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[2017] ZAGPPHC 133
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Lotter N.O. and Others v Cosmopolitan Investments (Pty) Ltd and Another (93465/2015) [2017] ZAGPPHC 133 (30 March 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
Date:
30/3/2017
Case
Number: 93465/2015
Reportable:
No
In
the matter between:
LOTTER,
RYAN DOUGHTY,
N.O FIRST
APPLICANT
(in
his capacity as trustee of the STRAP Trust
Registration
no: IT 1197/2002)
LOTTER,
ALIC GARTH,
N.O SECOND
APPLICANT
(in
his capacity as trustee of the STRAP Trust
Registration
no: IT 1197/2002)
LOTTER,
JEAN MARY,
N.O. THIRD
APPLICANT
(in
her capacity as trustee of the STRAP Trust
Registration
no: IT 1197/2002)
and
COSMOPOLITAN
INVESTMENTS (PTY) LTD FIRST
RESPONDENT
(Registration
no: 2014/170180/07)
MADIBO
EDMUND
PITSO
SECOND RESPONDENT
JUDGMENT
MALULEKE
AJ:
1.
In this matter the Applicants instituted proceedings against the 1
st
and 2
nd
Respondents ("the Respondents") for
payment of an amount of R19,5 million (Nineteen Million Five Hundred
Thousand
Rand) ("the purchase
consideration");
2.
The facts were briefly as follows: The Applicants and the 1
st
Respondent entered into an agreement in terms of which the 1st
Respondent purchased certain immovable property from the Strap Trust
("the Trust") for the above purchase consideration. It is
alleged that the 1
st
Respondent breached the terms of the
agreement by not making payment of the purchase consideration as and
when it was due;
2.1
It is alleged further that the
express, alternatively implied, further
alternatively tacit terms of the agreement were
inter
alia:
2.1.1
That the total amount of the purchase consideration is to be
deposited into
the transferring attorneys' trust account, which
attorneys are to be appointed by the trust, within 30 days of the
date on
which the agreement was concluded;
2.1.2
Vacant occupation of the property shall be given and taken by the 1st
Respondent
upon registration of the property into the name of the 1st
Respondent;
2.1.3
Agent's commission in the amount of R1 462 500.00 (One Million Four
Hundred
and Sixty Two Thousand Five Hundred Rand), plus VAT at 14%
shall be borne by the Trust, which commission shall be deemed to have
been earned upon signature of the agreement by both parties and is
payable upon payment of the complete purchase price;
2.1.4
In the event of the same being cancelled or not proceeding due to any
fault
on the 1st Respondent's part, then in such an event the 1
st
Respondent shall become personally liable to the agent for the
payment of the commission and the agent shall be entitled at his
option, to claim commission from the 1st Respondent;
2.1.5
Should any party breach any provision of the agreement and
fail to remedy such breach within 7 (seven) days after
despatch of
written notice by email, fax or any other form of written media,
requiring such breach to be remedied, the aggrieved
party shall be
entitled without prejudice to any other written law to cancel the
agreement forthwith or to claim immediate specific
performance for
all the defaulting party's obligations whether or not due for
performance and in either event, without prejudice
to aggrieved
party's rights to claim damages;
2.1
.6 Transfer of the property into the 1
st
Respondent's name shall be effected by the trust's appointed
conveyancer and all costs incidental to transfer, including transfer
duty and stamp duty, shall be paid by the 1
st
Respondent
on demand;
2.1.7
The 1st Respondent acknowledges that it has inspected the property
and
that it purchases the property (voetstoots) to the extent such as
it now lies, subject to the conditions of title under which it
is
held, and neither the Trust nor the agent shall be liable for any
defect, patent or latent, to the property or any damages
which
the 1
st
Respondent may suffer as a result of such defects;
2.1.8
If the agreement is signed by an agent for/on behalf of a company
which
already exists, the signatory on behalf of the company in his
personal capacity shall be regarded as the purchaser unless the
company
duly adopts or ratifies the agreement within 90 (ninety) days
of the date on which the seller signed the agreement;
2.1.9
No addition to, or variation of, or agreed cancellation of the
agreement shall be of any force or effect unless reduced to writing
and signed by or on behalf the parties;
2.1.10
The agreement contains the entire agreement between the parties and
neither party may rely
upon any representations, warranties and
undertakings to them that have not been incorporated into the
agreement;
2.1.11
The agreement includes all the equipment, furnishings, budge boat and
tractors as per annexure
"A" to the agreement.
3.
The Applicants alleged that the Respondents failed to comply with
their obligations in terms of the agreement and in particular
the 1
st
Respondent failed, refused and/or neglected to pay the purchase
consideration within 30 (thirty) days after conclusion of
the
agreement by depositing same into the transferring attorneys' trust
account as was agreed to. It is alleged further that at
the request
of the 2
nd
Respondent, Johan van Zyl of the Trust's
attorneys and the Applicant met the 2nd Respondent on 21 October 2015
at the Trust attorneys'
Hyde Park offices. It is further alleged that
at this meeting, the 2nd Respondent confirmed that moneys from which
the purchase
consideration in terms of the agreement had to be paid
were invested some years ago in an investment account held with Absa
Bank
Limited and that he was under the mistaken impression that this
money could be withdrawn at any stage. The 2
nd
Respondent
further advised the Applicants that he had made arrangements for a
meeting with Absa Bank Limited in an effort to release
these funds
and that he would inform the Applicants and the Trust's attorneys of
the progress in respect therefor before 23 October
2015.
4.
It appears that by 26 October 2015 and despite the 2
nd
Respondents' undertaking to revert to the Trust's attorneys on or
before 23 October 2015, the 2
nd
Respondent did not revert
to the Trust's attorneys in respect of his negotiations with Absa
Bank to release the monies required
for the purchase consideration in
terms of the agreement. As a result thereof the Trust's attorneys
then forwarded a letter to
the 1
st
Respondent recording
among others that no response was received from the 2
nd
Respondent despite his undertaking to do so and that the Trust will
not deviate from its intention to proceed with the transfer
of the
property to the 1st Respondent. It was specifically pointed out to
the 2
nd
Respondent that any indulgence granted to the
Respondents should not be construed as a waiver of the Applicants'
rights to enforce
the agreement between the parties. It appears that
after a complaint was received from the 2
nd
Respondent
relating to the conduct of Mr van Zyl who was the attorneys' of the
Trust, the Trust substituted its transfer attorneys
on the basis that
payment and consequently transfer of the property to the 1st
Respondent would be effected forthwith. Suffice
to say that despite
all other undertakings and further statements and representations
made, the 1
st
Respondent failed, refused or neglected to
pay the purchase price and/or any portion thereof.
5.
It was pointed out to the court, with reference to clause 15.2 read
with clause 15.2.1 of the agreement, that the agent who signs
the
agreement on behalf of a company in his personal capacity will be
regarded as the purchaser if the company does not ratify
the
agreement within 90 (ninety) days after the seller has signed. The
Applicants pleaded that in view of what has been alleged
that insofar
as the 1
st
Respondent may raise this as a defence to the
Trust's claim herein for specific performance, in such an event the
2
nd
Respondent agreed to be regarded as the purchaser and
that no reason exists why an order for specific performance should
not be
issued against the 2
nd
Respondent. The Applicants
further claim that seeing that the Respondents had no defence against
the relief sought in terms of
its papers, the court was therefore
requested to order that the 1
st
Respondent, alternatively
the 2
nd
Respondent pay the amount of R19,5 million to the
Trust, as well as interest on the aforesaid amount at a rate of 9%
per annum
from date of demand to date of final payment including the
costs of this application.
6.
The 1
st
and 2
nd
Respondent opposed the granting
of the relief on the basis:
6.1
That the 1
st
Applicant was not authorised to enter into
the agreement and thereby bind the Trust in that the Applicants
failed to resolve to
delegate their powers to a single trustees;
6.2
Alternatively, that the 1
st
Applicant failed to show, as
he was obliged to, the requisite authority to enter into the
agreement as a single trustee in his
founding affidavit;
6.3
That the trustees failed to resolve that the Trust institute
the
proceedings against the Respondents;
6.4
Alternatively, that the 1
st
Applicant failed to show, as
he was obliged to do, that the Applicants resolved that the Trust
institute proceedings;
6.5
And in the alternative, and only in the event that the court
does
find that the Trust:
6.5.1
Properly resolved to enter into the sale agreement; and
6.5.2
Properly resolve to institute the proceedings;
6.6
Then and in that event, the Respondents rely on the fact that
the
agreement of sale does not contain the true agreement between the
parties and that it requires ratification;
6.7
It was submitted on behalf of the Respondents that the allegations
and the annexures should have been made in the founding affidavit
insofar as the Applicants were aware, or should have been aware,
that
they are obliged to prove their
locus standi
when
making application. It was further submitted that the court should
strike out the matter as requested and that it would hold
extreme
prejudice to the Respondents should the honourable court grant the
application as requested.
7.
The Respondents raised a number of points
in
limine.
The first point was that in paragraph 10 of the founding
affidavit the deponent states that
"on
11
September 2015
and within
the jurisdiction
of
this
honourable court
at Vanderbijlpark
the
Trust,
duly
represented
by
myself
and
the
1st
Respondent,
duly
represented by the
2
nd
Respondent,
concluded
a
written agreement of
sale
.
.
.
"
The Respondents alleged that it is evident from the allegation
and from the perusal of the agreement that only the 1st Applicant
signed the agreement of sale on behalf of the Trust. The 1st
Applicant lacked authority to bind the Trust.
8.
The Respondents also submitted that it is trite law that such
appropriate allegations to establish
locus
standi
should be made in the launching affidavit, that is the founding
affidavit and not in the replying affidavit, as the Applicant makes
his/her case in the founding affidavit. The court was referred to a
number of authorities in this respect. It was submitted that
in terms
of the trust deed, referred to above, the trustees are obliged to
either 1.) convene a meeting in order to conduct their
business; or
2) resolve to do or not to do something which resolution is required
to be signed by all trustees;
9.
It was submitted that the trustees were, if one has regard to what is
set out above, obliged to resolve and/or convene a meeting
wherein it
was decided that the property would be sold and that such minutes or
resolutions were to be affixed to the founding
affidavit so as to
establish the requisite
locus
standi.
It was
submitted further on behalf of the Respondents that should it be
found that the trustees did not act in terms of the trust
deed, then
the signing of the agreement by the 1st Applicant could never have
bound the trust. In this regard I was referred
to further
authorities dealing with this issue. It was alleged that the 1st
Applicant did not have the necessary
locus standi
to enter
into the agreement of sale with the 1st Respondent and thereby bind
the trust. The Applicants failed to show that
they had the
necessary authority to institute the proceedings on behalf of the
trust. It was also submitted the Applicants did
not show the
necessary
locus
standi
to institute the
proceedings if one considers the provisions of the trust deed.
10.
Finally the Respondents submitted that in the event that the court
does find for the Applicants insofar as the points
in
limine
are concerned, it was at all times relevant
to the conclusion of the agreement of sale within the knowledge of
the agent:
10.1
That the monies that the 1
st
Respondent would utilise for
the purchase of the property, was in an investment account;
10.2
That it would take some time to get the
monies
released, especially considering the fact that it was a
substantial amount of money;
10.3
That it was impossible to have the monies available within
30
(thirty) days from date of signature of the agreement of sale;
11.
The Respondents then argued that notwithstanding being well aware of
the facts alluded to above, the estate agent insisted that
the
Respondents, especially the 2
nd
Respondent as a
representative of the 1
st
Respondent, sign the agreement
so as to ensure that the deal does not fall through. It is thus
stated that the 30 day payment term
as reflected in the agreement of
sale is not a true and accurate reflection of the agreement between
the parties, and as such the
1
st
Respondent intends to
bring a counter application for the stay of this application pending
the finalisation of an action to be
instituted for the rectification
of the agreement of sale. It is appropriate at this stage to mention
that no such counter application
was instituted by the Respondents as
alleged in its answering affidavit. The 1
st
and 2
nd
Respondent submitted that the agreement does not therefore contain
the true agreement between the parties in that the agreement
needs to
be rectified and they moved for the application to be dismissed with
costs.
12.
It is apposite to point out that the Respondents filed an application
in terms of Rule 6(15) of the Uniform Rules of court seeking
an order
for the striking out of:
12.1
certain paragraphs in the Replying Affidavit; and
12.2
certain annexures to the Replying Affidavit.
During
arguments, the Respondents abandoned their Rule 6(15) application.
It is necessary to mention that the Respondents
contention that
the agreement of sale did not contain the agreement between the
parties and therefore required ratification was
also abandoned.
Accordingly I shall not deal with these two issues in this judgement.
13.
Apart from what is stated above, it is common cause between the
Parties:
13.1
That there is a written contract
concluded by and between the
Applicants and the Respondents;
13.2
That no issue and/or dispute was raised directly or indirectly by the
2nd Respondent
in respect of the agreement in general, its execution
or the property or any of the parties' rights or obligations.
14.
Accordingly, I am required to decide whether the Applicants have
established the requisite
locus
standi
to
enter into the agreement of sale and to institute these proceedings.
As is clear from what is set out herein above, this application
turns
on the 2 (two) points which were raised
in Iimine
by
the Respondents.
15.
I will now deal with each of these points
in limine:
15.1
The
locus
standi
of the Applicants
15.1.1
In the founding affidavit the deponent, Lotter, alleges that he is a
trustee of the Trust,
he is authorised to represent the trust in
these proceedings and to depose this affidavit on behalf of the
Trust;
15.1.2
The Respondents contend that from the above allegation and from
perusal of the agreement of
sale that only the 1
st
Applicant signed the agreement of sale on behalf of the Trust. They
contend that save for the allegation by the deponent that he
represented the Trust when entering into the agreement of sale, no
other allegation or documentary evidence is produced which supports
this allegation. Their argument was that no single trustee as is the
case in the present proceedings could enter into the sale
agreement
and bind the Trust as a singular trustee.
15.1.3
Having
regard to
the
above,
I have
difficulty
with the
substance
of
the
Respondents'
point
in
limine.
The
1
st
Applicant
(deponent) made
the
required allegations of
due
authority
in paragraph
6
of
the
founding
affidavit.
The
only
problem
was that
documentary
proof
to
substantiate
the
same
was
not
attached to the founding
affidavit,
but to the
replying
affidavit
at a
later
stage.
In
my
view,
this
puts
the
matter
to
rest.
Accordingly this point
in
limine
is
dismissed.
There is
ample
authority
supporting
this
view.
[1]
15.2
Authority
to
institute
proceedings
and
to
depose
to the
affidavit
15.2.1
The Respondents contend that in terms of the Trust Deed, all the
trustees are required to sign documents
and not only a singular
trustee as is the case in the present application. They allege that
the only allegation that the deponent,
Lotter, makes
vis-a-vis
authority to make the application and to depose to the affidavit
is made in paragraph 6 referred to herein above. The Respondents
contended that the mere allegation is not sufficient and
accordingly denied that the deponent had the necessary authority
to
represent the Trust and to depose to the affidavit on behalf of the
Trust.
15.2.2
The Applicants attached a resolution by the trustees of the Trust
dated 5 November 2015 from which
it is clear that Lotter had the
authority to institute these proceedings and to depose to the
affidavit on behalf of the Trust.
The second point
in
limine
is therefore also dismissed.
16.
Having disposed of the above points
in
limine the only
remaining issue to be decided upon is whether on the papers before me
and on the strength of arguments presented
in court, the Applicants
made out a proper case for an order for specific performance. It was
submitted for the Applicants,
ex abundante
cautela,
that the nature and scope of this application is such that I can
make an order for specific performance. Whether this is so will
become apparent from the order that I shall make. In this regard the
Applicants tendered performance of their obligations in terms
of the
agreement to transfer the property into the name of the 1st
Respondent against payment of the purchase consideration.
17.
It
is
trite
that
to
succeed
within a
claim
for
specific
performance,
the
person
claiming
the
same
must
allege
and
prove
compliance
with
its
obligations
(i.e he has
made
the
performance)
or
tender
to
perform
them
or
that
he
is
excused
from
performance
by
reason
of, e.g.,
impossibility.
[2]
Such
a
tender
is not
implied.
[3]
In addition
to
this,
a
party
to
a
contract
may
only
claim
performance
when
it is due.
18.
In the premises, the 1st Respondent failed to perform in terms of the
contract of sale nor tendered any performance. On the
papers before
me, the Applicants made the requisite allegation and also tendered
performance of their obligations against payment
of the purchase
consideration by the 1st Respondent. It is clear therefore that
despite demand, the 1st Respondent failed, refused
on neglected to
pay the purchase consideration and/or any portion thereof. I am
therefore satisfied that a proper case has been
made out for the
relief sought. However, I am not persuaded that the 2nd
Respondent signed the sale agreement as agent on
behalf of a company
in his personal capacity to be regarded as the purchaser if the
company failed to ratify the agreement within
90 (ninety) days after
the Seller has signed it. There is in my view, simply no legal basis
for holding the 2nd Respondent personally
liable in terms thereof.
Accordingly this argument falls to be dismissed.
19.
In light of the aforegoing, I make the following order:
19.1
That the 1st Respondent is ordered to pay the amount of R19,5 million
(Nineteen
Million Five Hundred Thousand Rand) to the Strap Trust
(Registration No: IT 1197/2002);
19.2
That the 1st Respondent is to pay interest on the aforesaid amount at
the rate
of 9% per annum from the date of demand to date of final
payment; and
19.3
That the 1st Respondent is ordered to pay the costs of this
application.
__________________________
MJ
MALULEKE
JUDGE
OF THE HIGH COURT
OF
THE REPUBLIC OF SOUTH AFRICA
GAUTENG
DIVISION,
PRETORIA
Date
of
hearing:
17 October 2016
Date
of
delivery:
30 March 2017
Counsel
for the Applicants: HF Geyer
Instructed
by:
Swanepoel van Zyl Attorneys
c/o Malan & Nortje
Attorneys
Counsel
for the Respondents: S McTurk
Instructed
by:
Brian Blignaut Attorneys
c/o Campbell Attorneys
[1]
Fourways
Mall
v
SA
Commercial
Catering
and
Allied Workings
Union
(3)
SA
752
at p758
para
G-H
[2]
RM van
de
Ghinste
and
Company
(Pty)
Ltd
v
Van
de
Ghinste
1980
(1)
SA
250
(C)
at p253
para
H(e)
[3]
SA
Cooling
Services
(Pty)
Ltd v
Church
Council
of the
Full
Gospel
Tabernacle
[1955]
3 All
SA
257
(D)