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[2010] ZAGPPHC 624
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Northern Estate & Trust Administrators (Pty) Ltd v Agricultureal and Rural Development Corporation (520/2009) [2010] ZAGPPHC 624 (18 June 2010)
NORTH
GAUTENG HIGH COURT.
PRETORIA
DATE: 18 June 2010
CASE NO: 520/2009
In the matter
between:
NORTHERN ESTATE &
TRUST ADMINISTORS
(PTY)
LTD
..............................................................................................
PLAINITFF
AND
AGRICULTUREAL AND
RURAL
DEVELOPMENT
CORPORATION
..............................................................................
DEFENDANT
JUDGMENT
PHATUDl J
[1] The Plaintiff
instituted this action as against the Defendant claiming the transfer
of shares ceded to them by Charles Andrew
Boyes (cedent). The shares
claimed were purchased by the cedent from the Defendant.
[2] Mr Els, counsel
for the Plaintiff, placed on record that assertions set out in
paragraphs 1 to 6 of the Plaintiff’s particulars
of claim are
issues of common cause.
[3] The allegations
in paragraph 9 of the particulars of claim and assertions in
paragraph 2.2 of the Defendant Plea remain in dispute.
Mr Els submit
that the court must determine as to whether
3.1. Cession
agreement was concluded between the cedent and the Plaintiff and;
3.2. The agreement
of sale of shares concluded between the cedent (Mr Boyes) and the
Defendant was expressly cancelled alternatively
tacitly.
[4] Mr Els applied
in terms of Rule 39(11) for a ruling that the duty to begin in the
first issue to be determined is that of the
Plaintiff and to the
Defendant in respect of the second issue. He further applied that I
make a ruling that the Plaintiff shall
have the right to call
rebutting evidence on any issue in respect of which the onus is on
the Defendant.
[5] I, after hearing
arguments by both counsel, made a ruling to the effect that if the
Plaintiff shall have called evidence on
any such issues before
closing his case, he shall not have the right to call any further
evidence.
[6] Subsequent
thereto, Mr Blignaut, counsel for Defendant, applied with no
objection from the Plaintiff for amendment of paragraph
2.2.
[7] Andre Thomas (Mr
Thomas), an admitted attorney, a director at a firm of attorneys and
practising as such in the name and style
Thomas & Swanepoel
Inc (firm) testified that he is as well a director at Northern Estate
and Trust Administrators (Pty)
Ltd (Plaintiff). The firm is a
shareholder in the Plaintiff.
[8] Mt Thomas
testified that Mr Boyes (the cedent) has been the firm’s client
for over a period of 10-15 years. He says that
the cedent was
indebted to the firm in the sum amounting to R150 000.00. In order to
alleviate the debt burden from the cedent,
an agreement was entered
into wherein the cedent cedes his right to claim the title and
interest against the transfer of shares
from the Defendant, which he
(cedent) purchased from the Defendant. It was further agreed that the
cedent’s account at the
firm will be credited with an amount of
R150 000.00.
[9] He further
testified that a memorandum of agreement was drafted. A copy of the
said agreement is annexed at page 14 of the Pleadings
bundle. He is
the author of the agreement and represented the Plaintiff in
concluding same. He confirms the cessionary signature
appearing on
the document as his and for the cedent as that of Mr Boyes.
[10] He testified
under cross examination that upon conclusion of the cession
agreement, the original was filed in the “Master
file” at
the firm. He is the one with access to the master file.
[11] He says he did
not know where the cedent got the money from in purchasing the shares
from the Defendant. He was not involved
with the drafting of offers
to purchase the said shares.
[12] When confronted
with a letter issued by the Firm dated 14 November 2008, purporting
to be acting on the instructions of the
cedent, he testified that he
gave the litigation department instructions to cause issue of it. He
acknowledged that he failed to
inform the writer of the letter of the
existence of the cession agreement. Plaintiff closed its case.
[13] Gerhard
Esterhuizen (Mr Esterhuizen) testified that he is employed by the
Defendant as a manager of Corporate Services and
Finance department.
He testified that the sale of shares agreement was entered into on or
about 31 May 2005 by and between the
cedent and the Defendant. The
cedent caused electronic money transfer of the purchase price to
Defendant's chosen banking account.
[14] He says a
decision was taken at the Defendant’s board meeting held on 5
November 2008 to remarket the shares which included
those purchased
by the cedent. It was further decided to transfer the said shares to
the members of the community. He says the
cedent, even though he was
not happy, informed the board that he will accept the decision on
condition the said shares are transferred
to the community and not
sold to an individual.
[15]
He, on the 11 September 2008, received a call from the cedent. His
complaint was that the money (“refund”) has
been paid
into the wrong account. He informed the cedent that he will attend to
the matter once he is in his office. He then received
a letter from
the cedent as annexed at page 30 of the trial bundle. He instructed
Mr Naude by endorsing the following words:
“
Please
transfer to a new account”. The money was indeed paid to the
cedent’s banking account as is evident from the
deposit slip
annexed to the trial bundle.
[16] With regard to
the meeting of 5 November 2007, Mr Esterhuizen testified that the
cedent’s attitude was that of accepting
the decision of
“remarketing” the shares on condition they are
transferred to the community.
[17] Mr Els submits
that the cedent ceded his right to claim the transfer of the shares
he bought from the Defendant. The cession
is valid. The Debtor is not
obligated to be informed of cession.
[18] He further
submitss that there was no express cancelation of the sale of shares
agreement concluded between the cedent and
the Defendant. He submits
that cedent always wanted his shares and not the money. He submits
that no cancellation of agreement
was concluded at the board meeting
of 5 November 2007. The cedent did not provide the Defendant with
banking details where the
refund should be deposited into. He submits
that if the cancelation of the agreement had been agreed on, it would
have been discussed
and minuted as such at the meeting. He lastly
submits that the court should find in favour of the Plaintiff.
[19] In rebuttal
thereto, Mr Blignaut submits that it is clear from Mr Esterhuizen’s
testimony, that he (Mr Esterhuizen) was
under the impression that the
“cancelation” was resolved on condition that the shares
were to be transferred to the
communities and for benefit of the
members of the communities.
[20] He further
submits that the cedent was the only witness who would have clarified
the issue as discussed in the meeting of 5
November 2007. He submits
that an inference be drawn on the cedent’s failure to testify
that the Sale of shares agreement
was expressly cancelled at the
meeting of 5 November 2007.
[21] In the
alternative, Mr Blignaut submits that in the event I find that there
was no express cancelation at the board meeting
held on 5 November
2007, then the cedent tacitly accepted cancellation by providing his
banking details as set out in the letter
dated 12 September 2008. He
further thereto submits that the cedent was satisfied with the
“refund”. The cedent was
only not happy about the money
being paid into the account he did not prefer. He further submits
that the cedent said nothing about
the shares in the said letter. As
a result thereof, he said an inference be drawn that the cedent
regarded the sale of shares agreement
as not being in force or
effect.
[22] In my
evaluation of the evidence tendered and submissions made on behalf of
both parties, it is clear that the cedent and Plaintiffs
concluded an
agreement wherein the cedent ceded his rights, title and interest in
and to the claim against the Defendant for the
transfer of the shares
as listed in the Plaintiff Particulars of Claim.
[23] The Defendant
does not deny the signature attested on the memorandum of agreement
(annexed “NT4”) as those of the
cedent and cessionary. Mr
Thomas testimony on the conclusion of the agreement remains
uncontested.
[24]
It is common cause that the Defendant was not informed of the cession
prior to the institution of this action. In
LYNN
& MAIN INC v BRITS COMMUNITY SANDWORKS CC 2009(1) SA 308
SCA
t
referred
to by Mr Blignaut, Mpati P held that 'notice to the debtor is not a
prerequisite for the validity of the cession but a
precaution to
pre-empt the debtor from dealing with the cedent to the detriment of
the cessionary'.
It
is further held that
'cession
takes place without the concurrence of the debtor.'
[25] The Defendant
did not plead invalidity of the cession on the basis of the debtor
not being made aware of its existence. I,
on the basis set out herein
above, find that the cession agreement concluded by the cedent and
the Defendant as cessionary, valid.
[26]
I agree with Mr Els that cancellation of an agreement is effected
where there is a meeting of minds between the contracting
parties and
in absence thereto, no cancellation can be said to be effected.
[27]
Mr Blifnaut refers me to
SEWPERSADH
AND ANOTHER v DOOKIE
2009 (4) ALL SA 338
SCA
where
the court found the respondent to have been well aware of what was
required of him and further found no merit in his contention
of the
validity of the cancelation of contract. In
DATACOLOR
INTERNATIONAL (PTY) LTD v INTAMARKET (PTY) LTD
[2000] ZASCA 82
;
2001 (2) SA 284
SCA,
the
court held that
’
where
one party to a contract, without lawful grounds, indicates to the
other party in words or by conduct a deliberate and unequivocal
intention no longer to be bound by the contract, he is said to
“repudiate” the contract. Where that happens, the other
party to the contract may elect to accept the repudiation and rescind
the contract.’
[28]
In applying the principle set out in
SEWPERSADH
AND ANOTHER
,
I find the cedent to have been aware of the “cancelation”
of the sale of shares agreement concluded with the Defendant.
According to the testimony of Mr Esterhuizen he was under the
impression that the cedent accepted the “cancellation”
subject to the condition that the shares be transferred to the
communities, as per discussion at the meeting of 5 November 2007.
[29]
I further find the cedent to have accepted the Defendant’s
cancellation of the sale of shares agreement by causing issue
of a
letter informing the Defendant of the “correct” banking
account in which payment (refund) should be made. The
writing of the
letter is, in my view, a fact relevant to
(facta
probatia)
the
express cancellation of the sale of shares agreement discussed on the
5 November 2007.
[30]
Further thereto I, on the uncontested words
“
on
condition the shares are transferred to the communities”, draw
an inference that the cedent accepted cancellation of the
sale of
shares agreement.
[31] The fact that
the money was paid back to the cedent some months after the decision
or cancellation of the agreement as at 5
November 2007, is, in my
view, not an issue to rely on for “noncancellation” of
the agreement.
[32] The cedent has
since (at most) 5 November 2007 being aware that the shares will be
transferred to the communities and for the
benefit of the previously
disadvantage communities. He, in my view, accepted the said
cancelation subject to the said proviso.
There is no evidence that
the Defendant breached the cedent’s condition.
[33] I, as a result
thereof, am of the view that the sale of shares agreement was
concluded on the 5 November 2007 prior to the
Plaintiff causing issue
of the summons against the Defendant. The Plaintiff’s claim
stands to be dismissed.
[34] It is trite law
that costs follow the event. The Defendant succeeds in dismissing the
Plaintiff claim. He, as a result thereof,
is entitled to the costs
occasioned by this action.
[35] I thus make the
following order;
The Plaintiff’s
claim is dismissed with costs.
AML PHATUDI
JUDGE OF THE
NORTH GAUTENG HIGH COURT
Heard
on
:
1 June 2010
For
the Plaintiff
:
Adv ELS
Instructed
by
:
Messrs Naude & Brits Attorneys
For
the Defendant
:
Adv Blignaut
Instructed
by
:
Messrs Thomas &Swanepoel Attorneys
Date
of Judgment
:
18 June 2010