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[2018] ZANCHC 8
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NG White Farm Properties (Pty) LTD v Lategan N.O and Another (2184/2017) [2018] ZANCHC 8 (9 February 2018)
IN THE HIGH COURT OF SOUTH AFRICA
(NORTHERN CAPE DIVISION, KIMBERLEY)
Case number:
2184/2017
Date heard:
02/01/2018
Date
delivered:
09/02/2018
In the matter between:-
NG WHITE FARM
PROPERTIES (PTY) LTD APPLICANT
AND
JOHANNES DIEDERIK
LATEGAN N.O. FIRST
RESPONDENT
PETRUS JOHANNES ERASMUS
N.O. SECOND
RESPONDENT
Coram.
Stanton AJ
JUDGMENT
Stanton AJ
INTRODUCTION:-
1. This
is an application for the eviction of the respondents, JD Lategan
N.O.
and PJ Erasmus N.O., the trustees of the JDL Trust (IT981/2005),
("the JDL Trust "), as well as all persons claiming
possession through or under them from the immovable property known as
Lot 588, Vaal-Harts Settlement A, Registration Division Vryburg,
Northern Cape Province, 91,4895ha in extent and held by Deed of
Transfer T1619/1995 ("the immovable property").
2. The
JDL Trust opposed the granting of the relief on the merits and also
raised two points
in limine,
namely the non-joinder of the
Elnathan 2011 Trust (IT781/2012 ("The Elnathan Trust") and
a dispute of fact pertaining
to extension of the lease agreement.
RELEVANT
FACTS:-
3. It
is not in dispute that the applicant, NG White Farm Properties (Pty)
Ltd, is the registered owner of the immovable property or that the
applicant and the JDL Trust entered into a written lease agreement
in
terms of which the JDL Trust leased approximately 75 hectares of the
immovable property from the applicant for commercial farming
purposes
("the lease agreement").
4. It
is also not in dispute that on 07 November 2012, four years prior to
the expiration of the lease agreement on 31 December 2016, the
applicant entered into a written sale agreement in terms of which
the
applicant sold the immovable property to the Elnathan Trust ("the
sale agreement").
5. The
respondents
in casu
are trustees of both the JDL Trust and the
Elnathan Trust. Mrs C Lategan is, however, not a trustee of the JDL
Trust, but she is
a trustee of the Elnathan Trust.
6. The
first respondent concluded the lease agreement on behalf of the JDL
Trust. He also concluded the sale agreement on behalf of the Elnathan
Trust.
7. The
JDL Trust raised three defences in respect of the merits of the
application.
In the first instance, it was argued on behalf of the
JDL Trust that the applicant ought to have foreseen an intractable
dispute
of fact relating to the extension of the lease agreement and
that the application should for this reason alone, be dismissed with
costs.
8. In
the second instance, the JDL Trust, relies on an express,
alternatively
a tacit extension of the lease agreement, and further
in the alternative, on a tacit relocation of the lease agreement.
9. The
JDL Trust raised a third defence that it had a retention right in
respect
of its improvements on the immovable property. The JDL Trust,
however, in its heads of argument, abandoned this defence and
conceded,
correctly in my view, that a lessee of a rural tenement has
no right to assert a
lien
in respect of the improvements of
agricultural land.
10. In
terms of Clause 2 of the lease agreement:-
10.1 the lease
period was to be for a period of five and a half years, commencing on
01 July 2011 and terminating
on 31 December 2016;
10.2 upon
termination of the lease, the parties would negotiate a further lease
period on the terms set out in
the lease agreement; alternatively,
the applicant could decide to sell the property and undertook to
first negotiate with the JDL
Trust in that regard, and
10.3 the
applicant and the JDL Trust agreed to give each other notice of their
respective intentions six months
before expiry of the written lease
agreement.
11. In
addition to the lease and sale agreements, two further documents are
pertinent
to this application, namely the written acknowledgement of
debt and the registered mortgage bond.
12. The
Elnathan Trust lent and advanced an amount of R2 500 000,00 to the
applicant and
on 07 November 2017 the applicant signed a written
acknowledgment of debt in respect of the loan. The applicant agreed
to repay
the amount of R2 500 000,00 to the Elnathan Trust on or
before 31 March 2017.
13. As
security in respect of the applicant's indebtedness to the Elnathan
Trust, the applicant
registered a first mortgage bond in favour of
the Elnathan Trust over the immovable property. In terms of the
mortgage bond, the
applicant ceded to the Elnathan Trust its right to
collect rental payments. The relevant paragraph in the mortgage bond
provides:-
"Data/le huurge/de wat
van tyd tot tyd verskuldig mag wees deur die huidige of toekomstige
huurder of huurders van die eiendom
hiermee gesedeer en oorgemaak
word aan die genoemde Verbandhouerjs of ander wettige houer/s van
hierdie Verbanct as kollaterale
sekuriteit; en die genoemde
Verbandhouer/s of ander wettige houer/s hiervan word hiermee
gemagtig/ met mag van substitusie/ om
genoemde huurge/de in te
vorder, te verhaal en daarvoor te dagvaar, en om geldige kwitansies
daarvoor te verleen; maar geen gebruik
sal van genoemde sessie van
huurgeld gemaak word nie tensy die Komparant se Prinsipaal in gebreke
bly om die Hoofsom of rente op
die vervaldag of vervaldae te betaal.”
AD
NON-JOINDER OF ELNATHAN TRUST:-
14. Mr
Van Aswegen, on behalf of the JDL Trust, submitted that the
applicant's failure
to join the Elnathan Trust as a respondent to the
proceedings is fatal due to the direct and substantial interest the
Elnathan
Trust has in the outcome of the application.
15. It
was contended by Mr Van Aswegen that Elnathan's interest in the
matter is premised
on the mortgage bond registered in its favour and
its right to collect rental payments due under the lease agreement.
16. It
was furthermore submitted by Mr Van Aswegen that the JDL Trust and
the Elnathan
Trust are in reality the same legal entity by virtue of
the fact that they have the same trustees. As the two trusts are
separate
legal entities, I cannot agree with this submission in the
absence of evidence that justifies the lifting of the corporate veil.
17. Mr
Nel, on behalf of the applicant, argued that the mortgage bond only
granted the
Elnathan Trust a right with respect to rental of the
property and that if the lease agreement did in fact come to an end,
there
is no interest that the Elnathan Trust could conceivably have
in these proceedings and the eviction would not prejudicially affect
the Elnathan Trust.
18. In
addition, Mr Nel argued that the eviction of the JDL Trust will allow
the conclusion
of another lease agreement, to the benefit of the
Elnathan Trust, who will then again have collateral security in the
form of rental.
19.
It
is settled law that the joinder of a party is only required as a
matter of necessity - as opposed to a matter of convenience
- if that
party has a direct and substantial interest which may be affected
prejudicially by the judgment of the court in the proceedings
concerned.
[1]
The mere fact that a party may
have an interest in the outcome of the litigation does not warrant a
non joinder plea. The right
of a party to validly raise the
objection that other parties should have been joined to the
proceedings has thus been held to be
a limited one.
20.
With
reference to
United
Watch and Diamond Co (pty) Ltd and Others v Disa Hotels Ltd and
Another,
[2]
the right of a defendant to
demand the joinder of another party and the duty of the Court to
order such joinder or to ensure that
there is waiver of the right to
be joined (and this right and this duty appear to be co-extensive)
are limited to cases of joint
owners, joint contractors and partners
and where the other party has a direct and substantial interest in
the issues involved and
the order which the Court might make
21.
In
Henri Viljoen (Pty.)
Ltd. v. Awerbuch Brothers,
[3]
Horwitz AJA and Van Blerk J
analysed the concept of such a "direct and substantial interest"
and after an exhaustive review
of the authorities came to the
conclusion that:-
". . .
an interest in the
right which is the subject-matter of the litigation and
. . .
not
merely a financial interest which is only an indirect interest in
such litigation'
22.
With
regard to the interest of sub-tenants in eviction applications, it is
the generally accepted view that the sub-tenant has no
legal interest
in the contract between the landlord and the tenant"...
although
he may have a very substantial financial or commercial interest
therein which may be prejudicially affected by the judgmenr
[4]
23. As
I understand the case of the JDL Trust, Elnathan Trust's collateral
security
will effectively evaporate if the Elnathan Trust is not
joined as a party to the application. In view of the fact that the
mortgage
bond is registered as security in favour of the Elnathan
Trust, this submission cannot be sustained.
24. I
find that the Elnathan Trust's interest is at most a financial
interest, and therefore
an indirect interest pursuant to the mortgage
bond, which does not warrant its joinder in this application.
25. In
light of the foregoing, the point
in limine
of non-joinder is
without merit, and is dismissed.
RELEVANT
LAW:-
26.
In
Nedcor Bank Ltd v
Withinshaw Properties (Pty) Ltd
[5]
,
Van Zyl J confirmed
that an implied agreement can come into existence only if there has
been a tacit acceptance of a tacit offer.
The offer and acceptance,
indicating unqualified
consensus
ad idem
on all
essential aspects of the agreement, must clearly and unequivocally be
inferred from the conduct of the parties. It must,
in accordance with
what has been described as the "traditional" approach, in
fact be the only reasonable inference that
can be drawn from such
conduct. Corbett JA in
Standard
Bank of South Africa Ltd and another v Ocean Commodities Inc and
others
stated that
[6]
-
''In order to establish a
tacit contract it is necessary to show, by a preponderance of
probabilities, unequivocal conduct which
is capable of no other
reasonable interpretation than that the parties intended to, and did
in fact., contract on the terms alleged.
It must be proved that there
was in fact consensus ad idem.
"
27.
Corbett
JA adopted a somewhat less stringent approach in
Joel
Melamed and Hurwitz v Cleveland Estates
(
P/y) Ltd, Joel Melamed
and Hurwitz v Varner Investments (PM Ltd:-
[7]
''In this connection it is
stated that a court may hold that a tacit contract has been
established where, by a process of inference,
it concludes that the
most plausible probable conclusion from all the relevant proved facts
and circumstances is that a contract
came into existence
... "
28.
In
Muller v Pam Snyman
Eiendomskonsultante (Edms) Bpk
[8]
,
Comrie
J expressed a preference for "the so-called traditional test,
the only reasonable interpretation test, provided that
the test is
applied in a common-sense and businesslike way".
29.
In
Nedcor Bank Ltd v
Withinshaw Properties (Pty) Ltd,
Van
Zyl J, with regard to tacit relocation of lease agreements held
that:-
[9]
"Whether or not there was
an implied agreement to renew an existing lease (a so-called 'tacit
relocation’); or to conclude
a new lease on the same terms as
the previous one, is likewise dependant on the facts and
circumstances of the case. More specifically,
it must be
unequivocally inferred from the conduct of the parties (lessor and
lessee) that a renewed or new lease has come into
existence. Under
normal circumstances this would be the case when the lessor allows
the lessee to remain in occupation of the leased
premises after
termination of the lease and the lessee continues to pay rent that
the lessor accepts.
30.
The Court went on to state
that
[10]
:-
"The mere fact that a
lessee remains in occupation of the leased premises after the
expiration of the term of the lease does
not, of course, mean that
there is a tacit renewal of the lease. Similarly, the belief, or
impression, of one of the parties to
the lease that there has been a
tacit relocation is not sufficient to bring a new lease into
existence. There must be compliance
with the requirements for an
implied or tacit agreement”
31.
These
principles have, in substance, become part and parcel of South
African jurisprudence, as appears from
Bowhay
v Wardwhere
Innes O
held
that :-
[11]
''[T]acit relocation depends
upon this that both parties adopt and continue the position which the
termination of the lease found
them in/ in other words, that the
lessor is content that the lessee should remain, and the lessee is
content to remain"
32.
The
effect of a tacit relocation is, in general, that a new lease is
concluded on the same basis as the original lease.
[12]
APPLICATION OF THE
RELEVANT LAW:-
33. It
is not in dispute that the JDL Trust and the Elnathan Trust chose the
two entities
which concluded the written lease agreement on the one
hand and the sale agreement on the other hand.
34. JDL
Trust's version is that the parties had expressly, alternatively
tacitly agreed
that the period of the lease agreement would be
extended to coincide with the registration and transfer of the
immovable property
into Elnathan Trust's name. This submission was
made based on the "interconnectedness" of the JDL Trust and
the Elnathan
Trust and the sale of the immovable property to the
Elnathan Trust.
35. It
is common cause that:-
35.1 neither the
applicant nor the JDL Trust confirmed their respective intentions
regarding their positions six
months prior to 31 December 2016; and
35.2 the
Elnathan Trust purchased the immovable property in terms of a written
sale agreement concluded on 07 November
2012, which was three years
and eleven months prior to the termination of the initial period.
36. Clause
6 (improvements) and Clause 15 (expiry of the lease period) of the
lease agreement
furthermore underlines the fact that a further lease
had to be concluded explicitly.
37. Clause
1 of the sale agreement explicitly provides that the lease agreement
between
the applicant and the JDL Trust would terminate on 31
December 2016. The sale agreement furthermore contains a provision
that the
purchase price should be paid two months prior to the
expiration of the lease agreement between the applicant and the JDL
Trust
on 31 December 2016. In addition, the sale agreement provides
that the applicant will give possession and vacant occupation of the
immovable property to the Elnathan Trust on date of registration of
the immovable property.
38. The
acknowledgment of debt stipulates that the amount of R2 500 000,00
will not incur
interest until the expiration of the lease agreement
on 31 December 2016.
39. Significantly,
the mortgage bond also contains a reference to the expiration of the
lease agreement between the applicant and the JDL Trust.
40. Mr
Nel referred me to the various correspondence exchanged between the
applicant's
attorneys and the attorneys acting on behalf of the JDL
Trust.
41. In
a letter, dated 07 March 2017, the applicant's attorneys confirmed
that the lease
agreement expired on 31 December 2016 and afforded the
JDL Trust thirty days to vacate the property. The letter specifically
recorded
that
"The lease period has not in any way been
extended nor has the lease agreement been renewed whatsoever.”
42. In
response, JDL Trust's attorneys, in an e-mail dated 24 March 2017,
with reference
to Clause 2 of the lease agreement stated as follows:-
"Ek verstaan dat daar ten
gunste van JDL Trust 'n reg van verlenging, asook 'n Verkoopsreg
beding is.”
43. The
JDL Trust's attorneys by e-mail to the applicant's attorney on 29
March 2017, stated
as follows:-
''Neem hiermee kennis daarvan
dat ons klient begerig is om die huurkontrak te verleng/ soos hy
geregtig is om te doen/ vir 'n verdereJaar.”
44. On
10 July 2017 the JDL Trust's attorneys addressed a further e-mail to
the applicant's
attorneys. They reiterate:-
"Ons kliente is begerig
om die huurkontrak te verleng vir 'n verdere 6 maande en tender
hiermee betaling in die bedrag van
R197 004.09 daarvoor.”
45. On
24 July 2017 JDL Trust's attorneys e-mailed the applicant's attorney,
alleging as
follows:-
''Paragraaf 2 van die
huurkontrak bepaal dat die partye/ na verstryking van die
huurkontra!y sal onderhandel vir 'n verdere termyn.
Ons klient het dit gedoen en
betaling van die huurgelde getender en tender dit nog steeds.”
46. In
the correspondence attached to the affidavits, the JDL Trust never
claims the right
to have extended the lease agreement or that the
lease agreement was extended, but merely expressed a desire to do so.
47. In
addition, the lease agreement contains an express undertaking that
the JDL
Trust will not plant crops that would under normal
circumstances not be reaped by the end of the lease period.
48. With
regard to the tacit extension of the lease agreement, Mr Nel
submitted that the
tacit extension thereof had to take place before
the expiration of the lease agreement, being 31 December 2016 and as
such that
any tacit extension would most likely have been concluded
when the sale agreement was concluded.
49. The
first indication by the JDL Trust that it was desirous of extending
the lease agreement
is reflected in an email from its attorney to the
applicant’s attorney, dated 24 March 2017, almost three months
after the
expiration of the lease agreement. In the correspondence,
the JDL Trust did not claim or propose that the lease be extended to
coincide with the registration of the transfer of the immovable
property into the name of the Elnathan Trust.
50. I
agree with Mr Nel's submission that the JDL Trust was not desirous of
purchasing
the immovable property and that an extension of the lease
agreement was concomitantly never discussed or tacitly agreed to by
the
applicant and the JDL Trust.
51. On
the basis of the foregoing facts, an agreement to extend the lease
period to coincide
with the date of registration of transfer of the
immovable property into Elnathan Trust's name was not concluded
expressly or tacitly.
52. In
my view, the JDL Trust failed to provide any facts from which the
express or tacit
extension of the lease agreement can be inferred.
53. I
therefore cannot find that the lease agreement was expressly or
tacitly extended.
54. As
an alternative to their argument that the lease period was extended,
the JDL Trust
contends that there was a tacit relocation of the
lease.
55. In
the present case, the applicant at all times intended to sell the
property and provide
the Elnathan Trust with vacant occupation of the
immovable property. This intention was clearly known to the JDL
Trust. In addition,
the JDL Trust, when called upon to vacate the
immovable property, did not postulate a tacit relocation of the
lease, but sought
to negotiate an extension of the lease agreement,
which had already expired.
56. The
JDL Trust also did not, before or after being called upon to vacate,
pay any rental
with respect to the immovable property, but merely
offered to pay rental in their endeavours to negotiate an extension.
57. In
the circumstances I cannot find that there was a tacit relocation of
the lease
agreement. I can arrive at no other conclusion than that
none of the parties believed that a renewed or new lease has come
into
existence.
58. From
what has been stated above, it is clear that the JDL Trust has no
justification
for remaining in occupation of the immovable property.
DISPUTE OF FACT:-
59.
Based
on the aforegoing, I can also not find that the JDL Trust raised a
real, genuine or
bona
fide
dispute of facts
that cannot be resolved on the papers as envisaged by the
Plascon-Evans rule.
[13]
COSTS:-
60. Mr
Nel submitted that the JDL Trust's opposition of the application and
the grounds
raised are clearly without merit and so untenable as to
be vexatious in effect. He therefore sought an order for costs on a
scale
as between attorney and client against the JDL Trust.
61. Mr
Van Aswegen submitted that the costs should follow the cause and
should be awarded
on a scale as between party and party.
62. I
am not convinced that the JDL Trust’s opposition was
objectively vexatious
or an abuse of legal process that will warrant
a punitive cost order.
IN
THE CIRCUMSTANCES I MAKE THE FOLLOWING ORDERS:-
1. The
JDL Trust, represented by JD Lategan N.O. and PJ Erasmus N.0. (as
well as
all persons claiming possession through or under them) are
evicted from the immovable property known as Lot 588, Vaal-Harts
Settlement
A, Registration Division Vryburg, Northern Cape Province,
91,4895ha in extent and held by Deed of Transfer T1619/ 1995 ("the
immovable property");
2. The
JDL Trust, represented by JD Lategan N.0. and PJ Erasmus N.O. (as
well as
all persons claiming possession through or under them) are
ordered to vacate the immovable property within 30 (thirty) calendar
days of this order;
3. The
sheriff and the sheriff's deputy are authorised and ordered to evict
the JDL Trust, represented by JD Lategan N.O. and PJ Erasmus N.O. (as
well as all persons claiming possession through or under
them) from
the immovable property in the event that the order in terms of
paragraph 2 is not complied with;
4. The
sheriff and the sheriff's deputy are authorised and ordered to obtain
the
assistance of the South African Police Services for purposes of
complying with and executing this order; and
5. The
costs of this application to be paid by the JDL Trust, represented by
JD Lategan
N.O. and PJ Erasmus N.O., on a scale as between party and
party.
A STANTON
ACTING JUDGE
Northern Cape Division, Kimberley
On behalf
of Applicant: Adv
E JJ Nel (Duncan & Rothman)
On behalf
of First Respondent: Adv
WA Aswagen (Meryul Joel Smith Attorneys)
[1]
JUDICIAL SERVICE COMMISSION V CAPE BAR COUNSEL
2013 (1) SA 170
(SCA)
AT PAGE 176 PARAGRAPH 12; BOWRING NOV VREDEDORP PROPERTIES CC AND
ANOTHER
2007 (5) SA 391
(SCA) AT PARAGRAPH 21. SEE ALSO BURGER V
RAND WATER BOARD AND ANOTHER
2007 (1) SA 30
(SCA) AT PARAGRAPH 7
[2]
[1972] 4 ALL SA 493
[3]
1953 (2) SA 151
(O) AT PAGE 169
[4]
UNITED WATCH AND DIAMOND CO {PTY) LTD AND OTHERS V DISA HOTELS LTD
AND ANOTHER AT PAGE 501
[5]
2002 (6) SA 236
(C) AT PARAGRAPH 32
[6]
1983 (1) SA 276
(A) AT 292B
[7]
[1984] ZASCA 4
;
1984 (3) SA 155
(A) AT 165B-C
[8]
[2000] 4 ALL SA 412
(C) AT 418J-419B
[9]
2002 (6) SA 236
(C) AT PARAGRAPH 3 SEE IN GENERAL W E COOPER
LANDLORD AND TENANT 2
ND
ED (1994) AT 350, 352; WA JOUBERT
(ED) THE LAW OF SOUTH AFRICAN (FIRST REISSUE 1999) VOL 14 PARAGRAPH
217 10 AT 419 D - H
[10]
AT 419 D-H
[11]
1903 TS 772
AT PAGE 779
[12]
POTHIER OP CIT 363; LICENCES AND GENERAL INSURANCE CO V BASSANO
1936
CPD 179
AT 185- 186; RV CUMMING
1956 (4) SA 143
(E) AT 145C- 148A)
[13]
PLASCON-EVANS PAINTS LTD V VAN RIEBEECK PAINTS (PTY) LTD
[1984] ZASCA 51
;
1984 (3) SA
623
(AD) AT 634E- 635C.