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[2018] ZAFSHC 193
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Goldex 16 (Pty) Ltd v Body Corporate of Waterford Golf and River Estate and Another (3979/2016) [2018] ZAFSHC 193 (9 November 2018)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 3979/2016
In
the matter between:
GOLDEX
16 (PTY)
LTD
Applicant
and
THE BODY CORPORATE
OF WATERFORD
GOLF AND RIVER
ESTATE
1
st
Respondent
MOGWELE TRADING 291
(PTY)
LTD
2
nd
Respondent
CORAM:
DAFFUE, J
HEARD
ON:
25 OCTOBER
2018
JUDGMENT
BY:
DAFFUE, J
DELIVERED
ON:
09 NOVEMBER 2018
I
INTRODUCTION
[1]
This is an application in terms of rule 42(1)(b) of the Uniform Rules
of Court. The Body Corporate in whose favour I granted
relief
as long ago as 13 October 2017 seeks a variation of paragraph 4 of my
order. On that day I granted several orders,
having heard
extensive arguments and after being confronted with application
papers in excess of 750 pages. I
inter alia
had to deal
with a novel issue,
i.e.
the alleged statutory obligation of
owners of Real Rights of Extension in sectional title schemes to pay
levies. Although
I found in favour of the developer and owner
of several Real Rights of Extension that it was not obliged in terms
of the applicable
Statutes to pay levies as required by the Body
Corporate, I found that it was contractually bound to pay levies as
claimed.
II
THE PARTIES
[2]
The parties are Goldex 16 (Pty) Ltd (“Goldex”), the
applicant in the original application, but the respondent in
this
application and the Body Corporate of Waterford Golf and River Estate
SS139/2006 (“the Body Corporate”), the first
respondent
in the original application, but the applicant in this application.
Adv GF Porteous appeared for Goldex in this
application as was the
case earlier and Adv P Strathern SC appeared for the Body Corporate
as in the past.
III
THE RELIEF SOUGHT
[3]
The Body Corporate seeks a variation of paragraph 4 of the order
granted on 13 October 2017 which reads as follows:
“
4.
First respondent’s
monetary
claim
against applicant is referred to trial, the counter-application to
stand as simple summons and further pleadings to be exchanged
in
terms of the Uniform Rules of Court.” (emphasis added).
[4]
The words
“
monetary
claim”
caused confusion
as is apparent from the application papers.
The
Body Corporate’s viewpoint is that a variation of the order is
required only insofar as it is necessary to make it clear
that it is
only the
quantum
of the claim that has been referred to trial, submitting that the
amended order will bring it in line with the judgment.
According
to it the order should read as follows:
“
4.1 The applicant
is liable to pay the first respondent levies in respect of all vacant
premises held by the applicant, (i.e. the
areas of the common
property demarcated for future construction of houses), on the same
basis as other subsequent owners/developers
of vacant stands over
which they held and hold real rights of extension, such levies to be
calculated and payable on a pro rata
basis with owners of other
sections.
4.2 The quantum of first
respondent’s monetary claim against applicant is referred to
trial, the counter-application to stand
as simple summons and further
pleadings to be exchanged in terms of the Uniform Rules of Court.”
Goldex
denies that the Body Corporate is entitled to relief and I am again
confronted with an opposed application.
IV
WHAT SHOULD HAVE
TRANSPIRED
[5]
In my view and relying on experience as counsel and judge, counsel
were expected to approach me as the presiding judge immediately
upon
reading the judgment containing an order that is perceived to be
ambiguous, or containing a patent error or omission.
Counsel,
or if they are from out of town as
in casu
, the local
attorneys on their behalf, will approach the judge in chambers the
following day or very soon thereafter and request
him or her for
clarity and/or amendment of the order to deal with the ambiguity,
patent error or omission. It did not happen
in casu.
If it was the case, I might have said: ”Off course, this is
what I meant….., or there is a patent error in that….
or I omitted to add …..” I would have responded in
accordance with the conclusion to which I arrive herein,
notwithstanding a long delay and the litigation that ensued since
October 2017.
V
LITIGATION SINCE MY
ORDERS
[6]
An application for leave to appeal was brought by Goldex which I
dismissed on 11 December 2017. What amazes me is that
not a
word is said in either the founding affidavit, Goldex’
answering affidavit and the replying affidavit in the present
application pertaining to the arguments raised and my reasons
contained in my judgment, dismissing this application. I quote
some paragraphs from that judgment to show what I was called upon to
adjudicate:
“
[2] In his heads
of argument and during his oral submissions Mr Porteous submitted
that
the court erred in
finding that applicant contractually bound itself to pay levies to
the Body Corporate
.
He relied on the well-known authorities applicable to establish
whether tacit contracts were concluded.
He
reiterated that Goldex’s willingness to pay levies had nothing
to do with any obligation to do so
,
but because of its vested interest in the success of the Scheme.
He referred to the later
dissensus
and the attempts to mediate and submitted that the court erred in
coming to the conclusion arrived at as mentioned
supra.
[3]
Mr
Porteous submitted
with
reference to
Wightmann t/a
JW Construction v Headfour (Pty) Ltd
[2008] ZASCA 6
;
2008 (3) SA 371
(SCA) at para
[13]
that
the Body Corporate, who bore the onus to prove a tacit contract,
failed to allege sufficient facts to prove its case.
[8]
I agree with Mr Strathern that if the Body Corporate’s version
in respect of Goldex’s contractual undertaking to
pay levies
cannot be rejected, Goldex was not entitled to the final declaratory
and associated relief it sought. It did not
seek a referral to
oral evidence and its failure to do so is fatal to its application
for leave to appeal. See: Law
Society, Northern Provinces
v Mogami and Others
2010 (1) SA 186
(SCA) at para [23].
[9]
I do not intend to repeat my reasons and the conclusions arrived at
in my judgment. I merely refer to paragraphs [41] to [53]
of the
judgment and the contents of the minutes as well as the Body
Corporate’s allegations in that regard which are not
in
dispute. If Goldex intended to ensure that the Scheme did not
collapse, it would be possible to agree with the Body Corporate
to
settle any deficit on the income and expenditure account as and when
it arises, or even to pay an amount in advance, but making
it clear
that it is done
ex gratia
and without any statutory or other
obligation. However,
it agreed to pay levies as stipulated
in the minutes referred to.
[10]
I am satisfied that the Body Corporate’s defence to Goldex’s
claim based on the contractual undertaking was pleaded
with
sufficient clarity, setting out detailed facts, to such an extent
that it was not possible to reject the Body Corporate’s
version
as being untenable and/or false, bearing in mind the test in
Plascon-Evans
.
In fact, and unlike as suggested on behalf of applicant,
the
Body Corporate did not rely on a tacit contract, but on an express
oral agreement confirmed in various minutes of meetings.”
(emphasis added).
[7]
Goldex did not petition the Supreme Court of Appeal upon dismissal of
the application for leave to appeal whereupon the Body
Corporate
filed a declaration on 7 February 2018 in accordance with my order of
13 October 2017. It took Goldex four months
instead of the
prescribed twenty days to file its plea and counterclaim on 4 June
2018. On 6 July 2018 the Body Corporate’s
plea to the
counterclaim was filed. No replication was filed and the pleadings
closed on 27 July 2018.
[8]
When discovery was due the parties apparently considered what was to
be adjudicated during the hearing as the extent of the
dispute would
have a bearing on the extent of documents to be discovered. The
dispute in this regard triggered the present
application.
VI
THE PARTIES’
SUBMISSIONS
[9]
The application in terms of rule 42(1)(b) is brought by the Body
Corporate and therefore I shall firstly deal with Mr Strathern’s
arguments. He, as Mr Porteous, relied on
Firestone
South Africa (Pty) Ltd v Genticuro AG
1977 (4) SA 298
(A) and the summary by Trollip JA at 304D and
further. According to him the essence is firstly, whether there
is a congruity
between the judgment and the order and secondly, if
the matter falls within the ambit of rule 42(1)(b).
[10]
He also referred to
Marks v Kotze
1946 AD 29
where the Appeal
Court found, based on several well-known judgments, that a court has
the power to clarify its own order. In
Marks v Kotze
the
Appeal Court clarified its own order granted on appeal a year earlier
on urgent application by the successful respondent.
In doing so
the court stated at p 30:
“
It was really a
clarification of the order of the Cape Provincial Division, as
confirmed and amplified on appeal, which was sought.”
The
Appeal Court clarified its earlier order by declaring which Liquor
Licensing Board had to consider the liquor licence.
[11]
Based on the
Marks
and
Firestone
judgments Mr Strathern submitted that if my judgment is considered
and properly construed, it is clear that I intended only the
quantum
of the Body Corporate’s claim to be referred to trial. He
referred to several passages in my judgment to illustrate
his point.
I shall deal with some of these during my evaluation
infra
.
[12]
Finally, Mr Stathern submitted, with reference to
Firestone
supra
at 307 and
Thompson v SABC
[2000] ZASCA 76
;
2001 (3) SA 746
(SCA) at 748 I-749 C that if the order is amended as
requested,
“
the sense and
substance”
thereof will
not be changed as the order will merely follow the reasoning in the
judgment and therefore relief should be granted
as prayed for.
According to him the order should have been more intelligently worded
in explicit language and that will be
achieved if relief is granted.
[13]
Mr Porteous submitted, based on
Firestone
supra,
that an amendment
will change the
“
sense
and substance”
of the
order and therefore the relief should not be granted. He tried
to distinguish
Marks v
Kotze
, but conceded that a
court may clarify its order to give effect to its true intention.
He insisted that the court clearly
did not separate the merits and
quantum
of the Body Corporate’s claim and that no finding was made in
favour of the Body Corporate.
[14]
Mr Porteous argued with some persuasion that the Body Corporate
failed to bring the case within the ambit of rule 42(1)(b).
The
order as it stands is not ambiguous. The ambiguity must
manifest from the order itself and this is not the case.
The
words
“
monetary claim”
has a definite meaning and are
unambiguous. There is also no patent error in the order and no
indication of an omission.
[15]
He also argued that the Body Corporate cannot now, a year after the
order was granted, ask for amendment. It clearly
acquiesced in
the order and should in any event be penalised for the delay in
bringing the application and met by a dismissal of
the application.
When the application for leave to appeal was refused, the Body
Corporate proceeded to file a declaration
and also pleaded to Goldex’
counterclaim. Mr Porteous submitted that already in its
declaration the Body Corporate
anticipated that the court may not
agree with its viewpoint in respect of a contractual undertaking to
pay levies insofar as it
pleaded in its declaration in the
alternative as follows:
“…
.in the
event that this court determines that the judgment does not contain
or amount to a finding which is binding on the parties
(which is
denied) the Plaintiff relied on the following:…”
[16]
Finally Mr Porteous submitted that, even if the Body Corporate
succeeds to show that the relief it seeks falls within the ambit
of
rule 42(1)(b) which remained vehemently denied, the court should
dismiss the application because of the delay of about a year.
He
argued that Goldex will be severely prejudiced if the relief is
granted as it will be prevented from showing at the trial
that no
agreement was entered into as alleged on the basis that the merits
had been adjudicated in favour of the Body Corporate.
VII
EVALUATION OF THE SUBMISSIONS
[17]
I shall proceed with an evaluation soon, but first of all have to lay
a basis for the reader to appreciate the background.
I thought
I made myself clear in my judgment, but apparently not. I
intend to quote extensively from the judgment, indicating
my
reasoning and conclusions. I refer to the following passages:
“
[39]……..
I cannot see how I could possibly read into any sections of the two
Acts words and/or excise words from sections
in order to reconcile
the legislation with the approach of the Body Corporate. It is
the legislature’s task to draft
legislation.
[40] The
next issue
to consider
is Goldex’ possible liability based on contract
:
……
VIII
THE BODY CORPORATE’S RELIANCE ON A CONTRACTUAL UNDERTAKING TO
PAY LEVIES
[41] …….
[42]
The Body Corporate is of the view that Goldex is contractually bound
to pay levies in respect of the vacant stands mentioned
in its
Certificate of Real Rights of Extension of which it is still the
holder on the basis as if it was the owner of sections
in terms of
the Sectional Titles Act. Goldex, on the other hand, is of the
view that no levies or other amounts are due and
payable to the Body
Corporate in respect of its Real Right of Extension with specific
reference to 19 demarcated and numbered areas
on the common property.
[43]
On Mr Hulme of Goldex’ version it has paid an aggregate amount
in excess of R4.4m to the Body Corporate between 14 June
2007 and
February 2016, which contributions the Body Corporate submits was for
nothing else than levies raised and which Goldex
contractually agreed
to pay.
Goldex now claims that many payments were made
ex
gratia
and in some instances payments were made under
protest. I could not find any indication prior to the filing of
the founding
application that payments were made
ex
gratia.
This was raised for the first time in the
founding affidavit.
[44]
……
[45]
……
[46]
On 23 August 2007 the Body Corporate held its first special general
meeting. Messrs Hulme and Sneech represented Goldex
at the
meeting. It was agreed in paragraph 12.2 of the minutes that as
from 16 June 2007 the Body Corporate would be responsible
for
maintenance and equipment. I quote the following
verbatim
from paragraph 13.3:
“
It
was agreed that levies will commence at R2000 per month until 31
December 2007 then will be increased to R2500 per month until
the
next AGM which should be in August 2008. Payment of the base
levies will be monthly in advance by debit or stop order
to alleviate
body corporate cashflow collection problems. Interest on
outstanding levies will be levied at prime plus 2 percentage
points.
The developer will pay his
share of the levies in respect of actual costs incurred of the unsold
48 stands pro rata.”
[47]
In the light of the budget which was duly approved, the Judin
Children’s Trust would become liable for levies of about
R2m
for the year, if Goldex’ viewpoint is accepted and also bearing
in mind the legislation considered
supra. ….
Clearly,
Messrs Hulme and Sneech on behalf of the developer, Goldex, did not
believe that it could be expected of the first sectional
title owner
to pay all expenses of the Body Corporate. It is therefore no
surprise that Goldex agreed to pay pro rata in
respect of all of the
unsold 48 stands. The use of the term “pro rata”
can mean nothing else than that Goldex
accepted an obligation in
respect of each vacant unsold stand measured against the entire costs
of the Scheme. The agreed
levy is directly in line and
reconcilable with the amounts payable by Goldex’ purchasers, in
particular Mr Cowley referred
to in the next paragraph. It is
highly probable that the proposed levy of R2 000 per month, to
be increased during the
2007/2008 financial year to R2 500, was
arrived at by dividing the total expenses by 48, and consequently, it
is accepted
that it was agreed that a levy was to be paid in respect
of each vacant stand or section.
[48]
In the deeds of sale entered into between Goldex and various
purchasers, provision was made for payment of levies. It
escapes any logic that Goldex would be insisting on such payments to
be made to the Body Corporate if it had no statutory or contractual
obligation towards the Body Corporate……..
[49]
Even if Goldex was not statutory obliged to pay levies, nothing
prevented it to agree to the payment of levies and also contracting
with its purchasers to ensure that they pay levies. The
Scheme’s very existence was in danger if nobody was prepared
to
accept liability. Obviously, the entity that would have
suffered the most if the Scheme failed was Goldex. It must
have
spent a small fortune to develop the Scheme. I reiterate that
Goldex must have known that the Scheme would collapse
unless it
provided financial assistance in the form of levies to ensure that
the Body Corporate’s books balance.
[50]
……
[51]
On 5 October 2012, nearly two years later
, Mr Hulme on behalf
of
Goldex for the first time queried the correct calculation of
levies, although Goldex acknowledged its obligation to pay levies
…….
[52]
……
[53]
I am satisfied that the
golden thread
that emerges from
the minutes of meetings is that
Goldex agreed to pay levies on the
same basis as other subsequent owners/developers of vacant stands
over which they held Real Rights
of Extension
.
X
THE BODY CORPORATE’S CLAIM FOR THE PAYMENT OF LEVIES
[57]
There is
doubt about the correctness of the
quantum
of the Body Corporate’s claim.
I do not accept Mr
Porteous’ submission that the claim is illiquid as it is not
capable of easy proof. Items
might have been claimed that the
Body Corporate is not entitled to, but that
does not mean
, in
principle, that
levies due and payable cannot be ascertained with
relative ease
.
[58]
Mr Strathern, whilst
appreciating some difficulty
faced by the
Body Corporate
to prove the claim
, suggested that
this
aspect
be referred to trial, that the counter-application shall
stand as a simple summons and that further filing of pleadings be
allowed
to take place in terms of the uniform Rules of Court.
Contrary thereto, Mr Porteous submitted that the whole
counter-claim shall be dismissed with costs.
[59]
…….
XI
CONCLUSION
[60]
Applicant
is not entitled to a declaratory order as sought.
Although it is not liable as owner of a Real Right of Extension
reserved
in terms of s 25(1) of the Sectional Titles Act for the
payment to the first respondent of any amounts other than those
recoverable
in terms of s 3(1)(d) of the Management Act, it
has
bound itself
contractually
to settle levies charged from time to time by the Body Corporate in
respect of all vacant premises,
i.e.
the areas
of the common property demarcated for future construction of houses,
such levies to be calculated and payable on a pro
rata basis with
owners of other sections.
[61]
…… The monetary claim – prayer 3 – shall be
referred for trial.
[62]
…… Although I am satisfied that Goldex contractually
bound itself to settle the levies charged by the Body Corporate,
......” (emphasis added)
[18]
In
S v Wells
1990 (1) SA 816
(A) at 820C-F the court dealt with variation of a
judgment as follows:
“
The more
enlightened approach, however, permits a judicial officer to change,
amend or supplement his pronounced judgment, provided
that the sense
or substance of his judgment is not affected thereby…..
According to Voet a Judge may also, on the same day,
after the
pronouncement of his judgment add to it all remaining matters which
relate to the consequences of what he has already
decided but which
are still missing from his judgment. He may also explain what
has been obscurely stated in his judgment
and thus correct the
wording of the record provided that the tenor of the judgment is
preserved.”
I
am mindful of the fact that the judgment, and not the orders, was
under discussion, but this does not change the principle.
[19]
In
Thompson supra
at para [5] the Supreme Court of Appeal not only echoed the
dicta
in
Firestone
,
but adopted with approval the above
dictum
and quotation of the Appeal court in
Wells
supra
.
Mostert
NO v Old Mutual Life Assurance Co (SA) Ltd
2002 (1) SA 82
(SCA) is just one further example of the variation of
a court order in order to obtain clarity. See paras [17] and
[22].
[20]
I highlighted several passages in my judgment
supra
to show that I came to a final conclusion that Goldex expressly bound
itself contractually to pay levies on the basis set out in
the
judgment. These will not be repeated. The reference in
paragraph [58] of the judgment to Mr Strathern’s submission
that
“
this aspect”
be referred to trial is an obvious
indication that I expressed doubt about the correctness of the
quantum
of the Body Corporate’s claim – the particular aspect -
as explained in the previous paragraph, to wit paragraph [57].
[21]
In the event of the trial having been allocated to me and after
having read the judgment, orders and pleadings, I would most
definitely prevent the leading of evidence to prove a contract for
the payment of levies. I have reason to believe that anyone
of
my colleagues would take the same stance. As stated in
Firestone supra
at
306, the general rule, excluding the known and few exceptions, is
that once a court has pronounced a final judgment, it has no
authority to correct, alter or supplement it as it has become
functus
officio
. It has no
further jurisdiction over the case and its authority over the issue
has ceased. The Constitutional Court
referred to a second
equally important consideration and that is that there is a public
interest in bringing litigation to finality.
See:
Zondi
v MEC, Traditional and Local Government Affairs
2006 (3) SA 1
(CC) at para [28]. It will not be possible
for this court to reconsider in the trial to follow whether Goldex is
contractually
bound to pay levies as I have already found. The
passages quoted from my judgment
infra
confirm my viewpoint.
[22]
I repeat that I would have expected the parties to approach me in
chambers as soon as possible in order for me to clarify what
I meant
insofar as they interpreted my order differently. I refer to
what I stated
supra
and the parties are also directed to the procedure adopted in
Thompson supra
as mentioned in para [2] of that judgment. It became clear to
me during the hearing of the main application that there was
serious
animosity between the parties which apparently rubbed off on the
legal representatives. Apparently all disputes have
to be
resolved through litigation instead of in a collegial spirit.
[23]
Notwithstanding Mr Porteous submissions as to how he interpreted my
reasoning, I found that Goldex expressly agreed to pay
levies on the
basis set out in the judgment. If I was wrong in this regard,
it is for a court of appeal to make such finding.
This court is
functus officio
.
Goldex cannot be prejudiced if relief is granted in the form as
requested in order to clarify the order. It has the
right to
petition the Supreme Court of Appeal. It can do it now and in
fact should have done it a long time ago. It
may also go
through the trial and take any decision made against it on appeal.
[24]
I reiterate that I have read the application papers, the written
heads of argument and authorities referred to and I also considered
the oral submissions. The fact that I do not deal with any
specific issue does not mean that it has been ignored. In
my
view the matter is quite simple. Although I cannot change my
judgment or order by altering the
“
sense
and substance”
thereof, I
may certainly clarify the order to give effect to my true intention.
[25]
The use of the words
“
monetary
claim”
in paragraph 4 of
my order is unfortunate.
Erasmus,
Superior Court Practice
2
nd
ed at D1-570 points out with reference to authority that the
ambiguity, patent error or omission mentioned in rule 42(1)(b) must
be attributable to the court itself. If the parties approached
me directly after delivery of judgment, I would have told
them that I
obviously had in mind that the Body Corporate had to prove the exact
amount of levies due and payable,
i.e.
the
quantum
of its claim. No wonder the amended order sought is a mirror
image of the conclusion I arrived at in paragraph [60] quoted
supra
.
VIII
CONCLUSION
[26]
I conclude that the Body Corporate is entitled to the relief
requested. It might not have been necessary to pronounce
the
order in such an elaborate way, but it is apparently ideal to do it
in such a way to prevent any further misunderstanding.
I
possibly could have clarified the order by stating that the order as
granted in paragraph 4 is subject to and must be read with
my
conclusion in paragraph [60] of my judgment. Paragraph 4.1 of
the notice of motion is directly in line with the explicit
finding in
paragraph [60] of my judgment.
[27]
I am not prepared to grant a costs order in favour of any of the
parties. Both parties should be blamed for the delay
and not only one
of them. Unfortunately, and with the benefit of hindsight, my
order should have been worded differently.
However, seen in the
context of my judgment, there should not have been a difference of
opinion, but even so, the parties could
have saved unnecessary costs
by approaching me on receipt of the judgment. Each party shall
be responsible for its own costs.
IX
ORDERS
[28]
The following orders are issued:
1)
Paragraph 4 of the order of 13
October 2017 in application number 3979/2016 is varied to read as
follows:
“
4.1 The applicant
is liable to pay the first respondent levies in respect of all vacant
premises held by the applicant, (i.e. the
areas of the common
property demarcated for future construction of houses), on the same
basis as other subsequent owners/developers
of vacant stands over
which they held and hold real rights of extension, such levies to be
calculated and payable on a pro rata
basis with owners of other
sections.
4.2 The quantum of first
respondent’s monetary claim against applicant is referred to
trial, the counter-application to stand
as a simple summons and
further pleadings to be exchanged in terms of the Uniform Rules of
Court.”
2)
Each party shall be liable for
its own costs.
______________
J
P DAFFUE, J
On
behalf of Applicant : Adv P Strathern SC
Brian
Kahn Inc
c/o
Claude Reid Inc
Bloemfontein
On
behalf of Respondent: Adv GF Porteous
Jordaan
& Wolberg Attorneys
c/o
Rossouws Attorneys
Bloemfontein