Illegal farm sale deal backfiresBy: WERNER MENGES
A MARRIED couple who illegally sold their farm in the Maltahöhe area to a South African citizen have been ordered to pay back the money that they received from the buyer.
The agreement through which farm owners Willem and Aletta Dreyer sold their farm to South African citizen Willem du Toit breached sections of the Agricultural (Commercial) Land Reform Act of 1995, and due to its illegality the deal was null and void from the start, Judge President Petrus Damaseb has ruled in a judgement delivered in the High Court in Windhoek.
The Dreyers and Du Toit must share the blame for the fact that they signed an unlawful contract which allowed Du Toit to become the absolute owner of the couple’s interests in the close corporation owning their farm, Zaris, in the Maltahöhe area, Judge President Damaseb ruled.
He also commented that the evidence before him amply demonstrated that Du Toit was someone “who showed no respect for the laws of Namibia”.
The judge president stated: “He successfully flouted the laws of Namibia once and he had the audacity to try to do so a second time.”
The least the courts of Namibia can do is to frown upon his conduct by not allowing him to recover his legal costs through the courts of the land to whose laws he had “shown blatant and callous disrespect”, the judge president also remarked.
He ordered the Dreyers to pay back to Du Toit an amount of N$672 000, which was the amount Du Toit had paid the couple after they signed the farm sale agreement on February 18 2003.
The judge president did not order the Dreyers to also pay Du Toit an annual 20 percent interest on that amount, as had been requested by Du Toit. The interest payment alone would have amounted to about N$1,32 million by now.
Granting interest to Du Toit would have the effect of indirectly enforcing the illegal agreement, and that is something that is not permissible, he said.
“This is a difficult case,” Judge President Damaseb stated at the start of his judgement. “It is difficult because it raises, in a very real way and on a human level, conflict between the need on one hand to do justice between man and man and, on the other, the importance of exacting respect for the law of the land.”
At the time that the Dreyers and Du Toit signed the farm sale agreement, the Land Reform Act required that the consent of the Minister of Agriculture had to be obtained first before such a transaction could be concluded. The Act states that a foreign national would not be competent to acquire agricultural land, or obtain the controlling interest in a close corporation or company owning agricultural land, without the minister’s prior written consent.
The minister’s consent was not obtained before the Dreyers and Du Toit clinched their deal.
However, Du Toit immediately started to make payments as stipulated in the agreement, and ended up paying N$672 000 for an apartment which the couple was buying at Swakopmund at the time.
Du Toit also got possession of the farm. He had control over the farm for 18 months, until it was returned to the Dreyers when the sales agreement was cancelled because the minister’s consent had still not been obtained.
The Dreyers were claiming that they had agreed to sell their interest in the close corporation owning the farm for N$1 million, and not for N$840 000 as reflected in the signed agreement.
They admitted having received N$672 000 from Du Toit, but claimed he should pay them a total amount of N$645 000 for his use of the farm during the time it was under his control.
The judge president was informed that after the transaction fell through the Dreyers again sold the farm for a more profitable price of N$3 million, while they also sold the apartment at Swakopmund for N$1,1 million.
He also heard that Du Toit had boasted that he had earlier managed to circumvent the Land Reform Act when he bought another farm in 2001 and got a Namibian citizen to be registered as the 51 percent shareholder of the company which owned that farm.
Du Toit later had that shareholding transferred to himself, before the company owning the farm was sold in 2008.
The way that first farm transaction was done was in fraud of the law as it was a simulated transaction, the judge president said.
He found that the evidence showed that Du Toit intended to replicate that first farm transaction with a similar transaction in which the law was to be circumvented with the sale of farm Zaris.
Although there is a legal principle that a court would not come to the assistance of a litigant who parts with money in furtherance of a prohibited agreement, that rule may be relaxed to do simple justice between individuals, the judge president said.
In the case before him, he added, public interest demands that Du Toit should be refunded the money he had paid for the Dreyers to buy their seaside flat.