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IN THE HIGH COURT OF SOUTH AFRICA (EASTERN CAPE, GRAHAMSTOWN)
	CASE NO: 3995/2011 and 3593/2011 Date Heard: 25 November 2012 Date Delivered: 24 January 2013
In the matter between:
TRIPLE C RANCH CC	Applicant
And
HENDRICK FRANCOIS VORSTER REGISTRAR OF DEEDS LAND & AGRICULTURAL BANK OF SOUTH AFRICA	1st Respondent 2nd Respondent 3rd Respondent
J U D G M E N T

GOOSEN, J:

1. This is the extended return date in respect of an interim order interdicting the first respondent from transferring two agricultural properties, which together comprise a farm situated near Aliwal North in the Eastern Cape Province, to any person other than the applicant. The interim order was granted by Pickering J on 25 November 2011 pursuant to an application launched ex parte on that date. Since the granting of the interim order the matter has been postponed on several occasions. On 5 July 2012, Pillay J (as he then was) granted an order in an interlocutory application permitting the applicant to file an affidavit supplementing its founding affidavit. Thereafter the first respondent filed an answering affidavit and after receipt of the supplementary affidavit, filed a further answering affidavit to which the applicant has replied. The matter came before me in November 2012.

2. The application arises from the sale of two farms by first respondent to the applicant. The parties entered into a written deed of sale on 20 May 2010. The agreed purchase price for the two properties was R1.5 million. The agreement records that a deposit of R600,000.00 was paid prior to the conclusion of the agreement. In respect of the balance it is provided that the sum of R400,000.00 be paid upon registration of transfer and that such sum is to be secured within 60 days of the date of signature of the agreement by way of a suitable bank guarantee. The agreement further provides that it is subject to a suspensive condition in the following terms:

“Hierdie ooreenkoms is onderhewig aan die opskortende voorwaarde dat die koper binne 60 (SESTIG) dae vanaf datum van die ondertekening van hierdie ooreenkoms deur die partye daarin slaag om ‘n verbandlening teen die eiendom te bekom vir ‘n bedrag van minstens R500,000.00 (VYF HONDERD DUISEND RAND), by gebreke waarvan hierdie ooreenkoms sal verval, en sal die partye geen verdere eise teen mekaar hë nie.”

3. The agreement further contains a clause (clause 25) which provides as follows:

“Die volgende voorwaarde sal geskep word en in die titelakte van die eiendom geïnkorporeer word:

‘Die eiendom is onderhewig aan ‘n lewenslange vruggebruik ten gunste van:

1. Hendrik Francois Vorster

Identiteitsnommer: 430214 5017 08 9

Getroud buite gemeenskap van goed

en

2. Elizabeth Johanna Catherina Vorster

Identiteitsnommer: 470529 0027 08 5

Getroud buite gemeenskap van goed

en

3. Hendrik De Wet Vorster

Identiteitsnommer: 760801 5032 08 2

Getroud buite gemeenskap van goed

en

4. Engela Maria Vorster

Identiteitsnommer: 820403 0087 08 4

Getroud buite gemeenskap van goed

en

5. Jackie Vorster

Identiteitsnommer: 030823 0660 08 3

‘n Minderjarige.’”

4. The circumstances giving rise to the application are the following. The deponent to the applicant’s founding affidavit, Christo Coetzee, alleges that shortly after the parties signed the deed of sale he took occupation of the property on behalf of the applicant and commenced farming operations on the farm. In or about February 2011 the first respondent requested him to pay him a visit on the farm. On that occasion the first respondent informed him that his son, De Wet Vorster, who was to be part of the farming operations on the farm, had left to live in Cape Town and would no longer be part of the farming operations. The first respondent apparently requested Coetzee to vacate the farm. When informed that the applicant had purchased the farm in terms of a deed of sale and had already paid more than R1 million in reduction of the purchase price, the first respondent apparently demurred and said he would repay the applicant.

5. Coetzee, on behalf of the applicant, thereafter approached Attorney Louw of Tuckers Incorporated, who was responsible for the transfer of the property to the applicant, requesting the transfer to be expedited. He was informed that the first respondent had, despite being presented with the transfer documents, failed to sign them. Several interactions with the attorney followed from which it emerged that the first respondent was in the process of selling (or had already sold) the property to a third party. Based on the allegation that the applicant had complied with all of its obligations in terms of the deed of sale, the applicant sought and obtained an interim interdict requesting the transfer of the property to it. It now seeks a final order in this regard.¹ The application is opposed on a number of grounds, both procedural and substantive. The first respondent’s opposition to the application took the form of a notice filed pursuant to Rule 6 (11), in which was sought an order striking out portions of the founding affidavit as being inadmissible hearsay, and a notice filed in terms of Rule 6 (5)(d)(iii) in which the first respondent raises four points of law, namely: (a) that the deponent Coetzee is not authorised to institute the application; (b) that no binding or enforceable agreement came into existence between the parties by reason of the provisions of section 6A read with section 3 (e)(ii) of the Subdivision of Agricultural Land Act, Act 70 of 1970; (c) that any agreement which may have come into existence has lapsed by reason of the suspensive condition incorporated in the agreement; and (d) that the applicant failed to establish a basis for the urgent relief obtained; that the urgency relied upon is self-created and that the application ought to be dismissed on that ground alone.

6. Subsequent to the filing of the aforementioned notices the applicant made application to supplement its papers by the filing of further affidavits. Leave having been granted by order of this court, a set of supplementary affidavits were filed to which the first respondent filed an answering affidavit. In this affidavit the first respondent persisted with the legal points raised in his notices and further dealt with the substantive factual allegations upon which the applicant relies, placing in dispute the applicant’s alleged compliance with its obligations as well as the payments allegedly made to the first respondent in fulfilment of these obligations.

7. Before dealing with the issues raised by the first respondent, it is appropriate to consider the nature of the relief sought. As already indicated the applicant obtained an interim interdict restraining the transfer of the property to any person or body other than the applicant. The applicant now seeks a final interdict in this regard. This final order is not sought pending the resolution of any further disputes between the parties nor pending the determination of the validity or enforcement of the deed of sale entered into between the parties. In the light of this the order sought by the applicant can only be granted if the applicant satisfies the requirements for a final permanent interdict in this regard. It is with these requirements in mind that I turn to the issues raised in the first respondent’s opposition to the application.

Alleged lack of authority of Coetzee.

8. It is common cause that the applicant Close Corporation has only one member, namely Celeste Coetzee, the deponent Coetzee’s wife. In the founding affidavit deposed to by Coetzee he alleges that he is authorised to depose to the affidavit on behalf of the applicant. In support of this he annexes a written authorisation signed by Celeste Coetzee which is in the following terms:

“I, Celeste Anne Coetzee (ID 6809 160034 08 6), managing member of Triple C Ranch CC (registration no. 2008/055139/2) do hereby give full power of attorney in all matters currently being dealt with by Mr Hart of Netteltons Attorneys to Christo Coetzee (ID 590613 5178 08 8).”

9. The written authorisation was dated 24 August 2011. In the supplementary affidavits filed pursuant to the order made by Pillay J, Celeste Coetzee confirms that the written authorisation was executed with the express purpose of authorising her husband Coetzee to launch these proceedings, if necessary. She further ratifies any actions taken by Coetzee in regard to the application.

10. The question as to the authority of the deponent Coetzee featured prominently in the debate before Pillay J as to the applicant’s request for leave to supplement its papers. It is apparent from the heads of argument filed on behalf of the first respondent in that interlocutory application that it was argued that leave should not be given to the applicant since it is not competent to permit a party to ratify actions of an unauthorised person ex post facto. In my view much weight must be given to the fact that Pillay J permitted the applicant to supplement its papers in this regard. The effect of Pillay J’s order was to permit the applicant to tender evidence that Christo Coetzee was indeed authorised to initiate the application. In my view therefore the only question is whether such evidence as is now properly before me may as a matter of law permit of a finding that the actions of Coetzee in bringing the application were authorised.

11. In this regard the resolution records that Christo Coetzee is authorised, on behalf of the applicant, to deal with all matters in which Attorney Hart was instructed by the applicant. It is apparent from the affidavit filed by Attorney Hart that the subject matter of this application was one such matter and that he held instructions to take appropriate legal proceedings. The supplementary affidavit filed by Celeste Coetzee furthermore states in terms, that the resolution was adopted with the commencement of legal proceedings in respect of this matter in mind. Whilst the formulation of the resolution is, unfortunately, not definitive of the authority conferred upon Christo Coetzee, I am nevertheless satisfied that upon the evidence presented, Christo Coetzee was indeed properly authorised to commence these proceedings on behalf of the applicant. It is accordingly not necessary to consider the effect, if any, of the further statement by Celeste Coetzee in terms of which Christo Coetzee’s actions are ratified. It should be born in mind that the challenge to Christo Coetzee’s authority is raised in general terms only, i.e. on the basis that the resolution does not in terms authorise the commencement of this application. On the basis of what I have found to be the state of affairs at the time that the application was launched, the first respondent’s objection cannot be sustained.

Non fulfilment of suspensive condition

12. It is convenient to deal with the first respondent’s defence based on the non-fulfilment of the suspensive condition before addressing the other issues raised. The applicant argued that the agreement lapsed by reason of non-fulfilment of the suspensive condition relating to the approval of bond finance within 60 days of the date of signature of the deed of sale. It is common cause that no such mortgage bond approval was obtained prior to the expiry of the 60 day period. What is in issue is whether the applicant, as it alleges, lawfully waived that suspensive condition.

13. In the applicant’s founding affidavit Coetzee alleges that he “at all relevant times possessed sufficient funds to pay the remainder of the purchase price should same have been called, for which request was never made” (sic). He further states that he was informed by “his wife that the applicant waived the benefits of this clause”. This latter averment is not confirmed by way of affidavit and formed the subject of an application to strike it as hearsay in terms of Rule 6 (11).

14. It is, however, not necessary to deal with the hearsay objection since the supplementary affidavit filed by Celeste Coetzee addresses this issue. It is not in dispute that the applicant’s alleged waiver of the benefits of the clause in the agreement was at no stage communicated to the first respondent.

15. The applicant, in whose favour the suspensive condition was inserted in the agreement, asserts that it waived its reliance upon such suspensive condition, although when this occurred is not addressed. The condition required that the applicant obtain a loan from a financial institution to secure payment of the sum of R500,000.00 (being the balance of the purchase price) within a period of 60 days of the date of the signing of the agreement and that failing this “hierdie ooreenkoms sal verval, en sal die partye geen eise teen mekaar hë nie.”

16. It is trite that pending the fulfilment of a suspensive condition, such as that in issue here, no contract comes into existence between the parties. A party who seeks to rely upon an alleged waiver of a right bears the onus to prove such waiver. The waiver of a right which vests in a party to an agreement has no legal effect unless there is some expression or manifestation of such intention which is communicated to the other party or somehow brought to his or her attention. See Traub v Barclays National Bank Ltd; Kalk v Barclays National Bank Ltd 1983 (3) SA 619 (A) at 635, where the court quoted with approval the following dictum of Innes CJ in Mutual Life Assurance Company of New York v Ingle 1910 TPD 540 at 550:

“... it seems to me that mere intention, a mere mental resolution to waive a right not communicated to the other party affected, and not evidenced by any overt act known to him, cannot in law constitute a waiver or enunciation of the right by the person entitled to enforce it ... Until the intention to waive the right is communicated to the other party, or evidenced to him by some overt act, a change of mind is always possible and permissible. Otherwise a man might by an entry in his own diary, of an account of a causal casual conversation with a friend (quite unknown at the time to the party affected), find himself debarred from enforcing a right on further reflection he was desirous of vindicating. After all, waiver is the renunciation of a right. When the intention to renounce is expressly communicated to the person affected he is entitled to act upon it, and the right is gone. When the renunciation, though not communicated, is evidenced by conduct inconsistent with the enforcement of the right, or clearly showing an intention to surrender it, then also the intention may be acted upon, and the right perishes. But a mere mental resolve, not so evidenced, and not communicated to the other party, but discovered by him afterwards, seems to me (apart from considerations founded upon lapse of time) to have no effect upon the legal position of the person making the resolve.”

17. In seeking to establish the applicant’s waiver of the benefit of the suspensive condition, the applicant relies upon the fact that its conduct throughout manifested a continued intention to be bound by the agreement. In this regard it was submitted that certain payments made to the first respondent were made after the lapse of the 60 day period and that this conduct is consistent only with an intention to remain bound by the terms of the agreement.

18. Christo Coetzee alleges on behalf of the applicant that in addition to the payment of R600,000.00, which was paid prior to the signing of the agreement, a further sum of R439,611.68 was paid to the first respondent (or third parties nominated by the first respondent) in reduction of the purchase price. In support of this the applicant annexes a number of payment advices reflecting electronic fund transfers. These reflect a number of relatively small amounts paid to either EM Vorster or the De Wet Vorster Trust. Reference is also made to a loan in this regard. One such payment is for a larger amount in the sum of R50,000.00 paid to a firm of attorneys, Tuckers Incorporated. A further payment advice of R342,493.24, paid on 21 May 2011, is reflected as paid to Phathoane Henney Incorporated, a firm of attorneys. The particular circumstances of these payments is not elaborated by the applicant.

19. In an answering affidavit filed prior to the applicant being granted leave to supplement its papers, the first respondent specifically denies that the sum of R439,611.68 was paid to him or to third parties on his behalf in reduction of the purchase price. He goes on to state that the payments evidenced by the annexed payment advices (including that reflecting the payment of R342,493.24) were payments made to his son or to his son’s trust and had nothing to do with the reduction of the purchase price payable in terms of the agreement.

20. The first respondent however changes his stance in a subsequent affidavit (filed in answer to the supplementary affidavits filed by the applicant). In the latter affidavit the first respondent admits that the sum of R342,493.24 was paid to the attorneys and was an amount paid to him by the applicant in reduction of the purchase price. He goes on to state however that this amount was paid prior to the expiry of the 60 day period.

21. The first respondent offers no explanation for the earlier denial and for the significant volte face regarding payments made to him by the applicant in reduction of the purchase price. This contradiction does very little to engender confidence in the deponent’s credibility Having said that, however, it is clear from the evidence presented by the applicant itself that the significant payments made in reduction of the purchase price were all made prior to the lapse of the 60 day period provided for in the suspensive condition. The agreement was signed on 20^th and 25^th May 2010. The sum of R342,493.24 was paid on 21 May 2010. The sum of R50,000.00. paid to Tuckers Incorporated in respect of which the beneficiary is recorded as the De Wet Vorster Trust, was paid on the 2^nd of July 2010. The other payments comprising relatively small amounts were paid thereafter. Insofar as the admitted payment is concerned that was made at a stage when the agreement was signed and certainly prior to the expiry of the 60 day period provided for in the agreement.

22. Christo Coetzee alleges that he was informed that the applicant had waived reliance upon the suspensive condition. He does not state when he was so informed. According to him he, in his personal capacity, was always possessed of funds with which to satisfy the requirement of payment of the balance of the purchase price and that he intended to make payment on behalf of the applicant. Even accepting that this is so, the applicant offers no explanation as to why this was not communicated to the first respondent, proffering instead to manifest the alleged intention to waive the suspensive condition by making payment of certain amounts to the first respondent both prior to and subsequent to the lapse of the 60 day period, the latter payments comprising payment of relatively small amounts allegedly on behalf of the first respondent. It should be borne in mind that apart from the R600,000.00 paid by way of deposit, the agreement required that the sum of R400,000.00 was to be paid upon registration of transfer and in this regard a bank guarantee was to be furnished within 60 days of the date of signature. The agreement does not deal with when the balance of the purchase price was to be paid.

23. In my view the applicant’s conduct does not unequivocally evince an intention not to rely upon the suspensive condition. If consideration is had to the first respondent’s allegation that the payments (other than the admitted payment) related to dealings between the applicant and his son who was then involved in a joint farming operation, there is even less scope for inferring that such payments are consistent only with an intention to waive reliance on the suspensive condition.

24. In the circumstances I am not satisfied that the applicant has established that it waived its rights and accordingly find that the agreement lapsed by reason of non-fulfilment of the suspensive condition. Even if I am wrong in this regard there is the further aspect relating to the validity of the agreement having regard to the provisions of the Subdivision of Agricultural Land Act, 1970.

Non-compliance with the Subdivision of Agricultural Land Act, 70 of 1970

25. The first respondent contended that clause 25 of the agreement purports to establish as a condition of the agreement, the registration of a life usufruct in favour of certain persons listed in the section and that the agreement accordingly records the granting of such a life usufruct to said persons. It was submitted that the clause falls foul of section 6A of the Subdivision of Agricultural Land Act (hereinafter the Act) as read with section 3 (e)(ii) and that on this basis the agreement is invalid.

26. Section 6A of the Act provides as follows:

“(1) Subject to the provisions of the Water Act, 1956 (Act 54 of 1956), a servitude in respect of agricultural land, except –

1. A right of way, aqueduct, pipeline for conducting of electricity with the width not exceeding 15 metres;

1. A servitude which is supplementary to a servitude referred to in paragraph (a), and which has a servitude area not exceeding 225 square metres which adjoins the area of the last mentioned servitude;

2. A usufruct over the whole of the agricultural land in favour of one person or in favour of such person and his spouse or the survivor of them if they are married in community of property;

shall not be registered by a Registrar of Deeds without the written consent of the Minister.”

27. Section 3 (e) provides:

“(i) No portion of agricultural land, whether surveyed or not, and whether there is any building thereon or not, shall be sold or advertised for sale, except for the purposes of a mine as defined in section 1 of the Mines and Works Act, 1956 (Act 27 of 1956); and

(ii) No right to such portion shall be sold or granted for a period of more than 10 years or for the natural life of any person or to the same person for periods aggregating more than 10 years, or advertised for sale or with a view to any such granting, except for the purposes of a mine as defined in section 1 of the Mines and Works Act, 1956;

.... unless the Minister has consented in writing.”

28. The effect of these provisions, it was submitted, is to prohibit the granting of a life usufruct as provided by clause 25 of the agreement of sale. Since no written consent has been sought or obtained from the Minister the agreement is invalid by reason of the breach of these provisions.

29. Applicant’s counsel did not seek to suggest that clause 25 was not hit by the prohibition contained in section 6A of the Act. Instead it was submitted that the agreement was nevertheless enforceable save to the extent that the Minister’s written consent be obtained. It was suggested that the proper construction to be placed on the clause is that the agreement was in effect suspended pending the obtaining of the Minister’s consent.

30. There is in my view no merit in the argument. In Geue & Another v Van Der Lith & Another [2003] ZASCA 118; 2004 (3) SA 333 (SCA), Brand JA said, at para 19:

“As far as section 3 (e) of the Act is concerned it has been held in a number of decisions of the High Court that, on a proper interpretation of the provisions of the section, in accordance with the recognised tenets of construction, the Legislature’s intention was that agreements prohibited by the section should be visited with invalidity.”

31. Further, at para 20 (opposite 345 H), the learned Judge said:

“Once it is accepted that an agreement such as this is prohibited by section 3 (e)(i), despite the fact that it is subject to a suspensive condition, there is simply no room for an argument that the agreement is not in conflict with the Legislature’s intention.”

32. Similar considerations apply in respect of section 3 (e)(ii) of the Act as also, in my view, with section 6A of the Act. Mr Louw, on behalf of the respondent, conceded that a failure to obtain the Minister’s consent (assuming that it was still alive to the applicant to do so) would necessarily mean that the bargain represented by the agreement of sale was impossible to carry into effect and that in this circumstance the agreement would be unenforceable. Why different considerations should apply ab initio, was not explained, and I am not able to conceive why this should be so. In my view the purpose of the Act would, in substantial measure, be defeated if it were to be construed to allow the “granting” of a life usufruct such as that under consideration without ministerial consent and only require such consent if such usufruct was to be registered against the title deeds of the property.

33. In my view, the provision contained in clause 25 of the agreement contemplates something which the Legislature intended could only occur with the written consent of the Minister. Mr Louw sought to argue that the granting of the life usufruct would only occur at the stage of registration thereof and that it was only at that stage necessary to have secured the consent of the Minister. Construed thus, the usufruct could properly be considered separately from the agreement of sale and accordingly that the clause would not invalidate the agreement. This argument is, in my view, no more than an argument as to the “suspensive” nature of the clause. It cannot avail the applicant since the contract grants the right of use to the persons named in the clause. That is the bargain struck by the parties. Such bargain however, cannot validly be enforced by reason of the prohibition upon registration of such right unless the Minister has consented. Accordingly there is no basis to consider that the prohibition which arises from section 6A only comes into effect at the point at which registration of transfer is sought and it is sought to give effect to clause 25 of the agreement. In my view, the agreement is invalid by reason of its non-compliance with section 6A read with section 3(e) of the Act.

34. Based on this finding it is not competent to grant any order by which the agreement is enforced.

Urgency

35. As indicated hereinabove the applicant initially launched an urgent application which was aborted due to a failure to effect service. The application was thereafter launched on an ex parte basis on 25 November 2011. The first respondent opposed the confirmation of the rule nisi on the basis that the urgency was of the applicant’s own making and that the order ought not to have been granted ex parte.

36. Although there is much to commend the arguments raised in regard to urgency, in the light of the conclusion to which I have come in respect of the merits of the application, it is not necessary to deal with this aspect. By the time the matter came before me the application had been postponed on a number of occasions and there had been an interlocutory application relating to the filing of a supplementary affidavit. Any prejudice which the first respondent may have suffered consequent upon the urgency with which the application was launched had long since evaporated by reason of the opportunity to file answering affidavits as well as the lapse of time over which the application was prosecuted.

37. In the light of the findings set out above the application cannot succeed. I do not consider that there is a basis for a cost order other than the customary one. In the result the applicant’s application is dismissed, the rule nisi discharged thereby and the applicant is ordered to pay the costs of the application.

__________________________

G GOOSEN

JUDGE OF THE HIGH COURT

APPEARANCES:

FOR APPLICANT: Mr Louw, instructed by

Netteltons Attorneys

FOR RESPONDENT: Mr Snyman, instructed by

Wheeldon Rushmere & Cole,

as instructed by Neuhoff Attorneys

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