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[2018] ZAFSHC 171
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Johan Burger (Pty) Ltd v Broodryk (5473/2017) [2018] ZAFSHC 171 (1 November 2018)
FREE
STATE HIGH COURT, BLOEMFONTEIN
REPUBLIC
OF SOUTH AFRICA
Case
No.: 5473/2017
In
the matter between:
JOHAN
BURGER (PTY)
LTD
Applicant
and
M
A
BROODRYK
Respondent
CORAM:
HEFER, AJ
JUDGMENT:
HEFER, AJ
HEARD
ON:
16 AUGUST 2018
DELIVERED
ON:
1
NOVEMBER 2018
[1]
Although the only issue to be adjudicated upon is the question which
party should be held liable for the costs of the application,
in
order to come to a decision, the facts pertaining to the application
need to be set out.
[2]
The Applicant launched the application on an urgent basis for an
order in terms of which the Respondent was to be interdicted
and
restrained from in any way further conducting any farming activities
on the farm Smaldeel in the Heilbron district. The Respondent
was
further to immediately relinquish all possession of the farm referred
to and take and all necessary steps to restore the Applicant’s
possession thereof. Furthermore the Respondent was also to pay the
costs of the application.
[3]
According to the Applicant, the Respondent and his father approached
Johan Burger, the Managing Director of the Applicant during
August
2015, enquiring whether the Applicant would be interested in renting
out the farm Smaldeel, district Heilbron which the
Applicant
purchased during the course of 2015.
[4]
On Mr. Burger’s insistence Respondent then deposited an amount
of R1 000 000,00 in the trust account of Mr.
Burger’s
attorneys, namely Esthe Muller Attorneys in Vereeniging. The
arrangement was, according to the Applicant, that the
lease agreement
would be reduced to writting Ms. Muller was then instructed by Mr.
Burger to attend to the drafting of such an
agreement.
[5]
Ms. Muller provided Mr. Burger with a draft agreement during August
2015 which he then discussed with the Respondent. After
their
discussion, Ms. Muller was then instructed to draft a final
agreement.
[6]
According to Mr. Burger, the Applicant insisted that the Respondent
replenish the minerals ordinary absolved and lost in the
ground each
year on the leased property. He was to apply and work in a
certain amount of phosphate per ton as well as a certain
amount of
potassium.
[7]
According to the Applicant, Mr. Burger provided the Respondent with a
final agreement but he never signed it. The Applicant
alleged that on
each and every occasion Burger enquired about the signing of the
agreement, he was told that he, that is the Respondent,
was extremely
busy and would attend to it as soon as he possibly could.
[8]
The Applicant further alleges that the Respondent, however, planted
maize on the property for the 2015/2016 year without applying
the
potassium and phosphate the Applicant had insisted upon. According to
the Applicant, Mr. Burger then personally made a study
and brought in
the help of agricultural experts to determine the effect and damage
related to the withdrawal of potassium and phosphate
on the land.
[9]
The Applicant then sent a letter, dated 7 October 2016 addressed to
the Respondent in which the Respondent was urged to rectify
the
levels of phosphate and potassium. It was then also specifically
stated that if the said levels was not rectified, it would
constitute
a breach of the agreement.
[10]
In a letter dated 17 October 2016, Mr. H.S.L. du Plessis, an attorney
in Kroonstad, acting on behalf of Respondent addressed
a letter to
Applicant’s attorney in which he only dealt with the manner in
which the R1 000 000,00 paid by the
Respondent was to be
dealt with. It is notable that Mr. Du Plessis did not address the
potassium and phosphate issue at all.
[11]
According to the Applicant the Respondent then again planted maize on
the farm without the application of either the phosphate
or
potassium. This was during October, alternatively November 2016. As
the physical harvesting of the maize crop grew closer, Mr.
Burger
again requested a meeting in Kroonstad with Mr. Du Plessis, the
Respondent and his father which was held on 4 May 2017.
Mr. Du
Plessis drafted a minute of this meeting from which minute the
following important aspects appear:
(i) Mr. Burger handed a
written lease agreement and indicated that the Respondent refuses to
sign same;
(ii) According to Mr.
Burger the terms of the written agreement, in particular paragraph
4.1 thereof had been verbally agreed upon
between the parties to the
effect that Respondent is obliged to administer 3.5 kilograms of
phosphate per hectare per ton and 4
kilograms of potassium per
hectare per ton each year.
[12]
What is important is that it was noted that it was agreed upon that a
written lease agreement which was to be approved by both
parties
was to be drafted.
[13]
Save for the standard clauses which are normally contained in a lease
agreement, it was minuted that such written agreement
to be drafted,
shall contain a specific clause regarding the amount of phosphate
which had to be administered by the Respondent
during the beginning
of 2017.
[14]
According to Mr. Burger, he understood the arrangement was that Mr.
Du Plessis, therefore the attorney acting on behalf of
the
Respondent, was to draft an agreement and provide it to all
concerned. The Applicant through Mr. Burger, then states that such
agreement was, however, never forthcoming. The Respondent, according
to the Applicant, did not apply the phosphate for the two
preceding
years nor did he pay an additional R33 000,00 per year which
was allegedly also agreed between the parties.
[15]
The Managing Director’s son, Gert Burger, then wrote a letter
addressed to the Respondent’s attorney dated 31 August
2017.
This letter refers to the amount of R1 077 240,00 which was
outstanding in regards to the phosphate and potassium levels
which
had to be corrected by the Respondent. It is then also stated in this
letter that according to information received from
a certain Mr.
Scheepers, it appeared that the Respondent was going to sublease the
farm Smaldeel which fact, according to the Applicant,
the Respondent
was apparently trying to hide from the Applicant. This letter then
also contains a proposal that the parties agree
in writing that no
further lease agreement exists between the parties and that the
parties will not have any claims against each
other in future.
[16]
A letter, dated 19 September 2017 was then written on behalf of the
Applicant in which it was confirmed that the Applicant
do not wish to
continue with the continuance of the lease agreement and that Ms.
Muller apparently drafted an agreement of cancellation
which was to
be signed by the parties concerned. On 5 October 2017 Mr. Du Plessis,
on behalf of Respondent indicated that the Respondent
intended to
continue with the agreement.
[17]
In a letter dated 16 October 2017 Ms. Muller, then indicated that the
Respondent repudiated the terms of the agreement dated
4 May 2017 in
that, amongst others, he did not rectify the phosphate and potassium
levels as allegedly agreed upon. For sake of
clarity, the agreement
referred to which was concluded on 4 May 2017 is with reference to
the meeting which was held and in respect
of which a formal written
agreement was to be drafted. In a further letter dated 19 October
2017 Ms. Muller then again confirmed
that the agreement between the
parties had been lawfully terminated by the Applicant.
[18]
The basis for urgency of the matter, was that should the Respondent
at that stage continue to plant again on the farm Smaldeel
without
properly rehabilitating the land it will mean that the “…
situation and relationship between the parties would come even
more compounded …”
in that “…
the
company would not be able to utilize – in any way – its
property further for the whole of 2017/2018 production season
…”
I will return to this aspect of urgency later herein.
[19]
The Respondent challenges the deponent, being Johan Burger’s
authority to depose to the affidavit and to bring the application
on
behalf of the Applicant. In particular, the Respondent draws the
Court’s attention to the fact that the deponent has failed
to
provide the Applicant’s resolution passed by the Board of
Directors authorising this deponent to depose to the affidavit
and
also to bring the application on behalf of the Applicant.
[20]
The Respondent also draws attention to the fact that the agreement
was supposed to be concluded between the deponent, being
Mr. Johannes
Burger in his personal capacity and the Respondent and at no stage
was mention made of the Applicant.
[21]
Importantly, the Respondent relies upon a valid agreement of lease
which exists for a period of five years. The Respondent
disputes the
fact that it was the Respondent who contacted the deponent to the
founding affidavit but indeed alleged that it was
the deponent
himself who contacted the Respondent’s father and
requested a meeting in order to negotiate a lease agreement
in
respect of the property. According to the Respondent, Johan Burger
explained that he intended to purchase the property from
a certain
Mr. Wentzel and needed the money in order to fund the purchase
consideration.
[22]
The Respondent disputes that the Applicant ever presented a draft
agreement during August 2015 as alleged. According to the
Respondent,
the only draft which was presented to him was during the meeting on 4
May 2017. The Respondent further disputes the
obligation of 3.5
kilogram phosphate to be administered but indeed states that the
amount to be administered was 3 kilogram of
phosphate.
[23]
According to the Respondent the agreement which was to be drafted
pursuant to the meeting of 4 May 2017 was to be drafted by
the
attorney acting on behalf of the Applicant and not the Respondent’s
attorney. In this regard the Respondent refers to
a letter by Ms.
Muller addressed to Mr. Du Plessis dated 5 May 2017. This
aspect will also be dealt with herein later.
[24]
The Respondent further draws attention to the fact that the lease
agreement which was anticipated and/or purportedly concluded
at a
later stage did not contain a clause to the effect that the
Respondent was not allowed to sublease the property. The Respondent
further disputes the urgency of the matter and alleges that any
urgency which might exist was created through the Applicant’s
own doing.
[25]
According to the argument as contained in the Respondent’s
opposing affidavit, the original oral agreement was novated
and
replaced by the agreement referred to in the minutes of the meeting
held on 4 May 2017.
[26]
Furthermore, according to the arguments set out in the opposing
affidavit, the parties to the agreement were the deponent,
being
Johan Burger himself as well as the Respondent. Because the Applicant
was not a party to the original agreement, the Applicant,
according
to the Respondent does not have the necessary
locus standi
to
bring this application.
[27]
I was informed that the parties have reached an agreement thus the
reason for only argument in respect of the issue pertaining
to costs.
[28]
As far as the reply to Respondent’s opposing is concerned, such
reply contains a great number of legal argument. Practitioners
should
keep in mind that affidavits in Motion Court proceedings are there to
place evidence and facts before Court. For that reason
affidavits
should not contain legal argument nor reference to authorities. Legal
argument and references to authorities should
be reserved for heads
of argument and the oral argument presented in Court. The main reason
for this, in my mind, is that the purpose
of affidavits is to
place facts and evidence before Court in the first instance and
in the second instance, in most
of the matters the deponent himself
cannot under oath swear to authorities and legal argument which is
the effect if the latter
is contained in a sworn affidavit. In
appropriate cases a Court should consider punitive cost orders where
affidavits do indeed
contain such legal argument and/or authorities.
[29]
As far as the reply is concerned the deponent, Johan Burger concedes
in reply that he is no longer an Managing Director of
the Applicant
and then further states that he was unaware at the time of deposing
to the affidavit of this fact and more in particular
that he had been
removed as a director entirely. He then, however, states that the
facts are within his personal knowledge and
therefore he is able to
depose to the founding affidavit. In answer to the challenge to his
authority, he then refers to a confirmatory
affidavit by Gert Burger,
his son, who is the Director of the Applicant indicating that “
the
Applicant is indeed a company and that I am authorised to institute
proceedings on its behalf”.
He then refers to a
confirmatory affidavit by Gert Johannes Burger which is appended to
the replying affidavit.
[30]
It is necessary to consider this point. The words used by the
deponent, Johan Burger, is the following:
“
My authority is
confirmed by a confirmatory affidavit of Gert Burger, the Director of
whom Mr. Broodryk speaks indicating that the
Applicant is indeed the
company and that I am authorised to institute the proceedings on its
behalf. I mark it ‘REP1’.
[31]
REP1 being a confirmatory affidavit does however not indicate
that the Applicant is indeed a company and that Johan Burger
has been
authorised to institute the proceedings on behalf of the Applicant.
[32]
There is judicial precedent for holding that objection may be taken
if there is nothing before Court to show that the Applicant
has duly
authorised the institution of Notice of Motion proceedings.
“
Unlike an
individual, an artificial person can only function through its agents
and it can only take decisions by the passing of
resolutions in the
manner provided by its constitution”.
[1]
[33]
It was obvious that the Respondent challenged the authority of the
deponent to not only depose to the affidavit but also to
institute
the application on behalf of the Applicant. The Applicant failed to
produce a resolution that the Applicant itself has
indeed authorised
the deponent to institute the present application. The manner in
which the Applicant attempted to rectify the
absence of authority
does not assist the Applicant in establishing authority on behalf of
the Applicant. It therefore appears that
the deponent to the founding
affidavit do not have the necessary authorisation to both depose to
the affidavit as well as
to launch the application on behalf of
the Applicant.
[34]
According to the Applicant the essence of the dispute is whether
there is a legal and validly binding nexus between the parties
which
allows the Respondent to continue farming on the farm Smaldeel.
[35]
It is common cause that no written agreement was concluded between
the parties. Before the meeting of 4 May 2017, according
to the
Applicant, he produced a draft agreement at some stage, being
annexure “JB2” to the founding affidavit which
according
to the Applicant, the Respondent refused to sign.
[36]
Before this draft, final agreement, the Respondent apparently also
had a draft agreement prepared by his attorney, Ms. Muller.
The
first draft as opposed to the final draft was in the name of Mr.
Johan Burger personally, in his capacity as lessor of the
property
and not the Applicant as is in the second draft agreement. Be it as
it may, the Respondent denies that any agreement at
all had been
produced for signature as alleged by the Applicant.
[37]
What is of further importance is that after the meeting of 4 May
2017, again no written agreement came into existence. In the
minutes
in regards to the meeting held on 4 May 2017 it appears that a
written agreement was to be drafted which was to be approved
by both
parties to such an agreement. According to the Applicant it was the
responsibility of Respondent’s attorney to draft
such an
agreement whilst, according to the Respondent, it was the
responsibility of the Applicant’s attorney. For purposes
of
adjudication of the matter, and in particular the question in regards
to the costs of the application, it is not necessary for
me to find
which party’s responsibility it indeed was to draft such an
agreement. I need not say more than the contents of
the letter by Ms.
Muller dated 5 May 2017 addressed to Respondent’s attorneys
without doubt shows that it was the responsibility
of Applicant’s
attorneys to draft such an agreement. This letter refers to
minutes, to be provided ( referring to the
minutes of the meeting of
4 May 2017) in order to prepare an agreement Surely, had it
been the responsibility of Respondent’s
attorneys to draft the
agreement between the parties, one would have expected this letter to
refer to such draft agreement to be
drafted by the Respondent’s
attorneys. In fact there is no correspondence indicating any queries
from the side of the Applicant’s
attorneys enquiring when the
final agreement which was to be drafted was to be expected from
Respondent’s attorneys.
[38]
I found it astounding also that since 4 May 2017 the Applicant itself
has not taken any steps to have such written lease agreement
finalised between the parties. Even if it is accepted that it might
have been the responsibility of Respondent’s attorneys
to draft
this draft lease agreement, where this agreement was apparently of
utmost importance to the Applicant, why did he not
proceed and
instruct his attorney herself to proceed with the drafting of the
written agreement ?
[39]
Mr. Olivier
, on behalf of the Respondent argued that an
agreement came into existence during the meeting of 4 May 2017. I do
not deem it necessary
to make a finding in this regard. It has,
however, been established through the facts common cause that a
verbal agreement came
into existence during the second half of 2015.
This agreement is confirmed by the fact that Respondent occupied the
farm since
approximately August 2015. It appears from both annexures
“JB1” as well as “JB2” that the period of
lease
of five years commenced on 1 September 2015. It is further
common cause that the amount of R1 000 000,00 in regards to
the full five year period has already been paid by the Respondent to
the Applicant.
[40]
The so-called “
novation”
of this agreement
relied upon by the Respondent, with reference to the so-called
“
settlement agreement”
which the parties had
reached by 4 May 2017 can at most be in regards to the aspects as
contained in paragraph 2.6.2 of the minutes
in regards to the meeting
on 4 May 2017. This so-called “
settlement agreement”
did not alter the provisions regarding the amount of R1 000 000,00
which has already been paid as well as the duration
of such lease
agreement.
[41]
At the time of the hearing of the matter, the Respondent was also
still occupying the farm. Respondent relies upon the so-called
“
settlement agreement”
of 4 May 2017 as his right
to occupy the farm. Whether it was in terms of the agreement reached
during August 2015 or the settlement
agreement relied upon by the
Respondent reached on 4 May 2017, the Respondent had a right to
occupy the farm. The basis upon which
the Applicant approached the
Court is the alleged repudiation by the Applicant of the agreement
whether it being the 2015 or the
2017 agreement. In respect of the
repudiation of the agreement, the Applicant firstly relies upon the
letter dated 31 August 2017
written by Gert Burger to the
Respondent’s attorney. This letter records an outstanding
amount of approximately R1 000 000,00
concerning the
phosphate and potassium application and also reported the
conversation which the deponent apparently had with Mr.
Scheepers
concerning the possibility that Mr. Scheepers was to sub-lease the
farm from the Respondent. In this letter we find that
the Applicant
is already willing to terminate the agreement between the parties on
the basis that each party goes its own way.
It is evident that
nothing is being said about the R1 000 000,00 which has
already been paid for the full five year term
of the lease agreement.
[42]
According to the Applicant there was no reply by the Respondent to
the latter by the Applicant. Then follows a letter
dated 19 September
2017 by a certain Ms. Erasmus, in the conveyancing department of
Applicant’s firm of attorney’s,
merely stating that
because it is now the Respondent who is not interested in the
continuation of the lease agreement, an
agreement of
cancellation of the agreement should be signed. In response to this
letter Mr. Du Plessis, the attorney acting on
behalf of Respondent
then sent an e-mail dated 5 October 2017 in which Ms. Muller was
informed that the Respondent does not wish
to terminate the lease
agreement. Then follows an e-mail by Ms. Muller merely stating that
according to the Applicant the Respondent
has repudiated the
agreement, which repudiation was accepted by the Applicant and
therefore the agreement was cancelled. This letter
does not contain
any grounds concerning the repudiation of the agreement. When the
attorney acting on behalf of the Respondent
then responded to the
effect that the Respondent still wishes to continue with the
agreement, Ms. Muller then sets out such grounds
for cancellation in
a further letter dated 16 October 2017. According to this, the
grounds would be:
(a) Respondent’s
failure to administer the agreed amount of phosphate ; and
(b) Respondent’s
failure to pay the additional amount of R33 000,00 per year in
regards to the periods of 20174/2018
and 2019 as apparently agreed on
4 May 2017.
Ms.
Muller then further refers to the fact that Respondent apparently
indicated that he did not wish to continue with the lease
agreement
and that he wished to cede this agreement to Mr. Scheepers. This
letter by Ms. Muller must be compared with the e-mail
by Gert Burger
addressed to Mr. Du Plessis dated 31 August 2017. In the latter
e-mail Mr. Burger merely refers to an outstanding
amount in the first
instance and in the second instance that Mr. Burger is apparently
concerned about the alleged sub-lease of
the property. Nothing is
being said about the grounds relied upon in Ms. Muller’s letter
of repudiation referred to. Unlike
the letter almost a year before by
Mr. Burger dated 7 October 2016 Respondent’s attention is not
drawn to the fact that Respondent’s
failure to administer the
phosphate and potassium constitutes a breach of the agreement. From
the e-mail dated 31 August 2017 it
appears that the Applicant was
more than willing to terminate the agreement between the parties on
the terms as set out in the
draft cancellation agreement. When the
Respondent was not willing to terminate the agreement, it appears
that the Applicant was
in fact looking for any excuse to terminate
the agreement between the parties. Support for this is the fact that
before the letter
of repudiation by Ms. Muller, the Respondent was
not put on terms before cancellation of the agreement by the
Applicant.
[43]
The contents of the e-mail dated 31 August 2017 as well as Ms.
Muller’s letter of repudiation coupled with the Respondent’s
denial Muller’s letter of repudiation of the agreement,
coupled with the Respondent’s denial of repudiation
of
the agreement, lead to the inevitable conclusion that the
Applicant’s real reason for termination of the agreement,
are
those as contained in the e-mail of 31 August 2017. Whereas neither
one of the agreements contained a clause to the effect
that the
Respondent was not allowed to sublease the property and the alleged
outstanding amount in regards to the rehabilitation
of the property,
could be claimed by way of the action procedure, termination of the
agreement by the Applicant was therefore unlawful.
The Applicant
therefore did not approach the Court with the proverbial clean hands
. It is quite significant that is was the Respondent
who
enrolled the matter for hearing pertaining to costs and not the
Applicant.
[44]
As far as the urgency is concerned I am also not convinced that the
Applicant was entitled to approach the Court on an urgent
basis. On
the version of the Applicant itself it allowed the Respondent to
continue farming without administering the alleged agreed
amount of
phosphate and potassium for a considerable time .
[45]
I have been informed that the parties have come to an agreement in
regards to the present application and from what I could
understand a
new lease agreement was concluded between the parties. The fact
that the deponent to the Applicant’s founding
affidavit did not
have the necessary authority not only to depose to the affidavit but
also to launch the application, as well
as the facts relied upon by
the Applicant in regards to the alleged repudiation by the
Respondent, clearly shows that the Applicant
would not have been
successful in the application. In those circumstances only the
Applicant can be held liable for the costs of
the application.
[45]
Therefore the following order is made:
ORDER
Applicant
is ordered to pay the costs of the application.
____________________________
J.J.F
HEFER, AJ
On
behalf of the Applicant : Adv. A. Sander
Instructed
by Kramer Weihmann & Joubert Incorporated
BLOEMFONTEIN
On
behalf of Respondent: Adv. J.L. Olivier
Instructed
by Symington & De Kok Attorneys
BLOEMFONTEIN
[1]
Mall (Cape) Pty Ltd v Marino Koôperasie Beperk
1957 (2) SA 347
CPD.