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[2021] ZAMPMBHC 1
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Naude and Others v Mathonolo Construction (Pty) Ltd and Another (1089/2020) [2021] ZAMPMBHC 1 (19 March 2021)
SAFLII
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Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
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REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
(MPUMALANGA
DIVISION, MBOMBELA)
(1)
REPORTABLE:NO
(2)
OF INTEREST TO OTHER JUDGES
:NO
(3)
REVISED: YES
19/03/2021
CASE
NO: 1089/2020
In the matter
between:
ETIENNE
JACQUES NAUDE
First Applicant
JOHANNES
PETRUS KOEKEMOER
Second Applicant
JOHANNES
LOODWYK BOUWER
Third Applicant
JUSTICE
VAN WYK
Fourth Applicant
MAWEWE
COMMUNAL PROPERTY ASSOCIATION
Fifth
Applicant
and
MATHONOLO
CONSTRUCTION (PTY) LTD
First Respondent
RCL
FOODS, SUGAR AND MILLING (PTY) LTD
Second
Respondent
J
U D G M E N T
MASHILE J:
INTRODUCTION
[1]
To avoid confusion, I will refer to all the Applicants jointly as the
Applicants.
However, where the context warrants it, I will single
out the Fifth Applicant and refer to it as the MCPA. I am mindful
that there
are two Respondents but since the Second Respondent has
been cited as a party which might have interest or be affected by the
outcome hereof and that it is not actively involved in the opposition
of this application, I will only refer to the First
Respondent
as Mathonolo.
[2]
When I was ushered into court and settled down, I had known the above
matter to be
serving before court. Shortly after the matter had been
called and Counsel for both parties had placed themselves on record,
Counsel
for Mathonolo stood up to announce that insofar as this
application was concerned, his instructions were limited to moving an
application for my recusal. Naturally, the court enquired what the
position would be in the event that the court refused the
application.
Counsel for Mathonolo was categorical that his further
instructions were to move an application for postponement.
[3]
Asked why he would not proceed to argue the matter on behalf of
Mathonolo, he stated
that Counsel who was suppose to argue the matter
was involved in another matter in Middleburg. His instructions to
apply for a
postponement were as such, to be understood against the
background of the unavailability of Counsel for Mathonolo not being
able
to attend court. Subsequently, the court dismissed both the
recusal and postponement applications.
[4]
The main application proceeded without the Counsel for Mathonolo.
While I gave orders
in the recusal and postponement applications, I
reserved judgment in this application. The idea was that prior to
considering the
main application, I would furnish reasons for the
dismissal of the two applications. Below follows the reasoning of
the court
in both matters.
RECUSAL
APPLICATION
[5]
The nub of the recusal application is that on 16 October 2020 during
an urgent application concerning
the liquidation of Mathonolo, I
expressed myself on the merits in a manner that suggested
bias. The observations that I
made during those
proceedings, so continues the argument, disqualify this Court to
preside over this
application as they have raised
reasonable apprehension of bias on the part of the First
Respondent and its director, Happy
Mkhatshwa, who deposed to the two
answering affidavits of the applications heard on 16 and 29 October
2020.
[6]
The correlation between the two applications is that they derive from
the same set
of facts and circumstances. That said, the
distinguishing feature between those applications is that the former
was launched
as an urgent liquidation application of Mathonolo
whereas
in casu
the proceedings have been brought during the
ordinary opposed motion roll. A further difference is that the
Applicants seek
relief declaring the lease agreement between
Mathonolo and the MCPA a sham and therefore null and void
alternatively,
to determine whether or not the lease agreement
between the parties is still extant. The parties in the application
of the 16
th
of October 2020 and those
in casu
remain practically the same.
[7]
The remarks that are said to have generated the disquiet that
ultimately led to reasonable
apprehension of bias are contained in
the following paragraph quoted by the deponent in Mathonolo’s
founding affidavit in
support of the recusal application. The
paragraph reads: “
No,no,no
Mr Du Plessis. It has not been tested before Court that there has
been corruption. I am only saying look, obviously there
are,
according to the reports, I have read the report. There are things
that are wrong. And something can still be
done. We are talking
about the urgency of the matter and not the merits of the matter.”
[8]
It will be instructive to first make reference to pronouncements made
by other
courts that found themselves confronted with somewhat
similar facts before turning to those that this Court is
suppose
to deal with. The court in
President
of the Republic of South Africa and others vs South African Rugby
Football Union and others
[1999] ZACC 9
;
1999 (4) SA 147
(CC) at para 48
the court reasoned-
“…
that
the correct approach to this application for the recusal of members
of this Court is objective and the onus of establishing
it rests upon
the applicant. The question is whether a reasonable, objective and
informed person would on the
correct
facts
[emphasis] reasonably apprehend that the judge has not or will not
bring an impartial mind to bear on the adjudication of the case
that
is a mind open to persuasion by the evidence and submission of
counsel. The reasonableness of the apprehension must be assessed
in
the light of oath of office taken by the judges to administer justice
without fear or favour and their ability to carry out
that oath by
reason of their training and experience. It must be assumed that they
can disabuse their minds of any irrelevant personal
beliefs or
predispositions. They must take into account the fact that
they
have a duty to sit in any case in which they are not obliged to
recuse themselves
[emphasis added]. At the same time, it must never be forgotten that
an impartial Judge is a fundamental prerequisite for a fair
trial and
a judicial officer should not hesitate to recuse herself or himself
if there are
reasonable grounds on the part of a litigant for apprehending that
the judicial officer, for whatever reasons, was
not or will not be
impartial”
]
[9]
In Coop and others vs South African
Broadcasting Corporation and others
2006 (2) SA 112
(W) at 214,
the court had the following to say:
“…
the
role of a judicial officer in civil proceedings is not necessarily
that of a “silent umpire”. A valid criticism
of legal
representatives would not only be justified,
but
might
even be the duty of a judge
[Emphasis] The venting of frustration in regard to the conduct
of counsel or even comments on the merits of a case, cannot
per se be
indicative of bias.”
[10]
Having described the legal position against which my utterances in
court on 16 October 2020 ought
to be understood, it is now
appropriate to refer to the exchange between Mr Du Plessis and the
court before coming to the critical
paragraph cited by Mathonolo. Mr
Du Plessis, Counsel for the Applicants, was venting his frustration
with court processes when
the following ensued:
“…
..the
Court who are innocent, who are independent try their utmost to do
the right thing, to stop corruption and we come up all
the time
against hurdles. We come up with …
COURT:
You are using very heavy words. Because no one has been found
guilty of corruption
here.
MR
DU PLESSIS: Well M’Lord the evidence is so clear.
COURT:
The evidence …
MR
DU PLESSIS: The evidence is so clear. If Y’Lordship
wants to I will take you through this.
COURT:
No, no, no Mr Du Plessis. It has not been tested before court
that there is corruption. I only saying
look, obviously there
are, according to the reports, I have read the report. There
are things that are wrong. And
something can still be done.
We are talking about the urgency of this matter, I am not
talking about the merits of
the matter. We are talking about
urgency. I cannot just act because you say it is urgent, there
is corruption,
there is this and that and that.
Then I must come to your assistance. I cannot do that.
MR
DU PLESSIS: But the applicant is a creditor who says, well as a
result of this fraudulent company I am going to
suffer
damages.
COURT:
I do not want to go back there, please. Can you ...”
[11]
Mr Du Plessis was obviously dissatisfied that the court seemed not to
be entertaining
his argument on urgency of the matter.
He felt that the court was not coming to his aid
when it should, and
that as a result parties were getting away
with corruption and fraud. It is at that point that the court
reminded him that
no one has been found guilty of
corruption or fraud and that in any event, the court was only
concerned with the
urgency of the application. I went on to state
that I have read the report and that from the contents of the report
there is corruption
but that such have not been tested. I added that
something could still be done to address the corruption and fraud
but emphasized
that it was not the subject of the application before
court.
[12]
I then refused to be drawn further into the argument concerning
corruption and fraud.
In the end, I struck off the
application from the roll of the16th of October 2020 for
lack of urgency. It is incomprehensible
why Counsel for Mathonolo in
this application would ascribe a meaning that is perceptibly
incorrect. His interpretation
leads to one inexorable
conclusion, which is that he was not prepared to argue the matter on
29 October 2020. If
both he and the Counsel who was on brief for that
day could not proceed with the application because the latter was
involved in
another matter somewhere else, the application for my
recusal constituted a perfect excuse. This explains his
confession
that in the event of the recusal application failing, he
would move for a postponement, which he did albeit
unsuccessfully.
[13]
In any event, to the extent that the issue pertaining to my recusal
leaned heavily on the court
declaring the lease agreement a sham and
therefore null and void
ab initio
, the issue became moot.
Counsel for the Applicants subsequently made it clear during the
proceedings that he was no longer moving
for an order declaring the
lease agreement to be a sham and therefore null and void
ab
initio.
The Applicants’ abandonment of the prayer as
stated aforesaid completely ousts any hopes for a successful prayer
based
on my impartiality as the nexus between the applications of 16
and 29 October 2020 has been dealt a fatal blow.
[14]
Accordingly, the facts and circumstances from which the application
of 29 October arise being
different from that of 16 October 2020,
any notion of perceived prejudice cannot find application here. The
current application
concerns the determination of the validity
of the cancellation of the lease agreement by the MCPA and not to
declare the
lease agreement null and void
ab initio
. In the
circumstances, I found myself constrained to dismiss the application
for my recusal. Now that the recusal application
is out of the way,
I turn my attention to the postponement application.
POSTPONEMENT
APPLICATION
[15]
The court was advised that Counsel who was expected to argue the
matter had taken up another
matter in Middleburg and had asked that
the application be postponed to another date. When the court turned
down the application
for postponement, the court was requested
to stand down the matter until later that afternoon but
unfortunately it so happened
that the court would not be available at
that time. I am mindful that normally a court would bend backwards
to accommodate a party
applying for postponement as long as the
ensuing prejudice to the other party in the proceedings can be
assuaged by an appropriate
cost order. That said, where there is a
flagrant disregard of practice, the court should display
displeasure.
[16]
Ordinarily, the court would expect Counsel who subsequent to
accepting instructions become unavailable,
to make early appropriate
arrangements to avoid costs being incurred. The only reason for the
matter not to proceed was Counsel’s
unavailability, which came
on the date of hearing. No other reasons were provided. The court had
to show its discontent at being
advised on the day of the proceedings
that Counsel who was supposed to argue the matter had become involved
in another matter.
This was the essence of the dismissal of the
postponement application.
CURRENT
APPLICATION
[17]
The Applicants are the administrators of the MCPA appointed in terms
of a court order granted
by Roelofse AJ dated 10 March 2020. The
relief sought in this application initially formed part of an
application that served
before this Court presided by Mali J on 23
June 2020. While the court per Mali J granted other reliefs sought by
the Applicants,
it specifically and deliberately circumvented making
a decision on declaring the lease agreement between the MCPA and
Mathonolo
a sham and as such,
null
and
void ab initio.
[18]
The court per Mali J also steered free of declaring the Applicants’
alternative prayer
of cancelling the lease between MCPA and
Mathonolo. The court reasoned that the nature of the orders sought
with regard to the
declaration of the lease agreement as
null
and
void ab initio
or declaring it cancelled could not be
decided in urgent court proceedings because the declaratory orders
would have a final
effect. The court reckoned that for it to
make such a decision it would need more time to avoid
prejudice ensuing.
[19]
During argument in court, Counsel for the Applicants stated that he
was not persisting on the
court declaring the lease agreement a sham
and therefore
null
and
void ab initio
. He, however,
asserted that the Applicants remained adamant that the lease be
declared cancelled. Accordingly, all that this Court
must do is to
determine whether or not the evidence before this Court is consistent
with the contention that the lease
agreement between the
parties has been legitimately terminated. This presents
an opportune moment to turn to the BACKGROUND
FACTS OF THIS MATTER.
FACTUAL MATRIX
[20]
On 14 March 2018, the MCPA represented by Ms Happy Mkhatshwa as its
chairperson, and Mathonolo
represented by Ms Happy Mkhatshwa in her
representative capacity as its sole director, concluded a lease
agreement in terms
of which:
20.1
The MCPA let three farm properties described as
Portion
3 of
t
he
Farm Lekkerdraai No: 464
JU
,
Province of
Mpumalanga
Measuring
355.0684
(three
hundred and fifty five
point
zero
six eight four hectares) held by
Title
Deed No
:
T9295/2010
remaining
extent of the
Farm
Lekkerdraai No: 464 JU
Province
of Mpumalanga measuring
519.8355
(five
one nine point eight three five hectares held by
Title
Deed No: T6397/2010 and Portion 0 of the Farm Sanbult No: 604 JU
,
Province of Mpumalanga measuring
341.44457
(three
four one point four four four five)
20.2
The commencement date of the lease was 12 April 2018 and it was to
endure for a period of 35 years;
20.3
The rental amount was determined at R3 500.00 per hectare per
annum of the cultivated land;
20.4
The rental
would be payable after harvesting In each year at the following
bank account: Mawewe Communal Property Association,
First
National Bank Malelane Branch, Cheque Account Number: [….]
or any other place which the lessor may determine from time to time
in writing;
20.5
Interest would become payable at the current Interest
rate per annum as determined by the Minister of Finance
from
time to time In terms of section 80 of the Public Finance Management
Act,1999 (Act No.1999) in the event that Mathonolo
failed to pay any
of the rentals. A certificate issued by the accounting section of
the LESSOR would be prima facie proof of such
Interest rate; and
20.6
In terms of Clause 18.1, in the event that Mathonolo
failed to pay rent on due date In terms of Clause
5.1 of the
lease agreement and remained in default for more than 7 days
after receipt of written notice, the MCPA would be
entitled to:
20.6.1
cancel the lease agreement, without prejudice to any rights it may
have In terms of this lease agreement
or the law in general;
20.6.2
to take Immediate possession of the Property; and
20.6.3
to claim compensation for any loss that It might have suffered or
would In future suffer as well as rentals
In arears or any amounts
due and payable.
20.7 The lease
agreement was preceded by a resolution of Mathonolo. It was
firstly, resolved that the representative
of Mathonolo be
altered; secondly, that Mr Mkakazi Elia Mkhatshwa be Substituted for
Mrs Siphiwe Happy Sithole as
the representative of Mathonolo;
thirdly, that Siphiwe Happy Sithole was henceforth authorised to sign
and take binding resolutions
as the representative of
Mathonolo and fourthly, that the MCPA would conclude a 30-year lease
agreement with Mathonolo in
respect of the Farm: LEKKERDRAAI No:
464, JU.
20.8
On 15 August 2020, the Applicants addressed a letter of demand in
terms of Clause 18.1 of the lease agreement.
The letter reminds
Mathonolo of its obligations arising as a result of the
provisions of Clause 5.1 which is about rental
being payable after
harvest and Clause 18.1, which describes what would transpire if
Mathonolo fails to pay rental as per the lease
agreement. Mathonolo
was advised that the total rentals due and payable to the MCPA for
the years: 2018 and 2019 was R3
378
000.00. The letter concludes by giving Mathonolo 7 days within
which to remedy the breach failing which the MCPA threatened
to
cancel and take possession of the lease property.
20.9
There is no evidence to suggest that Mathonolo responded to the
letter from the MCPA dated 15 August 2020.
This happened following
the MCPA’s attempt to have the lease agreement either declared
a sham and therefore null and void
alternatively, have it declared
cancelled on 23 June 2020. The basis of the cancellation was that
Mathonolo had failed to pay
rentals for the years 2018 and 2019 and
that the rentals remained due, owing and payable. As alluded
earlier in this judgment,
Mali J refused to make any pronouncements
on the validity or breach of the lease on the ground that urgent
proceedings were not
well-suited to decide those questions due to
their complexity.
ISSUES
[21]
I have stated that Counsel for the Applicants said that it was not
necessary anymore for the
court to decide on whether or not the
lease agreement is a sham and therefore
null
and
void.
That said, he wanted this Court to nonetheless declare the lease
agreement between Mathonolo and the MCPA validly cancelled following
Mathonolo’s failure to observe its obligations arising
in terms of the lease agreement.
ASSERTIONS OF
THE PARTIES
[22]
The Applicants argue that to the extent that the lease agreement
between the MCPA and Mathonolo
might be valid, the MCPA has validly
cancelled it as provided in Clause 18.1 of the lease agreement.
Mathonolo has simply failed
to discharge the onus that it had to
demonstrate that it has paid as contemplated in Clause 5.1 of the
lease agreement. The entries
on the bank statement to which Mathonolo
refers does not vindicate its claim of payment of rentals for the
relevant period.
Accordingly, conclude the Applicants, the
lease agreement has been legitimately cancelled by the MCPA.
[23]
On the other hand, Mathonolo is adamant that it has complied with its
obligations of paying rentals
as described in the lease agreement.
Insofar as it is concerned, the rentals that it has paid to date is
in excess of R9 000 000.00.
The amount, claims Mathonolo,
includes rental advance as well as loans to the MCPA. The total
amount ultimately paid to the MCPA
by Mathonolo amounts in all to
R16 700 000.00 and the whole amount claimed by the MCPA as
rental has therefore been
paid in full.
LEGAL
FRAMEWORK
[24]
On the case authority of
RAMNATH
v
BUNSEE
[1961]
2
All
SA
22
(N),
which in turn
relied on
Pillay v Krishna and Another,
1946
AD 946
the onus is upon
Mathonolo to prove that it has made payment of the claimed rental.
In the latter case it was held that upon
a plea of payment of
money, as is the case here, the
onus
is on a
respondent/defendant, and that if he fails to satisfy the court
that there is a sufficiently strong balance of probabilities
in his
favour, judgment must be given for an applicant/plaintiff.
EVALUATION
[25]
The issue boils down to a simple enquiry – did Mathonolo
establish that it has paid rental
as stipulated in the lease
agreement? The allegation that Mathonolo has paid an amount of
R16 700 000.00 to the MCPA
in the form of loans and rental
advance to the MCPA is, without more, too bare. Like Mali J, I find
it hard to accept that the
amount of R16 700 000.00 constitutes
loans and early payment of rental to the MCPA in circumstances where
the alleged rental
advances are not recorded in the financial
statements of Mathonolo and the loans are not supported by some form
of loan agreements.
[26]
Mathonolo has failed to isolate the amount for the loan from the
rental yet it would boldly
have this Court believe that since the
amount demanded by the MCPA is less than what it has allegedly
paid, it is in fact
the MCPA that is indebted to it. This assertion
cannot find favour with this Court until Mathonolo levies
satisfactory evidence
that it is owed by the MCPA. The Applicants
alleged that entries captured on the MCPA bank statements show that
Mathonolo has
paid the sum of
R962 149.00
to the MCPA between 2017 and 2019. Conversely and during the same
period, MCPA has paid to Mathonolo the sum of
R2 128 015.00.
[27]
Mathonolo’s counter argument is that it has since the beginning
of the lease agreement,
2018, paid an amount of more than
R9 000 000.00. The aforesaid amount, it claims, is
made up of loans and early
payment of rental. I have already pointed
out elsewhere in this judgment the lack of buttressing material to
sustain the assertion.
Besides, there are contradictions in the exact
amount that has been paid to the MCPA. At one stage, it is
R16 700 000.00
and at another, it is an amount in excess of
R9 000 000.00. It is manifest that Mathonolo is unable to
prove the amount
that it has paid rental as required or if it did, it
is unable to demonstrate how much such amount was or which part of
it was
for rental and which was for loans.
[28]
I have had regard to the entries to which Mathonolo refers. It is
noteworthy that the bulk of
the description of those entries, on the
face of it, have nothing to do with Mathonolo as a party on which
the onus to demonstrate
payment to the MCPA rests. Mathonolo
should have done more instead of simply throwing around different
amounts claiming
to have been paid by it. On the evidence before this
Court I am unable to find that Mathonolo has discharged its rental
obligations
arising in terms of the lease agreement. As such, I am
obliged to find for the Applicants. The court makes the following
order.
1. The lease
agreement between the MCPA and Mathonolo is declared to have been
lawfully cancelled by the MCPA;
2. Mathonolo is
directed to pay the costs of the Applicants.
B A MASHILE
JUDGE OF THE HIGH
COURT OF SOUTH AFRICA
MPUMALANGA
DIVISION, MBOMBELA
This judgment was
handed down electronically by circulation to the parties and/or
parties’ representatives by email. The date
and time for
hand-down is deemed to be 19 March 2021 at 10:00.
APPEARANCES:
Counsel for the
Applicants:
Adv HF Oosthuizen
Instructed
by:
Swanepoel & Partners Inc
Counsel for the
First & Second Respondent:
Adv L Zwane
Instructed
by:
JF Shabangu Attorneys
Date of
Hearing:
29 October 2020
Date of
Judgment:
19 March 2021