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2024
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[2024] ZALMPPHC 70
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Devenco Investments 21 (Pty) Ltd v White Hall Trading and Projects 64 CC and Another (HCA64/2023) [2024] ZALMPPHC 70 (22 July 2024)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
LIMPOPO
DIVISION, POLOKWANE
CASE
NO: HCA64/2023
REPORTABLE:
YES/NO
OF
INTEREST TO OTHER JUDGES: YES/NO
REVISED
In
the matter between:
DEVENCO
INVESTMENTS 21 (PTY) LTD
APPELLANT
And
WHITE
HALL TRADING AND PROJECTS 64 CC
FIRST
RESPONDENT
R.
MAAKE
SECOND
RESPONDENT
JUDGEMENT
Deane
AJ
Introduction
This
is an opposed appeal against the judgment of the Magistrate’s
court, Tzaneen, delivered on 4 February 2022.
The
Appeal application is premised on eight grounds as listed in the
Notice of Appeal.
[1]
Together
with this application is an application for the late compliance with
Rule 50(4)(a) of the
Uniform Rules of Court
.
Having
considered the application for condonation and the applicable
principles, this court granted condonation as applied for.
Background
Facts
The
Appellant instituted action against the First and Second Respondents
(Respondents) for arrear rentals of a written lease agreement
attached to the summons marked Annexure “A”.
The
amount claimed by the Appellant is R196 971.90.
The
Respondents are denying liability on the Appellants’ claim and
raise a defence that they did not sign the lease agreement
on which
the Appellant is relying to wit: Annexure “A” of the
summons. The Respondents allege that Annexure “A”
is not
the document which the Second Respondent signed.
The
Second Respondent also submits that he only signed Annexure “RM1”
on a temporary basis in order to secure the
premises for the church,
Holy Ghost Embassy NPC.
It
is not disputed that
when the Second
Respondent signed Annexure “RM1” the unit number of the
premises and the period of lease agreement
were still left blank and
not completed.
The
blank spaces on Annexure “RM1” were said to be completed
by one Mr De La Rey (De La Rey), a director of the Appellant.
The
church, Holy Ghost Embassy NPC was registered as a nonprofit company
on 01/09/2015.
Holy
Ghost Embassy NPC took occupation of the property of the Appellant
on 1 May 2016.
The
Second Respondent locked the premises with a chain and padlock when
they were busy moving out of the said premises.
The
Second Respondent made no payments to the Appellant and all payments
received in terms of the premises were made by Holy Ghost
Embassy
NPC.
The
Appellant’s Case
In terms of a written
lease agreement, Annexure marked “A”, the Appellant let
to the First Respondent, premises from
the 1st of May 2016 for a 5
(five) year period at an initial rental of R21 929.82, which amount
would escalate on the 1
st
of May 2017 and each year
thereafter by 10%.
The
Appellant submits that
the Second
Respondent represented the First Respondent and bound himself as
co-debtor for any liabilities of the First Respondent.
It
is also known that the premises are used for commercial purposes and
do not serve as residential accommodation for anyone.
In
terms of the lease agreement, all monies payable by the First
Respondent to the Appellant were payable monthly in advance on
the
first day of every calendar month, free of deduction and set off.
In
material breach of its obligations the First Respondent failed to
maintain regular payments. Accordingly, the First Respondent
is
indebted to the Appellant.
As
a result of the said breach, and in terms of Clause 15 of the Lease
Agreement, the Appellant as Lessor had the right to cancel
the lease
and resume possession of the premises.
In
terms of Clause 18.2 of the Lease Agreement, the First Respondent is
liable for the legal costs on the attorney and client
scale.
The
Second Respondent as co-debtor is liable jointly and severally with
the First Respondent for payment of the aforesaid amounts.
The Second
Respondent’s Case
Holy
Ghost Embassy NPC is a church organisation and it wanted to
establish itself in Tzaneen.
In
order to secure the premises which are the subject of the Appellants
claim, it was agreed between Pastor Steven, representing
the Holy
Ghost Embassy NPC, De La Rey who was representing the Appellant
(Appellants representative), and the Second Respondent
representing
White Hall Trading and Projects CC, that whilst they were awaiting
the church papers required, the First Respondent
will conclude the
lease agreement with the Appellant.
It
was further agreed that the duration of the lease agreement with the
First Respondent will be left open and shall be inserted
when Holy
Ghost Embassy NPC replaces the First Respondent as the lessee.
[2]
The
lease agreement, which the Appellant uses as a basis of his claim,
is not the original lease agreement that the First Respondent
concluded with the Appellant.
When
the documents of Holy Ghost Embassy NPC became available same was
forwarded to the Appellant’s representative.
There
was an oral agreement with the Appellant’s representative that
the original lease agreement should be varied so that
the agreement
should be between the Appellant and Holy Ghost Embassy NPC.
The
Appellant’s representative undertook to vary the lease
agreement accordingly and on 22 February 2017 the Appellant’s
representative emailed the Second Respondent the new (amended) lease
agreement between the Appellant and Holy Ghost Embassy NPC.
[3]
The
Appellant’s representative forwarded the new lease agreement
to have it signed by the representative of Holy Ghost Embassy
NPC.
The
Second Respondent could not sign and send the amended lease
agreement to the Appellant’s representative as he was cited
as
the representative of Holy Ghost Embassy NPC and consequently
requested the Appellant’s representative to use one of
the
pastors as a representative of Holy Ghost Embassy NPC, and not the
Second Respondent himself.
[4]
The
Second Respondent accordingly denies that he is contractually
indebted to the Appellant as
the lease
agreement is between the Appellant and Holy Ghost Embassy NPC, not
between the Appellant and the Respondents.
First
Ground of Appeal
The
first
ground of appeal is that the
Magistrate erred in failing to indicate clearly whether it was her
finding that:
“
5.1.
No lease agreement ever came into existence between the parties; or
5.2.
That a lease agreement did come into
existence on a temporary basis but lapsed at some point in time.
”
It
is the Appellants submission that the Respondents amended plea,
[5]
more specifically paragraph 2 thereof, indicate that the Respondents
admitted that they concluded a lease agreement with the
Appellant.
Accordingly, the Respondents were liable for rent until such a time
as it was found that the lease agreement expired.
The
Respondents admit that they concluded a lease agreement with the
Appellant, but they deny that the annexed copy marked “A”
is the one signed by the parties. The Respondents further submit
that the annexed copy marked “A” has been amended
after
signatures without the Respondents consent. The lease agreement
signed by the Second Respondent on behalf of the First
Respondent is
the one marked Annexure “RM1”.
The
Respondents further submit that they concluded the agreement not in
their interest but in the interests of Holy Ghost Embassy
NPC, (a
church where the Second Respondent was a member at the time of
signing the agreement).
When
the matter came before the Magistrate, the Magistrate, correctly
concluded that “
the
only question that the court must decide on in this matter is, what
were the intention of the parties at the time they entered
into the
contract
”.
[6]
From
the papers before me and after hearing oral submissions, the lease
agreement marked Annexure “C” shows that the
Appellant
prepared an amended agreement. This Annexure “C”
indicates that the name reflected therein is that of the
church,
Holy Ghost Embassy NPC. It also shows that the names of the
Respondents have been struck out, purportedly by the Second
Respondent, with an instruction that states “please fix”
and for a request to call Pastor Steven “on this matter”.
[7]
Looking
at the record in its entirety, it is clear that this amended
agreement is meant to reflect the intention of the parties.
It is
the Appellants representative who inserted the name of Holy Ghost
Embassy NPC as the lessee with the
domicilium
citandi
at Unit 36 Savannah Block B, Silverlakes, Pretoria.
[8]
This is also clear from
the record of the arbitration proceedings.
Furthermore, the
evidence of the Second Respondent wherein he testified that he was
requested by the church to secure the premises
for Holy Ghost
Embassy NPC on a temporary basis, was corroborated by two witnesses
Mr Oubaas Sabela and Pastor Steven Mamba.
In
addition, the wife of the Second Respondent, testified that she was
a member of the church since 2016, whose head office was
in Pretoria
with a branch in Tzaneen. She assisted Holy Ghost Embassy NPC with
the administration of the Tzaneen branch, and
she ensured that
payments for the rental of the premises were done on a monthly basis
after they received the monthly invoice
from the Appellant. The
payments were made using the bank account of Holy Ghost Embassy,
Tzaneen.
To this effect the bank
statements were used as evidence during the proceedings, clearly
indicating that the premises paid for
by the church, Holy Ghost
Embassy NPC, Tzaneen, were utilised for church related interests.
When
one has regard to the e-mail communications on record,
[9]
it becomes even more clear that both the Appellant’s
representative and the Second Respondent had the necessary intention
and agreed to vary the agreement.
The
e-mail communications are clearly an attempt to vary the agreement
in line with the original intention of the parties.
In
Spring
Forest Trading 599 CC v Wilberry (Pty) Ltd t/a Ecowash and
Another
,
[10]
the Supreme Court of Appeal (SCA)
confirmed
the legal validity of the use of an e-mail and an ordinary signature
when varying or cancelling a contract which contains
a non-variation
clause. The SCA also confirmed that the legal requirement for an
agreement to be in writing, with the exception
of a contract that is
required to be reduced to writing, is satisfied if it is in the form
of a ‘data message’ as
defined in
Electronic
Communications and Transactions Act 25 of 2002
(
ECTA
).
In this case the court
ruled
that a contract was lawfully cancelled through e-mails sent between
the parties. The judgment has set a precedent in the
validity of the
cancellation of a written agreement via e-mail.
Furthermore,
section 22(1) of the
ECTA
provides that “
[a]n agreement is
not without legal force and effect merely because it was concluded
partly or in whole by means of data messages
”.
This provision applies to e-mail correspondence as well as other
data generated, sent, received, and stored by electronic
means.
Therefore, a formal requirement for an agreement, such as that the
contract be in writing is satisfied if it is in the
form of an
e-mail.
There
is therefore no question about the legal validity of varying or
amending an agreement via electronic messages like e-mail.
However,
the amendments as required and requested by the Second Respondent
were not affected accordingly.
Additionally,
the Second Respondent testified that after he sent the documents to
De La Rey to amend the lease agreement (Annexure
“C”) to
have his name and the First Respondent’s name removed, it was
still not done. The Second Respondent
then called De La Rey to
request that his name be removed as a party to the agreement, but
this too was not complied with.
The
Second Respondent also explained that he went to Pieter Human’s
offices to uplift the original contract, and this contract
that he
uplifted did not have his signature nor the unit number and duration
of the lease on it. The evidence indicates that
the Second
Respondent went to the office of the agent to uplift the contract
since he did not see the one signed and amended
by De La Rey until
he saw it annexed as Annexure “A” to the summons.
Looking
at the Annexure “A” lease agreement, the names of the
Respondents have been inserted therein and clearly do
not take into
account the intention of the parties at the time that the lease
agreement was initially concluded.
It
is therefore clear that the Appellant places reliance on a lease
agreement that it had unilaterally amended. The original lease
agreement signed by the Second Respondent is different from the copy
the Appellant has annexed to his Particulars of Claim, in
that the
Appellant inserted in the space left blank the duration of the lease
agreement.
[11]
Furthermore,
the Respondents submit that the lease agreement concluded and/or
signed by the Second Respondent was never brought
before court by
the Appellant due to the reason that the agreement relied upon by
the Appellant, which was attached to the summons
as Annexure “A”
is not the one the Second Respondent concluded and/or signed.
Annexure
“A” was amended after the Second Respondents signature
and certain information was added without the Second
Respondents
knowledge; therefore, it cannot be said that there has been a
meeting of the minds.
[12]
It
is also apparent that the Second Respondent did not sign the
amendments made by De La Rey. At the time of the Second Respondents
signature, the agreement did not have the duration and the
description of the leased property. This is clear from Annexure
“RM1” to the Respondents amended plea.
It
is also undisputed that all payments for rental were made by Holy
Ghost Embassy NPC.
The
Magistrate correctly found that a lease agreement existed, but it
was not for the benefit of the Respondents and/or not intended
to
bind the Respondents contractually but rather it was for the sole
purpose of securing the premises on behalf of Holy Ghost
Embassy
NPC.
Second
Ground of Appeal
The
Appellants second ground of appeal is that the Magistrate erred in
finding that it was an undisputed fact that Pieter Human
acted as an
agent for the Appellant and that the Magistrate omitted the
extremely important facts, namely:
“
38.1
that a valid lease agreement was concluded between the
parties, and
38.2
that the lease agreement concluded between the
parties was never replace
d
by another lease agreement with
different parties.
”
Looking
at the evidence before me, De La Rey, the one witness for the
Appellant, stated that:
“
I
am 74 years old
and
director of the Plaintiff. I have personal knowledge of the facts of
the matter. Plaintiff rented out a factory premises at
Loretta Park.
A Real Estate Agency of Realty Elk Pieter Human found a tenant. The
signature of tenant was done at Real Estate Agency
the one to be used
is Annexure A…….. The lease agreement, when it was
filled in the period was not filled in. I phoned
Pieter Human and he
said that the lease period is indeed five years. Mr Human was acted
as a representative of the lessee.
”
[13]
From
the Appellants own version Pieter Human was an agent of the
Appellant.
It
is therefore correct that the Magistrate found that it was an
undisputed fact that Pieter Human acted as an agent for the
Appellant.
Third
Ground of Appeal
As
its third ground of appeal, the Appellant submits that the
Magistrate erred in finding that to establish what the
consensus
ad idem
of the parties was at the time
of entering into the contract, it was of utmost importance to look
at the discussion between the
Second Respondent and the agent,
Pieter Human.
When one has regard to
the record, the Magistrate indicates the following:
“
(27)
See AJ Kerr, The Principles of the Law of Contract (sixth edition)
page 3 where it is written:….because the parties
themselves
(or their agents) form that contractual legal bond, that intention is
of fundamental importance……
”
[14]
The
Magistrate then subsequently goes on to reference a few case
laws.
[15]
Based
on the principles referred to above by the Magistrate, she was
correct in concluding that it was important to understand
what the
intention of the parties at the time of entering into the contract
or agreement was. The discussion between the Second
Respondent and
the agent is where the meeting of the minds of the parties was.
It
is very clear that De La Rey did not
personally
negotiate and/or conclude the agreement with the Second Respondents
but did that through Pieter Human as his agent.
Furthermore,
and in support of this third ground of appeal, the Appellant submits
“
that
it is clear from the record and the Defendant’s amended plea,
more specifically paragraph 2 thereof that the Defendants
admit that
they concluded a lease agreement with the Plaintiff and attach the
admitted lease agreement as Annexure RM1 to its
amended plea
.”
[16]
It
must be noted that it is not disputed that a contract was entered
into.
However, Annexure “RM1”
to the Respondents amended plea and Annexure “A” to the
summons are two different
documents.
The
record clearly indicates that the Appellant’s claim is not
based on Annexure “RM1” but rather on Annexure
“A”
to the Particulars of Claim.
The Second Respondent
however denies that the annexed copy marked “A” is the
one signed by the parties. The Second
Respondent submits that that
Annexure “A” has been amended after signatures without
the Respondents consent, and
which is the issue in dispute.
I
am in agreement that Annexure “A” has been unilaterally
amended and without the consent of the Second Respondent.
Fourth and Fifth
Grounds of Appeal
The
Appellant submits that the Magistrate erred in finding that the
failure by the Appellant to call Pieter Human as a witness
was
detrimental to the Appellant’s case.
The Appellant submits
that it was not necessary to call Pieter Human to testify since the
Respondents already admit that they
concluded a lease agreement with
the Appellant.
In
addition, the Appellant submits
that the
Magistrate erred in finding that in the absence of Pieter Human’s
evidence she was not even going to evaluate the
testimony of De La
Rey.
In
looking at the Magistrates’ reasons for same, it is indicated
that:
“……
.
the fact that the agent, Mr Pieter Human was not called by the
Plaintiff is absolutely detrimental
to
the case of the Plaintiff. Only the Defendants and their witnesses
gave an explanation of what transpired at the offices of
Mr Human
(the agent for the Plaintiff).
What was actually discussed and agreed upon prior,
the
signature of second Defendant placed on RM1, are of utmost
importance.
Placed before the court is only the version
of the Defendants and nothing from the side of
Plaintiff in respect of the negotiations.
”
[17]
The court went on to
state that:
“…
On
the Plaintiff’s version, he, only two months after the premises
was occupied,
met with the
second Defendant and others in order to discuss alterations at the
premises…….
Plaintiff in person was never part of any discussions before an
agreement was reached. Plaintiff was represented by his agent,
Mr
Human. The only person on the side of Plaintiff to
explain what was negotiated was Mr Human, and the Plaintiff
elects not to call him to testify.
”
[18]
In
evaluating the evidence before it, the Magistrate in the judgment
states that:
“
the
four (
4)
witnesses for the Defendants corroborate each other in their
testimonies. First witness for Defendants explained that he went
to
the second witness for the Defendants to ask for his assistance to
make use of his close cooperation to secure the premises
for the
church. Second witness only came to the negotiations because of the
request of Mr Rodwell Oubaas Sabela, (first witness
for the
Defendants)
,”
[19]
Furthermore,
the Magistrate writes that:
“…
.
the
first Defendant’s witness acted in this manner on advice of Mr
Pieter Human, the agent of the Plaintiff……Never
did
second Defendant made any payments to the Plaintiff. All payments
were made by the Holy Ghost Embassy NPC.
”
[20]
Looking
at the reasoning of the Magistrate in light of the evidence adduced,
indeed, the court was only faced with the version
of the Respondents
and nothing from the side of the Appellant in respect of the
negotiations.
Due
to the fact that the lease agreement, Annexure “A” to
the summons, was disputed by the Respondents it was indeed
of utmost
importance that the person who represented the Appellant during the
signature and/or conclusion of the Annexure “A”
be
called to testify in order to clarify the issues in dispute.
The
evidence is that the Second Respondent
admitted
that indeed a contract was signed by the Second Respondent at the
offices of Pieter Human, but that Annexure “A”
is not
the one that was signed by the Second Respondent. It was therefore
vital that the agent be called to testify. The failure
to do so
meant that on the evidence before the Magistrate, the version of the
Respondents was more probable than not.
Regarding
the exclusion of De La Rey’s evidence, from the record De La
Rey only met with the Second Respondent and other
members of Holy
Ghost Embassy NPC two months after the premises were already
occupied.
It
is not disputed that De La Rey was not personally a part of the
discussions or negotiations before an agreement was reached.
In
looking at what the real issue in dispute was before the Magistrate,
the weight of De La Rey’s evidence to the dispute
was
therefore questionable and could be rejected by the Magistrate.
Sixth
and Seventh Grounds of Appeal
The
Appellant submits that the Magistrate erred in finding that the
Second Respondent never acted on his own behalf and in finding
that
the Appellant failed on a balance of probabilities to prove its
case.
The
Appellant avers that from a reading of the agreement (Annexure RM1)
it is clear that the Second Respondent bound himself as
surety and
co-principal debtor together with the Second Respondent.
Looking
at the evidence before the Magistrate, Pastor Stevens, one of the
four witnesses for the Respondents, he corroborated
the evidence of
the Second Respondent, wherein the Second Respondent indicated that
he had not signed the agreement for and/or
on his own benefit and/or
behalf, but rather the signature was for the sole purpose of
securing the premises on behalf of Holy
Ghost Embassy NPC. This was
done because the Second Respondent was advised by the agent, Pieter
Human, that the owner prefers
juristic persons to lease his premises
rather than natural persons.
It
was also not disputed that the Second Respondent never made any
payments to the Appellant and that all payments were made by
Holy
Ghost Embassy NPC, a clear indication that the Second Respondent did
not sign the agreement for his own benefit.
The evidence was also
that the premises were indeed leased and/or utilised by the church,
Holy Ghost Embassy NPC and not by the
Respondents.
It
is therefore clear that the evidence overwhelmingly favours the
Respondents herein.
Eighth Ground of
Appeal
The
final ground of appeal is that the:
“
Magistrate
erred
by
totally ignoring the Second Respondents allegation in its affidavit
in support of its application in terms of Rule 28A(3)(b)
dated 13
April 2018 where the Second Respondent states in paragraph 6.3 and
6.4 that Holy Ghost Embassy NPC requested him to use
his close
cooperation, Whitehall Trading and Project 64 CC, to secure the lease
for the benefit of the Church and undertook to
pay rent and or all
financial requirements in the lease agreement, to which he agreed and
subsequently used his close corporations
name and also signed as
surety and co-principal debtor
”
.
[21]
Upon
the evaluation of all the evidence the Magistrate concludes that:
“
in
the evaluation of Mr De La Rey and also the testimony of the first,
second and fourth witness of the Defendants, it were never
explained
that the second Defendants witness went to any meeting with Mr Human
or Mr De La Ray alone, without being accompanied
by members of the
church. This shows that second Defendant never acted on his own
behalf - he only accompanied the main role players
- the members of
the church
”.
[22]
The
court went further and held that “
the
intention of the parties present in negotiation is clear: That
intention of the second Defendant was only to help the Church
on a
temporary basis to secure the premises and that another lease
agreement will follow between Plaintiff and Holy Ghost Embassy
NPC
”.
[23]
It
is therefore clear that the Magistrate considered the issue and
eventually found in favour of the Respondents. Once again it
must be
noted that the Respondents did not deny signing a contract, but they
dispute that the contract attached to the summons
and upon which the
Appellant is relying on as the basis of its claim is not the one
signed by the Second Respondent.
In
all the above, the Appellant has failed to prove on a balance of
probabilities and to show cause why the Magistrate’s
decision
should be set aside or replaced.
Consequently,
the appeal stands to fail, and the following order is made;
ORDER:
1.
The Appeal is dismissed with costs.
T
DEANE
ACTING
JUDGE OF THE HIGH COURT, POLOKWANE;
LIMPOPO
DIVISION
I
AGREE
KGANYAGO
J
JUDGE
OF THE HIGH COURT OF SOUTH
AFRICA,
LIMPOPO DIVISION, POLOKWANE
APPEARANCES
FOR
THE APPELLANT
Adv
WM Dreyer
INSTRUCTED
BY
Stewart
Maritz Basson
FOR
THE RESPONDENTS
TF
Mamitwa
INSTRUCTED
BY
TF
Mamitwa Attorneys
DATE
OF HEARING
17
May 2024
DATE
OF JUDGEMENT
22
nd
July 2024
[1]
Record:
p 283.
[2]
Record:
Annexure B, p 27.
[3]
Record:
Annexure C, p 28.
[4]
Record:
Annexure E, p 30.
[5]
Record:
pp 64-67.
[6]
Record:
p 280, para 26.
[7]
Annexure
C: p 28.
[8]
Annexure
C, para 13.
[9]
Annexures
D29, E30, E
[10]
(725/13)
[2014] ZASCA 178
;
2015 (2) SA 118
(SCA).
[11]
See
Annexure A to the Particulars of Claim.
[12]
Respondents
Heads of Argument: para 4.
[13]
[13]
Record:
p 78, lines 1-10.
[14]
Record:
p 280, para 27.
[15]
Record:
p 280, para 28.
[16]
Appellants
Heads of Argument: p 12, para 25.2.
[17]
Record:
p 281, para 34.
[18]
Record:
p 281, paras 35-36.
[19]
Record:
p 281, para 31.
[20]
Record:
p 281 paras 32-33.
[21]
Appellant
Heads of Argument: p 19, para 30 and Record: p 287, para 8.
[22]
Record:
p 282, para 41.
[23]
Record:
p 282, para 42.