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[2015] ZASCA 133
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Green Willows Properties v Rogalla Investment Company (20436/2014) [2015] ZASCA 133 (29 September 2015)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not Reportable
Case
No: 20436/2014
In
the matters between:
GREEN
WILLOWS PROPERTIES 215 (PTY)
LTD
APPELLANT
and
ROGALLA
VON BIBERSTEIN INVESTMENT COMPANY
RESPONDENT
(PTY)
LTD
Neutral
citation:
Green
Willows Properties v
Rogalla
Investment Company
(20436/14)
[2015] ZASCA133 (29 September 2015)
Coram:
Mpati
P, Cachalia, Tshiqi, Swain JJA and Gorven AJA
Heard:
11
September 2015
Delivered:
29 September 2015
Summary:
Contract
– sale of land – whether terms and conditions in written
agreement fulfilled – recusal – trial
judge refusing
recusal application after dismissal of application of absolution from
the instance – no basis for application
for recusal of trial
judge.
ORDER
On
appeal from:
KwaZulu-Natal
High Court, Pietermaritzburg (Pillay J sitting as court of first
instance):
The
appeal is dismissed with costs.
JUDGMENT
Tshiqi
JA (Mpati P, Cachalia, Swain JJA and Govern AJA)
CONCURRING
[1]
The
issue in this appeal is whether the terms of a written contract of
sale of property concluded in June 2006 between the appellant
(Green
Willows) and the respondent (Rogalla) were fulfilled. In terms of the
written contract Rogalla undertook to sell to Green
Willows, a piece
of undeveloped land: Portion 97 of the Farm Brakkloof, in the
Plettenberg Bay Municipal area, now known as the
Bitou Municipality,
Western Cape Province (the Municipality) for R13 250 000.
Green Willows intended to develop
it by constructing 80 residential
units, measuring a minimum of 9 000 square metres as well as onsite
parking bays. In order for
the development to take place, it was
necessary to rezone the property – which at the time allowed
for only one building
– through an amendment allowing for the
proposed development. The approval of the amendment had to be given
by the Municipality.
[2]
The
written contract contained a clause which provided:
‘
18.1
The Seller warrants written approval by the local authority for the
development of property as set out in annexure B, for the
construction of 80 residential units measuring a minimum of 9 000
square meters plus onsite parking bays (“the scheme”).
18.2
The Purchaser shall, pending the granting of final
written approval of the scheme by all relevant authorities
retain an
amount of R3 250 000 (Three Million Two Hundred and Fifty
Thousand Rand) of the purchase price, which amount
shall be secured
by a bank guarantee/s issued by a Bank or other recognised financial
institution, acceptable to the Seller and
shall be payable with
interest thereon, calculated from date of registration of transfer at
the rate of 5 per cent per annum, compounded
monthly, on demand upon
the granting of such final written approval as referred to herein,
and which amount shall be forfeited
to the Purchaser should final
written approval of the scheme by all relevant authorities not be
granted as provided for in this
clause 18.
18.3
The Purchaser shall, at the Purchaser’s
cost, do all things necessary and execute and produce all
documents
that may be reasonably required by all relevant authorities for the
securing of final written approval of the scheme,
including but not
limited to the following: site layout plan, Road and storm water
design, sewer design, water supply and services
report.
18.4
The Purchaser undertakes to do all things as may
be reasonably required by all relevant authorities for
the securing
of final written approval of the scheme within 90 days from the
signature of this offer to purchase by the last party
signing in
time.
18.5
In the event that for whatsoever reason, any final
written approval of the scheme, required by any relevant
authority,
is not secured within the period referred to in clause 18.4 above,
the same shall automatically be extended for a further
period of 90
days or by such period as the parties may agree in writing, and the
Seller shall be entitled, at the Purchaser’s
cost and acting as
the Purchaser’s duly authorised attorney and in his place and
stead, to secure fulfilment of all such
things as maybe reasonably
required by all relevant authorities of the scheme and to comply with
such conditions as may be prescribed
by any relevant authority for
the submission of building plans for the purpose of the development
of the property.’
The
90 day extension contemplated in clause 18.5 had the effect that the
final written approval had to be obtained not later than
18 December
2006.
[3]
On
5 May 2006 the Municipality had already passed a resolution (‘the
May resolution’) imposing certain conditions in
respect of the
anticipated development. Only two of those conditions are relevant
for the purposes of the dispute. The resolution
containing the
relevant conditions reads:
‘
That
in terms of section 43(3) of the Land Use Planning Ordinance, 1985
(Ord. 15 of 1985) [LUPO] approval be granted for an amendment
of the
conditions of rezoning approval which were imposed by the Municipal
Council on 29 May 1995 in respect of Portion 97 of the
Farm Brakkloof
No.443 in order to increase the number of residential “units”,
and to replace the building which currently
accommodates the
reception area, conference room and restaurant with additional
residential “units”, subject to the
following conditions:
‘
(a)
...
(b)
...
(c)
...
(d)
...
(e)
That
the ownership status, management and maintenance responsibilities of
the existing access road be addressed to the satisfaction
of the
Head: Public Works, and that this condition may require that the
access road be subdivided as a separate erf.
(f)
...
(g)
That,
prior to building plan approval, a Site Development Plan which
addresses all the above-mentioned conditions, be submitted
for
consideration and approval (and that no construction work of any
nature occurs prior to building plan approval).’
The
reference to Annexure B in Clause 18.1 of the contract is a reference
to this resolution.
[4]
Pursuant
to the agreement the property was transferred to Green Willows on 18
September 2006. Green Willows paid an amount of R10 000 000
of the purchase price against registration of transfer and secured
the balance of R3 250 000 plus retention interest through a
bank
guarantee. In the meantime, and in order to ensure compliance with
the terms of the contract, Rogalla took steps to obtain
the approval.
On 18 December 2006 the Municipality passed a resolution to the
following effect:
‘
That
approval be granted for the Revised Site Development Plan No.
06/08-01, 02 and 04 dated 10 December 2006, as further revised
on 15
December 2006 (which makes provision for 80 residential units within
a total floor area of 9 000m
2
and not less than 120 parking bays) in respect of Portion 97 of the
Farm Brakkloof No.443, subject to the following conditions:
“
(a)
That the floor levels of all habitable rooms be above the 1:50 year
floodline.
(b)
That the ownership status, management and maintenance
responsibilities of the existing
access road be addressed to the
satisfaction of the Head: Public Works prior to any building plan
approval, and that this condition
may require that the access road be
subdivided as a separate erf.
(c)
That an appropriate Services Agreement (which includes detail of the
payment of augmentation
and related fees) be finalised prior to
building plan approval”’.
[5]
It
is this resolution, to which I shall refer as the December
resolution, that is the subject matter of this dispute. The question
to be answered is whether the resolution constitutes final written
approval as contemplated by the contract. This requires an
interpretation of clause 18, in particular, to ascertain the meaning
of the words ‘final written approval’.
[6]
The
resolution was received by Rogalla on 18 December 2006. On the same
day Rogalla, through its attorneys, wrote a letter to Green
Willows
stating that the terms of clause 18.2 of the contract had been
fulfilled and demanding payment of the outstanding
amount of
R3 250 000. No payment was forthcoming and further
correspondence exchanged between the parties did not yield
any
result.
[7]
Rogalla
issued summons against Green Willows for the payment of this amount,
plus retention and mora interest. Rogalla also claimed
payment of an
additional amount of R81 762, which it stated represented costs
incurred during the second period of 90 days
leading up to 19
December 2006 for securing fulfilment of all such things as were
reasonably required by the relevant authorities,
as contemplated by
clause 18.5. Green Willows defended the action. It denied that it was
liable to pay the amount claimed, and
pleaded that final written
approval had not been granted and the amount was thus forfeited in
terms of clause 18.2 of the contract.
The proceedings in the high
court culminated in a trial before Pillay J in the KwaZulu-Natal
Division, Pietermaritzburg
[1]
.
[8]
At
the trial, Rogalla led the evidence of several witnesses and after it
had closed its case, Green Willows moved an application
for
absolution from the instance. After argument, the judge took some
time to consider the application, after which she gave a
ruling
dismissing it. The ruling was in the form of a judgment in which the
court made certain factual and legal findings. Before
the trial could
proceed further, a debate between the judge and counsel ensued, with
the judge responding to questions by counsel
for Green Willows on
whether certain specific findings were final, to which she responded
that they were final unless displaced
by the leading of further
evidence. After this interaction, counsel for Green Willows applied
for the judge’s recusal.
[9]
The
main ground for the application was that, without hearing the case
for the defendant and before the trial was concluded, the
judge had
made conclusive findings against her client. Pillay J dismissed the
application for her recusal. She stated that it had
not been
demonstrated that the court would not be open to persuasion by
further evidence and submissions of counsel. Green Willows
then
applied for a postponement in order to bring an application for leave
to appeal against this order. This application too was
refused.
Thereafter Green Willows closed its case without tendering any
evidence. The matter was argued and judgment given in due
course.
[10]
On
the merits, the court a quo stated that it was impressed by the
evidence of Mr Gericke and Mr Underwood, the two witnesses who
testified at the instance of Rogalla. It found that the approval of
the site development plan (‘SDP’), through the
December
resolution finally removed any impediments that previously existed by
way of conditions or restrictions. It further found
that, even if it
were accepted that the approval was invalid, it stood until set
aside, in the light of the decision of this court
in
Oudekraal
[2]
.
The court consequently granted an order in Rogalla’s favour. A
subsequent application for leave to appeal was dismissed.
This
appeal is with the leave of this court.
[11]
In
this court, Green Willows persisted with the contention that the
terms of the contract had not been met. It submitted that the
approval of the SDP by the December resolution did not constitute
final written approval.
Did
the December resolution constitute final approval?
[12]
Among
the witnesses who testified for Rogalla were Mr Gericke and Mr
Underwood. In reaching the conclusion that the December resolution
constituted final approval, the high court accepted their evidence.
Mr Gericke was the manager of the Municipality’s town
planning
and development department. He had been involved in the process
leading to the approval of the SDP. He holds a BSc degree,
a Master’s
degree in town and regional planning and an LLB degree. His career in
town planning and municipalities goes back
to 1989. In 2003 he joined
the Bitou Municipality. He testified about his knowledge of the
resolutions that were taken by the Municipality
concerning this
matter and other similar applications for the approval of development
schemes. He stated that he had the delegated
powers to sign off and
finally approve all building plans for the Municipality.
[13]
Mr
Underwood testified as an expert witness in town and regional
planning. Although he was not directly involved in the approval
process pertaining to this dispute, he stated that he had extensive
knowledge and experience of planning procedures and legislation
in
the Western Cape.
[14]
Messrs
Gericke and Underwood explained the process followed in considering
rezoning applications in the Western Cape and explained
the
significance of a SDP. They stated that a rezoning application
comprised four stages, the approval of a SDP being the completion
of
the third stage in the process. According to both of them, a SDP,
although not mentioned under the LUPO, was a town planning
technique
that was commonly used to assist municipalities to understand the
nature of a development in a schematic or conceptual
form. It showed
the layout, form and quantification of the development proposal in
sufficient detail to make the proposal clear.
When approved, it would
serve as assurance that the proposed development would be permitted
and the purchaser could with certainty
go ahead and obtain valuations
in respect of the property on the basis of that approval. The next
step, once a SDP had been approved,
was the submission of building
plans that would also be approved, as long as they complied with the
SDP. The fourth stage also
entailed the approval of detailed
engineering works drawings and associated administrative steps.
Thereafter construction would
be allowed to proceed.
[15]
Green
Willows did not lead any evidence to dispute that of these two
witnesses. It must thus be accepted that the SDP was
a tool
utilised in the Municipality to grant final approval of a rezoning
application and that once approved, it constituted final
written
approval as envisaged by clause 18. That this is so is supported by
the fact that the May resolution, is the resolution
by which the
Municipality imposed all conditions that needed to be fulfilled
before it would approve the development. Significantly,
sub-paragraph
(g) of that resolution means that a SDP was required to address these
conditions before building plans could be approved
and construction
could commence. The required SDP was submitted and approved. It can
thus be inferred that the Municipality was
satisfied that it had
addressed all the conditions prescribed by it in clauses (a) to (f)
of the May resolution, and Mr Gericke
confirmed this. It thus follows
that written approval, as contemplated in clause 18.1 of the
contract, for the development of the
property as set out in May
resolution (the scheme) was obtained timeously.
[16]
I
am strengthened in my reasoning by two factors. First, by letter
dated 14 December 2006 Green Willows requested Mr Gericke to
‘confirm
in writing to ourselves if there is final confirmation of this site
development plan’ noting that ‘the
final payment for the
property is due pending the confirmation of the development’.
This is a clear indication that, at the
time, Green Willows itself
saw the approval of the SDP as the final written approval which would
make the balance of the purchase
price payable. Secondly, after the
December resolution was passed and sent to it, Green Willows elected
to submit another application
for rezoning of the same property.
After considering that subsequent application, the Municipality
passed a resolution granting
approval on the strength of a revised
SDP that provided for a reduced number of units. In that instance
Green Willows accepted
the resolution as constituting
final written approval and on the strength of this, submitted
building plans for approval.
The manner in which this application was
processed illustrates the cogency of the evidence of Messrs Gericke
and Underwood that
the approval of a SDP constituted final written
approval.
[17]
The
above finding alone should dispose of this appeal. But counsel for
Green Willows persisted with an attack on the December resolution
on
two further grounds. First, she submitted that the Municipality had
failed to obtain a departure from the rezoning scheme as
required in
terms of s 15(1) of the LUPO and the Regulations promulgated in terms
of s 47(1) thereof. The Municipality, so the
argument proceeded, thus
did not lawfully approve a floor area or bulk of 9 000 square metres.
In the alternative, Green Willows
contended that the resolution did
not fulfil condition (e) of the May resolution. Condition (e) states:
‘
That
the ownership status, management and maintenance responsibilities of
the existing access road be addressed to the satisfaction
of the
Head: Public Works, and that this condition may require that the
access road be subdivided as a separate erf.’
I
will deal with both grounds in turn.
The
Departure in relation to Bulk
[18]
Bulk
is defined as the factor, expressed as a ratio of one ie 1:00
prescribed for the calculation of the maximum floor area of a
building or buildings permissible on an erf
[3]
.
Bulk governs the density of the construction allowed on any property.
The size of the floor area of a building on land is governed
by the
bulk limitation in the zoning scheme. The warranty required an
assurance that it was possible to get 9 000 square metres
of bulk on
the property.
[19]
The
issue relating to a departure arose for the first time during Mr
Underwood’s cross-examination. He conceded that before
he came
to court, he did not do a bulk factor calculation to satisfy himself
that 9 000 square metres would be achievable on the
property. He was
asked to perform a manual measurement of the floor area depicted in
the SDP. He then stated that it appeared that
there was a bulk
shortage or a minor bulk overrun as compared to the size of the
property but that the deviation could be fixed
through a technique
normally used in the Western Cape called ‘departures’.
He, however, testified that he could not
say that the plan proved
that one could not get 9 000 square metres on the property concerned.
He also stated that, although it
was ‘tight’, it could be
achieved within the ambit of the rights conferred by the approval of
the SDP.
[20]
Mr
Gericke was also questioned on the bulk factor. He testified that the
Municipality approved the SDP on the basis that it would
not exceed 9
000 square metres. During cross-examination he agreed that at the
time of the approval he had not engaged in a calculation
to fit the 9
000 square metres, but took the initiative to do so during the course
of the trial to satisfy himself that it was
indeed possible. After
performing the exercise, he was satisfied that with minor ‘tweaking’
of the plan this was possible.
On a factual level, accordingly, there
is no evidence that the bulk factor could not be achieved and that a
departure was necessary.
[21]
Significantly,
when questioned on whether it was necessary to submit a separate
application for a departure, he stated that the
permissible bulk is
determined when the SDP is submitted and evaluated. He said that if a
SDP for instance, indicates a different
building line from that
stipulated in the zoning scheme regulations, the municipality would
accept and approve it as an application
for relaxation of that
building line. According to him, a SDP was a package of directions of
what a developer could or could not
do. Insofar as was necessary,
therefore, the application for relaxation was made and granted. There
is no basis to reject the evidence
of Mr Gericke in this regard. The
contention that the Municipality failed to approve a departure from
the rezoning scheme thus
has no merit.
The
condition relating to the access road
[22]
The
contention by Green Willows that condition (e) of the May
resolution had not been fulfilled was influenced by a
misunderstanding of Mr Gericke’s evidence when he stated that
there was a long standing disagreement between the Municipality
and
the roads agency in relation to the ownership and responsibility of
‘the road’. Mr Gericke’s evidence related
to a road
depicted as the ‘Divisional Road Piesang Valley’. That
road is depicted on the SDP to the East of the property
and there
were no outstanding issues pertaining to it. Condition (e), according
to Mr Gericke, related to a different road depicted
on the SDP as a
tarred road to the North of the property. It serviced the property in
question and two other properties. According
to him, it transpired in
October 2006, after the condition had been inserted in the May
resolution, that the condition had in fact
been fulfilled. The road
already formed part of an approved subdivision and already vested in
the Municipality. The condition was,
nonetheless retained as
condition (b) in the December resolution because it served as a
reminder to the Municipality that it needed
to have it formally
transferred into its name. He stated that it was not for the
developer to do so, but for the Municipality.
Mr Gericke’s
evidence in that regard was also not disputed.
[23]
It
thus follows that the further attacks on the December resolution are
also without merit.
The
recusal application
[24]
Green
Willows persisted on appeal with the contention that the judge should
have recused herself after refusing the application,
because she had
made conclusive findings before the end of the trial.
[25]
The
test for recusal is objective and the onus of establishing it rests
upon the applicant. The question is whether a reasonable,
objective
and informed person would on the correct facts reasonably apprehend
that the judge has not brought or will not bring
an impartial mind to
bear on the adjudication of the case, that is, a mind open to
persuasion by the evidence and submissions of
counsel.
[4]
[26]
In
R
v Silber
[5]
an application for recusal of the magistrate was, as in this matter,
made when the matter was well on its way. There too the application
was grounded on certain utterances and rulings made by the magistrate
during the course of the trial. Of the recusal application
this court
said:
‘
It
unavoidably happens sometimes that, as the trial proceeds, the court
gains a provisional impression favourable to one side or
the other,
and, although normally it is not desirable to give such an impression
outward manifestation, no suggestion of bias could
ordinarily be
based thereon. Indeed a court may in a proper case call upon a party
to argue out of the usual order, thus clearly
indicating that its
provisional view favours the other party, but no reasonable person,
least of all a person trained in law, would
think of ascribing this
provisional attitude to, or identifying it with, bias.’
[27]
In
Take
and Save Trading v Standard Bank of SA Limited
[6]
the defendants’ legal team withdrew from the trial without
proffering any reason during the course of the plaintiff’s
case. The defendants represented by one of them then applied for a
postponement of the trial. During the course of the debate,
the
judge intimated that there was little merit in two aspects of the
defendants’ case and that the postponement would have
amounted
to an exercise in futility, that the other defences depended on the
evidence of one of the witnesses, which, the judge
suggested, could
be given without the benefit of counsel. Eventually the judge granted
a postponement. When the matter was again
enrolled, the defendants,
represented by another counsel, applied for the judge to recuse
himself. The judge refused the application
and leave to appeal. On
appeal this court, in addressing the allegations of bias stated that
the ‘possibly injudicious remarks
by the judge’ and the
fact that he had ‘evinced a strongly held belief’ on the
merits was ‘fully justified
and would never found a
well-informed reasonable apprehension of bias’.
[28]
In
this matter it is true that the judge did make certain findings in
her judgment on the application for absolution from the instance.
But, during the debate with counsel she explained that she could
change her findings if evidence was led that could persuade her
otherwise. That to me suggests that the judge was still open to
persuasion despite expressing preliminary views on the issues.
However, despite the assurance from the judge, Green Willows decided
not to lead evidence but instead closed its case, well aware
of the
preliminary findings of the judge and the intimation by her that she
could change her views on the issues. There is, in
the circumstances,
no basis to find that there was a reasonable apprehension of bias.
[29]
In
the result I make the following order:
The
appeal is dismissed with costs.
________________________
Z
L L TSHIQI
JUDGE
OF APPEAL
APPEARANCES
For
Appellants:
D C Fisher SC
Instructed
by:
Du
Toit Sanchez Moodley Inc., Randburg
Honey
Attorneys, Bloemfontein
For
Respondents:
R W F MacWilliam SC
Instructed
by:
Edward
Nathan Sonnenbergs, Cape Town
Matsepe
Inc., Bloemfontein
[1]
The Court has been renamed the KwaZulu-Natal
Division of the High Court, Pietermaritzburg (KZP) since 23 August
2013 in terms
of the Renaming of High Courts 2014(3) SA 319.
[2]
Ouderkraal Estates (Pty) Ltd v City of Cape
Town & others
2010 (1) SA 333
(SCA).
[3]
The term is defined as such in the Plettenberg
Bay Town Planning Scheme.
[4]
President of
the RSA & others V South African Rugby Football Union
& others
[1999] ZACC 9
;
1999 (4) SA 147
(CC) para 48.
[5]
R v Silber
1952 (2) SA 475
(A) at 481G-H.
[6]
Take and Save
Trading CC & others v Standard Bank of SA Ltd
2004 (4) SA 1
(SCA) para 16-18.