About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2019
>>
[2019] ZAFSHC 113
|
|
Motsima and Another v Kopa and Others (2296/2019) [2019] ZAFSHC 113 (4 July 2019)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number:
2296/2019
In
the matter between:
PHILLIP
TSHEPISO
MOTSIMA 1
st
Applicant
THANDIWE
PATIENCE MOTSIMA 2
nd
Applicant
and
LIPHAPANG ALBERT
KOPA 1
st
Respondent
NTHABISENG
MOSOEU-KOPA 2
nd
Respondent
THE TRUSTEES OF THE
TIME BEING
FOR THE C & D
INVESTMENT TRUST 3
rd
Respondent
[Registration number:
IT4256/2006]
THE REGISTRAR OF
DEEDS, FREE STATE
PROVINCE 4
th
Respondent
THE TRUSTEES FOR THE
TIME BEING OF
THE VAN DER MERWE
FAMILY TRUST 5
th
Respondent
[Registration number:
IT020728/2014(B)]
CORAM:
MBHELE, J
HEARD ON:
20 JUNE 2019
DELIVERED
ON:
04 JULY 2019
[1]
On 24 May 2019 the first and second applicant (
the applicants) commenced proceedings in this court by the
issue of a notice
of motion in which were reflected truncated time
periods in respect of the filing of a notice of opposition and an
answering affidavit.
The notice of motion indicated that the
applicant would move for a rule nisi on 20 June 2019, returnable on
18 July 2019. The applicants
sought a relief in the following
terms:
1. That condonation be
granted to the applicants for the non-compliance with the rules of
the Court regarding the time periods,
service and form of this
application and that the application be heard in terms of rule 6 (12)
as an urgent application.
2. That a rule
nisi
be issued, calling upon the respondents to show cause on 18 July 2019
at 09:30, why the following orders should not to be made
final:
2.1
That pending the finalisation of the action instituted by the
applicants against the respondents in this Honourable Court under
case number 2122/2019 (“the main action”) for the
transfer of the immovable property known and registered as Erf […].
Bloemfontein, Extension 166, Mangaung Metropolitan
Municipality, Free State Province held under Title Deed T15089/2018,
better known as […] Road, Woodland Hills Wildlife Estate,
(“property”) to the fifth respondent (the Trustees
for
the time being of the Van der Merwe Family Trust). The first,
second and fifth respondents are prohibited and interdicted
from
transferring the immovable property from the first and second
respondents to the fifth respondent:
2.2
That, pending the finalisation of the main action, the Fourth
respondent is interdicted from registering the Transfer of the
immovable property from the first and Second respondent to the fifth
respondent;
2.3
That the first and second respondents, be ordered to pay the costs of
this application; and
2.4
In the event that this application is opposed by the third and/or
fifth respondents that the third and/or fifth respondents,
jointly
and severally with the first and second respondents, be ordered to
pay the costs of this application
3. That the paragraphs
2.1 and 2.2 above shall serve as interim interdict with immediate
effect pending the finalisation of this
application.
4. Further and/or
alternative relief.
Although a rule nisi was
sought initially in the notice of motion, I am sure that with the
full exchange of affidavits what was
contemplated by the parties was
the finalisation of the matter as if it were the return day of the
rule nisi.
BACKGROUND
[2]
The applicants were owners of a property described as erf […]
Bloemfontein extention 166, Mangaung Metropolitan Municipality
better
known as […] Road, Woodland Hills Wildlife Estate,
(“property”).
[3]
Around February 2017 the applicants entered into an agreement with
the third respondent, represented by its trustee Stompie
Buys, in
terms of which the applicants would sell their property to the third
respondent and simultaneously conclude with it a
lease agreement
allowing the applicants to stay in occupation of the property with an
option to buy the property back at an agreed
price.
[4]
The purchase price was the outstanding amount the applicants owed the
bank in terms of the loan agreement, a securing covering
bond
registered in favour of the commercial bank (Standard bank) over the
property.
[5]
The sale was necessitated by the fact that the applicants had fallen
into arrears with the monthly repayments with the bond
holder and
unable to settle the outstanding loan.
[6]
The property was registered in the name of the third respondent after
the amount owing to Standard Bank was settled in full.
[7]
The applicants’ financial position did not improve and as a
result they failed to pay rental owed to the third respondent
in
terms of the lease agreement.
[8]
An agreement was reached between the applicants and the first and
second respondents in terms of which the first and second
respondents
would purchase the property from the third respondent for the same
amount that the third respondent paid to the bond
holder to
extinguish applicants’ debt.
[9]
The applicants would in terms of the agreement stay in occupation of
the property under a lease agreement.
The
applicants would have an option to repurchase the property from the
first and second respondent.
[10]
The agreement between the applicants and the first and second
respondents was not reduced into writing.
The
applicants presented a draft lease agreement to the first and second
respondents which the respondents refused to sign.
The
first and second respondents presented their own version of the lease
agreement which the applicants refused to sign.
Correspondence
was exchanged between the parties in an attempt to reach a common
ground to formalise the lease agreement. Letters
were exchanged
between 31 October 2018 and 12 November 2018. In the letter of 12
November 2018, the applicants had proposed amendments
to the lease
agreement prepared by the first and second respondent.
[11]
The applicants instituted an action in this court under case number
2122/ 2019 during May 2019 ( the main action) in which
action the
applicants seek transfer of the property from the first and second
respondent to the applicants.
[12]
The basis for their claim in the main action is that the transactions
that resulted in the transfer of the property into the
names of the
third respondent and, further, into the names of the first and second
respondent were unlawful and against the public
policy.
The
first and second respondent entered into an agreement of sale with
the fifth respondent
[13]
The parties are at variance on whether the transfer of the property
into the names of first and second respondents from the
third
respondents was as a result of loan agreement between the first and
second respondents and the applicants with the first
and second
respondent maintaining that the transaction was a pure sale agreement
between the first and second respondents and the
third respondents
with no attachment to the applicants.
Contentions
by the parties
[14]
Mr. Van der Merwe, on behalf of the first and second applicant,
submitted that the matter became urgent on 16 May 2019 when
the first
and second respondents refused to keep the transfer of the property
in abeyance pending the finalisation of the main
action. He contended
that, throughout, the transfer of the property was meant to serve as
security for what was actually a loan
that the third respondent
advanced to the applicants and a further loan that the first and
second respondent advanced to the applicants.
[15]
He contended further that first and second applicants never had the
intention of passing ownership of the property to the third
respondent as well as the first and second respondents. He argued
that the applicants’ continued occupation of the property
and
its sale far below its market value are an indication that the
agreement was a simulated transaction concealing the real intention
of the parties, which was a loan agreement to clear the debt owing to
Standard bank. He argued, further, that the transaction has
complete
characteristics of a
pactum commissarium.
[16]
Mr Reynders, on behalf of the first, second and fifth respondents,
argued that the applicants created their own urgency as
they knew as
far back as November 2017 that their request for the first and second
respondents to suspend the sale of the
property was not
favourably considered by the first and second respondents. He
contended further that the agreements that the applicants
rely on for
the relief they are seeking are bad in law and unenforceable in that
Section 2 (1) of The Alienation of Land Act
requires that
agreements for the sale of immovable property must be in writing. He
argued that the first and second respondents
entered into a valid
sale agreement with the Third respondent which establishes no
relationship between the first and second respondent
and the
applicants. He, further, argued that failure by the applicants to
exercise the option to repurchase the property
It
is clear from the papers that after the letter of 31 October 2018,
from applicants’ Attorney, there was a line of communication
opened with the parties engaging each other in an attempt to settle
the matter.
[17]
Pactum Commissarius
was
defined as follows by Cloete JA
in Graf v
Buechel
2003 (2) All SA 123
SCA.
A
pactum
commissorium
in
the context of a pledge is an agreement that if the pledger defaults,
the pledgee may keep the security as his own property.
[18]
Solomon JA in
Sun
Life Assurance Co of Canada v Kuranda
1924 AD 20
at
24
said of a
pactum
commissorium
:
‘
[T]he
very essence of that pact is that the creditor is entitled to retain
the article pledged, however great its value may be,
in satisfaction
of a debt, however small in amount. And it was because of the
harshness and injustice of such an arrangement made
with the debtor
in straitened circumstances that the Emperor Constantine decreed that
such pacts should for the future be prohibited’
[19]
It is so that our courts have repeatedly confirmed that an agreement
whereby a creditor retains a pledged asset tendered as
security for a
debt for itself for no value is a
pactum
commisorium
and is invalid and unenforceable.
The creditor must realise the pledged asset at a fair market value
for the transaction to be enforceable.
The fair price must be
determined at the default date and not the pledge date.
[20]
In
Plascon Evans Paints Ltd v van
Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A)
Corbett
JA found on 634 and 635:
“
It
seems to me, however, that this formulation of the general rule, and
particularly the second sentence thereof, requires some
clarification
and, perhaps, qualification. It is correct that, where in proceedings
on notice of motion disputes of fact have arisen
on the affidavits, a
final order, whether it be an interdict or some other form of relief,
may be granted if those facts averred
in the applicant's affidavits
which have been admitted by the respondent, together with the facts
alleged by the respondent, justify
such an order. The power of the
court to give such final relief on the papers before it is, however,
not confined to such a situation.
In certain instances the denial by
respondent of a fact alleged by the applicant may not be such as to
raise a real, genuine or
bona
fide
dispute of
fact (see in this regard
Room
Hire Co. (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd
,
1949 (3) SA 1155
(T), at pp 1163-5;
Da
Mata v Otto, NO
,
1972 (3) SA 585
(A), at p 882 D - H).
If in such a case the
respondent has not availed himself of his right to apply for the
deponents concerned to be called for cross-examination
under Rule
6(5)(g) of the Uniform Rules of Court (cf.
Petersen v Cuthbert &
Co Ltd,
1945 AD 420
, at p 428;
Room Hire
case, supra, at p
1164) and the court is satisfied as to the inherent credibility of
the applicant's factual averment, it may proceed
on the basis of the
correctness thereof and include this fact among those upon which it
determines whether the applicant is entitled
to the final relief
which he seeks.”
[21]
The parties are at variance as to whether the purchase price paid by
the first and second respondents to the third respondent
was a fair
market value for the property. The applicants allege that the
property was worth about 6 million rands while the first
and second
respondents aver that
it
was
worth far below 6 million rands.
It
is the applicants’ case that the agreement was that they would
have the first option to repurchase the property at a price
determined on the date of pledge.
[22]
First and second respondents deny that they were bound in terms of
the verbal agreement to give the applicants the first option
to
repurchase the property at a predetermined price, being the amount
the first and second respondents paid to extinguish the applicants’
indebtedness to the third respondent.
The
following communication was exchanged between the first applicant and
Buys who was the trustee of the third respondent before
an agreement
of sale was entered into between the third respondent and the first
and second repondent.
“
From:
Stompie Buys
To: The first
Applicant
Date: 2018/ 06
27
Hello Motsima
I refer to our
conversation this morning. Can you please confirm who the buyer of
this property will be? Send his ID. I would also
need your approval
in writing that we can sell the
property
to this person.”
On
the same day the applicant responded as follows to Buys:
Hi Stompie
“
Our
previous telephonic conversation on the matter stated above has
reference. I wish to confirm that I have authorized you to process
the buying back of the property situated at No. […] Road,
Woodland Hills Wild life Estates in Bloemfontein, Free State
Province. Secondly, I also wish to confirm that I have
authorized you to sell the property to Mr. and Mrs. Kopa as per the
copies of their ID numbers I sent to you earlier.
I hope you will
find the above in order and for any inquiries please do not hesitate
to contact me.”
[23]
From the correspondence exchanged between Buys and the first
applicant it is clear that third respondent required permission
from
the first applicant before the third respondent could enter into an
agreement of sale of the property with the first and second
respondents. This is an indication that the applicants still had a
say on how the property had to be disposed off.
It
is further not in dispute that the applicants were the ones who
approached the first and second respondents to request them to
buy
the property from the third respondent in order to ease their
financial burdens.
On
05 November 2018 first and second respondents’ Attorney wrote a
letter to the applicants’ Attorney in response to
the latter’s
correspondence of 31 October 2018.
[24]
Paragraph 2 and 3 of the letter written by respondents’
Attorney read as follows:
‘
2) Your
clients have not once given any indication they have security to pay
anything. Your clients have not once given our clients
any proof that
they are trying to buy back the property. Since registration of the
property in in the name of Mr. and Me. Kopa
there has been no attempt
from your client with proof of funding for the buy back, in fact they
would not meet with the Kopa’s
and myself and omitted to pay
rental. Your client also did not want to put the property on the
market or it seems pay rental.
3) it is
becoming apparent / or seemed so that your client wants to stay in a
property they cannot afford, and they refuse put the
property back in
the market, irrespective of the understanding between the parties.
Writer first phoned your client in August 2018
regarding the property
and the sale thereof, thus they were aware what the Kopa’s
understanding was. The fact that your client
does not want to put
property in the market is now clear.’
[25]
It is clear from the above paragraph that there was a relationship
between the applicants and first and second respondents
emanating
from some verbal agreement between the parties. It is not clear why
the first and second respondents would worry about
the applicants’
opinion on further alienation of the property if they understood that
they were complete owners of the property
with no strings attached to
the applicants. What is apparent is from the above extract is that
the applicants refused to put the
property in the market much to the
dismay of the first and second respondents who were
losing money because the applicants
had failed to honour their rental
payments.
[26]
The purpose of section 2 of The Alienation of Land Act is to achieve
certainty in transactions involving the sales of fixed
property so as
to avoid fraud or unnecessary litigation. See
Swanepoel
v Nameng
2010 (3) SA 124
SCA. An
agreement is valid whether written or not. What is important is the
meeting of the minds and articulation of the parties’
intention.
[27]
Before any agreement is reduced into writing the parties agree on the
terms to be reflected on the written document. The written
document
does not exist in vacuum. It is clear from the conduct of the
applicants and the first and second respondent that they
agreed on
certain terms which have a bearing on whether their agreement
constituted a
pactum commissorium
or a conditional sale
agreement. These issues are pending in the main action and can be
better ventilated at trial.
REQUIREMENTS
FOR AN INTERIM INTERDICT:
[28]
It is trite that the requisites for an
interim
interdict are the following:
i.
a
prima facie
right,
although open to some doubt;
ii. a well-grounded
apprehension of irreparable harm if interim relief is not granted and
ultimate relief is eventually granted;
iii. the balance of
convenience favours the granting of the interim interdict, and
v. the applicant has no
other satisfactory remedy. See:
Webster
v Mitchell
1948 (1) SA 1186
(W)
[29]
The respondents contend that the balance of convenience does not
favour the applicant in that the respondents are saddled with
the
burden of enduring all expenses relating to the property
pendente
lite
.
[30]
On the other hand the applicants contend that they will suffer
irreparable harm should the property be transferred to the fifth
respondent pending the main action. The transfer will result in the
applicants not being suited. They further contend that
the
granting of the relief will only result in maintaining the status quo
pendente
lite
.
If the applicants are unsuccessful in the main action, the transfer
of the property from the first and second respondent to the
fifth
respondents can still be effected.
[31]
The test to be applied in adjudicating a
prima
facie
right in
the circumstances of an interim interdict is well established. Having
regard to the facts averred by the applicant, together
with those
facts put up by the respondent that are not disputed, it must be
considered whether, having regard to the inherent probabilities,
the
applicant should obtain final relief on those facts at the trial. The
facts set up in contradiction by the respondent should
then be
considered and, if serious doubt is thrown upon the applicant’s
case, it cannot succeed. See:
Simon
No v Air Operations of Europe AB and Others
[1998] ZASCA 79
;
1999 (1) SA 217
(SCA)
at
228G
[32]
It is well established that for the applicants to be granted the
relief sought they must demonstrate a prima facie right which
if not
protected harm may ensue. I have already mentioned that the
applicants have demonstrated that there was an agreement between
them
and first and second respondents which the validity of its terms must
be tested at trial.
The
principle that the creditor should realise the pledged asset at a
fair price must be respected. It is against this background
that I am
of the view that the applicants have an issue justiciable in law
which the trial court must determine.
[33]
The applicants request that the sale be stayed pending the
finalisation of the main action. When all is considered I am of
the
view that the balance of convenience tilts the scales of fairness and
justice in favour of the applicants. The only way their
rights can be
protected
pendente
lite
is
by maintaining the status quo.
I
am of the view that the harm that may be suffered by the applicants
if the relief sought is not granted far outweighs the prejudice
likely to be suffered by the first, second and fifth respondents if
the status quo prevails
pendente
lite
.
[34]
It is trite that the issue of costs falls within the discretion of
the court. Such discretion must be exercised judiciously
having
regard to the facts of each matter. In the current matter I am
of the view that costs must be in the cause of action.
In view of the
above the following order is made:
ORDER:
2.
Condonation is granted to the applicants for the non-compliance
with the rules of the Court regarding the time periods,
service and
form of this application and that the application be heard in terms
of rule 6 (12) as an urgent application.
2. 1 Pending the
finalisation of the action instituted by the applicants against the
respondents in this Court under case number
2122/2019 for the
transfer of the immovable property known and registered as Erf […].
Bloemfontein, Extension 166,
Mangaung Metropolitan
Municipality, Free State Province held under Title Deed T15089/2018,
better known as […] Road, Woodland
Hills Wildlife Estate, to
the fifth respondent. The first, second and fifth respondents
are prohibited and interdicted from
transferring the immovable
property from the first and second respondents to the fifth
respondent:
2.2 pending the
finalisation of the main action, the Fourth respondent is interdicted
from registering the Transfer of the immovable
property from the
first and Second respondent to the fifth respondent;
3.
Costs are costs in the cause.
________________
NM
MBHELE, J
On
behalf of Applicant: Adv R Van der Merwe
Instructed
by: Maree & Vennote Attorneys
BLOEMFONTEIN
On
behalf of 1
st
, 2
nd
and 5
th
Respondent(s): Adv S. Reynders
Instructed
by: Van Wyk & Preller Inc
BLOEMFONTEIN