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2021
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[2021] ZAMPMBHC 43
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Pine Glow Investments (Pty) Ltd t/a Caltex Mpumalanga North Branded Marketer v Bushbuckridge Convenience Centre (Pty) Ltd and Others (3295/2021) [2021] ZAMPMBHC 43 (22 September 2021)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA,
MPUMALANGA
DIVISION (MAIN SEAT)
Case
Number: 3295/2021
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED
- NO
22
September 2021
In
the matter between:
PINE
GLOW INVESTMENTS (PTY) Ltd T/A
CALTEX
MPUMALANGA NORTH BRANDED
MARKETER
(Registration
Number: [....])
Applicant
and
BUSHBUCKRIDGE
CONVENIENCE CENTRE
(PTY)
LTD
(Registration
Number:
[....])
First Respondent
ELEGANT
FUEL (PTY) LTD
(Registration
number:
[....])
Second Respondent
TR
COMMODITIES (PTY) LTD
(Registration
number:
[....])
Third Respondent
The
Order was given on 20 September 2021 over the Zoom Platform. This
judgment will be distributed to the parties via email and
published
on the SAFLII website. The judgment shall be deemed to be handed down
at 09:00 on 22 September 2021.
JUDGMENT
Roelofse
AJ:
[1]
On 20 September 2021, I granted the
following order in this application:
1.
The first to third respondents are hereby ordered to cease all
construction works on the immovable property known as Farm M[....]
[....], Portions 2 and 3 Bushbuckridge Convenience Centre nR533,
Marijane A, Bushbuckridge, Mpumalanga Province, situated at Business
site [....] at M[....] 200/05/18, Provincial Road P57-2
Bushbuckridge.
2.
The order in paragraph 1 above shall serve as an interim interdict
with immediate
effect pending the outcome of this application.
3.
The oral evidence of Dr Moeen Ismael Omar and Mr. Zwelibanzi Solly
Peace Ndlovu
(“the deponents”) shall be heard on the
fulfilment of the conditions president contained in clauses 4.1.1 and
4.1.2
of the lease agreement entered into by the applicant and the
first respondent on 7 February 2018 (“the issue”).
4.
The relief sought in prayer 4 of the notice of motion is postponed
for determination
together with the issue.
5.
The deponents are hereby directed to appear personally before this
court for
purposes of giving evidence on the issue.
6.
The applicant and the first respondent are granted leave to:
a.
Subpoena any other person they deem meet for purposes of giving
evidence on the
issue;
b.
Make discovery of such documents they deem meet in terms of the
Uniform Rules.
7.
The applicant is ordered to pay the costs occasioned by the
appearance of the
respondents’ legal practitioners on 7
September 2021, such costs, in respect of the second and third
respondents, shall include
the costs of two counsel.
8.
Save for the order in paragraph 7 above, all further costs in the
application
are reserved.
9.
The applicant is hereby directed to, within 5 days of the date of
this order,
apply through the Registrar of this court for a date for
the judicial case management of the further determination of
application.”
[2]
What follows is the reasons for the
order.
The
relationship between the first to third respondents
[3]
The
first respondent (“
BCC”
)
holds permission to occupy
[1]
an
immovable property (“
the
property”
)
[2]
in Bushbuckridge, Mpumalanga. The second respondent (“
Elegant”
)
trades as a wholesale supplier of petroleum products which are
supplied to third parties such as the third respondent “(
TR”
).
Elegant,
on
a regular occasion assists third parties with the development of
immovable property to erect fuel stations for the supply of
fuel to
the general public and for profit by such third party.
[4]
BCC
and TR
have
entered into Site Lease agreement
[3]
on 9 February 2021 (“
the
TR lease”
)
in terms of which TR leases the property from BCC for the purpose of
operating a fore fuel court, convenience store and fast-food
outlet.
[4]
[5]
Elegant
was appointed by TR as agent to conduct the development and/or
alterations at the property as envisaged in the TR lease
agreement.
[5]
On or about 1 July
2021, Elegant was mandated and appointed by TR to commence with the
development, improvement and/or alteration
of the property.
[6]
During or about July 2021, Elegant commenced with the required works
needed for the development of the property on TR’s instruction.
The works in respect of the construction of the filling station is
close to 50% complete. As at 31 August 2021, the total amount
expended by Elegant amounted to R 2 830 368.80.
[7]
[6]
Elegant and TR allege that they had
no reason to suspect that or believe that BCC was involved with any
third party such as the
applicant (“
Pine
Glow”
) before they concluded the
TR lease agreement.
[7]
BCC
alleges that it had contact with other fuel wholesalers “…
to
explore the first respondent’s [BCC]’s options.
[8]
This was while Pine Glow and BCC were still addressing issues
regarding the delay in the development of the property (set out
immediately below). Nowhere does BCC say that BCC disclosed its prior
contractual relationship with Pine Glow to Elegant or TR or
that BCC
disclosed its dealings with Elegant and TR to Pine Glow.
The relationship
between the Pine Glow and BCC
[8]
Pine Glow holds a few wholesale
licenses and serves as wholesaler and supplier of fuel to certain
filling stations in Mpumalanga
and the Limpopo provinces. Pine Glow
also owns and leases out filling stations which are operated by
independent retailers. It
earns a fuel wholesale margin for each
wholesaling activities, and shares in the regulated fuel retail
margin depending on the
nature and extent of Pine Glow’s
investment in the relevant fuel station.
[9]
During 2017, BCC’s
representative, Mr Wenzel Mashele approached Pine Glow and proposed
that Pine Glow and BCC conclude agreements
pertaining to certain
sites situated at Bushbuckridge and Mashshu which were considered
suitable for filling stations and related
businesses. Negotiations
followed which led into certain agreements being entered into in
respect of Bushbuckridge and Mashushu.
[10]
The only agreement relevant for
purposes of this application is the agreement pertaining to the
Bushbuckridge development.
[11]
On 7 February 2018, Pine Glow and
BCC entered into a written agreement (
the
agreement”
). In terms of the
agreement:
a.
The effective date of the agreement would
be the date of fulfillment of the last of the conditions president;
b.
The lease would endure with effect from the
rental commencement for ten years;
(As will appear from what
he set out below, the rental commencement date is still to arrive).
c.
The
conditions president are defined as meaning the suspensive conditions
set out in clause 4 of the agreement. Clause 4 contains
two
suspensive conditions being fuliflled by no later than 12 months from
the signature date date, the relevant authorities approve
a site
license and retail license in respect of the property;
[9]
The obligation to procure the site license rested upon BCC while the
obligation to procure a retail license rested upon Pine Glow;
[10]
d.
BCC lets the property to Pine Glow with
effect from the effective date. Therefore, BCC would be the lessor
and Pine Glow the Lessee;
e.
BCC agreed to construct
the
building on the property in accordance with certain development
provisions which included certain design specifications;
f.
Pine Glow
was
obliged to procure the installation of the lessee installations in
accordance with the development provisions;
g.
Pine Glow's obliged to prior to the rental
commencement date, procured all licenses, consents and permits to
conduct the business
at the property:
h.
The business Pine Glow would be allowed to
conduct on the property in terms of the agreement is defined as the
business of an automotive
fuel filling station, a shopping including
a confectionery and take-away facility, an automatic teller machine,
a car wash and
related retail activities incidental and ancillary
thereto;
i.
Pine Glow would conduct the business
through an operator from time to time in terms of an operating lease
concluded between such
operator and Pine Glow in relation to the
property;
j.
The amount is also determined through
provisions in the agreement but it is not of real significance in
this application, save for
further proposals by Pine Glow to BCC to
which I shall refer later in this judgment.
Circumstances that led
to this application
[12]
I proceeded to summarize the
circumstances that led to this application.
[13]
BCC did not commence with the
construction as required in the agreement even after BCC and Pine
Glow had entered into discussions
on the way forward and how Pine
Glow could assist BCC to comply with its obligations in terms of the
agreement. In the course of
the negotiations, BCC’s suggestion
was that the agreement be amended to more favourable terms for the
BCC. Pine Glow was
willing to assist BCC to the extent necessary but
within the scope and confines of the existing agreement.
[14]
On 23 February 2021 (i.e, after the
conclusion of the TR lease agreement on 9 February 2021), BCC sent an
email to Pine Glow indicating
that its financial cash flow problems
were dire and that it wanted to terminate the lease agreement. BCC
said nothing to Pine Glow
over the conclusion of the TR lease
agreement.
[15]
Pine Glow was not willing to agree
to a cancellation of the agreement. On 19 March 2021, BCC adopted a
final stance and insisted
on the cancellation of the agreement. BCC
informed Pine Glow that “…
.due
to the current economic situation, we
[BCC]
are no longer in a position to
continue to honour the contract
[the
agreement]
we have signed
.
We therefore wish to terminate our
contract……
”
[16]
Pine Glow did not accept BCC’s
repudiation of the agreement. In a further effort to assist BCC, Pine
Glow, on 9 April 2021
made a proposal to BCC that would enable BCC to
perform under the lease agreement. Not even then did BCC disclose the
TR lease
agreement.
[17]
On 22 April 2021, Pine Glow send a
letter to BCC. In this letter, amongst other things, Pine Glow
confirmed that the suspensive
conditions regarding the procurement of
the necessary rights, authorizations and licenses were met and said
“
You are aware though that you are
at risk of having to reapply for licenses because of efflux of time
and as a consequence time
is of the essence.”
Pine Glow furthermore confirmed that it remains ready to proceed with
its works cope.
[18]
On 4 June 2021, BCC made a further
attempt to repudiate the agreement based on the stance that Pine Glow
was imposing new conditions.
Pine Glow’s response was that it
would pursue its rights should BCC refuse to comply with the lease
agreements.
[19]
On 25 June 2021, BCC informed Pine
Glow that it intended to proceed as if the lease agreements have been
canceled. BCC’s repudiation
of the lease agreements was not
accepted by Pine Glow. Pine Glow was of the view that the lease
agreements remained in force. This
was confirmed in a letter dated 16
July 2021 written by Pine Glow’s attorneys addressed to BCC.
[20]
Up to this stage, BCC remained
totally silent over the TR lease agreement and that by that time,
Elegant was already appointed to
do the construction on the property.
[21]
Pine Glow alleges that it for the
first time during the afternoon of 26 Aug 2021 learned that BCC had
given access to the property
to another party who was proceeding to
build what appears to be a filling station on the property.
[22]
Pine Glow
consulted
its attorneys on 26 August 2021 and caused the letter to be directed
to BCC. In the letter, BCC was requested to give
an undertaking that
construction works will immediately stop, failing which the court
will be approached on an urgent basis for
an appropriate interdict.
[23]
Pine Glow
learned
that the construction works on the property were affected by “the
Elegant group”, and more specifically TR.
Pine Glow’s
attorneys directed a letter to the Elegant group on 27 August 2021.
In the letter, the Elegant Group: was made
aware of Pine Glow’s
right in respect of the property and the unlawfulness of construction
works on the site; was invited
to confirm whether it is indeed
involved in the relevant construction works; requested to cease the
construction works and confirm
that it will not proceed there with,
and should the requested undertaking not be forthcoming the court
will be approached on an
urgent basis.
[24]
On 30 August 2021, BCC's attorneys
replied to Pine Glow’s letter. In its reply, BCC confirms
having concluded a new lease
agreement with another party and for the
first time alleged that the agreement with Pine Glow was invalid due
to the non-fulfillment
of one of the suspensive conditions being the
approval of the retail license in respect of the property in terms of
clause 4.1.2
of the agreement.
[25]
Elegant
replied
to Pine Glow’s attorney’s letter on 30 August 2021. in
this letter the Elegant: confirmed that it is assisting
TR with
construction works on the property; alleged that it has been unaware
of Pine Glow’s lease; confirmed that the construction
works
have reached an advanced stage; declined to give an undertaking to
stop the works and invited Pine Glow show that the lease
agreement is
valid in that the suspensive conditions have been fulfilled.
[26]
On 31 August 2021, Pine Glow
responded to the letters of BCC and Elegant’s attorneys and
attached proof that the suspensive
conditions have been fulfilled. To
Pine Glow’s attorney's letter is attached copies of the
approval of a retail and site
license that was issued on 21 December
2018 by the Controller of Petroleum products in terms of the
Petroleum Products Act 120 of 1977
. The approvals were addressed to
Mr W Mashele, who is a director of BCC.
[27]
In response, and on 31 August 2021,
BCC's attorneys replied to Pine Glow’s attorney’s letter
reiterating the stance
that they believe that the agreement is
invalid for one of these suspensive conditions, being clause 4.1.2 of
the agreement not
having a been fulfilled.
Relief
sought by Pine Glow
[28]
In its notice of motion,
besides the usual prayer in terms of
Rule 6(12)
, Pine Glow seeks
relief as follows:
“
2.
That it is declared that the conditions
president, contained in clauses 4.1.1 and 4.1.2 of the lease
agreement (annexure “FA
5” to the founding affidavit)
have been fulfilled and that delete agreement is binding on the
parties thereto.
3.
That the first to third and respondents are ordered to cease any and
all construction
works on the immovable property known as Farm
M[....] [....], Portions 2 and 3 Bushbuckridge Convenience Centre
nR533, Marijane
A, Bushbuckridge, Mpumalanga Province, situated at
Business site [....] at M[....] 200/05/18, Provincial Road P57-2
Bushbuckridge
(“the property”).
4.
That the first to third respondents are jointly and severally ordered
to cause
the site and/ or property to be vacated and restore to the
state it was in before the second and/or third respondent effected
any
works there on, within 30 days, alternatively such time period as
the Honorable Court may determine;
5.
Alternatively to prayers three and four above, that prayer three be
granted as
an interim order with immediate effect pending
finalization of prayers 3and 4 in the ordinary course, alternatively
pending an
action to be instituted by the applicant against
respondents for final relief.
6.
That the first responded and/or all respondents opposing the relief
sought herein
be ordered to pay the costs of this application joints
in severally, the one to pay the other to be absorbed on an attorney
and
client scale including the costs of two counsel.
7.
That such further and/or alternative relief be granted to the
applicant as the
Honorable Court deems meet.”
[29]
The declaratory order sought in
prayer 2 of the notice of motion will constitute a final finding in
respect of the continued existence
of the agreement. This may entitle
Pine Glow to a final interdict in terms of prayers 3 and 4 of the
notice of motion if Pine Glow
has satisfied the requirements for a
final interdict. If the declaratory order sought in prayer 2 of the
notice of the notice of
motion is not granted, Pine Glow may still be
entitled to the interim interdict sought in prayer 5 of the notice of
motion if Pine
Glow has satisfied the requirements for an interim
interdict.
Urgency
[30]
The application was issued 2
September 2021. The respondents were directed by Pine Glow to notify
Pine Glow’s attorneys of
their intention to oppose the
application by no later than 15:30 on Thursday 2 September 2021 and
to deliver their answering affidavits
by no later than 12:00 on
Friday 3 September 2021.
[31]
The application was served upon the
respondents by email sent at 11:25 on 2 September 2021.
[32]
It is therefore clear that the
application was required to be heard on an extreme urgent basis and
that the respondents were given
extremely short notice of the
application and an extremely short time to respond to the
application.
[33]
All the respondents opposed the
application. BCC’s answering affidavit was deposed to by Mr.
Zwelibanzi Solly Peace Ndlovu.
BCC’s answering affidavit was
delivered on 4 September 2021. Elegant and TR delivered a single
answering affidavit that was
disposed to by Mr. Ockie Andries Gabriel
Strydom. Their answering affidavit was delivered on 3 September 2021.
Pine Glow delivered
both its replying affidavits on 6 September 2021.
[34]
All the respondents objected to the
extremely short period they were afforded to respond to the
application in their answering affidavits
and challenged the urgency
of the application.
[35]
In this regard, the BCC says:
“…
..
The
applicant is not restricted to a choice between a hearing in the
ordinary course and a helter-shelter urgent application. Urgency,
I
am advised is a matter of degree. As a party should not seek the
relaxation of the order rules for the conduct of applications
more
extensive than what the emergency of the case demands.”
[11]
and
“
The
applicant’s interests herein are purely commercial. I am
advised that commercial urgency is generally not a justification
for
departing from the rules of court; certainly not to the degree that
the applicant seeks this matter to depart from the rules.”
[12]
and
“
Even
if assuming, in the applicant's favor, that its principle allegation
establishes some notional urgency, it does not establish
a degree of
urgency that justifies the unreasonable curtailment of the first
respondent's right to place its case before the court.”
[13]
and
“
The
applicant's timelines hamstrung the first respondent to such an
extent that it complains of being unable to present its case
fully.
This, we submit, must be borne in mind when considering the cogency
of the first respondent’s case.”
[14]
[36]
In this regard, Elegant and TR says:
“
2.3
T
he time periods
imposed on the Respondents:-
2.3.1 Does
not allow for a well considered, proper and comprehensive opposing
affidavit;
2.3.2
Constitutes such short service (reckoned from the time and date
imposed to file an opposing affidavit) that it
is 10 to mount to a
fragrant disregard of the Second and Third Respondent’s
constitutional and procedural rights to be heard
properly;
2.3.3
Constitutes a clear abuse of both the rules of this court and its
practice directives relating to urgency and
clear authorities
establishing principles of the approach of an urgent court and the
commitment rights afforded to once opponent
in urgent
applications…..”
[15]
and
“
T
he
Second Respondent is simply not in a position to fully deal and
comprehensively with the contents of the application and is
prejudiced thereby, but in order to comply with the unreasonable time
period imposed, the Second Respondent exerts its best efforts
for
such purposes.”
[37]
The matter was heard and partly
argued on 7 September 2021.
[38]
After hearing the parties’
initial argument, I deemed it in the interest of justice and in the
interest of a speedy resolution
of the despite to grant the parties
an opportunity to supplement their papers because the respondents all
lamented the extremely
truncated period given to them by Pine Glow to
properly respond to the application. I postponed the application to
17 September
2021 in order for the parties to file and deliver
further papers if so advised. All the parties filed and delivered
supplementary
affidavits. The respondents delivered supplementary
answering affidavits and Pine Glow delivered supplementary replying
affidavits.
Because of the view I had taken regarding the resolution
of the real dispute, this court simply sought a way to allow the
parties
to get to the essence of the dispute absent technical
objections over procedure if those objections had failed.
[39]
Pine Glow argues that the
urgency arose when Pine Glow for the first time knew that BCC had
given access to the property to another
party and that they were
construction works going on being on Thursday 26 August 2021. There
after Pine Glow acted reasonably by
requesting that the construction
works seize and also requested an undertaking to cease with the
construction work spending the
application. The refusal of such
undertaking on 30 and 31 August 2021 caused the application to become
necessarily urgent. In addition,
BCC for the first time on 30 August
2021 alleged the non-fulfillment of the suspensive conditions.
[40]
Elegant and TR allege that, given
the unreasonable adoption of truncated time periods to the extent
that it is that amount to an
abuse, the application falls to be
dismissed resulting from an abuse of the court’s process,
alternatively, struck from the
roll due to lack of agency and
self-created urgency which is obvious from the set of papers and
defiance of established rules in
terms of the Practice Directives of
this court.
[41]
The respondents nowhere deny that
construction work had commenced, was at an advanced stage and that
the undertakings that were
sought by Pine Glow were not met.
[42]
In my view, having regard to all the
facts before me, the undertaking that was sought was reasonable and
would have prevented this
application being brought on an urgent
basis. The urgency was not self-created but was as a result of the
respondents’ conduct.
BCC did not disclose to Pine Glow the TR
lease agreement or the involvement of Elegant or that the
construction works had begun.
[43]
Pine Glow alleges that it will not
be afforded substantial redress if the matter is heard in due course.
I agree having regard to
the undisputed allegations that the
construction works were continuing and will in all likelihood be
completed soon. I agree with
Pine Glow that, the further the
construction works proceeds, the less likely it will be that a court
will grant the relief sought
in prayer 3 and 4 of the notice of
motion which would ultimately result in the demolition of that which
was already constructed.
[44]
I agree that Pine Glow might have
been over enthusiastic in the time periods it gave to the respondents
to answer the application.
However, I gave the respondents an
opportunity to redress their complaints that the time periods
afforded to them by Pine Glow
to respond to the application was
extremely little. In my view, the basis of this objection being one
of the grounds advanced by
the respondents that the urgent
application should be entertained fell away.
[45]
I therefore find that the Pine Glow
has satisfied the requirements of urgency, and I enroll the matter as
such.
The
real dispute
[46]
The parties agree that the continued
existence of a valid and binding agreement between the Pine Glow and
first despondent is dependent
upon the question whether the
suspensive condition in clause 4.1.2 of the agreement was fulfilled
or not.
[47]
The suspensive conditions are
provided for in clause 4 of the agreement as follows:
“
4.
CONDITIONS PRESIDENT
4.1
S
ave for clauses 1 to 4, and clauses
27 to 35, all of which will become effective immediately, this
agreement is subject to the fulfillment
of the Conditions President
that-
4.1.1 by
no later than 12 (twelve) months from Signature Date the Relevant
Authorities approve the Site License in respect
of the Property; and
4.1.2 by
no later than12 (twelve) months from Signature Date the Relevant
Authorities approve the Retail License in
respect of the Property.
4.2
The Lessor shall, at its expense, use its best endeavors to procure
the fulfillment of the
condition president in clause 4.1.1, as soon
as reasonably possible after the Signature Date and shall to the
extent that such
Conditions President have been fulfilled, prior to
the expiry of the relevant time period set out in that those [sic]
clauses,
furnish the Lessee documents evidencing the fulfillment of
such Condition President. The Lessee carries the risk of non-
approval
of the aforesaid applications. The Lessee shall bear all
cost incurred by it to procure fulfillment of such Condition
President.
4.3
The Lessee shall use its best endeavors to procure the fulfillment of
the condition president
referred to in clause 4.1.1, as soon as
reasonably possible after the Signature Date and shall, prior to the
expiry of the relevant
time period set out in that clause, furnish
the Lessor documents evidencing the fulfillment of such Condition
President. The Lessee
shall bear all cost incurred by it to procure
fulfillment of such Condition President.
4.4
The Party responsible for the fulfillment of a Condition President
shall at all times keep
the other Party fully informed of progress
and, in particular, shall in writing immediately report to such other
Party anything
significant which may from time to time impede or
delay the fulfillment of the Condition/s President. In the event that
and approval
by the Relevant Authority is delayed, the relevant
professional consultant appointed by the Party responsible for the
fulfillment
of the relevant Condition President to procure such
consent or approval, will assist the prospects of successfully
achieving the
approval by the Relevant Authority and if the
professional consultant is of the view that, save for the
administrative delays,
there is no legitimate reason preventing the
approval by the Relevant Authority, the Parties will be negotiate a
further extension
of the time period for fulfillment of the relevant
Condition President/s in good faith.
4.5
Unless the Conditions President have been fulfilled by not later than
the relevant date
for the fulfillment thereof, inclusive (or such
later date or dates as may be agreed in writing between the Parties)
the provisions
of this Agreement save for clauses 27 to 35, which
remain in full force and effect, will never become of any force and
effect and
the status quo ante will be restored as near as may be and
neither of the Parties will have any claim against the other in terms
hereof or arising from the failure of the Conditions President.”
[48]
In its founding papers, Pine Glow
alleges that the suspensive condition in clause 4.1.2 where factually
fulfilled by virtue of a
retail license was already approved on 21
December 2017 as per the written approval confirmation from the
Department of Energy.
[49]
BCC challenged Pine Glow’s
allegation that the suspensive condition in clause 4.1.2 have been
fulfilled. It alleges that
it was never
intended that BCC (to whom the retail license was issued already on
21 December 2017), would operate the business as
defined in the
agreement. As such, a filling station business could not be operated
on the property upon a retail license in BCC’s
name. Properly
construed, so BCC contends, clause 4.1.2 refers to the retail license
required by the operator who would conduct
the filling station
business. Therefore, on BCC's interpretation of the condition
president in clause 4.1.2 was never fulfilled
and consequently, the
agreement never came became of any forced or effect.
[50]
Elegant and TR challenge Pine Glow’s
allegation that the condition president in clause 4.1.2 was fulfilled
by virtue of the
retail licence that was already issued on 21
December 2017 (i.e prior to the conclusion of the agreement) because
even if Pine
Glow had no contractual duty imposed upon it in in terms
of clause 4.1.2 because a retail licence had already been issue to
BCC,
such retail licence is not transferrable, therefore the business
could not lawfully be conducted by Pine Glow.
[51]
Pine Glow meets the respondents’
challenge in reply by stating that: clause 4.1.2 of the agreement
does not specify as part
of the condition by whom the retail licence
should be applied for and in whose name it must be issued; the
agreement was only suspended
until a retail licence is issued and
therefore if a retail licence is issued, the condition has been
fulfilled; the suspensive
condition had already been fulfilled and
there was no obligation on Pine Glow to obtain another retail
license; and, the agreement
became immediately binding.
[52]
In addition, in reply, Pine Glow
alleges that the agreement had come into existence, alternatively,
there was quasi-mutual assent
in that regard and that the delay in
the construction has led to a fictional fulfilment of the suspensive
condition.
[53]
Elegant and TR, in response to Pine
Glow’s reliance upon quasi-mutual assent and the fictional
fulfilment of the suspensive
conditions, in reply, argued in their
first set of heads of argument that in relying upon quasi-mutual
assent and fictional fulfilment
of the suspensive conditions, Pine
Glow sought to make out a case in reply and applied that the relevant
portions of the replying
affidavit be struck. This is what Elegant
and TR argue in their first set of heads of argument:
“
I
t
is a trite principle in our law of civil procedure that all essential
averments must appear in the founding affidavits, for the
Courts will
not allow an Pine Glow to make or supplement his case in his replying
affidavits and will order any matter appearing
therein we should have
been in the founding affidavits.”
I
take it that Elegant and TR meant that new matter must be struck for
this is what is said in
Titty’s
Bar and Bottle Store (Pty) Ltd v A.B.C Garage and Others
,
[16]
:
“
It
has always been the practice of the Courts in South Africa to strike
out matter in replying affidavits which should have appeared
in
petitions or founding affidavits, including facts to establish locus
standi or the jurisdiction of the Court.
[17]
However,
Rule 6(15)
[18]
still leave the
court with a discretion whether or not to strike out offending
material. Afterall, in the preceding paragraph referred
to above in
Titty’s
Bar and Bottle Store (Pty) Ltd
,
the following is said:
“
I
agree with Mr. Van der Spuy that the use of the word "may"
merely indicates that the Court has a discretion but, in
spite
thereof, the sub-rule was, in my viwe, not intended to be exhaustive.
The Court still has an inherent jurisdiction to grant
relief where
the Rules of Court make no provision therefor. Cf. Neal v Neal,
1959
(1) SA 828
(N).”
[54]
Nevertheless, Elegant and TR proceed
to argue that:
“
T
he
Court has discretion to allow new matter to remain in a replying
affidavit, giving the respondent opportunity to deal with it
in a
second set of answering affidavits. This indulgence, or ever, will
only be allowed in special or exceptional circumstances.”
[19]
I
agree with Elegant and TR’s argument and having regard that in
terms of the provisions of
Rule 6(15)
, offensive matter shall only be
struck if the party who laments the new material is prejudiced
thereby. It is for this very reason
that I granted the respondents an
opportunity to file and deliver supplementary answering affidavits so
that their potential prejudice
would be averted.
[55]
Elegant and TR delivered a notice in
terms of
rule 6(15)
on 16 September 2021 in terms of which they
sought an order:
“
T
hat
paragraphs 5.11, 5.12 and 5.13 of the Applicant’s replying
affidavit (and concomitant allegations in the second replying
affidavit) are struck out for one, more or all of the following
reasons:-
1.1
The factual allegations herein
constitutes new evidence, alternatively factual allegations
sustaining a
new cause of action
,
which is
inadmissible
as
it should have formed part of the Pine Glow's founding affidavit; and
1.2
It constitutes
speculative,
argumentative allegations
alternatively
hearsay evidence,
which in itself is inadmissible
,
absent proper averments for preliminary allowing of hearsay evidence
as an exception in terms of
Section 3
of the General Law of Evidence
Amendment act, 1986; and
1.3
It constitutes inadmissible evidence
contrary to the
parole evidence
principle
, relating to evidence
of an intention prior and on entering and agreement, together with
collateral years evidence post the entering
of such agreement
(s)
.
2.
The
previously mentioned are all irreparably prejudicial to the Second
Respondent and Third Respondent’s (and even to the
First
Respondent) to the extent that the allegations cannot be responded
to, either procedurally or substantively within the time
period
allowed in the Applicant's notice of motion.
(Elegant
and TR’s emphasis)
[56]
Instead of seizing the opportunity
when they filed and delivered their supplementary answering
affidavits, the respondents chose
not to deal with the issues of
quasi-mutual assent or fictional fulfilment of the suspensive
conditions.
[57]
BCC states in its supplementary
answering affidavit as follows:
“
I
do not intend herein to deal with the applicant’s new causes of
action in any detail. Be that as it may, from what follows
it will be
clear that the foundational facts reporting to support the
conclusions of quasi mutual ascent, fictional fulfillment
and fraud
are in dispute.”
[20]
[58]
The
only evidence that to my mind remotely raises a dispute to the
“
applicant’s
new causes of action
”
is that “
[T]he
fulfilment or not of suspensive conditions is purely a factual
determination which is ascertained by reference to objective
evidence
– the parties’ subjective interpretations, utterances or
intentions are simply irrelevant to this factual
enquiry.”
[21]
[59]
Although I agree that a
determination of whether or not a suspensive condition has been
fulfilled is ascertained by reference to
objective evidence, I do not
agree that subjective interpretations, utterances or intentions are
irrelevant for these factors ultimately
informs and contributes to a
party’s outward manifestation which forms part and parcel of
the factual determination that
may be required.
[60]
Elegant and TR do not directly meet
the quasi-mutual assent and fictional fulfilment issues. This is how
far Elegant and TR go in
their supplementary answering affidavits:
“…
..The
position of the third respondent was simply that it had a
valid
lease
agreement and accordingly, it did not act unlawful any
sense.”
[22]
(the
deponent’s underlining)
and
“
T
he
information at the disposal of the Second Respondent at the time of
receipt of the letter of demand (27 August 2021) and shortly
thereafter, was that two (2) lease agreements were apparently
concluded for the same site and one (1) of the lease agreements was
clearly
disputed by the party thereto, i.e the First Respondent in re the
lease agreement of the Applicant.”
[23]
(the
deponent’s underlining)
[61]
In their supplementary heads of
argument, Elegant and TR argue that: the court granted leave to
Elegant and TR to supplement their
answering affidavits and not to
file a rejoinder; Pine Glow’s averment that, because Elegant
and TR refrained from addressing
the issues in Pine Glow’s
replying affidavit, same must be taken to be admitted is untenable
and wrong because the respondents
were not afforded leave to file a
rejoinder and no leave was obtained from the court to file and
deliver a rejoinder. This argument
is totally at odds with the
Elegant and TR’s initial stance namely that the court has
discretion to allow new matter to remain
in a replying affidavit,
giving the respondent opportunity to deal with it in a second set of
answering affidavits. This court
gave them the opportunity. They did
not utilize same.
[62]
Therefore, although having been
afforded the opportunity to address the quasi- mutual assent and
fictional fulfilment issues, the
respondents deliberately failed to
do so, albeit for different reasons.
[63]
In view of the aforesaid evidence
and having regard to the argument that was presented on behalf of the
respondents and in circumstances
where the respondents did not use
the opportunity given to them to address any real prejudice, I am of
the view that the respondents
have failed to satisfy the requirements
of
rule 6(15)
in order for the alleged offending material referred to
in Elegant and TR’s rule 6(15) application be struck out.
[64]
The
rule 6(15)
application is
dismissed.
Quasi-mutual
assent
[65]
I consider the issue of quasi-mutual
assent against the background of the parties’ undisputed
conduct after the date for the
fulfilment of the suspensive
conditions expired.
[66]
It is common cause that the
development of the property was hamstrung due to an inability to
secure anchor tenants. This in turn
delayed the execution of the
agreement. Over the period 18 June 2020 to 8 January 2021, various
proposals were made regarding the
way forward in respect of the
agreement. The proposals are borne out by the correspondence between
Pine Glow and BCC that was attached
to the papers. It will serve no
purpose to set out the detail of that correspondence.
[67]
In
Pillay
and Another v Shaik and Others
[24]
,
the following is set out over quasi- mutual assent:
“
[50]
I do not agree with the court a quo's conclusion that there could be
no binding contracts between the parties unless each was
signed by or
on behalf of the buyers and the sellers. In my opinion it is clear
from Goldblatt v Freemantle, supra, and the authorities
cited therein
that, in the absence of a statute which prescribes writing signed by
the parties or their authorised representatives
as an essential
requisite for the creation of a contractual obligation (something
that does not apply here), an agreement between
parties which
satisfies all the other requirements for contractual validity will be
held not to have given rise to contractual
obligations only if there
is a pre-existing contract between the parties which prescribes
compliance with a formality or formalities
before a binding contract
can come into existence. That this is so is clear, for example, from
C W Decker's annotation on Van Leeuwen's
Roman Dutch Law 4.2
sec 1
(not
sec 2
as Innes CJ says at 129) where he pointed out (Kotzé's
translation, 2 ed, vol 2, p 12) that we no longer uphold the
distinction
drawn in Roman law between real, verbal, literal and
consensual contracts because all contracts with us are made with
consent.
With regard to written contracts he referred to an
observation by Samuel Strykius (Modern Pandect 2.14.7) as follows:
'. . . we must regard
the written contracts as distinct, in so far as we should bear in
mind that although the writing does not
constitute the essentiality
of the contract, which is contained in the mutual consent of the
parties, they may nevertheless agree
that their verbal agreement
shall be of no effect until reduced to writing, in which case the
agreement cannot before signature
have any binding force, although
there exists mutual consent; and it cannot be said that the writing
served not in perfecting the
transaction, but only as proof thereof .
. ., since here it is agreed that the consent should not operate
without the writing,
which must be observed as a legitimate
condition.'”
and
“
[53]
This raises the question as to whether the doctrine of quasi-mutual
assent can be applied in circumstances where acceptance
does not take
place in accordance with a prescribed mode but the conduct of the
offeree is such as to induce a reasonable belief
on the part of the
offeror that the offer has been duly accepted according to the
prescribed mode. Viewed in the light of basic
principle, the question
must surely be answered in the affirmative because the considerations
underlying the application of the
reliance theory apply as strongly
in a case such as the present as they do in cases where no mode of
acceptance is prescribed and
the misrepresentation by the offeree
relates solely to the fact that there is consensus.”
[68]
In applying the reliance theory as
was done in
Pillay
,
I find that there is a real possibility that there was consensus that
the agreement remained in full force and effect even after
8 February
2019 until, on 23 February 2021, when BCC pronounced that it wants to
cancel the agreement.
[69]
The reason BCC pronounced that it
wanted to cancel the agreement was not the non-fulfilment of the
suspensive conditions. The reason
advanced was BCC’s financial
inability to perform its bargain. I am further fortified in this view
because both parties attempted
to keep the agreement alive and sought
to secure its further operation as set out above after the expiry
date for the fulfilment
of the suspensive conditions as provided for
in clauses 4.2 and 4.3 of the agreement.
[70]
The parties conducted themselves as
if the non-fulfilment of the suspensive conditions in the manner
provided for in the agreement
was of no moment. The conduct of the
parties
prima facie
demonstrates that they considered themselves bound to the agreement
notwithstanding the non-fulfilment of the suspensive conditions
in
the manner provided for in the agreement. Why else would BCC seek to
cancel the agreement if the agreement had lapsed long ago
for want of
compliance with the suspensive conditions being fulfilled in the
manner provided for in clauses 4.2 and 4.3 of the
agreement and why
would BCC only raise the alleged non-fulfilment of the suspensive
conditions when it was confronted with a possible
claim for specific
performance of the agreement by Pine Glow.
Fictional
fulfilment
[71]
In
Scott
and Another v Poupard and Another
[25]
,
Holmes JA set out what a plaintiff must prove to successfully invoke
the doctrine of fictional fulfilment. These are: non–fulfilment
of the condition; the defendant’s breach of his duty with an
intention to frustrate the fulfilment, and a causal link between
the
non-fulfilment and the defendant’s intentional frustration of
the fulfilment of the condition.
[72]
Even accepting for the moment that
the existing retail and site licences does not constitute fulfilment
of the suspensive conditions,
I am of the view that, having regard to
the conduct of the parties prior to 23 February 2021, none of the
parties intentionally
frustrated the fulfilment of the suspensive
conditions. It did not even come to the fore between the parties
before the non-fulfilment
of the suspensive conditions was raised for
the first time on 30 August 2021.
[73]
Even having regard to what is set
out above, the effect of the respondents’ failure to properly
or at all address the issues
of quasi-mutual assent and fictional
fulfilment leaves these disputes unresolved and, in my view
impossible to be resolved on the
evidence presently before me. The
consequence of this finding is that I am unable to grant the
declaratory order sought in prayer
2 of the notice of motion.
[74]
In order to consider granting
prayers 3 and 4 of the notice of motion, the declaratory order in
prayer 2 would establish a clear
right for the Pine Glow, one of the
requirements for the granting of a final interdict. Because I am
unable to grant the declaratory
order, I am also unable to grant the
relief in prayers 3 and 4 of the notice of motion. Pine Glow is not
entitled to final relief
on the evidence presently before me.
Interim
relief
[75]
What therefore remains to be
considered is whether Pine Glow is entitled to interim relief being
the alternative relief that is
sought by Pine Glow in prayer 5 of the
notice of motion. The requirements for an interim interdict are
trite. Pine Glow must establish:
a prima-facie right; an injury
committed or reasonably apprehended; that the balance of convenience
favours him or her; and that
the Pine Glow has no alternative
satisfactory remedy.
Prima
facie right
[76]
Although there is some doubt whether
the agreement is still in force and effect, valid and therefore
binding due to the issue over
the fulfilment of the suspensive
conditions either factually or fictional or whether the parties
considered themselves bound to
the agreement through mutual assent, I
am of the view that,
prima facie
,
based on the evidence before me, the agreement may still be in force
and effect. Whether my
prima facie
view is correct or not is to be finally determined as contemplated in
the order that I have granted.
Injury
or real apprehension of injury
[77]
On the admitted facts, the
construction conducted by Elegant has commenced and would be
continuing until completion if they it is
not stopped. From Pine
Glow’s perspective, Pine Glow who entered into the agreement
for gain will lose the opportunity in
the filling station if the
filling station is completed and operated by another party.
Therefore, I find in favour of Pine Glow
that harm has already
commenced and will endure if the interim relief Pine Glow seeks is
not granted.
[78]
Pine Glow contends that the
respondents are acting unlawfully by infringing upon Pine Glow’s
contractual rights that flows
from the agreement (and unlawfully
competes with it) and that if the interim relief is not granted, the
respondents’ unlawful
actions will perpetuate. Absent a final
finding that the agreement is in full force and effect and therefore
still binding, it
cannot be found at this stage that the respondents
are acting unlawfully. However, if it is ultimately found that the
agreement
is
in esse
,
their actions would have been unlawful. In light of the possibility
that it may be found that the respondents have acted unlawfully,
I am
of the view that Pine Glow is entitled to protection against the
possible unlawful infringements upon his rights in terms
of the
agreement.
Balance
of convenience
[79]
This part of the enquiry requires
the weighing up of prejudice to each of the parties if an interim
interdict is granted or not
granted. Where the prejudice is the
greatest, that is where the balance of convenience lies. If the
interim relief is granted,
the respondents will be forced to
temporarily halt the construction until the matter is resolved. It is
Pine Glow’s case
that it seeks specific performance of the
agreement. If the interim interdict is not granted, the construction
will proceed to
finalization no doubt. In that event, Pine Glow would
have no way of securing specific performance of the agreement, which
I have
earlier indicated, may still be valid and binding. In my view,
Pine Glow’s potential prejudice outweighs that of the
respondents.
In order to limit the respondents’ prejudice, I
resolved to refer the question over the fulfilment of the suspensive
conditions
and the result of a finding upon the fulfilment of the
suspensive conditions to evidence and ordered the matter to proceed
to judicial
case management within 5 days of the date of the order.
In doing so
[80]
I am confident that delays would be
prevented to the advantage of all the parties. This is also the
reason why I did not grant an
order that the interim relief shall
stand until the Pine Glow institutes proceedings. In my view, due to
the limited dispute, the
oral evidence of the controlling minds of
the Pine Glow and the BCC together with the discovery of further
relevant documents will
be all that is necessary to resolve the real
dispute.
[81]
I am mindful of the fact that
Elegant and TR have already invested substantially on the
construction of the filling station and
that they stand to be
prejudiced by a delay in the completion of the filling station. It
will be in the hands of the parties to
manage the effective
resolution of the dispute through the court. This will limit the
respondents’ prejudice.
No
alternative satisfactory remedy
[82]
The Pine Glow contends that the
relief prayed for by it is the only remedy that will ensure that BCC
complies with its contractual
obligations. Well, I am unsure if BCC
will ever comply with its contractual obligations. It has said that
it is unable to do so.
Nevertheless. Pine Glow’s proposals
already made to facilitate the final execution of the agreement
stands. Perhaps that
will assist BCC in its alleged predicament. It
may therefore still be possible for Pine Glow to get BCC to perform,
either through
judicial intervention or through agreement. According
to Pine Glow, the loss of its opportunity to construct, brand,
sublease and
to supply petroleum products will lead to immediate
damage to Pine Glow.
[83]
Elegant and TR alleges and argues
that Pine Glow falls short of satisfying the requirements for an
interdict. BCC denies that Pine
Glow has made out a case for
interdictory relief, whether final or interim. I disagree.
Paragraphs
5 and 6 of the order
[84]
Rule 6(5)(g)
empowers the court in
instances where application cannot properly be decided on affidavit
to either dismiss the application or
make such order as to it seems
meet with a view to ensuring a just and expeditious decision. The
court it may direct that oral
evidence be heard on specified issues
with a view to resolving any dispute of fact and to that end may
order any deponent to appear
personally or grant leave for him or any
other person to be subpoenaed to appear and be examined and
cross-examined as a witness.
I have decided to do the latter for
there was no grounds to dismiss the application outright.
Costs
[85]
Pine Glow succeeded in being granted
the alternative relief it sought. However, Pine Glow was
over-confident that the matter could
be resolved with the extremely
truncated time periods given to the respondents to meet its case. I
am therefore of the view that
it would be proper to penalize Pine
Glow with an order that it is responsible for the costs associated
with the respondents’
legal practitioners’ appearance on
7 September 2021. In the case of Elegant and TR, two counsel was
necessary given the extent
of the application and the time that was
afforded to answer. The remainder of the costs I resolved to reserve
for costs should
normally follow the result which will only be known
when the application is finalized as envisaged in the order. I grant
no costs
order in the
rule 6(15)
application despite it being
dismissed because Pine Glow only in reply raised the issues of
quasi-mutual assent and fictional fulfilment.
Elegant and TR was
procedurally entitled to challenge Pine Glow’s stance in reply.
Roelofse
AJ
Acting
Judge of the High Court
DATE
OF HEARING:
7 and 17 September 2021
DATE
OF JUDGMENT: 22 September
2021
DATE
OF ORDER:
20 September 2021
APPEARANCES
FOR THE
APPLICANT:
Adv R Du Plessis SC together with Adv G Bench
INSTRUCTED
BY:
Du Toit-Smuts Attorneys
FOR THE FIRST
RESPONDENT:
Adv H Viljoen
INSTRUCTED
BY:
Harris Marcus Mahlangu Attorneys
FOR
THE SECOND AND
Adv Roux SC together with Adv Jacobs
THIRD
RESPONDENTS
INSTRUCTED
BY:
Schabort Potgieter Attorneys Inc.
[1]
Granted
to it by Thabakgolo Traditional Council on 4 September 2017.
[2]
20000
m2 situated on business stand A413 at Maviljan 200/05/18, known as
Farm Maviljan 252 Portion 2 and 3 Bushbuckridge Convenience
Centre
nR533.
[3]
The
agreement is annexed to Elegant and TR’s supplementary
answering affidavit as annexure “SAA1”
[4]
Clause
1 of the TR lease agreement.
[5]
Para.
2.3 of Elegant and TR’s supplementary answering affidavit.
[6]
Para.
3.1 of Elegant and TR’s supplementary answering affidavit.
[7]
Para.
3.11 of Elegant and TR’s supplementary answering affidavit.
[8]
Para.
60 of BCC’s supplementary answering affidavit.
[9]
I
shall return later in this judgment to more specifically the
provisions of the suspensive conditions is central to this matter.
[10]
Cluses
4.2 and 4.3 of the agreement.
[11]
Para.
7 of the BCC’s answering affidavit.
[12]
Para.
9 of the BCC’s answering affidavit.
[13]
Para.
5 of the BCCs heads of argument.
[14]
Para.
7 of the BCC’s heads of argument.
[15]
In
the second and TR’s answering affidavit.
[16]
1974(4)
S.A. 362 (T) at p. 368H.
[17]
Para
5.7 of the second and TRs’ first set of heads of argument.
[18]
Which
provides:
“
The
court may on application order to be struck out from any affidavit
any matter which is scandalous, vexatious or irrelevant
with an
appropriate order as to costs, including costs as between attorney
and client. The court shall not grant the application
unless it is
satisfied that the Pine Glow will be prejudiced in his case if it be
not granted.”
[19]
Para
5.8 of the second and TRs’ first set of heads of argument.
[20]
Para.
9 of the BCC’s supplementary answering affidavit.
[21]
Para.
74 of the BCC’s supplementary answering affidavit.
[22]
Paragraph
3.14 of the second and TRs’ supplementary answering affidavit.
[23]
Paragraph
3.15 of Elegant and TRs’ supplementary answering affidavit.
[24]
[2009]
2 All SA 435 (SCA).
[25]
1971
(2) SA 373
(A) at 378.