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[2018] ZANCHC 59
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Wiehahn v Goosen and Others (1202/2017) [2018] ZANCHC 59 (20 April 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTHERN
CAPE PROVINCIAL DIVISION, KIMBERLEY)
CASE
NO:1202/2017
DATE
HEARD:23 NOVEMBER 2017
DATE
DELEVERED:20 APRIL 2018
In
the matter between:
ELSA
WILHELMINA WIEHAHN
Applicant
and
GERT
JOHANNES SCHEEPERS GOOSEN
First Respondent
JOHANNA
MAGRIETHA GOOSEN
Second Respondent
ABRAHAM
GERHARDUS GELDENHUYS
Third Respondent
PHILLIPENTIA
JACOMINA JORDAAN
Fourth Respondent
ELRETHA
HUISAMEN
N.O.
Fifth Respondent
MASTER
OF THE HIGH COURT, KIMBERLEY
Sixth Respondent
REGISTRAR
OF DEEDS, KIMBERLEY
Seventh Respondent
Coram:
Lever AJ
JUDGEMENT
LEVER
AJ
1.
I had written a draft judgment in this matter.
At that stage I still
had concerns on one aspect of this case. On the 18 February 2018 I
wrote to the respective attorneys representing
the parties actively
involved in this application. The substance of this letter reads as
follows:
“
I
have written a provisional judgment in this matter, but I have
decided to hold the delivery of such judgment back because there
is
one aspect of the matter that still causes me a great deal of
concern. Both Mr Olivier SC and Mr Van Niekerk SC premised their
oral
arguments on the position that the note in terms of which the first
respondent purported to exercise his option, dated the
24 January
2017, did not comply with the formalities required by
section 2(1)
of
the
Alienation of Land Act 68 of 1981
.
What
was not pertinently addressed by either Mr Olivier or Mr Van Niekerk
was the question of whether the note dated 24 January
2017 read
together with the relevant provisions of the last will and testament
of the late Abraham Gerhardus Geldenhuys formed
a composite contract
which actually complied with the formalities required by the said Act
or in substance complied with the formalities
required by such Act.
The
respective parties are invited to make written submissions on this
point on or before the close of business on the 29 January
2018.”
2.
Both
Mr Olivier and Mr Van Niekerk provided written submissions by the
date requested. Both Mr Olivier and Mr Van Niekerk answered
the
question posed in my letter of the 18 February 2018 in the negative.
They were both of the view that in the circumstances of
the present
case that the note referred to and the last will and testament of the
late Abraham Gerhardus Geldenhuys did not and
could not be read as a
composite contract that complied with, or in substance complied with,
the formalities required by
s2(1)
of
THE
ALIENATION OF LAND ACT
>
[1]
(“
The
Alienation Act
”).
3.
I have considered the written submissions
made by both Mr Olivier and
Mr Van Niekerk and I have also concluded that in the circumstances of
the present case the note referred
to and the last will of the late
Abraham Gerhardus Geldenhuys cannot be read together as a composite
document that complies or
in substance complies with the formalities
required by s2(1) of the
Alienation Act
.
4.
Accordingly, I now turn to dealing with the
application itself.
5.
The application in its present form seeks
to set aside a purported
contract to purchase a farm entered into by the first respondent,
under the provisions of the last will
and testament of the late
Abraham Gerhardus Geldenhuys (applicant’s late father). Then to
deal with the property concerned
under another provision of the last
will and testament of the applicant’s late father.
6.
The issue to be determined, as defined by
the parties in their
respective oral arguments, relates to whether the provisions of the
said last will and testament dealing with
the disposal of the
relevant farms after the death of the father’s spouse, was
either a pre-emptive right or an option in
favour of the first
respondent. It was argued that if the right given to first respondent
in terms of the said last will and testament
was a pre-emptive right,
then no formalities were required. In those circumstances, the
application must fail.
7.
However,
if the said right amounted to an option, then this court would have
to determine if the formalities required by
THE
ALIENATION OF LAND ACT
[2]
(“
Alienation
Act
”)
had been complied with, within the period specified in the said will
for the exercise of such option.
8.
To place the matter in its proper context,
a fairly detailed summary
of the background facts is required.
9.
The applicant’s late father executed
a will in which he left
his two farms to his then wife, being the applicant’s
stepmother (“
stepmother
”). This bequest was
subject to certain conditions,
inter alia
, that: if the
stepmother were to dispose of one or both farms during her lifetime
then the spouse of second respondent (the first
respondent) would be
given an opportunity to buy one or both such farms; the price to be
paid by the first respondent in respect
of such farms was determined
in the relevant testamentary instrument; in the case of the farm
Hunitees at the rate of R20.00 (twenty
Rand) per morgen and in
respect of the farm Holte at the rate of R30.00 per morgen; if the
stepmother did not dispose of the said
farms during her lifetime the
first respondent could choose to acquire one or both such farms on
the same conditions, within three
months of the stepmother’s
death; that payment would be deferred for some time after transfer of
such property(ies) on terms
very favourable to first respondent; and
if the first respondent chose not to acquire the farms as set out
above they would be
sold by public auction, subject to certain
conditions.
10.
After the father passed away, on the 26 May 1997, the stepmother
inherited both farms and they were registered in her name. It was
common cause by the time that this matter was argued that, because
she had accepted the transfer into her name of the said farms, under
the provisions of the said will, that she was also bound by
the
conditions relating to such properties contained in the father’s
will.
11.
There are conflicting versions of how it came about, but at
some
stage after the father’s death, the farm Holte was sold to the
first respondent by the stepmother for R30.00 per morgen.
For present
purposes, nothing turns on the different versions that led to this
sale and accordingly I shall simply ignore such
differences, such as
they are.
12.
It appears that either: the stepmother came to believe that
the first
and second respondents had been unduly benefited by being able to
purchase the farm Holte at a price which is alleged
to be below the
then market value; or, as alleged by first and second respondents,
the relationship between the stepmother and
them simply soured.
13.
Whatever the case, the stepmother approached a psychiatrist
to
certify that she was of sound mind to execute a will. Thereafter, she
executed a will that essentially excluded the first and
second
respondents as well as the applicant from any benefit flowing from
the remaining farm (Hunitees or Hunites). In her will,
the stepmother
instructed that the said farm be sold at a market related price. She
further instructed that the proceeds of such
sale be divided equally
between the third and fourth respondents.
14.
The stepmother died on the 5 December 2016.
15.
In terms of the father’s last will and testament, first
respondent had to exercise his right to buy the relevant property
within three months of the stepmother’s death. First respondent
purported to exercise his option on the 24 January 2017. There are
two copies of this document attached to the papers in this matter.
The second one merely also indicated that the
executrix
, being
the fifth respondent herein acknowledged receipt of the said document
on the 27 January 2017.
16.
This note purporting to exercise this right to acquire the
farm
Hunitees reads as follows:
“
UITOEFINING
VAN OPSIE – PLAAS HUNITEES
Hiermee
wens ek u in kennis te stel dat ek die opsie gaan uitoefen aangaande
die plaas Hunitees, volgens die bepalings van my oorlede
skoonpa, AG
Geldenhuys, se testament.
Die
uwe”
17.
It is important to note at this juncture that both Mr LM Olivier,
who
appeared for the applicant in this matter and Mr JG Van Niekerk, who
appeared for the first and second respondents herein,
premised their
arguments and submissions on the position that this document
purporting to exercise an option did not comply with
the formalities
required in the
Alienation Act
. In these circumstances,
it is safe to conclude that it was common cause that this purported
exercise of his right, by the first
respondent did not comply with
the formalities required in the
Alienation Act
.
18.
The executrix and first respondent entered into a written contract
of
sale in respect of the relevant property on the 30 March 2017. Such
date being outside the three-month period contemplated in
the
father’s last will and testament for first respondent to
exercise his right to acquire the relevant property. The stepmother
having passed away on the 5 December 2016, the relevant three-month
period would have expired on the 5 March 2017
19.
Lastly, before turning to the actual terms of the respective
wills,
it needs to be mentioned that the applicant originally sought very
different relief. Originally, applicant sought relief
under the
common law, to depart from the provisions of clause 2 of the last
will and testament of her father insofar as it related
to the
purchase price of the said property. Also, applicant sought
alternative relief, to remove the restrictions imposed on the
relevant immovable property under the provisions of the
REMOVAL OR
MODIFICATION OF RESTRICTIONS ACT
, 94 of 1965.
20.
The underlying premise for such original application was that
the
father could not have foreseen nor could he have intended that the
first respondent would, many years after his death acquire
the
relevant property at one thirtieth of its present market value. It
was contended that this would have been grossly unfair and
prejudicial to his other children. A point
in limine
was
taken, the exact nature of which is not material for present
purposes, the Notice of Motion was subsequently amended to reflect
the current relief sought.
21.
The relevant terms of the father’s last will and testament,
reads as follows:
“
2
Ek bemaak my vaste eiendom synde my plase bekend as Hunitees en Holte
aan my eggenote ALBERTA JOHANNA
GELDENHUYS gebore Maass, onderhewig
aan die volgende voorwaardes:
2.1
Die eggenoot van my dogter JOHANNA MAGRIETHA GOOSEN, gebore
Geldenhuys, sal die eerste opsie he om indien
my eggenote die
eiendomme wil verkoop die plaas Hunitees en/of die plaas Holte te
koop op die volgende terme:
2.1.1
Die koopprys van die plaas Hunitees sal bereken word teen R20,00
(Twintig Rand) per morg en
die koopprys van Holte sal bereken word
teen R30,00 per morg;
2.1.2
Die koopsom(me) hierbo genoem sal binne vyf (5) jaar vanaf
registrasie van transport betaalbaar
wees tesame met rente bereken
vanaf datum van transport op enige bedrag uitgestel teen sewe persent
(7%) per jaar welke rente tesame
met die kapitaal betaalbaar sal
wees;
2.2
Indien die eiendom(me) wel verkoop word sal die opbrengs met rente
soos volg verdeel word:
2.2.1
Een-helfte daarvan aan my eggenote ALBERTA JOHANNA GELDENHUYS;
2.2.2
Een-helfte vir verdeling in gelyke dele aan my vier (4) kinders ELSA
WILHELMINA WIEHAHN, gebore
Geldenhuys, JOHANNA MAGRIETHA GOOSEN,
gebore Geldenhuys, ABRAHAM GERHARDUS GELDENHUYS en PHILLIPENTIA
JACOMINA JORDAAN, gebore
Geldenhuys.
2.3
Indien my eggenote een of albei plase nie gedeurende haar leeftyd
verkoop nie sal die eggenoot van my dogter
JOHANNA MAGRIETHA GOOSEN,
gebore Geldenhuys, by die dood van my eggenote en vir ʼn tydperk
van drie (3) maande daarna ʼn
opsie he soos hierbo in klosule 2.1
beskryf om die eiendom (een of albei) te koop op en onderheuwig aan
dieslefde voorwaardes as
wat hierbo in klousule 2.1 met subklousules
beskryf is en onderheuwig aan klousule 7 hieronder.
2.4
Indien die Opsies in 2.1 en 2.3 gemeld nie uitgeoefen word nie sal
die eiendom per publieke veiling verkoop
word onderheuwig aan die
voorwarde egter dat indien alle erfgename nie die aanbod wat op so ʼn
veiling behaal word aanvaar
nie hulle nie verplig sal wees om die
eiendom dan te verkoop nie maar sal hul ʼn verdere tydperk van
nog 12 maande daarna he
om die eiendom na goeddunke te verkoop maar
voor verstryking van die termyn van 12 maande sal die partye verplig
wees om die eiendom
te verkoop vir die beste aanbod wat ontvang word.
Ingeval van ʼn verkoping soos in hierdie klousule voorsien sal
die opbrengs
verdeel word tussen my vier kinders hierbo in klousule
2.2.2 genoem in gelyke dele.”
22.
Clause 7 of the father’s will, mentioned in clause 2.3
quoted
above, deals with the circumstance of him and his wife (stepmother)
dying simultaneously, and is not relevant to the present
application.
23.
The relevant terms of the stepmothers will, reads as follows:
“
4
Ten opsigte van my plaaseiendom bepaal ek:
4.1
Dat my plaas HUNITES deur my Eksekuteur verkoop sal word na my
afsterwe teen ʼn billike markverwante prys,
welke prys deur ʼn
bevoegde wardeerder bepaal sal word, en die koopprys sal betaalbaar
wees aan my boedel by registrasie van
die transport van die eiendom
op die koper se naam;
4.2
Die verkoopprys van die plaaseiendom moet gelykop verdeel word tussen
my twee kinders, ABRAHAM GERHARDUS GELDENHUYS
en PHILLIPENTIA
JACOMINA JORDAAN (gebore Geldenhuys).”
24.
Options
or pre-emptive rights are usually created by contract. However, such
rights can also be created by testamentary instrument
[3]
.
25.
When oral argument on this matter was presented, Mr Olivier,
for the
applicant, essentially ignored the Heads of Argument he had filed on
behalf of his client and struck out in a different
direction.
Although Mr Van Niekerk, for the first and second respondents, must
have been taken by surprise by this development,
he nonetheless
proceeded to present the case for his clients.
26.
The
present argument presented by Mr Olivier on behalf of the applicant
was developed as follows: he referred the court to the recent
Constitutional Court decision of
Mokone
v Tassos Properties
[4]
and submitted that such case was authority for the proposition that
in the case of pre-emptive rights there need not be compliance
with
the formalities prescribed in the
Alienation
Act
;
that clause 2.1 of the father’s last will and testament was in
substance a pre-emptive right where no formalities are required;
that
clause 2.3 of the said will, being the clause upon which the present
application turns, is in substance an option; accordingly,
in
exercising the option contained in clause 2.3 formalities are
required; that the purported exercise by the first respondent
of such
option did not comply with the formalities set out in the
Alienation
Act
;
and that consequently applicant was entitled to have the Deed of Sale
in respect of the farm Hunites, entered into on the 30 March
2017,
set aside.
27.
The
response of Mr Van Niekerk to this argument on behalf of the first
and second respondents’ was as follows: clause 2.3
of the late
father’s last will and testament did not operate in conjunction
with clause 2.2; that clause 2.3 in the said
will had to be read in
the context of clause 2.4; that reading clause 2.3 in the context of
clause 2.4 of the said will showed
that clause 2.3 evidenced a right
to pre-empt the sale contemplated in clause 2.4; that accordingly,
the right contemplated in
clause 2.3 of the said will was a
pre-emptive right; also relying on the judgment of the Constitutional
Court in the Mokone case
[5]
he
submitted that the exercise of the pre-emption contemplated in clause
2.3 did not require any formalities; and that consequently,
the
option was exercised timeously and the Deed of Sale in respect of the
farm Hunitees was valid and enforceable.
28.
In reply to this, Mr Olivier argued that clause 2.4 was intended
for
an entirely different purpose. That clause 2.3 should not be read in
the context of clause 2.4, as submitted by Mr Van Niekerk.
29.
As set out above, it is common cause that the document, dated
24
January 2017, purporting to exercise the first respondent’s
option to purchase Hunites does not comply with the formalities
required in the
Alienation Act
. It is also common cause
that the Deed of Sale for the relevant property was entered into on
the 30 March 2017, outside the three-month
period prescribed in the
father’s last will and testament.
30.
In
my view the decision in Mokone’s case
[6]
deals with the question of whether formalities are required when the
agreement granting the pre-emptive right comes into being.
Mokone’s
case
[7]
does not deal with the
question whether the exercise of the pre-emptive right requires
adherence to the formalities prescribed
by the
Alienation
Act
.
The upshot of this is that formalities would be required to enforce
and give effect to the right contained in clause 2.3 of the
late
father’s last will and testament regardless of whether such
right is a right of pre-emption or an option.
31.
Section 2(1) of the
Alienation Act
reads as follows:
“
No
alienation of land after the commencement of this section shall,
subject to the provisions of section 28, be of any force or
effect
unless it is contained in a deed of alienation signed by the parties
thereto or by their agents acting on their written
authority.”
32.
Clearly,
the note dated the 24 January 2017 does not comply with the required
formalities. Having regard to the common cause facts
set out above as
well as my understanding of the Constitutional Court’s judgment
in the
Mokone
[8]
matter, that should be the end of the matter. Accordingly, the
applicant should be entitled to the principal relief set out
in the
Notice of Motion.
33.
If
I am wrong in my understanding of the judgment of the Constitutional
Court in Mokone’s case
[9]
,
then I need to consider the arguments raised by Mr Olivier and Van
Niekerk on behalf of their respective clients. The appropriate
starting points to deal with these arguments is to define the terms
“pre-emptive right” and “
option
”.
34.
A pre-emptive right, in the context of a lease, is defined
by Kerr in
his work The Law of Sale and Lease, as follows:
“
A
preferent conditional right to purchase is referred to as a right of
pre-emption. It gives the grantee – in the context
under
discussion, the lessee – a right to purchase if the condition
in question is satisfied. Normally the condition is that
if the
lessor decides or desires or proposes to sell, he shall offer the
property to the lessee first.”
[10]
Even
though this definition is given in the context of a lease, it is
still helpful with appropriate adjustment for the present
context.
35.
Pre-emption is defined in Claasen’s work, DICTIONARY
OF LEGAL
WORDS AND PHRASES, as follows:
“
The
grant of a right of pre-emption does not compel the grantor to sell
it; it only compels him to give the grantee the preference
in case he
sells it at all.”
[11]
36.
Kerr, again in his work THE LAW OF SALE AND LEASE, defines
an option
in relation to the sale of land as follows:
“
An
option is a contract in which a person undertakes to keep open an
offer which he has made or is making or will make. If the offer
which
is kept open is to sell land, it must be in writing. The offer to
keep it open, however, being distinct and not falling within
the
province of the Act, may be oral. An offer contains the terms upon
which the offeror is prepared to sell, so in the case of
an offer to
sell land it will be ineffective if it does not cover the points
required by law to be in the contract.”
[12]
37.
Claassen in his work DICTIONARY OF LEGAL WORD AND PHRASES,
defines
option as:
“…
An
option to purchase is ‘in effect an offer to sell, which may be
accepted at any time within the period fixed by the contract,
and on
such acceptance being notified a contract is formed.”
[13]
(authorities omitted)
38.
Clearly, then the right granted to the first respondent under
the
provisions of clause 2.1 of the father’s last will and
testament is a pre-emptive right. This is so because the provisions
of clause 2.1 of the said will contemplates the circumstance where
the stepmother intended selling both or either of the said farms
during her lifetime. In which case, the first respondent would have
the right to buy the relevant farm(s) on the terms specified
in the
last will and testament of the father. There is no real dispute on
this issue between Mr Olivier and Mr Van Niekerk.
39.
The dispute emerged when the nature of the right acquired by
the
first respondent under the provisions of clause 2.3 of the said will
was debated. It is convenient to consider the argument
submitted by
Mr Van Niekerk on behalf of the first and second respondents first.
40.
To recap, Mr Van Niekerk’s argument was in substance
that
clause 2.3 must be read in conjunction with and in the context of
clause 2.4 of the last will and testament of the father.
That reading
clause 2.3 in the context of the provisions of clause 2.4 would show
that the right granted under the provisions of
clause 2.3 was a
pre-emptive right and thus on the authority of the judgment in
Mokone’s case, not subject to the formalities
contained in the
Alienation Act
. Accordingly, Mr Van Niekerk argued that
there was a valid sale between the executrix (fifth respondent) and
the first respondent
and that it followed from this that the
application should be dismissed with costs.
41.
In my view, Mr Van Niekerk’s argument does not stand
up to
scrutiny. Firstly, it seems to me that the provisions of clause 2.3
of the said will are independent and self-contained.
The provisions
of clause 2.4 are created to deal with an entirely different set of
circumstances, even though clause 2.4 will become
operative on first
respondent electing not to exercise his rights under clause 2.3.
Secondly, the provisions of clause 2.3
provide for: an offer to
sell on the death of the stepmother; such offer to be held open for a
period of three months from the
death of the stepmother; and the
conditions of sale are incorporated by reference therein.
42.
In substance, what the provisions of clause 2.3 of the said
will
contemplate is an option in favour of the first respondent. In the
circumstances, reading the provisions of clause 2.3 within
the
context of clause 2.4 cannot change what the father intended in
executing his said last will and testament.
43.
In my view, what is contemplated by the provisions of clause
2.3 is
clearly an option. This would be subject to formalities prescribed
under the
Alienation Act
. It is common cause that such
formalities were not complied with. In such circumstances the
applicant is entitled to have the sale
of the farm Hunites, entered
into between the first and the fifth respondent on 30 March 2017,
declared null and void as contemplated
in prayer 2 of the amended
Notice of Motion.
44.
The applicant is also entitled to an order contemplated in
prayer 3
of the said Notice of Motion that the executrix deal with the farm
concerned in accordance with the provisions of clause
2.4 of the last
will and testament of the father executed on the 27 November 1990.
45.
Applicant would in such circumstances be entitled to the ancillary
relief contemplated in prayer 4 of the said Notice of Motion.
46.
The last remaining question is the question of costs. The primary
rule in considering the question of costs is that the question of
costs rests within the discretion of the court. The ordinary
or
secondary rule in respect of costs is that, normally unless there is
sufficient reason to depart from such rule, costs follows
the event.
47.
In the present case, applicant substantially changed the nature
of
her case upon the filing of a point
in limine
. This court was
not provided with the application to amend the Notice of Motion.
Accordingly, there is no information before this
court indicating
whether the costs occasioned by the amendment have been appropriately
dealt with. In the circumstances, I have
to assume that the matter
was not settled.
48.
Further, there is the question of applicant’s counsel
Mr
Olivier taking as applicant’s main line of argument, an
argument that was not foreshadowed in applicant’s Heads
of
Argument. Also, I must bear in mind that first and second respondent
at the hearing hereof tendered that in the event of this
court ruling
in their favour, that they would not insist on a costs order against
the applicant but tendered that each party should
bear their own
costs.
49.
In all of these circumstances, I think that the equitable order
to be
made is that each party should bear their own cost
Accordingly,
the following order is made:
1)
THE WRITTEN AGREEMENT OF SALE ENTERED INTO BETWEEN THE FIRST
RESPONDENT AND FIFTH RESPONDENT
ON THE 30 MARCH 2017 IN RESPECT OF
THE PROPERTY KNOWN AS FARM HUNITES, FARM NUMBER 84 SITUATED IN
NAMAQUALAND, NORTHERN CAPE AND
HELD BY TITLE DEED NUMBER T20365/98 AS
REGISTERED WITH THE REGISTRAR OF DEEDS, KIMBERLEY (“THE
PROPERTY”), WHICH CONTRACT
IS ANNEXED TO THE FOUNDING AFFIDAVIT
MARKED ANNEXURE “F”, IS HEREBY DECLARED TO BE NULL AND
VOID.
2)
THE FIFTH RESPONDENT BE AND IS HEREBY ORDERED TO DEAL WITH THE SAID
PROPERTY IN ACCORDANCE WITH
THE PROVISIONS OF CLAUSE 2.4 OF THE LAST
WILL AND TESTAMENT OF THE LATE ABRAHAM GERHARDUS GELDENHUYS EXECUTED
ON 27 NOVEMBER 1990.
3)
THE FIFTH, SIXTH AND SEVENTH RESPONDENTS ARE HEREBY ORDERED TO DO ALL
THINGS NECESSARY TO
GIVE EFFECT TO THE ORDERS SET OUT IN 1) AND 2)
ABOVE.
4)
EACH PARTY SHALL PAY THEIR
OWN COSTS.
L.
LEVER A
NORTHERN
CAPE
PROVINCIAL
DIVISION
For
the Applicant:
ADV. L
M OLIVIER SC
(oio
Van De Wall Inc.)
For
the 1
st
& 2
nd
ADV. JG
VAN NIEKERK SC
Respondents:
(oio Haarhoffs Inc.)
[1]
Act 68 of 1981.
[2]
Act 68 of 1981.
[3]
Glass and Others v Ker N.O. and Others
1953 (1) SA 550
(AD).
[4]
Ntswaki Joyce Mokone v Tassos Properties and Another
[2017] ZACC 25
(24 July 2017). Also reported at 2017 (5) SA 456 (CC).
[5]
Above.
[6]
Above.
[7]
Above.
[8]
Above.
[9]
Above.
[10]
AJ KERR.,
THE
LAW OF SALE AND LEASE
.,
3
RD
Ed., Lexis Nexis p. 462.
[11]
RD CLAASSEN, SC.,
DICTIONARY
OF LEGAL WORDS AND PHRASES
.,
2
ND
Ed., Vol 3., P-80.
[12]
Kerr., Above at p 103.
[13]
Claassen., Above at O-45.