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[2010] ZASCA 86
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Lombaard v Droprop CC and Others (377/09) [2010] ZASCA 86; 2010 (5) SA 1 (SCA) ; [2010] 4 All SA 229 (SCA) (31 May 2010)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 377/09
In the matter between:
JAN ANTONIE
LOMBAARD
Appellant
and
DROPROP
CC
First
Respondent
DROPATHY
PREETHEPAUL
Second
Respondent
DHARUMDAW
PREETHEPAUL
Third
Respondent
OMESH
PR
EETHEPAUL
Fourth
Respondent
Neutral
citation
:
Lombaard
v Droprop
(377/09)
[2010] ZASCA 86
(31 May 2010)
Coram:
NAVSA,
HEHER, MHLANTLA, MALAN and SHONGWE JJA
Heard:
17
May 2010
Delivered: 31
May 2010
Corrected: 4
August 2010
Summary:
Whether
the description of the immovable property was sufficient and adequate
in terms of
S 2(1)
of the
Alienation of Land Act 68 of 1981
─
Practice ─ whether this court can exercise its discretion to
refer the question of a dispute of fact back for the
hearing of
evidence when such point was not canvassed or considered by the court
a quo, nor was it raised by the legal representatives.
_____________
_______________________________________________________________
ORDER
____________________________________________________________________________
On appeal
from:
KwaZulu-Natal
High Court, Pietermaritzburg (Ndlovu J sitting as court of first
instance).
The appeal is dismissed
with costs.
____________________________________________________________________________
JUDGMENT
____________________________________________________________________________
Navsa
and Malan JJA
(Mhlantla JA concurring):
[1] This
is an appeal
against
a judgment of the Durban High Court (Ndlovu J),
1
in terms of which an application by Mr Jan Antonie Lombaard, the
appellant, to compel a close corporation, Droprop CC and its members,
to transfer immovable property to him, was dismissed with costs. The
present appeal is before us with the leave of the court below.
The
corporation is referred to as Droprop.
[2] In
the notice of motion the property sought to be transferred was
described as Portion 526 (of 432) of the Farm Melkhoute Kraal
No 789,
Registration Division FT in the Durban entity, Province of
KwaZulu-Natal, in extent 2,0797 hectares as more fully appearing
on
FT diagram number 782/1998. Mr Lombaard claimed the relief referred
to in the preceding paragraph on the basis of an agreement
of sale
pursuant to the exercise of an option to purchase contained in a
lease agreement between him and Droprop.
[
3]
Ndlovu J found for the respondents on two grounds. First, he held
that the agreement of sale resulting from the exercise of
the option
was invalid because the third respondent, notwithstanding that he was
a member of Droprop, had signed the lease on its
behalf without
written authority. Second, the court below found that the description
of the property sold did not comply with the
requirements of s 2(1)
of the Alienation of Land Act 68 of 1981 (the ALA), in that the land
in question was not identified with
reasonable certainty and that the
purported sale was therefore invalid.
[4] Before
us, in view of the decision of this court in
Northview
Shopping Centre (Pty) Ltd v Revelas Properties Johannesburg CC &
another
(275/09)
[2010]
ZASCA 16
(18 March 2010) (SCA) the respondents correctly abandoned
reliance on the first ground. However, Droprop and its members raised
a further defence to Mr Lombaard’s claim, which hitherto has
not received sufficient attention as an issue between the parties,
namely, whether the agreement correctly reflects the intention of the
parties. In his founding affidavit, Mr Lombaard contended
that he was
the head lessee of the property described in the notice of motion and
that by virtue of the exercise of the option
contained in the lease
agreement he was entitled to demand transfer. In resisting the claim
Droprop stated that the lease agreement
and consequently any sale
pursuant thereto was not for the entire property but for a limited
demarcated area, identified on a map
attached to its answering
affidavit. It referred to the negotiations preceding the conclusion
of the lease and to other tenants
who during the period of the lease
occupied other portions of the property. Further particularity in
this regard and Mr Lombaard’s
reply will be dealt with later in
this judgment.
[5] We intend to deal
first with the question whether the description of the property
complies with the provisions of the ALA. The
following is the
material part of the letter purporting to exercise the option to
purchase:
‘
Kindly take note
that as of date hereof I hereby give notice to you of my exercise of
the Option to acquire the above property as
contained in Clause 5 of
the attached “Head Lease”.’
Clause
5
of the lease provides:
‘
The
TENANT has an option to purchase the property in the second year of
occupation for a sum of R3
000
000.00, with a yearly escalation of 12%, if the option to purchase is
not exercised within the specified period. This
option to purchase is
valid for a period of FIVE years only.’
[6] The
exercise of the option
to
purchase is not contested by Droprop on the basis of the manner in
which it was exercised, but rather on the alleged inadequate
description of the property in the lease, which is set out hereunder:
‘
CERTAIN
PORTION 526 OF LOT 432 OF THE FARM MELK HOUTE KRAAL NO 789
.’
[7] The
description of the entire property in the deeds register is the
following:
‘
PORTION
526 (OF 432) OF THE FARM MELK HOUTE KRAAL NO 789, Registration
Division FT in the Durban Entity, province of KwaZulu-Natal
.’
[
8] The
court below held that the insertion of the word ‘certain’
in the description of the property sold:
‘
may
sometimes refer to what is uncertain, what is unsure, what is
indefinite, what is imprecise, depending of course on the context
in
which the word is used in a particular text. In determining such
context
.
. . one cannot help but consider as well the surrounding
circumstances, including
ex
post facto
behavior and conduct of either party relative to the envisaged
agreement.’
2
He added:
‘
In
my view, the use of the word “certain” in the description
of the property in the head lease did create confusion
and ambiguity
as to the precise piece of land which was leased to the applicant.
The intention of the parties is of no relevance
for the compliance
with section 2(1) of the Act. . . . That being the case, it could not
be said that such description identified
the leased property with
reasonable certainty, given proof that this was not the same
description as in the title deed. However,
having considered the
matter I am inclined to conclude, on the probabilities, that the word
“certain” in the present
context could only mean that the
property which was the subject matter of the head lease was not the
entire property as described
in the title deed but only part thereof.
Indeed, on the face of it, it would have made no logical sense to
have included a word
in the head lease which was not there in the
description of the property in the title deed without intending to
reflect a deviation
from the original description of the property in
terms of the title deed.’
3
[9] In
coming to this conclusion the learned judge relied on
Cromhout
v Afrikaanse Handelaars en Agente (Edms) Bpk
1943
TPD 302
and
Lugtenborg
v Nichols
1936
TPD 76.
He chose not to follow
Blundell
v Blom
1950
(2) SA 627
(W) and
Van
Niekerk v Smit
1952
(3) SA 17
(T), both of which found that the prefixing of the word
‘certain’ did not by itself vitiate an otherwise adequate
description
of the property.
[
10] The
descriptions of the properties sold in those cases were all different
and each dealt with its own set of facts. However,
we agree with the
approach in
Blundell
v Blom
above
where Millin J at 630 stated:
‘
the primary
meaning of the word “certain” is something definite,
something prescribed, something determined, fixed or
settled.’
It
follows that
the
description in the lease is of a specified property, namely, portion
526 of lot 432 (cf P M Wulfsohn
Formalities
in respect of Contracts of Sale of Land Act (71 of 1969)
1980 p 112-3).
[11] The
fact that the description of the property in the lease, and
consequently the agreement of sale, does not correspond precisely
with the title deed description is of no consequence just as the
omission of the extent of the property does not affect the matter.
See
Blundell
v Blom
above
at 630-1 and
Van
Niekerk v Smit & others
above
at 20 E-H. The property was thus sufficiently described to render the
agreement of sale concluded when the option was exercised,
at least
on the face of it, valid. To hold otherwise would mean that the words
‘of portion’ must be read into the description
of the
property sold before the figures ‘526’. There is no
compelling reason to do so. The description of the property
is
unambiguous and speaks for itself. Thus, in this specific regard, no
evidence ought to be admitted to interpret the wording.
See R H
Christie
The
Law of Contract
5 ed (2006) p 204-205 and the authorities there cited.
[
12] A
party seeking to resist enforcement of a contract is not precluded,
in appropriate circumstances, from raising a defence that
the written
record is not the true contract between the parties. As foreshadowed
in para 4 above Droprop’s answering affidavit
is replete with
detailed allegations contesting the assertion that the head lease and
the agreement of sale entitled Mr Lombaard
to claim transfer of the
entire property. The diagram annexed to the answering papers shows
the portion allegedly leased by the
appellant at the lower end. It is
depicted as being surrounded by blocks with a wire mesh fence around
its perimeter. A shaded
area on the diagram indicates an area
formerly occupied by Indiba Investments but which was vacant at the
time of the proceedings.
The area alleged by the respondent to be the
part of the property leased to Mr Lombaard contained a building which
Droprop erected
partially and which Mr Lombaard had agreed to
complete. This area was sublet by Mr Lombaard to Nyathi Textiles in
terms of
a written lease containing the identical description of the
property as the one in the head lease.
[13] The
principal deponent to Droprop’s answering affidavit stated
emphatically that he had personally negotiated the lease
to Mr
Lombaard of
only
the
limited portion of the property referred to in the preceding
paragraph. In substantiation of this assertion he referred to a
portion of the property adjacent to the part leased to Mr Lombaard,
which had been let by Droprop to Execucrete. Two large red
silos
approximately 10 meters high were constructed on this portion. The
letter by Mr Lombaard exercising the option to purchase
is dated 12
November 2007. According to Droprop, Execucrete had been in
occupation of part of the property in terms of a lease
agreement
since at least April 2006. Mr Lombaard neither objected nor
complained about the lease of that portion to Execucrete,
which one
would have expected had he been the tenant of the entire property.
[
14] In
the very first paragraph of his replying affidavit, in which he deals
substantively with the allegations by Droprop, that
only part of the
property had been leased,
Mr Lombaard
stated the following:
‘
In this regard I
have been advised, which advice I verily believe, that the wording of
the written agreement is binding upon the
parties and that this
Honourable Court is not permitted to consider, in the instant
circumstances, extrinsic evidence of the alleged
intentions of the
parties.’
[15] In the next two
paragraphs the following appears:
‘
I am advised,
which advice I believe, that the people negotiating the lease have no
input in this dispute in view of the clear and
unequivocal wording of
the lease. In this regard I therefore submit that these aspects have
been raised by the Respondents in order
to create confusion in this
Court and as a red herring.
The whole portion of the
land forms part of the lease and the option. In view of the
irrelevance of the negotiations in light of
the relevant legal
principles set out above, I do not attach affidavits of the relevant
witnesses.’
[16] In subsequent
paragraphs Mr Lombaard makes the following point:
‘
Should
the version of the Respondents be believed, this Court would be
required to in fact rectify the express terms of the agreement
by
inclusion of additional words therein which never formed part of the
agreement.
No rectification by the
Respondents has been sought in these proceedings. I therefore submit
that the Respondents are bound by the
terms of the written
agreement.’
[17]
Mr
Lombaard engages in very limited terms with the alleged lease of
portion of the land by Droprop to Execucrete:
‘
[I] never deemed
it necessary to protest to such action as I, at that relevant time,
was not in a position to purchase the property
and exercise the
option. The presence of the other party on the premises only becomes
an issue once I exercise the option.’
This,
of course, does not answer the specific allegation, that one would
have expected Mr Lombaard as lessee of the entire property
to object
to other tenants on the property leased by him.
[18] It is crystal clear
from what is set out above that Mr Lombaard, advised by his legal
representative, deliberately chose not
to engage on material and
extensive allegations that the lease and sale agreement was not a
correct reflection of the intention
of the parties.
[1
9] The
court below noted that neither party had applied for rectification or
for a referral of the matter for the hearing of oral
evidence. It was
only in this court and late in the day that Mr Lombaard applied for
the matter to be referred to evidence and
only if it were to be found
that Droprop had set out facts on which it would have been entitled
to rectification.
[
20] In
Boundary
Financing Ltd v Protea Property Holdings (Pty) Ltd
2009
(3) SA 447
(SCA) para 13 Streicher JA stated:
‘
A
claim for rectification does not
have
as a correlative a debt within the ordinary meaning of the word.
Rectification of an agreement does not alter the rights and
obligations of the parties in terms of the agreement to be rectified:
their rights and obligations are no different after rectification.
Rectification therefore does not create a new contract; it merely
serves to correct the written memorial of the agreement. It is
a
declaration of what the parties to the agreement to be rectified
agreed. For this reason a defendant who contends that an agreement
sued upon does not correctly reflect the agreement between the
parties may raise that contention as a defence without the need
to
counterclaim for rectification of the agreement.’
And in
Gralio
(Pty) Ltd v DE Claassen (Pty) Ltd
1980
(1) SA 816
(A) at 824B-C Miller JA said:
‘
Indeed
(leaving aside cases in which the contract is by law required to be
in writing), a defendant who raises the defence that
the contract
sued upon does not correctly reflect the common intention of the
parties, need not even claim formal rectification
of the contract; it
is sufficient if he pleads the facts necessary to entitle him to
rectification and asks the Court to adjudicate
upon the basis of the
written contract relied upon by the plaintiff as it stands to be
corrected.’
[21]
In
The
Law of Contract
the
following appears:
4
‘
A document that is
invalid because it fails to comply with the statutory requirements
cannot be validated by rectification, and
even if this rule leads to
anomalous results it must be maintained so that the statutory
requirements are not subverted. Nevertheless
rectification can be
granted if the written contract as it stands complies with the
statute . . .’
[
22] It
should be repeated that the respondents’ failure to plead
rectification, in terms, was premised on the over-confident
view they
held that the agreement of sale was invalid for lack of compliance
with statutory formalities. Because they considered
the sale to be
invalid the respondents were under the impression that the agreement
of sale could not be rectified. In fact the
third respondent stated
expressly:
‘
Also,
the subject
matter of the sale, that is, the land being sold must be identifiable
with reasonable certainty from the agreement itself. If this
description is not sufficiently precise, the agreement may not be
rectified to reflect the real intention of the parties, if any.’
However,
the basis on which this averment was made was that the agreement was
invalid because the description of the land sold was
inadequate.
This, we have found, was not the case and the agreement of sale
relied upon by the appellant may indeed be rectified.
The
respondents have, in our view, pleaded sufficient facts to raise the
defence of rectification. The appellant chose not to respond
to the
factual allegations that support this defence. As can be seen from
what is set out above, Mr Lombaard was adamant, because
of a mistaken
view of the law, that evidence was inadmissible in relation to the
defence pleaded by the respondents.
[
23] In
Wightman
t/a JW Construction v Headfour (Pty) Ltd
[2008] ZASCA 6
;
[2008]
2 All SA 512
(SCA) para 12 Heher JA said:
‘
Recognising
that the truth almost always lies beyond mere linguistic
determination the courts have said that an applicant who seeks
final
relief on motion must in the event of conflict, accept the version
set up by his opponent unless the latter’s allegations
are, in
the opinion of the court, not such as to raise a real, genuine or
bona fide dispute of fact or are so far-fetched or clearly
untenable
that the court is justified in rejecting them merely on the papers:
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 634E–635C. . . . (I do not overlook that
a reference to evidence in circumstances discussed in the authorities
may
be appropriate.)’
He
continued
at
para 13:
‘
A real, genuine
and bona fide dispute of fact can exist only where the court is
satisfied that the party who purports to raise the
dispute has in his
affidavit seriously and unambiguously addressed the fact said to be
disputed. There will of course be instances
where a bare denial meets
the requirement because there is no other way open to the disputing
party and nothing more can therefore
be expected of him. But even
that may not be sufficient if the fact averred lies purely within the
knowledge of the averring party
and no basis is laid for disputing
the veracity or accuracy of the averment. When the facts averred are
such that the disputing
party must necessarily possess knowledge of
them and be able to provide an answer (or countervailing evidence) if
they be not true
or accurate but, instead of doing so, rests his case
on a bare or ambiguous denial the court will generally have
difficulty in
finding that the test is satisfied. I say “generally”
because factual averments seldom stand apart from a broader matrix
of
circumstances all of which needs to be borne in mind when arriving at
a decision. A litigant may not necessarily recognise or
understand
the nuances of a bare or general denial as against a real attempt to
grapple with all relevant factual allegations made
by the other
party. But when he signs the answering affidavit, he commits himself
to its contents, inadequate as they may be, and
will only in
exceptional circumstances be permitted to disavow them. There is thus
a serious duty imposed upon a legal adviser
who settles an answering
affidavit to ascertain and engage with facts which his client
disputes and to reflect such disputes fully
and accurately in the
answering affidavit. If that does not happen it should come as no
surprise that the court takes a robust
view of the matter.’
[24] The
allegations made by the respondents in the answering papers cannot be
rejected out of hand. If anything, they provide ample
factual details
substantiating their defence. As things stand presently, the
probabilities favour Droprop. Mr Lombaard has ignored
the detailed
allegations at his peril. The warning words of Heher JA, albeit
relating to a bare or general denial in the answering
papers, also
apply where a defence is raised in the answering papers that calls
for a response and should have been heeded. Since
the respondents’
defence cannot be said to be without substance and since Mr Lombaard
failed, in the court below, to avail
himself of the right to have the
matter referred to oral evidence or to call for Droprop’s
members to be cross-examined in
terms of the Uniform Rules of Court
and further, since the court could not be satisfied of the inherent
credibility of Mr Lombaard’s
factual averment the application
was bound to fail.
5
[
25] In
resolving to refer a matter to evidence a court has a wide
discretion, to be exercised according to the principle explained
by
Colman J in
Metallurgical
and Commercial Consultants (Pty) Ltd v Metal Sales Co (Pty) Ltd
1971 (2) SA 388
(W) at 396 E-G:
‘
It
is the respondent who would fail on the disputed issue if it fell to
be decided on the papers; an oral hearing is being granted
at its
instance, in order to afford it an opportunity of altering, if it
can, the incidence of the probabilities as they emerge
from the
papers, and of displacing the inference which flows from the signed
document. Thus
,
as matters now stand, the applicant needs no oral evidence to
strengthen its case; it will need such evidence only if and when
the
respondent creates, prima facie, a balance of probability in its
favour. There is no reason why I should compel anyone to testify.
What I should do is give the respondent the opportunity which it has
sought, and to give the applicant an opportunity of answering,
if he
wishes the case made out by the respondent.’
[26] An
order to refer a matter to oral evidence presupposes a genuine
dispute of fact (
Room
Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd
1949 (3) SA 1155
(T) at 1163;
Ripoll-Dausa
v Middleton NO & others
[2005] ZAWCHC 6
;
2005
(3) SA 141
(C) 151F ff). The appellant chose not to respond to the
factual allegations concerning rectification. He did so at his peril:
he
put forward no answer to allegations which, on their face,
substantiated the defence of rectification and laid no basis for an
application for a referral of the matter to evidence. In these
circumstances the application to refer the matter to evidence should
be refused. It remains open to the appellant to proceed by trial
should he so wish.
[27] The following order
is made:
T
he
appeal is dismissed with costs.
_________________
M S NAVSA
JUDGE OF APPEAL
_________________
F R
MALAN
JUDGE OF APPEAL
HEHER
and
SHONGWE
JJA:
[28] We have had the
opportunity of reading the judgment prepared by Navsa and Malan JJA.
We respectfully do not agree with the
dismissal of the appeal,
although we agree however, with the conclusion and reasoning reached
in concluding that the lease agreement
is valid and unambiguous, and
identifies a specific property, namely, Portion 526 (of 432) the
property in the title deed.
[29]
It
has long been recognised that a discretion resides in a high court,
derived from the rules of court, to refer a disputed issue
of fact
which cannot be decided on affidavit for the hearing of oral evidence
regardless of whether the parties request it.
6
The present uniform rule is 6(5)(g).
7
The overriding consideration in the exercise of the discretion is
ensuring a just and expeditious decision. In short, in the case
of a
dispute of fact, the court must be persuaded that the hearing of
evidence will be fair to the parties and will conduce to
an effective
and speedy resolution of the dispute and the overall application.
[30]
The
courts have developed rules of practice to guide (but not hamper) the
exercise of the discretion. In the context of the present
appeal it
is necessary only to refer to the principles set out in para 4 to 6
below which are trite.
[31] Motion proceedings
are not designed or intended to resolve disputes of fact. Therefore,
if a party has knowledge of a material
and bona fide dispute or
should reasonably foresee its occurrence and nevertheless proceeds on
motion that party will usually find
the application dismissed.
[32] Although
the court has the power to act
mero
motu
it
may properly regard the failure of a party who cannot succeed in an
application without resort to evidence to seek a reference
as an
indication that that party does not have evidence to support his case
or does not have confidence in such evidence as he
may have.
[33] If the
probabilities, on the affidavits, lie clearly against a party who
requires evidence in order to succeed on motion, the
court is
unlikely to regard evidence as profitable or necessary to determine
the issue. However if the balance of the probabilities
is even, or,
at least, the court considers that the issue can fairly be said to
remain open, then a just outcome may well require
the hearing of
evidence. With regard to the last-mentioned aspect, it is obvious
that the court must take into account all factors
relevant to the
manner in which the parties presented their versions in the
affidavits. (The relevance of this approach will become
clear in due
course.)
[34] As to the
consideration in paragraph 4 above, not only was the appellant not
apprised of a threatening dispute of fact, but
the attitude of the
respondents disclosed in the correspondence prior to the launching of
the application was such as positively
to mislead the applicant and
his legal advisers. In the preceding correspondence the following
allegations were made by the appellant’s
attorney.
(i) the property in
relation to which the lease and the option related were referred to
substantially as described in the lease
agreement (ie the deeds
office description of the whole property);
(ii) the option had been
exercised in terms of clause 5 of the lease with effect from 12
November 2007;
(iii) he had been
appointed to handle the transfer of that property and sought certain
information to enable him to pursue his mandate.
[35] For more than a
month there was no response from the respondents. At last, on 18
December 2007 their attorney sent a terse
reply:
‘
Kindly be advised
that our client had previously indicated to your client that he would
not be selling. You are invited to proceed
as you deem fit.’
[36] On 4 February 2008
the appellant’s attorney wrote to seek an undertaking that the
respondents would not deal with or
alienate the property. They added:
‘
Furthermore, we
are instructed that in breach of the Lease Agreement, you have
entered into a conflicting Lease on the same property.
We remind you
that the aforementioned Lease Agreement is for the entire Portion 526
(of 432) of the Farm Melk Houte Kraal No. 789
and that you
accordingly do not have Title to enter into a conflicting Lease
Agreement for a portion of that property with another
tenant, without
consulting our client and/or obtaining our client’s consent.’
[37] The respondents’
attorney replied as follows the following day:
‘
OPTION:
JA LOMBAARD – Agreement of Lease (dated 26 January 2005):
PORTION
526 (OF 432) OF THE FARM MELK HOUTE KRAAL No. 789
Your
telefax dated 04
th
February 2008 refers.
Client believes that your
clients threat of legal action to be some kind of fabrication, as it
has been anticipating just that since
November 2007.
Be that as it may, and
bearing in mind that client has no intention to alienate the property
we hereby undertake not to alienate
same for a period of only 7
(seven) days from date hereof.
We write to advise
further that client are duly represented and you are advised to refer
all correspondences to our offices and
not to our client.
You are invited to
proceed as you deem fit.’
[38] It can thus be seen
that not only did the respondents’ attorney not mention the
misdescription of the leased property
when a proper answer to the
letter demanded an appropriate response, but he adopted the same
description at the head of his letter.
Moreover the defence which he
put forward was patently no defence at all. There was therefore no
reason to incur the delay and
expenses involved in a trial action.
[39] The conduct of
their attorney and their subsequent failure, in the application, to
offer any explanation for it, justified
a strong inference that the
respondents had failed to instruct their attorney that they had only
leased a portion of the property
to the applicant and that the
property described in the lease had been misdescribed.
[40] As to the second
consideration (paragraph 5, above), the defence of rectification was
not pleaded in terms. It had to be inferred.
The defences readily
apparent from the answering affidavit were those related to
non-compliance with the formalities legislation.
The appellant, in
his replying affidavit, deposed, with reference to the factual
averments which were afterwards relied on to make
out the defence of
rectification:
‘
(a) It is denied
that I am tenant to only a portion of the property. In this regard I
have been advised, which advice I verily believe,
that the wording of
the written agreement is binding upon the parties and that this
Honourable Court is not permitted to consider,
in the instant
circumstances, extrinsic evidence of the alleged intentions of the
parties.
(b) I am advised, which
advice I believe, that the people negotiating the lease have no input
in this dispute in view of the clear
and unequivocal wording of the
lease. In this regard I therefore submit that these aspects have been
raised by the Respondents
in order to create confusion in this Court
and as a red herring.
(c) The whole portion of
the land forms part of the lease and the option. In view of the
irrelevance of the negotiations in light
of the relevant legal
principles set out above, I do not attach affidavits of the relevant
witnesses.’
and
‘
(e) Should the
version of the Respondents be believed, this Court would be required
to in fact rectify the express terms of the
agreement by inclusion of
additional words therein which never formed part of the agreement.
(f) No
rectification by the Respondents has been sought in these
proceedings. I therefore submit that the Respondents are bound
by the
terms of the written agreement. I have been advised that in terms of
the contractual principal of
caveat
subscriptor
,
the parties are bound by the written terms. I have also been advised
that there are only certain limited exclusions to this legal
contractual principle. I submit, and the necessary legal argument in
this regard will be presented at the hearing of the matter,
that none
of those exclusions are applicable in the instant matter.
(g) With regard to the
First Respondent leasing a portion of the property to Execucrete I
respectfully submit that I never deemed
it necessary to protest to
such action as I, at that relevant time, was not in a position to
purchase the property and exercise
the option. The presence of the
other party on the premises only becomes an issue once I exercise the
option. This duly occurred
and the letter was written, and therefore,
with respect, I submit that the contents of paragraphs (h), (i), (j)
and (k) of this
paragraph should be dismissed with the contempt it
deserves.’
The appellant also
pointed out that the first respondent had been responsible for the
drafting of the lease agreement in the form
in which he signed it.
From all this it is apparent that the appellant did not seek to
present evidence relating to the rectification
of the agreement
because he was advised that it was not relevant to the defences
raised by the respondents. Wrong he may have been.
But to hold, as
our colleagues, do that he so acted at his own risk, seems to leave
little room for the exercise of an equitable
discretion.
[41] Ndlovu J, in giving
judgment in the application, addressed only the technical defences
despite referring in detail to counsel’s
submissions. He said:
‘
Neither party
applied for rectification of the head lease nor referral of the
matter for the hearing of evidence.’
The
inference is overwhelming (and indeed counsel for the respondents in
the appeal, who did not appear in the application, conceded
as much):
the respondents’ counsel at the hearing did not rely on
rectification as a defence and did not raise it in argument.
Just as
important, Ndlovu J did not himself either understand that the
defence had been raised in the answering affidavit or realise
that he
was vested with a discretion
mero
motu
to
direct that evidence be heard.
[42] Before us, it was
with difficulty that counsel for the appellant accepted that the
answering affidavit set out the basis for
a defence of rectification.
Only at the last gasp of the appeal did he clutch at the possibility
of asking us to make such a direction.
[43] Having
regard to all the factors we have mentioned the injustice to the
appellant inherent in a dismissal of his application
is, in our view,
manifest. He is possessed of a written agreement which unequivocally
bears out his reliance on the exercise of
the option. He had been
misled by a perception induced by the respondents’ attorney and
his own legal advisers into not fully
confronting the defence. Both
counsel and the judge a quo did not appreciate the legal force of the
respondents’ factual
averments in the answering affidavit.
There are telling inferences against a bona fide belief in the
existence of a misdescription
in the attitude adopted by the
respondents before the proceedings were initiated. Even with the
failure fully to confront the consequences
of the rectification
defence, the balance of probabilities is open to the influence of
evidence. One can say no more with any certainty
than that one of the
parties has been deliberately misleading the court. That in itself is
a culpability worth determining by evidence.
For all these reasons
the
Wightman’s
case is, we think, a far cry from the situation in the case relied on
by our colleagues. There the deponent, Mr Head, provided
no
acceptable excuse for his failure to address certain circumstances
which were perculiarly within his knowledge. Here, by contrast,
not
only the appellant but everybody else involved in the application
understood the issues in the same way.
[44] There cannot be the
slightest prejudice to the respondents in referring what is now seen
to be the true issue between them
(a relatively narrow one) to the
test of oral evidence. We can see no point in putting the parties to
the unnecessary delay and
costs of an action commenced afresh,
especially as the delay is already substantial.
[45] The learned judge
misdirected himself both in what he decided and in what he should
have considered but did not. We are at
large to make the order he
should have made as all the information required to exercise the
discretion is available to us.
[46]
We
propose the following order:
1 The appeal is upheld.
2 The order of the court
a quo is set aside and the following order is substituted therefor:
(‘1) The issue of
whether or not the lease agreement between the parties should be
rectified in regard to the description
of the leased property and, if
so, the terms of the rectification, is referred for the hearing of
oral evidence.
(2) The parties are to
furnish each other with a list of witnesses which each proposes to
call at the hearing together with a summary
of the evidence of each
witness (to the extent that such evidence does not appear from the
affidavits) not less than thirty days
before the date for
commencement of the hearing.
(3) The rules of court
relating to discovery and production of documents, expert evidence
(if required) etc are to apply.’
3 The costs of all
proceedings to this stage are to be costs in the cause.
_________________
J A HEHER
JUDGE OF APPEAL
_________________
J B Z SHONGWE
JUDGE OF APPEAL
MHLANTLA JA: (Concurring
in the judgment of Navsa and Malan JJA):
[47] I have read the
judgments of my colleagues Navsa and Malan JJA on the one hand and of
Heher and Shongwe JJA on the other. I
respectfully concur in the
former judgment.
[48] I
find it necessary to add some comments of my own. First, there can be
no doubt that on the application of the
Plascon-Evans
rule, the application in the court below ought to have been
dismissed. Faced with the detailed factual allegations concerning the
true contract between the parties, the appellant deliberately and
consciously did not engage on those issues.
[49]
The
appellant, despite facing the mass of allegations concerning the true
contract, did not seek a referral to oral evidence. In
my view, it
was that attitude that led to the appellant's downfall. A referral to
oral evidence was sought by the appellant's counsel
before us at a
very late stage during the appeal hearing and was prompted by a
question
from the court.
[50] There
is no rule of law requiring a person threatened with litigation to
reveal beforehand such defences as may be available
to him or her. In
the present case had the respondents chosen to remain absolutely
silent and not respond to the correspondence
referred to by Heher and
Shongwe JJA the appellant would still have been faced with the
application of the
Plascon-Evans
rule and would, absent a justifiable request for a referral to oral
evidence, have failed at the first hurdle.
[51] I
agree that uniform rule 6(5)(g) should be employed to ensure a just
and expeditious decision . Equally, we should be consistent
in our
application of the principle set out in
Plascon-Evans
as described in the judgment of my brothers Navsa and Malan.
[52] In the court below
the appellant, against whom the probabilities were in relation to the
question of the true contract between
the parties, at that stage
stood before an election to request a referral to oral evidence. He
elected not to do so. In my view,
it is turning equity on its head to
suggest in those circumstances that the respondents should be
penalised by being compelled
to face further proceedings after having
incurred the inconvenience and costs of the present appeal.
[53] It
has repeatedly been held that an application to refer a matter to
evidence should be made at the outset and not after argument
on the
merits. See in this regard
Kalil
v Decotex (Pty) Ltd & another
1988
(1) SA 943
(A) at 981D-F. In
Kalil
Corbett CJ stated that this is a salutary rule. Recently, Streicher
JA, in
Pahad
Shipping CC v The Commissioner for the South African Revenue Service
[2009] ZASCA 172
(2 December 2009) stated that unnecessary costs and
delay can be avoided by following the general rule.
8
In
Kalil
Corbett CJ accepted that the rule was not inflexible. However, it is
only in exceptional cases that the court will depart from
the general
rule. See in this regard
Bocimar
NV v Kotor Overseas Shipping Ltd
[1994] ZASCA 5
;
1994 (2) SA 563
(A) at 587C-D and
Pahad
at para 20. The present case is not exceptional.
[54] The appellant chose
not to engage on the question of the true contract between the
parties and restricted its defence to resisting
any attempt to adduce
evidence in that regard on the basis that it would be inadmissible.
The referral to oral evidence now sought
is a desperate attempt to
salvage the situation. One is left to ponder what precisely it is
that the appellant seeks to have referred
for oral evidence.
[55] For these reasons, I
concur in the judgment of my brothers Navsa and Malan.
__________________
N
Z MHLANTLA
JUDGE OF
APPEAL
APPEARANCES:
For Appellant: M
Pillemer SC
R G Mossop
Instructed by
Susan Abro
Attorney Durban
Webbers
Bloemfontein
For Respondent: A M
Stewart SC
Instructed by
Henwood Britter
& Caney Durban
Claude Reid
Incorporated Bloemfontein
1
Reported as
Lombaard v
Droprop CC
2009 (6) SA 150
(N).
2
Para 35.
3
Para 41.
4
At p 334 and see Wulfsohn p 219 and
Magwaza
v Heenan
1979 (2) SA 1019
(A) 1030D-G.
5
See
Plascon-Evans Paints v
Van Riebeeck Paints
1984
(3) 623 (A) at 634E-635D.
6
Room Hire Co (Pty) Ltd v
Jeppe Street Mansions (Pty) Ltd
1949
(3) SA 1155
(T) at 1168.
7
‘Where an
application cannot properly be decided on affidavit the court may
dismiss the application or make such order as
to it seems meet with
a view to ensuring a just and expeditious decision. In particular,
but without affecting the generality
of the aforegoing, it may
direct that oral evidence be heard on specified issues with a view
to resolving any dispute of fact
and to that end may order any
deponent to appear personally or grant leave for him or any other
person to be subpoenaed to appear
and be examined and cross-examined
as a witness or it may refer the matter to trial with appropriate
directions as to pleadings
or definition of issues, or otherwise’.
8
See para 20.