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[2022] ZAFSHC 220
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Tswelopele Local Municipality v Tikwe Farming (Pty) Ltd and Others (1779/2022) [2022] ZAFSHC 220 (29 August 2022)

IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No.:
1779/2022
Reportable:
YES/NO
Of
Interest to other Judges: YES/NO
Circulate
to Magistrates: YES/NO
In
the matter between:
TSWELOPELE
LOCAL
MUNICIPALITY
Applicant
and
TIKWE
FARMING (PTY)
LTD
1
st
Respondent
PAULUS
MANYATSE
SEBILO
2
nd
Respondent
SHERIFF
OF
BULTFONTEIN
3
rd
Respondent
JUDGMENT
BY:
VAN RHYN, J
HEARD
ON:
9
JUNE 2022
DELIVERED
ON:
29
AUGUST 2022
[1]
The applicant is the Tswelopele Local Municipality, a local
municipality duly established
in terms the provisions of section 155
of the Constitution,
under whose
jurisdiction the town of, amongst others, Hoopstad in the Free State
falls. The applicant brought an urgent application
against first and
second respondents with the purpose of,
inter
alia
, interdicting first and second
respondents from harvesting, alternatively alienating any crops
already harvested. In the further
alternative and in the event of the
crops having been harvested and alienated, that the proceeds thereof
be paid to the third respondent,
being the Sheriff.
[2]
The applicant sought a
rule nisi
pending the hearing of part B
of the application, to perfect its hypothec over the crops and
movables which may be found on Camp
K and Camp L of Erf 17003,
Hoopstad (the property).  It is common cause that the applicant
is the registered owner of the
property. The application was issued
on 14 April 2022 and was set down for hearing on 16 April 2022.
[3]
On 16 April 2022 the urgent application was removed from the roll. On
two further
occasions, the 22
nd
April 2022 and 29
th
April 2022, the matter was also removed from the roll. On 2 June 2022
the matter was postponed to 9 June 2022 when it ultimately
came
before me for hearing. The applicant apparently abandoned its efforts
to proceed with the urgent application and on 22 April
2022 filed its
amended Notice of Motion in terms whereof a
rule nisi
be
issued calling upon the first and second respondents to show cause
why the following order should not be made final:
“
2.1
The applicant’s tacit hypothec held over the crops and movables
on Camp K and Camp L, Erf 17003, Hoopstad,
Free State Province
(“hereinafter referred to as “the Erf”) be
perfected by authorising the Third Respondent
to enter the Erf and to
attach the crops and movables which may be found thereon to the value
of R1 854 000.00 (One Million
eight Hundred and Fifty Four
Thousand Rands), as well as legal costs, and the reasonable costs of
harvesting and safeguarding the
crops and movables (if any),
estimated at R650 000 (Six Hundred and Fifty Thousand Rands);
2.2
That the first and Second Respondents are interdicted and restrained
from harvesting any crops, and removing
any movable assets, from the
Erf;
2.3
That the Applicant be authorized to timeously harvest and alienate
any crops on the Erf so attached by the
Third Respondent and that the
proceeds thereof, pending the finalization of this application and an
action referred to in paragraph
4, be paid into the trust account of
the applicant’s attorney with details….
2.4
In the alternative to paragraph 2.3 above, that the
Applicant be authorized to timeously harvest any crops on the
Erf so
attached by the Third Respondent and to keep same in storage at a
suitable facility pending the finalization of this application
and an
action referred to in paragraph 4;
2.5
That the First and Second Respondents be ordered to pay the costs of
this application;
3.
That the relief sought in prayers 2.1 -2.5 operate as an interim
interdict with immediate
effect pending the finalization of this
application and an action referred to in paragraph 4;
4
The Applicant is ordered to
institute its action for appropriate relief within 10 days of
the
date of this final order”
[4]
The application is opposed by the first and second respondents. The
first respondent
is Tikwe Farming (Pty) Ltd, a private company
situated at Hoopstad and the second respondent is the director of the
first respondent.
The application is opposed by the respondents on
the basis of the following preliminary points:
4.1
The application is defective on the basis of the lack of
locus
standi
of the deponent to the founding affidavit;
4.2
The application is premature as the applicant failed to comply with
the provisions of rule 41A(2)(a) for the
referral of the dispute to
mediation;
4.3
The applicant seeks an inappropriate remedy as the relief sought will
have no practical effect or result.
[5]
As to the merits of the application, the first and second respondents
contend that
the allegation that they are in arrears with the rental
under the lease agreement in respect of the property is disputed and
therefore
there is no tacit hypothec upon which the relief sought by
the applicant could be granted. The respondents furthermore argue
that
the applicant has failed to meet the requirement for the grant
of an interim interdict.
[6]
The founding affidavit by the applicant is deposed to by Matiro
Rebecca Ellen Mogopodi
(the “first deponent”), the
Municipal Manager of the applicant. The first deponent states that
she is duly authorised
to depose to the affidavit on behalf of the
applicant by virtue of her position as the accounting officer of the
applicant and
for being responsible for the administrative affairs of
the applicant. The first issue
in limine
is that the
application is defective because the first deponent lacks authority
to institute the proceedings on behalf of the applicant.
The
applicant furthermore filed a replying affidavit, deposed to by
Boitshoko Percival Dikoko, the Director: Technical Services
and
appointed in the position as Acting Municipal Manager (the “second
deponent”) of the applicant.
[7]
In the second deponent’s replying affidavit it is stated that
he is duly authorised
to depose to the affidavit on behalf of the
applicant by virtue of his position as the Acting Municipal Manager
who has been delegated
the authority to handle litigation proceedings
on behalf of the applicant. Furthermore, insofar as the municipal
manager’s
authority to represent the applicant in these
proceedings is concerned, the applicant during 2006 delegated certain
functions to
the office of the municipal manager as set out in
annexure R1 to the second deponent’s affidavit. On this basis,
the challenge
regarding the authority to represent the applicant, is
addressed by the applicant.
[8]
Mr Merabe, counsel on behalf of the first and second respondents and
with reference
to the matter
K2011148986
South Africa (Pty) Ltd v State Information Technology Agency SOC &
Others
[1]
argued that even though it is declared under oath that, as the
municipal or acting municipal manager, they are duly authorised
to
depose to the affidavits filed in this application, that does not
clothe the deponents with the necessary authority to bring
the
application on behalf of the applicant.
[9]
When a juristic person commences proceedings some evidence should be
placed before
the court to show that it has been resolved to
institute those proceedings.
[2]
Unlike an individual, a juristic person can only function through its
agents and take decisions by the passing of resolutions.
For this
reason, an attorney instructed to commence proceedings by an official
of a juristic person would not necessarily know
whether the juristic
person had resolved to do so, nor whether the necessary formalities
had been complied with regarding the passing
of the necessary
resolutions.
[3]
To prevent
unauthorised persons litigating under the guise of a juristic person,
a deponent must be duly authorised to institute
the proceedings in
question.
[4]
The responsibility
is heightened for public institutions.
[5]
[10]
Rule 6 of the Uniform Rules of Court provides that the applicant’s
authority to apply for
the relief (the applicant’s
locus
standi
)
should be established in the founding affidavit and not in the
replying affidavit. The deponent to the affidavit need not be
authorised by the party concerned to depose to the affidavit, it is
the institution of the legal proceedings that must be authorised
by
the applicant
[6]
.
[11]
The first and second respondents did not,
in
raising the aforementioned
point
in limine,
challenge the first and second deponents’ authority to depose
to the affidavits. The challenge is whether this application
was
instituted with the necessary authority from the municipal council of
the applicant and thus not instituted
ultra
vires
.
In
Griffiths
& Inglis (Pty) Ltd v Southern Cape Blasters (Pty) Ltd
[7]
an objection
in
limine
was
raised on the basis that there was no proper proof before court that
the application had been duly authorized by the applicant.
The court
rejected the contention by the applicant that it was implied in the
affidavit of the managing director, who was also
the majority
shareholder, and upheld the
point
in limine
to the effect that there was no proper proof that the application had
been duly authorised.
[12]
Corbett J (
as he then was
)
held as follows in
Griffiths
& Inglis (Pty) Ltd
“
In
the present case the founding affidavit makes no express mention of
authorization by the Company acting through its board of
directors.
The question of authority has been challenged in the opposing
affidavit, and thus the onus is upon the applicant
to show that the
application has been authorised by the directors of the company.
In as much as no contrary evidence had
been placed before the Court
by the Respondent, the minimum of evidence to use the words of
Watermeyer J in Malls’s case
will suffice.”
[8]
[13]
In
Pretoria
City Council v Meerlust Investments Ltd
[9]
it
was held as follows:-
“
The
question of authority having been raised, the onus is on the
petitioner to show that the prosecution of the appeal in this Court

has been duly autorised by the Council; that it is the Council which
is prosecuting the appeal, and not some unauthorized person
on its
behalf (cf. Mall (Cape) (Pty) Ltd. v. Merino Ko-operasie Bpk.,
1957
(2) S.A. 347
(C) at pp. 351-2).  As was pointed out in that
case, since an artificial person, unlike an individual, can only
function through
its agents, and can only take decisions by the
passing of resolutions in the manner prescribed by its constitution,
less reason
exists to assume, from the mere fact that proceedings
have been brought in its name, that those proceedings have in fact
been authorised
by the artificial person concerned.  In order to
discharge the above mentioned onus, the petitioner ought to have
placed before
this Court an appropriately worded resolution of the
Council.”
[14]
In the present matter the applicant has failed to prove that the
Municipal Council of the applicant
authorized the current proceedings
and therefore the
point in limine
raised by the first and
second Respondents should be upheld.
[15]
Despite the
point in limine
having been upheld, which
justifies a dismissal of the applicant’s application, I now
proceed to deal with the third point
regarding the appropriateness of
the relief sought by the applicant. I deem it in the interest of
justice and the parties concerned,
that this application for
perfection of its hypothec over crops and movables be dealt with.
[16]
On behalf of the applicant, it was argued that the applicant has the
right to attach the movables
found on the property, which consists of
an irrigation system on each of the two separate sections of land,
Camp K and Camp L and
any crops still to be found on the property.
Regarding the presence of the irrigation system, Mr. Naidoo, on
behalf of the applicant,
argued that the Sheriff will be tasked to
ascertain whether the irrigation system has been attached to the
land, and if so in which
way or whether it can be removed at all. The
Sheriff has the task and/or responsibility to decide whether the
irrigation system(s)
is a permanent fixture to the property.
[17]
On behalf of the first and second respondents, Mr. Merabe argued that
a lessor’s hypothec
only attaches to movable property present
on the leased premises or movables attached while in transit to a new
destination subsequent
to the removal from the premises.
[10]
It is common cause that the during April 2022 the first and second
respondents had already commenced with harvesting of the crops.
The
first and second respondents contend that at the time when this
matter was heard during June 2022, there were no crops and
movables
on Camp K and Camp L, accordingly the applicant’s application
has been overtaken by events.
[18]
Mr. Naidoo argued that even if most of the crops had been removed,
which fact is confirmed in
the report compiled by a land surveyor, C
J Nortjé of Matlhoko & Nortjé Geomatics of
Bloemfontein, filed subsequent
to the applicant’s replying
affidavit, any crops still available on the land may be attached. The
report by the land surveyor
is dated 17 May 2022.
[19]
The landlord’s tacit hypothec is a common law protection which
a landlord may implement
to collect arrear rentals from tenants and
thus provides a lessor with security for a lessee’s
arrears
[11]
. This provision
allows a landlord to sell the tenants immovable goods that are on the
leased premises if the tenant fails to pay
the rent.
[12]
The hypothec only becomes legally enforceable when a court order is
obtained. Before a court order is granted, the tenant may at
any time
remove the movable goods from the leased premises. The hypothec
lapses when the goods are removed from the leased premises,
whether
or not the person who removed such goods was aware of the
hypothec.
[13]
[20]
It was averred by the applicant that the lease agreement commenced on
1 September 2006 with a
termination date of 31 August 2016. The first
rental instalment amounted of R32 148.00, VAT inclusive and was
due on the date
of commencement of the lease agreement. The annual
rental payable by the first respondent was payable on the first day
of September
each year, to be calculated as per the schedule attached
to the agreement. The first respondent was furthermore liable to pay
the
rates and taxes for the year 2006 where after the applicant would
communicate the amount due and payable by the first respondent
for
the rates and taxes before the date upon which such amounts had to be
paid.
[21]
During 2008 the applicant resolved to extend the period of the lease
agreement by a further fifteen
years and to include an option to
purchase the leased premises. The addendum containing the amendments
were duly signed by the
representative of the applicant and the
second respondent, acting on behalf of the first respondent.  The
applicant contends
that the first respondent fell into arrears during
January 2007 by not effecting payment of the annual rent. Letters of
demand
in respect of Camp K and Camp L, respectively, were dispatched
to the first and second respondents by hand on the 21
st
and 29
th
April 2022, The applicant avers that the letters
of demand were ignored by the first and second respondents causing
the applicant
to cancel the lease agreement. The amount due in
respect of the lease agreement, in respect of both Camp K and Camp L,
is R 886 980.99
[22]
The first and second respondents dispute liability for any rental
under the lease agreements
and asserted that a decision was taken by
the applicant during 2008 to allow the applicant and other “emerging,
small, black
farmers”, to farm on the leased premises without
having to pay rent until their businesses have become sustainable.
The respondents
therefore deny the correctness of the statements
appended to the applicants founding affidavit pertaining to the
amount due in
respect of the arrear rentals.
[23]
On 18 April 2022, the first and second respondents’ attorney
addressed a letter to the
attorney acting on behalf of the applicant,
inter alia
, denying the amount claimed in respect of arrear
rental and that the applicant is therefore entitled to cancel the
lease agreement
on the basis of arrears due and payable. Furthermore,
it is alleged on behalf of the first and second respondents that a
significant
amount in respect of the rental claimed by the applicant
has prescribed.
[24]
First and second respondents therefore contend that the applicant
should have instituted action
proceedings based on the contents of
the letter from the first and second respondents’ attorney and
on the basis that the
calculation of the arrear rentals has been
placed in dispute prior to the launching of this application. The
relief sought will
have no practical effect or result because of the
fact that the remedy is requested upon misinformation that the crops
are still
available which, due to the lapse of time, has now become
moot.
[25]
In reply, the applicant contends that it is denied that a substantial
portion of the claim has
prescribed and, in any event, prescription
of any portion of the applicant’s claim is irrelevant for the
purposes of the
hypothec proceedings. It was furthermore argued that,
as is evident from the land surveyor’s report, crops are still
visible
from the photographs on a small portion of the leased
premises during May 2022.  The applicant intends an action to be
instituted
against the first and second respondent. The intended
action will be based upon a claim for payment of the arrear rental.
It is
contended in the replying affidavit that “the parties may
then fully ventilate their disputes regarding the claims for arrear

rental” during the trial.
[26]
From the contents of the statements appended to the founding
affidavit in respect of Camp K and
Camp L, it appears that an amount
of R 221 493.80 and an amount of R194 904.95, respectively,
had been in arrears since
2016. The amount due is now in excess of
R800 000.00 in respect of both camps.  It appears from the
contents of the statements
that, for several years, no rental was
levied. Only interest and interests on the property rates were
levied. It appears as if
rent was levied in the amount of R26 235.09
and R23 086.89 for Camp K and Camp L, only in respect of 2018 to
2019 and
for 2020, in the amounts of R 26 235.09 and R23 086.89
in respect of the two camps. It is therefore unclear whether the
rent
allegedly due was indeed levied as contended by the applicant as it
does not appear from the statements.
[27]
I point out that in view of the dispute of fact on the papers on the
material issue of whether
or not the first respondent was in arrears
with the rental, the contention that the first respondent was granted
an indulgence
on the basis of being a small and emerging farmer and
the issue of prescription of the rental claimed by the applicant,
which in
accordance with the “Plascon- Evans Rule”
(Plascon- Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[14]
must be resolved in
favour
of
the first and second respondent. In my view, due the fact that the
crops on the property have undoubtedly been removed from the

property, the applicant, in any event did not succeed in establishing
a tacit hypothec. Regarding the presence of the irrigation
system, I
cannot agree with the argument proffered by Mr. Naidoo referred to in
paragraph 16 above, that the Sheriff shall be tasked
to decide or
rule on the question whether the irrigation system is a permanent
fixture or not. The applicant will have to convince
the court that
same is not a permanent fixture in order to remove same in terms of
the hypothec it has.
[28]
There is no reason why the costs
should not follow the event.
ORDER:
[29]
In the result it is ordered that:
1.
The
application is dismissed with costs.
VAN
RHYN, J
On
behalf of the Applicant:
Adv
K NAIDOO
Instructed
by:
NGWANE

ATTORNEYS
BLOEMFONTEIN
On
behalf of the 1
st
and 2
nd
Respondent:
Adv J
MERABE
Instructed
by:
HORN

& VAN RENSBURG ATTORNEYS
BLOEMFONTEIN
[1]
Case Number 3996/2019 High Court, Free State Division, per Naidoo J
and Chesiwe J, delivered on 18 August 2020, [2020] JOL48167
(FB)
[2]
Mall (Cape) (Pty) Ltd v Merino Ko-operasie Beperk
1957 (2) SA 347
(C) at 351H -352A.
[3]
Mall at p 351-352; Pretoria City Council v Meerlust Investments
(Pty) Limited 1962 (1) SA 321 (AD).
[4]
FirstRand Bank v Fillis
2010 (6) SA 565
(ECP) paras 12 and 13.
[5]
Mohamed and Another v President of the Republic of South Africa and
Others
[2001] ZACC 18
;
2001 (3) SA 893
(CC) 2001 (7)
BCLR 685 (CC) at para
69.
[6]
Ganes v Telecom Namibia (Ltd)
2004 (3) SA 615
(SCA) at 624.
[7]
1972
(4) SA 249 (CPD).
[8]
at
252F.
[9]
1962
(1) SA 321
(AD) at 325.
[10]
“Mortgage and Pledge” LAWSA VOL 17, part 2 (2
nd
Ed 2008) para 439.
[11]
Eight Kaya Sands v Valley Irrigation Equipment 2003 (2) SA 459 (T).
[12]
Webster v Ellison
1911 AD 73
at 86.
[13]
Webster v Ellison (supra) at 88.
[14]
1983 (3) SA 623
(A) at 634E – 635C.