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[2012] ZASCA 164
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Adlem and Another v Arlow (782/11) [2012] ZASCA 164; [2013] 1 All SA 1 (SCA); 2013 (3) SA 1 (SCA) (19 November 2012)
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THE SUPREME COURT OF APPEAL OF
SOUTH AFRICA
JUDGMENT
Case No: 782/11
Reportable
In the matter between:
EUGENE
ADLEM
.......................................................................
FIRST
APPELLANT
JOSEPH
ADLEM
...................................................................
SECOND
APPELLANT
and
NESTOR
ALGEMUS ARLOW
............................................................
RESPONDENT
Neutral citation
:
Adlem v Arlow
(782/11)
[2012] ZASCA 164
(19 November
2012).
Coram:
Cloete, Cachalia, Shongwe and Theron JJA
and Erasmus AJA
Heard:
6 November 2012
Delivered:
19 November 2012
Summary: Land ─ Subdivision of Agricultural
Land Act 70 of 1970 ─ the word ‘portion’ in inter
alia s 3(
d
) must be interpreted as meaning
a part of property (as opposed to the whole property) registered in
the Deeds Registry, and not
as having the meaning used in the Deeds
Registry to describe the whole property.
______________________________________________________________
ORDER
______________________________________________________________
On appeal from:
North West High Court, Mafikeng
(Leeuw JP sitting as court
of first instance):
1 The appeal succeeds, with costs.
2 The order of the high court as amended on 18 August
2011 is set aside and the following order substituted:
‘
(a) The question raised is
decided in favour of the defendants.
(b) The plaintiff is ordered to pay the defendants’
costs occasioned by the argument.’
3 The order in para 2(b) above is provisional. Should
either party wish to make submissions in regard thereto, written
argument
must be delivered within ten days of this order (in which
case the other party may make contrary submissions within a further
ten
days), failing which the order shall become final.
______________________________________________________________
JUDGMENT
______________________________________________________________
CLOETE JA (CACHALIA, SHONGWE AND THERON JJA AND
ERASMUS AJA CONCURRING):
[1] This appeal concerns the correct interpretation of
the Subdivision of Agricultural Land Act 70 of 1970, and in
particular s 3(
d
)
thereof. The commencement of the Subdivision of Agricultural Land
Repeal Act 64 of 1998, that repeals the whole of Act 70 of 1970,
has
not yet been promulgated.
[2] On 14 August 2008 the parties entered into a written
agreement of lease. The relevant terms of the lease are the
following:
‘
1.
HUUR
Die
VERHUURDER
verhuur hiermee ’n
wooneenheid in die kompleks op die
EIENDOM
in klousule 3 [sic] beskryf aan
die
HUURDER
,
wat deur die
HUURDER
gehuur word onderhewig aan die
bepalings en voorwaardes van hierdie ooreenkoms.
2.
PERSEEL
Die
EIENDOM
bekend as Plaas JP 73
Koppieskraal Skuinsdrift (hierna “die
EIENDOM
”
)
[There is no paragraph 3.]
4.
HUURTERMYN
4.1 Die
EIENDOM
word aan die
HUURDER
verhuur vir ’n periode van
9 JAAR EN ELF MAANDE wat begin op 1 Augustus 2008 en eindig op 30
Junie 2016.
4.2 Die
HUURDER
behou die reg voor om na
verstryking van die huurtermyn genoem in paragraaf 4.1 die eerste
opsie uit te oefen om die huurtermyn
te verleng vir ‘n verdere
nege jaar en elf maande waarna die
HUURDER
na verstryking van hierdie
tydperk weereens die reg uitoefen om die eerste opsie te hê om
die huurkontrak te verleng vir ‘n
verdure nege jaar en elf
maande.’
[3] The respondent, as the plaintiff, instituted an
action against the appellants, as defendants, in the North West High
Court,
Mafikeng, in which he claimed ejectment of the appellants
inter alia on the basis that the lease (annexed to his particulars of
claim marked “B”) was void as it contravened s 3(
d
)
of the Act. The appellants brought nine counterclaims, some of which
were abandoned.
[4] When the matter came before the high court (Leeuw
JP) the parties agreed that what was described as ‘a point of
law’
would be argued ─ apparently because not all of the
witnesses were available. The court was informed that if the point of
law was decided in favour of the respondent, that would put an end to
most of the issues between the parties. In the event, the
court
upheld the respondent’s argument and granted an order ejecting
the appellants from the property and a further order
dismissing those
of their counterclaims that remained. The court subsequently granted
leave to appeal to this court.
[5] It appears that the parties adopted, and the court
sanctioned, an informal procedure based on rule 33(4). That is not
acceptable.
As this court held in
Absa Bank
Ltd v Bernert
2011 (3) SA 74
(SCA) para 21:
‘
It is
imperative at the start of a trial that there should be clarity on
the questions that the court is being called upon to answer.
Where
issues are to be separated rule 33(4) requires the court to make an
order to that effect. If for no reason but to clarify
matters for
itself a court that is asked to separate issues must necessarily
apply its mind to whether it is indeed convenient
that they be
separated, and if so, the questions to be determined must be
expressed in its order with clarity and precision.’
(See also
Denel Edms Bpk v
Vorster
2004 (4) SA 481
(SCA) para 3.)
[6] The question for decision was formulated before the
appeal was heard, as follows:
‘
Whether
on the assumption that (as alleged by the defendants) the written
lease signed by the parties on 14 August 2008 (Annexure
“B”
to the particulars of claim) constituted a lease by the plaintiff to
the defendants of the whole of the property
owned by the plaintiff
comprising Remaining Extent of Portion 16 (a portion of portion 3)
and Remaining Extent of Portion 3, both
of the farm Koppieskraal 73,
registration division JP, North West Province, and held by the
plaintiff in terms of title deed T24269
04, such lease was in
contravention of s 3(
d
)
of the Subdivision of Agricultural Land Act and therefore void in as
much as the property was agricultural land, and only Remaining
Extent
of Portion 16 and Remaining Extent of Portion 3 were leased; the
lease was for an initial period of nine years and 11 months
and
conferred a right on the defendants to renew the lease for two
further successive periods of nine years and 11 months each;
and the
consent of the Minister of Agriculture to the conclusion of the
lease, was not obtained.’
The essence of the question is therefore whether the Act
rendered the lease void.
[7] It will be noted that clause 2 of the lease quoted
in para 2 above refers to the whole of the farm Koppieskraal 73. The
appellants
however sought rectification of that clause to substitute
the following description of the property: Remaining Extent of
Portion
3 of the farm Koppieskraal 73, JP North West Province and
Remaining Extent of Portion 16 (a Portion of Portion 3) of the farm
Koppieskraal
73, JP North West Province. It is common cause that the
respondent held both pieces of land in terms of title deed T24269 04.
It
is also common cause that the lease was for an initial period of
nine years and 11 months and conferred a right on the defendants
to
renew the lease for two further successive periods of nine years and
11 months each; and that the consent of the Minister of
Agriculture
to the conclusion of the lease, was not obtained.
[8] Section 3 of the Act provides that (subject to the
provisions of s 2, which are not applicable to the present
appeal):
‘
(
a
)
agricultural land shall not be subdivided;
(
b
)
no undivided share in agricultural land not already held by any
person, shall vest in any person;
. . .
(
d
)
no lease in respect of a portion of agricultural land of which the
period is 10 years or longer, or is the natural life of the
lessee or
any other person mentioned in the lease, or which is renewable from
time to time at the will of the lessee, either by
the continuation of
the original lease or by entering into a new lease, indefinitely or
for periods which together with the first
period of the lease amount
in all to not less than 10 years, shall be entered into;
(
e
)
(i) no portion of agricultural land, whether surveyed or not, and
whether there is any building thereon or not, shall be sold
or
advertised for sale, except for the purposes of a mine as defined in
section 1 of the Mines and Works Act, 1956 (Act No 27 of
1956); and
(ii) no right to such portion
shall be sold or granted for a period of more than 10 years or for
the natural life of any person
or to the same person for periods
aggregating more than 10 years, or advertised for sale or with a view
to any such granting, except
for the purposes of a mine as defined in
section 1 of the Mines and Works Act, 1956;
. . .
unless the Minister has
consented in writing.’
[9] The purpose behind the Act has been dealt with in a
number of decisions. In
Wary Holdings (Pty)
Ltd v Stalwo (Pty) Ltd
[2008] ZACC 12
;
2009 (1) SA 337
(CC)
the Constitutional Court said in para 13:
‘
The
essential purpose of the Agricultural Land Act has been identified as
a measure by which the legislature sought in the national
interest to
prevent the fragmentation of agricultural land into small uneconomic
units. In order to achieve this purpose the legislature
curtailed the
common-law right of landowners to subdivide their agricultural
property. It imposed the requirement of the Minister’s
written
consent as a prerequisite for subdivision, quite evidently to permit
the Minister to decline any proposed subdivision which
would have the
unwanted result of uneconomic fragmentation.’
In
Geue v Van der Lith
[2003] ZASCA 118
;
2004 (3) SA 333
(SCA) this court said, in paras 5 and
15:
‘
[T]he
learned Judge commenced his motivation by identifying the essential
purpose of the Act as an attempt by the Legislature, in
the national
interest, to prevent the fragmentation of agricultural land into
small uneconomic units. This proposition, incidentally,
is well
supported by authority (see, for example,
Van
der Bijl and Others v Louw and Another
1974
(2) SA 493
(C) at 499C-E;
Sentraalwes
Personeel Ondernemings (Edms) Bpk v Wallis
1978
(3) SA 80
(T) at 84E-F; and
Tuckers
Land and Development Corporation (Pty) Ltd v Truter
1984
(2) SA 150
(SWA) at 153H-154A). In order to achieve this purpose, the
Legislature curtailed the common-law right of landowners to divide
their
agricultural property by imposing the requirement of the
Minister’s consent as a prerequisite for subdivision, quite
evidently
with the view that the Minister should decline any proposed
subdivision which would have the unwanted result of uneconomic
fragmentation.
. . .
The purpose of the Act is not
only to prevent alienation of undivided portions of land. The target
zone of the Act is much wider.’
The broadenening of the ‘target zone’ of the
Act by the amendment of its terms was dealt with in
Tuckers
Land and Development Corporation (Pty) Ltd v Wasserman
1984 (2) SA 157
(T) at 162B-D where the court held:
‘
In
this connection it seems to me to be of some importance to bear in
mind that s 3 in its original form included only paras
(
a
),
(
b
)
and (
c
),
which were repeated in the same form in the 1974 substitution quoted
earlier. It seems to me to be a clear inference that the
Legislature
in 1974 considered that the existing three paragraphs were not
sufficient by themselves to prevent the mischief of
the division of
agricultural land into uneconomic units, and therefore that it found
it necessary in addition to prohibit (
inter
alia
)
long leases of portions of agricultural land and the sale of erven
(whether surveyed or not) on such land. In other words, in
my view,
the primary purpose of the extension of the prohibitions in the
section was to improve the means of achieving the original
purposes
of the Act . . . .’
In
Tuckers Land and Development
Corporation (Pty) Ltd v Truter
1984 (2) SA
150
(SWA) the court held at 153G-H and 154B-C:
‘
The
basic object and purpose of the Act was obviously to prevent the
subdivision of agricultural land into uneconomic portions.
The long
title of the Act, prior to its amendment by s 9 of Act 55 of
1972, was “To control the subdivision of agricultural
land”,
and this was changed by the amending section referred to, the long
title after the amendment reading “To control
the subdivision
and, in connection therewith, the use of agricultural land”.
. . .
Apart from prohibiting the
subdivision of agricultural land without the written consent of the
Minister, the Act
inter
alia
also provides
that no undivided share in agricultural land shall vest in any person
without the Minister’s consent (s 3(
b
))
and that no lease in respect of a portion of agricultural land for a
period of 10 years or longer, or for other long terms, shall
be
entered into without the Minister’s written consent (s 3(
d
)).
The clear impression one gets
from reading the Act as a whole is that the object and purpose
thereof is to prevent subdivision of
agricultural land into
uneconomic units, and furthermore to prevent the
use
of uneconomic portions of
agricultural land for any length of time’
(to which I would add) ‘and furthermore to prevent
encroachment on the use of agricultural land so as to threaten its
viability
as such’.
[10] The respondent’s argument, upheld, as I
understand the judgment, by the court a quo, is succinctly stated in
the heads
of argument as follows:
‘
Section
3(
d
)
relates to “a portion of agricultural land” being any
portion whether such portion is a registered portion of agricultural
land or an unregistered (a surveyed or non-surveyed) portion of
agricultural land. It is submitted that the wording “a portion”
should be interpreted widely and given its general dictionary
meaning.’
The consequence of this argument is that a piece of land
that has already been subdivided and registered in the Deeds Registry
could
not be sold or let in terms of a long lease without the consent
of the Minister. Counsel gave several examples to illustrate why
in
his submission this should be so. In the one example, counsel
postulated the case where five pieces of land are all held under
separate title deeds by one owner, and the owner wants to sell the
middle portion which is surrounded by the other four and which
has
the only water supply necessary for the farming of all portions. In
another example, counsel postulated the case where several
pieces of
land are held by one owner who is a cattle farmer and who wants to
sell one portion that is adjacent to the others to
a person who
wishes to establish a game farm thereon, with the attendant risk that
the cattle farming enterprise on the other portions
would be
threatened by disease emanating from the wild animals on the game
farm. These, said counsel, are examples of why the Act
was amended to
enable the Minister effectively to veto the sale of the one portion,
so preserving the use of all portions concerned
as agricultural land.
[11] In advancing his argument, the respondent’s
counsel relied on the long title to the Act, substituted by s 9
of the
Subdivision of Agricultural Land Amendment Act 55 of 1972,
which reads:
‘
To
control the subdivision and, in connection therewith, the use of
agricultural land.’
The submission was that the statute is aimed at
controlling the use of agricultural land as much as the subdivision
thereof.
[12] I cannot agree with counsel’s interpretation.
So far as the long title of the Act is concerned, what is sought to
be
controlled is not both the subdivision and also the use of
agricultural land, but the subdivision and,
in
connection therewith
, the use of such land.
The Act does not confer on the Minister the power to control the use
of agricultural land absent a contemplated
subdivision, whether in
the literal sense as envisaged in s 3(
a
)
and (
e
)(i), or the
extended sense as envisaged in s 3(
d
)
(a lease for 10 years or longer) and 3(
e
)(ii)
(a right for 10 years or longer).
[13] The correct interpretation in my view is that
advanced on behalf of the appellants, namely that the word ‘portion’
in s 3(
d
) and in
s 3(
e
)(i) and
(ii) means a piece of land that forms part of a property registered
in the Deeds Registry; and, on the authorities I have
quoted, the
prohibition is aimed at preventing physical fragmentation of the
property, and the use of part of the property under
a long lease ─
as well as (I would add) the granting of a right for an extended
period in respect of the property. In other
words, the word ‘portion’
in inter alia s 3(
d
)
must be interpreted as meaning a part of property (as opposed to the
whole property) registered in the Deeds Registry, and not
as having
the meaning used in the Deeds Registry to describe the whole
property.
[14] Thus interpreted, s 3(
d
)
of the Act does not on the appellants’ case apply to the lease
in question as the whole of the property owned by the respondent
was
leased to the appellants. The parties were agreed that in the event
of the court coming to this conclusion, the whole of the
(amended)
order made by the court a quo should be set aside, costs in this
court should be awarded to the appellants and the matter
should be
referred back to the high court to continue with the trial. Nothing
was said about the costs occasioned by the argument
in the high
court. I see no reason why the appellants should not be awarded those
costs as well; but provision will be made for
further argument on
this question in case either party wishes a different order to be
made.
[15] The following order is made:
1 The appeal succeeds, with costs.
2 The order of the high court as amended on 18 August
2011 is set aside and the following order substituted:
‘
(a) The question raised is
decided in favour of the defendants.
(b) The plaintiff is ordered to pay the defendants’
costs occasioned by the argument.’
3 The order in para 2(b) above is provisional. Should
either party wish to make submissions in regard thereto, written
argument
must be delivered within ten days of this order (in which
case the other party may make contrary submissions within a further
ten
days), failing which the order shall become final.
_______________
T D CLOETE
JUDGE OF APPEAL
APPEARANCES:
For Appellant: P J van der Walt
Instructed by:
F & F van der Walt Attorneys, Rustenburg
Bezuidenhouts Inc, Bloemfontein
For Respondent: S Güldenpfennig
Instructed by:
Spector Attorneys, Johannesburg
Hill McHardy & Herbst Inc, Bloemfontein