Beneficio Developments (Pty) Ltd v Adgea Nelspruit and Others (1098/2018) [2020] ZAMPMBHC 36 (15 June 2020)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

MPUMALANGA DIVISION

Case : 1098/2018

(1) REPORTABLE: YES / NO

(2) OF INTEREST TO OTHER JUDGES: YES/NO

(3) REVISED.

SIGNATURE: H.C. Jansen van Rensburg

Date : 15th June 2020

In the matter between

BENEFICIO DEVELOPMENTS (PTY) LTD

APPLICANT

And

ADGEA NELSPRUIT AND 40 OTHERS

JUDGMENT

JANSEN VAN RENSBURG AJ

INTRODUCTION

[1]. This is an ’urgent application’ brought by the applicant against all the respondents mentioned in its Notice of Motion but specifically against 40th respondent [TARENTAAL CENTRE INVESTMENTS (PTY) LTD (REG NUMBER 2005/000028/2007)] and the 41st respondent [THE VILLAGE MALL INVESTNMENTS (PTY) LTD (REG NUMNER 2004/0302440/2007)].

[2]. The applicants application is brought in terms of rule 6(12) of the rules of the Superior Court whereby the court is requested to condone the deviation by the applicant from the rules, its requirements for the time periods allowed for service and set down.

[3]. The applicant request the court to grant a ‘rule nizi’ in that the rent due by the 1st to 39th respondents to the 40th and 41st respondent should be paid into the trust account of the attorney of the applicant. This rent would then be invested by the attorney of the applicant in an interest bearing account pending the outcome of the action to be instituted by the 40th and 41st respondents against the applicant as well as the entertainment of the counter claim of the applicant against the 40th and 41st respondents.

[4]. The rent so paid by the 40th and 41st respondents into the trust account of the applicants’ attorney will be used as payments (‘setoff’) against the outstanding loan amount purportedly due by the 40th and 41st respondents to the applicant. The purported and disputed outstanding loan amount due to the applicant as on 20th March 2020 was R 14 580 377 – 27 bearing interest of 1% per week monthly compounded and capitalised.

THE LOAN AGREEMENT BETWEEN THE APPLICANT AND THE 40TH AND

41ST RESPONDENT

[5]. On 13th December 2018 the applicant and the 40th respondent entered into a loan agreement to the value of R 40 166 166-50. [1] The 41st respondent bound itself a surety to this loan agreement. [2]

[6]. On 8th February 2018 the 40th respondent registered a mortgage bond B[...] as security over the immovable property commonly referred to as the COURTSIDE SHOPPING CENTRE.

[7]. On 8th February 2018 the 41st respondent registered a mortgage bond B 5[...] as security over the immovable property commonly known as the VILLIAGE MALL SHOPPING CENTRE.

[8]. The repayment of the loan was due by 31st March 2018 at an interest rate of 1% per week. On 12th January 2018, the first payment of interest in the amount of R 1 773 911-78 was made to the applicant in terms of the loan agreement. The repayment date was extended to 31st may 2018. [3]

[9]. The applicant made payment of further advances to the various additional loan amounts to the 40th and 41st respondents. [4]

[10]. The 40th and 41st respondents form part of the NOVA PROPERTY GROUP.

[11]. The applicant received various payments regarding the loan. The outstanding loan amount as on 20th March 2020 was R 14 580 377 – 27 bearing interest of 1% per week monthly compounded and capitalised. [5]

[12]. Communication between the parties regarding this matter started off as far back as 1st April 2019. Various emails and letters were exchanged [6] yet the applicant did not engage in litigation. The applicant delivered letters by hand to the tenants of both the COURTSIDE SHOPPING CENTRE and the VILLIAGE MALL SHOPPING CENTRE. [7]

CIVIL LITIGATION BETWEEN THE 40TH , 41ST RESPONDENTS AND THE APPLICANT

[13] . From the papers filed by the applicant it is clear that there is a dispute about the repayment of money due and paid to the applicant. [8] This is confirmed by DOMINIQUE HAESE who deposed to the opposing affidavit on behalf of the 40th and 41st respondents. [9]

THE POSITION OF THE 40TH AND 41ST RESPONDENTS

[14]. The 40th and 41st respondent oppose the applicants application for the relief it is seeking.

[15]. The 40th and 41st respondents admit to have entered into the loan agreements with the applicant but then declared a dispute over the repayments of the loan and rent to the applicant.

[16]. The 40th and 41st respondents confirmed that attorney Laas addressed a letter to each tenant to make payment into the trust account of Laas attorneys.

[10]

[16]. The total value of the properties in this matter owed by the 40th and 41st respondents is R 66 354 166-00 for COURTSIDE SHOPPING CENTRE and R 39 001 127 – 00 for THE VILLAGE SHOPPING

CENTER and a total of R 105 million. [11] The purported outstanding amount is R 14 580 377 – 27.

[17]. The 40th and 41st respondents dispute the purported outstanding amount of R 14 580 377 – 27 due to the applicant. The documents in this regard were annexed to the applicants’ application.

[18]. There is no evidence by the applicant that the NOVA GROUP or its companies are insolvent or stand to be liquidated.

[19]. The 40th and 41st respondent allege that the full outstanding loan has been repaid to the applicant and that the applicant has been ‘overpaid’. For this reason the 40th and 41st respondent are instituting legal action to reclaim the money paid to the applicant which was not due to it.

THE URGENCY OF THE APPLICANTS APPLICATION

[20]. The applicant referred to its ‘prima facie’ right to the cession of the rentals, that irrecoverable harm would be caused to the applicant due to the COVID-19 pandemic and that the ‘balance of convenience’ favoured the applicant.

[21]. The applicant spend a lot of time on the history of the application and annexed an extensive number of emails, photos, articles’, return of service, portfolios and documents.

[22]. Making use of COVID-19 as a reason for urgency stand to fail outright as every financial institution, business and economical active entity or person is affected thereby. To make a special provision for the applicant would not be in the interest of justice and fairness and set a dangerous precedent.

[23]. The applicant allegation that the rent due must be paid to the applicant instead of the 40th and 41st respondents under circumstances where allegations is made without substance that the NOVA GROUP stand to be liquidated, which is

outright unfounded; there is no proof thereof. Section 30 and 31 of the Insolvency Act 24 of 1936 (as amended) makes provision for actions against creditors in such circumstances.

[24]. The submission made that the ‘balance of convenience’ favours the applicant is not a reason not to proceed with other legal action against the 40th and 41st respondents.

[25]. The allegations by the applicant that should the rent not be paid to it; it would result in the utilising the money so collected by the 40th and 41st respondent for other purposes. [12] These allegations are not corroborated in any way. It is clear from the papers that the NOVA GROUP is worth 2,2 Billion and owe multiple properties and capital.

[26] . The allegations referring to the tenants and rentals and cancel- lation of leases are uncorroborated without any evidence in this regard. [13] The applicant has no input in this regard other as speculation.

[27]. Allegations by the applicant regarding the possible liquidation of the NOVA GROUP is uncorroborated and without any evidence. [14]

[28]. The applicant cannot say what the future amount of rent would be. This in itself raises an eyebrow. [15]

EVALUATION OF THE APPLICANTS URGENT APPLICATION

[29]. Sub-rule (12)(b) provides for that in every ‘urgent application’ in terms of sub-rule (12)(a) the applicant shall firstly, set forth explicitly the circumstances which he avers render the matter ‘urgent’. Secondly, explicitly advance the reasons why he or she claimed that he or she could not be afforded substantial redress if he had brought the matter to court by way of an ordinary ‘non-urgent procedure’, instead of this ‘extraordinary urgent procedure’. The applicant must motivate its grounds for urgency in a manner which would persuade the court to confirm the urgency of the matter prior to proceeding with the merit of the application. If the applicant fails on urgency; that’s the end of the application. An applicant cannot ‘create his own urgency’ by simply waiting until the normal rules of the court could no longer be applied.[16] In this regard one year lapsed since 1st April 2019 until now.

[30]. The first aspect to deal with is the discrepancies with the outstanding loan amounts vis-à-vis the allegation that applicant has been overpaid by the 40th and 41st respondents which legal action is or stand to be imposed.

[31]. Secondly the interference of the applicant with the tenants of the 40th and 41st respondents demanding that rent must be paid to the attorney of the applicant. This in itself leads to the applicant taking the law into its own hands by means of the attorney of the applicant.

[32]. Thirdly that the 40th and 41st respondents did make payments to the applicant of money towards the loan received from the applicant. In this regard the outstanding loan amount (which is disputed by the 40th and 41st respondents) is not specifically disclosed by the applicant. Read herewith the 40th and 41st respondents have enough security to satisfy the applicants’ outstanding amount, if so, after the litigation has been finalised by the parties in a court of law.

[33]. The allegations by the applicant regarding the possible liquidation of the 40th and 41st respondents and the effect on the tenants etc has no factual evidence to support such allegations.

[34]. There is no direct and / or serious infringement of any human rights of neither the applicant, nor any irreparable harm caused to or any threats to the applicant which warrant a ‘rule nizi’ as ‘urgent relief’ in this instance. There are no life threatening aspects or vis major in this application which would dictate that an ‘urgent rule nizi’ should be issued in favour of the applicant.

[35]. It is my view that grating a ‘rule nizi’ under these circumstances would not be in the interest of justice and fairness towards the 40th and 41st respondents. I am of the view that the 40th and 41st respondents should be allowed to collect the rent and to make payments to the applicant if and when required.

[36]. In my view ‘the balance of probabilities’ more likely favour the position of the 40th and 41st respondents in this application.

[37] It must be considered that the applicant engaged with the 40th and 41st respondent since 1st April 2019 in this regard. The applicants application was only issued on 4th June 2020, some one year [less the lock down as from 25 March 2020] after the initial engagement with between the applicant and the 40th and 41st respondents started. The question to be answered is why did the applicant waited so long before it instituted legal action against the 40th and 41st respondents? The applicant does not explain why it waited one year before instituting legal action against the 40th and 41st respondents (excluding the lock-down period).

[38]. In the case of Trustees BKA, Besigheidstrust v ENCO Produkte en Dienste [17] Van Zyl J held the following –

‘Soos tereg deur mnr Marais, namens die Respondent, betoog, is die blote feit dat onherstelbare skade gely word egter nie genoegsaam om ‘n saak vir dringendheid uit te maak nie. Dit mag wel ‘n grond daarstel vir ‘n aanspraak op ‘n interdik, maar die aansoek as sodanig word nie daardeur noodwendig dringend gemaak nie.’

[39]. I was referred by counsel or the applicant to African Dawn Property Finance 2 (Pty) Ltd v Dreams Travels and Tours CC and others [18] which case only dealt with the interest rates charged in agreements; nothing else. For the remainder of the arguments by the applicant this case has no influence or reference.

[40] Finally there are other methods and actions of which the applicant could have embarked upon to achieve its aim other as to bring an urgent application in the way it had. Interestingly enough, there the application is about 30 pages in total of which only a few paragraphs has been devoted to the heading ’URGENCY’. The remainder of nearly 450 pages contain letters, photos, emails and portfolios. Reference was made to emails from one mr Myburgh which is not under oath and annexed to the applicants application. Reference was made to the ‘in duplum rule’ which in my view is speculation and not applicable in this application. Arguments were submitted regarding the financial status of the 40th and 41st respondents which is clearly based on financials of 2019, some one year ago. The valuations of the properties of the 40th and 41st respondents were questioned but the valuations was included in the bundles and confirmed by Miss Bruyns (the affidavit was ruled admitted). The applicant did not produce or annexed a different valuation of the fixed properties on his behalf. Allegations regarding being commercially insolvent was not corroborated other as to refer to financial statements of 2019; nothing more.

[41]. I have mentioned above that the heads of argument on behalf of the applicant does not specifically deal with urgency other as a general referral to ‘urgency’ in a ‘broad sense’.

[42]. In conclusion, the applicant has not put a single factor before the court to warrant its urgency in this application. It seems more likely to have the ‘last bite at the cherry’ so to speak before it is involved in the litigation with the 40th and 41st respondents regarding the ‘over-payment’ of the loans granted by the applicant to the 40th and 41st applicants. It would be unfair to order the 40th and 41st respondents to make payment of purported monies (rent) to the applicants’ attorney where after litigation would follow. The

applicant had insight into the balance sheets [19] of the 40th and 41st respondents, the valuation of the properties [20] and has adequate surety but yet engage in this urgent application.

[43]. Urgent applications are not granted based on such actions which consists of uncorroborated allegations of potential financial loss such as in this application read with the allegations of the tenants and their faith. One cannot assume or speculate what is going to happen; facts and corroboration is required to succeed.

COST

[44]. It is trite that cost should follow in favour of the successful party. I am of the view that in this instance the applicant requested cost on attorney-own-client-scale whereas the 40th and 41st respondents requested cost to be awarded on a party-and-party scale.

[45]. Having regard to the case of the applicants urgent application against the 40th and 41st respondents, I am of the view that the applicant should be liable to pay the cost of the 40th and 41st in this application.

ORDER

1. The applicants’ urgent application is ‘’struck off’’ the roll due to lack of ‘urgency’.

2. The applicant to pay the cost of the 40th and 41st respondent on a party-and-party scale.

H.C. JANSEN VAN RENSBURG

ACTING JUDGE OF THE HIGH COURT OF SOUTH AFRICA

MBOMBELA DIVISION

DATE OF HEARING : 11th JUNE 2020

DATE OF JUDGMENT : 15th JUNE 2020

SENT ELECTRONICALLY DUE TO COVID-19 REGULATIONS

THE APPLICANT COUNSEL FOR APPLICANT : ADV LEATHERN (SC) 083 601 8208 Email: ml@clubadvocates.co.za LAAS DOMAN INC E mail : laas-am@law.co.za C/O CHRISTO SMITH ATTORNEYS INC GROUND FLOOR THE OUTPOST CENTRE CNR OF FERREIRA & VAN DER MERWE STREET NELSPRUIT BY EMAIL : chjristo@csprok.co.za Cell : 060 497 2512 40TH AND 41ST RESPONDENTS COUNSEL FOR THE 40TH AND 41ST RESPONENTS : ADV LOUIS HOLLANDER 082 889 2770 EMAIL : lhol.mweb.co.za FABER COERTZ ELLIS AUSTIN INC EMAIL: Melissa@houghbremner.co.za REF : MR BREMNER/mar/F11/2020 (F1158)

[1] Page 46

[2] Page 54.

[3] Page 84.

[4] Page 88 to 107.

[5] Page 29 para 6.37 and page 119.

[6] Pages 110 to 340 including annexures.

[7] Page 147 to 163, page 297 to 334 return of service and page 353 para 38 to 39.

[8] Page 182 to 191.

[9] Page 352 para 34 to 37 and page 356 para 50.

[10] Page 353 para 38 and 39.

[11] Annexure DH 2 and 3 to the opposing affidavit.

[12] Page 42 para 16.4. to 16.7.

[13] Page 43 para 18.2 18.2.1.

[14] Page 42 para 18.3.1.

[15] Page 44 para 18.4.3.

[16] Schweizer Reneke Vleis Mpy (Edms) Bpk v Die Minister van Landbou 1971 1 PH F11 (T); Twentieth Century Fox Film Corp v Anthony Black Films (Pty) Ltd 1982 (3) SA 582 (W); Bandle Investments (Pty) Ltd v Registrar of Deeds 2001 (2) SA 203 (SE) 213; Queenstown Girls High School v MEC for Education, Eastern Cape, and Others 2009 (5) SA 183 (Ck) par 11; Edrei Investments 9 Ltd (In Liquidation) v Dis-Chem Pharmacies (Pty) Ltd 2012 (2) SA 553 (ECP).

[17] 1990 (2) SA 102 (TPD) at 108 D – E.

[18] 2011 (3) SA 511 (SCA); [2013] 3 All SA 345 (SCA) [2011] ZASCA 45; 234/2010 (30March 2011).

[19] Page 412 and 413.

[20] Page 409.