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[2014] ZAGPPHC 313
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Colledge N.O and Others v Olifants North Game Reserve Share Block Limited (36878/2013) [2014] ZAGPPHC 313 (4 June 2014)
IN THE HIGH COURT
OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
Case
Number: 36878/2013
DATE:04
JUNE 2014
In the matter
between:
RICHARD JOHN
COLLEDGE N.
O
....................................................
FIRST
APPLICANT
DANIEL JOHN
COLLEDGE N. O
..................................................
SECOND
APPLICANT
SHELLEY MARY
COLLEDGE N. O.
................................................
THIRD
APPLICANT
(IN THEIR
CAPACITIES AS DULY APPOINTED
TRUSTEES OF THE
MONTEREY TRUST IT 1232/1997)
And
OLIFANTS NORTH
GAME RESERVE
SHARE BLOCK
LIMITED
….................................................................
RESPONDENT
JUDGMENT
Fabricius J,
1.
In this application,
the three Applicants in their capacities as appointed Trustees of the
Monterey Trust seek the following order:
a. “Confirming
the Applicants’ right to demand the permanent closure of Ebony
Road (in a Game Reserve known as Olifants
North Game Reserve);
b. Compelling the
Respondent to close Ebony Road permanently to all vehicles, save in
cases of emergency.”
The whole
application is comprised of some 380 pages, but it is my intention to
give only a summary of the essential facts.
2.
The Respondent is
the registered owner of the farm on which it conducts the business of
a game reserve. The Share Blocks Control
Act 59 of 1980 is applicable
as is the Respondent’s Memorandum and Articles of Association.
The Respondent acts through a
board of directors appointed in
accordance with these mentioned Regulations, if I can call them that
for present purposes. It is
stated in the Founding Affidavit that the
Board is, inter alia, in terms of the Respondent’s Memorandum
and Articles of Association,
entitled to make, vary or rescind
Regulations governing the use of the Respondent’s property.
3.
Before I commence
with the tale, it would be convenient to refer to certain applicable
provisions regulating the use of the various
members’ rights
and obligations:
3.1
S. 16 of the Share
Blocks Control Act reads as follows:
“The contract
for the acquisition of a share and a use agreement entered into and
any amendment of cession of any such contract
or agreement, after the
commencement of this Act, shall be reduced to writing and signed by
the parties thereto or by their representatives
acting on their
written authority, failing which the contract, agreement, amendment
or cession, as the case may be, shall, subject
to the provisions of
s. 18, be of no force or effect.”
In terms of the
Share Block Scheme, shareholders had a right to build a lodge/private
house at a certain indicated position. Their
rights were contained in
Use Agreement. The Use Agreement made provision for “Reserved
Areas” which “shall mean
portions of the Common Areas,
included selected roads, designated by the Directors from time to
time into which entry by Users
is prohibited at all times or during
certain hours as provided in 21.2.” Clause 21 is headed Rules
and Regulations and provided
the following:
“21.1 The
Members agree that the Directors shall be entitled at all times to
lay down terms and conditions governing the use
and enjoyment of the
Property generally, including those matters described in clause 16,
provided that such terms and conditions
do not override the terms of
this Agreement.
21.2 In particular
the Members agree that the Directors shall be entitled from time to
time to designate Reserved Areas which may
include, but are not
limited to, staff houses and gardens, staff villages, workshops,
storerooms, electricity substations, pump
and borehole installations
and the like and, ecologically sensitive areas, sensitive animal
breeding areas and areas where traversing
will adversely affect the
privacy of Units or units on neighbouring farms.”
According to clause
29, disputes arising out of or in connection with the Use Agreement
would be referred to private arbitration,
except where an interdict
was sought from a Court of competent jurisdiction.
4.
During 2006 a Mr
John Platter, a Trustee of the Bila Shaka Trust constructed a lodge
which was referred to in these affidavits as
a Unit 4. The present
Applicants, as Trustees of the Monterey Trust, later acquired this
unit. I was told during argument that
Mr Platter knew something about
the enjoyment of wines, and, no doubt keeping in mind the terrible
winter conditions that the Cape
Province experiences regularly and
without fail, probably (I presume) decided to enjoy his wines during
the mild, warmy, calm and
quiet winter months of the Limpopo
Province. He was however sadly surprised and disappointed by the lack
of privacy of Unit 4,
inasmuch as it was too close to Ebony Road. Mr
Platter did not say in his confirmatory affidavit exactly what
disturbed him the
most in this context, but in any event, the owners
of the various units could over many years not resolve the conflict
that arose
about the lack of privacy experienced by an occupant of
Unit 4. Mr Platter then at some stage, fed up with all the
disappointment
and strife that he did not expect (I presume) sold his
share to the Monterey Trust and left for other pastures. I was not
told
where he ultimately found the peace and quiet that he could not
experience in this wonderful area which is close to the Timbavati
and
Klaserie Reserves.
5.
Applicants, in the
founding affidavit, relied on an Agreement of Sale of Shares which in
Clause 5 contained a Resolutive Condition
which stated that the sale
was subject to the condition that should the Directors of the Company
refuse to issue an undertaking
to the Purchaser by 17 February 2006,
which had to read as follows:
“Duly
instructed by the Board I wish to confirm that the choice as to
whether Ebony Road is permanently closed or utilized
temporarily and
under strict conditions, lies with the owner of Site 4. At the moment
the Platters, the current owners of Site
4, have agreed that on a
strictly temporary basis, other owners may use Ebony Road, except
when they are in residence. It is confirmed
that if you, as the new
owner of Site 4, wish to alter that arrangement so that access is
limited further or even permanently,
that decision is at your
discretion and will be enforced by the Board”, the Agreement
would be of no force and effect. In
the answering affidavit, the
Respondent points out that this Agreement was amended during February
2006 by the deletion of clause
5.2.3. Respondents therefore deny that
when Mr Platter took occupation, he did so with the full knowledge
and understanding that
the Ebony Road would be closed permanently
once Unit 4 was occupant by him, which Applicants referred to in the
founding affidavit
as “the initial arrangement”. It was
stated however that Mr Platter took occupation during about October
2003 and that
Ebony Road was closed and remained closed till the end
of 2004. The exact date of occupation is disputed, but in any event
the
Respondent says that there was no valid agreement as required by
the applicable Regulations that the occupant of Unit 4 could demand
closure of Ebony Road. In the founding affidavit, it is then alleged
that there was a further “temporary arrangement”
in that
Mr Platter offered to re-open Ebony Road mainly because another road,
for unknown reasons called “Rocky Horror”
was upgraded by
Respondent, and could be used by other owners. It is also stated by
the Applicants that had the right to demand
closure of Ebony Road not
being transferred to the Monterey Trust, it would not have purchased
the relevant shares giving rights
to Unit number 4. Further, in the
founding affidavit, the Applicants then referred to an “extended
temporary arrangement”.
6.
Applicants then gave
further details about what do they refer to as an “extended
temporary arrangement”. In this context
they relied on a letter
written by Respondent to first Applicant dated 20 February 2006. It
reads as follows: “Duly instructed
by the Board, I wish to
confirm that the current owners of Site 4 have agreed that other
owners may use Ebony Road under strict
conditions agreed by the
Board, except when they are in residence. It is acknowledged that if
you wish to alter these arrangements
it would need to be agreed by
the Board. Should a satisfactory agreement not be reached you may
instruct the Board to close Ebony
Road. You acknowledge that should
you instruct the Board to close Ebony Road it will be closed to Site
4 as well. The Board records
that in terms of the Use Agreement it
has the right to close any road to all members at its discretion.”
The last mentioned
sentence is of course what the Respondent regards
as being the crux of the case, quite apart from the provisions of s.
16 of the
Share Blocks Control Act. Applicants then continued to say
in the founding affidavit that the Ebony Road remained a contentious
issue and having given details of all types of unpleasant
occurrences, this harmony and strife, Applicants say that they
accepted
the “offer” of 20 February 2006 by way of a
letter to Respondent dated 29 September 2011. They referred to
certain
temporary arrangements that had been in place from time to
time, and advised that any such arrangement as in place at the time
was not workable and was of such a nature that the patience of the
Trust had worn thin. Accordingly, and having set out the background
of the various arrangements in place from time to time, they said the
following in par. 6 of this letter: “6.In the circumstances
we
are instructed to advise you, as we hereby do, that:
6.1
Unless a viable and
generally acceptable alternative to the arrangement is achieved
within 45 days of the date of this letter;
6.2
Our client requires
that Ebony Road be closed to all members of Olifants, their guests
and invitees, permanently.”
On behalf of the
Applicants I was told that this letter was in fact an acceptance of
the offer made on 20 February 2006. Respondent
in turn argued that if
such an offer had been made, which it did not admit at all, it was
not accepted within a reasonable time,
the ostensible acceptance
being some five and a half years later. I agree with that contention.
It is in any event also abundantly
clear from this letter that even
the Applicants did not regard any previous “arrangement”
as having been of a contractual
nature binding between the parties.
This is abundantly clear from the letter of 29 September 2011 where
they repeatedly referred
to arrangements only, and certainly no
binding duties and obligations between the parties. If however the
letter of 20 February
2006 could be construed as an offer, which I do
not agree that it did, there was no unequivocal acceptance in any
event as is abundantly
clear from the terms of clause 6 that I have
quoted. It is a clear counter-demand.
See: Christie’s:
The Law of Contract in South Africa – 6th edition at page 52
(f).
Respondent’s
argument in this context was also, and in any event, that neither the
letter of 20 February 2006, nor the reply
thereto dated 29 September
2011, amounted to a written agreement such as was required by the
provisions of s. 16 of the Share Blocks
Control Act. Furthermore,
there was no allegation anywhere in the affidavits that the relevant
representatives had acted on the
written authority of the parties.
Accordingly, and quite apart from any other argument, any
correspondence between the parties
about Ebony Road, its closure and
any arrangement in regard to thereto, was not a written agreement as
required by the Act. I agree
with this contention and it follows from
the clear wording of the Act itself.
In any event, it is
also clear that Respondent did not regard itself as even having been
a party to any such written agreement and
on 20 March 2012 it adopted
the following resolution: “Ebony Road will remain open at all
times provided that no one is in
residence at Unit 4. Should someone
be in residence at Unit 4, Ebony Road will be closed to all persons
including the residents
of Unit 4. No other unit will be granted the
right to close any road while they are in residence or at any other
time.” Respondents
of course relied on their discretion given
to them in the mentioned Use Agreement. Applicants in turn said that
this resolution
by the Board amounted to a unilateral fundamental
amendment to the Ebony “alternative”. No Trustees of the
Monterey
Trust were given notice of this resolution or given an
opportunity to comment on it. There was no application before me to
have
this resolution set aside on the basis of some or other unlawful
conduct by the Board.
As far as the
interdict that was sought was concerned the Applicants said in the
founding affidavit that they have, as they were
entitled to do,
demanded permanent closure of Ebony Road. This road has not been
closed by Respondent. The right of the Applicants
to demand the
closure of this road has never been disputed by the Respondent, the
Board and the members of the Respondent. In the
circumstances they
say there was at least one ground upon which the Applicants were
entitled to the order that they sought and
this was said to be the
following: “The agreement between the Bila Shaka Trust and the
Board, alternatively Olifants North
Development Company (Pty) Ltd
created a right to demand the permanent closure of Ebony Road, which
right was transferred/ceded
by the Bila Shaka Trust to the Monterey
Trust. As aforesaid, the right was subsequently confirmed, and never
disputed, by the Respondent,
the Board and the members of the
Respondent.” Accordingly they said they were entitled to a
final mandatory interdict.
I have already
referred to Respondent’s defence regarding its discretion in
terms of the Use Agreement and also the provisions
of s. 16 of the
Share Blocks Control Act. Having been confronted with that in the
answering affidavit, the Applicants in the replying
affidavit then
said the following (there was some debate as to when exactly Mr
Platter had taken occupation): “The exact
timing of when Mr
Platter took occupation of the property is, in any event, irrelevant
to the issues before this … Court.
The Applicant’s right
to demand the closure of Ebony Road does not rely on the rights held
by its predecessor in title but
is based on an independent
undertaking given by the Board of Directors of the Respondent and
recorded in Annexure RJC25 to my founding
affidavit.” This is
the mentioned letter of 20 February 2006. They also relied on the
doctrine of estoppel on the basis that
the Applicants had concluded
the Sale Agreement having accepted or relied upon the undertaking by
the Respondent that they could
demand closure of the road. They say
in the replying affidavit that their case is in fact that when the
Monterey Trust acquired
Unit 4, it acquired the right to demand
permanent closure of the road known as Ebony Road. They have demanded
this closure and
Respondent has refused to do so. Accordingly they
seek the mandatory interdict. It is clear from the wording of the
replying affidavit
that Applicants no longer rely on, any initial
temporary or extended “arrangement”. I have referred to
what Respondent
relies on and I agree with its contentions. I also
agree with the argument that Applicants cannot rely on the estoppel
issue inasmuch
as any such representation would have been contrary to
the specific provisions of s. 16 of the Share Blocks Control Act.
Further
objection was that they also made out their ultimate case
only in the replying affidavit. I agree that it is clear from this
affidavit
that Applicants rely upon a specific right acquired at a
specific time. Contrary to all the allegations in the founding
affidavit
they no longer relied on any “arrangement” that
may or may not have been in place from time to time over the years.
As I have said, and in any event, Respondent argued that the terms
and conditions of an owner’s occupancy rights are to be
contained in the Use Agreement between the Company and the member
according to s. 16 of the mentioned Act. The legislature obviously
sought to sharply delineate, as between the shareholder and the
Company, the precise ambit of usage rights. It was argued that
the
Act thereby forged an inseverable link between block shareholding and
occupancy rights, which was confirmed by the Scheme’s
documentation. The purpose of the Use Agreement was therefore to
specify the exact terms and conditions of such occupancy rights.
It
was for that reason, that pursuant to s. 16 of the mentioned Act such
Agreement had to be in writing and signed by the parties
or their
representatives acting on written authority. Accordingly it was
contended that having regard to the abovementioned considerations,
Applicant had not made out a case for any clear right in respect of
the interdict sought. I agree with Respondent’s mentioned
arguments.
Upon reading the
affidavits and all the annexures, I deemed it a pity that the
Applicants have sought to have recourse to this Court.
It is of
course their good right to do so, but it is also patently obvious to
me that whatever decision I would give in this case
would not result
in any harmonious relationship between the parties in the context of
whether the road should be closed or not
and under which
circumstances. They ought to perhaps have considered alternatives,
such as the upgrading of the despised “Rocky
Horror” Road
or even the permanent closure of Unit 4 by way of an offer to the
owners. That may have been a drastic step
but it would have solved
all their problems permanently. Be that as it may, a wise
referee/mediator would probably have been of
some assistance.
Applicants however
did have the right to approach this Court and it is my duty to make a
judgment according to law, and not be concerned
at all with what I
would have done or recommended in the place of the parties.
It is my judgment
that Applicants have not established a clear right in the present
context and accordingly I order that the application
be dismissed
with costs.
JUDGE H.J
FABRICIUS
JUDGE OF THE
NORTH GAUTENG HIGH COURT
Case no.:
36878/2013
Counsel for the
Applicants: Adv R. D. McClarty SC
Instructed
by: Bowman Gilfillan Attorneys
Counsel for the
Respondent: Adv T. O’Hannessian
Adv L. T.
Leballo
Instructed
by: Turner Douglas Attorneys
Heard on:
13/05/2014
Date of Judgment:
04/06/2014 at 10:00