In a recent decision, the Supreme Court of Appeal shed light on the importance of adhering to contractual formalities in property transactions, particularly regarding suspensive conditions. The case, Christopher Charles Hughes v Nicolas Gargassoulas, Cindy-Ann Oosthuizen & Pam Golding Properties 2024 SCA (12 April 2024), centred on a dispute over whether a purchaser effectively waived a suspensive condition, leading to the sale’s completion, or if the contract lapsed, warranting the reimbursement of the purchaser’s deposit.


Background and Facts:

Mr. Green engaged estate agents to find a property for his daughter, Ms. Oosthuizen, and her partner, Mr. Gargassoulas. Subsequently, Mr. Green purchased a property in Hout Bay from Mr. Hughes for R4,950,000, with a R1 million deposit paid into the agency’s trust account. The offer to purchase (OTP) was contingent upon the purchaser securing bond approval by a specified date, subject to a 14-day extension.

Amidst the transaction, an email purportedly indicating the purchaser’s intention to pay the full purchase price in cash was circulated. However, due to unforeseen circumstances, including the COVID-19 lockdown, the transaction was delayed. Eventually, the daughter occupied the property prematurely, but the deal unravelled when renovation plans revealed discrepancies in approved building plans. Subsequently, the daughter vacated the property, seeking reimbursement of the deposit.


Legal Analysis and Ruling:

The central contention revolved around whether the email communication constituted a valid waiver of the suspensive condition. The court emphasized the significance of adhering to contractual requirements, highlighting that the secretary’s email did not constitute a legally binding waiver. Not only was the secretary unauthorised to waive the purchaser’s rights, but the purported waiver also failed to meet the contractual formalities, necessitating written agreement by both parties. Consequently, the court ruled that the contract lapsed as of the specified deadline, rendering it null and void, and ordered the full reimbursement of the purchaser’s deposit.


Conclusion and Implications:

The ruling underscores the critical importance of meticulous adherence to contractual terms and formalities in property transactions. Despite subsequent actions suggesting a willingness to proceed, the court maintained a strict interpretation of the contract, affirming the principle that waivers and modifications must be formalised in writing and signed by all concerned parties.

This decision serves as a cautionary tale for stakeholders involved in property transactions, emphasising the necessity of clear communication and compliance with contractual requirements. Moving forward, it is imperative for parties to ensure that any alterations or waivers to agreements are documented through formal addendums or waivers, signed by all relevant parties, to avoid ambiguity and potential legal disputes.

In essence, the case underscores the old adage: “The devil is in the details,” emphasising the importance of meticulous attention to contractual formalities to safeguard the interests of all parties involved in property transactions.