THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Case No: 52/09

LUC ARTHUR FRANCE CHRETIEN

First Appellant
CAROL ANNE CHRETIEN

Second Appellant

and

LINDA STEWART BELL

Respondent

Neutral citation: Chretien v Bell (52/09) [2009] ZASCA 147 (26 November
2009).

Coram:        NAVSA, NUGENT, PONNAN, MAYA JJA et TSHIQI AJA
Heard:         13 NOVEMBER 2009

Delivered:   26 NOVEMBER 2009

Summary: Alienation of Land – Purchase and Sale Agreement not stipulating
time for payment – contract unenforceable for non-compliance with s 2(1) of
the Alienation of Land Act 68 of 1981.
______________________________________________________________

ORDER
______________________________________________________________

On appeal from: High Court, Durban (Van Zyl J sitting as court of first
instance).

1.
The appeal is upheld with costs.
2.
The order of the court below is set aside and substituted as follows:
3.
The application is dismissed with costs, including the costs of two
counsel.

_____________________________________________________
JUDGMENT
______________________________________________________________

TSHIQI AJA (NAVSA, NUGENT, PONNAN, MAYA JJA concurring):

[1] The issue in this appeal is whether a written purchase and sale
agreement between the appellants and the respondent, is void ab initio for
non-compliance with the provisions of s 2(1) of the Alienation of Land Act 68
of 1981(‘the Act’)

[2] The appellant brought an application to the Durban High Court for an
order declaring the agreement enforceable and an order for the transfer of the
property into her name. Her application was upheld with costs, including the
costs of two counsel and this appeal is brought with leave of the court below.

[3] On 30 March 2005, the appellants, Luc Arthur France and his wife
Carol Anne Chretien, both property developers, entered into a written
purchase and sale agreement with the respondent, Ms Linda Stewart Bell for
the sale of immovable property known as Erf No 374, Ballitoville, South
Ballito, KwaZulu Natal. The agreement was recorded in a pre-printed form
normally utilised by estate agents, containing blank spaces to be completed
by the parties to record specific terms of their agreement.

[4] The agreement contained the details of the parties, a proper
description of the property and set out the purchase price. The effect of the
terms under the heading ‘Method of Payment of Purchase Price’ was that no
deposit was required to be paid, that no loan was required to be obtained by
the purchaser, and that the full price would be paid in cash. This integral part
of the agreement is reproduced hereunder:

The special conditions were inserted in manuscript in Clause M(1) and M(2)
and read :
'1.
The parties have entered into a separate agreement in terms of which the
Seller is obliged to effect improvements on the said property to the value of
R2,800 000,00 (Two Million, Eight Hundred Thousand Rand) and other terms
contained therein. [initialled]
2.
The Purchaser & Seller have mutually agreed that the purchase price
payment details will be agreed upon in writing between the two relevant parties by
not later than the 30/04/2005. This will be a cash payment. [initialled]
Conditions of Contract'

[5] The agreement provided further in Clause 2.3 that ‘ the Purchaser shall
not be entitled to take transfer of the property until the whole of the purchase
price and all other charges for which he is liable have been paid in full or
secured to the satisfaction of the seller'.

[6] As Clause M(1) pertains to a separate agreement already concluded
by the parties in relation to improvements to be effected on the land, the
disputes that arose between the parties concerning that separate agreement
are immaterial for the determination of the validity of the purchase and sale
agreement. M(2) is the controversial clause, because, although it provides
that the parties would conclude an agreement in writing regarding the
purchase price details before 30 April 2005, no such written agreement was
ever concluded.

[7] During July 2005, Ms Bell paid the purchase price in the amount of
R1,3m to the nominated conveyancing attorney together with all costs and

other amounts necessary to effect transfer into her name. The first sign that
the Chretiens no longer wished to continue with the agreement was conveyed
by their attorney to Ms Bell’s attorneys by way of a letter dated 13 June 2006.
Para 3 of the letter states:
'Our counsel has formed the prima facie view that there is no contract between your
client, Mrs Bell and my clients, Mr and Mrs Chretien. The basis for his view is that the
written document signed by our respective clients did not stipulate in writing the
method of payment as is required by legislation. If our counsel is correct, the
purported agreement would be void ab initio.'
This deadlock culminated in the application by Ms Bell to the court below.

[8] Section 2(1) of the Act provides:
'No alienation of land after the commencement of this section shall, subject to the
provisions of section 28, be of any force or effect unless it is contained in a deed of
alienation signed by the parties thereto or by their agents acting on their written
authority.'

[9] The formal legal requirements of a contract of purchase and sale have
been analysed in a number of decisions and were summed up concisely in
Dijkstra v Janowsky:1
'In regard to these requisites certain legal principles have been settled by our Courts:
(i)
The whole contract ─ or at least all the material terms ─ must be reduced to
writing (Johnston v Leal 1980 (3) SA 927 (A) at 937C-G).
(ii)
The Court must be able to ascertain with reasonable certainty the terms of the
contract. As Colman J stated in Burroughs Machines Ltd v Chenille Corporation of
SA (Pty) Ltd 1964 (1) SA 669 (W) in a passage cited with approval in Clements v
Simpson 1971 (3) SA 1 (A) at 7E:
"inelegance, clumsy draftsmanship or loose use of language in a commercial
document purporting to be a contract will not impair its validity as long as one can
find therein, with reasonable certainty, the terms necessary to constitute a valid
contract".
(iii)
There is no valid contract where a material term has not been finally agreed
upon, but is left open for further negotiations (Jammine v Lowrie 1958 (2) SA 430 (T)
and authorities there cited).

1 1985 (3) 560 (C) at 564G-H and 565A.

(iv)
The material terms are not confined to the essentialia of the contract of sale
(Johnston's case supra at 937H).
(v)
The manner of payment is ordinarily a material term (Patel v Adam 1977 (2)
SA 653 (A) at 666A-C).'

[10] In Patel v Adam (supra) the following was said:2
'It has been held by this Court that one of the terms of a contract of sale of land
which has to be in writing is the manner of payment of the purchase price. (Du
Plessis v Van Deventer 1960 (2) SA 544 (AD) at p 551A-B; Neethling v Klopper en
Andere 1967 (4) SA 459 (AD) at p 465B-C.) In the agreement in issue in the present
case clause 3 provides that the purchase price "shall be payable in monthly
instalments free of interest". The clause contains no statement of the amount of the
monthly instalments, and there are no other provisions in the agreement from which
the amount, or the period in which the purchase price has to be paid, can be inferred.
The agreement, it seems clear, leaves it to the purchaser alone to decide what
amount he wishes to pay every month, with the result that a court of law would not be
able to determine the monthly amount to be paid by him. Mr Wulfsohn, for the
plaintiff, relying, inter alia, on what was said in Dawidowits v Van Drimmelen 1913
TPD 672, and Towert v Towert 1956 (1) SA 429 (W), contended that in these
circumstances the agreement should be held to be void for uncertainty. . ..'

[11] There is no doubt that the time within which payment is to be made is a
material term of the agreement. As appears from the agreement itself, the
parties thought it so, and provided for that to be determined and to be reduced
into writing. This, as stated above, did not occur.

[12] It was submitted that because the parties have stipulated that the
payment will be a cash payment, in the absence of further agreement
between the parties, the sellers could not have expected anything better than
cash against transfer of property into the name of the purchaser. Whilst this
submission echoes the position in common law, it cannot be held to apply in
the present matter. It was an express term of the agreement that the purchase
price was required to be paid before the obligation to transfer arose, and
agreement still had to be reached in respect of the time of payment.

2 666A-C.

[13] Counsel for the respondent submitted that the term ‘purchase price
payment details does not refer to the time of payment but rather the manner in
which the cash payment would be made ie bank guaranteed cheque, bank
transfer etc. This argument is flawed because even such  payments are in fact
cash payments. The term therefore clearly referred to the time for payment
which is logically the only outstanding issue and which is clearly a material
term (Patel v Adam supra). Consequently; as the agreement does not
stipulate the time of payment; it does not comply with s 2 (1) of the Act and is
unenforceable.

[14] I accordingly make the following order:
1.
The appeal is upheld with costs.
2.
The order of the court below is set aside and substituted as follows:
3.
The application is dismissed with costs, including the costs of two
counsel.

_______________________
Z L L TSHIQI
ACTING JUDGE OF APPEAL

Appearances:
Counsel for Appellant:
W Singh SC

Instructed by
Legator McKenna Incorporated, Durban
Matsepes Inc, Bloemfontein

Counsel for Respondent: A Horwitz SC

Instructed by
Michael Werner & Associates, Sandton
E G Cooper Majiedt Inc, 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: 26 November 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

L A F CHRETIEN AND ANOTHER v L S BELL

The Supreme Court of Appeal has upheld an appeal and set aside an order declaring a
purchase and sale agreement enforceable.

The agreement provided that the parties would conclude a written agreement regarding the
purchase price payment details at a future date. No such agreement was concluded.

The SCA found that the 'purchase price payment details' referred to the time of payment and
that as the manner of payment is a material term, the agreement was unenforceable for non-
compliance with s 2(1) of the Alienation of Land Act 68 of 1981.

--ends--