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[2015] ZAGPJHC 115
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Nyathi and Others v Tenitor Properties (Pty) Ltd, In re: Tenitor Properties (Pty) Ltd v Nyathi and Others (06579/2015) [2015] ZAGPJHC 115 (9 June 2015)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG LOCAL DIVISION,
JOHANNESBURG
Case No. 06579/2015
DATE: 09 JUNE 2015
In the matter between:
NYATHI, S [JS
MADUMO]
............................................................................................
First
Appellant
NGCOBO, B & OTHERS listed in
Annexure
A
......................................................
Second
Appellants
And
TENITOR PROPERTIES (PTY)
LTD
................................................................................
Respondent
In re:
TENITOR PROPERTIES (PTY)
LTD
...................................................................................
Applicant
And
NYATHI,
S
.....................................................................................................................
First
Respondent
NGCOBO, B & OTHERS listed in
Annexure A
of the Notice of
Motion
.............................................................................................
Second
Respondent
THE UNLAWFUL OCCUPIERS OF THE RIDGE
HOTEL
.................................
Third
Respondent
JUDGMENT
WEINER J; VAN DER LINDE AJ; KLEIN
AJ:
Introduction
1 This is an appeal under s.18(4)(iii)
of the Superior Courts Act 10 of 2013 ( the Act). That section
provides for the appellants’
automatic right of appeal to this
court, as “the next highest court” against a judgment of
Twala, AJ decided under
s.18(3) of the Act on 28 April 2015. The
order was in the following terms:
“It is ordered that:
1. The order of the Honourable Judge
Wepener granted on 26 March 2015 is declared to be effective and
enforceable pending finalisation
of any application for leave to
appeal, including the respondents’ application for leave to
appeal against the said order
and if leave is granted pending
finalisation of an application to the Constitutional Court for leave
to appeal, if leave to appeal
is refused and if leave to appeal is
granted by the Constitutional Court, pending finalisation of the
respondents’ appeal.
2. The order in 1 above shall be
executed 30 (thirty) days from the date of service of this order.
3. The respondents are to pay the costs
of this application jointly and severally the one paying the other to
be absolved.”
2 The order of Wepener, J was granted
by him in favour of the respondent against the appellants in these
terms:
“1. The respondents are evicted
from the property at The Ridge Hotel, 8 Able Road, Berea,
Johannesburg, and more fully described
as Erven 187, 189 and 1411
Berea Township, Registration Division IR Gauteng (hereinafter
referred to as ‘the property’).
2. The respondents are ordered to
vacate the property within 48 hours of the date of service of the
court order herein.
3. In the event that the respondents do
not vacate the property within 48 hours of the date of service of the
court order herein,
the sheriff of the court or his lawfully
appointed deputy is authorised and directed to evict the respondents
from the property.
4. The respondents are directed to pay
the costs of this application, including the costs of the
applications in terms of Part A
of the notice of motion and in terms
of s.4(2) of the PIE Act.”
3 On 30 March 2015 Wepener, J refused
the appellants’ application for leave to appeal against his
judgment with costs as between
attorney and client. It may be
accepted for present purposes that the order of Wepener, J was not an
interlocutory order as envisaged
in s.18(2) of the Act, and that
accordingly s.18(1) applies. After the dismissal of the application
for leave to appeal, the appellants
applied to the Supreme Court of
Appeal for leave to appeal; that application is pending.
4 On 18 May 2015, the appellants filed
their grounds of appeal against the judgment of Twala AJ, now before
us. This appeal was
thereafter set down by the respondent for hearing
on Friday, 5 June 2015 as the appellants had failed to set it down.
At the hearing,
the appellants' counsel explained that he and his
instructing attorney had received notice of the hearing date only
late the previous
evening. He accordingly applied for a postponement
to afford him an opportunity better to prepare the argument.
5 He explained that he had represented
the appellants throughout; he had settled the answering affidavit in
the main application
before Wepener, J; he argued the matter before
Wepener, J; he argued the application for leave to appeal before that
court; he
settled the answering affidavit in the rule 49(11)
application; he argued the s.18 application before Twala, AJ; and he
settled
the grounds of appeal against the order of that court on 18
May 2015.
6 He has been aware, since 18 May, that
the appeal could be set down at short notice. The section provides
for the appeal to be
heard as a matter of "extreme urgency".
Although he stated that, if the court insisted, he could argue the
matter then
and there, he was concerned that he would not be able to
give the court appropriate page references in the course of his
submissions.
He needed 48 hours to be able to prepare heads of
argument to be able to do so.
7 After consideration, we resolved to
stand the appeal down until Monday morning, 8 June 2015 at 09h00 to
afford counsel that opportunity.
We accordingly heard argument
yesterday. This is our judgment.
8 We have only the order of Twala, AJ
and not his reasons. In consequence, even if we should have
approached the facts differently
as a court of appeal, we cannot do
so in this matter. Our approach is therefore to assess the matter
afresh. Since this approach
favours the appellants, we consider that
there cannot be any prejudice.
Background
9 We commence by setting out the
relevant background and then deal with the grounds of appeal and the
reasons advanced by the appellants.
10 The respondent asserts that it is
the owner of a building known as The Ridge Hotel in Berea,
Johannesburg. It is a block of residential
flats. The respondent puts
up a title deed to prove its ownership. It says it acquired the
building from the liquidator of Win
Win Training Specialists (Pty)
Ltd (in liquidation), the previous owner of the building. The
acquisition occurred on 28 June 2010
and the building was registered
in the respondent’s name on 25 May 2011.
11 After the respondent became owner,
the occupants of the building continued paying the rental as they had
done before to the previous
owners. However, during 2014, the
atmosphere at the building became increasingly tense with rental
collections declining, causing
the respondent substantial cash-flow
problems. The respondent’s bondholders were compelled to become
more actively involved
in order to ensure stability of the property.
12 A meeting took place in December
2014 between the respondent, the bondholders, and some of the
occupiers, including the first
appellant. At this meeting he said
that the SACP Youth League had a mandate to investigate inner city
buildings to ensure that
the owners thereof were paying their
obligations to the City of Johannesburg; and that unless the
respondent was co-operative he,
the first appellant, would ensure
that the City attached the property.
13 It is not disputed that, at this
meeting, the respondent was given a memorandum authored by the Mzansi
Progressive Movement.
The memorandum says that illegal evictions of
indigenous people were taking place on a daily basis in Berea,
Hillbrow and Yeoville.
14 The memorandum suggests that
property owners of hijacked buildings should be integrated into a
reconstruction and development
plan to allow voters to have ownership
through subsidised housing schemes. It is proposed that private
security firms be employed
at buildings or streets that were said to
be “problematic”, “in order to monitor and bring
control”. These
private security firms are to “monitor
all illegal evictions.”
15 The meeting did not resolve the
conflicts, as the following events will show. The respondent had
resolved to change its managing
agent and its security company with
effect from the 1st of January 2015. When the respondent’s new
security company attempted
to relieve the previous security company,
they were met with violent resistance. The deputy-sheriff was denied
access to the building
when he attempted to deliver letters on the
6th of January 2015.
16 A security firm known as FASA
Protection had, on the instructions of the occupants, taken control
of security issues at the building.
The papers include what appears
to be a resolution by the occupants whereby they appoint their own
security firm for the building.
The appellants’ counsel was not
able to address any argument on the document, because it had not been
included in his brief.
He was given a copy, but had no instructions
in relation to the document. The respondent, however, submitted that
the resolution
was attached to the applicants' answering affidavit in
the eviction application.
17 Be that as it may, the respondents
applied urgently to court for relief, and on 8 January 2015 Coppin, J
issued an order, the
effect of which was to evict FASA Protection
from the building. This firm was also interdicted from installing
guards on the property;
from purporting to conduct any kind of
security function at the property; from interfering with the
respondent's officers, employees
or agents in the legitimate conduct
of their business at the property; and from being within ten metres
of the building.
18 This was to no avail. When the
deputy-sheriff attempted on 14 January 2015 to serve the order with
the assistance of the SAPS,
a group of approximately 400 people
physically ejected the respondent’s security firm again. This
group of people broke
down the security gate, forced access into the
property, and tore down the respondent’s security devices at
the property,
including security cameras.
19 Since that date, the respondent has
not controlled the building. It is controlled by the appellants and a
security company acting
under their directions. Since the beginning
of February 2015, no rental at all has been paid to the respondent.
In fact, the events
of February 2015 and thereafter bear a striking
resemblance to the strategy referred to both in the resolution and in
the memorandum
referred to above.
20 Thereafter on 6 February 2015,
Mashile, J heard an application by the respondent to commit the
present appellants for contempt
of court for failing to have complied
with the order of Coppin, J. Such an order was granted but since the
appellants have given
notice of an intention to apply for leave to
appeal against that order, it has not been executed.
21 The urgent application before
Wepener, J followed, and thereafter, the events described earlier in
this judgment.
22 The essential picture that emerges
from the affidavits is one of a typical hijack of an inner-city block
of flats. The respondent’s
predecessors had let the flats to
occupiers, and the respondent’s immediate predecessor was
ultimately liquidated. The appellants
and the other occupiers of the
flats are quite unequivocal that they are not paying the rental,
because they dispute that the respondent
is the owner of the
building. The rental boycott is accompanied by violence and
vandalism. It is not effectively disputed that
persons unknown to
the respondent took up occupation within the building during and
after a violent takeover of the building.
23 Two salient, juxtaposed, points
stand out. The first is that the appellants do not appear to assert
any legal entitlement vis-à-vis
anyone to their continued
occupation of this private building. They deny that any lease
agreement exists between them and the respondent.
Secondly, the
respondent has provided the original title deed of the property and
it reflects that the respondent is its owner.
The appellants’ grounds of
appeal
24 For the respondent to have been
successful before Twala, AJ, the court had to be persuaded of the
presence of three requirements:
firstly, the presence of exceptional
circumstances; secondly, that suspension of the order would result in
irreparable harm to
the respondent; and thirdly that
non-suspension/execution would not result in irreparable harm for
the appellants.
25 The appellants have set out grounds
and reasons on which their appeal is based. These traverse the three
requirements set out
above. In addition, there are further grounds,
which, when distilled to the essence of the points made, mean that
there are really
five points to be addressed in this appeal. Apart
from the three statutory requirements, the two further points are
whether the
respondent has shown that it is the owner of the building
and therefore entitled to an eviction order; and the issue of the
non-existence
of the lease agreements. We address these five issues
in turn.
“
Exceptional circumstances”
26 S.18(1) and (3) of the Act provide
as follows (our emphasis):
“18. Suspension of decision
pending appeal
(1) Subjection to sub-sections (2) and
(3), and unless the court under exceptional circumstances orders
otherwise, the operation
and execution of a decision which is the
subject of an application for leave to appeal or of an appeal, is
suspended pending the
decision of the application or appeal.
(2) …
(3) A court may only order otherwise as
contemplated in sub-section (1) or (2), if the party who applied to
the court to order otherwise,
in addition proves on a balance of
probabilities that he or she will suffer irreparable harm if the
court does not so order and
that the other party will not suffer
irreparable harm if the court so orders.”
27 Under s.18(4)(i) of the Act, if a
court orders that the initial decision will not be suspended, “…the
court must
immediately record its reasons for doing so”; and
under s.18(4)(ii), “…the aggrieved party has an
automatic
right of appeal to the next highest court.” Under
s.18(4)(iii), “…the court hearing such an appeal must
deal
with it as a matter of extreme urgency.”
28 There is no shortage of hits in the
South African law reports response to a Jutastat search for the
linked words, “exceptional
circumstances”. The concept
features often in legislation, but also in the ratio decidendi of
judgments. It would be ambitious
here to try to capture its meaning
in a definition, because self-evidently the context determines the
application; but there is
no doubt that the courts consider it to set
the bar at a high level. Compare Chevron Engineering (Pty) Ltd v
Nkambule and Others,
2004 (3) SA 495
(SCA) at [42].
29 In the context of the present matter
we approach the concept of "exceptional circumstances" in
the following way.
30 First, by definition, these words
have a wide berth. Second, that notwithstanding, it would be wrong
to approach the assessment
of the concept on the basis that the
appeal has or does not have a prospect of success, one way or the
other, because all appeals
will either succeed or fail. Put
differently, the fact that an appeal has a weak prospect of success
cannot be exceptional; that
happens all the time.
31 Third, it follows that the
circumstances, for them to be exceptional, must as far as possible be
neutral in relation to the success
prospects. Fourth, since the words
have a wide reach, the potential harm that each side will suffer, if
the suspension issue goes
against that side, is a relevant factor.
32 Against this background, we consider
the following circumstances as being pertinent. The first
consideration is that the occupants
are not paying for their
occupation, nor is anyone else paying for it; while the respondent is
availing the building for their
occupation. This fact represents an
economical aberration for which there is, objectively, no
justification. Even if the occupants'
worst suspicions were true,
they ought to have been paying some compensation for the services and
the roofs over their heads.
33 Second, the scale on which such
conduct is occurring is significant. One is not dealing with a single
occupant in a block of
flats. That scenario might, depending on the
circumstances, have been manageable. Here a whole building is
involved.
34 Third, the fact that the appellants'
continued occupation is maintained by violence is relevant. This
represents a degree of
anarchy which is fundamentally incompatible
with the founding value of s.1(c) of the Constitution, which is the
supremacy of the
Constitution and the rule of law (emphasis added).
Irreparable harm
35 The next issue concerns that of the
respective potential harm that each side will suffer if the
suspension order goes against
it. Sutherland, J in Incubeta Holdings
(Pty) Ltd and Another v Ellis and Another,
2014 (3) SA 189
(GJ), held
that these are two distinct enquiries; not as before, in terms of
Rule 49(11), when there was a weighing up of the relative
positions
of the two sides in assessing a balance of convenience.
36 The appellants say that they will be
destitute if they are evicted. In his publication, “Essential
Judicial Reasoning”,
BR Southwood (LexisNexis 2015), a retired
judge of considerable experience, cautions (at p.28, para 4.6) that
to decide whether
the affidavits disclose real, genuine or bona fide
disputes of fact, a court must carefully scrutinise them.
37 The author refers to the judgment in
Wightman t/a JW Construction v Headfour (Pty) Ltd & another
[2008] ZASCA 6
; ,
2008
(3) SA 371
(SCA). That judgment, in paragraphs 12 and 13, refers to
the well-known judgments in Plascon-Evans Paints Ltd v Van Riebeeck
Paints
(Pty) Ltd,
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 634E to 635C. It refers
also to the analysis by Davis J, in Ripoll-Dausa v Middleton NO &
others
[2005] ZAWCHC 6
; ,
2005 (3) SA 141
(C) at 151A to 153C. These dicta stress the
point that a respondent could so easily trip up the motion court
process if it were
permitted to create artificial disputes of fact.
38 Despite saying that they would be
destitute, the appellants also say, several times, that they will pay
the respondent for their
occupation of the building if the respondent
were to satisfy their particular demands for proof of ownership. This
is stated repeatedly
in the answering affidavit; see paragraphs 3.2,
27.2, 29.2, 32.6, and 37.2. In fact, the appellants say that they
were prepared
to pay the rental into the trust account of an
attorney. They do not say that they won't pay because they can't pay.
They allege
that their earnings, in some instances, are R8000 pm.
They are not indigent.
39 In these circumstances, it is not
credible that the appellants will be destitute, if evicted. The
appellants are willingly participating
in a scenario where they have
decided to pay rentals to their own leaders and not to the owner of
the building. If they were evicted,
they would be able to apply
their rental payments to other accommodation.
40 Although we are not specifically
told where they can rent alternative accommodation, they have not
said that they won't be able
to find any. They also raise the issue
that children will be displaced and will not be able to go to school.
No evidence of this
was placed before any of the courts hearing this
matter. If the appellants can afford alternative accommodation, there
is no reason
advanced by them why such accommodation cannot be found
in proximity to transport and / or to the schools which the children
presently
attend. One's instinctive concern is really just that: a
concern, but not supported by evidence. One cannot accept, therefore,
that they will be destitute and displaced if the execution of the
eviction order is granted. One must accept that they have the
wherewithal to pay for occupation.
41 The respondent's expressed position
is that it will not survive the rent boycott. It borrowed R25 634
593 from the Trust for
Urban Housing Finance, and R12 000 000 from
the Gauteng Partnership Fund, totalling more than R37 000 000. The
interest alone
on its loans approximates R400 000 per month and
operational costs, including electricity, water, rates,
administrative fees and
staff salaries exceed R216 000 per month.
42 The respondent explains that its
only business is the rental of the building. Its damages escalate on
a daily basis and it has
no prospect of recovery. The shareholders
of the respondent are all black South Africans and the respondent is
driven by a pressing
imperative to transform the complexion of
inner-city land ownership patterns.
43 Clearly the building must have
involved a capital outlay for which mortgage bonds were registered
and clearly its continued operation
involves running costs. There
are also rates and taxes.
44 The appellants criticise the
respondent for not proving its dark prediction. They question why
letters of demand from the mortgage
bond holders, or bank statements
were not provided. However, common sense tells one that bond
repayments and rates and taxes are,
as the expression goes, like
death, certain. And appeals, virtually as certain, take time.
Financial ruin is not, we think, far-fetched.
The previous owner was
liquidated, and although one does not have hard facts about it, it
does seem certain that the investment
in the block of flats in Berea
did not prevent the financial demise. The respondent has stated
unequivocally that it has no other
income; the income it derives from
the rentals pays for the bond and rates and taxes and other running
costs. Without such payments,
the respondent cannot meet its
obligations.
45 One might not be able to say that
these circumstances individually are “exceptional” within
the meaning of s.18.
But in our view, taken together, they are.
Ownership of The Ridge Hotel
46 The fourth issue concerns the
ownership of the building. The appellants have throughout challenged
the ownership of the building.
Their case is that the previous owner
of the building, a Dr Mabunda, sold it to a different juristic
entity, Kaplan Estates, whose
owner, Mr Easy Norvac (sic), passed
away in 2010. They therefore attack the obligationary agreement.
They do not provide any further
proof or evidence relating to their
suspicions that there is something untoward in the respondent's
ownership.
47 The respondent handed the original
title deed to Wepener, J during the hearing. It annexed a copy of
the title deed certified
for judicial purposes by the Registrar of
Deeds, to its founding affidavit in the present matter. By virtue of
s.16
of the
Deeds Registries Act 47 of 1937
, “… the
ownership of land may be conveyed from one person to another only by
means of a deed of transfer executed
or attested by the registrar…”.
48 In Legator McKenna Inc and Another v
Shea and Others
2010 (1) SA 35
(SCA) the Supreme Court of Appeal held
that, in our law, the abstract theory of transfer applies to
immovable property as well.
Brand JA, writing for a unanimous court,
stated (para 22):
“In accordance with the abstract
theory the requirements for the passing of ownership are twofold,
namely delivery - which
in the case of immovable property is effected
by registration of transfer in the deeds office - coupled with a
so-called real agreement
or saaklike ooreenkoms. The essential
elements of the real agreement are an intention on the part of the
transferor to transfer
ownership and the intention of the transferee
to become the owner of the property (see eg Air-Kel (Edms) Bpk h/a
Merkel Motors
v Bodenstein en 'n Ander
1980 (3) SA 917
(A) at 922E -
F; Dreyer and Another NNO v AXZS Industries (Pty) Ltd supra at para
17). Broadly stated, the principles applicable
to agreements in
general also apply to real agreements. Although the abstract theory
does not require a valid underlying contract,
eg sale, ownership will
not pass - despite registration of transfer - if there is a defect in
the real agreement (see eg Preller
and Others v Jordaan
1956 (1) SA
483
(A) at 496; Klerck NO v Van Zyl and Maritz
NNO supra at 274A - B; Silberberg and
Schoeman op cit at 79 - 80).”
49 In these circumstances, the
challenge to the respondent’s ownership cannot be accepted. The
title deed establishes the
ownership, and it is not sufficient simply
to question its veracity; that does not raise a bona fide factual
dispute. That applies
particularly when one bears in mind that the
appellants would have to show that not only the respondent and the
liquidator of Win
Win Training, but the conveyancers, as well, were
all party to a fraud; when they expressed their intention to transfer
ownership,
that would have had to have been false.
No rental agreements
50 Finally there is the argument raised
by the appellants that the respondent has not proved rental
agreements between it and them,
and therefore there was no obligation
to pay rental.
51 It is not in dispute that the
appellants had concluded rental agreements with the respondent’s
predecessors. By virtue
of the huur gaat voor koop rule, the
respondent became their new landlord by operation of law. The
respondent simply stepped into
the shoes of the previous landlord. No
further agreement was necessary; see Genna-Wae Properties (Pty) Ltd v
Medio-Tronics (Natal)
(Pty) Ltd,
[1995] ZASCA 42
;
1995 (2) SA 926
(A).
52 In any event, as pointed out in the
judgment of Wepener, J, the appellants kept paying rental after the
respondent had become
owner of the building in 2011. A tacit tenancy
must have come into existence during that period.
53 It follows that the appellants have
failed to persuade this court that Twala, AJ erred in granting the
relief to the respondent.
The respondent has satisfied the
requirements of
Section 18
, in demonstrating exceptional
circumstances, and that it will suffer irreparable harm if the order
is suspended, whereas the appellants
will not.
Costs
54 The appellants asked for a special
costs order in two respects, should they be successful: that the
costs be paid de bonis propriis,
and on the scale as between attorney
and client. The latter submission was based on the proposition that
the appeal is an abuse,
not bona fide, a deliberate strategy to force
the respondent into liquidation, and by a litigant who does not shy
away from self-help.
The former was based on the submission that the
appellants took no steps to prosecute the appeal. Also, the defences
put up were
said to be without substance.
55 These two ostensibly separate issues
are really co-mixed. When does a legal representative begin to pay
the price for advising
on a case or defence that has no substance?
And when does the client have to pay a special price for having
abused court resources
for a failed and ill-conceived defence that
serves its own agenda?
56 On the issue of costs de bonis
propriis, the appellants’ counsel explained how much trouble he
and his instructing attorney
had taken to get the judgment from
Twala, AJ and the appeal enrolled. Also, the advice may very well
have been that the prospects
of success on- appeal were poor. We do
not think that the legal representatives should literally have to pay
the price if that
were so.
57 On the issue of costs on the scale
as between attorney and client, the position is more complex. We have
drawn attention to the
fact that the appellants have not asserted any
legal right of occupation against anyone, much less have they
asserted a right to
free occupation.
58 Instead, they appear to have
subjected their willingness to pay for their occupation to their
misguided belief that the respondent
is obliged to produce documents
that would supposedly prove the respondent’s ownership. It is
nonetheless an appeal against
a judgment given on an application
brought on motion proceedings. Affidavits may often obscure nuances
that are pertinent. Hijacking
of buildings in the inner-city by
unscrupulous parties may have raised fears, even if ill-founded, of
dishonest parties pretending
to be landlords.
59 In these circumstances we prefer not
to accede to a request that might have been legitimate were the
affidavits prepared with
more precision and circumspection and in
less haste.
Conclusion
60 It follows that in our view the
order of Twala, AJ was correctly made. We would dismiss the appeal,
with costs, and it is so
ordered.
SE WEINER, J
JUDGE OF THE HIGH COURT
JOHANNESBURG
WHG VAN DER LINDE, AJ
ACTING JUDGE OF THE HIGH COURT
KLEIN, AJ
ACTING JUDGE OF THE HIGH COURT
Counsel for the Appellants: Adv. BT
Ngqwangele
Instructed by: Malengeni Attorneys
Counsel for the Respondent: Adv. AW
Pullinger
Instructed by: Vermaak &
Partners Inc.
Date argued: 8 June 2015
Date of judgment: 9 June 2015