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[2015] ZASCA 99
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Red Dunes of Africa v Masingita Property Investment Holdings (159/2014) [2015] ZASCA 99 (1 June 2015)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
NOT
REPORTABLE
Case
No: 159/2014
In
the matter between:
RED
DUNES OF AFRICA
CC APPELLANT
and
MASINGITA
PROPERTY INVESTMENT
HOLDINGS
(PTY) LTD
1
ST
RESPONDENT
ZEBEDIELA
NDEBELE TRIBAL COUNCIL 2
ND
RESPONDENT
THE
MINISTER, RURAL DEVELOPMENT
AND
LAND
REFORM 3
RD
RESPONDENT
MEC
LIMPOPO PROVINCIAL DEPARTMENT
OF
ECONOMIC DEVELOPMENT, ENVIRONMENT
AND
TOURISM
4
TH
RESPONDENT
LEPELLE-NKUMPI
LOCAL MUNICIPALITY 5
TH
RESPONDENT
In
the matter between:
RED
DUNES OF AFRICA CC
APPELLANT
and
MASINGITA
PROPERTY INVESTMENT
HOLDINGS
(PTY) LTD
1
ST
RESPONDENT
MASINGITA
VLAMING CONSTRUCTION
(PTY)
LTD
2
ND
RESPONDENT
MONICA
LEOLO
3
RD
RESPONDENT
Neutral
citation:
Red Dunes of Africa v Masingita Property
Investment Holdings
(159/2014)
[
2015] ZASCA 99
(1 June
2015)
Coram:
Ponnan, Shongwe and Pillay JJA and Fourie
and Gorven AJJA
Heard
:
25 May 2015
Delivered:
1 June 2015
Summary:
Right to develop property ─ appellant relying on an
agreement containing suspensive conditions ─ cannot be relied
upon
to found any rights where there is no averment that the
suspensive conditions were fulfilled or waived ─ appellant also
relying
on resolution purporting to transfer a Permission to Occupy ─
no actual transfer ─ even if transfer took place, no right
to
develop founded ─ appeal dismissed.
ORDER
On
appeal from:
Gauteng Division of the High Court, Pretoria
(Kganyago AJ sitting as court of first instance)
The
appeal is dismissed with costs, including those occasioned by the
employment of two counsel where applicable.
JUDGMENT
Gorven
AJA (Ponnan, Shongwe, Pillay JJA and Fourie AJA concurring):
[1]
The use of property for commercial purposes is
often hotly contested. This appeal arises from just such a
contestation. It relates
to two properties. Both nominally vest in
the third respondent, the Minister for Rural Development and Land
Reform. Both fall under
the jurisdiction and control of the Zebediela
Ndebele Tribal Council (the Council). The first respondent, Masingita
Property Investment
Holdings (Pty) Ltd (Masingita), claims that it
has a right to construct a community shopping mall on one property
(the mall property).
The appellant, Red Dunes of Africa CC (Red
Dunes), claims that it has a right to construct a shopping centre on
the other property
(the café property).
[2]
In the court below, Masingita launched an
application against the Council, as the first respondent, and Red
Dunes, as the second
respondent. Masingita sought to enforce an
agreement which it alleged it had with the Council to develop the
mall property and
to interdict Red Dunes from continuing with
construction which it had commenced during September or October 2012
(the main application).
The basis of the main application was that
the construction in question was located at least partly on the mall
property. Red Dunes
opposed that application and itself brought an
application, claiming spoliatory relief and reinstatement to
possession of what
it said was the café property (the
spoliation application). The Council opposed the main application and
the appeal but
was not a party to the spoliation application. The
other parties did not enter the fray at any stage.
[3]
The matters were heard together in the Gauteng
Division of the High Court, Pretoria before Kganyago AJ. The court
below made no
order relating to the spoliation application, holding
that the outcome of the main application had rendered it moot.
Masingita
did not persist in the relief sought against the Council.
This was because the Council demonstrated in its answering affidavit
that it had not breached the agreement relied upon by Masingita and
made common cause with Masingita in respect of the relief sought
against Red Dunes. The court below granted relief in favour of
Masingita against Red Dunes as follows: (a) an interdict from
constructing
any development on the mall property; (b) a declaration
that any development by Red Dunes on the mall property was unlawful;
(c)
an order directing Red Dunes to demolish any structures on the
mall property; and (d) an order that Red Dunes pay the costs of the
application and counter-application, including those of two counsel.
[4]
Red Dunes was granted leave to appeal by the court
below against the dismissal of the spoliation application and the
grant of relief
under the main application. Red Dunes has abandoned
the appeal against the outcome of the spoliation application and
tendered any
associated wasted costs. Nothing further need be said in
this regard. The appeal before us, accordingly, lies only against the
relief granted in favour of Masingita against Red Dunes in the main
application.
[5]
The issue on appeal is whether the court below correctly granted the
relief. Both in the court below and in this court Red Dunes
raised
two issues. First, whether Masingita proved that it has a clear
right. This resolves itself in essence into the question
whether
Masingita proved a right to develop the mall property and the
concomitant finding that Red Dunes did not prove a prior
right of
development. Secondly, whether the construction of Red Dunes
encroached on the mall property.
[6]
I shall begin with the second of these.
Despite its assertion to the contrary, Red Dunes itself claimed that
there was ‘incontrovertible
proof that the [café]
property was . . . included in the mall property’. In addition,
when Masingita asserted that
the inclusion of the café
property contributed to the extent of the mall property increasing
from 5,0969 hectares to 5,2695
hectares, this was not denied.
Finally, each party put up a survey diagram of the property to which
that party claimed rights,
containing the usual references to fixed
points. The mall property has an approved sub-divisional diagram in
which it is described
as Portion 3 of the farm Zebedielas Location
No. 123 registration division KS Province of Limpopo, in extent
5,4300 hectares. The
café property does not have an approved
sub-divisional diagram or property description. The diagram put up by
Red Dunes
comprises all the properties referred to in the resolution
of the Council of 11 May 2007, of which the café property
forms
a part. I shall return to the resolution later. In reply,
Masingita put up a diagram, drafted by a land surveyor, which
superimposed
the diagram co-ordinates of that property onto those of
the mall property. This clearly shows that all but an insignificant
portion
of the entire property and the whole of the café
property falls within the mall property. In addition, the foundations
of
the building which Red Dunes began constructing were superimposed
on a concept sub-divisional diagram put up by Masingita. The
foundations clearly fall inside the mall property. The issue
concerning encroachment must therefore be decided in favour of
Masingita.
[7]
The remaining issue concerns the identity
of the party with rights to develop the mall property. The case of
Red Dunes is that Masingita
does not have any such rights because a
prior right was granted to Red Dunes to develop a shopping centre on
the café property.
This right has not been revoked and
therefore the council was not able to grant Masingita rights over
property which included the
café property. Red Dunes accepted
that its defence to the interdict application depended on its proving
this prior right.
Apart from asserting its prior right, Red Dunes
does not seriously contest the right asserted by Masingita to develop
the mall
property. As a result, I do not propose to deal in any
detail with the right asserted by Masingita. Suffice it to say that,
in
my view, this was adequately demonstrated on the papers. The only
issue is whether Red Dunes proved a prior right to develop the
café
property.
[8]
Red Dunes traces its right to the transfer
of a Permission to Occupy (the PTO) the café property. It says
that it obtained
these rights in the following manner. The PTO was
issued in 1990 to Mr Samuel Mathibana Mamabolo to operate a café
business.
On 7 December 2004, Mr Mamabolo sold the café
business, known as Sams Café, to Mr Alfred Lesibana Tlomatsana
for R120 000. On 29 May 2007 a recordal was made by Mr Mamabolo
to the effect that he had sold the business and his rights
in the
café property to Mr Tlomatsana and been paid in full by him.
The recordal by Mr Mamabola concludes with the words:
‘I am
aware that [Mr Tlomatsana] has now decided to sell to Red Dunes of
Africa CC and have no objection thereto.’
This recordal was
signed by Mr Mamabolo. It was also signed by Mr Tlomatsana above the
words ‘Purchaser (1)’ and by
a representative of Red
Dunes above the words ‘Purchaser (2)’. A written
agreement, headed ‘Land Sale Agreement’,
was concluded
between Mr Tlomatsana and Red Dunes on the same day. The agreement
provided for the sale of the café property
by Mr Tlomatsana to
Red Dunes for the sum of R180 000. A resolution was taken by the
Council on 11 May 2007 and
was signed on 25 May 2007. Red
Dunes contended that these documents link to each other to form a
chain proving its right to develop
the café property. This
contention must therefore be evaluated.
[9]
In the papers, Red Dunes based its case
squarely on the sale agreement concluded with Mr Tlomatsana. This
much was also conceded
in argument. The answering affidavit of Red
Dunes makes this clear. The deponent says, variously:
·
The property to which Masingita lays claim
was increased ‘to include the separate property that I
purchased . . .’
·
‘
Clause 3 of this agreement refers to
the conversion of the PTO . . .’
·
‘
Annexure “A” to the . .
. agreement is a drawing of the property . . .’
·
‘
[T]he property that Red Dunes
acquired was initially not valued . . .’
·
‘
This is incontrovertible proof that
the property was acquired by Red Dunes . . .’
·
‘
. . . Red Dunes acquired the
property in 2007 for R180 000.’
·
‘
The agreement referred to was
concluded in 2007 . . .’
·
‘
[T]he agreement that Red Dunes
concluded was in 2007 . . .’
·
‘
The property had [the rights to
erect a shopping centre] when Red Dunes concluded the agreement.’
[10]
The agreement contains a number of
suspensive conditions. One of these provides that the sale is subject
to the conversion of the
PTO certificate to a Title Deed under the
provisions of the Upgrading of Land Tenure Rights Act 112 of 1991.
The agreement is also
made subject to the approval of the sale of the
land in the Title Deed by the Minister of Land Affairs, which itself
requires approval
by the Council and the community at large. Once the
PTO has been converted to ownership, further suspensive conditions
require
the property to be subdivided and consolidated as a separate
erf by the cut-off date, the property to be rezoned (along with the
requirement that all the relevant processes for the amendment of the
town planning scheme are followed and completed) and all the
relevant
approvals to be obtained by the cut-off date.
[11]
There
is no averment on the papers that any of these suspensive conditions
was met. In fact, it was candidly conceded that none
had been
fulfilled. The law is clear that, in those circumstances, a party
cannot enforce any rights arising from the agreement.
[1]
Red Dunes initially submitted that it was unnecessary to fulfil any
of the suspensive conditions because it had elected not to
convert
the PTO to ownership. This was not, however, the only suspensive
condition. Also, the broader terms of the agreement make
it clear
that this was not an election open to Red Dunes. One example which
demonstrates this is that the agreement sets the date
of registration
of a Deed of Grant as the time that various actions must be
performed, not least the payment of the balance of
the purchase price
and the acquiring of possession and the right to occupy. Without the
registration of a Deed of Grant, the agreement
does not provide a
date for payment of the purchase price and effect cannot be given to
it. This shows that conversion of the PTO
to ownership is integral to
the agreement. It was finally conceded that at least certain of the
suspensive conditions had to be
fulfilled. As long ago as
Corondimas
v Badat
,
[2]
it was held that when a contract of sale is subject to a true
suspensive condition, there exists no contract of sale unless and
until the condition is fulfilled. Accordingly, and agreement of sale
subject to a suspensive condition cannot, pending fulfilment
of the
condition, be regarded as a sale.
[3]
As a result, it was also conceded in argument that Red Dunes could
not found any right to develop the café property on the
agreement.
[12]
In argument, Red Dunes then switched focus
to rely on the resolution of the Council taken on 11 May 2007. This
reads, in its material
parts, as follows:
‘
We,
Zebedelia-Ndebele Tribal Authority . . . resolved in the Traditional
Council meeting dated 11 May 2007, that . . . Red Dunes
. . . be
allocated land as applied for next to Moletlane Taxi Rank (Mr
Tlomatsana’s Sam’s Restaurant and a stand behind
the
restaurant, Mrs Maria Kekana’s stand behind Mr Huma’s
shop, the stand behind the Post Office and a 10m road from
the tar
road which will be in between the fence of the Post Office and the
Soccer Ground to the Erf behind the Post Office, as
entrenched in the
diagram emphasising proper co-ordinates in the company’s
application document submitted to our Tribal Authority).
The
land will be utilised for the execution of business activities in the
form of a Shopping Centre.
The
move above automatically transfers the P.T.O. previously held by
Samuel Mamabolo (for the operation of Sam’s Restaurant)
into
the name of Red Dunes of Africa CC.
The
Tribal Authority will assist and have no objection if the applicant
in future wishes to upgrade the status of its occupation.’
[13]
This
resolution, it was submitted, transferred the PTO from Mr Mamabolo to
Red Dunes. The PTO was initially given to Mr Mamabolo
under apartheid
era land regulations.
[4]
A PTO
is defined in the regulations to mean a ‘permission in writing
granted or deemed to have been granted in the prescribed
form to any
person to occupy a
specified
area of Trust land for a
specified
purpose’.
[5]
It is
required to be a formal document ‘in the prescribed form and be
registered . . . in [an] allotments register’.
[6]
According to the PTO issued to Mr Mamabolo, the café property
was to be determined and beaconed by the Magistrate, could
not exceed
0,5 hectares in extent and could be occupied for the sole purpose of
conducting a cafe business and a rental was to
be paid for it
annually in advance. The café property could not be sub-let,
nor could the right of occupation be ceded,
leased or transferred
without the written consent of the authority concerned. The café
property had to be personally occupied
and the business personally
conducted by the holder of the PTO unless the person appointed to do
so was approved by the authority
concerned.
[14]
It is common ground that the PTO was not
transferred to Mr Tlomatsana, nor was a fresh one issued to him. No
averment was made in
the papers that he obtained any written consent
to occupy it nor was it averred that when the business was sold to Mr
Tlomatsana,
the trustee approved his occupation of the café
property or his conduct of the business. The Council, in its
affidavit in
the spoliation application which was included by
reference in the main application, averred that no rights arising
from the PTO
had been transferred to Mr Tlomatsana. This averment was
not challenged. It is doubtless for this reason that the recordal of
29
May 2007 was made and the resolution of 11 May 2007 was said to
‘automatically’ transfer the PTO held by Mr Mamabola,
rather than Mr Tlomatsana, to Red Dunes.
[15]
However, Red Dunes did not found its case
on the transfer of the PTO. As mentioned, it founded its case on the
agreement which gave
rise to the resolution. In addition, in argument
Red Dunes expressly disavowed any reliance on the resolution as a
stand-alone
basis for the acquisition of rights in the café
property.
[16]
This disavowal was clearly appropriate. The
resolution, purporting to transfer rights accorded to Mr Mamabolo, is
at best the last
link in the chain of documents relied on by Red
Dunes. The recordal by Mr Mamabolo pertinently referred to the
decision of Mr Tlomatsana
to sell to Red Dunes. Without the link of
the agreement, the chain leading to the transfer, and thus the right
asserted by Red
Dunes is incomplete.
[17]
There are other reasons why no right to
develop arise from the resolution. First, the regulations governing
PTOs are still operative.
These require the issue of a formal
document and the recordal of the holder in an official register. This
was not said to have
been done and, accordingly, Red Dunes failed to
prove that it is the holder of a PTO for the café property.
Secondly, even
if it can be said that a transfer of the PTO took
place by way of the resolution, the PTO was not amended and its terms
remain
those of the PTO which was transferred. These do not permit of
any development of the café property by the holder. Thirdly,
in its affidavit the Council set out the customary law procedure
governing the obtaining of rights to develop a property. This
requires a number of steps to be taken, many of which mirror the
suspensive conditions appearing in the agreement. These averments
were dealt with in reply in the spoliation application by Red Dunes
and were not challenged. It is common cause that none of the
required
steps has been taken by Red Dunes. Even if the resolution gave rise
to the transfer of the PTO, which is at best doubtful,
this does not
accord to Red Dunes a right to develop the café property.
[18]
Red Dunes accordingly failed to make out a
case that it had a prior right to develop any part of the mall
property. As such, since
the right of Masingita was impugned on that
basis, the court below correctly granted the orders, even though the
judgment does
not engage with the issues dealt with above.
[19]
Masingita
proved that it had a clear right to develop the mall property. It is
also clear that the construction by Red Dunes committed
an injury to
Masingita. Since Red Dunes refused to remove the encroachment,
Masingita had no alternative but to approach the court
below for
interdictory and consequential relief. The three components of a
final interdict were accordingly proved.
[7]
[20]
The following order issues:
The
appeal is dismissed with costs, including those occasioned by the
employment of two counsel where applicable.
________________________
T
R Gorven
Acting
Judge of Appeal
Appearances
For
Appellant:
MC Erasmus SC (with
him J Rust)
Instructed
by: Morne Mostert Inc, Pretoria
Phatshoane
Henney Inc, Bloemfontein
For
1
st
Respondent:
AR Bhana SC (with him JJ Meiring)
Instructed by: Nam-Ford
Inc, Pretoria
Claude
Reid Inc, Bloemfontein
For
2
nd
Respondent: D
Watson
Instructed by: Abba Parak
Inc, Johannesburg
Webbers Attorneys,
Bloemfontein
[1]
Resisto
Dairy (Pty) Ltd v Auto Protection Insurance Co Ltd
1963 (1) SA 632
(A) at 644G-H.
[2]
Corondimas
v Badat
1946 AD 548.
[3]
Geue v
Van Der Lith
[2003] ZASCA 118
;
2004 (3) SA 333
(SCA) para 8.
[4]
Bantu Areas Land Regulations, 1969 (Proclamation R.188 of 1969)
promulgated under the Black (Native) Administration Act 38 of
1927.
[5]
My emphasis.
[6]
Regulation 47(3).
[7]
Setlogelo
v Setlogelo
1914 AD 221.