Runsin Properties (Pty) Ltd v Ferreira

• Jurisdiction: South Africa
• Judge: Addleson J
• Judgment Date: 14 January 1979
• Citation: 1982 (1) SA 658 (SE)
• Hearing Date: 15 December 1978
• Court: South Eastern Cape Local Division

Addleson J:

D This is an opposed application, brought as a matter of urgency on notice of motion, for an order ejecting the respondent from certain factory premises owned by the applicant in Uitenhage.

E The relief claimed was later amended to provide for an order that the respondent cease his occupation of those premises.

The affidavits of both parties were filed only within the last week and indeed the opposing affidavits of the respondent and the replying affidavits of the applicant were filed on the day before, and on the day of, the hearing respectively. The papers, comprising some 140 pages, F traverse many disputed issues of fact which counsel agree cannot be resolved on affidavits and may ultimately have to be decided after the hearing or oral evidence either under Rule 6 (5) (g) or on trial.

However, Mr Dison for the applicant, limited his argument in the first instance to a contention that on the papers a case has been made out for G a spoliation order based on the respondent's alleged unlawful occupation of the applicant's property and that, on that issue alone, the dispute is capable of being decided on affidavit.

Mr Browde, for the respondent, disputed both these contentions.

For the purposes of a decision on Mr Dison's submissions, therefore, I propose to set out only those facts which are necessary to enable me to H deal with the contentions of both parties on whether a spoliation order can properly be made on the papers before me. As I have indicated there is, for reasons which will appear, a prima facie case of urgency in the application and I, therefore, undertook to deliver judgment on the spoliation aspect as soon as possible before the further fate of the application was considered. This judgment has, therefore, had to be prepared with somewhat more haste than I should have preferred.

The shareholders in the applicant company were at all relevant times all members of one family and their interests were handled by one of

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them, Rubinstein, who was and still is a director of the applicant. It appears that the factory premises in question are either the sole or the A main asset of the applicant and that they had been unused and derelict for a number of years. They are apparently adjacent to the factory premises of Volkswagen Motor Car Co in Uitenhage. In his founding affidavit in para 4, Rubinstein sets out the following allegations:

'(a)

The property set out in the preceding paragraph was surplus to applicant's requirements and applicant had been negotiating for a considerable time with Volkswagen of Uitenhage for its acquisition. The price discussed was in the region of R65 000.

(b)

Nothing had come of these negotiations and, when I was in Port Elizabeth in August 1978, I telephoned respondent, who was apparently also interested in the property. I mentioned the figure C of R65 000 to him. As a result of several conversations with him, I understood that he was not prepared to go above R50 000 for the property.

(c)

Subsequently Mr Trevor Wait, the accountant of respondent, asked me for certain financial statements of the company.

5.

One of the problems relating to the company was that it had undistributed reserves amounting to R19 453 and the shareholders D were not prepared to distribute these reserves prior to a sale of their shares because of the tax implication. The shareholders would never have been prepared to sell their shares unless the deed of sale acknowledged without objection the reserves in question.

6.

About 16 October 1978, in an attempt to force the issue, I sent a telex to the said Wait on behalf of applicant purporting to accept E respondent's offer for the said shares of R50 000 although no offer had been made by him.'

The telex, to which that paragraph refers, reads as follows:

'We, Runsin Properties (Pty) Ltd, confirm acceptance of Mr Ferreira's offer of R50 000 for our property in Uitenhage stop The property is sold 'voetstoots' and by transfer of shares stop Payment to be effected by F Tuesday, 7 November 1978 stop.'

That telex is dated 16 October 1978. Clearly it was intended to goad the respondent into purchasing the property and it had the desired effect.

G There is a dispute as to the legal effect of what took place thereafter. It is neither necessary nor possible to resolve that dispute at this stage, but Mr Browde relied on certain aspects of the dispute in relation to the claim for a spoliation order and, more particularly, as to where the onus lay in such a claim and it is therefore necessary to refer to the main allegations of the parties.

Rubinstein says, in para 7 of his founding affidavit:

'7.

H I had to be in Port Elizabeth on 2 November 1978, and advised the said Wait and also advised him that I could be contacted at the Port Elizabeth Leather Co.

8.

Subsequently the said Wait made an appointment to meet me there on 2 November 1978.

9.

On that day respondent and the said Wait arrived together to see me, bringing a deed of sale without any price filled in. I was surprised that they should bring a prepared deed of sale which was produced out of the blue. I would never have been prepared to sign a deed of sale which was not prepared by my own attorney or, if this was not possible, I would have

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required my own attorney to have satisfied himself that the shareholders disposing of the shares in the company were adequately protected.

10.

Respondent offered the sum of R49 000 for the shares and shareholders' loan account. I told him that I and the other A shareholders together with our accountants would consider the offer. The figure of R49 000 was filled into the deed of sale. It was never even suggested that I should sign this deed of sale. Respondent, however, did sign it and I looked upon the deed of sale as an option in favour of the shareholders.

11.

It had been mentioned during the conversation that Mr Ferreira was prepared to pay the necessary deposit to show his good faith and he gave me a cheque for R4 900 which Mr Trevor Wait endorsed B on the back 'being 10 per cent of the purchase price of the shares in Runsin Properties (Pty) Ltd'. As the cheque was made out in my favour, I was asked to sign this endorsement so as to confirm that the payment was being made not personally to me but in regard to a possible sale of the shares.

12.

I did not have authority to bind the other shareholders and I never stated that I had such authority. Neither they nor I would C have agreed to a deed of sale without advice from both applicant's attorney and accountant. Apart from anything else, we would have required protection in regard to the acceptance by the purchaser of the undistributed reserves. I annex, marked A2, a copy of the draft deed of sale furnished to me by respondent.

13.

On my return to Cape Town the shareholders decided that it would D be only fair to communicate with Volkswagen with whom they had long been negotiating before considering respondent's offer. We did so and in fact Volkswagen showed lively interest and stated that they required the property for the Urban Foundation of South Africa.'

The upshot was that on 13 November Rubinstein advised the respondent by E telephone that the shareholders of the applicant had decided not to accept his offer; and on 16 November the applicant sold its shares to one McIntosh who was a nominee for Volkswagen, for R65 000. Volkswagen's interest in the property and the alleged urgency of the matter are set out in an affidavit of an executive of Volkswagen, one Swift, in the following terms:

'5.

F I respectfully submit that this application is one of urgency for the following reasons:

(a)

Volkswagen of South Africa (Pty) Ltd, in conjunction with the Urban Foundation and various Government departments, is committed to commence a technical training centre for Blacks on the property owned by the company as from February 1979.

(b)

G The Department of Education and Training has been requested to appoint staff for the training centre with effect from February 1979, and the Department has also undertaken to commence acquiring the necessary equipment for the training centre.

(c)

Modifications of the building erected on the property to meet departmental specifications have to be discussed and put out to tender for the work to be completed by the end of January 1979.

(d)

H If immediate occupation of the property is not acquired the whole training programme is likely to be delayed for at least one year as it is essential that the training programme commences and coincides with the school terms.'

The respondent's case in brief, as far as it concerns the present issue, is that a binding sale of the shares of the applicant to him was concluded on 2 November and that he was and is entitled to occupy the property. The respondent's auditor, Wait, who negotiated on

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behalf of the respondent with Rubinstein, says in para 7 of his affidavit the following:

'7.

On 1 November 1978 I received a telephone call from Mr A Rubinstein from Cape Town telling me that he would be in Port Elizabeth on the morning of 2 November 1978; that we should have a meeting and that he could be contacted at telephone 54 - 1416 if I required any further information. I informed him that I was going to prepare the deed of sale of shares, to which he agreed, and it was arranged that I would telephone him on the following morning, which I duly did.

8.

B I drafted the necessary deed of sale and, when I spoke on the telephone to Mr Rubinstein on the morning of 2 November 1978 to arrange the time of the meeting, I asked him for the names of the shareholders of the company. Mr Rubinstein asked me to complete the deed of sale of shares and to leave the names in blank.

9.

The respondent and I met Mr Rubinstein by arrangement at 2.30 pm at...