About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2015
>>
[2015] ZASCA 108
|
|
Rooyendal (Pty) Ltd v The Minister of Land Affairs (20049/14) [2015] ZASCA 108 (21 August 2015)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
reportable
Case
No: 20049/14
In
the matter between:
ROOYENDAL
(PTY)
LTD
FIRST APPELLANT
MARK
WILLIAM
BOSHOFF
SECOND APPELLANT
SENTA
BOSHOFF
THIRD APPELLANT
EDSEL
HOHLS
FOURTH APPELLANT
I
R VOIGTS (PTY)
LTD
FIFTH APPELLANT
WALTER
HERBERT
REDINGER
SIXTH APPELLANT
HEINZ
FRIEDEL REDINGER
SEVENTH APPELLANT
and
THE
MINISTER OF LAND
AFFAIRS
FIRST RESPONDENT
TABATHA
AGATHA SHANGE
SECOND RESPONDENT
Neutral
Citation:
Rooyendal
(Pty) Ltd v The Minister of Land Affairs
(20049/14)
[2015] ZASCA 108
(21 August 2015).
Coram:
Mpati
P, Lewis and Bosielo JJA and Van der Merwe and Gorven AJJA
Heard:
18 May 2015
Delivered:
21 August 2015
Summary:
Contract
─ appellants failed to prove oral agreements relied upon ─
oral agreements relied upon by first and seventh
appellants in any
event unenforceable as result of integration (parol evidence)
rule.
ORDER
On
appeal from:
Land
Claims Court, (Sardiwalla AJ sitting as a court of first instance in
KwaZulu-Natal): judgment reported
sub
nom Rooyendal (Pty) Ltd v Minister of Land Affairs
[2013] 3 All SA 588
(LCC).
The
appeal is dismissed with costs, including the costs of two counsel.
JUDGMENT
Bosielo
JA and Van der Merwe AJA (Mpati P, Lewis JA and Gorven AJA
concurring):
[1]
The Amakhabela and Ntunjambili/Ngcolosi communities lodged land
claims in terms of the Restitution of Land Rights Act 22 of
1994 (the
Act), in respect of a number of farms in the Kranskop region of
KwaZulu-Natal. The communities claimed inter alia restoration
of
farms owned and farmed by the first and seventh appellants. They also
claimed restoration of farms leased from their owners
by a
partnership consisting of the second and third appellants and by the
fourth, fifth and sixth appellants. These farms were
owned by family
trusts. The trustees of the respective family trusts included the
second, third, fifth and sixth appellants as
well as Mr Ivan Voigts,
the managing director of the fifth appellant. An attorney, Ms Karen
Hepburn, was a trustee of a number
of these family trusts. The
principal farming operations on these farms were the production of
timber and sugar-cane.
[2]
At all relevant times the second respondent, Ms Tabatha Shange, was
employed by the Department of Land Affairs (the department)
as
Regional Lands Claims Commissioner for KwaZulu-Natal. She caused
notices of the claims to be published in the government gazette
during 2003. The owners of the farms referred to in the previous
paragraph (the farms) opted to sell and commenced negotiations
for
that purpose with Ms Shange on behalf of the communities. These
negotiations were mainly conducted on behalf of the appellants
by the
third appellant, Ms Senta Boshoff, the fourth appellant, Mr Edsel
Hohls, Mr Voigts and Ms Hepburn. Ms Shange was assisted
by officials
of the department in KwaZulu-Natal.
[3]
The farms were eventually sold to the department, represented by Ms
Shange, on behalf of the communities, in terms of nine written
deeds
of sale, all entered into on 8 June 2005. The total consideration
payable in respect of the deeds of sale amounted to some
R90 million.
Apart from the description of the farms and the purchase price
thereof, the terms of the deeds of sale were identical.
Each
agreement provided in clauses 2 and 5 that the farm or farms and
standing sugar-cane and/or timber were sold as a going concern.
In
terms of clause 7 of each agreement occupation would be given to the
purchaser on the date of registration of transfer. Clause
8 contained
the following provisions:
‘
8.1
This agreement constitutes the entire record of the contract between
the PARTIES. No agreement
varying, adding to, deleting from or
cancelling this agreement, shall be effective unless reduced to
writing and signed by or on
behalf of the PARTIES.
8.2
The PARTIES agree and warrant that:
8.2.1
there are no conditions precedent suspending the operation of this
agreement save as specifically set out
in this agreement,
8.2.2
no warranties other than those contained in this agreement shall be
of any force and effect, and that no
other warranties have been given
or representations made to the PURCHASER by the SELLER whereby the
PURCHASER has been induced
to enter into this agreement.
8.2.3
This agreement replaces the terms and conditions of all preceding
negotiations, written or oral communication
between the parties with
regard to this PROPERTY.’
Clause
22 thereof provided:
‘
22.1
From the DATE OF SALE to the DATE OF TRANSFER, the SELLER shall
continue to farm the PROPERTY in accordance
with recognised farming
practices.
22.2
All proceeds during this period shall be for the SELLER’S
account.’
Registration
of transfer of the farms took place during September and October
2005.
[4]
During the negotiations a series of meetings took place between the
parties, notably on 8 July 2004, 19 August 2004, 30 March
2005 and 6
September 2005. Minutes of these meetings were prepared by Ms
Hepburn. Although these minutes were forwarded to Ms Shange
or her
officials, they never responded to them, not even acknowledging
receipt. The minutes were also not formally adopted at the
respective
subsequent meetings. It is notable, too, that Ms Hepburn accepted
that the minutes may have omitted various matters
discussed, and
agreed that they were not verbatim recordings of what was discussed.
[5]
Relying to a large extent on these minutes, the appellants averred
that during the period from 8 July 2004 to 6 September 2005
each of
them entered into an oral agreement with the department, represented
by Ms Shange, in terms of which the department agreed
to reimburse
them for input costs incurred in respect of their respective
sugar-cane and/or timber plantations during the period
from September
2004 to January 2005. The input costs consisted of the costs of
fertilisers, weed-killers, insecticides and the
like. The appellants
consequently instituted action in the Land Claims Court, claiming a
total amount of approximately R4,8 million
in respect of these input
costs.
[6]
The second and third appellants, Mr and Mrs Boshoff, also claimed
payment of what was referred to as development costs. They
alleged
that during the same period they entered into an oral agreement in
terms of which the department agreed to reimburse the
costs of
capital development of the farm Spekfontein. According to the
evidence these development costs related to the construction
of a
shed, the propagation of seedlings and the establishment of 60
hectares of timber and 30 hectares of sugar-cane.
[7]
In evidence on behalf of the respondents it was acknowledged that
mention of reimbursement of input costs had been made at the
meetings. Ms Shange and other witnesses testified that reimbursement
was mentioned solely within the context of the possibility
of
post-transfer involvement of the appellants in the farming operations
of the communities. They denied that any agreement was
actually
reached in respect of reimbursement of input costs and denied that
reimbursement of development costs was even the subject
of
discussion. On behalf of the respondents it was also contended that
these claims were in any event excluded by the terms of
the sale
agreements.
[8]
The Land Claims Court (Sardiwalla AJ) found that the appellants did
not prove the oral agreements relied upon on a balance of
probabilities and dismissed all their claims. Leave to appeal was
granted by this court. The issues in this appeal are therefore
whether reliance on the alleged oral agreements was excluded by the
terms of the deeds of sale and, if not, whether the finding
of the
court a quo that none of the alleged oral agreements were proved,
could be faulted. It is convenient to deal with the first
question at
the outset since in our view it conveniently disposes of the claims
of the first and seventh appellants.
[9]
The second to sixth appellants were not parties to any of the deeds
of sale in respect of the farms, even though some of them
signed the
respective deeds of sale on behalf of the owner trusts. The terms of
the deeds of sale are not binding on the second
to sixth appellants.
They do, however, bind the first and seventh appellants. The
question, therefore, is whether the oral agreements
in respect of
reimbursement of input costs relied upon by the first and seventh
appellants would in any event have been unenforceable
because of the
application of the integration rule.
[10]
As we will show, the evidence on behalf of the appellants was that
the oral agreements in respect of input costs had been entered
into
prior to the conclusion of the deeds of sale. The question is thus
whether the sale agreements entered into by the first and
seventh
appellants were intended to constitute the exclusive memorials of the
agreements reached during the negotiations between
the respective
parties.
[11]
In our view, the terms of the deeds of sale made clear that that was
the case. In terms of clause 8.1 of the deeds of sale
they
constituted the entire record of the contracts between the parties.
These contracts related to the sale of the farms and standing
sugar-cane and/or timber as going concerns, which were to be farmed
for the account of the sellers until the date of transfer of
the
farms. There can be no doubt that an agreement pertaining to
reimbursement of input costs incurred by the seller in respect
of a
farm prior to its transfer, would constitute an addition to or
variation of the deed of sale. Any oral addition to, or variation
of,
the deed of sale was, in each case, expressly rendered unenforceable
by the second sentence of clause 8.1. This is also clear
from the
provisions of clause 8.2.3. This clause provided that the written
agreement replaced the terms and conditions of all preceding
negotiations and communication between the parties with regard to the
immovable property sold. A preceding oral agreement for the
reimbursement of costs of the inputs made in respect of a farm, by
the seller during the period before transfer, would, in context,
constitute a term of preceding negotiations or communication and was
thus replaced by the deed of sale.
[12]
We therefore conclude that, even if the first and seventh appellants
were able to prove the alleged oral agreements, their
claims were bad
in law. Whether these oral agreements were in fact proved, in so far
as the other appellants are concerned, is
the question to which we
now turn.
[13]
It is trite that generally a contract is concluded when the
acceptance of an offer is communicated by the offeree to the offeror.
It follows that a party, wishing to rely on an agreement reached
during oral negotiations, should show when, where and how the
acceptance of the terms of the agreement was expressed by each of the
parties to the agreement. The content of the terms must also
be
clearly established.
[14]
No viva voce evidence of a director or employee of the first
appellant was presented. The sixth and seventh appellants did
not
testify. We accept that these appellants were represented during the
relevant negotiations by Ms Boshoff, Mr Hohls and Ms Hepburn.
They
gave evidence as to the conclusion of the oral agreements in respect
of reimbursement of input costs, as did Mr Voigts. It
is important to
note that according to each of these witnesses the oral agreements
between the department and the appellants were
concluded on a single
occasion.
[15]
Mr Voigts said that binding agreements were concluded at the meeting
held on 8 July 2004. But this evidence cannot be accepted.
One of the
issues raised during the negotiations between the parties was the
possibility of involvement of the appellants in arrangements
in
respect of utilization of the farms for the benefit of the
communities after the transfer thereof. These possibilities were
either lease agreements in terms of which the appellants would hire
the farms from their new owners (lease-back), or the establishment
of
partnerships between the appellants and the communities in respect of
the farming operations on the farms. It is common cause
that such
post-transfer involvement of the appellants was contemplated at the
meeting of 8 July 2004. It was recorded in the minutes
of the meeting
that a precedent of a memorandum of understanding in this regard
would be forwarded to the appellants and that a
full day would be set
aside for a future meeting to address these matters. Thus, it was at
least clear that the post-transfer arrangements
would be embodied in
written agreements and that, in such event, the appellants would not
be reimbursed for input costs in terms
of a separate oral agreement.
In addition, it is common cause that by 8 July 2004 it was expected
that takeover of the farms would
take place on 1 September 2004, that
is, before the inputs in question would be made. For these reasons
binding agreements in respect
of reimbursement of input costs for the
period September 2004 to January 2005 could hardly have been
concluded at the meeting of
8 July 2004. Both Ms Boshoff and Ms
Hepburn expressly conceded that binding agreements in respect of
input costs were not reached
at this meeting. Both also conceded that
no agreement was concluded at the meeting of 19 August 2004.
[16]
In his evidence, the fourth appellant, Mr Edsel Hohls, said that it
had been agreed with Ms Shange that the farms would be
taken over on
1 September 2004. According to his initial evidence, reimbursement of
the costs of inputs actually made were not
on the table for
discussion before 1 September 2004. He said that as the fertilisers
and other substances had to be ordered in
May and June of that year,
the concern was about the costs of these materials that had been
ordered but would not have been used
on takeover. According to Mr
Hohls, the response of Ms Shange was that these would be taken over
and paid for. He stated
that when takeover of the farms did not
take place on 1 September 2004, Ms Shange telephoned him during the
beginning of September
2004. She requested him to ensure that
all the relevant farmers make the inputs and said that their costs
would be paid.
Mr Hohls repeatedly testified that the agreements for
reimbursement of input costs were concluded during this telephone
conversation.
This was not put to Ms Shange in cross-examination. In
his later evidence, Mr Hohls said that on 8 July 2004, or perhaps
even prior
thereto, agreement had been reached that the department
would reimburse input costs if the farms were not taken over by 1
September
2004. This version, of a conditional agreement reached
before 1 September 2004, not only constituted a material adjustment
of his
evidence but was contradicted by the witnesses of the
appellants that we have mentioned.
[17]
Ms Boshoff testified that she was unable to provide the date on which
the oral agreements were concluded. She did say, however,
that they
must have been concluded prior to October 2004. Ms Hepburn, in turn,
said that the agreements were concluded at the meeting
of 30 March
2005.
[18]
Two advocates, Mr A J Rall SC and Mr A E Potgieter SC, testified for
the appellants. Both attended the meeting of 6 September
2005. Mr
Rall testified that his independent recollection was that at this
meeting the appellants received the undertaking or the
confirmation
of previous undertakings from Ms Shange that the input costs would be
paid on production of invoices. Mr Potgieter
had a similar
recollection. But both formed the impression that the undertaking to
reimburse input costs also related to the period
after January 2005.
Mr Rall said that the undertaking related to input costs incurred up
to 30 January 2005 and subsequently, and
Mr Potgieter said that he
presumed that it related to input costs that were incurred until at
least 6 September 2005. As we have
said, according to the appellants
the agreements were not reached on 6 September 2005, nor did they
relate to any period after
January 2005.
[19]
Ms Shange, as we have said, testified at the trial. The respondents
also called four witnesses who were employed by the department
in
KwaZulu-Natal. They were Mr Brendan Boyce, Mr M P Zuma, Ms Khethiwe
Mlotshwe and Ms Yolisa Ndia. Mr Boyce was deputy director
of the
post-settlement unit. Ms Mlotshwe was also a deputy director and was
the project manager of the claims in question. Mr Zuma
was a project
officer that reported to Ms Mlotshwe. Ms Ndia was the head of finance
and administration. Ms Shange was a poor and
evasive witness. No
criticism can, however, be levelled at the other witnesses on behalf
of the respondents.
[20]
The high-water mark of the minutes of the meeting of 8 July 2004 in
respect of the case of the appellants is the recordal that
Ms Hepburn
‘. . . summarised the position as follows: If there is no
leaseback or partnership, RLCC will reimburse the farmers
for
inputs’. But this does not appear to be an accurate summary of
the minuted preceding discussion on the subject. Mr Boyce
was the
spokesman of the department on the subject. According to the minutes
he, at best for the appellants, said that after submission
of a
detailed plan in respect of making of inputs and the verification
thereof, agreement might be reached for payment of input
costs. The
minutes do not gainsay the evidence of Mr Boyce that he told the
meeting that the department would pay for input costs
only in terms
of a written agreement in respect of a post-settlement dispensation.
The minutes must of course be viewed in the
light of what we have
said before, especially that, according to Ms Hepburn’s own
evidence, no binding agreement was concluded
at this meeting.
[21]
It was recorded in the minutes of the meeting of 30 March 2005 that
the appellants handed documentation to the officials of
the
department at the meeting. This documentation included the claims of
the appellants in respect of input costs for the period
September
2004 to January 2005, with supporting invoices. However, the minutes
did not by any stretch of imagination record that
agreement had been
reached at this meeting that these claims would be paid.
[22]
According to the minutes of the meeting of 6 September 2005, Ms
Shange said the following in respect of input costs:
‘
Confirmed
that these are reimbursable ─ payment will be done after
transfer and on proof of invoice. TS [Ms Shange] needs
to know the
amount of the inputs, the area and they need the empty bags in
respect of the fertilisers etc applied. TS needs schedule
with how
many bags bought, how many used and these must be backed up with
invoices eg. If you bought 200 bags of fertiliser and
100lt of weed
killer, how much was used on the land and how much is remaining and
the amount remaining must be left on the farm.
RLCC needs guarantees
that people have these chemicals on the land. These documents must be
submitted and they will be paid after
transfer.’
As
we have said, these claims and invoices had already been provided to
the department on 30 March 2005. The documents had been
audited by
Crystal Holdings (Pty) Ltd (Crystal Holdings) and the results were
presented to Ms Shange on 11 August 2005. In these
circumstances
these minutes are compatible with the evidence of Ms Shange that she
referred to submission of documentation in respect
of payment for
fertilisers, weed-killers, etc that remained on the farms on the
dates of transfer.
[23]
Counsel for the appellants relied heavily on the preamble to a
questionnaire that had been directed to the owners of the farms.
He
argued that this document provided strong support for the case of the
appellants. As we see it, however, the contents of the
document
pointed the other way. Although this was not provided for in the
deeds of sale, the parties were ad idem that the audits
would take
place to determine whether recognised farming practices were followed
on the farms and that only in case of a positive
audit result would
the balance of the purchase price be released in order for transfer
of a farm to proceed. Crystal Holdings was
appointed to conduct the
audits. Mr Pierre Redinger acted for Crystal Holdings in this regard.
The questionnaire was drafted by
Mr Redinger. There was some dispute
as to the extent to which Mr Boyce contributed to the contents of the
preamble to the questionnaire,
but in our view that is of no moment.
The questionnaire was finalised towards the end of April 2005. Both
Mr Boyce and Mr Redinger
testified that the questionnaire reflected
the understanding gained by Mr Redinger from his interactions with
the appellants and
the department. It is not disputed that Mr Boyce
informed Mr Redinger at the time that no agreement had been reached
in respect
of reimbursement of input costs. The questionnaire
reflected the purpose of the audits but also referred to a second
purpose in
the following terms:
‘
Secondly
the audit shall be used as an objective tool to assess and quantify
the various inputs the reasonable and diligent landowner
would have
incurred on the property and will assess whether or not he/she should
be compensated for reasonable input costs incurred
by him/her in
terms of a further agreement.’
[24]
In context, this paragraph conveyed that the results of the audit
would be used to assess whether or not a landowner should
be
compensated for reasonable input costs incurred by him or her and
that, if so, the compensation would be regulated by a further
agreement; that is, an agreement to be entered into after the
assessment. The implication is that no agreement for reimbursement
of
input costs had been reached by the end of April 2005. We know that
on no version of the appellants was such agreement reached
thereafter.
[25]
Upon a consideration of the probabilities, it is unlikely that the
appellants would take the trouble to compile the claim documents
handed over on 30 March 2005, had they not thought that an
undertaking had been given to reimburse input costs. The appellants
also pointed out that in the Kranskop region sugar-cane was harvested
every second year, with the result that they would not reap
the
benefit of inputs made during the period of September 2004 to January
2005. They said that this was the reason for the agreements
to
reimburse these input costs. Despite these factors, however, in our
view the probabilities arising from the policies and procedures
of
the department and the structure of the transactions in question, as
well as the evidence of the respondents, militate against
a finding
that it was agreed that the costs of the inputs be reimbursed.
[26]
The undisputed evidence of Ms Ndia was that under no circumstances
would payment in terms of an oral agreement be authorised
by the
department. Ms Mlotshwe and Mr Zuma confirmed that input costs could
only possibly be reimbursed in terms of written agreements
in respect
of post-transfer dispensations for the benefit of the communities.
The undisputed evidence was further that the department
would make
payments only pertaining to these land claims in accordance with
submissions in terms of s 42D of the Act, approved
by the
Minister. In respect of each of the claims of the communities, only
the total agreed purchase price in terms of the respective
deeds of
sale, a settlement planning grant and a restitution discretion grant
were approved. These two grants were calculated per
household of the
communities and were to be utilized for the benefit of the
communities. This was accepted by the appellants, who
said that Ms
Shange undertook to reimburse the pre-transfer input costs from funds
that would be obtained from other sources, especially
the Department
of Agriculture. But according to the evidence, Ms Shange and the
department had no control over whether such funds
would be made
available. If such funds would be made available, it would accrue to
the communities. Thus, it is highly improbable
that Ms Shange would
contractually bind the department in terms of an oral agreement or
for payment to the appellants from funds
to be obtained from another
department or source. Finally, the absence of a contemporaneous
letter confirming the conclusion of
the agreements and its terms,
must be placed in the scale against the appellants.
[27]
To sum up, the viva voce evidence presented on behalf of the
appellants in respect of the conclusion of the alleged agreements
relating to input costs is vague and contradictory; the appellants
could not state when precisely any of the oral agreements had
been
reached or for which of them Ms Boshoff and Mr Hohls was acting; the
documentary evidence tendered in support of the appellants’
claims is inconclusive and the probabilities favour the respondents.
Despite the poor quality of the evidence of Ms Shange, we
are not
persuaded that the court a quo erred in finding that the appellants
did not succeed in proving the oral agreements sought
to be relied
upon.
[28]
It remains to deal with the claim of the Boshoffs for reimbursement
of development costs. It can be disposed of briefly. The
only
evidence in this regard was that the subject was discussed at a
meeting on 19 August 2004, attended by Ms Boshoff, Ms Hepburn
and Ms
Shange. Although the evidence of Ms Shange, that no such meeting took
place, is probably false, it is clear from the minutes
of this
meeting that no binding agreement was concluded. A note made of a
conversation between Ms Boshoff and Ms Hepburn on 2 December
2004,
stated that this issue still had to be addressed in discussion with
Ms Shange and that a commitment in writing by her was
needed. This is
in accordance with the evidence of Ms Boshoff that she contemplated
that the development costs had to form part
of the purchase price of
the particular farm. Therefore, even she accepted that the notion
that costs of capital development of
a farm would be paid to a tenant
in terms of an oral agreement distinct from the deed of sale in
respect of the farm, was untenable.
[29]
It follows that the appeal cannot succeed. There is no reason to
deprive the respondents of any costs of appeal.
[30]
The appeal is dismissed with costs, including the costs of two
counsel.
_______________________
L
O Bosielo
Judge
of Appeal
______________________
C
H G van der Merwe
Acting
Judge of Appeal
APPEARANCES:
For
Appellants:
M G Roberts SC (with him C G Van der Walt)
Instructed
by:
Marshall
Attorneys, Johannesburg
McIntyre
& Van der Post, Bloemfontein
For
Respondents:
A A Gabriel SC
(with her J Thobela-Mkhulisi)
Instructed
by:
State
Attorney, Durban
State
Attorney, Bloemfontein