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2014
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[2014] ZAGPPHC 277
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Swart and Another v Silver Solution 688 CC and Others (14897/13) [2014] ZAGPPHC 277 (9 May 2014)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
In the matter
between:
P J
SWART
................................................................................................................................
1
st
Applicant
J H
SWART
...............................................................................................................................
2
nd
Applicant
and
SILVER SOLUTION 688
CC
...............................................................................................
1st
Respondent
D M
RUDMAN
....................................................................................................................
2nd
Respondent
A S RUDMAN
….................................................................................................................
3rd
Respondent
REGISTRAR OF DEED,
PRETORIA
.................................................................................
4th
Respondent
JUDGMENT
MALI
AJ
INTRODUCTION
[1] This is an
application to interdict the first, second and third respondents from
selling, transferring, encumbering, leasing
or otherwise allowing two
portions of an immovable property to become the subject of right of
retention pending the final adjudication
of an action instituted by
the Applicants regarding the validity of the agreement of sale
concluded on 30 June 2009. In addition
the Applicants claim the
registration of a caveat over the said property.
[2] The application
is opposed by the first, second and third respondent except the
fourth respondent.
BACKGROUND
[3] The third
respondent is the only member of the first respondent. The second
respondent is married in community of property to
the third
respondent. The first and the second applicant are married in
community of property to each other.
[4] The first
respondent owns the property in dispute which is described as
follows:
4.1. A Division A of
the remaining extent 166 (a Division of division 85) of the Farm
Kafferskraal 400, Registration Division, I.P.
North West Province.
4.2. A Division B of
the remaining extent of 166 (a Division of division 85) of the Farm
Kafferskraal 400, Registration Division,
I.P. North West
Province.property. Thereafter the parties entered into a deed of sale
for the portions of the farm Kafferskraal
400 Registration Division
IP North West Province which were not divide for the amount of R800
000. 00 each. The Deeds of Sale was
signed on 30 June 2009.
[6] On 4 August
2011, upon receipt of consent to the sub-division of the property
from the City Council of Matlosana the parties
concluded two new
agreements substituting the initial two agreements in respect of the
same portions mentioned in paragraph 5 above.
The portions were now
identified as Portions 197 and 198 of Portion 166 of the said farm
for different amounts each.
[7] It is common
cause that the applicants have paid the initial price of R800. 000,
00 constituting the first half of the total
purchase price; and that
the applicants have also paid the amount of another R800. 000, 00 in
respect of the balance of the purchase
price into the trust account
of their attorney.
[8] A special
condition was set out in clause 12 of the agreement of sale to the
effect that the transfer of property to the applicants
is linked to
the transfer of the property from the first respondent to the second
and third respondent. It therefore meant that
the transfer of
property to the applicants would be effected upon the property having
been transferred to the second and third
respondent. By agreement
between the parties, the applicants took occupation of the property
before 11 August 2011 and continued
to pay the agreed occupational
rent.
[9] It is common
cause that the property has not been transferred to the applicants
since 11 August 2011. The transfer has not been
effected due to the
decline of the sub-division of the land by the Ministry of Department
of Agriculture, Forestry and Fisheries
(“the Ministry”).The
refusal by the Minister is recorded in a letter addressed to the
respondent which reads as follows:
“
In
terms of section 4 of the Act this Department does not grant consent
for the abovementioned application, as this application
will change
the agricultural land use to residential zone in an area that is
still used for intensive farming. The abovementioned
has not been
formally excluded from the Subdivision of Agricultural Land Act, Act
70 of 1970 and the farms in the area are all
of the same size and
this application will set a precedent for similar applications”.
APPLICATION
[10] The counsel for
the applicants argued that despite that the suspensive condition,
namely first transfer of the property by
the first respondent to the
second and third respondent have largely not been complied with both
parties accepted that the transfer
was going to be completed
successfully. The rationale to first transfer the property to the
second and third respondents and in
turn the respondents transfer to
the applicants was based on the tax benefit to be acquired by the
first respondent.
[11] The counsel for
the applicants further argued that subsequent to the registration of
servitude in order to ensure that applicants
have access to the
property there were no problems. The problems transpired when it
became clear that the permission was required
for subdivision; and
the same was refused. What exacerbated the problem further is that
the respondent is raising dispute about
the validity of the
agreements, whether the agreement is valid if the subject of sale,
which is the immovable property in this
case requires the consent for
subdivision. The dispute regarding the validity of the agreement is
the subject of the pending action
under case number 41613/13 in the
North Gauteng High Court, Pretoria instituted by the applicants.
[12]
The counsel for the applicant argued that the applicants have a clear
right. He further argued that the immovable property
in this case
forms
rei litigos,
as
the property in dispute is the subject of litigation in the
abovementioned case. In the event that respondents sell the farms
without the involvement of the applicants, the applicants would be
prejudiced. Even third parties would be impacted negatively
as the
applicants have a claim in the property and the applicants could only
prevent the sale by way of litigation.
[13] During the
period when the applicants were in occupation of the property they
spent a sum of R170, 000.00 (ONE HUNDRED AND
SEVENTY THOUSAND RANDS),
towards the improvements of the property. They therefore claim a
right of retention based on enrichment.
The counsel for the applicant
argued that the applicant’s right of retention must be
protected pending the finalization of
the main action. There is no
bond against the properties and could therefore be easily
transferred. Counsel for the applicant further
argued that there is
no reason that the whole property must serve as security for the
first, second and third respondents.
[14] It was
applicant’s counsel submission that that the harm or threat
faced by the applicants is that the respondents have
not furnished
any security in respect of the monies paid by the applicants. Of
importance is that the applicants have fulfilled
all the conditions
on their part including the payment of R800. 000.00, occupational
rent and have made a further deposit of R800.
000, 00 in the
attorney’s account towards the purchase price.
[15] The applicants
pray for a caveat to be registered over the property as they fear
transfer or sale by the respondents to the
third parties. The
subdivisions could not be effected due to the Minister’s
decision as indicated in the background above.
Furthermore the
condition that the property must first be sold to the second and
third respondents for tax benefit purposes, has
not yet been
fulfilled.
[16]
The applicant’s counsel further argued that it is not
impossible to challenge the decision of the Ministry of Agriculture
and Fisheries if the respondents were willing to resolve the issue of
sub-division. In this regard counsel relied on the case of
Johannesburg
Metropolitan Municipality v Gauteng Development Tribunal and Others
1
which
held that
"in
granting applications for rezoning or the establishment of townships
the development tribunals encroach on the functional
area of
‘municipal planning’. The form that such encroachment
takes matters not”.
[17]
The counsel for the respondents referred to the case of
Simon
NO v Air Operations Europe AB & others
2
;
regarding
the test to be applied in determining the existence of a
prim
facie
right,
wherein it was stated at page 228:
"the
accepted test for a prima facie right in the context of an interim
interdict is to take the facts averred by the applicant,
together
with such facts set out by the respondent that are not or cannot be
disputed and to consider whether, having regard to
the inherent
probabilities the applicant should on those facts obtain final relief
at the trial. The facts set up in contradiction
by the respondent
should then be considered and, if serious doubt is thrown upon the
case of the applicant, he cannot succeed
[18]
The counsel further argued that the applicants have no right at all
because the agreement is unenforceable and there are no
prospects of
success in the main case to enforce the agreement. In support of the
above submission the counsel relied on the Constitutional
Court
decision of
Wary
Holdings (Pty) Ltd v Stalwo (Pty) Ltd and Another
3
,wherein
the validity and the enforceability of the sale agreement, on the
basis that the consent of the Minister of Agriculture
and Environment
was lacking was dealt with. The Minister maintained the provisions in
the Act to the effect that the land classified
as “agricultural
land” would retain that classification, whatever development in
local government structures had taken
place. Having regard to this
case the respondent’s counsel argued that the transaction
cannot be implemented as it cannot
be effected due the provisions of
Agricultural Land Act 70 of 1970.
[19] The counsel
further submitted that the court should weigh the prejudice the
applicant will suffer if the order is not granted
against the
prejudice the respondent will suffer. It is submitted that if the
prejudice that the applicant stands to suffer outweighs
the prejudice
that the respondent stands to suffer, the balance of convenience
favours interim relief. The assessment or evaluation
(of potential
prejudice) will also have regard to the applicant’s prospects
of success; the stronger the prospects of success,
the less the need
will be for the balance of convenience.
[20] The respondent
also argued that in assessing the requirement of irreparable harm,
the test is objective. Actual harm need not
be established. The
applicant will succeed if it can be established that the reasonable
man, confronted by the facts, would apprehend
the probability of
harm. In general, an applicant will not be entitled to an interdict
if he can obtain satisfactory redress through
an ordinary,
alternative remedy and, in particular, an award of damages.
[21]
The respondent’s counsel referred to
Kotze
v Min van Landbou
4
;
wherein
the honourable van der Westhuizen J considered whether ‘agricultural
land’ as defined in s 1 of the Agricultural
Land Act still
exists in view of the constitutional changes to the system of local
government in the context of category B and
C municipalities. The
honorable Judge found that the agricultural land is to mean what it
meant when the Act was enacted, despite
structural changes.
[22] Having regard
to the above the respondent’s counsel submitted that in respect
of prayer A namely; seeking to give transfer
of the property if
transaction is unenforceable the transfer logically fails. This
argument is misplaced, the validity of transaction
is before another
court in the case I mentioned above. What is before this court is the
application for interdict; not the case
to determine the
enforceability of the transaction and validity of the agreements.
[23] In respect of
prayer B, that of payment of R800. 000.00 the respondent argued that
the claim of the said amount does not require
protection by way of
interdict. The respondent’s submission is misdirected, the
payment of R800 000.00 is not in vacuum;
it finds place within the
applicant’s clear right arising out of a sale agreement, a
subject of this application.
[24] The counsel for
the respondent further argued that the only time the applicant can be
successful in obtaining interdict is
when the applicant’s right
are threatened, in this case the applicant’s rights are not
under threat as the land may
not be transferred, consequentially
there is no risk of the property in question being transferred. In
the event that the respondent’s
argument is valid I am taken
aback by the respondent’s action in opposing this application.
[25] The respondent
argued that the applicant has not instituted any review application
against the Municipality or the Minister.
The applicant has failed to
display any threat and therefore not making any case for interim
interdict. I disagree with the respondent’s
argument; a threat
exists as evidently advanced by the applicant. Furthermore the
Minister’s directive does not prohibit
the sale of the
agricultural land. There is a possible threat of the sale of the land
in question in its form by the respondent.The
respondent’s
counsel further argued that this court does not possess a wide
discretion if there is no right protected by
the interdict, therefore
the application must be dismissed with costs. As stated above
applicant has a clear right subject to protection
by law as this will
become clear in the discussion below.
THE LAW
[26] It is trite law
that for an interim interdict to succeed, an applicant must prove a
prima facie right; a reasonable apprehension
of irreparable injury or
harm, a balance of convenience that favours interim relief; and the
absence of a suitable alternative
remedy.
[27]
In
casu,
it
is not in dispute that—there is an agreement between the
parties and the applicant has fulfilled all conditions precedent.
I
find that the applicant has a prima facie and a clear right. I will
not deal with the validity of the agreements as it is not
necessary
to do so.
[28]
The law of interdict enjoins this court to consider the prejudice
that the applicant stands to suffer and whether it outweighs
the
prejudice that the respondent stands to suffer. In
casu
the
prejudice to be suffered by the applicant if the interdict is not
granted far outweighs the prejudice to be suffered by the
respondent
if the interdict is granted. The respondents may sell and or transfer
the land in its form; as nothing inhibits them
to do so. However if
the interdict is granted in favour of the applicants, the respondents
will not suffer any prejudice, because
on their own admission the
land is not transferrable.
[29] I also find
that there is no suitable remedy available to the applicant, this is
notwithstanding the respondent’s argument
that the applicant
may be awarded damages. It is not in the interests of justice to deny
the applicant the interim relief; having
regard that the claim for
damages could be a long drawn litigation process. At this stage it is
not open to the applicants to sell
or do anything about the land
except to occupy by agreement; as they are not the registered owners
currently.
[30] I am persuaded
that the applicant has satisfied the reasonable man test. Would a
reasonable man be apprehensive of the situation
the applicants find
themselves in? The answer is in the affirmative. The facts confronted
by the applicant as they are; that the
first respondent is the
registered owner of the property in question, there is no constraint
against the respondent to transfer
and or sell the same in its form
is enough for the applicant to apprehend harm.
I therefore make the
following order:
1. The first to
third respondents are interdicted from dealing with the immovable
property as described above; in any way whatsoever
and amongst
others:
1.1. not to transfer
the said property; and/or
1.2. not to encumber
the property with a further mortgage bond; and or
1.3. not to let any
right(s) of retention to be established over the property; and/or
1.4. not to sell or
lease the property
2. The order in
terms of paragraph 1 above shall serve as an interim order, pending
the final adjudication of the action instituted
against the first to
third respondents regarding the agreement concluded on 30
th
June 2009.
3. The fourth
respondent is ordered to register a caveat to the extent set out in
paragraph 1 and 2 above against the title deed
of the aforementioned
immovable property.
4.The First to Third
Respondents are ordered to pay the costs of this application.
MALI. AJ
ACTING JUDGE OF
THE HIGH COURT
APPEARANCES
Counsel for the
Applicants: Adv. N Davis SC
Instructed by:
Theron, Jordaan & Smith
Incorporated
Counsel for the
first to third Respondents: Adv. J Daniels
Instructed by:
Robert Coetzee Attorneys
Date heard: 12
February 2014
Date delivered:
09 May 2014
1
'
2010
(6) SA 182
2
:
1999
(1)SA 217 (SCA)
3
'2009 (1) SA 337
(CC) 2008
4
2003(1) SA 445 (T)