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[2012] ZASCA 179
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Rhoode v De Kock and Another (45/12) [2012] ZASCA 179; 2013 (3) SA 123 (SCA); [2013] 2 All SA 389 (SCA) (29 November 2012)
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THE SUPREME COURT OF APPEAL OF
SOUTH AFRICA
JUDGMENT
Case No: 45/12
Reportable
In the matter between:
NORMAN
HOWARD RHOODE
.............................................................
APPELLANT
and
NEIL
DE KOCK
.......................................................................
FIRST
RESPONDENT
BERTA
MARIA DE KOCK
.................................................
SECOND
RESPONDENT
Neutral
citation:
Rhoode v De Kock
(45/12)
[2012] ZASCA 179
(29
November 2012).
Coram:
Cloete, Cachalia, Bosielo, Wallis and
Pillay JJA
Heard:
19 November 2012
Delivered:
29 November 2012
Summary: Enrichment ─ whether lien for
necessary or useful expenses should be enforced where failure to
quantify the amount
of the claim ─ whether
rei
vindicatio
maintainable without a tender to repay what has
been paid under a void contract ─ whether ejectment should be
made subject
to such repayment.
______________________________________________________________
ORDER
______________________________________________________________
On appeal from:
Western Cape High Court, Cape
Town (Allie and Samela JJ
sitting as court of appeal):
The appeal is dismissed with costs.
______________________________________________________________
JUDGMENT
______________________________________________________________
CLOETE JA (CACHALIA, BOSIELO, WALLIS AND PILLAY JJA
CONCURRING):
INTRODUCTION
[1] The respondents, Mr and Mrs de Kock, instituted
motion proceedings as the applicants against the appellant, Mr
Rhoode, as the
respondent, in the Magistrate’s Court, George,
in which they claimed an order ejecting Rhoode from immovable
property owned
by them. The magistrate granted the order. An appeal
by the appellant to the Western Cape High Court, Cape Town (Allie J,
Samela
J concurring) was dismissed. Leave to appeal to this court was
refused by the high court but granted by this court.
THE FACTS
[2] The history of the matter began on 10 February 2006
when the respondents sold to the appellant a property described as
‘The
Boathouse, Langvlei, portion 1/191 district George’
for R1,85 million. The deed of sale was signed by both respondents,
who
are married in community of property and in whose names the
property is registered. It contained a suspensive condition that a
loan for the full purchase price, to be secured by a mortgage bond
over the property, would be obtained by the appellant within
twelve
months of the date of signature, ie on or before 9 February 2007. The
appellant took possession of the property. The loan
was never
obtained.
[3] On 6 March 2007 and again on 1 September 2008, the
parties attempted to extend the deed of sale by substituting those
dates
for the original date of signature. The amendments were
initialled by De Kock and the appellant but not by Mrs de Kock.
Between
these dates, on 16 March 2007, the appellant paid R400 000
to the respondents in reduction of the purchase price.
[4] On 11 October 2009 De Kock sent an email to the
appellant demanding a guarantee for the purchase price and
threatening to cancel
the agreement unless it was forthcoming within
ten days. This email elicited a response from the appellants’
attorneys on
30 October 2009 in which they contended that because the
suspensive condition in the original deed of sale had not been
fulfilled,
the sale had lapsed; that the attempts by the parties on 6
March 2007 and 1 September 2008 to revive the sale were void for want
of compliance with s 15(2)
(a)
read with
s 15(5)
of
the
Matrimonial Property Act 88 of 1984
and
s 2(1)
of the
Alienation of Land Act 68 of 1981
, inasmuch as Mrs de Kock, who was
the co-owner of the property, did not sign the amended deed of sale;
that Rhoode was entitled
to repayment of the R400 000 he had
paid on 16 March 2007; and that he reserved the right to claim the
amount by which the
value of the property had been increased by
virtue of improvements made by him, once this amount had been
quantified. There was
no mention of a lien.
[5] The appellant continued in occupation of the
property. In January 2010 the respondents approached the Magistrate’s
Court,
George, ex parte for an order in terms of
s 4(1)
of the
Prevention of Illegal Eviction from and Unlawful Occupation of Land
Act 19 of 1998. The application was accompanied by an
affidavit
deposed to by De Kock. The order was granted and served on the
appellant together with the affidavit.
THE AFFIDAVITS
[6] In his affidavit De Kock said that he and his wife
were the registered owners of the property, and annexed a print-out
of a
deeds office search in support of this allegation. He then
rehearsed the facts set out above and recorded the respondents’
acceptance of the legal position set out in the email from the
appellant’s attorney in so far as it dealt with the validity
of
the parties’ attempts to revive the deed of sale. He went on to
say (my translation):
‘
It is
in my view clear from the aforegoing that there is at present no
agreement between us [the respondents] and [the appellant]
in terms
whereof he occupies the property, and that he therefore has no right
to occupy the property.
I concede that [the appellant]
has already paid R400 000 to me, but I have a counterclaim
against him for the period of his
occupation of the property as well
as any other damage that I have suffered from the whole incident.
He also alleges that he has
effected improvements to the property that have increased its value
by about R300 000. I deny this.
I have made enquiries at the
local authority and no plans for any alterations were submitted or
approved. I am advised that the
municipality can therefore legally
compel me to demolish any illegal additions or alterations and to
restore the property to the
condition in which it was. That would
then indeed cause me a loss that cannot be quantified now. I cannot
expand on this aspect
as the nature of the so-called improvements is
not known to me.’
The cause of action relied upon by the respondents was
clearly the
rei vindicatio
.
[7] In his answering affidavit, the appellant said:
‘
I
depose to this affidavit in opposition to the relief sought by the
[respondents]. I do so essentially on the basis that I am lawfully
entitled to remain in possession of the property, by virtue of the
operation of a so-called improvement lien. As will appear, the
lien
secures a substantial claim that I have against the [respondents],
being the amount by which [they have] been enriched, and
I have
correspondingly been impoverished, by improvements to the property.’
The appellant averred that, up to the time his attorney
pointed out the legal position, he had laboured under the impression
that
his occupation of the property was in terms of a binding
contract, in terms of which he would become the owner of the
property;
and on this basis he contended that from 9 February 2007
until the end of October 2009 he was ‘in contemplation of law,
a
bona fide possessor, or at least a bona fide occupier of the
property’.
[8] The appellant went on to say:
‘
While
I laboured under the belief that I would in due course become its
owner, I caused substantial improvements to be effected
to the
property, as set out below. In order to quantify the cost of the
improvements, a local builder of George, one Mr Gerhard
Bouwer (of 3
Boom Street, Denneoord, George) was asked to inspect the property,
and to furnish an estimation of what the improvements
would cost, at
current market prices (ie, as at February 2010). Mr Bouwer has
furnished the following estimation:
(a) Building and/or rebuilding
garden walls: R86 631,84.
(b) Introduction of car port and
pergola to main house: R42 472,65.
(c) Repair to and upgrading
interior of old house: R11 937,35.
(d) Repair to and upgrading
exterior of old house: R23 574,25.
(e) Conversion of shed into
three flats/chalets: R683 489,58.
(f) Introduction of veranda for
flats/chalets: R38 767,10.
(g) Introduction of swimming
pool: R55 685,00.
(h) Introduction of septic tank
and plumbing: R36 373,70.
(i) Introduction of fresh water
tanks and plumbing: R67 388,50.
I annex hereto, marked “A”,
a copy of Mr Bouwer’s quotation.’
In a confirmatory affidavit, Mr Bouwer said:
‘
I
should mention that my aforesaid assessment of the cost of executing
the work performed by the defendant in improving the property
was not
intended to be, and was not presented to him as, a finite or precise
quotation of the cost. It is, however, in my opinion,
a fair
evaluation, which ought not to differ by a substantial margin
(whether upwards or downwards) from the result of a more detailed
assessment.’
The total assessment made by Bouwer amounted to
R1 046 319,97, of which a little under R600 000
represented materials
and the rest, labour.
[9] The appellant’s affidavit continued:
‘
I
respectfully say that, assessed at current market prices, the
aforesaid improvements have substantially increased the value of
the
property (ie, the value that it presently has, with improvements,
compared with the value that it would presently have had,
without
improvements). My attorney has engaged a registered professional
valuer, one Mr J P van der Spuy, to undertake an investigation
in
this regard. Mr van der Spuy examined photographs of the work that I
did at the property (a selection of which is contained
in the album
marked “B”) and also caused an appointee in the George
area to undertake a physical examination of the
property. Mr van der
Spuy’s provisional assessment is that my improvements increased
the value of the property by about R500 000.00.
I shall obtain,
and deliver in support of my opposition in this matter, Mr van der
Spuy’s confirmatory affidavit of the above.
. . .
It is self-evident that the
improvements which I effected were all necessary and useful
improvements, and not luxurious improvements.’
A confirmatory affidavit by Van der Spuy was annexed
which added nothing to the facts.
[10] The appellant admitted that the alleged
improvements were effected without building plans. He said:
‘
It is
true that the improvements to the property were effected without
approved building plans. However, I point out that the property
is
not within an urban area, in respect of which building regulations
are generally more rigorously enforced, but is zoned as “farm”
land . . . Moreover, it is a common practice for a local authority to
receive and approve building plans well after the structure
to which
they relate has been erected, if the plans and the structure comply
with the requirements of the National Building Regulations
. . . The
plaintiff has nowhere alleged that the improvements do not so comply,
and I respectfully say, in any event, that they
do comply
substantially
,
so that the approval of the local authority will in due course be
obtained, if necessary.’ (Emphasis supplied.)
[11] In the replying affidavit De Kock dealt at some
length with the nature, extent and alleged necessity for, and
usefulness of,
the improvements. He also annexed photographs of the
property.
THE ISSUES
[12] Three issues arise for decision on appeal: first,
whether the appellant has established a lien which entitles him to
remain
in possession of the property until compensated for the
improvements he alleges he has made; second, whether the order of
ejectment
made by the magistrate and confirmed by the high court
should be set aside and the matter remitted to the magistrate to
receive
a fourth set of affidavits; and third, whether the
respondents’ case was fatally defective, as submitted on behalf
of the
appellant, because they did not repay or tender to repay the
R400 000 paid to them by the appellant on account of the
purchase
price. I shall deal with the issues in that order.
THE LIEN
[13] The appellant claimed the rights of a bona fide
purchaser based on the decision in
Kommissaris van Binnelandse
Inkomste v Anglo American (OFS) Housing Co Ltd
1960 (3) SA 642
(A) at 657. He therefore claimed to be entitled to recover necessary
and useful expenses and to exercise a lien over the property
until
paid. His affidavit does not distinguish between the two categories
of expenses. I shall consider both possibilities.
[14] So far as the claim for necessary expenses is
concerned, Rhoode would have a claim for reimbursement for
expenditure of money
or material on the preservation of the property.
He has no claim for his own labour:
Harrison v Marchant
1941
WLD 16
at 20-21. The problem facing the appellant, however, is that
he relies on the evidence of Bouwer who has estimated what the
improvements
would cost as at February 2010. That evidence is
irrelevant. It does not establish that the appellant actually
expended anything
in money or materials.
[15] So far as useful expenses are concerned, the amount
of compensation is limited to the amount by which the value of the
property
has been increased or the amount of the expenses incurred by
the appellant, whichever is the less; and the court has a wide
discretion.
That was the Roman law: D 6.1.38;
1
the position was the same in the Roman-Dutch law: Voet
6.1.36;
2
and it remains the same in the modern South African law:
Meyer’s Trustee v Malan
1911
TPD 559
at 568;
Fletcher & Fletcher v
Bulawayo Waterworks Co Ltd; Bulawayo Waterworks Co Ltd v Fletcher &
Fletcher
1915 AD 636
at 648, 656-657 and
664-665.
[16] Here again, one does not know what the appellant’s
actual expenses were. In addition, there is no acceptable evidence
that the value of the property was increased. The opinion expressed
by Van der Spuy is of no assistance as neither the factual
foundation
nor his motivation therefor are set out:
(a) Van der Spuy never visited the property, but relied
upon photographs and what was told to him by an unnamed appointee.
Not all
of the photographs shown to him were annexed to the
appellant’s answering affidavit. Moreover, and more
importantly, what
the ‘appointee’ sent to examine the
property told Van der Spuy is nowhere recorded.
(b) The factors taken into account by Van der Spuy in
arriving at his ‘provisional’ valuation, such as the
location
of the property, its size and zoning, comparable sales in
the area and the nature, extent and degree of completion of the
improvements,
are nowhere set out.
The criticism by the respondents’ counsel of the
answering affidavit on this aspect as containing ‘vague, bald,
terse,
sketchy and insufficient allegations’ is entirely
justified. On top of everything else, there is the possibility that
the
local authority may order demolition of the alleged improvements.
[17] The present is not a case where it is common cause
or cannot on the papers be disputed that the property has been
increased
in value, and there is a disagreement as to the amount. In
such a case an owner seeking possession of his/her property would
usually
tender security such as a guarantee from a financial
institution for the amount by which the property will in due course
be found
to have been increased in value, up to the amount claimed by
the person asserting the lien (or such lesser amount as the court
might be able to determine on the papers as being the maximum amount
for which the lien is maintainable), and ask a court to exercise
its
discretion to order delivery of the property to him/her against
provision of such security:
Hochmetals Africa (Pty) Ltd v Otavi
Mining Co (Pty) Ltd
1968 (1) SA 571
(A) at 582C-F and cases there
quoted. Here, there is not even a prima facie case for the
respondents to meet. The appellant’s
case amounts to this: ‘I
have made alterations and additions to the respondents’
property. I have produced no acceptable
evidence to establish whether
the property has been improved in value, nor have I disclosed what I
expended in money or materials.
But I wish to resist an application
for ejectment until compensated for an amount that I have not begun
to quantify.’ To
enforce a lien in these circumstances would in
my view be to allow an abuse of the process of the court.
FOURTH SET OF AFFIDAVITS
[18] The appellant brought an application in the
magistrate’s court for the striking out of the allegations in
the replying
affidavit that dealt with the nature and value of the
alleged improvements and in the alternative, for leave to deliver a
fourth
set of affidavits. The magistrate dismissed the application.
In the high court, the appellant sought an order setting aside the
order of ejectment granted by the magistrate and substituting an
order granting him leave to deliver a fourth set of affidavits.
That
relief was also refused.
[19] In view of the conclusion to which I have come in
the previous section of this judgment, no point would be served in
granting
the relief sought by the appellant. He would not be entitled
to make allegations in a further set of affidavits that should have
been in his answering affidavit, in the absence of any explanation as
to why they were not there in the first place (
Kasiyamhuru v
Minister of Home Affairs
1999 (1) SA 643
(W) at 649F-650E) ─
and there was none; accordingly, the shortcomings in his case, which
I have held to be fatal, could not
be remedied.
RESTITUTION
[20] Counsel for the appellant submitted (I quote from
the heads of argument) that ‘it is an elementary principle of
justice
that someone who demands restitution of what he has performed
under a contract, which has been cancelled or has otherwise failed,
must himself restore, or at least tender to restore, what he received
thereunder’; and that the respondents’ failure
to make
such a tender or to repay the R400 000 paid by the appellant,
had the effect that the cause of action was not complete.
Counsel
relied for this latter proposition primarily on
Bonne Fortune
Beleggings Bpk v Kalahari Salt Works (Pty) Ltd
1974 (1) SA 414
(NC) at 424C-427A.
[21] Senior counsel who was not responsible for the
heads of argument, but presented oral argument on behalf of the
appellant, went
further and submitted that although the respondents’
claim was couched in the form of a
rei
vinidicatio
, they had, as a matter of fact,
parted with possession of the property in terms of a void contract of
sale; and that to avoid an
illogical development in the law, they
should be required to tender to restore what they had received.
Counsel was unable to point
to any case that supported this
proposition, but referred to
Patel v Adam
1977
(2) SA 653
(A), which he readily conceded did not go as far as he
would have wished.
[22]
Bonne Fortune Beleggings
concerned a claim for restitution. It is therefore
distinguishable.
Patel’s
case
is similar to the present matter on the facts, but it contains one
important distinguishing feature: there, although the plaintiff
relied on the
rei vindicatio
(see
p 669B-C) for ejectment of the defendant from the property that had
been sold in terms of a contract that was void, he specifically
tendered payment of the amount paid to him on account of the purchase
price. Rabie JA said at 670A-D:
‘
Such
enrichment occurs, it has been said (see, eg,
Mattheus
v Stratford and Others
1946
TPD 498
at p 504) when the seller retains both the land and the
price. There can, of course, be no quarrel with this view, but where,
as
in the present case (where, it may be noted, there is ─ save
for the reference to improvements made by the defendant, a matter
not
in issue in these proceedings ─ no allegation that the
plaintiff will be enriched at the expense of the defendant if
he is
granted the relief he seeks), the seller claims possession of his
property against repayment of what he has received from
the
purchaser, there is no question of his being enriched at the expense
of the purchaser if possession of the property is restored
to him:
the position in such a case is, simply, that the parties are restored
to their original, ie, pre-agreement, positions.
I can see no
inequity in such a result: the agreement which the parties purported
to conclude is, after all, declared by statute
to be of no force or
effect.’
[23] The court in
Patel
was therefore not concerned with the question whether
the failure to tender return of what had been received under a void
contract
was fatal to a
rei vindicatio
brought by the owner. In the present matter, the mere
fact that the appellant would be entitled to repayment of the
R400 000
(absent a defence) in order to prevent the respondents
being unjustly enriched, does not mean that he is entitled to resist
ejectment
until the amount is repaid or tendered: he could do so only
if repayment has to take place at the same time that the appellant is
ejected ─ I shall revert to this question; or if a tender to
repay is a necessary ingredient of the respondents’ claim.
And
it is not, for the reasons given by Botha J writing for the full
court of the Transvaal Provincial Division in
Vogel
NO v Volkersz
1977 (1) SA 537
(T) at
554H-555C:
‘
In my
opinion, the principle adopted and applied in [
Akbar
v Patel
1974
(4) SA 104
(T)], with which I associate myself, is decisive on the
question now being considered. The principle is that the seller of
property
under an invalid contract of sale has a claim to possession
based only on his ownership and the purchaser’s possession of
the property, in accordance with the general rule propounded in the
line of cases running from
Graham
v Ridley
1931
TPD 476
, to
Chetty
v Naidoo
[1974
(3) SA 13
(A)]. Nothing more is required to complete the seller’s
cause of action. It is true that in
Akbar’s
case
TRENGOVE J, referred to the tender of the plaintiff in that case to
refund to the purchaser what he had received in respect
of the
purchase price of the property with the observation “as he is
obliged to do in the circumstances” (at p 110H),
but in my
respectful view that observation was clearly
obiter
and
the learned Judge was not applying his mind to the question whether
such a tender was an essential ingredient of the plaintiff’s
cause of action. To require such a tender would be to negate the very
principle upon which the decision was based. If the seller
bases his
claim to possession simply on his ownership and the purchaser’s
occupation of the property, as he is entitled to
do, it is for the
purchaser to raise the point that the seller is obliged to refund
what he has received by way of payment of the
purchase price of the
property. If the point is raised by the purchaser, or by the Court
mero
motu
,
the Court will obviously make its order against the purchaser to
restore possession to the seller conditional upon the seller
refunding to the purchaser whatever the latter has paid in respect of
the purchase price of the property, but it is not necessary
for the
seller to tender such a refund.’
3
[24] I see no conceptual difficulty in following this
approach. In some cases, where there has been performance under a
void contract,
a party would have no option but to sue for
restitution and tender restitution of what he or she has received
pursuant to the ‘contract’,
for example where money has
been paid or where the party is not the owner of an article delivered
by him or her under the ‘contract’.
But where the
rei
vindicatio
is available, I see no reason why
relief should be denied merely because there is another cause of
action available that has advantages
for the respondent/defendant. Of
course the appellant is entitled to return of the R400 000 he
has paid (subject to any counterclaim),
otherwise the respondents
would be unjustly enriched. But that means that the appellant has an
action for the money; it does not
mean that the respondents were
obliged to tender the return of the money to complete their cause of
action. The cause of action
chosen by them was complete without such
a tender.
[25] I revert to the question whether the order for
ejectment should be made subject to repayment of the R400 000.
The respondents
have asserted a counterclaim for inter alia the
period of the appellant’s occupation of the property ─
which began
on 9 February 2007 (more than five and a half years ago)
and still continues. The appellant has already instituted a claim in
the
Western Cape High Court for repayment of the money and it seems
to me more appropriate for the respondents’ liability to be
decided in those proceedings. To order repayment now would be to
deprive them of the advantage conferred on them by Rule 22(4),
which
provides that:
‘
If by
reason of any claim in reconvention, the defendant claims that on the
giving of judgment on such claim, the plaintiff’s
claim will be
extinguished either in whole or in part, the defendant may in his
plea refer to the fact of such claim in reconvention
and request that
judgment in respect of the claim or any portion thereof which would
be extinguished by such claim in reconvention,
be postponed until
judgment on the claim in reconvention. Judgment on the claim shall,
either in whole or in part, thereupon be
so postponed unless the
court, upon the application of any person interested, otherwise
orders, but the court, if no other defence
has been raised, may give
judgment for such part of the claim as would not be extinguished, as
if the defendant were in default
of filing a plea in respect thereof,
or may, on the application of either party, make such order as to it
seems meet.’
ORDER
[26] The appeal is dismissed with costs.
_______________
T D CLOETE
JUDGE OF APPEAL
APPEARANCES:
For Appellant: S P Rosenberg SC
Instructed by:
Lamprecht Attorneys, Cape Town
Honey Attorneys, Bloemfontein
For Respondent: D J Coetsee
Instructed by:
Nico Smit Incorporated, Cape Town
Bokwa Attorneys, Bloemfontein
1
Translation
by Watson vol 1 p 207.
2
Translation
by McGregor J in
Ras v Vermeulen
1927
OPD 5
at 8 and
Gane’s
translation vol 2 p 249.
3
Vogel’s
case was followed on this point in
Hartland
Implemente (Edms) Bpk v Enal Eiendomme BK
2002
(3) SA 653
(NC) at 663I-664H.