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South Africa Judgment

South Gauteng High Court, Johannesburg

Mokone v Tassos Properties CC and Another (2012/12229) [2013] ZAGPJHC 197 (11 June 2013)

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01

Holding and result

The court held that the plaintiff's particulars of claim, in respect of the main claim, lacked the necessary averments to sustain a cause of action. The right of pre-emption does not create a binding sale agreement but only an obligation to offer the property for sale. Since the property had already been transferred to the second defendant, the relief sought against the first defendant was not competent. Regarding the alternative claim for damages, the particulars of claim did not comply with Rule 18(10) as the plaintiff failed to set out the basis and calculation of the alleged losses, making it impossible for the defendants to reasonably assess the quantum. Accordingly, the particulars of claim were set aside and the plaintiff was granted leave to amend.

Court disposition

Plaintiff's particulars of claim set aside; plaintiff granted leave to amend within 20 days; plaintiff to pay costs.

Orders

  • The plaintiff's particulars of claim are hereby set aside.
  • The plaintiff is granted 20 days from date of this order to amend her particulars of claim.
  • The plaintiff is ordered to pay the costs of this application.

02

Material facts

Parties

Mokone, N J

Plaintiff

Tassos Properties CC

Defendant

Blue Canyon Properties 125 CC

Defendant

Amounts and remedies

  • Purchase Price of Property: ZAR 558,866
  • Claimed Damages (potential Loss of Income): ZAR 5,000,000
  • Claimed Damages (loss of Business and Goodwill): ZAR 4,000,000

03

Procedural history

  1. Posture

    Exception Application / Application to Set Aside Particulars of Claim and Compel Amendment

04

Questions and positions

Legal issues

Party arguments

Applicant
The defendants argued that the particulars of claim are excipiable because the lease agreement relied upon had lapsed before the institution of action, the exercise of a right of pre-emption does not create a binding sale agreement, and the relief sought is incompetent as the property had already been transferred to the second defendant. They further contended that the damages claim fails to comply with Rule 18(10) as it does not set out the basis or calculation of the alleged losses.
Respondent
The plaintiff maintained that she had a valid right of first refusal under the lease and that she exercised this right, thereby entitling her to claim transfer of the property or damages. She attempted to amend her particulars of claim to address the lapsing of the lease and to specify the heads of damages, but did not provide details of the calculation or basis for the amounts claimed.

05

Court’s reasoning

  1. 01

    Owsianick v African Consolidated Theatres (Pty) Limited 1967 (3) SA 310 (A) at 319A–320H

    A right of pre-emption does not compel the grantor to sell but creates an obligation to offer the property to the grantee for sale.

  2. 02

    Uniform Rules of Court, Rule 18(10)

    Rule 18(10) requires a plaintiff to set out damages in a manner that enables the defendant to reasonably assess the quantum thereof.

06

Ratio, limits and disposition

Ratio decidendi

The court held that the plaintiff's particulars of claim, in respect of the main claim, lacked the necessary averments to sustain a cause of action. The right of pre-emption does not create a binding sale agreement but only an obligation to offer the property for sale. Since the property had already been transferred to the second defendant, the relief sought against the first defendant was not competent. Regarding the alternative claim for damages, the particulars of claim did not comply with Rule 18(10) as the plaintiff failed to set out the basis and calculation of the alleged losses, making it impossible for the defendants to reasonably assess the quantum. Accordingly, the particulars of claim were set aside and the plaintiff was granted leave to amend.

Obiter and limits

  • The court noted that dividing the damages into heads such as loss of income and goodwill, without explaining the calculation or basis, is insufficient for compliance with Rule 18(10).
  • The plaintiff must provide sufficient detail in her amended particulars of claim to enable the defendants to assess the quantum of damages claimed.

Court disposition

Plaintiff's particulars of claim set aside; plaintiff granted leave to amend within 20 days; plaintiff to pay costs.

  • The plaintiff's particulars of claim are hereby set aside.
  • The plaintiff is granted 20 days from date of this order to amend her particulars of claim.
  • The plaintiff is ordered to pay the costs of this application.

Source and reliance status

South Gauteng High Court, Johannesburg

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Judgment text

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Source document

South Gauteng High Court, Johannesburg

Judgment

[2013] ZAGPJHC 197

IN THE SOUTH GAUTENG HIGH COURT, JOHANNESBURG

(REPUBLIC OF SOUTH AFRICA)

CASE NO : 2012/12229

In the matter between:

MOKONE, N J Plaintiff/Respondent And

TASSOS PROPERTIES CC First Defendant/First Applicant

BLUE

CANYON PROPERTIES 125 CC Second Defendant/Second Applicant

JUDGMENT

KOLBE AJ:

INTRODUCTION

[1] I shall for convenience refer to the parties as in the main action.

[2] This is a twofold application by the Defendants in terms of Rules 23 and 30.

[3] On 4 April 2012, the Plaintiff caused summons to be issued against the Defendants in which she alleged that she had leased certain premises from the First Defendant in terms of an agreement which granted her the right of first refusal to purchase the leased premises.

[4] It is further alleged that on 15 July 2009, in breach of the lease agreement, the First Defendant sold the property to the Second Defendant for R558 866,00. .

[5] The Plaintiff then avers that on 27 January 2012, she exercised her right of pre-emption, tendered to pay the purchase price of R558 866,00 to the First Defendant and that consequently a valid and binding agreement of the sale exists between the Plaintiff and the First Defendant.

[6] The Plaintiff then claims an order directing the First Defendant to take all steps necessary to pass transfer of the said property to the Plaintiff, alternatively payment of the sum of R9 million constituting the damages suffered as a consequence of the First Defendant’s breach of the lease agreement.

NOTICES OF 22 JUNE 2012

[7] On 22 June 2012, a notice of exception to the Plaintiff’s Particulars of Claim in terms of Rule 23 as well as a notice ito Rule 30 to remove a cause of complaint was served on the Plaintiff.

[8] In the notice ito Rule 30 it is pointed out that the Plaintiff’s setting out of her alleged damages suffered, does not comply with Rule 18 (10) of the Rules of this Court.

[9] In the notice of exception, the following three grounds are set out on the basis of which the Particulars of Claim, that is as far as the main claim is concerned, are excepted to:

[9.1] the Plaintiff relies on clause 6 of a lease agreement attached to the Particulars of Claim which on the face of it has lapsed on 28 February 2005, before institution of action;

[9.2] the exercise of a right of pre-emption does not create a valid agreement and the Plaintiff’s claim therefore fails to disclose a cause of action; and

[9.3] the Plaintiff claims that the First Defendant takes all steps to transfer the property to the Plaintiff whereas, according to Annexure “D” to the Particulars of Claim, the property had been transferred to the Second Defendant and the relief sought is therefore not competent.

[10] On 4 July 2012, the Plaintiff caused a notice of intention to amend her Particulars of Claim to be served on the Defendants in which the issue of the lapsing of the lease agreement is dealt with.

[11] On 21 August 2012, the Plaintiff caused a further notice of intention to amend her Particulars of Claim to be served on the Defendants in which she divides the claimed amount into two heads, being R5 million for potential loss of income and R4 million as loss of business and goodwill.

THE EXCEPTION TO THE MAIN

CLAIM

[12] The granting of a right of pre-emption as opposed to an option does not compel the grantor of the right to sell the property. It merely creates the obligation to offer the property to the grantee for sale.

[13] The Plaintiff would only be entitled, as against the First Defendant, to enforce a right that the First Defendant offers the property to the Plaintiff for sale.[1]

[14] Furthermore, the Plaintiff seeks against the First Defendant transfer of the property whereas it is alleged in the annexure to the Particulars of Claim that the property had been transferred to the Second Defendant.

[15] In my view the Plaintiff’s Particulars of Claim, with respect to the main claim, lacks averments necessary to sustain a cause of action against the First and Second Defendants and the relief claimed against the First Defendant, in any event, not competent.

NON_COMPLIANCE WITH RULE 18 (10)

[16] As already stated, the Plaintiff, in a notice of intention to amend dated 19 August 2012, simply divides the claimed amount into two heads, namely R5 million for potential loss of income and R4 million for loss of business and goodwill.

[17] However, the Plaintiff does not state how these amounts are calculated.

[18] Rule 18(10) of the Rules of Court requires of a Plaintiff to set out the damages in a manner as will enable the Defendant to reasonably assess the quantum thereof.

[19] I agree with the submission on behalf of the Defendants that the proposed amended Particulars of claim , with respect to the alternative claim, does not comply with the provisions of Rule 18 (10) in that Plaintiff fails to state:

[19.1] on which figures it bases its calculation of the potential loss of income;

[19.2] what the Plaintiff’s income was;

[19.3] for which period the potential losses were calculated;

[19.4] how the goodwill was calculated or what is meant by goodwill.

[20] Therefore conclude that with respect to the main claim, the Particulars of Claim lack averments necessary to sustain a cause of action and the relief claimed against the First Defendant not competent and with respect to the alternative claim that the Particulars of Claim do not comply with Rule 18(10) of the Rules of Court which requires of a Plaintiff to set out its alleged damages in a manner as will enable the Defendant to reasonably assess the quantum thereof.

[21] In the result I make the following order:

1. The Plaintiff’s Particulars of Claim are hereby set aside.

2. The Plaintiff is granted 20 days from date of this order to amend her Particulars of Claim.

3. The Plaintiff is ordered to pay the costs of this application.

KOLBE AJ

[1] See : Owsianick v African Consolidated Theatres (Pty) Limited 1967 (3) SA 310 (A) at 319 A – 320 H

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Authorities

Authorities used by the court

Cases, legislation, regulations, and constitutional provisions identified in the available record.

Owsianick v African Consolidated Theatres (Pty) Limited 1967 (3) SA 310 (A)

Case cited

Uniform Rules of Court, Rule 18(10)

Legislation

Legislation referenced in the available case record.

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