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[2014] ZAFSHC 113
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Mokoena v Minister of Agriculture, Forestry and Fisheries, Government of South Africa and Another (4293/2013) [2014] ZAFSHC 113 (31 July 2014)
IN THE HIGH
COURT OF SOUTH AFRICA
FREE STATE
DIVISION, BLOEMFONTEIN
Case
No: 4293/2013
In
the matter between:-
NTAU
LUCAS MOKOENA
….................................................................................................
Applicant
and
MINISTER
OF AGRICULTURE, FORESTRY AND
FISHERIES,
GOVERNMENT OF SOUTH AFRICA
…...........................................
First
Respondent
REGISTRAR
OF DEEDS, BLOEMFONTEIN
…................................................
Second
Respondent
JUDGMENT
BY:
VAN
DER MERWE, J
HEARD
ON:
19
JUNE 2014
DELIVERED
ON:
31
JULY 2014
[1]
On 27 October 1993 the remainder of the farm Kareelaagte 394,
district Bloemfontein, Province Free State, extent 647,6755 hectares
(the farm) was transferred to the national Department of Agriculture
(the department) in terms of Deed of Transfer T19072/1993.
The
first respondent is the Minister responsible for the department.
The question in this application is whether the applicant
has
obtained a right to transfer of the farm.
BACKGROUND
[2]
During 2002 the department published a request for applications by
emerging farmers to lease certain specified farms owned by
the State,
including the farm, with a view to eventual purchase thereof.
This formed part of the government’s Land
Redistribution for
Agricultural Development Programme. The applicant submitted an
application, was interviewed by officials
of the department and an
agreement was entered into between the applicant and the department
in terms of which the farm was let
to the applicant. The lease
was subsequently renewed on two occasions. The applicant was
then advised by officials
of the department that the Minister of
Public Works has approved the sale of the farm to the applicant for
the amount of R365 000,00.
The applicant says that he was
informed at the time that the farm had been valued for the amount of
R365 000,00 and this is
not denied by the first respondent.
[3]
Following hereon, a lease agreement in respect of the farm was
entered into between the “The Government of the Republic
of
South Africa through its department of Agriculture, Forestry and
Fisheries” and the applicant (the lease). Although
the
lease was signed on behalf of the lessor on 19 December 2011, its
duration was from 1 April 2011 to 31 March 2014. The
initial
rental in terms of the lease was the amount of R34 787,01 per annum,
with annual escalation of 10%. Clause 5 of the
lease provides:
“
The
purchaser is hereby granted an option to purchase the property for
the sum of R365 000,00 (THREE HUNDRED AND SIXTY FIVE
THOUSAND
RANDS) at any stage during the existence of this lease agreement.
Should the Lessee wish to exercise the option
it must give the lessor
three months of notice in writing of its intention. This option
to Purchase is subject to the provisions
contained in clause 46
hereto.”
Clause
46 deals with crops not yet harvested at the time of termination of
the lease. Clause 7 of the lease contains the rather
peculiar
provision that should the lessee exercise the option in terms with
clause 5, all rentals paid in terms of the lease are
to be deducted
from the purchase price.
[4]
Clauses 42, 44 and 45 of the lease provide as follows:
“
42.
Should the Lessee fail to pay rent on due date and fail to make
payment within 7 (seven) days or after a written request, then
the
Lessor shall be entitled to cancel the agreement, without prejudice
to any rights it may have in terms of this agreement or
the law in
general, to have the Lessee removed from the Property and to claim
compensation for any loss it may have suffered or
shall in future
suffer as well as rent in arrears or any amount due and payable.
43.
…
44.
Should any party fail to comply with any other term of the Agreement
and fail to rectify such breach within 14 days of a written
request
to do so, then the aggrieved party shall be entitled without
prejudice to any other right it may have to terminate this
agreement
forthwith and exercise any right it may have in law.
45.
Should the Lessee be in breach in terms of clauses 43, 44 or 45 the
option to purchase the Property contemplated in clause 5
above shall
immediately fall away and be of no force or effect.”
[5]
The applicant exercised this option by a letter dated 4 July 2012.
The applicant’s case is that a binding agreement
of sale of the
farm accordingly came into being. It is not disputed that the
option was properly exercised, if it was still
extant at the time.
Repeated requests by the applicant that the agreement of sale be
given effect to, were to no avail.
The applicant therefore in
essence now asks for an order that obliges the first respondent to
transfer the farm to him against
payment of the purchase price.
[6]
Only two grounds of opposition to the application were persisted in
before me on behalf of the first respondent. The first
is
alleged non-joinder of the Minister of Public Works and the Minister
of Rural Development and Land Reform. The second
is that the
option was terminated in terms of clause 45 of the lease.
NON-JOINDER
[7]
A court should not decide a matter without joinder of or due notice
to a party with a direct and substantial interest in the
outcome of
the litigation. In
Henri Viljoen (Pty) Ltd v Awerbuch
Brothers
1953 (2) SA 151
(O), this court said that a direct
and substantial interest means a legal interest in the subject-matter
of the action which could
be prejudicially affected by the judgment.
A commercial, financial, political or other indirect interest is not
a legal interest.
This judgment has been followed and applied
on numerous occasions, including by the Constitutional Court in
President of the RSA v South African Football Union
2000 (1) SA 1
(CC) para [233] at 102.
[8]
I accept that the farm comprises State land. Section 2 of the
State Land Disposal Act 48 of 1961 (the Act) provides that
the State
President may, subject to provisions not relevant here,
inter
alia
lease or sell State land on such
terms and conditions as he may deem fit. Section 6 of the Act
provides that the State President
may either generally or in regard
to specified State land or in a specified case assign to “the
Minister” any power
or duty conferred or imposed by him by
inter alia
section 2 of the Act. “Minister” is defined in the
Act as the Minister of Public Works, but in relation to a
provision
of the Act which applies to or is connected to any land transferred
to the Minister of Rural Development and Land Reform
in terms of
paragraph 1(e) of Proclamation No R.28 of 31 March 1992 or after 1
April 1992, means the latter Minister. The
farm was not
transferred to the Minister of Rural Development and Land Reform as
envisaged in this definition. It follows
that the power to sell
the farm to the applicant may only have been assigned to the Minister
of Public Works and not the Minister
of Rural Development and Land
Reform.
[9]
It is an admitted fact that during 2004 the Minister of Public Works
granted approval in terms of the Act for the letting with
an option
to purchase and the eventual sale of specified State-owned farms,
including the farm, to emerging farmers approved by
the department.
It must therefore be accepted that the power to lease and sell the
farm to the applicant was assigned to
the Minister of Public Works in
terms of the Act. The approval was based on the recommendation
of the then Minister of Agriculture
and Land Affairs. The
Department of Rural Development and Land Reform was established only
in 2009. Before this, the
Minister of Agriculture and Land
Affairs was responsible for rural development and land reform.
The approval was also subject
to certain conditions, but they are not
relevant here and are not relied upon by the first respondent. It
is clear that the
department approved the sale of the farm to the
applicant. The Minister of Public Works therefore has approved
what the applicant
seeks in this application. Any interest of
the Minister of Public Works cannot be prejudicially affected by the
judgment
in this matter.
[10]
In respect of the interest of the Minister of Rural Development and
Land Reform, counsel for the first respondent only relied
thereon
that internal government policy and procedure require “ministerial
concurrence” of the Minister of Rural Development
and Land
Reform for the sale of the farm. But clearly that is not a
legal interest.
TERMINATION
OF OPTION
[11]
The first respondent says that as at 31 December 2013 the rent
payable in terms of the lease was in arrears in the amount of
R131 692,81. The first respondent made a written request
for payment thereof. The applicant denies that the rent
was in
arrears and says that he subsequently in any event paid the said
amount to the first respondent, without prejudice to his
rights and
simply to avoid an ancillary dispute. For purposes of these
motion proceedings the version of the first respondent
must however
be accepted.
[12]
The first difficulty with the first respondent’s contention
that the option was terminated in terms of clause 45 of the
lease, is
that clause 42 thereof, which deals with failure to pay rent, is not
referred to in clause 45. On this basis clause
45 cannot be
involved in respect of failure to pay rent. This may or may not
have been a mistake in the drafting of the lease,
but the first
respondent does not rely on rectification of the lease. The
second difficulty is one of timing. Assuming
that clause 44 is
applicable, the option would become of no force or effect should the
applicant be in breach of clause 44, that
is on failure to rectify
the breach within 14 days of a written request to do so. The
written request relied upon by the
first respondent was made in
December 2013, long after the option was exercised and even after the
application was launched during
October 2013.
[13]
It follows that the first respondent is bound by the agreement of
sale of the farm that was entered into when the applicant
exercised
the option contained in the lease and that the applicant is entitled
to an appropriate order to enforce compliance therewith
against
payment of the purchase price. In this regard the applicant
specifically elected not to rely on clause 7 of the lease
and tenders
to pay the full agreed purchase price or R365 000,00. I am
therefore prepared to grant the order prayed
for in the amended
notice of motion.
[14]
In the result the following order is made:
1.
It is declared
that the applicant validly exercised the written option to purchase
the farm known as remainder of the farm Kareelaagte
394, district
Bloemfontein, Province Free State, held by the first respondent under
Title Deed No T19072/1993, contained in the
lease agreement concluded
between the applicant and the Department of Agriculture, Forestry and
Fisheries (the department) dated
19 December 2011 and that a valid
and binding deed of sale came into existence between the applicant
and the department for sale
of the farm for the amount of
R365 000,00.
2.
The first
respondent is ordered to, within 30 days of the date of this order,
take all necessary steps and sign all necessary documents
in order to
ensure that the property is transferred into the name of the
applicant as soon as reasonably possible after the applicant
has paid
the purchase price of R365 000,00 or has provided an appropriate
guarantee for payment thereof.
3.
In the event
of the first respondent failing to comply with the order contained in
paragraph 2 of above, the registrar of this court
is authorised to do
all things necessary and sign all documents in order to ensure that
the property is transferred into the name
of the applicant upon
payment of the purchase price of R365 000,00 or provision of an
appropriate guarantee for payment thereof.
4.
The second
respondent is authorised to register the property in the name of the
applicant pursuant to the steps contemplated in
paragraphs 2 or 3
above.
5.
The first
respondent is ordered to pay costs of this application.
_________________________
C.
H. G. VAN DER MERWE, J
On
behalf of applicant: Adv. M. C. Louw
Instructed
by:
Kramer,
Weihmann & Joubert
BLOEMFONTEIN
On
behalf of first respondent: Adv. B. S. Mene
Instructed
by:
State
Attorney
BLOEMFONTEIN