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[2021] ZAGPJHC 16
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Just Agronomics Group (Pty) Limited v Afropulse 466 (Pty) Limited and Others (24535/2020) (24535/2020) [2021] ZAGPJHC 16 (8 January 2021)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION,
JOHANNESBURG
CASE
NO
:
24535/2020
DATE
:
7
th
January 2020
(1)
REPORTABLE:
NO
(2)
OF INTEREST TO OTHER JUDGES:
NO
(3)
REVISED:
Date:
8
th
January 2021
In the matter between:
JUST
AGRONOMICS GROUP (PTY) LIMITED
Applicant
and
AFROPULSE
466 (PTY) LIMITED
First Respondent
HISTOMARK
(PTY) LIMITED
Second Respondent
CLARK
,
WAYNE ROBERTS N O
Third Respondent
SERVIGRAPH
42 CC (In Business Rescue)
Fourth Respondent
Coram:
Adams J
Heard
:
23 & 24 November 2020 – The ‘virtual hearing’
of the application
was conducted as a videoconference on the
Microsoft Teams
digital platform.
Delivered:
8 January 2021 – This judgment was handed down
electronically by circulation to the parties' representatives by
email, by
being uploaded to the
CaseLines
system of the GLD
and by release to SAFLII. The date and time for hand-down is deemed
to be 12:00 on 8 January 2021.
Summary:
Opposed application – Interdict –
generally – temporary interdict for a preservation order –
when granted
– right
prima
facie
established – balance
of convenience – application
granted –
ORDER
(1)
The applicant’s application for leave
to amend dated the 1
st
of October 2020 is granted and the notice of motion be and is hereby
amended as per the ‘Amended Notice of Motion’,
being
annexure ‘A’ to the said application.
(2)
Pending the final determination of Part B
of the applicant’s application, Histomark (Pty) Ltd
(‘Histomark’) and
Servigraph 42 CC (in business rescue)
(‘Servigraph’), jointly and severally, the one paying the
other to be absolved,
are directed to pay within ten days from the
date of this order an amount equivalent to the proceeds of the sale
of a quantity
of 900 tonnes of yellow maize, into the trust account
of ENSafrica (Edward Nathan Sonnenbergs Inc, Account Held with First
National
Bank, Account Number 6[…], Swift Code FIRNZAJJ,
Branch Code 2[…]), to be held in escrow.
(3)
The first, second and third respondents,
jointly and severally, the one paying the other to be absolved, shall
pay the applicant’s
costs of this application, including the
costs consequent upon the employment of two Counsel.
JUDGMENT
Adams J:
[1].
The applicant
in this matter, Just Agronomics Group (Pty) Limited (‘JAG’),
conducts a
farming business on certain portions of a farm in the Westonaria
district known as Waterpan (‘the farm’),
as does
Servigraph 42 CC (in business rescue) (‘Servigraph’),
represented in these proceedings by the third respondent,
Wayne
Robert Clark (‘Clark’). Until recently the second
respondent, Histomark (Pty) Limited (‘Histomark’)
leased
the farm from the South African government. The second respondent,
Afropulse 466 (Pty) Limited (‘Afropulse’),
claims to be
the new lessee of the farm, the lease between Histomark and the
Government having allegedly been cancelled and a new
lease having
been concluded with Afropulse.
[2].
The real
dramatis
personae
in this drama, which plays itself out on the farm, are Mr Johan
Byliefeldt, who is the sole director and shareholder of the
applicant,
Mr Johan (Joe) Lategan and Mr Phillip Jacobs, who were
both previously shareholders and directors of the applicant and who
are
at present shareholders and directors of Histomark. This
application and the previous litigation between these three
individuals
appear to me to be an ongoing and energy zapping battle
for the soul of the applicant. As for Afropulse, one of its directors
and
shareholders is a Mr Werner Lategan, who is the brother of Mr Joe
Lategan. It is in the context of these inter relationships that
the
facts and conclusions drawn from those facts should be understood.
[3].
During July
2020 the applicant’s entire crop of yellow maize, which it had
planted and which by then was ready to be harvested,
was ‘hijacked’
by either Afropulse, Histomark or Servigraph or any combination of
these three entities. At first the
maize was stored in grain dams on
the farm as part of all of the Maize harvested on those portions of
the farm, including that
belonging to Servigraph. However, in the end
and in a somewhat clandestine fashion all of the maize was sold off
to a third party
entity, supposedly on behalf of a creditor of
Servigraph and on behalf of Histomark. All the same, the applicant’s
crop of
maize disappeared like mist before the sun, and in these
proceedings the applicant hopes to receive compensation from any
and/or
all of the liable parties for its loss. In the interim, the
applicant requires a preservation order to preserve the proceeds of
the sale of its maize.
[4].
This is an
application, comprising two parts, which was initially brought on an
urgent basis in terms of Rule 6(12) of the Uniform
Rules of Court.
However, on the 7
th
of October 2020, the matter was struck off the Urgent Court roll for
lack of urgency. In Part A, the applicant in essence
asks (in a
roundabout way) that Histomark and Servigraph be ordered to pay,
jointly and severally, into an Escrow account an amount
equivalent to
the proceeds of the sale of their 900 tons of yellow maize to an
unidentified third party. This amount, so the applicant
prays, should
be held in escrow pending the hearing and the final adjudication of
part B of the application, in which the applicant
applies for
judgment against Afropulse, Histomark and Servigraph, jointly and
severally, for payment of the sum of R2 781 000,
representing the value of their 900 tons of yellow maize stolen from
them by the respondents.
[5].
I interpose
here to note that the main relief claimed by the applicant is in fact
for delivery by Afropulse, Histomark and Servigraph
of the 900 tons
of yellow maize, alternatively, for payment of the proceeds of the
sale of this quantity of maize. In view of the
developments shortly
before the institution of the motion court proceedings, notably the
fact that, by all accounts, the maize
had been sold and delivered to
a third party by the 4
th
of September 2020, this relief was not pursued with any vigour during
the hearing of the application on the 23
rd
and the 24
th
of November 2020. Instead, the court was urged to grant an order as
prayed for in part A of the amended Notice of Motion, which
was
formulated as relief alternative to the main relief claimed as per
the amended notice of motion.
[6].
The main issue
to be determined in this part A of the application is whether the
proceeds received by the respondents from the distribution
of the
maize should be placed in escrow pending the determination of the
disputes referred to above. Those issues relate primarily
to the
applicant’s entitlement to the proceeds of the sale of its
maize and whether the written lease agreement concluded,
according to
Histomark between it and the applicant is authentic and/or valid and
enforceable. Closely linked to these issues is
the dispute between
the applicant and Histomark as to whether the latter is entitled to
the proceeds of the sale of the maize on
the basis of a cession and
pledge of the maize in terms of the lease agreement. This issue,
implicating the legal principles relating
to cession and pledge,
would be the primary aspect requiring adjudication in part B of the
application.
[7].
Whether or not
the applicant is entitled to an order that the proceeds of the
distribution of the maize be placed in escrow should
be decided
against the factual backdrop in this matter, which I succinctly
summarise in the paragraphs which follow. However, before
dealing
with the salient facts in the matter and embarking on an assessment
of the merits of the application, I need to deal with
a number of
preliminary issues raised mainly by Mr Clark, in his official
capacity as the Business Rescue Practitioner of Servigraph,
and also
by Histomark.
[8].
The applicant
applies for leave to amend its notice of motion and on the 1
st
of October 2020 had given notice of intention to do so. Histomark and
Mr Clark object mainly on technical grounds to the said application
to amend, which is aimed, according to the applicant, at bringing in
line the relief claimed with developments which occurred after
the
issue of the application. As I have already indicated, those
developments related to the fact that, unbeknown to the applicant,
Afropulse, Histomark and Servigraph had rather underhandedly allowed
the applicant’s crop of yellow maize to be spirited
away during
early September 2020 so much so that by the 4
th
of September 2020 same had been sold and delivered to a third party.
It therefore became necessary for the applicant to amend and
reformulate the relief it sought so that it remained relevant and to
counter the apparent endeavours by the respondents to undermine
the
applicant and to scupper its cause of action.
[9].
The primary
object of allowing an amendment is to ensure a proper ventilation of
the dispute between the parties and to determine
the real issues
between them, so that justice may be done. See:
Cross
v Ferreira
1950 (3) SA 443
(C) at 447. It is settled law that an amendment will
not be allowed only where it will cause the other side such prejudice
as cannot
be cured by a costs order or, where appropriate a
postponement.
As
was said in
Moolman
v Estate Moolman
1927
CPD 27
at 29:
‘
[T]he
practical rule adopted seems to be that amendments will always be
allowed unless the application to amend is
mala
fide
or
unless such amendment would cause an injustice to the other side
which cannot be
compensated
by costs, or in other words unless the parties cannot be
put back for the
purposes of justice in the same position as they were when the
pleading which it is sought to amend was filed.’
[10].
Mr Leech SC,
who appeared on behalf of the applicant, contended that the amendment
for the most part was occasioned by the conduct
of Afropulse and
Histomark in secretively spiriting away the maize in breach of an
undertaking and to avoid the proceedings. Therefore,
so he submits, a
refusal to grant the applicant leave to amend would tacitly condone
such conduct.
[11].
I find myself
in agreement with this submission. The applicant’s application
always was about its entitlement to the maize
and the concomitant
entitlement to the value in the event that the maize is rendered
unavailable. There can therefore not be any
talk of any prejudice to
any of the respondents as a result of the amendment.
[12].
The applicant
also sought to include reference to Servigraph, which received notice
of these proceedings as the papers were served
on Mr Clark in his
capacity as a business rescue practitioner of Servigraph, and in that
capacity Mr Clark has filed an answering
affidavit which contains
information purportedly derived from the members of Servigraph.
[13].
Accordingly, I
am of the view that there is no merit in any of the objections by the
respondents to the application for leave to
amend. An order amending
the applicant’s notice of motion therefore stands to be
granted.
[14].
Secondly, Mr
Clark contends
in
limine
that the applicant has instituted proceedings without the consent of
the business rescue practitioner or the court in contravention
of
section 133
of the
Companies Act 71 of 2008
. There is no merit in
this legal point. On a plain reading of the Act,
section 133
is not
applicable
in
casu
.
Section 133
provides as follows:
‘
133
General
moratorium on legal proceedings against company
(1)
During
business rescue proceedings, no legal proceeding, including
enforcement action against the company, or in relation to any
property belonging to the company, or lawfully in its possession, may
be commenced or proceeded with in any forum, except –
(a)
with the
written consent of the practitioner;
(b)
with the leave
of the court and in accordance with any terms the court considers
suitable.”
[15].
As rightly
contended by Mr Leech, the moratorium applies only where the claim is
for property lawfully in the possession of the
corporation in
business rescue. In proceedings for property unlawfully in possession
of the corporation, the moratorium does not
apply and the proceedings
are permissible, without consent. The possession of the maize in this
matter was unlawful, and accordingly
the moratorium in
section 133
does not apply. This point
in
limine
is
therefore dismissed.
[16].
Lastly, Mr
Clark, who is cited
nomine
officio
in
his representative capacity as the business rescue practitioner of
Servigraph and defends the proceedings in that capacity,
contends
in
limine
that the applicant failed to cite Servigraph as a party to the
proceedings because the citation ‘does not bring or place
Servigraph before court’, and ‘Servigraph, its creditors
and other affected persons have a direct and substantial legal
interest in the relief sought’.
[17].
This point
should be rejected, if for no other reason, on the basis that in the
administration of justice form should never be elevated
above
substance. As was said in
Gainsford
NO v Tanzer Transport (Pty) Ltd
2014 (3) SA 468
(SCA) para 14:
‘
As
stated above, Mailula J was correct ... to have regard to the
provisions of
s 386(5)
, which demonstrate that liquidators act in the
stead of the company in liquidation. A distinction between the
locus
standi
accorded to the company in
liquidation and that of its liquidators acting in their
representative capacity, is pedantic or illusory.
To disqualify
liquidators properly appointed from acting on behalf of a company in
liquidation would truly be elevating form above
substance.’
[18].
Although
concerned in that case with liquidators, there is in principle no
difference as between a company in liquidation and one
in business
rescue in these circumstances. The business rescue practitioner in
terms of
section 140(1)(a)
of the
Companies Act ‘has
full
management control of the company in substitution for its board and
pre-existing management’.
[19].
I therefore
conclude that where the business rescue practitioner is cited in his
representative capacity, the company is properly
before the Court. Mr
Clark’s legal point is therefore rejected.
[20].
That brings me
back to the merits of the application and the facts of the matter
which by and large are common cause or not seriously
challenged. And
even in those instances where the applicant’s version is
contested, certain facts can be and are accepted
by me on the basis
of the principles enunciated in
Webster
v Mitchell
1948 (1) SA 1186
(W). After all, the relief sort by the applicant in
this part of the application is in the nature of interim interdictory
relief,
which requires that the applicant demonstrates
inter
alia
that
it has a
prima
facie
right to the relief claimed. I
t
is sufficient if such right is
prima
facie
established,
though open to some doubt. The proper manner of approach is to take
the facts as set out by the applicant together
with any facts set out
by the respondent which applicant cannot dispute and to consider
whether, having regard to the inherent
probabilities, the applicant
could on those facts obtain final relief at a trial.
[21].
On the
instruction of Afropulse, the applicant’s yellow maize, which
was planted and cultivated on its portions of the farm,
was harvested
without its consent or knowledge on or about 5 July 2020. The
instruction to harvest the applicant’s maize
was given by
Afropulse to a Mr Naude, a member of Servigraph. This means that the
maize was harvested by Servigraph on instructions
from Afropulse, at
the same time that Servigraph was harvesting its own maize on the
farm. On the evidence before me, it appears
that the 5
th
of July 2020 was the first time that Afropulse, according to the
knowledge of the applicant, entered the fray. Up to that point,
the
applicant had no dealings with Afropulse, and was blissfully unaware
of its existence. One of the directors of Afropulse is
one Mr Werner
Lategan, who is the brother of one of the directors of Histomark, Mr
Joe Lategan. On the 8
th
of July 2020 and ‘out of the blue’ the applicant’s
attorneys received a letter from the attorneys representing
Afropulse, confirming that their client (Afropulse) was not involved
in the dispute between the parties and that they did not intend
to
become involved. In my view, this disclaimer by Afropulse has a
distinctly hollow ring to it – their entering the scene
at this
particular point in time seems too much of a coincidence. Moreover,
no explanation and no details are furnished as to why
Afropulse was
at the receiving end of what can only be described as an extremely
generous donation by Histomark to it of the former’s
rights,
title and interest to the lease agreements with the government. A
reasonable inference to be drawn is that Afropulse was
part and
parcel of an elaborate scheme to deprive the applicant of its lawful
entitlement to the proceeds of its assets, being
the crop of yellow
maize, and to ensure that the applicant has no recourse against the
wrongdoers.
[22].
This
communiqué plays a pivotal role in this matter and I think it
apposite to quote extensively from it. Importantly, as
regards the
applicant’s maize, the attorneys of Afropulse had this to say:
‘
4
Our client is currently the new landlord of the property known
as Waterpan 292 IQ portion 1, 9 and 32 on which Servigraph
42 CC (in
business rescue) is the tenant.
5
It
is our instruction that a portion of approximately 75ha has been
planted with yellow maize to which your client now seems to
claim
ownership and which ownership seems to be the subject of the current
dispute.
6
Our
client confirms that it has given instructions to Decker Naude to
harvest the 75ha of yellow maize and for same to be stored
in the
silos on the property.
7
Our
client has no intention to trade with the crop and we confirm that it
will be kept in the silos pending the outcome of the dispute
pertaining to ownership of the crop.
8
Once
ownership has been established our client will agree to the release
of the crop provided the harvesting cost and any further
possible
expenses has been paid which our client had to incur.
9
It
has also been brought to our attention that Just Agronomics Group
(JAG) is currently in business rescue and as such we urgently
need
confirmation that you have been mandated on behalf of the business
rescue practitioner to write the letter under discussion.’
[21]
It was also
during this time that the attention of the applicant was drawn to the
fact that there was in existence a lease agreement
between it (the
applicant) and Afropulse, which incorporated a cession and pledge in
terms of which the applicant had purportedly
ceded and pledged in
lieu of rental due to Afropulse its crops. I’ll revert to this
aspect of the matter later on in the
judgment.
[22]
The
applicant’s maize, after being harvested, was mixed with maize
belonging to Servigraph and the mixed maize was stored
in grain dams
on Waterpan farm. It can safely be assumed that, at that stage, the
applicant’s maize was in the possession
of Afropulse and
Servigraph. As already indicated, Afropulse gave an express
undertaking in no uncertain terms that no maize would
be released to
any party pending the determination of the dispute regarding
applicant’s right to the maize. Towards the end
of August 2020,
Servigraph was removing the maize from the grain dams on the farm,
having taken it upon themselves to deal with
all of the mixed maize
as if it belonged to them.
[23]
On the 4
th
of September 2020 Afropulse, having reached some sort of an agreement
with Histomark, released and delivered to Histomark the maize
despite
the undertaking given by Afropulse to the applicant that it would not
release the maize to any party pending the final
determination of the
dispute. Afropulse had released the maize to Histomark, on payment by
Histomark of the harvesting and storage
costs incurred by Afropulse.
[24]
The 17
th
of September 2020 – some thirteen days after delivery to
Histomark of the maize by Afropulse – was the first time that
the applicant was made aware of the fact that Histomark was then
laying claim to the applicant’s maize on the basis of a
cession
and pledge by the applicant in favour of Histomark in terms of a
lease agreement concluded between them on the 5
th
of June 2019 – which Afropulse should have known to be disputed
by the applicant.
[25]
On the 8
th
of September 2020 the applicant caused its urgent application to be
issued and served. As already indicated, only after the issue
of the
urgent application – on 17 September 2020 – did the
applicant become aware of the fact that Histomark,
purportedly acting
on the strength of a cession and pledge in its favour by the
applicant in respect of all its crops, had taken
possession by
self-help of the applicant’s maize and on-sold it to a third
party. That put paid to the applicant’s
prayer that the court
orders a return to it of its 900 tons of yellow maize – leaving
the applicant to persist only with
its claim for relief for the
preservation of the proceeds of the sale of the maize.
[26]
The final
chapter in the long and tedious saga, before the applicant proceeded
with the issue of the urgent application, was therefore
the events of
the 4
th
of September 2020, when Histomark sold the applicant’s maize
‘to a third party which had a silo number and who could
sell
the maize and make payment to [them]’.
The Law and
its Application
in casu
[27]
Pending the
final determination of part B of this application, the applicant
seeks an order in terms of which Histomark and Servigraph,
jointly
and severally, are directed to deliver to it (the applicant) 900
tonnes of yellow maize, which it would be permitted to
sell to
Unigrain with the proceeds to be paid over into an attorneys’
trust account, to be held in escrow. As I have already
indicated, on
the evidence before me, due to recent events this type of relief is
no longer sustainable as these respondents are
no longer in
possession of the maize. An order to that effect would therefore be
moot.
[28]
In the
alternative, the applicant applies for an order, pending final
determination of part B of the application, that Histomark
and
Servigraph, jointly and severally, are directed to pay any proceeds
of the sale of 900 tonnes of maize into an attorneys’
trust
account, to be held in escrow.
[29]
At this stage
the applicant accordingly applies for interim relief in the nature of
a preservation order in respect of the proceeds
of the sale of their
yellow maize. The aforesaid interim interdictory relief is sought
pending the final determination of Part
B of the application, in
which the Court will be asked to determine the authenticity of the
sublease agreement, incorporating a
cession and pledge, allegedly
concluded between the applicant and Histomark, as well as the
validity and the enforceability of
same. This issue, to be determined
in part B, is closely linked and flows naturally into the issue
as to whether the applicant
is entitled to the value of the disputed
maize sold ultimately by Histomark.
[30]
The
requirements for the granting of interdictory interim relief are well
established. They are: - (a) a prima facie right, though
open to some
doubt; (b) a well-grounded apprehension of irreparable harm, if the
interim relief is not granted and final relief
is granted; (c) the
balance of convenience should favour the granting of the interim
interdict; and (d) no alternative remedy.
These requirements should
be considered holistically, and none of it must be considered in
isolation.
[31]
In that regard, I have already referred
to
Webster v
Mitchell
1948
(1) SA 1186
(W), in which this court (Clayden J) held as follows at
pg 189:
‘
From the
Appellate Division cases to which I have referred I consider that the
law which I must apply is that the right to be set
up by an applicant
for a temporary interdict need not be shown by a balance of
probabilities. If it is 'prima facie established
though open to some
doubt' that is enough. … …
If the phrase
used were 'prima facie case' what the Court would have to consider
would be whether the applicant had furnished proof
which, if
uncontradicted and believed at the trial, would establish his right.
In the grant of a temporary interdict, apart from
prejudice involved,
the first question for the Court in my view is whether, if interim
protection is given, the applicant could
ever obtain the rights he
seeks to protect. Prima facie that has to be shown. The use of the
phrase 'prima facie established though
open to some doubt' indicates
I think that more is required than merely to look at the allegations
of the applicant, but something
short of a weighing up of the
probabilities of conflicting versions is required. The proper manner
of approach I consider is to
take the facts as set out by the
applicant, together with any facts set out by the respondent which
the applicant cannot dispute,
and to consider whether, having regard
to the inherent probabilities, the applicant could on those facts
obtain final relief at
a trial. The facts set up in contradiction by
the respondent should then be considered. If serious doubt is thrown
on the case
of the applicant he could not succeed in obtaining
temporary relief, for his right, prima facie established, may only be
open to
'some doubt'. But if there is mere contradiction, or
unconvincing explanation, the matter should be left to trial and the
right
be protected in the meanwhile, subject of course to the
respective prejudice in the grant or refusal of interim relief.
Although
the grant of a temporary interdict interferes with a right
which is apparently possessed by the respondent, the position of the
respondent is protected because, although the applicant sets up a
case which prima facie establishes that the respondent has not
the
right apparently exercised by him, the test whether or not temporary
relief is to be granted is the harm which will be done.
And in a
proper case it might well be that no relief would be granted to the
applicant except on conditions which would compensate
the respondent
for interference with his right, should the applicant fail to show at
the trial that he was entitled to interfere.’
[32]
In the present case the applicant says
that it was the owner of 900 tonnes of yellow maize, which it had
planted and grown and which
it was entitled to harvest and collect at
the beginning of July 2020. After the harvesting of the maize, the
applicant intended
to sell and probably would have sold its maize at
the prevailing market price, which they say was R3 090 000
per tonne
= R2 718 000.
[21]
None of the
parties seriously disputes the applicant’s right to have
harvested, collected and disposed of the maize. Importantly,
Histomark cannot be heard to dispute this – it cannot seriously
challenge these averments in view of the fact that its claim
to take
possession of the maize is based on a cession and pledge, which is
entirely contingent upon the applicant’s right
in and to the
maize. There is also no dispute that the maize was harvested,
collected and stored on the instructions of Afropulse,
without the
knowledge or consent of the applicant. The maize was in the
possession of Afropulse and Servigraph until it was released
and
delivered by Afropulse to Histomark, who apparently on-sold it.
Afropulse, Histomark and Servigraph have therefore clearly
infringed
the applicant’s rights.
[33]
The applicant’s right to dispose
of their yellow maize was infringed by the respondents in that they,
so the applicant states,
stole it. As I have already indicated, there
is not much dispute about the aforegoing allegations by the
applicant, and it follows,
in the absence of further considerations
that the applicant indeed has a
prima
facie
right on which its application
for an interim interdict can and should be founded. In other words,
these allegations, uncontested
and unchallenged as they are,
certainly in my view establish
prima
faci
e that the applicant is the
owner of 900 tonnes of yellow maize, and has the right to claim
repossession of it from the respondents,
alternatively the fair
market value thereof on the basis of the
condictio
furtiva
.
[34]
I have then to consider to what extent
that case is put in doubt by the allegations of the respondents,
especially Histomark. As
indicated above, Histomark says that it is
entitled to the appropriation of the yellow maize belonging to the
applicant on the
basis of a Cession and Pledge incorporated in a
written Lease Agreement concluded with the applicant on the 5
th
of June 2019.
[22]
The existence
and enforceability of the cession and pledge are disputed by the
applicant for the simple reason that the purported
sublease
(containing the cession and pledge) was not disclosed by Mr Jacobs or
Mr Lategan at the time that Mr Byliefeldt became
a member of the
applicant during August 2019. In fact, the very first time that
reference was made by Histomark to the alleged
written lease
agreement was during July 2020 – after there had already been a
plethora of litigation between the stakeholders
in the applicant and
only after it became apparent to Mr Lategan and Mr Jacobs that they
were fighting a losing battle in their
attempts to wrestle back
control of the applicant from Mr Byliefeldt, who they probably
resented for having taken over what was
in essence their company
before Mr Byliefeldt’s involvement in it after August 2019.
[23]
Moreover, so
the applicant contends, the rental obligation allegedly owed by it
under the written lease agreement was significant
and out of kilter
with a market related rental payable for the use of the farmland.
This point is furthermore bolstered by the
fact that the rental
payable by Histomark to the government in terms of the written leases
amounted to approximately R100 000
per annum compared to the
R3 410 910 claimed by Histomark as being rental payable for
the period from approximately July
2019 to July 2020.
[24]
Additionally,
so the applicant contends, Histomark has failed dismally to
demonstrate that the aforesaid rental payable by the applicant
was
accounted for in its books of account, income tax returns and annual
financial statements. I understand the applicant’s
point to be
that this confirms that the lease agreement is a simulated agreement,
which is not binding and unenforceable. In my
view, there is merit in
this submission.
[25]
During October
2019 Mr Byliefeldt, in his personal capacity, had concluded a
sublease with Histomark in respect of a portion of
the farm, which
fact is wholly incompatible with the existence and terms of the
alleged written lease between the applicant and
Histomark, which
incorporates the Cession and Pledge. This lease was also signed on
the 5 June 2019 by Mr Jacobs and Mr Lategan,
who represented the
applicant and Histomark respectively. At the time, Mr Jacobs and Mr
Lategan were not directors of either the
applicant or Histomark,
which places further doubt on the validity and enforceability of the
said agreement.
[26]
In light of
these facts, and having regard to the inherent probabilities, it is
my considered view that it cannot be said that the
facts set up in
contradiction by Histomark cast serious doubt on the case of the
applicant. I therefore do not believe that the
applicant should not
succeed in obtaining temporary relief – its right, in my
judgment, is
prima
facie
established, albeit only open to 'some doubt', if at all. The point
is that the main dispute between the parties should be left
to trial
and the applicant’s right should be protected in the meanwhile,
subject of course to the respective prejudice in
the grant or refusal
of interim relief.
[27]
I am also
bolstered in this conclusion by considerations relating to the legal
principles applicable to the case presented by Histomark
and the
facts set up by them in contradiction to the applicant’s case.
I do not intend dealing with those issues in detail
as they are best
left for adjudication in part B of the application. Suffice to state
that the wording of the Cession and Pledge
and the legal principles
applicable do not necessarily lend itself to an interpretation which
favour the case of Histomark.
[28]
The relevant
provision of the alleged written sub-lease between the applicant and
Histomark reads as follows:
‘
The
Lessee does hereby irrevocably and
in
rem suam
cede and pledge ... all of its
right, title and interest, claim and demand in and to all crops ...
which the Lessee may now or
at any time hereafter have planted or
harvested ...
… … …
the Lessor ...
shall be entitled to take possession of such Crops ... to give effect
to the terms of this cession
… … …
‘…
possession
of these crops is vested in the Lessor’.
[29]
So, for
example, Mr Leech submitted that the plain language refers to an
impossibility in so far as it refers to ‘the planted
crops’.
The crops are not separate things and cannot be the object of any
rights etc. The crops effectively do not exist,
the lessor cannot be
in possession and the crops cannot be pledged, and a corporeal thing
cannot be ceded. To the extent that the
sublease purports to create
real rights by permitting the lessor to ‘apply for surrender,
to realise or otherwise deal with
the Crops in its absolute
discretion’ it is invalid unless registered. In that regard,
see:
Barclays
Western Bank Ltd v Comfy Hotels Ltd
1980 (4) SA 174
(F) at 178C-D.
[30]
I find myself
in agreement with these submissions. The cession and pledge could
only have contemplated crops planted and harvested
by the lessee. I
also agree with the submission by Mr Leech that the cession and
pledge purports to provide personal rights that
supersede the real
rights of the land owner (which requires registration). The land
owner owns the crops and the lessor (Histomark)
cannot ‘realise
or otherwise deal with the Crops in its absolute discretion’.
It is therefore so that the sublease
can only apply to maize
harvested by the applicant.
[31]
I reiterate
that, in my judgment, the applicant has a
prima
facie
right to relief against the respondents.
In
my view, t
he doubt
cast by Histomark on the case set out by the applicant is, on the
above facts and legal considerations, not considerable.
Which version
will eventually be held to be the truth is in any event a matter with
which I cannot now concern myself.
[32]
I am of the
opinion therefore that the applicant has established a right to the
degree necessary for the obtaining of an interim
interdict, and
infringement of that right.
[33]
I come then to deal with the harm which
might be suffered by any of the parties. On the evidence before me,
the applicant has unlawfully
been deprived of 900 tonnes of yellow
maize belonging to it. The maize has been sold to third parties and
the applicant requires
that the proceeds of the sale be preserved.
Now if this is done, if the proceeds of the sale of 900 tonnes of
yellow maize is preserved
and held in an Escrow account, the
prejudice to Histomark and Servigraph consists only in the delay of
receipt by them of the proceeds
of the sale in the event it being
found that the applicant is not entitled to those proceeds. That may
cause harm to the Histomark
and Servigraph, if eventually it is found
that the applicant is not entitled to the proceeds of the sale of 900
tonnes of maize,
but that harm is not nearly as great in my view as
the harm which might be caused to the applicant if the respondents
were allowed
to appropriate the proceeds, if the applicant is later
found to have been entitled to same.
[34]
As rightly pointed out by the applicant,
Servigraph is in business rescue and Histomark has no assets other
than the lease agreements
with the Government, which reportedly have
now been cancelled, leaving the entity devoid of any property worth
executing against.
[35]
Normally the Court acts on the balance
of convenience. If there is greater possible prejudice to the
respondent an interim interdict
will be refused. See
Crossfield
& Son Ltd v Crystallizers Ltd
1925, WLD 216
at p. 223. If, though there is prejudice to the
respondent, that prejudice is less than that of the applicant the
interdict will
be granted, subject, if they can be imposed, to
conditions which will protect the respondent – see
Hillman
Bros (West Rand) (Pty) Ltd v van den Heuvel
1937 WLD 41
at pp 44-46.
[36]
The balance of convenience favours granting
the interdictory relief. Histomark and Servigraph stand to suffer no
prejudice if the
proceeds from the sale of the maize (regardless of
whether it is the sale of the maize by Histomark or Servigraph) are
paid over
and held in trust until the final determination of the
relief sought in Part B of the application.
[37]
I therefore
conclude that the applicant has met the requirements for an interim
interdict. On the evidence before me, it is clear
that there is no
more of the applicant’s maize left in possession of either
Histomark or Servigraph. There would therefore
be no point in
ordering them to return to the applicant any of its maize. The
correct order would be that Histomark and Servigraph
pay over the
proceeds of the sale of the maize so that same can be placed in
escrow, pending the determination of the dispute as
to its right in
and to the maize.
[38]
The
respondents also contend that the quantity of yellow maize which is
the subject of this dispute is not 900 tonnes as claimed
by the
applicant. It is, so they claim, far less. I disagree. The applicant
makes out a very convincing case, supported by the
evidence of an
expert witness, that they would have harvested and collected at least
900 tonnes of maize, which they would have
on-sold to buyers waiting
in the wings. What the respondents do in contradiction to the
applicant’s case is far from convincing.
Histomark, for
example, furnishes no details relating to the sale of the maize,
other than the fact that it was sold to a third
party – they do
not say who this third party is, what the quantity of the maize sold
and delivered was, how much they received
for the maize. Also, no
documentary proof relating to the transaction is furnished – no
invoices, no receipts and no correspondence
with the buyer are
produced. The inference to be drawn from this, which of necessity
would be one adverse to the respondents, is
that the tonnage maize
realized was as claimed by the applicant, namely 900 tonnes.
[23].
I am therefore
persuaded that the applicant’s application for an order as
prayed for in part A should be granted and that
it is entitled to the
interim interdictory relief in a slightly modified form.
Costs
[39]
The general rule in matters of costs is
that the successful party should be given his costs, and this rule
should not be departed
from except where there are good grounds for
doing so.
[40]
I can think of no reason why I should
deviate from this general rule.
[41]
I therefore intend awarding costs against
the respondents, jointly and severally, the one paying the other to
be absolved, in favour
of applicant.
Order
Accordingly, I make the following
order: -
(1)
The applicant’s application for leave
to amend dated the 1
st
of October 2020 is granted and the notice of motion be and is hereby
amended as per the ‘Amended Notice of Motion’,
being
annexure ‘A’ to the said application.
(2)
Pending the final determination of Part B
of the applicant’s application, Histomark (Pty) Ltd
(‘Histomark’) and
Servigraph 42 CC (in business rescue)
(‘Servigraph’), jointly and severally, the one paying the
other to be absolved,
are directed to pay within ten days from the
date of this order an amount equivalent to the proceeds of the sale
of a quantity
of 900 tonnes of yellow maize, into the trust account
of ENSafrica (Edward Nathan Sonnenbergs Inc, Account Held with First
National
Bank, Account Number 6[…], Swift Code F[…],
Branch Code 2[…]), to be held in escrow.
(3)
The first, second and third respondents,
jointly and severally, the one paying the other to be absolved, shall
pay the applicant’s
costs of this application, including the
costs consequent upon the employment of two Counsel.
L R ADAMS
Judge of the High Court
Gauteng Local
Division, Johannesburg
HEARD
ON:
23
rd
November 2020
– in a ‘virtual hearing’ during a
videoconference on the
Microsoft Teams
digital platform
JUDGMENT DATE:
8
th
January 2021 –
judgment handed down electronically
FOR THE APPLICANT:
Adv Q G Leech SC, together with
Advocate J L Griffiths
INSTRUCTED BY:
Edward Nathan Sonnenbergs Inc,
Sandton
FOR THE FIRST
RESPONDENT:
No appearance
INSTRUCTED BY:
Gildenhuys Malatji Attorneys,
Pretoria
FOR THE SECOND
RESPONDENT:
Adv Sandra Strauss
INSTRUCTED BY:
Frik Van Schalkwyk Attorneys,
Pretoria
FOR THE THIRD AND FOURTH
RESPONDENTS:
Adv Steven Van Rensburg SC
INSTRUCTED BY:
Brooks & Braatvedt Attorneys,
Johannesburg