Court name
High Court
Case number
525 of 2011
Title

Municipal Council of the Municipality of Windhoek v Trustco Group Holdings (Pty) Ltd and Others (525 of 2011) [2012] NAHC 127 (24 May 2012);

Media neutral citation
[2012] NAHC 127
Coram
Parker J





CASE NO







Unreportable’



CASE
NO.: I 525/2011








IN
THE HIGH COURT OF NAMIBIA








In the matter between:








MUNICIPAL COUNCIL OF
THE MUNICIPALITY



OF WINDHOEK
…................................................................................................
Plaintiff








and








TRUSTCO GROUP HOLDINGS
(PTY) LTD ….......................................First
Defendant



TRUSTCO GROUP
INTERNATIONAL (PTY) LTD ….......................Second
Defendant



ATLANTA CINEMA CC
….....................................................................Third
Defendant








CORAM:
PARKER J








Heard on: 2012 April 12



Delivered on: 2012 May 24



_________________________________________________________________








JUDGMENT



_________________________________________________________________


PARKER
J
: [1] In the action instituted against the first defendant,
the second defendant and the third defendant the plaintiff prays for
an order for:







(1) the ejectment of the
first defendant, the second defendant and the third defendant, or of
the first defendant, the second defendant or the third defendant,
from –



(a) the property at
Farming Unit 4 (shown on copy plan P/3141/A, annexed to the amended
particulars of claim and marked ‘POC1’) (‘the
immovable property’); and



(b) the Ithumba Business.








(2) the return to the
plaintiff of –



(a) the immovable
property; and



(b) the Ithumba Business.



by the first defendant,
the second defendant and the third defendant or by the first
defendant, the second defendant and the third defendant.








(3) rectification of the
written agreement (copy of which is annexed to the particulars of
claim and marked ‘POC2’) (‘the lease agreement’)
by the substitution of the words ‘Council Resolution
178/06/2000’ for the words ‘Council Resolution
197/06/2000 wherever they appear in the said agreement.








(4) the award to it of
its costs.








(5) Further relief and or
alternative relief.






[2]
The first defendant and the second defendant entered appearance to
defend the action and, thereafter, they delivered a notice in terms
of rule 23(1) of the Rules on the basis that ‘the plaintiff’s
particulars of claim (as amended) do not contain the necessary
averments to disclose a cause of action’. In satisfaction of
rule 23(3) of the Rules, the first defendant and the second defendant
have put forth grounds upon which the exception is founded.






[3]
I flag the crucial point that the burden of this Court in the present
proceeding is to determine whether the plaintiff’s particulars
of claim ‘lack(s) averments which are necessary to sustain’
the ‘action’ (instituted by the plaintiff against the
first defendant, the second defendant and the third defendant) within
the meaning of rule 23(1) of the Rules. It is here reiterated that it
is only the first defendant and the second defendant who have raised
the exception; and so hereinafter they will be referred to simply as
‘the defendants’ where the context allows.






[4]
It is submitted by Mr. Heathcote SC, counsel for the defendants, that
in virtue of the plaintiff amending its particulars of claim, ‘[f]or
the sake of completion, a new and fresh exception, on exactly the
same grounds, is filed simultaneously with these Heads of argument.’






[5]
The following facts are undisputed or indisputable. The first
defendant was at all material times the holding company of the second
defendant. As respects the lease agreement concluded between the
plaintiff and the first defendant, the latter was represented by a
Quinton van Rooyen, in his capacity as the first defendant’s
managing director. And the selfsame Quinton van Rooyen represented
the second defendant in the conclusion of the agreement between the
second defendant and the third defendant respecting the sale by the
second defendant to the third defendant of the ‘Business’
whose name is ‘Ithumba’ (‘the sale agreement’).
As an adjunct to these facts which are undisputed or indisputable, as
I say, is the issue of the correct reference to the plaintiff’s
resolution that is referred to in Clause 4 of the written agreement
(at ‘POC2’) (‘the resolution’). It is clear
and incontrovertible from the ‘Municipal Council Minutes:
2000-06-28’ (annexed to the particulars of claim and marked
‘POC3’) that the correct reference of the said resolution
is ‘Resolution 197/06/2000’; and did not hear the
defendants’ counsel to say otherwise.






[6]
I now proceed to treat the exception raised by the defendants and I
do so by considering the grounds against the facts pleaded and
against the well settled principles and approaches followed by the
courts (in e.g.
Marney v Watson and Another
1978 (4) SA 140 (C), cited with approval by the Court
in, for example, the recent case of
July v
Motor Vehicle Accident Fund
2010 (1) NR 368).






[7]
It seems to me clear from submission by the defendants’ counsel
that the exception is raised by the second defendant only, and it is
on the basis that ‘the plaintiff has failed to make out a case
of breach of contract (as) against the second defendant on account of
the fact that, according to counsel, ‘the second defendant was
never a party to the lease agreement, and could not have breached a
contract to which it was not a party.’ Mr Hinda, counsel for
the plaintiff argues the opposite way. According to Mr Hinda the
plaintiff does not dispute this fact but counsel says that the
plaintiff’s case is not founded on that fact. The plaintiff,
counsel submits, relies on the fact that the second defendant
purported to sell to the third defendant certain assets, including
game mentioned in clause 1.2.2.10 of the sale agreement, but there is
no evidence at this stage whether the first defendant has introduced
game as contemplated in clause 4 of the lease agreement. That being
the case, so counsel concludes, the second defendant had no title to
the game in camp K54 which the second defendant purported to sell, as
aforesaid and so, therefore, the plaintiff is entitled to make the
averments and to lead evidence in due course to support its case. Mr
Hinda makes the point that since the second defendant is a wholly
subsidiary company of the first defendant it would have been fatal to
the plaintiff’s case if the second defendant was not joined.






[8]
As I see it, the following undeniable facts are found in the
pleadings. (1) There is the aforementioned relationship between the
first defendant and the second defendant. (2) It is not stipulated in
the memorandum of the sale agreement the nature of the second
defendant’s entitlement to sell the assets. (3) A Quinton van
Rooyen, the managing director of the first defendant, represented the
defendant when the lease agreement was entered into, and the selfsame
Quinton van Rooyen represented the second defendant when the sale
agreement was concluded. From the apparent establishment of the nexus
co-joining (1) and (2) and (3), the plaintiff goes on to aver that
the ‘purported sale of Ithumba business and the grant of the
right to use the immovable property by the second defendant to the
third defendant ‘is unlawful and in breach of the lease
agreement’ for the following reasons, that is to say, the first
defendant did not obtain any prior permission or consent of the
plaintiff, as it was required to do in terms of clause 4 of annexure
‘POC2’ hereto; neither the first defendant nor the second
defendant was the owner or holder of a lawful title to and in respect
of the Ithumba business and neither of them did have any right to
sell it to the third defendant. But then Mr Heathcote argues, ‘A
contract of sale may be validly entered into by a seller who is not
the owner.’ And in support of what I characterize as a general
principle of law, counsel cites a passage by Voet which is cited with
approval by Hoexter JA in
Frye’s (Pty)
Ltd v Ries
1957 (3) SA 575 (A) at 319 at
381B-C:







‘ “Furthermore
it matters little whether things are one’s own or belong to
others,
in
so far as the seller is put under obligation to buy up such property
in the other person’s hands and to make it good
,
unless he prefers to have judgment given against him for damages if
he has knowingly sold the property of another ...” ’






[Emphasis
added]






[9]
The general principle of law proposed by Voet and cited with approval
by Hoexter JA is reasonable and it makes good business sense. But in
the instant case, I fail to see how Voet and Hoexter JA can assist
the first defendant and the second defendant: they were not ‘put
under obligation (none at all) to buy up’ the Ithumba business
‘and to make it (the obligation) good’.






[10]
But that is not the end of the matter. It is the position of the
defendants, that the averment is bad in law and therefore excipiable
where the plaintiff relies on clause 11 of the lease agreement to
assert that the purported sale of Ithumba business and the grant of
the right to use the immovable property by the second defendant to
the third defendant is unlawful and in breach of the lease agreement
on the basis that first defendant did not obtain any prior permission
or consent of the plaintiff, as it was required to do in terms of
clause 4 of the lease agreement (‘POC2’). According to
the defendants the ‘agreement between the second defendant and
the third defendant (is) not a lease agreement but an agreement of
sale, and so, the defendants conclude, ‘clause 11 of the
agreement of lease does not find application.’







[11] Mr Hinda’s
response in his submission is that the plaintiff’s case is not
based on the fact that the first defendant sublet the subject of the
lease. According to Mr Hinda, the plaintiff’s complaint is
rather ‘that the first defendant did not obtain any prior
permission or consent of the plaintiff as it was required to do in
terms of clause 4 of the lease agreement (‘POC2’). In
this regard, it is a part of the pleading that as far as the
plaintiff is concerned, the ‘sale of the Ithumba Restaurant to
other investors is regarded as a sublet without written approval from
the Lessor and as such a breach of the Lease Agreement.’








[12] In my view, the
plaintiff’s averments in this regard and the defendants’
objection thereto concern and are based on what each party considers
to be the correct interpretation of clause 4 and clause 11 of the
lease agreement. And for this, I accept Mr Hinda’s submission
that an exception is generally not the appropriate procedure to
pursue in order to settle disputes respecting interpretation of
words, terms or legal documents and instruments which are the subject
of action proceedings.








[13] It has been said
authoritatively that other than in the instance where an exception is
taken for the purpose of raising a substantive question of law which
may have the effect of settling the dispute between the parties, an
excipient should make out a very clear, strong case before he or she
should be allowed to succeed (Erasmus, Superior Court Practice
(1994): pp B1-152-153, and the cases there cited). It is my view that
the defendants have not raised substantive questions of law whose
determination may have the effect of settling the dispute between the
parties.








[14] For the aforegoing
reasoning and conclusions, I find that the defendants have not made
out a case for me to uphold the exception based on the grounds that
are raised: they cannot succeed in the exception. The exception
fails; whereupon, I make the following order:








The exception raised by
the first defendant and the second defendant is dismissed with costs;
to be paid jointly and severally, the one paying, the other to be
absolved; and such costs to include costs consequent upon the
employment of one instructing counsel and one instructed counsel.

















________________



PARKER J













ON BEHALF OF THE
PLAINTIFF:



Adv G Hinda








Instructed by: Dr
Weder, Kauta & Hoveka Inc.












COUNSEL ON BEHALF OF
THE DEFENDANTS:



Adv R Heathcote SC



Adv H Schneider








Instructed by: Van
der Merwe-Greeff Inc.