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[2011] ZASCA 79
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Similanie and Another v Kuswayo and Another (613/2010) [2011] ZASCA 79 (27 May 2011)
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THE SUPREME COURT OF APPEAL OF
SOUTH AFRICA
JUDGMENT
Case No: 613/2010
In the
matter between:
JOSEPH SIMILANIE & ELIZABETH SIMILANIE
…............................................Appellants
and
LEON KUSWAYO & REGINA KUSWAYO
….................................................
Respondents
Neutral citation:
Similanie v Kuswayo
(631/2010)
[2011] ZASCA 79
(27 May 2011)
Coram:
Navsa, Cloete and Malan JJA
Heard:
12 May 2011
Delivered: 27 May 2011
Summary:
Sale of land – effect of restraint against
alienation registered against title deeds – waiver of
registered condition.
_____________________________________________________________________
ORDER
On appeal from:
Northern Cape High Court, Kimberley (Bosielo
AJP and Steyn AJ sitting as court of appeal):
The appeal is upheld with costs including the costs of the
application for leave to appeal.
The order of the court below is set aside and replaced by the
following:
‘
The appeal is dismissed with costs.’
_____________________________________________________________________
JUDGMENT
MALAN JA (Navsa and Cloete JJA concurring)
[1] The O’Kiep Copper Company owned the farm Nababeep on which
the mining town with the same name was developed. When the
company
ceased mining operations it donated the land and houses in the town
to the Namakwa municipality. The municipality resolved
to donate the
land and houses in the town to the persons who occupied them at that
time. One of the houses was donated to the respondents,
Mr and Ms
Kuswayo, on 17 November 2003. The latter sold it to the appellants,
Mr and Ms Similanie, on 6 November 2006. The purchase
price was
R50 000 and a deposit of R15 000 was paid by the
appellants. At the time of the conclusion of the agreement
of sale
the property was not yet registered in the name of the respondents.
Registration only occurred on 22 May 2007. The deed
of transfer
contains the following condition:
‘
G ONDERHEWIG VERDER aan die
volgende voorwaarde opgelê deur die Namakwa
Distrikmunisipaliteit vir sy voordeel, welke voorwaarde
soos volg
lees, naamlik:
Bogemelde eiendom mag nie deur die Transportnemer of
sy/haar opvolgers in titel binne ‘n tydperk van 5 (vyf) jaar
gereken
vanaf datum van skenking (17 November 2003) van die eiendom
verkoop of andersins vervreem word nie.’
[2] The appellants complied with their obligations in terms of the
agreement of sale and tendered payment of the balance of the
purchase
price on registration of transfer. The respondents, however, offering
to return the deposit paid, contend that the agreement
of sale is
invalid by reason of the condition cited above and registered against
the title deeds of the property. The respondents
alleged that at the
time of entering into the sale agreement they were unaware of the
condition cited. To this the appellants countered
that the
municipality had waived its rights and, in this respect, they rely as
part of the replying papers on the affidavit of
Ms Jolene Faro, an
administrative official of the municipality, concerned with housing
matters who said that she was duly authorised
to represent the
municipality. She referred to the donation of the mining town to the
municipality and the subsequent donation
to the persons who occupied
the houses. She continued that the donation to the occupants was
subject to certain conditions one
of which was that the property
could not be sold or alienated to a third party for a period of 5
years unless it was first offered
for sale to the municipality:
‘
Ook in die geval van mnr en me
Kuswayo, die respondente, is daar so ‘n persoonlike serwituut
opgelê ten gunste van die
Namakwa Distriksmunisipaliteit. Die
Raad het besluit om nie die verkoopsreg uit te oefen nie, en daarvan
afstand te doen. Wat die
Namakwa Distriksmunisipaliteit dus aanbetref
verval die beperkende voorwaarde ten gunste van die Namakwa
Distriksmunisipaliteit
soos genoem in die transportakte. Die Raad het
ook geen beswaar indien die eiendom ter sprake verkoop word aan
iemand anders nie.
Sien die afdruk van die brief gedateer 25 Januarie
2008 hierby aangeheg wat ek in opdrag van die Raad geskryf het.’
[3] The letter of 25 January 2008 referred to reads:
‘
Hiermee om u mee te deel dat
die Raad nie die woning sal koop nie en dus hiermee afstand doen van
sy voorkoopsreg t.o.v. die woning
geleê te erfno. 558,
Nababeep. Die voorwaarde soos genoem in die transportakte verval dus.
Geliewe net daarop te let dat u geensins in die toekoms
vir enige staatsubsidie vir behuising sal kwalifiseer nie.’
[4] The appellants applied to the magistrate’s court of
Springbok for an order that the respondents sign the required
transfer
documents and deliver the original deed of transfer failing
which the sheriff be empowered to sign them and the appellants
authorised
to obtain a duplicate deed of transfer. The magistrate
upheld the claim and granted the order prayed for. He held that the
condition
reflected in the title deed was inserted for the benefit of
the municipality and that it could and did waive it as reflected in
Ms Faro’s letter of 25 January 2008. His reasons for judgment
were succinct and to the point and the criticism advanced in
this
regard in the court below was unwarranted.
[5] On appeal Steyn AJ and Bosielo AJP upheld the appeal by the
sellers (the respondents in this court) and set the order aside
with
costs. In her judgment Steyn AJ found that condition G involved an
absolute prohibition against the sale or alienation of
the property
within a period of 5 years from the date of donation rendering the
agreement of sale between the appellants and the
respondents invalid.
She further found that, because no resolution of the council of the
municipality accompanied Ms Faro’s
letter, there was no
evidence that the municipality had in fact passed such resolution.
Leave to appeal to this court was granted
by Majiedt AJP and Williams
J.
[6] In contending that the agreement of sale was invalid, the
respondents relied on
Strauss v De Villiers
1981 (2) SA 163
(NC).
1
In his judgment in that case Basson J held that a prohibition against
alienation that was registered against the title deeds of
immovable
property constituted an encumbrance on the property and that a sale
of the property in conflict with the prohibition
was void. To my
mind, one should rather distinguish between the validity of an
agreement and its enforceability, as was done in
Strauss’
case on appeal.
2
It is common cause that both the sellers and the purchasers were
unaware of the condition at the time of contracting. Transfer
of the
property in the name of the respondents was only registered after the
agreement of sale was entered into. The validity of
an agreement must
be considered in view of the circumstances existing at the time it is
concluded.
3
No impediment to the validity of the agreement of sale existed at
that time. To hold that it is invalid would be to deprive the
purchasers of any remedy they may have for damages by reason of a
failure by the sellers to perform, ie transfer the property sold.
An
analogous case is the sale of a
res aliena
.
4
Nor can the agreement be said to be invalid because of an initial
impossibility of performance because the restrictive condition
may be
waived.
5
[9] In the present case the appellants rely on a waiver of the
condition by the Namakwa municipality. The condition in the title
deeds was inserted for the benefit of the municipality. It expressly
provides that the condition was imposed ‘vir sy voordeel’.
Being a condition for its benefit it may be waived by the
municipality – also informally.
6
[10] The waiver is contained in the letter by Ms J Faro which was
attached to the respondents’ answering affidavit and in
her
replying affidavit. Whether or not the condition was a right of
pre-emption does not matter. The letter makes it clear that
the
condition as a whole was waived: ‘Die voorwaarde soos genoem in
die transportakte verval dus’. Even if the municipality
misconceived its rights, its intention to waive whatever rights it
had appears clearly from Ms Faro’s statement in her replying
affidavit:
‘
Wat die Namakwa
Distriksmunisipaliteit dus aanbetref verval die beperkende voorwaarde
ten gunste van die Namakwa Distriksmunisipaliteit
soos genoem in die
transportakte. Die Raad het
ook
geen beswaar indien die
eiendom ter sprake verkoop word aan iemand anders nie.’
(Emphasis added).
[11] The respondents, however, contend that the waiver was not
retrospective, only raised in the replying affidavit and not proved
by way of a resolution of the municipality’s council. The fact
that the waiver was not expressed to be retrospective is immaterial
and cannot affect the validity of the agreement of sale. Moreover,
the letter, as I have said, was annexed to the respondents’
answering papers. If the respondents intended to question the
validity of the waiver or Ms Faro’s authority they should have
raised the questions in their answering affidavit. They did not do so
and cannot do so now.
7
[12] It follows that the appeal should succeed. The following order
is made:
The appeal is upheld with costs including the costs of the
application for leave to appeal.
The order of the court below is set aside and replaced by the
following:
‘
The appeal is dismissed with costs.’
________________
F R MALAN
JUDGE OF APPEAL
APPEARANCES:
For Appellants: P J T de Wet
Instructed by:
Elliott Maris Wilmans & Hay
Kimberley
Lovius-Block
Bloemfontein
For Respondents: S J Reinders
Instructed by:
Venter Joubert Inc
Kimberley
Rosendorff, Reitz, Barry
Bloemfontein
1
See
also
Opperman v Uitvoerende Komitee van die Verteenwoordigende
Owerheid van die Blankes
1991 (1) SA 372
(SWA).
2
Strauss
v De Villiers
1983 (1) SA 1
(A) at 10B-H.
3
Strauss
v De Villiers
1983 (1) SA 1
(A) at 9F-G.
4
Frye’s
(Pty) Ltd v Ries
1957 (3) SA 575
(A)
at 581A-B.
5
Cf
R H Christie assisted by Victoria McFarlane
The Law of Contract
in South Africa
5 ed (2006) p 93.
6
Cf
Bezuidenhout v Nel
1987
(4) SA 422
(N) at 428B-G.
7
Eskom
Holings Ltd v New Reclamation Group (Pty) Ltd
2009
(4) SA 628
(SCA) para 17.