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[2023] ZAKZPHC 96
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105 Jayhold Proprietary Limited v Body Corporate Falcon Crescent (AR145/22) [2023] ZAKZPHC 96 (18 August 2023)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
CASE
NO.: AR145/22
In
the matter between:
105
JAYHOLD PROPRIETARY LIMITED
APPELLANT
and
BODY
CORPORATE FALCON CRESCENT
RESPONDENT
ORDER
On
appeal from:
the Durban Magistrates' Court (sitting as court a
quo):
The
appeal is dismissed with costs.
JUDGMENT
Chithi
AJ (K Pillay J concurring)
lntroduction
[1]
This is an appeal against the summary judgment which was granted
against the appellant
on 19 January 2022 by the Magistrates Court for
the district of Durban. On 29 March 2021 the respondent instituted an
action against
the appellant for levies in respect of Section 73
Falcon Crescent (Foyer). Old Main Road, Botha's Hill, KwaZulu-Natal
in the sum
of R85 446.62 plus interest thereon at the rate of 24% per
annum from the date that the levies became due to the date of final
payment and costs of suit on an attorney and client scale. The levies
as claimed by the respondent were due in terms of s 3 of the
Sectional Titles Schemes Management Act
[1]
("the STSMA").
[2]
On 28 July 2021 the appellant delivered a plea and presumably this
must have been
after the appellant had delivered its notice of
intention to defend which unfortunately did not form part of the
appeal record.
On 19 August 2021 the respondent applied for summary
judgment on the terms as set out above.
[3]
The appellant opposed the application for summary judgment with the
application consequently
set down for hearing on 19 January 2022 on
the opposed roll pursuant to which the judgment which is the subject
of this appeal
was granted. The essence of the defence which was
posited by the appellant as I could distil from the appellant's plea
is that
when the respondent's board of trustees, on 18 October 2016.
approved an amending sectional plan SG 0300/2016 to sub-divide
Section
34 into Sections 66-74 they impliedly alternatively tacitly
agreed to purchase Section 73 which comprised a portico, large foyer.
and passageway from the appellant and therefore the appellant was not
liable for the levies. I will revert later to deal with this
defence.
Common
cause facts
[4]
The following were common cause facts between the appellant and the
respondent:
(a)
The appellant was the owner of Section 34-which consisted of the
whole
of the ground floor of Manor House and the Jower ground floor.
(b)
During October 2016 the appellant applied to the respondent's board
of
trustees for consent to sub-divide Section 34-to create Sections
66-73 on the ground floor and Section 74 on the lower ground floor.
(c)
On 18 October 2016 the respondent's board of trustees approved the
appellant's
amending sectional plan to sub-divide Section 34.
(d)
The residential units namely units 66-72 were all sold to individual
owners
at least by May 2017.
(e)
Section 73 was registered in the appellant's name on 19 May 2017.
(f)
The appellant is currently the lawful owner of Section 73.
(g)
The appellant paid levies for Section 73 from 19 May 2017 until
October
2018.
Grounds
of appeal
[5]
The appellant seeks to assail the summary judgment on the following
grounds:
(a)
The learned Magistrate erred in placing undue emphasis on the
registration
of the appellant as the owner of the Section and that
the appellant had previously made payment of levies to the
respondent.
(b)
The
Magistrate erred in placing undue reliance on the application of the
Alienation of Land Act
[2]
to the
effect that a sale of immovable property must be in writing.
(c)
The Magistrate erred in not concluding that when the respondent
approved
the appellant's amended sectional plan on 18 October 2016
which created Section 73 a tacit alternatively implied agreement was
concluded that the respondent would purchase Section 73.
(d)
The Magistrate erred in overlooking the fact that since May 2017 the
appellant
has had no use and enjoyment of the Section in question
which had been used exclusively for the benefit and enjoyment of the
respondent
and with that Section accordingly being
de facto
common property of the respondent.
(e)
The Magistrate erred in failing to afford the appellant leave to
defend the case at trial
and instead granting summary judgment
against the appellant.
Issues
[6]
The issue is broadly whether the appellant had a bona fide defence to
the respondent's
claim and therefore whether the Magistrates' Court
was wrong to grant summary judgment against the appellant.
Applicable
law
[7]
Where there has been no misdirection on fact by the trial judge. the
presumption is
that his conclusion is correct, and the Appellate
Court will only reverse it where it is convinced that it is wrong.
[3]
[8]
The issue of whether the appellant had a bona fide defence to the
respondent's claim
and whether the Magistrates' Court judgment was
wrong must be considered within the context of the statutory
prescripts which regulated
the relationship between the appellant and
the respondent and relating to the sale of immovable property.
[9]
The first of such prescripts is the STSMA. For an owner of a
sectional title unit
to sub-divide a unit he must make an application
to the trustees of the body corporate in terms of s 7(2) of the STSMA
which provides
that:
'(a)
In addition to the functions contemplated in subsection (1). the
trustees of the body corporate
must receive and may consent to
applications for subdivision of sections or consolidation of
sections. made by the owners of sections.
(b)
Such consent must not unreasonably be withheld by the trustees.'
[10]
On 18 October 2016 the respondent's board of trustees approved the
appellant's subdivisional
plan. It is this approval which the
appellant contends constituted an implied alternatively tacit
agreement between the appellant
and the respondent. However, the
issue of whether there was any implied alternatively tacit agreement
which was concluded between
the parties must be considered in the
context of the parties conduct pursuant to the alleged conclusion of
the implied alternatively
tacit agreement to which I will refer
later.
[11]
Section 5 of the STSMA provides:
'(1)
In addition to the body corporate's main functions and powers under
sections 3 and 4, the body corporate-
…
(
d
)
may, subject to subsection (2), purchase land to extend the common
property, if duly authorised
thereto in writing by all the owners;
(2)
Land purchased by a body corporate in terms of subsection (1)
(d)-
(a)
must be registered in the name of the body corporate in terms of the
Sectional Titles Act and
Deeds Registries Act, 1937 (Act 47 of 1937);
and
(b)
is considered to be owned by the owners of sections in the building
concerned in the same
proportion as their participation quota as
contemplated in section 26 (2) of the Sectional Titles Act.'
[12]
The acquisition of land in terms of s 5 (1)(
d
) of the STSMA in
order to extend common property is subject to a proviso that the
trustees must be authorised in writing by all
the owners to acquire
such land. The land as purchased must then be registered in the name
of the body corporate with the Registrar
of Deeds. The reason why the
acquisition of land to extend the common property must be authorised
in writing by all owners is because
it would affect their
participation quota.
[13]
The second prescript is the Sectional Titles Act
[4]
("the STA"). Section 21(1) of the STA provides that after
the local authority has approved the proposed subdivision of
the
section or the consolidation of two or more sections, the land
surveyor or architect concerned may on behalf of the owner submit
the
draft sectional plan of subdivision or consolidation, as a case may
be, to the Surveyor-General for approval.
[14]
Further s 22(1) of the STA provides that an 'owner may, after
approval of a sectional plan of
subdivision of a section, apply to
the registrar of the deeds registry in which the section is
registered, to register the sectional
plan of subdivision'.
[15]
Furthermore, s 22(2)(
d
) of the STA provides that an
application under subsection (1) shall be accompanied by
'certificates of registered sectional title
in the prescribed form
for each of the new sections and their undivided shares in the common
property created by the subdivision,
made out in favour of the owner
or, in the case of a partition, in favour of the persons entitled
thereto in terms of the partition
agreement'.
[16]
It is common cause that Section 73 came into existence during 2016
when an amending sectional
plan SG 0300/2016 to sub-divide Section 34
into Sections 66-74 which was prepared by the appellant's appointed
land surveyor, Mark
Turnbull of Button & O'Connor Land Surveyors
was duly approved by the Surveyor-General in terms of s 21 (1) of the
STA. By
May 2017 the residential units namely units 66-72 were all
sold to individual owners. Subsequently, on 19 May 2017 the appellant
registered Section 73 in its name as contemplated in the STA.
[17]
The third prescript is the Alienation of Land Act. Section 1(1) of
the Alienation of Land Act
defines “land" as including any
unit or a proposed unit in terms of the STA. Further, s 2(1) provides
that no alienation
of "land" shall be of any force or
effect unless contained in a deed of alienation signed by both the
parties or their
agents acting on their written authority.
[18]
The provisions of the prescripts as referred to above must be
considered against the provisions
of rule 14(3)(b) of the
Magistrates· Court Rules. In terms of rule 14(3)(b) the
defendant may:
'satisfy
the court by affidavit (which shall be delivered five days before the
day on which the application is to be heard), or,
with the leave of
the court, by oral evidence of such defendant, or of any other person
who can swear positively to the fact that
the defendant has a bona
fide defence to the action; and such affidavit or evidence shall
fully disclose the nature, grounds of
defence and the material facts
relied upon therefor.'
This
is the statutory context within which the appellant's application was
considered by the magistrate and the statutory context
within which
the appeal must be considered.
[19]
In resisting the respondent's application for summary judgment. the
appellant was required to
disclose the nature and the grounds of its
defence with a sufficient degree of detail and clarity to enable the
court to ascertain
whether it has deposed to a defence which, if
proved at the trial, would constitute a good defence to the action in
reference to
the plea that was delivered.
[5]
The appellant contends that when the respondent approved the
appellant's amended sectional plan on 18 October 2016 which
created
Section 73 an implied alternatively a tacit agreement was concluded
that the respondent would purchase Section 73.
[20]
In order to answer the question of whether the respondent's approval
of the appellant's amended
sectional plan constituted the conclusion
of an implied alternatively a tacit agreement between the parties it
is apposite to have
recourse to how the courts have defined "implied"
or "tacit" terms in relation to contracts.
[21]
In
Alfred
McAlpine and Son (Pty) Ltd v Transvaal Provincial Administration
[6]
Corbett
AJA stated that an "implied term":
'In
the first place, it is used to describe an unexpressed provision of
the contract which the law imports therein, generally as
a matter of
course, without reference to the actual intention of the parties. The
intention of the parties is not totally ignored.
Such a term is not
normally implied if it is in conflict with the express provisions of
the contract. On the other hand, it does
not originate in the
contractual consensus ... In a sense "implied term" is, in
this context. a misnormer in that in
content it simply represents a
legal duty (giving rise to a correlative duty) imposed by law, unless
excluded by the parties, in
the case of certain classes of contracts.
It is a
naturalium
of the contract in question. In the second
place, "implied term" ls used to denote an unexpressed
provision of the contract
which derives from the common intention of
the parties. as inferred by the Court from the express terms of the
contract and the
surrounding circumstances.·
[22]
The learned judge further stated that:
[7]
'The
tacit term, on the other hand, is a provision which must be found, if
it is to be found at all. in the unexpressed intention
of the
parties. Factors which might fail to exclude an implied term might
nevertheless negative the inference of a tacit term...
The Court does
not readily import a tacit term... Before it can imply a tacit term
the Court must be satisfied, upon a consideration
in a reasonable and
businesslike manner of the terms of the contract and the admissible
evidence of surrounding circumstances,
that an implication
necessarily arises that the parties intended to contract on the basis
of the suggested term.'
[23]
A tacit term is distinguishable from a tacit contract, which is where
the entire contract is
implied from the facts and circumstances. In
cases where reliance is placed on a tacit contract (a contract
implied from the facts
and circumstances), a statement of the facts
and circumstances constituting the implied contract relied upon is
required. For a
party to establish a tacit agreement it is necessary
that he must allege and prove unequivocal conduct which is capable of
no other
reasonable interpretation and that the parties intended to
and did in fact contract on the terms alleged. It must be proved that
there was in fact
consensus
ad idem
.
[8]
The facts and circumstances from which such an implied contract is
inferred must be set out in the pleadings. In order to comply
with
the requirement of unequivocal conduct which is capable of no other
reasonable interpretation a catalogue of actions and specific
conduct
must be averred. Every relevant action or specific conduct must be
proved.
[24]
There is nowhere in the appellant's plea wherein the appellant
alleged any conduct on the part of the respondent. facts,
and
circumstances from which the alleged implied alternatively tacit
agreement could be inferred. All that the appellant alleges
is that
on 18 October 2016 when the respondent's board of trustees approved
the amending sectional plan SG 0300/2016 they impliedly
alternatively
tacitly agreed that:
(a)
'Section 73 would be purchased by the respondent for a market-related
price;
(b)
from the commencement of Section 73 being used as a portico, foyer,
and
passageway by the residents of Manor House alternatively upon the
sale of the Section to the respondent. the appellant would not
be
liable for payment of levies in respect of the Section; and
(c)
the respondent would formalise the conversion to common property by
zero-rating
Section 73 for levies or de-register it.·
[25]
I find that the respondent's actions did not demonstrate those of a
party from whose conduct
an implied alternatively tacit agreement
could be inferred. This is so because when the appellant started
paying levies the respondent
received them and when the appellant
ceased paying levies the respondent sued the appellant for such
levies.
[26]
While contrary to the appellant's assertion I find that the
appellant's conduct demonstrates
the opposite. When the appellant
applied to the registrar of deeds for the registration of the
subdivision in terms of s 22 of
the STA it never sought to have
Section 73 registered in the respondent's name as common property;
instead. the appellant sold
all the residential units, namely units
66-72 to individual owners except for Section 73. On 19 May 2017 the
appellant had Section
73 registered in its name and started paying
levies as an owner as it is required in terms of s 3 of the STSMA
until October 201S.
When the appellant registered Section 73 in its
name it must have been aware that as an owner of the unit it would in
terms of
s 3 of the STSMA be liable for levies in respect thereof.
When the appellant paid levies for Section 73 the appellant could not
have done this with the full knowledge that in fact there was an
implied alternately tacit agreement between the parties.
[27]
In addition, when the appellant's land surveyor prepared the amending
sectional plan SG D 300/2016
to subdivide Section 34-into Sections
66-74 in terms of s 21 of the STA there is nowhere in the sectional
plan where it is indicated
that Section 73 was
'common
property.'
[9]
Even if it was
assumed for a moment that the appellant is correct to say that upon
the approval of the amending sectional plan
on 18 October 2016 there
was an implied alternatively tacit agreement which came into
existence between the parties such an agreement
would not be valid
for two reasons. Firstly, by virtue of the provisions of s 5(1)(
d
)
of the STSMA which prohibits the acquisition of property to extend
the common property unless authorised in writing by all the
owners.
Such an implied alternatively tacit agreement would therefore be
invalid for want of compliance with s 5(1)(d) of the STSMA.
[28]
Secondly s 1 of the Alienation of Land Act defines "land"
as including a unit or a
proposed unit in terms of the STA, while on
the other hand, s 2(1) the Act prohibits any sale of land unless it
is contained in
a deed of alienation which has been signed by both
parties or their agents acting on their written authority. There is
no deed
of alienation which was signed by parties in relation to
Section 73 and therefore the alleged implied or tacit agreement which
was allegedly entered into between the parties would be invalid for
want of compliance with s 2(1) of the Alienation of Land Act.
[29]
In any event when the trustees of the respondent approved the
appellant"s amended sectional
plan on 18 October 2016 which
created Section 73, they were merely performing their statutory
functions in terms of s 7 of the
STSMA. The respondent is a creature
of a statute whose functions and powers are confined within the four
corners of the enabling
legislation and rules. Therefore, the
performance of those functions could not possibly be equated to the
trustees of the respondent
being empowered to bind the respondent to
contractual obligations whether expressly, impliedly and/or tacitly
which a.re otherwise
not sanctioned by the enabling legislation as
doing so would be ultra vires the powers conferred to them in terms
of ss 5 and 7
of STSMA.
[10]
[30]
It is indeed correct that a respondent in a summary judgment
application is not required to show
that it has a defence that is
likely to prevail, it is enough that it can demonstrate that it has a
cognisable defence. However.
such cognisable defence must be bona
fide. In this case I find that as much as the defence which the
appellant sought to raise
was clear it did not however constitute a
good defence and hopelessly fell short of constituting a bona fide
defence. In the circumstances,
I do not see in which respects is it
contended that the magistrate was wrong in granting the summary
judgment against the appellant.
In my view the appellant's appeal
must fail.
Costs
[31]
The general rule is that costs follow the event. I do not see why I
should deviate from that
general rule.
Order
[32]
In the result, the appeal is dismissed with costs.
K
Pillay J
Chithi
AJ
APPEARANCES
Counsel
for the Appellant:
Adv.
J. F. Nicholson
Instructed
by:
Larratt
Law Attorneys
Counsel
for the Respondent:
Mr.
T. K. Pearce
Instructed
by:
Pearce,
Du Toit & Moodie
Date
Hearing:
10
February 2023
Date
of Judgment:
18
August 2023
[1]
Sectional Titles Schemes Management Act 8 of 2011 ('"STSMA").
[2]
Alienation of Land Act 68 of 1981
.
[3]
R v
Dhlumayo and Another
1948 (2) SA 677 (A)at 705-706.
[4]
Sectional Titles Act 95 of 1986
.
[5]
Maharaj
v Barclays National Bank Ltd
1976 (1) SA 4-18
(A);
Barclays
Western Bank Ltd v Bill Jonker Factory Services (Pty) Ltd and
Another
1980
(1) SA 929 (SE).
[6]
Alfred
McAlpine and San (Pty) Ltd v Transvaal Provincial Administration
1974- (3) SA 506
(A) at 531 D-H, 532G-533A. See also
Robin
v Guarantee Life Assurance Co Ltd
[1984] ZASCA 72
;
1984 (4) SA 558
(A) at 567A-F;
South
African Mutual Aid Society v Cape Town Chamber of Commerce
1962 (1) SA 598
(A) at 615D.
[7]
Alfred McAlpine ibid at 532G-H.
[8]
66-7ndard Bank of South Africa Ltd and Another v Ocean Cormmodities
Inc and Others
1983 (1) SA 276
(A) at 292;
Triomf
Kunsrnis (Edms) Bpk v AE & Cl Bpk en Andere
1984 (2) SA 261
(W) at 267.
[9]
Record: page 26.
[10]
Zikalala
v Body Corporate, Selma Court and Another
2022 (2) SA 305
(KNP) para 19.