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Uys v Hoorzook and Another (M49/2017) [2017] ZANWHC 38 (22 June 2017)

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IN THE NORTH WEST HIGH COURT

MAHIKENG

M49/2017

In the matter between:

BRIERS UYS                                                                                     Applicant

and

ZIYADH HOORZOOK                                                              1st Respondent

KENTANI GRANITE MINING (PTY)                                       2nd Respondent

 

CIVIL MATTER

DATE OF HEARING: 30 MARCH 2017

DATE OF JUDGMENT: 22 JUNE 2017

FOR THE APPLICANT: Adv ZWIEGELAAR

FOR THE RESPONDENT: Adv D.D SWART

 

JUDGMENT

 

KGOELE J:

1. The applicant is the owner of the moveable assets which had been listed in Annexure ‘A’ to the loan agreement concluded between the parties and also referred to in the pleadings. The applicant launched an urgent ex parte application for an interim interdict prohibiting the first respondent from alienating the said movable assets, in addition he sought an order that the said movable assets be returned to him pending the finalisation of the determination of the rights of the parties, that is, himself and the first respondent.

2.  During or about June 2015 the applicant and the respondent agreed to work together in a business venture for the operation of a diamond digging on the immovable property belonging to the second respondent, a company registered in terms of the law of the Republic of SA. The father to the first respondent, Mohammed Sayed Hoorzook, is the owner of the second respondent. According to the applicant the parties firstly concluded a verbal joint venture agreement which governed their relationship but was never reduced into writing. The material terms of the joint venture agreement were according to the applicant that:

· All profits and losses of the digging operation as well as the income and expenditure thereof would be shared on a fifty/fifty basis;

· Applicant has to supply the earthmoving equipment necessary for the digging operation;

· The first respondent would supply certain sorting and grading equipment for the digging operation;

· The monthly overhead costs pertaining to the digging operation would be shared on a fifty/ fifty basis.

3. The conclusion of a verbal joint venture agreement is denied by the first respondent in his papers filed of record. It furthermore appears that the parties entered into a loan agreement subsequent to the alleged verbal joint venture agreement. The loan agreement is common cause between the parties as it has been reduced to witting and signed by both parties.

4. In terms of the loan agreement the first respondent agreed to advance a sum of R 3 000 000.00 (3 Million) to the applicant as a loan. The loan return was to be paid back by the applicant in six equal instalment of R 100 000.00 at the end of each month. Thus the loan return would amount to R 600 000.00 being 20% of the capital amount of the loan. Payment of the loan would be secured by the earth moving equipment to the value of R 3 6000 000.00 as listed in Annexure ‘A’ to the loan agreement.  The parties also amongst others agreed that should the applicant fail to make payment of the loan capital amount within the prescribed time period, the first respondent would have recourse against the earth moving equipments provided as security by the applicant. The first respondent will also have the right to sell them and recover the capital amount of the loan from the proceeds thereof.

5. The movable assets were thus moved to the property of the second respondent and the digging operations commenced. It appears that the digging operation lasted over a period of several months but no or negligible returns were made. The relationship of the parties in the meantime deteriorated as well. The applicant ended up leaving the movable assets on the property of the second respondent. This led to a series of further misunderstanding between the parties. When the applicant approach this Court on an urgent ex parte basis, it was at the time the first respondent had indicated to him that he intends to proceed with the marketing of the movable assets “as provided for in the loan agreement.”

6. The application served before this Court and a rule nisi was granted in terms of the prayers sought returnable on the 23 March 2017. The Sheriff together with the applicant effected the attachment and removal of the assets and placed them in a storage at Lumcrete Klip, Sand en Beton, Zeerust Road, Lichtenburg, on the 21 February 2017.

7. A notice in terms of Rule 6(12) (c) of the Uniforms  Rules of Court for the reconsideration of the rule nisi was served on the applicant by the respondents. The reconsideration application was by agreement between the parties granted on the 22 February 2017. The reconsideration Order confirmed that the movable assets should still be stored at the same place where they were with the exception that the Sheriff was now given control and possession of the keys to this premises. The main application was postponed to the 30 March 2017 for arguments.

8. On the 30th of March I heard the arguments in respect of the main application. The applicant submitted that prior to the conclusion of the written loan agreement, the parties concluded a verbal joint venture agreement which regulated the whole relationship between them. According to him the written loan agreement do not govern their relationship. Although the applicant does not deny that the first respondent paid some money to him, he denies that any amount paid was paid in terms of the written loan agreement, but that it was in terms of the verbal joint venture agreement.

9. The applicant claims that he is entitled to possession of the movable assets because:

· He is the owner of the movable assets;

· The written loan agreement never came into existence due to the fact that the first respondent did not advance any money in terms thereof to him;

· The first respondent possession of the assets is unlawful.

10. The first respondent on the other hand denies that he concluded a verbal joint venture agreement as alleged by the applicant. He submitted that the agreement concluded between the parties was the written loan agreement only and nothing else.

11. It is clear that there are disputes around whether:

· There was a verbal joint venture agreement in addition to the written loan agreement;

· The money the first respondent paid to applicant was in terms of the loan agreement or the verbal joint venture agreement;

· Whether the written loan agreement ever came into existence or not.

This Court is therefore called to determine if the disputes are genuine, bona fide and whether they can be resolved by way of affidavits in a motion proceedings.

 

Conclusion of a written loan agreement

12. The applicant submitted that the loan agreement never came into force because none of the obligations to perform imposed on him in terms thereof has arisen because of the fact that the first respondent has not advanced the sum of R 3 000 000.00 or any other amount as a loan to him. The first respondent on the other hand submitted that he had made payments in terms of the loan agreement to the applicant and that the applicant owes him an amount of R 208 088.36 in respect thereof.

13. This dispute does not pose any challenge and can be disposed of summarily on papers because it concerns a legal issue. I fully agree with the first respondent’s submission that the applicant’s submission that the written loan agreement never came into force due to the first respondent’s failure to advance money in terms of the agreement is unsound in law. There was consensus reached by the parties and they both signed the agreement. As soon as the offer for the lending of money was accepted, the terms thereof and the signatures applied thereto, a valid enforceable agreement came into existence.

14. Although the applicant is correct by stating that a loan agreement is a reciprocal agreement, his conclusion that the agreement only comes into existence as soon as the money is paid, is mistaken. In the case of Onderdaalrust Municipality v New Nigel Estate Gold Mining Co. Ltd 1948(2) SA 656(0) ,Van Der Heever J held that a contract is binding immediately upon its conclusion, what may be suspended by a condition is the resultant obligation or its exigible content.

15. From the facts of this matter, it is clear that the written loan agreement between the parties came into force soon as it was signed. The only possible suspension could have been the obligation of the applicant to repay the first respondent if the first respondent did not advance an amount of money to him. This brings me to the next question which is a bone of contention is this matter to wit, whether the first respondent paid the loan amount or not to the applicant.

 

The payment

16. First respondent submitted that he paid a sum of money in terms of the loan agreement to the applicant. The applicant avers that if the first respondent was paying in terms of the loan agreement, the money should have been paid in a lump sum as it is indicated in the loan agreement as a lump sum. The first respondent denies this and submitted that that the parties never agreed that the amount would be paid in one lump sum payment. He further argued that it was a tacit, alternatively implied term that the manner of payment of the loan amount to the applicant would be by paying the operating expenses of the applicant’s digging operation from time to time as and when the applicant incurred the expenses. He explained further that in fact he made the amount of R3 000 000-00 available to the applicant to draw from should he require it to find the operation. According to him all the amount paid in terms of the agreement by the first respondent in respect of operations costs, were to be deducted from the limit of R3 000 000-00. He claims he paid R2 083 088-00 in total.

17. The first hurdle the applicant is faced with is the fact that he does not necessarily dispute the amount received but qualifies it as an amount not in terms of the loan agreement. The second hurdle faces both parties. This is the fact that the loan agreement is silent as to how the loan amount is to be paid to the applicant. It does not also specify the manner in which the amount of money was supposed to be advanced to the applicant. But the problem does not end here. The biggest hurdle is that the parties gives two conflicting version as to what the amount that was paid by the first respondent was made pursuant to. Whether it was pursuant to a loan agreement or a verbal joint venture the question need to be looked into. This question raises a material dispute of fact which cannot be resolved on affidavits. I am saying this because the first respondent’s version cannot be regarded as fanciful or clearly untenable/fictitous because (i) the applicant does not deny signing the written loan agreement and the terms thereof; (ii) he also does not completely deny the receipt of any amounts from the first respondent.

But what aggravates this issue further is the fact that the first respondent also denies the conclusion of a verbal joint venture. This is so under the circumstances where the two parties has a business relationship. This brings me to the next issue which is also in dispute between the parties.

 

Co-existence of a written loan agreement and a verbal one.

18. As indicated above the applicant alleges that prior to the conclusion of the written loan agreement, the parties concluded a verbal joint venture agreement which governs the business relationship between the parties. The first respondent denies this and alleges that the whole relationship between the parties was governed by the written loan agreement. This is another bone of contention in this application which amount to a material dispute that in my view cannot be resolved on affidavits.

19. Whilst the first respondent categorically denied the existence of a joint venture agreement, he does not explain what the relationship between the two of them was, if it was not that of a joint venture as the applicant wants to give out. The first respondent furthermore admits that he undertook to supply certain grading and sorting equipment, but he does not explain on what basis. The documents he attached to substantiate his claim appears on the face thereof to proof payment of either the expenditure of the digging operation or the monthly overhead costs of the mining business, but unfortunately this is not borne out by the terms of the loan agreement he solely rely on. What make matters worse is the fact that the terms of the verbal joint venture agreement are totally different from those of the written loan agreement. No reference to the verbal joint venture was made in the written loan agreement. The issue of whether the two agreement co-exist cannot be resolved on affidavits because the two documents are not the same and or collaterals. The result of this is that the issue of whether the amount received by the applicant was received in terms of the verbal joint venture agreement and or written loan agreement remains a material dispute also as I had already mentioned above.

20. In a Room Hire Co (Pty) Ltd V Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 (T) at 11162 the following was said:

“…. The application may even be dismissed with costs, particularly when the applicant should have realised when launching his application that a serious dispute of fact was bound to develop. It certainly not proper that an applicant should commence proceedings by motion with knowledge of the probability of a protracted enquiry into disputed facts not capable of easy ascertainment, but in the hope of inducing the court to apply Rule 9 to what is essentially the subject of an ordinary trial action”

21. I fully agree with the first respondent’s Counsel that on the applicant’s own version a dispute of facts were bound to develop in this matter because of:

a) The purported verbal joint venture agreement which is not the same as the loan agreement. There is clearly a conflict between the two and the applicant was aware all along of the written loan agreement;

b) The applicant left the moveable assets in the first respondent’s possession during January 2017 when he left the mine on his own;

c) On his own version the applicant alleges that the money he received were not received as a loan without specifically denying that he had received any money at all;

d) Applicant was aware and does not deny the terms of the written loan agreement and more specifically clause 2.3 of the agreement.

22. In my view, this is matter wherein the applicant could have approach it by instituting an action as the disputes were clearly foreseeable. It is worth mentioning that the applicant does not even request the Court to either refer the matter to oral evidence or to trial. As such the applicant must stand and fall by the current proceedings.

 

Urgency

23.  From the above consideration, it is furthermore evident that the application should have never been brought on an urgent ex parte basis. As indicated above, the application had from the onset foreseeable disputes of facts which could not be resolved on papers only. On the applicant’s own version, the first respondent informed him during January 2017 of an impending sale of the moveable assets. I fully agree with the submission by the first respondent’s Counsel that if the applicant was really as concerned that a  sale might happened overnight, the applicant would have approached the Court during January 2017 rather than waiting for two weeks to launch an application. At the very least the applicant could have given the first respondent notice of the application, albeit short notice of one week. It appears from the manner in which the applicant was brought that the sole purpose of bringing the application ex parte was to obtain a procedural advantage over the first respondent and to spirit away the movable assets as quickly as possible. This conclusion is arrived at because all the facts are now before this Court from both parties and it I clear that the applicant was attempting to obtain a final order in a form of a disguised ex parte application. From the facts it is quite clear that he left the assets in question on his own accord. In addition,the applicant had all along an alternative remedy that he could resort to without coming to this court on self-created urgency.

24. From all of the afore-going considerations of the legal points raised by the first respondent, the application is capable of being dismissed. There were other arguments raised during the submissions by both respective Counsel which by virtue of the conclusion that I have already reached above, the need to consider them fell away.

25. The following order is thus made:

25.1. The application by the applicant is hereby dismissed with costs,  such costs to include costs which were previously reserved;

25.2. Paragraphs (a) (i)-(v) of the Order granted on the 22 February 2017 shall remain in force pending the finalisation of the rei-vindicatio action that the applicant has instituted and or shall institute within 30 days of the granting of this order.

 

______________________

KGOELE A.M

JUDGE OF THE HIGH COURT

 

ATTORNEYS:

FOR THE APPLICANT: BOTHA ATTORNEYS

c/o NIENABER & WISSING

PROKUREURS

10 Tillard Street

MAHIKENG

FOR THE RESPONDENTS: CJP OELOFSE ATTORNEYS

c/o LABUSCHAGNE

ATTONEYS

19 CONSTANTIA DRIVE

RIVIERA PARK

MAHIKENG