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[2010] ZASCA 78
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Oribel Properties 13 (Pty) Ltd and Another v Blue Dot Properties 271 (Pty) Ltd and Others (454/2009) [2010] ZASCA 78; [2010] 4 All SA 282 (SCA) (28 May 2010)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 454/2009
In the matter between:
ORIBEL PROPERTIES 13
(PTY) LTD First
Appellant
INTERACTIVE AFRICA
(PTY) LIMITED Second Appellant
and
BLUE DOT PROPERTIES
271 (PTY) LTD First
Respondent
GOSSOW HARDING
CONSTRUCTION (PTY) LTD Second Respondent
RANK SHARP (PTY)
LTD Third Respondent
THE BODY CORPORATE OF
THE THEBE HOSKEN
HOUSE SECTIONAL TITLE
SCHEME Fourth Respondent
THE REGISTRAR OF
DEEDS Fifth Respondent
THE SURVEYOR
GENERAL Sixth Respondent
XANTHA PROPERTIES 16
(PTY) LTD Seventh Respondent
Neutral
citation:
Oribel
v Blue Dot
(454/2009)
[2010] ZASCA 78
(28 May 2010)
Coram:
CLOETE,
PONNAN, MALAN, BOSIELO and LEACH JJA
Heard:
11
May 2010
Delivered:
28
May 2010
Summary: Section
25(13)
Sectional Titles Act 95 of 1986
– changed circumstances
– content of real right of extension reserved – standing
of owner of section to apply
for demolition of wall on common
property
______________________________________________________________________
ORDER
On
appeal from:
Western
Cape High Court (Cape Town) (Jamie AJ sitting as court of first
instance):
The
appeal is upheld with costs including the costs of two counsel where
so employed.
The
order of the court a quo is set aside and substituted with the
following:
‘
(a)
The first respondent is interdicted from exercising the right
reserved to extend the Theba Hoskens Sectional Title Scheme and
contained in the certificate issued to the first respondent on 28
November 2007 in terms of
s 12(1)(e)
of the
Sectional Titles Act 95
of 1986
in any way other than by transferring or ceding the right to
the exclusive use of the plant area to the owner of
section 401
in
the said Scheme.
(b) The
first respondent is interdicted from transferring or ceding the said
right reserved to any person other than to the owner
of
section 401
in the said Scheme.
(c) The
first respondent is ordered to pay the costs of the applicants.’
______________________________________________________________________
JUDGMENT
MALAN JA (CLOETE, PONNAN,
BOSIELO AND LEACH JJA concurring)
[1] This is an appeal,
with leave of Jamie AJ, against his dismissal of the appellants’
application to declare void the reservation
of a right to extend the
sectional title scheme by the developer, the first respondent; to
restrain the purported alienation and
transfer of that right to the
third, alternatively, the seventh respondent; and to order the
demolition of a wall constructed by
the developer pursuant to the
reservation of the right and in contravention of the rules of the
body corporate, the fourth respondent.
[2] The
Theba Hoskens Sectional Title Scheme was registered on 28 November
2007. It concerns a sectional title scheme in respect
of an existing
three story building on a stand in Cape Town. On the date of
registration of the scheme,
sections 401
and 501 were transferred
into the names of the first appellant and another person
respectively. By virtue of these transfers the
fourth respondent, the
body corporate, was also established. As part of the application for
the opening of the register and registration
of the scheme, an eight
page sectional title plan, approved by the Surveyor General, was
lodged with the registrar of deeds. The
scheme comprises five levels
of which the third to fifth levels correspond with the first to third
floors of the building.
Section 401
is situated on the second floor
of the building and consists of the whole of that floor less certain
common areas like staircases
and landings. The section on the first
floor,
section 301
, was later subdivided into three sections, viz
sections 302
,
303
and
304
. The developer of the scheme, the first
respondent, sought the reservation of various additional real rights
of extension in relation
to the third to fifth levels. On the
extension plans relating to the second floor of the building it is
indicated that a right
is reserved to extend the plant area adjacent
to
section 401
into the scheme.
[3] The
plant area is the matter in dispute. It is the area extending from
the eastern edge of
section 401
and faces Devil’s Peak. It used
to house the air-conditioning plant of the floor below it. Opaque
glass windows separated
it from
section 401
and a second row of
opaque glass windows formed the outer edge of the plant area
concealing it from the exterior of the building.
The floor of the
plant area is the roof of the section below, now
section 302
, and it
extends upwards past
section 401.
The plant area was separated from
the floor below it by a ‘false ceiling’ made up of thin
ceiling boards forming the
roof of the section below. After removal
of the air-conditioning unit and the exterior opaque windows the
plant area consisted
essentially of a void from the roof of
section
302
upwards. During June 2007 the first appellant and the developer
reached an agreement that the opaque glass windows separating the
plant area from
section 401
would be replaced by clear windows. Glass
doors were also installed but it is a matter of dispute whether this
took place with
the developer’s consent. A brick wall was
constructed by the developer on common property immediately adjacent
to the row
of opaque windows separating the plant area from
section
410
during the weekend of 10 May 2008.
[4] The
first appellant is the registered owner and the second appellant, an
associated company, the occupier of
section 401
of the scheme. The
first respondent, the developer of the scheme, sold
section 401
to
the second appellant on 16 February 2007 but, in terms of a
subsequent agreement (the ‘Addendum’), the second
appellant
was replaced as the purchaser by the first appellant. I
will refer to the purchaser as the ‘appellants’. The
seventh
respondent purchased
section 302
from the developer and also
‘the Real Right to Extend re: the plant room (situated directly
above the office space)’.
The third respondent (through the
seventh respondent) is entitled to occupy
section 302.
In the court a
quo the appellants disputed the validity of the creation of the right
of extension and, consequently, also the third
and seventh
respondents’ entitlement to receive transfer of it.
[5] The agreement of sale
between the developer and the appellants made provision for the
purchase and sale of
section 401
,
14
parking bays and an undivided
share in the common property. The developer warranted to the
purchaser that the boundaries of the
unit would be substantially in
accordance with those pointed out and as set out in Annexure ‘B’
to the agreement and
that it would consist of the entire second floor
of Theba Hoskens House (excluding staircases and landings). In terms
of the Addendum
it was recorded that the appellants waived their
rights to annul the agreement of sale and that a real right of
extension was reserved
pertaining to the retail section and minor
extensions thereto. The plans for the right to extend were to be
lodged in the Deeds
Office and furnished to the purchaser. The
rights so reserved have no bearing on the present dispute between the
parties.
[6] As part of the
application for the opening of a sectional title register the
developer lodged an application with the registrar
of deeds, the
fifth respondent, for the reservation of a real right to extend the
scheme in terms of
s 25
of the Act. On 28 November 2007 the registrar
issued a certificate of real right in favour of the developer
pursuant to
s 12(1)(e)
of the Act. The certificate of real right
records that the registrar certified
‘
that the developer
is the registered holder of the right to erect and complete from time
to time within a period of 10 years for
his personal account a
vertical and horizontal extension of an existing building in terms of
Section 25(1)(c)
of the said Act on the specified portion of the
common property as indicated on the plan referred to in
Section
25(2)(a)
of the Act filed in this office, and to divide such building
or buildings into a section or sections and common property, and to
confer the right of exclusive use over portion of such common
property upon the owner or owners of one or more units in the scheme
. . . as shown on Sectional Plan . . . .’
[7] At all material times
it was the intention of the developer to reserve the plant area for
the use of the applicants, ie the
owners of
section 401.
The
appellants produced plans depicting the casting of a concrete slab
and the utilization of the plant area as a deck extending
from the
section into the plant area. The plans lodged with the registrar
indicate that in respect of
section 401
the plant area was reserved
for ‘extension’ into
section 401.
[8] The developer
changed, as it was stated in the answering affidavit, his mind
regarding the right of extending
section 401
into the plant area and
decided to offer it to the purchaser of the section below
section 401
to be used as an office with a double volume. As a result an
agreement of sale with the seventh respondent was concluded on 30
January 2008 in terms of which a portion of
section 301
, ie the new
section 302
, and the ‘real right to extend re: the plant room’
was sold to the seventh respondent.
[9] The court a quo
dismissed the application holding that the registration of a real
right of extension and the issue of a certificate
pursuant thereto
amounted to administrative action as defined by the Promotion of
Administrative Justice Act 3 of 2000. The relief
sought was in effect
treated as an application to review and set aside the decisions of
the fifth and sixth respondents to issue
the certificate of real
right of extension of the scheme. It was further found that
non-compliance by the developer with the provisions
of s 25 had few
practical consequences. Exercising the discretion conferred by s 8(1)
of PAJA the court a quo declined to review
and set aside the
decisions of the fifth and sixth respondents reserving the real right
of extension. Finally, the court a quo
found that a safety and fire
hazard had arisen as a result of the installation of the clear glass
windows and sliding doors between
section 401 and the plant area and
that this constituted ‘changed circumstances’ as
envisaged by s 25(13)
that made strict
compliance with the registered plans impractical. The prayer to
demolish the wall was therefore also dismissed.
[10]
In this court the appellants limited the relief sought to the prayers
for an interdict prohibiting the developer from transferring
to the
seventh respondent or other party any real right to extend the scheme
so as to ‘incorporate’ the plant area
into an existing
section or to create a new section comprising the plant area or to
create an exclusive use area pertaining to
the plant area for the
benefit of any section other than section 401 as well as to an order
directed at the demolition of the brick
wall constructed by the
developer adjacent to section 401. It follows that I need not express
any view on the appellants’
submission that no ‘decision’
as envisaged by PAJA was made when the registrar issued a certificate
of real right in
terms of s 12(1)(e).
1
Nor do I have to determine whether the reservation of the real right
of extension was void by reason of non-compliance with the
provisions
of
s 25(2)
of the
Sectional Titles Act. The
application for the
interdict was premised on the provisions of
s 25
(13) but the prayer
for the demolition of the wall was based on a variety of grounds
which will be referred to below.
[11] A
developer may in terms of
s 25
in his application for the
registration of a sectional title plan reserve for himself the right
to extend the scheme by means of
a condition imposed pursuant to
s
11(2).
3
>
2
The right to extend the scheme includes the right to extend an
existing building horizontally or vertically or to erect an
additional
building or buildings on a specified part of the common
property and to divide the extended part of the additional building
or
buildings into a section or sections, common property and
exclusive use areas for the account of the developer.
3
The reservation of the right to extend is effected by means of a
condition imposed by the developer in terms of
s 11(2).
This section
allows the developer to impose a condition in the schedule filed with
the sectional plan which sets out the servitudes
and registrable
conditions burdening the scheme.
4
The period within which the extension or extensions are to be
completed must be set out in the condition and the area of the common
property where the extension or extensions will be erected
specified.
5
If a right of extension has been reserved, the application for the
sectional plan must, in addition to the usual documentation,
6
be accompanied by the documents specified in
s 25(2).
3
>
7
On the registration of the sectional plan and the opening of a
sectional title register in respect of the land and the buildings,
the Registrar must issue to the developer a certificate of real right
to extend the scheme in the manner indicated on the sectional
plan
and subject to any mortgage bond registered against the title deed of
the land.
8
According to
s 25(4)
a right reserved in terms of
s 25(1)
or (6) and
in respect of which a certificate of real right has been issued -
‘
(a) shall for all
purposes be deemed to be a right to urban immovable property which
admits of being mortgaged; and
(b) may be transferred by
the registration of a notarial deed of cession in respect of the
whole, a portion or a share in such right:
Provided that in the case
of a cession affecting only a portion of the land comprising the
scheme only such portion shall be identified
to the satisfaction of
the Surveyor-General.’
A
right reserved in terms of
s 25
(1) may be exercised by the developer
or his successor in title, even where the developer or his successor
in title has no other
interest in the common property.
9
When the right reserved is exercised the developer or his successor
in title must immediately after completion of the relevant
unit apply
for the registration of the relevant plan of extension and the
inclusion of such unit in the relevant sectional title
register.
10
[12] A
developer or his successor in title to a right reserved in terms of
s
25(1)
may, after approval of a sectional plan of extension by the
Surveyor-General, apply to the Registrar for the registration of the
plan of extension and the inclusion of the additional section or
sections in the relevant sectional title register.
11
The application for registration must be accompanied by certain
documents.
12
Section 25(11)
provides that when ‘the requirements of this
section and of any other law have been complied with, the registrar
shall -
(a) register the sectional plan of extension’ and
perform the other duties set out in the subsection. Upon the
registration
of a sectional plan of extension the owners of sections
in the building or buildings in the scheme that is being extended,
the
mortgagees of sectional mortgage bonds and the holders of any
real rights registered over such sections, are divested of their
share or interest in the common property to the extent that an
undivided share in the common property is vested in the developer,
his successor in title or the body corporate, as the case may be, by
the issue of the certificates of registered sectional title
referred
to in
s 25(11)(c).
13
[13]
It is common cause that it was envisaged by the parties that the
plant area would be ‘incorporated’ into
section 401.
However, as a result of the first appellant’s refusal to pay
for the area, as more fully discussed below, the developer resolved
to ‘incorporate’ it into the section below and sell it as
well as the right to extend in respect of the plant room
to the
seventh respondent. The sale was concluded on 30 January 2008. This
refusal to pay for the plant area, it was submitted,
constituted
‘changed circumstances’ as envisaged by
s 25(13)
justifying ‘incorporation’ of the plant area into the
unit below as an exclusive use area.
14
Section 25(13)
provides:
‘
A developer or his
successor in title who exercises a reserved right referred to in
subsection (1), or a body corporate exercising
the right referred to
in subsection (6), shall be obliged to erect and divide the building
or buildings into sections strictly
in accordance with the documents
referred to in subsection (2), due regard being had to changed
circumstances which would make
strict compliance impracticable, and
an owner of a unit in the scheme who is prejudiced by his failure to
comply in this manner,
may apply to the Court, whereupon the Court
may order proper compliance with the terms of the reservation, or
grant such other
relief, including damages, as the Court may deem
fit.’
[14] The
case for the appellants as made out in the founding papers is
premised on their contention that they purchased the whole
of the
second floor of the building, ie the built area (less certain common
areas) including the plant area. This is, however,
not borne out by
the agreement which described the
merx
as the ‘unit . . . and parking bays which are more fully
described in Annexure ‘A’, which unit and parking bays
include an undivided share in the common property in the land and
building/s’. Later in the agreement (clause 16.10) it was
stated that the property sold ‘includes the premises as
otherwise described herein, which are currently situated on the 2
nd
floor of the building in question, being the floor . . . directly
above Indwe Insurance, together with the parking bays (TBA)
(as
attached Annexure “B”) . . . ’. In Annexure ‘A’
the unit was described as ‘2
nd
floor (approximately 700 sqm) – For guidance purposes only’
and, after the parking bays are referred to, the exclusive
use areas
are set out as ‘2
nd
floor balconies approximately 106sqm – For guidance purposes
only’. Annexure ‘B’ contains a plan of the
second
floor of the building indicating the property sold. The plant area
was depicted on it but not as a part of the property
sold. In clause
15 of the agreement of sale it was recorded that the sectional title
plan had not been registered but it was stated
that the seller
warranted that the boundaries indicated ‘will be substantially
in accordance with those pointed out by the
Seller . . . and
incorporate the entire second floor . . . a portion which is
currently occupied by Moksha Yoga.’ It follows
clearly that the
plant area was not sold and remained part of the common property. It
was not contended in this court that any
other construction of the
agreement of sale was possible.
[15] Not only the plans
submitted but also the negotiations between the parties demonstrate
the intention that the plant area would
be ‘extended’
into
section 401
or that the exclusive use of that area would be made
available to the owner of
section 401.
In a proposal made by the
appellants on 10 September 2007 the construction of a deck from
section 401
extending into the plant area was envisaged. The
appellants were to bear the costs involved. However, their proposal
concluded:
‘
Based on the above
factors, and given the considerable cost of constructing the 2 parts
of the deck, it seems unreasonable that
any additional payment would
be required in order to get permission for the construction of the
deck. Given the costs to resolve
all the above issues . . . any
additional payment cannot be justified. . . . Should permission not
be forth-coming on the basis
of this agreement, we are happy to forgo
the option of the deck . . .’.
The
correspondence between the parties shows that the developer intended
selling the plant area to the appellants. On 4 May 2007
an email
message was sent to the first appellant’s representative
wherein it was stated that the area concerned measured
some 140
square meters and that ‘[w]e need to establish a price and
conclude a deal asap regarding the space so that we can
incorporate
rights over the space in the Sectional Title Plan . . . Please put
forward an offer amount in this regard.’
On 16 and again on 21
May 2007 the floor below
section 401
was offered for sale to the
appellants. The appellants declined the offers. On 26 July 2007 the
appellants wrote to the developer
alerting it to the fire risk posed
by the ceiling in the plant area separating the two floors. On 22
August 2007 the appellants
referred to the unsightly state of the air
conditioning unit in the plant area adding that they would revert to
the developer the
following week with a proposal concerning the
construction of the deck. This was followed by the letter of 10
September 2007 referred
to above. The developer recorded on 11
September 2007 that the proposal was being studied. On 11 October
2007 a further proposal
was made by the appellants: ‘We are no
longer considering turn[ing] the entire roof into a deck. The costs
are proving to
be too onerous.’ The message contained
suggestions for ‘an aesthetic solution’ to the plant
area. The developer’s
response on 8 November 2007 contained two
alternative suggestions: the first was that it kept the space because
‘[t]his allow
us the possibility to go up from below in the
future adding value to the lower space. This area does possess value
for us which
may increase in time to come.’ The second
suggestion was to offer the plant area for sale to the appellants at
a price of
R 120 000. The appellants declined the offer to purchase
the plant area. On 16 January 2008 the appellants requested
clarification
regarding the ‘current open space between the two
floors’ and enquired whether the sale of the second floor had
affected
the plant area and what the implications for the third floor
were. The developer responded on 17 January 2008 that they were still
negotiating but that no sale of the second floor had as
yet
been concluded. The message contained the following paragraph:
‘
Regarding the
areas you are querying – the real rights regarding these areas
are described in the rights of extension etc.
as registered in the
deeds office. Whether these rights will be part of the sale concluded
or will remain with Blue Dot Props remains
to be seen once the deed
of sale is finalized. Then what the new purchaser/Blue Dot does with
the area remains to be seen.’
The first appellant
reacted on the next day by making an offer to purchase the plant area
for the price originally suggested, R
120 000. The developer replied
that they would consider the offer but would first have to complete
the negotiations they were engaged
in. The second floor including the
right reserved pertaining to the plant area was, however, sold to the
seventh respondent on
30 January 2008.
[16] In
SP&C
Catering Investments (Pty) Ltd v Body Corporate of Waterfront Mews &
others
15
Hurt
AJA described the purpose of
s 25(13):
‘
The section is
plainly designed to enable unit owners to enforce compliance by the
developer with the specifications. It gives the
developer an
opportunity to justify non-compliance with his original
specifications on the ground of “changed circumstances”
and no more. The concept that the legislator intended to give him an
opportunity, in the face of a complaint by an aggrieved unit
owner,
effectively to obtain a variation of his registered real right to the
detriment of the rights of other registered owners
is ludicrous.’
This
remark was made in the context of an application to extend the period
within which the right reserved had to be exercised.
The court, for
the reasons stated, declined the application and emphasized that a
developer had to carry out the extended phases
‘strictly in
accordance with the documents referred to in
s 25(2)
’.
16
[17] The
importance of the documents referred to in
s 25(2)
is emphasized when
the history of the section is considered. Prior to the Sectional
Titles Amendment Act 63 of 1991 building plans
approved by the local
authority had to be submitted with an application for the
registration of a sectional title plan and for
the purpose of
acquiring a right of extension.
17
In 1991 the obligation to submit comprehensive and approved building
plans was replaced with the duties contained in s 25(2). The
purpose
of the amendment was to alleviate the position of developers who
experienced delays in achieving municipal approval of
building plans
prior to selling the units and without knowing whether the whole
development would be feasible.
Since
1991, the developer has been obliged to submit only plans to scale
containing the details required by s 25(2). These plans
are less
detailed, and delays experienced in obtaining the local authority’s
approval for building plans could be avoided.
Where the developer
decides to proceed with the extension of the scheme, building plans
of the extension will, however, still have
to be approved by the
local authority.
18
Under this system the developer needs to disclose only the real right
of extension to every purchaser in the deed of alienation.
The other
information relating to the proposed extension is contained in the
schedule filed with the sectional plan and in the
documents required
by s 25(2). These requirements are imposed for the benefit of future
owners or purchasers of the sections in
the scheme. The right of a
developer to extend the scheme involves a diminution of the rights of
owners of sections otherwise attaching
to the scheme, in particular
their rights of ownership in an undivided share in the common
property. Should the developer fail
to proceed with the extension or
if no reservation was made the right to extend the scheme vests in
the body corporate which is
entitled to obtain a certificate of real
right in respect thereof.
19
In the certificate of reservation of a real right issued by the
registrar of deeds to the developer, the right reserved is described
with reference to the plan referred to in s 25(2)(a) filed with the
registrar. It is thus with reference to this plan that content
must
be given to the right reserved. The plan clearly indicates that the
right of extension must be exercised for the benefit of
section 401:
it entails the creation of the plant area as an exclusive use area
for the benefit of that section.
20
[18]
Van
der Merwe
21
summarises the position as follows:
‘
A
developer, his successor in title or the body corporate in exercising
the right of extension is obliged to erect and divide the
building or
buildings included in the extension into sections strictly in
accordance with the documents submitted when the right
was reserved.
Due regard is taken of changed circumstances which would make strict
compliance impracticable. The courts
seem to be prepared to
allow the developer to effect deviations on account of changes in
market conditions. The rationale is that
no developer would regard it
as practicable to build units that are not saleable. An owner
of a unit in the first phase who
is prejudiced by the developer’s
(or body corporate’s) failure to comply in this manner, may
approach the court, whereupon
the court may order proper compliance
with the terms of the reservation, or grant such other relief,
including damages, as it may
deem fit’ .
He,
however, adds the following cautionary words:
22
‘
[i]n practice the
developer would not be allowed to change parts of the common property
into additional sections or even exclusive
use areas.’
[19] I
am prepared to accept for the purposes of this judgment, but need not
decide, that financial considerations may bring about
a change in
circumstances making strict compliance with the terms of the
reservation as set out in the documents filed in terms
of s 25(2)
impractical.
23
This, however, is not the end of the matter. Section 25(13) requires
a developer to comply ‘strictly’ with the documents
referred to in s 25(2). These documents give content to his right of
extension. He has no other right of extension and where changed
circumstances are present he is not excused from compliance with the
documents altogether but only from complying with them ‘strictly’.
In the present matter the developer’s right of extension
consists in conferring, should he wish to exercise it, the right
to
the exclusive use of the plant area upon the owner of section 401.
24
The developer is not entitled to confer the right to the exclusive
use on the owner of section 302 or any other sectional owner.
To
allow such an exercise of his right would in effect be to grant him a
right of extension quite different from the right reserved.
He would
not only not be exercising his right of extension ‘strictly’
in accordance with the documents referred to
in s 25(2) but he would
also not be exercising the right reserved at all. Such a deviation is
not sanctioned by the legislature
and it follows that the appellants
are entitled to an interdict.
[20] It is common cause
that the developer built a brick wall on the common property in the
plant area next to the clear glass windows
and doors of section 401
installed by the appellants. The relief claimed by the appellants
include a prayer for the demolition
of the wall. The court a quo
rejected this relief. It did so for four reasons. First, it rejected
the argument that, because the
wall was constructed without the prior
approval of the trustees of the body corporate contrary to rule 9.1
of the Conduct Rules
the appellants were entitled to the relief
sought: any breach of these rules was exigible at the instance of the
trustees and the
body corporate and not of an individual owner. This
is clearly correct. Secondly, the appellant relied on clause 1.3 of
the agreement
of sale which requires the seller, ie the developer, to
obtain the consent of the purchaser to effect any alternations or
improvements
‘to the premises’ which were not fully
recorded in Annexure ‘A’. The court a quo correctly
dismissed this
argument because the construction of the wall did not
amount to an alteration or improvement ‘to the premises’.
The
wall was built, not on section 401, but in the plant area which
is common property and not part of section 401. Thirdly, it rejected
the contention that there was a tacit agreement that, by agreeing to
the installation to the windows at the expense of them, the
developer
could not thereafter nullify the advantages the clear windows offered
to appellants, ie an uninterrupted view of Devil’s
Peak. The
court found that on the first respondent’s version the consent
given by the developer was without prejudice to
its rights. Moreover,
and also because there was a dispute as to whether permission was
given for the installation of the sliding
doors, the court could not
conclude that there had been the tacit agreement contended for.
Finally, the court a quo dismissed the
appellants’ reliance on
s 25(13) and found that there were ‘changed circumstances’
present which rendered strict
compliance with the terms impractical.
These circumstances were the necessity to erect a brick wall as a
result of the installation
of the windows and, mainly, the glass
sliding doors, thereby replacing what had previously been ‘a
solid wall’ and
creating both a safety and fire hazard. The
developer was thus excused from complying strictly with the terms of
the reserved right
with respect to the construction of the wall and
could not be ordered to demolish the wall.
[21] In this court the
argument on behalf of the developer proceeded somewhat differently.
As far as the wall was concerned the
submisssion was made that, since
the wall was constructed on common property, and in view of s 41 read
with the Conduct Rules,
the appellants had no standing to seek an
order for the demolition of the wall. The appellants’ refusal
to pay for the plant
area, on the other hand, constituted ‘changed
circumstances’ as contemplated by s 25(13) entitling the
developer to
‘incorporate’ the plant area into section
302 and not into section 401 as indicated on the plan reserving the
right
of extension.
[22] Section
41 of the Act provides for the circumstances under which the owner of
a unit may institute proceedings where the allegation
is made that
both he and the body corporate have suffered damages or loss or have
been deprived of any benefit in respect of a
matter mentioned in s
36(6) and the body corporate has not instituted proceedings for the
recovery of the damages, loss or benefit.
25
Where the body corporate has not instituted proceedings, a unit owner
may do so on its behalf but only after having given the notice
referred to in s 41(2)(a) to the body corporate and the latter’s
failure to comply with it, as provided for by s 41(2)(b).
Before
proceedings may be instituted by an individual owner, the court must
be approached for the appointment of a provisional
curator ad litem,
and only in the event of a positive report may the court give
directions as to the institution of proceedings
by the unit owner on
behalf of the body corporate. This procedure has not been followed in
this case.
[23] Section 36(6)
empowers the body corporate to sue or be sued in its corporate name
in respect of
‘
(a) any contract
made by it;
(b) any damage to the
common property;
(c) any matter in
connection with the land or building for which the body corporate is
liable or for which the owners are jointly
liable;
(d) any matter arising
out of the exercise of any of its powers or the performance or
non-performance of any of its duties under
this Act or any rule; and
(e) any claim against the
developer in respect of the scheme if so determined by special
resolution.’
[24] A
body corporate is constituted by law,
26
and it is charged with responsibility for the enforcement of the
rules and the control, administration and management of the common
property for the benefit of all members.
27
A body corporate has perpetual succession and is capable of suing or
suing in its own corporate name in respect of the five matters
referred to.
28
Some of the powers, such as the one in paragraph (a), are only
declaratory but the power granted in paragraph (b) - and in some
circumstances paragraph (c) as well - gives it an entitlement it
would otherwise not have had. Under normal circumstances only
all the
owners of the common property, ie the owners of the sections, would
have been able to do so jointly as the common property
is owned by
them jointly.
29
Section 36(6)(e) also bestows a power it would not otherwise have had
on the body corporate: there is no contractual arrangement
between
the developer and the body corporate and, while there may be cases
where a developer is contractually bound to a sectional
owner to give
effect to the scheme, the body corporate is in no such relationship
with the developer. However, s 41 is not intended
to detract from the
powers enjoyed by the owner of a section to institute proceedings
where his own rights whether of ownership
30
in his unit or otherwise are infringed. In addition, the owner of a
section who is prejudiced by a developer’s failure to
comply in
this manner, may apply to court in terms of s 25(13) for an order for
proper compliance with the terms of the reservation
or other relief,
including damages. Such an owner is, in other words, given the
required standing to enforce strict compliance
with the reservation.
This is essentially the relief prayed for by the appellants in this
case. The body corporate is empowered
by s 36(6)(e) to institute
proceedings against the developer ‘in respect of the scheme; if
so determined by special resolution’.
This general power of the
body corporate, however, does not detract from the specific right
given to the individual owner under
s 25(13).
[25] The
prayer for the demolition of the wall is a different matter. Normally
the body corporate would have the power to litigate
where damage to
the common property is concerned.
31
This, however, is not the appellants’ case. They complained
about the obstruction to the flow of light to and of their view
from
the premises. The appellants’ allegations were that the wall
obliterated any natural light and deprived them of the
view and sense
of space they enjoyed. They also stated that the wall was constructed
surreptitiously and over a weekend while settlement
negotiation
between the parties were pending. This allegation was met by a denial
that the construction of the wall took place
‘surreptitiously’.
The developer’s response was that, given that the natural light
entered through the opaque
windows, very little light in any event
came through. In addition, the ventilation remained the same. Because
section 401 adjoined
the plant area which in its original state was
‘unsightly’ and posed a fire and safety risk, the wall
was constructed.
In addition, the respondents annexed a report by
their architect showing that the opaque windows were manufactured of
‘Georgian
wire’ with no light coming through them, ie
effectively a solid wall. Moreover, the report continued, light comes
into section
401 through an opening which remained in place. The
light and ventilation, the report concluded, remained the same as it
was when
the section was purchased. These allegations were contained
in the answering affidavit which, for the purposes of this matter
must
be accepted. While it is correct that the fire and safety hazard
existed some time before the construction of the wall the appellants
have not demonstrated that it in any way affects their use and
enjoyment of the section as they had purchased it. It follows that
the appellants have not demonstrated that the construction of the
wall infringed any of their rights of ownership. Nor have they
demonstrated that in constructing the wall, the developer had caused
the plant area to be ‘incorporated’ into section
302 or
the exclusive use of that area to be transferred or ceded to the
owner of that section.
[26] As
a result the appellants have shown that they are entitled to an
interdict restraining the first respondent from transferring
to the
seventh respondent or any person other than the owner of section 401
the right to the exclusive use of the plant area or
to incorporate it
in any other way into any other section in the sectional title
scheme. The following order is made:
The
appeal is upheld with costs including the costs of two counsel where
so employed.
The
order of the court a quo is set aside and substituted with the
following:
‘
(a) The first
respondent is interdicted from exercising the right reserved to
extend the Theba Hoskens Sectional Title Scheme and
contained in the
certificate issued to the first respondent on 28 November 2007 in
terms of s 12(1)(e) of the
Sectional Titles Act 95 of 1986
in any way
other than by transferring or ceding the right to the exclusive use
of the plant area to the owner of
section 401
in the said Scheme.
(b) The first respondent
is interdicted from transferring or ceding the said right reserved to
any person other than to the owner
of
section 401
in the said Scheme.
(c) The first respondent
is ordered to pay the costs of the applicants.’
_____________________
F R MALAN
JUDGE OF APPEAL
APPEARANCES:
For Appellant: Derek
Mitchell SC
Instructed
by:
Bowman Gilfillan
Cape Town
Matsepes Inc
Bloemfontein
For Respondent: JG
Gauntlett SC assisted by FSG Sievers
Instructed
by:
C K Friedlander
Shandling Volks
Cape Town
c/o
Webbers
Attorneys (1
st
Respondent)
Bloemfontein
Jan
S De Villiers Attorneys (2
nd
Respondent)
Tygervalley
c/o
McIntyre & Van
der Post
Bloemfontein
1
Cf
Dolphin
Whisper Trading 10 (Pty) Ltd v The Registrar of Deeds & another
(20645/08)
[2009] ZAWCHC 31
(23 March 2009) para 26.
2
See CG van der Merwe
Sectional
Titles, Share Blocks and Time-sharing
para
12.1 ff at p 12.3 ff and cf
SP&C
Catering Investments (Pty) Ltd v Body Corporate of Waterfront Mews &
others
(84/09)
[2009]
ZASCA 162
(30 November 2009):
[2010] 2 All SA 261
(SCA) paras 8 and
9.
3
Section
25:
‘Extension
of schemes by addition of sections and exclusive use areas. (1) A
developer may, subject to the provisions of
section 4(2)
, in his
application for the registration of a sectional plan, reserve, in a
condition imposed in terms of
section 11(2)
, the right to erect and
complete from time to time, but within a period stipulated in such
condition, for his personal account-
(a) a further building
or buildings;
(b) a horizontal
extension of an existing building;
(c) a vertical extension
of an existing building,
on a specified part of
the common property, and to divide such building or buildings into a
section or sections and common property
and to confer the right of
exclusive use over parts of such common property upon the owner or
owners of one or more sections.’
4
Sections 11(2)
and
11
(3)(b).
5
">
5
Section 25(1).
6
Section 11(3).
7
">
7
Section 25(2):
‘In
the event of a reservation in terms of subsection (1), the
application for the registration of the sectional plan shall,
in
addition to the documents referred to in
section 11(3)
, be
accompanied by-
(a) a plan to scale of
the building or buildings to be erected and on which-
(i) the part of the
common property affected by the reservation;
(ii) the siting, height
and coverage of all buildings;
(iii) the entrances and
exits to the land;
(iv) the building
restriction areas, if any;
(v) the parking areas;
and
(vi) the typical
elevation treatment of all buildings, are indicated;
(b) a plan to scale
showing the manner in which the building or buildings to be erected
are to be divided into a section or sections
and any exclusive use
areas;
(c) a schedule
indicating the estimated participation quotas of all the sections in
the scheme after such section or sections
have been added to the
scheme;
(d) particulars of any
substantial difference between the materials to be used in the
construction of the building or buildings
to be erected and those
used in the construction of the existing building or buildings;
(e) particulars of such
applicable expenses as are specified in
section 37(1)(a)
, which will
be borne by the developer from the date of establishment of the body
corporate until the sectional plan of extension
is registered;
(f) the certificate of
real right which is to be issued in terms of
section 12(1)(e)
; and
(g) such other documents
and particulars as may be prescribed.’
8
Section
12(1)
provides: ‘When the requirements of this Act and any other
relevant law have been complied with, the registrar shall- ...
(e) issue to the
developer, in the prescribed form, a certificate of real right in
respect of any reservation made by him in terms
of section 25(1),
subject to any mortgage bond registered against the title deed of
the land . . .’.
9
Section 25(5).
10
Section 25(5A)(a).
11
Section 25(9).
12
Section 25(10).
13
Section 25(12).
14
Section
27(1)(a).
15
Para 9.
16
Para 8.
17
Section 15(b) of Act 63 of 1991 and see Van der Merwe p 12-18.
18
Van der Merwe p 12-18.
19
Section 25(6).
20
It is not necessary for the purposes of this judgment to determine
the nature of the right reserved. See
Erlax
Properties (Pty) Ltd v Registrar of Deeds & others
[1991] ZASCA 187
;
1992
(1) SA 879
(A) where the majority left the question whether the
right of extension was a personal servitude under the Sectional
Titles Act
66 of 1971 as held by Joubert JA (at 886 I – 887 E)
open (per EM Grosskopf JA at 489 C-D).
21
At p 12-32 para 12.3.8.
22
At 12-32 para 12.3.8 n128.
23
Knoetze
v Saddlewood CC
[2001] 1 All SA 42
(SE) at 46-8.
24
Section 27(1)(a).
25
Section 41(1) also deals with the situation where the body corporate
does not take steps against an owner of a unit ‘who
does not
comply with the rules’.
26
Section 36(1).
27
Section 36(4).
28
Section 36(6).
29
Section 16(1).
30
Van der Merwe at p 2-10 ff paras 2.3.1 ff.
31
Section 36(6)(b) and (c).