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[2014] ZAGPPHC 495
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Commission on Restitution of Land Rights v Knoetze (A75/13) [2014] ZAGPPHC 495 (13 June 2014)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
Case Number: A 75/13
Date: 13 June 2014
In the matter
between
COMMISSION ON
RESTITUTION OF LAND
RIGHTS
............................................................
Appellant
and
GERHARDUS
THEODORUS
KNOETZE
..................................................................................
Respondent
JUDGMENT
BAM J
1. In February 2007
the appellant issued summons against the respondent. In summary the
action turned upon the question whether
certain property, was
included in the written sale agreement between the parties in terms
of which the appellant purchased a farm
from the respondent. The
appellant's case was that the property in question, a dehusking
plant, used in the final production of
nuts, was included in the
agreement. The respondent disagreed and instituted several
counterclaims, which, during the trial were
separated in terms of
Rule 33(4).
2. The trial
pertaining to the appellant's claims started in October 2011.
On
30 April 2012 the court
a
quo
,
Ebersohn A J presiding, dismissed the appellant's claims with costs.
3. Leave to appeal
was refused by the trial court but subsequently granted by the
Supreme Court of Appeal.
4. The respondent
was the owner of a farm, measuring 158 hectares, in the Levubu area
of Limpopo, where he produced Macadamla nuts
on a commercial scale.
The respondent sold the farm to the appellant for R15M.
5. It was common
cause that an evaluator, Mr Kapp, evaluated the property on two
separate occasions.
The first
evaluation, (Exh C, Vol 5 p463), was done on 20 August 2002 on
request by the appellant to determine the open market value.
(This
evaluation was however later updated and signed by Mr Kapp on 24
November 2003.)
The second
evaluation, (Exhibit D, Vol 5 p478), was done on 24 February 2003
upon request by the respondent for the purposes of
Capital Gain Tax.
6. On both occasions
the property was valued at R15M and on both occasions Mr Kapp
regarded the dehusking plant immovable property.
The value of the
plant, R4,5M, was included in the valuation of the farm.
7. On 3 March 2003
the appellant made a written offer to the respondent to purchase the
farm for R15M and on 19 March 2003 the offer
was accepted by the
respondent. The written agreement of sale was entered into in
September 2005.
8. In 2006 a dispute
arose between the parties regarding the question whether the
dehusking plant was part of the immovable property
on the farm, and
whether it had been included in the sale agreement.
9. It was not in
dispute that the dehusking plant was installed by the respondent in a
shed on the farm and that it consisted of
several parts. The parts
obviously varied in size and structure, and included, amongst others,
electric motors, containers, conveyer
belts and the mechanism devised
for removing the shells. It was also not disputed that the plant was
assembled by the respondent
and that it was in use and functioning at
the time of the purchase of the property.
10.lt was the
appellant's case that the dehusking plant, was included in the
selling price of R15M. On the other hand it was the
respondent's case
that all along he had in mind that the plant was movable property and
that it was not included in the selling
price.
11.The latter issue
was the main point of dispute between the parties
12. On this basis
the matter was argued before us by Adv Notshe SC, assisted by Adv
Seneke, on behalf of the appellant, and Adv
Coetzee, representing the
respondent.
13.The
trial court, in considering whether the plant was immovable property
or not, referred to the law as stated in
Pettersen
and Others v Sorvaag
1955
(3) SA 624
(A). In this case the considerations, (referred to as
elements by the trial court), to be taken into account were
formulated and
discussed.
They are the
following:
(i) The nature of
the thing annexed;
(iii) The degree and
nature of its annexation; and
(iii) The intention
of the party annexing it.
14.This
was confirmed in
Konstanz
Properties (Pty) Ltd v WM Spilhaus en Kie (WP) Bpk
1996(3)
SA 273 AD, in which case it was stated that the issue, when movable
property becomes a fixture, depends on the circumstances
of the case.
15. In the latter
case, at 281 B-C, it was added that pertaining to the first
consideration, emphasis should be put on the assimilation
of the
movable property to the immovable property, and in regards to the
second consideration, with emphasis on the integration
of the movable
property with the immovable property as well as the removability of
the movable property, without causing damage
to any of the two. And
in regards to the third consideration, with emphasis on whether the
attachment was intended to be permanent.
16.ln regards to the
first consideration it was clear that the plant was used in the
process of the final stages of preparing macadamia
nuts for the
market. In my view there cannot be any doubt that it formed part and
parcel of the business venture on the farm.
17.With reference to
the terms of the agreement, the trial court pointed out that the
agreement did not describe the property as
a running concern, but
instead, referred only to the farm and not the farming activities.
This remark was, with respect, clearly
sound and correct. However, in
my opinion, there is much to say for the appellant's contention that
the farm was purchased for
the specific purpose to continue with the
production of macadamia nuts. In that regard the farm was clearly a
running concern.
What is therefore important is that at all relevant
times, including the time the property was evaluated before the
respondents
made the tender to purchase the farm, it was surely
within the contemplation of the parties that the farming on the
property as
a business venture, would proceed as before. It was even
agreed upon that the respondent would remain on the farm for a
certain
period with the intention to see to it that the nut
production continue.
18. Accordingly, in
my view, it was clear that in so far as the nature of the plant is
concerned, although it was constructed and
assembled from different
and separate parts, it was installed with the sole purpose to be part
of the process to produce nuts to
the market, (n this regard, I find
it impossible, in principle, to distinguish between the water pumps
on the farm used for irrigation
of the macadamia trees, which were
included in the sale, and the dehusking plant.
19.In
respect of the second consideration, although it was disputed by the
appellant that the plant was movable and that it could
be
disassembled and removed from the shed without damaging the structure
of the shed, it appears from the oral evidence, including
the
evidential material contained in the notes of the inspection
in
loco
held
during the trial, that it stands to reason that the plant could
indeed be disassembled and that the parts could be removed
separately. It was in any event initially assembled by the respondent
in this way. The trial court's finding that the nature of
the plant
was such that it could be removed, in my view, cannot be faulted.
20.ln respect of the
third issue, which seems to be the main issue in dispute, namely
whether it was the intention of the respondent
to affix the plant
permanently, and whether it should have been regarded as immovable or
movable, it was argued by Mr Coetzee that
the appellant's version
that he subjectively had it in mind to remove and relocate the
dehusking plant, was not contested.
21.lt was further
pointed out by Mr Coetzee that it was common cause that it was
already published in 2001 in the Government Gazette
that the farm was
subject to a land claim, and that the respondent, realising that he
was not entitled to develop the property
any further without notice,
and that he would not be compensated for further developments, still
proceeded to install the plant.
That proved, submitted Mr Coetzee,
that the respondent never intended the plant to be regarded as
immovable property and that it
should not be included in the sale
agreement.
22.The trial judge
considered the evidence and the submissions made by counsel and made
certain credibility findings in favour of
the respondent. In this
regard it is trite that a court of appeal will not lightly interfere
with a trial court's finding. This
court will however be entitled to
interfere in the event of the trial court having erred materially or
misdirected itself.
See
Kunz v Swart and
Others
1924
A.D. 618
at 655;
"And
if we are satisfied that the judge in the Court Below came to a wrong
decision on the facts we should not shrink away
from overruling him
.
But before doing
that we must be quite satisfied that he was wrong;"
23.The trial court,
amongst others, found that the respondent was a credible and honest
witness.
In this respect the
trial court's findings included the acceptance of the respondent's
evidence that he, at all relevant times,
intended to eventually
remove the dehusking plant, and that it should accordingly not have
been regarded as immovable property.
The trial court also
concluded that the fact that the plant was assembled after the
publishing in the Government Gazette of a land
claim on the property,
substantiated the respondent's contention that he intended the plant
not to be regarded as immovable property.
24. Unfortunately I
am unable to agree with the finding of the trial court. In arriving
at my conclusion the following aspects were
regarded as relevant:
(i) It was common
cause that the Mr Kapp, the evaluator who evaluated the farm in the
beginning of 2002 and in 2003, regarded the
plant as immovable
property.
(ii) It was further
not disputed that the respondent installed the plant subsequent to
the notice in the Government Gazette, in
order to continue with the
production of nuts, which apparently was in full swing at the time of
Mr Kapp's evaluation.
(iii) The farm was
evaluated for R15M, the amount eventually agreed upon as the selling
price. According to Mr Kapp's evaluation
the R15M included the amount
of R4,5M, the value of the dehusking plant.
(iv) The respondent
was aware that Mr Kapp was mandated to evaluate the property on
instructions by the appellant for purposes to
enable the appellant to
make an offer to the respondent to purchase the property.
(v) The respondent,
on his own version, refrained from informing Mr Kapp that the plant
should not be regarded, or evaluated, as
immovable property, and that
it should not be included in the evaluation of the property. In this
regard the evidence of the respondent
at the trial, when questioned
by his counsel, is very instructive and, for the purpose of this
judgment, need to be referred to:
(Record Vol
4, Page
410)
(Questions put by Mr Coetzee, respondent's counsel.)
"Did
you discuss the question whether the dehusking piant was to be
included or excluded from the evaluation? No, M'Lord we
did not
,
he wants to make
up his own mind, what was fixed items and what is not."
(vi) In view of the
respondent's contention that, at ail relevant times, he thought that
the dehusking plant was movable property,
it is peculiar, and not
explained by the respondent, why he decided not to inform Mr Kapp
immediately that the plant is movable
property and that it had to be
excluded from the agreement. During the trial it appeared that the
respondent blamed Mr Kapp for
not having informed him after the
evaluation that the plant was regarded as immovable property. This is
untenable.
(v) If the
respondent's version was true, it stands to reason, in my view, that
he would have been very concerned that his valuable
movable property
of R4,5M, should not be regarded as immovable property, and that he
surely would have alerted Mr Kapp accordingly.
(vi) I cannot for
one moment imagine that any person concerned about such valuable
movable property would have hesitated to tell
anybody concerned, what
he had in mind pertaining to it.
(vii)What, in my
opinion, further counts against the respondent's version is that he
did not communicate with Mr Kapp after the
evaluation at all, in
order, as one would have expected him to do, to find out what Mr Kapp
considered to be immovable property.
(viii)lt is further
also remarkable that at no stage, before, or even at the time, of
signing of the agreement, did the respondent
raise any concerns about
the valuation of the plant with the appellant's officers, neither did
he inform them that the dehusking
plant should not be included in the
agreement.
(ix) Although Mr
Coetzee, during cross examination of Mr Nkatingi made a lot about the
appellant's failure to state in the tender
of 3 March 2004 (page 273)
that the dehusking plant was included, it is remarkable that the
respondent, in accepting the offer
in his letter of acceptance dated
19 March 2004 (page 274), did not state in that letter that the plant
was not included, well
knowing at the time that Mr Kapp, on the
respondent's own version, had indicated that he wanted to make up his
own mind in that
regard.
(x)The argument of
Mr Coetzee that the respondent's conduct, in proceeding to install
the plant and thereby developing the farm
further, well knowing that
he was not entitled to do so, without notice to the appellant,
further substantiated the respondent's
contention that he did not
intend to sell the plant as an immovable and part of the farm, loses
sight of the circumstances and
that the respondent did absolutely
nothing to exclude the plant from the agreement.
(xi)What is further
a remarkable coincidence, according to the respondent's version, is
that the respondent's evaluation of the
plant corresponds, to the
Rand, with Mr Kapp's evaluation of R4,5M.
(xii)Although the
respondent in his evidence in chief denied that Mr Kapp had asked him
about the value of the plant, the following
was recorded when Mr Kapp
was cross-examined Mr Coetzee: (Vol.3 page 263-4)
"...
I want to make the following two statements to you
,
the first is, and
your valuation does not seem to be the one that you relied on very
heavily
,
for two reasons.
Firstly, you did not value the plant; you simply asked Mr Knoetze how
much it cost him. Secondly, when you were
asked to adjust the value,
you simply did so."
To
this proposition Mr Kapp answered that he, independently did some
research and that he was satisfied with the figure supplied
by the
respondent. Any "
coincidence"
that
Mr Kapp could have evaluated the plant without the contribution by
the respondent, seems to be unfounded. There cannot be any
other
reasonable finding in this regard but that the said figure was indeed
furnished by the respondent and that Mr Kapp's version
was the truth.
(xiii)During
argument before this Court, Mr Coetsee was unable to make any
submissions pertaining to the question how and in what
way the
respondent "
protected"
the,
on his version, movable dehusking plant from the time of installation
until the dispute arose.
25. At the trial the
respondent was unable to furnish any proof of the expenses he
incurred with the installation of the plant.
This, in my view, is a
matter of concern, especially in view of the fact that the
respondent, as alluded to above, installed the
plant well knowing
that he was not entitled to do so, and, as submitted by Mr Coetsee,
well knowing that he would not be compensated
by the appellant.
26.lt
follows that the whole situation leaves one with the uncomfortable
feeling that the respondent, in installing the dehusking
plant,
endeavoured to enhance the price of his farm, and that he belatedly
and in an opportunistic way pretended that he always
"
thought"
to
exclude the plant from the sale agreement.
27. Accordingly, in
my view the trial court erred in dismissing the appellant's claims. I
therefore suggest that the appeal should
succeed with costs, and that
the order of the trial court should be set aside. The order I
propose, entailing that the dehusking
plant was included in the sale,
corresponds with the appellant's first prayer. In my view the order
would be a resolution of the
whole problem.
Order
A. The appeal
succeeds to the extent as indicated in Part B. The respondent is
ordered to pay the costs of the appeal, including
the costs of two
counsel.
B. The order of the
trial court is substituted by the following:
1. It is declared
that the dehusking plant is included in the contract between the
parties, entered into in September 2005.
2. The respondent is
ordered to pay the costs.
A J BAM
JUDGE OF THE HIGH
COURT
I agreed
S STRAUSS
ACTING JUDGE OF THE
HIGH COURT
I agree, and it is
so ordered.
TM MASIPA
JUDGE OF THE HIGH
COURT
Appearances:
For the Appellant:
Adv Notshe SC and Adv Seneke.
For the Respondent:
Adv Coetsee.
Date of Hearing: 11
June 2014
Date of Judgment: 13
June 2014