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[2021] ZAWCHC 45
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Racing Park development Owners Association v Cape Killarney Property Investments (Pty) Ltd and Another (8175/2020) [2021] ZAWCHC 45 (15 March 2021)
Republic
of South Africa
IN
THE HIGH COURT OF SOUTH AFRICA
WESTERN
CAPE DIVISION, CAPE TOWN
Case
number: 8175/2020
Before:
The Hon. Mr Justice Binns-Ward
Hearing:
11 March 2021
Judgment:
15 March 2021
In
the matter between:
RACING
PARK DEVELOPMENT OWNERS’ ASSOCIATION
Plaintiff
and
CAPE
KILLARNEY PROPERTY INVESTMENTS (PTY) LTD
First Defendant
HOUSING
DEVELOPMENT AGENCY
Second Defendant
JUDGMENT
(Delivered
by email to the parties’ legal representatives and by release
to SAFLII.
The
judgment shall be deemed to have been handed down at 10h00 on
15 March
2021.)
[1]
This matter concerns an application by the
plaintiff to amend its
particulars of claim. The application was opposed by the first
defendant.
[2]
The plaintiff, which is a property owners’
association
constituted in terms of s 29 of the (since repealed) Land Use
Planning Ordinance 15 of 1985 by virtue of a condition
of subdivision
imposed in terms of s 42 of the Ordinance, instituted action
against the first defendant, which was the developer
of the
subdivided land, claiming the following relief:
1.
An order declaring the transfer of Erven 35163 -3574 Milnerton, Erf
35148 Milnerton and Erf
38368 Milnerton on 8 February 2019 to be
contrary to the Plaintiff’s Constitution and the title deeds of
the Erven and (sic)
invalid;
2.
An order directing the First and Second Defendants to take all steps
necessary to reverse
the transfer of Erven 35163 -3574 Milnerton, Erf
35148 Milnerton and Erf 38368 Milnerton to the Second Defendant;
3.
Costs of suit;
4.
Further and/or alternative relief.
The
development in issue exists on formerly agricultural land that was
subdivided at the instance of the first defendant for development
as
an industrial estate.
[3]
The second defendant, which is a national
public entity established
as a juristic person in terms of
s 3(1)
of the
Housing
Development Agency Act 23 of 2008
, purchased part of the subdivided
land from the first defendant and took registered transfer thereof.
It is reportedly currently
engaged in the process of applying for the
rezoning of such land for housing development.
[4]
The substantive allegations in the plaintiff’s
original
particulars of claim go as follows:
4.
The plaintiff was established when Cape Farm no. 215 “Doornbach”
at Potsdam Road in Cape Town was subdivided for the purposes of
developing an industrial park. The plaintiff has a Constitution,
a
copy of which is attached marked “
POC1
”.
5.
The First Defendant was the developer of the industrial park and
remains
an owner of erven within it.
6.
In terms of the Plaintiff’s Constitution:
6.1
membership of the plaintiff is compulsory for every registered owner
of an erf in the development; and
6.2
a member is not entitled to sell or transfer an erf within the park
unless it has first obtained the Plaintiff's written consent.
7.
In terms of the title deeds in respect of all of the Erven in the
park:
7.1
no erf shall be transferred without the written consent of the
plaintiff.
8.
In or about August 2019, the First Defendant sold Erven 35163 -3574
Milnerton,
Erf 35148 Milnerton and Erf 38368 Milnerton to the Second
Defendant without the Plaintiff's written consent.
9.
On 28 September 2018, also without the written consent of the
Plaintiff,
the First Defendant signed a power of attorney pursuant to
which transfer of above erven to the Second Defendant was registered
on 8 February 2019.
10.
The title deeds to the above erven are attached and marked “
POC2
”.
11.
Given that the transfer of the above Erven to the Second Defendant
occurred without the written
consent of the Plaintiff, it is entitled
to a declaration that such transfers were done contrary to the
Plaintiff’s Constitution
and the title deeds applicable to the
Erven and are invalid and, further, to an order directing the
Defendants to take all steps
necessary to reverse the transfers.
[5]
The first defendant delivered a notice of
exception to the
particulars of claim. The plaintiff reacted to the notice of
exception by giving notice, in terms of rule
28, of its intention to
amend the particulars of claim in the following respects:
1.
By adding the following at the end of paragraph 5:
‘
...
and is, as such, bound by its Constitution.
’
2.
By deleting paragraph 7 thereof.
3.
By replacing paragraphs 9 – 11 thereof with the following
paragraphs:
‘
On
or about 30 November 2018, Mr Morris Rubin, apparently representing
the First Defendant, signed a consent and acceptance of conditions,
purportedly on behalf of the Plaintiff, to allow for the transfer of
the above erven to the Second Defendant. A copy of the purported
consent and acceptance of conditions are (sic) attached and marked
“
POC 2
” and “
POC3
”.
To
the knowledge of both Mr Rubin and the First Defendant, neither of
them was authorised to sign the consent and acceptance of
conditions,
alternatively, neither Mr Rubin nor the First Defendant could
honestly have believed that they were authorised to sign
the consent
and acceptance of conditions.
In
signing the consent and acceptance of conditions under these
circumstances, Mr Rubin and the First Defendant acted fraudulently
and with the intention to induce the Registrar of Deeds to register
the transfer of the above erven to the Second Defendant.
The
Registrar of Deeds was so induced and, on 8 February 2019, transfer
of the above erven was registered. A copy of the Deed of
Transfer is
attached and marked “
POC4
”.
By
reason of the fraudulent conduct described above, the plaintiff is
entitled to seek an order reversing the transfer to the second
defendant of Erven 35163 -3574 Milnerton, Erf 35148 Milnerton and Erf
38368 Milnerton
.’
6.
By deleting prayer 1 thereof (sic).
The
application currently before the court was brought after the first
defendant indicated that it objected to the proposed amendment.
[6]
The ‘consent’ and ‘acceptance
of conditions’
referred to in the passages quoted above are concerned with clause
5.5 of the plaintiff’s constitution,
which provides as follows:
A
member shall not be entitled to:
5.5.1
sell or transfer an erf unless it is a condition of the sale and
transfer that:
5.5.1.1
the transferee agrees in writing to become a member of the
Association and to be bound by the provisions
of this constitution;
5.5.1.2
the registration of transfer of that erf into the name of the
transferee show ipso facto constitute the
transferee as a member of
the Association;
5.5.1.3
the member first obtains the written consent of the Association which
consent shall be given provided the transferee of
such erf agrees in
writing to become a member of the Association and to be bound by the
constitution of the Association and provided
further that the member
has paid all levies and any other amounts owing by such member (where
applicable) in terms of this constitution
as at the date of
registration of transfer of the earth to the transferee.
[7]
It is evident from the tenor of the proposed
amended particulars of
claim that the plaintiff appears to contend that the mere occurrence
of the alleged misrepresentation by
Mr Rubin or the first
defendant resulted ipso facto in the consequent transfer of the erven
to the second defendant being
vitiable at its instance.
[8]
The affidavits exchanged in the current application
indicate that
there is a dispute concerning whether the first defendant had been
entitled to make the representations that it did
to the registrar of
deeds. The dispute is centred on whether or not there had been
an effective amendment of the plaintiff’s
constitution to take
away the originally built-in paramountcy of the developer in the
Association’s decision-making processes.
It would
obviously not be appropriate to purport to determine that dispute in
the context of considering the proposed amendment
of the plaintiff’s
particulars of claim and I shall accordingly proceed on the
assumption, without making any finding to
that effect, that Mr Rubin
or the first defendant did wittingly mispresent to the registrar that
the plaintiff had consented to
the transfer of the erven to the
second defendant. It bears noting, however, that it has not
been alleged that the second
defendant was in any manner party to the
alleged fraud or that it has done the plaintiff any wrong.
[9]
The first defendant submits that the claim
that the plaintiff seeks
to advance in the proposed amended particulars of claim is not a
viable claim. It points out that
the levies and other amounts
due by it to the plaintiff had been paid when transfer of the
properties was effected, and that the
second defendant has been
discharging its obligation as a member of the plaintiff association
by the paying the Association’s
levies on the erven since it
took transfer of them. It also points out that, in terms of
clause 3.1 of the deed of sale concluded
between itself and the
second defendant, the erven were sold subject to all the conditions
mentioned in the title deeds and ‘subject
to all such other
conditions ... as may exist in regard thereto, including the
provisions of any applicable town planning scheme’.
The
first defendant drew attention to the fact that the approval of the
subdivision in accordance with general plan 5491/2006 was
subject to
the condition that the erven therein not be transferred without the
written consent of the owners’ association
of which the
transferee and its successors in title would become a member.
It contends, and I did not understand the plaintiff
to assert
anything to the contrary, that, having regard to the provisions of
clause 5.5.1.3 of its constitution, the plaintiff
would therefore not
have been entitled to withhold consent for the transfers. It
follows, so contends the first defendant,
that the plaintiff has not
sustained cognisable harm as a consequence of the alleged
misrepresentation and no practical object
would be served by granting
the plaintiff the relief it seeks in terms of the proposed amended
particulars of claim; for any reversal
of the transfer would have to
be followed by a fresh transfer.
[10]
The first defendant avers that the action is not bona fide and that
the reversal of the transfer of the erven to the second defendant is
being sought for an ulterior purpose, namely, to collapse
the
latter’s pending application to the local authority for the
rezoning of the acquired property; for it is only its registered
ownership of the property that gives the second defendant standing to
make the application. It does not appear to be disputed
that
the plaintiff association is in fact opposed to the second
defendant’s rezoning application.
[11]
As I understood his argument, Mr
Melunsky
SC, who
appeared for the first defendant, submitted that a viable claim was
not made out in the proposed amended particulars
of claim because it
lacked any allegation that the plaintiff’s situation had been
adversely affected by the alleged fraud
and also failed to contain
any allegation that might sustain the conclusion that the transfers
were voidable merely by reason of
the alleged misrepresentations.
(It bears stressing in this regard that this is
not
a case of
one party to a contract alleging that it was induced to enter into
the agreement by the fraudulent misrepresentation of
the other
party.) The essence of the argument, as I understood it, was
that the proposed amended particulars of claim failed
to show that
any right of the plaintiff had been affected in a manner that would
justify the remedy that is sought.
[12]
Counsel referred, in support of his argument, to
the Constitutional Court’s judgment in
Giant
Concerts CC v Rinaldo Investments (Pty) Ltd and Others
[2012] ZACC 28
(29 November
2012); 2013 (3) BCLR 251
(CC), in
which it was held that an ‘own interest’ (as distinct
from class interest) litigant has ‘no broad or
unqualified
capacity to litigate against illegalities. Something more must be
shown’.
[1]
Mr
Melunsky
acknowledged that
Giant Concerts
concerned a question of the litigant’s standing to challenge an
administrative decision under the
Promotion of Administrative Justice
Act 3 of 2000
, but he argued that the principle underpinning the
Court’s reasoning was equally applicable in the current case;
namely,
that the courts should not be required to deal with abstract
or hypothetical issues,
[2]
or matters in which the claimant did not demonstrate ‘sufficient
interest’ in the relief sought. He contended
that that
principle was of general application.
[13]
Mr
Melunsky
’s argument was well made in my judgment.
Indeed, the reasoning in
Giant Concerts
that he sought to
apply was made in the context of an observation by the Court in that
case that ‘constitutional own-interest
standing is broader than
the traditional common law standing, but that a litigant must
nevertheless show that his or her rights
or interests are directly
affected by the challenged law or conduct’. Standing in
the current case, which is own-interest
litigation in a private law
context, would, on the basis of the aforementioned observation, fall
to be assessed less generously
than it would be in constitutional
own-interest litigation.
[14]
The following summary of principle by Cameron J in para 41
of
his judgment in
Giant Concerts
is plainly of general
application:
...
5.
Standing is not a technical or strictly-defined concept.
And there is
no magical formula for conferring it. It is a tool a court employs to
determine whether a litigant is entitled to
claim its time, and to
put the opposing litigant to trouble.
6.
Each case depends on its own facts. There can be no general
rule
covering all cases. In each case, an applicant must show that he or
she has the necessary interest in an infringement or a
threatened
infringement. And here a measure of pragmatism is needed.
(Footnotes
omitted.)
[15]
The nature of the relief sought by the plaintiff
in terms of the amended particulars of claim is interdictory in
character.
The plaintiff seeks a mandatory interdict against
the defendants; a remedy where positive conduct on the part of an
alleged wrongdoer
is required to terminate continuing
wrongfulness.
[3]
Recognition of the legal character of the remedy brings to mind Innes
CJ’s famous analysis, often cited in connection
with questions
of standing,
[4]
in
Dalrymple and Others v Colonial Treasurer
1910 TS 372.
The learned chief justice explained that, in
addition to proving the infringement of a right, it was necessary, in
order to obtain interdictory relief, also to establish ‘an
injury sustained and continuing or apprehended’. He
illustrated how the incidence of that principle ‘runs through
the whole of our jurisprudence’, observing further ‘[i]t
is not confined merely to the civil side: it is of equal force in
regard to criminal procedure. Just as no man can claim damages
in a
civil action unless he has himself been injured, so no man may
institute a private prosecution unless he has been specially
affected
by the crime. And the rule applies to wrongful acts, which affect the
public, as well as to torts committed against private
individuals’.
The same goes for a case based on fraudulent misrepresentation.
Unless resultant prejudice, actual
or potential, can be shown by the
claimant, there is no viable basis to prosecute it.
[16]
The plaintiff’s proposed amended particulars of claim allege
the infringement of a right, but they do not contain any allegation
of resultant harm. And certainly not any that would support
the
interdictory relief prayed for.
[17]
In the result, the application is dismissed with costs.
A.G.
BINNS-WARD
Judge
of the High Court
APPEARANCES
Plaintiff’s
counsel:
D.W. Baguley
Plaintiff’s
attorneys:
Slabbert Venter Yanoutsos
Wynberg
Norton Rose Fulbright
Cape Town
First
Defendant’s counsel:
D. Melunsky SC
First
Defendant’s attorneys:
De Klerk & Van Gend
Claremont
[1]
In para 35.
[2]
Cf.
Ferreira
v Levin NO and Others; Vryenhoek and Others v Powell NO and Others
[1995] ZACC 13
;
1996 (1) SA 984
(CC);
1996 (1) BCLR 1
(CC) in
para 165 (cited in
Giant
Concerts
in
para 37).
[3]
Cf.
Democratic
Alliance v African National Congress and Another
2015 (2) SA 232
(CC) at para 159.
[4]
Cf. e.g.
Four
Wheel Drive Accessory Distributors CC v Rattan NO
[2018] ZASCA 124
(26 September
2018); 2019 (3) SA 451
(SCA) in para
7-8.