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[2010] ZAECPEHC 9
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Calcutt (Born Hyde) and Others v Maclean and Others (871/09) [2010] ZAECPEHC 9 (23 March 2010)
FORM A
FILING SHEET FOR EASTERN CAPE,
PORT ELIZABETH
NOT REPORTABLE
PARTIES
:
A V CALCUTT + 2 v K C MACLEAN + 7 OTHERS
Case
Number:
871/09
High
Court:
PORT
ELIZABETH
DATE
HEARD:
25
February 2010
DATE
DELIVERED:
23
March 2010
JUDGE(S):
EKSTEEN
J
LEGAL
REPRESENTATIVES â
Appearances:
ADV
P SCOTT (APPL)
ADV
BUCHANAN S.C (1
ST
RESP)
ADV
V D LINDE S.C. (4
TH
AND 5
TH
RESP)
ADV
GAJJAR (6
TH
RESP)
ADV
CERTFONTEIN
Instructing
attorneys:
APPL:
BOQWANA LOON & CONNELLAN
1
ST
RESP: RUSHMERE NOACH INC
4
TH
& 5
TH
RESP: OOSTHUIZEN HAZEL & WILMOT
6
TH
RESP: RUSHMERE NOACH INC
CASE
INFORMATION -
Nature
of proceedings
:
Key
Words
:
Summary:
IN
THE HIGH COURT OF SOUTH AFRICA
NOT
REPORTABLE
EASTERN
CAPE, PORT ELIZABETH
Case
No.: 871/09
Date
delivered: 23 March 2010
In
the matter between:
ANNE VERONICA
CALCUTT
(born HYDE)
First Applicant
SHAWN HALGREEN
NO
Second
Applicant
NICO DE VILLIERS
NO
Third
Applicant
and
KIM CHRISTINA
MACLEAN
First Respondent
THE REGISTRAR OF
DEEDS, CAPE TOWN
Second
Respondent
THE
SURVEYOR-GENERAL, CAPE TOWN
Third
Respondent
STEPHEN
CANTER
Fourth Respondent
TRACEY
CANTER
Fifth Respondent
HEMSLEY &
KOTZE
Sixth
Respondent
ROBERT
MARTINDALE NO
Seventh Respondent
DR KOTZE
NO
Eighth
Respondent
JUDGMENT
EKSTEEN,
J:
[1] The Kini Bay
Trust (âKB Trustâ) was
at
all material times the sole owner of a vacant erf, Erf 105, Kini Bay.
The Kamma Mews Trust (âKM Trustâ) owned Erf 97, Kini
Bay which
adjoins Erf 105. The KM Trust had erected a dwelling on Erf 97 which
enjoyed an attractive sea view across Erf 105. The
trustees of the
KM Trust, being the seventh and eighth respondents herein (referred
to jointly herein as the KM Trust), wished to
secure this view and
accordingly entered into negotiation with the trustees of the KB
Trust, the second and third applicants herein
(referred to jointly
herein as the KB Trust), to acquire a portion of Erf 105 together
with an undertaking that the KB Trust would
not construct any
building on Erf 105 which would impede the sea view from the balcony
of the dwelling erected on Erf 97. This culminated
in a deed of
donation entered into on 19 July 2001 (âthe first deed of
donationâ).
[2] In February
2002, a mere six months after the donation, the KB Trust,
inexplicably, entered into a deed of sale in terms of which
the KB
Trust sold the entire Erf 105 to the first applicant without any
mention of the donation. At the same time the first applicant
also
purchased, from a third party, Erf 106 Kini Bay which also adjoins
Erf 105, with the intention of extending the dwelling which
had
previously been erected on Erf 106 onto portion of Erf 105.
[3] After the
purchase, while awaiting transfer, the first applicant learnt of the
existence of the deed of donation. She challenged
the validity of
the deed of donation, which dispute was ultimately determined by
arbitration. The arbitrator held that the deed
of donation was in
fact valid and, because it had been concluded prior to the agreement
of sale, remained enforceable in the face
of the deed of sale.
[4] During
September 2002 the KM Trust sold Erf 97, together with its rights in
the donated portion of Erf 105 to the fourth and fifth
respondents.
At the time of the conclusion of the latter agreement the subdivision
had not occurred, the donated portion of Erf
105 had not been
transferred into the name of the KM Trust and litigation relating to
the validity of the donation was raging. When
ultimately the
litigation was concluded and the subdivision effected a new Erf 125
was created and a fresh deed of donation (âthe
second deed of
donationâ) was entered into in terms of which the newly subdivided
Erf 125 was donated directly from the KB Trust
to the fourth and
fifth respondents. The remainder of Erf 105 was transferred into the
name of the first applicant and the subdivided
portion, Erf 125,
which forms the subject of the present dispute was transferred into
the name of the fourth and fifth respondents
and Erf 125 was
consolidated with Erf 97, forming what was henceforth known as Erf
126, Kini Bay. Erf 126 was thereafter sold and
transferred to first
respondent.
[5
] During
or about the latter part of 2007 the first applicant discovered, to
her horror, that a change had occurred in the boundary
line of the
property which had originally been donated with the effect that Erf
125, prior to consolidation, was slightly larger
than the area set
out in the first deed of donation. The effect thereof is that the
remainder of Erf 105 which had been transferred
to her was smaller
than anticipated. The KB Trust contend that they were unaware of the
change which had occurred and now seek to
reverse the donation, the
subdivision, the consolidation and the transfer of the property.
These events give rise to the present
application.
[
6]
The
Relief Sought
.
The applicants seek a declaratory
order as follows:
â
1 That the deed of donation dated
19 July 2001 was cancelled.
2 . That the deed
of donation dated 15 December 2004 is void
ab
initio,
and
3. That the deed of sale entered into
between the First Applicant and the Kini Bay Trust relating to Erf
105 Kini Bay includes
that portion of property which was the
subject matter of the deed of donation dated 19 July 2001.â
[7
] On
this basis the applicants seek the following additional orders:
â
1. That the
consolidation of Erf 125 Kini Bay with Erf 97 Kini Bay to create
Erf 126 Kini Bay be set aside.
2. That the First,
Fourth and Fifth Respondents, jointly and
severally
be directed to take all steps necessary to procure the
subdivision of the property previously known as Erf 125 Kini
Bay
from Erf 126 Kini Bay.
3. That the First,
Fourth and Fifth Respondents, jointly and
severally,
be directed to take all steps necessary to procure the
registration of transfer of Erf 125 into the name of the
First
Applicant, and to effect the consolidation of Erf 125 Kini Bay
with Erf 105 Kini Bay, and that the First, Fourth and
Fifth
Respondents, jointly and severally, be ordered to pay all the costs
associated therewith.â
[8
]
The
Evidence.
The first deed of
donation concluded on 1
9
July 2001 recorded that the KB Trust, as donor, donated to the KM
Trust, as donee, âportion of Erf 105 Kini Bay as per annexure
Aâ.
It further recorded an undertaking by the donor not to erect any
building on Erf 105 which would impede the sea view from
the balcony
of the dwelling on Erf 97, Kini Bay. The âannexure Aâ to the
first deed of donation contained a sketch which depicted
two
rectangular blocks adjacent to one another representing Erf 105 and
Erf 97 respectively. A broken line was drawn parallel to
the
boundary line between Erf 105 and Erf 97 across the length of Erf
105. The annexure contains a key which indicates that the
area
between the boundary line separating Erf 105 and Erf 97 and the
broken line represents the donated area. The key indicates
that the
broken line demarcating the donated area is situated exactly 10
metres back from the boundary between the two properties.
[9
] In
terms of the deed of donation all costs associated with the
subdivision of Erf 105, the costs of consolidation of the donated
area with Erf 97, the costs of transfer and any donationâs tax
would be borne by the donee.
[10] After the
first deed of donation had been duly executed the KB Trust entered
into the deed of sale in respect of the entire Erf
105, as referred
to above, with the first applicant. Some time after the first
applicant had concluded this agreement of sale and
the agreement of
sale in respect of Erf 106, to which I have referred above, and
whilst the transfer was pending she learned of the
deed of donation.
Understandably she was upset. She immediately objected to the
subdivision. She instituted action claiming transfer
of the entire
Erf 105 and challenging the validity of the deed of donation. All of
this came to nought. The issue relating to the
validity of the deed
of donation was referred to arbitration. On 15 December 2004 the
arbitrator made the following award:
â
The deed of donation ⦠is
declared to be valid and enforceable, subject only to the Nelson
Mandela Municipality approving the application
to subdivide erf 105
Kini Bay, pursuant to the deed of donation (application 5171).â
The first
applicantâs objection to the subdivision was similarly dismissed
and the subdivision was duly approved by the Nelson Mandela
Metropolitan Municipality in approximately March 2006 pursuant to the
first deed of donation.
[11] In the
interim, during the latter part of 2002 the KM Trust, resolved to
sell erf 97 together with the rights which it had obtained
under the
first deed of donation. The fourth respondent and his wife, the
fifth respondent, showed an interest in acquiring the
property. The
fourth respondent states that they were shown the property by an
estate agent. In front of the dwelling was a grassed
area which was
incorporated into the garden of the home. The sea view which the
property enjoys is across this area. They were
not advised of any
deed of donation and were entirely unaware of any dispute relating to
the pending subdivision. The estate agent,
however, represented to
them that the entire grassed area was included in the sale. The
fourth respondent insisted that the representation
made by the estate
agent be confirmed and recorded in the contract of purchase when they
ultimately made an offer to purchase. The
contract records as
follows:
â
20.
Additional
clauses/fixtures and fittings
⦠Confirmation in writing that the property includes extended
erf seaside of house being erf 105 (part thereof). â¦â
[12] The fourth
respondent states that he would not have entered into the contract
unless the entire grassed area was included as
he required the entire
grassed area to secure an unimpeded view of the sea. The contract of
purchase was duly concluded in late
September 2002 on this basis.
[13
] A
few weeks after the conclusion of the contract of purchase the fourth
respondent entered into discussion with the eighth respondent,
as
trustee of the KM Trust, about the occupation of the dwelling. At
this stage he was first informed of the deed of donation and
the
challenge to its validity. Later, towards the end of 2002 he was
advised by a neighbour of the objection to the application
for
subdivision. This was followed by the institution of action which
challenged the validity of the deed of donation. Fourth respondent
was joined as a defendant in this litigation to the extent that he
had an interest in the property. No relief, however, was sought
against him. Upon receipt of the summons he consulted attorney
Martindale (seventh respondent) who advised that he had been joined
only as an interested party and accordingly he paid no further
attention to those proceedings.
[14] The litigation
raged forth for approximately three years before finality was
reached. As a result of the ongoing dispute the
fourth and fifth
respondents, who were now paying occupational interest on Erf 97 over
an extended period resolved to take transfer
of Erf 97 in the
meantime, leaving the transfer of the donated area in abeyance. It
was, however, expressly agreed that the KM Trust
would remain
responsible for ensuring that the subdivision of portion of Erf 105
was effected and that it was consolidated with Erf
97. This
agreement was confirmed by the seventh respondent, on behalf of the
KM Trust, in writing on 12 September 2005.
[15] Pursuant to
the arbitratorâs award on 15 December 2004 the Nelson Mandela
Metropolitan Municipality approved the subdivision
on or about
31 March 2006. It is not in dispute that the sixth respondent, a
firm of land surveyors, had been instructed by
the seventh respondent
to survey the donated area and to attend to the subdivision. There
was no contractual relationship between
the fourth and sixth
respondents.
[16] In the course
of 2005, the fourth respondent says that he first saw the original
diagram prepared by the sixth respondent which
had been submitted to
the Nelson Mandela Metropolitan Municipality for purposes of the
application for subdivision pursuant to the
first deed of donation.
This diagram had been prepared even prior to the purchase by the
fourth and fifth applicants of the property.
The diagram is similar
to, although more sophisticated than, the diagram which had been
annexed to the first deed of donation, save
that it reflected the
boundaries of the donated area as being â± 10 metresâ back from
the cadastral boundary between Erf 105
and Erf 97. The fourth
respondent noted that the boundary set back approximately 10 metres
as depicted on the diagram did not incorporate
the entire grassed
area which he had been assured would be included in the purchase. It
was further apparent that setting the boundary
back by 10 metres on
either side would enable the owner of the remainder of Erf 105 to
erect a building which would impede the view
of the sea from the
balcony of the dwelling on Erf 97.
[17] The fourth
respondent set up a meeting with one John Kotze, a member of the
sixth respondent being the land surveyor dealing
with the matter and
with the seventh respondent, being the attorney for the KM Trust and
a trustee of the said Trust. This meeting
occurred early in 2006.
At this stage when the meeting was held the subdivision had already
been approved. In the meeting the
fourth respondent enquired what
was meant by â± 10 metresâ. No doubt the question was raised in
the context of what had been
represented to the fourth respondent
relating to the grassed area. There is some dispute between the
fourth respondent and the said
Kotze as to the events hereafter. The
fourth respondent states that Kotze indicated that he thought that a
deviation of 1,5 metres
from the diagram approved by the Nelson
Mandela Metropolitan Municipality was permissible and undertook to
find out and to revert.
The fourth respondent says that Kotze
reverted some weeks later declaring that such deviation was indeed in
order. Kotze, for his
part, states that he had informed the fourth
respondent and seventh respondent there and then in the meeting that
such deviation
was in fact permissible. Nothing turns on this
dispute.
[18] It is common
cause that when Kotze advised that such deviation was indeed
permissible the fourth respondent enquired whether
it would be
equally permissible to extend one side by 12,5 metres and make no
extension to the other, thus keeping the extended area
within the
same limits. Kotze confirmed that this would permissible.
[19] Clearly the
fourth respondent found the latter proposal acceptable, although he
states that it still did not include the entire
grassed area which he
believed was included in his contract of purchase with the KM Trust.
Whilst the fourth respondent does not
expressly say so, Kotze states
that the fourth respondent requested such a deviation. That is not
inconsistent with the fourth respondentâs
version.
[20] Kotze
accordingly revised the diagram and, it is common cause, the revised
diagram was in due course approved by the Surveyor
General. There is
a considerable dispute on the papers as to who âinstructedâ Kotze
to effect such a revision and the KB Trust
contends that they were
neither consulted nor advised. The KB Trust states that they were
not aware of the change in the boundary
and that the fourth
respondentâs conduct in procuring such change was unlawful and
fraudulent whilst Kotze acted improperly. I
shall revert to this
dispute below.
[21] Up until this
amendment to the boundary line the seventh respondent, in his
capacity as an attorney, had been charged with the
subdivision
process. It is not in dispute, and he confirms, that he originally
engaged the sixth respondent to attend to the subdivision.
This
accords with the records of the sixth respondent as attested to by
Kotze. At some stage, probably after the meeting referred
to above,
the seventh respondent states that he proposed to the fourth and
fifth respondents that attorneys Greyvensteins Nortier
(the name of
the firm changed to Greyvensteins at some point, however, the firm is
referred to herein as Greyvensteins Nortier) attend
to the
registration of the subdivision as they were the attorneys for the KB
Trust and were attending to the transfer of the remainder
of Erf 105
to the first applicant. This, he says, was accepted and he
accordingly requested attorneys Greyvensteins Nortier to obtain
the
survey diagrams directly from the sixth respondent, which they duly
did. It is not in dispute that at all times prior to the
institution
of the present proceedings the KB Trust were represented by
Greyvensteins Nortier.
[22] The Surveyor
General approved the revised diagram on 8 September 2006. After the
meeting referred to above Martindale Attorneys
had no further
involvement in the subdivision. The subdivision and the conveyancing
of the subdivided portions were attended to
by, attorneys
Greyvensteins Nortier, attorneys for the KB Trust. The subdivided
erf was, upon subdivision, allotted Erf No. 125.
It would in due
course, upon consolidation with Erf 97 form part of the consolidated
Erf 126. The subdivision occurred in accordance
with the revised
diagram which reflected an amended boundary line as set out above.
[23] The revised
diagram referred to above differs from the diagram previously
approved by the Nelson Mandela Metropolitan Municipality
in a number
of respects as a result of the revised boundary. The original
diagram depicted the proposed subdivided erf as a parallelogram
with
two boundaries of â± 28 metresâ, two boundaries of â± 10
metresâ and an area of â± 280 square metresâ. The revised
diagram depicted a trapezium which did not indicate the length of the
sides on the sketch itself. The exact length of each side
is,
however, set out in large print at the top left hand side of the
document. It records the boundaries of the trapezium as 28,01
metres, 10,0 metres, 28,07 metres and 12,5 metres respectively.
The area of the subdivided erf is shown as 315 square metres.
The
change which has occurred between the previous diagram and the one
submitted to the Surveyor General is apparent at a cursory
inspection.
[24] At
approximately the time of the approval of the surveyed diagram the
fourth and fifth respondents resolved to market Erf 97
together with
their rights to the donated area which was in the process of
subdivision. In April 2007 the fourth and fifth respondents
entered
into an agreement of sale in terms of which they sold Erf 126, the
appellation given to the consolidated erf, to the first
respondent.
First respondent had no knowledge of the events which had preceded
her purchase and she was a
bona
fide
third party, entirely oblivious of all the disputes, who had viewed a
property which was available on the market and purchased same.
[25] At the time of
the conclusion of this deed of sale in April 2007 the newly formed
Erf 125 had not yet been transferred to the
fourth and fifth
respondents. Seventh respondent recommended to fourth and fifth
respondents that Erf 97 and Erf 125 be marketed
as one and that all
the transfers be effected simultaneously. The property was
accordingly marketed in this manner and the contract
entered into in
respect of Erf 126 being the yet to be formed consolidated erf.
After the sale to the first respondent was concluded
seventh
respondent, on behalf of the KM Trust, proposed to transfer Erf 125
directly from the KB Trust to the fourth and fifth respondents,
thus
leaving the KM Trust out entirely. The correspondence between the
parties in this regard has assumed some importance in the
applicantsâ
argument and I shall accordingly set out the material portions
thereof. Initially attorneys Greyvensteins Nortier
acting on behalf
of the KB Trust had some difficulty with this proposal and addressed
a letter to attorney Martindale on 23 April
2007 which records as
follows:
â
We further
confirm that we have been advised that it has been suggested that
transfer takes place directly from Kini Bay Trust to
S & T
Canter, however we confirm that we are required to follow the
procedure of registration in terms of the courtâs decision
in the
matter of the validity of the existing Deed of Donation between Kini
Bay Trust and Kamma Mews Trust.â
[26] Seventh
respondent, a trustee in the KB Trust, responded on the same day.
He recorded as follows:
â
The courtâs
decision in which it held that the Deed of Donation is valid, is with
respect, irrelevant. The Deed of Donation can
always be changed. It
is simply a matter of changing the donee to S &
T
Canter. It makes no difference to the donor who the transferee is.
He can simply sign the new Deed of Donation with a different
donee.â
[27] Upon
consideration Greyvensteins Nortier responded as follows on 24
April 2007:
â
We confirm that Mr & Mrs Canter
are not prepared to pay for the transfer fees associated with the
registration costs for Erf 125
(Portion 105) Kini Bay. If both
parties are willing to enter into a new Deed of Donation then we will
be in a position to amend
our transfer documents.â
[28]
Seventh
respondent responded on 30 April in which he states,
inter
alia,
as follows:
â
Mr & Mrs Canter are prepared to
pay the transfer fees. What they are not prepared to pay is the
transfer duty. There should
be no transfer duty payable.
I propose that a new Deed of Donation
be entered into directly between the Kini Bay Trust and Mr & Mrs
Canter.
In the normal
course, there would be transfer duty payable from the Kini Bay Trust
to the Kamma Mews Trust, but there would be no
transfer duty payable
from the Kamma Mews Trust to Mr & Mrs Canter. In other words,
although two registrations were anticipated
to (be) registered the
donated potion into the Canterâs names, the South African Revenue
Services would only get one amount of
transfer duty on the value of
the donated portion on the first transfer.
In effect transfer
duty has already been paid on the donated portion when the Canterâs
took transfer of Erf 97. In this regard,
I refer you to the Deed of
Sale dated 30 September 2002 in which the Canterâs bought Erf 97
including the donated potion (I refer
you to paragraph 20 of the Deed
of Sale) â¦
It is suggested that you please
explain the above to the South African Revenue Services and in
particular that it does not prejudice
the South African Revenue
Services for the donation to go directly from Kini Bay Trust to the
Canterâs.â
[29] On this basis
the second deed of donation was prepared. Although there is some
debate on the papers as to how and when this
deed of donation was
signed it was common cause when the matter was argued that the second
deed of donation was prepared and signed
in 2007, shortly after the
exchange of correspondence referred to above. It was, however,
backdated to 15 December 2004, being the
date of the arbitratorâs
award. The second deed of donation records as follows:
â
The Donor hereby
donates to the Donee, the property situate at
also known as ERF 125 (A PORTION OF
ERF 105) KINI BAY (âthe Propertyâ) and the Donee hereby accepts
this Donation.â
[30] At this stage
Erf 125 had been surveyed and the subdivision approved
and registered. It is, as a matter of interpretation, the new
subdivided Erf 125, having the amended boundaries as set out above,
which forms the subject of the second deed of donation.
[31] Pursuant to
the second deed of donation the KB Trust, represented by the second
respondent, completed a power of attorney in
favour of its attorneys,
attorneys Greyvensteins Nortier, to pass the transfer of Erf 125 in
favour of the fourth and fifth respondents.
The KB Trust states that
the power of attorney consists of a bundle of documents which are
annexed to the first applicantâs founding
affidavit. Included in
the bundle which constitutes the power of attorney is the diagram
approved by the Surveyor General which
records expressly the
dimensions of the erf and the length of each boundary.
[32] Transfer of
Erf 125 was duly effected into the name of the fourth and fifth
respondents by attorneys Greyvensteins Nortier pursuant
to the power
of attorney and Erf 125 and Erf 97 were consolidated into the newly
formed Erf 126. Erf 126 was then transferred into
the name of the
first respondent pursuant to the agreement of sale referred to above.
At approximately the same time the remainder
of Erf 105 was
transferred to the first applicant during or about July/August 2007.
[33] In September
2007 the first applicant first became aware that the boundaries of
the original donated area had been changed as
set out above and that
the subdivided Erf 125 was in fact larger than she had been led to
believe that it would be. She instructed
her present attorneys,
Boqwana Loon & Connellan, to investigate the matter.
Correspondence again passed between her attorney
and attorney
Martindale. On 8 May 2008 Martindale recorded as follows:
â
Further to our telephone discussion
yesterday regarding the transfer of the donated portion directly to
Canter, and your letter dated
8 May, I enclose herewith copies of the
following:
(a) Letter from
Greyvensteins dated the 23
rd
April 2007;
(b) My response
dated 23
rd
April 2007;
(c) Greyvensteinsâs
response dated the 24
th
April;
(d) My response to
Greyvensteins dated the 30
th
April.
Canter was never my client. My client
is Dr Kotze. Greyvensteins dealt directly with Canter, and Halgreen.
In regard to your question about
whether the original Deed of Donation was required to be cancelled, I
would submit that the exchange
of correspondence between myself, and
Greyvensteins who represented the donor, amounts to a cancellation.
The arbitrator made no comment about
who the donated potion may be transferred to. He ordered only that
Halgreen transfer the remainder
(excluding the donated portion) into
the Plaintiffâs name.
To the extent that
Halgreen may not have transferred the full extent of the remainder
into the Plaintiffâs name, due to the boundary
of the donated
portion being changed, Halgreen is accountable for the error. The
Kamma Mews Trust had nothing to do with the transfer
of the
remainder.â
[34]
The
seventh respondent does not, in his affidavit filed, allude at all to
the question of the cancellation or otherwise of the original
deed of
donation. The second applicant, who acted on behalf of the KB Trust,
admits that he signed the second deed of donation,
however, in his
supporting affidavit he has no recall of where, when or how he came
to append his signature thereto. This notwithstanding,
he makes the
bald statement that prior to signature of the second deed of donation
the KM Trust and the KB Trust âcancelledâ
the first deed of
donation. He does, however, confirm the averments of first applicant
in this regard. First applicant, who was
not a party to any of these
events, relies exclusively on the correspondence set out above and
the conclusion of seventh respondent
in his last letter of 8 May
2009. In the letter referred to above he âsubmitsâ that the
correspondence âamounts toâ a cancellation.
In argument Mr
Scott
,
who appears for the applicant, relies only on the series of
correspondence between attorneys Greyvensteins Nortier and Martindale
Attorneys for the contention that the donation was cancelled. The
second applicant is, however, adamant that no one at any time
told
him that the diagram annexed to the first deed of donation dated 19
July 2001 had been changed. He contends that he did not
intend to
donate or to transfer Erf 105 with the enlarged boundaries and
accordingly the applicants contend that the second deed
of donation
is void and the transfers and subdivision fall to be set aside.
[35]
The
Declaratory Orders
.
The applicants seek
a declaratory order that the
first
deed of donation dated 19 July 2009 was cancelled and that the second
deed of donation is void. A contract can always be cancelled
by
mutual agreement. The mutual agreement to cancel the contract is a
contract whereby another contract is terminated. See
Van
Streepen and Germs (Pty) Ltd v Transvaal Provincial Administration
1987
(4) SA 569
(A) at 588 (I); and
Atteridgeville
Town Council And Another v Livanos t/a Livanos Brothers Electrical
[1991] ZASCA 139
;
1992
(1) SA 296
at 304H. The ordinary rules relating to contracts apply
equally to such an agreement. In the circumstances the onus to
establish
such a cancellation rests on the party seeking to rely on
the cancellation.
[36]
In
the present matter the question to be determined is accordingly
whether the exchange of letters set out above can be said to
constitute
an agreement to cancel the first deed of donation so as to
terminate both the rights and obligations on both sides. In contrast
to a cancellation of an agreement, however, where a creditor of an
obligation does not intend to renounce the debt due to him unless
a
new debt is substituted in the place of the old one, a novation of
the agreement occurs. A voluntary novation has its origin in
contract and it is accordingly essentially a question of whether the
parties had the intention to replace a valid contract with another
valid contract. See
Swadif
(Pty) Limited v Dyke NO
1978 (1) SA 928
(A) at 940G; and
Weltsmans
Custom Office Furniture (Pty) Ltd v Whistlers CC
[1997] 3 All SA 467
(C) at 472c-e.
[37] Novation has
two elements, namely the creation of a new debt and the extinction of
an old debt, but the two elements are inextricably
linked since in
the absence of the creation of a new debt the old debt is not
extinguished and in the absence of the extinction of
the old debt a
new debt is not created. (See
Joubert:
General
Principles of the Law of Contract
p. 297;
Wessels:
Law
of Contract in South Africa
(2
nd
ed) vol 2 para 2383.) There can accordingly only be a novation if
there is a valid existing debt. In the present instance this
matter
has been resolved by arbitration and there is no doubt that the first
deed of donation was valid. Where the second agreement
creates an
obligation inconsistent with the existing obligation it would
ordinarily lead to the conclusion that the parties intended
to novate
the older, but this is not essential as an intention to novate may
also appear from other
indicia
.
[38] The law
recognises two kinds of novation, namely specific novation and
novation by delegation. Where the new contract is between
the
original parties the category is specific; where there is a third
person in the new contract the category is novation by delegation.
(See
Kerr:
The
Principles of the Law of Contract
(5
th
ed) p. 483 and the authorities referred to therein; and
Joubert
(supra)
298-299.) Unlike cancellation by agreement if the new contract is
void, then, as set out above, novation does not take place and
the
old contract remains in being and in force.
[39] I have stated
above that novation has its origin in contract and accordingly it is
essentially a question of whether all the
parties had a intention to
replace one contract with another. The common intention of the
parties may be express or it may be implied
from the conduct of the
parties or from correspondence between them (in respect of the latter
see
Sage
and Co. v Lezard Bros
(1891)
6 HCG 139 at 144;
Sindall v Haddad and Co.
1920
(OPD) 262, 265 and 267-268).
[
40] Reverting
to the facts of the present matter the correspondence which passed
between attorneys Greyvensteins Nortier, on behalf
of the KB Trust
and Martindale Attorneys on behalf of the KM Trust between 23 April
2007 and 30 April 2007, does not, in my view,
exhibit any intention
to terminate the rights which had been acquired under the first deed
of donation. On the contrary the fourth
respondent states that he
was at all times advised by Greyvensteins Nortier Attorneys and by
Martindale Attorneys that the second
deed of donation was to be
signed purely to simplify and give expeditious effect to the transfer
of the subdivided erf directly to
the fourth respondent and his wife
instead of going the long route via the KM Trust. The KM Trust was
the beneficiary under the
first deed of donation. It had sold on its
rights under the first deed of donation to the fourth and fifth
respondents. What the
correspondence reveals is the firm intention
by both the KM Trust and the KB Trust to enforce the rights which the
KM Trust had acquired
under the first deed of donation and to
facilitate the onward transfer of the subdivided portion of Erf 105,
which had been subdivided
pursuant to the first deed of donation, to
the fourth and fifth respondents. What it sought to achieve was to
substitute the fourth
and fifth respondents for the KM Trust as
donee. I do not think that it can conceivably be inferred that the
KM Trust intended to
abandon its rights obtained under the first deed
of donation in the event of the second deed of donation being void.
Such a course
would have opened the KM Trust up for a damages claim
by fourth and fifth respondents. The very purpose of the second deed
of donation
was to facilitate the transfer of the rights obtained by
the KM Trust, which all parties wanted to enforce, to the fourth and
fifth
respondents pursuant to the sale by the KM Trust of those
rights.
[41]
In
the light of the correspondence I consider that all parties had the
intention that the fourth and fifth respondents would substitute
the
KM Trust as donee and that the second deed of donation would
substitute the first as the instrument containing the obligation.
It
is for that purpose that the second deed of donation was signed.
[42]
It
is argued on behalf of the applicants that a âdelegatedâ novation
can only exist where a third party is introduced as debtor
and not
where the new party enters as creditor. It is true that the
substitution of creditors is frequently effected by cession,
however,
there is no reason in principle why it cannot be achieved by a
delegated novation (see
Joubert:
supra
p. 299;
Van
der Merwe et al:
Contract
General Principles
(3
rd
ed) p. 531 footnote 132;
Wessels:
supra
para
2443).
[4
3] It
is further argued that in order for there to be a delegated novation
it is essential that the new obligation must be identical
to the old.
No authority is referred to for this submission. I do not consider
this to be correct. On the contrary, as set out
above, where the
second agreement creates an obligation inconsistent with the original
agreement it would ordinarily lead to the
conclusion that the parties
intended to novate. (See
Joubert:
supra
p.
299; and
Van
der Merwe et al: supra
p. 531.)
[4
4] In
these circumstances the conclusion reached by the seventh respondent,
ex
post facto
,
that the correspondence âamounts to a cancellationâ is, in my
view, incorrect. I hold accordingly that the first deed of donation
was not cancelled and was novated by the second deed of donation.
The second deed of donation substituted the first deed of donation
as
the instrument containing the obligation to pass transfer of the
subdivided portion. By the signature of the second deed of donation
fourth and fifth respondents accepted the KB Trust as its debtor in
lieu of the KM Trust to pass transfer to it of the subdivided
erf and
the KB Trust accepted the obligation to fourth and fifth respondent.
All this occurred with the agreement of the KM Trust.
In the event
of the second deed of donation being void
ab
initio
then the first deed of donation survives.
[45] It is
accordingly necessary to consider the validity of the second deed of
donation. The second applicant, as a trustee of the
KB Trust, is
adamant, as set out above, that he was unaware of the change in the
boundary line of the donated property which occurred
as a result of
the meeting which was held between the fourth respondent, seventh
respondent and the said Kotze on behalf of the sixth
respondent. He
states that it was at all times his intention to donate and to
transfer to the fourth respondent the original donated
portion of Erf
105, that is the portion of land depicted on the diagram which is
annexure A to the first deed of donation dated 19
July 2001. He
declares that he never intended to donate or transfer to the fourth
respondent that portion of land which is depicted
on the diagram
approved by the Surveyor General. He accordingly contends that there
was no consensus between the parties and that
the second deed of
donation is void.
[46] It is of
course impossible to determine the subjective state of mind of any
party save by external manifestations. Blackburn
J stated as follows
in
Smith
v Hughes
(1871) LR 6 QB 597
ay 607:
â
If, whatever
manâs real intention may be, he so conducts himself that a
reasonable man would believe that he was assenting to the
terms
proposed by the other party, and that that other party upon that
belief enters into a contract with him, the man thus conducting
himself would be equally bound as if he had intended to agree to the
other parties terms.â
This dictum has
frequently been adopted and approved in South African courts. In
assessing the second applicantâs allegation of
ignorance it is
necessary to consider the process of subdivision of Erf 105.
Pursuant to the first deed of donation Erf 105 was
subdivided in
accordance with the provisions of the Cape Land Use Planning
Ordinance 15 of 1985 (LUPO). The process is set out in
section 24-27
of LUPO.
[4
7] Section
24(1) provides that âan owner of land may apply in writing for the
granting of a subdivision under section 25 to the
town clerk or
secretary concerned as the case may be.â The remainder of section
24 sets out the process to be followed by the
relevant authority.
[4
8] Section
25 empowers the administrator, or a council if empowered thereto, to
grant or refuse an application for subdivision of
land. Once an
application for subdivision has been approved in terms of section 25
section 26 provides that âthe owner of the
land concernedâ has to
submit a general plan or diagram, as indicated by the Surveyor
General concerned, to the Surveyor General
for his approval.
[49] Section 27(1)
then provides as follows:
â
(1) If a
Surveyor General has approved a general plan or
diagram
as contemplated by section 26, the owner concerned shall, â¦
furnish the Registrar of Deeds concerned with such
documents and
information as he may require ⦠and obtain the registration of at
least one land unit.â
[50] It is apparent
from the procedure that only the owner of land can apply for a
subdivision. Once the application for a subdivision
is finally
approved, as envisaged in section 25 of the Ordinance, the owner of
land is required to submit a diagram in the form required
by the
Surveyor General to the Surveyor General for his approval. Only
after receipt of the approval by the Surveyor General of
the diagram
submitted may the owner of land in question apply to the Registrar of
Deeds for confirmation of the subdivision. It
is only the owner of
land who is empowered to make such an application.
[51] In the present
case there is no dispute that the KB Trust was the owner of Erf 105.
The obligation flowing from the first deed
of donation to obtain the
subdivision of the erf and to pass transfer thereof was accordingly
an obligation imposed upon the KB Trust.
It is true that landowners
would frequently, indeed usually, employ professionals to perform
these functions on their behalf. In
the present instance it is
common cause that the KM Trust, being the beneficiary of the deed of
donation, appointed the sixth respondent
to prepare the application
for subdivision. The seventh respondent contends that he acted on
behalf of the KM Trust. The papers
do not explain on what basis the
KM Trust obtained the mandate to act on behalf of the KB Trust. It
is, nevertheless, clear that
the KB Trust left the process of
subdivision in the hands of the KM Trust. The actions of the KM
Trust in this regard are actions
on behalf of the owner of the land.
[52] The sixth
respondent duly prepared a diagram in accordance with the first deed
of donation which was, for purposes of an application
in terms of
section 24 of LUPO to be submitted to the Nelson Mandela Metropolitan
Municipality for approval. During March 2006 the
Nelson Mandela
Metropolitan Municipality approved the subdivision in terms of
section 25 of LUPO. LUPO then imposes an obligation
upon the KB
Trust as owner to submit a diagram to the Surveyor General for
approval.
[53] It is at this
stage of the process that the much debated meeting occurred between
Kotze, the fourth respondent and the seventh
respondent. It was as a
result of this meeting that the diagram was amended and that the
boundary line in respect of the donated
property was extended by 2,5
metres at one side of the property. There is much debate on the
papers as to who instructed Kotze to
effect the amended boundary
line. The facts giving rise to the variation are however not
seriously in dispute. Clearly the KB Trust
had left the entire
subdivision in the hands of the KM Trust. The seventh respondent, as
trustee of the KM Trust appointed the
sixth respondent to perform
various functions in respect of the subdivision on behalf of the KB
Trust, who were obliged to obtain
the subdivision as set out in LUPO.
In that sense the sixth respondent took its instructions from
seventh respondent.
[54] The meeting,
however, was called by the fourth respondent, who realised that the
original diagram submitted to the Nelson Mandela
Metropolitan
Municipality for approval of the subdivision did not depict the area
which he believed that the fourth and fifth respondents
had purchased
from the KM Trust. He accordingly called the meeting with Kotze, the
land surveyor appointed for purposes of the subdivision
and seventh
respondent. It is apparent that the fourth respondent intended the
meeting to address the deficiencies in the initial
diagram as
measured against his perception of his contractual rights as against
the KM Trust. The meeting was set up with the seventh
respondent,
representing the KM Trust, they being the seller who had sold the
property to the fourth respondent. At this meeting
the discussion
occurred in respect of extending the boundary. Kotze postulated the
permissible deviations and the fourth respondent,
although it is not
expressly stated in the papers, clearly requested that the boundary
be extended in the manner in which it was
eventually done. The sixth
respondent is of course the land surveyor performing the functions
which LUPO requires the KB Trust to
perform
[55] The applicants
contend that the fourth respondent and Kotze acted fraudulently,
deceitfully and unlawfully in so amending the
diagram. Kotze, for
his part, contends that he was under the
bona
fide
impression that the seventh respondent represented the interests of
the donor. The seventh respondent had appointed the sixth
respondent.
The appointment was made in order to perform those
functions which LUPO imposes upon the owner of the property. In
these circumstances
it appears to me that Kotzeâs assumption that
the seventh respondent represented the interests of the donor was not
only reasonable
but it is indeed the only logical conclusion which he
could have drawn from the facts.
[56] The fourth
respondent, for his part, approached the seventh respondent, who was
a trustee of the seller of the property to him
and who, on his own
admission was representing the KM Trust. He was firmly of the view
that he had purchased the entire grassed
area in front of the
dwelling situated on Erf 97 and was of the view that the diagram in
existence did not depict that which he had
purchased. He wished to
obtain delivery of that which he had purchased.
[57] It may be that
the KM Trust had sold to the fourth and fifth respondents more than
that which they were entitled to sell. A
person may of course
validly and legally contract to sell a thing which does not belong to
him and thereby undertake the duty to
transfer ownership to the
buyer. It is however, only the owner of the thing who can actually
transfer the right of ownership in
it. The seller of a thing which
does not belong to him must first acquire it for himself and then
transfer it, or induce the owner
to transfer the real right of
ownership direct to the buyer. (See
Silverberg
& Schoemanâs:
The
Law of Property
(5
th
ed) p. 73.) This, it seems to me, is what fourth respondent sought
to achieve.
[
58] The
fourth respondent has no contract with any of the applicants. He is
obliged to look to the KM Trust and to demand of the
KM Trust that
they ensure that that which he purchased would be transferred to
him. I think that if any duty was owed to the KB
Trust in respect of
this extension it was a duty owed by the KM Trust not by the fourth
respondent. In the circumstances I do not
consider that either Kotze
or the fourth respondent can be said to have acted fraudulently or
unlawfully. On the evidence I consider
that each of them acted
bona
fide
in accordance with their understanding of the factual position.
[59] In any event,
subsequent to the meeting referred to the seventh respondent advised
that it would be prudent for the applicantsâ
attorneys, Messrs
Greyvensteins Nortier, to deal further with the application for
subdivision. This duly occurred and the seventh
respondent states
that the revised sketch plan prepared by Kotze pursuant to the
request by the fourth respondent was obtained by
Greyvensteins
Nortier directly from Kotze. It follows that immediately after
preparation of the revised plan by Kotze it was provided
to the KB
Trust by delivery to their attorneys. The revised plan sets out
clearly the revision which is apparent from the shape
of the diagram,
the surface area of the donated portion and the measurements of the
boundaries thereof as expressly set out on the
revised diagram. The
KB Trust, acting through their attorneys, submitted this diagram for
approval as required by LUPO. It therefore
appears to me that
whatever Kotze may have believed at the time of the meeting referred
to above, his subsequent conduct was not
clandestine. When he
prepared the revised drawing he delivered it to the KB Trust for all
to see by providing same to the KB Trust
attorneys.
[60] The
applicantsâ papers do not expressly deal with the manner in which
the registration of the subdivision was obtained, however
seventh
respondent states that the subdivision âwas attended to by the
Second and Third Applicantsâ attorneys Greyvensteinsâ.
This
accords with the obligations imposed upon the owner of the property
in terms of section 27 of LUPO. Approval of the revised
diagram and
the ensuing subdivision was accordingly procured by the KB Trust. I
consider that both Kotze and fourth respondent were
entitled to
assume that the KB Trust acquiesced in the amended diagram. That, I
think, is the necessary inference which flows from
the facts. The
second applicantâs subjective ignorance cannot in these
circumstances assist him. The KB Trust, through their
attorneys had
been provided with the revised diagram immediately after the
amendments were made. They procured the subdivision on
this basis.
[
61] The
papers do not disclose who the author of the second deed of donation
was. Attorneys Greyvensteins Nortier acted throughout
on behalf of
the KB Trust, although they did also act on behalf of the fourth and
fifth respondent for purposes of the consolidation
of Erf 97 and Erf
125 and for the transfer of the consolidated erf to the first
respondent. It is apparent that the second deed
of donation was
signed at the offices of attorneys Greyvensteins Nortier during or
about May 2007 and backdated to 15 December 2004.
At the time of
signature of the second deed of donation the donated property was not
described with reference to any annexure but
rather the KB Trust
donated Erf 125, the newly created subdivided erf. It is the erf
which the KB Trust had itself subdivided and
registered through the
medium of their attorneys, Greyvensteins Nortier.
[62] I think that
the only reasonable inference to be drawn from the facts is that the
KB Trust intended to donate Erf 125 as registered
in accordance with
the diagram approved by the Surveyor General on the application of
the KB Trust. This is what the KB Trust represented
to the fourth
and fifth respondents by its signature to the second deed of donation
and this is what fourth and fifth respondent
intended to accept. In
the circumstances the second deed of donation is valid.
[63] In any event,
even if I err in the conclusion to which I have come I do not
consider that the contractual validity of either
of the deeds of
donation is material to the remainder of the relief sought by the
applicants for the reasons which follow.
[64]
Transfer
of Ownership
.
Transfer of a real
right
is in Roman-Dutch law regarded as a separate transaction from the
underlying cause for the transfer. The conclusion of the underlying
contract, whether it be a contract of sale or donation gives rise to
personal rights and duties and an additional transaction is
required
in order to effect transfer of the real right from one party to
another. A valid underlying contract is not required for
a valid
transfer of ownership.
[65] These
principles arise from the fact that our law subscribes to the
abstract theory of transfer of ownership as opposed to the
causal
theory. According to this theory the validity of the underlying
cause is not an essential for the validity of transfer of
ownership.
What is required to pass transfer of ownership in terms of the
abstract theory is firstly delivery â which in the case
of
immovable property is effected by the registration of transfer in the
Deeds Office â coupled with the so-called real agreement
or
âsaaklike ooreenkomsâ. (See
Legator
McKenna and Another v Shea and Others
2010 (1) SA 35
(SCA) at 44G-H; and
Du
Plessis v Prophitius and Another
2010 (1) SA 49
(SCA) at 51H-52B.)
[66] Although the
abstract theory does not require a valid underlying contract
ownership will not pass, notwithstanding the registration
of
transfer, if there is a defect in the real agreement. (See
Legator
McKenna and Another v Shea and Others
(supra)
at 44I-J.) The essential elements of the real agreement are an
intention on the part of the transferor to transfer ownership and
an
intention on the transferee to become the owner of the property.
(See
Air-Kel
(Edms) Bpk h/a Merkel Motors v Bodenstein en ân Ander
1980
(3) SA 917
(A) at 922E-F;
Trust
Bank van Afrika Beperk v Western Bank Beperk
1978 (4) SA 281
(A) and
Legator
McKenna and Another v Shea and Others
(supra)
at 44H-I.) The underlying agreement may be relevant and may be
indicative of an intention to pass ownership, however, such an
intention
may be proved in various other ways. Thus Centlivres JA,
in
Commissioner
of Customs and Excise v Randalls Brothers and Hudson
1941 (AD) 369 states at follows at p. 411:
â
The legal
transaction preceding the
traditio
may be evidence of an intention to pass and acquire ownership, but
there may also be direct evidence of an intention to pass and
acquire
ownership and, if there is, there is no need to rely on a preceding
legal transaction ⦠To put it more briefly it seems
to me that the
question of whether ownership passed depends on the intention of the
parties and such intention may be proved in various
ways.â
[67] The principles
applicable to contracts in general apply equally also to real
agreements. In the circumstances the dictum of
Blackburn J in
Smith
v Hughes
which is set out above finds equal application in respect of the real
agreement. (Compare
Silverberg
and Schoemanâs
Law
of
Property
supra
at
p. 79 para 5.2.2.5.)
[68] I have dealt
above with the KB Trustâs knowledge of the dimensions of the
subdivided erf which it had created and registered.
The second deed
of donation provides expressly for the donation of Erf 125. There
was no confusion as to the subject matter of
the donation. It was
that erf which the KB Trust had subdivided from Erf 105.
Subsequently to the conclusion of the second deed
of donation the KB
Trust provided a power of attorney to their attorneys, Greyvensteins
Nortier, to pass transfer of Erf 125. The
second applicant declares
that the power of attorney consisted of a number of documents which
are annexed as a bundle to the first
applicants founding affidavit.
The first document contained in the authority given to attorneys
Greyvensteins Nortier confirms the
second applicantâs authority to
represent the KB Trust. It proceeds to clothe one John West
Hendricks and/or Christo Philip Notnagel
with power of substitution
to be the lawful attorney and agent in the name of the Trust to pass
transfer to the fourth and fifth
respondents of the property
described as-
â
Erf 125 (portion of Erf 105) KINI
BAY
In the Nelson Mandela Metropolitan
Municipality
Division of Port Elizabeth, Province
of the Eastern Cape
IN EXTENT: 315 (THREE HUNDRED AND
FIFTEEN) square meters
HELD by Deed of Transfer no.
T42805/1996â.
I pause to mention
that the area of 315 square metres represents the area depicted on
the revised diagram and is at variance with
the area depicted on the
original diagram attached to the first deed of donation.
[69] Further
included in the bundle which constitutes the power of attorney is the
revised sketch plan which depicts the donated area
in the shape of a
trapezium as opposed to the parallelogram contained in the first deed
of donation and in the original diagram submitted
to the Nelson
Mandela Metropolitan Municipality. It sets out expressly the exact
length of each of the boundaries of the property
which the attorneys
are mandated to transfer.
[70] The power of
attorney was signed on 11 May 2007, at approximately the same time as
the second deed of donation. The KB Trust
had the benefit of legal
assistance at the time of the conclusion of these documents. I am of
the view that the facts are strongly
indicative of an actual
intention on the part of the KB Trust to pass transfer of Erf 125, as
it had been registered, to the fourth
and fifth respondents. Not
only was the KB Trust, through the medium of their attorneys, in
possession of the actual revised diagram
at the time when the second
deed of donation and the power of attorney were executed but the
actual revised diagram formed part of
the power of attorney. The KB
Trust were assisted by their attorneys in the process of subdivision
which I have discussed above,
in the registration of the subdivision,
in the execution of the second deed of donation and in the execution
of a power of attorney
to pass transfer. I consider that the only
and necessary inference which may be drawn from these facts is that
the KB Trust intended
to, and represented to the fourth and fifth
respondents that it intended to, give transfer of Erf 125 as depicted
on the revised
diagram which formed part of its power of attorney
given to its attorneys to pass transfer. The KB Trustâs subjective
ignorance
does not assist and I consider that the real agreement is
valid. Ownership of Erf 125 accordingly passed to the fourth and
fifth
respondents upon registration.
[7
1]
Relief
against first respondent.
It follows from the conclusion which I
have reached above that fourth and fifth respondents, as new owners
of Erf 125 and of the consolidated
Erf 126 had the capacity to
legitimately pass ownership to first respondent. Her title is
accordingly unassailable.
[72] In any event,
as set out above, the KB Trust took no steps to satisfy themselves as
to the dimensions of the revised diagram
which they themselves
requested the Surveyor General to approve, albeit through the medium
of their attorneys. They took no steps
to satisfy themselves as to
the dimensions of the subdivided erf which they themselves, albeit
through their attorneys, requested
the Registrar of Deeds to
register. They took no steps to determine the extent of Erf 125 when
they signed a deed of donation in
favour of the fourth and fifth
respondents. They did not attempt to satisfy themselves as to the
dimensions of the property which
they authorised their attorneys to
transfer to the fourth and fifth respondents. In these circumstances
the first respondent, a
bona
fide
,
third party came to purchase the property and took transfer of the
property into her name.
[7
3] Even
if I err in concluding, as I have done, that the KB Trust were not
misled into believing that Erf 125 equated to the original
donated
property I do not consider that they may attack the legitimate title
of the first respondent in circumstances where the KB
Trust had every
opportunity, and indeed obligation, to obtain the true facts prior to
passing transfer and where they have simply
neglected to take any
reasonable steps to satisfy themselves as to the truth. In these
circumstances ownership in Erf 126 passed
to the first respondent
(Compare
Standard
Bank v Du Plooy
(1899) 16 SC 161
at 169; and
Christie:
The
Law of Contract in South Africa
(5
th
ed) p. 3231).
[
74] In
all the circumstances the application is dismissed with costs.
______________________
J W EKSTEEN
JUDGE OF THE HIGH COURT