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[2014] ZAGPPHC 223
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MEC For Education: Mpumalanga Province v New Horizon Capital (Pty) Ltd and Another (76883/13) [2014] ZAGPPHC 223 (14 March 2014)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
Case
Number: 76883/13
Date:
14 March 2014
In the matter
of:
MEC FOR
EDUCATION: MPUMALANGA
PROVINCE
...................................................
Applicant
and
NEW HORIZON
CAPITAL (PTY)
LTD
....................................................................
First
Respondent
TRICHARDTSFONTEIN
COMBINED SCHOOL
................................................
Second
Respondent
JUDGMENT
BAM J
1.
The applicant applied for an interdict
restraining the first respondent from closing a school and
interfering with the school’s
activities and the attending
learners. The application is opposed by the first respondent.
2.
On 1 March 2004 the Trichardstfontein
Combined School, cited as second respondent, “
the
School”,
was established on the
farm Trichardtsfontein. In 2006, in terms of a written
agreement, “
the rental agreement”,
entered into between the applicant, and the then owner of the farm,
Ecencico (Pty) Ltd, “
Ecencico”,
provided that the part of the farm on which the school is located was
rented by the applicant for an amount of R120 000 00
per year.
One of the terms of the rental agreement, clause 7 thereof, was the
perpetuation of that agreement as long as the school
should exist,
however, subject to compliance with the other terms.
3.
It is common cause that on 12 October 2012
the first respondent, “
New
Horizon”,
represented by Mr W
Brits, “
Brits”,
purchased the said farm from
Ecencico
.
It was conceded on behalf of New Horizon that the farm was bought
subject to the lease agreement pertaining to the school. Brits
informed the applicant’s officers of this purchase in February
2013 and stated that he was not satisfied with the old contract
and
wished to negotiate new terms for the contract between the parties.
4.
The representative of applicant, Dr Thusi,
“
Thusi”,
was
apparently amenable that a new contract could be concluded between
the applicant and New Horizon. The parties however failed
to get to
terms, and the negotiations were unsuccessful. One of the issues was
damage to the school caused by vandalism. Certain
demands were made
by Brits that were not acceptable to Thusi. According to the
applicant’s version Brits was subsequently
informed that Thusi
was not in a position to negotiate a new contract and Brits was
referred to the applicant’s head office.
Further discussions
between Brits and officers representing the applicant did not result
in a substituting agreement being concluded.
Deliberations between
Brits and representatives of the applicant proved to be unsuccessful.
I will revert to that issue.
5.
In terms of the agreement the rental amount
had to be paid to the owner of the property. It appears from the copy
of the contract
attached to the applicant’s founding affidavit
that a clause specifying that the rental amount had to be paid on a
specific
time was deleted. It is the applicant’s version that
the yearly rental is paid in advance during April/June for the year
ending the following year on 31
st
March, upon furnishing an invoice by the landlord of the premises.
The applicant furnished proof that the rental for the year ending
31
st
March 2014 was claimed by Ecencico per invoice dated 31 January 2013,
and paid to Ecencico on 16 October 2013. It is conceded on
behalf of
the applicant that the rental amount should have been paid to New
Horizon instead. This was due to an administrative
oversight and
mistake made by the Department, which, despite demands made on behalf
of New Horizon, has as yet not been rectified.
New Horizon was
clearly aggrieved by this situation. I will return to this issue
below.
6.
In the answering affidavit of New Horizon,
deposed to by Brits, the following facts were stated:
(i)
At the time New Horizon purchased the
property Brits was aware of the existence of the rental agreement;
(ii)
In October 2012 Brits made contact with the
applicant’s officials at the local offices in Ermelo but failed
to get hold of
the responsible officer;
(iii)
In February 2013, Brits went to Ermelo
personally with the intention to formally inform the first respondent
of the purchase of
the property and to negotiate a new lease
agreement. Brits then discussed the issues with Thusi who supplied
him with a
pro forma
contract.
(iv)
On 5 April 2013 Brits informed Thusi
telephonically that he wanted certain amendments to the pro forma
agreement and that he wanted
to discuss the matter. Brits further
stated that additional classrooms would be sponsored by
Sasol
,
and that New Horizon would be willing to sell that part of the land,
on which the School is located, to the Department.
(v)
On 28 May 2013, after having received no
counter response to his proposals, he addressed a letter to the
Department of Education
Mpumalanga, requesting, amongst others, that
the existing agreement be cancelled and that a new agreement with New
Horizon be signed.
(vi)
On 4 June 2013 the Department responded
that the request for new agreement to be negotiated and signed was
accepted.
(vii)
Consequently a meeting was held on 7 June
2013 at the school premises. Thusi was absent. The officials present
agreed to revert
after having discussed the issues with Thusi.
(viii)
Brits followed up with Email correspondence
on 14/17 June 2013 but no response or feedback came forth.
(ix)
On 22 July 2013 further Email
correspondence by Brits followed. The contents of the correspondence
included a threatened eviction
notice against the Department and the
School.
(x)
On 22 August 2013 Thusi responded and
invited Brits to a meeting for the purpose of signing a new
agreement. This was however
not acceptable to Brits in that the
parties had not yet agreed on the terms. Brits informed Thusi
accordingly.
(xi)
No response was forthcoming and on 4
September 2013 Brits requested a response, and informed the
Department on the same day that
the school should be evacuated by 24
December 2013 and that New Horizon will not grant any access to the
Department or any learner
from January 2014.
(xii)
Further correspondence in October and
November, as well as a meeting on 28 November 2013 between the
parties, again proved to be
unsuccessful.
(xiii)
A follow up, concerning the rental paid to
Ecencico, and several proposals, did not put an end to the deadlock
between the parties.
7.
In December 2013 Brits took the School keys
from the principal and indicated that nobody would be allowed to
enter the School premises
the next year. This caused the
applicant to lodge an urgent application to interdict New Horizon
from interfering with the
School activities. An interim agreement was
reached pending the hearing of the matter in the opposed motion
court, and Brits returned
the School Keys.
8.
The applicant’s case is based on the
submission that at all relevant times a valid lease agreement
in respect of the
School existed and that New Horizon had no right to
disregard it. It was further contended by the applicant that Brits,
on behalf
of New Horizon, took the law into his own hands in taking
the keys and indicating that the School is closed down.
9.
It is New Horizon’s contention that
there is no agreement in place authorising the School to operate from
the farm. It is
further New Horizon’s case that the title deed
of the farm is not endorsed and that New Horizon did not receive any
rental
income for 2013. On this basis New Horizon’s argument is
that it is entitled to have the School evacuated.
10.
The question to be addressed in this matter
is crisp, namely whether, in terms of the provisions of section 14 of
The South African
Schools Act, No. 84 of 1996 (the “
Act”)
a valid agreement existed, in terms of
which the property on which the School is situated was leased by the
applicant. It further
concerns the question whether New Horizon was
in the circumstances entitled to unilaterally cancel the existing
lease agreement
and to prevent any access to the school, as it is
contended on behalf of New Horizon.
11.
It is common cause that a valid lease
agreement existed between the applicant and the former owner of the
land, Ecencico, the previous
owner of the farm on which the School is
situated. It was conceded by Brits in New Horizon’s answering
affidavit that the
existence of the lease agreement was brought to
his attention at the time the property was purchased in October 2012.
12.
Section 14(4) of the said Act provides that
a real right, as is the right created by the lease agreement, is
enforceable against
any successor in title to the owner of the
immovable property in question. This perpetuation of the lease
agreement, subject to
compliance by the parties with all the terms
thereof, is consistent with the Roman Dutch principle, “
Huur
gaat voor koop”,
which is
still part of our Common Law. It was therefore, correctly in my view,
conceded on behalf of the first respondent
that the property was
bought subject to the existence of the lease agreement.
13.
The first respondent’s contention, in
paragraph 6 of the answering affidavit, that no agreement was
entered into between
New Horizon and the applicant to provide for the
School is therefore irrelevant and of no consequence. There was
in fact
a valid and lawful lease agreement in existence at the time
New Horizon purchased the property.
14.
Section 14(3) of the Act provides that the
Deeds Registries Act No. 47 of 1937
do not apply. It means that the
rental agreement does to need to be registered on the title deed of
the property. The first respondent’s
reference in paragraph 7
of the answering affidavit to the fact that the title deed of the
farm is not endorsed to record that
the property is subject to the
lease agreement, implying that the existing lease agreement was
therefore null and void, is evenly
without substance and of no
consequence.
15.
It is evident from the answering affidavit
that Brits was aggrieved by the applicant’s officers alleged
frustrating and obstructing
conduct in regards to his endeavours to
conclude a lease agreement between the applicant and New Horizon. In
paragraph 34 of the
answering affidavit it is stated by Brits that
the applicant’s officials were not prepared to apply their
minds to conclude
a new agreement.
16.
However, in this regard there are two sides
to the story. On behalf of the applicant it is averred that some New
Horizon’s
suggestions, or demands, of what should be included
as terms of the new lease agreement were unreasonable and
unacceptable.
17.
Despite these two conflicting versions it
is clear that the parties are ad idem that a deadlock ensued between
the parties. The
mere fact that a dispute of fact exists between the
parties about negotiations and correspondence pertaining to a
possible new
contract between the parties is immaterial in regards to
the question whether the relief sought by the applicant should be
granted.
The material issue is the existence of the lease agreement
and not the side issues in respect of the new contract.
18.
In paragraph 35 of the answering affidavit
the following is stated by Brits:
“
I
was left with no alternative while this impasse existed but to give
notice to the Department that as they were not interested
in
concluding a lease agreement or paying for the premises which they
occupied to request the School vacate the premises by year
end.”
19.
In paragraph 38 of the answering affidavit
Brits refers to a letter dated 18 October 2013 addressed by New
Horizon’s
attorneys to the Department. In the letter it
is stated, amongst others, that there is “
no
agreement”
in place; that no effort has been made by the Department to conclude
a
section 14
agreement; that New Horizon has not received any rental
income from the School for 2013; and that the letter serves as a
notice
of evacuation.
20.
Apparently the letter of 18 October
elicited some response from the Department, but, eventually it all
came to nothing. The deadlock
remained.
21.
The criticism levelled by New Horizon, in
paragraph 54 of the answering affidavit, at the validity of the lease
agreement, namely
that the agreement fails to indicate whether the
agreement was concluded directly with the applicant or whether the
applicant was
represented by somebody, is without substance. The
agreement was concluded between the applicant in his official
capacity, clearly
represented by a member of his Department as is
practice. In my view the agreement complies with the provisions of
section 14 of
the Act.
22.
New Horizon’s main ground for
opposing the application is, as stated in paragraph 56 of the
answering affidavit, that the
existing lease agreement was cancelled
on 5 December 2013 as a result of the Department’s failure to
pay rental due for 2013.
In this regard it is clear that the
Department was at fault. The Department paid the wrong entity,
Ecencico, the previous owner
of the property. There is no explanation
advanced by the applicant why the wrong payment was not retrieved
from Ecencico and why
New Horizon was not paid. In my view there was
no obligation on New Horizon to approach Ecencico, it was the
Department’s
problem. However, the question to be answered is
whether New Horizon was in the circumstances entitled to unilaterally
cancel the
lease agreement.
23.
It is of importance to note that it is
contended by New Horizon, in paragraph 151 of the answering
affidavit, New Horizon denied
having closed the School and stated it
“
merely denied the Applicant
access to the property”
because
the applicant failed to pay the rental for 2013. However in paragraph
152 New Horizon re-stated that the applicant as notified
that the
lease was cancelled and that it was required that the School “
be
vacated”.
24.
It appears from New Horizon’s
answering affidavit that Brits was mainly concerned about
negotiating new terms
of the contract and the fact that he was
frustrated by the applicant’s officials in that regard. On the
version of Brits
this is quite understandable. The explanation,
or lack of explanation by the applicant for the delays since April
2013, seems
to be unreasonable, even taking into account that State
Departments may experience administrative difficulties regarding
communication
between the responsible officers.
25.
It was submitted on behalf of the applicant
that the School could only be closed in terms of the provisions of
section 33 of the
Act. This contention is indeed correct, it
however does not preclude the owner of the premises, in terms of the
standard
Law of Contract principles, to cancel the lease agreement in
circumstances where the other contracting party fails to comply with
the terms of the agreement, for instance failing to pay the rental
amount timeously or at all. I have already alluded to the fact
that
the applicant failed to comply with the provisions of the existing
lease agreement by not paying the lease amount to New Horizon.
It is
remarkable that, whilst this issue was pertinently addressed in the
answering affidavit, the applicant, as he was, in my
view, in the
circumstances expected to do, did not respond at all to the relevant
averments pertaining to the demand for the payment
of the lease
amount in his replying affidavit.
26.
Although New Horizon was in law justified
to cancel the agreement, the subsequent taking of the keys and
denying the applicant,
and for that matter the School staff and
learners’
access
to the School seems to me to be an infringement of the learners
constitutional right, entrenched in the Bill of Rights, section
29 of
the Constitution. In this regard Brits, on behalf of New Horizon,
took the law into his own hands which he was not entitled
to do. New
Horizon clearly had other lawful remedies which I do not find it
expedient to discuss. Neither do I deem
it expedient to
consider New Horizon’s lawful options in regards to a possible
solution to the problem .
27.
It therefore follows that the applicant has
made out a case for a final interdict. A clear right was established
being that the
applicant, the School and the learners, are
Constitutionally entitled to be protected against the unlawful
infringement of their
rights entitled to protection should, at least
partly, succeed with the application.
28.
In respect of costs the following issues
are taken into consideration:
(i)
The conduct of Brits to take the keys of
the School from the principal was not justified in law ;
(ii)
Brits had no right to prevent, or threaten
to prevent the applicant to have access to the School;
(iii)
Brits returned the keys of the School;
(iv)
The applicant failed to take any steps to
pay the lease amount for 2013 to New Horizon;
(v)
The applicant failed to explain to the
court, in view of the fact that the lease amount was wrongly paid to
the previous owner of
the farm, what steps, if any, were taken to
resolve the problem and to comply with the terms of the agreement.
29.
Accordingly the following order is made:
1.
The first respondent , or anybody in its
employ, or representing it, is interdicted and restrained from
interfering, in any
way, with any school activities at the
Trichardsfontein Combined School;
2.
The first respondent is interdicted and
restrained from preventing the applicant, the applicant’s
officials, teaching
staff, and learners, from accessing the School
premises;
3.
The parties are ordered to pay their own
costs.
AJ
BAM
JUDGE
OF THE HIGH COURT
12
March 2014.