Court name
Supreme Court
Case number
SA 27 of 2013
Case name
Witvlei Meat (Pty) Limited v Agricultural Bank of Namibia
Media neutral citation
[2014] NASC 8
Judge
Mainga JA










IN
THE SUPREME COURT OF NAMIBIA





CASE
NO.: SA 27/2013





DATE:
27 MAY 2014





REPORTABLE





In
the matter between:





WITVLEI
MEAT (PTY)
LIMITED
................................................................Appellant





And


 


AGRICULTURAL
BANK OF
NAMIBIA
.............................................Respondent


 


Coram:MAINGA
JA,


STRYDOM
AJA


and


CHOMBA
AJA





Heard:28
October 2013





Delivered:27
May 2014


 


APPEAL
JUDGMENT





STRYDOM
AJA


(MAINGA
JA and CHOMBA AJA concurring):


 





[1]          
By notice of motion the respondent (the
applicant in the court
a quo)
applied in the High Court of Namibia for the following order against
the appellant (the respondent in the court
a
quo)
namely -


1.       
An order that respondent or any person claiming occupation through or
under it be ordered to forthwith vacate the immovable property owned
by the applicant comprising abattoir facilities situated on Portion
38 of the Farm Okatjirute No. 155 in the Village of Witvlei.


 


2.        
An order ordering the respondent to vacate possession of the premises
to the applicant.


 


3.        
In the event of the respondent or any person claiming occupation of
the premises through or under it refuses to vacate the premises as
ordered by the Honourable Court to do so the Deputy Sheriff of the
above Honourable Court be authorised and directed to effect an
eviction and handover possession of the premises to the applicant.


 


4.        
The respondent pays the costs of this application.


 


5.        
Alternative relief.’


 


[2]          
The respondent was successful and the court
a quo ordered
the appellant to vacate the premises owned by the respondent. The
appellant appealed against the whole judgment of the court
a
quo
and the orders made by it. The
appellant was represented by Mr Tötemeyer, assisted by Mr
Corbett, whereas Mr Bokaba SC represented the respondent, assisted by
Mr Namandje.


 


[3]          
Mr Iipumbu, the Chief Executive Officer of
the respondent, deposed to an affidavit on behalf of the respondent.
He stated that the respondent has the power to purchase, sell and let
property. He pointed out that the respondent, in the discharge of its
functions and duties, was responsible to the Minister of Finance and
Minister of Agriculture, Water and Forestry (Ministers).


 


[4]          
The deponent stated that the parties
entered into a lease agreement whereby the respondent leased the
above premises to the appellant for a period of two years commencing
on 1 August 2006 and terminating on 31 July 2008. The lease agreement
contained an option in favour of the appellant to buy the property
for N$15 million. The option was for a period of two years covering
the period of the lease. During any renewal or extension of the lease
agreement the respondent shall have a right of pre-emption subject to
certain conditions.


 


[5]          
In terms of the agreement the lease was
renewable for a further period of two years but the appellant was
required to give six months’ notice of its intention so to
renew. It was alleged that the terms and conditions of such renewed
lease would be the same as those contained in the original agreement
except for a change in the amount of rent to be paid by the
appellant.


 


[6]          
The lease agreement contained a
non-variation clause and unless the variation was reduced to writing
and signed by both parties it would not be valid. The lease also
contained a non-waiver clause. Furthermore the appellant was required
to improve and re-commission the abattoir at its own costs to an
amount not less than N$500 000.


 


[7]          
In a letter dated 25 January 2008 the
appellant requested the respondent to amend clauses 2 and 18 of the
agreement by extending the periods mentioned therein, namely 2 years,
to 3 years. This request was denied but the respondent offered to
renew the lease for a further period of 2 years commencing on 1
August 2008 and terminating on 31 July 2010. A written renewal
agreement was duly concluded on 26 January 2009.


 


[8]          
It was alleged by Mr Iipumbu that at the
time when the lease agreement was renewed, on 26 January 2009, the
appellant had not yet exercised its option contained in the original
lease and as the option was only open for a period of two years it
meant that the option had lapsed and was no longer available to the
appellant. The appellant subsequently requested a change to the
monthly rental to be paid by it and another renewal agreement was
concluded by the parties on 30 November 2009.


 


[9]          
However, on 18 August 2009 the appellant
applied for a loan from the respondent in order to buy its property
in the amount of N$15 million as was stated in the original lease. It
further offered as security a first bond over the property and to
repay the loan over a period of ten years at a monthly rate of N$178
052,66 and at an interest of 7.5% calculated at
1/12
of the annual interest rate on the
remaining principal amount.


 


 


[10]       
Mr Iipumbu denied that this was an offer
made in terms of clause 18 of the original lease agreement. He stated
that it was also not understood by either himself or the Board of the
respondent to be in terms of clause 18. Consequently it was not an
exercise of the option contained in the original lease agreement as
by that time the option to purchase had already expired.


 


[11]       
The respondent’s Board of Directors
considered the offer by the appellant and resolved to make a distinct
and separate offer to sell the property for N$15 million.  In
regard to the interest rate it proposed a rate of 8.5% payable over a
period of ten years at monthly repayments of N$175 000. It also
stated that the counter-proposal was subject to the approval of the
two Ministers.


 


[12]       
By letter dated 15 February 2010 the Board
recommended the sale of the property on the above conditions to the
respective Ministers. This recommendation, so it was stated, was made
in terms of the offer by the appellant dated 18 August 2009 and not
in terms of the original lease agreement containing the option. 
Furthermore the appellant was informed by letter dated 19 February
2010 of the conditions proposed by the Board. This letter further
explained to the appellant that the proposal was subject to the
approval of the Ministers. This offer by the Board was purely for the
purpose of discussion and there was, at least at that stage, nothing
firm on the table. The respondent stated that whatever the outcome of
the discussions between the parties it was still subject to the
approval of the Ministers. Mr Iipumbu emphasised that the respondent
could not unilaterally take a decision to sell the property, as such
a decision would have been a breach of its statutory duties and
therefore illegal.


 


[13]       
The appellant replied to this offer by
letter dated 26 February 2009 confirming its right to exercise the
option and furthermore by accepting the conditions set out in the
letter of the respondent. Notwithstanding its acceptance of the
conditions set out in the respondent’s letter the appellant
indicated that it would still decide whether to arrange its own
funding or whether to opt for the funding proposal of the
respondent.  Respondent stated that appellant’s letter was
clearly out of tune with the events that had preceded. 
Furthermore it was clear that the appellant was making a counter
offer to the respondent’s counter offer.


 


[14]       
Consequently, so it was said by the
deponent on behalf of the respondent, it was clear that the appellant
did not accept the proposals by the respondent and no agreement was
concluded. In further correspondence the appellant claimed that it
had entered into a binding agreement with the respondent when it
exercised its option whereas the respondent denied this claim on
various grounds.


 


[15]       
By letter dated 30 July 2010 Mr Iipumbu
proposed, on behalf of the respondent, to extend the lease for a
further six months in order to obtain the necessary approvals from
the two relevant Ministers. This was rejected by the appellant which
indicated that the lease should continue until such time as ownership
of the property had been passed to it. The respondent’s offer
of a further extension of the lease for six months was withdrawn and
cancelled and consequently the occupation of the property by the
appellant remained unlawful and the respondent stated that the rental
paid by the appellant and accepted by it was in lieu of damages
suffered by it for the unlawful occupation of the premises by the
appellant.


 


[16]       
By letter dated 30 May 2011 the Minister of
Finance advised the respondent that Cabinet has directed that the
respondent should offer the property at a market related price which,
at 23 July 2010, was N$40 494 141,00.


 


[17]       
On behalf of the appellant a Mr Badenhorst,
the Managing Director of the appellant, filed an affidavit. He stated
that the purpose for leasing the abattoir was to use it as an export
facility. The abattoir previously had European Export approval. 
However at the time that appellant had leased the abattoir it did no
longer hold such approval, it was non-operational for some time and
was in a state that required serious maintenance, refurbishment and
upgrades before it could again function as an abattoir. To again
regain its export status the appellant had to expend more than N$20
million which increased the value of the facility to that amount.
According to the deponent that was common cause between the parties.
Appellant was only able to operate as an export facility a year after
the lease had been entered into.


 


[18]       
Mr Badenhorst pointed out that even after
the abattoir regained its European export status, it did not follow
that it immediately became profitable. All the factors present at the
time, such as the worldwide recession, necessitated that the lease
had to be extended for a further two years on the same terms and
conditions as set out in the original lease agreement. It is alleged
that that in fact happened and the agreement was extended for a
further period of two years on the same terms and conditions as
before with exception of the rental which was increased.


 


[19]       
With reference to the letter of 19 February
2009, which originated from the respondent, the deponent said that
there was now a condition imposed whereby the proposal by the
respondent to buy the property for N$15 million was made subject to
the approval of the Ministers. This, so it was stated, was something
new which did not form part of the agreement of the parties.  In
terms of the agreement between the parties it was not permissible for
the respondent to now introduce a new term to the agreement.


 


[20]       
Further correspondence ensued between the
parties wherein the appellant insisted on the terms of the option, as
set out in the original lease agreement and which were, according to
it, made part of the renewal agreement.  Mr Badenhorst stated
that it was only by letter dated 10 June 2010 that the respondent for
the first time denied that the appellant was entitled to purchase the
property in terms of clause 18.1 of the lease agreement. Appellant
said that bearing in mind the amounts spent by the appellant in
upgrading the abattoir the appellant would never have done so if it
did not at all times have the option to buy the property.


 


[21]       
Thereafter, and by letter dated 22 July
2011, appellant sent to respondent a deed of purchase of the property
drafted by it. The respondent refused to sign this agreement.
Appellant still tendered to pay the purchase price of N$15 million in
respect of the abattoir and said that it is entitled to specific
performance by the respondent.  Appellant further denied that it
was unlawfully occupying the property and stated that it timeously
exercised the option whereby it purchased the said property and that
the respondent was obliged to transfer the property to appellant.


 


[22]       
In its replying affidavit the respondent
re-iterated its position that the clause containing the option had
not been extended by the renewal agreement and that it had lapsed
when the original lease period ended. There was therefore no timeous
exercise of the option by the appellant. The respondent again took up
the position that approval by the Ministers was a legislative
requirement which could not be bypassed by the respondent. It was
further pointed out that in terms of clauses 7.3 and 7.4 of the lease
agreement the appellant was protected in regard to improvements made
by it in that it had a right of claim to the specific items mentioned
or could claim compensation.


 


[23]       
The respondent further stated that its
letter of 19 February 2010 was clearly a proposal by it which had to
be approved by the relevant Ministries. This proposal, so it was
said, was never accepted by the appellant. Referring to the
appellant’s letter dated 26 February 2010 the respondent said
that the appellant effectively rejected the counter proposal made by
it and it was clear that the appellant intended to make yet a counter
proposal to the respondent’s counter proposal. Hence no
agreement had been concluded. Referring to the letter by the
appellant dated 9 September 2010 the respondent stated that the only
investment made by the appellant in relation to the property amounted
to N$2 476 282,18.


 


[24]       
Respondent further referred to its letter
dated 8 July 2011 in which it had indicated that it would only be
prepared to sell the property at a market related price.  This
offer was rejected by the appellant.


 


[25]       
The learned judge a
quo
made the following findings:


 


(a)      
That where in eviction proceedings the ownership of an applicant was
admitted as well as the continued occupation of a respondent the onus
would be on such respondent to establish its right to remain in
occupation of the property. (See De Villiers v Potgieter and
Others NNO,
2007 (2) SA 311 (SCA).) The court found that the
lease agreement between the parties was terminated at the end of July
2010 when the renewal agreement came to an end as a result of the
effluxion of time and that no further renewal was agreed between the
parties. There was also no tacit relocation of the lease as both
parties made it clear by conduct and express external manifestations
that the lease had come to an end.  It was also common cause
that there was no transfer of the property to the appellant and hence
no lawful basis had been established by the appellant to be in
occupation of the property. The respondent was therefore entitled to
the eviction of the appellant from the property.



 


(b)     
Dealing with the renewal agreement the court found that at the time
the agreement was concluded the option to purchase had already lapsed
by virtue of effluxion of time and was no longer a term or condition
which could be enforced even if the terms of the lease were made
applicable to the renewed lease.


 


(c)       
The court further found that it was not clear that the conduct of the
appellant, as evidenced by its correspondence in December 2009 and
February 2010, was an unequivocal exercise of the option.  The
court found that the appellant’s letter of 26 February 2010 had
accepted the conditions as put forward in the respondent’s
letter of 19 February 2010 and one such condition was that the
approval of the two Ministers, to the sale of the property, was
necessary. The letter also contained further proposals in regard to
the rate of interest to be paid and was also a rejection of the
appellant’s proposal by making the counter offer.  The
court therefore found that it was not clear that the acceptance of
the contents of this letter would create an enforceable agreement as
the parties had not reached consensus on the essential and material
terms of the agreement. In any event, the non-fulfilment of the
condition of ministerial approval would render the contract void.


 


[26]       
Before dealing with the merits of the
appeal there is the issue of condonation. The appellant applied for
condonation for its failure to comply with the provisions of rules
8(2) and 8(3) read with rule 5(5) of the Supreme Court Rules by not
arranging for security before the filing of the record. This failure
had the further result that in terms of rule 5(5) the appeal of the
appellant had lapsed and the appellant now also has to apply for the
re-instatement of the appeal.


 


[27]       
The application for condonation is opposed
on various grounds and to that extent the respondent had filed an
opposing affidavit. 


 


[28]       
Some factors which the court must consider
in an application for condonation were set out by this court in the
matter of
Rally for Democracy and Others
v Electoral Commission of Namibia and Others,
2012
(3) NR 664 (SC) at para 68, as follows:


 


.
. . the extent of the non-compliance with the rule in question, the
reasonableness of the explanation offered for the non-compliance, the
bona fides of the application, the prospects of success on the merits
of the case, the importance of the case, the respondent’s (and
where applicable, the public’s) interest  in the finality
of the judgment, the prejudice suffered by the other litigants as a
result of the non-compliance, the convenience of the Court and the
avoidance of unnecessary delay in the administration of justice.’


 


[29]       
It was further stated by this court in the
matter of
Rainer Arangies t/a Auto Tech
v Quick Build
(SA 25/2010) [2013] NASC
4 delivered on 18 June 2013 para 5 as follows:


 


These
factors are not individually determinative, but must be weighed one
against the other. Nor will all the factors necessarily be considered
in each case.  There are times, for example, where this Court
has held that it will not consider the prospects of success in
determining the application because the non-compliance with the rules
has been glaring, “flagrant” and “inexplicable”.


 


[30]       
A point which was strongly argued by Mr
Bokaba was that the appellant’s legal practitioner did not
disclose that the appellant was pursuing some other relief in the
High Court which, according to counsel, covered the same issues as
the appeal.  These proceedings were instituted on 23 May 2013
and counsel further submitted that the appellant’s
non-compliance with the rules of this court was because it had
abandoned the appeal in favour of the fresh proceedings. Consequently
counsel submitted that the non-compliance with the rules had been
wilful.


 


[31]       
The inference Mr Bokaba asked the court to
draw seems to me not to be supported by the facts in this case. The
facts, which are not in contention, showed that on 21 May 2013, that
is two days before the instituting of the new process, a facsimile
was addressed to the legal practitioners of the respondent requesting
them to indicate what security was required by the respondent. Surely
by then the appellant must have been aware that it was going to
institute the fresh proceedings. Then on 3 June 2013 the legal
practitioner for the appellant addressed a further request, seemingly
not having had any reply to the first request. This was followed up
by further correspondence on 12 June and the filing of the record on
19 June 2013. The steps taken by the appellant gainsaid any intention
by it to abandon the appeal and there is no substance in Mr Bokaba’s
submission.


 


[32]       
While I agree that a legal practitioner
cannot shield behind his lack of knowledge of the rules, the delay
was not inordinate. How the delay came about was in my opinion fully
explained by the legal practitioner of the appellant and although one
could say that he should have started attempts to resolve this issue
earlier it also seems that although he tried to resolve the issue he
was hampered in this regard by circumstances, sometimes beyond his
control.


 


[33]       
The finalisation of this matter is
certainly of importance to both parties and in my opinion there was
not a deliberate and flagrant non-compliance with the rules.  I
am further of the opinion that there is merit in the appeal. Compare
the decision of this court in
Chairperson
of the Immigration Selection Board v Frank and Another,

2001 NR 107 (SC) where condonation was granted for the late filing of
the record on the appellant’s good prospects of success on
appeal, even where there was no explanation for a delay of five and a
half months. Under these circumstances I am of the opinion that the
application for condonation should succeed and the appeal should be
re-instated, which I hereby do.


 


[34]       
There are primarily three issues which the
court must decide, namely-


(a) 
Whether clause 18 of the lease agreement,
which contains the option clause, was transferred into, and became
part, of the renewal agreement;


 


(b) 
If it did, whether the option was properly
exercised; and


 


(c) 
If it was properly exercised, whether an
enforceable contract was concluded between the parties.


 


[35]       
The last two issues overlap to a certain
extent and will be dealt with together.


 


[36]       
As far as the first issue is concerned
there are various cases dealing with the question when provisions,
which are not strictly part of the lease provisions, such as option
clauses, will be carried forward into a renewal of the lease
agreement. The court
a quo did
not refer to any of these cases either because it felt that in all
the circumstances they were irrelevant or the attention of the
learned judge was not drawn thereto.


 


[37]       
The first case is Webb
v Hipkin
1944 AD 95. In this matter the
lease agreement was for a period of three years and it granted to the
lessee, at that time a person with the name Schuld, the option during
the currency of the lease and until 1 September 1941, i.e. the date
on which the lease terminated, to buy the property. However, in
January 1942 the parties agreed to a renewal of the lease for a
further period of three years under the same terms and conditions as
before. Schuld, in the meantime, had assigned the lease to Hipkin
with the consent of the lessor. In 1943 the new lessee exercised the
option contained in the original lease agreement with Schuld and
claimed transfer of the property. This was resisted by the lessor who
maintained that the option had expired on 1 September 1941 and that
the renewal of the lease did not extend the option beyond that date.


 


[38]       
Feetham, JA, who wrote the judgment of the
court, referred to what was stated in
Halsbury,
(2 ed) Laws of England, (Vol 20, para
69) under the heading
Landlord and
Tenant,
as well as to two English
cases, namely
Sherwood v Tucker (1924,
2. Ch 440) and
Batchelor v Murphy 1926,
A.C. 63. The first case was an example where the extension of the
lease was found not to cover an option to purchase contained in the
original lease agreement. The words used in the renewal contract were
We, the undersigned, hereby agree
that this lease be extended for three years expiring December 21,
1923’.
The court found that one
could not extend a lease and that the word ‘extend’ could
only refer to the period of the lease and did therefore not include
the option clause.


 


[39]       
The latter case was an example where the
court concluded that the new lease did contain an option to purchase
the property. This was an instance where a new lease was granted to a
new lessee in regard to the unexpired term of the lease granted to
the previous lessee.  The previous lease contained an option to
purchase the property and the operative part of the new lease, which
called for interpretation, was the following, namely, ‘
execute
a new lease for the unexpired term of eight years and six months from
the sixth of October last on the same terms and conditions in all
respects as the lease of 17 October, 1913’.
(The
reference to the lease of 17 October 1913 is a reference to the
original lease contract.)


 


[40]       
The English Appeal Court concluded as
follows at pp 70-71:


 


In
this memorandum of November 17, 1915, there are three references, two
of them in terms and one, in effect,  equally direct, to the
lease so described of October 17, 1913.  In my opinion as a
matter of construction each of these three references is a reference
to the indenture or document of that date and not to the tenancy
thereby constituted. That document, which also contains an option of
purchase, is described in the memorandum as a “lease”,
but I think there can be no question that, even so described, the
option contained in it is one of its terms, collateral to the letting
though it be.  When, therefore, you find, as you do, that the
new “lease” is to be on the same terms and conditions in
all respects as the ‘lease of October 17, 1913 – I supply
the word “contains” - it seems to me to follow by
necessity of reasoning that this new lease is amongst its terms to
include the provision relating to the option of purchase, which is
one of the “terms” of the document of October 17, 1913.’


 


[41]       
In the Webb-case
the learned judge Feetham JA pointed out that these two decisions did
not depend on any principle peculiar to English law but were
illustrations of the manner in which the English Courts have dealt
with questions of interpretation which were similar to that which the
court had to deal with.


 


[42]       
The words which the court in the Webb-case
was called upon to interpret were the following:


 


We,
the undersigned, . . .  do hereby agree to a renewal of the
aforementioned Lease; for a further period of three (3) years from 1
September, 1941, under the same terms and conditions as
aforewritten.’


 


[43]       
The learned judge first dealt with the
words the ‘aforementioned lease’ and pointed out that
where these words were previously used, both in the assignment and
the consent by Mrs Webb to the assignment, they referred to the
previous lease between Webb and Schuld.  The learned judge then
concluded that the same words as used in the renewal of the lease was
prima facie
to be read as meaning a reference to the document containing the
lease with Schuld.


 


[44]       
The court concluded as follows at p 102:


 


In
the renewal agreement with which we are here concerned, there seems
to me to be no room for doubt that the “lease” to which
reference is made is the document containing the terms of the lease
and not merely the demise. I have already dealt with the question of
the meaning of the expression “the afore-mentioned lease”,
and the conclusion to which the use of that expression points is
strongly fortified by the final words of the agreement “under
the same terms and conditions aforewritten”, which may be
compared with the corresponding phrase  used in the memorandum
in
Batchelor v Murphy,
and seems to me to be quite unmistakable, and necessarily to refer to
the terms and conditions written in the document of lease.’


 


(See
also the following cases: Levy v Banket Holdings (Private) Ltd,
1956 (3) SA 558 (FC); Doll House Refreshments (Pty) Ltd v O’Shea
and Others,
1957 (1) SA 345 (T); Tor Industries (Pty) Ltd v
Gee-Six Superweld CC and Others,
2001 (2) SA 146 (W) and
Southline Retail Centre CC v BP Namibia (Pty) Ltd, 2011 (2) NR
562 (SC) at p 576, para 34.)


 


[45]       
From a reading of the above cases it seems
that where the renewal of the lease was
simpliciter
(see Levy
v Banket Holdings, supra,
at p 562) or
in instances where there was a tacit re-location of the lease (see
Doll House Refreshments, supra, at
p 348) collateral issues contained in a contract of lease, such as an
option to purchase, are not carried forward into the renewal of the
lease and the renewal will only contain those terms which have a
direct bearing on the lease. Where the renewal is governed by an
express contract between the parties, as is the case in this
instance, the question whether collateral issues also form part of
the renewal will depend on an interpretation of the renewal contract
and in this regard it is relevant whether what is renewed is only the
lease
simpliciter
or whether the intention was to renew the document containing the
lease which would then include all the terms contained in such
document, also collateral issues such as an option to purchase.


 


[46]       
Because of its importance I will set out
the entire renewal contract entered into between the parties. In this
regard I must point out that there are two renewal contracts, one
entered into on 26 January 2009 and the other on 30 November 2009. 
This came about because the appellant, subsequently to the contract
of 26 January, requested a change of the monthly rent to be paid to
which the respondent had acceded. Except for this alteration the two
contracts are identical.  I will herein set out the contract
entered into on 26 January 2009, namely:


RENEWAL
OF DEED OF LEASE





MEMORANDUM
OF AGEEMENT MADE AND ENTERED INTO BY AND BETWEEN:





AGRICULTURAL
BANK OF NAMIBIA


 


(herein
duly represented by Leonard Nangolo IIPUMBU





in
his capacity as Chief Executive Officer)





(hereinafter
referred to as the “LESSOR”)





of
the one part








AND





WITVLEI
MEAT (PTY) LTD





Company
No. 2005/153





(Herein
duly represented by Sidney Wilfred Martin in his capacity as





Executive
chairman





and
him warranting to be duly authorised thereto)





(hereinafter
referred to as the “LESSEE”)





On
the other part


 


WHEREAS
the LESSOR is the registered owner of certain premises situated on
Portion 38 of the Farm Okatjirute No. 155 in the village of Witvlei
(Registration Division “L”) REPUBLIC OF NAMIBIA;


 


AND
WHEREAS the LESSEE gave due notice of its intention to renew the
existing Deed of Lease in terms of Clause 25 thereof;


 


AND
WHEREAS the LESSOR is prepared to renew the existing Deed of Lease
upon the expiry thereof, on the same terms and conditions contained
therein, and subject to the terms and conditions contained and
agreed;


 


AND
WHEREAS the parties have reached agreement to the terms and
conditions upon which the renewal of the Deed of Lease shall occur;
subject to such terms being recorded in writing;


 


NOW
THEREFOR it is hereby agreed as follows:


 


1.   
RENEWAL:


The
existing lease is hereby renewed with effect from 1 August 2008 for a
further period of two years, to the 31st of July 2010.


 


2.   
 VARIATION OF RENT:


In
terms of clause 25 of the existing Deed of Lease, the parties hereby
agree that the annual rental shall increase to N$1 500 000,00 per
annum for the two years renewal and that:


 


2.1.       
 the  annual  rental  as
 from 1 August  2008  to  31
th
 July  2010 shall  be  N$ 1 500 000.00 being
N$125 000.00 per month, payable monthly in arrears by the last day of
each and every month; for the aforesaid period;


 


3.   
Other provisions of the existing
Deed of Lease to continue.


 


Subject
to the provisions of clause 2 hereof, all the terms and conditions of
the existing Deed of Lease dated 1 August 2006 shall continue and
operate during the said further period of renewal.


 


THUS
DONE AND SIGNED AT WINDHOEK . . . ’.


 


The
document is styled as the RENEWAL OF THE DEED OF LEASE.  In the
second WHEREAS clause reference is made to the Lessee’s
intention to renew the ‘existing Deed of Lease in terms of
clause 25 of the original Deed of Lease’.  Then in the
third WHEREAS clause the Lessor expressed its willingness to renew
the existing Deed of Lease ‘on the same terms and conditions as
contained therein’. Clause 3 was made subject to clause 2 of
the renewal agreement which contained the alteration of the monthly
rental and then continued ‘. . .  all the terms and
conditions of the existing Deed of Lease dated 1 August 2008 shall
continue and operate during the said further period of renewal.’


 


[47]       
Where ever the word ‘lease’ was
used in the renewal contract it was prefaced by the words ‘deed
of’. According to the
Concise
Oxford Dictionary, 11
th
Edition revised,
by Soanes and
Stevenson, the word  ‘deed’ has the following
meanings: n
1
a conscious or intentional action;
2
a legal document that is signed and delivered, especially one
relating to property ownership or legal rights. Hiemstra and Gonin
,
Trilingual Legal Dictionary,
translates
the word ‘deed’ as a ‘document’ and a ‘deed
of lease’ as ‘a contract of lease’ (Huurkontrak).
The word ‘deed’ therefore means the instrument or
contract/document and where this is then used in conjunction with the
words ‘all the terms and conditions of the existing Deed of
Lease . . . shall continue and operate’ the meaning of the
words necessarily convey, in my opinion without doubt, that all the
terms and conditions contained in the document, styled the Deed of
Lease, shall continue to apply, except for the exclusion set out in
clause 2 of the renewal Deed of Lease.  It therefore also
included clause 18, the clause which contained the option to purchase
and the other provisions set out therein.


 


[48]       
I further agree with Mr Tötemeyer,
assisted by Mr Corbett, that the conduct of the parties, as expressed
by their correspondence or lack thereof, is a further clear
indication of the intention of the parties to incorporate all the
terms of the original Deed of Lease also in their renewal agreement.


[49]       
As early as 28 January 2008 the appellant
addressed a letter to the respondent in which it had set out its
problems in getting the necessary EU approval for the abattoir, which
was only achieved at the end of the first year of the 2 year lease
period. Furthermore the letter stated that uncertainties concerning
the future of trade agreements between Namibia and other countries,
concerning the meat market, including Europe, affected their ability
to enter into longer term and firm supply contracts with overseas
markets. The appellant then requested the respondent for more time
and suggested that instead of a 2 year contract the contract of lease
should be extended to 3 years. The appellant further stated that
these problems had a significantly negative impact on their financial
position. It seems to me to be justified to draw the inference that
financially the appellant was not then in a position to exercise the
option to buy the abattoir and that they needed more time in order to
improve their position. The respondent did not accede to this request
but offered a renewal of the contract for a further period of 2 years
which was accepted by the appellant.


 


[50]       
The first renewal agreement was concluded
on 26 January 2009. Shortly thereafter, in an e-mail dated 29 January
2009, the appellant raised two issues. The first was to complain that
the monthly rental to be paid in the renewal agreement, namely N$125
000 was erroneous and should have been the sum of N$68 750. This
request was acceded to by the respondent. The second issue mentioned
concerned the interpretation of the renewal agreement and was stated
as follows:


 


I
trust the interpretation of the renewal is in order in that ownership
will pass to Witvlei Meat any time during the renewal period once the
purchase price of N$15 mil is paid to Agribank.’


 


[51]       
There was no challenge by the respondent of
this statement and it prepared and submitted for signature the second
renewal agreement which was precisely the same as the first renewal
except that the amount of rental, payable monthly, differed.  If
the respondent did not agree with the interpretation of the renewal
contract by the appellant it would have said so and it would have
qualified the contract to exclude the option clause becoming part of
the renewal contract. This it did not do and it furthermore did not
respond in any way to the interpretation set out above.


 


[52]       
Then on 18 August 2009 appellant wrote a
further letter to respondent enquiring about the possibility of
obtaining a loan for the option amount of N$15 million. Attached to
this letter was a copy of a page from the initial Deed of Lease,
containing the option and with that portion underlined where it was
stated that the option was valid for a period of two years from ‘the
date of signature of this agreement’. I agree with counsel that
Mr Iipumbu’s assertion that neither he nor his Board understood
this to be an offer in terms of the option, cannot be accepted. The
offer subsequently made by the respondent’s Board to the
appellant by its letter dated 19 February 2010 contained nothing
which was not consistent with the option agreement save for a rider
added that the approval of the Ministers was necessary before a
binding contract could be concluded. I will later herein show that
the respondent’s insistence on approval by the Ministers was
based on a misconception on their part.


 


[53]       
As far as the appellant was concerned the
respondent only in a letter dated 10 June 2010 took up the position
that the renewal of the Deed of Lease had not included clause 18.1 of
the initial agreement.


 


[54]       
Counsel for the respondent, Mr Bokaba,
supported the finding by the court
a quo
that the option was time bound and that
it did not survive once the first term of 2 years, for which the Deed
of Lease was valid, came to an end. It was also argued that because
the renewal only took place during January 2009, i.e. after the lease
had already lapsed on 31 July 2008, and with it clause 18, the option
was therefore not capable of being extended. This, so it was
submitted, was supported by clause 18.2 which only provided for a
right of pre-emption in the case of any further extension or renewal
of the lease agreement and did not also similarly make provision for
extension or renewal of the option set out in clause 18.1.


 


[55]       
The relevant provisions of clause 18 read
as follows:


 


18.1


For
the duration of a period of 2 years from the date of signature of
this agreement, the LESSOR grants the LESSEE an option to purchase
the LEASED PREMISES for an amount of N$15,000,000.00 (FIFTEEN MILLION
NAMIBIAN DOLLARS).


 


 


18.2


After
the expiration of the aforesaid 2 years period, and for the remainder
of the duration of the lease agreement, or any renewal or extension
thereof, the LESSOR hereby grants a right of pre-emption to the
LESSEE, subject to the following conditions. .  .’


 


[56]       
As far as the first submission is concerned
Mr Bokaba conceded, correctly in my view, that nothing prohibited the
parties from also extending the provisions of clause 18 of the
original Deed of Lease in the event of a renewal or extension
thereof. However, counsel submitted that if it were the intention of
the parties to include the option clause in the renewal agreement it
would have been necessary for them to state so expressly. I do not
agree. The words ‘all the terms and conditions of the existing
Deed of Lease . . . shall continue and operate’ already
included clause 18 and the only way to have avoided the wide import
of the words would have been to qualify them as was done in respect
of the increased monthly rental to be paid. In order therefore to
determine what the intention of the parties was the original Deed of
Lease cannot be of assistance because what the parties intended when
they renewed the Deed of Lease is only determinable from their
renewal contract. That is the instrument which must be interpreted. 
It seems to me that the court
a quo
and counsel for the respondent erred when they answered this question
by only interpreting the provisions of the original Deed of Lease.
For the reasons set out herein before this argument must be rejected.


 


[57]       
The second submission by counsel concerns
the lapse of the lease agreement during the period 1 August 2008 and
when the renewal agreement was signed on 26 January 2009. It was
submitted that clause 18.1 lapsed on the 31 July 2008 and could
therefore not be renewed by a renewal agreement, concluded only in
January 2009. In
Webb’s-case,
supra, a
similar argument was presented. In that matter the lease agreement
lapsed on the 31 August 1941 and the renewal agreement was only
concluded in January 1942. The court, at p 104, rejected this
argument and stated as follows:


 


I
am willing to assume that pending the renewal the options had ceased
to exist during the interval mentioned; but, even if that was so,
there was no reason why they should not be revived by the renewal
agreement which, according to my construction of it purported to
revive the options, as well as the tenancy, retrospectively, as from
1 September 1941.’


 


[58]       
Also in this instance the renewal agreement
stated that the existing lease is renewed from 1 August 2008 (and not
the 26 January 2009) till 31 July 2010 so that the renewal agreement
revived all the terms retrospectively, including the option clause,
from 1 August 2008.


 


[59]       
Because of the conclusion to which I have
come on this issue it is not necessary to deal with Mr Tötemeyer’s
alternative argument that the option clause was by implication
revived when the renewal agreement was concluded.


 


[60]       
The second issue to be decided is whether
there was a proper and valid exercise of the option by the appellant.
This question depends on the correspondence which was exchanged
between the parties. The sequence of events, as reflected in the
correspondence between the parties, started with the letter dated 18
August 2009 in which the appellant applied to the respondent for a
loan of N$15 million to enable it to acquire the property and plant
situated at Witvlei.  This letter also contained a proposal to
repay the loan over a period of 10 years at a monthly sum of N$178
052,66 and at a rate of 7.5% calculated at
1/12
of the annual interest rate on the
remaining principal amount.


 


[61]       
According to the minutes of a meeting of
respondent’s Board on 28 January 2010, the following resolution
was tabled, namely-


 


The
Board has agreed to sell the Abattoir to Witvlei Meat (Pty) Ltd for
an amount of N$15 million at the interest rate of 8.5% over a period
of 10 years. The interest rate, as will all other interest rates, can
be varied depending on the movement of the interest rates. Witvlei
Meat (Pty) Ltd should pay the transfer duty and costs and they should
make monthly payments of N$175 000.00. The monthly payment amount
should be verified by the Credit Department and management should
meet with Witvlei Meat (Pty) Ltd to sort out the modalities. This
decision of the Board is subject to the approval by the Minister of
Finance and the Minister of Agriculture, Water and Forestry.’


 


[62]       
Following this resolution by the respondent
a letter was addressed to the appellant in which the following three
conditions were set out for discussion between the parties namely -


 


1. 
You can buy the Abattoir for the price of N$15 million at an interest
rate of 8.5% over a period of 10 years.  As with all other
loans, the interest rate can be varied depending on the movement of
interest rates;


 


 


2.   
The Bank will finance the purchase of the
Abattoir against registration of a bond over the property; and


 


3.   
The loan must be repaid over 10 years in
equal monthly instalments and the transfer costs and bond fees are to
be paid by the purchaser and will not be part of the loan.’


 


[63]       
The letter further informed the appellant
that the proposal by the Board was subject to the approval of the
Ministers. The appellant was further informed that such approval had
been sought.


 


[64]       
By letter of 26 February 2010 the appellant
replied as follows to the above letter by the respondent, namely:


 


RE:
PURCHASE OF WITVLEI PLANT


 


Dear
Mr L. Iipumbu,


 


Witvlei
hereby confirms to exercise it (sic) right to acquire the
plant subject to conditions between the Agribank and Witvlei as per
the letter dated 19 February 2010.


Witvlei
will communicate in due course when to engage the Bank with its own
funding arrangements or to opt for the funding proposal from the
Agribank of Namibia.


We
trust that this transaction can be finalise (sic) in due
course.’


 


The
letter was signed by S W Martin the executive chairman of the
appellant.


 


[65]       
On the 19 May 2010, the appellant wrote to
the respondent in the following terms:


 


RE:
APPLICATION FOR THE ACQUISITION OF THE WITVLEI PLANT


 


Dear
Ambassador Leonard N. Iipumbu


 


We
hereby kindly request your good office to arrange for a meeting with
the Honourable Minister of Finance and Honourable Minister of
Agriculture in respect to our application exercising our right in
terms of the lease agreement to purchase the Witvlei Plant.


 


We
have entered into a binding agreement with the Agricultural Bank of
Namibia for the lease of the said plant with the exclusive option to
purchase the plant for the amount of N$ 15 million as per the lease
agreement dated 1 August 2006.


 


The
lease agreement has been extended until 31 July 2010 however “all
the terms and conditions of the existing Deed of Lease dated 1 August
2006 shall continue and operate during the said further period of the
renewal”
which is now coming to an end 31 July 2010.


 


Our
application to purchase was not based on a valuation to be done on
the property to determine a selling price. The selling price has
already been agreed between the Agricultural Bank of Namibia and
ourselves in terms of the lease agreement.


 


Our
application was based on financing of the plant through the
Agricultural Bank of Namibia based on its terms and conditions and as
per your letter dated 19 February 2010 and feedback for the condition
of funding was sought from the relevant Ministry.


 


We
now note that there appears to be a diversion that the selling price
is subjected to a valuation.


 


The
question to be answered is who has to pay for the value that has been
created.  Any valuation will have a substantial value that has
been created by Witvlei Meat (Pty) Ltd.


 


We
regard this approach unacceptable as substantial investments were
made by the shareholders at own risk to bring the plant to the
standard where it is today.


This
diversion is jeopardizing the provisional N$23 million loan for the
purchase and expansion of the plant we have obtained from Norfund and
which is subjected to ownership of the plant to be transferred to
Witvlei Meat (Pty) Ltd.


 


We
herewith call on your good office to inform the relevant Ministry
that they must inform us to whether the Agribank is going to fund
Witvlei as per the conditions requested or not. Norfund has indicated
that they will not compete with the Agribank if the latter is going
to fund the purchase.


 


If
the answer is in the affirmative for Agribank not to fund then
Witvlei will then arrange for the payment of the N$15 million on or
before the 31 July 2010 to the Agricultural Bank.’


 


The
letter was again signed by S W Martin.


 


[66]       
The last letter which is relevant to the
present issue was from the respondent to the appellant dated 10 June
2010. It stated as follows:


 


Dear
Sir


 


RE:
SALE OF WITVLEI ABATTOIR TO WITVLEI MEAT (PTY) LTD


 


We
refer to the above matter and your letters dated 19 May 2010 and 08
June 2010.


 


We
have noticed that in your two previous letters you are stating that
you have the exclusive right to purchase the Abattoir.  In terms
of Clause 18.1 of the Lease Agreement you had the option to purchase
the Abattoir within the first two years of the initial Lease
Agreement which option Witvlei Meat (Pty) Ltd did not exercise within
the required period.  This option has expired and was not
carried over into the Renewal Agreement because it was time bound.
Witvlei Meat (Pty) Ltd now has the right of pre-emption in terms of
Clause 18.2 and this cannot be interpreted as an exclusive right to
purchase.’


 


[67]       
Before dealing with the correspondence
between the parties I must correct two misconceptions under which the
respondent, and unfortunately also the court
a
quo,
laboured. The first concerns the
allegation by Mr Iipumbu that the respondent was under a statutory
obligation to obtain the approval of the Ministers. This claim was
repeatedly made in the affidavits of the respondent. This attitude of
the respondent was also reflected in their letter of 19 February 2009
wherein they
informed
the appellant that their offer was subject to this approval. If this
was a correct statement of the law then
cadit
quaestio
that would have been the end
of this matter.


 


[68]       
The  respondent was established by
Act, 5 of 2003  with a Board of Directors (s 7) and a chief
executive officer (s 16). In s 6(1)
(b)
the respondent’s powers to sell, buy and let property were set
out. Nowhere in the Act was the exercise of these powers made subject
to the approval of the above Ministers or any other instance. 
Mr Bokaba could also not refer us to any provision in the Act, or
anywhere else, where these powers were made subject to such
approval.  The best counsel could do was to refer the court to
the case of
Minister of Mines and Energy
and Others v Petroneft International Ltd and Others
2012
NR 781 (SC) which dealt with the overall duty of Cabinet to direct,
co-ordinate and supervise the activities of parastatals according to
the provisions of Art 40 of the Constitution. In the present instance
the respondent was specifically given the power to sell its assets by
an Act of Parliament and it seems to me that only Parliament could do
away with those powers. In the
Petroneft
matter this was not the issue and the
case is distinguishable. Such notification, requiring the approval by
the two Ministers, did not form part of the option agreement, and as
the appellant was unaware thereof, it follows that the respondent
could not impose such a qualification unilaterally. If the respondent
wanted such approval to be binding it should have included it as a
term of the option agreement.  This was not done. (See
Legator
McKenna Inc and Another v Shea and Others
2010
SA (1) 35 (SCA) at p 42, para 16.)


 


[69]       
The second misconception was that the
appellant accepted the notification that the offer was subject to the
approval of the Ministers. As far as the sale of the property was
concerned the respondent’s proposal contained three conditions.
Because of the respondent’s misconception in regard to the
approval by the Ministers it merely informed the appellant that the
sale was subject to their approval.  As far as the respondent
was concerned this issue was not open for negotiation as it believed
that it was legally obliged to obtain such approval.  In its
letter of 26 February 2010 the respondent confirmed to exercise its
right to acquire the property subject to the conditions per the
respondent’s letter dated 19 February 2010. However, in
correspondence following upon this letter the appellant denied that
the respondent had the right to change the terms of the option
unilaterally by adding a rider that the proposal required the
approval of the Ministers. In para 23 of its founding affidavit the
respondent confirmed, in my view, that the conditions to which it had
referred were only those paras numbered 1, 2 and 3 set out in its
letter of 19 February 2009.  These were the only conditions
conveyed to the appellant for consideration. This clearly did not
include the rider concerning approval by the Ministers. (See para 24
which dealt separately with this issue.)


 


[70]       
The essensialia
of a contract of sale are identification of the seller and the
purchaser, identification of the
merx,
and the price at which the property was
sold. (See
Meyer v Kirner 1974
(4) SA 90 (N) at p 97 to 98 and the cases there referred to, and
Johnston v Leal 1980
(3) SA 927 (A).) However, in order to comply with the formalities set
out in s 1(1) of the Formalities in respect of the Land Act 71 of
1969, the cases have laid down that all material terms of such
contract had also to be in writing and signed by the parties or their
agents acting on their written authority. It is also trite that the
terms of the contract need not be contained in one document but can
consist of various documents, such as letters, provided that the
provisions of the Act had been complied with. (See
Meyer
v Kirner, supra,
p 97D-F and Johnston
v Leal,
at p 937E–H.)


 


[71]       
Generally speaking once the court had come
to the conclusion that the option clause had been part of the renewal
agreement the payment of the purchase price had to be in accordance
with the agreement of the parties, namely the option. The option
agreement did not require the appellant to obtain funding from the
respondent and how the appellant would arrange its funding was
entirely a matter which was left into the hands of the appellant.
(See
Van Jaarsveld v Coetzee 1973
(3) SA 241 (A) at 244B-G and
Wacks v
Goldman
1965 (4) SA 386 (W) at p 388 to
389.) Where an agreement is silent as to when payment should be made,
as is the case in this instance, our law requires that payment be
made simultaneously (
pari passu)
with the transfer of the property. (See
Venter
v Liebenberg
1954 (3) SA 333 (T) at
339A and
Herselman v Orpen en ‘n
Ander
1989 (4) SA 1000 (T) at p 1005 to
1006.)


 


This
is usually done by means of a guarantee of the purchase price by the
purchaser who must perform once he or she is called upon to do so.
Where the option granted did not provide for a date of transfer of
the property, once the option had been exercised, transfer must take
place within a reasonable time. (See Visagie v Gerryts en ‘n
Ander
2000 (3) SA 670 (C) at 676C.)


 


[72]       
Clause 18.1 granted an option to the lessee
to purchase the leased premises. The leased premises is properly
identified in the Deed of Lease as Portion 38 of the Farm Okatjirure
No 155 in the Village of Witvlei (Registration Division ‘L’). 
The parties were identified as the Agricultural Bank of Namibia,
being the owner/lessor of the property and Witvlei Meat (Pty) Ltd,
the lessee. Furthermore the purchase price was determined to be N$15
000 000. Respondent did not at any stage argue that any uncertainty
or ambiguity pertained to these formal essentials which had to form
part of a sales agreement.


 


[73]       
Apart from the fact that the exercise of
the option had to be in writing and signed, clause 18.1 did not
prescribe any other formal requirements so that an intimation in
writing that the appellant exercises the option would, in my opinion,
suffice to bring about a valid exercise of the option and would bind
the parties. (See
Amcoal Collieries Ltd
v Truter
1990 (1) SA 1 (A) at 4D.)


 


[74]       
The fact that the respondent, as the owner
of the property, was a possible source to finance the purchase by the
appellant was a coincidence, and it did not change the position of
the appellant to obtain funding elsewhere on terms which were more
favourable than those which the respondent was offering unless the
appellant had accepted this offer set out in respondent’s
letter of 19 February 2010.


 


[75]       
Furthermore this being a contract of sale
of immovable property the manner of the repayment of the loan, and
the terms thereof, became material terms of the contract of sale
which had to be in writing and should be clear in order that
acceptance thereof by the appellant constituted a contract. See Kerr:
The Principles of the Law of Contract, 5
ed p150 where the learned author stated:


 


Further,
a statement concerning the manner of payment of the purchase price is
not essential to the existence of a sale of movables but if the
parties to a sale of land agree on a provision other than the
residual one concerning the manner of payment it must be reduced to
writing.’


 


 


[76]       
In this regard Mr Tötemeyer submitted
that the appellant’s letter of 26 February 2010 in regard to
the issue of funding was merely a request to elicit a response from
the respondent in regard to its funding proposal and did not affect
the unequivocal exercise of the option. (See
JRM
Furniture Holdings v Cowlin
1983 (4) SA
541 (W) and
Seagulls Cry CC v Council
for the Municipality of Swakopmund
2009
(2) NR 769 (HC) para 36.) Although I agree with counsel, for reasons
that will follow, that the exercise of the option was not affected by
the appellant’s non-acceptance of the terms of the funding, I
do not agree that this letter was merely a request, which, if
rejected by the respondent would still result in a binding agreement.
If that were so then there was no basis for the appellant to still
leave himself with a choice whether to accept funding from the
respondent or to arrange funding elsewhere. This was not an instance
where the offeree ‘makes some simultaneous “request”,
but it must appear that . . . the offeree has assented to the offer,
even though the offeror shall refuse the request’. (
JRM
Furniture Holdings
case at 544G.) The
‘request’ was conditional on the respondent accepting the
appellant’s terms as set out in its letter of 18 December 2009.
If those terms were not accepted by the respondent the appellant left
itself the choice to find funding elsewhere. That was also made clear
in the appellant’s letter of 19 May 2010.


 


[77]       
I agree with the learned judge a
quo
that the mode of payment of the
purchase price was a material term and that in this instance, where
the sale concerned landed property, it also had to be in writing and
signed by the parties or their agents on their written authority.
This did not happen.  It follows therefore that the issue of
funding by the respondent did not materialise into a binding
agreement.


 


[78]       
The fact that the parties could not agree
as to the mode of funding did, in my opinion, not affect the exercise
of the option by the appellant in its letter of 26 February 2010 read
with the letter of 19 May 2009. The appellant did not in any way in
the said letter make the exercise of the option conditional on
acceptance of its proposal in regard to the funding. The option is a
separate issue which stands on its own and on its own the exercise
thereof brought about a binding agreement between the parties. I
refer to the principles set out herein before where the common law
steps into the breach where parties had not agreed to the mode and
time of payment it lays down that the sale is for payment
pari
passu
with the registration of transfer
of the property which had to be within a reasonable time. Once the
agreement of the funding by the respondent did not materialise it
follows in my opinion that the parties could still perform in terms
of their option agreement. For his part the appellant offered to do
so in the letter of 19 May 2010.


 


[79]       
Although the appellant exercised the option
‘subject to conditions between Agribank and Witvlei as per the
letter dated 19 January 2010’, a further reading of the letter
showed that the appellant still reserved for itself the right to
choose funding from a source other than Agribank. This reservation
had the result that no agreement was reached in regard to the funding
of the purchase price by the respondent. I agree with the court
a
quo
that, as far as the issue of
funding was concerned, the letter of 19 February was a counter
proposal and did not result into an acceptance of funding by the
respondent.


 


[80]       
The court a
quo
found that because the appellant
made a counter offer the exercise of the option was not unequivocal
and therefore the exercise of the option did not result into a
binding agreement of purchase and sale. The counter offer only
pertains to the issue of funding by the respondent. I agree that the
letter was clumsily worded and if there was any doubt or uncertainty
left that was in my view cleared up by the letter of 19 May 2010 when
the appellant offered to pay the purchase price of N$15 million
against transfer of the property into its name.


 


[81]       
This was rejected by the respondent
based on its attitude that the option clause had not been renewed and
by concluding that it was statutorily obliged to obtain the approval
of the two Ministers before it could alienate the property. I have
found that both these conclusions were wrong. This also takes care of
Mr Bokaba’s arguments based on these issues
.
Mr Bokaba’s argument concerning these issues is
self-destructing. On the one hand he argued that the appellant had
accepted the conditions set out by the respondent in its letter of 19
February 2010. On the other hand he argued that the appellant made a
counter offer in its letter of 26 February 2010, which was not
accepted by the respondent and consequently there was no valid
exercise of the option. The two issues, namely the option, and the
exercise thereof, and the funding, are separate and should be dealt
with as such.


 


[82]       
The question remains whether under these
circumstances the court should still order the appellants to vacate
the premises bearing in mind that their lease contract had come to an
end and that they are, as yet, not the registered owners of the
property. With reference to the case of
Du
Plessis N.O. and Another v Goldco Motor and Cycle Supplies (Pty) Ltd
2009 (6) SA 617 (SCA), Mr Tötemeyer
submitted that it was the conduct of the respondent which resulted in
frustrating to give effect to the valid exercise of the option and
the resultant agreement of sale which came into being. Counsel
submitted that but for this conduct of the respondent the exercise of
the option would have resulted in permanently securing the
appellant’s right of possession. Counsel further submitted that
where there was a deliberate frustration of contractual performance
the doctrine of fictional fulfilment of conditions comes into play
and should be applied in the circumstances of this case.


 


[83]       
Mr Bokaba, on the other hand, submitted
that it was never the case of the appellant, as made out in the
affidavits, to rely on the doctrine of fictional fulfilment of the
contract or frustration of the contract. Counsel submitted that as a
result thereof it was impermissible for the appellant to do so at
this late stage.


 


[84]       
Because of the conclusion to which I have
come I need not decide whether this is an appropriate instance to
apply the doctrine of fictional fulfilment. I agree with Mr Tötemeyer
that in the event that after the exercise of the option the transfer
of the property could not be completed before the period of lease
came to an end that it was an implied term of the original lease
agreement, and the renewal thereof, that the appellant would remain
in possession of the property until transfer was given. I am
satisfied that at the time when these agreements were concluded, and
if the parties had been asked by the hypothetical bystander what
would happen if transfer of the property would only be finalised
after the lease had come to an end that both parties would have said
‘it’s obvious; of course the appellant must remain in
occupation till transfer took place’. (See
Alfred
McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration

1974 (3) SA 506 (A) at 525C and 533B and
Delfs
v Kuehne & Nagel (Pty) Ltd
1990 (1)
SA 822 (A) at 827G.)


 


[85]       
I say so for the reason that the appellant,
if it had to vacate the premises for any period of time, might have
had to again make renovations and would have had again to apply for
EU approval. It would also, according to the evidence, have to fulfil
contracts with clients, which could not happen if it had to vacate
the premises at any time. It also demonstrates its attitude that it
was entitled to remain in occupation of the premises, by its refusal
to vacate the property.


 


[86]       
The respondent was willing to offer the
appellant an extension of the lease after the lapse thereof by
effluxion of time. It further had the benefit of receiving the
monthly rental for as long as it would take to complete the transfer
of the property to the appellant. The Board of the respondent, acting
reasonably, would have known that any interruption of the appellant’s
business, as an abattoir with overseas contracts, could spell
disaster for the business and would have acted in a way to avoid such
a situation arising.


 


[87]       
In this instance, and as I have already
found, the option contains all the essentials required for a sale of
the immovable property so that the valid exercise thereof constituted
the agreement of the parties.


 


[88]       
It follows therefore that I am of the
opinion that the appeal must succeed.


 


[89]       
In the result the following order is made:


 


 



1. (a)  
The application for condonation is allowed and it is ordered that the
appeal be re-instated.


 


(b) 
The applicant is ordered to pay the costs
of the application which will include the costs of one instructing
counsel and two instructed counsel.


 


2.   
The appeal succeeds with costs, such costs
to include the costs of one instructing counsel and two instructed
counsel.


 


3.   
The order of the court a
quo
is set aside and the following
order is substituted therefore:



 



 



The
application is dismissed with costs including the costs of one
instructing and one instructed counsel’.





STRYDOM
AJA





MAINGA
JA





CHOMBA
AJA


 


 


APPEARANCES


 


 


APPELLANT:                                               
Mr R Tötemeyer (with him Mr A W Corbett)


                                                                       
Instructed
by H D Bossau & Co


 


RESPONDENT:                                          
Mr T J B Bokaba SC



(with him Mr S
Namandje)



Instructed by
Sisa Namandje & Co Inc