Uzima Property Investments 1 (Pty) Ltd v Masmagnet CC (45879/2016) [2017] ZAGPJHC 433 (13 November 2017)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 45879/2016

Not reportable

Not of interest to other judges

Revised.

13/11/2017

In the matter between:

UZIMA PROPERTY INVESTMENTS 1 (PTY) LTD Defendant/Applicant

and

MASMAGNET CC Plaintiff/Respondent

JUDGMENT

MODIBA, J:

[1] This is an opposed application in terms of Rule 28(4) for the amendment of the plea filed by Uzima Property Investments (Uzima)

dated 9 September 2016 in defence of the summons issued by Masmagnet CC (Masmagnet).

[2] The issue to be determined is whether Uzima has made out a case for the amendment of its plea in terms of rule 28 (4). Masmagnet

opposes the application on the basis that if allowed, the amendment would render Uzima’s plea excipiable.

[3] Masmagnet’s cause of action arises from a contract for the sale and purchase of immovable property (the contract) in terms of which Uzima sold to Masmagnet certain immovable property. Masmagnet seeks to recover money it paid to Uzima allegedly in the mistaken belief that the money was due when Uzima demanded it.

[4] Masmagnet alleges that the property is a sectional title unit. Uzima was the developer of the scheme. Uzima demanded payment of the purchase price prior to the sectional title register for the sectional title scheme being opened. Masmagnet made payments as demanded by Uzima. It is these payments that Masmagnet seeks repaid. I pause to mention that Uzima’s demands for payment were consistent with clause 2 of the contract which made provision for progressive payments of the purchase price commencing on the date of signature and terminating 3 months after Masmagnet takes occupation of the property. Masmagnet alleges that this constitutes a contravention of section 26(1) of the Alienation of Land Act, 68 of 1981 (“the ALA”).[1]

[5] Uzima purported to cancel the agreement on the basis that Masmagnet failed to pay the purchase price for the property.

Masmagnet alleges that as the developer of the scheme, Uzima was not entitled to claim payment of the purchase price directly prior to the sectional title register being opened. Therefore Uzima’s demand for payment was accordingly unlawful, and constituted a repudiation of the contract.

[6] Uzima refuses to repay money claimed by Masmagnet. It contends that the money constitutes its damages pursuant to the purported

cancellation of the contract.

[7] Masmagnet accuses Uzima of seeking to evade the provisions of section 26(1) (a) of the ALA by pleading that the payments demanded

by it were in respect of the building to be constructed, and that the price payable for the unit would only be demanded and payable when ownership of the unit is actually transferred to Masmagnet. Uzima pleaded in its plea dated 9 September 2016, that the contract should be extensively rectified to reflect two agreements: one for the sale of the unit, and the other for the construction of the building. Uzima also pleaded that the building agreement is not subject to the provisions of the ALA, and that as such, the amounts demanded pursuant to the building agreement do not conflict with the provisions of the ALA. Masmagnet delivered a notice to remove cause of complaint on 26 September 2016, raising deficiencies in the plea.

[8] In response, Uzima delivered a notice of amendment on 15 October 2016, in which it set out the scope of the rectification it seeks more fully. Masmagnet has objected to that amendment on the basis that if allowed, it would render the plea vague and

embarrassing.

[9] The contract appears to have a number of deficiencies that have landed the parties in their present predicament. It is not necessary that I enumerate these. If the parties intended the merx being sold to be a sectional title unit, by making provision for progressive payments directly to Uzima, prima facie the contract is in conflict with section 26(1) of the ALA. If the parties intended to enter into a contract for the sale of land and a building contract as alleged by Uzima, prima facie, periodic payments in respect of the latter contract would not violate the ALA. What appears prima facie from Masmagnet’s particulars of claim, Uzima’s filed plea and proposed amendment to the plea is that the contract as drafted does not reflect the parties’ intention. The parties seem to be attempting to unravel the consequences of a contract that does not reflect their intention. To do so it appears that the court ought to interpret the contract to give effect to its meaning. Masmagnet contends for an interpretation that favours its version. It is on that basis that it is objecting to the amendment. To sustain Masmagnet’s objection, it impels me to find that the merx is a sectional title unit; therefore the proposed amendment will violate the Sectional Title Act. Promoting such an interpretation solely on the wording of clause 1 and completely ignoring the wording in clause 2 would not only be inappropriate, it would fly in the face of the trite principles for the interpretation of contracts which require the court to have regard to the grammatical meaning of words used in the contract, as well as its context and the purpose for which it was concluded. The court hearing an application for an amendment is not placed to interpret such a contract. Its interpretation is a triable issue for determination by the trial court.

[10] The principles regulating the amendment of pleadings are trite. A litigant may amend his or her pleadings at any stage of the proceedings before judgment (Rule 28(10)).[2] A court hearing an application for an amendment has a discretion to grant it. Such discretion must be exercised judiciously. Further,

an amendment should not be allowed if it would render the pleading excipiable.[3] The Constitutional Court stated as follows in Affordable Medicines Trust & Others v Minister of Health & Others[4] at paragraph 9:

“The practical rule that emerges – is that amendments will always be allowed unless the amendment is mala fide – or unless the amendment will cause an injustice to the other side which cannot be cured by an appropriate order for cost, or unless the parties cannot be put back for purposes of justice in the same position as they were when the pleading which it is sought to amend was filed – the question in each case, therefore, is, what do the interest of justice demand?”

[11] Uzima has pleaded the rectification of a contract to reflect a contract for the sale of land and a building contract. If the

rectification succeeds, Uzima’s plea based on the rectified contract would not violate ALA and therefore would not render the plea excipiable as contended by Masmagnet.

[12] If allowed, the proposed amendment will ensure a proper ventilation of the issues to permit a proper consideration of the

triable issue articulated above. Disallowing the amendment will afford Masmagnet an unfair advantage over Uzima, by trumping the

contractual interpretation preferred by the later and promoting the interpretation preferred by the former without any regard to evidence as to the context and purpose of the contract and the conduct of the parties before and after the contract was concluded.

[13] It is not Masmagnet’s case that the proposed amendment is mala fide, or that it would cause an injustice. Neither is it alleged that the amendment will have the effect that the parties cannot be put back for purposes of justice in the same position as they were when the pleading sought to be amended was filed.

[14] The primary object of allowing an amendment is to obtain a proper ventilation of the disputes between the parties and to determine the real issues between them so that justice may be done.[5] The proposed amendment constitutes a triable issue. It therefore falls within the object of allowing amendments.

[15] In the premise, the application stands to succeed with the costs of opposition.

ORDER

1. The application succeeds.

2. The respondent shall file its amended pages within 10 days of this order.

3. The respondent shall pay the costs of opposition.

________________________________________

MS. L.T. MODIBA

JUDGE OF THE HIGH COURT

For the Applicant

G F Heyns

Instructed by

Le Roux & Du Plessis Attorneys

For the Respondent

Mr A O Cook SC

Assisted by

Ms F R Mc Adam

Instructed by

Prince Mudau & Associates

Date of hearing:

30 October 2017

Date of judgment:

13 November 2017

[1] Section 26 (1) reads “No person shall by virtue of a deed of alienation relating to an erf or a unit receive any consideration

until- (a) Such erf or unit is registrable; and (b) In case the deed of alienation is a contract required to be recorded in terms of section 20, such recording has been effected.”

[1] Section 26 (1) reads “No person shall by virtue of a deed of alienation relating to an erf or a unit receive any consideration

until-

(a) Such erf or unit is registrable; and

(b) In case the deed of alienation is a contract required to be recorded in terms of section 20, such recording has been effected.”

[2] Moolman v Estate Moolman 1927 CPD 27 at page 29.

[3] Cross v Ferreira 1951 (2) SA 443 (C) at 449G and 450E-F.

[4] 2006 (3) SA 247 (CC).

[5] Blaauwberg Meat Wholesalers CC v Anglo Dutch Meats (Exports) Ltd 2004 (3) SA 160 (SCA) at paragraph 12.