THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case No:  650/11
In the matter between:

HANO TRADING CC

Appellant

and

J R 209 INVESTMENTS (PTY) LTD

First Respondent
NEDBANK LIMITED

Second Respondent

Neutral citation Hano Trading CC v J R 209 Investments (Pty) Ltd (650/11)
[2012] ZASCA 127 (21 September 2012)

Coram:
MTHIYANE DP, VAN HEERDEN, MHLANTLA, BOSIELO JJA
AND ERASMUS AJA

Heard:
30 August 2012
Delivered: 21 September 2012

Summary:  Rules of court – rule 6 – non-compliance – filing of further affidavits
– test to be applied – Indulgence – factors to be presented in application for court
to exercise discretion to allow further affidavits. Contract – breach – notice of –
requirements in terms of contract.

_________________________________________________________________
ORDER
__________________________________________________________________
On appeal from: North Gauteng High Court, Pretoria (Tlhapi J sitting as court of
first instance):
The appeal is dismissed with costs.
__________________________________________________________________
JUDGMENT
__________________________________________________________________

ERASMUS AJA (MTHIYANE DP, VAN HEERDEN, MHLANTLA, BOSIELO
JJA concurring):

[1] The issues in this appeal are whether the court a quo should have allowed
the filing of further affidavits, as envisaged in rule 6(5)(e) of the Uniform Rules of
Court, and to whether the first respondent (applicant a quo) was entitled to a
declarator and ancillary relief, to be discussed later in the judgment. For
convenience I shall refer to the first respondent as the respondent in view of the
fact that the second respondent was cited nominally and played no role, either in
the proceedings in the court below or in this appeal.

[2] The respondent brought an application in the court below for a declaratory
order that an agreement entered into between itself and the appellant on 2 June
2009 is valid and binding on the parties thereto. The ancillary relief prayed for
was in relation to the registration of the property in terms of the agreement.

[3] The appellant opposed the matter by filing an answering affidavit together
with supporting documents. The defence raised therein contained a denial that the

agreement between the parties was enforceable, as it had been legally cancelled in
terms of clause 14 of the agreement which reads:
‘14.
Default/Breach
In the event that (sic: of) the Purchaser committing a breach of any of the terms of this
Agreement and failing to remedy such breach within a period of 14 (fourteen) days after receipt
of a written notice from the Seller calling upon the Purchaser to remedy the breach complained
of, then the Seller shall without further notice cancel the Agreement and the Purchaser shall
forfeit all monies paid as a deposit to the Seller, and the Seller shall claim and recover all
damages from the Purchaser.’(My emphasis.)
This clause must be read with clause 12.2:
‘12.2 Any notice given by prepaid registered post in terms of this clause shall be deemed to
have been received by the addressee within 7 (seven) days after the date of posting.’

[4] The appellant attached a letter dated 3 December 2009 addressed to an
entity whose name was not the same as the respondent and to an address that did
not conform with the respondent’s chosen domicilium citandi et executandi in
terms of the agreement. It further denied that the respondent had previously
tendered or had the ability to make payment of the deposit in the manner
prescribed by the agreement, the details of which will be discussed below.

[5] The respondent replied to the answering affidavit and laid a basis, by
referring to common cause facts between the parties, to infer that the averments
made by the appellant were unsustainable. In particular, that there was no proper
compliance with clause 14 of the agreement upon which the appellant could rely
for its insistence that it had cancelled the agreement.

[6] No new issues were raised in the replying affidavit of the respondent, but
the  appellant deemed it necessary to obtain various affidavits and documentation,
most of which were generated after the filing of the respondent’s replying

affidavit.

[7] The appellant filed these documents seemingly with the registrar and placed
them on the court file without leave of the court as envisaged in rule 6(5)(e) of the
rules of court.

[8] The court a quo, per Tlhapi J, ruled these further affidavits inadmissible.
Relying on the evidence contained in the three sets of affidavits, referred to above,
the agreement was ruled to be valid and binding upon the parties.

[9] Rule 6 of the rules of court reads:
‘6
Applications (rules of the court)
(1) Save where proceedings by way of petition are prescribed by law, every application shall be
brought on notice of motion supported by an affidavit as to the facts upon which the applicant
relies for relief.
(2)….
6(5)(d) Any person opposing the grant of an order sought in the notice of motion shall-
(i) ….
(ii) within fifteen days of notifying the applicant of his intention to oppose the application,
deliver his answering affidavit, if any, together with any relevant documents; and
(iii) ….
(e) Within 10 days of the service upon him of the affidavit and documents referred to in sub-
paragraph (ii) of paragraph (d) of subrule (5) the applicant may deliver a replying affidavit. The
court may in its discretion permit the filing of further affidavits.’

[10] A litigant in civil proceedings has the option of approaching a court for
relief on application as opposed to an action. Should a litigant decide to proceed
by way of application, rule 6 of the Uniform Rules of Court applies. This rule sets
out the sequence and timing for the filing of the affidavits by the respective
parties. An advantage inherent to application proceedings, even if opposed, is that

it can lead to a speedy and efficient adjudication and resolution of the disputes
between parties. Unlike actions, in application proceedings the affidavits take the
place not only of the pleadings, but also of the essential evidence which would be
led at a trial. It is accepted that the affidavits are limited to three sets.1 It follows
thus that great care must be taken to fully set out the case of a party on whose
behalf an affidavit is filed. It is therefore not surprising that the rule 6(5)(e)
provides that further affidavits may only be allowed at the discretion of the court.

[11] Rule 6(5)(e) establishes clearly that the filing of further affidavits is only
permitted with the indulgence of the court. A court, as arbiter, has the sole
discretion whether to allow the affidavits or not. A court will only exercise its
discretion in this regard where there is good reason for doing so.

[12] This court stated in James Brown & Hamer (Pty) Ltd (previously named
Gilbert Hamer & Co Ltd) v Simmons NO 1963 (4) SA 656 (A) at 660D-H, that:
‘It is in the interests of the administration of justice that the well-known and well established
general rules regarding the number of sets and the proper sequence of affidavits in motion
proceedings should ordinarily be observed. That is not to say that those general rules must
always be rigidly applied: some flexibility, controlled by the presiding Judge exercising his
discretion in relation to the facts of the case before him, must necessarily also be permitted.
Where, as in the present case, an affidavit is tendered in motion proceedings both late and out of
its ordinary sequence, the party tendering it is seeking, not a right, but an indulgence from the
Court: he must both advance his explanation of why the affidavit is out of time and satisfy the
Court that, although the affidavit is late, it should, having regard to all the circumstances of the
case, nevertheless be received. Attempted definition of the ambit of a discretion is neither easy
nor desirable. In any event, I do not find it necessary to enter upon any recital or evaluation of
the various considerations which have guided Provincial Courts in exercising a discretion to
admit or reject a late tendered affidavit (see e.g. authorities collated in Zarug v Parvathie, 1962

1 Transnet Ltd v Rubenstein 2006 (1) SA 591 (SCA) para 28; Minister of Land Affairs and Agriculture v D & F Wevell Trust & others 2008 (2) SA 184 (A) para 43; MEC for
Health, Gauteng v 3P Consulting (Pty) Ltd 2012 (2) SA 542 (SCA) para 28.

(3) SA 872 (N)). It is sufficient for the purposes of this appeal to say that, on any approach to
the problem, the adequacy or otherwise of the explanation for the late tendering of the affidavit
will always be an important factor in the enquiry.’

[13] It was then later stated by Dlodlo J in Standard Bank of SA Ltd v
Sewpersadh & another 2005 (4) SA 148 (C) at paras 12-13:
‘The applicant is simply not allowed in law to take it upon himself and (to) file an additional
affidavit and put same on record without even serving the other party with the said affidavit. . .

Clearly a litigant who wished to file a further affidavit must make formal application for leave
to do so. It cannot simply slip the affidavit into the Court file (as it appears to have been the case
in the instant matter). I am of the firm view that this affidavit falls to be regarded as pro non
scripto.’

[14] To permit the filing of further affidavits severely prejudices the party who
has to meet a case based on those submissions. Furthermore no reason was placed
before the court a quo for requesting it to exercise a discretion in favour of
allowing the further affidavits. Consequently the court a quo was correct in ruling
that the affidavits were inadmissible.

[15] Having ruled that the court a quo was correct in its finding to disallow the
filing of further affidavits, and the potential evidence contained therein, I now turn
to the relevant facts.

[16] On 2 June 2009, the parties entered into a written agreement whereby the
appellant sold land to the respondent for the amount of R7,5 million. A non-
refundable deposit of R2 million was payable, of which it was recorded that an
amount of R1,25 million had already been  paid and utilised by the appellant. This
amount was paid by a third party, Centurus Pty Ltd, on behalf of the respondent.

[17] In respect of the outstanding R750 000 the agreement read:
‘The balance of the deposit being R750 000,00 (SEVEN HUNDRED AND FIFTY
THOUSAND RAND) payable in cash or bank cheque or bank transfer directly to the Seller or
the Seller’s nominated beneficiary by the Purchaser on 12th June 2009.’ (My emphasis.)

[18] The balance of the purchase price would only become payable on
registration or on 12 June 2014 which was also the agreed date upon which that
the respondent would take full occupation and possession of the property. The
respondent failed to pay the balance (R750 000) of the deposit by the stipulated
date of 12 June 2009. The respondent claimed that this was due to an
administrative oversight.

[19] On 23 October 2009, without any prompting or enquiries from the
appellant, M & T Development (Pty) Ltd drew a cheque for R750 000, payable to
the appellant on behalf of the respondent. The respondent instructed its agent to
facilitate the delivery thereof to the appellant. The agent in turn contacted the
appellant’s attorney, who is the current attorney of record, as well as the firm of
attorneys mandated in the agreement to attend to the transfer of the property.

[20] The response received from the attorney by electronic mail on 29 October
2009 reads:
‘I had the opportunity of meeting Mr James Semoka and Simon Sebyenane in this regard. I
confirm that their instruction are that they are not selling the farm anymore and as such the deed
of sale is null and void.’ (My emphasis.)
It is noteworthy that the two persons mentioned by the attorney are the same
persons mentioned in the agreement as the representatives of the appellant.

[21] The respondent then, on 25 November 2009, tendered payment in the form

of the same cheque directly to the appellant’s attorney. The covering letter from
the respondent’s attorney included a paragraph in the following terms:
‘We understand from our client you refused to accept the above payment by reason of the
AGREEMENT having been cancelled, for want of our client having paid the deposit by
12/06/2009.
Clause 2.3 of the AGREEMENT is not a suspensive clause. You have also failed to invoke the
provisions of clause 14 of the AGREEMENT. As a result, the AGREEMENT remains binding
and our client keeps you bound to the provisions of the AGREEMENT. We require your written
confirmation, within three (3) days from receipt hereof that you keep yourself bound to the
AGREEMENT, in the absence of which we shall approach the High Court for an interdict
against you.’

[22] This letter was met with a prompt response, dated 27 November 2009, from
the same attorney that wrote the e-mail, referred to in para 20 above, to the agent
of the respondent a month before. It reads:
‘We refer to the above matter and confirm receipt of your letter dated 25th instant. Kindly advise
as to whether your client by tendering the cheque, a copy of which you attached to your letter,
was rectifying the breach it has committed.’

[23] As the response from the appellant’s attorney did not address the
cancellation of the agreement it was followed by another letter, dated 3 December
2009, in which the respondent’s attorney again drew the attention of the
appellant’s attorney to clause 14. No response was received to this letter until 1
February 2010, to which I shall revert later. Instead, the appellant’s attorney wrote
a letter dated 3 December 2009 and sent it to JR 29 Investment (Pty) Ltd, which is
not the name of the respondent. This registered item was also despatched to an
address which was incomplete in a material manner as regards the domicilium
citandi et executandi chosen by the respondent in the agreement.

[24] This letter posted on 7 December 2009 reads:
‘We refer to the above matter and advise that you are in breach of your obligations in terms of
the offer to purchase signed by yourself and our client Hano Trading cc.
This letter serves as a notice to you to rectify the breach within 14 days of receipt of this letter
failing which the agreement shall be cancelled without further notice to yourself.’
It is instructive to note that the attorney did not alert his colleague, representing
the respondent, of this correspondence and the respondent did not receive this
letter.

[25] On 1 February 2010 the respondent’s attorney requested the appellant’s
attorney to provide a response to his letter of 3 December 2009. The appellant’s
attorney responded as follows:
‘We refer to the above matter and in particular your even dated letter, wherein you are referring
to your letter dated 3rd December 2009.
In as far as we are [sic: concerned] the letter dated 3rd December 2009 did not require us to
respond as you have indicated certain steps that you were in the process of taking.
We further refer you to our letter which we wrote to you in response to your letter dated 25th
November 2009 in which we requested you to state whether by tendering the cheque your client
was attempting to rectify the breach to which we did not get a response.
Kindly let us hear from you what your client intends doing since it had failed to comply with its
obligations in terms of the offer to purchase that it has signed with our client.
Our client’s instructions is that your client has failed to comply with its obligation in terms of
the agreement and therefore the contract or agreement has been cancelled.’

I pause to note that nothing is said in this letter, which was posted by registered
post on 7 December 2009, about the notice in terms of clause 14, nor is any other
issue raised more particularly the manner and form of the payment.

[26] The respondent then launched the proceedings in the court a quo on 21 May
2010. The appellant replied and in its affidavit it primarily raised three defences,

namely that: (a) the respondent was unable to pay the deposit, (b) the appellant
had served a notice in terms of clause 14 read with clause 12.2 and that the
respondent had failed to remedy the breach; and (c) the tender made by the
respondent was not a valid tender in terms of clause 2.3 of the agreement. Before
this court, the appellant claimed further that the continued repudiation by the
respondent entitled the former’s non-compliance with clause 14 before
cancellation. Not only was the last defence never raised on the papers, but it is
also in direct contradiction to the appellant’s defence that, in sending the letter of
3 December 2009, it provided the respondent with a notice to remedy its breach.

[27] It is common cause that the respondent never tendered the portion of the
deposit in the amount of R750 000 strictly in accordance with the agreement. The
cheque tendered is not one of the three forms of payment described in clause 2.3.
However, and with regard to the conduct of the appellant herein, it is disingenuous
to raise this as a defence at this stage.2

[28] The appellant relies on the fact that an entity other than the respondent drew
the cheque that was tendered; and then infers that the respondent does not have the
ability to perform in terms of the agreement insofar as it relates to the balance of
the deposit. This inference, in my view, is misplaced as the initial amount of
R1,25 million was also not paid by the respondent company but by an entity that
was not necessarily related to the respondent. The identity of the source of the
money was never a term of the agreement and the appellant’s reliance thereon is
clearly misplaced.

[29] Clause 2.3 of the agreement requires the payment to be in one of three
forms, being ‘cash or bank cheque or bank transfer’. The cheque drawn on the

2 Taggart v Green 1991 (4) SA 121 (W); Edengeorge (Pty) Ltd v Chamomu Property Investments (Pty) Ltd 1981 (3) SA 460 (T).

account of M & T Development (Pty) Ltd does not qualify as one of the above.
The question that arises is whether the respondent’s failure to strictly comply with
the mode of payment was a relevant factor warranting the purported cancellation
of the agreement by the appellant.

[30] It is my view that the appellant cannot rely solely on this fact to validly
cancel the agreement for the following reasons:
First, if this amounted to a breach, the provisions of clause 14 had to be followed.
Second, at the time when the appellant’s attorney wrote the e-mail message dated
29 October 2009 to the agent, he could not have been aware that the cheque was
not a’ valid tender’ in terms of the agreement. In fact at that stage he was not even
aware that the balance of the deposit would be paid by a cheque, his view was that
the agreement was ‘null and void’.

[31] I now turn to the appellant’s reliance on compliance with clause 14 of the
agreement. In order for the appellant to succeed in this regard it had to show that it
complied strictly with the peremptory provisions of clause 14. The appellant was
obliged in terms of the said clause to notify the respondent in writing, of the
breach complained of. The appellant further had to prove that the respondent
received such notice. If the notice was despatched by registered post, the appellant
could rely on clause 12.2 as it would deem the respondent to have received the
notice within 7 days of the date of posting.

[32] This presupposes that the notice was sent to the correct address and to the
correct entity. For the purpose of the correct identity and address of the
respondent, clause 12.1 provides that;
‘All notices to be given by either of the parties to the other in terms of this Agreement, shall be
given by prepaid registered post or by telegram or facsimile, or be delivered by hand to:

12.1.1 . . .
12.1.2 The Purchaser:

JR 209 INVESTMENTS (PTY) LTD

GROUND FLOOR, BLOCK 5, PHASE 4

BOARDWALK OFFICE PARK

HAYMEADOW STREET

FAERIE GLEN.’

[33] The notice that the appellant relies on in the instant matter, dated 3
December 2009, was despatched by registered post. Although the proof of
registration does not indicate that it was prepaid, as required in terms of clause 12,
it will be accepted as such for present purposes. As indicated above, the appellant
addressed the notice to JR 29 Investment (Pty) Ltd instead of JR 209 Investments
(Pty) Ltd. The address also did not indicate that it was in ‘Boardwalk Office Park’.
It would appear that the failure to identify Boardwalk Office Park would have
rendered delivery of the notice impossible, as Haymarket Street in Faerie Glen
consists of numerous businesses and office premises. The provision contained in
12.1 of the agreement is peremptory as is evident from its wording, ie if the
information is not in compliance with that stipulated in the agreement, the
deeming provision of 12.2 does not apply.

[34] Moreover on a closer analysis of the notice itself, it is evident that it entirely
fails to indicate, and call on the respondent to remedy, any particular breach
complained of. It thus fails to comply with the requirements of clause 14.

[35] In my view the non-compliance with clause 14 prevents the appellant from
relying on any of the three breaches on which it purported to rely to cancel the
agreement.

[36] The court a quo was therefore correct in declaring the said agreement valid
and binding upon the appellant and the respondent and ordering the appellant to
pay the costs.

[37] Consequently the appeal is dismissed with costs.

_____________________

NC Erasmus

Acting Judge of Appeal

APPEARANCES

For Appellant:

G M Young

Instructed by: Botha Massyn, Thobejane

c/o Malebye Attorneys, Pretoria

Rossouws Attorneys, Bloemfontein

For Respondent:

M C Erasmus SC

Instructed by: A B Lowe

A B Lowe Attorneys, Pretoria

Honey Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal
Date:
21 September 2012
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.

HANO TRADING CC v J R 209 INVESTMENTS (PTY) LTD

The Supreme Court of Appeal (SCA) today held that failure by Hano Trading CC (the
appellant) to give J R 209 Investments (Pty) Ltd (the respondent) written notice of its
breach of the sale agreement between them as required by clause 14 thereof, prevented the
appellant from relying on the breaches on which it had purported to rely to cancel the
agreement. It dismissed an appeal against an order of the North Gauteng High Court,
Pretoria declaring the agreement valid and binding upon the parties.

The parties had entered into an agreement in terms of which the appellant sold land to the
respondent for the amount of R7.5 million. In terms of the agreement, the respondent was
required to pay a non-refundable deposit of R2 million. The respondent had already paid
R1.25 million which the appellant had already used. In terms of the agreement, the
remaining balance of the deposit, namely R750 000, was payable in cash or bank cheque or
bank transfer on 12 June 2009. The respondent failed to pay the balance on the stipulated

date. The appellant then purported to give written notice to the respondent as required by
clause 14. However, this notice was despatched to a wrong party and a wrong address. The
appellant then purportedly cancelled the agreement, which prompted the respondent to seek
an order in the high court declaring the agreement valid and binding between the parties.
After the three sets of affidavits had been filed, the appellant filed further affidavits without
seeking leave of the court to do so. The high court disallowed the further affidavits and
granted the order sought. The SCA further held that the high court had correctly disallowed
the further affidavits and that deviation from the Court Rule 6(5)(e) can only occur in the
discretion of the court on application.

In dismissing the appeal, the SCA held that the high court was correct in making the order
that it had made. In any event, the SCA held, the purported notice entirely failed to indicate,
and call on the respondent to remedy, any particular breach complained of. It therefore
failed to comply with the requirements of clause 14.