THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Case No: 809/2011
Reportable

In the matter between:

NATIONAL SCRAP METAL (CAPE TOWN) (PTY) LTD

First Appellant

MUREC CRUSHING AND MILLING (PTY) LTD
Second Appellant

and

MURRAY & ROBERTS LTD

First Respondent
MURRAY & ROBERTS STEEL (PTY) LTD

Second Respondent
CAPE TOWN IRON AND STEEL WORKS (PTY) LTD
Third Respondent

Neutral citation:
National Scrap Metal v Murray & Roberts (809/2011) [2012]
ZASCA 47 (29 March 2012)

Coram:
Mthiyane DP, Cloete, Leach, Tshiqi and Wallis JJA

Heard:
7 March 2012

Delivered:
29 March 2012

Summary: Motion proceedings – whether disputed allegations of fact capable of
being rejected on the papers – factors relevant thereto.

___________________________________________________________________
O R D E R
___________________________________________________________________

On appeal from:
Western Cape High Court, Cape Town (Griesel J sitting as court
of first instance):

1. The appeal succeeds, and the order of the high court is set aside and replaced
with the following:
‘(a)
The application is dismissed.
(b) The applicants are to pay the respondents’ costs, jointly and severally, the
one paying the others to be absolved.
(c)
The respondents are to pay the applicant’s costs of the interlocutory
proceedings on 31 August 2011 and 13 September 2011, jointly and severally,
the one paying the other to be absolved.
(d) The above orders as to costs shall include the costs of two counsel where
employed.’
2. The respondents are to pay the appellants’ costs of the appeal, including the
costs of two counsel, jointly and severally, the one paying the others to be absolved.

___________________________________________________________________

J U D G M E N T
__________________________________________________________________

LEACH JA (MTHIYANE DP, CLOETE, TSHIQI AND WALLIS JJA concurring)

[1] The appellants appeal against an order of the Western Cape High Court
(Griesel J) granted on 9 November 2011 evicting them from certain immovable
property in Kuilsrivier owned by the first respondent. It was common cause that the
appellants had earlier leased portions of the property, the first appellant under a
written agreement which had expired on 31 October 2010 and the second appellant
under a lease which the respondents had purported to terminate in 2011. Both
appellants relied upon an oral lease agreement allegedly concluded in 2008 which
entitled them to remain in occupation for at least ten years after the expiry of the first

appellant’s written lease. This agreement was, in turn, denied by the respondents.
Without resorting to oral evidence, the high court concluded that the appellants’
allegations in regard to the oral lease were not sustainable and granted the eviction
order sought by the respondents. With leave of the high court, the appellants now
appeal to this court, contending that in the light of the dispute of facts raised on the
papers, the eviction application ought to have been dismissed.

[2] The respondents are all members of the Murray & Roberts group of
companies. The first respondent, Murray & Roberts Ltd (‘M&R Ltd’), is a subsidiary
of Murray & Roberts Holdings Ltd, a public company listed on the Johannesburg
Stock Exchange. M&R Ltd is, in turn, the holding company of the second
respondent, Murray & Roberts Steel (Pty) Ltd (‘MRS’) of which the third respondent,
Cape Town Iron & Steel Works (Pty) Ltd (‘CISCO’) is a wholly owned subsidiary.
(For convenience I intend to adopt the nomenclature used by counsel by referring to
the respondents collectively as ‘M&R’.)

[3]   Not only are the respondents related to each other in this way, but MRS holds
42.8 per cent of the ordinary issued share capital of the first respondent, National
Scrap Metal (Cape) (Pty) Ltd (‘NSM’). The second appellant, Murec Crushing &
Milling (Pty) Ltd (‘Murec’) is a wholly owned subsidiary of NSM.

[4] At all material times each of the parties was, in some way or other, involved in
the scrap metal industry. NSM was established by MRS, effectively as a joint
venture with a company that for present purposes may simply be referred to as
‘Reclam’, which also holds 42.8 per cent of NSM’s shares. The principal motivation
behind the establishment of NSM was for it to provide CISCO with an adequate
supply of the ferrous scrap it required for its manufacturing steel plant. Pursuant to
this, in September 1999, CISCO and NSM concluded a supply agreement under
which CISCO agreed to purchase its scrap metal requirements exclusively from
NSM which agreed, in turn, to supply the scrap metal it collected exclusively to
CISCO. CISCO retained the right to purchase scrap metal from other sources if
NSM was unable to fulfil its requirements, while NSM had the right to supply other
customers if it had scrap metal available surplus to CISCO’s requirements. This

initial supply agreement was later amended in May 2001. In terms of the agreement
as amended, it was to remain in force until 31 October 2010.

[5]   M&R Ltd is the owner of a piece of immovable property in Kuilsrivier,
approximately 20.25 hectares in extent. Of this CISCO was using a portion of some
15.5 hectares (referred to in the papers as ‘the CISCO portion’). Shortly after it had
been established, and in order to facilitate its supply of scrap to CISCO, NSM leased
another portion of the property from CISCO (‘the leased portion’). Situated
immediately adjacent to the CISCO portion, it was let for a period of 12 months with
effect from 1 July 1999, the stated intention in the lease being that NSM would use
the premises for the ‘procurement, processing, handling and distribution of scrap
metals’.

[6]   Although the lease contained an option to renew for an indefinite period, neither
NSM nor CISCO actually exercised the option before the lease expired in mid-2000.
Despite this, they thereafter conducted themselves as if the lease had in fact been
renewed, with the rental escalating at eight per cent. Eventually, however, as NSM
found it was spending a considerable amount of money on improvements to the
property, it decided to formalise the agreement, and it is recorded in the minutes of
an NSM board meeting held on 27 August 2003 that a director was tasked with
finalising a rental agreement by 30 September 2003. But although the existence of a
rental agreement between CISCO and NSM was confirmed in the minutes of the
NSM board meeting of 27 November 2003, a written agreement was not finalised
until 13 March 2007 to do so when a so-called ‘amending agreement’ was concluded
which extended the terms of the lease until 31 October 2010.

[7] The initial lease included a gantry and existing cranes on the leased
premises. NSM’s operations duly flourished and by the time it came to amend the
initial lease it had spent vast sums on various improvements, as I have mentioned.
This gave rise to protracted problems which took years to resolve but which finally
led to NSM’s ownership of the gantry being recognised and adjustments to the rental
being made. Ultimately this was reflected in the amending agreement.

[8] In October 2003, CISCO and NSM entered into a waste removal and disposal
agreement with Murec to provide for the collection, removal and disposal of waste
products known as ‘slag’ produced by CISCO’s operations from an area of the
CISCO property. This portion of the property, approximately 1.2 hectares in extent,
has been referred to as ‘the services site’. Under this agreement, Murec operated
and used the services site with effect from 20 January 2003. The initial agreement
provided for the lease to be valid until 31 January 2008 but it was amended to
continue indefinitely, subject to the right of either CISCO or Murec to terminate on
not less than six months notice. The services site was the property from which
Murec was evicted under the order of the court below.

[9] As appears more fully below, in 2009 NSM purchased a heavy duty shredder
with integrated hydraulic and electrical control systems. It is an extremely large
plant. Its feeding belt alone weighs 140 tons; the shredder weighs 80 tons; its router
25 tons; its motor 12 tons; and its feed rollers 20 tons. Due to its size and weight it is
necessary for the shredder to be based on substantial concrete foundations which
had to be erected when it was installed.

[10]   In 2008, Murec and CISCO agreed to allow NSM to install the shredder on a
portion of the services site. This portion is referred to in the papers as ‘the shredder
site’. For illustrative purposes a diagram of the CISCO portion, the leased portion,
the shredder portion and the slag handling area (being the remainder of the services
side excluding the shredder portion) is attached to this judgment.

[11] During the course of 2010, due to a change in economic circumstances, MRS
decided to dispose of CISCO and its business. Pursuant to this decision, the
respondents’ attorneys wrote to NSM on 6 May 2011 and instructed it to vacate both
the leased portion and the shredder portion by 8 August 2011. The same day, the
attorneys sent a notice to Murec, terminating its lease of the services site and
requiring it to vacate by 8 November 2011. This notice was later withdrawn and a
second notice of termination was given to Murec on 3 June 2011 requiring it to
vacate by 31 December that year. When both NSM and Murec indicated that they

would not vacate their respective portions of the property, the respondents applied to
court for their eviction.

[12] In seeking to avoid eviction, the appellants relied upon the oral agreement
mentioned at the outset of this judgment.  They drew attention to an NSM board
meeting held on 19 June 2008 at which the board had agreed to purchase a heavy
duty shredder at an anticipated cost of some R45 million on condition that a long-
term lease be concluded with CISCO relating to the property on which the shredder
would be erected. On behalf of the appellants, Mr Michael Movsas and Mr Dave
Kassel, both members of the NSM board, alleged they had met with Mr Robert
Noonan who was on the boards of both MRS and NSM, but who had not attended
the meeting of 19 June 2008. They stated that to the best of their recollection, this
meeting occurred at the Johannesburg airport. They alleged that Noonan was fairly
assertive at the meeting and, after referring to a competitor known as ‘SA Metal’,
which had ordered a steel rolling mill, had stated that M&R could not be in the hands
of its opposition and would therefore purchase a shredder if NSM did not do so.
Kassel and Movsas alleged that they then told Noonan that ‘as he was aware the
board of [NSM] had resolved to proceed with the purchase of a shredder on
condition that a long-term lease agreement be entered into with [CISCO] in respect
of the premises where the shredder was to be located’. They went on to say that
they had stated that if Noonan agreed on behalf of M&R that such a lease would be
entered into, they (on behalf of NSM) would confirm that NSM would acquire and
install a shredder that would meet M&R’s requirements. They further alleged that
Noonan had immediately responded by saying that M&R would be prepared to let
the premises to NSM for a further period of ten years following 31 October 2010
when the existing lease would lapse, and that:
‘After a brief discussion, Noonan . . . Kassel and [Movsas] agreed that following the expiry of
the existing lease on 31 October 2010, [NSM] would continue occupation of the premises
(including the premises in which the shredder would be installed) on the same terms and
conditions as those recorded in the existing lease and that such occupation would be for a
period of at least ten years commencing 1 November 2010. The rental was to be on the
basis of the built-in escalation in the existing lease over the ten year period.’

[13] Movsas alleged that after this he had advised NSM’s remaining board
members who were not M&R appointees that agreement had been reached with
M&R as to the terms which would govern NSM’s continued occupation of the leased
premises, including the portion on which the shredder would be installed.

[14] The respondents denied that this meeting had ever taken place or that
Noonan had ever purported to conclude an oral lease on such terms. According to
them there had been two meetings at the airport attended by Noonan and Movsas.
The first had been much earlier, on 17 March 2008, and had been attended by
various other persons, including a representative of SA Metal; that the discussions
had centred on whether the SA Metal’s increase in its steel mill capacity would result
in there being insufficient shred to satisfy both its and CISCO’s requirements; and
that there had been no discussion concerning a lease for NSM. The second, they
alleged, had been on unspecified date at which Noonan had indeed said that unless
NSM installed a shredder, M&R would purchase one itself. M&R averred this latter
meeting had taken place well before the June 2008 board meeting.

[15] The respondents also alleged that Noonan had in any event not been
authorised on behalf of any entity in the M&R group to conclude a ten-year lease
which, they said, would have been highly unusual and would have required the
approval of M&R’s board of directors – which had neither been sought nor obtained.
I intend to deal with this issue at the outset.

[16] Although the appellants denied that Noonan lacked the necessary authority to
bind M&R, it was contended by the respondents that this amounted to no more than
a bare denial which did not raise a genuine and bona fide dispute on the issue. They
therefore contended that the matter had to be decided on what they had alleged the
facts to have been viz that only a board decision, and not Noonan acting alone, was
required to conclude a long lease.

[17] Of course NSM was not a party to whatever authorisation M&R may or may
not have given to Noonan relevant to the conclusion of a lease, and the original
denial in the appellants’ answering papers did in fact consist of no more than the
bold assertion that M&R’s appointee to the NSM board (Noonan) ‘was authorised to

and agreed to a lease for a period of at least ten years’. However, as pointed out by
this court in Wightman1:
‘A real, genuine and bona fide dispute of fact can exist only where the court is satisfied that
the party who purports to raise the dispute has in his affidavit seriously and unambiguously
addressed the fact said to be disputed. There will of course be instances where bare denial
meets the requirement because there is no other way open to the disputing party and
nothing more can be expected of him. But even that may not be sufficient if the fact averred
lies purely within the knowledge of the averring party and no basis is laid for disputing the
veracity or accuracy of the averment’ .

[18]   Here, not only were the appellants probably not privy to the extent of the
authority M&R had vested in Noonan, but in a further affidavit Movsas stressed that
it had taken seven years for the amending agreement to be concluded after the
original lease had lapsed; that during that period Noonan had been intimately
involved in the interactions in regard to the conclusion of a fresh lease and that he
had, effectively, been allowed to represent M&R in the negotiations which led to the
amending agreement. Consequently there was no reason to suspect that he lacked
authority to represent M&R in concluding another lease on its behalf.

[19] These are valid considerations. Accordingly, in the light of the respondents’
failure to either attach any documentation or provide any other evidence to
demonstrate Noonan’s alleged limited authority or showing that the consent of
M&R’s boards was a prequisite for the conclusion of a ten year lease, in my view the
appellants made sufficient allegations relevant to Noonan’s actual authority for there
to be a genuine and bona fide dispute between the parties on the issue. The matter
must therefore be decided on the basis of the averments made by appellants in their
affidavits ie that Noonan in fact had the necessary authority.

[20] Consequently, I turn to consider the respondent’s contention that the
appellants’ allegation of the conclusion of an oral lease for a period of ten years can
be rejected on the papers. In attacking what was referred to as the ‘implausibility’ of
the appellants’ allegations concerning an oral lease agreed at the Johannesburg

1 Wightman t/a J W Construction v Headfour (Pty) Ltd and another 2008 (3) SA 371 (SCA); [2008] 2
ALL SA 512, para 13.

airport, counsel for the appellant argued that there were eight main reasons why the
appellants’ version could not be seriously entertained, expressed by counsel as the
following:
(a)
First, the documentation shows that M&R’s approach had consistently been
that any new lease agreement could only be concluded in tandem with a new supply
agreement, the terms of which could only be agreed once there was certainty as to
what supply arrangements would be permitted under competition law. This was
crucial as the Competition Commission had already found that the original supply
agreement between CISCO and NSM involved the commission of prohibited
practices. As it had not been possible to conclude a new supply agreement before
the alleged oral lease was concluded, and as indeed there still remained great
uncertainty as to what supply arrangements would be permitted under competition
law at that time, it was wholly improbable that M&R would have committed to a long-
term lease in 2008.
(b)
Second, there was no correspondence or any other document either
confirming the terms of the alleged oral agreement or supporting the allegation that
such an agreement had been reached. In particular, none of the NSM’s board
meeting minutes pertinently reflect that such an agreement had been reached.
(c)
Third, as none of the other agreements between any of the interested parties
relating to the premises, or indeed the supply agreements, were for a period of ten
years, it was wholly improbable that Noonan, ‘off the cuff’ so to speak, would agree
to a ten year lease.
(d)
Fourth, in the light of the conclusion of written lease agreements relating to
the premises in the past, it was extremely unlikely for M&R to have concluded an
oral lease for a period of ten years.
(e)
Fifth, that the rental allegedly agreed under the oral lease was unrealistic as
the lease purportedly encompassed a bigger area than that leased under the
amending agreement (it included not only the portion NSM had leased but also the
shredder portion as well) but at the same rental charged for the leased portion alone,
and at a rental which was well below the current market value. This was all the more
unlikely as under the oral lease M&R would have been liable for all electricity
consumed on both the leased portion and the shredder portion.
(f)
Sixth, it was inherently improbable that discussions about a shedder to be
installed on the shredder portion would have led to the conclusion of a lease relating

to both the leased portion and the shredder portion on the same terms as the lease
agreement, particularly as: the occupation and use of the shredder portion was
governed by the Murec agreement which was to endure indefinitely subject to the
right of either CISCO or Murec to terminate it on six months’ written notice; any new
lease agreement would therefore have involved a variation of the parties’ rights
under the Murec agreement; given that the shredder portion was not the subject of
the lease agreement, it made no sense for a purported long-term agreement in
respect of the shredder portion to mirror the terms of the lease agreement.
(g)
Seventh, it was unlikely for the meeting at which Noonan told NSM that if it
did not acquire a shredder M&R would do so, to have taken place after the 19 June
2008 board meeting of NSM. It was far more likely that this ultimatum had been
given before that date which would have precipitated NSM‘s decision to purchase
and install the shredder.
(h)
Eighth, and finally, that as M&R were intending to purchase a shredder if
NSM did not do so, there was no reason for it to agree to a long-term lease even for
the shredder portion, as NSM was given no choice and was in no position to
bargain.

[21] These factors, particularly collectively, do cast a measure of doubt on the
appellants’ version, which is certainly improbable in a number of respects. However,
as the high court was called on to decide the matter without the benefit of oral
evidence, it had to accept the facts alleged by the appellants (as respondents below)
unless they are ‘so far-fetched or clearly untenable that the court is justified in
rejecting them merely on the papers.2 An attempt to evaluate the competing versions
of either side is thus both inadvisable and unnecessary as the issue is not which
version is the more probable but whether that of the appellants is so far-fetched and
improbable that it can be rejected without evidence.

[22]   As was recently remarked in this court, the test in that regard is ‘a stringent
one not easily satisfied’.3  In considering whether it has been satisfied in this case, it
is necessary to bear in mind that, all too often, after evidence has been led and

2 Per Cameron JA in Fakie NO v CCII Systems (Pty) Ltd 2006 (4) SA 326 (SCA) para 55 ─ referring
to the phrase used by Corbett CJ in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty)Ltd 1984
(3) SA 623(A) at 635C.
3 Mathewson and another v Van Niekerk and others [2012] ZASCA 12 para 7.

tested by cross examination, things turn out differently from the way they might have
appeared at first blush.4 As Megarry J observed in a well-known dictum in John v
Rees [1970] Ch 345 at 402:
‘As everybody who has anything to do with the law well knows, the path of the law is strewn
with examples of open and shut cases which, somehow, were not; of unanswerable charges
which, in the event, were completely answered; of inexplicable conduct which was fully
explained; of fixed and unalterable determinations that, by discussion, suffered a change.’

[23] Moreover, it is also necessary to guard against approaching a case such as
the present on the assumption that businessmen will act in a businesslike manner or
with meticulous concern for the keeping of accurate records. All too often they do
not. As Harms JA has pointed out:
‘Businessmen are often content to conduct their affairs with only vague or incomplete
agreements in hand. They then tend to rely on hope, good spirits, bona fides and
commercial expediency to make such agreements work.’5
This is all the more so in this case where there was not only a close symbiotic
relationship between NSM and M&R, but where M&R also had representation on
NSM’s board and was therefore a party to its business plans and strategies. The
closeness of the relationship between M&R on the one hand and NSM and Murec
on the other may readily explain why the respective parties did not conduct their
business relationships with greater formality. In particular it may well explain why
agreement on a ten-year oral lease did not result in it immediately being reduced to
writing. And in regard to this latter issue, it is significant, as Movsas pointed out, that
it had taken years for the amending agreement to be reduced to writing despite
consensus on its terms having been reached. Consequently, so he alleged, NSM’s
board had become accustomed to the slow processes that took place within M&R’s
organisation and that he therefore never entertained any doubts that M&R would
honour the oral agreement. This is a telling comment, and in the light of the
relationship between M&R and NSM and the previous delay that Movsas mentioned,
his explanation cannot be regarded as being one which is so far-fetched or
untenable that a court is justified in rejecting it merely on the papers.

4 Cf Metallurgical & Commercial Consultants (Pty) Ltd v Metal Sales Co (Pty) Ltd 1971 (2) SA 388
(W) at 390F-H and Sewmungal & another NNO v Regent Cinema 1977 (1) SA 814 (N) at 819A-D ─
also an ejectment case.
5 Namibian Minerals Corporation Ltd v Benguela Concessions Ltd 1997 (2) SA 548 (A) at 561G.

[24] In addition, as is clear from what I have already said, the respondents’
argument is based in various respects upon what was or was not said at a number
of NSM board meetings, relying on the minutes kept of those meetings for that
purpose. It is necessary to remember that minutes of board meetings do not purport
to be a verbatim record of what was said; rather they tend to be a fairly terse
synopsis of what was discussed, highlighting what the compiler, usually the
company secretary, considered to have been of importance.  Merely because
something is not specifically recorded in a minute does not necessarily mean that it
was not mentioned, even in passing, and this should be borne in mind when
considering what effect the minutes have upon the probabilities.

[25] In the light of these remarks, it is clear that undue weight should not be
accorded to the fact that the oral agreement the respondents rely upon was not
specifically recorded in the minutes of any NSM board meetings. As clearly
mentioned, the minutes of 19 June 2008 record that after a presentation had been
made in regard to the installation of a Newell 300 HP heavy duty shredder at an
anticipated cost of approximately R45 million, the board ‘agreed to go ahead with
installation of this shredder on condition that a long term lease agreement be
entered into with CISCO where the shredder is to be erected’. While it is so that
Noonan, M&R’s representative on NSM’s board, did not attend that particular
meeting, he must have received the minutes as he attended the following NSM
board meeting on 5 August 2008 when the minutes of the meeting of 19 June 2008
were confirmed and the shredder issue was again discussed.  By then, according to
the appellants, the meeting at the airport at which they alleged Noonan had agreed
to bind M&R to a lease for ten years, had already occurred. Such a lease would
have fulfilled the condition stipulated at the 19 June 2008 meeting as being
necessary for the board to persist with the purchase of a shredder. Significantly, it
did so persist. The acquisition of a shredder was discussed again at the board
meetings of 20 November 2008 and 5 March 2009, both of which Noonan attended.
Neither the minutes of these nor any other board meeting mention a failure to obtain
the required commitment to a long term lease as a potential stumbling block to NSM
making the substantial capital investment required to purchase a shredder. It is hard
to conceive that no-one on the board ever thought about the issue, Noonan

included. Movsas, however, stressed that after the agreement on the oral lease was
concluded, he informed the other non-M&R members of the board thereof and, if he
did, this might well explain why the issue was never raised pertinently at subsequent
board meetings. By the same token, Noonan’s failure to raise the issue could also
be explained by his knowledge of the lease. In these circumstances there really is
nothing overtly sinister in the failure of the minutes to specifically record that oral
agreement had been reached in regard to a long term lease to accommodate the
new shredder.

[26] What the minutes do reflect are discussions relating to a potential lease
between NSM and CISCO in regard to the shredder portion. It was argued that on
the appellants’ version no separate agreement for the shredder portion would have
been necessary as that portion was included in the premises leased under the oral
agreement, and the fact that these discussions took place is therefore destructive of
that version. But the appellants explained that a specific lease relating to the
shredder portions was required in order to obviate similar difficulties to those that
had arisen in regard to the improvements they had effected on the leased premises
after the lapse of the 1999 lease which had led to a dispute as to ownership of the
gantry that took several years to resolve. A similar dispute could once more be a
potential problem, bearing in mind that a good deal of civil construction was required
to install a shredder. Moreover, as Movsas explained, the local municipality was
prohibited from supplying electricity to premises that were being supplied by Eskom.
Eskom was already supplying electricity to CISCO’s premises but was unable to
supply sufficient power to satisfy the demand of the shredder. Accordingly, in order
to enable the shredder to operate using power from the municipality, it was agreed
with CISCO for the property to be sub-divided to enable the municipality to supply
power to the portion housing the shredder. Indeed it is recorded in the minute of an
NSM board meeting held on 12 May 2011 that the sub-division had been effected,
that a municipal substation had been commissioned from which the shredder was
being powered, and that NSM was being billed directly by the municipality.

[27]   In the light of the proposed sub-division, Movsas explained that it was
desirable for a separate lease relating to the shredder portion to be concluded,
despite that portion having already been part of the premises leased under earlier

oral agreement. A separate lease also had the advantage of recording that NSM
was the owner of the shredder and that it was not a permanent fixture that acceded
to the property. This is by no means an improbable explanation for the parties’
discussions in regard to a separate lease for the shredder portion.

[28] In this regard, it is also significant that after the original lease agreement
between CISCO and NSM had lapsed in June 2000, no formal lease relating to the
lease premises was concluded until 13 March 2007 when agreement was reached
on the ‘amending agreement’. The fact that both sides conducted their affairs in such
an informal  manner is probably the product of the close relationship between them.
This relationship appears also to have been the reason why, when NSM installed the
shredder on the shredder portion (being part of the premises subject to the Murec
lease), it did so without any formal agreement having been concluded and without
thereafter paying any rental.

[29] In considering the inherent probabilities, it seems to me, as was strenuously
argued by the appellants, that it is highly unlikely, particularly given the concern
expressed at the board meeting of 19 June 2008 that the shredder should only be
acquired if M&R would commit itself to a long-term lease, that NSM would then go
ahead and incur the substantial capital expenditure required to acquire and install
the shredder if it had not obtained such a commitment. This must also be considered
in the light of the events which occurred at the board meeting on 2 December 2010
when M&R indicated it proposed to close down CISCO’s operations. A discussion
about the shredder followed immediately after this revelation. Movsas recorded that
NSM board had approved and entered into the shredder project with the
commitment from M&R to extend the necessary lease and that M&R would be going
back on its previous assurance if it now refused to execute a written lease. Another
director stated that he would be ‘shocked’ if M&R would not honour its commitment
to execute a written lease. Faced with this indignation, Noonan appears not to have
denied having committed M&R to a lease. Instead he stated that NSM needed to
write to M&R in regard to the issue. If ever there was a time for Noonan to have
alleged that he had not committed M&R to a lease, this was it. He did not do so and
his failure in that regard can, at the very least, be interpreted as an implied

admission of that with which he was being confronted, namely, that he had indeed
committed M&R to a lease.

[30] I do not think that any useful purpose would be served by attempting to
analyse the various allegations, minutes, correspondence and other documentary
evidence in any greater detail. Suffice it to say that there are probabilities and
improbabilities in the versions of both sides. But, as I have already stressed, that is
not the issue. In the light of the facts as I have already mentioned, it does not seem
to me that, even though the appellants’ version is improbable in certain respects, it
can on the papers be rejected as palpably false in regard to the allegation that on
oral  long-term lease had been concluded, as both Movsas and Kassel alleged was
the case. In my view, the high court erred in reaching the contrary conclusion.

[31] Both sides were agreed that if this court should find that the high court had
reached the wrong conclusion, the matter should not be referred for the hearing of
oral evidence and that the appropriate course would be to allow the appeal and
dismiss the application.

[32] Finally, I must deal with the costs of two opposed interlocutory applications
which had been awarded against the appellants: the first relating to a discovery of
certain documents pursuant to a rule 35(12) notice; the second relating to the
question of urgency. The costs of both these applications were reserved for decision
in the main application. In dealing therewith, the high court observed that the present
respondents had been substantially successful in both instances and should be
awarded their costs. This conclusion was attacked on appeal, but with no real force.
In my view, the respondents indeed achieved substantial success and, therefore,
there seems to be no reason to interfere with the high court’s decision in the
exercise of its discretion to order the appellants to pay such costs, including the
costs of two counsel where so employed.

[33] On the other hand, there is reason to interfere with the scale on which those
costs were awarded. Persuaded that the appellants’ allegations in their answering
affidavits had been fabricated, the high court awarded costs on the scale as between

attorney and own client. But as is apparent from what I have set out above, the high
court erred in finding the appellants’ case to be a fabrication and, in these
circumstances, I see no reason for the appellants to pay costs on a punitive scale.
The attorney and client award thus cannot be allowed to stand. This will be reflected
in the order below.

[34] In the result the following order is made:
1. The appeal succeeds, and the order of the high court is set aside and replaced
with the following:
‘(a)
The application is dismissed.
(b)  The applicants are to pay the respondents’ costs, jointly and severally, the
one paying the others to be absolved.
(c)
The respondents are to pay the applicant’s costs of the interlocutory
proceedings on 31 August 2011 and 13 September 2011, jointly and severally,
the one paying the other to be absolved.
(d)  The above orders as to costs shall include the costs of two counsel where
employed.’
2. The respondents are to pay the appellants’ costs of the appeal, including the
costs of two counsel, jointly and severally, the one paying the others to be absolved.

______________________
L E Leach
Judge of Appeal

APPEARANCES:

For Appellant:

A Subel SC (with him R Howie)

Instructed by:

Werksmans Attorneys, Sandown, Sandton

Naudes Inc, Bloemfontein

For Respondent:

W H G van der Linde SC (with him P B J Farlam)

Instructed by:
Webber Wentzel, Johannesburg

Symington & De Kok, Bloemfontein
THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF
APPEAL

From:  The Registrar, Supreme Court of Appeal
Date:  29 March 2012
Status:  Immediate

Please note that the media summary is intended for the benefit of the media and does not
form part of the judgment of the Supreme Court of Appeal

Neutral citation: National Scrap Metal v Murray & Roberts (809/2011) [2012] ZASCA 47
(29 March 2012)

The respondents, Murray & Roberts Ltd, Murray & Roberts Steel and Cape Town Iron &
Steelworks, all members of the Murray & Roberts group of companies, successfully obtained
an order evicting the appellants from certain premises owned by Murray & Roberts in
Kuilsrivier, Cape Town. The appellants had previously occupied the premises in terms of
certain lease agreements which had either lapsed or had been terminated by notice. The
appellants, however, alleged that they were entitled to remain in occupation of the premises
in terms of an oral lease for a further period of ten years. The respondents denied that such a
lease had ever been concluded. When the matter came before the Western Cape High Court,
Cape Town neither side requested that oral evidence be taken in regard to the dispute as to
the existence or otherwise of the alleged oral agreement. The high court, however, concluded
on the papers alone that the appellants’ allegations in regard to the conclusion of the oral
agreement were so untenable that they could be rejected without hearing oral evidence.

The Supreme Court of Appeal today ruled otherwise. It found that the versions of both sides
contained certain improbabilities, but that it could not be found on the papers alone that the

version of the appellants in regard to the oral lease could be rejected as palpably false. In
these circumstances the appeal was allowed and the order evicting the appellants from the
property concerned as set aside.

---ends---