Steyl v Du Plessis and Others

• Jurisdiction: South Africa
• Judge: Irish AJ
• Judgment Date: 12 August 2004
• Docket Number: 5038/2003
• Court: Cape Provincial Division
• Hearing Date: 12 August 2004
• Citation: 2004 JDR 0594 (C)

Irish AJ:

1

The applicant, Johan Steyl, and the first respondent, Wynand du Plessis, were at all material times the share holders of the third respondent, Jacrens 0011 (Pty) Ltd, a company duly incorporated according to the laws of the Republic of South Africa, having its principal place of business at Hillside Farm in the Olifantsberg District, near the town of Worcester in the Western Cape. These gentlemen each held 50% of the issued shares in the third respondent and were also co-directors of the company, enjoying equal voting rights. The inevitable consequence of these circumstances was that, to all intents and purposes, neither party was able to effect the adoption of a resolution by majority vote, but had perforce to rely on the attainment of a consensus about the affairs of the company. Each director could, effectively, veto a proposal of the other.

2

The third respondent became the registered owner of Hillside Farm on 31 July, 2001. The first respondent thereafter lived in the farmhouse and, from some time during 2002, the applicant also took up residence in a smaller cottage situated higher up on the sloping lands of the farm. Immediately to the west of Hillside Farm lies Weltevrede Farm [1] , the common boundary of the two farms lying not far from the respective residences of the applicant and of the first respondent.

3

Quite apart from his standing as a shareholder and director of the third respondent, the first respondent was also at all relevant times the only member of the second respondent, Agenplesi Boerdery CC, a close corporation duly incorporated according to the Close Corporations Act, No 69 of 1984 as amended, which also has its principal place of business at the farmhouse on Hillside Farm.

4

As early as September or October of 2000, the first respondent commenced negotiations with the owner of Weltevrede, one Agenbag, and with Rainbow Chickens concerning the possible development of intensive chicken battery farming on Weltevrede. By June of 2001, matters had reached sufficient agreement for the first respondent to engage the services of a town and

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regional planner, Jaco Terblanche, to further husband the process and prepare the necessary applications. At this stage, first respondent discussed the intended project with the applicant and offered him a share therein, which offer applicant declined. The result of these negotiations, however, was that the second respondent, acting pursuant to the directions of the first respondent, purchased the neighbouring Weltevrede, which was eventually transferred to the second respondent on 7 March, 2002.

5

The second respondent also negotiated a supply agreement with Rainbow Chickens in terms of which he and/or the second respondent were to supply Rainbow Chickens with an unspecified quantity of battery chickens of a particular age on a continuing basis. In furtherance of this project, first respondent determined to construct a series of sixteen large chicken broiler houses, each covering a surface area of approximately 90 by 10 metres, on Weltevrede.

6

Before it was legally possible to erect the envisaged broiler houses on Weltevrede, it was necessary for diverse approvals and departures to be granted by the relevant authorities. Firstly, in terms of the scheme regulations applicable to the locality and promulgated in terms of section 8 of the Land Use Planning Ordinance [2] , Weltevrede was zoned as ordinary agricultural land in zone 1 and a use right departure was required for the envisaged intensive battery farming to be carried out on the property. An application to this effect was submitted to the fourth respondent on 8 August, 2001. Secondly, the construction of the envisaged broiler houses was an identified activity as referred to in Schedule 1 of Government Notice R 1182 of 5 September, 1007, promulgated under the provisions of the Environment Act [3] , which circumstance necessitated the permission of the relevant Minister for such construction, in accordance with the provisions of section 22 of the said act. Thirdly, the necessary and applicable building and planning approvals would also be required from the relevant local authorities. Finally, the precise location of envisaged broiler houses relative to the neighbouring properties might require an amendment of the existing building line of 30 metres.

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7

Because of its status as the owner of the immediately adjoining property, the third respondent clearly had a most pertinent interest in the various departures and permissions which were required by the first and second respondents, and its consent was – if not a sine qua non – at the least an important factor to be taken into consideration by the relevant authorities. Undoubtedly, such consent would have facilitated the obtaining of the necessary approvals required for implementation of the scheme. In this regard, the Municipal Manager of the fourth respondent, one Daniel du Plessis, in the initial affidavit filed on behalf of the fourth respondent stated inter alia that the use right application had been approved "onder andere uit hoofde daarvan dat die eienaar van Hillside nie enige beswaar daarteen geopper het nie." [4] (One of the mystifying aspects of the fourth respondent's approach to this application is that the selfsame du Plessis, in a subsequent affidavit jurat 18 August 2003, strongly denied that the consent of the owner of Hillside Farm to the proposed departure "enige wesenlike bydrae gelewer het tot Vierde Respondent se besluit om die aansoek toe te staan. " [5] That statement would at first blush appear to be irreconcilable with his earlier evidence.)

8

It is convenient to note at this point that the owner of another farm, called Kleinbegin, which adjoins Weltevrede Farm on its eastern flank and which lies immediately to the north of Hillside Farm, did object to the proposed scheme unless the building line on Weltevrede was increased to between 60 and 80 metres, so as to provide a cordon sanitaire between the properties. Accordingly, when the departure was authorised by the fourth respondent's executive committee on 22 November 2001, the approval was for the construction of a maximum of twelve broiler houses on Weltevrede, subject to an increased building line of 150 metres on the common boundary between Weltevrede and Kleinbegin, which building line could be decreased to 60 metres by the fourth respondent's manager in the event of the respective farm owners agreeing thereto. (The first respondent subsequently extended his fiefdom by the acquisition of this farm as well, and a year later, in May 2003 duly motivated and achieved the

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reduction of this building line to 60 metres.)

9

During or about August, 2001, the second respondent commenced implementing the project (notwithstanding the fact that the departure application had only just been submitted and had not yet been approved) by the construction of eight of the chicken broiler houses, this phase of the project being completed by 30 May, 2002. It was during the construction of these buildings that the public participation process required by fourth respondent took place. The can be no doubt that the applicant was aware of what was taking place on Weltevrede; the first respondent had in July 2001 explained the project to him and had offered him a share in the venture, which the applicant had declined. In addition, his residence on the immediately adjoining farm gave him constant opportunity to view the building activities taking place on Weltevrede.

10

After the completion of the broiler houses, the farming operation commenced. Thereafter, and at the time of the launching of this application on 25 June, 2003, the second respondent was moving into the second phase of its development of the business by the erection of a further four broiler houses on Weltevrede. The applicant alleged that, as of that date, no plans for these four broiler houses had been approved by the relevant local authority, being the fourth respondent, the Municipality of Witzenberg, a factor heavily relied on in the founding affidavit.

11

In addition, the applicant alleged that the original eight broiler houses as also the further four which were in the course of construction, fell within what the applicant termed the "wetlik voorgeskrewe boulyn" of 150 metres from the common boundary with Hillside Farm. The applicant further stated that he understood that the building line had been reduced to 60 metres with the consent of the owner of Hillside, the third respondent. Since he had taken no part in such a decision, said the applicant, such consent as might have been given could only have been given by the first respondent and was clearly irregular. Accordingly, averred the applicant, the building activity in progress on Weltevrede Farm in the proximity of his residence was unlawful, both because no plans for the construction had been approved and because the construction was taking place in contravention of the building line.

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12

The applicant further alleged that the first respondent had purported to consent to the aforementioned departures on behalf of the third respondent, despite his personal conflict of interest in the proposed development, without disclosing such to the applicant or consulting him thereanent, and in clear breach of his fiduciary duty to the third respondent.

13

The applicant contacted one Lombard, the head of the fourth respondent's planning department, who visited the site in the first week of May, 2004. Following this visit, Lombard established from the fourth respondent's building inspectorate that there were no approved plans for the four broiler houses under construction. Accordingly, on 12 May 2003 the fourth respondent wrote to the first respondent, pointing out that a building...