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[2016] ZAGPJHC 384
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Nilgra Flats CC v Central Country Lodge CC and Another (26980/2016) [2016] ZAGPJHC 384 (19 August 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Case
No: 26980/2016
In
the matter between:
NILGRA
FLATS
CC
Applicant
and
CENTRAL
COUNTRY LODGE
CC
First
Respondent
ZIAD
NOUR
Second
Respondent
Case
Summary: Ejectment – by means of
rei vindicatio –
applicant’s ownership and respondents’
possession establish entitlement to ejectment of respondents –
Only defence
raised against
rei vindicatio
is
that first respondent is lawfully in possession as improvement lien
holder and second respondent possesses for and on behalf
of first
respondent – elements of defence not established and exclusive
possession of the property not proved – Ejectment
ordered.
JUDGMENT
MEYER,
J
[1]
This is an application that is brought by way of urgency in which the
applicant, Nilgra Flats CC, seeks the ejectment of the
first
respondent, Central Country Lodge CC, and of the second respondent,
Mr Ziad Nour, from an immovable property known as Holding
31,
Beverley Agricultural Holdings, Registration Division JR, in extent
2,0234 hectares, with street address at 31 Mulbarton Road,
Beverley,
Lonehill, Gauteng (‘the property’) by means of the
rei
vindicatio
. The applicant claims that the respondents
restore possession of the property and its contents to it
immediately. The
second respondent controls and is the sole
member of the first respondent. The application, despite the
respondents’
protestation, is urgent.
[2]
The applicant is the owner of the property and the respondents are
currently in possession of it. The property is developed
and
equipped to be operated as a lodge. A number of people reside
in certain units of the lodge. The applicant does
not seek any
order against them. In addition, although it is disputed, the
second respondent alleges that he too occupies
a unit, namely unit
201. He freely admits that he is an ‘unlawful occupier’
of that unit. The applicant
also does not seek his eviction
from that unit for the reason that it did not bring this application
in compliance with the requirements
of the Prevention of Illegal
Eviction from and Unlawful Occupation of Land Act, 19 of 1998.
[3]
The applicant’s ownership and the respondents’ possession
establish the applicant’s entitlement to the ejectment
of the
respondents from the property, and the onus is upon them to establish
a right to possession of the property, or other valid
defence (see
De
Villiers v Potgieter and others NNO
2007 (2) SA 311
(SCA), para
12;
Chetty v Naidoo
1974 (3) SA 13
(A), at 20A-E). The
only defence against the
rei vindicatio
raised by the first
respondent is that it is lawfully in possession of the property as an
improvement lien holder. The defence
of the second defendant is
that he is in possession of the property for and on behalf of the
first respondent lien holder.
An improvement lien provides a
dilatory defence against a
rei vindicatio
and, if successfully
raised, the owner may not recover possession of the property from a
person who is lawfully in possession and
who has an underlying valid
enrichment claim, unless and until that person has been compensated.
(See
Singh v Santam Insurance Ltd
[1996] ZASCA 92
;
1997 (1) SA 291
(SCA).)
[4]
I briefly deal with the history to the present litigation. In
June 2011, the second respondent together with a business
partner, Mr
Jonathan Van der Westhuizen, entered into a lease agreement in
respect of the property with Town and Country Hotel
CC (Town and
Country). During the subsistence of that lease the first
respondent conducted the business of a lodge and ‘full
function
venue’ at the property. In September 2013 that lease
terminated when a lease agreement was purportedly concluded
between
Town and Country and ‘Life Recovery Centre (Pty) Limited’
(Life Recovery). It later transpired that Life
Recovery was
never incorporated. The envisaged rehabilitation centre that
would have been conducted by Life Recovery on the
property,
accordingly, did not realise. That purported lease was
‘terminated’ in December 2013. From January
until
August 2014 the second respondent personally conducted a lodge
business at the property.
[5]
Oasis Lonehill Hotel (Pty) Limited (Oasis) became the tenant of the
property in terms of a written lease agreement concluded
between it
and the applicant. The second respondent was the sole
shareholder of Oasis. It conducted the lodge business
from
August 2014. Due to non-payment of rental and other charges, the
lease agreement was cancelled on 25 May 2015. The cancellation
was disputed, and was ultimately resolved in the applicant’s
favour in arbitration proceedings before Bham SC on 17 June
2016.
In terms of the award, Oasis was obliged to vacate the property with
immediate effect and return it, with the movables
thereon, to the
applicant. The second respondent, on behalf of Oasis, refused
to hand over possession of the property to
the applicant. On
Monday, 20 June 2016, the attorney then acting for the second
respondent and Oasis, sent a letter to the
applicant’s
attorney, Mr Kerr-Phillips, informing him that Oasis was no longer in
possession of the property, but that the
second respondent-
‘
. . .
continues to retain possession of the property on behalf of Central
Country Lodge CC in respect of its lien over the property
for
renovations effected thereto’.
[6]
The respondents contend that the first respondent never surrendered
possession of the property in September 2013 when it ceased
conducting the business of a lodge and ‘full function venue’
at the property and that it is entitled to retain possession
of the
property by virtue of its lien.
[7]
In order to succeed with the dilatory defence provided by a lien, a
party must prove: (a) that it is in lawful possession;
(b) that the expenses were necessary for the preservation of the
property or useful for its improvement; (c) the actual expenses
and the extent of the enrichment of the property owner (because the
lien only covers the lesser of the two amounts); (d)
that the
property owner’s enrichment is unjustified; and (e)
that there was no contractual arrangement between
the parties, or a
third person, in respect of the expenses. A lien is simply
security for a debt. It does not entitle
the possessor to use
the property. Loss of possession destroys a lien, which cannot be
revived by recovery of possession. (See
Harms
Amler’s
Precedents of Pleadings
6
th
Ed at 226 and the
authorities therein cited.) Exclusive possession of the
property forming the subject matter of the lien
is an absolute
requisite for its operation. (See
LAWSA
Vol 15 1
st
Re-issue para 51.)
[8]
The respondents did not establish the defence provided by a lien at
least for two reasons. First, they dismally failed
to establish
the requirements for that defence and, second, they did not prove
that the first respondent had exclusive possession
of the property
since September 2013 (when it ceased conducting the business of a
lodge) until 20 June 2016 (when the respondents’
erstwhile
attorney notified the applicant ‘s attorney that the second
respondent continues to retain possession of the property
on behalf
of the first respondent).
[9]
The totality of the respondents’ allegations relating to its
underlying claim are that the first respondent effected improvements
and renovations to the property and that the total cost thereof
amounted to R5 217 500. They attach a few documents in support
of their allegations that the first respondent built a pool and a
lapa. These documents fall substantially short of the alleged
amount of the claim, and only show improvements, not renovations.
It is common cause that the first respondent conducted
business at
the property during the period June 2011 to September 2013.
Also that the first respondent was not a party to
any lease agreement
with the applicant. The respondents deny the validity of the
agreement between Town and Country as lessor
and the second
respondent and Van der Westhuizen as lessees. But they do
not state on what basis the first respondent
was entitled to be in
possession of the property. They have, therefore, failed to
establish that the first respondent ever
had lawful possession of the
property. They have furthermore not shown that the expenses
were necessary for the preservation
of the property, or that they
were useful improvements. They have not proven the actual
expenses, nor the extent of the enrichment
of the applicant, or that
it was unjustified. Their failure to do so also precludes the
applicant from seeking an order for
the release of the property
against the provision of security for the first respondent’s
claim. (See See Harms
Amler’s Precedents of
Pleadings
6
th
Ed at 227 and the authorities therein
cited.)
[10]
It is trite that affidavits in motion proceedings constitute both
pleadings and evidence. The answering affidavit lacks
such
facts as would be necessary for determining whether a lien was
conferred upon the first respondent by operation of law.
The
allegations that the first respondent effected improvements and
renovations to the property at a total cost of R5 217 500 and
that it
has a lien are mere conclusions with the primary facts on which they
depend omitted. (See
Radebe and others v Eastern Transvaal
Development Board
1988 (2) SA 785
(A), at 793C-F.)
[11]
The respondents allege that the first respondent never surrendered
possession of the property. Life Recovery would have
exercised
concurrent possession with the first respondent, so they allege, had
the business begun to operate, because the second
respondent would
have been the controlling member of Life Recovery and the first
respondent, and accordingly would have permitted
concurrent
possession. The first respondent ‘enjoyed
concurrent possession with Oasis’, the respondents
allege,
because the second respondent was the controlling member of Oasis and
accordingly permitted the concurrent possession.
They also allege
that the first respondent ‘exercised concurrent possession with
other entities over the relevant period’.
The applicant
takes issue with the first respondent’s alleged concurrent or
joint possession of the property during the period
September 2013
until June 2016. I need not consider this issue. The
first respondent was not in exclusive possession
of the property
during that period and the alleged lien could not be revived when it
recovered exclusive possession of the property
on 20 June 2016.
I should add that our law recognises the concept of ‘joint’
possession (
Rosenbuch v Rosenbuch
1975 (1) SA 181
(W);
Shapiro v Roth
1911 WLD 43
; Van der Merwe
Sakereg
102-103) but not that of ‘concurrent’ possession.
[12]
Finally, the matter of costs. The applicant seeks a punitive
costs order against the respondents. In all the circumstances
of this case I am of the view that a deviation from the ordinary rule
that the successful party is awarded costs as between party
and party
is warranted and an order on the attorney and client scale is
appropriate. Such an order would express this court’s
disapproval of the conduct of the respondents herein. The
second respondent is the sole member of the first respondent and
the
sole shareholder of Oasis. He controls both corporate
entities. He is the person who represented both Oasis in
the
arbitration proceedings and the first respondent in these
proceedings. He puts on different corporate hats as and when
it
suits him. The second respondent blatantly disregarded the
award of the arbitrator by not restoring the property and movable
assets on the property to the applicant. Furthermore, neither
the first respondent nor the second respondent has any right
to use
the applicant’s property, whether or not the first respondent
enjoyed a lien over the property. Nevertheless,
the second
respondent, by his own admission, occupies a unit and uses the
property. The respondents, at the very least, permit
others to
use the applicant’s property. Such use is in blatant
disregard of the applicant’s rights as property
owner.
The respondents have shown a general lack of candour as to the
activities that are currently undertaken on the property.
There is no
justifiable reason why the applicant should financially be prejudiced
as a result of this litigation. It has
been put through the
unnecessary trouble of enforcing its rights as property owner.
[13]
In the result, the following order is made:
(a)
The first respondent and any person
claiming possession by, through or under the first respondent shall
vacate the property situated
at 31 Mulbarton Road, Beverley,
described as Holding 31 Beverley Agricultural Holdings, Registration
Division J.R., Gauteng (the
property) and restore possession of the
property with its contents to the applicant immediately.
(b)
The second respondent and any person
claiming possession by, through or under the second respondent shall
vacate the property and
restore possession of the property with its
contents to the applicant immediately.
(c)
The sheriff of this court is authorised to
eject the first and second respondents from the property in the event
of them not vacating
the property and restoring possession thereof,
together with its contents, to the applicant, with immediate effect.
(d) The occupants of the
individual units on the property, including the second respondent in
respect of unit 201, are not subject
to this order.
(e) The first and second
respondents shall pay the costs of this application, jointly and
severally, the one paying the other to
be absolved, on the scale as
between attorney and client.
P.A.
MEYER
JUDGE
OF THE HIGH COURT
Date
of hearing: 18 August 2016
Date
of judgment: 19 August 2016
Counsel
for applicant: A Bester
Instructed
by: Matthew Kerr-Phillips, Norwood, Johannesburg
Counsel
for respondent: R Bhima
Instructed
by: Bloom Attorneys
C/o
Richter Attorneys, Parkhurst, Johannesburg