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[2019] ZAGPJHC 467
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Qayisa NO and Others v Alticon Group (Pty) Ltd and Others (28143/17) [2019] ZAGPJHC 467 (20 December 2019)
HIGH
COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, JOHANNESBURG)
Case
No: 28143/17
In
the matter between:
AYANDA
QAYISA
N.O.
First
Applicant
THEMBALIKAYISE
JOHN LUPEPE N.O.
Second
Applicant
VUYO
KONA
N.O.
Third
Applicant
KWEZI
KOMANISI
Fourth
Applicant
and
ALTICON
GROUP (PTY)
LTD
First
Respondent
STI
CONSULTING SERVICES
CC
Second
Respondent
MEC:
GAUTENG PROVINCIAL GOVERNMENT
DEPARTMENT
OF HUMAN SETTLEMENTS
Third
Respondent
REGISTRAR
OF DEEDS, JOHANNESBURG
Fourth
Respondent
COMPANIES
AND INTELLECTUAL PROPERTY COMMISSION
Fifth
Respondent
HEINRICH
CORNELIUS VON
LANDSBERG
Sixth
Respondent
MICHAEL
NICOLAS
GEORIOU
Seventh
Respondent
FERDI
KLEYNHANS
Eighth
Respondent
DAGGAFONTEIN
DEVCO (PTY)
LTD
Ninth
Respondent
EKURHULENI
METROPOLITAN MUNICIPALITY
Tenth
Respondent
RODASH
117 (PTY)
LTD
Eleventh
Respondent
Case
Summary
: Contract – Breach – Condition –
Right of cancellation upon breach – Prior written notice to be
given
– Effect of notice stating incorrect amount.
JUDGMENT
MEYER,
J
[1]
This application essentially concerns a claim by the first applicant,
Mr Ayanda Qayisa N.O, the second applicant, Mr Thembalikayise
John
Lupepe N.O., the third applicant, Mr Vuyo Kona N.O., in their
capacities as the trustees of the Uhuru Business Trust (the
trust),
and the fourth applicant, Mr Kwezi Komanisi (Mr Komanisi), for
specific performance of a written agreement of sale of certain
immovable properties comprising portions of the farm Daggafontein
located near Springs (the land) concluded between the second
respondent, STI Consulting Services CC (STI), as the owner and seller
of the land, and the ninth respondent, Daggafontein Devco
(Pty) Ltd
(Daggafontein), as the purchaser, on 25 May 2017 (the sale of land
agreement).
[2]
The sixth respondent, Mr Heinrich Cornelius von Landsberg (Mr von
Landsberg) is STI’s managing member and the eighth respondent,
Mr Ferdi Kleynhans (Mr Kleynhans) was Daggafontein’s sole
director at the time of the conclusion of the sale of land
agreement.
The seventh respondent, Mr Michael Nicolas Georgiou
(Mr Georgiou), was a signatory to the sale of land agreement; he
bound himself
as surety and co-principal debtor in favour of STI for
the due performance of Daggafontein’s payment obligations
arising
from the sale of land agreement. The trust and Mr
Komanisi also claim to be entitled to the transfer to them of the
entire issued share capital of Daggafontein, and such relief they
claim from the first respondent, Alticon Group (Pty) Ltd (Alticon).
STI cancelled the sale of land agreement on 13 June 2017 and
concluded a subsequent written sale agreement of essentially the same
land with the eleventh respondent, Rodash 117 (Pty) Ltd (Rodash).
Other parties cited as respondents in these proceedings,
but against
whom no relief is claimed, is the third respondent, the MEC: Gauteng
Provincial Government, Department of Human Settlements
(the
department), the fourth respondent, the Registrar of Deeds,
Johannesburg, the fifth respondent, the Companies and Intellectual
Property Commission, and the tenth respondent, the Ekurhuleni
Metropolitan Municipality (the municipality).
[3]
The notice of motion is divided into two parts: Part A in which
certain urgent relief was sought and Part B in which the
substantive
relief referred to in the preceding paragraphs is sought. The
urgent relief sought was resolved amongst the parties
and the urgent
court made the draft order to which they agreed an order of court,
and reserved the question of costs of Part A
for determination by the
court hearing Part B. The parties are
ad idem
that the
successful parties in claiming or resisting the substantive relief
should also be awarded the costs of Part A.
[4]
I now turn to the facts relevant to the determination of the issues
between parties. Motion proceedings in which final
relief is
sought, however, ‘cannot be used to resolve factual issues
because they are not designed to determine probabilities’
(
per
Harms JA in
National Director of Public prosecutions v Zuma
[2009] ZASCA 1
;
2009 (2) SA 277
(SCA) at 290D-E). I, therefore, must accept
the facts alleged by the opposing respondents, unless they constitute
bald or
uncreditworthy denials or are palpably implausible,
far-fetched or so clearly untenable that they could safely be
rejected on the
papers. Such finding ‘occurs infrequently
because courts are always alive to the potential for evidence and
cross-examination
to alter its view of the facts and the plausibility
of the evidence. (
Media 24 Books (Pty) Ltd v Oxford University
Press Southern Africa (Pty) Ltd
2017 (2) SA 1
(SCA) at 18A-B).
That test for rejecting the facts put up by the opposing respondents
on the papers is not satisfied
in casu
.
[5]
The trust has many business interests across a wide spectrum of
activities, including the undertaking of property development.
Alticon is a property development, design and management consulting
company. It offers a full range of services that includes
professional planning, design, costing, development and project
management. During the latter part of 2015, Alticon introduced
the trust and Mr Komanisi to the business opportunity of acquiring
and developing the land with a subsidy from the department.
The
project envisaged the initial construction of 15 511 mixed use houses
as part of the department’s integrated residential
development
programme. The services which Alticon provided in connection
with the envisaged project included a comprehensive
due diligence and
feasibility study, the planning, design and costing of the proposed
development, the incorporation of the company,
Daggafontein, which
company was to acquire and develop the land, and the submissions to
all the relevant government departments
for project approval and
accreditation. According to Alticon, it carried all those
initial costs but was to be repaid all
amounts it expended in
bringing the project to a point where Daggafontein would be accepted
by the department as the developer
of the project. It is common
cause that Alticon was to be appointed as project consultant for the
project as a whole and
be paid 8% on design development and 3% on
project management calculated on the total project value, which was
in excess of R2
billion.
[6]
It was envisaged that the trust and Mr Komanisi would own the issued
shares in Daggafontein, although they had at that stage
not provided
definitive instructions as to the percentage of shares that would be
held by the shareholders. According to
Alticon, their
acquisition of shares in Daggafontein, however, was conditional on
Alticon being paid by the trust and Mr Komanisi
‘or the
proposed shareholders of Daggafontein at the time’ for all the
initial costs it expended, which, according
to it, had not yet been
paid in full, as well as Daggafontein acquiring ownership of the
property, which also had not materialised.
According to Alticon
the ‘whole premise and condition precedent for the transfer of
the shares’ had fallen away as
a result of the cancellation of
the sale of land agreement and the resultant cancellation of the
agreements concluded between Daggafontein
and the department.
Daggafontein, according to Alticon, is a shell company ‘with no
assets and with huge outstanding liabilities
to the First Respondent
[Alticon]’. The version of the trust and Mr Komanisi, on
the other hand, is that-
‘
Alticon was to be
paid for the services it rendered on that score, and we take no issue
with that. It moreover was certainly
not any kind of suspensive
condition or a prerequisite for the transfer of the shares.’
The
facts alleged by Alticon, however, must be accepted and the relief
which the trust and Mr Komanisi claim against it relating
to the
transfer of the Daggafontein shares to them and the appointment of
Messrs Lupepe and Komanisi as the directors of Daggafontein,
therefore, must fail.
[7]
On 23 January 2017, a ‘developmental rights (land availability)
agreement’ was concluded between STI and Daggafontein
(the
STI/Daggafontein development rights agreement), in terms whereof it
was agreed that STI would make available the land to Daggafontein
to
be developed as a mixed housing development forming part of a mega
housing project ‘. . . on the principles of a Smart
City with a
view to transferring ownership of such land or any portion thereof in
accordance with the provisions of this agreement’.
The
STI/Daggafontein development rights agreement was subject to certain
suspensive conditions, including that both the department
and the
municipality approve the development of the land by Daggafontein and
enter into agreements with Daggafontein or a third
party with whom it
has contracted, recording the terms and conditions of such approval
(clause 3.1), that ‘an agreement of
purchase and sale is being
concluded contemporaneously with this agreement between STI
Consulting Services CC (as seller) and Daggafontein
Devco (Pty)
Limited (as purchaser) in respect of the land’ (clause 3.2.1.2)
and that Daggafontein ‘. . . timeously
complies with the said
sale agreement and, hence, also: (a) by no later than 17 February
2017, pays an amount of R15 000 000.00
(fifteen million Rand) to STI
Consulting Services CC; and (b) by no later than 28 February 2017
furnishes a guarantee for the balance
of the purchase price which was
agreed upon in the sale agreement referred to in clause 3.2.1.2’.
The guarantee ‘must
be issued in favour of the seller or the
seller’s nominee and expressed to be payable on registration of
transfer and subject
to no other conditions’ (clause 3.2.2.).
The STI/Daggafontein development rights agreement expressly provides
that
it ‘will automatically terminate and be of no further
force or effect’ in the event of the non-fulfilment of the
suspensive
conditions (clause 3.3).
[8]
On 26 January 2017, an agreement of purchase and sale was concluded
between STI, as the owner and seller of the land, and Daggafontein,
in terms of which agreement STI sold the land to Daggafontein.
The purchase price was payable by way of a non-refundable
deposit in
the amount of R15 million on 7 February 2017, and the balance on
registration of transfer. In respect of the balance
purchase
price, Daggafontein was obliged, by no later than 28 February 2017,
to furnish one or more approved banker’s guarantees
made out in
favour of such party or parties as STI may indicate and expressed to
be payable on registration of transfer.
On 20 April 2017, this
agreement was cancelled due to the non-payment by Daggafontein of the
non-refundable deposit.
[9]
On 22 March 2017, a turnkey development agreement ‘for an
integrated and mixed-use development programme’ (the turnkey
agreement) and a subsidy agreement (the subsidy agreement) were
entered into between Daggafontein and the department.
Daggafontein
was to develop the land and the department was to pay
for the development. It was envisaged, in terms of the turnkey
agreement,
that the trust would own 40%, Mr Komanisi 20%, a Mr David
Lupepe 20% and a Mr Mhanisi Malaba 25% of the shareholding in
Daggafontein.
It was recorded in clause 3.1 of the
turnkey agreement that Daggafontein ‘. . . has the right to
develop the land either
by virtue of being the owner of the land or
having acquired the development rights in terms of a development
rights agreement’.
In terms of the subsidy agreement,
Daggafontein warranted,
inter alia
, that ‘. . . it holds
the right to develop the land either by virtue of being the owner of
the land (as prescribed in the
project application) or by having
acquired the development rights in terms of the development rights
agreement . . . ‘.
The right to develop the
land referred to in the turnkey and subsidy agreement was the
right arising from the STI/Daggafontein
development rights agreement,
which agreement, by the time of the conclusion of the turnkey and
subsidy agreements, had already
terminated and became of no further
force or effect due to the non-fulfilment of its suspensive
conditions.
[10]
Nevertheless, on 25 May 2017, a second written agreement of purchase
and sale was concluded between STI and Daggafontein in
terms which
STI sold the land to Daggafontein (the sale of land agreement).
An addendum to the sale of land agreement was
concluded on the same
day. The land sold were portions 115 and 196 of the Farm
Daggafontein for a purchase consideration
of R170 million.
Options were also given to Daggafontein to acquire the other portions
comprising the Farm Daggafontein.
An initial
non-refundable amount of R10 million was payable by no later than 29
May 2017. Mr Georgiou, as I have mentioned
at the outset, bound
himself as surety and co-principal debtor in favour of STI for
payment of all amounts due by Daggafontein
in terms of the sale of
land agreement. It appears that Mr Georgiou was to be the
funder of part of the purchase price and
that he would have obtained
a 10% shareholding in Daggafontein, although his name did not feature
in any of the subsequent shareholding
proposals mooted by the trust
and Mr Komanisi nor in the relief claimed in Part B of the notice of
motion.
[11]
The sale of land agreement further provides that Mr von Landsberg or
STI would be entitled to apply to Investec Bank Limited
(Investec)
for a loan in the amount of R40 million, which, if approved and
granted, would be deducted from the total purchase price
of R170
million, and for which loan Mr Georgiou was obliged to bind himself
as surety and co-principal debtor with STI in favour
of Investec.
In this regard the addendum to the sale of land agreement provides as
follows:
· It is agreed
that the seller or its director, HEINRICH CORNELIUS VON LANDSBERG, is
entitled to apply to Investec Bank for
a R40 000 000.00 (forty
million Rand) loan in respect of which MICHAEL NICOLAS GEORGIOU is
obliged to bind himself as a surety
and co-principal debtor with the
applicant for the loan in favour of Investec Bank. Should the
loan be granted and advanced
by Investec Bank the second part of the
purchase price will be reduced by the amount of the loan advanced to
the seller or its
said director and the purchaser will be obliged to
make the necessary arrangements with Investec Bank that the seller or
its said
director be released from all liability under the loan and
that the liability to repay the loan become a liability of the
purchaser.
The process shall be completed by Friday 2
nd
June 2017.
· A normal
valuation process with the bank will continue, with a view to obtain
funding to the capacity accepted by the bank
at earliest convenience.
The valuation expert to be used will be Teuns Behrens from Investec.
· This will leave
the outstanding amount to be determined at this point as follows
o Total sale price of
R170,000,000
o Less R10,000,000
deposit
o Less R40,000,000
facility from Investec
o Less additional
Investec bond supported post land valuation
o Equals outstanding
amount
· Notwithstanding
alternative inflows of capital into the project, the balance shall be
paid as follows
o 100% of the outstanding
amount no later than the 6 month anniversary of the advancement of
the deposit amount.’
[12]
Clause 18.6.1 of the sale of land agreement is also presently
relevant. It reads:
’
18.6.1 Should the
seller or the purchaser (the “transgressing party”) fail
to comply punctually with any provision of
this agreement, the other
party (“the aggrieved party”) will be entitled to notify
the transgressing party in writing
thereof and should the
transgressing party remain in default 7 (seven) days after the
notice, the aggrieved party will be entitled
without further notice
and without prejudice to his other rights:
18.6.1 (i) to cancel this
agreement and claim damages from the transgressing party; or
alternatively
18.6.1 (ii) to enforce
specific performance by the transgressing party of his obligations in
terms of this agreement and to claim
damages from him.’
[13]
It is common cause that Daggafontein failed to pay the initial amount
of R10 million on or before 29 May 2017, or at any time
thereafter.
According to Mr von Landsberg, he, subsequent to the conclusion of
the sale of land agreement has spoken to Mr
Georgiou on a number of
occasions who assured him that the initial payment of R10 million
would be forthcoming. When the
amount was not paid on 29 May
2017, he elected not to exercise his right to apply to Investec for
the R40 million loan until such
time as the initial payment had been
made.
[14]
On 5 June 2017, STI’s attorneys, Bredells, on its behalf,
addressed a letter of demand to Daggafontein, which letter
was also
sent to the attorneys of record for the trust and Mr Komanisi, Peyper
Attorneys (STI’s notice). It reads thus:
RE: AGREEMENT OF
SALE BETWEEN STI CONSULTING SERVICES CC AND DAGGAFONTEIN DEVCO
(PROPRIETARY) LIMITED – VARIOUS PORTIONS
OF THE FARM
DAGGAFONTEIN 125, I.R., GAUTENG
‘
1. We represent
STI Consulting Services CC (“STI”), the abovementioned
seller.
2. In terms of an
agreement of purchase and sale dated 25 May 2017 various portions of
the farm Daggafontein 125, I.R., Gauteng,
were sold by STI to
Daggafontein Devco (Proprietary) Limited (“Daggafontein
Devco”). A subsequent addendum to
the agreement of sale
was signed on the same date.
3. In terms of the sale
agreement:
3.1
An amount of R10 000 000 (ten million Rand) was payable to
STI by 29 May 2017. This amount was not paid;
3.2
An additional amount of R40 000 000 (forty million Rand)
was payable to STI by 2 June 2017. The amount was not
paid.
4. We have instructions
to demand the immediate payment of the aforesaid amounts in terms of
clause 18.6.1 of the agreement and
to inform you that if payment is
not made within 7 (seven) days after this notice STI will exercise
its rights in terms of clause
18.6.1.(i) or (ii), as it deems
appropriate at the time.’
[15]
Bredells, on behalf of STI, also addressed a letter on the same day
to Mr Georgiou, which letter reads as follows:
‘
RE:
AGREEMENT OF SALE BETWEEN STI CONSULTING SERVICES CC (“STI”)
AND DAGGAFONTEIN DEVCO (PROPRIETARY) LIMITED
(“DAGGAFONTEIN
DEVCO”) – VARIOUS PORTIONS OF THE FARM DAGGAFONTEIN 125,
I.R., GAUTENG
I attach a copy of the
letter which I have just despatched to The Directors, Daggafontein
Devco (Proprietary) Limited. You
have bound yourself as surety
and co-principal debtor with Daggafontein Devco in favour of STI for
the proper performance by Daggafontein
Devco in terms of the sale
agreement. In view of this, STI is entitled to claim payment of
the unpaid amount/s from Daggafontein
Devco or from you, the one to
pay the other to be absolved. Should Daggafontein Devco fail to
comply with the demand made
in the attached letter, STI will exercise
its rights against the said company and you (the one to pay the other
to be absolved)
or against you, as it deems fit at the time.’
[16]
STI’s notice was not responded to, nor was the initial amount
of R10 million paid to STI. On 13 June 2017, STI
cancelled the
sale of land agreement due to the non-payment of the amounts demanded
in terms of its notice. Bredells, on
behalf of STI, addressed
the following letter to Daggafontein, which letter was also copied to
Mr Georgiou and sent to Peyper Attorneys
(STI’s cancellation):
It reads thus:
‘
RE: AGREEMENT OF
SALE BETWEEN STI CONSULTING SERVICES CC AND DAGGAFONTEIN DEVCO
(PROPRIETARY) LIMITED – VARIOUS PORTIONS OF
THE FARM
DAGGAFONTEIN 125, I.R., GAUTENG
1. We represent STI
Consulting Services CC, the abovementioned seller.
2. We refer to our letter
of the 5
th
June 2017 in which payment was claimed of the
amounts of R10 000 000 and R40 000 000
respectively. Neither
payment was made.
3. Acting on the
instructions of our client, we hereby cancel the agreement. Our
client reserves the right to claim such damages
from Daggafontein
Devco (Proprietary) Limited as it may have suffered or still may
suffer as a result of the breach of contract.’
[17]
By letter dated 14 June 2017, Peyper Attorneys, on behalf of
Daggafontein and Mr Georgiou, responded to STI’s cancellation.
Therein Mr Peyper,
inter alia
, stated the following:
‘
3. The Agreement
inter alia
provided that:
3.1 a first payment of
R10 000 000.00 (Ten Million Rand) plus VAT will be due on
25 May 2017;
See: clauses 1.5.1,
1.7.4, 1.9 and 4.1.1(i) of the Agreement
3.2 that Von Landsberg
will be entitled to apply to Investec Bank for a R40 000 000.00
(Forty Million Rand) loan in respect
of which Georgiou will be
obliged to bind himself as surety and co-principal debtor with the
applicant (Von Landsberg) for the
repayment of the loan in favour of
Investec Bank;
See:
clause 4.1.2(i) of the Agreement
4. The Addendum
inter
alia
provide that:
4.1 the first payment in
the amount of R10 000 000.00 (Ten Million Rand) plus VAT
will be due on 29 May 2017;
See: first paragraph
under heading “Payment Terms”
4.2 the process of Von
Landsberg acquiring a loan from Investec Bank as envisaged in terms
of clause 4.1.2(i) of the Agreement should
be completed by 2 June
2017;
See: last sentence of
second paragraph under the heading “Payment Terms”
4.3 the parties to the
Addendum made the Addendum subject to the approval conditions of
Investec Bank in respect of the bond.
See: handwritten sentence
initialled by signatories to the Addendum on the last page of the
Addendum
5. Regarding our clients’
obligations in terms of the provisions of the Agreement read with the
provisions of the Addendum,
it is our instructions that:
5.1
Daggafontein Devco caused the transfer of an amount of
R10 000 000.00 plus VAT to the bank account nominated by
the Seller;
5.2 Georgiou is still
prepared to bind himself as surety and co-principal debtor in favour
of Investec Bank in respect of Von Landsberg’s
intended
application for a loan in the amount of R40 000 000.00.
Von Landsberg is the applicant in this loan and
our client would like
to enquire what progress he made in respect of his application to
Investec Bank.
6. Your letter of breach
dated 5 June 2017 was incompetent due to
inter alia
the demand
in paragraph 4 thereof calling for payment of the amount of R50
Million (R10 Million in terms of paragraph 3.1 and R40
Million in
terms of paragraph 3.2). Daggafontein was, on 5 June 2017, only
indebted in an amount of R10 Million plus VAT.
7. Daggafontein
accordingly insist on specific performance and reserve its right to
approach the court for appropriate relief should
the need arise.’
[18]
It is common cause that Mr Peyper was wrong in stating that
Daggafontein ‘caused the transfer of an amount of
R10 000 000.00
plus VAT to the bank account nominated by
the Seller’ (STI), and correct in stating, or suggesting, that
the amount of R40
million was not yet payable in terms of the sale of
land agreement at that time and that the demand for payment thereof
was premature.
It is, as I have mentioned, common cause that
Daggafontein failed to pay the initial amount of R10 million on or
before 29 May
2017, or at any time thereafter. Furthermore, on
the facts presented by STI, its attorney, Mr Bredell, misread the
addendum
to the sale of land agreement and erroneously included the
demand for payment of the amount of R40 million in STI’s
notice.
This amount, it concedes, was not payable at that time
and, in terms of the sale of land agreement, formed part of the
balance
purchase price (R160 million), which was payable within a
period of no longer than six months calculated from 25 May 2017.
[19]
It is clear from a reading of the papers that neither the trust, the
trustees nor Mr Komanisi or Mr Georgiou were willing to
fund the
payment of the initial amount of the purchase price for the land, nor
was Daggafontein in a financial position to do so.
The
explanation proffered by the trust and Mr Komanisi for the
non-payment of the initial amount is that they had ‘an internal
arrangement’ with Mr Georgiou that ‘he was to make
payment of the R10 million by 29 May 2017’ and that, as far
as
they were concerned, he had paid the amount and had ‘intimated
as much to both Mr Peyper and [Mr Lupepe] personally’.
They concede, however, that ‘this subsequently turned out to be
incorrect’. In this regard they also state in
their
founding affidavit that ‘[i]t is so that the R10 million was
not paid timeously, notwithstanding the assurances Georgiou
gave us’.
[20]
As a result of the cancellation of the sale of land agreement between
STI and Daggafontein, the department cancelled the turnkey
and
subsidy agreements on 8 August 2017. Thus, the development
rights agreement lapsed due to the non-fulfilment of its suspensive
conditions, the sale of land agreement was cancelled on 13 June 2017
due to the non-payment of the initial amount of R10 million
and the
turnkey and subsidy agreements were cancelled by the department on 8
August 2017.
[21]
STI, on 22 June 2017, concluded a subsequent purchase and sale and
option agreement with Rodash. An addendum to this
agreement was
concluded between STI and Rodash on 4 July 2017 (the STI/Rodash
agreement). In terms of the STI/Rodash agreement,
Rodash
purchased essentially the same land for the amount R170 million and
options were granted to it to purchase the other portions
of the Farm
Daggafontein. The STI/Rodash agreement is unconditional and not
subject to any suspensive conditions. It
was, according to a
director of Rodash, Mr Nel, concluded in consequence of urgent
negotiations which followed upon the cancellation
of the sale of land
agreement between STI and Daggafontein. The project, according
to him, -
‘
. . . envisages
the creation of infrastructure in a mega township consisting 17 000
individual stands over a period of 5 years
commencing from the
beginning of 2018. This will assist the crucial housing need in
the area and any further delay . . .
would prejudice the whole
project and the service delivery of land to the “poorest of the
poor”.’
Rodash
also entered into new development agreements in respect of the land
with the department.
[22]
The trust and Mr Komanisi contend that they are entitled to specific
performance by STI of its obligations in terms of the
sale of land
agreement, because STI’s notice on which it based its right to
cancel does not comply with the requirements
of the sale of land
agreement in that it demands payment of a larger amount (R50 million)
than was payable at the time (R10 million)
and that STI’s
conduct in demanding the amount of R50 million ‘without Von
Landsberg applying to Investec for 80% of
the deposit amount’
amounted to a repudiation of the sale of land agreement, which
repudiation Daggafontein refused to accept.
The contentions of
the trust and Mr Komanisi, in my view, are unmeritorious.
[23]
In
Rautenbach v Venner
1928 (TPD
)
26 at 30-31,
Greenberg J said-
‘
. . . that the
correct principle is to ascertain in every case whether all the
conditions on which the right is dependent have been
fulfilled.
If they have been fulfilled, then the right comes into existence
whether it be a right of forfeiture or
of any other kind. And
in construing the words setting out the conditions, the object of the
conditions will have to be considered
in order to assist in the
question of construction. This I think was the course that was
followed in the cases of
Barrett v. New Oceana Transvaal Coal
Company, Limited
[1903 T.S. 431]
and
United Bioscope Cafés,
Limited v. Moseley Buildings, Limited
(
supra
)
[1924 A.D.
60].
In the present case the object of sec. 8 of the agreement
was that appellant should be notified in writing of the amount
payable and given one month in which to pay it. If this is so,
then I do not see why a notice which demanded three amounts
of £5
15s. 1½d. in respect of three periods is not as good a notice
as if one amount in respect of one of the periods
had been demanded.
If instead of sending one notice in respect of the three amounts the
respondent had sent a separate notice
in respect of each of the
amounts, I do not think that the notice in respect of the amount
really owing, the notice which standing
by itself would have been
valid, could be invalidated by the other notices. If however
the notice had been in such terms
as to make it difficult for
appellant to understand the details of what was demanded from him,
then it might be said that he had
not received such notice as was
contemplated by the agreement. But if it is clear that the
respondent did what he was required
to do and gave the appellant such
information as the agreement requires then I think the respondent is
entitled to the rights provided
for in the agreement.’
[24]
In
Godbold v Tomson
1970 (1) SA 61
(D) at 65C-D, Fannin J said
this:
‘
The question for
decision is always whether the conditions on which the right to
cancel was dependent have been fulfilled (
Rautenbach v Venner
1928
TPD 26
at 31). The purpose of such a notice is to inform the
recipient of what he is required to do in order to avoid the
consequences
of default, and if it is in such terms as to leave him
in doubt as to the details of what is required of him, then it may be
that
it will be held that the notice is not one such as is
contemplated by the contract (
Rautenbach’s
case,
supra
at 31).
[25]
Rautenbach
was quoted with approval by the Appellate Division
in
Phone-A-Copy Worldwide (Pty) Ltd v Orkin and Another
1986
(1) SA 729
(A) at 750G-H. There, Nicholas AJA said the
following:
‘
What had to be
ascertained was whether the conditions set out in s 13(1), on which
the seller’s right to terminate the agreement
of sale was
dependent, had been fulfilled. If the conditions had been
fulfilled, then the right came into existence.
Compare
Rautenbach v Venner
1928 TPD 26
at 30
in fine
. It
was only if the notice had been in such terms as to make it difficult
for the plaintiffs to understand the details of
what was demanded
from them that it might be said that they had not received such
notice as was contemplated by the section (
ibid
at 31).’
(Also
see
Klopper en Andere NNO v Engelbrecht en Andere NNO
1998 (4)
SA 788
(W) at 800B-801E.)
[26]
The object of clause 18.6 of the sale of land agreement on which
STI’s right to cancel was dependent, was to provide
for the
giving of written notice to the defaulting party informing it of the
particular breach of the sale of land agreement and
what it is
required to do in order to avoid the consequences of default (remedy
the breach within seven days). The conditions
set out in clause
18.6 had been fulfilled, and STI’s right to cancel the sale of
land agreement, therefore, came into existence.
An initial
amount of R10 million was payable by Daggafontein to STI by no later
than 29 May 2017, which amount was not paid by
that date or at any
time thereafter. STI’s notice identified that specific breach.
Daggafontein received the written
notice, it was able to identify
precisely what was being demanded from it, it was informed of what it
was required to do in order
to avoid the consequences of its default,
but it nevertheless remained in default of paying that amount within
seven days after
being so notified. The demand for payment of
also R40 million in the same notice constitutes a
plus petitio
on
the part of STI (it claimed more than was just) and did not
invalidate STI’s notice in respect of the R10 million amount
really owing. Daggafontein knew what had been required of it to
remedy its breach in failing to pay the initial amount of
R10 million
and it knew that the further amount of R40 million demanded was not
due at that time. It should have paid the
R10 million in order
to avoid the consequences of its default. Absent payment of the
amount of R10 million the conditions set out
in the breach clause of
the sale of land agreement had been fulfilled, and STI became
entitled to cancel the agreement.
[27]
I now turn to the contention that STI’s conduct in demanding
the amount of R50 million ‘without Von Landsberg applying
to
Investec for 80% of the deposit amount’ amounted to a
repudiation of the sale of land agreement on the part of STI.
In their replying affidavit it is stated on behalf of the trust
and Mr Komanisi that-
‘
. . . not only was
Von Landsberg obligated to apply for the loan, but also he was to do
so post haste. This obviously was
then also so as to make sure
that the deposit amount that was required (which was in actual fact
meant to be R50 million) would
be paid. . . .
As the court will see
from Von Landsberg’s affidavit he did not do this. In
fact he testifies (para 3.5 of his affidavit)
he did not do it
because the deposit for the initial R10 million was not paid by 29
May 2017. His obligation was however
not dependent upon payment
of that amount in any way. The addendum (p. 244) in this regard
is clear.’
And:
‘
This was
accordingly the plan from the start. Von Landsberg did not
apply to Investec (as he was obligated to do) so as to
make sure that
by far the largest portion of the initial deposit amount would not be
paid. By failing to perform thus, he
would make sure that
Daggafontein Devco will not pay by far for the largest portion of the
deposit, which would entitle STI –
without any consideration of
their
bona fides
or indeed simple justice between man and man
– to then outright cancel the agreement. This was the
plan all along.
. . .
The evidence I tender in
my founding affidavit as to Mr Peyper’s letter –
informing Bredells of their reliance upon
something which was not
agreed and which was in accordance with the initial unsigned
agreement – alleging a repudiation of
what the true agreement
between the parties was, should be considered in this context as
well. By asking for R50 million
(without Von Landsberg applying
to Investec) and without Von Landsberg applying to Investec for 80%
of the deposit amount, STI’s
conduct actually amounted to a
repudiation of the agreement.’
[28]
The provisions of the sale of land agreement must be interpreted in
accordance with the established principles of interpretation.
(See
Natal Joint Municipal Pension Fund v Endumeni Municipality
2012 (4) SA 593
(SCA) para 18;
Bothma-Batho Transport (Edms) Bpk v
S Bothma & Seun Transport (Edms) Bpk
2014 (2) SA 494
(SCA)
para 12.). The clear and unambiguous wording of the
relevant provisions of the sale of land agreement makes
it plain that
the purchase price was the amount of R170 million, that a
non-refundable deposit in the amount of R10 million
was to be
paid by no later 29 May 2017, that STI or its director, Mr von
Landsberg was ‘entitled to apply to Investec’
for a R40
million loan, that the ‘process’ of obtaining the loan
was to be completed by 2 June 2017, and that if the
loan was approved
and advanced by Investec to STI or Mr von Landsberg, the second part
of the purchase price (R160 million) would
be reduced by the amount
of the loan.
[29]
The dictionary meaning of the noun ‘entitlement’ includes
‘something to which a person is entitled’
(
The New
Shorter Oxford English Dictionary
Vol. 1 (Clarendon Press Oxford)
1993 at 830) and of the verb ‘entitle’ is ‘give a
right to’ or ‘give
a title to’ (
Collins English
Dictionary & Thesaurus
(HarperCollins Publishers) Third
Edition 2006 at 257). It was thus the prerogative of STI or Mr
von Landsberg (and not their
obligation) to apply for a loan from
Investec, and that of Investec to approve or decline the loan
application. The loan
proceeds did not form part of the initial
amount or non-refundable deposit in the amount of R10 million as the
trust and Mr Komanisi
would have it, but were to reduce ‘the
second part of the purchase price’. Furthermore,
payment of
the initial amount of R10 million and the application for
the R40 million loan from Investec were not reciprocal obligations.
The amount of R10 million was payable by no later than 29 May 2019
and the process of obtaining the loan from Investec was to be
completed by 2 June 2017. Nothing in context detracts from the
clear and unambiguous wording of the relevant provisions of
the sale
of land agreement.
[30]
The election made by STI or Mr von Landsberg not to apply to Investec
for the R40 million loan until such time as the initial
payment had
been made, therefore, did not amount to a repudiation of the sale of
land agreement on the part of STI, which vested
Daggafontein with an
election to keep the contract alive. My findings thus far
are dispositive of the substantive relief
claimed in Part B of the
application rendering it unnecessary to deal with the other
contentions raised, such as whether or not
the trust and Mr Komanisi
are non-suited due to their non-compliance with the provisions of
s
165
of the
Companies Act 71 of 2008
relating to derivative actions.
[31]
In the result the following order is made:
Part
B of the application is dismissed with costs, including those of Part
A.
P.A.
MEYER
JUDGE
OF THE HIGH COURT
Date
of hearing: 30 April 2019
Date
of judgment: 20 December 2019
Counsel
for the applicants: Adv Lubbe
Instructed
by: Peyper Attorneys, Bloemfontein
C/o
Smith Sewgoolam Inc., Johannesburg
Counsel
for the 1
st
, 8
th
, 9
th
and
11
th
respondents: Adv PF Louw SC
Instructed
by: Theron, Jordaan & Smith Inc., Klerksdorp
C/o
Couzyns Inc., Johannesburg
Counsel
for the 2
nd
respondent: Adv AG South SC
Instructed
by: Bredells, Pretoria
C/o
Moodie & Robertson, Johannesburg