Colchester Zoo SA Investments (Pty) Ltd v Weenen Safaris CC (2386/07) [2007] ZAKZHC 24 (16 October 2007)

IN THE High Court OF SOUTH AFRICA

NATAL PROVINCIAL DIVISION

CASE NO : 2386/07

In the matter between :-

COLCHESTER ZOO SA INVESTMENTS (PTY) LTD Applicant

and

WEENEN SAFARIS CC Respondent

JUDGMENT

delivered on 16 October 2007

MOOSA AJ

The applicant seeks a declaratory order with regard to the validity of a written agreement of option to purchase, together with an order directing the Respondent to take all reasonable steps to obtain the relevant approvals, and an interdict to preserve the property.

In terms of the written agreement:-

(a) the Respondent granted to the Applicant the sole, indivisible and irrevocable right and option to purchase a game fishing farming business comprising the immovable property described in the agreement;

(b) the option may only be exercised after the approvals referred to in clause 3 had been obtained to subdivide the land;

(c) the option shall expire on the 30th day after notification by the Respondent to the Applicant that the approvals had been granted;

(d) the Respondent undertook to do all things necessary to finalise the application for subdivision as soon as possible and by no later than the 30th June 2006;

(e) the terms and conditions of the proposed sale are contained in Annexure “B” to the agreement.

The Respondent lodged an application for the approval by the Minister of Agriculture of the subdivision.

The Respondent however failed to lodge a water certificate which was a requirement for the application. The Respondent thereafter decided not to pursue the application.

On 10th November 2006 the Respondent’s attorney informed the Applicant’s attorney that the Respondent no longer considered the option agreement to be of any force or effect and did not consider bound by it.

(a) The Respondent contends that the agreement of option is void and unenforceable because it offends against the prohibition contained in section 3(e) (i) of the Subdivision of the Agricultural Land Act, No 70 of 1970.

(b) The subsection provides that agricultural land shall not be sold or advertised for sale unless the Minister has consented in writing.

The Applicant has argued that an option is not hit by the prohibition referred to above and that the subsection makes no reference to an option.

The Applicant submitted that in our law, parties are free to arrange their affairs so as to remain outside the provisions of the statute.

See: Michu v Maise Board 2003 (6) SA 459 (SCA) at 464B

The main issue that arises is whether the agreement in terms of which an option was granted to the Applicant offends the case and provisions of Section 3(e)(i) of the Subdivision of the Agricultural Land Act No. 70/1970 (“the Act”).

Section 3 of the Act when it was originally enacted and came into effect of 02nd January 1971 provided as follows:-

“Subject to the provisions of Section 2 –

agricultural land shall not be subdivided; no undivided share in agricultural land not already held by any person, shall vest in any person; no part of any undivided share in agricultural land shall vest in any person if such part is not already held by any person;

unless the Minister has consented in writing to the subdivision or vesting concerned.”

The Respondent’s Counsel has argued that the scope of the prohibition in Section 3 of the Act has been considerably widened, subsequently and most notably in this regard are:-

(a) the introduction of subsections 3(d), (e) and (f), by Act 55 of 1972 which took effect on 02nd June 1972; and

(b) the introduction of an extended definition of sale by Act 18 of 1981 which came into effect on 04th March 1981.

The Respondent’s Counsel submitted that whereas originally, the prohibition focused primarily on the Act of Subdivision of Agricultural land itself and the vesting of subdivisions of such land, the legislature through these amendments also sought to prohibit other Acts and practically steps which typically precede the actual subdivision of Agricultural Land.

The Respondent’s Counsel submitted that the Act gives extended definitions to the words “advertise and sale” .The Respondent’s Counsel argued that it is significant that although options and rights or pre-emption in respect of land are not expressly mentioned in the formalities legislation, the Courts have held that the requirements of such legislation also apply to such transactions; the Court was referred to the case of Hirschowitz v Moolman and Others 1985 (3) SA 739 A at 767H. It was argued that the reason for this is self-evident, that is that the object and purpose of both options and rights or pre-emption are the sale (alienation) of the land in question.

In that case, the learned Judge Cortbett JA stated:

“It seems to me that in order that the holder of a right of pre-emption over land should be entitled, on his right maturing and on the grantor failing to recognize or honour his right, to claim specific performance,(assuming that he has such a right), the right of pre-emption itself should comply with the Formalities Act. Were this not so, the anomalous situation would arise, that on the strength of a verbal contract, the grantee of the right of pre-emption could, on the happening of the relevant contingencies, become the purchaser of land. This would be contrary to the intention and objects of the formalities Act.”

It was argued by the Respondent’s Counsel that the same logic applies in this case.

It was argued by the Applicant that the order sought related only to an option which may not materialise into a purchase and sale agreement. However, in the light of the judgment of His Lordship Corbett JA in the case of Hirtschowitz v Moolman and Others, I am of the view that the written agreement of option annexed to the papers cannot be held to be valid and binding between the parties in the light of the provisions of the Subdivision of Agricultural Land Act.

Even if I am wrong in the conclusion referred to below, Section 19 (1)(a)(iii) of the Supreme Court Act No. 15 of 1959 provides that:

“A provincial or local division shall have jurisdiction … in relation to all causes arising … and all other matters of which it may according to law, take cognizance and shall,… have power … in its discretion and at the instance of any interested person to enquire into and determine any existing, future of contingent right or obligation, notwithstanding any right or obligation, notwithstanding that such person cannot claim any relief consequential upon the determination.”

and, having regard to the judgment in the Appellant Division case of E parte Mill 1963 (1) SA 754 (AD), (judgment of STEYN JA. Chief Justice), I have exercised my discretion towards not granting a declarator in the circumstances of the facts set out in this application.

I also refer to Shoba v Temporary Police Camp, Wagondrift Dam 1995 (4) SA 1 (AD) 14 where CORBETT CJ stated:-

“I agree with Hurt J. Generally speaking, the Courts will not, in terms of s 19(1) (a) (iii), deal with or pronounce upon abstract or academic points of law. An existing or concrete dispute between persons is not a prerequisite for the exercise by the Court of its jurisdiction under this subsection, through the absence of such a dispute may, depending on the circumstances, cause the Court to refuse to exercise its jurisdiction in a particular case (see ex parte Nell 1963 (1) SA 754 (A) at 759H-760B). But because it is not the function of the Court to act as an adviser, it is a requirement of the exercise of jurisdiction under this subsection that there should be interested parties upon whom the declaratory order would be binding (Nell’s case, at 760B-C). In Nell’s case, supra at 759A-B, Steyn CJ referred with approval to the following statement by Watermeyer JA in Durban City Council v Association of Building Societies 1942 AD 27, at 32, with reference to the identically worded s 102 of the General Law Amendment Act 46 of 1935:

‘The question whether or not an order should be made under this section has to be examined in two stages. First the Court must be satisfied that the Applicant is a person interested in an “existing, future or contingent right or obligation and then, if satisfied on that point, the Court must decide whether the case is a proper one for the exercise of the discretion conferred on it.’”

The Defendant’s Counsel argued that there is particularly for the reasons set out in the Van Der Lith [2003] ZASCA 118; (2004 (3) SA 333 (SCA)) judgment, no scope for a restrictive interpretation of Section 3 of the Act. On the contrary, the true intention of the legislation with regard to the scope of the prohibition in Section 3 must be determined with reference to the wording thereof, but at the same time having due regard to the context and the purpose of such prohibition.

The Respondent’s Counsel argued it would be anomalous if Section 3(e)(i) of the Act were to be interpreted and applied on the basis that it leaves unaffected an option such as the one contained in the agreement.

The Respondent’s Counsel argued that clearly judicial policy requires that an interpretation be placed on Section 3(e)(1) of the Act which would encompass an option; further that such interpretation will also resonate with the approach followed by the Courts in interpreting the formalities legislation.

They were compelling and very lucid arguments by both Counsel, as well as very helpful Heads of Arguments by both Counsel.

In the end result, this Court comes to the conclusion that the written option document is covered by the definition of sale in the Subdivision of the Agricultural Land Act and accordingly, that the Applicant is not entitled to a declarator as sought.

Initially, the Respondent’s Counsel has also raised the issue as to whether a valid option document has been concluded but as I understood the argument, that point was not persisted in.

The last issue that arises from consideration is the costs incurred as a consequence of the postponement of the Application on 25th June 2007.

The adjournment was granted as a result of an application by the Applicant for an adjournment so that it could file a supplementary affidavit.

The Applicant’s Counsel has argued that in the end result, what was clarified in the supplementary affidavit was what the Applicant submitted initially.

However I am of the view, that the adjournment on 25th June 2007 was sought at the instance of the Applicant and an indulgence was sought by the Applicant to enable the Applicant to file a supplementary affidavit. The Applicant should therefore pay the costs occasioned by the adjournment.

In the end result, the following is the order that is made:-

(a) The application is dismissed with costs.

(b) The Applicant is ordered to pay the wasted costs occasioned by the adjournment on 25th June 2007.

_________________________

ACTING JUDGE M F MOOSA

DATE OF HEARING : 12 September 2007

DATE OF JUDGMENT : 16 October 2007

APPLICANT’S COUNSEL : Mr J A Ploos van Amstel, SC

INSTRUCTED BY : Deneys Reitz

c/o Tatham, Wilkes Inc.

200 Hoosen Haffejee Street

PIETERMARITZBURG

RESPONDENT’S COUNSEL : Mr C J Hartzenberg, SC

INSTRUCTED BY : Ven Nemeth & Hart Inc.

281 Pietermaritz Street