Goudini Chrome (Pty) Ltd v MCC Contracts (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Hoexter JA, Nestadt JA, Eksteen JA, Nienaber JA and Nicholas AJA
• Judgment Date: 28 September 1992
• Citation: 1993 (1) SA 77 (A)
• Hearing Date: 14 September 1992
• Court: Appellate Division

Nienaber, JA.:

A The appellant, applicant in the Court below, sought an urgent order evicting the respondent from a property on which the latter, by agreement, had been excavating chrome ore. The respondent resisted the application on a variety of grounds, one of which was that it enjoyed a debtor and creditor lien over 'the works' for which it had not yet been B paid in full. This defence in turn gave rise to a number of subsidiary disputes, some of which were decided in favour of the one and some in favour of the other party. The upshot of the proceedings before Labuschagne J in the Witwatersrand Local Division was that the application for eviction failed with costs. Hence the present appeal which is brought before this Court with leave of the Court below.

C More than half the shares in the appellant were owned by Canadian Gold SA (Pty) Ltd (hereinafter referred to as 'Canadian Gold'), a company incorporated with limited liability according to the laws of the Republic of South Africa. In 1989 Canadian Gold decided to develop a mine for the extraction of chrome ore on a certain property in the Zeerust area D described as 'Remaining extent of the farm Goudini 30, registration division JP, Transvaal, measuring 2109,4681 hectares.' At that stage the property, to the knowledge of the respondent, was still registered in the name of a certain De Waal. Canadian Gold called for tenders from several contractors to do the excavation work. The respondent was one of them. It was eventually agreed between Canadian Gold, represented by one of its E directors, a certain Doyle, and the respondent, represented by its managing director, Hayes, that respondent would move its equipment on to the property and would commence operations, even though a formal contract had not yet been prepared and signed. The respondent did so in January 1990. Thereafter the respondent was regularly paid for its work by F Canadian Gold in terms of payment certificates approved by it.

In April 1990 the appellant, not Canadian Gold, entered into an agreement with a company based in Luxembourg, one of the major commodity dealers in Europe, to supply it with at least 200,000 tons of chrome ore extracted from the mine on the property. Negotiations with a view to a G formal comprehensive contract with the respondent continued in the meantime. In June 1990 one McGrath, who had replaced Doyle as the managing director of the appellant (and who was also a director of Canadian Gold), suggested to the respondent that the appellant be substituted for Canadian Gold as the contracting party as it was the actual operating company. This H was one of several matters yet to be settled. On 9 July 1990 the property was sold by De Waal to the appellant and transfer was eventually passed to it on 14 August 1990. Towards the middle of August 1990 McGrath instructed the respondent to submit all draft payment certificates prepared by it to the appellant and not to Canadian Gold - which the respondent thereafter did. All payments to the respondent continued to be made by Canadian Gold. I A formal written agreement was never concluded. Disputes about a number of matters eventually led to the respondent discontinuing work in October 1990 and reducing its staff and equipment on site. It had until then been paid in the region of R3,5m for work done. According to the respondent it was still owed a balance in excess of R1,3m. It was for the payment of that amount that the respondent maintained a presence on the property and J claimed a lien over

Nienaber JA

A the works. The works at that stage consisted in the main of a stockpile of excavated material containing some chrome ore and one or two open pits (depending on which version is preferred) which the respondent had excavated to reach a chrome reef on the property. By remaining in occupation of certain portions of the property the respondent effectively prevented the appellant from continuing mining operations on it through B another contractor. It was that fact which prompted the urgent application.

What is to be extracted from this resumé is the following:

(a)

The appellant claimed to be the owner of the property.

(b)

The respondent conducted mining operations on it.

(c)

C It did so in terms of an oral agreement with Canadian Gold. The understanding was that a formal agreement was to be finalised, possibly with the appellant instead of with Canadian Gold.

(d)

The arrangement between Canadian Gold and the appellant in terms of which the latter took over control of the project was never explained D by the appellant on the papers.

(e)

The respondent nevertheless continued to be paid for its work by Canadian Gold and not by the appellant.

(f)

Negotiations broke down and to all intents and purposes the respondent ceased its operations on the property.

(g)

The respondent continued to maintain a presence on the property E through one or two of its employees in order to protect what it proclaimed to be a common law lien over the works.

In essence the appellant's cause of action for the eviction of the respondent was the rei vindicatio. A number of issues arose before the F Court a quo. These were, in the main: (i) whether the appellant had established its ownership of the property concerned - the Court a quo found that it had; (ii) whether the respondent was entitled to rely on a debtor and creditor lien against the appellant on the basis that the latter was substituted for Canadian Gold as the true contracting party during the interim period while a formal contract was being negotiated - the Court a quo found that it was not so substituted; (iii) whether the respondent's admitted debtor and creditor lien against Canadian Gold G extended to the appellant, a non-contracting party, on the ground that the appellant was aware of, consented to and authorised the respondent to conduct its excavating activities on the appellant's property - this was essentially the issue on which the Court a quo found in favour of the respondent; and (iv) whether the respondent had lost its debtor and creditor lien through the temporary absence of its employees from the H property - on which issue the Court found that it had not. The respondent accordingly succeeded in the Court below.

Some subsidiary issues fell away before the matter reached this Court. Others were abandoned in the course of argument and need not be mentioned. I But on the other hand a completely new issue emerged before this Court, on facts not ventilated in the Court below, namely whether a cession by the respondent to the Standard Bank of South Africa Ltd of its claim for payment for the work done jeopardised any lien it may otherwise have had against the appellant.

I deal with these issues in turn.

J The first pertinent one is whether the appellant had proved its title to

Nienaber JA

A the property. Since its claim was vindicatory in its nature ownership was an essential averment and had to be adequately proved by it (Ruskin NO v Thiergen 1962 (3) SA 737 (A) at 744A-B). Failure to adduce proper proof would result in the failure of vindicatory proceedings irrespective of a detentor's own entitlement to occupation (Van der Merwe Sakereg 2nd ed at B 348). The best evidence of ownership of immovable property is the title deed to it (R v Nhlanhla 1960 (3) SA 568 (T) at 570D-H; Gemeenskapsontwikkelingsraad v Williams and Others (1) 1977 (2) SA 692 (W) at 696H; Hoffmann and Zeffertt The South African Law of Evidence 4th ed at 391-2). A title deed conforms to the preconditions specified for a public document (cf Hoffmann and Zeffertt (op cit at 150); Schmidt Bewysreg 3rd C ed at 331). A public document is admissible in evidence, according to s 18 of the Civil Proceedings Evidence Act 25 of 1965, if a copy thereof is produced which purports to be signed and certified as a true copy or an extract from the relevant register by the officer to whom custody of the original is entrusted.

In the instant case McGrath, in the appellant's founding affidavit, made D the positive averment that the appellant was the owner of the property described and annexed 'a copy of the title deed . . . marked BM2'. Annexure BM2 is a photocopy of the original title deed relating to the property, issued and signed by the Registrar of Deeds. The copy was not, however, certified by him. In its answering affidavit to this allegation E the respondent denied knowledge of the appellant's averment and added: 'It will be submitted at the hearing that the applicant has not produced admissible...