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[2011] ZAKZDHC 47
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Strangprop (Pty) Ltd v Vasriawa and Another (6109/2010) [2011] ZAKZDHC 47 (21 September 2011)
11
IN THE KWAZULU-NATAL HIGH COURT,
DURBAN
REPUBLIC OF SOUTH AFRICA
Case
No: 6109/2010
In
the matter between:
STRANGPROP
(PTY) LTD
…................................................................................
Plaintiff
and
ESSOP
MOHAMED VASRIAWA
…..........................................................
First
Defendant
THE
REGISTRAR OF DEEDS
KWAZULU-NATAL
…...........................................................................
Second
Defendant
JUDGMENT
SEEGOBIN
J
[1] The first defendant (“the
defendant”) has excepted to the plaintiff’s particulars
of claim “
as the alternative claims do not disclose causes
of action sustainable in law”
. The defendant contends that
the plaintiff is not entitled to any relief in the absence of a claim
by the defendant for the demolition
of the structure.
[2] The plaintiff’s claims have
their origins in a “Memorandum of Agreement” “(the
agreement”) in
terms of which the plaintiff purchased Erf 2664
Broadlands, Mount Edgecombe (“the property”) from the
defendant for
the sum of R6 250 000,00 (six million two
hundred and fifty thousand Rand). Upon the signing of the agreement a
deposit
of R500 000,00 (five hundred thousand Rand) was to be
paid and held in trust by the conveyancer.
[3] The relief sought by the plaintiff
in the main claim is the following:
“
9.
In
the premises, it is proper that this Honourable Court issue
adeclarator declaring that:
The
agreement evidenced by Annexure ‘A’ has not lapsed due
to non-fulfillment of the suspensive conditions set for
the in
clauses 6.1.1 and 6.1.2 of Annexure ‘A’;
Ownership
of the property is deemed to be vested in the Plaintiff pursuant to
clause 7.1 of Annexure ‘A’ alternatively
the Plaintiff
is entitled to registration of the property upon payment of the
agreed purchase price.”
[4] In the first alternative claim the
relief sought is the following:
“
18.
In
the premises, the Plaintiff is entitled to:
18.1
occupation of the premises constituted by the completed premises,
together with reasonable access thereto, subject to payment
by the
Plaintiff to the First Defendant of any damages sustained by the
First Defendant arising from the encroachment, together
with a
solatium
;
18.2
continue such occupation in perpetuity;
18.3
a declaratory as follows:
It
is declared that the First Defendant is not entitled to the removal
from Erf 2664, Broadlands, Mount Edgecombe of the encroachment
erected thereon by the Plaintiff, subject to payment by the Plaintiff
to the First Defendant of such damages [including a
solatium
]
as the parties may agree or the Court determine to be payable.”
[5] In the second alternative claim
the following relief is claimed:
“
22
In
the premises, the Plaintiff is entitled to orders, upon compliance by
the Plaintiff with the orders referred to in paragraph
18 of the
Alternative Claim:
22.1
ordering the First Defendant to transfer the property described as
Erf 2664 Broadlands, Mount Edgecombe to the Plaintiff;
22.2
directing the Second Defendant, upon due compliance with his
requirements to register the said property in the name of the
Plaintiff;
22.3
ordering the Plaintiff to pay all the costs consequent upon transfer
of the property aforesaid;
22.4
directing the First Defendant to sign all necessary papers and do all
necessary things to cause the transfer aforesaid to be
effected, and
failing which directing the Deputy Sheriff for the area in which the
property is situate to sign all necessary papers
and do all necessary
things to effect the transfer aforesaid
23.
Alternatively
to the orders referred to in paragraph 22, and in the event of it
being held that the Plaintiff is not entitled to
transfer [but only
in that event], then and in that event the Plaintiff is entitled to
orders as follows:
23.1
an order that the encroachment aforesaid be registered against the
Title Deed over the property at the expense of the Plaintiff,
and
subject to:
an
amended plan of the property approved by the Surveyor-General being
prepared;
due
approval of the Second Defendant and compliance with his
requirements;
alternatively
to sub-paragraph 23.1, an order that a servitude be registered in
the offices of the Second Defendant over the
property [as defined]
in favour of the dominant tenement, namely Erf 2663 Broadlands,
Mount Edgecombe granting a praedial servitude
in perpetuity of a
right of way over and on the encroachment aforesaid in terms of
section 76 of the Deeds Registries Act 47
of 1937 (as amended)
subject to all the costs of registration of such servitude being
paid by the Plaintiff.”
[6] Clause 5.5 of the agreement reads
as follows:
“
The
balance of the purchase price shall be paid in cash on registration
of transfer, and shall be secured by the issue of a bank
guarantee,
on behalf of the STRANGPROP [the plaintiff], in a form acceptable to
VARIAWA [the defendant]”
[7] Clause 6 of the agreement contains
a suspensive condition which stipulates:
“
6.1
The coming into effect of this agreement is entirely conditional on
Strangprop meeting both the following suspensive conditions,
that:
6.1.1
on or before 15 December 2009 Strangprop is granted, in writing, a
loan, secured by a mortgage bond, from any financial institution
for
the balance of the purchase price of R5 750 000;
6.1.2
STRANGPROP delivers the guarantee referred to in 5.5 above to the
CONVEYANCERS within 45 days of the date of grant of the
loan referred
to in 6.1.1 above.
6.2
Should STRANGPROP fail to meet either condition detailed in 6.1.1 or
6.1.2 above within the specified time limits, this agreement
shall
lapse.”
[8] Clause 7 of the agreement deals
with issues relating to the passing of risk, ownership and
occupation. In terms of Clause 7.1
it was agreed that the risk and
ownership in the property shall pass to the plaintiff on the date of
occupation, from which date
the property shall be at the sole risk of
the plaintiff, which shall thereafter be liable for all expenses
relating to the property
such as rates, insurance, maintenance and
the like. Clause 7.3 records that the plaintiff may take occupation
on 15 January 2010,
against payment of occupational interest of
R39 000,00 (thirty nine thousand Rand) per month payable in
advance from the date
of occupation.
[9] The passing of ownership on date
of occupation in terms of Clause 7.1 (which is claimed by the
plaintiff) seems to be dependent
on whether the agreement was still
in effect or not. The issue is whether or not ownership still passes
even where the suspensive
conditions detailed in Clauses 6.1.1 and
6.1.2 were not fulfilled within the specified time. The defendant
takes the view that
non-compliance by the plaintiff of the suspensive
conditions has caused the agreement to lapse.
[10] It is common cause that the
plaintiff took occupation on 14 January 2010. It is also common cause
that the plaintiff, with
the defendant’s knowledge and consent,
commenced construction of a building on two (2) sites, namely, the
property in question
and another property already owned by the
plaintiff or by an associate company of the plaintiff. The plaintiff
claims that regardless
of whether or not the court finds that it
fulfilled the suspensive conditions recorded in Clauses 6.1 and 6.2
of the agreement,
since the defendant allowed it to take occupation
and permitted the construction to take place, the plaintiff is
“
deemed
” to be the owner of the property
alternatively
it is entitled to require the defendant to
register the property in its name upon payment of the purchase price
stipulated in the
agreement.
[11] The plaintiff contends that the
provisions of Clause 7.1 should be read to mean that on taking
occupation the plaintiff was
“
deemed”
to be the
owner of the property even though the word “
deemed”
was not used in the text of the clause. It was submitted that the use
of the word in the context of Clause 7.1 provides a reasonable
meaning to the use of the word “
ownership
”. It was
further submitted that when the defendant permitted the occupation
and commencement of the construction, the defendant
essentially
waived the provisions of the suspensive conditions contained in
Clause 6 of the agreement. The plaintiff avers that
it is thus
entitled to lead evidence in the trial on the issue of waiver.
GENERAL PRINCIPLES
[12]
In
Dendy
v University of Witswatersrand, Johannesburg and Others
1
the Court stated that:
“
It
is settled law that for the purpose of deciding an exception the
court takes the facts alleged in the pleading excepted to as
being
correct. Also see
Fosev
Minister of Safety and Security
2
.”
[13]
In
Christian
Lawyers’ Association v National Minister of Health and Others
3
2004 (10) BCLR 1086
(T),
the Court explained as follows:
“
In
order to determine whether the particulars of claim disclose a cause
of action, one must determine whether the allegations contained
in
the particulars of claim, if proven, would entitle the plaintiff to
the relief sought by the plaintiff as prayed for in such
particulars
of claim. To determine whether the allegations in the particulars of
claim support the relief prayed for therein, the
allegations must be
presumed to be true. Accordingly the test is whether the allegations
or statements in the particulars of claim,
read together with the
correct position of the law, support the relief.”
[14]
The Supreme Court of Appeal in
Vermeulen
v Goose Valley Investments (Pty) Ltd
4
emphasised
that in terms of the law an exception succeeds only where
ex
facie
it
is evident that ‘
the
allegations made by a plaintiff and any document upon which his or
her cause of action may be based, the claim
is
(not may be) bad in
law
.’
[15] Rule 23(3) of the
Uniform Rules prescribes that whenever an exception is taken to any
pleading the grounds upon which the exception
is founded shall be
clearly and concisely stated.
[16]
In
Francis
v Sharp and Others
5
Erasmus J prefaced his
evaluation of an exception with the following general observations:
An exception ought to
make out a very clear, strong case in order to succeed, except where
it raises a substantive question of
law the resolution of which may
settle the dispute between the parties;
Because courts are
reluctant to decide upon exceptions based on the interpretation of
contracts, the excipient must persuade the
Court that on every
reasonable interpretation no cause of action is disclosed (also see
Lewis v Oneante (Pty) Ltd and Another
[1992] ZASCA 174
;
1992 (4) SA 811
(A)
817F);
Where a commercial
document has been executed by the parties with the clear intention
that it have commercial operation, it should
not lightly be held to
be ineffective (also see
Murray & Roberts Construction Ltd v
Finat Properties (Pty) Ltd
1991 (1) SA 508
(A) at 514E-F).
[17]
The Court in
Sun
Packaging (Pty) Ltd v Vreulink
6
discussed the basic
principles relating to the interpretation of a contract. The
intention of the parties, gleaned from the language
used and read in
its proper context in light of admissible evidence, is the paramount
consideration. Evidence relating to background
facts is always
admissible for the exercise as it provides the ‘
genesis
of the transaction’
;
the ‘
factual
matrix
.’
Evidence of surrounding circumstances is admissible only in so far as
it is necessary to clear up any uncertainty and ambiguity
in the
agreement. The Court in
Davenport
Corner Tea Room (Pty) Ltd v Joubert
7
noted that an exception
may be attacked by illustrating that the contract as pleaded could
reasonably possibly have an interpretation
adverse to the excipient,
if there is ambiguity. However this argument cannot be used to repel
an exception that has merit. The
Appellate Division in
Sun
Packaging
8
approved the reasoning in
Davenport
that there must be ‘
more
than a notional or remote possibility’
holding that:
“
The
mere notional possibility that evidence of surrounding circumstances
may influence the interpretation of a contract does not
necessarily
operate to debar a Court from deciding the issue on exception. The
contention that such evidence exists must be examined
with care.”
[18]
In
Pete’s
Warehousing and Sales CC v Bowsink Investments CC
9
the Court considered the
situation where an appellant sought to rely on an implied term of the
contract. The Court referred to the
Appellate Division finding in
LanificioVaram
SA v MasurelFils(Pty) Ltd
10
and formulated the
following test:
“
The
test at the exception stage is whether the trial Court could
reasonably imply the term alleged…where the term contended
for
would, as a matter of law, otherwise be implied, the test is whether
the agreement can reasonably be interpreted as not excluding
that
term
.”
ONUS
[19] The
onus
lies on the defendant as excipient to
show that the meaning attributed to the provisions of Clause 7.1 of
the agreement, namely
that ownership, as between the plaintiff and
the defendant, is “
deemed
”
to vest in the plaintiff, cannot be a
possible interpretation. If there is any uncertainty attaching to the
plaintiff’s intentions
set forth in the particulars of claim,
an exception cannot be upheld on any of the constructions
maintained
11
.
ISSUE OF
“
DEEMED”
OWNERSHIP
[20] Mr
Tobias
,
who appeared on behalf of the plaintiff, argued that since transfer
of ownership of immovable property can only be effected by
registration, whether the use of the word
“
ownership”
in Clause 7.1 renders the
clause nugatory or should one endeavor to give it a meaning.
[21] It seems to me that one cannot
look at the word “
ownership
”
in isolation as it appears in Clause
7.1 of the agreement. It falls to be interpreted in light of the
contract as a whole and in
light of its nature and purpose. By using
the word “
ownership
”
in the context of Clause 7.1, the
parties must have, albeit impliedly,intended that on occupation, the
plaintiff would become the
owner, hence the allegation in
sub-paragraph 7.3 of the particulars of claim following upon
sub-paragraph 7.2 that the plaintiff
“is
deemed
to be the owner of the property …”
In my view, any meaning short of this would render the provisions of
Clause 7.1
nugatory. In order to determine whether the word “
deemed
”
provides a reasonable meaning to the
use of the word “
ownership
”
,
it may be necessary to resort to evidence of the background facts and
surrounding circumstances in order to ascertain the intention
of the
parties at the time of the conclusion of the agreement.
[22] Bearing in mind that courts are
reluctant to decide upon exceptions based on the interpretation of
contracts, the defendant
bore the duty of persuading the court that
upon every interpretation which the particulars of claim could not
reasonably bear,
no cause of action was disclosed. In my view, the
defendant has failed to discharge this
onus.
AWARD OF COMPENSATION INSTEAD OF
DEMOLITION
[23] The defendant’s contention
that the plaintiff is not entitled to relief in the absence of a
claim by the defendant for
the demolition of the structure, loses
sight of the following averments contained in paragraph 14 of the
particulars of claim:
“
The
First Defendant has demanded that the Plaintiff remove the
constructed premises alternatively has demanded an increased purchase
price of R8 130 000 (eight million one hundred and thirty
thousand rand) more than the original purchase price set forth
in
Annexure “A” and being the agreement dated 30 November
2009.”
[24] It is well established that at an
exception stage, the allegations contained in the particulars of
claim must be accepted as
being true. This being the case it seems to
me that in light of the allegations contained in paragraph 14 of the
particulars of
claim, the defendant has already sought to enforce his
right by demanding the removal of the encroaching portion of the
structure.
The argument put forward by Mr
Mathis
on behalf of the defendant that the
plaintiff will have to wait for a formal claim either in convention
or reconvention before it
has any remedy is, in my view, untenable.
The demand by the defendant for the ‘
removal’
of the building can only mean a demand
for a demolition. It is not clear how a removal of a building can be
achieved without demolishing
it. The plaintiff would thus be entitled
to lead evidence, on the facts pleaded, that such a demand for a
demolition was made.
The submission on behalf of the defendant that
the plaintiff has not specifically pleaded that the defendant has
sought a “
demolition
order
”
loses sight of
the allegations contained in paragraph 14 of the particulars of claim
and the evidence that may be necessary to establish
these
allegations.
[25] In any event, in matters of this
nature, the court has a wide and equitable discretion, based on
considerations of fairness
and reasonableness, to award damages in a
given situation, rather than to order demolition of encroaching
structures,. The existence
of this wide and equitable discretion is
consistent with the general approach of South African law to similar
situations found
in claims for enrichment, specific performance or
interdicts
12
.
The rigid enforcement of the primary remedy in the circumstances viz
demolition of the encroachment, could sometimes have unjust
results.
The purpose of the court’s discretion was to prevent such
unjust results. On the evidence in
Brian
Lackey
, it was held that
the only realistic alternative to an award for damages would be the
complete demolition of the plaintiff’s
dwelling. It was
accordingly held that, weighing up the option of complete demolition
against the option of payment of compensation
(including a
solatium
),
and having regard to considerations of the disproportionality of the
prejudice and the principles of neighbor law, it was clear
that
ordering the complete demolition of the plaintiff’s dwelling
would indeed produce an unjust result. The court accordingly
declined
to make a demolition order.
[26] It seems to me that if the
allegations contained in paragraph 14 of the particulars of claim are
established, they may convince
a court hearing the matter that the
defendant was prepared to accept monetary compensation for his Erf
and that he attempted to
use his superior bargaining position in an
endeavor to extract from the plaintiff a much higher amount than he
was entitled to.
Being armed with a demolition order would place him
in an even stronger position to continue doing so. This is the
position which
was found to exist in
Brian
Lackey, supra
. Griesel J
said the following in this regard:
“
This
was the precise concern expressed by the South African as well as the
English Courts and on the basis of which those Courts
considered
themselves empowered to exercise the discretion not to order removal
of an encroachment. In
De
Villiers v Kalson
Graham
JP put it as follows:
‘
It
is quite true that for the reasons stated in so many of the English
cases, the wrongdoer who encroaches on another’s rights
cannot
be heard to say, unless there are some very special circumstances,
that a monetary compensation is sufficient, for that
would be
tantamount to compelling the plaintiff to consent to expropriation.
But
on theother hand it would be equally inequitable to place the
plaintiff in a position to extort wholly excessive compensation
from
the defendant by granting an order for the removal of the buildings
in cases in which the facts disclose that a remedy in
damages would
fully meet the justice of the case.’
(my
emphasis).”
[27] In the final analysis, I am of
the view that for a court to exercise its discretion properly in this
matter, it will need to
hear all the evidence. I am accordingly of
the view that the exception taken by the defendant is ill-founded.
ORDER
[28] For all the reasons set out
herein, I make the following order:
The exceptions taken by the first
defendant against the alternative claims of the plaintiff are
dismissed with costs.
The first defendant is directed to
file his plea within twenty (20) days of this order.
Date of Hearing : 21/06/2011
Date of Judgment : 21/09/2011
Counsel for Plaintiff : Adv. Tobias
Instructed by : De Villiers Evans &
Petit
Counsel for 1
st
Defendant :
Adv. Mathis
Instructed
by : AJ.H. Nicolson Stiller &Geshen
1
Dendy
v University of Witswaterand, Johannesburg and Others
[2005] ZAGPHC 39
;
2005 (9)
BCLR 901
(W) at para 31.
2
Fose
v Minister of Safety and Security
1997 (7) BCLR (CC) at para 73.
3
Christian
Lawyers’ Association v National Minister of Health and Others
2004 (T) BCLR 1086 (T) at 1098.
4
Vermeulen
v Goose Valley Investments (Pty) Ltd
2001 (3) SA 986
para 7.
5
Francis
v Sharp and Others
2004 (3) SA 230
(CPD) at 237D-I.
6
Sun
Packaging (Pty) Ltd v Vreulink
[1996] ZASCA 73
;
1996 (4) SA 176
(A) at 184A-E.
7
Davenport
Corner Tea Room (Pty) Ltd v Joubert
1962 (2) SA 709
(D) at 716A.
8
Sun
Packaging
supra at 184E.
9
Pete’s
Warehousing and Sales CC v Bowsink Investments CC
2000 (3) SA
833
(ECD) at para 14.
10
LanificioVaram
SA v MasurelFils (Pty) Ltd
1952 (4) SA 655
(A) at 661B.
11
See
Harms, Civil Court Practice (vol. 1) para 23.3 page B1-166 citing:
Callender-Easby v Grahamstown Municipality 1981(2) SA 810
(E);
Manyetshe v SA Post Office Ltd
[2008] ZAGPHC 253
;
[2008] 4 All SA 458
(T); Manyetshe v
SA Post Office Ltd
[2008] ZAGPHC 253
;
[2008] 4 All SA 458
(T)
12
See
Trustees, Brian Lackey Trust v Annandale 2004(3) SA 281 (CPD)