Meyer N.O. and Another v Joubert (1694/2008) [2010] ZAGPPHC 615 (17 March 2010)

55 Reportability
Contract Law

Brief Summary

Contract — Lease agreement — Option to purchase — Authority of trustees — Dispute arose regarding the validity of the exercise of an option to purchase property by the Elardus Trust, represented by the plaintiffs, following a lease agreement with the defendant. The plaintiffs contended that the option was properly exercised based on a resolution from a trustees' meeting. The legal issue was whether the extract from the minutes constituted proper authority under Section 2 of the Alienation of Land Act 68 of 1981 for the first plaintiff to exercise the option. The court held that the extract from the minutes provided the necessary authority, and thus the option to purchase was properly exercised, resulting in a valid and enforceable sale agreement between the Elardus Trust and the defendant.

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[2010] ZAGPPHC 615
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Meyer N.O. and Another v Joubert (1694/2008) [2010] ZAGPPHC 615 (17 March 2010)

IN THE NORTH
GAUTENG HIGH COURT, PRETORIA
(REPUBLIC OF
SOUTH AFRICA)
CASE NO:
1694/2008
DATE: 17 MARCH
2010
IN THE MATTER
BETWEEN:
WILLEM ELARDUS
MEYER N.O.
…..........................................................................
FIRST
PLAINITIFF
ELARDUS WILLEM
MEYER N.O.
….....................................................................
SECOND
PLAINTIFF
And
F G
JOUBERT
.........................................................................................................................
RESPONDENT
JUDGMENT
TOLMAY. J:
This matter was
initially set down for trial, but after the opening address it became
clear that the dispute between the parlies
was limited and
consequently a stated case was prepared and argued before me.
BACKGROUND
The
plaintiff issued summons against the defendant and alleged that on 1
March 2004 the Elardus Trust (“the Trust") represented
by
the plaintiffs entered into a written lease agreement (“the
lease agreement”) with the defendant in his personal
capacity.
It was
inter alia
agreed
that the Trust would lease Portion 8. n a Portion of Portion 2 of the
Farm Diepkloof 185. Registration Division JS. Mpumalanga
(“the
property") for a period of 5 years from 1 April 2004.
In
terms of the lease agreement the Trust had an option to buy the
property for the amount of R250 000-00. which option was valid
for
the duration of the lease agreement. In terms of the lease agreement
the Trust was obliged to exercise the option in writing
at the
defendant’s chosen
óomicilium
citandi et executandi.
The
Trust was furthermore obliged to pay the full purchase price on
registration and transfer of the property in defendant's name.
THE STATED
CASE
In terms of the
stated case I was asked to decide whether the extract from the
minutes of the meeting of trustees dated 10 July
constituted proper
authority as contemplated by
Section 2
of the
Alienation of Land Act
68 of 1981
to the first plaintiff to exercise the option as was
purported to be done with the Exercise of Option dated 11 July 2007.
If the
aforementioned question is decided in favour of the plaintiff, then
judgment should follow for the plaintiff in terms of
prayers 1. 2 and
3 of the particulars of claim. If it is however decided in favour of
the defendant then the claim of the plaintiff
should be dismissed
with costs.
In the stated case
the parties agreed that the following facts were common cause between
them:
1.
The citation and
locus
standi
of
the parties
2. That the
plaintiffs were at all relevant times the duly appointed trustees of
the Elardus Trust, which trust bore the registration
number
IT7436/03.
3. That the trust
deed and letters of authority are exhibit “A1" to A10”
respectively.
4. The Trust Deed
does not provide for one trustee to act on his own, neither does it
expressly prohibit same.
5. That the
plaintiffs and the defendant on 11 March 2004 concluded a written
lease agreement (the lease agreement) in respect of
which the
plaintiffs rented the property known as:

Gedeelte
8 (‘n gedeelte van Gedeelte 2) van die plaas Diepkloof 185.
Registrasie-Afdeling JS. Provinsie Mpumalanga
Groot: 347,1810
hektaar
Gehou: Kragtens Akte
van Transport T”
Which is exhibits
,:
A11 ” to

A26”.
6.
That the lease agreement included an option to purchase the property
referred to in paragraph 5
supra.
7. That the second
plaintiff resided in the United States of America during the year
2007.
8.
That the first plaintiff during or about July 2007 telephonically
resolved with the second plaintiff that the trust should exercise
the
option referred to in paragraph 5
supra
(the
oral resolution).
9. That the first
plaintiff, in pursuance of the oral resolution, on or about 11 July
2007, consulted the attorney Pierre de Villiers
(De Villiers) of De
Villiers Attorneys at Belfast.
10. That De Villiers
on 11 July 2007 prepared the following documents:
10.1 The “Uittreksel
uit die notule van
:
n vergadering van trustees"
(exhibit *A27(b)’);
10.2 the letter
dated 11 July 2007 (exhibit “A28”) and
10.3 the
“Uitoefening van opsie” (exhibit “A29”).
11. That the first
plaintiff signed the “Uitoefening van opsie" on 11 July
2007 (exhibit A28).
12. That the
“Uittreksel uit die notule van ‘n vergadering van
trustees" (exhibit ‘A27(b)”) was e-mailed
to the
second plaintiff in the United States of America on 11 July 2007
under cover of an e-mail (exhibit “A27(a)”).
13.The Second
Plainiff on 11 July 2007 phoned the first plaintiff and informed him
that he had signed the “Uittreksel uit
die notule van ‘n
vergadering van trustees’’ (exhibit “A27”)
and that he would forward same to De
Villiers by courier.
14. That De Villiers
kept the letter (exhibit “A28”) and the “Uitoefening
van opsie” (exhibit “A29”)
on the file until
receipt of the “Uittreksel uit die notule van ‘n
vergadering van trustees” (exhibit “A27")
signed by
the second plaintiff only.
15.
That upon the receipt of exhibit “A27” as referred to in
paragraph 13
supra,
the
first plaintiff signed it and only thereafter and on 25 July 2007 did
De Villiers in purported exercise of the option dispatch
exhibit
“A28” to which was attached the “Uitoefening van
opsie” (exhibit “A29”) to the defendant
at P 0 Box
327. Belfast being the chosen
domicilium
citande et executandi
of
the defendant.
THE EXTRACT OF
THE MINUTES
The relevant extract
of the minute of the meeting of trustees read as follows:

UITTREKSEL
UIT DIE NOTULE VAN “n VERGADERING VAN DIE TRUSTEES VAN DIE
ELARDUS TRUST Nommer I Trust 7463/2003 (“die trust”)
Gehou op 10 JULIE
2007
BESLUIT:-
1. Dat die opsie om
te koop soos vervat in klousule 17 van die Huurkontrak tussen
FRANCOIS GERHARDUS JOUBERT en DIE ELARDUS TRUST,
deur DIE ELARDUS
TRUST uitgeoefen word.
2. Dat WILLEM
ELARDUS MEYER gemagtig word om die opsie namens die Trust uit te
oefen en alle dokumente te teken vir die doeleindes
daarvan sowel as
vir die oordrag van die eiendom na Trust.
Gesertifiseer as
korrek,
(Get) W E MEYER
(GET) E W MEYER”
THE EXERCISE
OF THE OPTION
The exercise of the
option read as follows:

UITOEFENING
VAN OPSIE
Ek die
ondergetekende WILLEM ELARDUS MEYER in my hoedanigheid as Trustee van
DUE ELARDUS TRUST I Trust 7463/2003 behoorlik hierttoe
gemagtig, gee
hiermee kennis aan FRANCOIS GERHARDUS JOUBERT krtagtens klousule 17.2
van die huurooreenkoms aangegaan tussen gemelde
FRANCOIS GERHARDUS
JOUBERT en DIE ELARDUS TRUST die opsie uitoefen om die eiendom synde:
-
GEDEELTE 8 (‘N
Gedeelte van Gedeelte 2)
Van die plaas
DIEPKLOF 186
Regustrasie Afdeling
J.S. Provinsie MPUMALANGA
Groot 347 : 1810
Hektaar
GEHOU: Kragtens Akte
van Transport T3359871987
Te koop.
GETEKEN TE BELFAST
op hierdie 11de dag van JULIE 2007.
AS GETUIES:
1. (GETEKEN ) _
(GET) WE MEYER
Namens ELARDUS TRUST
2.(GETEKEN)”
CONCLUSION
Both these documents
were properly signed by the trustees.
On 25 July 2007 the
plaintiff's attorney sent a letter to the defendant indicating the
Turst exercised its option to purchase the
property in writing. The
written exercise of option was attached to this letter.
In
the decision of
Thorpe
and Others v Trittenwein and Another
2007 (2) SA
172
the following was said on p 176 G:
[9]
As observed by Cameron JA in
Land
and Agricultural Bank of South Africa v Parker and Others
2005
(2) SA 77
(SCA) ([2004]
4 All SA 261)
at para [10] at 83H (SA) a
trust is an accumulation of assets and liabilities”. Although
forming a separate entity, that
entity, like a deceased estate, is
not a legal
persona.
The
assets and liabilities constituting the trust vest in the trustees
and it is they who must administer them. They are therefore
not the
agents of the trust, nor for that matter of the beneficiaries
(Hoosen
and Others NNO v Deedat and Others
1999
(4) SA 425
(SCA) ([1999]
4 All SA 139)
at para [21]). It is moreover
trite that unless the trust deed provides otherwise, trustees must
act jointly. In the absence of
a contrary provision in the deed they
may. however authorise someone to act on their behalf and that person
may be one of the trustees.
(See
Nieuwoudt
and Another NNO
v
Vrystaat Mielies
(Edms) Bpk
2004
(3) SA 486
(SCA)
1 All SA 396)
at para [16] and [23].)
The trustees in this
instance had a discussion that culminated in the written resolution
that the option be exercised. It is quite
clear in this instance that
the trustees were of one mind that the option should be exercised and
did that in writing. The extract
of the minutes of the meeting
clearly authorized the first plaintiff to exercise the option, which
was subsequently done by the
first plaintiff.
Consequently the
extract of the minutes of trustees constituted a proper authority as
contemplated by
Section 2
of the
Alienation of Land Act 68 of 1981
to
the first plaintiff to exercise the option as was purported to be
done with exhibit A29. and called “Uitoefening van opsie".
Consequently the
following order is made:
1. A declaratory
order is issued that the option to purchase was properly and legally
exercised and that a legal and enforceable
sale agreement was
concluded between the Elardus Trust and the defendant pertaining to
the sale of the property to the Elardus
Trust.
2. An order is
issued in terms whereof the defendant is ordered to take all steps
and to sign all documents to enable the transfer
of the property to
the Elardus Trust, alternatively and in the event of the defendant
failing to do so the sheriff of the district
of Belfast is ordered to
sign all documents on behalf of the defendant to enable such
transfer.
3. The defendant is
ordered to pay the costs.
R G TOlMAY
JUDGE OF THE HIGH
COURT
WILLEM ELARDUS
MEYER N.O.
ELARDUS WILLEM
MEVER N.O
Vs
F C. JOUBERT
CASE NO:
1694/2008
JUDGE TOLMAY
ATTORNEYS FOR
PLAINTTFF
LOUBSHER VAN DER
WALT INGELYF
375 CHARLES STREET
BROOKLYN
PRETORIA
REF: J A VAN DER
WALT/R1212
ADV
FOR PLAIMTFF
ADV
L DE KONING
ATTORNEYS FOR
DEFENDANT:
M WENTZEL ATTORNYES
P/A SURITA MARAIS
ATTORNEYS
755 PARK STREET
ARCADIA
PRETORIA
REF: S
MARAlS/bh/MW0490 TEL: 012 343 0267
ADV
FOR DEFENDANT
M
GRANOVA
DATE
OF HEARING
9 MARCH
2010
DATE
OF JUDGMENT
1
7
MARCH 2010