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[2014] ZAGPPHC 140
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Four Arrows Investment 68 (Pty) Ltd v Abigail Construction CC and Another (44493/13) [2014] ZAGPPHC 140 (2 April 2014)
IN THE HIGH COURT
OF SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
CASE
NO: 44493/13
DATE:
02 APRIL 2014
In the matter
between
FOUR ARROWS
INVESTMENT 68 (PTY) LTD
.................................
Applicant
And
ABIGAIL
CONSTRUCTION CC
..............................................
First
Respondent
THE REGISTRAR OF
DEEDS PRETORIA
........................
Second
Respondent
JUDGMENT
BAM J
1. The main dispute
in this matter turns upon an agreement (“the agreement”)
between the applicant and the first respondent
in regards to
immovable property, Portion 175 of the farm Tweefontein, extent 21.8
ha, situated in the Limpopo province, registered
in the name of the
first respondent.
2. The applicant,
basing its application on the terms of the said agreement, applied
for an order entitling applicant to take transfer
of the property
against payment in the amount of R3 585 972.43 to the first
respondent. The first respondent opposed the application
and in its
counterclaim applied for an order declaring the said agreement null
and void, and that the mortgage bond registered
over the property be
cancelled against payment in the the amount R4 047 000.00.
3. The salient facts
are as follows. The first respondent purchased the property, Portion
175, in extent 21ha, for a purchase price
of R8 094M. On 1 March 2011
the parties entered into the agreement, the terms, amongst others,
provided that the applicant would
assist the first respondent in
financing the purchase price and that the Property would be
registered in the name of the first
respondent. The terms further
provided that the parties intended to have 10.9ha of Portion 175,
subdivided which subdivided portion
the first respondent then sold to
the applicant.
4. It is common
cause that leave to subdivide the property was subsequently granted
by the Minister of Land Use and Soil Management.
It is further common
cause that the applicant did assist the first respondent in financing
the purchase price.
5. The applicant’s
case is founded on the provisions of clause 2.5 of the agreement
which provides as follows;
“Should the
sale agreement between the Seller (First Respondent) and the
liquidator in respect of Portion 175 stand to be
terminated or not to
proceed for any reason pertaining to the inability on the part of the
Seller to comply with the Seller’s
payment obligations towards
the liquidator, then the Purchaser (Applicant) shall have the right
to either:
2.5.1 . . .
2.5.2 advance to
the Seller all amounts payable by the Seller to the Liquidator in
order that registration of transfer of Portion
175 may be passed into
the name of the Seller and to simultaneously register transfer of
Portion 175 from the name of the Seller
into the name of the
purchaser; in which event this Agreement mutatis mutandis shall
constitute the required deed of alienation
between the Seller of the
purchaser for this purpose”.
6. In this regard it
is the applicant’s contention that it had to advance an amount
of R495 369 69 to the first respondent
in order to enable the first
respondent to pay the liquidators the required deposit. This fact, as
submitted made by Mr Erasmus
SC, appearing for the applicant with Mr
Prinsloo, entitled the applicant to rely on the provisions of clause
2.5.2 to claim that
the property be transferred into its name.
7. Mr da Silva SC,
appearing with Mr Klopper for the respondent, argued that the
applicant was not entitled to rely on that clause
in view of the fact
that the sale in fact proceeded.
8. I agree with the
Mr da Silva’s argument. The problem with the applicant’s
contention in the above regard starts with
the factual situation
that, although the first respondent may have experienced problems
with the full payment to the liquidators,
and for that reason needed
the financial assistance of the applicant in terms of the agreement,
the sale was indeed proceeded with
and eventually concluded. The
property was then registered in the name of the first respondent on
30 June 2011. The applicant
was clearly satisfied with the
developments. Only after expiration of a further approximately 2
years, the applicant decided to
rely upon the provisions of clause
5.2. Accordingly I am of the opinion that the applicant’s
belated reliance on clause 5.2
is without merit.
9. However the main
dispute between the parties turns upon the validity of the agreement.
The first respondent’s contention
is that the agreement was
null and void ab initio, based on the prohibition of contracts in
respect of the subdivision of agricultural
land in terms of the
provisions of section 3(e)(i) of the Subdivision of Agricultural Land
Act, No. 70 of 1970, that provides:
“no portion of
agricultural land, whether surveyed or not, and whether there is any
building thereon or not, shall be sold
or advertised for sale . . .
unless the Minister has consented in writing.”
10. The applicant
contended that the agreement was subject to a suspensive condition
and therefore not prohibited, alternatively,
that the clauses not
dealing with the subdivision of land should be separated from the
offending clauses and held to be valid,
binding on the parties and
enforceable.
11. The issue
regarding the validity of agreements pertaining to the sale of land
subject to a suspensive condition that the consent
of the Minister
for the subdivision of land be obtained in cases where subdivision of
land is prohibited by the Act as referred
to above, was discussed and
ruled upon in Geue and Another v Van der Lith and Another
2004(3) SA 335. In
this case it was pointed out that the definition of “sale”
in the Subdivision of Land Amendment Act,
No. 18 of 1981, includes a
sale subject to a suspensive condition. After considering the
relevant principles in regards to the
issue at hand, the Court
arrived at the conclusion that an agreement for the sale of land
subject to a suspensive condition as
in this case, is null and void.
The said case is the locus classicus on the issue.
12. In my view the
clauses of the agreement cannot be separated as suggested by Mr
Erasmus, in that the whole of the agreement was
void ab initio. It
therefore follows that the applicant cannot rely on any clause of the
agreement.
13. Regarding the
averment in the first respondent’s answering affidavit, I am
not convinced that Ms Maphanzela, representing
the first respondent,
was not au fait with the contents of the agreement, although at the
time she signed the agreement, she may
not have been aware of the
fact that the agreement was in fact null and void. In paragraph 51 of
the affidavit Ms Maphanzela stated
that in August 2011 she, albeit on
advice of the applicant’s attorneys, approached the land
surveyors to enquire about consent
by the Minister for the sub
division of the land. In paragraph 52 Ms Maphanzela stated that upon
realizing that the agreement was
null and void she was prepared to
enter into a new contract with the applicant. She did however not
state when this happened.
14. At first blush
it appeared that the parties were in dispute in respect of the total
amount paid by the applicant. However in
paragraph 24.2.3 of the
first respondent’s opposing affidavit it is admitted that the
applicant in fact contributed a total
amount of R4 757 000 00 and the
first respondent R3 592 093 00. In respect of the latter sum, the
applicant’s calculation,
at p16, amounts to R3 585 972 45. In
the circumstances the difference between the two figures is
insignificant. The first respondent’s
calculation of the
tendered R4 047 000 00 plus R510 00 00 (R710 00 00 – R200 000
00) therefore seems substantiated.
15. Accordingly it
is clear that the applicant’s application cannot succeed. The
respondent’s counterclaim, on the other
hand, should be
granted.
ORDER
1. The applicant’s
application is dismissed with costs.
2. The first
respondent’s counterclaim succeeds as follows:
(i) The agreement
signed on behalf of the Applicant and First Respondent, dated 1
March 2011 is declared null and void and unenforceable;
(ii) The Applicant
is ordered, not later than 20 days from the date of this order, to
take all reasonable steps required for the
Second Respondent to
cancel Mortgage Bond B27312/2011 registered against the property
known as Portion 175 of the farm Tweefontein
915, Registration
Division L.S. Limpopo Province, in the extent of 21.8000 hectares,
held by the First Respondent in terms of
Deed of Transfer
T42174/2011, against payment to the Applicant of the amount of R4 047
000-00;
(iii) That in the
event of the Applicant failing or refusing to take all reasonable
steps required for the Second Respondent to
cancel Mortgage Bond
B27312/2011 registered against the property mentioned in (ii) above,
held by the First Respondent in terms
of Deed of Transfer
T42174/2011, against payment to the Applicant of the amount of R4 047
000-00, within the 20 days stated in
(ii) above, the Sheriff of the
Court for the Limpopo Province is empowered to sign all documents
required for the Second Respondent
to cancel the mortgage bond
mentioned in (ii) above;
(iv) The applicant
is ordered to pay to the respondent an additional amount of R510
000.00, plus interest a tempore morae, at the
present mora interest
rate;
(v) The applicant is
directed to pay the costs of the counter application, including the
costs of two counsel; as well as the costs
occasioned by paragraphs
(ii) or (iii), whichever is applicable.
A J BAM
JUDGE OF THE HIGH
COURT
31 March 2014