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[2024] ZAKZPHC 13
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Wetlands Country Retreat (Pty) Ltd and Another v Schutmann Agri (Pty) Ltd (13203/2023P) [2024] ZAKZPHC 13 (23 February 2024)
IN THE HIGH COURT OF
SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case no:13203/2023P
In the matter between
WETLANDS COUNTRY
RETREAT (PTY) LTD
FIRST APPLICANT
(Registration Number:
2008/011285/07)
RENSBURG BOERDERY
(PTY) LTD
SECOND APPLICANT
(Registration Number:
2018/306669/07)
And
SCHÜTMANN AGRI
(PTY) LTD
RESPONDENT
(Registration Number:
2020/727828/07)
JUDGMENT
PITMAN
AJ
[1]
The first applicant is the registered owner of two farms, the
possession of which
is at the core of this application. The second
applicant is an entity to which the first applicant granted the right
to lease the
farms to the respondent. The precise nature of the
relationship between the applicants is not set out in the papers, but
is irrelevant
because what is set out above is common cause.
[2]
The respondent initially leased the farms for the period 1 September
2020 to 30 August
2022. A further written lease was then concluded in
order that the respondent could continue on the farms, this time for
the period
1 September 2022 until 31 August 2023. A portion of this
written lease forms the basis of the dispute between the parties. The
applicants allege that the lease terminated by agreement on 31 August
2023 and that the respondent is obliged to vacate. It has
refused to
do so and, as a consequence, the applicants allege that they are
entitled to orders removing the respondent and interdicting
it from
using the farms any longer or inciting or allowing anyone else to do
so. The respondent alleges that the written lease
provided it with an
option to purchase, as set out in clause 16 thereof. It alleges
it exercised that option and it is therefore
entitled to remain
occupying the farms until the transfer takes place. The applicants
deny that an alleged option to purchase was
agreed in the signed
lease agreement. The applicants put up a copy of the lease they say
they agreed to, which has clause 16 deleted
in manuscript. The
respondent, on the other hand, put up a copy that did not have clause
16 deleted. The respondent alleges that
its version of the written
lease was what was agreed. It alleges that the copy put up by the
applicants, with clause 16 deleted,
is a fraud.
Clause 16 of the lease
document reads as follows:
“
16.
SPECIAL CONDITIONS
16.1 The Lessor on
behalf of the registered owner of the farms hereby grants the Lessee
an option to purchase the farms on or before
31 August 2023.
16.2 The parties
hereby agree that the purchase price will be an amount of R10 800.00
per hectare and guarantee(s) for
the purchase price will be delivered
within 30 (thirty) days from the date on which the option is
exercised, alternatively, if
such is exercised less than 30 (thirty)
days before the expiry of the lease, then such guarantee(s) are to be
provided before the
expiry of the lease…..”
There are an additional
two sub clauses which are irrelevant at this point.
[3]
This application was launched as an urgent application on 5 September
2023 for a hearing
on 13 September 2023. The urgent relief sought by
the applicants (and I summarise) was that the respondent be ordered,
within three
days from the date of the order, to remove, and be
interdicted from grazing, any and all livestock under its control on
the farms
and the removal of all farming equipment and implements
under the control of the respondent from the farms. Further that the
respondent
be interdicted from thereafter re-entering the farms or
from permitting anyone else to do so. In the event of the respondent
not
complying, the applicants sought the authorisation of the court
to remove the respondent’s livestock and take them to “
the
nearest pound in Utrecht”
and also to remove the equipment
and other movable assets belonging to the respondent still remaining
on the farm. Costs are sought
on an attorney and client scale.
[4]
Effectively, the relief sought amounts to an eviction of a commercial
entity although,
for reasons I remain unsure of, the applicants have
been reluctant to call it that. The relief sought is final relief.
[5]
The notice of motion called upon the respondent to file its notice of
intention to
oppose by 17h00 on 5 September 2023, and an answering
affidavit, if any by 18h00 on 8 September 2023. The respondent
opposed and
delivered an answering affidavit dated 8 September 2023.
It is deposed to by one Johan Schutte, the authorised director of the
respondent. The applicants delivered an answering affidavit dated 11
September 2023.
[6]
The matter initially came before Mossop J on 13 September 2023. With
his authority,
and by consent, it was adjourned to the opposed role
for argument on 12 of February 2024. In addition, Mossop J granted
the respondent
leave to supplement its answering affidavit and he
also recorded that the respondent’s rights, as far as taking
issue with
the urgency of the matter, were reserved. Costs were also
reserved.
[7]
The respondent did not, however, deliver a supplementary affidavit.
The applicants
delivered a one-page supplementary affidavit dated 23
January 2024 complaining about the respondents failure to do so and
warning
the respondent that late filing of the permitted
supplementary affidavit would not be entertained, so as not to derail
the opposed
hearing on 12 February 2024. It also dealt with ancillary
matters relating to the respondents tender in its opposing affidavit
regarding certain “
rental”
payments it was
prepared to make and the applicants’ attitude thereto. It is
not necessary to deal with that issue any further
at this stage. The
respondent then, however, delivered a further answering affidavit to
this supplementary affidavit wherein it,
inter alia
, indicates
that it is of the view that it was not necessary to file a
supplementary affidavit. It dealt with other issues which
are also
irrelevant at this stage, in my view.
[8]
As a consequence of the dispute about the “
option”
clause, as it arose in these papers, it is common cause that the
respondent saw fit to, on 31 January 2024 only, commence an action
against the applicants for declaratory relief to the effect that the
option “
is a valid option which was properly and legally
exercised by plaintiff”
(respondent) together with relief
flowing therefrom relating to the transfer of the farms to the
respondent. This was brought to
the court’s attention in the
respondent’s heads of argument and a copy of the summons was
attached thereto. The action
was launched after all the initial
affidavits in this application had been delivered. The final
“
answering affidavit”
by the respondent referred
to above, is dated the same day i.e. 31 January 2024. Precisely why
the respondent chose to pursue the
action at this late stage is far
from clear. It was argued by the respondent’s Counsel that the
summons is necessary to provide
a platform for a determination of a
dispute about whether the option was actually agreed and whether it
was then properly and legally
exercised. There is no counter
application for such relief when one would have expected such, if the
alleged “
dispute”
is
bona fide
raised, in
my view. Whatever the reason may be, however, for reasons I will
provide below, I do not need to decide that issue.
[9]
The application was argued before me on 12 February 2024.
[10]
In argument, Counsel for both sides accepted that the pivotal issue
for a determination of this
application involved the alleged option
to purchase, as set out above. They accepted that there exists a
genuine dispute of fact
as to whether that option, as expressed in
writing in the lease document, was agreed or not. The applicants’
argument, however,
was that even if the option as set out in clause
16
had been agreed
as contended for by the respondent, the
respondent still could not succeed in its defence of the application
because the option
had not, on the respondent’s own version,
been validly accepted and exercised. Alternatively, it was argued by
the applicants,
that the option was coupled with a suspensive
condition, being the delivery of the guarantee/s timeously as
offered, failing which
the option become void and unenforceable.
On either scenario, it was argued, the respondent, even in the face
of the dispute
of fact regarding the existence of the option, had
acquired no right to purchase the farms and accordingly no right to
remain on
them because the guarantees had not been delivered. The
applicants argued that that issue could and should be determined on
the
papers in the applicant’s favour and would prove to be
dispositive of the application. They further argued that the issue
of
summons, after the fact, was irrelevant and simply a duplication of
what could and should be determined on these papers. The
evidence on
the pivotal issue, so it was argued, is before me already.
[11]
Respondent’s counsel argued that his client should have the
right to lead evidence about
what clause 16 means and requires. He
provided no basis in law for how such evidence would be admissible
but submitted that there
was a history leading up to the relevant
written lease document and that the applicants had changed their
requirements about the
option in the run up to the final written
version produced by the applicants containing the version of clause
16 referred to above.
In my view, even if such evidence were
admissible to an interpretation of clause 16, (and it seems unlikely
to me, but I express
no decision on the point) such evidence simply
demonstrates a shift in the requirements of the applicants while
negotiating the
further lease and cannot effect an interpretation of
the terms of clause 16 as is alleged by the respondent to have been
agreed.
The respondent’s version is that clause 16 of the lease
was agreed
in that form
by it.
[12]
The respondent must therefore establish that it has properly and
fully accepted and exercised
the option, if it is entitled to remain
on the farms and that it has complied with any suspensive conditions
as may have been applicable
to the option. The following legal
principles are of application.
[13]
An option is an offer to enter into a main agreement together with a
“
concluded
subsidiary contract (the contract of option) binding the offeror to
keep that offer open for a certain period.”
It is a contract complete in itself.
[1]
An option to buy land concerns a transaction relating to a future
sale of land. As such, as a bare minimum the option must include
the
description of the land and the purchase price and must be in
writing.
[2]
The option must also
be accepted and exercised in the terms thereof. In
Du Plessis NO
and Another v Goldco Motor & Cycle Supplies (Pty) LTD
2009 (6) SA
617
(SCA), the position was that the alleged option read as follows,
as set out in the headnote:
“
The
respondent hired certain premises from the trust of which the
appellants were trustees. The agreement of lease contained, inter
alia, an option to purchase the leased premises on condition that:
(i) the sectional title register in respect of the premises
was
opened within 24 months of conclusion of the lease; and (ii) the
option was exercised by way of a written contract of sale
drawn up by
the trust's attorneys and signed by the parties within 24 months of
conclusion of the lease; and (iii) the written
contract of sale was
drawn up after the approved plan had been delivered to the trust's
attorneys by the land surveyors, in which
the premises leased and
sold were reflected as a sectional title unit.”
[14]
In the majority judgement Lewis J wrote, at paragraph [17]:
“
The
fact that Goldco's right could not be exercised simply by notifying
the trust (in writing) does not mean that there was
no right
conferred on Goldco. The written contract envisaged in the option
clause was, in my view, no more than a prescribed mode
of acceptance:
the conclusion of a written contract, drafted by Rossouws, and signed
by the parties.”
[15]
As far as suspensive conditions go; non-fulfilment thereof usually
renders the contract void.
[3]
[16]
As set out above, the respondent claims it exercised this option. It
sets out how it did so in
paragraphs 4.13 of the answering affidavit
where the deponent for the respondent says the following:
“
4.13
On 31 July 2023, Hartzenberg
(the
respondents attorney)
informed Van der
Merwe
(the applicants’ attorney)
,
in writing, that:
‘
4.
Our instructions are to exercise the option on behalf of our client,
our client hereby purchasing the aforesaid farms from Wetlands
Country Retreat (Pty) Ltd, at a purchase price of R10,800 per hectare
for a total purchase consideration of R14,954,312,00…
(The
farms comprising of 1384.6586 hectares)’
5.
Our client will deliver the guarantee for the purchase price within
30 (thirty) days from the date hereof,
but,
in any event, not later than 31 August 2023
…”.
(My underlining).
[17]
Thirty days from the date of the “acceptance” of the
option was 30 August. The “acceptance”
provided for
possible delivery only on 31
st
August. The “acceptance”
was therefore not in the terms required by the option. The option did
not permit a day longer
than 30 after acceptance unless “
if
such is exercised less than 30 (thirty) days before the expiry of the
lease, then such guarantee(s) are to be provided before
the expiry of
the lease…..”.
On that basis alone, in my view, the
respondent, on its own version, did not exercise its option as
agreed.
[18]
Alternatively, and on an assumption that the acceptance conveyed in
the letter referred to above
was proper, it is common cause that the
guarantees referred to by the respondent’s attorney in
exercising the option have
never been delivered and remain
undelivered. They have never been tendered by the respondent either.
In fact, the respondent does
not deal with the guarantees at all in
the answering affidavit nor in its last affidavit dated 31 January
2024. In oral argument,
Counsel for the respondent argued that by
disputing the existence of the option, the applicants made it
impossible for the respondent
to comply. No facts are set out in the
papers justifying such a submission, however.
[19]
On the papers, the respondent’s explanation for not delivering
the guarantees or even tendering
them in order to perfect the option,
is not dealt with. The answering affidavit deals with correspondence
involving argument between
the parties relating to the existence or
otherwise of the option in the written lease agreement, with the
respondent taking the
view, in the face of the applicants’
denials in that regard, that it (the respondent) now in fact owned
the property and
all it had to do was tender “
occupational
rental”
, which it did. It went as far as alleging in the
answering affidavit that because it had accepted the option, a valid
“
purchase and sale”
agreement was “
immediately
brought into being.”
It alleged that it had become “
the
owner of the farms and as such is entitled to remain in occupation
thereof.”
It accordingly asserted that it had acquired
“
independent title to the farms”
and that the
applicant accordingly had no
locus standi
in relation to the
farms any longer. That argument is self-evidently incorrect. I do not
intend to deal in any detail with it,
save to say, that it is trite
that ownership of land can only transfer upon registration and any
rights asserted before then could
only be personal rights and not
rights arising from ownership.
[20]
To perfect the option, the respondent ought to have delivered
guarantees as required, even if
the option itself was being disputed.
The dispute did not render performance impossible. As I pointed out
to the respondent’s
Counsel during argument, the respondent was
represented by attorneys at the time who could not have been ignorant
to the fact that
to exercise the option, as they had indicated the
respondent was doing, the guarantees need to be timeously delivered.
[21]
The respondent bore an onus of proving that it had accepted and
complied fully with the terms
of the option that it says it relies
on. What it had to establish was the acceptance by it of the offer to
purchase the land at
the agreed sum, and the provision and delivery
of the guarantees within 30 days from the date of which the option
was exercised.
Those are the terms of the option the respondent was
required to give effect to. In its replying affidavit the applicant
in fact
argues that “
The respondent did not deliver any
guarantees. Accordingly, and on the respondent’s own version
the alleged option was not
validly exercised.”
It also
alleged that the option relied upon by the respondent “
contains
a suspensive condition that the guarantee …had to be provided
within 30 days from the date on which the respondent
exercised the
option…”
[22]
The respondent’s counsel argued that the required delivery of
the guarantee/s was not a
term of the option. I cannot agree. Not
only is it clearly apparent from a reading of clauses 16.1 and 16.2
that the option included
the requirement that the guarantee/s be
provided as agreed, but that is how it was accepted by the
respondent. Had the respondent
genuinely believed that the guarantees
were nothing more than a requirement for an inclusion in a full deed
of sale ultimately,
I have no doubt that its attorneys would either
have not referred to them at all in purporting to accept the option
or would have
qualified the delivery of the guarantee/s in the
acceptance letter on that basis.
[23]
The respondent’s counsel also argued that even if the provision
of the guarantees was a
term of the option, the lease itself had a
breach provision in paragraph 11 which provided for what he called a
lex commissoria
. Clause 11 of the lease is a commonly found
breach clause which entitles a lessee to cancel or claim specific
performance subject
to the prior dispatch of a written notice
demanding that the breach be remedied. The application before me has
nothing to do with
the cancellation of the agreement or a claim for
specific performance. This matter concerns the requirements of the
allegedly agreed
option clause and whether the respondent fulfilled
it.
[24]
At the hearing the respondent persisted with the argument that the
matter was not urgent and
ought not to have been launched as an
urgent application. In my view events had superseded that submission
but even if they hadn’t
I am satisfied that the matter was
properly before court in urgent circumstances permissible by this
Court, and it was ripe for
hearing.
[25]
Respondent’s Counsel argued that the dispute of fact on the
papers regarding whether the
option was agreed or not, should be
referred to oral evidence or trial or that the application be stayed,
pending a determination
of the action. The applicant argued that the
respondent had, in this application, put up a defence, with the
factual basis supporting
it, to the relief sought, being that it had
validly fulfilled and exercised the option it had been given. I am
satisfied that the
question whether the respondent had done so on its
own version was an issue that could be dealt with on these papers and
that any
referral for oral evidence was not necessary in the
circumstances.
[26]
As a result, I am satisfied that:
a)
The lease terminated on 31 August 2023.
b)
This Court is able to decide the exercise
of the option issue on the respondent’s version on these papers
without the need
for oral evidence or trial.
c)
The determination of that issue, as set out
below, disposes of the application.
d)
If there was no option agreed, the
respondent has acquired no rights, either personal or real, entitling
it to remain on the farms.
e)
If there was an option agreed, and as
alleged by the respondent, on its own version the respondent
has failed to accept and/or
exercise the relevant option in its
entirety and fully and accordingly it did not, and cannot, have
acquired the right to purchase
the farms from the first applicant.
f)
As a result, the respondent has acquired no
rights, either personal or real, entitling it to remain on the farms.
[27]
The notice of motion requires the respondent to vacate the farms
within three days of this order.
Considering the nature of the
enterprise I’m of the view that the
dies
are too short.
Considering the livestock has to be rounded up and transported out, I
am of the view that seven days is more reasonable.
[28]
Because my decision is based on this narrow issue, it is not
necessary that I deal with any of
the allegations made by the
respondent as to the possible fraudulent manipulation of the written
lease document. I do not, as a
result, intend to do so.
[29]
In the result I make the following orders:
1.
The respondent is ordered, within 7 (seven)
days from date of this order:
a)
To remove any and all livestock under its
control from the farms known as:
i.
The Remainder of Portion 1 the farm
Vredehof Number 17, Registration Division HT, Province of
KwaZulu-Natal.
ii.
The Remainder of Portion 2 the farm
Vredehof Number 17, Registration Division HT, province of
KwaZulu-Natal,
“
Hereafter
the farms”.
b)
To remove any and all farming
equipment, implements and movable assets belonging to or under its
control currently kept on or at
the farms.
2.
The respondent is, after complying with
paragraph 1 above, interdicted from entering the farms or from
permitting any employee,
agent representative or person through or
under it from entering the farms.
3.
The respondent is interdicted from
preventing or inciting, or using any other person or entity to
prevent or incite, the applicants
or their representatives or
employees, or any other person under control of the applicants, to
enter and take possession of the
farms and to conduct farming
activities on them.
4.
In the event of the respondent failing to
comply with paragraph 1 above, the applicants are authorised to, at
the cost of the respondent,
remove the respondent’s livestock
and take them to the nearest pound in Utrecht and place any of the
respondents farming
equipment and movable assets still remaining on
the farms in storage.
5.
The respondent is ordered to pay the costs
of this application.
PITMAN AJ
Date
reserved:
12
February 2024
Date
delivered:
23
February 2024
For
Applicant:
Adv
Botes SC – Adv Gous
Instructed
by:
Van
Der Merwe & Associates
Email:
legal5@vdmass.co.za
Tel:
087 654 0209
Ref:
I RAUCH/zl/ MW0020/4
c/o
Botha & Olivier Inc
Tel:
033 342 7190
Email:
sanet.botha@bando.co.za
cathys@bando.co.za
For
Respondents:
Adv
Hattingh
Instructed
by:
Hartzenberg
Incorporated
Email:
f.hartzenberg@hartzlaw.co.za
Tel:
012 362 8994
Ref:
F HARTZENBERG/LS/SCH2734
c/o
Venn Nemeth & Hart Attorneys
Ref:
J ASKEW/BERNICE
[1]
Christie’s
The Law of Contract in South Africa, Lexis Nexis, 6
th
Edition at page 57.
[2]
Hersch
v Nel
1948 (3) SA 68(A)
at 700-702;
Van
Aardt v Galway
2012 (2) SA 312
(SCA) at [14]
[3]
Southern Era Resources Ltd v Farndell NO
2010 (4) SA
200
(SCA) at [11]; Red Dunes of Africa CC
v Masingita Property
Investment Holdings (Pty) Limited and others; Red Dunes of Africa CC
v Masingita Property Investment
Holdings (Pty) Limited and others
[2015] JOL 33328
(SCA)