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[2018] ZAECPEHC 5
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Friedman N.O. and Another v Moolman (821/2017) [2018] ZAECPEHC 5 (22 February 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE DIVISION – PORT ELIZABETH
Case
No.: 821/2017
In
the matter between:
GERALD
JACK FRIEDMAN N.O.
First
Applicant
BEVERLY
GAY FRIEDMAN N.O.
Second
Applicant
In
their capacity as Trustee for the time being of
THE
RIETVALLEI TRUST, IT 484/2007
And
JOYCE
D MOOLMAN
Respondent
JUDGMENT
REVELAS
J
:
[1]
On
2 December 2016 the first applicant, in his capacity as trustee of
the trust and the respondent, in her personal capacity, signed
a
document headed “OOREENKOMS”. This document was the
product of a proposal, an oral agreement, discussions and
pursuant
e-mail correspondence and telephone conversations between the
applicant and Mr Heinrich Nel of the attorneys firm Nel
Mentz
Incorporated of Humansdorp. In terms of the
agreement, the respondent sold a portion of her farm to the
trust
(280 hectares) to the trust. In this application the applicant
seeks the following relief:
“
1.
Declaring that the Agreement between the Applicants and Respondent,
annexure GJF4 to the founding affidavit
of the First Applicant (“the
Agreement”) is of no force and effect;
2.
alternatively
,
confirming the cancellation of the Agreement.
3.
that the respondent be directed to pay the applicants, in their
aforesaid capacities, the
sum of R1 325 000.00 (the purchase price),
together with interest thereon at the legal rate a
tempore
morae
;
4.
that the respondent be directed to pay the costs of this
application.”
[2]
The
applicant contends that the agreement is null and void for failure to
comply with the provisions of
section 2(1)
of the
Alienation of Land
Act, 68 of 1981
;
alternatively
,
for want of compliance with the provisions of
section 3
of the
Subdivision of Agricultural land Act, 70 of 1970;
alternatively
,
that the agreement was consensually cancelled by the parties;
alternatively
,
that the agreement is, in any event, at an end, by virtue of the
respondent’s repudiation thereof, which repudiation the
trust
has accepted,
alternatively
,
accepts as a result of which the trust cancels the agreement.
[3]
The
applicant contends that in all the premises contemplated in law, the
respondent is liable to repay the trust the initial purchase
price of
R1 175 000.00 which amount was later amended to R1 325 000.00.
The applicant filed a supplementary affidavit wherein
he explained
that upon reconciliation of his bank statement, he realized that he
had made a mistake in regards to the amount that
he had paid the
respondent. He alleges that he paid an additional amount of
R150 000.00 in part redemption of the purchase
price payment.
In this regard the applicant relied on an e-mail dated 7 December
2016 sent to him by Hugo Muller, respondents
grandson.
[4]
The
said payment of R1 325 000.00 made to the respondent is made up as
follows:
(1)
R300
000.00 – 28 November 2016
(2)
R200
000.00 – 1 December 2016
(3)
R300
000.00 – 6 December 2016
(4)
R265
279.63 – 7 December 2016
(5)
R109
720.37 – 9 December 2016
(6)
R150
000.00 – R20 December 2016.
Background
:
[5]
The
two applicants in this matter are trustees of Rietvallei Trust (“the
trust”). Since the first applicant was
the predominant
role player in the events set out herein, I shall refer to him as
“the applicant”.
[6]
The
trust owns a farm adjacent to tracts of land respectively owned by
the respondent (Mrs Joyce Moolman) and her daughter (Hannelie
Muller). The portion west of a gravel road belongs to
respondent. The portion east of the gravel road is owned by
Hannelie Muller (the correct identification of their respective
properties occurred later). The applicant and the Muller family
had a long term relationship pertaining to farming matters. Mr
Adriaan Muller, the husband of Hannelie Muller, had an arrangement
with the applicant in terms whereof Adriaan Muller would manage 200
sheep owned by the applicant for their mutual benefit.
When the
marriage relationship between Hannelie Muller and her husband broke
down during 2016 and Adriaan Muller left the farm
in October 2016,
their son, Hugo Muller, thereafter managed the applicant’s
sheep on their joint behalf. Mr Nel also
represented Hannelie
Muller in her divorce proceedings and was familiar with the financial
affairs of the respondent and her family.
[7]
According
to the applicant, Adriaan did not farm profitably and by the time he
left and, the Mullers were experiencing financial
difficulties.
The Mullers and the respondent needed to generate capital and the
possible sale of a portion of Uitvlucht (adjacent
to the applicant’s
eastern boundary) was discussed with the applicant Hugo Muller
approached the applicant. This portion
of Uitvlucht was
believed by all concerned to be owned by the respondent. Her
grandson Hugo Muller was in charge of the farming
operations
thereon. According to the applicant, Hugo confirmed to him,
that he was authorized by the respondent to conclude
an agreement of
sale with the applicant, with the objective of the trust purchasing a
portion of the respondent’s farm (approximately
280 hectares)
at the asking price of R5 000.00. The respondent disputes that
she gave such authority to her grandson or any
other member of her
family.
[8]
For
purposes of identification of the land to be sold, Hugo Muller and
the applicant agreed that the area intended for sale should
be
measured. To this end Hugo Muller and the applicant’s
farm manager, Ricardo Byers walked around the boundaries and
used
Hugo Muller’s measuring device to take measurements. The
applicant and Hugo Muller agreed that the measurements
would later be
verified by Mr S.T. Maarschalk, a land surveyor. Hugo Muller
later reported it was 235 hectares. The
applicant wanted to be
sure.
[9]
For
the sale to have any legal consequences, the agreement had to be
reduced to writing. The applicant was also desirous to
commence
payment. The Mullers conveyed to the applicant that the
respondent was willing to conclude the agreement.
[10]
According
to the applicant, the terms of their oral agreement were:
(1)
The
trust would buy the land (later identified by Hugo Muller and Ricardo
Beyers) from the respondent at a purchase price of R5
000.00 per
hectare.
(2)
If
the agreement of sale should fail for same reason (related to the
relevant legislation) the land in question will be rented by
the
trust for nine years and eleven months at a renal equal to five
percent of the purchase price, per annum.
(3)
Should
the agreement fail through no fault of the trust, any monies paid by
the trust in respect of the proposed sale, would be
treated as a loan
to the respondent.
[11]
The
agreement was translated into Afrikaans to accommodate the respondent
who is Afrikaans speaking.
The
salient terms of the agreement were the following:
[12]
Clause
3 of the agreement stipulates that the trust agreed to purchase a
portion of land, approximately 280 hectares in size, owned
by the
Muller family.
[13]
Clause
4 records that the applicant and Hugo Muller, the grandson of the
respondent, walked around the boundaries of the land in
question for
purposes of identification of the land and noted that a land surveyor
(Mr T.S. Maarschalk) would measure the land.
Later Hugo Muller
advised that the land was 235 hectares in size.
[14]
Clause
5 sets the purchase price at R5 000.00 per hectare
[15]
Clause
7 notes that pending compliance with the provisions of the
subdivision of Agricultural Land Act, 70 of 1970, the trust would
lend and advance certain sums of money to the respondent (referred to
as “Mev Moolman”) who, in turn would on-lend
those sums
of money to her grandson Hugo Muller, or the payments would be
regarded as payment towards the purchase price (“afbetaling
op
die koopprys”).
[16]
Clause
9 makes provision for the eventuality that the transfer of the
property is not effected due to no fault on the part
of the
trust or the applicant. It provides that the sums of money
already paid by the applicant, be repaid to her, together
with 10%
interest, which is then set off monthly against the rental, and on no
other basis (“en op geen ander basis nie”).
This
clause previously provided differently and was amended by Mr Nel who
did not alert the applicant to the amendment.
[17]
Clause
13 records that the applicant had already paid R500 000.00 towards
the purchase price.
[18]
Clause
14, which must be read in conjunction with clause 7 of the agreement,
provides that the balance of the purchase price, to
be advanced as a
loan to the respondent, would be paid on her confirmation of
acceptance of the terms of the agreement by virtue
of her signature
being appended thereto. The applicant avers that this clause
does not reflect the agreement between them.
[19]
The
property had yet to be subdivided at that stage, in accordance with
the measurements of the land surveyor, and the Minister
of
Agriculture and Land Affairs had to give the necessary consent to
subdivision. Hence the provisions and the conditions
contained
in clause 7.
[20]
The
respondent signed the agreement thereby confirming as provided for in
clause 13 of the agreement, that by the time she appended
her
signature to the agreement, that the applicant had already paid R500
000.00 over to Hugo Muller. The balance of the purchase
price
(R650 000.00 would be paid on acceptance of terms of the agreement,
by signing it. The payment of the R500 000.00 was
acknowledged
and confirmed by Hugo Muller in and e-mail addressed to the applicant
on 5 December 2016. He requested the balance
of R650 000.00 to
be paid. The applicant first wanted a copy of the signed
agreement which he received on 8 December 2016,
and thereafter he
paid the outstanding balance of R650 000.00.
[21]
A
dispute about the 200 sheep (referred to above) ensued between the
applicant and Hugo Muller in January 2017. According
to the
applicant he demanded the return of the sheep and discovered that
some sheep were not form his herd. Hugo Muller denied
this but
nonetheless refunded the applicant for the sheep to preserve their
good relationship.
[22]
In
the interim, the services of the land surveyor Mr S.T. Maarschalk
were engaged. Mr Maarschalk delivered a sketchplan of
the
portion of land to be sold in terms of the agreement and its measured
area was 112,9026 hectares in extent. It was not
280 hectares
as Hugo Muller had reported after his excursion. The land
intended for sale was portions 3/293 of the farm Rietvallei
and
portions 5/194 and 7/194 of the farm Uitvlucht. As it turned
out the latter two portions were owned by Hannelie Muller,
and not
the respondent. It was unclear what portion of land was sold,
who the owner was, nor how big or small was it.
[23]
As
matters then stood, the property referred to in the agreement was not
identified properly in respect of its situation, it extent
or its
ownership. Mr Nel subsequently advised the applicant that as a
result of the incident in the sheep “only the
rental
alternative” provided for in the agreement “remains”
an option. The signed agreement of sale of
land was thus
repudiated by the respondent and that was accepted by the applicant.
All parties agreed that the agreement
was null and void, with this
difference: The respondent’s stance was that the sale of
land was void but not the lease
agreement in respect of that land.
The lease agreement which eventuated from a failed sale of the land
in question, was alive,
according to the respondent.
[24]
The
applicant alleges that he was unaware that Mr Nel had effected
amendments to the agreement, and in particular amendments to
clauses
7, 9 and 12. Clause 9 according to him incorporated a new
provision that there would be no monies repayable and whatever
monies
were due, would be offset by rental. The applicant reiterated
that the agreement between himself and the respondent
was that if the
respondent transaction failed, the respondent would refund the
applicant. Mr Nel advised the applicant that
the respondent did
not have the money to refund him.
[25]
As
the applicant pointed out, the set off arrangement in clause 9 would,
on a mathematical basis, not be feasible since, on the
one hand, the
respondent had an interest obligation of ten percent annually on the
purchase price, whilst on the other hand she
would be receiving
interest of only five percent per annum on the purchase price, i.e.
the capital sum as and for rental.
[26]
Between
the applicant and Mr Nel no solution could be found. The
agreement had failed. No further agreements could be
reached
and the respondent refused to repay the applicant. Accordingly
the applicant launched the present application.
[27]
The
respondent opposed the relief sought by the applicant on several
grounds. Firstly she denies being aware of any negotiations
between the applicant and Hugo Muller and stressed that she had no
personal involvement in any negotiations regarding “an
agreement which was allegedly entered between him [the applicant] and
my attorney Mr Hein Nel.”
[28]
The
respondent alleged that a loan was not made to her, but to her
grandson Hugo Muller. She reiterated that she was never
in a
position to repay such a large loan. She said that Mr Hein Nel
was given a mandate to protect her interests and in this
regard, both
Mr Nel and the respondent rely on the contents of clause 9. As
stated before, the respondent denies that she
ever authorized any of
her family members to negotiate or act on her behalf.
[29]
Secondly,
the respondent accused the applicant of being a credit provider, who
provided “reckless credit”, in that he
never required her
to provide him with the necessary information as required by the
National Credit Act, 34 of 2005
. None of the parties regarded
the applicant or the trust as a credit provider and the agreement is
in any event not enforceable.
Therefore this second point has
no merit.
[30]
The
respondent also averred that a 20 year lease would have eventuated if
the sale did not go through. Such a lease is prohibited
by
section 3(d) of the Subdivision of Agricultural Land Act, Act 71 of
1970.
[31]
The
respondent also accuses the applicant of misrepresenting to Mr Nel
and herself that the portion of the farm he intended to purchase
was
owned by her. She states that it was only much later when the
she prepared her answering affidavit that her attorney,
Mr Nel,
noticed that only one portion of the three portions intended for
sale, was actually owned by her. In my view, the
applicant
cannot be blamed for this clear oversight on the part of the
respondent and her family. They wanted to sell land
to the
applicant and should have ascertained before approaching him, what
portion they wanted to sell.
[32]
The
respondent accused the applicant of
mala
fides
,
stating that he knew, when he signed the agreement that it did not
comply with
section 2(1)
of the
Alienation of Land Act in
that the
land being sold was not identified. The applicant may have
conducted his business in this instance in a rather unorthodox
way.
In fact, this case is a text book example of how not to go about
buying land. However, the applicant never intended
to mislead
anyone. The whole body of evidence in this matter suggests that
the applicant had the interests of the respondent
and her family at
heart. Hugo Muller called him “Oom”. The idea
to sell the farm emanated from the Muller
family’s financial
predicaments and the applicant immediately responded to Hugo Muller’s
approach to him by starting
putting a proposal in writing. He
was also clearly sympathetic to their plight.
[33]
Lastly
the respondent submitted that the applicant’s assertion that
Hugo Muller and her daughter acted as her agents, is so
fraught with
factual disputes that the trust ought to have issued summons instead
of seeking relief in motion court proceedings.
The approach I
choose to adopt in this matter renders oral evidence unnecessary.
Conclusion
:
[34]
The
respondent’s opposition is essentially two-fold. Even
though contends the agreement of sale was null and void, she
added
that, a loan agreement was entered into between the applicant and her
grandson, and a lease between herself and applicant.
[35]
The
respondent cannot rely on clause 9 of the agreement or any ancillary
agreements contained therein. The entire agreement
is void.
The respondent cannot escape the consequences thereof by pleading a
loan to her grandson. The respondent signed
the agreement.
Even if clause 9 was not null and void, that would not assist the
respondent. The land referred to in
the deed of sale was area
of 280 hectares. Subsequent land surveying measurements
demonstrated that it was in effect half
the size. The
respondent could not tender performance of the so-called lease
agreement as an alternative to the agreement
of sale by offering the
property to the applicant to lease. The land tendered
(approximately 112 hectares) was not the 280
hectares described in
the agreement. Neither party could therefore perform their
obligations under such a lease.
[36]
The
agreement, in its signed form, whether or not the applicant agreed to
the amendment of certain paragraphs therein, is of no
force and
effect, because it does not comply with the mandatory provisions of
section 2(1)
of the
Alienation of Land Act. This
section
requires land being sold in terms of an agreement of sale, to be
identified or described. If an agreement is of no
force and
effect, it is void
ab
initio
[1]
.
This case is a clear illustration of why the formal requirements for
a valid deed of sale in
section 2(1)
are important. In
Philmatt
(Pty) Ltd v Mosselbank Development CC
1996(2) SA 15(A) at 25 C-D, Grosskopf JA held as follows:
“
The
general object of s 2(i) of the Act [the
Alienation of Land Act, 68
of 1981
], and similar enactments which preceded it, has been
considered in a number of cases and it is generally accepted that the
policy
underlying this legislation is, to prevent disputes,
uncertainties and possible malpractices in respect of transactions,
which
as a rule, are of considerable value and importance.”
[37]
Even
at this stage it is not certain what precise portion of land the
parties had in mind. That in itself demonstrates a lack
of
consensus in respect of the sale and the lease of the land. The
trust performed its obligations by making payment of the
purchase
price in terms of the void agreement. The respondent has not
affected any performance in terms of that agreement.
[38]
The
respondent argued that she was not enriched and therefore the
applicant is not able to rely on the provisions of the
condictio
indebiti
,
or enrichment, as a ground for repayment of the purchase price.
The basis for this proposition is that her son, and not
she, had
received the applicant’s money.
[39]
This
submission has no merit. Clearly the applicant has been
impoverished by paying the purchase price when the agreement
turned
out to be of no force and effect. The agreement in terms
whereof he had paid, was signed by the respondent.
She loaned
the money to her grandson, a fact incorporated in terms of the same
agreement. She therefore has a
jus
in personam
against her grandson who was an
adiectus
solutionis causa
[2]
in the transaction, and the respondent was thus enriched at the
applicant’s expense. The respondent concluded an
agreement
of sale with the applicant in terms whereof the applicant
paid her, through her grandson, the full purchase price for property
she could not deliver. Her stance that she can simply wash her
hands off the whole transaction is misconceived.
[40]
Section
28(1)
of the
Alienation of Land Act provides
as follows in respect of
the consequences of deeds of alienation of land which are void:
“
(1)
Subject to the provisions of subsection (2), any person who has
performed partially or in full in terms of an alienation
of land
which is of no force or effect in terms of
section 2(1)
, or a
contract which has been declared void in terms of the provisions of
section 24
(1) (c), or has been cancelled under this Act, is entitled
to recover from the other party that which he has performed under the
alienation or contract, and-
(a)
the
alienee may in addition recover from the alienator-
(i)
interest
at the prescribed rate on any payment that he made in terms of the
deed of alienation or contract from the date of the
payment to the
date of recovery;
(ii)
a
reasonable compensation for-
(aa)
necessary expenditure he has incurred, with or without the authority
of the owner or alienator of the land, in
regard to the preservation
of the land or any improvement thereon; or
(bb)
any improvement which enhances the market value of the land and was
effected by him on the land with the express
or implied consent of
the said owner or alienator; and
(b)
the
alienator may in addition recover from the alienee-
(i)
a
reasonable compensation for the occupation, use or enjoyment the
alienee may have had of the land;
(ii)
compensation
for any damage caused intentionally or negligently to the land by the
alienee or any person for the actions of whom
the alienee may be
liable.”
[41]
Section
28 is a type of statutory
condictio
indebiti
and its terms clearly favour the applicant in the present situation.
[42]
In
terms of
section 28
of the
Alienation of Land Act and
the common law,
the respondent has to repay the applicant the purchase price of the
agreement which amounted to R1 350 000.00.
[43]
In
the circumstances the applicant is entitled to the relief sought in
his amended notice of motion.
[44]
The
following order is made:
1.
That
the respondent is directed to pay the applicants, in their aforesaid
capacities, the sum of R1 325 000.00, together with interest
thereon
at the legal rate a
tempore
morae
.
2.
That
the respondent is directed to pay the costs of this application.
____________________
E
REVELAS
Judge
of the High Court
Appearances
:
For
the Applicant: Adv. Beyleveld SC and Adv Ronaasen SC instructed
by Kaplan Blumberg, Port Elizabeth
For
the respondent: Adv Pretorius SC instructed by Greyvensteins,
Port Elizabeth
Date
heard: 21 September 2017
Date
delivered: 22 February 2018
[1]
Wilken v Kohler
1913 AD 135
at 143.
[2]
De Wet en van Wyk: Kontraktereg en
Handelsreg 5
th
ed at 261