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[2016] ZAGPPHC 44
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Lindley Farm 528 (Pty) Ltd v Cradle City (Pty) Ltd (13868/2013) [2016] ZAGPPHC 44 (29 January 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
CASE
NUMBER: 13868/2013
29/1/16
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
In
the matter between:
LINDLEY
FARM 528 (PTY)
LTD PLAINTIFF
and
CRADLE
CITY (PTY)
LTD DEFENDANT
JUDGMENT:
STRIJDOM
AJ:
A.
INTRODUCTION
1.
The Plaintiff instituted action against the Defendant in which the
Plaintiff claims substantial amounts of money from the Defendant,
based upon 3 claims which .... all relate to the sale by the
Plaintiff to the Defendant of an immovable property, Remaining Extent
of Portion 13 of the farm Lindley, 528, Registration Division JQ,
Province of Gauteng, measuring 90,2408 hectares and held under
deed
of transfer T3914/1990 ("the property").
2.
The Defendant disputes the Plaintiff's claims and instituted a
counterclaim in which it claims·damages from the Plaintiff,
also for a very substantial amount.
THE
CONTRACT:
3.
The conclusion of the written agreement of sale between the parties,
as well as certain addenda thereto, are common cause.
4.
On 23 March 2009 the relevant agreement of sale was concluded.
See:
Agreement of
sale, trial bundle,
p.11
5.
The agreed purchase price for the property is the amount of R112
million.
See:
Agreement of
sale, trial bundle,
par.2, p.2
6.
The purchase price was payable in different tranches at future dates,
and it was also recorded that by the time the agreement
was concluded
the Defendant had already paid a portion of the purchase price.
7.
Paragraph 4 of the sale agreement reads as follows:
"Possess on and
risk:
Possess on shall be
given by the seller to the purchaser on the date of transfer,
together with vacant occupation, from which date
the purchaser shall
be entitled to all benefits from and be liable to all risks of
ownership in respect of the property including
liability for
rates and taxes and any other charges or levies on the property
from such date."
See:
Trial bundle,
clause 4, p.6
8.
It is common cause between the parties that there were, at all
relevant stages, and there are still currently, a large number
of
squatters occupying the property.
9.
On 4 May 2009, before transfer of the property to the Defendant, the
Plaintiff wrote a letter to the Defendant which reads as
follows:
"The company
(that is
a
reference to the Plaintiff) will fully comply with
the provisions of clause 4
as
set out in the agreement of sale
dated 2310312009.
Should there be any
unlawful occupiers present on the property at the date
of registration of the transfer of
the property, we
undertake to remove any such occupiers at our cost within
a
reasonable time but not later than 2810212010, said undertaking
will only apply to the number of unlawful occupiers that might be
present on the property at the time
as
stated above.
We confirm that
Lindley Farm 528 (Pfy) Ltd (which is again
a
reference to the
Plaintiff) will not be held responsible for the
removal of any
additional unlawful occupiers which might occupy the property after
date of registration of the transfer."
10.
The property was transferred to the Defendant on 7 May 2009, and by
that date the squatters had not been removed from the property.
11.
Upon the same day that the property was transferred to the Defendant
the parties concluded a further addendum to the sale agreement,
in
the form of an
"indemnity and undertaking"
which the
Defendant attached as annexure "A" to its plea.
12.
The indemnity and undertaking reads as follows:
"We, the
undersigned, Lindley Farm 528 (Pty) Ltd ("Lindley Park
528'J
hereby-
1.1.
agree and undertake in favour of Cradle City (Pty) Ltd ("Cradle
City”), by no later than 31 August 2009 at our cost, to
take
all such steps and to do and procure the doing of all thal is
requisite in order to lawfully evict all squatters including,
but not
limited to all on the list attached hereto, marked
as
appendix
1, occupying the Remaining Extent of Portion 13 of the farm Lindley
528, registration JQ, the Province of Gauteng, measuring
90,2408
hectares ("the land'J
as
at the date upon which the land
is transferred into
the name of Cradle City in the relevant
Deeds Office ("the Squatters');
1.2.
indemnity and hold Cradle City harmless against
–
1.2.1.
any and all
claims,
losses,
damages, actions, liabilities, expenses,
including all legal fees and expenses on an
attorney and
own client basis
(collectively, the "claim/s”) which may be made against
Cradle City –
1.2.1.1.
as a
result of
a
breach of any or all of
our
undertakings referred to in this indemnity;
1.2.1.2.
arising from or ancillary to or connected
with the
occupation of the squatters on
the land and/or the eviction or
removal of the squatters from the land;
1.3.
agree and undertake in favour of Cradle City to make payment under
this indemnity
as
soon
as
Cradle City becomes obliged
to make any payment in respect of any of the claim/s in an
amount
equal to the amount paid by Cradle City to settle the claimls."
See:
Indemnity and
undertaking, trial bundle,
p.92
13.
In paragraph 5 of its particulars of claim the Plaintiff alleged,
when it instituted the action against the Defendant in 2013,
that it
complied with all its obligations in terms of the sale agreement,
alternatively that it substantially complied with all
its obligations
in terms of the sale agreement.
See:
Amended
particulars,
par.5
14.
In claim 1 of its claim the Plaintiff claims from the Defendant the
balance of the purchase price. The Plaintiff alleges that
as at 31
January 2013 the balance of the purchase price, together with
capitalised interest, amounted to R79 601 756.00.
15.
The first claim consists of 2 parts. The first part is for the
balance of the purchase price, as stated above. The second part
is
for a penalty. In this regard the Plaintiff relies upon paragraph
2.2.5.1 of the sale agreement which states that should payment
of the
balance of the purchase price not be made as was agreed and
contemplated in paragraph 2.2.2 of the agreement (i.e. R50 million
payable not later than 30 months after registration of transfer) then
in terms of clause 2.2.5.1 a penalty of 20% of the amount
outstanding
shall become due and payable. In this regard the Plaintiff claims a
penalty of R14 328 479.00 from the Defendant.
See:
Amended
particulars,
par.9
16.
In claim 2 the Plaintiff claims payment to it of the clearance costs
it alleges to have paid on behalf of the Defendant. In
this regard
the Plaintiff relies upon paragraph '3 of the sale agreement which
stipulates that any amounts advanced by the Plaintiff
to pay for
transfer and clearance costs shall be repaid by the Defendant to the
Plaintiff within 90 days from date of registration
of transfer.
See:
Sale
agreement, trial bundle,
par.3, p.6
17.
Claim 3 relates to the Plaintiff's alleged entitlement to monies
payable by the Gauteng Provincial Government : Department of
Roads
and Transport, in respect of the expropriation of a portion of the
property. The Plaintiff alleged that the parties concluded
an oral
agreement on 2 March 2010 and that the Defendant agreed then to pay
to the Plaintiff an amount of R3 767 158.00, which
represents a
partial compensation which the Department paid for the expropriation
of the portion of the property.
18.
After the Plaintiff instituted its action against the Defendant it
applied for summary judgment. The Defendant filed an opposing
affidavit and
inter a/ia,
raised as a defence the issue that
the Plaintiff has in fact not complied with its contractual
obligations and had failed and still
fails, to provide to the
Defendant vacant occupation.
19.
In addition, the Defendant also raised in its affidavit resisting
summary judgment the issue that the Defendant had failed to
refer to,
or to attach to its particulars of claim, the indemnity and the
undertaking which the Plaintiff gave to the Defendant
upon date of
transfer.
20.
After an opposed argument leave to defend was granted to the
Defendant.
21.
In its plea the Defendant refers to the indemnity and undertaking and
alleged that the said indemnity and undertaking forms
an essential
part of the agreement between the parties, and should therefore be
read with the sale agreement and the other addendum,
namely annexures
"POC2" and "POC3" attached to the Plaintiff's
particulars of claim.
22.
Regarding claim 1 the Defendant disputes liability for the
penalty, and contends that upon a proper interpretation of
the sale
agreement the penalty would only be payable if the Defendant
requested the Plaintiff, not later than 60 days before the
expiry of
the 30 month period mentioned in paragraph 2.2.2 for an extension of
a further 6 months for payment of the balance purchase
price. The
Defendant pleaded that it never had asked the Plaintiff for an
extension and that consequently the penalty provision
contained in
paragraph 2.2.5.1 does not apply. In the alternative the Defendant
pleaded that should the court arrive upon the conclusion
that the
Plaintiff is entitled to rely upon the penalty provision, then it
ought not to be enforced by virtue of a discretion afforded
to the
court not to enforce a penalty provision in a contract, which
discretion a court derives from the provisions of the conventional
Penalties Act, 15 of 1962. In this regard the Defendant requested
that the court should reduce any such a penalty to an amount
which
the court may deem appropriate in the prevailing circumstances.
23.
The Defendant's main defence on the Plaintiff's first claim is that
the Plaintiff did not comply with paragraph 4 of the sale
agreement,
the Defendant also breached annexure "A", and also breached
the undertaking which was recorded in the letter
dated 4 May 2009,
annexure "A1" to the plea.
24.
The Defendant pleaded that initially it did not want to allow
registration of the property to take place due to the fact that
it
could not get or receive vacant occupation as promised in paragraph 4
of the sale agreement on the date of registration of transfer,
due to
the presence of squatters on the property. Annexure "A", so
alleged the Defendant, was then concluded between
the parties on 7
May 2009, before registration of transfer.
25.
The Defendant alleged that the Plaintiff is premature with its
action, and that the Defendant is only obliged to pay the remainder
of the purchase price to the Plaintiff after the Plaintiff first
complied with its undertaking to give vacant occupation and its
undertakings recorded in the indemnity and undertaking. Therefore,
the Defendant pleads that its obligation to pay the remainder
of the
purchase price is reciprocal to the Plaintiff's obligations and that
until sue a time as the Plaintiff had complied with
its obligations
there is no obligation on the Defendant to pay the remainder of
the purchase price.
26.
With reference to claim 2 the Defendant repeats its defence that the
Plaintiff is premature in instituting its action. The Defendant
also,
in addition, alleges that the Plaintiff received various amounts of
R77 273.00 each from 1 October 2010. In this regard the
Defendant
relies upon set-off.
See:
Plea,
par.20.2
27.
In response to claim 3 the Defendant repeated its defence that the
Plaintiff is not entitled to payment, due to the Plaintiff's
non-compliance with its own contractual obligations. In addition the
Defendant contends that any obligation to refund the Plaintiff
is an
obligation that arises only if the Defendant is in a position to do
so, and in this regard the Defendant refers to the fact
that annexure
"POC8" provides that the Defendant will only refund the
Plaintiff
"as soon as you are in
a
position to do so".
The Defendant then continues to allege that it is not in a
position to do so, because it suffered and is still suffering
significant
damages as a result of the breach by the Plaintiff of the
terms of the agreement.
28.
In the Defendant's counterclaim it claims damages from the Plaintiff
in an amount of R300 000 000.00. In this regard the Defendant
alleges
that it paid the Plaintiff an amount of R43 000 000.00 as at the date
of transfer, but as a result of the breach on the
part of the
Plaintiff to provide to the Defendant vacant occupation, the failure
on the part of the Plaintiff to honour its indemnity
and undertaking,
and furthermore as a result of fraudulent misrepresentations made by
the Plaintiff to the Defendant, to the effect
that it will
procure an ejectment of the occupiers from the property, the
Defendant suffered significant damages.
See:
Counterclaim,
par.11
29.
The Defendant alleges that if vacant occupation was provided to it
the value of the property would have been R300 000 000.00.
The
Defendant alleges that with the squatters on the property, the
property is completely valueless.
30.
The Plaintiff filed a replication, and later an adjusted replication.
In the adjusted replication the Plaintiff alleged that
annexure "A"
varied clause 4 of the sale agreement and, instead of having an
obligation to give to the Defendant vacant
occupation, the only
obligation that remained with the Plaintiff was that, by no later
than 31 August 2009, the Plaintiff had to
take all steps and to do
and procure the doing of all that was required in order to lawfully
evict all squatters from the property,
which duty the Plaintiff
alleged it complied with.
See:
Adjusted
replication,
par.3.2, p.120
In
the alternative the Plaintiff alleges that should the Court find in
favour of the Defendant, namely that the Defendant was
entitled to
withhold payment until the Plaintiff had caused the eviction of the
squatters, then the Plaintiff alleges that a
fair and reasonable
cost for the Defendant to achieve a vacation of the property by the
squatters would not exceed an amount
of R6 million, and the
Plaintiff then continues to allege that it is consequently entitled
to a reduced purchased price.
See:
Adjusted replication,
par.3.8, p.121 - 124
32.
In the result, in the replication, the Plaintiff persists with its
claims in the main, but also alleges in the alternative that
it ought
to be granted the relief prayed for, but with a reduction of the
purchase price by an amount of R6 million.
See:
Adjusted
replication,
p.125
B.
THE TRIAL
33.
Three witnesses gave evidence, namely:
33.1. On behalf of the
Plaintiff:
33.1.1.
Mr Grant Collin Fraser, an expert;
33.1.2.
Mr Jacobus Gustavus Pansegrouw, the Plaintiff's representative.
34.
Mr Grant Fraser testified that he would subtract an amount of between
R3 million and R6 million, which, according to him is
the sum with
which the presence of the squatters diminishes the value of the
property. He concluded that he would value the
property at slightly
more than R180 million. He also accept that the presence of the
occupiers diminishes the value of the property.
35.
In a joint minute, prepared by the two experts, they concluded that
the informal settlers reportedly number about 40 people
and occupy
about 20 structures.
36.
The crux of the evidence presented was that the parties' experts
agreed that the portion of the property on which the squatters
were
located was no more than R6,000,000.00 (Six million rand). No
evidence was tendered comparing values of the property with
or
without the squatters.
37.
It was submitted by counsel for the Defendant that Mr Pansegrouw
initially limited the Plaintiff's obligation under the undertaking
to
institute the necessary litigation to ensure that the squatters could
be lawfully evicted and subsequently that the Plaintiff
indeed had
the obligation to see such process through.
38.
I must agree with- counsel for the Plaintiff that the criticism is
unfounded by virtue of the fact that when the cross-examination
was
originally directed to the witness in this respect. It was limited to
what the Plaintiff was obliged to do in terms of the
undertaking in
August 2009.
39.
The Defendant's counsel never previously asked the question whether
the Plaintiff was obliged to ultimately evict the squatters,
the
question related only to what had to be done by August 2009.
40.
The second criticism related to the suggestion that Mr Pansegrouw had
testified that there were documents where the Defendant
had conceded
the obligation to make payment of Claim 3, where the witness in fact
testified that the concession of the Defendant
was made during
meetings that were held after the Defendant's initial denial of its
liability therefor.
41.
The witness did not initially answer that there were documents
wherein the Defendant had conceded liability, but when asked
by the
Defendant's counsel "show me documents" that is when the
witness for the first time tendered and subsequently
referred to D108
and D109.
42.
In my view the witness was a reliable witness. He did not contradict
himself on any material aspect and there are no inherent
improbabilities in his evidence.
43.
The majority of the questions for determination are ultimately to be
decided on the interpretation of the Sale Agreement and
Indemnity and
Undertaking.
C.
THE INTERPRETATION OF THE CONTRACTS
44.
In
Coopers
&
Lvbrand
and Others v Brvant
[1]
Joubert JA set out
the legal position in the interpretation of contracts as follows:
''According to the
golden rule of interpretation the language in the document is to be
given its grammatical and ordinary meaning,
unless this would result
in
some
absurdity, or
some
repugnancy or inconsistency
with the
rest
of the instrument."
45.
The mode of construction should never be to interpret the particular
word or phrase in isolation.
See:
Swart
and Another v Cape Fabrix
(PtvJ
Ltd
[2]
46.
In
Sassoon
Confinninq and Acceptance Co
(PtvJ
Ltd
v Barclays National Bank Ltd
[3]
it was pointed out by
Jansen JA at 6468-D:
"The first step
in construing
a
contract is to determine the ordinary
grammatical meaning of the words used by the parties. Very few words,
however, bear
a
single meaning, and the ordinary meaning of
words appearing in
a
contract will necessarily depend upon the
context in which they are used, their interrelation, and the nature
of the transaction
as
it appears from the entire contract. It
may, for example, be quite plain from reading the contract
as a
whole that
a
certain word or words are not used in their
popular everyday meaning, but are employed in
a
somewhat
exceptional, or even technical sense. The meaning of
a
contract
is, therefore, not necessarily determined by merely taking each
individual word and applying it to one of its ordinary
meanings."
D.
THE FACTUAL MATRIX OF THE SALE AGREEMENT
47.
The Sale Agreement constitutes a contract whereby:
47.1. the sale of an
immovable property;
47.2. of significant
size;
47.3. for a significant
amount of money;
47.4. for the purpose of
developing the property;
47.5. whereby parts of
the purchase consideration has been deferred to the happening of
specific occurrences and dates;
47.6. the seller would
assist the purchaser to comply with its payment obligations by:
47.6.1.
effectively lending money for the payment of the transfer costs;
47.6.2.
allowing the purchaser to request for a further 6 month deferment of
the payment of the deferred purchase price under certain
circumstances;
47.6.3.
motivating to pay the deferred purchase price timeously and
penalising the purchaser in the event of its default;
47.6.4.
monthly meetings would be held between the seller and purchaser
whereby the purchaser would provide the seller with details
of the
sales development costs, status of township development and other
relevant information that may be requested by the seller.
48.
I am of the view!hat the ordinary meaning of the words in context
remain the same and the factual matrix is established as the
sale of
a large immovable property for purpose of development. The Sale
Agreement was intended to be the sole record of the agreement
between
the parties, as amended by the Indemnity and Undertaking. There is
nothing in the Sale Agreement that is ambiguous.
49.
Clause 4 of the Sale Agreement provided as follows:
"Possession shall
be given by the Seller on the date of the transfer, together with
vacant occupation, from which date the
Purchaser shall be entitled to
all benefits from and be liable to all risks of ownership in respect
of the property including liability
for rates and taxes and any other
charges or levies on the property from such date."
50.
On the date of registration (7 May 2009), the parties concluded the
Indemnity and Undertaking which forms part of the Sale Agreement.
51.
The Undertaking provided as follows:
'We the undersigned,
Lindley Farm 528 (Propriety) Limited ("Lindley Part<
528'J
hereby agree and undertake in favour of Cradle City (Propriety)
Limited ("Cradle
City'J
by no later than 31 August 2009
at our
costs,
to take all such steps and to do and procure the
doing of all that is requisite in order to lawfully evict all
squatters, including
but not limited to all on the list attached
hereto marl<ed
as
Appendix 1, occupying the Remaining
Extent of Portion 13 of the Farm Lindley No 528 Registration JQ, the
Province of Gauteng, measuring
90.2408 (ninety point two four zero
eight) hectares (the "Land'J
as
at the date upon which
the Land is transferred into the name of Cradle City in the relevant
Deeds Office (the "Squatters”)."
52.
Upon comparing clause 4 and the Undertaking, it is clear that:
52.1. vacant occupation
was still the ultimate purpose - this was not changed by the
undertaking;
52.2. irrespective of
what was required to be done, be it the provision of vacant
occupation or to take steps to obtain vacant occupation,
it is clear
that it was no longer to occur at date of registration, but by 31
August 2009.
53.
Had the Plaintiff undertaken to lawfully evict the squatters by 31
August 2009, there would have been no need to insert the
phrase
"to
take all such
steps and to do and procure the doing of all
that is requisite in order to lawfully evict all squatters".
54.
The Sale Agreement was not cancelled. The inescapable conclusion is
that the parties did not intend that the Plaintiff evict
the
squatters by 31 August 2009, but rather takes steps to do so.
55.
Counsel for Plaintiff submitted that the preceding negotiations and
agreements between the parties were clear stipulations that
the
Property would nevertheless be developed (with the Plaintiff being
paid after certain amount of sales in the development had
been
achieved). Thus, eviction of the squatters, be it on date of
registration, or by 31 August 2009, was clearly not of crucial
importance to ensure that the purpose of the Sale Agreement was
achieved. I must agree with the submission.
56.
The Defendant did not plead nor did the Defendant tender any such
evidence that the presence of the squatters hindered development
of
the property.
57.
It is also common cause between the parties' experts that the
property could be developed by excluding the portion occupied
by the
squatters.
58.
I came to the conclusion that the Indemnity and Undertaking had
amended clause 4 of the Sale Agreement and that the Plaintiff
was
only obliged by no later than 31 August 2009, to take all steps and
to do and procure the doing of all that is requisite in
order to
lawfully evict all squatters.
59.
The second part of claim 1 is for a penalty. In this regard the
Plaintiff relies upon paragraph 2.2.5.1 of the Sale Agreement.
In
this regard the Plaintiff claims a penalty of R14,328,478.00 from the
Defendant.
60.
The Defendant suggests that the third part of clause 2.2.2 means
that:
60.1. absent a request by
the Defendant for an extension in terms of the second part of clause
2.2.2;
60.2. that is, a request
to pay the purchase price six months after the expiration of the
period of 30 months after the registration
of transfer of the
property in the Defendant's name as envisaged in terms of the first
part of clause 2.2.2. Then, in that event,
the penalty provision
contained in 2.2.5 does not find application.
61.
The Defendant's contention is based on the ordinary meaning of the
third part of clause 2.2.2 without consideration of the ordinary
meaning in clause 2.2.5. The ordinary meaning and context principles
must be applied side by side.
62.
In context, an indulgence is provided for breaching of the
Defendant's obligation to pay the deferred purchase price at an
agreed date. Record of the indulgence - with - penalty principle
employed by the parties is expressed at cluse 2.1 of the Sale
Agreement. The Defendant was afforded an opportunity to request the
Plaintiff to invoke this indulgence
\
and there does not appear any obligation on the
Plaintiff to extend the indulgence requested.
63.
In my view it was the probable intention that payment would occur on
the due date, which were explained by the parenthesis to
be 30 months
after registration.
64.
The extrinsic evidence principle does not require employment as
clauses 2.2.2 and 2.2.5 are not ambiguous. In my view the penalty
provision finds application and that the Defendant is liable
therefor.
E.
THE RECIPROCITY QUESTION
65.
The right to refuse performance is consequently a method to enforce
counter performance, as long as counter performance is still
possible
and the contract not cancelled.
66.
The Defendant suggests that its payment obligation of the deferred
purchase price was conditional upon the Plaintiff providing
it with
vacant occupation on date of registration of transfer (7 May 2009) of
by no later than 31 August 2009.
67.
There is nothing in the Sale Agreement or the Indemnity and
Undertaking to suggest that payment of the deferred purchase price
was conditional upon the Plaintiff providing vacant occupation to the
Defendant There are no
"on condition that"
or
"subject to"
phrases indicative of any conditional
relationship between vacant occupation and payment of the
deferred purchase price.
68.
In the premises, I concluded that there is no reciprocity between the
bilateral obligations of the parties.
69.
As reciprocity falls away, so too does:
69.1. the amendment
question;
69.2. the price reduction
question; and
69.3. the eviction
question.
F.
CLAIM 1 (QUANTUM QUESTION)
70.
70.1. It is common cause
that the Defendant did not pay the outstanding purchase price, apart
from payments totalling R1, 159,095.00.
70.2. The penalty amount
was confirmed by Mr Pansegrouw to be correct and the Defendant did
not dispute this fact.
G.
CLAIM 2 (QUANTUM QUESTION)
71.
71.1. Mr Pansegrouw
confirmed that the Defendant did not pay the Plaintiff the transfer
costs on 7 August 2009, it being common
cause that the amount was
only paid on 21 October 2010. Mr Pansegrouw also confirmed the
interest calculation of R256,640.00 as
correct.
72.
The Plaintiff conceded that the penalty clause constitutes a penalty
for purposes of the Conventional Penalties Act. No facts
have been
pleaded and no evidence produced as to why the penalty should be
reduced or by how much. Accordingly the Defendant failed
to discharge
the onus resting upon it.
H.
THE FINANCIAL ABILITY QUESTION
73.
73.1. The Defendant
pleaded that it was not in a position to pay the partial compensation
because it suffered damages as a result
of the Plaintiff's breach of
the Sale Agreement.
73.2. The Defendant did
not tender any evidence in support of the pleaded version. The
Defendant refused to discover its relevant
financial statements,
despite the Plaintiffs requests therefor. In my view the Defendant
has failed to discharge the onus resting
upon it in this respect.
THE
SET-OFF QUESTION
74.
74.1. The Defendant
contends that, as the outstanding purchase price would become due on
the earliest 30 months after
date of registration of
transfer, any payments made by the Defendant to the Plaintiff prior
thereto were not due thus should be
set-off against Claim 2 which was
due on 1 October 2010.
74.2. As the Defendant
was indebted to the Plaintiff for more than one bebt, set off does
not necessarily apply where the parties
intended the payment of a
specific debt as opposed to the other.
74.3. The amount of
R1,159,095.00 was significantly in excess of any interest claim on
the transfer costs and was clearly intended
and agreed to be
allocated towards the outstanding purchase price. The Defendant did
not stipulate it as a payment of the interest
forming the subject of
Claim 2 nor has the Defendant proven that the appropriation of the
Plaintiff to Claim 1 was not valid or
equitable. The Defendant also
did not seek to suggest that the payment from the Department was to
be set off against Claim 2. Set-off
Claim 2 therefore did not occur.
J.
THE INDEMNIFICATION QUESTION
75.
75.1. Claim 3 relates to
the Plaintiffs alleges entitlement to monies payable by the Gauteng
Government, in respect of the expropriation
of a portion of the
property.
75.2. The Defendant
contends that it is indemnified by the Plaintiff against the
Plaintiffs Claim 3 as a result of the indemnity
provided in the
Indemnity and Undertaking.
75.3. When regard is had
to what obligation of the Plaintiff flows from indemnifying the
Defendant - namely to effect payment to
settle claims against the
Defendant, that the indemnity relates to patrimonial or contingent
patrimonial diminishment that the
Defendant might suffer.
75.4. It cannot be said
that Claim 3 for the partial compensation, which would form part of
the outstanding purchase price for which
a bond was registered over
the expropriated property arose as a result of any alleged breach of
the undertaking or connected to
Squatters whatsoever. It can hardly
be said that the Plaintiff would protect the Defendant from a claim
of the Plaintiff for an
outstanding purchase price.
75.5. In my view the
Plaintiff's claim do not fall under any of the grounds upon which the
Defendant is entitled to indemnification.
76.
The amendment question was answered in favour of the Plaintiff
therefore there could be no breach by the Plaintiff.
L.
THE COUNTERCLAIM BY THE DEFENDANT
77.
77.1. The Defendant claim
damages from the Plaintiff in an amount of R 300,000,000.00. The
Defendant alleges that it paid the Plaintiff
an amount of
R43,000,000.00 as at the date of transfer. As a result of the breach
on the part of the Plaintiff to: 1) provide the
Defendant vacant
occupation, 2) failure on the part of the Plaintiff to honour its
indemnity and undertaking, and 3) the fraudulent
misrepresentations
made by Plaintiff to the Defendant, that it will procure an ejectment
of the occupiers from the property, the
Defendant suffered
significant damages.
77.2. The onus was on the
Defendant to allege and prove fraud. It should be proved that the
representation was false and that the
Plaintiff knew it was false and
the representation caused the Defendant to conclude the Sale
Agreement and the Indemnity and Undertaking.
77.3. Mr Pansegrouw
testified and denied that the Plaintiff is unable to get the
squatters off the property. He did not consider
it an
impossibility and in fact testified that on a previous occasion the
Plaintiff obtained a court order for eviction of the
unlawful
occupiers. The Land-Claims Court
rule nisi
had been discharged
as a result of the local authority not having any available
accommodation for the squatters when the matter
was finally heard in
2014. The Plaintiff is also attempting to acquire alternative
accommodation for the squatters hat would be
available.
77.4. The Defendant did
not present any evidence that it had relied on the presentations in
concluding the Sale Agreement.
77.5. No evidence was
tendered by the Defendant that as a result of any breach or
misrepresentation the Defendant could not develop
the property or
could not sell the property or the property was worth less that it
would have been absent the breach or misrepresentation.
78.
The innocent party is entitled to cancel an agreement, which had been
concluded as a result of a misrepresentation.
In casu
the Sale
Agreement has not been cancelled.
79.
The Defendant did not prove its allegations that it should not
have concluded the Sale Agreement and that at the date
of the
conclusion of the Sale Agreement what the market value of the
property with no squatters present was, The Defendant was
also
required to provide evidence of what the company values of the
property were.
80.
The Plaintiff has in my view discharged the onus of proving its
onuses and the Defendant failed to discharge the onuses resting
upon
it.
81.
In the result the following Order is made:
1. The Defendant is
ordered to to pay the Plaintiff:
1.1.
Claim 1
: R75,834,598.00 together with VAT thereon.
1.2.
Claim 2
: R14,328,479.00 together with VAT thereon.
1.3.
Claim 3
: R258,640.00.
1.4.
Interest on the amounts of:
1.4.1. R75,834,598.00 at
prime calculated monthly in arrears and compounded from 31 January
2013 until date of final payment.
1.4.2. R14,328,479.00 at
15.5% per annum a
tempore
morae.
1.4.3. R258,640.00 at
15.5% per annum a
tempore
morae.
1.4.4. Costs of suit,
including costs of two counsel.
1.4.5. The Defendant's
counterclaim is dismissed with costs, including costs of two counsel.
________________________________
JJ
STRIJDOM
ACTING
JUDGE OF THE HIGH COURT
GAUTENG
DIVISION, PRETORIA
HEARD
ON:
DELIVERED
ON:
APPEARANCES:
Counsel
for Plaintiff: Adv
HB Marais SC
Adv HP van Nieuwenhuizen
Attorneys
for Plaintiff: Barnards
Incorporated
Barnard
& Patel Incorporated
Counsel
for Defendant: Adv MP van der Merwe SC
Attorneys
for Defendant: Saunders Venter Van der Walt
Attorneys
[1]
[1995] ZASCA 64
;
1995 (3) SA 761
(A) at 767E -768E
[2]
1979 (l) SA 195 (A) at 200E -201A, 201B & 202C
[3]
1974 (I) SA 641 (A)