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[2010] ZASCA 164
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National Stadium South Africa (Pty) Ltd an Others v Firstrand Bank Ltd (2011 (2) SA 157 (SCA); [2011] 3 All SA 29 (SCA)) [2010] ZASCA 164; 670/10 (1 December 2010)
Links to summary
THE
SUPREME COURT OF APPEAL
OF
SOUTH AFRICA
JUDGMENT
Case No: 670/10
In
the matter between:
NATIONAL STADIUM SOUTH AFRICA (PTY) LIMITED
.......................
First Appellant
STADIUM MANAGEMENT SOUTH AFRICA (PTY) LIMITED
..........
Second Appellant
CITY
OF JOHANNESBURG
..................................................................
Third
Appellant
and
FIRSTRAND
BANK LIMITED
......................................................................
Respondent
Neutral
citation:
National Stadium v Firstrand Bank
(670/10)
[2010] ZASCA 164
(1 December 2010)
Coram:
Harms DP, Maya JA and Bertelsmann AJA
Heard:
23 November 2010
Delivered:
01 December 2010
Summary:
Servitude ─ personal servitude ─ right to name
stadium
___________________________________________________________________
ORDER
___________________________________________________________________
On appeal from:
South Gauteng High Court
(Johannesburg) (Victor J sitting as court of first instance):
The following order is made:
(a) The appeal is upheld to the extent indicated below
and is otherwise dismissed with costs, including the costs of two
counsel
to be borne by the appellants jointly and severally.
(b) Paragraphs 2 and 3 of the order of the court below
are amended to read as follows:
‘
2 Until the lapse of the
Applicant’s servitude rights as set out in the Notarial Deed of
Servitude 2529/08 and registered
by the Registrar of Deeds, Pretoria,
the First, Second and Fourth Respondents are interdicted from:-
2.1 naming the soccer stadium on Portion 4 of the farm
Randskou 324 (Reg Div IQ) Gauteng Province by means of naming boards
or the
like affixed in, on, or at all outer perimeter entrances and
exits of the stadium, or elsewhere on the property by a name other
that “FNB Stadium”;
2.2 purporting to sell or dispose of the right to name
the stadium during the period;
3 The following declaratory order is made:-
3.1 The Applicant has the sole right to name the stadium
by means of naming boards and the like affixed in, on, or at all
outer
perimeter entrances and exits of the stadium, or elsewhere on
the property during the life of the deed of servitude;
3.2 The Applicant has chosen the name “FNB
Stadium”;
3.3 The First, Second and Fourth Respondents do not have
the right to name the stadium during the period and the extension
period.’
___________________________________________________________________
JUDGMENT
___________________________________________________________________
HARMS DP (MAYA JA and BERTELSMANN AJA concurring)
HARMS DP:
INTRODUCTION
[1] One of the iconic stadiums used for the 2010 FIFA
Football World Cup was known for the duration of the competition as
‘Soccer
City’. The original stadium on the site in Soweto
was financed by First National Bank, which is now a division of the
respondent
bank (Firstrand Bank Ltd), and was built in about 1988. It
was since then called the ‘FNB Stadium’. During the
period
2007 to 2010, the stadium, financed by the central government
and the local authority, was virtually rebuilt for purposes of the
World Cup. The Bank, relying on a naming right, holds the view that
the name of the stadium has to revert to ‘FNB Stadium’.
[2] The local authority and third appellant, the City of
Johannesburg, as tenant of the stadium, and its appointed stadium
manager,
National Stadium SA (Pty) Ltd, the first appellant, together
with an associated company, Stadium Management SA (Pty) Ltd, the
second
appellant, assert that the right to name the stadium no longer
vests in the Bank and that they, instead, are entitled to ‘name’
the stadium or sell the naming rights to third parties. (For the sake
of convenience I do not intend to draw any distinction between
the
first and second appellants and will simply refer to them as the
managers.)
[3] When the Bank became aware of attempts by the
managers to market the naming rights it launched an urgent
application for an
interdict (in general terms) to prevent them from
marketing the stadium by any other name than FNB Stadium. It joined
the owner
of the stadium, which is Government, as respondent without
seeking any relief against it and Government consequently did not
take
part in the proceedings. The City, as head tenant and on whose
behalf the managers manage the stadium, sought and obtained leave
to
intervene, and joined in opposing the relief sought.
[4] The court below (Victor J) found in favour of the
Bank and issued an order against the managers and the City in more
expansive
terms than originally sought. The order has two parts. The
first is an interdict restraining the managers and the City from
‘referring’
to the stadium by any other name than ‘FNB
Stadium’ or from disposing of the naming rights to the stadium.
The second
part is a declaratory order declaring that the Bank has
the sole right to name the stadium and, accordingly, that the
managers
and the City do not have naming rights. There is a time
limit attached to these orders.
[5] The court below granted the necessary leave to
appeal to this court and the matter was heard at the request of the
parties as
a matter of urgency. It is necessary for an understanding
of the issues to set out the history of the football stadium with
reference
to a number of events beginning in 1988.
THE LOAN FACILITY AGREEMENT OF 20 OCTOBER 1988
[6] The Bank is rather proud of the fact that it was
prepared as early as 1988 to finance the erection of a football
stadium in
Soweto. The terms and conditions of the provision of this
facility were set out in an agreement of 20 October 1988. There were
four parties to the agreement: (a) the future owner of the land (a
trust) that intended to purchase the property to establish a
soccer
complex (including a stadium) to be known as Soccer City thereon; (b)
a company, also named Soccer City, that was to lease
the property
from the trust and that undertook to erect the complex; (c) the
National Soccer League, the body that controlled the
sport; and (d)
the Bank as lender.
[7] The Bank undertook to provide a funding facility of
R15m for the erection of particularly a stadium on the property. It
is not
necessary to detail the funding arrangements save to refer to
clause 7.1, which is the origin of the Bank’s naming rights.
It
provided as follows:
‘
As
additional consideration for First National providing the Facility,
the main stadium at Soccer City shall be known as “First
National Bank Stadium” or by such other name as may be chosen
by First National from time to time. The Trust and the Company
shall
take all steps and do all things necessary to ensure and procure that
First National acquires and retains such right in perpetuity
or for
such lesser period as First National may determine.’
[8] The other parties to the agreement undertook to
comply with a number of obligations towards FNB such as to host at
least 50
soccer matches per annum and to utilise part of the ticket
sales to reduce the debt. FNB was also entitled to receive maximum
positive
publicity in respect of its involvement in Soccer City and
to erect a number of signboards in the best possible places on or
around
Soccer City for which it had to pay R5m upfront as advertising
revenue.
THE WAIVER AGREEMENT OF 24 MARCH 2003
[9] It would appear that the trust and the Soccer City
company were unable to service their obligations towards the Bank or
to pay
the building contractor in full with the available finances.
This led to the conclusion of the waiver agreement of 24 March 2003.
The building contractor, Grinaker-LTA Ltd, waived payment of a
substantial amount subject to, inter alia, the right to execute
future construction work on the stadium complex.
[10] The Bank, in turn, agreed to waive its rights to
payment of the outstanding amounts under the loan facility agreement.
This
waiver was subject to a number of conditions. They were (a) that
the naming rights referred to in the loan facility agreement would
endure for ten years; (b) that the Bank had an option to extend this
right for a further two years upon payment of R10m; and (c)
that the
Bank had a renewal right for a further ten years for which it had to
pay a market related price. The effect of this was
that the Bank lost
its right to repayment of the loan facility but retained a diluted
naming right: it was no longer in perpetuity
and the Bank had to pay
for the right during any extended period.
THE SERVITUDE AGREEMENT OF 31 JANUARY 2007
[11] Because of the anticipated FIFA World Cup event,
which had been scheduled for 2010, it became necessary to rearrange
the relationship
between the parties with an interest in the stadium.
The stadium had to be ‘reconstructed’. This required
substantial
funding from both Government and the City. And to enable
FIFA to enjoy the exclusive merchandising rights for the event FNB
had
to relinquish its naming rights in favour of FIFA for a period
preceding and during the event.
[12] The servitude agreement (which was probably one of
a series covering the World Cup) was concluded between the parties to
the
loan facility agreement and Government. Government was to become
owner of the property by taking transfer from the trust. It undertook
to honour and be bound by the FNB naming rights as set out above, and
to secure them by means of a personal servitude in favour
of the
Bank. These rights were, however, to last for only ten years as from
7 July 2004 but FNB had a right of renewal for another
two years
subject to payment of a fair market value for those rights, meaning
that if the right of renewal were to be exercised
the naming rights
will terminate on 6 July 2016 instead of on 6 July 2014. FNB,
importantly, agreed to forego its naming right
for the duration of
the World Cup in favour of FIFA.
[13] The exact terms of the relevant provisions are
these:
‘
4.2
For the sake of clarity, The State, the Trust and Soccer City hereby
grant to FNB, the exclusive right to name the Stadium “First
National Stadium”, or “FNB Stadium”, or by any
other such name as may be chosen by FNB from time to time. The
State,
the Trust and Soccer City shall take steps and do all things
necessary to ensure and procure that FNB acquires and retains
such
rights for the period set out above.’
‘
4.4.2
In keeping with the FNB Rights, the name “FNB Stadium”
shall be prominently displayed at all outer perimeter entrances
and
exits of the Stadium and on not less than four prime skyboard sites
in the Stadium. FNB accepts that during periods of reconstruction
of
the Stadium the skyboards may not be able to be displayed and that
any re-design may require the skyboards to be relocated.
In the
latter event, FNB shall be granted a preferent right to choose the
sites for its relocated skyboards. The Parties agree
that any
relocation of the said skyboards shall take place in consultation
with FNB in an effort to facilitate the placement of
the skyboards
within the Stadium so as to afford to FNB similar exposure as
previously provided to FNB prior to any relocation
of the skyboards.’
‘
7.2
FNB shall be entitled, simultaneously with the cancellation with the
FNB Bond and the transfer of the Property to The State,
to register a
personal servitude against the Property in respect of FNB’s
rights under this Agreement in a form reasonably
required by FNB’s
attorneys and that is acceptable to the Registrar of Deeds at
Johannesburg. All costs of registration of
these rights shall be
borne and paid by FNB.’
‘
7.3
The State, the Trust and Soccer City agree that the registration of
the personal servitude referred to in clause 7.2 shall be
binding on
any successors in title to the Property and shall, to the extent
required, disclose the details of such personal servitude
to any
successor in title to the Property.’
[14] The ‘reconstruction’ of the stadium to
which the agreement referred commenced during 2007 and, according to
the
appellants, the original stadium was for all intents and purposes
demolished and replaced by a new stadium.
THE SERVITUDE
[15] The property was transferred to Government on 17
April 2008, and on 29 April Government registered a personal
servitude ‘for
naming right purposes of the Stadium on the
Property’ in favour of FNB. The executive portion states that
Government thereby
‘grants as a personal servitude to FNB the
right to name the Stadium and erect naming boards therein’ as
set out in
the servitude agreement, and provides that the ‘Stadium
shall be known as “FNB Stadium” or such other name as
may
be designated by the Bank in agreement with the State’. It
further provides for the same time limit and for termination
as set
out in the agreement, and it repeats in Deeds Office parlance the
first two sentences of the quoted clause 4.2.2.
THE STADIUM MANAGEMENT AGREEMENT OF 16 JANUARY 2009
[16] The City entered into a stadium management
agreement with the first appellant on 16 January 2009. The agreement,
significantly
but prematurely, recorded that the City in its capacity
as the lessee of the stadium had ‘a real right’ to the
stadium.
The manager was appointed as an independent contractor to
render defined management services and received the exclusive and
full
use of the stadium. The agreement also mentioned that the
stadium was under construction and it imposed certain limited
obligations
on the manager during the construction period.
[17] The agreement further provided that the manager was
entitled to conduct ‘NSSA Business’ (the business of the
first
appellant) on the premises and this was defined to include the
business conducted by the manager in the field of operational and
commercial management and administration of sport stadiums. This
incorporated, in terms of clause 6.3.3.2.2, the right ‘to
sell
the Naming Rights and Commercial Rights in respect of the Stadium’
for the duration of the agreement. ‘Naming
Rights’ was
defined to mean ‘the right to name the Stadium, any of its
facilities and/or any part thereof’.
[18] The agreement contemplated the possibility that a
third party might have had the naming rights because of a prior
agreement
entered into by either the City or someone else. In that
event the parties undertook to renegotiate the terms of the naming
rights
so as to limit any loss of revenue.
[19] The parties estimated the annual value of the
naming rights for at least R8m, which would escalate. Apart from this
agreed
figure, the evidence confirms that naming rights of sport
stadiums world-wide are extremely valuable. The managers anticipate
that
the annual revenue from the naming rights could be in the region
of R15m to R20m.
THE LONG-TERM LEASE OF 7 AUGUST 2009
[20] Government entered into a long-term notarial lease
for 99 years with the City on 7 August 2009 in terms of which the
property
on which the stadium was erected was leased to the City for
the purpose of promoting the sport of football in general and the
2010
FIFA World Cup in particular. Although the erection of the ‘new’
stadium was in already in progress it provided that
the City was
entitled to upgrade and renovate the stadium.
[21] The lease was not registered when litigation began
but nothing turns on this. The only other matter of any significance
for
present purposes is that the City was entitled to erect signage
on the property and to affix or paint advertising signs. Nothing
was
said about naming rights.
THE CONTENTIONS OF THE PARTIES ON THE PAPERS
[22] The Bank’s case as set out in the founding
affidavit was that it has naming rights over the stadium in terms of
the servitude
agreement. In addition, it alleged, it has a real right
in terms of the servitude, which is enforceable against third
parties,
to name the stadium. Its cause of complaint was that the
managers, shortly after the completion of the World Cup, claimed
publicly
that they had acquired from the City ‘all the rights
to Advertising, Sponsorships, Naming Rights and Commercial Rights to
Soccer City Stadium’ and that they had the right to sell the
naming rights to Soccer City Stadium. Because the managers were
third
parties it meant that the Bank relied on its servitude.
[23] The managers, in the answering affidavit, asserted
that the right to name the stadium belonged to the City. This right,
they
said, followed from the fact that the City was the lessee and
‘as such possesses the right to name the Stadium’. They,
as managers were entitled, in terms of the management agreement, to
sell those rights. They added that the name ‘National
Stadium’
was simply a holding or interim name used to neutralize the limiting
consequences of the FIFA name ‘Soccer
City’. If the
naming rights were to be sold, they said, the purchaser would be
entitled to use its brand name on its own
or in conjunction with
‘National Stadium’.
[24] Their defence against the claim was that the Bank’s
naming rights, which had been conferred by agreement, were never
capable of registration in the form of a servitude. In the
alternative, they said, the servitude ‘expired’ when the
original stadium was demolished during 2007, and that the servitude
did not apply to the ‘new’ stadium.
[25] The City, as mentioned, intervened as fourth
respondent and asked that the Bank’s application be dismissed
with costs.
Apart from complaining about the extent of the relief
sought by the Bank, the City alleged that it had the right to name
the stadium
by virtue of the terms of the long-term lease agreement
with Government, that it could transfer those rights to the managers,
and
that its rights prevailed over whatever naming rights the Bank
may have had.
THE NATURE OF NAMING RIGHTS
[26] As pointed out, it is common cause that the naming
rights attached to a sport stadium are exceptionally valuable. But
that
does not tell one anything about their nature. During argument
the Bank and, unexpectedly, the City argued that these rights are,
in
the particular circumstances of this case, real rights that flow from
ownership of the stadium. The consequence of this acceptance
by the
City led to the recognition that its case as set out in its affidavit
had no merit; that the servitude was valid and created
real rights in
favour of the Bank; that the City did not ‘receive’ any
naming rights from Government by virtue of the
lease; and that the
clause in the management contract in which the City purported to
grant naming rights to the managers was ineffectual.
[27] This attitude of the City was in
direct conflict with that of the managers. They insisted that naming
rights cannot be real
rights and can only arise by virtue of contract
and that, accordingly, the servitude was void. Mr du Plessis SC, on
behalf of the
managers, referred in this regard to an article by
Lionel Hogg and Franki Ganter where the authors, presumably writing
about Australian
law without quoting authority, stated as follows:
1
‘
One
cannot effectively acquire naming rights to an event or venue without
having practical control of the event or the venue. Naming
or title
rights are contractual and not proprietary. Their protection and
value is dependent almost entirely on market usage.’
[28] It is no doubt correct that some
naming rights are purely contractual in the sense that they arise as
a result of an agreement.
This would for instance apply where someone
wishes to stage a sporting or cultural event and enters into
agreements with others
relating to the event. Whether that is
necessarily true about a product or a commercial building, such as a
shopping centre, office
block or sports stadium, is another matter.
One would assume that the owner would be the person who could name
the building by
attaching naming boards to the property or to use its
name for commercial purposes.
2
As Mr Joseph SC for the City said, it
is a common occurrence that the owner of a commercial building would
let the building and
give the head lessee the right to name the
building. Although the grant of the right to name to the lessee is by
contract, the
owner must have had the right by virtue of its control
over the building. This does not mean that others may not refer to
the building
by some other name but that use will not have commercial
significance.
[29] That naming rights vest in the owner was impliedly
admitted by the managers when they sought to justify their
entitlement to
those rights. They said that the rights were derived
from the City who had obtained them from the owner, albeit by
contract. Although
Mr du Plessis initially submitted that the naming
rights of his clients flow from the control Government as owner had
over the
stadium, he retracted from this position and eventually
submitted that the managers’ lawyerly evidence was based on a
misconception
of the legal position. His argument in this regard that
naming rights come from nowhere, could (somewhat unkindly) be
compared,
according to Mr Louw SC for the Bank, to the Big Bang
theory.
[30] It is not necessary to get
embroiled with a discussion about the nature of rights according to
Bentham or Hohfeld and the like,
3
or (for those who are not affected by
cultural cringe)
4
according to WA Joubert
cum
suis
.
5
It is also not necessary to delve
into the history of real rights,
6
to re-conceptualize ownership,
7
or (as the court below did) to
‘dephysicalise’ property law.
8
In any event, as the Digest 50.17.202
warns, ‘omnis definitio in iure civilis periculosa est; parum
est enim, ut non subverti
posset’. Instead, it should suffice
to deal with some elementary propositions still taught, I hope, at
law schools.
9
[31] The first concerns the
distinction between real and personal rights. Real rights have as
their object a thing (Latin:
res
;
Afrikaans: saak). Personal rights have as their object performance by
another, and the duty to perform may (for present purposes)
arise
from a contract. Personal rights may give rise to real rights, for
instance, a personal obligation to grant someone a servitude
matures
into a real right on registration.
10
Real rights give rise to
competencies: ownership of land entitles the owner to use the land or
to give others rights in respect
thereof. Others may say that
ownership consists of a bundle of rights, including the right to use
the land, but it does not really
matter who is right on this point.
[32] A servitude is a limited real
right in respect of the property of another. There are two types,
namely praedial and personal.
In spite of the confusing nomenclature,
a personal servitude is also a real right which imposes a burden on
the property of another.
It is ‘personal’ because the
right holder is a particular person whereas in the case of a real
servitude the right
adheres to a dominant property.
11
[33] In this case we are concerned
with an alleged personal servitude. The question is then whether
these rights are real rights
in respect of land or are personal (in
the sense that they place obligations on others to perform).
12
Unless the rights are real they do
not bind third parties.
13
This principle is embodied in the
Deeds Registries Act 47 of 1937
.
Section 63(1)
provides that no deed,
or condition in a deed, purporting to create or embodying a personal
right, and no condition which does
not restrict the exercise of any
right of ownership in respect of immovable property shall be capable
of registration. This means
that the servitude to be valid must carve
out a portion, or take away something, of the dominium.
14
Whether a deed of servitude embodies
a personal right or restricts the exercise of ownership is a matter
of interpretation.
15
[34] The present servitude is in its terms said to be a
personal servitude. According to its tenor Government, as owner of
the property,
granted the Bank the right to name the stadium the ‘FNB
Stadium’. The Bank is in consequence entitled to erect naming
boards displaying this name. These may be placed at all outer
perimeter entrances and exits of the stadium and on not less than
four prime sites in the stadium. The servitude does not purport to
place any duties on Government, which means that Government
has no
obligations to perform which, in turn, means that the servitude did
not create a personal right in favour of the Bank. The
fact that the
Bank has the rights mentioned means that Government, in its capacity
as owner, is not entitled to place other naming
boards on or around
the stadium. It is not conceivable that the parties could have
intended that conflicting naming boards could
be erected at the
stadium. This means that the right to name the stadium as owner was
carved out from the owner’s full ownership
right, thereby
restricting the exercise of this particular right of ownership in
respect of the immovable property.
[35] The particular naming rights can
be compared to a trading right. It is accepted, at least since
Willoughby’s
Consolidated Co Ltd v Copthall Stores Ltd
1913
AD 267
, that the right to trade on the property of another amounts to
the right to use and occupy that property or part of it for a
specific
purpose and can amount to a personal servitude. It should be
borne in mind that there is not a closed list of personal servitudes
and that the right of the Bank to advertise its business on and
through the stadium does not differ in kind from a conventional
trading right.
16
Since a stadium cannot have more than
one name the naming right is the sole right of the Bank and affixing
any other name for the
stadium on, in or around the stadium would
infringe the Bank’s real right because the property is put to a
use that belongs
exclusively to the Bank.
[36] It follows from this that the present stance of the
City as expressed during Mr Joseph’s argument is correct and
that
the contrary submissions of the managers have to be rejected.
THE BUSINESS EFFICACY ARGUMENT
[37] The argument just disposed of was not the managers’
main argument but it had to be dealt with first because was the basis
of the Bank’s claim. Their main argument was the so-called
business efficacy argument which was directed at the terms of
the
servitude agreement and not the servitude itself. Although the
written submissions stated that this agreement was void for
vagueness
the oral submission was that it lacked business efficacy because it
did not oblige Government to use and promote the
stadium. Without, at
least, a contractual obligation on the owner or manager to
acknowledge and use the name, said Mr du Plessis,
the naming right is
valueless.
[38] I have serious difficulty in following the
argument. Counsel relied in support of the argument on cases that say
that a tacit
term cannot be implied into a contract merely because
the agreement lacks business efficacy. Lack of business efficacy may
affect
the value of the agreement but it does not affect its
enforceability. If counsel’s argument was that there was
nothing to
enforce in the agreement, I have to disagree. The Bank is
entitled to erect the naming boards and the owner has to respect that
right as described above.
[39] The problem with the argument is more fundamental.
The Bank seeks to enforce a registered servitude right and not
contractual
rights under the servitude agreement. In addition, the
purpose of the agreement was to create real rights and if were to
create
additional personal rights by imposing contractual obligations
on the owner of the property it would have been self defeating.
THE DESTRUCTION OF THE STADIUM
[40] I have alluded to the fact that
the original stadium, which was financed by the Bank, was
substantially demolished and replaced
by what the appellants call the
‘new’ stadium. They argue that the servitude was intended
to cover the original stadium
and since that has been destroyed the
servitude was extinguished. For this they rely on Voet
Commentarias
ad Pandectas
8.6.4
where the author dealt with the
effect of the destruction of the servient tenement: in principle it
extinguishes the servitude.
He added, however, that if in the case of
a praedial servitude the property is restored the servitude revives,
but not in the case
of a personal servitude. If one follows the
reasoning in
Kidson
v Jimspeed Enterprises CC
2009
(5) SA 246
(GNP) this might not necessarily be the case.
17
However, there are two fundamental
reasons why the argument cannot succeed.
[41] In the first instance it is
clear from the examples given by Voet that he was concerned with
those cases where the subject
of the servitude was destroyed as a
result of
casus
fortuitous
or
vis
maior.
He did not
deal with the case where the owner of the servient tenement (here, in
conjunction with the lessee) intentionally destroyed
the subject
matter of the servitude within weeks after conclusion of the
servitude agreement and even before its registration and
then erects
a similar structure in its stead. It is a general principle that one
cannot rely on one’s own wrongdoing to evade
any obligation. A
party is not, for instance, relieved from a contractual obligation
because of supervening impossibility where
that party was responsible
for the impossibility.
18
Another example would be the doctrine
of fictional fulfillment of a condition.
19
There is no reason why the underlying
principle cannot be extended to a case such as this and why the right
holder has to be satisfied
with a damages claim which, in this case,
would probably be met with a defence that the Bank had agreed in the
servitude agreement
to the destruction and why the servitude should
not extend to the replacement structure.
[42] There is, however, a more profound reason why the
‘destruction’ of the old stadium did not extinguish the
servitude.
It is because the servitude agreement and the servitude
itself, on a proper interpretation, covered the ‘new’
stadium.
It is in this regard necessary to have regard the
circumstances against which the servitude was granted.
[43] The Bank held a bond over the property and had
naming rights. Government committed itself to finance, in conjunction
with the
City, the redevelopment of the stadium to the satisfaction
of FIFA. The stadium was redesigned to be in the form of a calabash.
The new design was approved before conclusion of the servitude
agreement. When the agreement referred to the fact that the servitude
would cover the stadium as ‘reconstructed’ it referred to
the stadium as ‘reconstructed’ for purposes of
the World
Cup event. It was never intended that the old stadium would simply be
rebuilt to be in the same form and with the same
capacity as the old
stadium. The fact that the costs estimate was way out and that the
supposition that more of the old stadium
could have been used –
matters that did not concern the Bank – cannot affect the
interpretation of the agreement and
servitude. I therefore find that
there is no merit in this submission.
THE ORDER AGAINST THE CITY
[44] As mentioned, the City became a
party to the proceedings by its own volition. The Bank did not ask,
either initially or subsequently,
for any substantive relief against
the City but the order of the court below was directed against not
only the managers but also
the City. It is customary, and also
procedurally correct, that if a party joins proceedings as respondent
and in the absence of
a suitable and timely amendment of the notice
of motion in which substantive relief is sought against the joining
party, the only
order a court can grant against it is one for costs.
20
[45] The court below justified its
approach on the ground that in joining the managers in the
proceedings and supporting them the
City became a co-wrongdoer and
had to be restrained. This, however, does not dispense with the
required prayer for relief against
the City. The court also relied on
the prayer for alternative relief. It erred because this superfluous
prayer does not entitle
a court to grant relief that is inconsistent
with the factual statements and the terms of the express claim,
21
especially where, as in this case,
the last affidavit of the Bank made it clear that the only relief
sought against the City was
one for costs.
[46] In spite of these procedural
problems it appears to me that the order should not be set aside
because the City can suffer no
prejudice as a result of the order.
Because the City joined in the proceedings and made common cause with
the managers the judgment
of the court below would in any event bind
the City in any future proceedings.
22
THE TERMS OF THE ORDER
[47] The appellants also object to the terms of the
order. The objections of the managers depend largely on the
correctness of their
submissions on the nature and effect of the
servitude and, because of my findings, need no further consideration.
The remaining
objections are formalistic and were not even raised
during oral argument, and can be discounted.
[48] The City’s first objection to the formulation
of the interdict is that it prevents the appellants from ‘referring’
to the stadium by any name other than ‘FNB Stadium’. The
argument was that this limits the City’s rights of free
speech
because if it wished to refer to it as ‘the stadium in Soweto’
or as ‘the stadium that looks like a calabash’
or the one
‘that was used during the World Cup’ it would be guilty
of contempt of court. These examples are farfetched
and although the
word ‘refer’ could, if read out of context, give rise to
difficulties it should be clear to all who
read with a mind willing
to understand that the order was directed to the protection of the
Bank’s merchandising rights.
But in order to state matters more
clearly, I propose to amend the order to reflect the fact that the
appellants are interdicted
from ‘naming’ the stadium by
means of naming boards on or around the stadium by a name other that
‘FNB Stadium’.
[49] These formal changes do not justify any costs order
in favour of the appellants. For sake of completion the substantive
order
as amended will be rendered in full.
ORDER
[50] The following order is made:
(a) The appeal is upheld to the extent indicated below
and is otherwise dismissed with costs, including the costs of two
counsel
to be borne by the appellants jointly and severally.
(b) Paragraphs 2 and 3 of the order of the court below
are amended to read as follows:
‘
2 Until the lapse of the
Applicant’s servitude rights as set out in the Notarial Deed of
Servitude 2529/08 and registered
by the Registrar of Deeds, Pretoria,
the First, Second and Fourth Respondents are interdicted from:-
2.1 naming the soccer stadium on Portion 4 of the farm
Randskou 324 (Reg Div IQ) Gauteng Province by means of naming boards
or the
like affixed in, on, or at all outer perimeter entrances and
exits of the stadium, or elsewhere on the property by a name other
that “FNB Stadium”;
2.2 purporting to sell or dispose of the right to name
the stadium during the period;
3 The following declaratory order is made:-
3.1 The Applicant has the sole right to name the stadium
by means of naming boards and the like affixed in, on, or at all
outer
perimeter entrances and exits of the stadium, or elsewhere on
the property during the life of the deed of servitude;
3.2 The Applicant has chosen the name “FNB
Stadium”;
3.3 The First, Second and Fourth Respondents do not have
the right to name the stadium during the period and the extension
period.’
_____________________
L T C HARMS
DEPUTY PRESIDENT
APPEARANCES
APPELLANT/S 1 & 2: S J du Plessis SC (with him T vd
Walt)
Instructed by Glyn Marais Inc in association with Denton
Wilde Sapte, Johannesburg
Matsepes Attorneys, Bloemfontein
3: S L Joseph SC (with him M Smit)
Instructed by Cliffe Dekker Hofmeyr Inc, Sandton
McIntyre & Van der Post, Bloemfontein
RESPONDENT/S: P F Louw SC (with him G Amm)
Deneys Reitz, Bloemfontein
Webbers, Bloemfontein
1
‘
Legal
Issues in Sports Marketing’ (1997) 13
Queensland
University of Technology Law Journal
92 at p 120.
2
The
right to an exclusive name of one’s property does not exist
unless the name has a commercial or financial significance.
Compare
Day v Brownrigg
(1878)
10 ChD 294.
3
See
F M Kamm ‘Rights’ in Jules Coleman & Scott Shapiro
(eds)
The Oxford Handbook of
Jurisprudence & Philosophy of Law
(Oxford
2002); P J Fitzgerald
Salmond on
Jurisprudence
12 ed (1966) para 41.
4
Prof
Ricketson’s description of the inclination of Australian
lawyers to follow English precedents blindly. Quoted by Kathy
Bowrey
in Catherine W Ng, Lionel Bently & Giuseppina D’Agostino
eds
The Common Law of Intellectual
Property –Essays in honour of Professor David Vaver
(Hart Publishing 2010) p 46.
5
Discussed
for instance in Van Heerden & Neethling
Unlawful Competition
(Butterworths 1995) ch 4.
6
Robert
Feenstra
Ius in Re: Het Begrip Zakelijk
Recht in Historisch Perspektief
(Leiden
1979); R Feenstra
Romeinschregtelijke
Grondslagen van het Nederlands Privaatrecht
(Leiden
1984).
7
J
R L Milton ‘Ownership’ in Reinhard Zimmermann and Daniel
Visser (eds)
Southern Cross: Civil Law
and Common Law in South Africa.
8
With
special reference to Kenneth J Vandevelde ‘The New Property of
the Nineteenth Century: The Development of the Modern
Concept of
Property’
(1980) 29
Buffalo Law
Review
325.
9
For
a full discussion of the topic reference may be made to the standard
works such as C G van der Merwe
Sakereg
2 ed (1989) and the same author’s chapters
on ‘Things’ in
Lawsa
and in Francois du Bois (ed)
Wille’s
Principles of SA Law
9 ed (2009);
Badenhorst, Pienaar & Mostert
Silberberg
and Schoeman’s The Law of Property
5
ed (2006). The judgment in
Lorentz v
Melle
1978 (3) SA 1044
(T) provides an
encyclopaedic excursion on the subject.
10
Van
Vuren v Registrar of Deeds
1907 TS 289
at 296.
11
See
e g M J de Waal ‘Servitudes’ in
Southern
Cross
supra.
12
This
is the basis of
Lorentz v Melle
1978 (3) SA 1044
(T). See
Hollins
v Registrar of Deeds
1904 TS 603
at
605.
13
The
Bank’s case as set out in the founding affidavit was not based
on either the doctrine of notice or interference with
contractual
rights. The judgment of the court below occasionally dealt with the
matter on one or other of these bases, as did
the Bank’s
written argument, but it would be inappropriate to decide the case
on that basis.
14
Grant
v Stonestreet
1968 (4) SA 1
(A) 24A-B.
15
Venter
v Minister of Railways
1949 (2) SA 178
(E);
Edelor Ltd v Champagne Castle
Hotel (Pty) Ltd
1972 (3) SA 684
(N) at
689F-690C and the authorities there mentioned.
16
Durban
City Council v Woodhaven Ltd
1987 (3)
SA 555
(A) at 559B-I.
17
See
also the case comment by C G van der Merwe ‘Extinction of
Personal Servitude of
Habitatio
’
2010 (73)
THRHR
657.
18
Van
der Merwe et al
Contract: General
Principles
(1 ed) p 385-386.
19
Ibid
p 206.
20
Compare
in the context of third party proceedings
Geduld
Lands Ltd v Uys
1980 (3) SA 335
(T).
21
Johannesburg
City Council v Bruma Thirty-Two (Pty) Ltd
[1984]
4 All SA 137
(T),
1984 (4) SA 87
(T)
;
Combustion Technology (Pty) Ltd v Technoburn
(Pty) Ltd
2003 (1) SA 265
(C).
22
Compare
Le Roux v Le Roux
[1967]
1 All SA 488
(A),
1967 (1) SA 446
(A) and
Du
Raan v Maritz
1973 (4) SA 39
(SWA).