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[2021] ZAWCHC 4
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Steenkamp N.O and Others v Mirage Catamaran (Pty) Limited and Others (12354/2020; AC28/2017) [2021] ZAWCHC 4 (20 January 2021)
THE REPUBLIC OF
SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
(Exercising
its admiralty jurisdiction)
Case
No: 12354/2020
Case No:
AC28/2017
In
the matter between:
JURGENS
JOHANNES STEENKAMP N.O.
First
Applicant
GARY
DONOVAN WALLACE
N.O.
Second Applicant
LOUISE
GROENEWALD
N.O. Third
Applicant
SIYABONGA SAMUEL
MOHLOMI N.O. Fourth
Applicant
[in their capacities
as joint liquidators of Matrix
Yachts
(Pty) Limited (in liquidation)]
and
MIRAGE CATAMARAN
(PTY) LIMITED First
Respondent
(Registration
number: 2016/001323/07)
MARK
WEHRLEY Second
Respondent
THE
MASTER Third
Respondent
Coram:
Bozalek J
Heard: 17
November 2020
Delivered:
20 January 2021
JUDGMENT
BOZALEK
J
[1]
This matter commenced as
an urgent application which first came before Court on 23 September
2020 and thereafter before me for hearing
on the semi-urgent roll on
17 November 2020. The Court exercises its Admiralty jurisdiction
since the subject matter of the dispute
is a catamaran yacht, SY
‘
Mirage’
(‘the yacht’).
[2]
The applicants are the
joint liquidators of Matrix Yachts (Pty) Ltd (in liquidation)
(‘Matrix’) whilst the first respondent
is Mirage
Catamaran (Pty) Ltd and the second respondent is Mark Wehrley. The
central dispute in this application concerns ownership
of the yacht
which was initially manufactured for the second respondent by Matrix.
[3]
The application is the
most recent chapter in a long running legal saga arising out of a
bitter family dispute. Second respondent’s
father and
step-mother, Peter and Fiona Wehrley (‘the Wehrley’s),
founded Matrix. Each held a 25% shareholding therein
whilst a company
which they controlled held a 40% shareholding and second respondent
held the remaining 10%. Matrix carried on
business for some years as
a builder of luxury catamaran sailing vessels. First respondent is a
company formed by second respondent
and his partner in December 2015.
[4]
In early 2015 Matrix
commenced building the yacht pursuant to an agreement between Matrix
and second respondent, the terms of which
were later disputed, to be
used as a charter boat operating day charters and day trips from the
Victoria and Alfred Waterfront.
The yacht was completed and launched
in December 2015 and second respondent began conducting the envisaged
charter business. The
relationship between second respondent and the
Wehrley’s appears to have become strained over the ensuing year
or two arising
out of differences relating to the expense of building
the yacht, control over it and the disposition of the proceeds of the
charter
business.
[5]
In July 2017 second
respondent instituted an action against Matrix and the Wehrley’s
for an order confirming that he was the
lawful holder of the rights,
title and interest in the yacht. The following month the Wehrley’s,
through Matrix, launched
a spoliation application against first and
second respondents in order to regain possession of the yacht. The
application was opposed
but in September 2017 Meer J granted an order
awarding Matrix temporary possession of the yacht pending the
determination of second
respondent’s action. Importantly for
the purposes of the present application, second respondent was also
interdicted and
restrained from receiving income from the yacht’s
charter business. At the same time the Court granted second
respondent’s
counter application interdicting and restraining
Matrix from taking any steps to sell or dispose of the yacht pending
the outcome
of his action.
[6]
The parties then agreed to
refer the issues in second respondent’s action to arbitration
before Advocate Mitchell SC. It was
further agreed that the following
issue would be separated out and heard first, namely, ‘
Was
a contract concluded between the parties as alleged by the plaintiffs
and, if so, what are the terms of that contract?’
.
It was also agreed that the remaining issues would stand over for
later determination by the arbitrator, to be concluded within
two
months of the final determination of the separated issue.
[7]
After an arbitration
lasting some three weeks the arbitrator handed down an award
confirming the conclusion of an oral agreement
between Matrix and
second respondent. He did so in the following terms:
‘
[85]
I conclude therefore that a valid contract was entered into between
Mark and Matrix on 13 March 2015. The terms
of the contract were as
follows:
(a)
Matrix agreed to
manufacture a Mirage 760 sailing catamaran for Mark;
(b)
Mark would use the
vessel to conduct a charter business for his own account at the
Victoria & Alfred Waterfront, Cape Town;
(c)
the costs incurred
by Matrix in manufacturing the vessel would be paid to it by Mark by
applying all of the profit earned from the
charter business until
Matrix’s costs had been paid in full;
(d)
ownership of the
vessel would remain vested in Matrix until full payment of the costs
had been effected, whereupon ownership would
pass to Mark’.
[8]
Some two months later and
before the remaining issues could be arbitrated the Wehrley’s
brought an application to liquidate
Matrix pursuant to which it was
finally liquidated on 25 October 2019. Thereafter the applicants were
finally appointed as its
liquidators on 28 April 2020.
[9]
In his founding affidavit
in the liquidation application Mr Peter Wehrley confirmed that second
respondent was entitled to ‘
acquire
the ownership of the yacht upon full payment of the manufacturing
costs and that as a consequence of that claim Matrix was
unable to
sell or otherwise encumber the vessel’
.
In November 2019 second respondent gave notice to the applicants in
terms of sec 359(2)(a) of the Companies Act that he intended
to
continue proceeding either by way of litigation or arbitration to
adjudicate the remaining issues set out in the arbitration
agreement.
[10]
On 31 July 2020 and at the
instance of the applicants this Court granted an order granting an
extension to the powers of the liquidators,
inter
alia
to abandon
uncompleted contracts and dispose of the assets of the company by
public auction or private treaty. In regard to the
remaining issues
the liquidators addressed a letter to second respondent on 4 August
2020 advising that they had considered the
question of where
ownership in the yacht vested as at date of liquidation and, although
the disputes in respect of the construction
costs of the yacht and
the profits of the charter business remained, they were satisfied
‘
upon
consideration of the information available’
that at such stage ownership in the yacht had vested in Matrix. They
further advised second respondent that they would not abide
the
agreement which the arbitrator had found to have been established,
that they would now proceed to sell the yacht for the benefit
of all
creditors and they invited second respondent to lodge a claim against
Matrix (in liquidation) for any loss he might suffer
as a result of
the liquidators not abiding by the agreement and selling the yacht.
[11]
Second respondent’s
attorney responded to the liquidators by pointing out
inter
alia
that the interim
interdict granted by Meer J precluded them from taking any steps to
sell the yacht pending the finalisation of
the remaining issues. He
recorded furthermore that second respondent’s position was that
he had fully paid the yacht’s
construction costs out of the
profits of charter business.
[12]
In the face of this
standoff the applicants launched the present proceedings on 4
September 2020 on an urgent basis claiming the
following substantive
relief:
1.
a declaration that Matrix
is the owner of the yacht;
2.
discharging Meer J’s
order restraining Matrix from taking any steps to sell or dispose of
the yacht.
[13]
The application is opposed
by first and second respondents who raised a number of points in
limine
and who also brought a counter application seeking a declaration that
Meer J’s order prohibiting the sale of the yacht remained
in
force pending the final determination of the action, for access to
Matrix’s books, documents and records in terms of sec
360 of
the Companies Act and for a statement and debatement of account in
respect of the profits generated by the charter business
and the
yacht’s construction costs.
The
issues
[14]
The primary issue which
arises for determination is whether the applicants have established
that Matrix is the owner of the yacht
and therefore that paragraph 4
of Meer J’s order falls to be discharged. Determining this
question requires
inter
alia
interpreting the
arbitrator’s award and a consideration of the applicants’
argument that, even on second respondent’s
version of events,
ownership of the yacht could not have passed to him.
The
applicants’ case
[15]
The applicants contend
that it is not necessary to establish what the costs of manufacture
of the yacht were or, for that matter,
whether or not there has been
full payment of those costs by second respondent. In essence their
argument is that even if it is
assumed in favour of second respondent
that he made full payment prior to liquidation, ownership in the
vessel was not automatically
or by operation of law transferred from
Matrix to second respondent. The argument is based on the principle
that ownership only
passes when delivery of possession is given,
accompanied by an intention on the part of the transferor to transfer
ownership and
on the part of the transferee to receive it. The
applicants point out that pursuant to Meer J’s order in the
spoliation application
Matrix regained possession of the yacht which
situation obtained until the date of liquidation. They contend
further that it was
common cause that when Matrix regained possession
of the yacht the construction costs had not been paid in full.
Furthermore, they
contend, no real agreement to effect transfer of
the ownership of the yacht had been concluded and it had not been
delivered to
second respondent; finally, they contend, neither Matrix
nor the applicants ever had the intention of transferring ownership
of
the yacht to second respondent.
[16]
Insofar as second
respondent argues that the arbitrator held that it was a tacit term
of the agreement that ownership of the yacht
would pass to second
respondent on payment of its total construction costs, the applicants
take issue with the suggestion that
this could take place
‘automatically’ on that event. They contend that the
arbitrator made no finding that the initial
delivery had been subject
to a condition that ownership would automatically pass as and when
payment was made in full. They argue
further that inasmuch as the
arbitrator found that there was a tacit term that ownership would
pass upon payment of the costs this
meant that neither party had any
express intention in respect of the passing of ownership and thus
could not have had the intention
to conditionally transfer ownership,
this being the argument relied upon by second respondent in these
proceedings. They point
out furthermore that, inasmuch as second
respondent contends that the yacht’s construction costs and the
total profit repaid
to Matrix have yet to be determined with the
result that ownership of the yacht cannot presently be confirmed,
neither he nor Matrix,
represented by the Wehrley’s, could have
had the subjective intention to accept or give transfer of ownership
to the yacht.
[17]
In
making their case the applicants seek to distinguish the matter of
Info
Plus v Scheelko and Another
[1]
which held, in the context of a written instalment sale agreement
containing a reservation of ownership clause until such
time as the
final instalment was paid, that a redelivery or further delivery of
the
merx
was unnecessary on the facts. They contend further that no delivery,
even in the form of
traditio
brevi manu
,
could take place in the present matter since second respondent lost
possession of the yacht pursuant to the spoliation application
and
without such possession fictitious transfer could not be effected.
[18]
As an adjunct to its
argument the applicants contend that inasmuch as the contract was
uncompleted as at date of Matrix’s
liquidation and their having
given notice to second respondent that they refused to fulfil the
contractual obligations imposed
on Matrix, they could not be
compelled to render specific performance. Inasmuch as ownership of
the yacht had or still vested in
Matrix, as its liquidators they were
entitled to realise the yacht as an unencumbered asset in the estate,
leaving second respondent
with a concurrent claim for damages. In
this regard they argue that there could be no dispute that the
contract was uncompleted
at the date of liquidation as Matrix was in
possession of the vessel and had not transferred ownership to second
respondent.
The
respondents’ case
[19]
The respondents contend
that on a proper interpretation of the arbitrator’s award it is
clear that the common intention of
the parties was that ownership of
the yacht would pass automatically to second respondent upon
repayment of the vessel’s
construction costs; furthermore, that
the applicants’ argument that ownership in the vessel could
never have been transferred
to second respondent, irrespective of
whether he had repaid its construction costs because there had been
no physical delivery,
is flawed inasmuch as it ignores the terms of
the agreement as expressed in the arbitrator’s award. The
respondents contend
that the applicants’ reliance on the
argument that transfer of ownership could never have passed
inter
alia
because second
respondent was not in possession of the vessel at the time of any
final payment was a technical argument not previously
advanced and
designed to avoid a proper ventilation of the remaining issues in the
action. They contend further that the applicants’
arguments
relating to possession and delivery misconstrue the law and in
particular the decision in
Info
Plus
where, according
to the respondents, the Supreme Court of Appeal rejected the argument
that for ownership to have passed in circumstances
similar to the
present the purchaser had to be in possession of the
merx
at the time of
fulfilment of the condition. The respondents argue that the tacit
term found by the arbitrator regarding the passing
of ownership
suspended the transfer of ownership until repayment of the
construction costs at which point the conditional delivery
of the
yacht to second respondent became unconditional without any further
real agreement or act of delivery or redelivery being
necessary. They
take issue with the grounds upon which the applicants seek to
distinguish the
Info
Plus
case from the
present matter. The applicants’ case is that the provision
found by the arbitrator concerning where ownership
of the vessel lay
and when it would pass amounted to a suspensive condition which
suspended the transfer of ownership and was not
a term with the
consequence that as and when second respondent paid the construction
costs in full the suspensive condition was
fulfilled and ownership
automatically passed to him. As a further consequence the respondents
contend that the applicants’
purported election not to abide by
the agreement, thereby purporting to leave second respondent with no
more than a concurrent
claim for damages, was invalid since the
agreement had already been completed and ownership had passed prior
to liquidation. In
this regard they argue in the alternative that the
applicants purported election not to abide by the agreement was
invalid as they
had already elected to abide by the agreement either
expressly or tacitly.
[20]
Overall the respondents
contend that the applicants have failed to discharge the onus which
they bear of proving Matrix’s
ownership of the yacht and as
such had failed to justify a discharge of the relevant portion of
Meer J’s order with the result
that the application fell to be
dismissed in toto.
Points
in
limine
[21]
The respondents raised a
number of points in
limine
contending that these
alone justified the dismissal of the action. These were that the
application was not urgent, that the subject
matter of the dispute
was
lis pendente
,
that the substantive relief sought was not competent in the absence
of any procedural or substantive ground to justify interfering
with
Meer J’s order and, lastly, that there were foreseeable
disputes of fact which could not be resolved on affidavit. In
my view
none of these preliminary points has any merit. Firstly, the argument
regarding urgency has been overtaken by the fact
that the matter was
placed on the semi-urgent roll by agreement. As regards the
contention that the subject matter is
lis
pendens
, the very
purpose of the application is, on the basis of a law point, to avoid
having to determine the remaining issues in the
arbitration which
flow out of the action. The subject matter of the pending dispute is
thus not sought to be determined again in
different proceedings but
to be circumvented. Nor is there any merit in the suggestion that the
applicants should have applied
for a variation or discharge of Meer
J’s order in those proceedings. The provisions of Rule 42 are
not applicable to the
present matter and there can be no objection in
principle to the applicants seeking a declaratory order that the
relevant portion
of Meer J’s order is no longer applicable or
falls to be discharged or varied through the vehicle of this separate
application.
Finally, although the foreseeability of disputes of
facts may play a role in the present application it does not preclude
the determination
of the primary basis for the applicants’
challenge in these proceedings inasmuch as it is founded on a legal
point which
in effect accepts the respondents’ version of
events on the facts.
The
merits
[22]
In considering the
opposing submissions the starting point must be the terms of the
arbitrator’s award declaring the terms
of the contract between
the parties and more particularly how ownership of the yacht would be
treated. The arbitrator found that
‘
ownership
of the vessel would remain vested in Matrix until full payment of the
costs had been effected whereupon ownership would
pass to (second
respondent)’
.
[23]
The
interpretational dispute between the parties was whether this
declaration made provision for an ‘automatic’ passing
of
transfer. It is correct, as the applicants contend, that the
arbitrator never made use of the term ‘automatic’ nor
expressly provided that ownership would automatically pass. It is
difficult however to see how any other interpretation can be
given to
this aspect of his award. It is now trite that the proper approach to
interpretation is to regard it as a process of attributing
meaning to
the words used having regard to the context provided by reading the
particular provision or provisions in the light
of the document as a
whole and the circumstances attendant upon its coming into existence.
In this process consideration is given
to the language used in the
light of the ordinary rules of grammar and syntax, the context in
which the provision appears, the
apparent purpose to which it is
directed and the material known to those responsible for its
production. The process is objective
not subjective and a
sensible meaning is to be preferred to one which leads to insensible
or unbusinesslike results or undermines
the apparent purpose of the
document. See
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[2]
and
Bothma-Botha
Transport (Edms) Bpk v S Bothma & Seun Transport (Edms) Bpk
[3]
.
[24]
Applying this approach to
clause 85(d) of the arbitration award it is difficult to interpret
the clause as providing for anything
else but an automatic transfer
of ownership. The ordinary dictionary definition of ‘
whereupon’
is ‘
immediately
thereafter’
or
‘
immediately
after which’
. In
my view the arbitrator used the word ‘
whereupon’
and the further wording of clause 85(d) to indicate the common
intention of the parties that ownership of the yacht would
automatically
pass to second respondent upon payment of the yacht’s
construction costs. In paragraph 64 of his award the arbitrator
observed that the term regarding transfer of ownership was necessary
to give business efficacy to the contract. Furthermore, it
must be
borne in mind that when the arbitrator declared the terms of the
contract he was analysing and declaring what the parties
had agreed
in March 2015 when the vessel was yet to be constructed and when all
the subsequent difficulties which arose between
the parties lay in
the future. At that stage it was envisaged, and indeed agreed, that
second respondent would use the vessel to
conduct a charter business
and to that end would be in possession of, or at least the detentor
of, the vessel. In those circumstances
it would have been impractical
and unnecessary, if not absurd, to have required Matrix to redeliver
the yacht to second respondent
in some or other form.
[25]
The applicants’
further contention is that on the facts in the present matter no such
automatic transfer could have taken
place since second respondent was
neither in possession of the
merx
when any final payment would have been made and neither he nor Matrix
had the requisite intention to accept or give transfer at
the
relevant time.
[26]
A similar situation is
dealt with in
Info
Plus
, a case upon
which second respondent relied and which the applicants sought to
distinguish on the facts. One of the issues in that
matter was
whether, in the context of an instalment sale agreement, a transfer
of ownership in respect of a vehicle could have
taken place where
there had been a reservation of ownership on the part of the seller
until such time as the final instalment was
paid and where,
furthermore, the vehicle was no longer in the possession of the
purchaser when such instalment was paid.
[27]
The Court held, per Van
Heerden JA, that, as to delivery, under a hire purchase contract no
further real agreement concluded subsequent
to the delivery of the
merx
was required to transfer ownership. The real agreement reached when
delivery took place sufficed. Because of the conditional term
in the
hire purchase contract that agreement was also conditional.
Notwithstanding delivery, ownership of a thing sold therefore
did not
pass prior to fulfilment of the condition, the condition in the
circumstances being payment of the amount due to Wesbank.
The Court
held that it was therefore not necessary that the purchaser had to be
in possession of the vehicle at the time of the
fulfilment of the
condition and that there was no warrant for insisting that one of the
requirements of
traditio
brevi manu
had to be
satisfied. In the course of reaching this decision the Court stated
as follows:
‘
It is, of
course, trite law that transfer of ownership of corporeal movable
property requires delivery i.e. transfer of possession,
of the
property by the owner to the transferee coupled with the real
agreement between them. The constituent elements of this agreement
are the intention of the owner to transfer ownership and the
intention of the transferee to enquire it. Transfer of possession
can
be actual or constructive … The requirement that subsequent to
delivery of the merx under a hire purchase contract there
should be a
further agreement between the parties, in the sense of a mutual
intention at the time of fulfilment of the condition
that ownership
should be transferred to the purchaser, with due respect strikes me
as somewhat artificial. I would indeed be surprised
if a substantial
number of sellers give any consideration to the passing of ownership
when the condition is fulfilled and even
if a seller should prior to
fulfilment inform the purchaser that he no longer intends
transferring ownership to the latter that
by itself would not
preclude a transfer from taking place’.
I
pause to observe that this last sentence is particularly relevant to
the present matter given the applicants’ contention
that
subsequent to the conclusion of the agreement Matrix never had the
intention to transfer ownership to second respondent.
[28]
The Court went on to deal
with the situation where the purchaser is no longer in possession of
the
merx
at
the critical moment stating as follows: ‘
It
remains to consider the question whether a different position obtains
if the purchaser is no longer in possession at the relevant
time. A
positive reply gives rise to some rather curious consequence …’
After giving certain examples the Court continued:
‘
In my view
however this is not the law. I fail to see why a second form of
delivery should be required at the material time. It
is true that
pendente condicione ownership of the thing sold, say, a vehicle,
remains vested in the seller, but nevertheless a
transfer of
possession which is one of the requirements of transfer of ownership,
does take place. Such transfer of possession
is effected in terms of
a real agreement embodying the intention of both parties that at the
material time the purchaser shall
without more ado become owner of
the vehicle. At the risk of repetition, I stress that at that time
both requirements for a transfer
of ownership are satisfied inasmuch
as the conditional delivery ipso jure becomes an unconditional one …
It is therefore
not necessary that the purchaser must be in
possession of the vehicle at the material time. Such a requirement
can only be justified
on the premise, which I have already rejected
that, conditio existente a second real agreement must be concluded.
That being so,
there is no warrant for insisting that one of the
requirements of a traditio brevi manu must nevertheless be satisfied.
I would
add that if a purchaser under a hire purchase contract does
not acquire ownership if at the material time he is not in possession
of the merx, it is not at all clear to me by virtue of which legal
principle he will become owner should he later regain possession’.
[29]
As I understood the
arguments advanced on behalf of the applicants they sought to
distinguish
Info Plus
from the present matter
inter
alia
on the basis that
detentio
of the yacht was recovered from second respondent by Matrix, the then
owner, prior to liquidation, whereas in
Info
Plus
the owner did not
recover possession. In this regard I see no reason in principle why
the situation should be any different because
possession of the
merx
is in the hand of the seller at the relevant time rather than some
other third party. Secondly, the argument put forward in effect
shuttles back and forth in time in relation to the intention which
the parties allegedly had and disregards the fact that a party’s
intention may have been based upon a mistaken view of what the
original contract between the parties was. When Matrix regained
possession of the yacht subsequent to the spoliation application, and
at least up until the arbitrator’s award was made known,
its
mindset, as manifested in the views of the Wehrleys, was that no such
agreement existed as found by the arbitrator to have
been concluded,
including an intention on the part of Matrix to pass transfer of
ownership of the yacht once its construction costs
had been paid in
full. The terms and conditions of the contract having been declared
by the arbitrator and in the absence of any
appeal against his award,
Matrix cannot be heard to state that it never had the intention to
pass transfer. This would be to disregard
the terms of the award now
binding on it and/or to dispute the arbitrator’s findings
without appealing against them. Furthermore,
as I have pointed out,
the judgment in
Info
Plus
holds that even
if a seller should prior to fulfilment inform the purchaser that he
no longer intends transferring ownership to
the latter, that by
itself would not preclude transfer from taking place.
[30]
I do not find persuasive
the further grounds relied upon by the applicants in seeking to
distinguish
Info Plus
.
The first such reason was that the present contract was one of
locatio conductio
operis
and not an
instalment sale contract. It is unhelpful to seek to pigeonhole the
present agreement. Although the agreement provided
for Matrix to
build the yacht, key provisions were that the yacht would be
delivered to the respondents who would be required to
pay for its
costs over an extended period of time from profits generated by the
charter business. These provisions, including the
reservation of
ownership until such time as final payment was made, echo the
hallmarks of an instalment sale agreement. That the
contract as
established by the arbitrator did not contain an express term that
ownership would be transferred conditionally is
neither here nor
there since exactly the same can be said of a standard instalment
sale agreement. That is a construction of the
agreement. It was
contended furthermore that there was no delivery of the yacht to
second respondent and it was not registered
in his name after its
launch. There was however an initial delivery of the yacht to second
respondent whereafter he conducted the
charter business for an
extended period of time. Finally, the fact that the present matter
involves insolvency and, arguably, an
uncompleted contract is also no
reason in principle to distinguish it from
Info
Plus
.
[31]
It was further contended
on the applicants’ behalf that the present contract had not
been completed not least because second
respondent, although claiming
to have paid the costs of construction of the yacht, was unable to
prove that he had done so and,
at other stages, had stated that he
did not know whether he had paid the construction costs from profits
generated by the charter
business. In my view it is futile to
consider the question of whether the construction costs of the yacht
have been paid for by
profits when there is no agreement, let alone
an assertion by either of the parties as to what the yacht’s
construction costs
were nor as to how much of the monies generated by
the charter business must be regarded as profit and set off against
the aforesaid
cost. There are numerous disputes between the parties
in respect of these issues. Neither Matrix nor the applicants have
ever stated
what they regard as the costs of construction and whilst
it appears that some R22mil turnover was generated by the charter
business
there is no clarity from either side as to how much of this
must be treated as profit. Unless agreed these figures can only be
established through an accounting exercise forming part of an
arbitration.
[32]
Thus the Court is left
with the possibility, one which is not far-fetched, that the
construction costs may well have been paid through
profits received
by Matrix from the charter business conducted by second respondent.
The primary issue in the present application
is the question of
ownership and in this regard it is clearly not incumbent upon second
respondent, in order to succeed in his
opposition to the relief
sought, to prove that he has paid off the costs of construction and
accordingly is owner of the yacht.
He may well attract that onus in a
subsequent hearing when the remaining issues in the arbitration arise
for determination but
in the present proceedings it is the applicants
who, in order to succeed in setting aside the interdict granted by
Meer J against
the sale or disposal of the yacht, must prove that
second respondent did not pay the costs of construction prior to the
date of
liquidation.
[33]
The reasoning I have
already expressed also puts paid to the applicants’ argument
that after liquidation the applicants were
entitled to repudiate the
uncompleted contract leaving second respondent with a concurrent
claim for damages suffered. The applicants
are in no position to
prove that the contract was uncompleted since they cannot exclude or
disprove the possibility that the yacht’s
construction costs
were indeed paid off by the profits generated by the charter business
either when it was conducted by second
respondent or by Matrix
following the spoliation proceedings. In this regard it was submitted
on behalf of the applicants that
there could be no dispute that the
contract was uncompleted at the date of liquidation as Matrix was in
possession of the yacht
and had not transferred ownership to Mark. As
dealt with in
Info Plus
v Scheelko and Another
and as discussed above, although Matrix was indeed in possession of
the yacht at the relevant time it does not follow that it had
not
transferred ownership to second respondent by virtue of that part of
the agreement found by the arbitrator to have provided
for automatic
transfer of ownership.
[34]
In my view on a proper
interpretation of the contract found by the arbitrator the tacit term
in paragraph 85(d) rendered delivery
of the yacht conditional upon
second respondent paying its construction costs in full and
accordingly suspended the transfer of
ownership of the vessel from
Matrix to second respondent until that condition was fulfilled. Upon
payment of those costs the conditional
(initial) delivery of the
yacht to second respondent became unconditional and ownership passed
to him without any further real
agreement or act of delivery being
necessary. In the circumstances of the present matter the fact
that for some period of
time Matrix regained possession of the yacht
takes the applicants’ case no further; the condition could have
been fulfilled
before that stage and in any event, as in
Info
Plus
, it is not
necessary for a purchaser to be in possession of the
merx
for ownership to be transferred in circumstances such as the present.
In this regard it must also be borne in mind that the nature
of a
spoliation application is to temporarily restore possession of
property in order to preserve the status quo ante. Needless
to say,
in such proceedings the Court is not concerned with determining the
parties’ rights of ownership to the relevant
property.
[35]
For all these reasons I
consider that the applicants have failed to establish, on the facts
which are common cause supplemented
by their legal argument, that
they are the owner of the yacht and therefore that this Court can
discharge the interim interdict
granted by Meer J in September 2017
or grant declaratory relief to the effect that the yacht is an
unencumbered asset in Matrix’s
liquidated estate.
[36]
Turning to the counter
application, the respondents seek firstly declaratory relief
confirming that the relevant part of Meer J’s
order prohibiting
the sale of the yacht remains operative or, in the alternative, an
interim interdict prohibiting its sale pending
the determination of
the action. However, this Court’s finding that the applicants
have failed to make out any case for the
relief sought coupled with
their repeated statements that they accept that Meer J’s order
remains in force until set aside
or discharged renders both the
declaratory relief and the alternative relief unnecessary.
[37]
The third prayer in the
counter application sought access to the books, documents and records
of the company in liquidation in terms
of sec 360 of the Companies
Act. As Mr Olivier SC pointed out on behalf of the respondents, an
order in these terms was granted
by agreement by Erasmus J at an
earlier stage in the present proceedings. To the extent that this
order has allegedly not been
complied with in full, second
respondent’s remedy lies in contempt proceedings or an order to
compel and not in this Court
making a duplicate order. To the extent
that there was a debate or a dispute about the precise form in which
access should be given,
the parties were urged to reach agreement on
the terms of an order which would govern the form of such access. No
such agreement
could be reached and since this issue was not argued,
and strictly speaking was not properly before Court, no order will be
made
in this regard. Finally, second respondent sought a statement
and debatement of account in respect of the profits generated by the
charter business and the yacht’s construction costs. Such
relief is premature since it relates not to the issues in the present
matter but to the remaining issues which must still be arbitrated. In
the result I decline to grant any such relief.
Costs
[38]
Counsel for the applicants
initially contended that in the event of them being unsuccessful any
costs order should stand over until
such time as the remaining issues
are arbitrated and a finding is made on whether second respondent
indeed paid the costs of the
yacht’s construction with the
result that ownership passed to him prior to Matrix’s
liquidation. I am not persuaded
that this would be a proper exercise
of the Court’s discretion regarding costs. These are separate
proceedings which in effect
sought a ‘shortcut’ as
opposed to the full ventilation of the remaining issues which the
contracting parties initially
intended and which are necessary to
determine the disputes between the parties. The respondents have been
put to considerable expense
in opposing the present application and
in circumstances where they have prevailed I see no reason why the
applicants should not
have to pay their costs. As far as the counter
application is concerned none of the relief sought has been granted.
In the result
I see no reason why the respondents should not be held
liable for the applicants’ costs in the counter application.
[39]
For these reasons the
following order is made:
1.
Both the application and
the counter application are dismissed with costs.
______________________
BOZALEK
J
For
the Applicant
Adv L Olivier (SC)
As
Instructed by
ENS Africa
For
the Respondent
Adv J Foster
As
Instructed by
Lawrence Whittaker Attorneys
[1]
1998
(3) SA 184 (SCA).
[2]
2012 (4) SA
593 (SCA).
[3]
2014
(2) SA 494
(SCA).