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[2011] ZAFSHC 160
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Greg & Son Enterprises CC v Occupier of Eastern Section, Greg & Son Enterprises, Selbourne Lane, Kroonstad (1785/2011) [2011] ZAFSHC 160 (22 September 2011)
FREE
STATE HIGH COURT, BLOEMFONTEIN
REPUBLIC
OF SOUTH AFRICA
Case No. : 1785/2011
In
the matter between:-
GREG
& SON ENTERPRISES CC
...........................................
Applicant
and
OCCUPIER
OF EASTERN SECTION, GREG
&
SONS BUILDING, SELBOURNE LANE,
KROONSTAD
…...................................................................
Respondent
_______________________________________________________
JUDGMENT BY:
MUSI, JP
_______________________________________________________
HEARD ON:
23 JUNE 2011
_______________________________________________________
DELIVERED ON:
22 SEPTEMBER 2011
_______________________________________________________
[1]
These are eviction proceedings brought by way of motion. The
applicant seeks an eviction order against the “occupier of
the
Eastern Section, Greg & Son Building, Selbourne Lane, Kroonstad”
(the “premises”). It turns out that
the occupier of the
premises is Kroonstad Good-Life Supermarket, a duly registered close
corporation which is represented in these
proceedings by its manager,
Mr Qiang Lin (Lin). It is the respondent in these proceedings. The
applicant is also a duly registered
close corporation which is
represented in these proceedings by its sole member, Mr Gregorios
Papapanos (Papapanos).
[2]
The applicant’s case is that the respondent is occupying the
premises unlawfully in that it conducts business there without
the
permission of the owner. But the applicant does not stop there. It
goes on to disclose that the respondent purports to be occupying
the
premises in terms of an alleged right obtained from Divine Heights
CC, which claims to have the right to let the premises.
The applicant
further discloses that a deed of sale was concluded between it and
Divine Heights, in terms of which the premises
were sold to Divine
Heights but claims that such contract is invalid. Since the
respondent relies on the very lease and sale, the
onus
shifts
to the applicant to show that the respondent has no valid grounds to
occupy the premises. See
MYAKA v HAVERMANN AND ANOTHER
1948 (3) SA 457
(AD) at 465;
CHETTY v NAIDOO
1974 (3)
SA 13
(AD) at 23. I shall revert to this issue in due course.
[3]
The following facts are either common cause or undisputed:
3.1
That the applicant is the registered owner of the premises;
3.2
That on 14 February 2005 the applicant concluded a deed of sale with
Divine Heights CC, whose sole member is Mr Fayyaaz Ismail
Seedat
(Seedat) in terms of which the applicant sold the premises to Divine
Hights for an amount R650 000,00; that this purchase
price was paid
in full into the trust account of the applicant’s then
attorney, Mr Deon Jacques Gresse of the firm Grimbeeck
Van Rooyen and
Partners of Kroonstad but that the premises has not been transferred
to Divine Heights CC.
3.3
That the deed of sale is presently the subject of a dispute between
the contractants, which is pending in this court under case
number
1844/2001, wherein Divine Heights CC seeks an order declaring the
deed of sale to be valid and transfer all the premises
to itself.
3.4
That the respondent and Seedat concluded a lease agreement on 23
October 2009 for a five years period with effect from 1 November
2009
in terms of which the respondent occupies the premises and conducts
business thereon. (Copy of the lease is annexed to the
respondent’s
answering affidavit and marked “B”.)
[4]
In opposing the application, the respondent relies on the lease
aforesaid. Its deponent, Lin, states in the answering affidavit
that
prior to the respondent taking occupation, the premises had been
occupied by Nungu (Pty) Ltd t/a Kroonstad Frozen Foods of
a period of
5 years and that the latter had also rented the premises from Seedat.
He goes on to say that the respondent has been
conducting business
there for over a year prior to the institution of the instant
proceedings with full knowledge of Papapanos.
Lin bases this
assertion on the fact that Papapanos has been conducting a tavern and
muti business right next to the premises in
the same building and
that Papapanos observes activities in premises on a daily basis and
that on one occasion Papapanos actually
came onto the premises to
complain about the way that the respondent prepared its polony, and
proceeded to lodge a complaint with
the Health Department of the
local municipality which complaint was investigated but dismissed.
Based on all this, Lin submits
that Papapanos had represented to the
respondent that it was entitled to occupy the premises and that the
applicant should be held
to have consented to the respondent’s
presence on the premises on the basis of the doctrine of estoppel.
[5]
Lin goes on to state that he had
bona fide
believed that
Seedat was the owner of the premises and that when he discovered that
there was a dispute over ownership, he stopped
paying rent to Seedat.
Instead the monthly rental of R16 000,00 has since been paid, and is
still being paid, into the trust account
of his attorneys pending the
outcome of this case.
[6]
I should mention that in his founding affidavit Papapanos claims that
he had not known who was the real occupier of the premises,
which
explains why he cited an unnamed occupier as respondent in this case,
which assertion is disputed by Lin as indicated above.
In his
replying affidavit, Papapanos makes a rather startling but very
serious allegation that his then attorney, Mr D J Gresse,
had been in
charge of the premises and made all the arrangements regarding
occupation; knew who the tenants were and collected
the monthly
rental, which he then paid over to Papapanos. He says that he had
been under the impression that the money received
from Gresse every
month was rental from whoever were the tenants. It turned out that in
fact the source of the money was the purchase
price paid by Divine
Heights CC. I should mention that this fact was in fact disclosed in
a letter written by Gresse’s partner,
Mr Barend Christiaan van
Rooyen, dated 17 December 2010, to which is annexed a statement of
account prepared by Gresse. It is apposite
to quote this letter in
full:
“
Ons
heg hierby ‘n staat voorberei deur Mnr Gresse wat aantoon welke
bedrae aan Mnr Papapanos betaal is sedert die R650 000,00
koopprys
van die eiendom in September 2005 betaal is. U sal merk dat ‘n
totaal van R1 225 868,64 betaal is in die vorm van
“huur”.
Mnr Gresse
beweer dat hy ‘n verdere bedrag van R167 450,45 uit sy eie
fondse betaal het aan die Moqaka Munisipaliteit ten
opsigte van ‘n
uitklaringsertifikaat. Daar is derhalwe R1 393 319,09 aan mnr
Papapanos en ten behoewe van hom betaal, wat
substansieel meer is as
die R650 000,00 wat hy moes kry ten opsigte van die koopprys.”
[7]
On the basis of this letter Papapanos avers that he had been badly
misled by his attorney and it is interesting to note that
Mr Gresse
acted for both the seller and the purchaser in the sale transaction
and similarly also for the landlord and tenant in
regard to the
renting out of the premises prior to the applicant terminating his
mandate when the shenanigans came to light.
[8]
I pause to say that this allegation and others contained in the
applicant’s replying affidavit point to very serious
unprofessional and unethical conduct on the part of an attorney, for
it suggests that Mr Gresse was engaged in double dealing to
the
detriment of his client. The very letter quoted above is startling,
coming as it does, from the mouth of an attorney. Mr Van
Rooyen has
no qualms to state that money that was supposed to be kept in his
firm’s trust account pending transfer of the
property to the
purchaser, alternatively, pending resolution of the dispute around
the sale agreement, is paid over to the seller
in monthly instalments
until it is used up without the client’s knowledge, let alone
authorisation. And where does the balance
of R1 225 868,64 (R5 175
868,64) paid to Papapanos come from? On what basis does Mr Van
Rooyn’s firm pay a lump sum of R167
450,54 to the Moqhaka
Municipality out of their pocket, when their client seemingly knows
nothing about it? It is noteworthy that
Mr Gresse has not responded
to these allegations nor has anyone of his partners done so in spite
of the fact that one of them is
the attorney of record for the
respondent in these proceedings. The Law Society of the Free State
will be directed to investigate
these allegations.
[9]
The crux of the matter is whether it can be said that the
respondent’s occupation of the premises is unlawful. The first
point to be noted is that these are motion proceedings and where
there are disputes of fact that cannot be resolved on the papers,
the
version of the respondent, taken together with the admitted facts in
the applicant’s affidavit, prevails. See
PLASCON-EVANS
PAINTS LTD v VAN RIEBEECK PAINTS (PTY) LTD
[1984] ZASCA 51
;
1984 (3) SA 623
(AD);
THE PRESIDENT OF THE RSA v M & G MEDIA
2011
(2) SA 1
(SCA) para [13]. There is a dispute of fact about whether
Papapanos was aware of the presence of the respondent on the premises
and consented thereto. The respondent’s version is that he was
aware. Aspects of such version are undisputed and make sense.
There
is no way that an owner of premises who is there on a daily basis and
who sees people conducting business right under his
nose next to his
own business in the same building will not know who the occupants are
or allow them to continue trading unless
they have his approval.
Moreover, on his own version, Papapanos had entrusted the
arrangements regarding occupancy to his attorney
and agent, Mr
Gresse. Obviously, Gresse knew about the fact that the applicant had
been renting the premises from Seedat and approved
of it. Besides, on
his own version Papapanos did not really care who occupied the
premises and as long as the occupant paid rent
the latter could
occupy the premises. It is clear that the applicant started these
proceedings not because the respondent was an
unlawful occupant but
primarily because the applicant discovered that the respondent was
paying rent to someone else.
[10]
Even if I am wrong in my application of the
PLASCON-EVANS
rule this is a matter that calls for a robust approach to resolution
of disputes of fact in motion proceedings. See
BUFFALO FREIGHT
SYSTEMS (PTY) LTD v CRESTLEIGH TRADING (PTY) LTD AND ANOTHER
2011 (1) SA 8
(SCA) at 14A – C. The applicant’s version
that it did not approve of the respondent’s occupation of the
premises
is, on an objective analysis of the evidence, untenable and
should be rejected.
[11]
During the hearing, counsel for the respondent focused much of his
argument on estoppel. In the view that I take of the matter
it is
unnecessary to deal with this issue. Suffice it to say that I have
serious reservations about its applicability in the instant
case.
[12]
The application stands to fail on another ground. There is authority
for the view that a lessor may validly let property to
which he or
she has no title. See
WILLE’S PRINCIPLES OF SOUTH AFRICAN
LAW
, 9
th
Edition by F Du Bois,
et al
at
191, para [6]. A
fortiori
the position of a lessor such as
Seedat who claims a valid title based on an existing (albeit
disputed) written sale and purchase
contract.
[13]
The last issue to be dealt with is the applicant’s contention
that the lease between the respondent and Seedat is invalid.
Three
grounds are relied upon. Firstly, it is pointed out that the deed of
sale between the applicant and Divine Heights prohibited
the latter
from taking occupation before registration of transfer in its name.
It was submitted on behalf of the applicant that
Divine Heights did
not therefore acquire the right of occupation and could not validly
let the premises. The short answer to this
is that the uncontested
version of the respondent shows that Divine Heights was, through its
sole member Seedat, in
de facto
control of the premises, in
the sense that he was able to let unchallenged not only to the
respondent, but also to the previous
occupant, Kroonstad Frozen
Foods, for a considerable period running over six years.
Interestingly, the name Kroonstad Frozen Foods
is still prominently
displayed on the walls of the premises as can be seen from the photo,
annexure “DP5” to the applicant’s
founding
affidavit. It appears that Divine Heights took over occupation soon
after the sale agreement was concluded. And it is
quite clear that
Gresse, the applicant’s agent, had consented to this. The
applicant cannot avoid the consequences of his
agent’s conduct
by pleading ignorance or that his agent cheated him. That is a matter
it must sort out with Gresse.
[14]
The second point is that the lease cites Seedat as the lessor whereas
the purchaser is his close corporation, Divine Heights.
The answer to
this is that it is Seedat who runs Divine Heights and the latter acts
through him. At any rate, even if Seedat was
not the purchaser and
had no claim to the property, he could still let the property based
on the authority cited above. The last
objection is that the lease
was concluded by a non-existent entity called Choice Supermarket and
Mini Market. But it is obvious
that respondent has taken the place of
Choice Supermarket in the lease and it is the respondent that
conducts business there and
pays rent. This means that the respondent
has simply been substituted for Choice Supermarket in the lease. At
any rate, the validity
or invalidity of the lease is, strictly
speaking, a matter between the lessor and the lessee and they could
agree to implement
the terms of the lease even if it was invalid. In
this regard, the applicant has failed to discharge the
onus
resting on it as alluded to in para [2] above.
[15]
Finally, it is important to note that the applicant launched this
application fully aware that the respondent would rely on
the lease
with Seedat and fully aware that Seedat’s close corporation is
seeking to enforce the sale contract through the
pending case number
1844/2011. That is the case that should resolve the dispute between
the parties once and for all. The applicant
should have awaited the
outcome for that case and it is noteworthy that the respondent has
adopted the proper course of paying
the rent into the trust account
of his attorneys pending the finalisation of that case. This would
ensure that if the dispute is
resolved in favour of the applicant it
would still get the accumulated rent. In the circumstances, I had the
option of simply ordering
that these proceedings be stayed pending
the outcome of that case. In the event, I opted to deal with the
merits of the matter.
[16]
The application is dismissed with costs.
______________
H. M. MUSI, JP
On
behalf of the applicant: Adv. H. J. Benade
Instructed
by:
Phatshoane
Henney
BLOEMFONTEIN
On
behalf of the respondent: Adv. J. Y. Claasen SC
Instructed
by:
QB
Grimbeek Attorneys
BLOEMFONTEIN
/eb