INTRODUCTION AND BACKGROUND
Forum 1 and 2 Panorama Office Estate (Pty) Ltd v Indigold Cellular CC and Others (72355/09) 2015 ZAGGP (10 July 2015) dealt with, to some extent, the same issues that were dealt with by the Supreme Court of Appeal in Spring Forest Trading v Wilberry (725/13) 2014 ZASCA 178 (21 November 2014) (Spring Forest). See my earlier article on my blog on this website.
As a bit of background, these are the material facts:
With regard to the variation of the rental agreement, the court stated (paragraph ) that it did not agree that the e-mails proved variation of the rental agreement as alleged by Indigold and the Pillays. It stated that the words in the e-mail indicated that Indigold and the Pillays were merely giving permission to Swart and Forum to lease or sell the property and nothing more. Swart’s e-mail in response clearly held Indigold and the Pillays compliant with the terms of the rental agreement to pay rentals until a new tenant had been secured. The court said there was no ambiguity or lack of clarity in these e-mails and that they were not an intention of the parties to vary the rental agreement.
Based on this, the court stated that it need not discuss the issue raised by Forum as to the signature on the e-mails.
Counsel for Indigold and the Pillays relied on the names at the bottom of the e-mails as the parties’ signatures in line with Spring Forest, where the SCA held, unambiguously, that the legal requirement that an agreement or its variation be in writing is met in the form of a data message.
The court stated that the general rule is that parties who have signed a written agreement are free to vary or discharge their agreement within the limitations contained in the agreement. At paragraph  it said that “it would be remiss of the courts to permit parties who had entered into contracts with the prescribed formalities to vary such informally”. In the court’s view the Pillays’ signature at the bottom of the e-mails do not constitute signatures nor electronic signatures as contemplated and required in the written agreement and do not comply with the non-variation clause. The court rejected Indigold and the Pillays’ plea that the agreement was varied by the e-mails – there was no written and signed variation of the rental agreement.
COMMENTARY AND ANALYSIS
Without commenting on the conduct of Indigold and the Pillays in this matter, I submit that the court erred on the question of law as to whether the rental agreement was varied in writing and signed by the parties.
The SCA in Spring Forest is quite clear on this issue. Without going into too much detail, the SCA stated that an e-mail meets with the requirements of “in writing”, and the appending of names at the end of an e-mail constitutes “signatures” in terms of a non-variation clause and the Electronic Communications and Transactions Act (25 of 2002). See my earlier article on the Spring Forest judgment and its implications for parties to agreements.
By refusing to consider adequately the Spring Forest judgement, as it pertains to the e-mails already referred to, the court has not kept in line with SCA precedent. Further, the reasons for the courts diversion from the Spring Forest judgement were inadequate in the court’s judgment. No real discussion was entertained by the court in this regard; merely paying lip service by a reference to the SCA precedent.
Perhaps the reason for this is the conduct of Indigold and the Pillays but this is not established in the portion of the judgement dealing with the e-mail variation of the agreement. Possibly the best reason is the content of the e-mails themselves – it does not suggest a variation of the agreement. Or, contrary to the judge’s judgement itself, it was not clear that there was a meeting of the minds leading to a variation of the agreement by virtue of the e-mail exchange. However, Indigold and the Pillays argued that i the exchange did indeed lead to a variation of the terms of the agreement. I believe the court was remiss in not delving deeper into the Spring Forest decision and applying them to the facts in issue.
Whilst I disagree with the judgement on the point of law, we can learn something from this judgement: If you are going to vary an agreement by e-mail, it is best that it be clear from the emails that there is indeed a variation of the original agreement (that there is clear and unequivocal proof of a meeting of the minds leading to the variation of the agreement). When drafting an agreement with a non-variation clause, should the parties not wish the Spring Forest judgement to apply to their agreement, this should be clearly stipulated allowing no question of interpretation of the clause and the import of the Spring Forest and Forum issues.
There is the possibility that this judgement will go on appeal on this point of law. If so this will provide clarity on the state of the law on this issue based on the facts before the court.