Dlamini v Daryali Investments (Pty) Ltd and Others (1123 of 2017) [2018] SZHC 173 (16 August 2018)

IN THE HIGH COURT OF SWAZILAND

HELD AT MBABANE CASE NO. 1123/2017

In the matter between:

MKHULULI DLAMINI APPLICANT

and

DARYALI INVESTMENTS (PTY) LTD 1^ST RESPONDENT

PHESHEYA ZWANE 2^ND RESPONDENT

STANDARD BANK SWAZLAND LIMITED 3^RD RESPONDENT

REGISTRAR OF DEEDS N.O. 4^TH RESPONDENT

THE ATTORNEY GENERAL N.O. 5^TH RESPONDENT

REGISTRAR OF THE HIGH COURT N.O. 6^TH RESPONDENT

BARAKA INVESTMENTS (PTY) LTD 7^TH RESPONDENT

Neutral Citation : Mkhululi Dlamini vs Daryali Investments (Pty) Ltd and 6

Others (1123/2017) [2018] SZHC 173 (31 JULY 2018)

Coram : MABUZA – PJ

Heard : 18^T SEPTEMBER 2017

Delivered : 17 AUGUST 2018

SUMMARY

Civil Law – Civil Procedure - Applicant seeks declaratory order

that deed of sale of immovable property between the parties is null and void.

Civil Law – Immovable Property – That such be re-transferred

to the Applicant – Application fails with costs.

JUDGMENT

MABUZA -PJ

[1] The Applicant has made an application for an order as follows:

1. Interdicting the Respondents from alienating, selling, transferring,

encumbering or dealing with the land subject herein, in any way,

manner or form, pending finalization hereof.

3.1 That prayer 3 hereof operates forthwith as an interim order

pending finalization of this application.

2. Declaring the Memorandum of Understanding signed by the Applicant

and the 1^st Respondent as cancelled and of no force and effect, by virtue of the 1^st Respondent’s material breach thereof;

3. Declaring that the land subject-matter herein still belongs to the Applicant

unconditionally and free of any encumbrances and/or claims by the Respondents;

4. Directing the 4^th Respondent to do all that is necessary to have the immovable

property registered under the Applicant;

5. Alternatively that the 6^th Respondent sign the necessary documents to give

effect to the order of this Honourable Court;

6. That the 4^th Respondent expunge all records of the purported transfer of the

land from the Applicant to the 1^st Respondent;

7. Costs of suit.

[2] The application is opposed by the 1^st Respondent.

[3] The Applicant is an adult Swazi businessman of Manzini and the Director and Shareholder of the 7^th Respondent herein.

[4] The 1^st Respondent is Daryali Investment (Pty) Ltd a company with limited liability duly registered in terms of the Companies Act of Swaziland and having its principal office in Manzini, in the Manzini District.

[5] The 2^nd Respondent is Phesheya Zwane an employee of the 3^rd Respondent cited herein in his capacity as the agent and employee of the 3^rd Respondent.

[6] The 3^rd Respondent is Standard Bank Swaziland Limited (Mbabane Branch), a financial institution registered as such, having its palace of business in Mbabane.

[7] The 4^th Respondent is the Registrar of Deeds N.O. having its offices in Mbabane, in the District of Hhohho.

[8] The 5^th Respondent is the Attorney General, cited herein as attorney for the 4^th Respondent, carrying on business as such at 1^st Floor, Justice Building, Mbabane, in the District of Hhohho, Swaziland.

[9] The 6^th Respondent is the Registrar of the High Court N.O. cited herein in his/her official capacity as such and whose principal place of business is in the High court, Swaziland, Hospital Hill, Mbabane, in the District of Hhohho.

[10] The 7^th Respondent is Baraka Investments (Pty) Ltd, a limited liability company duly registered in terms of the Companies Act of Swaziland and having its principal place of business at Sidvokodvo, Manzini, in the Manzini District.

[11] Many facts were pleaded by the parties herein. I have tried to glean from those facts what appears to be the problem. The Applicant was initially the owner of Portion 48 (a Portion of Portion 26) of farm Nkonyeni III No. 523, situate in the District of Manzini Swaziland. (hereinafter referred to as the property). From the 20^th December 2016 the aforesaid property was transferred and registered into the name of the 1^st Respondent under Deed of Transfer No. 1050/2016.

[12] The said property was registered into the 1^st Respondent’s name subsequent to a memorandum of agreement entered into between the Applicant and the 1^st Respondent on the 13^th July 2016.

[13] The Applicant now wants all records of the purported transfer of the land from the Applicant to the 1^st Respondent expunged and to have the immovable property re-registered to the Applicant. The 4^th Respondent (Registrar of Deeds) has been cited in order to fulfill this purpose.

[14] Alternatively, that the 6^th Respondent (the Registrar of the High Court) sign the necessary documents to effect the order of this Court.

[15] The reason given for this application is that the 1^st Respondent breached the Memorandum of Understanding that was signed by the parties on the 13^th July 2016.

[16] Furthermore, it was argued on behalf of the Applicant that the Applicant had only agreed to sell to the 1^st Respondent a subdivided portion of the immovable property described in paragraph 11 supra.

[17] On the property is a refueling business (filling station) at Tri-Cash at Nkonyeni area along the Manzini/Nhlangano Yithi Abantu Highway.

[18] The 7^th Respondent of which the Applicant is a Director and shareholder and the 1^st Respondent entered into a Management Agreement for the 1^st Respondent to manage the filling station which was previously managed by the Applicant. The management agreement was signed on the 25^th February 2016 and was for a period of 72 months (6 years).

[19] The monthly rental was fixed at E30,000.00 (Thirty thousand Emalangeni) for the initial 36 months (3 years) and was to be negotiated for the remaining 36 months (3 years) based on fuel volume sale increases.

[20] The Applicant had loaned money from Fincorp in order to finance his businesses. He defaulted on repayment and was under pressure because Fincorp wanted to foreclose on the mortgage bond it had with Applicant over these moneys.

[21] The Applicant sold the business owned on by the 7^th Respondent to the 1^st Respondent. They entered into an agreement of sale on the 13^th July 2016.

[22] The material terms of the Deed of Sale were inter alia as follows:

1. The 7^th Respondent wishes to sell its business a fuel station, business situate at Portion 48 (a Portion of Portion 26) of farm Nkonyeni III No. 523, situate in the District of Manzini, Swaziland to Daryali Investments (Pty) Ltd.

2. The aforementioned business is trading as Tri-Cash Filling Station and Daryali Investments (Pty) Ltd wishes to purchase the business and its assets.

3. The full purchase price payable by the purchasers to the seller for the business and the assets would be E4,000,000.00 (Four Million Emalangeni).

4. The purchasers would pay the full sum of E4,000,000.00 (Four Million Emalangeni) not later than close of business on Friday 15 July 2016.

[23] The Deed of Sale for the business and the Memorandum of Understanding were signed on the same day, that is on the 13^th July 2016. The Deed of Sale for the business failed and never went through.

[24] It is not denied that the Applicant and the 1^st Respondent concluded a Memorandum of Understanding. The 1^st Respondent argues that after being advised that Fincorp was going foreclose on its bond, the Applicant in fear of Fincorp appealed to 1^st Respondent to purchase the entire property for the sum of E4,000.000.00 (Four Million Emalangeni).

[25] The Applicant denies that he sold the entire property to the 1^st Respondent. He states that he sold a portion which was to be subdivided later. At paragraph 14 of the founding affidavit the Applicant states as follows:

“14.1 In fact the land was never sold to the 1^st Respondent it was only aimed,

at obtaining finances from the 3^rd Respondent in favour of the 2^nd Respondent. This is common cause between myself, 1^st Respondent, 2^nd Respondent, 3^rd and 7^th Respondents.

14.2 Therefore no ownership of the land would pass on to the 1^st Respondent but a transfer of land would only be effected to facilitate the finance.

14.3 It was a material term that the 1^st Respondent was purchasing from myself, the business, which is the Galp Filling Station and the shops within the same structure, not the land. It would only be upon future contracts that the land would be sold to the 1^st Respondent.

14.4 As alluded to hereinabove, the contract of sale was undertaken in phases as follows:

1. The 1^st Respondent shall purchase the business for E4,000,000.00 (Four Million Emalangeni) to be paid by the 15^th July 2016.

2. That on this payment being effected, at the offices of S.V. Mdladla & Associates, the business only would be considered sold to the 1^st Respondent.

3. After the conclusion of the sale of the business, then I would proceed to sub-divide the whole piece of land and then sell a maximum of 7245 square metres (Seven thousand two hundred and forty five square metres) to the 1^st Respondent for a further 4 Million Emalangeni, and I keep the remaining extent of the land.

[26] And the response of the 1^st Respondent is that it is not true that the transfer of land was aimed at obtaining finances, and that the 2^nd and 3^rd Respondents made it clear from the onset that they will not finance the purchase of the business because the asking price was unjustifiable. Furthermore, it was not provided for in the MOU that the transfer of the property was for purposes of finance.

[27] The Applicant is adamant that even the 2^nd Respondent who is employed by the 3^rd Respondent was aware that the sale was for the business and that the transfer of the land was a means to meet the security requirements required by the 3^rd Respondent and not meant to pass ownership of the land to the 1^st Respondent. Alas, neither party caused the 2^nd Respondent to file an affidavit detailing his part in the transaction and in particular confirming the Applicant’s allegations.

[28] The Applicant further states that the understanding was that in order to finance the transaction the 3^rd Respondent agreed to pay off the money owing to Fincorp, advance the money needed to the 1^st Respondent and register a bond over the property once the property was registered to the 1^st Respondent. The Applicant now tenders re-payment of the amount of E4 Million to the 3^rd Respondent together with any associated costs for the immovable property to be returned to him.

[29] Ultimately the 3^rd Respondent declined to finance both transactions. It agreed to finance the purchase of the land because it could readily register a mortgage bond over the land and not the business. To that end the 3^rd Respondent issued a Guarantee (DAI) on the 1^st November 2016.

[30] The Guarantee is addressed to Messrs Mdladla and Associates Trust Account. The contents of the Guarantee are as follows:

“Dear Sirs,

Acting under instructions received from DARYALL INVESTMENTS (PROPRIETARY) LIMITED, we advice that we are holding the sum of SZL 1,012,754.19 (EMALANGENI ONE MILLION AND TWELVE THOUSAND SEVEN HUNDRED AND FIFTY FOUR, NINETEEN CENTS) at your disposal IN FAVOUR OF DLAMINI MKHULULI SIBUSISO.

This amount will be paid to you at our MANZINI Branch free of commission presentation of the Original Guarantee (Endorsed for Payment) to the Bank of advice in writing from S.V. MDLADLA AND ASSOCIATES their signatures having been duly confirmed by their bankers, or other sufficient evidence that:

1. TRANSFER OF PORTION 48 (A PORTION OF PORTION 26) OF FARM NNKONYENI 3 NO. 523 MANZINI DISTRICT INT O THE NAME OF DARYALI INVESTMENTS (PROPRIETARY) LIMITED HAS BEEN EFFECTED.

2. REGISTRATION OF A FIRST CONTINUING COVERING MORTGAGE BOND FOR SZL4,000,000.00 (EMALANGENI FOUR MILLION) OVER THE ABOVE PROPERTY IN FAVOUR OF STANDARD BANK SWAZILAND LIMITED HAS BEEN EFFECTED.

3. SIMULTANEOUS CANCELLATION OF ANY EXISTING BONDS OVER THE ABOVE PROPERTY HAS BEEN EFFECTED.”

[31] On the 1^st December 2016, the Applicant executed a Power of Attorney to pass transfer of title from himself to the 1^st Respondent. It is reproduced hereunder:

“POWER OF ATTORNEY TO TRANSFER

I the undersigned,

MKHULULI SIBUSISO DLAMINI

(BORN ON THE 1^ST DAY JUNE, 1981).

I.D. NO. 8106016100452

MARRIED ACCORDING TO SWAZI LAW AND CUSTOM TO

KATHRYN MBULI

Do herby nominate, constitute and appoint

JUBA SAMUEL DLAMINI

AND/OR

HLOMENDLINI NKANYEZI MDLADLA

With power of substitution to be my/our true and lawful Attorney and

Agent in our name, place and stead to appear before the

REGISTRAR OF DEEDS FOR SWAZILAND AT MBABANE

And then and there to declare that I

Did on the 13^th day of July, 2016 sell to

DARYALI INVESTMENTS (PROPRIETARY) LIMITED

CERIFICATE OF INCORPORATION NO. 847/2011

For the sum of E4,000,000.00 (Four Million Emalangeni).

The following property, namely:

CERTAIN: Portion 48 (A Portion of Portion 26) of Farm

Nkonyeni III No. 523, situate in the District of Manzini, Swaziland;

MEASURING: 7517 (Seven Five One Seven) square metres;

HELD: Under Deed of Transfer No. 614A/2014 dated the 29^th day of July, 2014 made in favour of Mkhululi Sibusiso Dlamini.

And to transfer the said property in full and free property to the said,

DARYALI INVESTMENTS (PROPRIETARY) LIMITED.”

[32] The guarantee referred to in paragraph 30 supra clearly states that transfer of portion 48 (a Portion of Portion 26) of Farm Nkonyeni 3 No. 523 Manzini District was to be effected into the name of the 1^st Respondent.

[33] The Power of Attorney referred to in paragraph 31 supra, clearly refers to the transfer of Portion 48 (a Portion of Portion 26) of Farm Nkonyeni 3 No. 523 situate in the District of Manzini measuring 7517 (seven five one seven) square metres to the 1^st Respondent.

[34] Mr. Mdladla argued that the property be transferred back to the Applicant and that there was no formal Deed of Sale of the immovable property in terms of section 31 of the Transfer Duty Act which provides as follows:

“No contract of sale of fixed property shall be of any force or effect

unless it is in writing and signed by the parties thereto or by their

agents duly authorized in writing”

[35] Arif Umarji (deponent) for the 1^st Respondent disagrees and argues that:

“32.5 Mr. Dlamini was paid in full for the said sale of the property in the amount of E4,000.000.00 which amount he accepted and benefitted from. In this regard I draw the Court’s attention to the Guarantees showing that an amount of E2,772,288.00 was paid to Fincorp to extinguish his bond, and an amount of E1,227,712.00 was paid to Mr. Dlamini’s Attorneys. These payments were accepted by Mr. Dlamini; and

32.6 Upon having passed transfer of the property to Daryali and

received the payment in respect of the purchase price, Mr. Dlamini

has not done anything pertaining to the said transaction and has

now, eight months after, rushed to court and complains that his

property has been “stolen”.

[36] The Power of Attorney to Give Transfer and the Deed of Transfer (Title Deed) provide proof that the 1^st Respondent is the owner of the disputed immovable property. I have no doubt that even the declarations of purchase and sale reflect similar details as appear on the Power of Attorney to Give Transfer.

[37] For the foregoing I am unable to grant the application and it is hereby dismissed with costs.

For the Applicant : Mr. S.V. Mdladla

For the 1^st Respondent : Mr. M. Nkomondze