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[2021] ZAGPPHC 449
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Wearine Aggregates (Pty) Ltd v Africa Best' Minerals 146 Limited and Others (21468/ 2021) [2021] ZAGPPHC 449 (6 July 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION
,
PRETORIA
CASE
NUMBER: 21468/2021
In
the
matter
between:
WEARNE
AGGREGATES (PTY) LTD
APPLICANT
and
AFRICA
'
S
BEST MINERALS 146 LIMITED
(IN
LIQUIDATION) RESPONDENT
PETRUS
JACOBUS CORNE VAN STADEN N.O SECOND
RESPONDENT
JOHANN
A
NINI
MA
HANYLE
N.O
.
THIRD
RESPONDENT
THE
UNKNOWN PURCHASER OF THE PROPERTY
FOURTH
RESPONDENT
OF
PORTIONS OF THE FARM VARKENSLAAGTE
119
JUDGMENT
TLHAPI
J
[1]
This is an application brought on
urgency in which the following relief is
sought:
"
2.
Ordering the respondents to refrain from selling/ processing /
loading/ removing the processed aggregate until the parties have
reached an agreement
on
the
value
that was added by the applicant by processing the processed
stockpiles of aggregate;
3.
Ordering
the first to third
respondents
to preserve the
proceeds
of
the
sale
of property/ portion of the farm
Varkenslaagte 119 until the parties have reached an agreement on the
value that was added by the
applicant by processing the processed
stockpile of aggregate
;
4.
Ordering the
first to third respondents
to
supply
the
applicant
with a copy of
the sale agreement of the property /
portion of the farm Varkenslaagte 119 between the respondents to
allow the applicant to peruse
the documents to determine
i
f
the processed stockpiles were included in the sale agreement or not.
5.
In the
alternative to
4
above
ordering
the
first
to
third
respondents
to
inform the applicant in wr
i
ting
whether the processed stockpiles were sold to
the fourth respondent and on which terms such sale took
place
'
5
.
The cost of this application is to be
paid by the applicant in the event that
the matter remains unopposed.
"
[2]
The application was aimed at recouping
what was believed to be value added to the property of the fourth
respondent who had purchased
property from the
liquidated estate of the first
respondent. The application was opposed by the first to third
respondents and they raised points
in
limine
relating to urgency and
locus
standi
.
BACKGROUND
[3]
On 4 March 2016 the applicant and the
second and third respondents acting in their capacity as joint
liquidators of the first respondent
,
entered into an agreement
for the sale of stockpile material /
aggregate material on Portions of the farm known as Varekenslaagte
119
,
(the
property)
,
in
the district of Carltonville
.
The
applicant engaged in processing waste rock dumps, crushing and
separating the rock
,
sifting
and sorting the crushed rock according to size and prepared same for
removal from the property.
[4]
The applicant was responsible for
installing a weigh-bridge where the processed aggregate would be
loaded and weighed and
,
a
weighbridge slip handed
over
to a representative of the first respondent before the removal of
processed aggregate from the property and
,
the applicant would be free to sell the
aggregate
.
The
applicant was invoiced on a monthly basis for the processed aggregate
so removed and payment made into a stipulated bank account.
[5]
The applicant fell
into
arrears with its monthly payments due to
poor demand in
the
construction
industry
.
It nevertheless
continued
to
make
regular payments
and
continued
with its activities on the property until 28 January 2021
.
On the latter date the applicant by
letter informed the first to the third respondents that it was
struggling
to
keep up with the minimum payments for the aggregate removed and
,
requested an
arrangement for the removal of the
stockpiles of aggregate already processed
.
This was followed by letter on 4
February 2021 where the applicant was informed that its letter of 28
January
2021
was taken as a form of repudiation
and
,
the contract entered into
was cancelled with immediate effect and
a demand was made for payment of the
outstanding amount. The first to the
third respondents
,
represented
by their attorney engaged in discussions and
without
prejudice
offers were made (which
were neither accepted or rejected).
[6]
A meeting on 23 February 2021 was held
in an attempt to resolve the issue
around the already processed stockpile
of aggregate
.
The
applicants contend that
they
were not informed during such meeting that the property had been sold
on auction
and
that the stockpiles
would
be included in such sale. The applicant contended that even from the
auction brochure the stockpile aggregate was not "included
,
marked or
specified
"
"J
"
and "K" were annexed to the
founding papers
.
[7]
The applicant contended that it had an
enrichment claim in that there was contributory value added in the
form of the already processed
stockpile which was ready to be loaded
and removed. The applicant was also aware that it would not be
able to claim the sellable or market
value of the aggregate that that it's claim related
to its input and other costs during the
production of the aggregate.
[8]
The applicant contended that it only
learned on 19 April 2021 that the waste rock and stockpile of
processed aggregate were sold on
auction
.
The attorney for the
first to third respondent was contacted
and that was followed by letters dated 20 and 22 April 2021 to
address applicant's concerns
.
A
document indicating processed stock sheet volumes and values was
annexed as
"
M
"
were provided and it was also alleged
that the fourth respondent had proceeded
to load 2 loads of processed stock piles on
21
Apr
i
l
2021 without the knowledge and
consent
of
the
applicant.
Also annexed were
images
of
the stockpile,
a
size/volume
description
and chart including selling
price
.
The
reply which came through on 22 April 2021 was to inform, that the
property had
been
sold at an auction to one Jannes and another letter which informed
that the 'property had been sold
"
lock
stock and barrel.
"
[9]
The
urgent
application
was resorted to after all remedial
efforts had failed and
after
the applicant had failed to obtain a written undertaking from the
respondents to refrain from
'
selling
,
removing or loading the processed
stockpiles
.'
Further
,
it was necessary to determine what value
was added to the sale price and a copy of the sale
agreement had to be scrutinized
alternatively
,
that
the applicant to be informed in writing whether the processed
stockpiles were sold and the terms thereof
.
The applicant contended
that it
had
complied
with the requirements
for interdictory
relief
.
It could not wait to launch the
application in the ordinary course in that it would take several
months before the matter was heard
,
that
the processed stockpiles could not
be
left unchecked for a significant period of time
.
[10]
In the first point
in
limine
the first to third respondent
contended that the application lacked urgency because the applicant
knew as far back as November 2020
that the property was be sold at an
auction
.
The
applicant was a participant in the auction proceedings and was
present when the sale was concluded
.
The
applicant proceeded to make a higher offer by contacting the
auctioneer direct. Further, the urgency was self
-
created
.
The applicant stopped its operations in
January 2021 and removed his
equipment
from
the
property on
27
April
2021 before
launching the
urgent application
.
[11]
In the second point
in
limine
the first to third
respondents contended that the application was without merit in that
applicant lacked
locus standi.
It
relied on a cancelled agreement for the relief sought. The agreement
gave
"
permission
"
to the applicant to do its operations on
site if it wished to and there was no provision for the
applicant
to render service to the Company on site
.
Besides it was only the applicant
which der
i
ved
benefit and was charged amounts for the aggregate far below market
value
.
[12]
The first to third respondents contend
that the applicant being present at the auction failed to exercise
diligence in identifying
the proper
name
of the present owner of
the
property
,
and
that
there
was
a
misjoinder
of the
present owner Seri.co 474
(Pty) Ltd
.
The agreement annexed to the founding
affidavit was replaced by another
annexed as
"
C
"
to the answering affidavit. In terms of
the agreement it was the applicant who derived more benefit from its
operations at the site
and was paid far below the market value for
the aggregate removed from the site. As at January 2021
the applicant was in arrears to the tune
of R1 561 453
.
86
and the first respondent reserved the right to recover such monies
owned.
[13]
The first to third respondents contend
that the processed aggregate remained the property of the first
respondent. The agreement did
not provide for a return of any
processed aggregate which accumulated as a result of the activit
i
es
of the applicant.
No
issue was raised by
the applicant as
a participant at
auction about any value added to
the
property as
a result of
the
accumulated processed aggregate.
Further
,
what also needed to be dealt with were
the large rock deposits
,
a
by-product of the applicant
'
s
operation which remained a liability to the first respondent and to
the new owner
.
The
applicant had also failed to provide any
information to sustain its view that value had been added to the
property by the accumulated
processed aggregate
.
In
as
far as
the
enrichment claim
is
alleged
the
applicant is invited to
proceed by
way of
action
to
prove its claim
.
It was also denied that
the applicant had
made out a case for re
i
mbursement
of any alleged value added to the
property
.
[14]
In reply the applicant stated that it
was contacted by the auctioneer after the offer at the November
auction was not accepted
.
The
applicant's equipment was not
sold
at the
auction
and the processed
aggregate
stockpile was not included
in
the
November 2020 auction
,
despite
the
assertion
that the property
was
sold
"
lock
stock and barrel." The applicant
became aware
that
the
sale was finalized on 19 April 2021 and this included the
processed stockpile aggregate
.
In
the
agreement the rock dump
was
referred to as property which the applicant still had to crush and
screen and the processed stockpile aggregate could not be sold
together with the property. The purchasers own risk did not re
l
ate
to financial risk. The applicant contended that it could not bear the
risk of
"
processing
the processed stockpile
if
it
was
aware that the stockpiles could be sold at any given time
"
alternatively that it would be willing
to process large stockpiles for someone else
'
s
benefit without being compensated and that the stocklist in annexures
"
M"
and
"
N"
to the founding affidavit had significant
value as railway blast.
[15]
The
applicant stated
that the original offer of R2 600 000.00
was not accepted,
and
this resulted in a new offer where the purchase price was pushed up
to
R5
499 500.00. This made it clear that the purchase price went up after
inclusion of
the
processed aggregate stockpiles and the sale of property agreement was
only signed on 26 March 2021
.
URGENCY
[16]
I am satisfied that a case has been made
out for urgency. In this regard I take
into account the time
line
of events. The applicant and first to
third respondents
'
agreement
regarding the rock dump and processed aggregated endured from 2016
until January
2021
when it
was
allegedly
repudiated
by the applicant.
The second
and third respondents were administering
the estate of the first respondent for the benefit
of its creditors and, in the process the
property had to be sold and the applicant had interest in acquiring
ownership thereof
.
Although
the applicant participated in the November 2020 auction, the sale of
the property was not finalized and the applicant continued
with its
activities on the property from November 2020 up to January 2021.
It is not disputed that the applicant
engaged with the attorneys for the first to third
respondents
and it is not disputed that the sale of the property at an increased
price was finally concluded in March 2021. It is
further not disputed
that the applicant only became aware of what was included in
the revised purchase price
mid-April 2021 and
that its equipment was removed from the
property thereafter
.
The
issue revolved around the added value the processed aggregate gave
and was contributory to an increase in the
,
purchase price arose shortly before the
urgent application was launched
.
NON-JOIN
DER
[17]
The
first
to
third
respondents
contend
that
the
fourth respondent is not properly
before the court or cited
.
Counsel for the applicant in the
supplementary heads of argument submits that the fourth respondent is
properly before the court in
that the notice to oppose and the
opposing affidavit was filed on behalf of all
the respondents. In my view the second
and third respondent can by law only represent the first respondent
and I do
not
understand the answering affidavit to make out a case for the
fourth respondent. The second prayer in
the relief sought impacts upon the fourth respondent. In the founding
affidavit the removal
of two truck loads of processed aggregate was
witnessed
.
In
my view the applicant having finally come to the knowledge that the
person who bought the property was not one Jannes
,
and had been advised in the answering
affidavit who the purchaser
was
and
,
conducted
a search to establish the true identity
,
should as a matter of urgency sought
leave to joined the correct fourth respondent and to stand the matter
down. The second prayer
seeks
to interdict
the
fourth
respondent
from dealing
with the dump rock and processed
aggregate on the property it had purchased and for this reason such
prayer cannot succeed because
it also affects the fourth respondent
directly
.
[18]
However
,
in
my view the issue raised by the applicant being the value added to
the property by the processed stockpile
aggregate still present on the property
,
is about whether the applicant stood to
benefit from the value placed on
the
processed aggregate when the property was sold. The applicant seeks
to be given opportunity to
measure
and put
value
on
the
stockpile aggregate. As
I see
it
,
no case
has
been made
out
for
the value added to
the
dump
rock. In
this
regard only it is
my
view that
the
fourth
respondent is indirectly affected. It
has paid over the purchase price and there is potential of it
resiling
if
performance
like
registration
does
not follow
through
because of the dispute
.
LACK
OF LOCUS STANDI /REPUDIATION OF THE AGREEMENT/ CANCELLATION/ UNJUST
ENRICHMENT/ THE SERVICES RENDERED BY THE APPLICANT
[19]
Counsel for the applicant contends that
it has been proved that a business relationship existed
which
establishes locus standi
and
,
further
,
that
it
has
been
proved
that
the stockpiles
of
processed aggregate
have
significant
value
.
It
is
contended to the contrary that the applicant having repudiated the
agreement and
,
it
having being cancelled such rights that the applicant had with the
first to third respondent was cancelled
and
cannot
be enforced
against
the new owner
,
the fourth
respondent.
[20]
It is common cause that the first to
third respondent interpreted the applicant's
notification
communicated
in writing in
January
2021 to be a repudiation
and elected to
cancel
the
agreement. It is
trite
law
that
the
test
for
repudiation is objective
,
Erasmus v Pienaar
1984 (4) SA 9
(T) at
20C-H
.
The
subsequent cancellation put an end to the
existing agreement and to any
relationship that
may
have
prevailed
since 2016
.
In
my
view whatever was attempted to be negotiations with the attorneys for
the first to third
respondent's
attorneys
related to a possible
conclusion
of an agreement
pertaining
to the stockpile processed aggregate
that was on the property, before the actual conclusion of the
agreement of the sale of the property
in March 2021
.
Any attempted
negotiation subsequent thereto required
the involvement of the purchaser
.
As
I see it the applicant lacks locus standi in as far as it seeks to
assert any right to the stockpile ag
gregate
or any right to what it would perceive as valued added to the
property after
the property was sold
.
However
,
can one say that the applicant has a
claim of unjust
enrichment
against the first to the third respondent in as far as the first
respondent
,
represented
by the second and third respondent and the creditors of the first
respondent
would
be enriched
by
the
amount the
stockpile
processed
aggregate
was sold to the fourth respondent?
[21]
In my view the issue of enrichment is
firstly premised on the nature of the agreement. What needs to be
determined is whether services
were rendered by the applicant to the
respondent or whether the applicant rendered services to itself and
was the sole beneficiary
in the agreement. Further
,
the issue of the
risk
undertaken
needs to be determined
,
and
whether
it
also
related to the applicant taking upon
itself the financial risk in the agreement it concluded with the
first to the third respondent.
[22]
My understanding of the nature of the
agreement from the version of first to third respondent is that the
dump rock and any product
thereof including the stockpile
of processed aggregate remains with the
property and that it transfers to ownership by the applicant only
when it has passed through
the weighbridge
.
The price per ton relates to the amount
which the processed aggregate is sold for by
the
owner of the land. The applicant
provided its own workforce and equipment and expended its own money
to process the dump rock.
[23]
In my view the applicant understood the
implications of the cancellation and never attempted to remove of its
own accord the processed
aggregate despite cancellation, and sought
to negotiate a new order. The applicant is determined in its view
that there was an
enrichment
claim in view of
the
increase in the
purchase
price
,
which
could only have been as a result of the inclusion of the stockpiles
and that significant value was added
.
In
my view the applicant concedes that it would not be in
a position to recoup market value of the
stock file and that it was entitled to recoup
its
expenditure incurred in
the
processing
.
It is questionable to me whether the
applicant c
an convincingly show that it
has a claim based on unjust enrichment but this is for another court
to dec
i
de
.
However
,
I
am of the view that in the interests of jus
t
ice
I should find that there may be a case made out by the applicant for
i
nterim
relief
.
I
will
therefore
will not grant the relief as sought in the notice of motion as is
,
but give such relief to the applicant as
will enable it to properly institute proceedings for enrichment
if it so wishes against the respondents
.
[24)
In the result the following order is granted
:
1.
Prayer
1
is
granted
;
2.
The applicant is granted six weeks to
obtain a proper measurement and
valuation of the ex
i
sting
stockpile processed aggregate on the farm Varkenslaagte 119
;
3.
The
prayers
2
,
3
,
4
,
5
,
6
,
are dismissed
4.
Costs are reserved
TLHAPI
VV
(JUDGE
OF THE HIGH COURT)
MATTER
HEARD ON: 13 May 2021
JUDGMENT
RESEVED ON: 13 May 2021
ATTORNEYS
FOR THE APPLICANT â PAGEL SCHULENBURG DREYER & DREYER ATT
ORNEYS
FOR THE RESPONDENTS â DREYER & DREYER