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IN THE HIGH COURT OF SOUTH AFRICA

EASTERN CAPE DIVISION, GRAHAMSTOWN

                                                                                    CASE NO: 4071/2014

                                                                                    DATE HEARD: 14/10/2014

                                                                                    DATE DELIVERED: 20/10/2014

NOT REPORTABLE

In the matter between:

MOSSTRICH (PTY) LTD                                                                                        APPLICANT

and

SIDNEY BONNER BIRCH                                                                                 RESPONDENT

t/a LF BIRCH AND SON

JUDGMENT

PLASKET J

[1] In this urgent application, the applicant (Mosstrich) seeks an order interdicting the respondent (Birch) from ‘alienating, selling or encumbering’ a large number of ostriches identified by tag numbers and from removing them from his farms pending the hearing on 30 October 2014 of an application (the main application) for broader and more comprehensive relief concerning the same ostriches, pending an arbitration that will resolve a dispute as to the ownership of the ostriches. The main application is incorporated by reference into this application. 

[2] The reason why this application was brought is this. In the main application, Birch, who has avoided stating unequivocally that he had no intention of disposing of the ostriches, said that he could not, in any event, move them because they were under quarantine, avian influenza having been detected in some of the birds. The quarantine was, however, lifted by a veterinary quarantine cancellation notice issued by the State Veterinarian, Grahamstown on 7 October 2014. As a result of this Mosstrich feared that Birch would now dispose of the ostriches and it would suffer the kind of harm that interdicts are designed to prevent. 

[3] The requirements for an interim interdict are well known: and applicant must establish (a) a prima facie right, even if it is open to some doubt; (b) a well-grounded apprehension of irreparable harm if the interim relief is not granted and the final relief is granted; (c) a balance of convenience in its favour; and (d) the absence of an adequate alternative remedy. See Eriksen Motors (Welkom) Ltd v Protea Motors, Warrenton & another 1973 (3) SA 685 (A) at 691 C-E.

[4] Various points in limine have been taken by Birch. I do not intend dealing with them save to say that the matter is, on its face, sufficiently urgent to be dealt with under rule 6(12) of the uniform rules, and sufficiently different from the main application to defeat the lis pendens point raised. 

[5] At the heart of the dispute between the parties is a contract entered into by them on 4 June 2013 in terms of which it was agreed that Birch would sell ostriches to Mosstrich in what was described in the founding affidavit in the main application, deposed to by Mr HF De Wet, Mosstrich’s managing director, as a ‘four-tiered transaction’. That affidavit sets out the central terms of the contract as follows:

‘5.1 The Respondent shall maintain and rear the ostriches to maturity according to sound principles of animal husbandry.

5.2 The Applicant shall make payment for the ostriches to the Respondent at regular intervals depending on the average minimum weight of the ostriches.

5.3 On maturity the ostriches shall be removed by the Applicant to its abattoir for slaughter after which it shall account to the Respondent as set out in the Agreement. 

5.4 Ownership of the ostriches bought by the Applicant from the Respondent in terms of the Agreement shall be deemed to have passed to the Applicant upon the first payment made to the Respondent in respect of each individual bird. 

5.5 Ostriches bought by the Applicant from the Respondent in terms of the Agreement shall be tagged with sequentially numbered tags as in common in the industry.

5.6 If the Applicant fails to pay any of the payments stipulated in the Agreement despite written demands calling for payment within 14 days, ownership of the ostriches shall revert to the Respondent.’

The contract provided for disputes between the parties to be determined by arbitration. 

[6] In paragraph 7 of the main application, De Wet stated the following:

‘The ostriches with the tag numbers contained in the list attached hereto marked ANNEXURE “HFDW3” became the property of the Applicant in terms of the Agreement and are still the property of the Applicant at present as the Applicant had performed in terms of the Agreement as set out in Paragraph 6 above. The Applicant has a clear right to these ostriches in terms of the Agreement even though these ostriches remain on the Respondent’s properties to be reared by him in terms of the Agreement.’

[7] During September 2014, according to De Wet, he was informed by ‘a mutual client’ that Birch was offering ostriches for sale. He instructed Mosstrich’s attorneys to despatch a letter to Birch requesting him to refrain from doing so. Birch’s attorney replied by alleging that Mosstrich had short-paid Birch in respect of its obligations in terms of the agreement, that the agreement specified that in such an event ownership of the ostriches would revert to Birch and that he had consequently become the owner of the ostriches. The letter further stated that as Birch was the owner of the ostriches he was entitled to do with them as he wished. Paragraph 9 of the letter stated:

‘Quite apart from our clients right to claim ownership of the ostriches, even if our client is not the owner, it is our view that given the circumstances, where the ostriches are desperately short of food, our client would be justified in selling certain of the ostriches out of necessity in order to assist with the continued survival of the remaining ostriches.’

[8] As this letter clearly raised a dispute concerning the ownership of the ostriches, Mosstrich’s attorneys wrote a letter to Birch’s attorney stating:

‘1. The Agreement states that payment shall be made by our client within 14 days of the issue of an invoice by your client. It is our client’s instructions that all issued invoices were duly paid by them well within 14 days of receipt thereof. 

2. Ownership of the ostriches can, in terms of the clause 6.2, only revert to your client if our client fails to pay within 14 days of written demand for payment from your client. As all issued invoices were paid in time there could not have been any need for written demand for payment and no such demand was ever received by our client. In the absence of any written demand for payment, we fail to see how your client can claim that ownership of the ostriches reverted to him.   

3. Therefore our client denies that they have short paid your client in respect of their obligations in terms of the Agreement. It is our client’s instructions that they have in fact overpaid your client to date.

4. It is our submission that the ostriches remain the property of our client. However, that fact is now expressly disputed in your letter under reply. 

5. We hereby give you formal notice, in terms of clause 17.1 of the Agreement, that this dispute must be submitted to an expert for decision. 

6. The ownership dispute is a legal matter and should therefore be decided by an Attorney or Senior Advocate as provided for in clause 17.2.2 of the Agreement.

7. We propose any one of advocates Smuts (Grahamstown), Rorke or Schubart (Port Elizabeth) SC to act as an expert to decide on the dispute of ownership. As clause 17.2.6 provides that the parties shall use their best endeavours to procure that the decision of the expert shall be given within 7 days or so soon thereafter as reasonably possible after it has been demanded, please revert whether your client is agreeable to any one these gentleman acting as expert on or before 12h00 on 29 September 2014.’

[9] An undertaking was also demanded of Birch that he would not sell, alienate, encumber or remove from his properties any of the ostriches contemplated by the agreement. 

[10] When no undertaking was forthcoming the main application was launched.  Its purpose was to prescribe a method of dealing with the ostriches pending the outcome of the arbitration to determine their ownership. For instance, the order sought in paragraph 2.2 was to the effect that the parties would proceed ‘to sell as many of the ostriches . . . as possible at a mutually acceptable price with all proceeds of such sale(s) to be deposited in Trust with Applicant’s attorneys pending the outcome of the arbitration’ and paragraph 2.4 postulated that Mosstrich would be allowed to ‘remove as many of the ostriches that have reached maturity in terms of the Agreement for slaughter as what the Applicant can accommodate within 30 (thirty) days of this Order with all proceeds of such slaughter to be deposited in Trust with Applicant’s attorneys pending the outcome of the arbitration’. Paragraph 3 of the Notice of Motion was to the effect that Mosstrich would ‘commence arbitration proceedings in terms of Clause 17 of the Agreement . . . within 10 (ten) days from the date of this order failing which the interim order shall lapse’. 

[11] De Wet noted that he had been informed that the quarantine on the ostriches on Birch’s properties would in all likelihood be lifted. He said that when this happened ‘nothing will prevent the respondent from selling the ostriches and immediately delivering them to prospective bona fide third party purchasers’. 

[12] In his answering affidavit in the main application, Birch asserted his ownership of the ostriches. He also said that it was ‘incorrect that the quarantine is about to be lifted’; later that, as the test results were mixed, the quarantine ‘may or may not be lifted’; and still later, that he had been informed that it was ‘highly unlikely that the quarantine will be lifted taking into account the latest set of test results’. 

[13] At no stage did he indicate that he would not sell the ostriches. This is, perhaps, not surprising in the light of his claim to be the owner of the birds. He did state, however, that he ‘categorically’ refuses to sell them ‘prior to them reaching slaughter weight’. He also said that ‘if any purchase could ever take place, it could only be on the basis that the ostriches would remain in my possession . . .’. He denied being obliged to provide an undertaking. 

[14] The main application was set down for 7 October 2014 but on that day was postponed to 30 October 2014.

[15] As stated earlier, the quarantine was lifted on 7 October 2014. That was the trigger for this application. In paragraph 5 of the founding affidavit, deposed to by De Wet, the basis of the case is set out:

‘The basis upon which the application was brought on an urgent basis was that the quarantine over the ostriches forming the subject matter of the application which prevented the respondent from selling the ostriches and removing them from his farms, could be lifted or cancelled at any moment. The moment the quarantine is lifted, the respondent would be free to sell the ostriches and remove them from his farms which will mean that, if the ostriches are sold to bona fide third parties, the applicant would be deprived of its ownership and left without remedy as far as such sold ostriches are concerned.’

[16] It is clear from this paragraph in particular that Mosstrich asserts a right of ownership in respect of the ostriches. De Wet later stated that Mosstrich paid Birch for the ostriches, which totalled 2 829 birds.

[17] A demand was made of Birch that he undertake that the ostriches with which this matter is concerned would remain on his properties and that he would not ‘alienate, sell, encumber or let the ostriches out of his possession pending the outcome of the application that was postponed on 30 October 2014’.  No undertaking was forthcoming. 

[18] He persisted in this application with his averment that as a result of Mosstrich’s failure to pay him, ownership of the ostriches had reverted to him. He also stated that the logistics of selling the birds and them being removed from his properties could not be achieved in two weeks. 

[19] These allegations amount to a denial that Mosstrich has established a prima facie right and a well-grounded apprehension of irreparable harm. It was also argued that Mosstrich did not establish the remaining two requirements for an interim interdict, the absence of an adequate alternative remedy and the balance of convenience being in its favour.  

[20] I turn to the first requirement – whether the applicant has established a prima facie right, even if it is open to some doubt. In this instance, Mosstrich’s right of ownership of the ostriches is denied by Birch. I cannot say on the papers where the truth lies. That would require oral evidence to determine. Neither version on the papers is more or less probable than the other. At best for Birch then, his contradiction of Mosstrich’s assertion of ownership in these circumstances establishes some doubt in relation to its prima facie right. That is good enough for an interim interdict. See Webster v Mitchell 1948 (1) SA1186 (W) at 1189; Spur Steak Ranches Limited & others v Saddles Steak Ranch, Claremont & another 1996 (3) SA 706 (C) at 714E-G.

[21] In my view the second requirement – a well-grounded apprehension of harm – is also established. Birch has steadfastly refused to give an undertaking that he will not alienate the ostriches, knowing full-well that the ownership of the birds is an issue that has to be resolved by way of arbitration (or otherwise). He has asserted his ownership of the birds, which implies that he believes that he has the right to alienate them if he wishes. He has not said that he will not sell them, only that he will not consider selling them before they reach slaughter weight and that, if he sells them, he will retain possession. That, of course, heightens the apprehension that the birds may be sold at any time because, if they are not going to be moved off his properties, the time consuming procedures for moving them do not apply.

[22] I deal now with whether an adequate alternative remedy is available to Mosstrich. I do not believe that one is. It wants to protect its right of ownership. It would be cold comfort if the ostriches were sold for it to have a damages claim in the future. An action for damages is not an effective remedy in these circumstances.

[23] Finally, the balance of convenience favours the granting of the interdict. All that Birch has to do is abstain from alienating the ostriches for the short period from now until the main application is determined one way or the other. On the other hand, if an interim interdict is not granted and the ostriches are alienated by Birch, the harm caused to Mosstrich will be substantial.

[24] I am accordingly of the view that an interim interdict should be granted. I make the order that follows:

(a) The respondent is interdicted from alienating, selling or encumbering the ostriches identified by the tag numbers listed in annexure “HFDW3” to the founding affidavit in the main application and from removing them from his farms pending the hearing of the main application on 30 October 2014.

(b) The respondent is directed to pay the applicant’s costs of this application.

________________________

C Plasket

Judge of the High Court

 

APPEARANCES:

Applicant: DJ Coetsee, instructed by Neville Borman and Botha

Respondent: K Van Huyssteen of Fluxmans Inc, locally represented by JD Haydock  

  

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