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[2016] ZASCA 99
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Minister of Human Settlements, Western Cape Provincial Government v Penhill Residents Small Farmers Co-operative Ltd and Others (429/2015) [2016] ZASCA 99 (3 June 2016)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 429/2015
In
the matter between:
THE
MINISTER OF HUMAN SETTLEMENTS, WESTERN
CAPE
PROVINCIAL
GOVERNMENT
APPELLANT
and
THE
PENHILL RESIDENTS SMALL FARMERS
CO-OPERATIVE
LTD
FIRST
RESPONDENT
GRAHAM
ADA
SECOND
RESPONDENT
IVAN
CLOETE THIRD
RESPONDENT
Neutral
Citation:
Minister of Human Settlements,
Western Cape v Penhill Residents Small Farmers Co-operative
(429/2015)
[2016] ZASCA 99
(3 June 2016)
Coram:
Lewis,
Cachalia, Saldulker and Mathopo JJA and Tsoka AJA
Heard:
24
May 2016
Delivered:
3
June 2016
Summary:
Land: unlawful occupation of land owned by provincial
government: occupiers of farm land interdicted from taking further
occupation
of additional land and erecting new structures: did not
have consent of owner to settle on additional land and were not
deprived
of any right unlawfully.
ORDER
On
appeal from:
Western
Cape Division of the High Court, Cape Town (Saldanha J, Cloete J and
Nyman AJ concurring, sitting as full court of appeal)
1 The appeal is upheld
with the costs of two counsel where so employed.
2 The order of the full
court is set aside and replaced with the following:
‘
(a) The first
respondent is interdicted and restrained from-
(i)
Settling on any of the portions of the
properties listed in annexure A to the notice of motion and which are
demarcated in red on
the plan attached hereto (the unoccupied areas);
(ii)
Erecting structures on any portion of the
unoccupied areas;
(iii)
Claiming rights over any portion of the
unoccupied areas by cordoning off such portion;
(iv)
Inciting or encouraging other persons to
settle on any portion of the unoccupied areas, or to erect structures
on such portions.
(b)
The first respondent is directed to pay the
costs of the application.’
JUDGMENT
Lewis
JA (Cachalia, Saldulker and Mathopo JJA and Tsoka AJA concurring)
[1]
The Western Cape Provincial Government owns a tract of land close to
Stellenbosch known as the Penhill Farms. The land consists
of several
registered farms and is very close to the N2 highway running between
Cape Town and Somerset West. It is thus land of
considerable value. I
shall refer to it either as Penhill Farms or the property. Until 1994
it was not occupied and not farmed.
In that year indigent small scale
farmers started to occupy Penhill Farms and to establish farming
operations – mostly pig
and livestock farming.
[2]
The number of people occupying the land and the extent of Penhill
Farms used for farming increased significantly over time.
The
Provincial Government was aware of the occupation, and indeed over
many years gave assistance to the farmers and tried to regularize
their occupation through proposed leases at a nominal rental. In 2000
the farmers began to organize as a group and eventually formed
the
Penhill Residents Small Farmers Co-Operative Ltd, which is the first
respondent in this appeal. I shall refer to it as the
Penhill
Farmers.
[3]
However, in early 2011 the Provincial Government wished to settle
another group of farmers – the Ithemba farmers –
for whom
it was obliged to find land for occupation in terms of a settlement
made an order of court, on the unoccupied portions
of Penhill Farms.
The Penhill Farmers were advised before then that the unoccupied land
was needed for other people. Nonetheless,
the Penhill Farmers and
others continued to take occupation of portions of the property
previously unoccupied and to erect structures
without consent. In
February 2011 they were given notice by the Department of Human
Settlements that they should demolish the structures
illegally
erected. The notice was ignored and people continued to erect
structures and to fence off previously unoccupied portions
of Penhill
Farms.
[4]
The Minister of Human Settlements, Western Cape Provincial Government
(actually the Member of the Executive Council (MEC) of
the Provincial
Council, but referred to in the application as a Minister, and I will
refer to him as such accordingly) accordingly
brought an urgent
application in May 2011, which was heard on 14 June 2011, for an
interdict preventing further settlement and
the erection of new
structures on Penhill Farms. The respondents cited were, in addition
to Penhill Farmers, two members, Mr G
Ada and Mr I Cloete. Mr Ada has
subsequently died and Mr Cloete no longer occupies a portion of
Penhill Farms: the only respondent
now is Penhill Farmers. The
Minister also sought orders prohibiting the incitement of others to
occupy and to erect structures
on unoccupied portions of Penhill
Farms. These were identified in an annexure to the notice of motion.
[5]
The Provincial Government did not attempt to interfere with the
occupation of the property by existing occupiers: it did not
seek to
evict any of the Penhill Farmers or other occupiers. It sought to
prevent future unlawful occupation. Its ownership of
the property was
not disputed by the respondents. The court of first instance (Allie J
in the Western Cape High Court) dismissed
the application some six
months after it was heard, despite the urgency. It refused an
application for leave to appeal in February
2012. This court gave
leave to appeal against Allie J’s order to the full court of
the Western Cape High Court.
[6]
The full court (per Saldanha J, Cloete J and Nyman AJ concurring)
heard the appeal in July 2013, and refused it in November
of the
following year. This court gave special leave to appeal against the
order of the full court. It directed the Provincial
Government to
file, together with the record of appeal, a plan depicting precisely
the portion of the properties in respect of
which it claimed an
interdict, together with a description of the area. This court also
requested the parties to make good faith
efforts to agree on the
current number of occupiers, the portions of Penhill Farms occupied,
and the extent not occupied.
[7]
No agreement was reached. The Provincial Government attempted to get
clarity, and on its own inspection concluded that 52.2473
hectares
(26.1 per cent) of the property were occupied, whereas Penhill Farms
was 200.0844 hectares in extent. Thus 73.9 per cent
was not occupied.
It also established that there were 269 people occupying Penhill
Farms. The areas not occupied were described
as empty farm land. The
State Attorney advised the court of this on 26 March 2015.
[8]
In August 2015 professional land surveyors provided a comprehensive
survey at the request of the Provincial Government. The
statistics
were somewhat different. The surveyors advised that 69.8154 hectares
(36.4 per cent of the Penhill Farms) were actively
occupied; 86.4374
hectares (45.08 per cent) have been fenced off for grazing; and
35.4937 hectares (18.51 per cent) were unoccupied.
One of the
inferences to be drawn from the difference is that there had been
further settlement between March and August of 2015.
Indeed,
the surveyor observed in his report that ‘The situation on the
ground is dynamic and changing frequently. New settlement/occupation
and “subletting” are happening continuously.’
[9]
It is possible, however, that the first inspection following the
court’s request was less accurate than the surveyor’s
observations. Whatever the reason for the discrepancy, there are at
least 35.4937 hectares of land unoccupied and on which the
Provincial
Government wishes to develop housing and settle the Ithemba farmers.
[10]
What is more startling is the significant difference between the
occupation alleged when the application was first moved and
the
position established by the land surveyor some four years after the
interdict was sought. In June 2011 only some 90 hectares
were
occupied, including fields used for grazing. About 110 hectares was
thus available for settlement of the Ithemba farmers and
for other
developments proposed by the Provincial Government.
[11]
The interdict sought would have protected the clear right of
ownership that vests in the Provincial Government. But Allie J
refused it, finding that the Penhill Farmers had a ‘legitimate
expectation’ to use the entire property, exceeding 200
hectares, and had thus to have been given ‘lawful notice’
before seeking the interdict. She also held that the Provincial
Government had given ‘actual authority’ to occupy and use
the entire land for farming purposes. The full court confirmed
that
finding.
[12]
Before traversing the development of the settlement and the history
of negotiations between the parties, I should observe that
these
findings are mutually destructive. If the Penhill Farmers had actual
consent, then the question of legitimate expectation
would not have
arisen. The question is one of fact, and mutually exclusive facts
cannot be pleaded in the alternative, as the courts
below failed to
appreciate. The Penhill Farmers could not rely on consent, and then,
if that was not established, rely in the alternative
on the right to
a hearing before they are prevented from unlawfully occupying land
that they had not occupied before. In
any event, a legitimate
expectation to a hearing arises only where there is a decision taken
by an administrative body: the launch
of proceedings to protect a
right can hardly be said to be administrative or executive action.
The
history of occupation and of negotiations between the Provincial
Government and the Penhill Farmers
[13]
I have indicated already that the first farmer settled on Penhill
Farms in 1994, and that further settlement occurred thereafter.
The
entire farm was never occupied, which Mr Ada and Mr Cloete confirmed
in their answering affidavits in the application. Mr Ada
said:
‘
The
portion of the farm occupied by [the Penhill Farmers] and currently
used for farming purposes is only a small portion of the
total size
of the farm and will not adversely affect any housing project
implemented on the farm.’
They
also did not deny that the vacant land was designated for imminent
use by the Provincial Government.
[14]
In response to the allegations that they were responsible for new
structures being erected, the Penhill Farmers pointed out
that the
property was very large and was occupied by ‘a substantial
number of persons who are not members of the [Penhill
Farmers]. Any
one of these persons could have erected the structure.’ Penhill
Farmers do not thus claim that they occupy
all of the property, and
they deny that they are responsible for settlement by other people.
[15]
The question that then arises is whether the Provincial Government
ever gave them consent to occupy the entire property, as
the courts
below found. Such consent is essentially argued to have arisen from
negotiations between the parties over the years.
There were a number
of meetings held from 2004 onwards to regularize their existing use
of portions of Penhill Farms. Minutes of
these meetings, and draft
documents put up by the Penhill Farmers, show various attempts to
structure their arrangements formally.
On 9 December 2004, a meeting
was held between the Penhill Farmers, the Provincial Government and
the City of Cape Town. They agreed
to ‘give attention to the
zoning of the land for agricultural purposes, the provision of
services to the small scale farmers
on the land and the conclusion of
a formal lease agreement with [the Penhill Farmers] to regularize its
members occupation of the
land’. Members of Penhill Farmers
then drew up an action plan to deal with services.
[16]
In May 2005 the Provincial Minister of Agriculture (also in fact an
MEC) wrote to the Provincial Minister of Human Settlements
requesting
him to submit a project plan and information about the nature of the
farming to be conducted so that a lease agreement
could be drafted
for each farmer. In October 2005 the former recorded in a letter to
Mr Cloete that a meeting had been held at
which it was agreed that
the conclusion of lease agreements between the individual farmers and
the Department of Human Settlements
was a priority.
[17]
In August 2006, a firm of consultants engaged by the Provincial
Department of Agriculture provided it with a ‘project
plan’
for the development of the small-scale farming on Penhill Farms. The
Department of Agriculture confirmed in a letter
to Mr Cloete on 6
September 2006 that the Penhill Farmers could use the project plan as
a basis for concluding lawful lease agreements
with the individual
farmers.
[18]
On 23 November 2006, the Provincial Government advised the Penhill
Farmers that property would be made available to individual
farmers
for leases for a period of nine years and 11 months. The Department
of Transport and Public Works (Public Works) would
take over all
risk, and profit and loss, but should any of the properties not be
used for farming they would have to be handed
back to the Department
of Local Government and Housing. Public Works would manage the
leases while Agriculture would facilitate
farming and mentor the
farmers. However, no leases were actually concluded, and it was
clearly the understanding of the Provincial
Government that the
leases would be with the individual farmers in respect of each
portion of Penhill Farms farmed by them.
[19]
On 27 February 2007, the Chief Director of Planning and Development
in the Provincial Department of Local Government and Housing
wrote to
Mr Cloete advising that, while the department was committed to making
land available for the farming project on Penhill
Farms, there was
increasing pressure to provide housing in the area and some of the
land might be required for housing. This was
followed by a meeting on
19 July 2007 between City of Cape Town representatives, the
Provincial Department of Agriculture and the
Penhill Farmers where
the proposed development was discussed. The following year, on 9
April 2008, another meeting was held with
the same representatives
where the City advised all present that it proposed a holistic
development of the Blue Downs area, into
which Penhill Farms fell,
with the financial assistance of the Development Bank. The minutes
recorded that:
‘
It
was agreed that a User Agreement will be entered into with two
parties. The definition of User Agreement and Lease Agreement
in
legal terms is the same thing. The proposed ten (10) year period
cannot be acceded to due the greater Bluedowns development
plan and
the proposed plan has now been submitted to the City of Cape Town for
comments. The agreed term for the User Agreement
will be for three
(3) years with a condition for renewal for a longer period subject to
the finalization of a study for greater
Bluedowns development and a
rental will be at market related (sic).’
[20]
A draft lease agreement was prepared by the Provincial Government
(Local Government and Housing). The Penhill Farmers were
said to be
the lessee. A plan was attached. It is not clear whether the plan was
in respect of the entire property or only portions.
The Penhill
Farmers maintain that it was in respect of the entire property but it
is not apparent from the plan. They attach significance
to this.
Indeed it is the high watermark of their case based on actual consent
to occupy the entire property.
[21]
At a meeting on 30 April 2008, the Penhill Farmers were advised that
the draft lease had been prepared and had been sent to
the legal
services department for input. They presented their own draft lease
to the chairman. The Provincial Government engaged
a property
valuator to prepare a property valuation in order to determine a
market related rental for possible letting to ‘small
farmers’.
The date of the valuation was 2 June 2008. The valuation related to
Penhill Farms but also to other properties
– some 248 hectares
in all.
[22]
The next meeting was on 9 October 2008. There was a discussion of the
term of the draft lease that prohibited the erection
of any permanent
structure: the Penhill Farmers pointed out that there were already
permanent structures on the property. There
was also disagreement
over the rental to be paid. The valuator had recommended that it be
five per cent of the value, which was
set at R1 000 per hectare. The
Penhill Farmers proposed one per cent of value.
[23]
The parties met again on 19 November 2008. The same issues were
discussed. Several other meetings were held over the course
of the
following two years but no agreement was reached. On 14 January 2011
another meeting was held where the same issues were
raised again. The
Provincial Government’s representative confirmed again that it
was willing to assist the Penhill Farmers
but that the property was
situated along a major transport route and was needed for urban
development. The Penhill Farmers registered
dissatisfaction at not
being included in the discussions about the relocation of the Ithemba
farmers but stated that ‘they
are not against the Ithemba
farmers also farming at Penhill, but that they need to be part of
future discussions’. The notice
to demolish structures was
issued shortly after this and the urgent application followed in May
2011.
Consent
[24]
The courts below found that there was actual consent for the Penhill
Farmers to occupy the entire property, and that is what
the Penhill
Farmers argue again on appeal. It can be seen, however, from the
minutes of meetings and the content of correspondence
that there were
negotiations over the occupation of the portions already farmed. But
there was nothing either express or implicit
in any of the
discussions that approved the Penhill Farmers’ taking
occupation of the entire property.
[25]
As I have said, they place store on the plan attached to the draft
lease prepared by the Provincial Government and on the valuation
done
in respect of Penhill Farms as well as on the negotiations to
regularize their position over the years. But does any of this
indicate unequivocal conduct that justifies an inference that there
was consensus regarding the term of the contract they allege?
In
Standard Bank of South Africa Ltd & another v Ocean
Commodities Inc & others
1983 (1) SA 276
(A) this court said
(at 292B-C):
‘
In
order to establish a tacit contract it is necessary to show, by a
preponderance of probabilities, unequivocal conduct which is
capable
of no other reasonable interpretation than that the parties intended
to, and did in fact, contract on the terms alleged.’
[26]
In
Joel Melamed and Hurwitz v Cleveland Estates (Pty) Ltd
[1984] ZASCA 4
;
1984
(3) SA 155
(A) Corbett JA, after citing the test in
Ocean
Commodities
, referred to a different and less stringent
formulation (at 165B-C): ‘a court may hold that a tacit
contract has been established
where, by a process of inference, it
concludes that the most plausible probable conclusion from all the
relevant proved facts and
circumstances is that a contract came into
existence’. He did not determine which test was preferable as
it was unnecessary
for the determination of the case. The
requirement that unequivocal conduct is required before a contract
will be held to
have come into existence was also confirmed in
McDonald v Young
[2011] ZASCA 31
;
2012 (3) SA 1
(SCA) para 19.
[27]
Residents of Joe Slovo Community, Western Cape v Thubelisha Homes
& others (Centre on Housing Rights and Evictions & another,
Amici Curiae)
[2009] ZACC 16
;
2010 (3) SA 454
(CC) dealt with
consent of an owner to occupy property in determining whether there
had been compliance with the Prevention of
Illegal Eviction from and
Unlawful Occupation of Land Act 19 of 1998. The issue there was
whether eviction had been effected lawfully.
There are five different
judgments in the matter but the result was agreed. The only relevance
of
Residents of Joe Slovo
to this matter is that the court
made it clear that by ‘consent’ is meant not simply
acquiescence, but voluntary agreement.
Consent cannot be conferred
unless it is asked for and given (para 55). The court endorsed the
test mooted by Corbett JA (above
at 165B-C) as to drawing an
inference that all parties agreed on occupation: consent must be the
‘most plausible probable
conclusion from all the proved facts
and circumstances’ (para 58).
[28]
Where is the unequivocal conduct of both the Provincial Government
and the Penhill Farmers, showing that the Provincial Government
had
consented to the occupation by the farmers of the entire property, to
be found in any of their meetings or other interaction?
During the
course of argument before us, counsel for the Penhill Farmers
accepted that the Provincial Government had not acted
consistently or
unequivocally over the course of the discussions that took place over
the years. All the discussions related to
regularizing the existing
occupation by the Penhill Farmers – not future conduct.
There is no evidence of unequivocal
conduct that establishes, as the
most plausible probable inference, that the Provincial Government had
consented to the Penhill
Farmers occupying the entire property. There
was thus no consent and the full court erred in finding that there
was.
Legitimate
expectation
[29]
The full court held also that the decision by the Provincial
Government to use a portion of the property for the Ithemba farmers
and for a housing development constituted administrative action –
‘it had a direct effect on the rights and legitimate
expectations of the’ Penhill Farmers. The consequence of the
‘decision’ was that there was less land available
to be
used when, throughout the negotiation period, they ‘were
brought under the impression that the entire property was
available
for their beneficial occupation’. Nothing in the factual matrix
bears this out. (See
Minister of Environmental Affairs and Tourism
& others v Phambili Fisheries (Pty)
Ltd
[2003] ZASCA
46
; 2003 (6) SA 407 (SCA) paras 64-69.) And a decision
by an owner of property to use it can hardly amount to administrative
action that impacts adversely on a person who has no right to use or
occupy it.
[30]
The finding that the Penhill Farmers had a right to be consulted
about the future use of property to which they had no right
is quite
astonishing. And equally astonishing are the following two
conclusions, which are at odds with each other:
‘
In
the result I am satisfied that the respondents had authority to
occupy the entire 200ha of the property and that they enjoyed
a
legitimate expectation to proper notice and consultation with regard
to any restriction of such occupation, whether by way of
a
substantial housing development on the property or the relocation of
the Ithemba Farmers onto the property.’
In
Vanger v Thomson & Meyer
1915 CPD 752
, Juta JP (Kotzé
J concurring) said, where inconsistent and mutually exclusive facts
had been pleaded by a defendant:
‘
I
do not think that a defendant can say, “I did not buy,”
and “I paid.” Mr
Upington
has cited cases in our Courts and in
the High Court at Kimberley to the effect that it is nothing unusual
for a defendant to plead
that he did not enter into a contract and
that the contract was cancelled, but he has cited no case which says
that a defendant
may plead that he did not buy and that he paid. It
would be very difficult to conceive of a defendant going into the box
and
bona fide
denying
the purchase – especially in the present case in view of the
account showing that a large sum has been paid off –
and also
saying that he had paid. Having eliminated the possibility of all
special pleas, as I already said, I cannot believe that
this is a
bona fide plea
.
The magistrate was therefore quite right in not allowing these two
pleas to stand.’
[31]
If there was actual consent, the Provincial Government would not have
been entitled to an interdict. How then can the Penhill
Farmers
honestly allege in the alternative that promises had been made and
expectations arisen which gave rise to a right
to notice and
consultation? The full court thus erred in finding both that there
was both consent and a legitimate expectation
that the Penhill
Farmers be heard.
[32]
The effect of the full court’s decision would be that when
government, provincial or local, attempts to negotiate with
unlawful
occupiers in order to regularize their occupation, it will be
precluded from asserting its right to use unoccupied land.
The
consequences could be dire.
[33]
The Provincial Government is entitled to the interdict that it seeks.
It, and people in the Western Cape, have been severely
prejudiced by
the delay in the court system. It is also entitled to the costs in
the courts below and on appeal. Although the Penhill
Farmers argued
that they were asserting constitutional rights, that is not in fact
the case. They had no right at all to the whole
property, and they
are commercial farmers. They were seeking to enhance their commercial
positions and they did so very successfully
in the period between the
launch of the application and the set down of this appeal.
[34]
Accordingly:
1 The appeal is upheld
with the costs of two counsel where so employed.
2 The order of the full
court is set aside and replaced with the following:
‘
(a) The first
respondent is interdicted and restrained from-
(i)
Settling on any of the portions of the
properties listed in annexure A to the notice of motion and which are
demarcated in red on
the plan attached hereto (the unoccupied areas);
(ii)
Erecting structures on any portion of the
unoccupied areas;
(iii)
Claiming rights over any portion of the
unoccupied areas by cordoning off such portion;
(iv)
Inciting or encouraging other persons to
settle on any portion of the unoccupied areas, or to erect structures
on such portions.
(b)
The first respondent is directed to pay the
costs of the application.’
_______________________
C H Lewis
Judge of Appeal
APPEARANCES
For
the Appellant: P
B J Farlam (with him K Pillay and T Mayosi)
Instructed
by: State
Attorney, Cape Town
State
Attorney, Bloemfontein
For
the First Respondent: S
Magardie (with him R Matsala)
Instructed
by: Legal
Resources Centre, Cape Town
Webbers,
Bloemfontein