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[2017] ZANCHC 35
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Lategan N.O. and Others v NG White Farm Properties (Pty) Ltd and Others (747/2017) [2017] ZANCHC 35 (28 April 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
(Northern
Cape Division, Kimberley)
Saakno
/ Case number:
747/2017
Datum
aangehoor / Date heard:
24/04/2017
Datum
beskikbaar/Date available:
28/04/2017
In
th
e
matter
between:
JOHANNES
DIEDERICK LATEGAN
N.O
1
st
Applicant
CHEREe
LATEGAN
N.O
2
nd
Applicant
PETRUS
JOHANNES ERASMUS
N.O
3
rd
Applicant
And
NG
WHITE FARM PROPERTIES (PTY)
LTD
1
st
Respondent
WIM
SCHOLTZ
2
nd
Respondent
THE
REGISTRAR OF DEEDS,
VRYBURG
3
rd
Respondent
Coram:
Snyders AJ
JUDGMENT
SNYDERS,
AJ
1.
The applicants herein
applied for an urgent interim interdict to restrain the 1
st
respondent from passing transfer of the property known as Plot 588,
Vaalharts Settlement A, Registration Division Vryburg, Northern
Cape
measuring 91.4895 ha (the property) to 2
nd
respondent, pending the finalisation of an action to be instituted by
the applicants claiming transfer of the property to
applicants.
2.
The applicants, Johannes
Diederick Lategan NO, Cheree Lategan NO and Petrus Johannes Erasmus
NO, act in their capacity as trustees
of the Elnathan Trust ("the
trust").
The
1
st
respondent is NG
White Farm Properties
(Pty) Ltd ("the company") and is the owner of the property.
The 2
nd
respondent is Wim Scholtz ("Scholtz")and the 3
rd
respondent is
the
Registrar of Deeds, Vryburg ("the Registrar").
The
Registrar is cited by virtue of
s 97
of the
Deeds Registries
Act 47 of 1937
and no relief is sought against the 3rd respondent.
3.
During November 2012, the
trust and the company entered into a deed of sale for the purchase of
the property by the trust from the
company. The clause under dispute
herein reads as follows:
'1.
KOOPPRYS
Die
koopprys is die bedrag van R8 000 000.00 (AGT MILJOEN RAND) plus BTW
teen 'n nulkoers indien van toepassing, wat deur die Koper
aan die
Verkoper betaalbaar is 2 (Twee) maande voor die verstrykingvan die
bestaande Huurkontrak tussen NG WHITE FARM
PROPERTIES (EDMS) BPK en JDL TRUST
op 31
Desember 2016.
Die
Koper sal ' n g oedgekeurde Bankwaarborg(e) vir die volle koopsom aan
die Verkoper lewer, betaalbaar op datum van registrasie
te
Hartswater, vry van wisselkoste 6 maande voor die verstryking van die
bestaande huurkontrak.
'
4.
In terms of clause 1 of
the deed of sale, a guarantee was to be delivered by the trust to the
company for the full purchase price
by 31 July 2016. The full
purchase price was thereafter payable by 31 October
2016.
5.
The deed of sale referred
to a lease agreement which was concluded between the company and JDL
Trust. The lease agreement was concluded
during
July
2011
and JDL trust
was
represented
by
the 1
st
applicant in
his
capacity as trustee of said trust. In terms of the lease agreement,
JDL trust would lease the property from the company from
1 July 2011
to 31 December 2016.
6.
To further convolute
matters, the company signed an acknowledgment of debt in favour of
the trust. The date upon which it was signed
is unclear but the
resolution by the company to sign such acknowledgment of debt is
dated 17 August 2012. In terms of the acknowledgment
of debt, the
company borrowed R2 500 000.00 from the trust against a bond to be
registered over the property in favour of the trust.
The instrument
further determined that should the trust not perform in terms of the
deed of sale on 31 December 2016, the trust
would forfeit R1 250
000.00 of the loan amount. The company would then only be
liable for the remaining R1 250 000.00.
The amount in the
acknowledgement of debt became due and payable on 31 March 2017.
7.
A guarantee dated 30 June
2016 for the amount of R5 500 000.00 was received by the transfer
attorneys on 2 August 2016. On
20 December 2016, NG White
signed a power of attorney on behalf of the company, authorising the
transfer attorneys to appear before
the Registrar to pass transfer of
the property to the trust. On the same day however, the company
addressed a letter to the transfer
attorneys, confirming the averment
by said attorneys that the purchase price had not been paid on the
due date, viz 31 October
2016. The letter further stated that the
company was exercising its rights in terms of clause 8.1.1 of the
deed of sale. Clause
8.1.1 gave the company the right to cancel the
agreement in the event of breach of contract by the trust. The
company followed
up with the transfer attorneys on 4 and 17 January
2017,
respectively.
8.
On 19 January 2017, the
transfer attorneys notified the company that they would not proceed
with the transfer without the instruction
of the company and that the
trust had proposed paying interest on the outstanding purchase price
which was to be paid on 31 October
2016.
9.
On 31 January 2017, the
company once again sent a cancellation letter in terms of clause
8.1.1 of the deed of sale to the trust.
The breach alleged in said
notice was the failure by the trust to pay the purchase price on 31
October 2016. The letter further
revoked the power of attorney signed
on 20 December
2016.
10.
On 28 February 2017, the
company sent a letter to the trust indicating that despite the
cancellation, the trust was given an opportunity
to match an offer of
R18
500
000.00 made on
the
property
by a 3
rd
party. The
company
indicated that they were under pressure to accept the offer
and the trust was to provide an offer with haste, should they so
choose.
11.
Needless to say
,
the trust responded on 1
March 2017 and
indicated
that clause 1 of the
agreement did not reflect the true
intention
of the parties
.
The trust alleged that
the second part of clause 1 reflected the common intention correctly,
being that a guarantee for the purchase
price should be delivered 6
months prior to the exp
i
ry
of the lease agreement. The trust placed on record that it had
complied with its obligations in terms of the deed of sale and
that
the company had in fact also complied with its obligat
i
ons
by signing the power of attorney to effect transfer of the property.
The trust then denied that the company had the right
to cancel the
agreement and demanded specific performance
,
being the transfer of the
property into the trust's name.
12.
There were various
correspondence exchanged between the parties
between 1 and 31 March 2017. The gist of
said correspondence was
in an effort to reach
some
accord as to the way
forward
,
to
establish the parties positions and for the trust to
ascertain the identity of the
3
r
d
party
to whom the property was sold. The trust alleged that
they had ascerta
i
ned
the identity of the new purchaser as Scholtz on 30 March
2017
and
confirmed with him that the property had
indeed
been sold to
him
.
13.
It was at this stage that
papers were issued on 6 April 2017 for hearing on 13 April 2017 on an
urgent basis. The company opposed
the application and filed opposing
papers on 12 April 2017, as was set out in the notice of motion. On
the hearing on 13 April
2017, the trust requested a
postponement to the urgent roll for 24 April 2017 in
order to file
replying
papers. At that stage, the trust argued that the postponement
would not affect urgency and the Judge hearing the matter on 24 April
2017 would be in a better position to make a determination on
urgency. I granted the postponement on 13 April 2017 and adjudicated
on the matter on 24 April 2017.
14.
A determination was to be
made on the urgency of the matter and whether the trust had made out
a proper case for the granting of
an interim interdict restraining
the company from passing transfer to Scholtz
,
pending
finalisation of action to be instituted by the trust against the
company.
15.
Counsel for the applicant
argued that the issue of urgency was no longer relevant as the matter
could be finally determined as all
papers had been filed. The main
application was instituted as a matter of urgency
.
The respondent denied
that the matter was urgent and moved for the matter to be removed
from the roll
.
I
was of the strong view
,
based on the reasons
below
,
that
the main application was not urgent and the usual rules should have
applied
.
However
,
I believed to have struck
the matter from the roll on the ground of absence of urgency
,
would only have delayed
the finalisation
of
these proceedings unnecessarily. I therefore dealt with
the
main application on urgency, as well as the merits.
[1]
16.
The trust's grounds for
urgency were that the company had concealed the identity of Scholtz
and the true position of the further
sale of the property. The
further reason for the delay in approaching court was for the parties
to attempt to settle the issues
inter
partes.
The
trust was only able to
obtain
Scholtz' details on 30 March 2017 and was not in a position to
approach court before then. Incidentally, the deed of sale was not
concluded between the company and Scholtz but between the company and
Swellendam Trust, of which Scholtz is a trustee. The matter
is
further argued to be urgent as the transfer of the property may
pass to the Swellendam Trust within a month, whereas the
application
would take much longer to be finalised.
17.
Counsel for the company
argued that the matter was not urgent by virtue of the trust having
had knowledge as early as 28 February
2017 of the offer to purchase
the property. The trust was also the bondholder of a first mortgage
bond registered over the property
and the company could not pass
transfer without the trust's
consent.
18.
In
Gouws
v Scholtz
[2]
,
Steenkamp
J held as
follows:
"Gronde
vir dringendheid sat van die omstandighede van elke saak afhang. In
hierdie Afdeling word daar te maklik beweer dat
'n aansoek dringend
is en praktisyns behoort noukeurig na le gaan of 'n aansoek dringend
is aldan nie, want as die Hof bevind dat
'n aansoek nie dringend is
nie en dat die gewone kennisgewing van mosie
soos
in Vorm 2(a)
uiteengesit, gebruik moes gewees het, dan kan die aansoek van die
hand gewys word, met verspilde koste en tyd wat verlore
gaan. Die
meeste dringende gevalle sat egter nag steeds op 'n gewone
Mosiehofdag verhoor kan word
-
dit sat die
uitsonderlike geval wees, waar 'n veiling gestop moet word of waar
een of ander dringende grand uitgemaak kan word,
wat in Kamers of na
ure verhoor sat
moet word."
19.
The
Honourable Judge went further and aligned himself with the following
passage from
Luna
Meubel Vervaardigers (Edms) Bpk v Makin and Another (t/a
Makin's
Furniture
Manufacturers)
[3]
:
"
Practitioners
should carefully analyse the facts of each
case
to
determine
,
for the purposes
of setting the case down for hearing
,
whether
a
greater
or
lesser degree
of relaxation of the Rules and of the ordinary practice
of
the
Court
is
required. The
degree of relaxation should not be greater than the exigency of the
case
demands.
It must be commensurate therewith. Mere lip-service to the
requirements
of
Rule 6(12)(b)
will
not do and an applicant must make out a
case
in
the
founding
affidavit
to justify the
particular extent of the departure from
the
norm
,
which is
involved
in the time
and day for which the matter be set down.
"
20.
The
applicant submitted that the urgency is not self-created with
reference
to
Nelson
Mandela Metropolitan Municipality
&
Others
v Greyvenouw
CC
&
Others,
[4]
where
it was held that the protracted attempts by a litigant to resolve a
matter before it approached the court did not amount to
dilatory
action which negated the urgency of the matter.
[5]
21.
Urgent
applications which are not
ex
parte
applications
under Uniform
Rule 6(4)
entails the abridgment of time periods
prescribed by the rules. The question is thus whether a departure
from time frames in the
rules is justified and
if
so,
to
what
extent
such
departure
is
necessitate
d
[6]
.
22.
The trust was in a
position to bring this application on an urgent basis on the e-mail
dated 28 February 2017. To suppose that an
entire month should be
taken up with negotiations that were leading nowhere
,
is
opportunistic
.
23.
The application was
served on the company on 7 April 2017
,
providing the company
with 3 court days to file opposing papers on 12 April 2017 and to
argue the matter on 13 April 2017
.
Whilst I find there to be
some measure of urgency in the application,
it
was semi-urgent at best
and did not justify such a drastic departure from the rules
.
24.
Taking into account the
fact that all the papers were filed and arguments heard herein
,
I nevertheless disposed
of this matter on the merits as well, notwithstanding the lack of
urgency
herein.
25.
In
order to obtain interim relief in the form of an interdict, the trust
must make out a case as was recently confirmed by the Constitutional
Court in
South
African Informal Traders Forum
&
Others
v City
of
Johannesburg
&
Others:
[7]
"Once
we grant leave to appeal our immediate concern becomes whether we
should grant temporary relief. Foremost is whether
the applicant has
shown a prima facie right that is likely to lead to the relief sought
in the main dispute. This requirement is
weighed up along with the
irreparable and imminent harm to the right if an interdict is not
granted and whether the balance of
convenience favours the granting
of the interdict. Lastly, the applicant must have no other effective
remedy."
26.
In
Simon
NO v Air Operations of Europe AB
[8]
,
the
court held that it was incumbent upon the applicant to establish, as
one of the requirements for
the
relief sought, a
prima
facie
right,
even though open to some doubt. The court then formulated the
following test to determine whether a
prima
facie
right
exists:
"The
accepted test for a prima facie right in the context of an interim
interdict is to take the facts averred by the applicant,
together
with such facts set out by the respondent that are not or cannot be
disputed and to consider whether, having regard to
the inherent
probabilities, the applicant should on those facts obtain final
relief at the trial. The facts set up in contradiction
by the
respondent should then be considered and, if serious doubt is thrown
upon the case of the applicant, he cannot succeed."
27.
The facts averred by the
applicant are that its
prima facie
right
arises out of a deed of sale
,
the trust complied with
the deed by providing the company with a guarantee in terms of said
deed of sale
,
the
company did not indicate that the guarantee was defective
,
the company relied on a
failure to pay the sale price in their letter of cancellation and not
the defective guarantee and the company
signed a power of attorney to
pass transfer
,
clearly
indicating the company's intention to proceed with the transfer
.
28.
It cannot be disputed
that in order for the property to be sold as a going concern
,
it was a requirement that
the trust be registered as a VAT vendor. Thus
,
if the trust
were a registered VAT vendor
,
the amount of RB
000
000.00
would be payable for the property. If the trust was not
registered as a VAT vendor, the purchase
price for the property would be R912 000 000.00.
The guarantee was delivered to the company for an amount of
R5 500
000.00. The trust did not dispute that it was not a VAT vendor at the
time of the delivery of the guarantee, as the trust
only provided
proof of registration as a VAT vendor on 24 November 2016. Thus the
amount of the guarantee was to be for the amount
of R912 000 000.00.
29.
The trust avers that the
amount of R2 500 000.00
in
the acknowledgment of
debt was set off against the purchase price of R8 000 000.00. The
amount in the acknowledgement of debt, although
a liquid amount
,
was not yet due and
payable at the time of the issuing of the guarantee and could not be
set off against the purchase price. The
contract clearly stated that
the guarantee should be for the
full
purchase price.
The
trust had also not disputed that the guarantee was delivered to the
company on 2 August 2016
,
being 2 days after the
guarantee was to be
delivered
to the company
.
Thus
,
not only was the
guarantee delivered late
,
it was also delivered for
the incorrect amount.
30.
In the letter of
cancellation, the company relied on the trust's failure to pay the
purchase price by 31 October 2016. The issues
raised by the trust
hereon are twofold: firstly the applicant now relies also on the
defective guarantee and did not indicate that
they were dissatisfied
therewith at the time that it delivered; and secondly the
interpretation of the contract is such that the
payment of the
purchase price should be scrapped by a trial court to give effect to
the common intention of the
parties.
31.
The
SCA has indicated the settled law on the grounds of cancellation in
the
Datacolor
matter
[9]
as
follows:
"
In
particular
,
the innocent party need not identify the
breach or the grounds on which he relies for cancellation. It is
settled law that the innocent
party
,
having purported
to cancel on inadequate grounds
,
may afterwards rely on
any adequate ground which e
x
isted at
,
but
was only discovered after, the time (cf Putco Ltd v TV
&
Radio Guarantee
Co
(Pty) Ltd and Other Related Cases
1985
(4)
SA
809
(A)
at 832C
-
D).
"
32.
The deed of sale contains
a clause which stipulates that the company reserves all its rights in
terms of the deed of sale
,
notwithstanding any
relaxation of the terms thereof or indulgence extended to the trust.
Coupled with the above
dicta
,
the argument
regarding the grounds of cancellation d
i
d
not assist the trust.
33.
This clause in the deed
of sale also impacted the argument that the company did not
raise a concern as the correctness of
the guarantee at the time that
it was filed. This also goes to the root of the argument regarding
the company having signed the
power of attorney. The company's
explanation for signing same is supported on the papers. The power of
attorney was revoked by
the company. This revocation was also done
within a short period of time and cannot be seen as the company
waiving its right
to cancellation in terms of the deed of
sale.
34.
Based
on the above, the trust's
prima
facie
right is open to too much doubt to have
established such right. In the
Informal
Traders matter
[10]
the
Constitutional
Court held that a
prima
facie
right
may be established by demonstrating prospects of success in the
review. In this matter, the trust must show prospects of success
in
the intended action. The action will contain relief for specific
performance in terms of the deed of sale. In order to sustain
such an
argument, a trial court will have to give an interpretation to clause
1 of the deed of sale.
35.
In
the SCA matter of
Bothma-Batho
Transport
[11]
the
guidelines pertaining to the interpretation of contracts is set out
as follows:
"Whilst
the starting point remains the words of the document, which are the
only relevant medium through which the parties
have expressed their
contractual intentions, the process of interpretation does not stop
at a perceived literal meaning of those
words, but considers them in
the light of all relevant and admissible context, including the
circumstances in which the document
came into being. The former
distinction between permissible background and surrounding
circumstances, never very clear, has fallen
away. Interpretation is
no longer a process that occurs stages but is 'essentially one
unitary exercise'
36.
The court further
indicated that when interpreting a document, one must have regard to
the context provided by reading the particular
provision or
provisions in the light of the document as a whole and the
circumstances attendant upon its coming into existence.
Whatever the
nature of the document, consideration must be given to the language
used in the light of the ordinary rules of grammar
and syntax; the
context in which the provision
appears; the apparent purpose
to which it is directed and the material known to those responsible
for its production. Where more
than one meaning is possible each
possibility must be weighed in the light of all these factors. The
process is objective, not
subjective. A sensible meaning is to be
preferred to one that leads to insensible or unbusinesslike results
or undermines the apparent
purpose of the document. Judges must be
alert to, and guard against, the temptation to substitute what they
regard as reasonable,
sensible or business-like for the words
actually used.
37.
I cannot pre-determine
the result of an action that has yet to be instituted. can however
make a finding on the prospects
of
success. The company
indicates that clause 1 was
worded as such in order to obtain a guarantee by 31 July 2016, being
6 months before the expiry of the
lease agreement on 31 December
2016. This, stated the company, was to account for the expiry of the
lease agreement and for the
crop rotation regarding JDL Trust's
farming activities on the property. The parties were of the view that
transfer of the property
would occur within a 4 month period, hence
the purchase price being payable on 31
October
2016. It is
disingenuous
of
Counsel
for the trust to state that this explanation defies understanding.
38.
Thus looking at the
context, the purpose of the provision and the background to the
preparation thereof, the two sections of clause
1 are not
contradictory and ought not to be scrapped by a trial court. Even if
this does occur, and the section on the delivery
of the guarantee in
clause 1 remains, the trust will not be able to prove their
compliance with the deed of sale. I find that the
trust has not
established a
prima
facie
right.
39.
The further requirements
for an interim interdict are to be considered in conjunction with the
establishment of a
prima
facie
right. The
trust must thus also show that it will suffer irreparable harm if the
relief is not granted. The trust must show that
the balance of
convenience favours the granting of
the interim interdict
,
as well as there being no
other satisfactory remedy at the trust's disposal.
40.
The
trust must indicate a well-grounded apprehension of irreparable harm
if the interdict is not granted. The test in
this regard
is an objective
[12]
test
on
the
basis of the facts presented to me. In order to determine whether the
balance of convenience favours the granting of the interim
interdict,
I must compare the prejudice to the applicant if the interlocutory
interdict is refused against the prejudice to the
respondent if it is
granted. Usually this will resolve itself into a consideration of the
prospects of success in the main action.
The weaker the prospects of
success, the greater the need for the trust to show that the balance
of convenience favours it.
[13]
The last requirement is that there must be no other adequate ordinary
remedy. This requirement is closely linked to the requirement
of
irreparable harm. The trust herein claims delivery of
specific property as owner thereof under
a
legal
right emanating from the deed of sale. The trust's claim is
thus seen to be vindicatory, alternatively, quasi-vindicatory.
[14]
Therefore, the trust need not show that it will suffer irreparable
harm if the interdict is not
granted,
[15]
nor
that it has alternate
satisfactory
remedy. However, this is
only
a
presumption, which may be rebutted by the company.
41.
I have taken the
following factors into account in exercising my discretion
to
refuse the interdict. The
trust will not suffer irreparable harm as the company had
rebutted the presumption of the irreparable
harm applicable to a
quasi-vindicatory action on
the following basis:
41.1
There is a dispute
between the parties as to whether the R1
250 000.00 was forfeited by the trust in terms of the
acknowledgement of debt. Pending such dispute, the trust is under no
obligation
to consent to the cancellation of the mortgage bond. This
will result in the passing of transfer of the property being halted
pending
the resolution of such dispute. Counsel for the company had
indicated that they do not intend to tender payment of the full
amount
of R2 500 000.00 in terms of the acknowledgment of debt.
41.2
As Scholtz, on behalf of
Swellendam Trust, was notified of these proceedings, the trust can
claim transfer of the property
from
Scholtz if they are successful in their action for specific
performance
.
[16]
42.
Thus, the lack prospects of
success in the main action does not lend itself to the balance of
convenience favouring the granting
of the interim relief. The
transfer cannot proceed until finalisation of the dispute on the
acknowledgment of debt and there is
no immediateirreparable harm for
the
trust. The trust may also claim transfer
of the property from Scholtz, if
necessary, if
the trust is successful in the action.
43.
I can find no reason why
costs should not follow the result. Added to this,
the
trust failed to make out a case on urgency which gives an added
reason for an adverse cost order against the
trust.
Wherefore
I make the following order:
1.
THE APPLICATION IS DISMISSED WITH COSTS.
______________
JA
SNYDERS
ACTING
JUDGE
On
behalf of Applicant:
Adv H De Bruin SC (Van de Wall &
Partners)
On
behalf of First Respondent:
Adv EJJ Nel (Duncan & Rothman Attorneys)
[1]
Compare
Blue Nightingale Trading 397 (Pty) Ltd t/a Siyenza Group
v
Amathole
District Municipality
2017 (1) SA 172
(ECG)
[2]
1989
(4) SA 315
(NC)
at
322
8
-
D
[3]
1977
(4) SA 135
{W) op 137E
-
G
[4]
2004
(2) SA 81
at 94 C-E
[5]
Compare
Stock
&
Another
v Minister of Housing
&
Others
2007 (2) SA 9
at 12 F
-
J
[6]
Luna
Meubels case at
136
G - 137
A
[7]
2014
(4) SA 371
(CC)
at
para
24
[8]
1999
(1) SA 21
7 (SCA)
at
228
G-H
[9]
Datacolor
International (Pty) Ltd v lmtamarket (Pty)
Ltd
[2000] ZASCA 82
;
2001 (2) SA 284
(SCA) at para 28
[10]
See
fn
7
at
para 25
[11]
Bothma-Batho
Transport (Edms) Bpk v S Bothma
&
Seun
Transport {Edms) Bpk
2014 (2) SA 494
(SCA) at para 12
[12]
Janit
v Motor Industry Fund Administrators (Pt y) Ltd
1995
(4 )
SA
293
(A)
at
304
H-I
[13]
See
fn
8
at
231
G
-
I
[14]
Stern
v Ruskin NO v Appleson
1951
(3)
SA
800
(W)
at
810-811
[15]
Compare
Huthwaite v Wainer Ltd
1916
WLD
117
[16]
Bowring
NO v Vrededorp Properties CC
&
Another
2007 (5) sa 391 (SCA) at para 11