About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Eastern Cape High Court, Grahamstown
SAFLII
>>
Databases
>>
South Africa: Eastern Cape High Court, Grahamstown
>>
2022
>>
[2022] ZAECGHC 10
|
|
Department of Public Works and Infrastructure v Whittlesea Builders and Civils CC and Others (1359/2021) [2022] ZAECGHC 10 (15 February 2022)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE DIVISION, GRAHAMSTOWN
Case
no: 1359/2021
Date heard:03
December 2021
Date
delivered: 15 February 2022
OF
INTEREST
In
the matter between
DEPARTMENT
OF PUBLIC WORKS
AND
Applicant
INFRASTRUCTURE
AND
WHITTLESEA
BUILDERS AND CIVILS
CC First
Respondent
WHITTLESEA
TYRE REPAIRS AND MOTOR Second
Respondent
DEALERS
FURTHER
OCCUPIERS OF THE STRUCTURES Third
Respondent
AND/OR
BUILDINGS ON ERF 166, WHITTLESEA
JUDGMENT
GOVINDJEE,
J
Background
[1]
The
first respondent entered into a standard lease agreement with ‘The
Provincial Government of the Eastern Cape (Department
of Public
Works)’ in October 2008. The property leased is described as
Erf 166, Whittlesea (the premises). The lease commenced
on 27 August
2008 and terminated on 27 August 2009. The agreement was then
extended on at least four occasions, most recently for
the period
between 3 September 2013 and 2 September 2015.
[2]
The
first respondent fell into arrears with payment of its monthly rental
and signed an acknowledgement of debt during August 2012,
including a
commitment to repay the arrears by means of monthly instalments.
These payments were not maintained, and notice was
given to the first
respondent on 17 March 2016 to vacate the premises, which it claims
was not received.
[3]
The
first respondent remains in occupation of the premises and has sublet
various portions of the premises to no less than seven
individuals,
who operate various types of businesses on the property.
[4]
second
respondent entered into a lease agreement with the ‘Department
of Roads and Public Works Eastern Cape Provincial Government’
on 2 September 2013. The lease was to terminate on 31 July 2016. The
property is described in this agreement as ‘Erf 166
Main Road,
situated in the Lukhanji Municipality, Division of Whittlesea,
Eastern Cape Province’. The second respondent fell
into arrears
and Zoleka Bula, representing the second respondent, signed an
acknowledgment of debt in favour of the applicant on
9 March 2016.
The applicant alleges that it cancelled that lease agreement on 19
September 2016 and gave notice to the second respondent
to vacate the
premises. Despite this, the second respondent remains in occupation.
Other than claiming that the first respondent
never received notice
of cancellation, this is admitted by the respondents.
[5]
During
March 2021, the respondents were given further notice to vacate the
structure and / or buildings situated on the premises.
The first
respondent denies receiving this notice, even though it was signed
for.
[1]
The applicant seeks an order for cancellation of the lease
agreements, and eviction of the respondents from the structures and
/
or buildings on the premises.
[6]
The
respondents raised three main grounds of opposition, detailed as
follows:
i)
The
applicant lacks locus standi to institute the proceedings. There is
no legal entity by the name of the ‘Provincial Department
of
Public Works’. The department is supposed to be represented in
legal proceedings by the executing authority, who is its
member of
executive council for public works, who is accountable for the
applicant in the provincial legislature in terms of
section 4A
of the
State Liability Act, 1957
(‘SLA’).
[2]
At best for the applicant, it is the premier, who is not party to the
proceedings, who has the right to institute the claim in
terms of the
SLA. The applicant has failed to establish a nexus between its right
to institute the proceedings given that the property
is registered in
the name of the government of the province of the Eastern Cape, whose
executing authority is the Premier, and
not the applicant.
[3]
ii)
Paragraph
5.1 of the lease agreement provides that ‘The property may only
be used for single residential purposes for private
occupation’.
As such, the applicant’s contention that the Prevention of
Illegal Eviction from and Unlawful Occupation
of Land Act, 1998
[4]
was inapplicable could not be accepted.
iii)
The
land was leased as vacant land, and the respondents effected
improvements thereon, apparently with full knowledge of the
applicant,
so that an enrichment lien was created. The respondents
were therefore entitled to remain in occupation of the property until
they
had been compensated for the improvements by the applicant.
Locus
standi
[7]
The
first respondent admits that ‘On or about 2007, the Department
of Public Works of the South African Government (“the
Applicant”) issued my business with a right to occupy and
develop a vacant land for business use’. Both the first and
second respondents admit the description of the applicant and there
is no dispute on the papers that the lease agreements that
were
previously concluded between the parties were concluded with the
applicant as the lessor. Indeed, it is apparent from the
lease
agreements attached in respect of both the first and second
respondents, as well as from the subsequent addendums, that the
contracting party (lessor) was the applicant, variously described as:
·
The
Provincial Government of the Eastern Cape (Department of Public
Works);
[5]
·
The
Eastern Cape Provincial Government (Department of Roads and Public
Works);
[6]
·
The
Department of Public Works, Eastern Cape Provincial Government;
[7]
·
The
Department of Public Works;
[8]
and
·
Department
of Roads and Public Works.
[9]
[8]
The
letters addressed to the respondents to vacate emanated from the
‘Province of the Eastern Cape: Roads and Public Works’,
or the Office of the State Attorney, acting on behalf of the
applicant.
[9]
‘
Provincial
department’ is defined in the Public Finance Management Act 1
of 1999 (‘PFMA’) to include ‘a
provincial
department listed in Schedule 2 to the Public Service Act, 1994’.
That schedule lists the applicant as a provincial
department and
confirms that it is headed by the ‘Head: Public Works and
Infrastructure’. The suggestion that no such
legal entity
exists, is accordingly erroneous.
[10]
Thandolwethu
Manda, as Head of Department (‘HOD”) for the applicant,
is the accounting officer envisaged in the PFMA.
His authority stems
from s 38 of the PFMA, and includes responsibility for the effective,
efficient, economical and transparent
use of the resources of the
applicant. S 38 of the PFMA confirms the HOD’s duty to take
appropriate steps to collect all
monies and / or revenue due to the
applicant and that he is responsible for the management, including
the safeguarding and maintenance
of the assets, of the applicant.
[10]
The applicant is described in the papers as being the department
under whose custodianship certain State-owned land resorts. The
respondents admit this description.
[11]
In
Farocean
Marine v Minister of Trade and Industry
,
[11]
the Supreme Court of Appeal confirmed that proceedings on behalf of
the State may be commenced both in the name of the State or
the
Government and in the name of a nominal plaintiff or applicant,
usually the Minister as the embodiment of a (national)
Department.
[12]
Proceedings may also be commenced by the administrative head of a
department.
[13]
[12]
The
submissions and authorities relied upon by the respondents in respect
of the
State Liability Act, 1957
[14]
appear to be misplaced. That legislation is concerned with the
liability
of the State, indicating the required citation when proceedings are
instituted against a national or provincial department.
[13]
In
Distcor
Export Partners and Another v The Director-General of the Department
of Trade and Industry
,
the Supreme Court of Appeal stated as follows:
[15]
‘
There
is no statutory provision on how the State may initiate
proceedings…Although proceedings may, as commonly happens,
be
commenced in the name of the Government of the Republic of South
Africa, the government may also sue through a nominal plaintiff
or
applicant, usually the ministerial head of a department. According to
the appellants the latter practice is so inflexible that
it precludes
the administrative head of a department from instituting action on
behalf of a department of State. In my view the
practice is more
relaxed. It is a matter of authority…Particulars of claim
alleging that an administrative head of a department
sues on behalf
of the government may elicit a puzzled request for further
particulars on the scope of his authority but if authority
can be
satisfactorily established that is the end of the matter.’
[14]
In
MEC:
Department of Public Works & Infrastructure: Free State Province
v Tuscaloosa 21 (Pty) Ltd
,
[16]
the court seemed to accept that it was appropriate for a Provincial
Department of Public Works and Infrastructure to launch proceedings
involving property that had been leased on behalf of another
provincial governmental department (the Department of Cooperative
Governance and Traditional Affairs).
[17]
Proceedings on behalf of the State may be commenced both in the
name of the State or Government and in the name of a nominal
plaintiff or applicant. In the case of a national Department, it is
usually the Minister who serves as nominal plaintiff or
applicant.
[18]
Proceedings may also be commenced by the administrative head of a
department.
[19]
There is, however, no basis (and certainly none emanating from the
SLA, as argued) for suggesting that this is obligatory.
[15]
In
this instance, the application has been launched by the ‘Department
of Public Works and Infrastructure’ in its own
name, and not
through a nominal citation. Manda was duly authorised to depose to
the founding affidavit and to take the necessary
steps to launch the
application. The applicant remains the Department and the remarks in
cases such as
Distcor
about the locus standi of nominal plaintiffs / applicants are
therefore inapposite. The essential locus standi enquiry is whether
the applicant has a sufficient interest in the proceedings.
[20]
Given the nature of the various agreements entered into between the
parties, as detailed above, and the purpose of the application,
this
cannot be gainsaid. The respondents admit the description of the
applicant on the papers, including that ‘[I]t is .
. . the
Department under whose custodianship certain State-owned land
resorts.’
[21]
To suggest that the proceedings had to have been launched by the MEC,
alternatively the Premier, because of the provisions of the
SLA is
untenable.
[22]
I am satisfied that the applicant’s right to institute the
present proceedings has been established
The
use of the property
[16]
The
respondents do not deny that the structures on the premises are
commercial in nature and income generating.
[23]
Mr Nobatana nevertheless persisted in his submission that the
Prevention of Illegal Eviction From and Unlawful Occupation of Land
Act, 1998 (‘PIE’)
[24]
was applicable.
[17]
This
submission was based on the inclusion of paragraph 5.1of the lease
agreement, which states:
‘
The
Property may only be used for single residential purposes for private
occupation.’
The
ostensible reason for this is provided in paragraph 5.2, namely to
enable the lessor to terminate the lease agreement with immediate
effect in the event that the property is used for any other function
without prior written approval
.
[18]
The
argument cannot be accepted. PIE flows directly from s 26(3) of the
Constitution, which provides that no person may be evicted
from their
home or have their home demolished, without an order of court granted
after consideration of all relevant circumstances.
While PIE provides
for the prohibition of unlawful eviction and arbitrary deprivation of
property, its preamble further confirms
that the context in which it
applies is eviction from a ‘home’ or demolition of a
person’s home. As a result,
it is during the course of a
‘residential’ eviction that PIE provides for special
consideration to be given to the
rights of the elderly, children,
disabled persons and, particularly, households headed by women.
[19]
It
appears to be clear that it is the use to which the property is put
that determines whether or not PIE is applicable. In
Ndlovu
v Ngcobo; Bekker v Jika
,
[25]
the Supreme Court of Appeal confirmed that PIE has to be employed in
all instances where persons are evicted from homes, shelter,
residential accommodation (including leases) and dwellings. In this
case, there is no suggestion in the opposing papers that the
structures on the premises served as housing or were utilised for
that purpose.
[20]
The
insertion of a clause restricting the lessee to private residence was
probably erroneously included in this instance. It is
certainly no
longer apposite given the use to which the property has subsequently
been put, the nature of the first and second
respondents’
enterprises and the parties’ understanding that the property
was now utilised for commercial premises.
The mere inclusion of such
wording in the lease agreement cannot, on its own, result in the
protection offered by PIE becoming
applicable prior to eviction. As
Muller
et
al
have confirmed, where rental premises are employed for business,
trade, industrial or commercial purposes, PIE would be inapplicable
given that s 26(3) of the Constitution, linked to access to adequate
housing, is not at stake.
[26]
The
creation of an enrichment lien
[21]
The
first and second respondents argued that they enjoyed a real right of
retention over the property given the improvements that
had been
effected. The answering papers reflect the contention that the first
and second respondents developed vacant land for
business use, from
as early as 1992 and on an ongoing basis.
[27]
[22]
Liens
are known and often described as a ‘right of retention’.
An improvement lien is one for useful expenses that enhance
the
market value of property, even if these improvements were not
necessary to protect it. Together with salvage liens, they are
frequently referred to as ‘enrichment liens’, being based
on the principle that no one should be unjustifiably enriched
at the
expense of another.
[28]
[23]
Courts
enjoy an overriding discretion whether or not to recognise a lien.
This is based on determining a fair and equitable outcome,
even if
the normal requirements of enrichment liability and liens are
met.
[29]
[24]
The
first difficulty for the first and second respondents is their
reliance on the development of vacant land in order to support
their
right of retention.
[30]
The lease agreements that they entered into subsequently with the
applicant clearly related to ‘property’, defined
to
include ‘the Buildings and all other improvements to or upon
the Property’. ‘Buildings’ was defined
to mean ‘the
house and outbuildings situated on the Property’. In
other words, in terms of the lease agreement,
the applicant let and
the first and second respondents hired ‘property’ as
described on the terms and conditions contained
in the lease
agreement, which was not vacant land.
[31]
[25]
A
related difficulty stems from the agreed terms and conditions of the
original lease agreements, coupled to subsequent addendums
and
extended on various occasions. In particular:
‘
14.
Alterations, Additions and Improvement
14.1
The Lessee shall not make any alterations or additions to any of the
buildings, the property, or any part thereof, without
the Lessor’s
prior written consent, but the Lessor shall not withhold its consent
unreasonably to any such alterations or
addition which is of a minor
nature and not structural.
14.2
If the Lessee does altar, add to, or improve the Property in anyway,
whether in breach of §14.1 or not, the Lessee shall,
if so
required in writing by the Lessor, restore the property on the
termination of this lease to its condition as it was prior
to such
alteration, addition or improvement having been made. The Lessor’s
requirement in this regard may be communicated
to the Lessee at any
time, but not later the 21
st
(twenty first) day after the Lessee had delivered up the Property
pursuant to the termination of this lease; and this clause shall
not
be construed as excluding any other or further remedy which the
Lessor may have in consequence of the breach by the Lessee
of §14.1.
14.3
Save for any improvement, which is removed from the Property as
required by the Lessor in terms of §14.2, all improvements
made
on or to the Property shall belong to the Lessor and may not be
removed from the Property at any time.
The
Lessee shall not, whatsoever the circumstances, have any claim
against the Lessor for compensation for any improvement or repairs
to
the Property, nor shall the Lessee have a right of retention in
respect of any improvements.
’
(Own
emphasis).
[32]
[26]
In
terms of an addendum signed by the first respondent on 27 August
2008, the following was recorded:
‘
1.
The installation of water and electricity will be the responsibility
of Whittlesea Builders & Civil CC.
2.
Only temporal structures may be constructed on erf 166.
3.
Whittlesea Builders and Civil CC should inform the Department of any
new developments or temporal structures to the site.
4.
The escalation rate shall be 10% per annum.’
As
Mr Gajjar for the applicant pointed out, these terms were
incorporated in the last extension of the lease agreement concluded
on 3 September 2013 between the applicant and first respondent.
[27]
Glover
confirms that parties are at liberty to agree expressly in their
contract on what rights to removal and what compensation
in the
absence of removal the lessee may have.
[33]
In these circumstances, the contractual provisions agreed to between
the parties, quoted above, appear to be fatal to the defence
of an
enrichment lien.
[34]
[28]
I
might add that I am unconvinced that the position would have been
different even if this had not been the case, and would not
be
inclined to exercise a discretion in favour of the respondents.
[35]
This is because, firstly, it is for a lessee claiming a lien to
allege and prove that improvements were in fact made.
[36]
This includes
alleging
and proving that the expenses were useful for the property’s
improvement. The respondents should also have alleged
and proved the
actual expenses and the extent of the enrichment of the applicant,
since a lien only covers the lesser of these
two amounts.
[37]
This has not occurred.
[29]
Secondly,
the first and second respondents both referred to correspondence
pertaining to the late Mr Bula, in the context of the
development of
vacant land some years ago. A similar claim was made in
De
Aguiar v Real People Housing
.
[38]
Griesel AJA, for a unanimous court, held that:
[39]
‘…
the
appellant made mention of various improvements effected to the
property over the years, making it clear that it was
his
father
who had developed the property and paid for the various
improvements….no mention was made of any improvements for
which
the appellant himself can claim credit…Any improvements
effected by his father are, of course, completely irrelevant to a
consideration of the lien on which the appellant seeks to rely.’
[30]
The
respondents in this case encounter the same obstacle. There is also a
complete dearth of detail relating to the alleged improvements
themselves.
[40]
In
Rhoode
v De Kock
,
[41]
evidence estimating what improvements would cost was held to be
irrelevant for purposes of establishing that the appellant had
actually expended anything in money or materials. The Supreme Court
of Appeal added as follows:
[42]
‘…
one
does not know what the appellant’s actual expenses were. In
addition, there is no acceptable evidence that the value of
the
property was increased. The opinion expressed by Van der Spuy is of
no assistance as neither the factual foundation nor his
motivation
therefor are set out…The criticism by the respondent’s
counsel of the answering affidavit on this aspect
as containing
‘vague, bald, terse, sketchy and insufficient allegations’
is entirely justified.’
[31]
The
same may be said in this case, and the conclusion of Cloete JA in
Rhoode
is equally applicable (substituting the respondents in the present
matter for the appellants in the quotation to follow):
[43]
‘
The
present is not a case where it is common cause or cannot on the
papers be disputed that
the property has been increased in value…Here, there is not
even a
prima
facie
case
for the respondents to meet. The appellant’s case amounts to
this: “I have made alterations and additions to the
respondents’ property. I have produced no acceptable evidence
to establish whether the property has been improved in value,
nor
have I disclosed what I expended in money or materials. But I wish to
resist an application for ejectment until compensated
for an amount
that I have not begun to quantify.” To enforce a lien in these
circumstances would in my view be to allow an
abuse of the process of
the court.’
[32]
In
these circumstances I am satisfied that the applicant has made out a
proper case for the relief that it seeks. It would, in my
view, be
just and equitable for the respondents to be afforded a period of 30
days within which to vacate.
Order
[33]
The
following order will issue.
a.
The
first, second and third respondents (the respondents) are evicted
from the structures and / or buildings on Erf 166, Whittlesea,
situated in Main Road, Whittlesea (the premises).
b.
The
respondents shall vacate the premises within 30 days of service of
the order on them.
c.
The
Sheriff of this Honourable Court, and where necessary, with the
assistance of members of the South African Police Service, shall
execute the eviction order in the event that the respondents fail to
voluntarily vacate the premises within 30 days after service
of the
order on them.
d.
The
costs of the application shall be borne by the first and second
respondents, jointly and severally, the one paying the other
to be
absolved.
_______________
A.
GOVINDJEE
JUDGE OF
THE HIGH COURT
Appearances:
Counsel for the
Applicant: Adv GJ
Gajjar
Instructed
by
:
Whitesides attorneys
53 African Street
Makhanda
046 622 711
Pa1whitesides.co.za
Counsel for the Respondents:
Mr MW Nobatana
Instructed
by
: Mti Attorneys
39 New Street
Makhanda
046 622 2047
office@mtilaw.co.za
[1]
P 81 of the index.
[2]
Act 20 of 1957.
[3]
The issue of the
applicant’s locus standi to litigate in its own name, in the
context of eviction, was left open in
Department
of Public Works v M S Moos Construction CC
[2006] SCA 63 (RSA) at para 11.
[4]
Act 19 of 1998.
[5]
P 95 of the index.
[6]
P 41 of the index.
[7]
P 96 of the index.
[8]
P 110 of the
index.
[9]
P 111, 112, 113 of
the index.
[10]
Ss 38(1)(c) and
(d) of the PFMA.
[11]
2006 SCA 165
(RSA).
[12]
Para 8.
[13]
Ibid
,
with reference to
Distcor
Export
paras
6,10.
[14]
Act 20 of 1957.
[15]
[2005] ZASCA 13
at
paras 5, 6.
[16]
Unreported case no
3778 / 2017 (High Court of South Africa, Free State Division,
Bloemfontein) para 9.
[17]
The distinction
between the Provincial Department of Public Works and Infrastructure
instituting action in its own name, as opposed
to the MEC
instituting action as a nominal applicant, as appears to have been
the case, seems, with respect, to have been overlooked.
[18]
Farocean Marine
(Pty) Ltd v Minister of Trade and Industry
[2006]
ZASCA 137
at para 8.
[19]
Ibid
.
[20]
Distcor
supra
para 7;
Farocean
Marine supra
para 8.
[21]
Respondent’s
counsel’s heads of argument, by contrast, suggests that there
is no law or document to support the allegation
that land that is
registered in the name of the Province of the Eastern Cape vests
with the applicant.
[22]
It might be added
that such an approach would render the notion of locus standi
unnecessarily formalistic and technical: see
Jacobs
v Waks
1992 (1) SA 521 (A).
[23]
Paras 14 and 15 of
the founding affidavit and the responses thereto.
[24]
Act 19 of 1998.
[25]
2003 (1) SA 113
(SCA).
[26]
G
Muller
et al
Silberberg and Schoeman’s The Law of Property
(6
th
Ed) (2019) (LexisNexis) 500.
[27]
Pp 85, 122-123 of the answering affidavits.
[28]
There is a key
distinction between an enrichment lien, as described, and a
‘contractual lien’, when a claim to right
of retention
originates in contract.
[29]
Fletcher and Fletcher v Bulwayo
Waterworks Col Ltd; Bulawayo Waterworks Co Ltd v Fletcher and
Fletcher
1915 AD 636
648;
R Brits
Real
Security Law
(2016)
(Juta) 493.
[30]
P 85, 123 of the
index. The first and second respondents suggests that they developed
vacant land (in the second respondent’s
case that it was Ms
Bula’s father who did this) by having services installed and
constructed buildings on the erf, including
the building from which
it operates.
[31]
The wording and
definitions contained in the lease agreement with the second
respondent is slightly different, but the effect
is the same.
[32]
Similar wording is
reflected in the lease agreement entered into with the second
respondent, save that ‘Property’
is replaced by
‘Premises’ and compensation may be claimed for
improvements made with the Lessor’s prior written
consent: p
144 of the Index, clauses 11.1-11.3 of the lease agreement.
[33]
G Glover
Kerr’s
Law of Sale and Lease
(4
th
Ed) (2014) (LexisNexis) 554. See
Bowhay
v Ward
1903 TS 772
for an example of an agreement between the parties
favouring the lessor and prohibiting removal of improvements
altogether.
[34]
Also see LTC Harms
Amler’s
Precedents of Pleadings
(9
th
Ed) (2018) (LexisNexis) 249: it is for the parties relying on the
lien to allege and prove that there was no contractual arrangement
between the parties in respect of the expenses.
[35]
As Brits has
noted, restriction on ownership imposed by an enrichment lien should
be treated as an ‘exceptional privilege
that the law offers an
improver and therefore the lien should be interpreted restrictively
[by] giving the owner the benefit
of the doubt unless equity clearly
dictates that the retentor should be allowed to retain [a] hold over
the property: Brits
supra
556.
[36]
Glover
supra
562; Harms
supra
249. This assumes that the respondents are not
mala
fide
occupiers, given that their lease periods have been cancelled, or
that, even if they are
mala
fide
occupiers,
they may nevertheless, in principle, have a claim to exercise a
lien: Brits
supra
503.
[37]
Harms
supra
249.
[38]
2011 (1) SA 16.
[39]
Para 18.
[40]
De Aguiar supra
para 19.
[41]
2013 (3) SA 123.
[42]
Para 13
et
seq
.
[43]
Para 17. The most
that the first respondent says is that the deponent to its answering
affidavit requested a property evaluation
‘…to
determine the value thereof
in
order for the rental amount of the land only to be determined
’
(own emphasis).