to
grant or refuse an order of specific performance. See the case of
Farmers’ Cop
Society (Reg) v Berry
4where
Innes J said:



Prima facieevery
party to a binding agreement who is ready to carry out his own
obligation under it has a right to demand from the other party, so
far as it is possible, a performance of his undertaking in terms of
the contract. As remarked by Kotze CJ in
Thompson
v Pullinger
(1984) 1
OR at p 301, ‘the right of a plaintiff to the specific
performance of a contract where the defendant is in a position to do
so is beyond all doubt’. It is true that Courts will exercise a
discretion in determining whether or not decrees of specific
performance will be made. They will not, of course, be issued where
it is impossible for the defendant to comply with them. And there are
many cases in which justice between the parties can be fully and
conveniently done by an award of damages. But that is a different
thing from saying that a defendant who has broken his undertaking has
the option to purge his default by the payment of money. For in the
words of
Storey (Equity
Jurisdiction,
sec
717(a)), ‘it is against conscience that a party should have a
right of election whether he would perform his contract or only pay
damages for the breach of it’. The election is rather with the
injured party, subject to the discretion of the Court.”








[36] Also see the decision5
of this court where Smuts J
quoted with approval
6
and described specific
performance as a:



“…cornerstone of our
law relating to specific performance. Once that is realized, it seems
clear, both logically and as a matter of principle, that any
curtailment of the Court's discretion inevitably entails an erosion
of the plaintiff's right to performance and that there can be no
rule, whether it be flexible or inflexible, as to the way in which
the discretion is to be exercised, which does not affect the
plaintiff's right in some way or another. The degree to which it is
affected depends, of course, on the nature and extent of the rule;
theoretically, I suppose, there may be a rule which regulates the
exercise of the discretion without actually curtailing it but, apart
from the rule that the discretion is to be exercised judicially upon
a consideration of all relevant facts, it is difficult to conceive of
one. Practically speaking it follows that, apart from the rule just
referred to, no rules can be prescribed to regulate the exercise of
the Court's discretion.



This
does not mean that the discretion is in all respects completely
unfettered. It remains, after all, a judicial discretion and from its
very nature arises the requirement that it is not to be exercised
capriciously, nor upon a wrong principle (
Ex
parte Neethling
(supra
at 335)). It is aimed at preventing an injustice - for cases do arise
where justice demands that a plaintiff be denied his right to
performance - and the basic principle thus is that the order which
the Court makes should not produce an unjust result which will be the
case, eg, if, in the particular circumstances, the order will operate
unduly harshly on the defendant.
Another
principle is that the remedy of specific performance should always be
granted or withheld in accordance with legal and public policy

(cf De Wet and Yeats Kontraktereg
en Handelsreg 4th ed at 189). Furthermore, the Court will not decree
specific performance where performance has become impossible. Here a
distinction must be drawn between the case where impossibility
extinguishes the obligation and the case where performance is
impossible but the debtor is still contractually bound. It is only
the latter type of case that is relevant in the present context, for
in the former the creditor clearly has no legal remedy at all.”
{My
emphasis}








CONCLUSION



[37] In the present matter, the
defendant has not advanced any evidence that is impossible to perform
or that an order to perform willresult in undue hardship to it. It
follows that, the plaintiffsare in my view entitled to specific
performance of the deed of sale and that the defendant is obliged to
take all necessary action to provide transfer of the property to the
plaintiffs and that the second defendant is to be ordered to make the
necessary transfer to the first defendant to achieve specific
performance.








[38] As regards cost, I asked
both Mr. Tjombe who appeared on behalf of the plaintiffs and Mr.
Karuiahe who appeared on behalf of the first defendant to address me
on the scale of costs, which I must make in this matter. Mr. Tjombe
submitted arguments in this regard whereas Mr. Karuiahe did not.








[39]
The basic rule is that, except in certain instances where
legislation otherwise provides, all awards of costs are in the
discretion of the court.7.
It is trite that the discretion must be exercised judiciously
with due regard to all relevant considerations. The court's
discretion is a wide, unfettered and equitable one8.








[40] There is also, of course,
the general rule, namely that costs follow the event, that is, the
successful party should be awarded his or her costs. This general
rule applies unless there are special circumstances present. In the
present case, no special circumstances were placed before me. There
is therefore, no reason to depart from this general rule. The
plaintiffsare thus entitled to the costs of this action.








[41] Mr. Tjombe argued that
the first
defendant’s defence to the Plaintiffs’ claim is so bad in
law and on the facts that the Court should exercise its discretion in
favour of a punitive costs order.”
He
referred me to the case of
South
African Bureau of Standards v GGS/AU (Pty) Ltd
9,
where Patel, J stated:








Clearly there must be
grounds for the exercise of the Court’s discretion to award
costs on an attorney and client scale. Some of the factors which have
been held to warrant such an order of costs are: that unnecessary
litigation shows total disregard for the opponent’s rights
(
Ebrahim v
ExcelsiorShopfitters and Furnishers(Pty) Ltd (II)

1946 TPD 226 at 236); that the opponent has been put into unnecessary
trouble and expense by the initiation of an abortive application (In
re Alluvial Creek Ltd
1929 CPD 532 at 535;
Mahomed
Adam (Pty) Ltd v Barrett

1958 (4) SA 507 (T) at 509B-C;
Lemore
v African Mutual Credit Association and another

1961 (1) SA 195 (c) at 199;
Floridar
Construction Co (SWA) (Pty) Ltd v Kries

(
supra
at 878);
ABSA Bank
Ltd(Voklskas Bank Division) v S J du Toit& Sons Earthmovers (Pty)
Ltd
1995 (3) SA 265
(c) at 268D-E); that the application is foredoomed to failure since
it is fatally defective (
Bodemer
v Hechter
(supra
at 245D-F)) or that the litigant’s conduct is objectionable;
unreasonable, unjustifiable or oppressive.








[42] I am of the view that the
defendant’s conduct in this matter is objectionable;
unreasonable, unjustifiable, oppressiveand that it warrants me to
exercise my discretion to award costs on an attorney and own client
scale.








[43] I accordingly make the
following order:








1. The second defendant is
directed to pass transfer of the immovable property
situated in Katutura, Windhoek (being Erf 15160, Katutura)
to
the first defendant. The first defendant is directed to take all
necessary steps within 10 days from this order including paying the
necessary transfer costs to pass transfer of Erf
15160, Katutura
from the second defendant to him
andsimultaneously to pass transfer of the property to the plaintiffs,
and failing compliance herewith, the deputy sheriff is authorized to
take such steps as may be necessary and to sign such documents as may
be necessary to give effect to this order.








2. The second defendant is
directed to take such steps as are necessary to pass transfer to the
first defendant against payment of such transfer costs by the first
defendant and any outstanding balance on the first defendant’s
loan account owing to it [the outstanding loan account must be paid
by the plaintiffs] within 10 days of such payments and failing
compliance herewith, the deputy sheriff is authorized to take such
steps as may be necessary and to sign such documents as may be
necessary to give effect to this order.








3. The first defendant is
directed to pay the costs of this actionon an attorney and own client
scale.


















_____________________________



UEITELE, J


















ON BEHALF OF THE APPELLANT:
Mr.Tjombe



TJOMBE-ELAGO LAW FIRM INC


















ON BEHALF OF THE RESPONDENT:
Mr. Karuaihe



KARUAIHE LEGAL PRACTITIONERS




1I
will in this judgment refer to the immovable property as the
property and for the sake of convenience, to the first defendant as
the defendant and the second defendant simply as “NHE”





2R
H Christie :
The
Law Of Contract In South Africa
5thEd
LexisNexis at page 539





31952
(3) SA 121 (C) at page 123





4192
AD 343 at page 350





5The
unreported judgment of
Willbard Ashipala v
Sonia Nashilongo and Another Thusnelde( High Court Case
NO:
I 3583/2007)
delivered on 28 July 2011.





6From
Benson v SA
Mutual Life Assurance Society
1986(1)
SA 776 (A) at 783-785





7Hailulu
v Anti-Corruption Commission and Others
2011
(1) NR 363 (HC) and
China
State Construction Engineering Corporation (Southern Africa) (Pty)
Ltd v Pro Joinery CC
2007
(2) NR 674





8See
Intercontinental
Exports (Pty) Ltd v Fowles
1999
(2) SA 1045
.





92003
(6) SA 588 (TPD)
at
592B-D