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2023
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[2023] ZAECMKHC 136
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Terer Beleggings (Pty) Ltd v Houghamdale Trading (Pty) Ltd and Others (2567/2021) [2023] ZAECMKHC 136 (5 December 2023)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE DIVISION, MAKHANDA)
NOT
REPORTABLE
Case
no: 2567/2021
In
the matter between:
TERER
BELEGGINGS (PTY) LTD Applicant
/ Plaintiff
and
HOUGHAMDALE
TRADING (PTY) LTD First Respondent / Defendant
HUMANSDORP
COOPERATIVE LTD Second
Respondent / Defendant
ABSA
BANK LTD Third
Respondent / Defendant
THE
REGISTRAR OF DEEDS,
KING
WILLIAM’S TOWN Fourth
Respondent / Defendant
JUDGMENT:
APPLICATION FOR LEAVE TO APPEAL
Govindjee
J
[1]
The
plaintiff instituted an action claiming that a deed of sale entered
into with the defendant was illegal and void ab initio because
it
contravened the Subdivision of Agricultural Land Act, 1970.
[1]
This was on the basis that it constituted a sale of an undivided
portion of agricultural land without the written consent of the
Minister of Agriculture, Land Reform and Rural Development. As a
result, it was argued that the subsequent transfer and registration
of the immovable property ought to be set aside.
[2]
In the alternative, it pleaded that at the
time of contracting neither party intended that the defendant would
become owner of the
whole of the immovable property. The intention
was that the defendant would become owner only of an undivided
portion comprising
some 474 hectares, rather than the full 552,0256
hectares held by the title deed. As a result of the statutory
prohibition against
sale of agricultural land, transfer of the
immovable property, in its full extent, was effected. As the parties
never intended
the transfer of the immovable property, ownership
never passed on registration of transfer, so that the plaintiff
‘remained
owner of the immovable property’ and was
entitled to its return.
[3]
The main claim was dismissed on the basis
that the
rei vindicatio
was
incorrectly invoked, the plaintiff not being the owner of the
immovable property. The possible classification of the claim as
a
condictio
was also considered. That claim was rejected based on prescription,
being a claim to transfer immovable property in the name of
another.
[4]
This
plaintiff takes no issue with the dismissal of the main claim. The
basis for the application is, in essence, that the court
erred in its
interpretation of the agreement of sale; in finding that the
plaintiff intended to transfer ownership of the whole
of the farm to
the defendant; and in not finding that the defendant never intended
to receive transfer of ownership of the whole
farm. The court is
required to test the grounds on which leave to appeal is sought
against the facts of the case and the applicable
legal principles to
ascertain whether an appeal court ‘would’ interfere in
the decision against which leave to appeal
is sought.
[2]
[5]
Both
representatives who had entered into the deed of sale on behalf of
the parties testified. There is no suggestion that the court
erred in
respect of its summary of the evidence, or in respect of its
understanding of the legal position. Other than re-emphasising
its
reliance on the SCA decision in
Four
Arrows Investment 68 (Pty) Ltd v Abigail Construction CC and
Another
,
[3]
there was also no reference to decided cases to support the argument.
In particular, this court’s reliance upon
Garden
Estate Ltd v Lewis
[4]
was left unchallenged. The importance of that judgment is that it
emphasised the effect of the express declaration in the Deed
of
Transfer, coupled with the fact of the transfer, the clear inference
being that there was no intention to retain dominium of
a portion of
the immovable property. Had that been the case, the plaintiff would
not have passed transfer of the whole.
[6]
Leaving aside the clear wording of
the power of attorney and Deed of Transfer, real agreement to pass
ownership of the immovable
property was also apparent from the
evidence led by both parties, also when considering their testimony
as to the history of the
transaction and the surrounding
circumstances. The plaintiff, through Mr Van Bergen, had itself
purchased the entire immovable
property, satisfied that the
resolution of boundaries could be addressed with the seller
separately and subsequently. The evidence
was clear that he adopted
the same approach in his engagements with the defendant, knowingly
giving power to attorney for the sale
of the immovable property in
its entirety. On his own version, the predominant intention was to
place the immovable property, as
a whole, in the name of the
defendant. Boundaries and any exchange of pieces of land with
neighbouring land was, on his own evidence,
a subsequent matter. The
significant passage of time without any claim to the immovable
property, or a portion thereof, is consistent
with this.
[7]
Suffice
to say that Mr Holliday’s evidence, on behalf of the defendant,
accords with this. Importantly, he knew that the property
had to be
purchased as a whole and confirmed this repeatedly during
cross-examination. He too understood any future exchange of
land to
be a subsequent, separate matter to the preceding transfer of the
immovable property, as a whole, into the name of the
defendant. This
prompted the following conclusion in the judgment:
[5]
‘
The
consequence is that there is ample direct evidence to show that both
parties genuinely intended for the plaintiff to sell (and
the
defendant to purchase) the immovable property as a whole and that the
process of transfer of ownership of that property was
completed when
the act of registration occurred. Come the time of execution of the
deed of transfer, and delivery of the immovable
property by
registration, there was simply no error or doubt about the extent of
the property being sold…’
[8]
This was not an instance where it could be
held that a flaw in the contract of sale was so potent as to affect
the real agreement,
or the transaction being rendered
in
fraudem legis
based on an unexpressed
agreement or tacit understanding. In addition, properly interpreted,
the contract of sale was for the whole
property held by the deed. The
various arguments advanced at the time have been repeated in this
application and have been duly
considered and addressed in the
judgment. In particular, the reference to ‘474 hectares’
was overtaken by the various
references to the description of the
property ‘in the current title deed’. On an ordinary
reading, the reference in
clause 24.5 to ‘in the process of
sub-dividing’ related to ‘a piece of the land hereby
sold’. That the
purchaser was expected ‘to sign all the
necessary documentation to enable the seller to proceed with the
aforesaid’
proved the point: the intention was clearly to sell
the entire property to the defendant, and to deal with any other
matters as
a subsequent step, by which time the defendant would be
the owner of the entire property. Had that not been the
understanding,
the last-mentioned insertion would have been
unnecessary.
[9]
The context in which the agreement was
signed is also important. On the evidence, the ‘material known’
to the party
responsible for the inclusion of clause 24.5 was that
the immovable property had to be sold as a whole in order for the
sale to
be valid. The subsequent conduct of the parties in
implementing the agreement is a further telltale indicator. The
importance of
this consideration in the process of interpretation has
been repeatedly emphasised by the SCA. Here, Mr Van Bergen knowingly
gave
power of attorney to transfer the immovable property, in its
full extent, approximately a month after conclusion of the contract
of sale. The power of attorney makes explicit reference to sale of
the immovable property to the defendant in terms of the deed
of sale.
The immovable property was duly sold for an agreed R9,1 million
during April 2008. On the evidence, any suggestion that
this was the
agreed price only for an undivided portion of the land was rejected.
It goes without saying that the further subsequent
‘conduct’
includes the absence of any claim premised on a purported lack of
intention until the particulars of claim
were amended during May
2023. There has, in all the intervening time, been no claim by the
plaintiff to that portion of the land
that it now avers it did not
intend to sell.
[10]
Applications
for leave to appeal require careful, dispassionate analysis of both
the facts and the law. Proper consideration must
be given to whether
the appeal would have a reasonable prospect of success. The test is
not whether another court ‘may come
to a different
conclusion’.
[6]
[11]
As indicated, the present application is
focused mainly on this court’s interpretation of the written
deed of sale. Many of
the issues raised in the application (namely,
paras 2.1, 2.3, 2.6, 6, 9-19) address the manner of interpretation.
To this is added
the defendant’s conduct post-transfer in not
exercising any rights in respect of the portion of the land over
which the plaintiff
avers it retained ownership.
[12]
These
matters were scrutinised in the judgment and it is unnecessary to
summarise the full analysis. It may be emphasised that this
court had
the benefit of evidence being adduced in respect of the context
surrounding the agreement of sale. In so far as the basis
for the
court’s interpretation was reliant upon factual findings, as
part of the interpretive exercise, the presumption is
that the
conclusion is correct, and an appeal court will only reverse it where
it is convinced that it is wrong.
[7]
This is, however, not an inflexible rule, also where credibility
findings were largely unnecessary. There is no real suggestion
of any
misdirection of fact in the present instance, including the finding
that on Mr Van Bergen’s own evidence he had the
intention to
transfer ownership of the whole property
at
the moment of transfer
.
[13]
What
appears to me to be an insurmountable difficulty for the plaintiff is
that the question of intention of both parties must be
gauged ‘at
the moment of transfer’, not at the time of contracting, which
appears to be the thrust of the plaintiff’s
contentions.
[8]
The probabilities clearly favour consensus and ‘real agreement’
to pass ownership of the whole at the relevant time,
namely the
moment of transfer.
[14]
To overcome the evidence of the real
agreement, the plaintiff over-emphasised the contractual agreement
that created the obligation
to transfer (ie the deed of sale).
Indeed, many of the grounds for seeking leave focus on the proper
interpretation of the deed
of sale, as opposed to the evidence of the
parties’ intention at the moment of transfer. The difficulty
with this is that
it must be accepted that under the abstract system
of transfer of ownership of immovable property, the passing of
ownership is
wholly abstracted from the deed of sale. Even an invalid
contractual agreement would not affect the validity of the real
agreement.
None of these principles were contested. Nor is there any
argument countering the authority that ‘in the context of
registration
of land, the intention to transfer is usually apparent
from the power of attorney’.
[15]
Here, the power of attorney to transfer
makes clear reference to the full extent of the property, and conveys
the plaintiff’s
intention to be divested of the immovable
property as a whole, against payment of the purchase price. This,
coupled with the fact
of the transfer, is precisely what has been
emphasised in
Lewis
.
As Mr
De La Harpe
pointed
out, the evidence as to the parties’ intention
at
the time
of transfer puts the matter
beyond doubt. This is also illustrated by the fact that it is common
cause that both parties knew that
a sale of an undivided portion
absent ministerial consent would be unlawful. To the extent that the
evidence of the parties, their
conduct before and after transfer, and
the actual contents of the deed of sale are relevant and must be
considered as part of the
total picture, the probabilities favour the
conclusion reached in the judgment.
[16]
In
all these circumstances, I am unable to conclude that an appeal in
respect of the judgment on the alternative claim would have
a
reasonable prospect of success. Nor is there any other compelling
reason that has been demonstrated as to why an appeal should
be
heard. This is not an instance where there are conflicting
interpretations of law or a matter of public importance that might
have an effect on future matters. Although implicating the
plaintiff’s personal right to property, the matter was not, in
any genuine sense, of a constitutional nature.
[9]
Order
[17]
The following order is issued:
1.
The application for leave to appeal is
dismissed with costs.
A
GOVINDJEE
JUDGE
OF THE HIGH COURT
Heard:
22 November 2023
Delivered:
05 December 2023
APPEARANCES:
Counsel
for the Applicant / Plaintiff: Adv
JJ Nepgen
Chambers, Gqeberha
Instructed
by: Nolte
Smit Inc.
Applicant / Plaintiff’s
Attorneys
51A
Hill Street
Makhanda
Tel:
046 622 7209
Counsel
for the First Respondent / Defendant: Adv DH De La Harpe SC
Chambers,
Makhanda
Instructed
by: De
Jager & Lordan Inc.
Respondent’s /
Defendant’s Attorneys
2
Allen Street
Makhanda
Tel:
046 622 2799
[1]
Act
70 of 1970. The parties entered into a written deed of sale on 19
November 2007.
[2]
Van
Den Heever v RC Christie Incorporated
(unreported,
GJ case no 21746/2019 dated 5 March 2023) para 3.
[3]
Four
Arrows Investment 68 (Pty) Ltd v Abigail Construction CC and
Another
.
[4]
Garden
Estate Ltd v Lewis
1920
AD 144.
[5]
At
para 36, footnotes omitted.
[6]
See the judgment of Van Zyl DJP in
VN
obo PN v MEC for Health and Social Development of the Eastern Cape
Province
[2022] ZAECQBHC 13 para 3.
[7]
R
v Dhlumayo
1948
(2) SA 677 (A).
[8]
See
F du Bois (ed)
Wille’s
Principles of South African Law
9 ed (2007) at 521: at the moment of transfer, the transferor must
have the intention to transfer ownership (
animus
transferendi domini
)
and the transferee must have the intention to accept ownership
(
animus
accipiendi domini
).
Also see
Du
Plessis v Prophitius and Another
2010 (1) SA 49
(SCA) para 11.
[9]
See
Minister
of Safety and Security v Schuster
and
Another
[2018] ZASCA 112
paras 24 and 25.