Van Wyk and Sons & Others vs Swaziland Perishable Foods (Pty) Ltd & Others (791/2018) [2019] SZHC 49 (14 March 2019);

 

 

IN THE HIGH COURT OF ESWATINI

JUDGMENT

                                                                                                CASE NO. 791/18

HELD AT MBABANE                                                        

In the ex parte Application of

VAN WYK AND SONS (PTY) LTD                                  1^st APPLICANT

MBHILIBHI FAMILY TRUST                                         2^nd APPLICANT

CINDY ANN VAN WYK (TRUSTEE)                             3^rd APPLICANT

 

In re:

VAN WYK AND SONS (PTY) LTD                                 1^st APPLICANT

MBHILIBHI FAMILY TRUST                                        2^nd APPLICANT

CINDY ANN VAN WYK (TRUSTEE)                            3^rd APPLICANT

And

SWAZILAND PERISHABLE FOODS (PTY) LTD       1^st RESPONDENT

EKWESUTSENI INVESTMENTS (PTY) LTD             2^nd RESPONDENT

SWAZILAND DEVELOPMENT FINANCE

CORPORATION                                                            3^rd RESPONDENT

MATSAPHA TOWN BOARD                                       4^th RESPONDENT

REGISTRAR OF DEEDS                                              5^th RESPONDENT

ATTORNEY GENERAL                                               6^th RESPONDENT

Neutral Citation: Van Wyk and Sons & 2 Others vs Swaziland Perishable                                                 Foods (Pty) Ltd & 5 Others [791/18] SZHC 49 [2019]                                        (14 March 2019)

Coram:                 M. LANGWENYA J

Date Heard:         23 November 2018

Date Delivered:    14 March 2019

Summary:           The applicants and the first and second respondents entered into                         an agreement of sale of land—applicants paid the purchase price                         and parties signed an agreement of exchange-the first                                           respondent failed to provide conveyancer with necessary                                                documents to enable registration of property in the name of the                                      applicant-order for specific performance granted.

 

JUDGMENT

Introduction

[1]     On 25 May 2018, this matter was enrolled as an urgent ex parte application           before this Court. After two judges recused themselves from hearing the matter on 25 May 2018 and 28 May 2018 respectively, the matter was heard          by another judge on 29 May 2018. On 29 May 2018, the Court ordered the     fourth respondent to show cause why it should not be interdicted from         attaching the property which is the subject matter of the proceeding pending   finalization of the matter. The matter was postponed to 4 June 2018 to enable the fourth respondent to file its papers if it was so inclined and to allow that        pleadings be concluded on 23 July 2018.

 

[2]     On 9 November 2018, I was due to hear the matter on the contested motion      roll and I was informed that the file could not be located. The file had to be    reconstructed and the matter was finally heard on 23 November 2018. This is      the short but chequered history of this matter.

 

Orders Sought

[3]     As stated in the preceding paragraphs, by way of notice of motion an urgent     ex parte application effectively seeking a final interdict was filed on 25 May          2018 seeking the following orders:

1. Dispensing with the usual forms and procedures relating to the       institution of these proceedings and allowing the matter to be heard and          enrolled as one of urgency;
2. Condoning the applicant’s non-compliance with the rules;
3. That pending finalization of this matter a rule nisi do hereby issue calling upon the respondents to show cause on a date and time to be         determined by the above honourable Court why the Court should not          make the following Orders final:

3.1     Interdicting or restraining the sale of the immovable property                    fully described hereunder, by the first, third and fourth                             respondents          either by private treaty or by public auction to wit:

          Certain: Lot No. 684, situate in Matsapha Industrial sites, Manzini district,           Eswatini; Measuring as: 4138 (Four One Three Eight) square metres;

                   3.2     Interdicting or restraining the fifth respondent from effecting                                       and or authorizing any transfer and registration of the above-                                      mentioned property in prayer to any prospective purchaser                               thereon;

                   3.3     Interdicting the second and third respondents from remitting and                       or disposing off the amount of E750 000.00 (Seven Hundred and                       Fifty Thousand Emalangeni) to the first respondent, which                                 monies were paid by the applicant to the first respondent through                     the second and third respondents towards the purchase price.

                   3.4     Interdicting the first respondent from transferring its shares to a                                  potential purchaser pending the outcome of this application;

          4.       Ordering that prayers 3, 3.1, 3.2, 3.3 and 3.4 hereof operate with                      immediate interim effect.

          5.       Directing or ordering the first respondent to furnish the applicants with           the title deed in respect of Lot No. 684.

          6.       Directing or ordering the first respondent to endorse its signature on all           the necessary documents to facilitate and effect the transfer and                                   registration of Lot 684 in the name of the second applicant within seven           days of being issued with the order to do so.

          7.       In the alternative to the above prayers, the second and third respondents                  be ordered to pay back the monies received as part of the purchase price           and that the cession be cancelled.

          8.       Directing that copies of the application and the Court Order be served              together to the respondent

          9.       Costs of suit in the event of opposition.

          10.     Further and/or alternative relief.

 

Brief background

[4]     It is only prudent that I lay a foundation of evidence led by the disputants. I           commence with the applicants’ averments.

 

[5]     From the founding affidavit the applicants have stated that on 21 January 2015           the first applicant and the first respondent concluded a written agreement of     sale and exchange in terms of which the applicant was sold property fully      described as lot 684, situate in Matsapha Industrial sites, Manzini district,     Eswatini by the first respondent which was represented by Ms. Thandi        Maziya.

[6]     The agreed purchase price was a sum of E750.000.00 (seven hundred and fifty           thousand Emalangeni) along with plot 225 and plot 234 situated at Tubungu           township. The memorandum of agreement of exchange provides as follows:

                   ‘[4] For purposes of payment of Stamp Duty the parties declare their                                       respective properties to be valued at E400.000,00 (four hundred thousand                               Emalangeni)’.

 

[7]     The agreement of sale states that ownership of the properties referred to herein           shall pass to the purchaser from the date of registration of transfer of the           property into the name of the purchaser[1].

 

[8]     According to the deed of sale the price of E750.000,00 was to be paid as           follows: E250.000,00 was to be paid on signature of the agreement by the           purchaser to the seller. The balance of E500.000,00 was to be paid by the           purchaser within ten days of signature into the account of Fincorp (herein cited           as the third respondent).

 

[9]     As the remainder of the agreement, the second applicant had to cede plots 225 and plot 234 situate at Tubungu township into the name of the first respondent.

 

[10]   The agreement of sale states that the purchaser of lot 684, Matsapha shall           occupy the property upon transfer of the property to its name[2].

 

[11]   The circumstances under which either of the parties would be entitled to a           cancellation of the agreement are set out in clause 8 of the agreement. In particular clause 8.3 provides:

                        ‘If the seller commits any material breach of this agreement and fails to                                    remedy same within ten (10) days of receiving written notice from the                                       purchaser to do so, then the purchaser shall be entitled at his option to claim                            specific performance or to cancel this agreement and to claim damages without                       prejudice to any other rights he may have in law[3].’

 

[12]   It is common cause that a written agreement of sale and exchange was     concluded between the first respondent and the first applicant who were         represented by Thandi Maziya and Cindy Ann Van Wyk in their capacities as          directors respectively. The applicant paid an amount of E750.000,00  to the         third respondent and the second respondent who received the monies on     behalf of the first respondent.

 

[13]   It is not in dispute also that Thandi Maziya representing the first respondent           signed the undated and un-witnessed deed of exchange[4]. During submissions,           counsel for the applicants contended that the agreement of exchange was           intentionally left undated to enable the calculation of duties to commence on     the date of registration which was not the same date as the one of signing the          deed of exchange by both parties.

 

[14]   It is first respondent’s director, Ms. Thandi Maziya’s lamentation that ‘despite           her request to be taken to Tubungu township to view the plots in question, the           applicants have refused and or neglected to take her to the site. The applicants aver that they had, on previous occasions arranged with Ms. Maziya to view the properties and that she was either too busy, or it was inconvenient or she       would simply cancel the appointment on the last minute.

 

[15]   Aside the fact that the first respondent has not pleaded in her papers when she           raised the concern and what the applicants and conveyancer’s response thereto           was- it is a material term of the agreement of sale that there was no condition           precedent that the properties would be viewed. See clause 9.2 of the agreement           of sale which provides:

                        ‘No party shall be bound by any express or implied term, representation,                                 warranty, promise or the like not recorded herein[5].’

          Clause 9.1 of the agreement of sale provides as follows-

                        ‘This document constitutes the sole record of the agreement between the                                  parties[6].’

 

[16]   It would appear from the conveyancer’s written correspondence of 16 June           2015 and of 1 April 2016 that the conveyancer attempted in vain to get the       first respondent to provide the required documentation in order to facilitate    the transfer.

 

[17]   I reproduce hereunder the letters from SB Mnisi and Associates of 16 June           2015 addressed to the first respondent:

                   ‘Agreement of Exchange-Swaziland Perishable Foods/Mbhilibhi Family Trust

1. Kindly urgently provide us with our requirements in terms of previous             correspondence herein.
2. The protracted delay is now causing concern as we had hoped to finalise                      registration of the transactions expeditiously.
3. We hereby confirm that Mbhilibhi Family Trust has provided us with all our requirements.

 

                  Yours Faithfully

                  S.B. Mnisi & Associates

                  CC-Mbhilibhi Family Trust

 

                  Letter dated 1 April 2016 addressed to Mbhilibhi Family Trust states as                             follows:

                  ‘Re: Exchange Transfers-Mbhilibhi Family Trust/Swaziland Perishable                             Foods

                  Kindly be advised that the above company has still not provided us with our                      requirements as advised in terms of previous correspondence.

                  Yours Sincerely

                  S.B. Mnisi & Associates.

 

[18]   The first respondent avers that a complete signed documentation for the exchange transfer with dates and witnesses were to be done after the viewing          of the properties. The first respondent admits however that this was not a         condition specific to the contract of sale[7]. The first respondent admits signing         the agreement of sale and the agreement of exchange. It is settled law through the pacta sunt servanda maxim that contracts freely and seriously entered into must be honoured and, if necessary, enforced by the courts. The unilateral act     of the first respondent to adding new conditions to the contract of sale amounts   to a repudiation albeit without invoking clause 8.1 of the agreement of sale    and as such cannot be countenanced. In my view the first respondent’s          contention with regard to the viewing of the properties in Tubungu is       implausible and clearly untenable to the extent that they may justifiably be           rejected merely on the papers[8].

 

[19]   The first and the second respondents aver that because the applicants have not           complied with clause 2 of the agreement of sale[9] they are the ones who are in           breach of the agreement. The respondents contend further that the applicants           have not ceded the plots in Tubungu to the respondent much against clause      2.3 of the agreement of sale. The memorandum of agreement of exchange      although undated and bearing no signatures of witnesses is signed by the first        respondent’s director.

 

[20]   I am none the wiser how the applicants were expected to provide cessionary           documents if the respondents’ director was unwilling to provide the necessary           documentation to the conveyancer to enable the cession to be formalized. In      his letter of 16 June 2015, the conveyancer urges the respondents to provide          the necessary documents so that the registration could be expedited and        finalized. The conveyancer states that the applicants had provided the        necessary documents to enable finalization of the registration transaction. It is unclear how the applicants can be said to be in breach of clause 2 of the         agreement of sale if they paid the purchase price of E750.000 to the         respondents and the cession of the Tubungu plots was stalled by the first       respondent’s refusal to cooperate with the conveyancer.

 

[21]   The respondents aver further that a concern was raised with the conveyancer           regarding the reluctance to sign the exchange transfer documents. It is the           respondent’s contention that the exchange transfer documents could only be           signed by its director once she had viewed and participated in the evaluation     of the plots in Tubungu. Notably, in the letters written by the conveyancer there is no reference to respondents’ concern. The respondents have not just   failed to produce any written communication to that effect; they do not refer           to the date(s) or instances during which their concern was communicated to         the conveyancer. It defies logic why the conveyancer would complain only       about respondents’ protracted delay in availing the necessary documents in     June 2015 and almost a year later (April 2016) reiterate his exasperation about        respondents’ failure to provide the documents and say nothing about          respondents’ concerns if these were communicated to him. Clearly, what the           applicants have said and as supported by the agreement of sale has more           credence and is more probable than the respondents’ version.

[22]   Despite stating that the applicants have failed to comply with the deed of sale, the first respondent has never issued out a written notice as required by the   deed of sale in clause 8.1 of the agreement which states as follows:

                   ‘If the Purchaser commits any breach of this sale and fails to remedy such                               breach within ten (10) days after receiving written notice requiring the                                     Purchaser to remedy the breach, then the Seller shall be entitled, either:-

                        8.1.1 to claim payment of all amounts payable in terms of this sale, whether or                         not such amounts are then due for payment; or

                        8.1.2 to cancel this sale by written notice to the Purchaser.’

 

Sale of property to third parties

[23]   It is the applicants’ averment that unbeknown to it, and without its approval   and knowledge, the first respondent is now selling the property to third parties.      To this end, the applicants have attached a deed of sale between the first    respondent and WBJ Investments (Pty) Ltd[10]. The respondents deny that they        tried to sell the property in question. In the deed of sale between the first      respondent and WBJ Investments (Pty) Ltd, the first respondent is now        demanding an amount of E2.200.000.00 purchase price. Considering the    increased purchase price of the immovable property in the second deed of sale,         one may attribute the first respondent’s change in attitude to what is           colloquially known as ‘seller’s remorse’ in a rapidly escalating property market.

 

[24]   The law is that the existence of a contract for the sale of a specific property      does not affect the validity of a subsequent sale of the same competing   personal right ex-contractu for the delivery or the transfer of the same    movable or immovable property. Consequently, ownership is generally not acquired by the purchaser whose contract was the earlier one but by the         purchaser who was the first to obtain delivery or the transfer without the       knowledge of the existence of the prior right of another[11].

 

[25]   Where ownership has not yet passed to any of the competing purchasers, the           personal right of the purchaser who is first in time is given preference by           application of the maxim qui prior eat tempore potior est jure[12]. The result is     that the first purchaser has the right to claim specific performance of his         contract and to restrain the seller from committing a breach of his contract by        interdicting the seller from passing ownership to the second purchaser whose        remedy in turn is an action for damages against the seller[13].

 

Specific Performance-when applicable?

[26]   What the applicants seek in this application is specific performance of the        deed of sale between the parties. In general, an aggrieved party has a right to   an order of specific performance. The classic statement of this rule is by Innes JA in Farmers Cooperative Society v Berry[14] where he stated as follows:

                        ‘Prima facie every party to a binding agreement who is ready to carry out his              own obligation under it has a right to demand from the other party as far as                                    is possible, a performance of his undertaking in terms of the contract’.

[27]   In order to be entitled to the remedy of specific performance, the applicants           must establish the following: a) allege and prove the terms of the contract; b)           allege and prove that they have complied with its antecedent or reciprocal           obligations; c) allege non-performance by the respondents of their obligation     and lastly, d) claim for specific performance[15].

 

[28]   The Court has a discretion to grant or refuse specific performance. This   discretion must be exercised judiciously and ‘not capriciously nor upon a       wrong principle[16]’ Although certain situations are commonly cited as inviting    the exercise of the discretion to refuse to grant specific performance, such as   impossibility of performance, undue hardship any many other situations. Nor   is it circumscribed by rigid rules. Each case must be judged on the basis of its     own peculiarities[17].

 

[29]   In casu, the fact of the deed of sale is not disputed. That the applicants have     paid an amount of E750,000.00 as part of the purchase price is also not          disputed. That the first respondent has been frustrating the transfer and       registration process by failing to submit the required documents to the   conveyancer to effect same is also apparent from the papers and is confirmed         by the first and second respondents in their answering affidavit. In fact, the          respondent in its answering affidavit aver that ‘a complete signed         documentation for the exchange transfer with dates and witnesses were to be   done after the viewing of the properties…Respondents were not to sign off           exchange without viewing the properties[18].’ For reason of failure to sign the           relevant papers, the respondents have not performed their part of the bargain   in the contract.

 

[30]   In this matter the deed of sale was concluded between the parties and the           purchase price was set out in clause 2 of the agreement. Other than to hazard    that the first respondent’s change in attitude may be ascribed to what is          colloquially known as ‘seller’s remorse’, no sound reason has been put   forward why it is impossible, difficult, unreasonable or unjust in the       circumstances to comply with its obligations in terms of the agreement.

 

[31]   I am of the view that granting the order of specific performance sought would   not operate unreasonably hard on the respondents nor would it result in an   injustice or be inequitable in the circumstances. It is also not impossible for          the respondents not to perform. The inconvenience that would be visited by    the enforcement of the agreement of sale, is in my view self-styled and self-       inflicted by the respondents who opted not to uphold an agreement they had          voluntarily concluded with the applicants.

 

[32]   In my view no other grounds have been advanced to deny the buyer’s claim      for specific performance of the agreement of sale; the buyer is therefore         entitled to an order as claimed.

 

[33]   That the applicants have taken nearly three years before they demanded           performance is, to me of no moment because in law a party cannot waive its           right merely by delaying to enforce it. Christie[19] states the position in the           following terms:

                        ‘Delay in enforcing a right conferred by the terms of a contract is not                                       necessarily a waiver of the right. One can go further and say that delay, of                               itself and without more, can never deprive a party of a right conferred by the                      terms of a contract except by prescription. In North Eastern Districts                                      Association (Pty) Ltd v Surkhey Ltd 1932 WLD 181 at 186 Krause J said that:                          “it is not by mere delay that a man loses his rights, even if he is aware of the                              fact that another has infringed his rights. Delay or ‘standing by’, as it is called               may be taken into consideration by the Court in arriving at the conclusion as              to whether or not the man did or did not lose his rights’.

 

[34]   In their founding affidavit, the applicants aver that they were informed that      the first respondent was now trying to sell the same immovable property to third parties. That is one of the reasons they moved the present application.       The applicants attached a deed of sale to that effect. The first respondent’s   bare denial that it has been attempting to sell the same property to third parties     is not worthy of any credit, is implausible and clearly untenable to the extent    that it may justifiably be rejected merely on the papers.

 

Leasing of property

[35]   In the founding affidavit applicants aver that the director of the first           respondent gave them permission to lease out the property Lot No. 684 at           Matsapha industrial sites for rentals of E5,000 per month. A lease agreement   to that effect is attached. The first respondent states that the applicants were         receiving rentals of E35,000 per month and not E5,000 per month. Notably,          the first respondent does not provide evidence either by way of a confirmatory     affidavit of these assertions.

 

[36]   The first respondent denies also that it gave permission to the applicants to           lease the premises. In my view, the argument does not avail the first           respondent as it was not ignorant of the contract in as much as it argues that    the lease agreement is in breach of clauses 2, 3.1, 4 and 6 of the sale     agreement.

 

[37]   The applicants aver that the rentals collected were used to maintain the affairs of the second respondent together with its subsidiary companies and the first           respondent does not deny this averment. Except to lament that the first           respondent has had to continue to pay rates and taxes and other imports levied           on the property since 2015, there is not much that can be done to relieve it           from having to continue to pay the rates and taxes as long as the property is    not registered in the name of the applicants.

 

 

Dispute of facts

[38]   It is the submission of the first and the second respondents that there is a           dispute of facts in this matter which cannot be resolved on the papers as they           stand. It is my considered view that there is no real or substantial dispute of           facts that attend this application, contrary to respondents’ assertion. The only           dispute I see is as relates to payment of the purchase price of the property in           question. This dispute can be resolved on the papers.

 

[39]   Much was said by the first and second respondents about applicants’ failure    to meet the requirements of a final interdict in this application. This argument       is made in respondents’ supplementary submissions which were handed to     Court from the bar on the date of the submission. As earlier stated in this       judgment, if the seller is found to be selling the same property to another          purchaser, the first purchaser has the right to claim specific performance of its       contract and to restrain the seller from committing a breach of its contract by          interdicting the seller from passing ownership to the second purchaser whose remedy in turn is an action for damages against the seller. It is on this basis that the order in terms of prayers 3.1, 3.2, 5, 6 and 9 of the notice of motion           dated 24 May 2018 is granted.

 

[40]   In the circumstances, the following order is issued:

1. The first respondent is directed and ordered to furnish the applicants       with the Title Deed in respect of Lot No. 684 situate in Matsapha Industrial Sites, Manzini district, Eswatini
2. The first respondent is directed to endorse its signature on all the             necessary documents to facilitate and effect the transfer and registration of Lot No. 684 in the name of the second applicant within seven days          of been issued with this order
3. Without derogating from order 2 above, I also specifically order that:
   1. Should the first respondent fail to take such steps as are necessary                to effect the transfer of the property into the name of the second             applicant within the above specified period, the fifth respondent              be and is hereby directed, authorized and empowered to take all                  such steps as are necessary to effect the transfer of the property                     mentioned in order 2 above into the name of the applicant                         including the signing of such documents as may be necessary.
4. The first and the second respondents be and hereby ordered to pay the           costs of the proceedings on the ordinary scale.
5. The respondents are interdicted or restrained from selling the           immovable property herein described as Lot 684 situate in Matsapha           Industrial Sites, Manzini district, Eswatini.

 

 

 

 

 

 

1. The fifth respondent is interdicted or restrained from effecting and or           authorizing any transfer and registration of the abovementioned     property to any prospective purchaser thereof.

 

 

 

•  

M. LANGWENYA

JUDGE OF THE HIGH COURT

 

For the Applicants:                                 Ms.  M. Smith

For the 1^st & 2^nd Respondents:               Mr. S. Masuku