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[2024] ZAECMKHC 127
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De Beer N.O and Others v Ghulam and Another (4217/2022) [2024] ZAECMKHC 127 (26 November 2024)
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Certain
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IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE DIVISION, MAKHANDA)
Case Number: 4217/2022
In
the matter between:
JOHAN
DE BEER N.O.
First Applicant
LIZL
DE BEER N.O.
Second Applicant
LAURENCE
SAHD N.O.
Third Applicant
and
SHABBIR
GHULAM
First Respondent
ENOCH
MGIJIMA LOCAL MUNICIPALITY
Second Respondent
JUDGMENT
RUSI
J
[1]
At the center of this application are two immovable properties
described as the remainder
of Erf 8[...], Queenstown and remainder of
Erf 1[...], Queenstown (the first property); and the remainder of Erf
8[...], Queenstown
(the second property) which the first respondent
occupies.
[2]
The applicants are the trustees for the time being of the UITSUG
Trust. They shall
conveniently be referred to in this judgment as
‘the Trustees’. Whenever reference is made in the
judgment to the Trust,
it must be taken to be reference to the
Trustees.
[3]
The Trustees now seek an order evicting the first respondent from
these properties
in terms of section 4(1) of PIE. Notice was given to
the first respondent as envisaged in section 4(2) of the same Act, of
the
Trust’s intention to apply for his eviction from the
properties.
[4]
No substantive relief is sought against the second respondent (the
Municipality),
having been cited in these proceedings as an
interested party to the extent that it may be required by this Court
to provide the
first respondent with emergency temporary
accommodation. It is necessary to indicate at this early stage that
even though the Municipality
was given due notice of these
proceedings, it has never participated in them, in particular, by the
submission of a report regarding
the availability of alternative
accommodation in the event of the eviction order sought is granted.
[3]
The first property is situated at 33 B[...] Street, Komani and the
second property
at 31 B[...] Street, Komani. Both the first and
second
properties are owned by the UITSIG Trust as shown in
the Deeds Registry property search report which the Trust annexed to
its founding
papers. The Trust sold these properties to the first
respondent in terms of two written sale agreements that were
concluded in
October 2019 and July 2020, respectively. For
convenience, I will refer to the first property as “33 B[...]
Street”,
and to the second as “31 B[...] Street”.
The purchase price for 33 B[...] Street was R2million, while 31
B[...] Street
was sold for R1 750 000.00. These amounts were payable
in instalments over a period of time.
[4]
The two sale agreements simultaneously made provision for
occupational rental by the
first respondent who had already taken
their possession and occupation as provided for therein. They also
made provision for payment
by the first respondent of municipal
charges relating to the properties which included but were not
limited to all rates, services,
insurance, water, electricity and
levies.
[5]
The first respondent allegedly fell in default of the payment terms
set out in the
first agreement. In order to cure the default and,
inter alia
, to regulate the future terms of payment of the
balance of the purchase price in respect of 33 B[...] Street, and the
monthly occupational
rental for both properties, he and the Trust
entered into a settlement agreement (the settlement agreement) on 13
January 2021.
He failed to honour the terms set out in the settlement
agreement too, resulting in the cancellation of all three agreements.
[6]
It was a term of the settlement agreement that in the event of its
cancellation due
to breach, the first respondent would be evicted
from both properties. The eviction is opposed by the first respondent
who, simultaneously
with his opposing papers, filed a counter
application.
[7]
The ground on which the Trust seeks the eviction of the first
respondent from the
properties is that since the sale agreements and
the settlement agreement have been cancelled owing to his breach of
these agreements,
his continued occupation of the properties is
unlawful.
[8]
In opposing the application, the
first respondent raised several points in limine, namely
that:
(a)
the first and second agreements are unlawful due to non-compliance
with section 40(1) of the National Credit Act in that they are
credit
agreements as defined in the Act, and when they were concluded the
Trust was not registered as a credit provider;
(b)
the first
and second agreements are invalid in that they were not recorded and
registered by the Registrar of Deeds as required
by section 20(1) of
the Alienation of Land Act 68 of 1981 (the ALA) hence, the
cancellation of the two agreements is premature
and ought to be set
aside in that in terms of section 26 of the ALA no payments were due
by the first respondent until the two
agreements were recorded as
envisaged in section 20(1) of the ALA;
(c)
the settlement
agreement is void
ab initio
as it was induced by material
misrepresentation;
(d)
the cancellation of the second
agreement is unlawful as the first respondent has paid the purchase
price for 33 B[...] Street in
full.
[9]
These points
in limine
are also the grounds for the various
declaratory reliefs that the applicant seeks in his
counter-application.
[10]
On the date of hearing of the application, the first respondent
abandoned the point of law relating
to non-compliance with the
provisions of section 20(1) and 26 of the ALA. Since the points
in
limine
that the first respondent raised constitute the bases on
which the counter-application is founded, the abandonment of this
point
in limine simultaneously disposes of the declaratory relief
sought by the first respondent based on the provisions of sections
20(1) and 26 of the ALA.
[11]
The remaining declaratory relief that the first respondent seeks in
his counter application is,
therefore, that
(a)
the first and
second agreements are unlawful due to non-compliance with section
40(1) of the National Credit Act in that they are
credit agreements
as defined in the Act and when they were concluded, the Trust was not
registered as a credit provider;
(b)
the settlement agreement
is void
ab initio
as it was induced by material
misrepresentation.
[12]
He further seeks, in the counter application, an order directing the
Trust to transfer to him
the first property (remainder of Erf 8[...]
Queenstown and remainder of Erf 1[...] Queenstown) situated at 33
B[...] Street Komani,
as well as other ancillary relief. As the basis
of this relief, he states that he has paid more than 50 per cent of
the purchase
price in respect of 33 B[...] Street, therefore, in
terms of section 27(1) of the ALA, the Trust is obliged to transfer
this property
to him.
[13]
The counter-application is opposed by the Trust on the basis that its
cancellation of the agreements
is lawful and not premature as the
first respondent asserts. According to the Trust, the first and
second agreements are not invalid
in that they are incidental
agreements as opposed to credit agreements, and as such, it did not
have to register as a credit provider
as envisaged n section 40(1) of
the NCA when it concluded them.
[14]
It must further be stated at this early stage that the Trust’s
cancellation of the second
agreement is accepted by the first
respondent who further states in his answering affidavit that he has
vacated the property forming
the subject of the second agreement
(that is, 31 B[...] Street) and has handed over the keys to the
Trust. He, however, denies
that he is in unlawful occupation of 33
B[...] Street. This fact notwithstanding, it was suggested by counsel
for each of the parties
at the time of hearing of the application
that the facts relating to the second agreement still bear relevance
to the determination
of the issues that remain in respect of 33
B[...] Street. I agree.
The
background facts
[15]
In October 2019 the Trust, duly represented by the first applicant
entered into a written sale
agreement (the first agreement) in
respect of 33 B[...] Street for the purchase price of R2 million.
This amount would be payable
by way of 10 equal instalments of R200
000.00. The first instalment was payable on 15 October 2019, and
thereafter, on the 25
th
day of each month.
[16]
Since the first respondent was already in occupation of 33 B[...]
Street at the time the sale
agreement was entered into, it was a
further term of the agreement that he would pay occupational rental
of R9 000.00 per month.
As a result, the total monthly instalment
that the first respondent would pay to the Trust in respect of 33
B[...] Street was R219 000.00
and his tenth and last instalment
towards the full purchase would be payable on 15 July 2020.
[17]
Further in terms of this first agreement, the transfer of 33 B[...]
Street would be given by
the Trust to the first respondent after the
full purchase price had been paid. The first respondent also had an
obligation to pay
municipal charges relating to the property which
included but were not limited to all rates, services, insurance,
water, electricity
and levies.
[18]
It was a further term of the first agreement that where the
prescribed payments were not made
on their due date, interest at the
prevailing prime rate at the time, plus 2% would be charged from the
date of the default or
delay to the date on which the delay was
cured, both dates inclusive as certified by the conveyancer.
[19]
On 16 July 2020, the Trust sold 31 B[...] Street to the first
respondent in terms of a written
sale agreement (the second
agreement) for the purchase price of R1 750 million, similarly, to be
paid in ten instalments. The first
nine instalments would be in the
amount of R150 000.00 and the final and tenth instalment would be
R100 000.00. The first payment
towards the purchase price for 31
B[...] Street, in terms of the second agreement, would be payable
upon the first respondent paying
the last instalment in respect of
the purchase price of 33 B[...] Street. This would be on the 25
th
day of the month succeeding that in which the first respondent made
payment of the last instalment for 33 B[...] Street. Arithmetically,
in relation to 15 July 2020, this would be 25 August 2020.
[20]
The second agreement further stipulated that an amount R300 000.00
which the first respondent
had paid to the Trust in respect of the
first agreement would be allocated to the acquisition of this
property as a non-refundable
deposit.
[21]
Similar to the first agreement, the first respondent had an
obligation to pay all costs relating
to municipal rates, insurance,
water electricity and levies as well as costs of the full maintenance
of the property.
[22]
The transfer of 31 B[...] Street from the Trust to the first
respondent would be given once the
full purchase price was paid.
Since the first respondent had already taken occupation of 31 B[...]
Street by 06 June 2020, an amount
of R10 000.00 per month was payable
in advance as occupational rent.
[23]
Any default by the first respondent in paying the agreed amounts
under the second agreement would
result in interest being payable at
the prevailing prime rate plus 5% from the date of commencement of
the default until it is
cured, both dates inclusive as certified by
the conveyancer.
[24]
A payment schedule annexed to the papers filed of record as FA7 shows
that the first respondent
failed to make payment of the first
instalment towards the purchase price of 33 B[...] Street on the due
date of 15 October 2019.
His failure to make the agreed payments on
their due date as envisaged in the first and second agreements
persisted. As a result
of his persistent breach of payment terms
under the two agreements the first respondent was charged default
interest.
[25]
Upon demand of payment by the Trust by a letter dated 20 November
2020, the first respondent
admitted his default, and made an offer to
the Trust to re-negotiate the payment terms of the purchase price for
33 B[...] Street.
He proposed to pay an amount of R50 000.00 towards
the balance of the purchase price.
[26]
The first respondent’s offer was encapsulated in the letter
written by his legal representatives
to those representing the Trust.
These are the relevant contents of the said letter
dated 27 November 2020:
“
We
act for Mr Shabbir Ghulam.
Your letter of demand
dated 20 November 2020 addressed to our client has been handed over
to us for attention and reply.
Due to the Covid 19
Pandemic our clients business has been severely hampered causing him
to experience a severe cash flow problem.
Prior to the failure
to pay his instalment for the month of November, he did his level
best to, within each month, to meet his obligation
of paying your
client the R200 000.00 within each month and to pay his
occupational rental of R9 000.00 per month.
As a result of the
impact of Covid 19 on his business his cash resources have dwindled
and would like to re-negotiate the balance
of the purchase price by
paying the balance in the sum of R50. 000.00 per month.
To date our client has
paid R1.3 Million towards the purchase price leaving the balance of
R700 000.00.
Our client would like
to re-negotiate the repayment of the balance of R700 000.00 by
offering to pay the balance at the rate
of R50. 000.00 per month.
Kindly request your
client to consider our clients proposal and vary the agreement to
accommodate our client.”
[27]
This offer culminated in a settlement agreement dated 13 January
2021. Its introductory portion
records the following in its clause 3
regarding the first respondent’s admitted breach of the first
and second agreements
and what he and the Trust intended following
such breach:
‘
3. The Purchaser
defaulted on is payments since inception and the Seller reached an
agreement with him on 21 September 2020 whereby
the Purchaser would
pay monthly instalments of 219 000.00 from 15 November 2020 onwards
together with outstanding rent until the
property in clause 1 has
been paid in full.
[1]
Once the
capital on the property referred to in clause 1 has been paid in
full, the Purchaser would pay the interest, insurance,
municipal
rates and taxes. Once this has been settled, he would commence with
monthly instalments of R160 000.00 until the
property in clause
2 has been paid in full
[2]
,
whereafter he would pay the interest, insurance and municipal rates
and taxes.
[28]
The terms of the settlement agreement were as follows: The first
respondent would pay monthly
instalments of R50 000.00 with interest
on the outstanding balance of the purchase price of 33 B[...] Street
at the prevailing
rate of 6% from the date of commencement of the
default calculated daily and compounded monthly until the purchase
price; rental
interest, insurance premiums and municipal rates and
taxes had been paid in full.
[28]
The payment of the instalments agreed upon in terms of the settlement
agreement would commence
on 15 January 2021 with the next instalment
being payable on the 15
th
day of each succeeding month.
The agreed monthly instalment of R50 000.00 would escalate with 10%
per annum while the monthly rental
would escalate with 9% per annum.
The escalation would commence in December 2021 and would further be
escalated in December of
each subsequent year.
[29]
Further in terms of the settlement agreement, the monthly instalments
of R50 000.00 would be
utilised first in covering the rental, as well
as the municipal rates and taxes paid by the Trust which the first
respondent was
otherwise responsible for in terms of the first and
second agreements; insurance and the capital amount being the balance
of the
purchase price of 33 B[...] Street with interest thereon.
[30]
It is common cause that at the time of conclusion of the settlement
agreement, the Trust had
registered as a credit provider as required
by the NCA. Subsequent to the conclusion of the settlement agreement,
the first respondent
made various intermittent payments which did not
comply with the payment schedule agreed to between him the Trust in
terms of the
settlement agreement. The last payment he made was of an
amount of R50 000.00 on 17 July 2022. He stopped further payments,
and
he indicates on this score that he stopped making further
payments as he saw that the amounts owing by him did not decrease
despite
the payments he made.
[31]
The first respondent’s failure to honour the terms of the
settlement agreement resulted
in the cancellation of the agreements
and the eviction that the Trust now seeks.
At
the time of this application, the first respondent had already paid
the Trust in total the amount of R2 346 072.22.
[32]
These facts are either common cause between the applicants and the
first respondent or have not
been seriously disputed.
The
case for the applicant
[33]
In substantiating the eviction application, the Trust contends that
since the agreements have
been cancelled there is no basis for the
first respondent and all persons occupying the two properties through
him to remain in
their occupation.
[34]
As regards the alleged breach, the Trust contends that the first
respondent ought to have paid
to it on 15 July 2020 the full purchase
price of R2 million in respect of 33 B[...] Street but failed to do
so. Despite being afforded
further opportunities to cure his default,
he failed to pay the monthly instalment of R219 000.00 which was due
on 15 November
2020. By the time the settlement agreement was entered
into, he had only paid to the Trust a total sum of R1 396 072.22.
[35]
The first respondent further breached the terms of the settlement
agreement that was concluded
on 13 January 2021. According to the
Trust, as at 15 October 2022, he should have paid to the Trust, in
keeping with the terms
of the settlement agreement, R1 205 000.00
representing 12 monthly instalments of R50 000.00 for the period of
15 December 2020
to 15 November 2021; and the escalated monthly
instalment of R55 000.00 for the period of 15 December 2021 to 15
October 2022 which
equalled the total sum of R605 000.00. As a
result, says the Trust, in so far as the settlement agreement is
concerned, by
02 December 2022 he had paid R950 000.00. According to
the Trust, the first respondent had, therefore, fell in arrears of
R255
000.00 under the settlement agreement, which excluded interest.
[36]
The Trust goes on to state that from the total amount of R2 346
072.22 that the first respondent
had paid from 21 October 2019 until
17 June 2022, it applied an amount of
R921 403.08
towards the occupational rental for both properties and associated
costs. In this regard the applicants annexed to their
application
papers the relevant schedules depicting the amounts that were payable
by the first respondent.
[37]
Also annexed to the applicant’s founding papers is a payment
schedule marked Annexure FA7
(“FA7”) which sets out the
amounts owing and paid by the first respondent to the Trust, together
with interest thereon,
both in relation to the purchase price of the
two properties and their occupational rental and associated costs.
The total interest that, according to Annexure FA7 was owed to
the Trust by the first respondent under the first and second
agreements
and the settlement agreement as at 30 September 2022 is
R1 053 616.05.
[38]
It is the Trust’s evidence further that it utilises the
properties to generate income,
and the first respondent’s
continued unlawful occupation is severely detrimental to it. It
contends that the first respondent’s
continued occupation of
the properties in circumstances where he has made no payments since
June 2022 is prejudicial in that it
prevents it from exercising its
rights in relation to the properties as their registered owner. It
further states that it remains
liable to pay insurance taxes, rates,
refuse removal and water consumption in respect of the properties
while the first respondent
continues to occupy the properties without
making any payments for its continued occupation.
[39]
Further, according to the Trust, there is sufficient and adequate
accommodation readily available
to the first respondent in Komani
against payment of reasonable rent which would be suitable for his
residential needs. For these
reasons, the Trust asserts that it is
just and equitable that the first respondent be evicted from the
properties.
The
case for the first respondent
[40]
I set out first, the points
in limine
that the first
respondent persists with in opposing his eviction from 33 B[...]
Street.
(a)
The non- compliance with section 40 of the National Credit Act
[41]
The first respondent contends that the first sale agreement is an
instalment sale agreement as
envisaged in the National Credit Act 34
of 2004 (the NCA). Therefore, the Trust was required in terms of
section 40(1) of the NCA
to register as a credit provider when the
agreements were concluded.
[42]
In the light of the fact that the Trust had not registered as a
credit provider as required by
section 40(1) of the NCA, so the first
respondent contends, in terms of section 89(2)
(d)
of the same
Act the second agreement is accordingly void
ab initio
. On
these bases, the first respondent contends that he did not commit any
breach of the agreements when the settlement agreement
was concluded,
and he is not indebted to the trust at all and therefore his
occupation of the property is not unlawful.
(b)
The settlement agreement is void on the ground of misrepresentation
[43]
The first respondent states that he signed the settlement agreement
under a false misrepresentation
made by the Trust that he was in
breach of both sale agreements. It was subsequent to the legal advice
he obtained that he became
aware that he was in fact not in breach of
any of the sale agreements. This, he says, was so because the Trust
was not registered
as a credit provider and therefore the agreements
are unlawful and void
ab initio
, alternatively, that he was
not in breach of the second agreement as payments of the purchase
price in respect of 31 B[...] Street
would only commence after the
instalment sale agreement had been registered. In this regard, he
further sates that he saw from
Annexure FA7 that the purchase price
for 31 B[...] Street was incorrectly debited on his account on 16
July 2020.
[44]
The first respondent goes on to state that the misrepresentation by
the Trust was a material
one and it induced the conclusion of the
settlement agreement. He further states that it was reasonable for
him to believe the
misrepresentation. He had no reason to believe
that the Trust was not allowed to enter into the sale agreements with
him when it
was not registered as a credit provider.
(c)
The cancellation of the first agreement is unlawful
[45]
The first respondent contends that he has fully paid the purchase
price in respect of the 33
B[...] Street which forms the subject of
the first agreement and therefore its cancellation is unlawful.
[46]
In substantiating this point
in limine
, the first respondent
asserts that the settlement agreement amends the terms of the first
and second agreements in relation to
interest. In terms of the
settlement agreement, he was obliged to pay interest on the
outstanding balance at the prevailing rate
of 6%. He contends that
this interest clause in the settlement agreement also exceeds the
rate of interest prescribed from time
to time for contracts of the
class to which the sale agreements belong.
[47]
As regards his obligation to commence payment in respect of 31 B[...]
Street, the first respondent
asserts that he was incorrectly charged
interest on the purchase price of R1 750 000.00 in respect of 31
B[...] Street in circumstances
where his obligation to pay this
purchase price had not become effective. He bases this contention, as
already mentioned, on the
fact that in terms of the second agreement,
his obligation to pay the purchase price for 31 B[...] Street would
commence once he
had paid in full the purchase price in respect of 33
B[...] Street.
[48]
The first respondent further states that the variation of interest on
the purchase price of 33
B[...] Street is not provided for in either
the original sale agreement or the settlement agreement. He therefore
disputes the
interest charges and calculations reflected in Annexure
FA7. He also disputes liability for the debited charges on a monthly
basis
for insurance, municipal rates and water on both properties,
stating that he never agreed to such a debit and that the Trust has
failed to adduce proof of supporting vouchers to verify these
expenses.
The
first respondent’s opposition on the merits of the application
[49]
On the merits of the application, the first respondent denies
indebtedness to the Trust in the
amounts it alleges. The Trust, he
says, incorrectly calculated interests on the outstanding amounts
based on his indebtedness under
the second agreement when he was not
in default of that agreement as his obligation to make payments had
not taken effect.
[50]
According to the first respondent, the total purchase price for both
properties is R3 750
000.00. He contends that the arrear amount
of R219 000.00 was incorrectly calculated, and the actual amount of
arrears was R150
000.00. He further states that he had paid to the
Trust a total amount of R 1 745 000 .00 by December 2020 and not the
R950 000.00
that the Trust alleges to be the total amount paid.
[51]
The first respondent further states that the eviction grounds relied
upon by the Trust cannot
be sustained in that the remaining agreement
(the first agreement) is unlawful, alternatively, its cancellation is
premature, and
further alternatively, that the settlement agreement
itself is invalid and should be set aside.
[52]
The first respondent states as his personal circumstances that he has
used 33 B[...] Street as
a residence for his family including his
wife, brother-in-law and minor children since the year 2015. Prior to
purchasing this
property, he had been renting from the Trust. He
moved to Komani to start a business and to support his family. His
business was
severely affected by the COVID-19 pandemic. However, he
has, to the best of his ability, paid the instalments due to the
Trust
in terms of the settlement agreement and acted in good faith in
so doing at all times.
[53]
The first respondent further contends that it is not just and
equitable to evict him from 33
B[...] Street in circumstances where
the Trust has not tendered the return of the purchase price which he
has paid in full and
that this conduct is unconscionable.
The
counter-application
[54]
To avoid repetition, it is sufficient to state that the facts relied
upon by the first respondent
in support of his counter-application
are the same as the facts he relies on in opposing the main
application, as they relate to
both the points
in limine
and
the merits of his opposition.
[55]
Of note from the counter-application are the assertions made by the
first respondent regarding
the settlement agreement that was
concluded on 13 January 2021. In this regard he states that the
settlement agreement which is
recorded in English was drawn by the
legal representatives of the Trust. He goes on to state that English
is his second language
as he is from Pakistan and therefore his
ability to read, speak and understand English is limited; hence, he
never confirmed what
was recorded in the settlement agreement as its
material terms.
[56]
In demanding the transfer to him of the property forming the subject
of the first agreement the
first respondent relies on the provisions
of section 27(1) of the ALA in terms of which a purchaser is entitled
to demand the registration
of transfer of property into his name
where he has,
inter alia
, paid not less than 50% of the
purchase price of that property.
[57]
In tandem with his claim to the transfer of the property situated at
33 B[...] Street as envisaged
in section 27(1) of the ALA, he tenders
payment of all amounts owing, if any, in terms of the first
agreement.
The
Trust’s replying affidavit
[58]
In reply to the first respondent’s answering affidavit, the
applicants persist with the
relief that they seek, contending in
essence that, in any event, if the first respondent asserts that the
second agreement and
the settlement agreement are invalid, there is
no legal basis for his occupation of 33 B[...] Street, and there is
no legal basis
for a transfer of this property to him.
[59]
In dealing with the first respondent’s assertion that its
conduct in evicting him without
a tender of monies paid by him is
unconscionable, the Trust contends that the first respondent never
made a demand of repayment
of monies paid by him under the first
agreement.
[60]
It is further the Trust’s evidence in reply that the first
respondent breached the terms
of these agreements by failing to pay
occupational rental in respect of 33 B[...] Street in the amount of
R252 077.83 which amount
includes associated costs; as well as
occupational rental and associated costs in respect of 31 B[...]
Street in the amount of
R84 571.31. Further according to the Trust,
the total amount that was owing, and payable by the first respondent
was R3 086 649.00,
and he had only paid R1 396 072.22 at the time of
conclusion of the settlement agreement.
[61]
The Trust further states that it is incorrect that the first
respondent had paid the full purchase
price 33 B[...] Street. It
states in this regard that since the settlement agreement
provided
for interest on the purchase price of R2 million, that interest over
the period of default of 1 135 days at 9% amounted
to R864 943.11. It
goes on to state that when the interest computed
according to the terms of the settlement agreement is added to the
balance owed
by the first respondent,
he has not paid 50 per
cent of the purchase price for 33 B[...] Street and therefore he is
not entitled to the transfer of this
property in terms of section
27(1) of the ALA.
[62]
The Trust further contends that the first agreement is an incidental
agreement as opposed to
credit agreements. Therefore, the Trust was
not required to register as a credit provider when it concluded it.
[63]
That the settlement agreement is void on the ground of false
representation as to the first respondent’s
breach and
indebtedness is denied by the Trust. In this regard, it contends that
the settlement agreement was proposed by the first
respondent’s
legal representatives by way of the already quoted correspondence
written to the legal representatives of the
Trust.
[64]
Regarding the first respondent’s tender to pay any amount that
may be outstanding in respect
of 33 B[...] Street, the Trust states
that this is an acknowledgement by him that he has not in fact paid
the full purchase price
in respect of the said property which as he
contends would entitle him to a transfer.
The Trust’s
opposition of the counter-application
[65]
In opposing the counter application, the Trust persists with the same
contentions it made regarding
the first respondent’s breach of
the agreements in its founding affidavit and in reply to the first
respondent’s answering
affidavit in the main application. It
reiterates that there was no misrepresentation by the Trust which,
according to the Trust,
led to the conclusion of the settlement
agreement. It further states that the settlement agreement was
entered into after the first
respondent acknowledged his default
during which time he was legally represented.
The Trust’s
reply in the counter-application
[66]
In reply the Trust states that in computing the amount owed to it by
the first respondent, it
applied the lowest interest rate of 7% to
the full purchase price, plus 2% upon default. This, it says, is a
calculation to the
benefit of the first respondent. It determines
this to be 9 per annum over 1135 days.
The issues for
determination
[67]
The issue to be determined by this Court in the main application, is
whether the Trust has made
out a case for the eviction of the first
respondent from 33 B[...] Street. In the counter application I am
called upon to determine
whether the first respondent is entitled to
the transfer of 33 B[...] Street to his name, and whether he is
entitled to the declaratory
relief that he seeks.
The parties’
submissions
[68]
Dealing with the points
in limine
raised by the first
respondent in the main application, Ms
Watt
submitted that
since the agreements provided for payment of interest only upon
default of the payments that are due, they are incidental
agreements.
According to Ms
Watt
, they are excluded from the registration
requirement of section 40 (1) of the NCA, the first agreement is not
void, therefore.
Ms
Watt
further submitted that if it is so
that the first agreement is void
ab initio
, there is,
therefore, no basis for the first respondent’s occupation of 33
B[...] Street.
[69]
On the score of the alleged false premise which renders the
settlement agreement void according
to the first respondent, Ms
Watt
submitted that the contention made by the first respondent cannot be
sustained in that it is his legal representatives who, acting
upon
his instructions, proposed the settlement agreement.
[70]
Regarding the point
in limine
that the first respondent is
entitled to the transfer of 33 B[...] Street as envisaged in section
27(1) of the ALA, it was submitted
on behalf of the Trust that it is
not correct that he is so entitled. Ms
Watt
further submitted
that the Trust was, in any event, entitled to cancel the sale
agreement following the first respondent’s
breach of its terms.
[71]
Ms
Watt
further submitted that the first respondent makes a
bald denial of the Trust’s computation of the amounts owed to
it by the
first respondent. She re-iterated the fact that the first
respondent’s application of the agreed total amount that he
paid
overlooks the fact that interest was payable on the capital
purchase price. She further submitted that the 16% interest charged
according to Annexure FA7 represents 1.33% per month. Ms Watt took
the view that the court is not called upon to determine how
much is
owing to the Trust but rather whether the eviction sought is just and
equitable.
[72]
In similar vein, Ms Watt accepted that the Trust debited the first
respondent with the purchase
price for 31 B[...] Street on the 10
th
month when the first respondent fell in breach of the first
agreement.
[73]
On behalf of the first respondent, Mr
Cetywayo
submitted that
the first and second agreements are credit agreements and not
incidental agreements as contended by the Trust in
that the Trust
levied on the two agreements interest more than the 2% that is
allowed in terms of the NCA. Such interest, so Mr
Cetwayo
submitted, was 6% in respect of the first agreement, and 5% in
respect of the second agreement, respectively. Therefore, the Trust
was required to register as a credit provider. In this regard, Mr
Cetywayo
argued that the amount owing from both agreements
combined brings them within the purview of a credit agreement in
terms of the
NCA.
[74]
He further submitted that in respect of 31 B[...] Street, interest of
16% per annum was charged
by the Trust even though the first
respondent had not fallen in default of the second agreement since
his obligation to pay the
purchase price under the second agreement
had not come into effect. This, he said, meant that the interest
charged on the second
agreement was not incidental to default.
[75]
For these reasons, he persisted with the first respondent’s
contention that the two agreements
are unlawful and fall to be
declared void from the date of their conclusion as envisaged in
sections 89(2)
(d)
and section 89(5) of the NCA. In this
regard, he further submitted that a just and equitable order that
section 89(5) envisages
would, in the present circumstances, be that
since the first respondent has paid the Trust the sum of R2 346
072.22 it must transfer
33 B[...] Street to him.
[76]
In developing the contention that the first respondent is entitled to
the transfer of 33 B[...]
Street, Mr
Cetywayo
submitted
that the interest that was charged by the Trust in terms of the
settlement agreement was incorrectly computed on the purchase
price
for 31 B[...] Street in respect of which no payment obligations had
yet arisen. In this regard he relied on
Botha
and Another v Rich NO and Others
[3]
,
in which the Constitutional Court considered the import of section
27(1) of the ALA.
[77]
As regards the settlement agreement, he submitted that apart from the
fact that the first respondent
was not in breach of the second
agreement when the settlement agreement was concluded, he had limited
understanding of the language
in which it was written. Relying on
Ratanee
v Maharaj
[4]
where
the court set aside an ante-nuptial agreement which was induced by
mistake. He submitted that the Trust’s misrepresentation
that
the first respondent was in breach of the agreements induced the
conclusion of the settlement agreement, hence, it must be
set aside.
[78]
Regarding the disputed calculation by the Trust of the arrear amounts
that are owing by the first
respondent on 33 B[...] Street, Mr
Cetywayo
submitted that the first respondent has advanced
reasonable and justifiable grounds for disputing the arrear amount
determined
by the Trust. This, he said, was an issue that the first
respondent raised with the Trust before these proceedings were
instituted,
and therefore, the Trust should have foreseen the dispute
and not sought relief by way of an application. He submitted that
this
on its own is a ground for the dismissal of the application with
costs.
[79]
It was submitted on behalf of the first respondent, as an
alternative, that in the light of the
material dispute of fact
regarding the amounts owed by the first respondent to the Trust, the
application must be referred to oral
evidence.
The Law
[80]
Evictions from land are governed by the
Prevention
of Illegal Eviction from and Unlawful Occupation of Land Act 19 of
1998 (
PIE). Section 4 of this Act which deals with the
eviction of unlawful occupiers by an owner or a person in charge of
land, provides
that courts may only grant an order for eviction if it
is just and equitable to do so, after considering all the relevant
circumstances.
In this regard, section 4(7) of PIE provides as
follows:
‘
(7) If an unlawful
occupier has occupied the land in question for more than six months
at the time when the proceedings are initiated,
a
court may grant an order for eviction if it is of the opinion that it
is just and equitable to do so, after considering all the
relevant
circumstances
,
including, except where the land is sold in a sale of execution
pursuant to a mortgage, whether land has been made available or
can
reasonably be made available by a municipality or other organ of
state or another land owner for the relocation of the unlawful
occupier, and including the rights and needs of the elderly,
children, disabled persons and households headed by women.’
(Emphasis added)
[81]
In
Port
Elizabeth Municipality v Various Occupiers
[5]
,
it was held that in determining whether an eviction order
should be granted, the court is enjoined to balance out and reconcile
the opposing claims in as just a manner as possible, taking into
account all the interests involved and the specific factors relevant
in each particular case.
[82]
Part of the central issue in the instant application being the sale
and transfer of the already
mentioned properties, two other
legislations are applicable – the National Credit Act and the
Alienation of Land Act.
[83
]
In terms of section 40(1) of the National Credit Act, a person must
apply to be registered as a
credit provider if the total principal
debt owed to that credit provider under all outstanding credit
agreements, other than incidental
credit agreements, exceeds the
threshold prescribed in terms of section 42(1) of the same Act.
[84]
An incidental credit agreement is defined in section 1 of the NCA to
mean ‘
an agreement, irrespective of its form, in terms of
which an account was tendered for goods or services that have been
provided
to the consumer, or goods or services that are to be
provided to a consumer over a period of time and either or both of
the following
conditions apply—
(a) a fee, charge or
interest became payable when payment of an amount charged in terms of
that account was not made on or before
a determined period or date;
or
(b) two prices were
quoted for settlement of the account, the lower price being
applicable if the account is paid on or before a
determined date, and
the higher price being applicable due to the account not having been
paid by that date.’
[85]
A “credit agreement” is defined to mean an agreement that
meets all the criteria
set out in section 8, and relevant to the
instant case are the provisions of section 8(3) and (4), which
provide as follows:
‘
(3)
An agreement, irrespective of its form but not including an agreement
contemplated in subsection (2) or
section 4 (6) (b),
constitutes a credit facility if, in terms of that agreement—
(
a
) a credit
provider undertakes—
(i) to supply goods or
services or to pay an amount or amounts, as determined by the
consumer from time to time, to the consumer
or on behalf of, or at
the direction of, the consumer; and
(ii) either to—
(
aa
) defer the
consumer’s obligation to pay any part of the cost of goods or
services, or to repay to the credit provider any
part of an amount
contemplated in subparagraph (i); or
(
bb
) bill the
consumer periodically for any part of the cost of goods or services,
or any part of an amount, contemplated in subparagraph
(i); and
(
b
) any charge,
fee or interest is payable to the credit provider in respect of—
(i) any amount deferred
as contemplated in paragraph (a) (ii) (aa); or
(ii) any amount billed as
contemplated in paragraph (a) (ii) (bb) and not paid within the time
provided in the agreement.
(4) An agreement,
irrespective of its form but not including an agreement contemplated
in subsection (2), constitutes a credit transaction
if it is—
(
a
) a pawn
transaction or discount transaction;
(
b
) an incidental
credit agreement, subject to section 5(2);
(
c
) an instalment
agreement;
(
d
) a mortgage
agreement or secured loan;
(
e
) a lease;
or
(
f
) any other
agreement, other than a credit facility or credit guarantee, in terms
of which payment of an amount owed by one person
to another is
deferred, and any charge, fee or interest is payable to the credit
provider in respect of—
(i) the agreement;
or
(ii) the amount that has
been deferred.’
[86]
Section 1 of the NCA limits the definition of “
an instalment
agreement”
to a sale of movable property.
[87]
The calculation of interest which is applicable to various types of
agreements to which the NCA
applies is, in terms of section 103, set
out in Regulation 39 and 42 of the Regulations to the NCA. In terms
of Regulation 42,
the maximum interest that a credit provider may
charge in incidental agreements is 2% per month.
[88]
Concerning a purchaser’s claim to the transfer of property
where he has, under a sale agreement,
paid more than 50% of the
purchase price, section 27(1) provides:
‘
27. (1) Any
purchaser who in terms of a deed of alienation has undertaken
to pay the purchase price of land in specified instalments
over a
period in the future and who has paid to the seller in such
instalments not less than 50 per cent of the purchase price,
shall,
if the land is registrable, be entitled to demand from the seller
transfer of the land on condition that simultaneously
with the
registration of the transfer there shall be registered in favour of
the seller a first mortgage bond over the land to
secure the balance
of the purchase price and interest in terms of the deed of
alienation.’
[89]
The Constitutional Court had occasion to consider the meaning and
import of the already quoted
provisions of section 27(1) of the ALA
in
Botha
[6]
,
when it held:
‘
A
plain reading of section 27(1) reveals that it seeks to protect the
rights of a purchaser who has paid not less than half of the
purchase
price. The section states that a purchaser “
shall
.
. . be entitled to
demand
.
. . transfer” (emphasis added). Plainly, this section requires
the presence of the following jurisdictional facts before
the
purchaser can enjoy the protection under it. First, the purchaser
must have undertaken to pay the purchase price in specified
instalments. Second, the purchaser must have paid to the seller in
such instalments not less than 50 per cent of the purchase price.
Third, the property in question must be registrable. . .’
[7]
[90]
There is no controversy between the parties that 33 B[...] Street is
registerable property. Emphasizing
the protective characteristic of
section 27 of the ALA of seeking to ensure fairness between sellers
and purchasers, the Court
went further and said:
‘
Its
provisions are in accordance with the constitutional values of
reciprocal recognition of the dignity, freedom and equal worth
of
others, in this case those of the respective contracting parties. The
principle of reciprocity falls squarely within this understanding
of
good faith and freedom of contract, based on one’s own dignity
and freedom as well as respect for the dignity and freedom
of others.
Bilateral contracts are almost invariably cooperative ventures where
two parties have reached a deal involving performances
by each in
order to benefit both. Honouring that contract cannot therefore be a
matter of each side pursuing his or her own self-interest
without
regard to the other party’s interests. Good faith is the lens
through which we come to understand contracts in that
way.’
[8]
[91]
The common law principles of contract are trite – a binding
contract comes to being when
one or more persons of appropriate
contractual capacity who have a serious intention of creating a legal
obligation, communicate
such intention, without vagueness, each to
the other and being of the same mind as to the subject-matter, to
perform positive or
negative acts, which are possible of
performance.
[9]
[92]
Consensus requires that the contracting parties are of the same mind
regarding their intention
to contract (
animus
contrahendi
).
This is the cornerstone of any agreement. Misrepresentation and
mistake will exclude such consensus.
Where
a party to an agreement raises mistake and wishes to escape
contractual liability, he/she must prove not only that the mistake
is
material but also that it is reasonable (
iustus
error).
[10]
Misrepresentation will exclude consensus if it is material and in
fact induced the representee to conclude the contract.
[11]
[93]
These being application proceedings
,
a
final order will be granted only if the facts averred in the
applicant's affidavits, which have been admitted by the respondent,
together with the facts alleged by the latter, justify such an order,
unless the respondent’s version consists of bald or
uncreditworthy denials, raises fictitious disputes of fact, is
palpably implausible, far-fetched or so clearly untenable that the
court is justified in rejecting them merely on the papers.
[12]
[94]
In the discussion that follows I deal with the application of these
principles of the law to
the facts of this application, starting with
the points
in limine
raised by first respondent.
Discussion
[95]
As regards the point
in limine that
the first sale agreement
is unlawful because the Trust was not registered as a credit provider
when it was concluded, the starting
point is that from the terms of
the first agreement, it is evident that the interest charged was
incidental upon default. A reading
of the first and second agreements
shows that the Trust did not intend to make a profit from them by
charging interest on the purchase
price of the two properties.
[96]
The agreements provide for payment of interest on the deferred amount
if payments are not made
on the agreed date. There is a difference
between this situation and one where the payment of the debt is
deferred, and interest
is charged immediately on the deferred amount.
This is what constitutes the difference between a credit agreement
and an incidental
credit agreement.
[13]
[97]
The submission made on behalf of the first respondent that the
agreements are instalment sale
agreements loses sight of the fact
that in terms of the NCA, the definition of an instalment sale
agreement is limited to the sale
of movable property.
[98]
It is so, that section 8(4)
(f)
provides for a catch all
category of ‘any other agreement, other than a credit facility
or credit guarantee’, in terms
of which payment of an amount
owed by one person to another is deferred, and any charge, fee or
interest is payable to the credit
provider in respect of- (i) the
agreement; or (ii) the amount that has been deferred. This cannot
extend to the first sale agreement
for the same reason that in terms
of that agreement, interest would be charged on the deferred amount
not immediately upon deferral,
but when the first respondent failed
to make payments of the date agreed for the payment of the deferred
amount.
[99]
Mr
Cetywayo
took the view that since the two sale agreements
provided for interest of more than 2%, that excludes them from the
ambit of incidental
credit agreements. When regard is had to the
NCA’s definition of an incidental agreement, this submission
cannot be sustained
as the interest is charged upon default of the
payment time frames agreed between the parties.
[100] That
being said, I take note of the fact that the default interest charged
in terms of the first sale agreement
is stated as the applicable
prime interest rate plus 2%. In terms of Regulation 42 of the
Regulations to the NCA, the maximum interest
rate applicable to
incidental agreements is 2% per month.
[101] What
this means is that for the purposes of the first sale agreement the
default interest determined was not in
accordance with the
Regulations determined by the Minister in terms of section 103 of the
NCA. As I will demonstrate, this has
a bearing, not
per se
on
whether the first agreement is an incidental agreement or credit
agreement, but on whether the Trust’s computation of
the amount
of debt owed by the first respondent was a correct one.
[102]
Therefore, as regards the question whether the first agreement is
unlawful for non-compliance with the provisions
of section 40(1) of
the NCA, I make a finding that it is an incidental agreement, and
therefore, the Trust was not required to
register as a credit
provider. The point
in limine
that the first sale agreement is
a credit agreement in respect of which the Trust was required to
register as a credit provider
in terms of section 40(1) of the NCA
fails.
[103] I deal
next with the point
in limine
that the settlement agreement is
void as it was induced by misrepresentation. In buttressing this
contention the first respondent
relies on two grounds. The first is
that he could not have been in breach of the two agreements as the
Trust falsely represented
that it was entitled to conclude the first
sale agreement and induced him to conclude it in circumstances where
it was not registered
as a credit provider as section 40(1) of the
NCA requires. In the light of the finding that I have made that the
first sale agreement
is an incidental agreement and therefore
excluded from the registration requirement of section 40(1), this
contention cannot be
sustained.
[104] The
second ground on which the first responded states that the settlement
agreement is void
ab initio
, is that the Trust incorrectly
charged interest on the purchase price for 31 B[...] Street whereas
the first respondent’s
obligation to make payment on the
purchase price for that property had not yet arisen. It is correct
that the payment schedule
(FA7) reflects that on 16 July 2020 the
purchase price for 31 B[...] Street was debited against the first
respondent with interest,
as well as interest on the occupational
rental where it was paid out of the agreed time.
[105] A
closer look at the terms of the settlement agreement reveals that
nowhere is it provided therein that the R50
000.00 monthly
instalments would be applied towards the purchase price for 31 B[...]
Street. As recorded in the introductory portion
of the settlement
agreement, at the time it was concluded the first respondent owed the
Trust default interest on the purchase
price of 33 B[...] Street and
occupational rental. This has not been disputed.
[106]
As the Supreme Court of Appeal held in
North
East Finance v Standard Bank of SA
,
[14]
in assessing what the intention of the contracting parties was regard
must be had to the purpose of their contract which must be
interpreted so as to give it a commercially sensible meaning.
[15]
[107] The
settlement agreement is not a free-standing agreement. It sought to
afford the first respondent an opportunity
to regularize his payment
obligations under the first agreement. It further sought to regulate
future payments in relation to the
purchase price of 33 B[...] Street
and occupational rental in respect of both properties.
[108] On his
own admission, when the settlement agreement (which his attorneys
initiated) was concluded the respondent
had fallen in default of his
payment obligations in respect of the purchase price of 33 B[...]
Street and occupational rental for
both properties, i.e. 33 B[...]
Street and 31 B[...] Street as set I have alluded to in the foregoing
discussion. The settlement
agreement stipulates that part of the R50
000.00 instalment would be applied first towards payment of the
default interest that
the first respondent owed,
inter alia
.
[109] Apart
from the fact that the first respondent has made a sweeping
allegation that the Trust incorrectly charged
him interest under the
settlement agreement, he has not seriously disputed the Trust’s
assertion that at the time the settlement
agreement was concluded he
owed the Trust default interest in relation to payment of the
purchase price for 33 B[...] Street and
occupational rental for the
two properties.
[110]
In so far as the first respondent’s complaint regarding
computation of interest payable on the purchase
price of 31 B[...]
Street is concerned, regard must also be had to the fact that he has
accepted the Trust’s cancellation
of the second agreement
following his breach of that agreement and of the settlement
agreement. It is rather opportunistic of him
to rely on the Trust’s
alleged incorrect charging of interest on the purchase price of 31
B[...] Street (whose cancellation
he has accepted) as his basis for
impugning the validity of the settlement agreement when his
contractual obligations relating
to 33 B[...] Street remain
uncontroverted.
[111] I
therefore come to the conclusion that the settlement agreement is not
void but enforceable against the
first respondent. The point
in
limine
that it is void as it was induced by misrepresentation and
by reason of the Trust’s incorrect computation of interest
payable
in respect of the purchase price of 33 B[...] Street and 31
B[...] Street must accordingly fail.
[112]
This leads me to the last point
in limine
, that the
cancellation of the first agreement is unlawful as the first
respondent has paid the full purchase price of 33 B[...]
Street. This
point
in limine
is inextricably linked to the claim that the
first respondent makes in the counter-application to the transfer of
33 B[...] Street.
In substantiating this point
in limine
, the
first respondent asserts that the interest that was charged by the
Trust on the purchase price of 33 B[...] Street and 31
B[...] Street
exceeds the interest prescribed for the category in which the two
agreements fall. According to him, he has, as a
result, in actual
fact paid the full purchase price for 33 B[...] Street.
[113]
Put in another way, the first respondent states that if the interest
that the Trust says he owes is disregarded,
he has paid the full
purchase price for 33 B[...] Street. This contention overlooks the
fact that in tandem with the default interest
that he was liable to
pay to the Trust in terms of the first sale agreement, the first
respondent also agreed in the settlement
agreement, to pay interest
on the amount outstanding on the purchase price of 33 B[...] Street.
[114]
It has been held that interest is the ‘life-blood’ of
finance and that late payments by debtors
deprives the creditors of
the productive use of that money thereby causing them loss.
[16]
If regard is had to this principle, which ought to be accepted as
correct, it then becomes difficult to fathom the basis on which
the
first respondent asserts that the interest that he agreed, in the
settlement agreement, to pay on the outstanding amount of
the
purchase price must be ignored in calculating whether he has paid
over 50% of the purchase price for 33 B[...] Street.
[115]
Under the settlement agreement, which in effect replaced the first
respondent’s payment obligations
under first agreement (a
novation), the first respondent had an obligation to
pay the
purchase price with interest
in specified instalments
. For him
to successfully claim the transfer of 33 B[...] Street, he must also
have paid the Trust
in such instalments
not less than 50% of
the purchase price.
[116]
No issue is taken by the Trust concerning the manner and form of the
first respondent’s demand for
the transfer of 33 B[...] Street
to him as envisaged in section 27(1) of the ALA. In any event, there
is authority from this Division
and elsewhere, to the effect that a
demand which is made for the first time in summons or notice of
motion is a valid demand for
the purposes of asserting the
purchaser’s right created by section 27(1) of the ALA.
[17]
I am in respectful agreement with such authority.
[117]
That being the case, it seems to me that there is a material dispute
of fact regarding the amount which
the first respondent has paid
towards the purchase price of 33 B[...] Street. It has not been
disputed that the first respondent
previously challenged the Trust’s
computation of the amount he had thus far paid to it under the first
sale agreement and
the settlement agreement. What compounds the
issue, in my view, is the fact that FA7 sets out payment transactions
emanating from
four different contractual obligations, viz, payment
towards the purchase price of 33 B[...] Street; occupational rental
for both
33 B[...] Street and 31 B[...] Street, respectively; rates
and services in respect of the two properties; as well as default
interest
on each of these amounts where there was late payment.
[118]
In
Wightman
t/a JW Construction v Headfour (Pty) Ltd and Another
(
Wightman
t/a J W Construction v Headfour (Pty) Ltd and Another Another
[18]
the
Court said:
‘
A real, genuine
and bona fide dispute of fact can exist only where the court is
satisfied that the party who purports to raise the
dispute has in his
affidavit seriously and unambiguously addressed the fact said to be
disputed. There will of course be instances
where a bare denial meets
the requirement because there is no other way open to the disputing
party and nothing more can therefore
be expected of him. But even
that may not be sufficient if the fact averred lies purely within the
knowledge of the averring party
and no basis is laid for disputing
the veracity or accuracy of the averment. When the facts averred are
such that the disputing
party must necessarily possess knowledge of
them and be able to provide an answer (or countervailing evidence) if
they be not true
or accurate but, instead of doing so, rests his case
on a bare or ambiguous denial the court will generally have
difficulty in
finding that the test is satisfied.’
[119]
In his submissions on behalf of the first respondent Mr
Cetywayo
took the view that it can only be resolved with the benefit of oral
evidence.
I agree.
[120]
As held in
National
Director of Public Prosecutions v Zuma,
[19]
motion proceedings,
unless concerned with interim relief, are about the resolution of
legal issues based on common cause facts.
Unless the circumstances
are special, they cannot be used to resolve factual issues because
they are not designed to determine
probabilities.
[121] Hence,
where a case is properly made out, the disputes of fact are genuine,
far-reaching and fundamental and cannot
be resolved by application of
the rule in
Plascon-Evans,
the proper course is, in general,
referral to oral evidence or trial. In this regard, Rule 6(5)(g)
provides:
‘
Where
an application cannot properly be decided on affidavit the court may
dismiss the application or make such order as it deems
fit with a
view to ensuring a just and expeditious decision. In particular, but
without affecting the generality of the a foregoing,
it may direct
that oral evidence he heard on specified issues with a view to
resolving any dispute of fact and to that end may
order any deponent
to appear personally or grant leave for such deponent or any other
person to be subpoenaed to appear and be
examined and cross-examined
as a witness or it may refer the matter to trial with appropriate
directions as to pleadings or definition
of issues, or otherwise.’
[122] I
readily accept that the first respondent’s claim in the
counter-application to the transfer of 33 B[...]
Street has a life of
its own. However, a finding that there is a material dispute of fact
regarding whether he is entitled to such
transfer necessarily has a
bearing, in my view, on whether the Trust has made out a case for the
eviction of the first respondent.
I elaborate below.
[123]
That the respondent is an unlawful occupier of 33 B[...] Street is
beyond dispute – he no longer has the
consent of the Trust to
occupy this property. However, the Constitutional Court has held that
a finding that an occupation is unlawful
in matters regarding PIE
does not necessarily lead to an order of eviction without a
consideration of other relevant factors.
The
court must exercise its discretion in deciding whether an eviction
order is just and equitable in light of the facts of the
given
case.
[20]
In this regard I am
enjoined to strike a balance between the rights of the occupier and
those of the owner in order to attain justice
and equity in my
enquiry whether the eviction sought is just and equitable.
[124]
I am alive to the legal principle, as authoritatively enunciated in
Ndlovu
,
[21]
that PIE was not enacted to allow for the expropriation of land from
a private land owner from whose property the eviction is being
sought. In
Blue
Moonlight
,
the Court recognized the need for the private land owner to accept
that his right to take possession of his land where occupation
has
become unlawful may be restricted in certain circumstances.
[22]
[125]
It is, furthermore, not without significance, that the first
respondent is in breach of his obligations under
the first sale
agreement and the settlement agreements. He is no doubt bound by the
principle of reciprocity and sanctity of agreements.
However, where
in a particular set of circumstances a rigid application of the
principle of reciprocity may lead to injustice,
there ought to be
flexibility to ensure fairness. The position in our law is that
justice, reasonableness and fairness constitute
good faith in
contracts.
[23]
[126]
In the instant matter, I have taken account of
the fact that
in purchasing the property situated at 33 B[...] Street and
simultaneously paying occupational rental since a time
before the
conclusion of the first sale agreement (i.e. a time before
October 2019) until such time as the purchase price
would be paid in
full, the first respondent intended to make the property his and his
family’s home. In this regard, his
personal circumstances which
I have set out elsewhere in this judgment stand undisputed. Barring
his default, he made attempts
to make payments towards the purchase
price, occupational rental, and all the associated costs of
occupational rental. Furthermore,
in these proceedings, he has made
an undertaking (in the context of his claim in terms of section 27(1)
of the ALA) to pay to the
Trust any amounts outstanding under the
agreements.
[127]
With reference to
Claytile
,
[24]
a case decided by the Constitutional Court in 2017, TSHIQI J put it
this way in
Grobbler:
[25]
‘
Claytile
,
as well, reminds us that there has to be “some give by both
parties”. In essence, when balancing the interests, compromises
have to be made by both parties in order to reach and equitable
outcome. . .’
[128]
I am in respectful agreement with these sentiments. In as much as the
Trust asserted its contractual right to
cancel the agreements and to
apply for the eviction of the first respondent, it is a disconcerting
feature of its case that it
makes no undertaking to pay back the
monies paid to it by the first respondent towards the purchase price
for 33 B[...] Street.
[129]
As far as I could have ascertained from the first sale agreement and
the settlement agreement, none of them make
provision for the
forfeiture of monies paid by the first respondent towards the
purchase price of 33 B[...] Street in the case
of breach of the
agreements. While it is so that the respondent would not be barred,
as correctly submitted by
Ms Watt
, from instituting
appropriate proceedings in which he claims restitution of the monies
paid by him towards the purchase price of
33 B[...] Street, an
important question which remains whether there is the fairness and
reasonableness in his eviction in the present
circumstances.
[130] When
regard is had to the foregoing facts and circumstances, equity and
justice demand, that the first respondent’s
eviction from 33
B[...] Street be refused.
[131]
Concerning referral of an application to oral evidence, the general
rule is that litigants should apply for a
referral to oral evidence
or trial, where warranted, as soon as the affidavits have been
exchanged but the rule is not an inflexible
one.
[26]
Even though in the instant case the request to refer the application
to oral evidence was made on the date of hearing of the application,
I have had regard to the nature and ambit of the disputed facts and
the interests of justice.
[132]
I come to the conclusion that it is with the benefit of oral evidence
that the court will be better placed to
determine whether the first
respondent has paid more than 50% of the purchase price for 33 B[...]
Street.
On the facts set out above, I hold the view that the
issues to be determined at the hearing of oral
evidence are simple and discrete.
[133]
In the result, I make the following order:
1.
The application for the eviction of the first respondent from the
property
described as the remainder of Erf 8[...],
Queenstown and remainder of Erf 1[...], Queenstown, situated at
33 B[...], Komani, is dismissed, with costs.
2.
The counter application is referred to the hearing
of oral evidence on a date to be determined by the Registrar, on the
following
issues:
(a)
whether the first respondent has paid more than
50% of the purchase price for 33 B[...] Street; and if so,
(b)
whether the Trust is obliged to register the
transfer of
the property
described as the
remainder of Erf 8[...], Queenstown and remainder of Erf 1[...],
Queenstown, situated at
33 B[...], Komani,
in
the name of the first respondent.
3.
The evidence to be adduced at the hearing of oral
evidence shall be that of any witnesses whom the parties or either of
them may
elect to call.
4.
The provisions of rules 35, 36, 37 and 37A of the
Uniform Rules of Court shall apply concerning the hearing of oral
evidence.
5.
Cost
s of the counter-application shall be costs in
the hearing of oral evidence.
L. RUSI
JUDGE OF THE HIGH
COURT
Appearances
:
Counsel for the
applicants
:
Adv.
K
L Watt
Instructed
by
:
BOWES
McDOUGALL INC.
c/o
119 High Street
MAKHANDA
Counsel for the first
respondent :
Adv.
Y Cetywayo
Instructed by
:
T. ADAM
ATTORNEYS INC.
No 3A Douglas Street
KOMANI
Date heard
:
06 June
2024
Date
delivered
:
26
November 2024
[1]
Clause
1
of
the recordal of the settlement agreement sets out the terms of
payment of the Purchase price of 33 B[...] Street and the agreed
occupational rental for that same property as these terms were set
out in the first agreement.
[2]
Clause
2
of
the recordal of the settlement agreement sets out the terms of
payment of the Purchase price of 31 B[...] Street and the agreed
occupational rental for that same property as these terms were set
out in the second agreement.
[3]
Botha
and Another v Rich NO and Others
[2014]
ZACC 11
at para 34.
[4]
Ratanee
v Maharaj
[1950]
All SA 98
(D), at 113.
[5]
Port
Elizabeth Municipality v Various Occupiers
[2004]
ZACC 7
;
2005 (1) SA 217
(CC);
2004 (12) BCLR 1268
(CC) (PE
Municipality), para 17;
City
of Johannesburg Metropolitan Municipality v Blue Moonlight
Properties 39 (Pty) Ltd and Another
(CC)
[2011] ZACC 33
;
2012 (2) BCLR 150
(CC);
2012 (2) SA 104
(CC) (1
December 2011) (“
Blue
Moonlight”
),
para 29.
[6]
Footnote 3, supra.
[7]
Id, para 34.
[8]
Id p
ara
46.
[9]
Gibson’s
South African Mercantile and Company Law (Juta, 2003) 8
th
Edition
– Vesser Pretorius Shamrock and Van Jaarsveld, page 9 -10.
[10]
George
v Fairmead (Pty) Ltd
1958
(2) SA 465 (A).
[11]
Service v
Pondart-Diana
1964(3)
SA 277(D), at 279.
[12]
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A) 634- 635 (“
Plascon
Evans”
).
[13]
See
JMV
Textiles (Pty) Ltd v De Chalain Spareinvest 14 CC
and
Others
[2011
1 All SA 318
(KZD)
,
WALLIS J, followed and
applied by REVELAS J in
Seaworld
Frozen Foods (Pty) Ltd v Butcher's Block and Another
(CA
122/2011) [2011] ZAECGHC 67 (24 November 2011).
[14]
2013
(5) SA 1
(SCA), and all authorities referred to therein.
[15]
At
para 25; see also
Bothma-Batho
Transport v S Bothma & Seun Transport
2014
(2) SA 494
, para 12;
Novartis
v Maphil
(20229/2014)
[2015] ZASCA 111
;
2016 (1) SA 518
(SCA);
[2015] 4 All SA 417
(SCA)
(3 September 2015), para 27 - 31 and the authorities referred to
therein.
[16]
Land
and Agricultural Development Bank of South Africa v Ryton Estates
(Pty) Ltd and Others
(460/12)
[2013] ZASCA 105
;
[2013] 4 All SA 385
(SCA);
2013 (6) SA 319
(SCA)
(13 September 2013), para 13.
[17]
Chetty
v Erf 311, Southcrest CC
2020
(3) SA 181
(GJ), para 17; followed in Christ the King Primary School
CC v V.F. Group Trust (3668/2022) [2023] ZAECMKHC 132 (28 November
2023), at para 22 -23.
[18]
Whightman
t/a JW Construction v Headfour (Pty) Ltd and Another
(
Wightman
t/a J W Construction v Headfour (Pty) Ltd and Another Another
[2008]
ZASCA 6
; [2008] 2 All SA (SCA)
[2008] ZASCA 6
; ;
2008 (3) SA 371
(SCA), para 13.
[19]
National
Director of Public Prosecutions v Zuma
(573/08)
[2009] ZASCA 1
;
2009 (2) SA 277
(SCA);
2009 (1) SACR 361
(SCA) ;
2009 (4) BCLR 393
(SCA) ;
[2009] 2 All SA 243
(SCA) (12 January
2009) para 26.
[20]
Grobler
v Phillips and Others
(CCT
243/21)
[2022] ZACC 32
;
2023 (1) SA 321
(CC);
2024 (1) BCLR 115
(CC)
(20 September 2022) para 29; section 4(7) of PIE.
[21]
Ndlovu
v Ngcobo, Bekker and Another v Jika
(1)
(240/2001, 136/2002)
[2002] ZASCA 87
;
[2002] 4 All SA 384
(SCA);
2003 (1) SA 113
(SCA) (30 August 2002).
[22]
Blue
Moonlight
,
at para 40.
[23]
Botha
,
at para 45.
[24]
Baron
and others v Claytile (Pty) Limited and Another
(CCT241/16)
[2017] ZACC 24
;
2017 (10) BCLR 1225
(CC);
2017 (5) SA 329
(CC) (13
July 2017).
[25]
Footnote
20, supra.
[26]
Mamadi
and Another v Premier of Limpopo Province and Others
(CCT
176/21)
[2022] ZACC 26
;
2023 (6) BCLR 733
(CC);
2024 (1) SA 1
(CC)
(6 July 2022), para 44, in which THERON J referred to
Law
Society, Northern Provinces v Magami
[2009]
ZASCA 107
;
2010 (1) SA 186
(SCA) at 195C-D.