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[2019] ZANCHC 63
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Mahlabe v Fischer N.O and Others (1817/19) [2019] ZANCHC 63 (18 October 2019)
IN
THE HIGH COURT OF SOUTH AFRICA, NOTHERN CAPE DIVISION, KIMBERLY
Reportable
Case No: 1817/19
In
the matter between:
LEFIFI
STEPHENS MAHLABE
APPLICANT
And
CHARLES
AREND FISCHER N.O
FIRST RESPONDENT
JENNIFER
ANNE FISCHER
N.O
SECOND RESPONDENT
NEIL
CARLISLE CURRIE N.O
THIRD RESPONDENT
Heard:
19 August 2019
Delivered:
18 October 2019
Phatshoane
ADJP, Williams J and Sieberhagen AJ
JUDGMENT
PHATSHOANE
ADJP
[1]
This
is an appeal against the whole of the judgment and order of the Court
a quo,
per
Stanton AJ, handed down on 02 March 2018 directing Mr Lefifi Stephens
Mahlabe, the appellant, to remove his cattle and/or livestock
from
Vaalboshoek, Windsorton and Vaalkop Farms, situated in the district
of Barkly West ("the farms"), within 10 days
from the date
of the order; further authorising Charles Arend Fischer N.O, Jennifer
Anne Fischer N.O, and Neil Carlisle N.O, the
first to the third
respondents, in their capacities as the Trustees of Charles Fischer
Farming Trust (IT2014/1997), to remove the
said livestock from the
farms and shelter it elsewhere should the appellant fail to comply
with the order.
[2]
In
the appeal the appellant seeks an order setting aside the order of
the Court
a quo
and
substituting it with an order dismissing the application,
alternatively, that the application be stayed pending the outcome
of
the action instituted on 16 July 2013 under Case No: 767/2013. The
appeal is with leave of the Supreme Court of Appeal which
was granted
on 08 October 2018.
[3]
The litigation is entangled in twist and turns. It concerned the
eviction of the appellant's
cattle and/or livestock from the farms
but has now transmogrified into the acquisition and disposal of the
farms which is characterised
by internal conflicts on the part of
members of the Dirisanang Small Farmers Communal Property Association
("the CPA").
Chief amongst the controversies falling for
consideration is whether the Court
a
quo
was correct in ordering the
appellant to remove his cattle and/or livestock from the farms in
light of the allegations that Lerospot
(Ply) Ltd ("Lerospot"),
which sold the farms to the Charles Fischer Farming Trust ("the
Trust"), acquired the
said properties from the CPA through
unlawful and fraudulent means.
[4]
The CPA was established and registered
on 22 June 1998 pursuant to s 8(3) of the Communal Property
Association Act, 28 of 1996,
for purposes of acquiring, holding and
managing property. The appellant intimates that in compliance with
the registration documents
of the CPA its first committee,
constituted by the following members, was elected to manage its
affairs: Rev L S Mahlabe (the appellant),
as the chairperson, Mr
Montshabatho, as the deputy chairperson, Mrs Tlhaloganyo as the
Treasurer, Mrs Gabanakgosi, Mr Sekgame,
Mr Joseph Kgang, Mr Vaaltyn,
Mr Barends, Mr Majola and Mr D Greef.
[5]
The government purchased, for the CPA,
the farms together with some livestock including horses, ostriches,
tractors, and other farming
implements from a certain Mr Percy
Douglas Lloyd, referred to as Mr Douglas in the papers, sometime in
1998. Mr Douglas also privately
sold some of his livestock, which did
not form part of the batch purchased by the government to members of
the community of Warrenton,
Magogong and Ganspan. The appellant, who
is a beneficiary of the CPA, intimates that he initially bought two
head of cattle whereas
a certain Mr Tselane, also a beneficiary of
the CPA, purchased one beast from a committee of the CPA. As at
present Mr Tselane
has 56 herd of cattle while the appellant, has
approximately 18, which are still roaming the farms.
[6]
The CPA had about 384 beneficiaries when
the farms were purchased. Some disagreements relating to the running
of its affairs emerged
in 2008 which resulted in the intervention by
the Department of Rural Development and Land Reform (DRDLR). Further
attempts made
to resolve the CPA's problems came to naught. Its
meetings were not regularly held in 2011 and its difficulties became
profoundly
insurmountable.
[7]
On 01 October 2012 the CPA alienated the
farms to Lerospot which took transfer on 14 December 2012. The
appellant explained that
the CPA's signatories to the Deed of Sale of
the farms, Mr Simon Kgomogadio, Ms Mary Selaledi and Ms Selinan
Rakgoete, were not
mandated to sign because they were not committee
members of the CPA and did not have a Power of Attorney to pass
transfer. It anecdotally
came to his attention during 2013 that the
CPA's farms were sold to Lerospot for approximately R6 million. He
then informed DRDLR,
Kimberley, of the problem. This led to DRDLR
appointing a firm of attorneys to assist the CPA to reverse the
transaction.
[8]
On 22 May 2013 under Case No 767/13 the CPA obtained an interim order
prohibiting
Lerospot, Tobie Myburg Afslaers CC, Statusfin Finansiele
Dienste (Pty) Ltd and Mr Simon Kgomogadio, the respondents in that
application,
from transferring the farms under Deed of Transfer
number: T3466/12 pending the determination of an action by the CPA
for an order
setting aside the transfer of the said properties which
action the CPA was ordered to institute within 30 days from the date
of
the confirmation of the interim order.
[9]
The interim order referred to in the preceding paragraph was
discharged by agreement
between the parties on 07 June 2013. This
notwithstanding, the CPA instituted action against Lerospot on 16
July 2013 under the
same Case No: 767/2013 challenging, as it were,
the validity of the sale of the farms to Lerospot. It avers at para
6.1 of its
Particulars of Claim that it neither intended nor
authorised the transfer of the farms to Lerospot. These allegations
are, without
more, denied by Lerospot, Mr Simon Kgomogadio, Ms MM
Selaledi and Ms MS Rakgoete, the first to the fourth defendants in
the action.
They questioned the
locus
standi
of the CPA on the basis that
it was allegedly dissolved in 2012 in terms of clause 23 of its
constitution. They further contest
the authority of those bringing
the action on its behalf. To this end, these defendants served and
filed with the Court a Notice
in terms of Uniform Rule 7(1) placing
in dispute the authority of those acting on behalf of the CPA and
barring them from so acting
until they satisfy the Court that they
were authorised to act.
[10] In
the action the CPA seeks a declarator,
inter
alia,
that the
transfer of the properties to Lerospot was unlawful and void
ab
initio;
that
Lerospot sign all documents and take all necessary steps to
retransfer the farms to the CPA; further ancillary relief is also
sought.
[11] The
action has not been diligently prosecuted. The defendants' plea and
their Notice in terms of Rule
7(1) were filed on 08 November 2013,
almost six years ago. At the date of the filing of the replying
affidavit to the present application
no response had been delivered
by the CPA to the defendants' Notice in terms of Rule 7(1). I
interpose to mention that the Trustees
are not parties to the action.
I accept that the appellant recently intervened as the second
plaintiff in the action as counsel
informed us from the bar. However,
the Notice of Intervention by the appellant is not apparent from the
record of the action which
I have had the benefit of perusing.
Nothing turns on this.
[12]
On 23 June 2014 the Trustees of
Charles Fischer Farming Trust ("the Trust") purchased
Vaalboshoek and Vaalkop Farms from
Lerospot for an amount of
approximately R20 million. The Trust took occupation of the farms
during September 2014 which were transferred
by the Registrar of
Deeds on 31 October 2014 by virtue of the Deed of Transfer No:
T2110/2014. Mr Charles Arend Fischer, the deponent
to the founding
papers, explained that shortly after taking occupation it became
apparent that the appellant's cattle were grazing
on the farms. When
he discussed "the situation" with the appellant he informed
Mr Fischer that he was a beneficiary to
the farms; he was entitled to
make use of the land; and had lodged a dispute with the Department of
Land Affairs. Mr Fischer says
that he afforded the appellant two
years to finalise the dispute he filed with the Department of Land
Affairs. The two years indulgence
was also premised on the Deed of
Sale between Lerospot and the Trust in terms of which Lerospot was
given a period of two years
within which to evict the alleged
unlawful occupiers from the farms. The grace period lapsed during
September 2016. The appellant
refused to remove his livestock from
the farms. Mr Fischer is of the view that the Trust, as the
registered owner of the property,
is entitled to the undisturbed
possession and exclusive use thereof.
[13]
The appellant submitted that the
sale of the farms by Lerospot to the Trust was tainted and unlawful
because the CPA had initially
disposed of the properties in a
fraudulent manner to Lerospot. This is gainsaid by the Trust.
[14]
In another twist the appellant
brought an application in terms of
s 19(b)(c)
of the
Superior Courts
Act, 10 of 2013
, that he be granted leave to introduce new evidence
on appeal which he says he did not have when he filed the answering
affidavit
in the main application for eviction.
[15]
The new evidence is to the effect
that the decision taken on behalf of the CPA to sell and transfer the
farms to Lerospot was tainted
by fraud in that,
inter
alia,
the individuals who voted in
favour of the motion to dispose of the properties were deceased when
the decision was taken. He says
that he can now produce credible
evidence to show that the individuals who were on the list and
alleged to have signed the attendance
register were deceased on the
date of the meeting where a decision was taken to deregister the CPA;
that the persons who signed
the document, purportedly selling the
property, and claiming to have been properly elected could not have
been elected at such
a meeting as the dead tell no tales; that Mr
Simon Kgomogadio, who was purportedly the Chairperson of the CPA
committee, was an
imposter and not lawfully elected because on the
date of the meeting to elect him and other CPA committee members he
had already
written a letter, giving himself out to be the
chairperson of the CPA, to a certain Mr William Diphahe, a tracing
agent.
[16]
The Trustees are opposing the
application for the admission of new evidence on the basis that ii is
difficult to accept that the
information was not available at the
time of filing the answering affidavit; the evidence is inadmissible
hearsay and does not
comply with s 19 and 20 of the Civil Proceedings
Evidence Act, 25 of 1965; that an Appellate Court will accept new
evidence under
exceptional circumstances if such evidence is relevant
to the issues in dispute. It was contended for the Trust that these
requirements
were not satisfied for the Court to grant the indulgence
sought.
[17]
The Court
a
quo
correctly identified that the
issue for determination was the ownership of the immovable properties
(the farms). It held that the
trite principle is that ownership would
be properly proven by the production of the relevant title deeds.
Insofar as the Trust
produced the relevant title deed to the farms
the Court found that it could not be disputed that it was the
registered owner thereof.
The Court was of the view that Clause 5.2.2
of the Trust Deed confirmed the absence of fraud on the part of the
Trust where it
stipulates:
"Die
koper boekstaaf dat die koper daarvan bewus is dat die verkoper tans
in 'n regsgeding betrokke is met die onregmatige
okkupeerders van die
Dirisanang Small Farmers Communal Property Association ter afsetting
van die onregmatige okkupeerders en die
afwysing van 'n aksie deur
die Dirisanang Small Farmers Communal Property Association."
The
Court held that in the absence of any allegation that the transaction
between Lerospot and the Trust was tainted by fraud it
could not
conclude that it was not the intention of Lerospot to sell the
immovable properties to the Trust and that the Trust intended
to
obtain ownership thereof.
[18] The
Court further found the underlying agreement between Lerospot and the
Trust and the subsequent
registration of the transfer of the
immovable properties in the name of the Trust to have been valid. It
reasoned that any right
that the appellant may have had to occupy the
farms ceased to exist when the CPA was divested of its ownership of
the property.
It concluded that the appellant failed to establish
that he was vested with some enforceable right that entitled him to
remain
in occupation of the farms. The Court was unpersuaded that the
appellant raised real, genuine, or bona fide disputes of facts which
could not be resolved on the papers as they stood. As already alluded
to, it made an order that the appellant remove his cattle
and/or
livestock from the farms.
[19]
The appellant is a beneficiary to the
government's land distribution scheme of 1998 in terms of which
certain portions of the farms
were availed to the communities of
Warrenton, Magogong and Ganspan through the CPA to accommodate and
rear their livestock. His
cattle grazed and is still roaming the
farms since 1998. It is against this background that the application
for eviction ought
to have been considered by the Court
a
quo.
[20]
Our law does not expressly guarantee the
impeachability of a registered deed.
[1]
The SCA made it plain that where an underlying sale agreement was
tainted by fraud, the registration of transfer would not divest
the
seller of ownership of the immovable property concerned.
[2]
This principle was laid down as follows in
Nedbank
Ltd v Mende/ow and Another NNO:
[3]
'[12] It is trite that where
registration of a transfer of immovable property is effected pursuant
to fraud or a forged document.
ownership of the property does not
pass to the person in whose name the property is registered after the
purported transfer. Our
system of deeds registration is negative: it
does not guarantee the title that appears in the deeds register.
Registration is 'intended
to protect the real rights of those persons
in whose names such rights are registered in the Deeds Office'. And
it is a source
of information about those rights. But registration
does not guarantee title, and if it is effected as a result of a
forged power
of attorney or of fraud, then the right apparently
created is no right at all.
[13] This court has recently
reaffirmed the principle that where there is no real intention to
transfer ownership on the part of
the owner or one of the owners,
then a purported registration of transfer (and likewise the
registration of any other real right,
such as a mortgage bond) has no
effect. In
Legator McKenna Inc and Another v Shea and Others
[2010
(1) SA 35
(SCA) paras 21 and 22] Brand JA confirmed, first, that the
abstract theory of transfer of ownership applies to immovable
property,
and, second, that if there is any defect in what he termed
the 'real agreement' - that is, the intention on the part of the
transferor
and the transferee to transfer and to acquire ownership of
a thing respectively - then ownership will not pass despite
registration.
Thus while a valid underlying agreement to pass
ownership, such as a sale or donation, is not required, there must
nonetheless
be a genuine intention to transfer ownership. This
principle was unanimously approved in
Commissioner of Customs and
Excise v Randles Brothers
&
Hudson Ltd
[1941 AD 369]
and has been followed consistently since then."
[21]
In the summary of the article
"Met
andermanskalf mag jy nie ploeg nie, en andermansgoed kan jy nie
verpand nie"
[4]
under the heading
"The
Property of another cannot be pledged or mortgaged unless with the
owner's consent'
the following
seminal remarks are made:
'The registration of transfer of
immovable property pursuant to a fraud perpetrated on the legitimate
owner is an empty gesture
with no legal consequences as far as the
material real rights of the parties involved are concerned. Unless
the owner forms the
subjective
animus transferendi domini
the
formal completion of the transfer formalities and even the
administrative registration of the transfer in the deeds office
remain an ineffective paper exercise. No real right of ownership
vests in the transferee as a consequence of such a pretence.
Registration
does not guarantee title, and if ii is effected as a
result of a feigned power of attorney or of an outright fraud thanks
to a
falsified signature of the rightful owner, the right apparently
created, is no right at all.'
[22]
The principles established in the above
decisions and authorities cited apply squarely to the present matter.
The import is simple.
If it can be established that the title to the
transferee, in this case Lerospot, was secured through some
fraudulent means ownership
would not have validly passed to it. This
was a key issue in dispute which the Court
a
quo
was enjoined to determine. To
the extent that the Court did not consider this principal question it
erred. The determination of
the issue relating to the intention to
sell and acquire the farms between the CPA and Lerospot was, in my
view, antecedent to the
residual question whether the Trust was the
legitimate title holder of the farms. The Court
a
quo's
finding that any right that
the appellant may have had to occupy the farms ceased to exist when
the CPA was divested of its ownership
of the property does not take
into account that the issues pertaining to the acquisition of the
land by Lerospot were highly contested,
in particular the mandate of
those who signed the Deed of Sale on behalf of the CPA was brought
into question.
[23]
Section 12(1) of the Communal Property
Association Act, 28 of 1996, provides that an Association may not
dispose of or encumber
or conclude any prescribed transaction in
respect of the whole or any part of the immovable property of the
association, or any
real rights in respect thereof, without the
consent of the majority of members present at a general meeting of
members. Clause
11 of the constitution of the CPA mirrors what is set
out in s 12 as follows:
'11.
MEMBERS RIGHT TO SELL THEIR RIGHTS/INTEREST
11.1
The members may not sell or dispose of
their rights in any way whatsoever without the written consent of the
entire committee of
the Association.
11.2
The Association can only furnish such
member or members with their written consent if all the members were
consulted in one general
meeting and a quorum was available and a 70%
majority of such members present had consented thereto.
11.3
A member may subject to the above rules
[sell] his shares/interest/rights to the Association.'
[24]
Viewed contextually within the ambit of
s 12 of Act, 28 of 1996, read with Clause 11 of the CPA constitution,
there can be no question
that there are serious issues to be tried in
this litigation. These include: whether the representatives of the
CPA were properly
mandated to transfer the farms to Lerospot; whether
the representatives of the CPA, who purported to sell the farms to
Lerospot,
were duly elected and/or eligible to serve as
representatives of the CPA; whether Lerospot validly acquired the
ownership of the
farms and could consequently validly transfer
ownership to the Trust; whether the alleged decision by the CPA to
transfer the immovable
properties to Lerospot was duly supported by
an inclusive decision making process; whether the alleged decision by
the CPA to transfer
the immovable properties to Lerospot was made
with the consent of the stipulated majority of the CPA's members; and
whether the
alleged transfer of the immovable properties to Lerospot
was done in accordance with the relevant prescripts and the CPA's
constitution.
[25]
To the questions above there are serious
disputes of fact emerging on the papers. The Court
a
quo
correctly noted, albeit
belatedly in its ruling on the application for leave to appeal, that
the grounds of appeal related to the
disputes of fact in respect of
the transaction between the CPA and Lerospot. In terms of the
well-established
Plascon-Evans
rule
[5]
where in motion proceedings disputes of fact arise on the affidavits,
a final order can be granted only if the facts averred in
the
applicant's affidavits, which have been admitted by the respondent,
together with the facts alleged by the latter, justify
such order.
The application procedure was not designed to resolve material
factual disputes which ought to be resolved through
the leading of
oral evidence and require factual resolution.
[26]
There is no indication on the papers
that any of the parties at any stage sought leave from the Court
a
quo
to refer the matter to oral
evidence. It is generally undesirable that a Court
mero
motu
orders a referral. In
Joh-Air
(Pty) Ltd v Rudman
[6]
the Court cautioned against this as
follows:
'It requires in my view a bold
step, by a presiding Judge in an opposed application, to refer the
matter to evidence or trial
mero motu,
because it is a real
possibility that the applicant had decided not to ask for such
procedure to be followed because: he may not
want to be involved in
the cost thereof; his prospects of success, after studying the
answering affidavits, may be slender; it
may possibly lead to an
undesired protracted hearing; the amount involved may be small; the
respondent may be a man of straw or
on account of any of the other
usual considerations in deciding whether or not to apply for the
provisions of Rule
6(5)(g)
to be invoked.'
[27]
In my view, to resolve this application
under the prism of the
Plascon
Evans
rule may lead to considerable
injustice. The Court a
quo
incorrectly determined that the
appellant did not raise real, genuine, or bona fide disputes of fact.
The veracity of the issues
in dispute as foreshadowed in the papers
would require to be properly tested. Referring the application to
oral evidence is inescapable.
[28]
The issues raised in the action
proceedings conflate somewhat with the issues raised in this
application. The parties cited in the
action are the CPA, as the
plaintiff, whereas Lerospot and others, are the defendants. As
already alluded to, the Trust (represented
by its Trustees) is not
cited as a party in the action although, in my view, it has a direct
and substantial interest in the outcome
of that litigation. In this
application Lerospot and the CPA are not cited as parties. On the
view I take, all the issues stemming
from this application, that
ought to be referred to oral evidence, should be consolidated with
the action proceedings under Case
No 767/13. Regard being had to the
fact that the action proceedings stagnated, I am of the view that,
this application and the
action be placed before a case-flow
management judge to prevent any further undue delay.
[29] On
the question of the introduction of new evidence on appeal the
appellant mentioned
en passant
that he intervened in the
action and would place the evidence before the trial Court for its
final determination of the matter as
that evidence will canvass
material facts which are not only relevant to the present application
but also to the pending action;
and that the evidence would also
prove that the sale of the farms was unlawful and should be set
aside.
[30] On
account of my conclusion that there are disputes of fact not soluble
on the papers little purpose
will be served in determining the
application in respect of the admission of new evidence. This is so
because the suggested new
evidence seems directly linked and relevant
to the issues in dispute which ought to be referred to oral evidence.
Similarly the
probative value of the new evidence ought to be tested
through oral evidence. It would therefore be pragmatic that the new
evidence
should also serve before the same Court.
[31]
On
the question of costs: ordinarily the application to admit new
evidence on appeal has a bearing on costs which, to my mind, should
be reserved for determination at the hearing in due course of the
oral evidence.
[32]
From
the foregoing analysis, the appeal should succeed with costs. I make
the following order.
Order
1.
The appeal is upheld
with costs which shall include the costs of the application for leave
to appeal in the Court
a
quo
and the
Supreme Court of Appeal.
2.
The order of the Court
a
quo
is set aside and substituted
with the following:
"1.
The application is referred to oral evidence on the following
issues:
1.1
whether the representatives of
the Dirisanang Small Farmers Communal Property Association ("the
CPA') were properly mandated
to transfer the immovable properties to
Lerospot (Pty) Ltd ("Lerospot”);
1.2
whether the representatives of
the CPA, who purported to sell the immovable properties to Lerospot,
were duly elected and/or eligible
to serve as representatives of the
CPA;
1.3
whether Lerospot validly acquired
the ownership necessary to transfer the said ownership to the Charles
Fischer Farming Trust ("the
Trust);
1.4
whether the alleged decision by
the CPA to transfer the immovable properties to Lerospot was duly
supported by an inclusive decision-making
process;
1.5
whether the alleged decision by
the CPA to transfer the immovable properties to Lerospot was made
with the consent of the requisite
majority of the CPA's members; and
1.6
whether the alleged transfer of
the immovable properties to Lerospot was done in accordance with the
relevant legislation and the
CPA's constitution.
2.
All the affidavits
exchanged between the parties shall serve as the pleadings at the
hearing/trial in due course.
3.
The evidence to be adduced
shall be that of any witness whom the parties, or either of them, may
elect to call, with rights of subpoena
and production of documents
under subpoena.
4.
The costs of the
application are reserved for determination at the hearing of oral
evidence."
3.
The costs of the application for the
admission of new evidence on appeal are reserved for determination at
the hearing of oral evidence.
4.
The application under Case No: 1817/2017
is hereby consolidated with the action instituted under Case No:
767/2013.
5.
The Registrar of this Court is directed
to refer the application and the action referred to in para 4 to
judicial case-flow management.
MV
Phatshoane ADJP
Williams
J and Sieberhagen AJ concur in the judgment of Phatshoane ADJP
APPEARANCES:
FOR
THE APPLICANT: Adv T Makoti
Instructed by Engelsman
Magabane Attorneys.
FOR
THE RESPONDENTS: Adv JG Van Niekerk SC
Instructed by Haarhoffs Inc.
[1]
Silberg and Schoeman's The Law of Property, fifth edition,
LexisNexis, Butterworths, p 236.
[2]
Meintjes NO v Coetzer and Others
2010 (5) SA 186
(SCA) at 190
paras 9-10;
Quartermark Investments (Pty) ltd v Mkhwanazi and
Another
2014 (3) SA 96
(SCA) at 104-105 para 25;
Nuance
Investments (Pty) ltd v Maghilda Investments (Pty) Ltd 2016 JDR 2255
(SCA) at para 47
[3]
2013 (6) SA 130
(SCA) at 135C-G paras 12-13
[4]
2014 TSAR 45
JC Sonnekus - Professor in Private Law University of
Johannesburg
[5]
Plascon-Evans Paints Ltd v Van Riebeeck Paints {Pty} Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A) at 634H - I
[6]
1980 (2) SA 420
(T) at 428 - 429C