Court name
High Court
Case name
Kuiiri v Bulk Trade (Pty) Ltd
Media neutral citation
[2006] NAHC 32







        
        
        
        
        
        
        
        
CASE NO.:      
I 103/05



IN THE HIGH COURT OF NAMIBIA


In the matter between:


JOSEPH FRANS KUIIRI     
        
        
        
        
        
PLAINTIFF



and     
        
        
        
        
        
        
        
        
        



BULK TRADE (PTY) LTD    
        
        
        
FIRST DEFENDANT



AARON MUSHIMBA  
        
        
        
        
        
SECOND DEFENDANT


ERIS FARMING (PTY) LTD  
        
        
        
        
THIRD DEFENDANT


OBETH MBUPAHA KANDJOZE  
        
        
        
FOURTH DEFENDANT


KAHOO FRIEDA WITNESS KANDJOZE   
        
FIFTH DEFENDANT

KANAINDO HOLDINGS (PTY) LTD     
        
        
SIXTH DEFENDANT

AGRICULTURAL BANK OF NAMIBIA    
        
        
SEVENTH DEFENDANT

THE REGISTRAR OF DEEDS  
        
        
        
EIGHTH DEFENDANT



CORAM   
        
:       
PARKER, A J




Heard on        
        
:       
13 March 2006

Delivered on    
        
31 March 2006


___________________________________________________________________


JUDGMENT




PARKER, A J:


BACKGROUND


[1]     
The plaintiff instituted an action against first to seventh defendants in which, in the main, he avers that he was induced by fraudulent misrepresentation by the second defendant into signing an agreement of sale with the first defendant, represented by the second defendant, for the sale of farm Sandfontein (now called Remaining Extent of Farm Santfontein), No. 468 (the farm), Gobabis District, of which the plaintiff was at all material times the owner, to the first defendant, of which, according to the declaration, the second defendant was at all material times the sole shareholder and managing director (Annexure “JK4” to the plaintiff’s particulars of claim).




[2]     
The pleading sets out further that the second defendant is also the sole shareholder and managing director of the third defendant; fourth and fifth defendants are married in community of property; sixth defendant is a company limited by liability, of which the plaintiff is a shareholder; seventh defendant is a juristic person; and eighth defendant is the Registrar of Deeds. The pleading also states that the third, sixth, seventh and eighth defendants have been cited because they might have an interest in the outcome of the present dispute, and no substantive relief is, therefore, claimed against them.





The plaintiff’s particulars of claim


[3]     
The plaintiff’s main claim, entitled “VOIDABLE SALE OF THE FARM”, is couched in the following terms:





21.     
The parties to the joint venture agreement were not able to continue with it and
PLAINTIFF and SECOND DEFENDANT agreed orally during about April/May 2001 at Windhoek that:




21.1    
PLAINTIFF
would sell the farm to FIRST DEFENDANT at a purchase price of N$ 540,000.00 that does not reflect the true value of the farm because in reality only 50% of the ownership is acquired.




21.2    
The said sale was conditional upon
PLAINTIFF acquiring 50% of the shareholding in the FIRST DEFENDANT and that PLAINTIFF would remain in possession and control of the farm; and




21.3    
This oral agreement supersedes
JK1 as amended.




22.     
PLAINTIFF never intended to relinquish his entire ownership of the farm, nor that the farm be sold to third parties.




23.     
SECOND DEFENDANT fraudulently represented to PLAINTIFF at the time that:




23.1    
He would comply with the terms of the agreement referred to in paragraph 21.1 supra, while he had no intention of doing so; and





23.2    
The “purchase price” of N$540,000.00 represents consideration for 50% of the farm while his intention was to acquire the entire ownership of the farm for that price.



24.     
PLAINTIFF
was induced by these misrepresentations to sign an agreement of sale with FIRST DEFENDANT on 31 May 2001, selling the farm for N$540,000.00. A copy is annexed, marked “JK4”.




25.     
As a result the said agreement is voidable and should be declared void on the basis of fraud.





26.     
The farm was registered in the name of
FIRST DEFENDANT on 14 December 2001 in terms of deed of transfer T7666/2001. A copy is annexed, marked “JK5”. This deed should equally be declared void, alternatively be set aside.




27.     
PLAINTIFF
tenders to repay the N$540,000.00 or any amount the court may find he received as a result of this voidable transfer.




FURTHER SALE OF FARM:




28.     
On 8 July 2003
FIRST DEFENDANT, represented by SECOND DEFENDANT entered into a deed of sale with FOURTH and FIFTH DEFENDANT in respect of the farm. A copy is annexed, marked “JK6”.




29.     
On 9 September 2003
PLAINTIFF caused a summons in respect of the disputed ownership of the farm to be served on, amongst others, FIRST, SECOND and FOURTH DEFENDANTS.




30.     
Despite knowledge of the disputed ownership the said defendants entered into the said deed of sale and proceeded with the transfer of ownership of the farm into the names of
FOURTH and FIFTH DEFENDANTS on 9 December 2003. A copy of the deed of transfer number T6728/2003 is annexed, marked “JK7




31.     
FIRST DEFENDANT could not transfer ownership in the farm to FOURTH and FIFTH DEFENDANTS alternatively transferred it subject to PLAINTIFF’S rights.




32.     
Furthermore, the sale and transfer were effected by
SECOND DEFENDANT in collusion with FOURTH and FIFTH DEFENDANTS with the fraudulent intent to frustrate PLAINTIFF’S claim to the ownership of the farm.




        
33.     
As a consequence this transfer should also be set aside.




[4]     
The plaintiff’s first alternative claim, entitled “50% SHAREHOLDING IN FIRST DEFENDANT”, contains eight paragraphs:





34.     
In the event the court finds that the sale of the farm by
PLAINTIFF to FIRST DEFENDANT is not voidable: PLAINTIFF repeats paragraph 21, supra and alleges that he complied with his obligations under the agreement.




35.     

As a result PLAINTIFF was since 31 May 2001, when he signed the deed of sale (JK4), owner of 50% of the shareholding in FIRST DEFENDANT, alternatively, deemed to be such owner.




36.     

In the premises SECOND DEFENDANT or directors appointed by him only represented 50% of the voting power, or decision-making, of FIRST DEFENDANT.




37.     

FIRST DEFENDANT had to decide by 75%, alternatively 51%, of its voting to (sic) power to sell the farm.




38.     

PLAINTIFF, or a director appointed by him, would never have agreed to FIRST DEFENDANT selling the farm and as a result no valid decision to sell the farm could have been taken by it.




39.     

Consequently, FIRST DEFENDANT could not enter into the deed of sale (JK6) with FOURTH and FIFTH DEFENDANTS and as a result the said deed is void, alternatively voidable.




40.     

FOURTH and FIFTH DEFENDANTS knew at all material times that PLAINTIFF is entitled to 50% ownership in FIRST DEFENDANT, alternatively 50% of the farm, and fraudulently colluded with SECOND DEFENDANT to deprive PLAINTIFF of his ownership of the farm.




41.     

In the premises the deed of sale (JK6) and the transfer (JK7) in respect of the farm by FIRST DEFENDANT to FOURTH and FIFTH DEFENDANTS should be set aside.



[5]     
The plaintiff’s second alternative claim, entitled “REMAINDER OF PRICE/VALUE OF FARM”, is framed thus:





42.     
In the event the court finds that the respective deeds of sale and transfers are not void or voidable,
PLAINTIFF alleges that:




42.1    
The joint venture agreement
(JK1), as amended by the two addenda (JK2 and JK3) is the operative agreement; and




42.2    
He never received the agreed price, alternatively, the true value of the farm.





43.     
In terms of clause 4.5 of
JK1, as amended by clause 2.3(c) of JK3, the parties agreed that the consideration for the farm would be the valuation minus the amounts referred to in clause 1 of JK1. The amount in the said clause 1 is N$155,000.00.




44.     
In addition to the said amount a further N$98,110.00 (clause 3.2 of
JK2) and N$30,000.00 (clause 3.2 of JK3), totalling N$128,110.00 were advanced to the benefit of PLAINTIFF.




45.     
The farm was valued at N$1,747,200.00 and as a result of the agreed purchase price of the farm was N$1,464,090.00 [N$1,747,200.00 – (N$155,000.00 + N$1,128,110.00)].





46.     

The purchase price of N$540,000.00 in JK4 and JK5 and paid by FIRST DEFENDANT is not a true reflection of the agreed price for the farm, or its value, and PLAINTIFF never intended to sell the farm for that price.




47.     

The purchase price as reflected in JK4 and JK5 is a mistake due to SECOND DEFENDANT’S fraud, alternatively, a misunderstanding of the reason for the sale of the farm and does not reflect the agreement between the parties contained in JK1 as amended.




48.     

As a result, clause 4.1 of