Roselli v Derek’s Boerewors and Pie Mecca CC and Others (84979/2014) [2016] ZAGPPHC 1160 (7 December 2016)

 

A little less controversial post. In the matter of Roselli v Derek's Boerewors and Pie Mecca CC and Others, the High Court of South Africa (Gauteng Division), was called upon to decide on a procedural matter that concerned a somewhat trite legal principle: The infamous mischief of practitioners to launch motion proceedings (despite having knowledge of material disputes of facts) with the hope that the matter will be referred to trial thereby gaining advantage over matters that were instituted by way of proceedings from the onset. 

 

Briefly, the facts are as follows: The applicant alleged that he was part of the first respondent close corporation because he had paid the second respondent a some in excess of 1.2 million rands. The second respondent then admitted that the applicant paid her approximately 1.2 million rands but the transfer of the 50 percent of the close corporation was not transferred to the applicant. Which then meant that the claim for about 1.2 million rands was against the second applicant and not the first respondent close corporation. 

Ngalwana AJ, reaffirmed the Stellenvale Rule, which warns against applications-cum-trials because the applicant wanted to refer the matter for viva voce evidence having known of said material dispute of fact and going on to institute motion proceedings and not action proceedings. It is worth mentioning that there are circumstances where motions cum trial, Ngalwana AJ details those circumstances in para 13.1-13.5.

The application was eventually dismissed with costs.    

It is worth mentioning that there were some remedies that were sort that were not applicable to the litigants situations. Namely: Asking the court for punitive costs for inclusion of inadmissable evidence is not appropriate, a striking out application is. 

Also, punitive costs for a misjoinder is not an appropriate remedy. 

 

Limited Role of assessors in sentencing: Justified or Arbitrary ?

 

In S v Botha 2006 (2) SACR 110 (SCA) the accused was convicted

of murder and an attempt to defeat the ends of justice and sentenced

to an effective 18 years imprisonment. In imposing the

sentence the trial judge (who was sitting with two assessors) stated

that this sentence had been agreed upon 'unanimously'. From this

it was inferred by the accused that the sentence 'was not the product

of the learned judges' independent discretion, but was the product

of a discretion exercised by the judge acting in concert with the two

assessors' (at 114d-e).

This, in turn, raises the question of the ambit and nature of the

power and functions of a presiding officer when it comes to the

imposition of any sentence. In particular, the question must be

surveyed within the context of the role played by assessors.

The Supreme Court of Appeal (per Ponnan AJA) commenced by

reiterating the trite assertion that 'an assessor's function does not

extend beyond verdict' and therefore that it is 'not competent for

an assessor to participate thereafter in the decision as to what

punishment should be imposed' (at 114h-i). But this does not

mean to say that the presiding judge cannot consult with the

assessors on the basis of what is an appropriate sentences 'but the

sentence must remain that of the judge alone' (at 114j).

It is submitted that the question raises some important considerations

around the sentencing process and the constraints imposed

upon presiding officers. This is because, although it is accepted that

it is the presiding officer alone that is empowered to exercise a

discretion in regard to imposition of sentence, there is nothing to

prevent the presiding officer from consulting others in order to

determine a suitable sentence. Particularly so in the case of assessors

who have sat through the trial and hence would have first-hand

knowledge of the issues concerning an appropriate sentence.

In addition, in practice, assessors are usually not asked to retire

after the verdict (when their functions have formally ended) but

rather to remain on the bench and listen to arguments on sentence.

A logical consequence of this would be that the judge would consult

with them and take their advice into account in determining an

appropriate sentence

Therefore what is of significance in this respect is the precise

meaning and context of the word 'unanimous'. If it simply meant

that the judge discussed the sentence with the assessors and took

their advice, but the ultimate decision remained that of the judge

alone, then any 'unanimity' that might be reached between the

judge and the assessors 'is but a logical extension of that process' (at

115c). However, where ajudge and assessors hold different views on

sentence 'it would be impermissible for the judge to succumb to the

will of the assessors in the belief that they constitute the majority of

the court' (at 115a)

Is a re-transfer clause a Real or a Personal Right ?

 

In Bondev Midrand (Pty) Limited v Puling & another and a related matter [2017] JOL 38971 (SCA) the appellant, Bondev, a property developer, unsuccessfully sought an order obliging the respondent to re-transfer to it a piece of land it had earlier purchased from the appellant. The basis for the claim was that the respondent had failed to comply with a condition registered against the title deed obliging the respondent to erect a building on the property within a prescribed period. The Gauteng High Court, Pretoria, dismissed the developer's claim on the basis that Bondey was seeking to enforce a debt as envisaged in section 11(d) of the Prescription Act 68 of 1969 which had prescribed and become unenforceable as more than three years had elapsed since had become due. The Supreme Court of Appeal granted leave to appeal. The respondents contended that the claim for re-transfer constituted a 'debt' for the purposes of the Prescription Act, but not one envisaged in section 11(a), (b) or (c) of the Act. They therefore submitted that, in terms of section 11(d) of the Act, the prescriptive period was three years. In contrast, the developer (appellant) argued that the registered condition gave rise to a real right (and not merely a personal right), which did not prescribe within three years.

Leach JA referred in passing to the recently reported case of Bondev Midrand (Pty) Ltd v Madzhie & others 2017 (4) SA 166 (GP), which the parties' legal representatives correctly brought to the attention of the court. In that case the court concluded that a similar repurchase clause was grossly unfair to a purchaser intending to build a residential home, that it infringed the constitutional right to adequate housing, and that enforcing it would be against public policy. The acting judge dealt with various constitutional issues and stated, amongst others, that the clause was grossly unreasonable towards a purchaser who wished to pursue the suburban dream incrementally, and that a repurchase clause is 'not central to the business of a developer or the operations of a homeowners association,' before concluding that enforcement of the present type of repurchase clause should be refused (paras [7] [8]). Leach JA correctly pointed out that the applicant in that case wished to abandon an application for default judgment and all that was required was the court's consent. Leach JA found that this was not an instance that required a formal judgment, let alone one in respect of constitutional issues that had not been raised or canvassed in the papers and in respect of which interested parties had neither been forewarned nor heard. Consequently, it was inappropriate for the court in Madzhie to have reached the conclusion that it did in regard to the constitutionality and lack of enforceability of the repurchase clause. Leach also found that it was extremely unfortunate that the Registrar of Deeds now viewed the judgment in Madzhie as binding and, consequently, refused to register deeds containing such clauses which are relatively common and are regularly registered at the instance of developers and local authorities (paras [7]–[11]).

Returning to the question of whether the claim for re-transfer constituted a debt capable of prescribing or a real right, Leach JA explained that the condition in question consisted of two clauses. The first obliged the transferee or its successors in title to erect a dwelling on the property within a period of eighteen months. The second provided that in the event of a dwelling not being erected within that period, the appellant was entitled, but not obliged, to have the property re-transferred to it against a return of the purchase price (para [12]). As the first clause reflected an intention to bind not only the transferee but also its successors in title, it resulted in an encumbrance upon the exercise of the owner's rights of ownership of its land and, therefore, gave rise to a real right — Willow Waters Homeowners Association (Pty) Ltd v Koka NO & others 2015 (5) SA 304 (SCA) (paras [16] [22]) and the authorities there cited (para [13]). On the other hand, the right of the appellant to claim re-transfer of the property against repayment of the original purchase price, as set out in the second clause, did not amount to such an encumbrance. This is a right which can only be enforced by a particular person, the appellant, against a determined individual, and does not bind third parties, which is the hallmark of a personal right which the appellant could exercise at its sole discretion. Standing alone, that clause would not have carved out a portion of the respondents' dominium and would, therefore, be regarded as creating a personal right (para [14]). 

On the authority of, amongst others, British South Africa Company v Bulawayo Municipality 1919 AD 84 93 and Lorentz v Melle & others 1978 (3) SA 1044 (T) 1049, Leach JA then pointed out that although only real rights and not personal rights should be registered against a title deed, the fact that a personal right is registered does not, in itself, convert that right into a real right.

Leach JA then dealt with the appellant's contention, with reliance on Cape Explosive Works Ltd & another v Denel (Pty) Ltd & others 2001 (3) SA 569 (SCA), that although the second clause appeared to create a personal right, it was so inextricably linked to the first clause — which clearly created a real right — that the two clauses should be read together as creating a real right capable of registration (para [15]–[17]). Leach JA explained that Denel's right under condition 2 to give notice to the transferor, Capex, that the property was no longer being used for the specified purpose provided, in Cape Explosive Works, a mechanism by which terminate the restriction upon the rights of ownership. Consequently, either Capex would repurchase the property, or, if Capex was not inclined to do so, Denel would retain its ownership free of the restriction. The encumbrance on the land created by condition 1 could only continue until Denel gave Capex a notice under condition 2. Therefore, the restriction on ownership in condition 1 was inseparably bound up with condition 2 (para [18]).

By contrast, Leach JA found that the burden created by the first clause in the present case — ie, the obligation to build a dwelling on the property — was binding on the transferee (the respondent) and its successors in title. The respondent had no right under the second clause to bring that restriction to an end. Clause two provided only that in the event of a failure to build a dwelling in the time provided, the developer (appellant), as the transferor, could recover the land against the payment of the purchase price if it so wished. This was akin to providing the appellant with an option to purchase which, on the authority of Barnhoorn NO v Duvenhage & others 1964 (2) SA 486 (A)494F–H, essentially constituted a personal right. However, as the developer (appellant) was not obliged to demand or claim re-transfer of the land, and the obligation to build would remain extant so long as the respondents retained their ownership, the restriction on ownership created by clause 1 remained binding and would not be terminated should the appellant elect not to seek re-transfer. The two clauses read together, therefore, did not constitute 'a composite whole' restricting the respondents' use of the property. Therefore, the second clause, under which the developer (appellant) could choose to claim re-transfer of the property, created no more than a personal right akin to an option to purchase which was not inseparably bound up with the first clause (paras [19] [20]).

In conclusion, Leach JA dealt with whether the debt which was the subject of the claim in terms of the second clause had prescribed. He found that it appeared to be settled that even on a narrow meaning, a 'debt' includes the right to claim the return of property. The court therefore concluded that, in the light of its finding that the second clause of the condition did indeed create no more than a personal right, the appellant's claim in each case had been correctly dismissed by the court a quo on the basis of prescription (paras [21] [22]).