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[2016] ZAGPPHC 707
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Tolmay t/a Quality Plant Hire v Blue Moonlight Properties 82 (Pty) Ltd and Others (33468/2013) [2016] ZAGPPHC 707 (17 August 2016)
IN THE HIGH COURT OF SOUTH
AFRICA
(GAUTENG DIVISION, PRETORIA)
Case
Number: 33468/2013
DATE:
17 AUGUST 2016
In
the matter between:
ETIENNE
TOLMAY t/a QUALITY PLANT
HIRE
.......................................................
APPLICANT
And
BLUE
MOONLIGHT PROPERTIES 82 (PTY)
LTD
.................................................
RESPONDENT
SOTHERN
PALACE INVESTMENTS 265 (PTY) LTD
.......................
1
st
INTERVENING PARTY
LOUWRETTE
FOURIE
.........................................................................
2
nd
INTERVENING PARTY
JUDGMENT
This
application served before me In the Opposed Motion Court on 10 August
2016. Because it appeared to me that there could be scope
for
settlement of the various disputes between the Applicant and the
Respondent I indicated to the parties that if no such settlement
was
forthcoming by 1
7
August
2016, i would make the appropriate order.
As
far as the formal application in terms of the relevant statutory
provisions is concerned, I am satisfied that they have been
complied
with. In the Founding Affidavit the Applicant alleges that it
performed certain contractual work for a residential development
project. It says that during 2011 Respondent signed an
acknowledgement of debt in which it accepted liability for the amount
of
R 1 399
7U
6.82. This
acknowledgement of debt was annexed to the Founding Affidavit. It is
further alleged that Respondent undertook the transfer
of seven
stands from the particular development to the Applicant on completion
of the development. The value of these sites came
to R
U
263
225.80. On that basis the work was eventually completed by the
Applicant, and on
2U
August
2012 he issued completion certificates. The relevant letters of
demand were sent to the Respondent and all the payment certificates
remained unpaid to date, so it was said. As I have said, the relevant
section 3^5 Notice in terms of the Old Companies Act 61 of
1973 was
delivered during January 2013. Applicant then gave details of the
financial affairs of Respondent and concluded that Respondent
was in
fact unable to pay its debts and was also commercially insolvent.
The
Founding Affidavit was signed during May 2013. There was a long delay
in the proceedings relating to the late filing of the
Respondent’s
Answering Affidavit for which condonation had to be sought, and in
that context further affidavits were filed
as well, there were also
intervening parties involved, but at this stage of the proceedings, I
was told by Counsel from the Bar,
that I need not concern myself any
further with either the condonation application affidavit, nor the
intervening party’s.
The
final liquidation application was launched on 30 May 2013. On
7
August 2013, the parties hereto,
plus a further two parties, entered into a settlement agreement which
the Applicant annexed to
the papers by way of a Supplementary
Affidavit dated 22 April 201
k.
He
says in that Affidavit that “subsequent to the launching of the
liquidation application, whereupon the matter was set down
on the
Unopposed Motion Roll for hearing, an agreement was entered into with
the Respondent, titled Memorandum of Agreement, dated
5 August 2013
and attached hereto marked “A”.” He also stated
that in the light of the agreement the application
for liquidation
was postponed and then referred to certain terms of the agreement
itself. The conclusion in the Supplementary Affidavit
is that
Respondent admits that it cannot pay its debts, that Applicant is a
creditor of the Respondent in the sum of R
U
200,000,
which amount is due and owing, and that it would be just and
equitable that the company
be
wound up. It is common cause from this Affidavit that the Option 1,
referred to in
the agreement
fell by the wayside, and that Applicant relies on Option 2.
Paragraph 3 of
the agreement, which is presently relevant states as follows:
“
3
RECORDAL:
3.1
QPH and
Etienne have performed services rendered deliverables to Blue
Moonlight in respect of the development property.
3.2
The costs
associated with this service and deliverables performed by QPH and
Etienne for and in favour of Blue Moonlight have not
been discharged
by Blue Moonlight to QPH and /or Etienne in full.
3.3
As from date
hereof, capital amount outstanding to QPH and Etienne, jointly and
severally is a sum of R
k
200
000.
3A QPH and
Etienne have instituted proceedings, including liquidation
proceedings against Blue Moonlight based on their capital.”
Other
paragraphs follow with reference to Forum SA, Southern Palace and
Investec Bank, but for present purposes these are in my
view not
relevant any further.
From
paragraph
h,
the actual
agreement is spelled-out and paragraph 4.1 states that Blue Moonlight
acknowledges its indebtedness to QPH in the amount
of R
k
200
000. It acknowledges that the debt is due and payable. Payment of
this debt will be made by the parties exercising one of the
two
options:
Option
1, this is an option relating to property owned by Forum SA and is no
longer relevant to these proceedings;
Option
2, is the relevant option (this is common cause), and in paragraph
6.3 of the agreement the following is said: lf the alternative
method
(Option 2) takes effect, QPH will be entitled to the transfer of the
Forum SA Trading property into its name, or into the
name of any
nominee of QPH, at an agreed price of R 2 500 000. This purchase
price will be set off against the debt owing and payable
by Blue
Moonlight in terms of this agreement. Forum SA Trading will sign all
documents and pay all fees and/or payments due in
order to obtain a
clearance certificate from the Greater Tzaneen Municipality”.
Clause
7
of this agreement
dealt with payment of the balance of the capital amount. Paragraph 8
is relevant and states that “whereas
QPH has filed an
application for the liquidation of Blue Moonlight and Blue Moonlight
has filed a notice to oppose said application,
the parties agree for
the liquidation application to be withdrawn, but on condition that
the terms and conditions of this agreement
are fully implemented”.
Paragraph 11 of the agreement deals with cession of rights which
would be, if necessary, embody such
agreement to a separate
agreement.
Paragraph
12 of this agreement deals with breach and the relevant parts read as
follows: “Should any party commit a material
breach of this
agreement and fail to remedy such breach within seven days of written
notice requiring the breach to be remedied,
then the party giving the
notice will be entitled, at his discretion, either to cancel this
agreement, claim damages or to claim
specific performance of all the
defaulting parties’ obligations together with damages, if any
whether or not such obligations
have fallen due for performance.
12.2
The parties
specifically agree that in the event of Blue Moonlight and/or Forum
SA Trading being in breach of this agreement, and
failing to rectify
its said breach, after notice in terms of sub-paragraph 12.1, QPH
will be entitled to relief required in the
application”.
Mr
Swanepoel, on behalf of the Applicant agreed in his argument that
this clause ought to be read with the addition of “subject
to
law, and/or subject to the Court’s discretion”. There was
certainly no suggestion that a liquidation order would
or could be
issued as of right.
I may
just repeat that in deciding this application, I will not have regard
to any new allegations made in further affidavits, nor
those that are
relevant, or vexatious.
On
behalf of Applicant it was contended that the mentioned agreement had
been cancelled and that it was therefore entitled to proceed
with the
liquidation application. On 12 November 2013, Applicant’s
Attorneys wrote to Respondent stating that it intended
exercising its
rights as set out in Clause 12.1 of the agreement, if the alleged
breach was not rectified within seven days. The
liquidation
application would then be set down without further notice. At the
same time however, Applicant relied on a further
cancellation letter
dated 29 April 2015. This is some 18 months after the initial
“cancellation letter”. It was then
said that this letter
serves as a final notice in terms of Clause 1 of the said agreement
“of our client’s intention
to cancel the agreement,
unless the breach of agreement as set out herein, but not limited
thereto, are rectified within seven
days from receipt hereof, no
further notice of cancellation will be served”.
On
behalf of Respondent, in the course of arguing a number of other
defences, raised the issue which I regard as material, namely
that
the parties had in fact agreed that they did not cancel the
settlement agreement. In this context reference was made to
Respondent’s
Founding Affidavit in the condonation application
with the deponent on behalf of Blue Moonlight said the following
(paragraph 5.9
page 352): ‘The settlement agreement was never
cancelled between the parties and I am not aware of the status of the
transfer
process of the immovable property”. The Applicant then
drafted an Opposing Affidavit to the application for condonation and
said the following in reply to this particular paragraph (paragraph
20 page 388):
u
lt
is confirmed that the settlement agreement was never cancelled...”
In Respondent’s Answering Affidavit to the liquidation
application, Respondent then said the following (paragraph
kA.U
page 538): It is common cause that
Forum SA was unable to procure the sale of the property to an
independent purchaser in terms
of Option 1 and the Applicant
therefore became entitled to specific performance in terms of Option
2
M
.
It continued to say that the Applicant was obliged to enforce the
settlement agreement because the parties had not cancelled the
same,
and the Applicant had not claimed damages for breach of contract.
Furthermore, it was said that “a creditor, who has
locus
standi
to apply for the winding up
of a company is a person who, by reason of an existing
vinculum
iuris
between themselves and the
company, has a claim against the company which may at least become an
enforceable debt on the happening
of some future event or at some
future time. It follows that a debt must sound in money and a claim
for the transfer of property
or specific performance is not such a
debt. Having exercised Option 2 of the settlement agreement, the
Applicant is precluded from
subsequently claiming the money. As a
result of the exercise of Option 2, the Applicant has a claim for the
transfer of properties.
He is accordingly not entitled to enforce any
debt against the Respondent, because the original debt is no longer
in existence.
On
behalf of Respondent it was further pointed out that on 19 December
2013, Applicant’s Attorneys in fact wrote and said
that they
demanded that the terms of the settlement agreement be implemented
immediately. It was therefore argued that Applicant
has to enforce
the settlement agreement, because the parties have not cancelled the
same and because the Applicant has not instituted
a claim for damages
for breach of contract. Enforcement and cancellation being
inconsistent with each other, or mutually exclusive,
the innocent
party must make his election between them and he cannot both
approbate and reprobate the contract. In this context
I was referred
to a judgment of Watermeyer J (as he then was) in
Siegel vs
Mazzur
1920 CPD 634
at 644 to 655: “
Now,
when an event occurs which entitles one party to a contract to refuse
to carry out his part of the contract, that party has
a choice of two
courses. He can either elect to take advantage of the event or he can
elect not to do so. He is entitled to a reasonable
time for which to
make up his mind, once he has made his election he is bound by that
election and cannot therefore and cannot
afterwards change his
mind...” It was, as I have already stated, submitted that a
debt must sound of money and a claim for
the transfer of property was
specific performance is not such a debt and, Applicant having
exercised Option 2, is now precluded
subsequently claiming the money.
His claim would be for the enforcement of the settlement agreement.
In any event, apart from what
the parties themselves said in their
Affidavits the purported notices of cancellation were ambiguous and
certainly not clear and
unequivocal as they must be.
See:
PUTGO Ltd vs TV and Radio Guarantee
Company (Pty) Ltd
1985 (4) SA 809
A at 830 E
and
Kragga Kamma Estate CC vs Flanagan
[1994] ZASCA 137
;
1995
(2) SA 367
(A) at 375 E to F.
I
agree with that submission. The authorities are clear.
Furthermore,
the settlement agreement was not the only agreement that compromised
Applicant’s claim against Blue Moonlight,
because on
Applicant’s own version the parties agreed that Blue Moonlight
would transfer seven of its properties to Applicant.
This is indeed
what Applicant’s own Founding Affidavit says.
In
the above context I was also referred to the decision of Watermeyer J
in
Fryburg vs Van Nlekerk
1962 (2) SA 413
(C)
where
the distinguished Judge held that in an application for a
sequestration order the claim of the petitioning creditor must under
the section (of the 1936 Act) be a monetary claim. Consequently an
Applicant who had a claim for transfer of certain property or
payment, but who has elected to claim transfer, has no
focus
standi
to apply for a sequestration
order.
On
behalf of Respondent it was further contended that Applicant’s
claim, whatever its true nature had become prescribed in
terms of the
Prescription Act. it was however not clear from the Respondent’s
own Affidavits in the context when exactly
prescription had commenced
to run, and whether or not it had been interrupted by an
acknowledgement of debt subsequent thereto.
I do not intend delving
into this argument in any great detail inasmuch as it is not
necessary on the one hand, and on the other
hand it seems that this
particular issue could not be properly solved without the leading of
oral evidence.
In
the result of all of the above, the following order is made:
1. The
application is dismissed with costs, such costs to include the costs
of two Counsel.
JUDGE
H.J FABRICIUS
JUDGE
OF THE GAUTENG HIGH COURT, PRETORIA DIVISION
Case
no.: 33468/13
Counsel
for the Applicant: Adv P. A. Swanepoel
Adv
P. A. Venter Instructed by: Stephan van Rensburg Attorneys
Counsel
for the Respondent: Adv D. B. du Preez SC
Adv
J. A. du Plessis Instructed by: Johann De Wet Attorneys
Heard
on: 10 August 2016
Date
of Judgment: 17 August 2016 at 10:00