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Onegrain (Pty) Ltd v Theron and Others (4679/2021) [2022] ZAFSHC 54 (11 March 2022)

80 Reportability
Land and Property Law
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Brief Summary

Property — Delivery of movable property — Applicant sought delivery of property under an instalment sale agreement, claiming lawful possession against the first respondent who alleged a partnership — Court found that the applicant was the lawful possessor of the property purchased from the second respondent, and the first respondent's claims of partnership were unsubstantiated — The court held that the instalment sale agreement clearly stipulated that ownership remained with the second respondent until full payment was made, thus dismissing the first respondent's claims.

Comprehensive Summary

Summary of Judgment


1. Introduction


This matter concerned an application for the delivery (return) of specified movable property described in annexures to the notice of motion. In the alternative, the applicant sought interim interdictory relief restraining the first respondent from disposing of, encumbering, using, or operating the property pending the institution and finalisation of an action.


The applicant was Onegrain (Pty) Ltd, a private company. The first respondent was Mr Petrus Andreas Theron, a farmer and businessman. The second respondent was FirstRand Bank Limited t/a WesBank, cited as the financier and (on the applicant’s version) the owner of the property under an instalment sale arrangement. The third and fourth respondents were cited as the joint trustees of an insolvent estate in which the farm where the property was located was an asset. No substantive relief was sought against the second to fourth respondents; they were cited as parties with a potential interest.


The judgment recorded that there was prior litigation between the applicant (and/or Mr Botha who deposed to affidavits) and the first respondent concerning the same property, including a spoliation order granted on 13 May 2021 under case number 642/2021. Although the parties’ counsel referred extensively to that spoliation matter in oral submissions, the court stated that the present judgment was drawn exclusively from the papers in this application (case number 4679/2021).


At its core, the dispute concerned the right to possess and control the movable property acquired under a credit/instalment sale agreement, and whether the first respondent could resist delivery on the basis of an alleged partnership or joint venture arrangement in terms of which he asserted a claim to the property.


2. Material Facts


In or about June 2020, the applicant concluded a written instalment sale agreement with the second respondent (WesBank) relating to the movable property that is the subject of the application. The payment schedule provided for instalments commencing on or before 7 August 2020, and ending on or before 7 July 2024.


The agreement expressly provided that ownership remained with the second respondent until the last instalment was paid. It further restricted the applicant from giving, selling, loaning, letting, pledging, or transferring the goods to any person without the second respondent’s written approval, and obliged the applicant not to allow the goods to be subjected to attachment or third-party legal claims.


It was common cause that the property was used in a grain-sifting and teff-cleaning operation involving the applicant and an entity known as Josme (Pty) Ltd, whose sole director was the first respondent’s wife. The court considered it apparent that, in practice, the arrangement and dealings were driven by Mr Botha (deposing on behalf of the applicant) and the first respondent, utilising corporate entities that were, on paper, driven by their spouses.


A core factual dispute raised by the first respondent was the alleged existence of an “informal partnership” between himself and Mr Botha (and/or involving their entities), which he alleged had ended, and from which he contended the property had effectively been acquired or was intended to be acquired for the partnership. The first respondent alleged that partnership funds were used in relation to the property and that the property was intended eventually to form part of the partnership’s assets. The applicant, through Mr Botha, denied the existence of a partnership agreement, though an admission was relied upon by the first respondent that there had been a joint venture relating to the teff-cleaning operation.


The first respondent contended that he was in possession of the property and was utilising it, and he opposed the application on the basis, among other things, that there were genuine disputes of fact which made motion proceedings inappropriate.


3. Legal Issues


The central legal questions the court was required to determine were whether the applicant had established a basis, on motion, to obtain an order compelling the delivery/surrender of control of the movable property from the first respondent, and whether the first respondent’s opposition—particularly the alleged partnership claim—constituted a legally and factually sustainable basis to resist such relief.


A related question was whether the matter was rendered incapable of determination on the papers by real, genuine, and bona fide disputes of fact, as contended by the first respondent, applying the approach to disputes of fact in motion proceedings.


The dispute therefore involved the application of legal principles to largely documentary and common-cause facts (the instalment sale agreement and its ownership/possession incidents), together with an evaluative assessment of whether the first respondent had raised a genuine dispute of fact concerning the alleged partnership and competing entitlement to possession.


4. Court’s Reasoning


The court approached the application as one seeking delivery/return of specific movable property purchased on credit under an instalment sale agreement. In addressing the appropriate standard for interim relief in the context of vindicatory or “quasi-vindicatory” claims, the court referred to the principles stated in Fedsure Life Assurance v Worldwide African Investment Holdings 2003 (3) SA 268 (W), including that in such matters a court is entitled to ensure that the property is preserved pending final determination, and that certain usual requirements for interim interdictory relief (such as irreparable harm and absence of alternative remedy) may be relaxed in that context, as described in the cited authorities.


On the facts, the court rejected the first respondent’s resistance to the applicant’s claim to lawful possession. It found that, notwithstanding the first respondent’s protestations, the applicant was the lawful possessor of the property purchased from the second respondent. The court treated the instalment sale agreement and its annexures as prima facie proof supporting this conclusion. The submission that the seller was “unknown or unidentified” was rejected as meritless, as the position was regarded as clear from the papers.


The court considered the first respondent’s reliance on Concor Construction (Cape) (Pty) Ltd v Santam Bank Ltd 1993 (3) SA 930 (A) to be misplaced in the present context. While Concor concerned requirements for transfer of ownership of movables by delivery, the court emphasised the settled principle that a person cannot transfer more rights than he or she has. Because the instalment sale agreement reserved ownership to the second respondent until full payment, the court reasoned that there could be no proper basis for the first respondent to contend that the property already belonged to, or could presently be claimed as an asset of, a partnership.


The alleged partnership was then assessed against the essential elements of partnership in South African law, as referenced with reliance on Buffers v Mncora 2012 (4) SA 1 (SCA): each party must bring something into the partnership; the enterprise must be carried on for the joint benefit of the parties; and the object must be to make a profit. The court held that there was no evidence sustaining the allegation of a partnership between the applicant and the first respondent. It accepted that there were business dealings between the applicant and Josme (Pty) Ltd, but treated that entity as a distinct juristic person with its own legal personality, separate from the first respondent.


The court also addressed the first respondent’s characterisation of the arrangement as an “informal partnership”. It stated that, despite a diligent search, it found no such legal concept in South African law and concluded that the concept, as presented, did not exist. In addition, the court regarded the first respondent’s partnership allegations as insufficiently particularised and inconsistent with the position that the alleged partnership had ended while nothing had been done to dissolve it, and while the first respondent continued to utilise the property and payments to the second respondent were not being made.


On the alleged disputes of fact, the court considered the first respondent’s reliance on Wightman t/a JW Construction v Headfour (Pty) Ltd [2008] ZASCA 6; 2008 (2) ALL SA 512 (SCA). It concluded that the purported disputes were directed at side issues rather than the “nub” of the application, and that the disputes raised were not of such a nature as to require wide-ranging factual enquiries or to render the matter incapable of determination on the papers. The court therefore rejected the contention that there were real, genuine, and bona fide disputes of fact barring final relief in motion proceedings.


Finally, the court reasoned that ordering delivery of the property to the applicant would not extinguish any claim the first respondent might have against the applicant. It characterised the relief as aimed at preserving the property and not as a final determination of all rights between the parties.


5. Outcome and Relief


The court granted an order directing the first respondent to deliver or surrender control of the movable property described in the annexures to the notice of motion to the applicant within three days of the order.


It further authorised the Sheriff (Bultfontein, or any sheriff within whose jurisdiction the property might be found) to take possession and hand the property to the applicant should the first respondent fail to comply.


The court ordered that the costs of the application be paid by the first respondent.


Cases Cited


Fedsure Life Assurance v Worldwide African Investment Holdings 2003 (3) SA 268 (W).


Stern and Ruskin NO v Appleson 1951 (3) SA 800 (W).


UDC Bank Ltd v Seacat Leasing and Finance Co (Pty) Ltd and Another 1979 (4) SA 682 (T).


Mathews v Mathews 1936 TPD 124.


Maroudus v Curich 1924 WLD 249.


Ogilvie Flour Mills Co Ltd v H F Picot & Co Ltd (in Liquidation) 1927 WLD 146.


Cowen & Hammond v Campbell 1906 TH 191.


Concor Construction (Cape) (Pty) Ltd v Santam Bank Ltd 1993 (3) SA 930 (A).


Buffers v Mncora 2012 (4) SA 1 (SCA).


Wightman t/a JW Construction v Headfour (Pty) Ltd [2008] ZASCA 6; 2008 (2) ALL SA 512 (SCA).


Legislation Cited


No legislation was cited in the judgment.


Rules of Court Cited


No rules of court were cited in the judgment.


Held


The court held that, on the papers, the applicant established entitlement to relief for the delivery/surrender of control of the movable property. The instalment sale agreement constituted prima facie proof that the applicant was the lawful possessor of the property, while ownership remained reserved to the second respondent pending full payment.


The court held that the first respondent failed to demonstrate the existence of a legally cognisable partnership (including the essential elements of partnership) that could ground a competing claim to the property, and that the alleged “informal partnership” was not shown to exist as a legal concept or on the facts presented.


The court further held that the alleged disputes of fact were not real, genuine, or bona fide disputes that prevented the matter from being decided on motion, and that the order for delivery served to preserve the property without finally determining any broader claims the first respondent might pursue separately.


LEGAL PRINCIPLES


The judgment applied the principle that in applications for interim relief pending vindicatory or quasi-vindicatory actions, a court may grant relief to ensure the property is preserved pending final determination, and that the applicant may benefit from a presumption of irreparable harm and need not necessarily show the absence of an alternative satisfactory remedy, as discussed in the authorities cited in Fedsure Life Assurance v Worldwide African Investment Holdings 2003 (3) SA 268 (W).


The judgment applied the rule that a party cannot transfer more rights than it has, and that where an instalment sale agreement reserves ownership to the seller/financier until full payment, competing claims premised on ownership vesting elsewhere during the currency of the agreement are inconsistent with the reservation of title.


The judgment applied the established requirements for the existence of a partnership in South African law, namely a contribution by each party, an enterprise carried on for their joint benefit, and a profit motive, and held that these were not established on the papers.


The judgment applied the approach to disputes of fact in motion proceedings associated with Wightman t/a JW Construction v Headfour (Pty) Ltd [2008] ZASCA 6; 2008 (2) ALL SA 512 (SCA), and concluded that the alleged disputes were not of a kind that precluded determination on affidavit.

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[2022] ZAFSHC 54
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Onegrain (Pty) Ltd v Theron and Others (4679/2021) [2022] ZAFSHC 54 (11 March 2022)

IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case number:
4679/2021
In the matter
between:
ONEGRAIN
(PTY) LTD
Applicant
And
PETRUS
ANDREAS
THERON
First Respondent
FIRSTRAND
BANK LIMITED t/a WESBANK
Second Respondent
ELRICH
RUWAYNE SMITH
N.O.
Third Respondent
ELNA
ELSA POHL
N.O.
Fourth Respondent
CORAM:
MATHEBULA, J
HEARD
ON:
02
DECEMBER 2021
DELIVERED
ON:
This
judgment was handed down electronically by circulation to the
parties' representatives by email and by release to SAFLII on 11
March 2022. The date and time for hand-down is deemed to be 11 March
2022 at 16h15.
Introduction
[1]
The applicant in this matter has brought an application for an order
for delivery of movable property
(“property”) mentioned in the
notice of motion. In the alternative the applicant seeks an interim
order that pending the outcome
of an action to be instituted, the
first respondent be interdicted and restrained from disposing,
alienating, encumbering, utilising
or operating the aforementioned
property for its purposes and functions.
Parties
[2]
The applicant is described as a private company with limited
liability and shareholding
registered in accordance with laws of the
Republic. The founding and answering affidavits are deposed to by Mr
Jacobus Johannes Botha
(Mr “Botha”) who is the husband of its
sole director Me Telana Botha. The first respondent is a farmer and
businessman of Bultfontein.
He is the husband of the sole director of
an entity called Josme (Pty) Ltd. The second respondent is a finance
house registered as
a bank in accordance with the company laws.  On
the strength of the founding papers, it is for all intents and
purposes the
owner of the property in dispute. The third and fourth
respondents are joint trustees of the insolvent estate of Phillips
Abraham
De Bruyn (Mr “De Bruyn”). Apparently the property in
dispute is on his farm called Hertzog in the district of Bultfontein
owned
by Mr De Bruyn. The farm is an asset of the insolvent estate.
No order is sought against the second to fourth respondents. They are
merely cited as parties who may have an interest in the matter.
Factual
background
[3]
It is necessary to set out factual background to the dispute. There
is a long history
of litigation between the applicant Mr Botha and
the first respondent over the same property. On 13 May 2021, Majozi
AJ granted a
spoliation order in favour of the first respondent under
case number 642/2021. The applicant deemed the spoliation
application, judgment
and order significant to these proceedings and
requested that the file be made available to me by the Registrar of
this court. In
the oral submissions, both counsel referred
extensively to the spoliation application. My judgment is drawn
exclusively from the
papers before me under case number 4679/2021.
[4]
Sometime in June 2020, the applicant entered into a written
instalment sale agreement
(“the agreement”) with the second
respondent for the disputed property. The first instalment was
payable on/or before 7 August
2020 and the last one on/or before 7
July 2024. This is stipulated in the payment schedule. The terms and
conditions of clause 4.2
of the agreement expressly provides that
ownership of the property remained with the second respondent until
the last instalment
has been paid. Also clause 7.2 provides that the
goods may not be given, sold, loaned, let, pledged or transferred to
any person
without the written approval of the second respondent. The
same clause provides that the applicant should not allow the goods to
be subject to any attachment or legal claim by a third party. In
simple terms it means that there cannot be competing claims until
the
last instalment is paid.
[5]
It is common cause that the property was utilised in the business of
sifting grain and
cleaning of teff involving applicant and an entity
called Josme (Pty) Ltd whose director is the wife of the first
respondent. What
is apparent is that the implementation of the
agreement was between Mr Botha and the first respondent. The
negotiations and actual
running of the business venture was driven by
them using business entities which on paper were driven by their
wives. Mr Botha denies
the existence of the partnership agreement
between the applicant and the first respondent. In response, the
first respondent alleges
the establishment of an “informal”
partnership between Mr Botha and himself. He contends that the
agreement with the applicant
and Mr Botha envisaged that the property
will eventually be acquired by the partnership. However, the
relations between them soured
and it has come to the end.  He
alleges that the property was bought with the funds from the
partnership. Therefore, he lays
claim on them.
Arguments
[6]
I now turn to the arguments raised by both counsel on behalf of the
parties which must
be repeated. Mr Synman intimated that the first
respondent is relying on the existence of a partnership which has
ended but nothing
has been done to dissolve it despite the lapse of a
substantial period. He pointed out that the property was in the
possession of
the first respondent and not the partnership. He also
pointed out that there was credible evidence on affidavit that the
first respondent
was using the property for his own benefit and not
for the so called partnership. His argument is that on the papers,
there is overwhelming
evidence that there was no partnership between
the applicant and first respondent.
[7]
In the alternative, counsel for the first respondent referred to the
admission by Mr
Botha on paragraph 64.5.2 of the founding affidavit
that a joint venture for teff cleaning operation was established
between the
parties. This he submitted, is self-evident on the
schedule of payments indicating payments made to various parties from
the proceeds
or fees for services rendered. This bolsters the
contention that there was a partnership in existence.
[8]
The mainstay of the case for the first respondent is that there are
glaring, real, genuine,
and
bona fide
dispute of fact in the
papers. This was foreseeable on the part of the applicant that this
matter cannot be adjudicated on the papers.
It was pointed out that
the applicants premised its ownership or right to possession on the
instalment sale agreement with the second
respondent. The applicant,
being aware that this document is disputed, failed or neglected to
set out the requirements for a vindicatory
claim. The contention is
that the applicant has failed to allege the seller from whom the
property was purchased from. On this basis,
the application must be
dismissed with costs.
Discussion
[9]
What remains to be discussed is various decisions and principles of
law that the parties
drew to my attention. In this matter, the
applicant seeks a delivery for the delivery or return of the property
purchased on credit
from the second respondent. Counsel placed
reliance on two (2) passages from the judgement of Cloete J writing
for the undivided
bench in
Fedsure
Life Assurance v Worldwide African Investment Holdings
[1]
where he said the following:
“
There
are two exceptions to the requirements set out in
Eriksen
.
They occur in applications for interim relief pending vindicatory and
'
quasi-vindicatory'
actions.
A vindicatory action has been categorised as one in which the
plaintiff claims delivery of specific property as owner
or lawful
possessor; and an action has been categorised as '
quasi-vindicatory
'
when delivery of specific property is claimed under some legal right
to obtain possession (
Stern
and Ruskin NO v Appleson
1951
(3) SA 800
(W)
at
810
in
fine
-
811;
UDC
Bank Ltd v Seacat Leasing and Finance Co (Pty) Ltd and Another
1979
(4) SA 682
(T)
at
688G - H). I do not wish to be detained by terminology. In all such
cases it has been settled law in this Division for over half
a
century that '(T)he court is entitled to ensure that the thing shall
be preserved until the dispute is decided finally' -
per
Tindall
J in
Mathews
v Mathews
1936
TPD 124
at 128.
The
two exceptions are the following: the applicant need not allege
irreparable loss inasmuch as there is a presumption, which may
be
rebutted by the respondent, that the injury is irreparable -
Maroudus
v Curich
1924 WLD 249
at 250,
Ogilvie Flour Mills Co
Ltd v H F Picot & Co Ltd (in Liquidation)
1927 WLD 146
at 150 and
Stern
at 813B - C; nor need the applicant
show that it has no other satisfactory remedy -
Cowen &
Hammond v Campbell
1906 TH 191.”
[10]
There is no doubt despite protests from the first respondent that the
applicant is the lawful possessor
of the property which has been
purchased from the second respondent. There are no factual basis upon
which the first respondent is
denying this fact except that he
desires to do so. The copies of the agreement and annexures are
prima
facie
proof behind this finding. The argument that the seller is
unknown or unidentified is bereft of any merit. It is patently clear
in
the papers. Somehow the first respondent acknowledges that payment
for the property is made from the offers of the alleged partnership.
Further that it was agreed by the applicant, Mr Botha and himself
that the property will eventually form part of the assets of the
partnership. The question is when? Clearly if anything once full
payment has been made.
[11]
The first respondent also placed reliance on the decision of the
court in
Concor
Construction (Cape) (Pty) Ltd v Santam Bank Ltd
[2]
as a proposition that the applicant has failed to make out a case
against him. It is self-evident that this reliance was misplaced.
What the applicant argued that it must be alleged and proved by the
applicant in order to succeed, was the crux of the argument on
behalf
of the appellant in that matter. The court stipulated the
requirements for passing ownership of movables by delivery These
are
the following: (i) the transferor had to be capable of transferring
ownership; (ii) delivery had to be effected by the transferor
with
the intention of transferring ownership and taken by the transferee
with the intention of accepting ownership; and (iii) there
had been
payment where the sale was a cash sale.
[12]
Having set out these principles. It is settled how that a person
cannot transfer more rights than he
has. The applicant cannot give
more than he has. The owner or titleholder of the property is the
second respondent and that will
remain until the last instalment has
been paid. Therefore, there can be no talk of the property belonging
to any partnership. The
parties relevant to the instalment sale
agreement is the applicant and the second respondent to the exclusion
of all others. The
instalment sale agreement specifically provides
that the applicant must keep possession and control of the property
as well as keep
it in good condition. It cannot be clearer than that.
[13]
Perhaps the strongest argument on behalf of the first respondent is
that he is/was in a partnership with
Mr Botha. In our law there are
three essential elements of a partnership. Firstly, each party must
bring something into it.  That
can be skill or money or labour.
Secondly, the said partnership should be carried to the joint benefit
of both parties. Thirdly,
the common object should be to make
profit.
[3]
[14]
I now turn to consider whether the alleged partnership satisfies
these requirements. At the onset, I
hold the view that there is no
evidence to sustain this allegation. What is apparent is that there
were business dealings between
the applicant and business entity
called Josme (Pty) Ltd. That is also apparent on the document titled
summary of payments attached
to the opposing papers.
[4]
That is distinct entity from the first respondent and its sole
director is his wife. It may well be so that affairs are to a great
extent handled by him. However, it is a juristic person in accordance
with the laws of the Republic having its own legal personality.
It is
not the case for the first respondent that the applicant is the
alter
ego
of
Mr Botha.
[15]
The applicant deliberately withheld the details of the alleged
partnership. Instead he resorted to fancy
descriptions and labelled
it an informal partnership. These are three (3) different types of
partnerships namely ordinary, anonymous
and commanditarian
partnership. The elements of a partnership have been discussed in
preceding paragraphs. Despite diligent search,
I did not find
anything called informal partnership and its characteristics in our
law. It is safe to conclude that the aforementioned
legal concept
does not exist.
[16]
Clearly, the first respondent alleges the existence of a partnership
but is unable to demonstrate the
existence of its essential elements.
The first respondent alleges that the partnership has ended. However,
as correctly pointed out
by the counsel for the applicant, nothing
has been done to dissolve it. The first respondent continues to
utilise the property for
his own benefit. The payments for the
property to the second respondent are not being effected. He appears
to be in no hurry to move
towards its dissolution. The overwhelming
evidence is that there was no partnership between the applicant and
the first respondent.
[17]
The first respondent also raised the point that there are
bona
fide
dispute of fact in the papers. He stated that not only was it
foreseeable but the matter cannot be decided on the papers as they
are. Counsel relied on the often quoted judgment of
Wightman
t/a JW Construction v Headfour (Pty) Ltd
[5]
to illustrate that the applicant’s papers did not only fail to
define the relevant issues but has not seriously and unambiguously
addressed the disputed facts.
[18]
There is absolutely no need at all to strain on this contention. The
first respondent is attacking side
issues instead of the nub of the
application. The issue for determination is centred around ownership
or possession of the property
and existence or non-existence of the
partnership. Informal or otherwise. The dispute of fact alleged by
the first respondent is
not of such a nature that will give rise to
wide ranging factual enquiries. There is no possibility of any real
or substantial questions
of fact arising that may lead to this matter
incapable of being adjudicated on the papers. My conclusion is that
the contention about
the existence of the dispute of fact lacks
merit.
[19]
Delivering the property to the applicant does not extinguish any
claim that the first respondent might
have against the applicant. It
is by no means definitive of the rights of the parties. This order is
intended to preserve the property
and does not in any manner
prejudice the first respondent.
[20]
I make the following order: -
20.1.
The first respondent is ordered and directed to deliver or surrender
control to the applicant the property described
as Annexure “A1”
and “A2” read with Annexure “A3” as well as “B1”, “B2”,
“B2”, “B3”, “B4” and “B5”
attached to the Notice of
Motion within three (3) days of this order.
20.2.
Should the first respondent fail to do so, the Sheriff, Bultfontein
or any Sheriff in whose jurisdiction the property
may be found is
authorised and directed to take possession and control and hand the
same to the applicant.
20.3.
The costs of this application are to be paid by the first respondent.
M.A. MATHEBULA, J
Counsel
on behalf of Applicant:
Adv. C Snyman
Instructed
by:
McIntyre Van
Der Post Attorneys
BLOEMFONTEIN
Counsel
on behalf of the First Respondent:
Adv. A Sander
Instructed
by:
Badenhorst Attorneys
BLOEMFONTEIN
Counsel
on behalf of the Second Respondent: No Appearance.
Counsel
on behalf of the Third Respondent:    No Appearance.
Counsel
on behalf of the Fourth Respondent:    No Appearance.
/TKwapa
[1]
Fedsure Life Assurance v Worldwide African Investment Holdings
2003
(3) SA 268
(W) at paras 27 and 28.
[2]
Concor Construction (Cape) (Pty) Ltd v Santam Bank Ltd 1993 (3) SA
930 (A).
[3]
Buffers v Mncora
2012 (4) SA 1
SAC at para 5F.
[4]
Page
152 of the Paginated Papers
[5]
Wightman
t/a JW Construction v Headfour (Pty) Ltd
[2008] ZASCA 6
;
2008 (2) ALL SA 512
(SCA)
at para 12.

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