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[2022] ZAMPMBHC 44
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Mpakeni Mlegeni Community Property Association v Castellazzo (Pty) Ltd and Another (4726/2021) [2022] ZAMPMBHC 44 (27 June 2022)
THE
HIGH COURT OF SOUTH AFRICA
MPUMALANGA
DIVISION, MBOMBELA MAIN SEAT
CASE
NO: 4726 / 2021
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED.
27
June 2022
In
the matter between:
MPAKENI
MLEGENI
COMMUNITY
APPLICANT
PROPERTY
ASSOCIATION
Registration
no. CPA/12/1329/Z
And
CASTELLAZZO
(PTY)
LTD
FIRST RESPONDENT
Registration
no. 2018/5536838/07
MONTE
GRAPPA (PTY)
LTD
SECOND RESPONDENT
Registration
no. 2015/117195/07
JUDGMENT
RATSHIBVUMO
J:
Delivered:
This
judgment was handed down electronically by circulation to the
parties' representatives by email. The date and time for hand-down
is
deemed to be 10H00 on 27 June 2022.
[1]
This is an
application for an order declaring a lease agreement signed between
the Applicant and the First Respondent, dated 23
November 2020 in
respect of four listed properties, declared null and void. Further
relief sought is an order for the First and
the Second Respondent
(the Respondents) to vacate these properties with immediate effect
with no claim against the Applicant in
respect of damages suffered
and/or expenses incurred resulting from the signing of the said lease
agreement. The Applicant further
seeks a relief in which the First
Respondent is ordered to reconstruct thirty-eight compound houses
demolished or damaged by it
after occupation of the properties, or
compensate it for such reconstruction within 180 days from the date
of the court order.
[2]
The two
respondents oppose the application and there is a counter application
by the Second Respondent in which it seeks an order
compelling the
Applicant to sign all documents necessary to successfully effect
registration of a lease agreement against the two
title deeds, being
T766/2013 and T753/2013. In case the Applicant refuses or neglects to
comply within 48 hours of being presented
with the necessary
documents, the Second Respondent further seeks an order authorising
and directing the Sheriff of this Court
to attend to the signing of
the said documents in order to effect the registration of lease
agreement against the title deeds.
The Applicant opposes this counter
application.
[3]
Following is
the background that culminated in the application and counter
application before the court. The Applicant and the First
Respondent
entered into a lease agreement which was signed on 21 and 23 November
2020 respectively. In line with the provisions
in the lease
agreement, the Second Respondent was nominated by the First
Respondent as an alternative entity to serve as the lessee.
Around
May 2021, the Applicant approached
the Second Respondent
with a proposal to have certain provisions of the lease agreement
amended. After exchanging a few correspondences
and meetings in
between, the request for amendments was finally not acceded to by the
Second Respondent. The Applicant then informed
the Second Respondent
that an application to declare the lease agreement null and void
would be launched in that the Applicant
did not have consensus with
the First Respondent at the time it was signed. For that reason, the
Applicant contends that there
is no valid lease agreement in
existence. The current lease agreement should be declared null and
void as per notice of motion.
[4]
It is
important that the following clause of the disputed lease agreement
be laid bare right from the beginning as it is determinative
of the
dispute between the parties. Clause 23 thereof provides,
“
WHOLE
AGREEMENT
23.1
This lease constitutes the entire agreement between the parties.
23.2
Neither party relies in entering into this agreement on any
warranties, representations, disclosures of opinion which have
not
been incorporated into this agreement as warranties or undertakings.
23.3
No variation or consensual cancellation, save for
de
factu
early termination, of this agreement shall be of any force or effect
unless reduced to writing and signed by both parties.”
[1]
[5]
Although
clause 3.1 provides that the Lessor was awarded the property in terms
of the Land
Restitution of Land Rights Act, 22 of 1994
, and
transferred to the Lessor, it is important to note that the
application is not premised on this Act. As a result, this judgment
should not be construed as evaluating the compliance or otherwise
with the provision of this Act.
[6]
The deponent
to the founding affidavit, Mr. R Khoza, is the same person who signed
the lease agreement on behalf of the Applicant
on 21 November 2020,
in his capacity as the Chairperson of the Applicant. He went into
great length giving details as to why the
Applicant could not have
had the consensus with the First Respondent, to enter into a lease
agreement in the format it was at the
time he signed it. According to
him, the idea of leasing out the Applicant’s farms was first
canvassed with its Executive
Committee in a meeting held on 10
October 2020, by a certain Mr. S Mamba from the Mpumalanga Farmers
Association, and the Executive
Committee was interested.
[7]
At the
beginning of November 2020, a copy of the draft lease agreement,
apparently prepared by the First Respondent and/or its legal
representative was made available to the Chairperson and the
Secretary of the Applicant, who in turn made it available to the
Applicant’s legal representative, Mr. Mazibuko of ME Mazibuko
Inc. On 20 November 2020, members of the Board of the Applicant
attended a meeting with the First Respondent’s legal
representative, Ms. Z van Rensburg of Van Rensburg Incorporated. It
was in this meeting that the First Respondent’s legal
representative explained the clauses in the draft lease agreement to
the Applicant’s Board members. The Applicant’s
Chairperson laments the fact that the copies of the draft were not
made available to each and every Board member in attendance by Ms.
van Rensburg. This according to him, marked the beginning of
lack of
consensus.
[8]
Following this
meeting, Ms. van Rensburg forwarded an amended copy of the draft
lease agreement by email to the Applicant’s
Chairperson, the
Secretary and the Applicant’s legal representative, Mr.
Mazibuko on 21 November 2020. It was on this day
that the Applicant’s
Chairperson proceeded to sign the amended lease agreement. From the
founding affidavit, a picture gets
gloomy as to what happened after
the amended lease agreement was sent to him, before he signed it on
21 November 2020. He however
makes it clear that the other members of
the Applicant’s Board never had sight of the amended lease
agreement that he signed
on 21 November 2020, except him and the
Secretary. He claims not to have had time to apply his mind before
signing the amended
lease agreement.
[9]
The
picture gets clearer when one reads the answering affidavit deposed
to by Mr. IJ Giuricich who was mandated by the two respondents
to
oppose the application. The amended lease agreement was sent by the
Ms. van Rensburg to Mr. Mazibuko on 21 November 2020 at
14h07. At
14h45, Mr. Mazibuko responded having made two amendment proposals
which were rather cosmetic in that they dealt with
just typos –
one where a reference was made to “lessee” instead of
“lessor” and another which was
to remove “the”
before the word “behalf”. No suggestions were made
regarding removal or addition of any
clause in the amended draft. I
guess the first proposal was rather explained to the Mr. Mazibuko
that it was intended to be a lessee
and not a lessor. The second
suggestion must have been accepted by Ms. van Rensburg, who removed
“the” from the final
draft which was signed by the
Applicant on that day.
[2]
[10]
The
significance of the above is to illustrate that before the
Chairperson of the Applicant could sign the lease draft, it had been
seen by the Applicant’s legal representative who gave it thumbs
up subject to the corrections he proposed. A document was
attached to
the founding affidavit purporting to be an extract from the
Applicant’s Board meeting held on 20 November 2020,
signed by
the Board’s Secretary. The extract confirms that the Board
resolved to authorise its Chairperson to sign the lease
agreement
between the Applicant and Castellazzo (the First Respondent). It
further explained that the lease agreement was explained
to the
Board, the contents of which they understood and accept. The
Chairperson was also authorised to “ratify all actions
preceding.”
[11]
The second leg
of the Applicant’s application pertains to the destruction of
38 compounds in the leased properties of which
the Applicant lays the
blame on the Second Respondent. The Applicant demands that the
compounds be reconstructed or that it be
compensated for the
reconstruction thereof. The Respondents oppose the application in
that the destruction of the compounds had
nothing to do with them.
According to the Respondents, the destruction of the compounds was a
direct result of the Applicant fulfilling
its obligations as per
lease agreement, to have all the occupants of these compounds evicted
from the leased property before the
occupation. The compounds’
occupants are said to have removed items such as the doors and
windows which they claimed belonged
to them, before moving out. It
was the Second Respondent who confronted some of them and confiscated
these items and informed the
Applicant to come and collect, which it
did. The Respondents oppose this part of the application for reason
that there is dispute
of fact.
[12]
In
Estate
Breet v Peri-Urban Areas Health Board
[3]
the Appellate Division held,
“
The
basic fallacy underlying appellant's contention is what I may call
the apotheosis of
consensus
.
According to this approach certain negative aspects of contract are
given a positive effect.
Consensus
is
normally evidenced by offer and acceptance. But a contract may be
concluded without offer and acceptance other than pure
fictions
imported into the transaction for doctrinal reasons. Nor does
every accepted offer constitute a contract. The absence
of
consensus
may
render an ostensible contract void, but it does not follow that
whenever two or more persons are in agreement they contract
with each
other. Many legal situations arise in which
consensus
was
a
sine qua non
to
validity but cannot be said to be contractual.”
[13]
The approach
by the Applicant raises important questions pertinent to the law of
contract. The first question is whether the institution
that mandates
and authorises its Director or Chairperson as the case may be, to
negotiate and enter into a contract, retains the
powers to still
negotiate the terms of the contract with the other party even after
mandating a representative to do so. The second
question is whether
the other contracting party is obliged to inquire if the person
representing the institution with whom a contract
is being negotiated
is updating and getting approval over the newly negotiated terms. In
other words, should the other contracting
party be concerned with
whether the mandated representative fully informed the institution he
represents of the final negotiated
contract. These questions are
relevant in that the Applicant’s Chairperson received a mandate
and authorisation to sign the
lease agreement on its behalf on 20
November 2020. He was sent an amended draft to the lease agreement by
email from the First
Respondent’s legal representative on 21
November 2020 and signed it later the same date without further
consulting the Applicant’s
Board.
[14]
D
Hutchison
et
al
remarks as follows in their book,
The
Law of Contract in South Africa
,
[4]
“
Since
a juristic person has no physical existence, it can act only through
its organs or representatives. The latter are always
natural persons.
Only those natural persons who have the necessary power or authority
to represent the juristic person can bind
it by performing juristic
acts on its behalf. For example, where ABC (Pty) Ltd, a company,
wants to buy a piece of land on which
to erect an office block, a
deed of sale has to be drawn up and signed by the parties to the
contract. As the company is an immaterial
entity that cannot
physically sign a document, the deed will be signed by one or more
directors or officers of the company in a
representative capacity.”
[15]
The
Applicant referred this court to a judgment of
Jordan
and Another v Farber
[5]
where the court set aside a lease agreement citing
inter
alia
,
lack of consensus. The facts of that case are clearly
distinguishable. In that case the applicants sought a declarator that
the
lease agreements concluded between the first applicant and the
respondent were void (alternatively cancelled). They also sought
the
eviction of the respondent and any member of his family living with
him, from the farm at the centre of the dispute. The applicants
were
co-owners of the farm. When they ran into financial difficulty, they
consulted the respondent, a practising attorney, to defend
an action
against them. The respondent then indicated that he was interested in
leasing the farm, and that he would negotiate with
the Land Bank
which was suing the applicants. He then took occupation of the farm
in terms of written agreements of lease which
were drawn by him in
his capacity as the attorney for the applicants on the one hand and
in his personal capacity on the other
hand.
[16]
After
analysing what constitutes public policy in line with the decision of
Barkhuizen
v Napier
[6]
,
the
court declared the lease agreement null and void for reason that it
was
contra
bonos mores.
The
court held that the respondent was obliged to inform the applicants
of their right to seek independent legal advice now that
he was
conflicted. The court did mention though, that the fact that the
respondent was disputing the rental amount that was in
the lease
agreement signified that the parties also lacked consensus. The
finding that the agreement was null and void was not
based on the
parties’ lack of consensus. It found that their lack of
consensus simply made the agreement unenforceable.
[7]
[17]
Whereas it is
a material mistake that precludes
consensus
ad idem
between
the parties, in this application there is no suggestion that the
Applicant laboured under a mistake of whatever nature,
factual or
legal. The Applicant argues that its dissensus is rooted on the fact
that the draft lease agreement it had at the time
it authorised its
Chairperson to sign, differs from the one he finally signed. This
argument is not convincing for a number of
reasons. According to the
founding affidavit, all Board members of the Applicant attended a
meeting with the First Respondent’s
legal representative, with
whom they expressed their views while she took time to clarify
clauses in the draft. The Applicant’s
Board members also signed
a resolution mandating its Chairperson to sign the lease agreement.
[18]
I
am of a view that once the Chairperson was mandated as such, he held
the powers to negotiate and sign the lease agreement without
having
to report back to the Board about further clauses added or removed
from the draft following the negotiations and legal advice.
If there
was such a duty on him, the resolution would have expressly made
provision for that. Even if he was obliged to get further
or fresh
mandate; failure to get that mandate does not take away consensus in
that it cannot be expected for the Second Respondent
to have known
that the Chairperson was not fully mandated by his Board, especially
with the express provision to the contrary in
the lease itself.
[8]
The Applicant or its Board could not have mandated its Chairperson to
sign the lease agreement in its draft format without any
amendment.
There would have been a need for it to hire a legal representative.
The role of a legal representative was to give advice
which could
lead to the amendment of the draft as it happened in this case. The
Chairperson already had the mandate long before
the proposals from
its lawyer were made known.
[19]
As pointed
above, the Applicant appointed a legal representative who was to
advise it regarding the draft lease agreement. The First
Respondent’s
legal representative liaised directly with him in sending the amended
draft so that he could advice his client
the Applicant, which he did.
The amended draft was given thumbs up by the Applicant’s legal
representative on 21 November
2020 and on the same date, its
Chairperson signed it. Although the first draft originated from the
First Respondent’s legal
representative, it was the Applicant
who signed it first and the First Respondent only signed some two
days later; making the Applicant
to have made an offer to the
Respondent.
[20]
For two days,
the offer stood unaccepted by the First Respondent, and the
Applicant’s Chairperson could have withdrawn it
if he wanted
to. Two highly responsible members of the Board, being the
Chairperson and the Secretary, had full insight of the
amended draft
sent by the First Respondent’s legal representative and the
proposed amendments from their own legal representative.
These are
the people who also had insight of the first draft and were present
in the meetings preceding the signing of the amended
lease agreement.
They surely knew very well what the Applicant wanted and if there was
anything amiss in the final draft, I have
no doubt that they would
have brought it to the attention of the Board. It would appear they
saw nothing worth of reporting to
the Board at the time.
[21]
The conduct of
the Applicant after the amended lease agreement was signed does not
display dissensus between it and the Respondents.
It is common cause
that several months after the signing of the amended lease agreement,
the Applicant’s legal representative
wrote to the Respondents
demanding payment of the rent in with the provisions of the lease
agreement. This was specific performance
demand. One can only demand
specific performance if one believes the contract to be valid.
[22]
What actually
led the Applicant to launch this application was the failed attempts
around May 2020 to have the lease agreement amended.
It was only
after the Second Respondent rejected those attempts that this
application was launched. I agree with the Respondent’s
submission to the effect that it is only a valid agreement that can
be amended. If the agreement was void
ab
initio
,
the Applicant should have gone the route to have it declared as such
than to seek its amendment first. For these reasons, the
application
to declare the lease agreement null and void is bound to fail. The
eviction relief would consequently face the same
fate.
[23]
As
for the application to order the Respondents to reconstruct the
damaged compounds and the declaratory relief that comes with
it, it
is clear that there is dispute of facts on how and who damaged the
compounds. These disputes cannot be resolved on papers
and the court
cannot find in favour of the Applicant notwithstanding the
Respondent’s dispute. As Harms DP observed in the
judgement of
the
National
Director of Public Prosecutions v Zuma
[9]
,
“
Motion
proceedings, unless concerned with interim relief, are all about the
resolution of legal issues based on common cause facts.
Unless the
circumstances are special they cannot be used to resolve
factual issues because they are not designed to determine
probabilities. It is well established under the
Plascon-Evans
rule that where in motion proceedings disputes of fact arise on the
affidavits, a final order can be granted only if the facts
averred in
the applicant's (Mr Zuma's) affidavits, which have been admitted by
the respondent (the NDPP), together with the facts
alleged by the
latter, justify such order. It may be different if the respondent's
version consists of bald or uncreditworthy
denials, raises fictitious
disputes of fact, is palpably implausible, far-fetched or so clearly
untenable that the court is justified
in rejecting them merely on the
papers.”
[24]
Given the
exchanges that took place between the Applicant and the Second
Respondent through their legal representatives over the
subject,
prior to this application, the Applicant should have foreseen that
there was or would be a dispute of fact on who and
how the compounds
were damaged. The court cannot resolve a dispute without making a
credibility finding. Credibility finding is
not possible on papers.
For this reason, this relief cannot be granted.
[25]
The counter
application is premised on the provisions of the lease agreement.
Clauses 6.2 and 14.10 of the said document provide,
“
The
Lessee (First Respondent), shall at its cost and endeavours, obtain
the consent of the Minister to register the lease agreement
against
the title deed of the property.”
And
“
The
Lessor, in the registration of this lease agreement, shall consent to
the removal of certain redundant conditions in the title
deed.”
[26]
The lease
agreement does not define who the Minister is. It however appears
from the wording of this clause that the said Minister
has the final
say on whether to allow the registration of the lease against the
title deed. Perhaps the visitation of the Applicant’s
constitution and the Land
Restitution of Land Rights Act can
shed
some light. It is however irrelevant for determination of this
application as the reasoning appears nowhere in the papers.
What
appears plain from the affidavits is that the Minister is an
interested party. The court would as such have reservations in
granting any order involving a government Minister who has not been
cited as a party.
[27]
Further to
this, the obligations pertaining to the Applicant regarding this
registration is only in giving consent to the removal
of certain
redundant conditions in the title deed. As it stands, the court has
not been made aware of “certain redundant
conditions”
that could be in the title deed currently. Even if there were, the
relief sought is not in forcing the Applicant
to agree to the removal
of these, but something else not provided for in the lease agreement.
In fact, the reading of these clauses
places the burden on the First
Respondent to obtain the consent from the Minister to register the
lease against the title deed,
at its cost. The application to force
the Applicant to sign all the documents to have the lease agreement
registered against the
title deed is misdirected and not in line with
the lease agreement.
[28]
I have also
noted that the First Respondent claimed that being cited in the
application was a misjoinder for reason that it has
since nominated
the Second Respondent as a lessee. There is no merit in this argument
given the fact that the First Respondent
is the person who entered
into an agreement with the Applicant and that the Second Respondent
is a member of the First Respondent.
This is evidenced by the fact
that one affidavit deposed to by one person on behalf of the two
Respondents was presented in opposing
the application. In fact,
failure to cite the First Respondent as a party would have been a
non-joinder. It was rather appropriate
to seek an order against the
two, jointly and severally.
[29]
As for costs,
each party scored some limited success in opposing the application
and the same should reflect in the costs order.
I think this is an
appropriate case in which each party should pay its own costs.
[30]
For the
reasons mentioned above, I make the following order.
[30.1]
The application is dismissed.
[30.2]
The counter application is also dismissed.
[30.3]
No cost order is made.
TV
RATSHIBVUMO
JUDGE
OF THE HIGH COURT
FOR
THE APPLICANT ADV.
J BOSHOFF
INSTRUCTED
BY NTULI
& MANANA ATTORNEYS
MBOMBELA
FOR
THE RESPONDENT ADV.
GF HEYNS
INSTRUCTED
BY
SEYMORE
DU TOIT &
BASSON
ATTORNEYS
MBOMBELA
DATE
HEARD 24
MAY 2022
JUDGMENT
DELIVERED 27
JUNE 2022
[1]
See p. 73 of the paginated bundle.
[2]
See p. 68 of the paginated bundle, para 14.1 of the Lease Agreement.
[3]
1955
(3) SA 523 (A)
at 532E-F.
[4]
Third Edition, 2017, Oxford, at Chapter 5.4 p.6 of 9.
[5]
(1352/09)
[2009] ZANCHC 81
(15 December 2009),
[2010]
JOL 24810
(NCB)
[6]
2007 (5) SA 323 (CC)
[2007] ZACC 5
; ,
2007
(7) BCLR 691
(CC)
[7]
See
Jordan
and Another v Farber (supra)
at para 33 where the court said, “
If
I am wrong to conclude that the written contracts were validly
cancelled, still the contract cannot be enforced for the following
reasons: 1. if the version of the respondent that he has at all
material times laboured under the impression that amount of rent
is
R100 000 per annum , payable in R50 000 instalments, is to
be believed it cannot be said that there was any meeting
of the
minds between the parties; and 2. further, the fact that the
according to the respondent states (
sic
)
it was the intention of the parties to conclude one agreement in
respect of livestock and the farm whereas the applicants state
the
contrary indicates that there was no consensus. For these reasons I
find that the contract should be declared
void
ab initio
.”
[8]
See paragraph 4 of this judgment read with the Board’s
resolution mandating the Chairperson to sign the lease agreement.
[9]
[2009] ZASCA 1
;
2009
(2) SA 277
(SCA)
at para 26. See also
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
1984
(3) SA 623 (A)
634
– 635.