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[2011] ZASCA 101
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Klub Lekkerrus/Libertas v Troye Villa (Pty) Ltd and Others (260/10) [2011] ZASCA 101; [2011] 3 All SA 597 (SCA) (1 June 2011)
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THE SUPREME COURT OF APPEAL OF
SOUTH AFRICA
JUDGMENT
Case No 260/10
In the matter between
KLUB LEKKERRUS/LIBERTAS
...........................................................
APPELLANT
and
TROYE VILLA (PTY) LTD
.......................................................
FIRST
RESPONDENT
LEKKERRUS WARMWATERBRON (PTY) LTD
...............
SECOND RESPONDENT
LIBERTAS MINERALE BRON (PTY) LTD
............................
THIRD
RESPONDENT
WERNICO (PTY) LTD
........................................................
FOURTH
RESPONDENT
LEKKERRUS BESTUURSONDERNEMING CC
....................
FIFTH RESPONDENT
JOHANNA JACOBA VAN TONDER
......................................
SIXTH
RESPONDENT
HERMAN DANIEL WOITE
...............................................
SEVENTH
RESPONDENT
Neutral citation:
Klub
Lekkerrus/Libertas v Troye Villa (Pty) Ltd
(260/10)
[2011] ZASCA 101
(1 June 2011)
Coram: HARMS DP, MALAN, SHONGWE, MAJIEDT JJA and MEER
AJA
Heard: 13 May 2011
Delivered: 1 June 2011
Summary:
Contract ─ sale of shares ─
new tacit agreement ─ not affected by non-variation clause ─
voluntary associations
─ dissolution of ─ legal effect of
amalgamation.
______________________________________________________________
ORDER
______________________________________________________________
On appeal from:
North Gauteng High Court
(Pretoria), (Makgoba J sitting as court of first instance):
(1) The appeal is upheld with costs against the first,
sixth and seventh respondents jointly and severally, including the
costs
of two counsel.
(2) The order of the court below is substituted with the
following order:
‘
(a) Mr H D Woite is joined as
the eighth plaintiff in his capacity as executor in the estate of the
late P J H van Tonder, estate
no 14453/97.
(b) It is declared that the first defendant and its
members are, with effect from 10 August 2007, not entitled to any
right of access,
possession, control and occupation of any of the
properties belonging to first and fourth plaintiffs, namely Portions
21, 22, 23,
24 and 25 of the farm Welgevonden 343 district
Potgietersrus, Registration Division KR, Limpopo Province and Portion
32 (a portion
of Portion 12) of the farm Welgevonden 343, district
Potgietersrus, Registration Division KR, Limpopo Province.
(c) The balance of the plaintiffs' claims is dismissed.
(d) It is declared that the first defendant is the sole
shareholder of all the issued shares in the second and third
plaintiffs
and that the share registers should reflect that fact.
(e) The balance of the first defendant’s
counterclaims is dismissed.
(f) The first, sixth, seventh and eighth plaintiffs are
ordered jointly and severally to pay the first defendant's costs,
including
the costs of two counsel.’
______________________________________________________________
JUDGMENT
______________________________________________________________
MAJIEDT JA
(HARMS DP, MALAN, SHONGWE JJA and MEER
AJA concurring):
[1] The appellant, Klub Lekkerrus/Libertas (the Club)
came about through the amalgamation of two voluntary associations,
Klub Lekkerrus
and Klub Libertas. Like its forebears, the Club (which
was the main defendant below), operates as a holiday club under a
written
constitution.
[2] This appeal concerns in the main a dispute about the
ownership of shares in the second and third plaintiffs (the
plaintiffs
are the respondents in the appeal) arising from two
written agreements in terms of which Klub Lekkerrus and Klub Libertas
had purchased
all the issued shares and loan accounts in the second
plaintiff and the third plaintiff respectively. At issue further is
the effect
of the amalgamation on these agreements of sale which the
Club had continued with and whether a non-variation clause in the
agreements
precluded such continuation. For the reasons that follow
we find that the Club is the owner of the shares in the second and
third
plaintiffs, since new agreements on the same terms were tacitly
concluded between the parties in place of the two agreements
mentioned
and that the non-variation clause was no bar to the tacit
new agreements.
[3] Sitting in the North Gauteng High Court (Pretoria),
Makgoba J held otherwise by upholding the plaintiffs’ claims
with
costs and dismissed with costs the Club's counterclaims. This
appeal is with the leave of the court below.
[4] Klub Lekkerrus and Klub Libertas previously operated
as separate voluntary associations with separate constitutions,
members'
meetings and financial statements. The Club was formed after
the two clubs' members unanimously resolved during 1991 to
amalgamate.
A single board of trustees was constituted to give effect
to the amalgamation. A constitution for the new Club was drawn and
there
is no dispute about its validity.
[5] The first plaintiff, Troye Villa (Pty) Ltd (Troye
Villa), is registered as the sole shareholder of the second and third
plaintiffs
each of which owns a portion of the farm Welgevonden 343,
district Mokopane (previously Potgietersrus). Troye Villa is also the
registered owner of Portions 21, 22, 23, 24 and 25 of Welgevonden.
The fourth plaintiff (Wernico) is the registered owner of a
remaining
part of another portion of that farm. The fifth plaintiff, Lekkerrus
Bestuursonderneming CC, is a close corporation which
conducts
business as a management corporation. It was established with the aim
of managing a holiday resort on behalf of Klub Lekkerrus.
[6] The sixth plaintiff, Mrs Johanna Jacoba van Tonder,
is the widow of the late Mr P J H van Tonder who owned all the issued
shares
in the second and third plaintiffs and who was the president
of the clubs and a member of a managing corporation. The seventh
plaintiff,
Mr H D Woite, is an auditor by profession and at all
material times he acted as such for the second, third and fourth
plaintiffs
and for the appellant. He was also the executor in the
deceased estate of Mr van Tonder. Although Mr Woite joined as
plaintiff
in his personal capacity only, there is an application
before this court that he be joined also in his capacity as executor.
In
the light of the special circumstances of this case, that
application is granted.
[7] Welgevonden, which consists of a number of portions,
has several hot water springs. Holiday resorts, Lekkerrus and
Libertas,
have since the late 1950s and early 1960s been established
on two of them. During the early 1980s, Mr van Tonder operated the
holiday
resorts through his companies, the second and third
plaintiffs – each being the owner of a portion of the farm. A
comprehensive
strategic reorganisation of the businesses of the
resorts occurred in 1990. First, on legal advice, they were converted
into holiday
clubs, apparently in order to preserve their racial
exclusivity in the face of impending legislation outlawing racially
segregated
residential areas, facilities and amenities. Secondly,
they became timeshare schemes on the advice of an estate agent in
order
to enhance the businesses' financial viability.
[8] Several agreements were concluded on 10 August 1990
following the establishment of the two holiday clubs. Separate
management
contracts were concluded between them and two management
corporations, namely the fifth plaintiff and Libertas
Bestuursonderneming
CC, which was not a party to the proceedings. It
is common cause that after amalgamation, the fifth plaintiff, in
terms of the
contract concluded with Klub Lekkerrus, managed the
affairs of the amalgamated Club. One of the claims against the latter
was in
fact based on this agreement.
[9] Separate lease agreements were likewise concluded
between Klub Lekkerrus and the second plaintiff and between Klub
Libertas
and the third plaintiff for periods of 9 years and 11
months, each for a different portion of Welgevonden. These leases
contained
a non-variation clause. In spite of this it was common
cause on the pleadings that the Club was the lessee until 2007. A
claim
upheld by the court below was based on the common assumption
that these agreements survived the amalgamation and that the Club was
the lessee. This is only possible if one accepts, as one has to do,
that tacit agreements were entered into between Mr van Tonder
and the
amalgamated Club in the same terms.
[10] On that same date Klub Lekkerrus purchased all the
issued shares and the loan accounts of Mr van Tonder in the second
plaintiff
and Klub Libertas all the issued shares and loan accounts
of Mr van Tonder in the third plaintiff. These agreements will be
referred
to as agreements 'E' and 'F' respectively. The respective
sales of shares agreements were referred to in and linked to the
corresponding
lease agreements. The terms of these agreements were
identical, save that the minimum purchase price for the second
plaintiff's
shares and loan accounts was R4.5 million and for the
third plaintiff it was R2.5 million. Both agreements stipulated that
the
purchase price had to be paid within 60 months from the date of
the signature of the agreements. The purchase price provision read
as
follows:
'2.1 Die totale koopprys vir die
aandele sowel as die leningsrekenings beloop die gesamentlike bedrag
van 'n som gelykstaande aan
60% van die lidmaatskapintreegelde
(waarby ingesluit tydsdelingbelange) wat die koper van sy lede
invorder oor 'n tydperk van sestig
maande vanaf datum van die
ondertekening hiervan, met dien verstande dat die koopprys minstens
die som van R4 500 000.00 (vier
en 'n half miljoen rand) sal beloop.
[For second plaintiff; in respect of third plaintiff the sum was R2
500 000.00].
2.2 Betaling van voormelde som
geskied in kontant aan die Verkoper aan die einde van elke maand
ooreenkomstig die formule hierbo
vermeld (waarop die koopprys bereken
word) ten opsigte van alle voormelde gelde wat die koper werklik van
tyd tot tyd in ontvangs
neem.
2.3 Die eerste betaling
ooreenkomstig voormelde formule sal plaasvind voor of op 30 Deptember
1990 en daarna op die laaste dag van
elke daaropvolgende maand vir 'n
totale tydperk van 60 maande vanaf datum van sluiting van hierdie
ooreenkoms, met dien verstande
dat die voormelde minimum koopprys
voor die afloop van die gemelde tydperk van 60 maande betaal moet
wees.'
[11] Ownership of the shares passed immediately and
effect was given to the sale of shares agreements by transferring the
shares
to the respective purchasers, but the share certificates and
blank transfer forms were held in pledge for Mr van Tonder by Mr
Woite
as security for the outstanding purchase prices. The share
registers reflect that the shares were later, on 19 January 1998,
registered
in the Club's name.
[12] The sixty-month period for payment of the purchase
price expired on 9 August 1995. It is common cause that the full
purchase
price was not paid by that date, due to insufficient
timeshare sales. No demand for payment or threatened cancellation by
reason
of non-payment was however made by Mr van Tonder. Towards the
end of 1995, Mr van Tonder began experiencing severe financial
hardship
due to unrelated failed business ventures and the poor
timeshare sales in the holiday clubs. He passed away in July 1997,
while
there was a sequestration application, instituted by Absa Bank
against him, pending. After Mr van Tonder's death, Mrs van Tonder
and
Mr Woite effectively assumed control of the Club's business affairs.
Mrs van Tonder succeeded her late husband as president
of the Club.
[13] In spite of the amalgamation all the parties to the
sale agreements acted on the assumption that the amalgamated club had
stepped
into the shoes of the original clubs. This was in the face of
non-variation clauses in terms identical to those contained in the
leases.
[14] It was only after the death of Mr van Tonder that
the continued existence of the sale agreements became an issue -
probably
due to Mr Woite's poor understanding of the law. He believed
that agreements 'E' and 'F' had come to an end because of Mr van
Tonder’s
demise – long after the final date for payment
and many years after the amalgamation. As indicated, Mr Woite during
all those
years kept the original clubs as owners on the share
registers. Acting on this belief, the Club (represented by Mrs van
Tonder)
and Mr van Tonder's estate (represented by the executor Mr
Woite) purported to enter into a new written agreement during
November
1997 in terms of which the Club purchased the shares in the
second and third plaintiffs from the estate. Mrs van Tonder,
believing
that because she as chairman was entitled to do so, signed
on behalf of the Club. It was common cause that this agreement
(agreement
'G') was null and void due to the fact that the purchase
price of the shares was indeterminable. The plaintiffs contend,
however,
that clause 2.5 thereof was severable from the rest of the
agreement because it did not concern the purchase price of the shares
but was instead an undertaking by the Club with no counter
obligation. It read as follows:
'Die partye kom verder ooreen
dat 60% van die akkommodasiegelde van Jaarlede aan die VERKOPER
betaal word in kontant vir 'n onbepaalde
tydperk vanaf 16 November
1996 op 'n maandelikse basis.'
This clause formed the basis of the claim by the
plaintiffs for payment by the Club of some R 15 million, which was
successful.
[15] A further written agreement, linked to agreement
'G', was concluded during January 1998 between Mr Woite
qua
executor and Mrs van Tonder on behalf of Troye Villa, a company
belonging to Mrs van Tonder, in terms of which the latter purchased
Mr van Tonder's entire interest in agreement 'G' for a sum of R2,355
million. The objective appears to have been for Mrs van Tonder
to
step into her late husband's shoes as seller and developer. The
interest of the deceased estate in the Club was thereafter
purportedly transferred to Troye Villa. The parties were agreed at
the trial that this agreement was tainted by the invalidity of
agreement 'G' so that it, too, was of no force and effect.
[16] The minutes of the Club contain a repeated recordal
during the period prior to the change in trustees referred to below,
that
part of the purchase price in respect of the sale of shares
remained unpaid. From around 2005 relations between Mr Woite and Mrs
van Tonder on the one part and Club members on the other began to
sour. Club members became increasingly hostile, the primary bone
of
contention being the outstanding purchase price. The Club members
elected a small committee to take issues up with Mr Woite
and Mrs van
Tonder. Matters came to a head in 2007 when, in a palace revolt, a
new board of trustees was elected, effectively deposing
Mr Woite and
Mrs van Tonder. The management agreement with fifth plaintiff was
cancelled. Shortly thereafter the Club was notified
in writing by an
attorney acting for the second and third plaintiffs of the
termination of the lease agreements, effective six
months later,
namely on 10 August 2007. The Club was asked to vacate the properties
on that date. The demand was not met.
[17] The court below granted the plaintiffs' claims by
ordering as follows:
(a) A declarator that Mr van Tonder's estate is entitled
to the possession and registration of all issued shares in the second
and
third plaintiffs in the name of the estate as well as cession of
all the loan accounts of the Club in the said plaintiffs and
rectification
of their share registers accordingly. This was based on
the finding that the sale agreements between Mr van Tonder and the
two
clubs had lapsed when they came to an end at the time of
amalgamation; that the amalgamated Club had no contract with him;
that
the 1998 share sale was void because of the uncertainty of the
price; and that the subsequent sale to Troye Villa was also void.
(b) An order that the aforementioned transfer and
cession be effected only upon payment of the sum of R3 198 688.80 by
the estate
to the Club. This was ordered because of a tender by the
plaintiffs, allegedly to assure that they were not enriched at the
expense
of Club members.
(c) An order declaring that the estate is entitled to
payment by the Club of the sum of R15 699 576.00 with interest from 1
January
2007 to date of payment. This order was based on the finding
that the quoted clause 2.5 was divisible from the rest of the
agreement.
(d) Declarators that the lease agreements had been
lawfully terminated with effect from 10 August 2007 and that with
effect from
that date the second and third plaintiffs were entitled
to full possession, control and occupation of the properties in
question
and that the Club had no such rights. It was common cause
that the leases had come to an end. The right to occupation depended
on who was in control of the two property-owning companies.
(e) An order that the Club and its members vacate the
properties within 30 days of the date of the order. This order was
not sought
but if the first declaratory should stand it would have
followed. However, if the first declarator fails, it cannot remain.
(f) A declaration that the Club and its members were,
with effect from 10 August 2007, not entitled to any right of access,
possession,
control and occupation of any of the properties belonging
to first and fourth plaintiffs, namely portions 21, 22, 23, 24, 25
and
portion 32 (a portion of portion 12) of the farm Welgevonden.
These are adjoining properties that have been used by the Club
precario
and to which the Club had no legal entitlement. It
was not really an issue during the trial and its correctness has not
been in
issue on appeal.
[18] Apart from costs orders the court below also
dismissed the Club’s counterclaim. The counterclaim was based
on the allegation
that the amalgamated Club was the purchaser in
terms of the two sale agreements ‘E’ and ‘F’
and that the
agreements stood and that the Club was entitled to
rectification of the share registers to reflect it as owner.
[19] The plaintiffs’ claim, as originally framed,
was based on the tacit supposition that the sale agreements had
survived
the amalgamation but had been cancelled due to non-payment.
How or why they had survived was not, as in the case of the leases
and the management contract, an issue. The original plea responded to
the original averments in the particulars of claim by admitting
the
conclusion of agreements 'E' and 'F' followed by an averment that the
Club had fulfilled all its obligations in terms of the
said
agreements. Survival, as a matter of fact and law, was common cause.
[20] However, shortly before the trial date the
plaintiffs amended the particulars of claim substantially. As will be
indicated,
the amendment only affected the sale agreements and not
the leases which were on all fours with them. There was also not a
consequent
amendment of the plea to the counterclaim. That amendment
introduced new material averments that:
(a) Klub Lekkerrus and Klub Libertas had come to an end
in 1991 and that a new entity, namely the Club, was established;
(b) agreements 'E' and 'F' contained a non-variation
clause;
(c) the Club was never substituted as party to these
agreements;
(d) no lawful delegation of rights and obligations had
taken place from Klub Lekkerrus and Klub Libertas to the Club;
(e) the said agreements had come to an end in 1991 so
that all the issued shares fell into the deceased estate.
[21] Surprisingly, no consequential
amendment of the Club's original plea ensued in the face of the
substantial amendments and new
averments in the particulars of claim.
But at the beginning of the trial the Club sought leave to amend its
plea to deal with the
plaintiffs’ new stance. The plaintiffs
objected to the proposed amendment on the basis that it amounted to
the withdrawal
of an admission, namely that the two constituent clubs
had been dissolved and that, as a consequence, the agreements had
been terminated
at that time. This implied admission emanates from
the Club's failure to plead in particular to the new averments in the
amended
particulars of claim.
1
In refusing the application for
amendment, the trial judge described the result as a 'technical
knockout' to the Club's case. There
can be little doubt that the
refusal did indeed have a severe adverse impact on the Club's case.
[22] The court below found that the plaintiffs would be
prejudiced by the introduction of new defences in the proposed
amended plea,
such as waiver and estoppel. But such prejudice was
irrelevant for present purposes, because the court below did not deal
at all
with the aspect of prejudice in the context of the withdrawal
of the admission. As will be shown, there was no conceivable
prejudice
to the plaintiffs, except that they could lose the case,
which is not a factor.
[23] The Club was ready to introduce its application for
amendment at the commencement of the hearing and before any evidence
was
led, but the court below, at the behest of the plaintiffs,
permitted the hearing of this substantive application only during Mrs
van Tonder's evidence. As it turned out, the particular issue, namely
whether the sale agreements ‘survived’ the amalgamation
was fully canvassed with Mrs van Tonder in chief and during
cross-examination and was based on common cause facts. The plaintiffs
did not seek a postponement and during argument before this court
their counsel was singularly unable to point to any evidence
which
could have been led to address the so-called new issue. There simply
was no such evidence and there was no prejudice to the
plaintiffs.
The Club's alleged admission was in any event inconsistent with:
(a) its counterclaim that the Club, based on agreements
‘E’ and ‘F’, be reflected on the share
registers
as sole shareholder of the second and third plaintiffs and
the lack of a plea thereto that the agreements had fallen away;
(b) the plaintiffs' averments in their particulars of
claim that the management agreement continued in respect of the Club
as it
did previously in respect of the two constituent clubs because
of the amalgamation;
(c) the plaintiffs' claims, granted by the court below,
that the lease agreements were lawfully terminated on 10 August 2007,
which
implied that, until then, the lease agreements had simply
continued as before with the Club (which in any event became a common
cause fact at the trial).
[24] Moreover, and in any event, the
conclusion concerning the dissolution of the two constituent clubs
and the consequent termination
of agreements 'E' and 'F' as pleaded
in the amended particulars of claim, is legal and not factual. A
court is not bound to a party's
admission on a legal issue ─ it
has to bring its own assessment to bear on it and to apply the law in
that assessment.
2
The trial judge erred in refusing the
application for amendment in relation to the withdrawal of the
admission.
[25] Turning to the merits ─ the kernel of the
dispute is whether agreements 'E' and 'F' had lapsed on amalgamation
which,
in turn, would answer the enquiry as to where the shares in
second and third plaintiffs vest. The plaintiffs' argument, which
found
favour with the court below, was that the constituent clubs had
dissolved upon amalgamation, thereby terminating agreements 'E'
and
'F'. The court below found further that because of the non-variation
clause there had to be a written cession and delegation
of rights and
obligations to change the name of the purchaser in agreements 'E' and
'F' to that of the Club. It also found that
the agreements had in any
event lapsed because the purchase prices had not been paid within 60
months. These findings are supported
neither by the law nor the
facts. I discuss first the applicable legal principles before turning
to the facts which underlie them.
[26] A transfer of rights and
obligations (generally referred to as an 'assignment' in our law)
must be assessed in the context
of each case to ascertain whether
both rights and obligations or only the one or the other are to be
transferred.
3
The intention of the parties must be
ascertained in this regard.
4
Our law recognizes that agreements
can be concluded tacitly to replace previous agreements.
5
The non-variation clauses in
agreements 'E' and 'F' on which strong reliance was placed by the
plaintiffs, do not preclude the application
of this principle. As
Harms JA put it in
Telcordia
:
6
‘
[T]he
principle [that is of the effect of a non-variation clause in a
contract] does not create an unreasonable straitjacket because
the
general principles of the law of contract still apply, and these may
release a party from its workings. One of these would,
for instance,
be the rule that a party may not approbate and reprobate.'
The example cited in this passage is apposite in this
matter, as will presently appear.
[27] It is also trite that a
contracting party, when faced with breach of the contract by the
other party, must elect whether to
terminate or to enforce the
contract. Once an election is made, the party is bound by it. A party
who elects to cancel must clearly
and unequivocally express an intent
to do so.
7
Whether or not there has been such an
election to cancel is a factual issue.
8
[28] In applying these principles to the facts the
following emerge: First, it became common cause during the trial that
the Club
was formed by unanimous decision of the members of the two
constituent clubs to merge. It follows that, in law, the Club became
the successor to the two clubs. The evidence overwhelmingly supports
this conclusion. It is not in issue that the management contract
with
the fifth plaintiff simply continued after amalgamation as before. It
is further common cause that the lease agreements also
continued as
before after amalgamation. This continuation could only have been
possible if the Club had as a matter of law stepped
into the shoes of
its predecessors. Like agreements 'E' and 'F', the lease agreements
also contained non-variation clauses. The
minutes of the members'
meetings after amalgamation and Mrs van Tonder's own evidence lend
further support to this conclusion.
One example will suffice to
illustrate the point. The minutes of the Club's seventh annual
general meeting on 15 November 1997
(ie the first such meeting after
Mr van Tonder's death) reflect that Mr Woite delivered the
presidential address in which he declared
as follows:
'Ten opsigte van die
voortbestaan van die Klub moet ons meld dat die Klub ongestoord
voortgaan. Daar bestaan nog steeds huurkontrakte
vir die eiendom en
die Klub kan dus nog die Oorde benut soos voorheen. Die kontrak met
die Bestuursonderneming, om die klubsake
te hanteer, is nog steeds in
plek en gaan gewoonweg voort.'
When questioned on this in her
evidence in chief, Mrs van Tonder confirmed the correctness of these
recordals and confirmed that
'everything carried on as normal'. This
conclusion is further buttressed by the Club's plea and counterclaim.
To conclude ─
there can be little doubt on the evidence that
tacitly new agreements of sale on the same terms as agreements ‘E’
and
‘F’ had been concluded between the parties. The above
references provide ample evidence of the parties' conduct justifying
the inference that the parties had the requisite consensus.
9
New agreements had therefore tacitly
come into being.
10
The plaintiffs' reliance on the
non-variation clauses cannot be upheld. The Club is therefore the
lawful owner of all the issued
shares in the second and third
plaintiffs.
[29] The second aspect is Mr van Tonder's election in
respect of the non-payment of the purchase price of the shares by the
due
date. The evidence is overwhelming that he elected to keep the
agreements, including the new tacit agreements, extant. As stated
above, he did not threaten cancellation, nor did he demand immediate
payment of the outstanding balance. On the contrary, Mr van
Tonder
continued to collect payments made towards the purchase price, he
decided where such payments should go and at the 1996
annual general
meeting granted the Club an indefinite extension of time for payment
of the balance of the purchase price. On the
evidence this conduct
signifying an election to continue with the contract, continued for
well over ten years. I therefore find
that there was a clear and
unequivocal approbation on the part of Mr van Tonder.
[30] There is considerable merit in the contention
advanced by its counsel that the Club has on the evidence paid the
minimum purchase
price in respect of second and third plaintiffs. We
have not been asked to make such a finding, but it is nonetheless
clear in
the light of our finding that clause 2.5 is not divisible
and in the fact that large sums of money were paid over to the estate
that this contention is correct. In view of these findings, the
plaintiffs’ claim for rectification and attendant orders
cannot
stand while, in turn, the counterclaim for rectification of the share
registers must be upheld.
[31] What remains are the claim for
R15 699 576.00, the declarator that the two lease agreements had been
lawfully terminated with
effect from 10 August 2007, and the
ejectment of the appellant from the properties. The claim for R15 699
576.00 was based on clause
2.5 of agreement 'G', signed by Mrs van
Tonder as trustee on behalf of the Club. She apparently believed that
since she took over
from her husband as chairman of the Club she
could do as she wished, including entering into contracts. However,
the constitution
of the Club provided otherwise. In spite of a clear
challenge to her authority, there was no evidence that she was
authorised by
the board of trustees to enter into this agreement.
Absent an authority, the question whether the agreement was divisible
does
not arise because clause 2.5 was also not authorised. But, in
any event, even if clause 2.5 survived this lack of authority, it
is
clearly not severable. This is apparent not only from the text of
agreement 'G' but also from the context, that is the factual
matrix
in which the parties operated.
11
Agreement 'G' is an agreement for the
sale of shares as its heading indicates. Clause 1 deals with the merx
and clause 2 with the
purchase price. Clauses 2.1, 2.2, 2.3 and 2.4
concern the purchase price and its calculation. Clause 2.5 is
inserted in the clause
dealing with the price. The word 'verder' is
significant and suggests that it is a further provision dealing with
the price. There
is no provision for any other consideration for the
undertaking in clause 2.5, and the conclusion seems inescapable that
it is
an integral part of agreement 'G'. It cannot be severed from
the rest of the agreement. The context also supports this
construction.
The accommodation fees referred to in that clause were
payable by non-members ('jaarlede') for accommodation at the resorts.
Members
paid joining fees ('intreegelde') to purchase timeshare and
also paid annual levies ('jaargelde') and in return received free
accommodation
at the resorts. Clause 2.5 purportedly replaced the
purchase price provision in agreements 'E' and 'F' in terms of which
the purchase
price was calculated as 60% of members' joining fees
collected for a period of 60 months from date of signature of the
agreements
(with the proviso that for Lekkerrus the minimum purchase
price was R4.5 million and for Libertas it was R2.5 million). The
change
in the price formula was brought about by the extremely poor
timeshare sales. The provision that the purchase price was to be
recovered
from income derived from non-members' accommodation fees
was therefore introduced to meet the shortfall. It is plain from the
aforegoing
that clause 2.5 forms an integral and inseparable part of
the purchase price provision, which is a material term of the
contract.
It is thus not severable from the rest of agreement 'G'.
[32] I therefore conclude on the main issue that tacit
agreements in the terms set out in ‘E’ and ‘F’
between
the Club and Mr van Tonder were concluded upon the
amalgamation of the clubs; that they survived the payment date; that
they were
not affected by Mr van Tonder’s death; that the
shares were properly transferred to the Club; that the agreements
were not
replaced by the later sale agreement; that Mrs van Tonder
and Mr Woite were not entitled to transfer the shares to anyone save
the Club; and that the Club is entitled to rectification of the share
registers.
[33] I do recognise the fact that neither party has
relied in explicit terms on tacit agreements, but to deny their
reality after
nearly two decades of acceptance by everyone of their
existence would amount to a travesty of justice.
[34] The finding of the court below that the lease
agreements had been validly terminated with effect from 10 August
2007, was not
challenged on appeal, correctly so. No order to that
effect was, however, required. The issue is academic in the light of
my finding
that the Club is the lawful owner of all the issued shares
in the second and third plaintiffs which own the resorts. It is
therefore
for the Club as sole shareholder to make a decision on
eviction and the use of the resorts. For the same reason the eviction
order
cannot stand.
[35] As mentioned, it was not in issue that the Club had
made use of facilities on properties belonging to Troye Villa and
Wernico,
namely staff accommodation, a walking trail, a sewerage
treatment plant, a refuse dump and a lapa, without any agreement
between
the parties in respect thereof. The relief sought, namely
that access to these properties and use of the facilities had been
lawfully
cancelled on 10 August 2007 and that, consequently, the Club
and its members thereafter had no right to access of such property,
was also not in issue. The order to that effect has to be retained.
[36] Lastly, the costs order warrants consideration. The
Club has been substantially successful, inasmuch as the appeal is to
be
upheld. Ordinarily the plaintiffs, having met with some success on
appeal to the limited extent set out in the previous paragraph
would
have been entitled to a portion of their costs. But there was hardly
any dispute on these aspects at the trial, nor did they
add
measurably to the litigation costs. It seems that, in exercising a
discretion on costs, it should follow the outcome, that
is that the
Club was successful on all those matters which were in issue. The
first, sixth, seventh and eighth plaintiffs litigated
in the names of
the second and third plaintiffs, while they were not entitled to the
shares in those companies. It would consequently
be just and
equitable for the first, sixth, seventh and eighth plaintiffs to bear
the costs.
[37] The following order is made:
(1) The appeal is upheld with costs against the first,
sixth and seventh respondents jointly and severally, including the
costs
of two counsel.
(2) The order of the court below is substituted with the
following order:
‘
(a) Mr H D Woite is joined as
the eighth plaintiff in his capacity as executor in the estate of the
late P J H van Tonder, estate
no 14453/97.
(b) It is declared that the first defendant and its
members are, with effect from 10 August 2007, not entitled to any
right of access,
possession, control and occupation of any of the
properties belonging to first and fourth plaintiffs, namely Portions
21, 22, 23,
24 and 25 of the farm Welgevonden 343 district
Potgietersrus, Registration Division KR, Limpopo Province and Portion
32 (a portion
of Portion 12) of the farm Welgevonden 343, district
Potgietersrus, Registration Division KR, Limpopo Province.
(c) The balance of the plaintiffs' claims is dismissed.
(d) It is declared that the first defendant is the sole
shareholder of all the issued shares in the second and third
plaintiffs
and that the share registers should reflect that fact.
(e) The balance of the first defendant’s
counterclaims is dismissed.
(f) The first, sixth, seventh and eighth plaintiffs are
ordered jointly and severally to pay the first defendant's costs,
including
the costs of two counsel.’
___________
S A MAJIEDT
JUDGE OF APPEAL
APPEARANCES:
Counsel
for Appellant : N G D Maritz SC
:
A A Botha
Instructed
by : Van der Merwe Attorneys
Pretoria
Kramer
Weihmann & Joubert Inc
Bloemfontein
Counsel
for Respondent : T P Krüger
J
R Minnaar
Instructed
by : Marius Coertze Attorneys
Pretoria
Oelofse
& Kriel Attorneys
Bloemfontein
1
Uniform
Rule 22(3) reads as follows:
'Every
allegation of fact in the combined summons or declaration which is
not stated in the plea to be denied or to be not admitted,
shall be
deemed to be admitted. If any explanation or qualification of any
denial is necessary, it shall be stated in the plea.'
2
Saayman
v Road Accident Fund
2011 (1) SA 106
(SCA) paras 28 and 29.
3
Simon
NO v Air Operations of Europe AB & others
[1998] ZASCA 79
;
1999 (1) SA 217
(SCA) at 228I-J.
4
MTK
Saagmeule (Pty) Ltd v Killyman Estates (Pty) Ltd
1980 (3) SA 1
(A) at 12A.
5
Golden
Fried Chicken (Pty) Ltd v Sirad Fast Foods CC & others
2002
(1) SA 822
(SCA) para 7;
Telcordia Technologies Inc v Telkom SA
Ltd
[2006] ZASCA 112
;
2007 (3) SA 266
(SCA) para 12.
6
Ibid.
7
Stewart
Wrightson (Pty) Ltd v Thorpe
1977 (2)
SA 943
(A) at 954A.
8
Peters
& others NNO v Schoeman & others
[2000] ZASCA 152
;
2001 (1) SA 872
(SCA)
para 12.
9
See
Gordon Lloyd Page & Associates v
Rivera & another
2001 (1) SA 88
(SCA) para 11.
10
Golden
Fried Chicken (Pty) Ltd v Sirad Fast Foods CC & others
supra
para 7.
11
See
KPMG Chartered Accountants (SA) v
Securefin Ltd & another
2009 (4)
SA 399
(SCA) para 39;
Swart & 'n
ander v Cape Fabrix (Pty) Ltd
1979 (1)
SA 195
(A) at 202C-D.