Fynbosland 435 CC v Torro ya Africa (Pty) Ltd and Others (1861/2011) [2011] ZANWHC 68 (15 December 2011)

NORTH WEST HIGH COURT, MAFIKENG

CASE NO.: 1861/2011

In the matter between:-

FYNBOSLAND 435 CC ….....................................................................Applicant

and

TORRO YA AFRICA (PTY) LTD ….............................................1st Respondent

MEC FOR HUMAN SETTLEMENT, PUBLIC SAFETY

AND LIASON, NORTH WEST …................................................2nd Respondent

NALEDI LOCAL MUNICIPALITY …...........................................3rd Respondent

JUDGMENT

LEEUW JP

Introduction

[1] The applicant approached the Court on an urgent basis seeking an order in the following terms:

“1. THAT the use of form and time periods as provided for by the Uniform Rules of Court be dispensed with and the matter be heard on an urgent basis in accordance with Rule 6(12) of the Uniform Rules of Court.

2. THAT the First Respondent, its employees, workmen, subcontractors and other persons claiming the right of possession of the township development known as Naledi Extension 25 (“the premises”) through the Respondents, be directed and ordered to immediately restore the undisturbed possession and control of the premises to the Applicant.

3. THAT the Sheriff or his deputy be authorised and directed to eject the First Respondent, its employees, workmen, subcontractors and other persons claiming the right of possession of the premises through the First Respondent from the premises, in the event of possession and control of the premises not having been restored to the Applicant within 24 (twenty four) hours from the date of service upon the Respondents and all other persons who may be found in possession or control of the premises of this order by the Sheriff or his deputy.

4. THAT the First Respondent be interdicted and restrained from interfering in whatever manner with the existing builder’s lien held by the Applicant over and in respect of the premises.

ALTERNATIVELY to prayer 4;

THAT the Applicant be directed to waive the existing builder’s lien which it enjoys over the premises upon the Third Respondent rendering security in the form of depositing an amount of R4,280,519.57 plus interest, calculated at 15,5% per annum from 1 June 2011 into the trust account of the Applicant’s attorneys of record, such security to remain in place, pending the outcome of arbitration proceedings to be instituted by the Applicant against the Third Respondent for the payment of the amount of R4,280,519.57 or for such other relief as the Applicant may be advised that it may be entitled to against the Third Respondent in respect of the building works on the premises.

5. THAT the First and Second Respondents are ordered, jointly and severally to pay the costs of the application, to be taxed on the scale as between attorney and client, alternatively and in the event that the Third Respondent opposes the application, then and in such event that the Respondents be ordered to pay the costs of the application jointly and severally, the one paying the other to be absolved.

6. THAT such further and/or alternative relief as this Honourable Court may deem just be granted to the Applicant.”

[2] The application is opposed by the first and second respondents. There is no notice to oppose the application filed on behalf of the third respondent. According to Ignatius Petrus Nieuwoudt, (Nieuwoudt) who is a sole member of the applicant, the mandament van spolie sought is in respect of the “unlawful infringement on the Applicant’s builder’s lien” which right is been interfered with by the first respondent who disturbed the applicant’s possession thereof. The second respondent is joined as a co-spoliator.

Factual Background

[3] It is common cause that on 30 November 2010, the applicant, who conducts business in the construction industry, was contracted to build low cost houses by the third respondent (“the Municipality”) on a portion of land known as Naledi Extension 25 and 28 respectively. In terms of their contract, applicant was to complete the low cost houses which were left incomplete by Khasu Engineering Services (Pty) Ltd (Khasu) which company was previously employed by the Municipality to undertake the project and was no longer involved because of a dispute that arose between the Municipality and Khasu. In addition to completing Khasu’s project, the applicant was contracted to build 3000 low cost houses and to install the required sewerage and water systems in Naledi Extension 25 and 28.

[4] The applicant commenced with the completion of the partially constructed houses as well as the water supply and sewerage lines in respect of some of the completed houses and had also erected a site office in the premises of Extension 25, and secured the area by encamping it where the various building materials were safely stored. Two site managers Messrs Anthony Louw (Louw) and Clarance Leornard Twiggie (Twiggie) are on site on a daily basis. Construction has not started in Extension 28.

[5] As per agreement with the Municipality, the applicant submitted its claims in a form of invoices to the Municipality for payment in respect of the completed houses. Some of the claims were paid by the Municipality but as at May 2011, despite demand, a total amount of R4, 280,519.57 remained unpaid, even though Mr Regardt de Vos (de Vos) who is the project manager of the Municipality, had certified that the amounts were due and payable.

[6] The applicant was allegedly informed by the responsible officers at the Municipality that failure to pay the claims was occasioned by the second respondent’s failure to provide additional funding to the Municipality for the completion of the project as well as for the payment of the amount owed to the applicant.

[7] Applicant further states that several letters were directed to the Municipality demanding payment without success. Presently the applicant is still awaiting arbitration processes to be convened in terms of its agreement with the Municipality. As a result of failure to pay by the Municipality, the applicant decided to suspend construction work on Naledi Extension 25 pending payment of the arrear amounts owed by Municipality, but exercised its right of retention over the buildings and structures it constructed, in order to secure the contract amount for expenses and claims incurred and work done.

[8] According to Nieuwoudt, on 2 September 2011, the first respondent entered the construction premises in Naledi Extension 25, with various staff members, off-loaded building materials, building equipment and machinery, three water tanks with a capacity of approximately ten (10) thousand litres each, and established a site plant and office which first respondent is in the process of fencing.

[9] Nieuwoudt further states that the staff members of the first respondent occupied the houses already constructed by applicant and connected electrical power to some of the units completed by the applicant. They removed all notice boards erected by applicant on the premises and shoved aside applicant’s building material in order to make space for the first respondent to set up its camp. It is further alleged that the first respondent connected water and sewerage lines to those installed by the applicant.

[10] Nieuwoudt contends that until 2 November 2011, he enjoyed undisturbed possession of the premises and that he “enjoys a builder’s lien over the completed and partially completed portions of the works insofar as the applicant has not been compensated for its value”.

[11] The first respondent avers, through its Director Frik Nel (Nel) that it was appointed by the second respondent to erect new houses and services on Naledi Extension 25 and 28, and that their contract does not include buildings and renovations of any of the low cost houses fully and partially built by the applicant.

[12] Nel further states that first respondent is not part of the dispute between the applicant and the Municipality and that it is not the first respondent’s intention to disturb the possession of the houses held by the applicant in Naledi Extension 25.

[13] The respondents do not dispute that the applicant has a builder’s lien over the property or houses which applicant has fully or partially constructed but contend that such builder’s lien is only in respect of the structures it built; but that it does not extend to the premises of the entire Naledi Extension 25.

[14] It is further not disputed by the first respondent that the applicant’s completed houses were occupied. Nel avers that it was only brought to first respondent’s attention, after it was served with this application, that some of its subcontractors occupied the houses without the first respondent’s knowledge and consent. He further asserts that the first respondent instructed its attorneys of record to tender an undertaking to the applicant that the houses will be vacated and will not be occupied.

[15] The first respondent further avers that in terms of its contract with the second respondent, its building operation is restricted to building new houses or residence units and that it has neither made any connections nor utilized any water and or sewerage lines installed by the applicant.

The Issues

[16] The issues to be decided are:

Whether the builder’s lien of the applicant extends to the completed and partially built structures together with the entire premises in Extension 25;

Whether or not the respondents have interfered or disturbed the applicant’s right to the builder’s lien.

Analysis of Issues

[17] To succeed in an application for mandament van spolie, the applicant must establish on a balance of probabilities that:

He or she was in peaceful and undisturbed possession of the thing; and

that he or she was unlawfully deprived of such possession. See LAWSA vol. 27 (First Reissue) par. 29; Bon Quelle (Edms) Bpk v Munisipaliteit van Otari 1989 (1) SA 508 (A); Telkom SA Ltd v Xsinet (Pty) Ltd 2003 (5) 309 (SCA)

[18] It is trite law that the purpose of mandament van spolie is to restore the status quo which prevailed prior to the illegal action of dispossession, irrespective of whether or not the dispossessed party was himself or herself in unlawful possession or use of the thing or property at issue. See Yako v Qana 1973 (4) SA 735 (A). In Administrator, Cape, and Another v Ntshwaquela and Others 1990 (1) SA 705 (AD), Nicholas AJA (as he then was) on p.717 at E-F held that “… The accepted principle is that the mandament van spolie envisages not only the restitution of possession but also the performance of acts, such as repairs and rebuilding, which are necessary for the restoration of the status quo ante”.

[19] I have alluded to the assertion by Nieuwoudt that the applicant seeks mandament van spolie based on the “unlawful infringement of the applicant’s builder’s lien” in that first respondent is depriving applicant of its undisturbed possession of the houses built by it.

[20] A builder’s lien is a right of retention over the building or structure which a builder has constructed or repaired to secure payment of the contract price. See LAWSA Vol.15 par.70 and the cases therein referred to. See also Wightman t/a JW Construction v Headfour (Pty) Ltd [2008] ZASCA 6; 2008 (3) SA 371 (SCA).

[21] The applicant exercises control over the property which is subject to its right to a lien. The lien entitles the applicant to his full contract price. Compare Beetge v Drenka Investments (Isando) (Pty) Ltd 1964 (4) SA 62 (WLD) where the court had to decide whether the applicant was in possession of the premises or the building. Ludorf J on p.69E held the view that “the whole question depends on the facts of each case, whether the workman is given possession for the purpose of the work”. The court went further to state on p.69H, that the applicant has shown on “a balance of probabilities that he was in lawful possession of at least the buildings erected by him and that he was unlawfully dispossessed of his jus retentionis by respondent”. Compare Muller and Another v Bryant & Flanagan (Pty) Ltd 1976 (3) JA 210 (D&C.L.D) at 219E-G. See also Hillkloof Builders (Pty) Ltd v Jacomelli 1972 (4) SA 228 (D&CLD) at 232F.

[22] It is not in dispute that the applicant has a builder’s lien on the buildings that it completed as well as those which are partly built at Naledi Extension 25. The lien is in respect of the outstanding payment for work done in respect of the houses referred to above.

[23] Nieuwoudt asserts that applicant had started with the building of structures abandoned by Khasu and as per its contract with the Municipality, was contracted to build the additional 3000 low cost units in both Extension 25 and 28. He further states that it had a site office as well as a secure area which encamped the building materials which were safely stored therein.

[24] The first respondent neither denies that it removed the notice boards erected by the applicant on the premises nor disputes that the building material of the applicant was shoved aside in order to make space for the first respondent to set up its camp.

[25] The applicant has suspended its construction of the buildings which are not completed, and those which are completed cannot be occupied. The fact that the applicant was contracted to build 3000 more houses in both Naledi Extension 25 and 28, which agreement was breached by either the Municipality and/or the second respondent, is a matter that cannot be redressed by an order of mandament ban spolie.

[26] Nieuwoudt pertinently states in paragraph 18 of his founding affidavit that he had completed or partly completed a total of the 365 low cost housing units which were left incomplete by Khasu and that these units are situated in “a portion of land known as Naledi Extension 25”, which he refers to as the premises. The fact that he has built houses in a portion of Naledi Extension 25 premises, does not necessarily extend his builder’s lien to the entire part of the premises where construction of the remainder of the housing units has not commenced.

[27] The builder’s lien only entitles the applicant to retain the property only of those units for which payment is still outstanding. Nieuwoudt stated in his founding affidavit that the “mandament van spolie is based on the unlawful infringement on the applicant’s builder’s lien”, not the portion of the premises on Naledi Extension 25 where the building construction has not yet commenced. If the first respondent embarks on a building construction in the same premises, without interfering with the work done by the applicant, the applicant cannot claim that the first respondent is interfering with its builder’s lien.

[28] The respondents have referred to payments which they allege were made to the applicant by the Municipality in respect of building work and professional services. This in an attempt to dispute the fact that the applicant holds a lien for professional services rendered on Naledi Extension 25.

[29] The allegations made by the first respondent in that regard cannot be relied upon in view of the fact that Nel cannot claim to have personal knowledge of the various payments made by the Municipality to the applicant.

[30] The second respondent has been joined as a co-spoliator on the basis that he entered into a contract with the first respondent to undertake the building of the 3000 low cost houses whilst the contract between the applicant and the Municipality is still subsisting.

[31] Matshidiso Cordelia Mogale (Mogale) who is a Director of Legal Services in the employ of the second respondent, avers that it did appoint the first respondent to build the low cost houses in Naledi Extension 25 and 28, but denies taking possession of any buildings in the possession of the applicant on the basis of his builder’s lien.

[32] There is nothing on record to suggest that the second respondent had instructed the first respondent or even contracted the first respondent to interfere with the applicant’s building construction or the applicant’s builder’s lien. The second respondent contracted the first respondent to build low cost houses in the Naledi Extension 25 and 28 premises. The respondents have expressed the view that in terms of the Constitution of the Republic of South Africa, the second respondent is enjoined to provide adequate housing to all its citizens and that if the applicant was to be granted an order restoring the entire premises of Naledi Extension 25 and 28 to the applicant pending the finalisation of its dispute with the Municipality, the constitutional obligation of the second respondent to provide housing to its citizens will be jeopardised. I agree with this submission.

[33] Nieuwoudt states in his founding affidavit that applicant has encamped a secure area where various building material are safely stored. According to him, the low cost houses constructed by him are located on the portion of land at Naledi Extension 25. It is not clear from his papers as to whether or not the applicant occupied the total area of Naledi Extension 25 where the houses were constructed. Although not clear from the papers, it is very much unlikely that the applicant would occupy the entire premises of Naledi Extension 25 where low cost houses are erected, in that even in the Notice of Motion, applicant in paragraph 1 thereof, refers to Naledi Extension 25 as a “township” development.

[34] The respondents, through Nel, contend that the area where it has commenced with the construction of the low cost housing, is detached from the applicant’s area, and that their operation does not in any way interfere with the builder’s lien held by the applicant against the Municipality. Nel also disputes the allegation that first respondent is utilising the infrastructure installed by the applicant. There is a dispute relating to the use of water and the sewerage line connection. The first respondent avers that it uses the connection for water from the Fire Department, which is a State Institution. The applicant asserts that the Fire Department is a division of the Municipality and that the “only potable (sic) water and sewerage line on Extension 25 had been constructed by the Applicant”.

[35] The onus is on the applicant to prove, on a balance of probabilities, that his lien extended to the entire premises of Naledi Extension 25 and not only a portion of land at these premises. See Beetge v Drenka Investments (Isando) (Pty) Ltd supra and Muller and Another v Bryant & Flanagan (Pty) Ltd supra.

[36] The first respondent has attached a map (FNA) indicating the site plan on Naledi Extension 25 which clearly shows that the housing units where the builder’s lien is operated are not affected by the first respondent’s intended construction work. Nel disputes this allegation, and contends that his lien extends to the entire premises and not only to the buildings.

[37] In order to decide a dispute of facts based on the affidavits, the Court has to rely on the facts asserted in the applicant’s affidavits which are admitted by the respondents as well as the averments made in the respondents’ affidavits. See Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 633 (A) at 634E to 635C.

[38] I am of the view that the applicant has been in peaceful possession of the houses or buildings erected by it including the place where its materials were stored for safety, but find that applicant has failed to establish, on a balance of probabilities, that it was in possession of the entire premises of Naledi Extension 25.

[39] Having decided that the applicant did not have a lien on the premises but rather on the buildings only, the second respondent cannot be held liable as a co-spoliator only on the basis that he entered into a contract with the first respondent to build houses whilst the contract between the applicant and the third respondent is still in existence. Compare Administrator, Cape, and Another v Ntshwaquela and Others supra. The unlawfulness of this agreement cannot be addressed through a spoliation order.

Urgency

[40] The respondents argue that this application is not urgent in view of the fact that, firstly, applicant’s claims for payment were submitted to the Municipality in May 2011. From that time, applicant did not take steps to recuperate its claim except through a letter of demand dated 3 August 2011. Secondly, in September 2011 the applicant became aware of the contract between the first and the second respondents to take over the erection of the remaining 3000 low cost houses;

Thirdly, on 25 October 2011, the applicant wrote a letter to the first respondent, warning first respondent to desist from its intended occupation of the premises which was probably to take place the following day;

Fourthly, the first respondent entered the premises at Naledi Extension 25 on 2 November 2011, which is the date when the first respondent’s employees occupied the completed unit which were subject to the applicant’s builder’s lien.

[41] The urgent application was only launched on the 10 November 2011 and enrolled for hearing on 24 November 2011. It is not clear as to when the undertaking to vacate the occupied units were made on behalf of the first respondent, but Nel states that applicant was aware of the occupation after it received this application, which, according to the return of service, is probably after the 11th November 2011. This is not disputed by Nieuwoudt. However, Twiggie asserts that as at 23 November 2011, the first respondent’s employees were occupying the houses and utilising the power connected and supplied by the applicant.

[42] There was an inordinate delay by the applicant to take action to prevent the first respondent from disturbing its lawful possession of the buildings or houses occupied as well as the utilisation of the infrastructure and there is no explanation from the applicants as to why this application was not launched either on the 2 November 2011 or soon thereafter. However, I find that for the purpose of the remedy of mandament van spolie sought, this application is of an urgent nature.

[43] I am of the view that the applicant has succeeded in establishing that it has a right or a builder’s lien over the low cost housing units erected by it as well as whatever infrastructure was installed by it. The dispute regarding the lien is between the applicant and the Municipality. The Municipality did not take issue with the applicant over this dispute. The first and second respondents cannot profess to have facts which can gainsay the applicant’s allegations in that regard. The first respondent has correctly, in my view, admitted that the applicant does have a builder’s lien over the houses and infrastructure constructed by it.

[44] I am not convinced that the applicant has not succeeded in proving on balance of probabilities, that its builder’s lien extends to the entire premises in Naledi Extension 25. It is a fact that the first respondent, through its employees and/or subcontractors have disturbed the lawful possession of the applicant’s builder’s lien.

[45] With regard to the second respondent, as a co-spoliator, it is common cause that the first respondent occupied the premises in Naledi Extension 25 and 28 at the instance of the second respondent. It was not its mandate in terms of the contract that the first respondent should disturb the builder’s lien held by the applicant. The dispute regarding occupation of the houses is a matter that has to be resolved between the applicant and the first respondent. The second respondent is not a co-spoliator with the first respondent in that regard.

[46] The applicant is not entitled to the alternative to the order sought in prayer 4 of the Notice of Motion, because there is nothing on record to suggest that the third respondent was involved in the contract entered into between the first and the second respondents.

I accordingly make the following order:

Order

The applicant was entitled to approach the Court on an urgent basis;

That the first respondent and its workmen, subcontractors and other persons interfering with the applicant’s right to a builder’s lien are directed to restore the applicant’s undisturbed possession of the 365 low cost units constructed by the applicant in the township development, Naledi Extension 25, and the secured area where the building material of the applicant is stored, as well as the sewerage and water connections installed by the applicant;

That, in the event of possession and control of the buildings and infrastructure not having been restored to the applicant as stated in paragraph 2 above, within 24 (twenty-four) hours of this order, the Sheriff or his deputy is authorised and directed to eject the first respondent, its employees, workmen, sub-contractors and other persons interfering with the applicant’s right to a builder’s lien as stipulated in paragraph 2 above;

That the first respondent and all other persons referred to in paragraph 2 above, are hereby interdicted and restrained from interfering in whatever manner with the applicant’s builder’s lien in respect of the property referred in paragraph 2 above;

The application against the second respondent is dismissed

Each party is ordered to pay its own costs.

__________________

M M LEEUW

JUDGE PRESIDENT OF THE HIGH COURT

APPEARANCES

DATE OF HEARING: 24th November 2011

DATE OF JUDGMENT: 15th December 2011

COUNSEL FOR APPLICANT: Advocate Hitge

COUNSEL FOR 1st RESPONDENT: Advocate N Davis SC

COUNSEL FOR 2nd RESPONDENT: Advocate Harms

ATTORNEYS FOR APPLICANT: Van Rooyen Tlhapi Wessels Inc.

ATTORNEYS FOR RESPONDENTS: Nienaber & Wissing Attorneys