THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

NOT
REPORTABLE

Case number:  358/07

In the matter between:

LANCINO FINANCIAL INVESTMENT (PTY) LTD

FIRST APPELLANT
J H HATTINGH

SECOND APPELLANT

and

F J BENNET

FIRST RESPONDENT
MAJESTIC SILVER TRADING 94 (PTY) LTD

SECOND RESPONDENT

CORAM:

HARMS ADP, NUGENT, HEHER, VAN HEERDEN JJA et HURT
AJA

HEARD:

19 MAY 2008

DELIVERED:
30 MAY 2008

Summary:

Pleading – Exception upheld – Almost invariable practice for court to
give pleader opportunity to amend -  Order for costs – Where separate
orders for costs made for separate aspects of the hearing, order must
indicate to taxing master how costs are to be apportioned.

Neutral citation:
Lancino Financial Investments (Pty) Ltd  v F J Bennet (358/2007)
[2008] ZASCA 74 (30 MAY 2008)

_____________________________________________________________________
HURT AJA/

HURT AJA:

[1] The appellants instituted action against the respondents in the High Court of the
High Court Pretoria for an order for specific performance of an executory contract, and in
the alternative, for cancellation of the contract and damages. There was a second
alternative claim based on enrichment. The first respondent excepted to the claims and the
court upheld the exceptions in respect of the main and first alternative claims. An order was
granted in the following terms: -
'1.
That the exceptions in regard to claim 1 and also claim 2 in the alternative are upheld, with costs.
2.
That claim 1 and claim 2 in the alternative are both dismissed with costs.
3.
That the plaintiffs both or jointly or severally, the one paying the other to be absolved, are directed to
pay the aforesaid costs mentioned in order 1 and order 2 herein above, which costs shall include the
costs of senior counsel in both orders.
4.
That the exception in regard to the alternative claim 3 is dismissed with costs, which costs shall
include the costs of senior junior counsel.'
The appellants appeal, with leave of the court a quo, against  the orders in paragraphs 1, 2
and 3. I will refer to the parties by their designations in the court a quo.

[2] The particulars of claim alleged that, in December 2003, the plaintiffs and the first
defendant concluded a contract (described as a 'samewerkingskontrak') concerning, inter
alia, the development of a township on a property (referred to as 'plot 62') owned by the
first defendant. (There were other aspects of co-operation which formed the subject matter
of the agreement, but they are not directly relevant to this judgment.) In regard to this
development, the plaintiffs pleaded that: -
‘7.3
Die Eerste Eiser en die Eerste Verweerder sal saamwerk om Hoewe 62 as 'n dorp te ontwikkel en die
erwe te verkoop, soos volg:
7.3.1
Die Eerste Verweerder sal die Eerste Eiser magtig om aansoek vir dorpstigting op Hoewe 62
te doen.
7.3.2
Die eerste Eiser sal alle kostes en uitgawes wat aan die aansoek om dorpstigting verbonde
is, betaal.
7.3.3
Indien die aansoek om dorpstigting suksesvol sou wees, sal –

(a)
die Eerste Eiser alle handelinge verrig wat nodig is om die dorp op Hoewe 62 te stig;

(b)
Die Eerste Eiser alle kostes wat aan die stigting van die dorp verbonde is, insluitend
die installasie van grootmaat- en interne dienste, betaal; en

(c)
Die betrokke vaste eiendom aan 'n nuwe maatskappy oorgedra word waarvan die
Eerste Eiser en die Eerste Verweerder elkeen 50% van die aandele sal hou, en
waarvan die Tweede Eiser en die Eerste Verweerder die alleen-direkteure sou wees.
7.3.4
Wanneer die dorpstigting voltooi is en die betrokke vaste eiendom in die naam van die
voormelde nuwe maatskappy geregistreer is, sal die erwe waaruit die dorp bestaan deur die
Eerste Eiser bemark word, ooreenkomstig verkoopkontrakte –

(a)
waarkragtens die verkoopprys van elkeen van die erwe aan die gemelde nuwe
maatskappy betaalbaar sou wees; en

(b)
wat voorts aan 'n maatksappy bekend as Sencon 1 (Edms) Bpk die eksklusiewe reg
sal gee om wonings op die erwe op te rig en wins uit die oprigting van die wonings te
maak; en

(c)
waarkragtens die Eerste Eiser geregtig sal wees om die aktevervaardiger wat die
registrasie van transport aan die kopers moet hanteer, te nomineer, en sal toesien
dat sodanige registrasie plaasvind.
7.3.5 Die koopprys wat deur die voormelde nuwe maatskappy aan die Eerste Verweerder betaalbaar
sal wees vir die verkryging van die betrokke vaste eiendom, word bereken as een helfte van die
som van die netto verkoopprys van elke erf aan die uiteindelike kopers daarvan, welke bedrag
deur die nuwe maatskappy aan die Eerste Verweerder afbetaal sal word deur middel van die
betaling van die ooreenstemmende gedeelte by registrasie van transport van die erwe in die
naam van die onderskeie kopers daarvan.
7.3.6 Wanneer die geheel van die bedrag wat aan die Eerste Verweerder betaalbaar is, oorbetaal is,
dra die Eerste Verweerder sy 50% aandeelhouding in die nuwe maatskappy aan die Eerste
Eiser oor, sodat die Eerste Eiser die alleen-aandeelhouer van die nuwe maatskappy word, en
die Eerste Verweerder bedank voorts as direkteur van die nuwe maatskappy. Die nuwe
maatskappy sou dan geen verdere verpligting gehad het nie.'

[3] To complete the relevant picture, it is alleged that the plaintiffs had discharged all
those obligations which had fallen due in terms of the contract up to 6 July 2005. However,
on that date, the first defendant transferred plot 62 to the second defendant pursuant to a
contract of sale. It is alleged that this act constituted a repudiation of the contract by the first
defendant, which the plaintiff is unwilling to accept. The plaintiff accordingly claims an order
for specific performance of the contract and demands that the first defendant be ordered to
perform all acts necessary to allow the first plaintiff to complete the application for approval

of the township development, and, upon the approval being granted, to put plot 62 at the
plaintiffs' disposal to enable the remainder of the contract to be carried out. As an
alternative claim (in the event of the court declining to grant the decree of specific
performance) the plaintiffs claim cancellation of the contract and damages amounting to
approximately R17 million. A large portion of this latter claim comprises damages allegedly
suffered by a company called Sencon (Pty) Ltd (the company referred to in paragraph
7.3.5) which, the plaintiffs allege, has suffered a loss as a result of being deprived of the
opportunity of the building that houses on plot 62. The plaintiffs allege that the second
plaintiff has taken cession of Sencon's claim in this regard.

[4] The first defendant excepted to the particulars of claim on three grounds, viz -
First, the agreement provided for the transfer of plot 62 to the new company for a purchase
price ('koopprys') equivalent to half the ultimate total purchase price of the erven in the
township. It purported, accordingly, to be an oral agreement for the alienation of land which
was invalid for want of compliance with section 2(1) of the Alienation of Land Act 68 of
1981.
Second, the stipulation in paragraph 7.3.4 relating to the securing, for Sencon, of the right
to build houses on the erven was a stipulatio alteri and, in the absence of an averment to
the effect that Sencon had accepted the relevant benefit, it would have acquired no rights
under the agreement and could therefore not have had a claim for damages which it could
cede to the plaintiff.
The third exception, which failed, need not be considered further, save in relation to the
order for costs.

[5] Counsel for the appellants, in his heads of argument, doggedly defended his
pleading against both exceptions. However, almost at the inception of his argument before
us, he conceded that the averments in connection with the terms of the agreement had
been neither accurately nor clearly pleaded. He also conceded that the exception to the
alternative claim for damages had been correctly upheld. In view of these concessions it is
not necessary to decide whether the first two exceptions were properly upheld. Having
made the concessions, counsel for the appellant shifted the thrust of his argument to the

issue of whether the order dismissing the main and alternative claims had been correctly
made. In this he found himself on firmer ground. It is apparent, if only from the plethora of
adjectives with which the pleader found it necessary to introduce paragraph 7, that clarity
has been sacrificed for breadth and, in all probability, so has accuracy. The contract
(assuming that a contract was, indeed, concluded) was plainly a complicated one. It
appears that the creation of a form of partnership was intended and that the first
defendant's contribution was to centre around plot 62. One must accept that more attention
to detail and a careful consideration of precisely how the parties intended to put their
agreement into effect may enable the plaintiffs, through their counsel, to formulate their
claims in clearer terms. Counsel for the first defendant submitted that the plaintiffs had
ample opportunity to amend their particulars of claim before judgment and, having failed to
do so, cannot now seek to rescue their position by amendment. That contention flies in the
face of what this court has referred to as 'the invariable practice' when an exception is
upheld. In Group Five Building Ltd v Government of the Republic of South Africa (Minister
of Public Works and Land Affairs) 1993 (2) SA 593 (A) at pp 602C to 604I, Corbett CJ set
out the reasons for not resorting to the 'drastic remedy' of dismissing a plaintiff's claim in
these circumstances, and in Rowe v Rowe 1997 (4) SA 160 (SCA) at p 167, Hefer JA said :
'. . . it is doubtful whether this established practice brooks of any departure, and . . . in the rare cases in which
a departure may perhaps be permissible, one expects to find the reasons in the Court's judgment.'

No such reasons were given by the judge a quo.

[6] I accordingly consider that the appeal against the upholding of the exceptions should
be dismissed, but that the appeal against the dismissal of the plaintiffs' action should be
upheld.

[7] That leaves only the issues concerning costs. It is necessary to comment on the
orders for costs which the judge a quo made in paragraphs 1, 2 and 4 of his order. Where a
court decides to make separate costs orders in relation to separate aspects of a hearing, it
is incumbent upon the judge, in the order, at least to give the taxing master guidance as to
what proportion of the total time each such aspect occupied, for without that information,

the taxing master will have no basis on which to make his allocation. The costs orders
made in paragraphs 1, 2 and 4 are accordingly defective in this regard. Moreover, it seems
from the judgment that the exception to the second alternative claim based on enrichment
could hardly have occupied a substantial portion of the hearing. In those circumstances, in
any event (considering that the first defendant was plainly the successful party) it is
doubtful whether the learned judge should have exercised his discretion to make a
separate costs order. However, absent a cross-appeal, the costs order cannot be varied in
favour of the respondent. Although the plaintiffs have been successful on appeal in relation
to the dismissal of their claims, in view of the concessions (wisely) made by their counsel
as to the exceptions themselves, I consider that the fairest result would be to make no
order as to the costs of the appeal.

[8] (a)
The appeal is allowed in part with no order as to costs;

(b)
The order of the court a quo is altered by the insertion of §4:

‘4.
The plaintiffs are given leave to amend their particulars of claim, the notice of
intention to amend in terms of Rule 28 to be delivered within 20 days of the
date of this judgment.’

…………………….
N V HURT
ACTING JUDGE OF APPEAL

Concur:
HARMS ADP
NUGENT JA
HEHER JA
VAN HEERDEN JA

THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

Case number:  358/07
In the matter between

LANCINO FINANCIAL INVESTMENT (PTY) LTD
FIRST APPELLANT
J H HATTINGH

SECOND APPELLANT

and

F J BENNET

FIRST RESPONDENT
MAJESTIC SILVER TRADING 94 (PTY) LTD
SECOND RESPONDENT

From: The Registrar, Supreme Court of Appeal
Date: 2008-05-
Status: Immediate

The Supreme Court of Appeal today partly upheld an appeal against a judgment in the
Pretoria High Court in which claims by the plaintiffs, Lancino Financial Investment (Pty) Ltd
and Mr J H Hattingh, had been dismissed on the ground that the claims as pleaded did not
make out a valid cause of action. The SCA upheld the finding that the claims did not make
out a valid cause of action, but set aside their dismissal which, instead, gave the plaintiffs
leave to amend them by no later than 27 June 2008. No order was made as to the costs of
the appeal.