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[2018] ZAGPJHC 478
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Wisdom Through Christ Ministries v Ekhuruleni Metropolitan Municipality (42952/2013) [2018] ZAGPJHC 478 (21 August 2018)
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IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
REPORTABLE
OF
INTEREST TO OTHER JUDGES
REVISED.
CASE
NO: 42952/2013
21/8/2018
In
the matter between:
WISDOM THROUGH
CHRIST MINISTRIES
Applicant
And
EKURHULENI
METROPOLITAN
MUNICIPALITY
Respondent
JUDGMENT
SPILG,
J:
INTRODUCTION
1.
The applicant, Wisdom Through Christ Ministries seeks an order
declaring that the Ekurhuleni Metropolitan Municipality
(“
the
Municipality”
) replace Erf [….] with Erf [….]
in Thokoza, Alberton. Ancillary relief includes requiring the
Municipality to sign
a new sale agreement and directing it to
transfer the property into the name of the applicant.
2.
The basis of the application is twofold. Firstly, an agreement that
Erf [….] would be replaced with
another suitable piece of land
because of an undisclosed defect on the property. The other is that,
by reason of this defect, the
applicant is entitled to an alternative
piece of land.
3.
The respondent has brought a counter-application declaring that the
initial sale of erf [….] was validly
cancelled by reason of a
breach of contract, alternatively that it is entitled to cancel the
sale, retain all monies paid in respect
of the purchase price and
claim damages for breach. Clearly the counter-application can only be
considered if the applicant is
not entitled to the relief it claims.
4.
It is necessary to preface this judgment with a number of
observations.
Firstly, the
critical facts are essentially undisputed. It is the task of the
court to identify and resolve the real legal issues
that arise from
these facts.
Although the parties
have characterised the matter in various ways, it would be incorrect
to commence the characterisation of the
issues by reference to a
legal principle and then see if the facts can be squeezed to fit.
That puts the cart before the horse.
The second is that
provided the facts are before the court, and provided a possible
legislative impediment is not raised for the
first time after close
of pleadings (subject to lack of prejudice) then it remains open for
the court to raise a legal issue
mero
motu
.
[1]
Thirdly it is a
foundational principle that provided there is a legal right the law
will provide a remedy
[2]
. In
practice this mean that the court has the power to fashion an
appropriate remedy even if it is not expressly asked for. Again
this
is subject to neither party being prejudiced.
The last observation
is that before a court can make a determination on legal principles
other than those initially raised it should
be satisfied that no
additional facts could have been raised by the unsuccessful party.
5.
In the present case the parties argued over the meaning to be
attributed to correspondence between the parties,
the issue of
rectification, the requirements of the
Alienation of Land Act 68 of
1981
, the need for resolutions to have been passed by the
Municipality, the question of whether there was a
volte face
on
the part of the Municipality, whether the Municipality could be held
to its commitment to provide alternative land as evidenced
(so it was
submitted) by the correspondence, the alleged subsequent
intransigence of the Municipality and the validity of the obstacles
that were claimed to exist which prevented it from being able to
provide the alternative land that was identified by the applicant
(which included the entitlement of the Municipality to first consider
whether there were alternative pieces of land which might
be
available), the refusal to make a decision on providing alternative
land and whether the court could intervene and direct that
the erf be
replaced if the Municipality’s objections were not valid.
UNDISPUTED
FACTS
6.
Pursuant to a tender process the respondent had originally allocated
to the applicant the land situated at
Erf [….] Phola Park.
This was in November 2004.
The land measured
some 2 400m
2
.
After the applicant
had paid the full purchase price of R45 000 it turned out that
the land had been invaded by squatters and
was not suitable for its
intended purpose.
The intended purpose
was the development of buildings as a place of worship for the
church’s congregants with the provision
of the usual ancillary
communal activities and on-site parking.
7.
The applicant then requested that the property be replaced with an
alternative piece of land and suggested
erf [….] as a
possibility. The respondent’s internal departments assessed the
suitability of erf [….] for sale
to the public. This included
a determination by its then Road Transport and Civil Works Department
(“
the RTCW”
) and it’s Water Department of
the extent of any underground municipal pipes on the land.
8.
The
assessment disclosed only sewerage pipes traversing the property. As
a consequence the respondent’s interests required
protection by
means of a three metre wide servitude. It is evident that the
applicant did not consider this to be a problem as
erf [….]
Thokoza was some 50% larger and measured 3 795m
2
.
[3]
9.
The parties then agreed to replace the property with erf [….]
Thokoza. This was achieved by the Municipality
rescinding its
previous resolution regarding the sale of the Phola Park property to
the applicant, resolving that it no longer
required to hold erf [….]
Thokoza and that it be sold for R55 000. In a later resolution
the Municipality also resolved
that the purchaser would be the
applicant and that the amount of R45 000 which was paid by the
applicant for the Phola Park
property would be held as part payment
for the Thokoza stand.
10. At the time of
the conclusion of the sale agreement, which was eventually signed on
16 October 2006, the respondent had disclosed
to the applicant the
existence of certain sewage pipes running across the stand and the
applicant accepted this on the basis that
it would not interfere with
the intended land use. The applicant subsequently occupied the
property although transfer had not yet
been effected.
11. A year later in
October 2007 the applicant discovered that there was also an
underground storm water pipe running through the
property. The papers
sometimes refer to it as a sewage pipe. Nevertheless it is in fact a
storm water pipe and is to be distinguished
on this basis from the
sewage pipes of which the applicant had been precognised and which
was identified in the agreement as the
“
3 metre wide sewer
servitude indicated on the attached plan”
.
12. The applicant
requested the respondent to replace the property with another on the
ground that the existence of the storm water
pipe had not been
disclosed.
13. On 30 April 2008
the respondent through Mr Sibeko, it’s Manager Corporate and
Legal Services (Alberton Customer Care Centre)
acknowledged in a
letter addressed to the Chief Engineer Water Services that subsequent
to the sale of the erf an “
additional sewer main
”
was discovered running half way across the erf. This was in fact the
storm water pipe.
14. On 17 July 2008
in a further letter addressed by Sibeko to the RTCW: Land Use
department he stated that this pipe was “
a
huge
pipe … in addition to the sewer line previously mentioned”
(emphasis added). The letter also acknowledged that the pipe was
for storm water and that it had not been previously disclosed which
“
is currently a huge embarrassment to Council
”.
15.
Accordingly
the respondent accepted that the storm water pipe had not been
disclosed.
[4]
16. On 23 April 2009
Mr Smit, who appeared to have replaced Mr Sibeko as the Manager;
Legal and Administration Services, advised
the applicant in a letter
that:
“
Kindly
note that in the light of the attached comments received from the
Roads, Transport and Civil Works Department
confirming that
no development would have been allowed in the servitude area even if
no service had been installed there
, and your indication
that your church does not agree with the said department and does not
want to proceed with the transfer as
a result of the said services
affecting the property a meeting would serve no purpose.
You are requested
to either identify an alternative erf or request Council to refund
you the money already paid
whereafter the matter will be submitted
to Council for consideration
. “
(emphasis added)
I should add that
the applicant contended that the development of the land would not be
possible, and might be unlawful, because
of the location of the storm
water pipe on the erf.
17. The applicant
proceeded to identify erf [….] as the alternative piece of
land it wished to acquire. On 17 June 2009 the
respondent, still
represented by the Manager; Legal and Administrative Services (but
now a Mr Herbst who took over from Smit) advised
the applicant that
erf [….] was not available for purchase.
In this letter
reference was made for the first time to the voetstoots clause
contained in the agreement. The letter then directed
the applicant to
look for solutions with the Director: Roads, Transport and Civil
Works.
18.
Almost
four years passed before the applicant, through its attorneys, wrote
to the City Mayor. The letter added that there was a
sink hole along
the storm water pipe
[5]
. The
letter claimed that the applicant had been in discussion with the
Town Council during the intervening years without success.
The letter
again requested that the property be replaced with erf [….]
which was on an adjacent piece of land. The letter
requested the City
Mayor’s intervention.
19.
On 7
October 2013 the applicant ascertained that erf [….]was
available and requested that this piece of land replace erf
[….].
The applicant also alleged in its founding affidavit that the land
was not earmarked for development.
[6]
20. Aside from
effectively disputing every legal element of the applicant’s
case, the respondent counterclaimed that the applicant
had breached
the agreement by not taking transfer when it was requested in October
2013 to sign the necessary documents. As a consequence
the respondent
contends that it is entitled to cancel the agreement and retain the
monies paid, which in fact is the full purchase
price.
THE
RESPONDENT’S DEFENCES TO THE APPLICANT’S CASE
21. The respondent
argues that there is no contract between the parties in respect of
erf [….] and that no case can be made
out for rectification.
22. I believe that
this begs the question. It is evident from the common cause facts
that there was an agreement in terms of which
a suitable piece of
available municipal land selected by the applicant would be allocated
in substitution for the land originally
obtained through the tender,
beneficial occupation of which was frustrated when squatters were
found to be on it.
23. It is common
cause that as a result, the applicant was entitled to and did in fact
propose an alternative piece of land which
was 50% larger than the
original one. From the aforegoing it was also clearly implicit that
provided the proposed land was available
for private development the
respondent would be agreeable to substitute, and in fact did
substitute the replacement piece of land,
via
the cancellation
of the first sale and the signing of a subsequent sale.
24. It is evident
from the facts that in October 2006 the parties had concluded a
composite oral agreement (which I will also refer
to as the
“
Substitution Agreement”
) comprising;
a.
the cancellation of the original November 2004 agreement for the sale
of Erf [….] Phola Park;
b.
a replacement agreement between the same parties which would be
reduced to writing for a suitable alternative
piece of land
c.
the
transfer of the original amount already paid towards, or in
settlement of, the purchase price of the land to be acquired under
the replacement agreement.
[7]
It is also evident
that there would be no need to go to a tender process as the
applicant had been the successful tenderer and the
Municipality was
unable to deliver as undertaken.
The outstanding
requirement was that the land be available for private development,
which of necessity would have included no more
than a determination
by the Municipality that it no longer required the land in question.
25. I am satisfied
that the way in which the 16 October 2006 agreement came to be
implemented through the substitution of another
piece of land and
without a new tender process, as well as the conduct of the parties
as evidenced by subsequent correspondence,
demonstrates that there
was an implicit (i.e. tacit) underlying agreement between the parties
that if there was any impediment
in respect of the replacement land
that was offered rendering it unsuitable for its disclosed purpose
then another suitable piece
of land would be found and substituted in
its stead.
Tested another way;
if the second storm water pipe had been disclosed on erf [….]
prior to signature of the 16 October 2006
agreement then it is
evident from the intention of the parties as revealed by their
communications that the property would not
have been agreed upon but
another piece of land would have been found which was available for
private ownership and capable of
proper development by the applicant
as a place of worship for its congregation with provision for the
usual accompanying communal
activities and on-site parking. This
alternate piece of land would have replaced stand [….] and, if
applicable, there would
have been an adjustment of the purchase
price, based on a fair market value.
26. The applicant
expressly averred that erf [….] was not suitable because of
the subsequent discovery of the storm water
pipe. This is beyond
dispute since the respondent itself acknowledged in the two letters
mentioned earlier that;
a.
the storm water pipe had not been disclosed; and
b.
by reason of its existence no development would have been allowed on
the servitude area around the pipe, thereby
further restricting the
area available for development.
27. An overarching
argument presented by the respondent is that the court cannot make a
contract for the parties. The respondent
however overlooks that there
was a pre-existing oral agreement in terms of which it would provide
the applicant with a suitable
alternative piece of land. That is the
agreement relied upon and for the reasons given in the preceding
paragraph the physical
attributes of erf [….] failed to
satisfy this requirement, albeit that they were only discovered
later.
Accordingly the
court is not making an agreement for the parties. As for the merx;
sufficient was agreed upon in relation to what
would qualify and what
would not when the selection choice was exercised. The implied term
of the agreement, in order to give it
efficacy (as had occurred on
the previous occasion) was for that piece of land to be identified in
the signed agreement. Similarly
the purchase price was not subject to
negotiation but based on an objectively determinable fair market
value.
28.
If the
sale agreement for erf [….] stood alone then on ordinary
principles the common mistake as to the existence of a state
of
affairs in relation to the subject matter would vitiate it
[8]
,
and place the parties in the position
status
quo ante
[9]
.
This consequence arises since the development of the property was an
express requirement, and therefore vital to the transaction.
29.
In my
view a
voetstoots
clause does not assist the respondent because it cannot go so far as
to cover a state of affairs which is required to exist in
order for
the party who imposes the clause to meet a condition contained in the
agreement. Otherwise logic dictates that there
would be an
irresoluble ambiguity.
[10]
30. The difficulty
is that the 16 October 2006 agreement does not stand alone. It is the
executive part of a composite agreement
which, as mentioned earlier,
is intrinsically one to substitute the first piece of land, lawfully
acquired through a successful
tender process in November 2004, with a
suitable alternative piece of land that was available.
Both parties
believed that the alternative piece of land selected, being erf [….],
was capable of development save for one
area; whereas in fact there
was a second significant area which was incapable of being developed.
In the present case a department
within the respondent was to blame
for not marking or identifying the second area; a failure which
self-evidently induced the applicant
to agree to swop the initial
piece of land for this one and therefore, it might be argued that
there was an actionable error induced
by the other party.
[11]
31. In either event,
the mistake or error is actionable but the remedy cannot be to annul
the 16 October 2006 agreement since it
is part of a composite
agreement which in turn had cancelled the initial sale agreement of
November 2004. In my view what is resurrected
is the October 2006
oral agreement to substitute erf [….]. Phola Park with an
available suitable property.
32. The applicant
avers that it was entitled to select erf [….] to which the
respondent raises a number of impediments. .
33. The one
substantive argument presented by the respondent is that there is no
written agreement in terms of which the property
which the applicant
wishes to acquire is identified and the letter relied on does not
constitute a written contract for the sale
of land as required under
the
Alienation of Land Act.
It
was also argued
that in order to act in a procedurally lawful manner the respondent
would have to pass similar resolutions to those
when it had agreed to
replace the initial property with erf [….], and that this had
not occurred.
34.
In my
view, once the agreement is vitiated by common mistake then as a
matter of law the parties are restored to the position
status
quo ante (
i.e.
they are put back to the position
vis
a vis
one
another as if the agreement had not been concluded). The same would
be the case if there had been an actionable unilateral mistake
[12]
.
In the result
restoring the parties to the
status ante quo
means that the
oral Substitution Agreement of October 2006 is resurrected. In its
terms the original piece of land which was unsuitable
because of the
presence of squatters is to be replaced with a suitable property
selected by the applicant provided it is available
for private
development.
Since that agreement
was purportedly implemented, the regularity of the actions of the
Municipality regarding the process involved
in giving consideration
to an alternative piece of land for the applicant cannot be
questioned. The Municipality does not again
have to consider whether
or not to provide the applicant with an alternative piece of land for
the initial one
[13]
. That part
of the resolution must still be implemented by reason of the transfer
of erf [….] being vitiated resulting in
the restoration of the
status
quo ante
.
REMEDY
35. As mentioned
earlier it is a basic principle of our law is that where there is a
right there will always be an effective remedy.
The question then
is: What remedy is available to the applicant?
36. The respondent
has not suggested any alternate piece of land to the one the
applicant alleges is available and which it is prepared
to take in
substitution; namely erf […..] Thokoza. As a fact, since
Herbst took office, the respondent has actively frustrated
the
securing of an alternative piece of land and has not suggested that
any other suitable land is available despite having been
given the
opportunity of doing so over many years. It will be recalled that the
only other suitable land pointed out by the applicant
was said to be
unavailable.
37. I have found
that the October 2006 oral agreement to substitute erf [….]
Phola Park with a suitable alternative piece
of land remains
operative and a part of its terms has in fact been implemented,
namely the cancelation of the Phola Park agreement.
The result is
that there must be a remedy available that can give effect to the
agreement.
38. However a number
of legal obstacles have been raised and the question is whether they
can be overcome.
The most serious is
that the essential terms of an agreement for the sale of land must be
reduced to writing and signed by the parties-
this would include the
description of the property. The other is that post Sibeko and Smit,
the respondent has adopted an obstructive
approach. It is therefore
not possible for the court to be satisfied that any alternate piece
of land other than that identified
by the applicant exists, and if it
did, that the respondent will abstain from placing impediments in the
path so as to frustrate
the exercise of the right to which the
applicant is entitled. For this reason it is inadvisable to simply
direct that the respondent
is to provide an available suitable piece
of land in substitution. The risk of further litigation over an
indefinite period is
too great.
39. In the
circumstances of this case where it was accepted that a substituted
piece of land would be provided, and which was not
at the sole
discretion of the respondent, it seems appropriate to fashion a
remedy that finds its roots in cases where there is
a need to
substitute property and the market related price because, at its
lowest an error common to the parties. The only difference
between
the usual cases of rectification and the present one is that in the
former the mistake arises in drafting the agreement
incorrectly
whereas here the mistake arose in the attributes of the property
selected enabling another selection to be made which
meets the
specific criteria that had been agreed upon.
40. In my view this
does not extend the law relating to rectification.
There are two
reasons for this.
41. Firstly, Harms
DP in
Amler’s Precedent of Pleadings
(5
th
ed,
1998) under the subject of rectification referred to three situations
where a mistake in drafting a document will permit the
remedy of
rectification. The first two are where there has been a
bona fide
mutual error or an intentional act of the other party. The last
is of interest for present purposes; here the author describes “
a mistake by the parties by wording the written agreement in such
a way as not to exclude their oral agreement from operating together
with their written agreement”
. In
Tesven CC and another
v South African Bank of Athens
[1999] 4 All SA 396
(A) Farlam AJA
gave effect to this at paras 13-18 and cited with approval the
explanation by Trollip J (at the time) in
Von Ziegler v Superior
Furniture Manufacturers (Pty) Ltd
1962(3) SA 399(T) at 411A-D of
the then leading case on the subject; namely
Mouton v Hanekom
1959
(3) SA 35
(A). The key element was the recognition that in such
circumstances the parol evidence rule would not be offended by having
regard
to the oral agreement.
42. If I am wrong
then the peculiar facts of the underlying oral agreement which was
premised on substituting a piece of land in
respect of which vacant
possession could not be given for another suitable property should
not be thwarted and rendered incapable
of fulfilment by the
self-evident subsequent frustrating and obstructive acts of Herbst
who, for no valid reason, reneged on what
amounts to admissions by
both Sibeko and Smit whom he replaced as the head of the
Municipality’s legal and administration
services.
Moreover it is not
unusual for a local authority to encourage development of an area by
making land available for that purpose and
in some cases making
temporary sites available on the basis that once development starts
there will be a relocation to permanent
sites. These types of
transactions should not be discouraged or rendered unenforceable even
though there is no specifically identified
replacement site having
regard to the common understandings and commitments each party makes
to the project for their respective
objectives but mutual benefit.
[14]
43. The appropriate
relief is to give effect to the oral substitution agreement by
replacing the erf that was unsuitable with the
only one identified by
the respondent and which this court has found to be available and
which is suitable to the applicant. It
will also necessitate changing
the size of the property and consideration price contained in the
written agreement.
44.
The
terms of the agreement dealing with interest can be capable of
variation on the basis that the situation which arose was not
covered
in the written memorial but which can be inferred from the express
terms and the surrounding circumstances in order to
give the
agreement business efficacy
[15]
.
In this regard it is relevant that the failure to pick up the defect
in the substituted piece of land was the fault of the Municipality
and it is evident that further delay arose when Herbst refused to
respect the admissions made by both his predecessors. Effect
will be
given in the body of this court’s order as to the tacit term of
their agreement regarding when interest starts running.
In doing so I
have regard to the intervening circumstances mentioned. I add that
interest is an ancillary provision in the agreement
and is based on
the existence of a debt that has become due, owing and payable on the
basis that the reciprocal obligation of the
other party has been
performed. In addition the Municipality did not produce any
resolution or document to suggest that market
price for erf 11953 had
been amended despite eight years having passed since the resolution
relied upon.
45. This brings me
to the next major issue raised; namely the identification of the
replacement property and whether it is available
for private
development.
The respondent
contends that erf [….] is unavailable to the applicant as it
has been put out to tender.
46.
At the
outset it is common cause that erf [….] is available for
private development. The difficulty facing the respondent
is that the
alleged resolution relied on to put erf 11953 out to tender was
passed in April 2006 yet by February 2014 the respondent
stated that
the public tender process had not yet been conducted
[16]
.
Moreover of the four
applications to purchase the property relied on by the
respondent
[17]
, one is to
lease, this one and two others predate the resolution (in one case by
over a year) while the fourth application is unsigned
and undated. It
is evident that nothing has happened in regard to any development of
that property for over seven years. This reinforces
the applicant’s
statement in its founding affidavit that on 7 October 2013 Senior
Pastor Tshirumbula attended the respondent’s
offices and was
informed that erf 11953 was vacant and not earmarked for any
development.
[18]
47. It is also
evident that there has been no publication of a tender for the
acquisition of erf [….] even by April 2014
when the respondent
filed a further affidavit. The respondent’s averments regarding
a resolution to go out to tender is therefore
glib as it has never
been implemented. On the contrary the only evidence produced
demonstrates that the erf never went out to tender
and that the
requirements for a lawful tender process have never been followed.
48. The resolution
relied on does however confirm that erf [….] was formally
released for private development by the Municipality.
49.
The
respondent did not seek to refer the matter to oral evidence.
Applying the
Plascon-Evans
principles
I am satisfied that the respondent has not raised a real or genuine
dispute of fact to support the legal positions contended
for.
[19]
50.
Moreover
the issue does not concern the exercise of administrative power. By
lawfully passing the initial set of resolutions which
adequately
provided the policy framework and going through a tender process that
was regular in all respects
[20]
the Municipality entered the commercial arena and must submit to its
consequences. The applicant is entitled to enforce the agreement
for
the provision of alternative available land. I have found that the
respondent has not suggested any other piece of land and
that there
is no validly raised impediment to the land in question (i.e. erf
[….]) being made available. In any event it
is up to the
respondent to regularise it’s internal situation if needs be,
although there appear to be none as the Substitution
Agreement was
regularly concluded and remains extant while a resolution was in fact
passed to release erf [….] for private
development at a price
of R95 800.
51.
I have
found that there is no impediment to the applicant acquiring erf
[….]. The respondent intended to sell it at the price
of R95
800
[21]
. By reason of the
restoration of the position
status
quo ante
the
respondent remains obliged to honour the commitment made in the oral
Substitution Agreement of 2006. It cannot attempt to sell
this land
without first ensuring that previous transactions in relation to the
acquisition of suitable land that in fact were paid
for are taken
into account. I adapt the
qui
prior est
doctrine
to this since at this stage the rights are personal.
[22]
52.
A
final impediment raised is that even in 2006 erf [….] was
valued at R95 800 and it is almost double the size of erf
[….]
.
[23]
53. I do not believe
that the greater size of erf [….] creates an impediment. It
did not erf 430 Phola Park was swopped for
erf [….] and an
additional sum had to be put in. it could hardly be argued then that
the Municipality could have resiled
from the verbal agreement of
October 2006 by refusing to sign the written agreement drawn despite
the property being significantly
bigger and more expensive. The
Municipality never increased the consideration price it was amenable
to receiving for erf 11953
and it was the prevailing price in the
same year as the applicant concluded the Substitution Agreement.
Therefore the only issue
relates to whether the applicant is prepared
to put the extra amount in. It is prepared to pay in the difference,
as it had in
fact been prepared to do and did in respect of the first
substitution.
54. Moreover the
value must be at the 2006 prices since any difference would amount to
damages sustained as a result of at least
a failure by the
respondent’s RTCW department to have ensured that the applicant
was apprised of the second storm water pipeline.
As mentioned
earlier, it is also evident that the respondent’s relevant
department would not have sold erf [….] or
swopped it had it
known of the pipeline’s existence as no development could have
taken place along the servitudal line.
55. In all the
circumstances this is a case where the municipality being an organ of
state must act transparently and lawfully.
It cannot take money and
not meet its obligations under the 2006 Substitution Agreement which
have yet to be complied with. It
has refused to do so and in my view,
to the extent that this is not simply the exercise of a contractual
obligation which it is
already empowered to take, but may result in
an inroad into any additional administrative act that the respondent
failed to take
or ought to have taken this court is entitled to order
that erf [….] , Thokoza is to replace the original property
known
as 430 Phola Park, because;
a.
the conduct of the respondent since its inexplicable and irrational
volte face
would render it unfair for the applicant to submit
to the respondent’s decisions again;
b.
the respondent sought to cancel a putative agreement and take the
entire purchase price paid as a penalty when
it had acknowledged
responsibility for not ensuring that servitudal lines were accurately
reflected on its plans;
c.
it is not disputed that erf [….] is available, and available
to a religious institution;
d.
further delay would cause unjustifiable prejudice as the applicant
had paid in full for unsuitable land and
was at all times willing to
pay any additional amount required to obtain a suitable piece of
land; and
e.
the
result is a foregone conclusion as there was no suggestion that there
were any other facts which could lead to a different conclusion;
unless the municipality was to act in an obstructive manner and not
in good faith (which would simply result in the matter being
brought
back to this court).
[24]
ORDER
56.
It
is for these reasons I ordered that:
1.
The agreement between the applicant and the respondent signed on 16
October 2006
is rectified and amended as follows:
a.
The words “erf [….], Thokoza measuring 3 795 m
2
in extent, as indicated on the plan annexed hereto marked “Annexure
A” are replaced with the following:
“
erf [….],
Thokoza measuring 7 075 m
2
in extent,
situate at [….], Alberton”
b.
The purchase price in clause 2 of the agreement of
“
R55 000
(fifty five thousand Rand)” is replaced with the following:
“
R95 800
(ninety five thousand eight hundred Rand)”
2.
Interest on the outstanding balance of the purchase price as provided
for in
clause 3(b) is only to be calculated as from the date of this
order. It is recorded that R55 000 of the purchase price has been
paid
3.
The respondent is interdicted and restrained from enforcing the
provisions of
clause 3(b) of the agreement unless the applicant fails
to secure payment of the balance of the purchase price, as provided
for
in that clause, within thirty days after the date of this order.
4.
The respondent is directed and ordered to transfer the aforesaid
property situated
at erf [….] Thokoza forthwith into the name
of the applicant, and to cause its nominated conveyancers to have all
necessary
documents ready for lodging by no later than 60 days from
the date of this order and if it fails to do so, then and in such
event:
a.
If applicable, no further interest shall be payable;
b.
And provided further that the applicant has complied with all its
obligations
as required for transfer to be effected, the Sheriff of
the High Court is directed and authorised to take all necessary
steps,
including signing the transfer documents in order to effect
transfer of the property into the name of the applicant
5.
The counter-application is dismissed
6.
The respondent is to pay the costs of both the application and
the
counter-application.
SPILG
J
DATE
OF REASONS:
21 August 2018
FOR
APPLICANT:
Adv R N Ralikhuvhana
Denga Inc
FOR
RESPONDENT:
Adv G I Hulley SC
Tshiqi Zebediela Inc
[1]
See
Yannakou v Apollo Club
1974 (1) SA 614
(A) at 623H.,
Pratt v First Rand Bank
[2008] ZASCA 92
;
2009 (2) SA 119
(SCA) at para
12and
Bato Star Fishing (Pty) Ltd v Minister of Environmental
Affairs and Others
[2004] ZACC 15
;
2004 (4) SA 490
(CC) at para 27. Compare
Bank of Lisbon International Ltd v Venter en 'n Ander
1990
(4) SA 463
(A) at 474G-475D
[2]
Minister of the Interior and another v Harris
1952(4) SA 769 (AD) at 781A-B
[3]
See Deed of Transfer at paginated p20
[4]
Annexures
WTC003 and WTC004
.
[5]
Para 5 of the letter
from Denga Inc to the
Municipality dated 22 April 2013
[6]
See pp15-16 para 30
[7]
See para 33-34 of the answering affidavit
[8]
See Dickinson Motors (Pty) Ltd v Oberholzer
1952 (1) SA
443
(A) at 450B-C
[9]
See
Van Reenen Steel (Pty) Ltd v Smith NO and Another
2002
(4) SA 264
(SCA) at para 1 and paras 9 to 13 which approved the
following statement in
Wilson Bayly Holmes (Pty) Ltd v Maeyane
and Others
1995 (4) SA 340
(T) at 344I:
'a
common mistake relating to the existence of a particular state of
affairs will not render the contract void unless it can be
said that
the parties expressly
or tacitly
agreed that
the validity of the contract was conditional upon the existence of
that state of affairs'.
(emphasis added)
In
Van Reenen Steel
Harms JA
(at the time) at paras 9 to 13 recognised that an assumption made by
the parties as to a state of affairs regarding the
subject matter of
eth transaction can be elevated to a term of the contract, even if
only implied. Reliance was placed on the
following: Firstly
Bell
v Lever Bros Ltd
[1931] UKHL 2
;
[1932] AC 161
(HL), where the court pointed out
at 224 and 225 respectively that:
'It
is said that in such a case as the present there is to be implied a
stipulation in the contract that a condition of its efficacy
is that
the facts should be as understood by both parties . . .'
and
'if
the contract expressly or impliedly contains a term that a
particular assumption is a condition of the contract, the contract
is E avoided if the assumption is not true'
.
Reliance was also placed on the
statement by Van der Merwe
et al
in
Contract: General
Principles
at 19 that:
'A
common mistake is said to be present where both parties to an
agreement labour under the same incorrect perception of a fact
external to the minds of the parties. Such a mistake, of course,
does not lead to dissensus: the parties are in complete agreement,
although their consensus is based on an incorrect assumption or
supposition. This kind of mistake can be related to the concept
of a
common underlying supposition (''veronderstelling'') on which the
parties base their contract. In this manner the parties
can
introduce a common motive into the (terms of the) contract so that a
mistake in their common motive will render the contract
without
further effect.'
Quite distinctly, it may also be
assumed that both parties anticipated that in the nature of things
the congregation would be
expected to grow over time and space for
parking and further development would be required.
[10]
In cases of
error in corpore
consent to the whole agreement
is vitiated- accordingly a voetstoots clause cannot survive. See
Maresky v Morkel
1994 (1) SA 249
(C) at 255F-256C citing
Allen v Sixteen Stirling Investments (Pty) Ltd
1974 (4)
SA 164
(D) at 170H-171F. So too would common error.
[11]
This would render the error material,
attributable to the other party and in all the circumstances
justus
or reasonable
.
See
Sonap Petroleum (SA) (Pty) Ltd (formerly known as
Sonarep (SA) (Pty) Ltd) v Pappadogianis
[1992] ZASCA 56
;
1992 (3) SA 234
(A)
and
Wille’s Principles of South African Law
(9
th
ed) at 745-749. It will be recalled that in
Dibley v Furter
1951
(4) SA 73
(C) the one area of the farm where graves were located had
been ploughed over, was used as farmland and the usefulness of the
property was not materially impaired. It is therefore
distinguishable from the present case where the second area was
unknown,
not developed and is undevelopable by reason of the
servitudal rights or bye-laws.
[12]
See
Gollach &
Gomperts (1967) (Pty) Ltd v Universal Mills & Produce Co (Pty)
Ltd
1978 (1) SA 914
(A) at
926F-927A
[13]
If only because of the presumption of the validity of an
administrative act until set aside-
omnia praesumuntur rite esse
acta.
See
MEC for Health, Eastern Cape and Another v Kirland
Investments (Pty) Ltd t/a Eye & Lazer Institute
2014
(3) SA 481
(CC) at para 102 and the cases cited at ftn 75
[14]
See for example the encouraging of commercial enterprise in the
mining town of Selebi-Phikwe in Botswana by providing temporary
sites which would be converted into permanent land rights elsewhere
once there was development. This appears from the facts of
Essack
v. Bamangwato Concessions Ltd
1983 BLR 307
(HC)
per
Hannah
J
[15]
Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial
Administration
1974 (3) SA 506
(A) at 531H-532A and
Botha v
Coopers & Lybrand
2002(5) SA 347 (SCA) at paras 22-25
[16]
Para 121.7 of the
answering affidavit
[17]
Annexures DF28 to DF31 of the answering affidavit.
[18]
Para 30 of the founding affidavit read with para 121
[19]
Plascon-Evans Paints Ltd v Van Riebeeck Paints
(Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at
634H – I which effectively requires a court to accept the
version of the party against whom the application is brought
unless
there is no genuine defence raised or certain other exceptional
features are present
[20]
Compare
Minister of Transport NO and Another v Prodiba (Pty) Ltd
[2015] 2 All SA 387
(SCA) at paras 26, 27, 32 and 39
[21]
See para 121.4 of the answering affidavit and annexure DF2. On 24
April 2006 the respondent passed a resolution that it would
alienate
erf 11953 measuring 7 075 m
2
by public tender for
R95 800.
[22]
“
Qui prior est tempore, potior est jure”
[23]
See ftn 13.
[24]
See on the court being entitled in similar
exceptional circumstances to supplant its own decision for that of
an administrative
body under common law:
Johannesburg
City Council v Administrator, Transvaal and Another (1)
1970
(2) SA 89
(T) at 75H-77C;
Under
s 8(1)(c
)(ii)(a) of the Promotion of Administrative Justice Act 3 of 200
(PAJA) see
National Tertiary Retirement Fund v Registrar of
Pension Funds
2009 (5) SA 366
(SCA) at para 26 and
Gauteng
Gambling Board v Silverstar Development Ltd and Others
2005
(4) SA 67
(SCA) at paras 28, 29 and 41; and
Trencon Construction
(Pty) Ltd v Industrial Development Corporation of South Africa Ltd
and another
2015 (5) SA 245
(CC) at para 47
s8(1)(c
)(ii)(aa) of PAJA reads:
Remedies
in proceedings for judicial review
(1) The
court or tribunal, in proceedings for judicial review in terms of
section 6 (1), may grant any order that is just and
equitable,
including orders-
(c)
setting aside the administrative action and-
(ii)
in exceptional cases-
(aa) substituting or
varying the administrative action or correcting a defect
resulting
from the administrative action;