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[2021] ZAGPJHC 77
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Hill N.O and Another v Strauss (13523/2020) [2021] ZAGPJHC 77 (2 July 2021)
HIGH
COURT OF SOUTH AFRICA
GAUTENG DIVISION, JOHANNESBURG
(1)
REPORTABLE: Electronic
reporting only.
(2)
OF INTEREST TO OTHER
JUDGES: No.
(3)
REVISED: Yes
28
April 2021
Judge P.A. Meyer
Case
No: 13523/2020
In
the matter between:
TRACEY
HILL
N.O.
First
Plaintiff
NTSHENGENDZENI
ANTHONY MICHAEL TSHIVASE N.O.
Second
Plaintiff
and
RYNO
JOHANNES STRAUSS
Defendant/Excipient
Case
Summary
:
Practice – Exceptions - against alternative claims in
particulars of claim – whether pleading lacks averments
necessary to sustain a contractual cause of action for specific
performance – whether pleading is vague and embarrassing
in
respect of alternative enrichment claim.
JUDGMENT
MEYER J
[1]
The excipient, Mr Ryno Johannes Strauss, who is the defendant in
action proceedings
instituted by the first plaintiff, Ms Tracey Hill
N.O., and the second plaintiff, Mr Ntshengendzeni Anth ony Michael
Tshivase N.O.,
in their official capacities as joint liquidators of
Waenhuiskraal Boerdery CC, which corporation was placed under final
winding-up
by an order of this court on 1 February 2019 due to a
deadlock amongst its members, raises exceptions against the summons
of the
plaintiffs, asserting that a contractual claim for specific
performance pleaded by the plaintiffs lacks averments necessary to
sustain a cause of action and that their alternative enrichment claim
is vague and embarrassing.
[2]
By the nature of exception proceedings the correctness of the facts
averred in the
particulars of claim must be assumed (see for example
Trustees, Two Oceans Aquarium Trust v Kantey & Templer (Pty)
Ltd
2006 (3) SA 138
(SCA) paras 3-10;
Stewart & another v
Botha & another
[2008] ZASCA 84
;
(2008 (6) SA 310
(SCA) para 4).
According to the particulars of claim, Waenhuiskraal Boerdery CC (the
corporation), represented by Ms Ana
Sophia Kruger and Mr Hendrik
Frederik Kok, and Mr Jasper Lodewicus Janse van Rensburg (snr)
concluded a written sale of land in
instalments agreement (written
sale agreement) in respect of an immovable property, Remaining Extent
of Portion 101 of the Farm
Tweefontein 413 (the property). In
terms of the written sale agreement, Mr Janse van Rensburg (snr) sold
the property to
the corporation for a total purchase price of R1,8
million, which was payable in instalments over 60 months.
[3]
The corporation duly complied with its obligations in terms of the
written sale agreement.
It was given occupation of the property
and made payment of the agreed instalments. Mr Janse van
Rensburg (snr) consented
to the corporation constructing wedding
venue facilities and related improvements on the property. Such
improvements were
constructed on the property by the corporation in
anticipation of the registration of transfer of the property into its
name.
The construction of the improvements was completed and
paid for by the corporation by September 2015. The cost of the
improvements
paid for by the corporation was the sum of R604 279.00,
and the value of the property was increased by that amount. The
value
of the improvements was not included in the computation of the
purchase price for the property.
[4]
On 9 December 2015, the defendant and his wife, Ms Hannelie Strauss,
were registered
as members of the corporation. During March
2016, the members of the corporation orally agreed that the defendant
and Ms
Strauss should conclude an agreement of sale of the property
between themselves and Mr Janse van Rensburg (snr) in order for them
to obtain transfer and registration of the property into their
names. It was agreed that the corporation will pay the mortgage
bond instalments due by the defendant and Ms Strauss to a bank or
financial institution which agreed to finance the acquisition
of the
property by them. This arrangement will afford the corporation
a period of trading, which will enable it to secure
a mortgage loan
in due course and to obtain the passing of ownership of the property
from the defendant and Ms Strauss into the
corporation’s own
name. The defendant and Ms Strauss would be the registered
owners of the property until the corporation
was in a financial
position to obtain mortgage loan finance or until the mortgage loan
to be obtained by the defendant and Ms Strauss
had been fully paid
from the proceeds of a rental agreement to be concluded between the
corporation, the defendant and Ms Strauss.
The monthly rentals
payable by the corporation will be utilised to pay of their mortgage
loan. Thereafter the corporation
will take transfer of
ownership into its own name (the members’ agreement).
[5]
On 13 May 2016, Mr Janse van Rensburg (snr) passed away and Mr Jasper
Lodewicus Janse
van Rensburg was appointed as executor of his estate
(the executor). On 31 October 2016, the defendant and the
executor concluded
a written agreement of sale of the property for
the same purchase price in the amount of R1,8 million. This
sale agreement
was subject to the suspensive condition that the
defendant obtains approval of a mortgage loan in the amount of R1,8
million from
a registered bank or financial institution by no later
than 21 days from the date of signature of the sale agreement.
The
suspensive condition was fulfilled. Ownership of the
property was transferred and registered into the defendant’s
name
on 27 June 2017, when a covering mortgage bond was
simultaneously registered in favour of the bank from which a mortgage
loan was
procured for an amount of R1 440 000. On 1 August
2017, the defendant and the corporation, represented by Ms Kruger and
Ms
Strauss, concluded a written agreement of lease in respect of the
wedding venue premises for a period of five years with an option
to
renew for a further period of five years at a monthly rental of R20
000 (the lease agreement).
[6]
On 2 April 2018, all the members of the corporation - Ms Kruger, Ms
Strauss and the
defendant – concluded a written association
agreement (the association agreement). Therein, they confirmed
the members’
agreement and agreed to abide the unanimous
decision for the sale or transfer of the property to the corporation;
that no second
mortgage bond could be registered against the property
without the consent of the members; that the corporation must
purchase the
property within a period of five years; that the rental
payments by the corporation would be utilised to pay the mortgage
loan,
insurance and rates and taxes; that each member would be liable
for payment of the mortgage loan repayments in proportion to their
membership interest in the corporation; that each member would
receive a receipt in respect of such payments; and that at each
monthly members’ meeting a statement would be signed by the
members. In addition to the express terms of the members’
agreement and the association agreement, it was a tacit term of each
of them that the defendant would transfer ownership of the
property
to the corporation in consideration for the payment by the
corporation, and/or its members, of the outstanding amount
due to the
mortgagee.
[7]
The contractual claim against which several exceptions are raised,
reads as follows:
’
32.
In the premises, the members’ agreement and the association
agreement, upon their proper construction:-
32.1. bound the
Corporation and its members in terms of Section 44(4) of the Close
Corporation Act 69 of 1984;
and
32.2. do not
constitute a “
sale”
, “
exchange”
or
“
donation”
as envisaged in the definition of
“
alienate”
in terms of Section 1(1) of the
Alienation of Land Act 68 of 1981 (“the
Alienation of Land
Act&rdquo
;), and are accordingly not subject to the formalities in
respect the Section thereof
(sic)
.
33. The
Plaintiffs hereby tender to provide the necessary guarantee to pay
all outstanding amounts in respect
of the mortgage bond registered
over the property to the mortgagee, costs necessary to cancel the
mortgage bond, and transfer costs
and costs related thereto, in order
to transfer the property from the Defendant to the Corporation, to be
paid out upon registration
of transfer of the property to the
Corporation and the cancellation of the said bond, which guarantee is
to be presented within
30 days from the date an order is granted in
terms hereof.
34. In order to
give effect to the transfer of the property it would be convenient
and in the Plaintiffs’
best interest to appoint the Plaintiffs’
attorneys as the transferring attorneys.
35. In the
premises, the Plaintiffs’ are entitled to an order for specific
performance whereby the Defendant
be directed to sign all necessary
documentation to give effect to the members’ and association
agreements and effect to the
transfer of the property from the
Defendant to the Corporation.’
[8]
In its first exception, the defendant/excipient asserts that the
tacit term on which
the plaintiffs rely does not disclose the
necessary averments to sustain a cause of action in that it is
unclear: (a) who
was liable for the payment - the corporation
or its members or both – and, if both, what the detail of the
said payments
would be by each individual member as well as the
corporation, whichever is applicable; (b) whether the
outstanding amount
includes capital, interest, or both; and (c)
when and how and/or by whom the outstanding amount would be
calculated.
The exception raised is not that the
contractual claim as pleaded is vague and embarrassing. An
exception is a pleading and
the excipient is bound by the terms in
which it is framed or by the issues which it raises. (See
Jowell v Bramwell-Jones and others
1988 (1) SA 836 (W) at
898F-899A.)
[9]
The unclear aspects pertaining to the tacit term in this exception do
not amount to
the claim in question lacking the necessary averments
to sustain a cause of action. Nevertheless, I am of the view
that the
averments relating to the tacit term are sufficiently lucid
for the excipient to plead thereto. It is permissible to plead
in the alternative, such as that payment had to be made by either the
corporation or its members or by both the corporation and
its members
and the excipient should plead to each alternative. The phrase
‘outstanding amount due to the mortgagee’
is also not
ambiguous. It clearly includes the interest that accrued on the
capital amount advanced. The objection that it
is uncertain who
would determine the amount is equally unmeritorious. The
outstanding amount owing on a mortgage loan is
routinely provided by
banks or other financial institutions before they permit a mortgage
bond registered in their favour as security
for the payment of a
mortgage loan to be cancelled
pari passu
with registration of
transfer of ownership in the deeds registry.
[10]
The excipient asserts that the tacit term is contrary to the express
wording of the members’
agreement and the association
agreement, and that the purchase price is not fixed nor capable of
determination. However,
the assertion that the tacit term is
contrary to the express wording of both agreements is made baldly and
no express term is referred
to in the exception that points to any
such contradiction. The tacit term should not be considered in
isolation, but within
the context of the whole cause of action for
specific performance as pleaded. The tacit term does not relate
to a ‘purchase
price’, but rather the discharge of the
outstanding obligation owed to the mortgagee. Whatever
the outstanding
amount due to the mortgagee will be, is, as I have
mentioned, readily ascertainable in accordance with general
conveyancing practice.
[11]
The excipient asserts that this claim is further excipiable in that
the relevant provisions of
the members’ agreement and the
association agreement including the tacit term on which the
plaintiffs rely, on a proper interpretation
thereof, constitute an
‘alienation’ of land as contemplated in
s 2(1)
of the
Alienation of Land Act, and
that there was non-compliance with
that provision.
Section 2(1)
of the
Alienation of Land Act
provides
that ‘[n]o alienation of land after the commencement
of this Section shall, subject to the provisions of
Section 28
, be of
any force or effect unless it is contained in a deed of alienation
signed by the parties thereto or by their agents acting
on their
written authority’. In terms of
s 1
‘alienate’
in relation to land means ‘sell, exchange or donate’
irrespective of whether such sale exchange
or donation is subject to
a suspensive or resolutive condition and ‘alienation’ has
a corresponding meaning.
‘Land’ is defined as
including ‘any right to claim a transfer of land’.
[12]
The agreements pleaded, it is common cause, were not a ‘sale’
or ‘donation.
In
Hoeksma and another v
Hoeksma
[1990] ZASCA 41
;
1990 (2) SA 893
(A) at 897A-D, Nienaber AJA said the
following regarding the meaning of ‘exchange’ as
contemplated in the definition
of ‘alienate’ or
‘alienation’ in
s 1
of the
Alienation of Land Act:
‘”
Exchange
”
is not defined in the Act. It therefore bears its ordinary
meaning. In its most rudimentary form, exchange (barter,
‘ruil’, permutatio) marks a transaction between two
people whereby each gives to the other, as his own, one thing in
return for another. (De Groot Inl 3.31.6; Voet 19.4.1.)
Exchange differs from sale, historically its precursor and
now its
counterpart, in the nature of the reciprocal consideration which is
promised for the res sold or exchanged: with
sale the agreed
co-ordinate is essentially the payment of money; with exchange it is
the delivery or transfer of another asset.
But just as in sale,
the res sold must be an identified or identifiable asset (cf Clements
v Simpson 1971 (3) SA 1 (A) at 7C-G),
so too, in exchange, the
commodity exchanged must both be capable of proper identification. If
not, the transaction, whatever else
it might or might not be, would
not be an exchange.’
[13]
The excipient avers that the transaction entails an ‘exchange’.
The rights
exchanged between the parties, so the excipient asserts,
are the right of the corporation to receive transfer of the property
in
exchange for the right of the defendant to have his mortgage loan
paid off and the mortgage bond cancelled. The plaintiffs,
on
the other hand, contend that on a proper contextual interpretation of
the members’ agreement and the association agreement,
the
transaction is not an exchange; no identified or identifiable
commodity or asset was exchanged. The transaction, they
contend
is
sui generis
and is not an exchange. The
plaintiffs contend that payment of the mortgage loan by the
corporation and/or its members
does not constitute an exchange of an
identifiable or identified commodity or asset. They contend
that the obligation to
pay off the mortgage loan, has, on a proper
contextual interpretation of the agreements, always been the
obligation of the corporation
through
inter alia
its monthly
rental payments to the excipient for the wedding facility premises.
Thus, the issue between the parties, as far
as this exception is
concerned, turns on the interpretation of the relevant contractual
provisions, and more particularly whether
the agreements mark a
transaction between two parties whereby each gives to the other, as
its or his own, one thing in return for
another.
[14]
As was said by Brand JA in
Trustees, Bus Industry Restructuring
Fund v Break Through Investments CC & others
2008 (1) SA 67
(SCA) para 11-
‘
Because
the respondents chose the exception procedure – instead of
having the matter decided after the hearing of evidence
at the trial
– they had to show that the appellant’s claim is (not may
be) bad in law. In the present context
they therefore had to
show that clause 19.5 cannot reasonably bear the narrower meaning
contended for by the appellants (see eg
Lewis
v Oceanate (Pty) Ltd and Another
[1992] ZASCA 174
;
1992
(4) SA 811
(A) at 817F-G;
Vermeulen v
Goose Valley Investment (Pty) Ltd
[2001]
3 All SA 350
(A) para 7).’
The
same holds true in this case. The excipient needs to show that
the agreements relied upon by the plaintiffs cannot reasonably
bear
the meaning contended for by them.
[15]
In the past decade there have been significant developments in the
law relating to interpretation
of instruments (see
Natal Joint
Municipality Pension Fund v Endumeni Municipality
2012 (4) SA 593
(SCA) paras 18-26 and
Bothma-Batho Transport (Edms Bpk v S Bothma
& Seun (Edms) Bpk
2014 (2) SA 494
(SCA para 12). In
Endumeni
para 12, Wallis JA
inter alia
said this:
‘
The
“inevitable point of departure is the language of the provision
itself”, read in context and having regard to the
purpose of
the provision and the background to the preparation and production of
the document.’
And in in
Bothma-Batho
para 12, Wallis JA said that-
‘
.
. . the process of interpretation does not stop at a perceived
literal meaning of those words, but considers them in the light
of
all relevant and admissible context, including the circumstances in
which the document came into being. The former distinction
between permissible background and surrounding circumstances, never
very clear, has fallen away. Interpretation is no longer
a
process that occurs in stages but is “essentially unitary
exercise”.’
It
is also trite that a sensible meaning is to be preferred to one that
leads to insensible or unbusinesslike results or undermines
the
apparent purpose of the document:
Endumeni
para 12.
[16]
The excipient has not shown that the plaintiffs’ claim is bad
in law. It has not
been established that the agreements cannot
reasonably bear the meaning contended for by the plaintiffs. At
least two possible
meanings are available on the language used in the
agreements within their context and within the broader context
averred in the
particulars of claim. The agreements should not
be interpreted without the benefit of evidence relating to the full
factual
matrix at the trial. (
Cf. Belet Cellular v MTN
Service Provider
(936/2013)
[2014] ZASCA 181
(24 November 2014)
paras 10-12.)
[17]
A plaintiff must set out only the
facta probanda
, or primary
factual allegations, and not the
facta probantia
, which are
the secondary facts upon which the plaintiff will rely at the trial
in support of his primary factual allegations.
In
Novartis SA (Pty) ltd v Maphil Trading (Pty) Ltd
2016 (1) SA
518
(SCA) para 28, Lewis JA said that-
‘
.
. . [a] court must examine all the facts – the context –
in order to determine what the parties intended. And
it must do
that whether or not the words of the contract are ambiguous or lack
clarity. Words without context mean nothing.’
And in
Pholile
Business Solutions CC v Sidas Security Guards (Pty) Ltd
(A5051/14)
[2015] ZAGPPHC 510 (12 June 2015) para 16, Victor J, who wrote the
unanimous judgment of the full court, said:
There
is a further principle which is apposite as a result of the evolving
jurisprudence on interpreting contracts within context.
The
context of an agreement is relevant and the evidence about the
Mpumalanga contract as contended for by the Appellant
should not be
curtailed at exception stage.’
[18]
This conclusion renders it unnecessary for me to consider the further
aspect of this exception,
which is whether the agreements on which
the plaintiffs rely fail to comply with the requirements of
s 2(1)
of
the
Alienation of Land Act if
it is held that the transaction
constitutes an ‘alienation of land’ as contemplated in
that section and read with the
definitions in
s 1.
[19]
I now turn to the exception raised by the excipient against the
plaintiffs’ alternative
enrichment claim on the basis that it
is vague and embarrassing. In
Jowell
at 902C-903A,
Heher J said this:
‘
When
the lack of particularity relates to mere detail, the remedy of the
defendant is to plead to the averment made and to obtain
the
particularity he requires:
(i)
either by means of discovery/inspection of
document procedure in terms of the Rules; or
(ii)
by means of a request for particulars for
trial of those particulars which are strictly necessary to enable the
defendant to prepare
for trial.
The framers of the Rules have
provided different remedies in
Rules 18
and
23
. The presumption
is that they are not co-extensive, but designed to deal with
different situations.
Rule 18
is restrictive and sets out the
bare minimum required of a factual averment, while
Rule 23
goes to a
vagueness and embarrassment which strikes at the whole cause of
action pleaded. As Cloete J said in
Sasol Industries (Pty) Ltd t/a
Sasol 1 v Electrical Repair Engineering (Pty) Ltd t/a L H Marthinusen
1992 (4) SA 466
(W) at 469J—470, “. . . if a pleading
both fails to comply with
Rule 18
and is vague and embarrassing, the
defendant has a choice of remedies” (ie to proceed by way of
Rule 23
or
Rule 30).
I agree with counsel that the crucial
distinction between
Rules 23
and
18
may be summarised as follows:
(a)
an exception that the pleading is vague
and embarrassing may only be taken when the vagueness and
embarrassment strikes at the root
of the cause of action as pleaded;
whereas
(b)
Rule 30
may be invoked to strike out
the claim pleaded when individual averments do not contain sufficient
particularity; it is not necessary
that the failure to plead material
facts goes to the root of the cause of action.
It is therefore incumbent upon a
plaintiff only to plead a complete cause of action which identifies
the issues upon which the plaintiff
seeks to rely, and on which
evidence will be led, in intelligible and lucid form and which allows
the defendant to plead to it.
The attacks mounted by the
defendants that the particulars of claim are vague and embarrassing
cannot found on the mere averment
that they are lacking in
particularity. This might, depending on the circumstances,
allow an application in terms of
Rule 30.
An allegation that a
pleading is vague and embarrassing is far more serious than a
complaint about particulars.
Furthermore, in approaching these
exceptions, I shall bear in mind the following general principles:
(a)
minor blemishes are irrelevant;
(b)
pleadings must be read as a whole; no
paragraph can be read in isolation;
(c)
a distinction must be drawn between the
facta probanda
,
or primary factual allegations which every plaintiff must make, and
the
facta probantia
,
which are the secondary allegations upon which the plaintiff will
rely in support of his primary factual allegations. Generally
speaking, the latter are matters for particulars for trial and even
then are limited. For the rest, they are matters for
evidence;
. . .’.
[20]
In
Levitan v New Haven Holiday Enterprises CC
[1990] ZASCA 107
;
1991 (1) SA 297
(C) at 298A, Conradie J said that-
‘
[i]t
has been stated, clearly and often, that an exception that a pleading
is vague or embarrassing ought not to be allowed unless
the excipient
would be seriously prejudiced if the offending allegations were not
expunged’.
[21]
The claim is thus formulated in the plaintiffs’ particulars of
claim:
’
37.
At all material times the Corporation was a
bona
fide
possessor and/or a lawful occupier
of the property and/or the premises and accordingly held the property
precario
.
38. On 27 June
2017 being the date when the Defendant acquired registration of
transfer of the property, the Defendant
acquired the value of the
aforesaid improvements without making payment in respect of such
improvements, since such were not included
in the purchase price on
the basis that the Corporation was expected to take registration of
transfer in due course. As a
result of the members’
agreement and the association agreement being found unenforceable as
a consequence of the Plaintiff’s
[claim for specific
performance] not being upheld, but for the permanent attachment to
the soil of the improvements, there would
be an absence of a
causa
dandi
,
alternatively
a
causa retindendi
. For the
improvements.
39. In the
circumstances, the Defendant has been enriched at the expense of the
Corporation in the amount of R604
279.00, constituting the amount by
which the value of the property increased as a result of the said
improvements alternatively
constituting the cost of the said
improvements to the property.
40. The
improvements constitute necessary and/or useful improvements to the
property.
41. Despite
demand alternatively summons constitutes demand, the Defendant has
failed and/or neglected to make
payment to the Plaintiffs of the
amount of R604 279.00 or any other amount whatsoever for which the
Defendant is liable as the
owner of the property at the time that
this Claim is made.’
[22]
The excipient contends that the enrichment claim is vague and
embarrassing in that it is only
pleaded in the particulars of claim
that the corporation constructed wedding venue facilities and related
improvements on the property
after it had concluded the written sale
agreement with the late Mr Janse van Rensburg (snr) on 14 August 2013
and was given occupation
of the property and that the construction of
such improvements was completed by September 2015 at a cost of R604
279.00 to the
corporation with a concomitant increase of the value of
the property in that amount, without pleading what the improvements
comprise
of, which makes it not possible for the excipient to infer
why the plaintiffs aver that they constitute necessary and/or useful
improvements to the property. This exception, in my view, is
also unmeritorious.
[23]
The exception fails to distinguish between the
facta probanda
,
which the plaintiffs have pleaded, and the
facta probantia
upon which the plaintiffs will rely at the trial in support of their
primary factual allegations pleaded in their particulars of
claim.
The ‘full nature and extent of the improvements’
and their composition in relation to ‘material’,
‘labour’
and ‘other expenses’ do not constitute
facta
probanda
. The lack of particularity relates to mere
detail. The excipient’s remedy is to plead to the
averment that the
improvements constitute necessary and/or useful
improvements to the property and to obtain the particularity he
requires either
by means of discovery/inspection of document
procedure in terms of the Uniform Rules of Court and/or by
means of a request
for particulars for trial of those particulars
which are strictly necessary to enable him to prepare for trial.
The plaintiffs
only needed to plead a complete cause of action which
identifies the issues upon which they seek to rely, and on which
evidence
will be led. This they have done.
[24]
This attack mounted by the excipient that the plaintiffs’
enrichment claim is vague and
embarrassing cannot be founded on the
mere contention that the enrichment claim pleaded comprises
individual averments that do
not contain sufficient particularity
pertaining to the nature of the improvements. An exception that
the pleading is vague
and embarrassing may only be taken when
the vagueness and embarrassment strikes at the root of the cause of
action, which
is not the case here. I also bear in mind that a
pleading must be read as a whole; no paragraph can be read in
isolation;
and that minor blemishes are irrelevant. It has not
been established that the excipient would be seriously prejudiced if
this exception is not upheld,
[25]
In the result the following order is made:
The
exceptions are dismissed with costs.
P.A. MEYER
JUDGE
OF THE HIGH COURT
Judgment:
02 July 2021
Heard:
28 April 2021
Excipient’s
Counsel:
Adv A Lamprecht
Instructed
by:
GJ Vonkeman Attorneys, Vryheid
C/o Adams
Attorneys, Northcliff, Johannesburg
Plaintiffs’ Counsel:
Adv HP van Nieuwenhuizen
Instructed
by:
Eugene Marais Attorneys, Bryanston, Johannesburg
C/o Mervin
Smith Attorneys, Johannesburg