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[2016] ZAGPPHC 939
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Bondev Midrand (Pty) Limited v Ndlangamandla NO and Others (38331/2015) [2016] ZAGPPHC 939 (11 November 2016)
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IN THE HIGH COURT OF SOUTH AFRICA
/ES
(
GAUTENG DIVISION, PRETORIA
)
CASE NO: 38331/2015
DATE: 11/11/2016
Reportable: No
Of interest to other judges: No
Revised.
IN THE MATTER BETWEEN
BONDEV MIDRAND (PTY)
LIMITED APPLICANT
(Registration Number: 2000/027600/07)
AND
SIKHUMBUZO NDLANGAMANDLA
N.O. 1
ST
RESPONDENT
(TRUSTEE OF B & L RESIDENCE TRUST)
iPROTECT TRUSTEES (PTY) LTD
N.O. 2
ND
RESPONDENT
(TRUSTEE OF B & L RESIDENCE TRUST)
THE REGISTRAR OF DEEDS,
PRETORIA 3
RD
RESPONDENT
JUDGMENT
PRINSLOO, J
[1] The applicant claims re transfer of a property situated in a
large property development, Midstream Estate, registered
in the name
of the Trust, B & L Residence Trust ("the Trust"),
of which the first and second respondents are
the trustees, and they
are cited in this matter in their representative capacity as such.
[2] The Trust, as owner of the property, and as represented by the
first and second respondents as the trustees, opposes the
application.
[3] The Registrar of Deeds, the third respondent, did not play any
part in the proceedings before me.
[4] Mr Horn appeared for the applicant and Mr Fouche appeared for the
first and second respondents.
Synopsis
[5] The applicant is a developer of various townships, including
Midstream Estate.
[6] The applicant has developed in excess of 4 500 residential stands
in Midstream Estate, as well as shopping centres, private
schools, a
retirement complex and other amenities in that development.
[7] Over a period of some ten years, the applicant has been selling
off the originally demarcated erven to interested buyers.
[8] The property forming the subject of this dispute is Erf […],
Midstream Estate Extension 35 ("the property").
The first purchasers of the property out of the development, were
R Moatshe and B K Maditse ("Moatshe and Maditse")
who bought the property from the applicant/developer for a sum of
R560 000,00. They took transfer of the property in
January
2009, obviously subject to the title conditions stipulated in the
title deed. In the papers, Moatshe and Maditse
are also
referred to as "the first purchasers".
[9] The sale was subject to title condition B which is directly
relevant for present purposes. The title condition reads
as
follows:
"B. Subject to the following condition imposed and enforceable
by Bondev Midrand (Pty) Ltd registration number 2000/027600/07
(an
obvious reference to the present applicant), namely:
The Transferee or his Successors in Title will be liable to erect a
dwelling on the property within 18 (eighteen) months from 25 April
2008, failing which the Transferor will be entitled, but not obliged
to claim that the property is transferred to the Transferor
at the
cost of the Transferee against payment by the Transferor of the
original purchase price, interest free. The Transferee
shall
not within the said period sell or transfer the property without the
Transferor's written consent. This period can
be extended at
the discretion of the Developer (also a reference to the applicant)."
[10] Moatshe and Maditse failed to erect a dwelling on the property
within the time provided for in the title deed, or at all.
[11] During 2012, Moatshe and Maditse sold the property to M M and
S C Mphahlele ("Mphahlele").
[12] In terms of title condition B the applicant's consent was
required, and provided, for transfer of the property to take place
in
the name of Mphahlele. Such consent was given on the strength
of an agreement between Mphahlele and the applicant, in
the spirit of
title condition B, for an extension of the building period. The
extension was signed (on behalf of both parties)
on 27 February 2012,
recognising that the original building period stipulated in the title
condition expired on 30 June 2010,
and providing for the
dwelling to be erected by Mphahlele within twelve months, ie by
27 February 2013. This did not
happen.
[13] In June 2013 Mphahlele sold the property to the Trust
represented, as I mentioned, by the first and second respondents as
trustees and the property was transferred in the name of the Trust in
November 2013.
[14] Prior to transfer taking place in favour of the Trust, the
Trust, represented by the first respondent, entered into a written
agreement with the applicant under the title "Extension of
Building Period – Midlands Estate". This is annexure
B5 to the founding affidavit. For the sake of brevity I will
refer to it as B5.
[15] I consider it convenient, and appropriate, to quote the contents
of B5:
"[The first respondent on behalf of the Trust] hereby
acknowledge, agree and undertake:
1. The original building period, as stipulated in the Title Deed, has
expired on 30 June 2010.
2. I am bound by the building period stipulated in the conditions in
the Title Deed whether as first owner and/or subsequent owner
and/or
new transferee and I am again bound as a separate legal enforceable
document in terms hereof.
3. Bondev is entitled to purchase the stand back, at the original
selling price which Bondev sold the stand for as the original
transferor from the developer to the first owner amounting to
R560 000,00.
4. Midlands Home Owners Association is a separate legal entity with
its own rules who manages and enforces their own rules and
regulations including rules in respect of the standard of buildings,
aesthetical rules and building regulations.
5. By my/our signature hereto as owner and/or transferee I agree and
undertake to be fully bound by the terms of the building period
and
any extensions granted in writing by Bondev on the conditions imposed
by Bondev for such extension in terms of the Title Deed
or in terms
of this agreement which constitutes a separate binding agreement.
6. I undertake and agree with Bondev to erect and complete a fully
completed dwelling house on the stand within 9 months of signature
hereof.
7. I undertake not to sell the property unless these conditions have
been fully complied with and that the building has been erected
on
the property.
8. I bind myself hereby irrevocably to this undertaking to erect a
dwelling on the property and complete such a dwelling and will
not
sell the property until such dwelling has been fully built and
completed, save with the written consent of Bondev.
9. I hereby fully agree that if the dwelling is not built and/or
completed fully within the agreed time period herein, Bondev shall
be
entitled on demand to take re transfer of the property
alternatively I hereby grant Bondev an option to buy the property
for
a purchase price of R560 000,00 to be executed by Bondev in
writing if I fail to comply with my obligation to erect a
dwelling on
the property.
I undertake to:
1. immediately proceed with the preparation of building plans and
lodge building plans within thirty days hereof at the Aesthetical
Committee of the Home Owners Association;
2. appoint a building contractor within sixty days hereof;
3. supply Bondev with proof of finance and a monthly building program
within sixty days hereof;
4. start construction within ninety days after acceptance hereof by
Bondev;
5. complete construction within nine months hereof.
If I fail to comply with any of above undertakings, Bondev shall
immediately be entitled to take re transfer of the property
and/or execute the option stipulated hereinbefore for the purchase of
the property from me at the agreed price.
I understand that this agreement does not negate or affect:
1. Bondev's rights in terms of the original Offer to Purchase and the
Title Deed;
2. that this agreement constitutes a new binding agreement in
addition to all existing rights between the owner and Bondev
enforceable
by Bondev, and in the event of non compliance with
this agreement, Bondev shall be entitled to re transfer the
property
at the initial purchase price;
3. the rules of the Home Owners Association.
Bondev hereby extends the building period, on condition that this
undertaking is strictly complied with."
[16] B5 was signed on 16 September 2013 by the first respondent on
behalf of the Trust and by a representative of the applicant.
[17] I simply record, although perhaps unnecessarily so, that title
condition B also appears in the 2013 Deed of Transfer
reflecting
the sale between Mphahlele and the Trust.
[18] I add that B5 was ostensibly signed on behalf of "Bondev
Developments (Pty) Ltd" and not on behalf of Bondev Midrand
(Pty) Ltd. This issue, if it is one, was not mentioned anywhere
in the papers or during the hearing before me. I assume
that it
is of no consequence, and it may even be an erroneous reference.
In this regard, it may also be noted that the required consent (in
the spirit of title condition B) for the transfer from
Mphahlele
to the Trust to take place, was signed on 27 September 2013 by
Conveyancer P J L Strydom ("Conveyancer Strydom")
recording
that it was done in terms of a resolution of the applicant, Bondev
Midrand (Pty) Ltd. In the consent it is
also recorded that
title condition B had not yet been complied with and that the
consent is subject to such compliance.
[19] It is common cause that, by the time of the launching of this
application, the Trust had not yet erected a dwelling on the
property, neither has it done so in the mean time. The time
frames for the systematic implementation of the construction
of the
dwelling, as stipulated in B5, were also not complied with.
[20] On 14 October 2014, more than a year after B5 was entered into,
and about four months after the nine month period stipulated
in B5
had expired, the applicant's attorneys wrote a letter of demand to
the Trust, c/o the first respondent, to set the re transfer
process in motion, against payment of the original purchase price.
[21] When the demand was not adhered to, this application was
launched towards the end of May 2015, and served on the Trust on
1
June of that year.
[22] Importantly, I have to record that, at the commencement of the
proceedings before me, and although the application was launched
on
the basis of calling for a re transfer against payment of the
original purchase price of R560 000,00, counsel for
the
applicant informed me that the latter tenders payment of the purchase
price paid by the Trust, namely R840 000,00, as
opposed to the
entitlement figure of R560 000,00 against re transfer, in
the event of the application being upheld.
Remarks about defences raised in the opposing papers, responses
thereto in reply and submissions offered by counsel in argument
before me
[23] The bulk of the opposing affidavit consists of no fewer than
five points
in limine
. At the commencement of
the proceedings, I was informed that the respondents were not
proceeding with the third point
in limine
which, in any
event, has no merit, in my view.
[24] I turn to the remaining four points
in limine
.
First point
in limine
[25] Essentially, it was argued that Conveyancer Strydom, who signed
the consent to the transfer of the property from Mphahlele
to the
Trust, appears to have an interest in the transaction, with the
result that his actions fly in the face of the provisions
of the
Justices of the Peace and Commissioners of Oaths Act, 16 of 1963, and
the regulations promulgated in terms thereof.
[26] Regulation 7 stipulates:
"(1) A Commissioner of Oaths shall not administer an oath or
affirmation relating to matter in which he has interest.
(2) Subregulation (1) shall not apply to an affidavit or a
declaration mentioned in the schedule."
(The affidavits mentioned in the schedule do not apply for present
purposes.)
[27] In the replying affidavit, it is stated that Conveyancer Strydom
is a conveyancer acting on behalf of the applicant.
He is not
involved in the litigation and has no knowledge, interest or
applicability whatsoever in respect of the litigation.
Conveyancer Strydom signed a confirmatory affidavit confirming that
he does not have any interest whatsoever in respect of the
applicant
or the respondents, does not have such a file in his office, does not
have knowledge of the background of the dispute
and he is completely
impartial in the matter. It also appears that he is a director
of Wikus Strydom Attorneys (probably
named after him, judging by his
full names, Phillipus Jacobus Lodewikus) which is not the attorney of
record. One is left
with the impression that he simply performs
standard conveyancing duties to comply with all the formalities
flowing from the host
of property transactions and other business
conducted in this vast property development scheme. It appears
that he clearly
does not have "an interest" in the
matter as foreshadowed by regulation 7(1).
[28] The respondents, in support of their argument, rely on the
judgment in
Radue Weir Holdings Ltd t/a Weirs Cash and Carry v
Galleus Investments CC t/a Bargain Wholesalers
1998 3 SA 677
(EC). In that case, in an application for summary judgment, the
defendant's opposing affidavit had been attested to by an
attorney
practising in association with the defendant's attorneys. The
rationale
behind the rule is illustrated at 680E H where,
with reference to
R v Brummer
1952 4 SA 437
(T) the
learned Judge in
Radue
quotes the following passage from the
said judgment:
"The reason for the rule appears to me to be that a person
attesting an affidavit is required to be unbiased and impartial
in
relation to the subject matter of the affidavit. If his
position is such that this qualification is
prima facie
absent
there is a danger that he may have influenced the deponent in regard
to the subject-matter of the affidavit."
[29] The learned Judge also quotes from another judgment, at 680E-F,
in which it was stated:
"The object of the rule in practice is, I think, to prevent an
attorney from drawing up a petition and putting, as it were,
the
words of the petition in the mouth of a client, and then himself
taking the oath of the petitioner to that petition."
[30] It seems to me, from the uncontested evidence of the deponent on
behalf of the applicant, confirmed by Conveyancer Strydom,
that the
present situation falls well outside the ambit of the rule.
[31] Counsel for the applicant referred me to
Louw v Riekert
1957 3 SA 106
(TPD) where the word "interest" in the
context of the "interest" which a Commissioner should not
have in a
matter when administering the oath, was considered and
discussed at 110A H. The following is stated:
"In determining the sense in which it is used in the regulation,
one should have regard to the object of the regulation.
...
It must at least mean some pecuniary interest or some interest by
which the legal rights or liabilities of the Commissioner
of Oaths
are affected."
In my view, the involvement of Conveyancer Strydom, such as it may
have been, falls well short of these requirements.
In any event, the main objection to Conveyancer Strydom's involvement
was the fact that he signed the consent for the transfer
of the
property to take place in the name of the Trust. On a
general reading of the papers, he did not even officiate
as a
Commissioner of Oaths. This much appears
ex facie
the
document which is part of the record. As I understand the
papers, this was simply a formality to be complied with, with
the
document being filed with the Registrar of Deeds to meet the
requirement in title condition B that the property is not
to be
transferred (if no house had been built) without the consent of the
applicant/developer. In this sense, the statutory
provisions
relied upon by the respondent do not come into play.
[32] In all the circumstances, I am of the view that there is no
merit in this argument
in limine
and it falls to be
dismissed.
The second point
in limine
[33] In summary, the argument amounts to the following: title
condition B provides that the first owner is obliged to erect a
dwelling on the property within 18 (eighteen) months from 25 April
2008.
The Trust, as the third owner, only bought the property in June 2013,
and took transfer in November 2013, well after the initial
period
expired in about October 2009.
[34] Consequently, as the Trust could not comply with the
requirements of title condition B, the applicant had to rely on
B5, the agreement quoted, which,
inter alia
, provides for an
extension of the period within which the dwelling had to be erected.
The extension was until about
16 June 2014.
[35] However, B5 was only signed by the first respondent and not by
the remaining trustee, the second respondent. The trust
deed
does not make provision for a single trustee to enter into an
agreement such as B5, so that B5 is a nullity and unenforceable.
In this regard, it is convenient to quote the extracts from the Trust
Deed which are relevant to this argument:
"14.3 notwithstanding any power herein granted to the Trustees;
14.3.1 no Trustee shall have the power, on their own, to appropriate
or dispose of any part of the Trust Fund, as they see fit,
for
their own benefit or for the benefit of their estate
, whether
directly or indirectly, including the use of any person, to achieve
same,
14.3.2 no Trustee shall have or be competent to obtain such power
directly or indirectly by the exercise, whether with or without
notice, of any power exercisable by them or with their consent."
(Emphasis added.)
And also:
"17.
Authority to negotiate and execute documents
17.1 The Trustees are authorised to enter into, negotiate, execute
and sign any document, contract, agreement, instrument, negotiable
instrument, bill of exchange, deed, memoranda, articles of
association and any prescribed form in any statute to achieve the
purpose
and objectives of the Trust in terms of the provisions of the
Trust Deed.
17.2 All and any document, contract, agreement, instrument,
negotiable instrument, bill of exchange, deed, memoranda, articles
of
association or any prescribed form in any statute which are required
to be signed on behalf of the Trust shall be signed
in such
manner as the Trustees shall from time to time determine: Provided
that all such negotiable instruments, contracts, deeds
and other
documents shall be signed by Sikhumbuzo Ndlangamandla (
my note
:
an obvious reference to the first respondent who, in any event,
signed B5) or his/her alternate, should he/she be a Trustee at
the
time.
17.3 The Trustees are empowered to appoint or nominate any person in
their place and stead to act on their behalf to so sign or
execute
any document, contract, agreement, instrument, negotiable instrument,
bill of exchange, deed, memoranda, articles of association
or any
prescribed form in any statute."
From the aforegoing extracts, it is clear that the submission on
behalf of the respondents that "the Trust Deed does not make
provision for a single Trustee to enter into an agreement such as the
purported agreement ... B5" is not correct: it is quite
clear,
from a reading of clause 17 of the Trust Deed, that the first
respondent is authorised to sign the necessary documents,
alternatively his "alternate" and, as per 17.3, the
Trustees are empowered to appoint or nominate any person to
sign
documents on their behalf. This is exactly what happened, as
appears from what is stated hereunder.
[36] The argument offered by the applicant in reply, is that all
three the owners, including the Trust, failed to erect a dwelling
since 2009. It consequently became imperative for the applicant
to enforce title condition B. The argument is developed
along
the following lines:
• Had B5 not been signed and delivered together with documents
proving the ability of the Trust to proceed with the erection
of the
house, the applicant would never have consented to the transfer of
the property and would never have consented to the extension
of the
building period.
• B5 is therefore the
causa
for the consent for transfer
and the consent for the extension of the building period.
• The applicant attached a resolution to the replying affidavit,
as "RA4", which is clearly to the effect that a
representative of the second respondent, iProtect Trustees (Pty) Ltd,
authorised the first respondent, in his capacity as a trustee,
to
"sign the relevant documents which may be necessary for the
registration of transfer thereof into the name of the B & L Residence
Trust Registration Number IT2612/2013". In the body of the
resolution, the property transfer referred to, is the one
from
Mphahlele to the Trust of the property Erf […] Midstream
Estate Extension against payment of the sum of R840 000,00.
• The resolution clearly authorises the first respondent to
enter into B5 on behalf of the Trust, alternatively, by virtue
of the
resolution and the facts, the first respondent acted on ostensible
authority of the second respondent.
• If it was found that there was no proper authority, the
respondents intentionally and/or negligently made a misrepresentation
to the applicant to procure the latter's consent under false,
misrepresented and misstated facts to obtain the benefit of the
granting of the building extension and the consent to transfer.
Both the extension of the building period and the consent
to the
transfer were granted by the applicant at its prejudice and detriment
which caused harm to the applicant under the circumstances
and the
respondents are
estopped
from denying the authorisation of the
authority of the first respondent.
• In any event, if it were to be found that the first respondent
had no authority and that the respondents are not
estopped
as
argued, the respondents were in any case in
mora
with the
obligation to erect a dwelling on the property as soon as they took
transfer of the property. The result is that
the applicant
simply became entitled to enforce title condition B, a restrictive
condition, on that basis alone.
As authority for this proposition, counsel for the applicant relied
on the judgment of Du Plessis J, in this court, in a virtually
identical matter,
Bondev Developments (Pty) Ltd v Mosikare and
three Others,
under case number 50391/2008. On pages
7-8 of the judgment, the learned Judge remarks:
"Counsel pointed out that the fact that the second purchaser
(respondents in this case) took transfer after the building
time-limit had expired, does not mean that the obligation to build
within the stipulated time had 'disappeared'. It only means,
the argument went, that when the respondents took transfer the first
purchaser was in
mora
with the obligation to build. It
further means that, the moment they took transfer, the respondents
were also in
mora
.
I agree with counsel's submission. Obligations are extinguished
when they are performed. Apart from that, obligations
can be
extinguished by, for instance, waiver or prescription. If,
however, an obligation is not extinguished, it remains
despite the
fact that the time for its performance has come and gone. The
person who has to perform the obligation is not
excused when he falls
into
mora
. Mr Celliers correctly pointed out that the
applicant could not have enforced the obligation before expiry of the
time limit.
To hold that it cannot thereafter enforce it would
render the whole obligation meaningless."
In that matter an order was made for the property to be
re transferred, along the lines of the relief presently sought.
[37] I find myself in respectful agreement with the arguments
advanced on behalf of the applicant in response to this point
in
limine
.
[38] In the result, I am of the view that point
in limine
two
falls to be dismissed.
The third point
in limine
[39] I have pointed out that this argument was abandoned.
[40] In any event, it overlaps with the second point
in limine,
relying on the fact that the initial time period for erecting the
dwelling had lapsed before the Trust entered into B5.
[41] For the reasons mentioned, there is no merit in this argument
in
limine
.
The fourth point
in limine
[42] This argument
in limine
, essentially, amounts to the
following:
Title condition B stipulates that, in the event of the transferee not
erecting a dwelling within the specified time, the applicant
can
claim re transfer against payment of the original purchase
price, interest free.
In this case, the original purchase price was R560 000,00.
The Trust, as the third owner, paid R840 000,00 for the
property.
In terms of B5, it is acknowledged by the first respondent (on the
authority of the second respondent, as I have mentioned) that
the
Trust is bound by the title conditions and that the applicant is
entitled to re transfer at the original amount of R560 000,00,
in the event of the extended building period not being met.
In the circumstances, the agreement (B5) is in contravention of the
provisions of the Consumer Protection Act 68 of 2008 ("the
Act")
in that:
• it is unfair, unreasonable and/or unjust as the agreement is
excessively one sided in favour of the applicant;
• it requires the Trust to forfeit money to the applicant to
which the applicant is not entitled in terms of the Act or any
other
law;
• it expresses, on behalf of the applicant, a consent to a
predetermined value of costs relating to enforcement of the
agreement;
• the agreement is therefore unconscionable, unjust,
unreasonable and unfair;
• the respondents therefore seek an order declaring the
agreement B5 to be unenforceable.
[43] In the replying affidavit, and in heads of argument, the
following submissions are made on behalf of the applicant:
• The respondents (essentially the Trust) bought the property
from an individual (Mphahlele) and not from the applicant.
It
bought the property from an individual subject to the existing
conditions of title and is bound by those conditions.
• In the result, the provisions of the Act are not applicable.
If the Trust has any recourse, it should be exercised
against the
previous owner from whom the property was bought.
• The rights and obligations flowing from B5 cannot be said to
be goods or services as defined in the Act. The Extension
Agreement imposes an obligation to build within a particular period,
failing which the applicant is entitled to re transfer
of the
property.
• Should the respondents contend that the applicant's right to
re transfer is a legal interest in land as defined in
paragraph
(d) under the definition of "goods" in the Act (
my note
:
this is the only aspect that may resort under the definition of
"goods" and it reads:
"A legal interest in land or any other immovable property, other
than an interest that falls within the definition of 'service'
in
this section."),
the Act still does not apply as it is the applicant who acquires the
interest and not the respondents. The Trust is then
the
"supplier" of the "goods" who "supplies"
the legal interest in land to the applicant.
• As for the respondents' acquisition of the property, the
respondents did not buy the property from the applicant.
Consequently, there is no "transaction" between the parties
as far as the sale of the property is concerned. (I add
that, on my reading of the definition of "transaction" in
the Act, this specific stipulation in B5, dealing with the
re transfer, falls outside the ambit of the "transaction"
definition.)
[44] I also make the following observations:
• The complaint about having to return the property for payment
of less than what the Trust paid when taking transfer thereof,
is, in
any event, overtaken by the rather gracious gesture by the applicant
to refund the full R840 000,00 as opposed to the
R560 000,00
as it is entitled to do in terms of title condition B and the
provisions of B5.
In this regard it is convenient to revisit clause 9 of B5 which
stipulates:
"I hereby fully agree that if the dwelling is not built and/or
completed fully within the agreed time period herein, Bondev
shall be
entitled on demand to take re transfer of the property
alternatively I hereby grant Bondev an option to buy the property
for
a purchase price of R560 000,00 to be executed by Bondev in
writing if I fail to comply with my obligation to erect a
dwelling on
the property."
It is well settled that contracts are there to be enforced by the
courts. The learned author, Christie,
The Law of Contract in
South Africa
, 6
th
edition puts it as follows at page
12:
"The principle that the courts will enforce contracts, expressed
in Latin as
pacta sunt servanda
, is obviously necessary as a
general principle and it is consistent with the constitutional values
of dignity and autonomy."
For the sake of brevity I refrain from referring to all the
authorities relied upon by the learned author for this proposition.
I add, in fairness, that the learned author does mention that it is
"by no means obvious that the courts should enforce unfair
contracts". The learned author deals with investigations
into this subject by the South African Law Commission.
Nevertheless, objectively speaking, I am of the view that there is no
indication that this contract, B5, was unfair: there is no
suggestion
that the first respondent was coerced into signing the agreement or
that he did not understand what he was committing
the Trust to do.
There is no suggestion that the Trust, objectively speaking, was not
in a position to erect the dwelling
within nine months. In B5,
as I have quoted from its terms, a clear time frame is provided for
the respondents to systematically
manage the process from the
preparation of building plans, the appointment of a building
contractor, the start of the construction
and up to the completion
thereof. After the previous owners had also failed to erect the
dwellings, it was understandable
and, indeed, imperative, as stated
by the applicant, that the extension period had to be enforced.
There is no suggestion
that a nine month period is unfair.
There is no suggestion that the Extension Agreement, B5, was not
freely and voluntarily
concluded. There is no suggestion that
the first respondent, at any stage before the filing of the opposing
papers, considered
the agreement to be unfair. There is also no
evidence of a change in circumstances to render the title condition
invalid.
It seems to me that, in the particular circumstances, it was
practical and realistic for the "return purchase price"
in
the event of a re transfer, to be fixed in title condition B.
Failure to do so, may cause insurmountable difficulties
years down
the line, if, like here, the latest in a line of defaulting
purchasers, fails to erect a dwelling, through no fault
of the
applicant, and be put in a position to insist on a higher
"repurchase" amount commensurate with the purchase price
paid by this particular purchaser.
• In these circumstances, I am not in sympathy with the argument
offered on behalf of the respondents that B5 was "unfair,
unreasonable and/or unjust".
The only one of these terms defined in the Act is "unconscionable"
which definition stipulates that, when used with reference
to any
conduct, it means:
"(a) Having a character contemplated in section 40; or otherwise
unethical or improper to a degree that would shock the conscience
of
a reasonable person."
Section 40 deals with "unconscionable conduct" and
provides:
"(1) A supplier or an agent of the supplier must not use
physical force against the consumer, coercion, undue influence,
pressure, duress or harassment, unfair tactics or any other similar
conduct, in connection with any-
(a) marketing of any goods or services;
(b) supply of goods or services to a consumer;
(c) negotiation, conclusion, execution or enforcement of an agreement
to supply any goods or services to a consumer;
(d) demand for, or collection of, payment for goods or services by a
consumer; or
(e) recovery of goods from a consumer.
(2) In addition to any conduct contemplated in subsection (1), it is
unconscionable for a supplier knowingly to take advantage
of the fact
that the consumer was substantially unable to protect the consumer's
own interest because of physical or mental disability,
illiteracy,
ignorance, inability to understand the language of an agreement, or
any other similar factor.
(3) Section 51 applies to any court proceedings concerning this
section."
(Section 51, dealing with prohibited transactions, does not apply for
present purposes.)
In the light of these provisions, it seems to me to be clear,
objectively speaking, that B5 does not disclose or exhibit any form
of "unconscionable conduct", as defined in the Act.
[45] Against this background, I am of the view that there is no merit
in the fourth argument
in limine
and it also falls to be
dismissed.
The fifth point
in limine
[46] The submission by the respondents is that B5 is
contra bonos
mores
.
[47] I have, at least to a considerable extent, dealt with this
subject when considering the fourth point
in limine
.
[48] Counsel also referred me to the case of
Napier v Barkhuizen
[2007] ZACC 5
;
2007 5 SA 323
(CC) where the following is said at paragraph [57]:
"The first question involves the weighing-up of two
considerations. On the one hand public policy, as
informed
by the Constitution, requires in general that parties should
comply with contractual obligations that had been freely and
voluntarily
undertaken. This consideration is expressed in the
maxim
pacta sunt servanda
, which, as the Supreme Court of
Appeal has repeatedly noted, gives effect to the central
constitutional values of freedom and dignity.
Self-autonomy, or
the ability to regulate one's own affairs, even to one's own
detriment, is the very essence of freedom and a
vital part of
dignity. The extent to which the contract was freely and
voluntarily concluded is clearly a vital factor as
it will determine
the weight that should be afforded to the values of freedom and
dignity. The other consideration is that
all persons have a
right to seek judicial redress."
And, at paragraph [58]:
"The second question involves an enquiry into the circumstances
that prevented compliance with the clause. It was unreasonable
to insist on compliance with the clause or impossible for the person
to comply with the time limitation clause. Naturally,
the
onus
is upon the party seeking to avoid the enforcement of the
time-limitation clause. What this means in practical terms is
that
once it is accepted that the clause does not violate public
policy and non compliance with it is established, the claimant
is required to show that in the circumstances of the case there was a
good reason why there was a failure to comply."
[49] For all these reasons, I am of the view that the respondents
failed to discharge the
onus
to show that this contract, B5,
was
contra bonos mores
. Consequently, the fifth point
in
limine
also falls to be dismissed.
Other "defences" raised
[50] As I indicated at the outset, the points
in limine
make
up the bulk of the opposing affidavit.
[51] In dealing
seriatim
with the paragraphs in the founding
affidavit, the respondents, again, raised the point, already dealt
with, that the time period
for the erection of the dwelling on the
property had lapsed (as per the original title condition B) by the
time the Trust took
transfer.
In this regard, when dealing with this argument, I mentioned that
this court, per Du Plessis J, in case no 50391/2008,
already endorsed a claim for similar relief based on title condition
B, or a similar title condition, applicable to transactions
in
Midstream Estate. I need not dwell on this subject any further.
[52] The respondents, in the opposing affidavit, also deny that the
Trust failed to take any steps to erect the dwelling on the
property. An account is given about various steps allegedly
taken by the respondents to get the construction of the dwelling
off
the ground. Reference is made to a number of contractors
engaged for the purpose who did not comply with their mandates.
An allegation is made that in June 2015 (well after the extension
period lapsed in June 2014, and even after this application was
launched), a certain contractor was again instructed to draw the
plans for the proposed dwelling and these were allegedly submitted
to
the Aesthetics Committee of the Home Owners Association.
Of course, this is irrelevant, given the fact that by then
the
contract, B5, had been breached, and the extension period had expired
at least a year earlier. It is alleged that on
9 June 2015
(after the papers were served on the respondents) an attempt was made
to file the final plans with the Aesthetics
Committee whereupon a
member of that committee informed the first respondent that the
applicant had instructed that committee not
to accept the plans as
the matter is now the subject of litigation.
Apart from the fact that all this is irrelevant, for the reasons
mentioned, the following is said in reply by the applicant:
"The entire history stipulated and set out by the respondents is
apparently an issue between the Home Owners Association and
the
respondents as owners of the property and as members of the Home
Owners Association. As indicated hereinbefore, the applicant
has no
locus standi
in respect of the Home Owners Association,
has no
locus standi
in respect of the Ethical Committee of the
Home Owners Association and has no influence thereon.
The Home Owners Association is a separate legal entity running under
its own management and auspices."
And further:
"It is an issue between the Home Owners Association and the
owner's financiers. The applicant's only interest after
transfer is to take action once it has noted that the building period
has not been complied with.
Save therefore, the applicant has no authority to intervene or impose
itself in any way whatsoever."
[53] Against this background, I am of the view that the "defences"
raised, such as they are, have no merit.
[54] Finally, I add that, after the replying affidavit was delivered,
the respondents saw fit to file another affidavit "in
response
to" the replying affidavit. The following issues are
raised:
• The Home Owners Association has a direct and substantial
interest in the matter and the applicant's failure to cite this
association as a party to the proceedings constitutes a non joinder.
In view of the circumstances, and the relationship between the
applicant and the Home Owners Association, and, in particular,
because the latter association was approached more than a year after
the extension period had lapsed, I see no merit in this
argument.
It was also submitted, in this regard, on behalf of the applicant,
that the test for joinder is whether or not a party has a direct
and
substantial legal interest in the subject matter of the
litigation. A mere financial or commercial interest (which
in
my view is not present either) is insufficient – see
Standard
Bank of South Africa Ltd v Swartland Municipality and Others
2010
5 SA 479
(WCC) at 482F 483A.
• The case should have been referred to oral evidence or trial,
with particular reference to the second point
in limine
,
dealing with the question of estoppel and, as explained, the fact
that there was a resolution signed on behalf of the second respondent
authorising the first respondent to enter into the transaction.
There was no application by either party, during the proceedings
before me, for the matter to be referred to evidence.
It is generally undesirable for the court itself to refer the matter
for oral evidence
mero motu
– see Harms
Civil
Procedure in the Superior Courts
at B 64 and the authorities
there quoted.
In any event, I see no need for the matter to have been referred to
evidence on this particular subject. As I have pointed
out,
even if there was no authority, the respondents were, in any event,
in
mora
from the outset, as held by Du Plessis J in
the case mentioned with which finding I am in respectful agreement.
Conclusion
[55] For all the reasons mentioned, I have come to the conclusion,
and I find, that there is no merit in any of the points
in limine
raised, neither in the other "defences" such as they may
be.
[56] In the result, the relief ought to be granted, and the amount
tendered by the applicant ought to be increased, as per the
request
of the applicant, from R560 000,00 to R840 000,00.
The costs
[57] Some argument was presented on behalf of the respondents that
the tender to increase the "refund amount" came at
a late
stage and the matter was initially prepared on the basis of the lower
amount of R560 000,00. Consequently, there
is some
justification in considering a costs order whereby the respondents
are ordered to pay only a percentage of the applicant's
costs, in the
event of the application being upheld.
[58] After due consideration, I have come to the conclusion that
there is some merit in this argument and it seems to me that a
proper
contribution to the applicant's costs, in these circumstances, ought
to be 75%.
The order
[59] I make the following order:
1. The first and second respondents, jointly and severally, are
ordered to take the necessary steps to re transfer the property
described as Erf […], Mainstream Estate Extension 35 Township,
Registration Division J.R.; held by Deed of Transfer T90725/13
to the
applicant.
2. The first and second respondents, jointly and severally and in
their representative capacities, are to bear the costs associated
with
1 above
.
3. The applicant is to pay to the first and second respondents, in
their representative capacities, the amount of R840 000,00
(eight hundred and forty thousand rand) against transfer of the
property mentioned in
1 above
.
4. The first and second respondents are directed to sign all
documents and take all steps reasonably required to give effect to
the order in
1 above
, within a period of seven days from
date of such request by the applicant and/or someone on its behalf.
5. Should the first and second respondents refuse and/or fail to sign
the relevant documentation to give effect to the orders in
1 and 4
above
, then the Deputy Sheriff of this Court is authorised and
directed to sign all necessary documents on their behalf to effect
re transfer
of the aforementioned property from the
B & L Residence Trust to the applicant against
payment of the amount
of R840 000,00 (eight hundred and forty
thousand rand) less the costs payable to the Sheriff, transfer fees,
clearance fees
at the local authority and Home Owners Association in
respect of the transfer.
6. It is declared that the applicant is entitled to register this
order with the third respondent, the Registrar of Deeds.
7. The first and second respondents, jointly and severally, in their
representative capacities, are ordered to pay 75% of the applicant's
taxed or agreed costs flowing from this application.
W R C PRINSLOO
JUDGE OF THE GAUTENG DIVISION, PRETORIA
HEARD ON: 4 MAY 2016
FOR THE APPLICANT: N J HORN
INSTRUCTED BY: TIM DU TOIT & COMPANY INCORPORATED
FOR THE 1
ST
AND 2
ND
RESPONDENTS: VAN
RHYN FOUCHE
INSTRUCTED BY: VAN STADE VAN DER ENDE INCORPORATED