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[2017] ZAKZDHC 10
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Colour Tech Panel and Paint (Pty) Ltd v Crest Investments CC and Others (2748/17) [2017] ZAKZDHC 10 (16 March 2017)
IN THE HIGH COURT OF SOUTH AFRICA
KWAZULU NATAL LOCAL DIVISION, DURBAN
CASE NO. 2748/17
In the matter between:
COLOUR TECH PANEL AND PAINT (PTY)
LTD APPLICANT
and
CREST INVESTMENTS
CC FIRST
RESPONDENT
THE LIQUIDATORS OF TIRADEPROPS 1187 CC
(IN
LIQUIDATION) SECOND
RESPONDENT
THE SHERIFF OF THE HIGH COURT,
INANDA
AREA THIRD
RESPONDENT
ORDER
The application is dismissed with costs.
JUDGMENT
HENRIQUES J
Introduction
[1] This was an urgent application which served before
me on 13 March 2017. The relief sought in the notice of motion
is the
following, namely:
‘
1.
That a
rule nisi
do hereby issue, calling upon
the respondents to show cause, to this Honourable Court, on the …
day of … 2017, at
9:30 a.m. or so soon thereafter as counsel
may be heard why an order in the following terms should not be
granted:-
1.1 An order that the First and Third Respondents
current eviction of the Applicant from certain immovable property,
being Erfs
143 and 144 Phoenix Industrial Park, situated at 57 to 63
Hunslett Road, Phoenix Industrial Park, Kwa Zulu Natal is unlawful;
1.2 The First and Third Respondents are hereby
interdicted and restrained from unlawfully evicting the Applicant
from the aforesaid
property;
1.3 Any Respondent/s who oppose/opposes this application
is/are ordered to pay the costs thereof and in the event of there
being
no opposition thereto, then there be no order as to costs.’
[2] The applicant sought interim relief directing that
the orders set out in paragraphs 1.1 and 1.2 will operate with
immediate
effect, pending the outcome of the application.
[3] The applicant indicates the relief it seeks is a
mandament van spolie.
At the outset I must point out that the
order in 1.1 is essentially tantamount to a declarator which in my
view, an applicant is
not entitled to seek on an interim basis.
The principles relating to the
mandament van
spolie
[4] It is trite that the purpose of a spoliation
application is to prevent self-help. An applicant need only prove two
requirements
to succeed in an application in terms of the
mandament
van spolie
, namely:
[4.1] Proof that it was in peaceful and undisturbed
possession of the property; and
[4.2] That it was unlawfully deprived of such
possession.
[5] An applicant must prove that it had actual
possession and control coupled with an intention to derive some
benefit. No spoliation
occurs when the person is lawfully deprived of
possession,
[1]
by for example, a court order authorising such dispossession.
[6] The applicant indicates the following in respect of
its possession and being deprived thereof in its founding papers:
[6.1] that it has been in occupation of the premises
since 2012 i.e. before the second respondent acquired any rights over
the premises
or immovable property on which it is situated;
[6.2] that the second respondent consented to its
occupation of the premises as evidenced by a letter dated 3 June
2013
[2]
in which the liquidator required rental payment to be made by the
applicant into a specific trust account;
[6.3] the applicant had paid rent in respect of the
premises into the second respondent’s nominated bank account;
[6.4] neither the first nor second respondents have
obtained an order for the ejectment of the applicant from the
premises;
[6.5] the first and third respondents are evicting the
applicant from the premises pursuant to an order
[3]
dated 24 October 2016 which does not provide for the ejectment of the
applicant from the premises;
[6.6] the applicant acknowledges receiving a letter from
the first respondent’s attorney enclosing a copy of the court
order
Annexure KP2 requesting the applicant to vacate the
premises. It acknowledges that based on legal advice it received,
because
the order did not make reference to the applicant and did not
grant the first respondent the right to eject the applicant from the
premises, it did not at that stage deem it necessary to expend money
on legal costs. The applicant submits that the first respondent
has
proceeded to evict it from the premises without the right to do so.
It is for these reasons and the fact that the third
respondent
attended at the premises on 10 March 2017 that it submits the
application is urgent.
[7] On 13 March 2017, the urgent application was opposed
by the first respondent, Crest Investments CC.
Mr
Harrison
who appeared on the first
respondent’s behalf submitted an affidavit filed in support of
a warrant of ejectment and placed
the following facts before the
court.
[4]
[8] The property which the applicant occupies namely Erf
143 Phoenix Industrial Park and Erf 144 Phoenix Industrial Park
formed
part of the estate of Tiradeprops1187 CC (Tiradeprops). It is
common cause that Tiradeprops was wound up and liquidators were
appointed.
[5]
The sole member of Tiradeprops is Charlene Padayachee
and the sole director of the applicant is Kajal Padayachee.
[6]
[9] In order to decide this application and whether it
is a spoliation application, one must consider the allegations
contained
in the founding affidavit relied upon by the applicant for
the relief, and the principles applicable to such applications.
[10] In such application the applicant (Govindsamy
Shanmugam) alleged that on 1 June 2011 he concluded two agreements of
lease with
Tiradeprops for the immovable property. Such lease
agreement granted him the right of first refusal in the event of
Tiradeprops
wanting to sell the property. As the liquidators had not
afforded him a right of first refusal to purchase the property he
sought
the relief.
[11] He also indicated that he had become aware of the
fact that the liquidators had concluded a sale agreement in respect
of the
property with the second respondent Crest Investments CC. He
indicated that he had become aware of the sale of the property to the
second respondent after its member visited the property and advised
his tenant Colour Tech Auto Centre that it had purchased the
property. After informing the liquidator of his right of first
refusal pursuant to a lease agreement, Shanmugan contacted
the member
of Tiradeprops, Mrs Padayachee, who furnished him with copies of the
leases.
[12] He intimated in the founding affidavit that after
the liquidation of Tiradeprops, he had informed the liquidator that
he was
the lessee of the property and that he had sublet the premises
to Colour Tech Auto Centre. Ms Cronje accepted the position and chose
to abide by the leases.
[13] An agreement of sale of the immovable property was
in fact concluded between the liquidators of Tiradeprops and Crest
Investments
CC by way of private treaty on 12 August 2014.
Interestingly enough, clause 5 of the private treaty sale agreement
reads as follows:
‘
The Liquidators herein confirm that to the best
of their knowledge they are not in possession of any written lease
agreement/s neither
are they aware of any existing lease agreement/s
that are in place, and they are not collecting any rental from any
occupants in
terms of a lease agreement/s over the property herein.’
[14] An application was instituted on 29 September 2014
under Case No. 11269/14 by Shanmugam. Shanmugam sought an interim
order
interdicting the respondents from transferring the immovable
properties, pending the determination of legal proceedings to declare
the agreements of lease granting him a right of first refusal to
purchase the properties mentioned, valid. The respondents in such
application were the liquidators of Tiradeprops, Crest Investments
CC, Johnson and Partners and the Registrar of Deeds.
[15] As a consequence of Shanmugam’s application,
interim relief was granted. In response to the application the
liquidators
filed an affidavit disputing the existence of the two
lease agreements annexed to Shanmugam’s founding affidavit.
Interestingly
enough the liquidators disputed payment of rental in
terms of the alleged lease agreement and placed in issue that
Shanmugam had
been previously invoiced for such rental, pursuant to
the lease agreement.
[16]
In opposition, reference is made to the winding-up application and
the contents of the founding affidavit deposed to by one
Sigamoney
Pillay who sought the winding-up of Tiradeprops CC. In such
affidavit, Pillay intimates that on a visit tothe premises
situated
on the immovable property he had been approached by Shanmugam who
informed him that he was the principal tenant at the
premises and had
leased the premises from Tiradeprops at the end of December 2012 and
had taken occupation of these premises at
the beginning of January
2013. The liquidators pointed out that the allegations by Shanmugam
in his founding affidavit conflicted
with what Pillay had said in the
liquidation application, and it appeared that Shanmugam had taken
occupation of the premises long
after Tiradeprops had been placed in
liquidation and not in terms of the leases annexed to his founding
papers from 2011.
[17]
In the answering affidavit the liquidators also record that an offer
to purchase the property was received from an entity called
Colour
Tech Panel and Paint (Pty) Ltd and a copy of the agreement is annexed
thereto. The liquidators were aware that the director
of Colour Tech
Panel and Paint (Pty) Ltd was Padayachee who was the younger sister
of the Padayachee who was a member of Tiradeprops.
Such agreement to
purchase was subsequently cancelled. In addition, the liquidators
intimated that it was odd for Colour Tech Panel
and Paint (Pty) Ltd
to make an offer to purchase the property when it would have been
aware of Tiradeprops’ obligation to
allow Shanmugam the right
to make an offer on the property and the right of first refusal. The
liquidator also indicated that it
was apparent that there was an
enormous amount of co-operation between the various parties,
including Shanmugam to prevent the
disposal of the immovable property
in the insolvent estate and to finalise and not to hamper the
finalisation of the insolvent
estate.
[18]
Subsequently on 13 November 2013, Van Zÿl J granted an interim
order. On 27 November 2014 Shanmugam instituted an action
under Case
No. 13802/2014 against the liquidators of Tiradeprops and Crest
Investments CC. In such action Shanmugam pleaded the
following:
[18.1] He had concluded two written agreements of
lease with the liquidators of Tiradeprops in terms of which he was
granted
a right of first refusal to purchase the property;
[18.2] After Tiradeprops was placed in final
liquidation, Shanmugam orally informed Cronje that he was the lessee
of the property
and he had sublet the property to Colour Tech Auto
Centre and Cronje orally, alternatively, tacitly accepted the
position;
[18.3] In breach of the lease agreement, the
liquidators of Tiradeprops concluded a written agreement of sale with
Crest Investments
CC on 12 August 2014 and failed to notify Shanmugam
of its intention to sell the property and that the liquidators of
Tiradeprops
dispute the validity of the lease agreement.
[19] In such action Shanmugam sought the following
order, namely:
‘
1. An Order declaring the agreements of lease
(annexures “
A1”
to “
A15”
and
“
B1”
to “
B15”
) concluded
between the plaintiff and the first defendant valid.
2. An Order directing the first defendant to comply with
the provisions of clause 24 of each of the lease agreements by
notifying
the plaintiff that it intends to sell the properties and
granting the plaintiff the right of pre-emption to purchase the
properties
as contemplated by the said clause.
3. Costs of suit against the first defendant including
the costs of the application under Case No. 11269/2014 and costs of
suit
against the second defendant only in the event of the second
defendant defending the action in which event such costs order shall
operate jointly and severally with the costs order against the first
defendant, the one paying the other to be absolved.’
[20] The liquidators filed a plea in the action pleading
that
inter alia
:
‘
In terms of
section 37
of the
Insolvency Act 24
of 1936
, if the first defendant did not, within three months
appointment, notify the lessee of an election to continue with the
lease on
behalf of the insolvent estate, the first defendant will be
deemed to have determined the lease at the end of such three months.
In the event of the plaintiff proving the lease alleged, the first
defendant did not elect to continue the lease on behalf of the
estate
and it is accordingly terminated.’
[21]
When the matter came before court on the expedited trial roll,
Shanmugam and the liquidators of Tiradeprops and Crest Investments
CC
had concluded a settlement agreement in respect of the action under
Case No. 13802/14 and the application under Case No. 11269/2014.
The
terms of the settlement are the following:
‘
1. The Plaintiff hereby agrees to withdraw the
action under case number 13802/2014 and the application under case
number 11269/2014,
and consents to the discharge of the interdict
with immediate effect, with each of the parties to pay their own
costs both in relation
to the action and the application for the
interdict.
2. The Plaintiff consents to the removal of any
endorsements against the title deeds of the said immovable
properties, and agrees
to do all things necessary for any such
endorsements to be uplifted and/or removed.
3. The parties agree that neither the Plaintiff, nor the
other party acting through or under any purported rights of the
Plaintiff
to occupy the property are terminated forthwith, the
Plaintiff contending that the lease agreements have been validly
cancelled
and the First Defendant contending that no such lease
agreements were ever concluded or in existence. Irrespective of the
parties’
respective contentions, they agree that no further
rights to occupy the properties by the plaintiff or any other party
exists.
4. The Plaintiff agrees to vacate the immovable
properties immediately, and to do all things necessary to ensure
vacant possession
thereof to the First defendant with immediate
effect.
5. None of the parties to this settlement agreement will
have any further claims against the other arising from any purported
lease
agreements, occupation of the property, or from any delay in
the sale and registration of transfer of the said properties to the
Second Defendant.’
[22] Pursuant to such settlement agreement, Crest
Investments CC took transfer of the property on 27 February 2017. As
a consequence
of Shanmugam’s refusal to vacate the premises, a
writ of ejectment was issued on 9 March 2017.
[23] In support of the warrant of ejectment, Crest
Investments CC’s sole member deposed to an affidavit setting
out the terms
of the settlement and annexing a copy of the settlement
agreement as well as the order. Pursuant to such affidavit and
request
the warrant of ejectment was issued.
[24] Interestingly enough the warrant of ejectment
records the following:
‘
WHEREAS The Liquidators of Tiradeprops 1187 CC,
the First Respondent in the above matter obtained an Order in the
High Court, KwaZulu-Natal,
Local Division, Durban under case no:
11269/2014, on the 24
th
day of October 2016, against
Govindsami Shanmugam, the Applicant in the matter, ordering him and
all persons claiming through him
to be ejected from and out of Erf
143 and Erf 144 Phoenix Industrial Park having physical address 57
Hunslett Road, Phoenix Industrial
Park, Phoenix, Durban.’
[25] It was presumably pursuant to the warrant of
ejectment that the third respondent attempted to evict the applicant
in these
proceedings from the premises. The settlement
agreement specifically records that Shanmugam and all persons
occupying through
or under him are to vacate the premises and more
importantly records Shanmugam, as well as the liquidators’
views respectively
in relation to the validity or otherwise of the
lease agreement. Paragraph 3 of the settlement agreement specifically
records that
Shanmugam’s and all other persons occupying the
property through or under him rights to occupation are terminated. At
paragraph
4 of the agreement Shanmugam specifically agrees to vacate
the property and to do all things necessary to ensure vacant
possession
thereof to the liquidators.
[26] It would thus appear that even though the applicant
may meet the first requirement for spoliation, in that it was in
peaceful
and undisturbed possession of the property, it has not been
unlawfully spoliated or dispossessed of the property. A valid warrant
of execution has been issued pursuant to a properly concluded
settlement agreement and court orders being issued by the court.
In
addition, during the course of argument,
Mr Khan
for the
applicant, acknowledged that the member and director of the corporate
entities; Tiradeprops, and the applicant, are members
of the same
family.
[27]
Having regard to all the papers filed in this matter, as well as the
pleadings filed under Case No. 13802/2014 and Case No.
11269/2014, as
well as the terms of the settlement agreement, it is clear that the
consent order ought to have reflected Case No.
13802/2014 as well.
This appears to have been an error on the part of the office of the
registrar. I indicated to the parties prior
to the commencement of
the argument that I had called for the respective court files and had
same in my possession. I brought it
to the attention of
Mr Khan
that the order annexed to the papers was not endorsed on the court
file under Case No. 11269/2014 but subsequent investigation
has
revealed that it was recorded on Case No. 13802/2014. The consent
order taken settled the action as well as the application.
In
addition, the applicant appears to be the sub-tenant of Shanmugam and
they have no right of occupation or action against third
parties.
[28]
Further, the relief which the applicant seeks in paragraph 1 of the
notice of motion is a declarator. It is not entitled to
any order
either on an interim basis or as a final order given the facts of the
matter.
[29]
In addition, the applicant did not take the court into its confidence
insofar as Tiradeprops is concerned and the goings on
between
Shanmugam, the member of Tiradeprops and the liquidators. The
liquidators have already determined a right of occupation.
Furthermore, the new owner, Crest Investments CC was substituted
ex
lege
as landlord and therefore the first
respondent steps into the shoes of the liquidators of Tiradeprops. I
agree, even though the
case dealt with the principle “huur gaat
voor koop”, that the decision in
Genna-Wae
Properties (Pty) Ltd v Medio Tronics (Natal) (Pty) Ltd
[1995] ZASCA 42
;
1995 (2) SA 926
(A) is apposite in that ‘the purchaser (new
owner) is substituted
ex lege
for the original lessor and the latter falls out of the picture’.
[7]
[30]
The warrant of ejectment was legitimately and validly issued and
consequently the applicant in these proceedings ought to have
applied
for the setting aside of the writ should it contend that it was
invalid. It must follow then that I cannot agree with the
submission
of
Mr Khan
that the new owners, being the first respondent,
must take steps to eject the applicant.
[31]
The payment of rental either by Shanmugam or the applicant appears to
be placed in issue. In addition, the applicant contents
itself with a
payment made in 2013. No other payments are put up confirming that it
consistently paid the rental to date. Moreover,
it is quite obvious
that the applicant had deliberately not been honest with the court
and has not alleged specifically the basis
upon which it acquired the
right of occupation. It must follow that in light of what is herein
before set out in the judgment,
the applicant has not made out a case
for any of the relief it seeks, either on an interim or final basis.
No purpose will be served
in adjourning the application for purpose
of the declarator as this appears to have already been decided or
resolved in the matters
which formed the subject of the settlement
agreement.
[32]
In the premises the order I issue is the following:
The
application is dismissed with costs.
……………………
HENRIQUES
J
Application heard on:
13 March 2017
Judgment delivered:
16 March 2017
Counsel for the applicant:
Adv MS Khan SC
Instructed by:
Messrs Kershnie Govender Attorney
39 Umhlanga Rocks Drive
Durban North
KZN
Tel 031 564 9856
Email :
kershmie@law.co.za
Reference K Govender
Counsel for the first respondent: Adv GM Harrison
Instructed by:
Attorneys Kathija Limalia & Associates
Suite 4, 500 Peter Mokaba (Ridge) Road
Overport
Durban
[1]
AW Burman Holdings (Pty) Ltd v Great Letaba
Irrigation Board
1995 (3) SA 158 (T).
[2]
Annexure KP3.
[3]
Annexure KP2.
[4]
I must also add that prior to hearing the opposed application, I
requested the court file under Case No. 11269/14 to ascertain
the
circumstances under which the court order annexed as KP2 was
obtained as on the face of it the order did not appear to make
reference to the applicant.
[5]
The liquidators being Nicola Cronje and Chavonnes Badenhorst St
Clair Cooper.
[6]
At the hearing of the urgent application
Mr
Khan
acknowledged that they are sisters.
[7]
At 939B.