Ixhanti Lethu Trading (Edms) Beperk v Matjhabeng Munisipaliteit and Others (6567/2007) [2008] ZAFSHC 17 (27 February 2008)

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[2008] ZAFSHC 17
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Ixhanti Lethu Trading (Edms) Beperk v Matjhabeng Munisipaliteit and Others (6567/2007) [2008] ZAFSHC 17 (27 February 2008)

IN THE HIGH COURT
OF SOUTH AFRICA
(ORANGE
FREE STATE PROVINCIAL DIVISION)
Case
No. : 6567/2007
In
the matter between:
IXHANTI
LETHU TRADING (EDMS) BEPERK
Applicant
and
MATJHABENG
MUNISIPALITEIT
First
Respondent
DIE
DORPERAAD VAN DIE VRYSTAAT
Second
Respondent
PROVINSIE
DIE
LID VAN DIE UITVOERENDE RAAD:
Third
Respondent
PLAASLIKE
BESTUUR EN BEHUISING
VRYSTAAT
PROVINSIE
_____________________________________________________
HEARD
ON:
12
FEBRUARY 2008
_____________________________________________________
JUDGMENT
BY:
MOLOI,
AJ
_____________________________________________________
DELIVERED
ON:
27
MARCH 2008
_____________________________________________________
[1] This
matter comes before me for confirmation of an interim order granted
by Wright J on 7 December 2007. The interim order prohibited
the
respondents from
inter
alia
alienating the property which is the subject matter of the dispute
between the parties pending final adjudication of the matter.
[2] The
above order was granted in the absence of the first respondent while
the second and the third respondents filed a notice to
abide the
decision of the court. The return day of the interim order was fixed
at 17 January 2008. The matter was thereafter postponed
to 21
February 2008 and 28 February 2008 when the applicant was ordered to
replicate by 22 February 2008. On 28 February 2008 the
matter was
postponed for argument on 13 March 2008 and the parties were ordered
to file the heads of argument not later than 11 March
2008.
[3] On
11 March 2008 the first respondent, in addition to the heads of
argument, filed a notice of rejoinder as it wished to apply
to court
for permission to file a further affidavit to respond to certain
allegations made in the replying affidavit. On 13 March
2008 this
application was argued but wisely abandoned by the first respondent.
The matter proceeded to be heard on the main application.
[4] The
application was essentially based on a deed of sale attached to the
applicant’s founding affidavit as annexure “A”.
The said deed
of sale was signed by the parties’ representatives on 14 December
2004. On behalf of the applicant one Mziwandile
Benedic Ngezi, a
director of the applicant company signed purportedly duly authorised
by the board of directors. It needs to be
mentioned that no
resolution in writing to this effect was included. On behalf of the
first respondent the deed of sale was signed
by one R.S.B. Sesele and
one S. Leeuw, the Municipal Manager and Executive Mayor of the first
respondent, respectively, duly authorised
by a council resolution
dated 2 November 2004 attached to the papers as annexure “B”.
[5] The relevant parts of
the council resolution (annexure “B”) read as follows:
“
1. That Council approves the
application of Ixhati Lethu (Pty) Ltd to purchase the Remainder and
Subdivision 3 of Erf 8, Welkom.
2. That
a selling price of R35/m² be determined for the areas known as Phase
I and phase II (Phase I – hotel and conference area
and Phase II –
office block area).
3. That
the final area to be purchased be determined by a land surveyor at
the expense of the developer prior to the finalisation
of the Deed of
Sale.
5. That
the transaction be structured in a Deed of Sale whereby the interest
of Council be protected, which Deed of Sale to be signed
by the
Executive Mayor and the Municipal Manager on behalf of Council.”
The property to be bought
is described in the deed of sale as follows:
“
1.
SALE:
The SELLER sells to the PURCHASER who
purchases the following property upon the terms and conditions
hereof:
THE IMMOVABLE PROPERTY:
The property hereby
sold is a portion of the immovable property on which Rovers Club is
currently situated, also known as Remainder
and Subdivision 3 of Erf
8, Welkom (hereinafter referred to as “the
Property
”)
and demarcated in the color pink on the diagram hereto marked “A”.
The area is known to the parties as the current rugby
fields of
Rovers Club (hereinafter referred to as “
Phase
1
”)
and the area opposite the Welkom Magistrate Court which include the
current parking area situated in the vicinity (hereinafter
referred
to as “
Phase
2
”.
The
SELLER will appoint land surveyors at the cost of the PURCHASER to
survey the land as described above and prepare the diagram
necessary
for the purposes of giving the PURCHASER title to the property. The
parties agree to be bound by the diagram prepared
for this purpose
provided it is essentially in compliance with Annexure “A” and
waive any minor deficiency or surplus in extent
which may be in
either parties favour.”
[6] In
addition the deed of sale provided for an option to the applicant to
purchase additional adjacent property from first respondent
which
option was duly exercised by the applicant.
[7] The
application was prompted by a letter from the first respondent dated
3 August 2007 to the effect that the first respondent
is of opinion
that the deed of sale is null and void in that the statutory
prescribed procedures were not followed at the conclusion
of the
agreement and that the conduct of the Executive Mayor and the
Municipal Manager when concluding the agreement was “
ultra
vires
”
and the agreement was consequently
ab
initio
invalid.
As a result of these defects, the letter stated, the first
respondent was not proceeding with the registration and transfer
of
the property to the applicant.
[8] Applicant
responded by writing a letter to the first respondent on 5 September
2007 denying the alleged invalidity of the agreement
and requiring
the first respondent to state the alleged statutory procedures that
were not followed and the grounds of the alleged
invalidity of the
agreement. In addition the first respondent was requested to
undertake that it will not alienate the said property
pending the
legal action applicant would institute to enforce the agreement. No
response from first respondent was forthcoming,
however.
[9] Applicant
believed the first respondent was in the process of alienating the
said property and attached to his papers a notice
in “The Sowetan”
newspaper dated 27 September 2007 inviting interested persons to make
proposals for the development of the property
forming the
subject-matter of the alleged sale.
[10] In
its opposing affidavit the first respondent raised several points on
which it relied for the invalidity of the agreement.
In argument
before this court these points were restricted to the following:
(a) Non-compliance with
the provisions of section 2 of the Alienation of Land Act, No. 68 of
1981;
(b) The provisions of
paragraph 3 of the Council resolution of 2 November 2004, and
(c) The provisions of
section 14
of the
Local Government: Municipal Finance Management Act,
No. 56 of 2003
.
Section 2
of the
Alienation of Land Act provides
as follows:
“
(1) No
alienation of land after the commencement of this section shall,
subject to the provisions of
section 28
, be of any force or effect
unless it is contained in a deed of alienation signed by the parties
thereto or by their agents acting
on their written authority.”
[11] Arguments
advanced at length on behalf of both parties during the hearing
centred around the adequacy of the description of the
land sold.
Several cases were referred to. For the applicant it was argued that
the
merx
was sufficiently described and is ascertainable “on the ground”
as comprising the two “rugbyfields” and the “area next
to the
magistrates court, Welkom including the parking area” according to
the diagrams attached to the Deed of Sale and accepted
by both
parties. A counter submission with substantial reference to case law
was equally made on behalf of the first respondent
to illustrate how
inadequate the description of the
merx
was.
[12] The
court was not moved by either argument and found them wanting for
lack of relevance to the provisions of
section 2.
Section 2
requires
the contract for alienation of land to be in writing and is silent on
the question of the description of the land to be
sold. It also
requires that if the contract is concluded by agents, it be under
written
authority. The provisions relating to the description and extent of
the land to be sold are contained in
section 6(1)(b)
of the
Alienation of Land Act. As
regards
section 2
what the court found
wanting, however, is the written mandate or authority of Mziwandile
Benedic Ngezi, the director of applicant
who signed the deed of sale
as an agent for applicant which is a prerequisite for the validity of
the agreement of sale of land.
[13] No
such document was attached to the papers filed of record especially
where it is alleged such agent was duly authorised by
the board of
directors as was done with those that acted under authority of the
council of the first respondent. Without such document
the authority
of the agent cannot be determined; neither the validity of the
agreement. An agent cannot act on mere oral authority
when signing
on behalf of a company in a sale of land transaction. Proof of a
resolution or mandate of the company’s board of
directors is
sufficient. See R H Christie,
The
Law of Contract in South Africa
,
5
th
Edition, p. 116. Mere allegation that an agent is acting duly
authorised by the board of directors is not necessary. Particularly
in application proceedings:
AFRICAN
PEACH GROWERS (EDMS) BPK v BOUWER EN ‘N ANDER
1973 (4) SA 654
(T) op 655 C – F;
WESSELS
EN ‘N ANDER v GROENEWALD EN ‘N ANDER
1963 (4) SA 30
(O) p.33 G – H;
TREVER
INVESTMENTS (PTY) LTD v FRIEDHELM INVESTMENTS (PTY) LTD
1982 (1) SA 7
(A) P. 16 F – H. The court will not know if there
is, in fact, compliance with the requirement of
section 2(1)
until
and unless a written authority is filed of record.
[14] Paragraph
3 of the Council resolution of 2 November 2004 categorically required
that a land surveyor be engaged to demarcate
and measure the land to
be sold
prior
to the deed of sale being signed on behalf of council. According to
the papers filed, the land surveyor, a Mr. P.J. Human, completed
this
process in October 2006 whereas the deed of sale was signed on 14
December 2004 already.
[15] It
was argued on behalf of the applicant that “die afwyking is nie
wesenlik nie” as only the sequence was not followed.
The court
does not agree. The insistence by the council of the first applicant
in having the demarcation and measurement of the
merx
to be done before the agreement of sale is concluded, was
unquestionably based on the need to obtain accurate description and
extent
of the land to be sold as is required by
section 6(1)(b)
of
the
Alienation of Land Act in
order to remove all doubts relating
thereto. The designated officials of the Council, acting outside
this stipulation clearly acted
ultra
vires
and the contract is thus
ab
initio
null and void. There having been no question of estoppel raised or
arguable on the papers before me, I cannot find otherwise than
that
the agreement was invalid as a consequence.
[16] On 17 January 2008
the application was postponed to 21 February 2008 and first
respondent was ordered to file opposing affidavit
on or before 28
January 2008 and applicant its replication on or before 15 February
2008. Costs were to be costs in the cause.
On 21 February 2008 the
matter was further postponed to 28 February 2008 and applicant was
ordered to replicate not later than 22
February 2008 and costs were
to stand over. On 28 February 2008 the matter was further postponed
to 13 March 2008 by agreement and
both parties were ordered to file
their heads of argument by 11 March 2008. The court is of opinion
that it will be fair to let
costs follows the cause. On 13 March
2008 three counsel appeared for the first respondent and the court is
of the view that this
was not warranted. The court, therefore,
orders that the applicant pay the costs.
[17] Having reached the
above conclusions I do not deem it necessary to deal with the third
ground of opposition. The application
is consequently dismissed with
costs.
_____________
K.J. MOLOI, AJ
On
behalf of applicant: Adv. F.W.A. Danzfuss SC
Instructed by:
Rossouws Attorneys
BLOEMFONTEIN
On
behalf of first respondent: Adv. P.J. Pretorius SC
With him:
Adv.
M.D.J. Steenkamp
and
Adv.
N.R. Rathidili
Instructed
by:
Moroka Attorneys
BLOEMFONTEIN
/sp