SP & C Catering Investments (Pty) Ltd v The Body Corporate of Waterfront Mews and Others (84/09) [2009] ZASCA 162; [2010] 2 All SA 261 (SCA) ; 2010 (4) SA 104 (SCA) (30 November 2009)

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SP & C Catering Investments (Pty) Ltd v The Body Corporate of Waterfront Mews and Others (84/09) [2009] ZASCA 162; [2010] 2 All SA 261 (SCA) ; 2010 (4) SA 104 (SCA) (30 November 2009)

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THE
SUPREME COURT OF APPEAL
REPUBLIC
OF SOUTH AFRICA
JUDGMENT
Case No: 84/09
SP
& C CATERING INVESTMENTS (PTY) LIMITED Appellant
and
THE
BODY CORPORATE OF WATERFRONT MEWS First Respondent
THE
REGISTRAR OF DEEDS, JOHANNESBURG,
GAUTENG
Second Respondent
N
A POP & M M SAMODIEN Third Respondent
G
T J MOORE Fourth Respondent
U
B JANUARY, R JONES &
D
J VAN DER WESTHUIZEN Fifth Respondent
J
M RANGWAGA Sixth Respondent
N
BAPOO Seventh Respondent
G
M LEHAPA & I M LEHAPA Eighth Respondent
I
PATEL & S BHOOLA Ninth Respondent
A
AKHTAR & N AKHTAR Tenth Respondent
M
RANKOE Eleventh Respondent
D
V SHEZI Twelfth Respondent
P
NAICKER Thirteenth Respondent
S
P MBELE Fourteenth Respondent
B
T TEKLETSION & L A TEKLETSION Fifteenth Respondent
R
G DON Sixteenth Respondent
A
GOWRIAH & E GOWRIAH Seventeenth Respondent
P
GOVAN Eighteenth Respondent
Neutral citation:
SP &
C Catering Investments (Pty) Ltd v The Body
Corporate of Waterfront Mews
(84/09) [2009] ZASC 162 (30 November 2009).
Coram:
HARMS DP, NAVSA,
MTHIYANE, PONNAN JJA
et
HURT AJA
Heard:
24
NOVEMBER 2009
Delivered:
30
NOVEMBER 2009
Summary:
Sectional
title scheme ─ reserved right to extend scheme ─ right lapsing
after period for which it is reserved ─ court has
no 'inherent’
or statutory power to extend the period.
______________________________________________________________
ORDER
______________________________________________________________
On appeal from: North Gauteng High Court, (Botha J
sitting as court
of first instance).
The appeal is dismissed with costs.
______________________________________________________________
JUDGMENT
______________________________________________________________
HURT AJA (HARMS DP, NAVSA, MTHIYANE
et
PONNAN JJA concurring):
[1] The appellant applied to the North Gauteng High
Court for an order extending the time within which the appellant was
entitled
to complete extensions to the Waterfront Mews sectional
title scheme, of which the appellant was the ‘developer’ as
defined
in
s 1 of the Sectional Titles Act 95 of
1986 (‘the Act’). The application was opposed by 16 of the unit
holders in the scheme.
Botha J dismissed the
application
on the ground that the high court did not have jurisdiction to grant
such an extension. He refused leave to appeal but
a petition to this
court for leave was successful.
[2] The appellant’s title to extend the scheme was
derived from s 25(1) of the Act.
1
As stated in the subsection, this right must be
reserved
at the time when application is made for the registration of the
initial sectional plan and the developer is required to
stipulate the
period for which he requires the right to complete the extensions.
There are no limits set in relation to this period
and the developer
is at liberty to fix the period to meet his own requirements and
future plans. Section 25(2) stipulates that
when a right is reserved
in terms of subsec (1), the application must include detailed
documentary information which, inter alia,
specifies precisely the
layout of the new units in the extended portion, the nature and
extent of the construction work involved
and requires the developer
to furnish estimates of the anticipated participation quotas of all
the sections in the scheme after
its extension. In addition, the
developer is required to include in the documents a copy of the
certificate of real right. The
appellant, on its own election,
stipulated a period of ten years in this regard. The right was
registered on 31 August 1998. The
relevant portion of the certificate
reads:
‘
In pursuance of the
provisions of the said Act, I, the Registrar of Deeds at JOHANNESBURG
do hereby certify that the Developer or
his successor in title is the
registered holder of the right to erect and complete from time to
time within a period of 10 (TEN)
years for his personal account a
further building or buildings on the specified portion of the common
property as indicated on
the plan referred to in Section 25(2)(a) of
the Act filed at this office . . .’
Subsections 25(14) and (15) make it mandatory for the
developer to disclose the existence of the reserved right to
purchasers of
units in the scheme on pain of rendering the purchase
voidable at the instance of the purchaser.
[3] Section 25(6) provides that if no right is reserved
in terms of subsec (1) at inception of the scheme or if a right has
been
reserved but has lapsed, the right to extend the scheme will
vest in the body corporate.
2
[4] The application was based, in the first instance,
upon the contention that the court had ‘inherent jurisdiction’ to
grant
an order in relation to the reserved right particularly because
the right was one to ‘immovable property’ and the court had

inherent power to regulate all matters pertaining to such property.
Botha J rejected the contention. He held, following the decision
of
this court in
Erlax Properties (Pty) Ltd v
Registrar of Deeds
[1991] ZASCA 187
;
1992 (1) SA 879
(A) at p
886-887, that the right of extension is a personal servitude which,
in this instance, was subject to the time limit stipulated
by the
developer in reserving it and causing it to be registered.
[5] After pointing out that there is no provision
empowering a court (or indeed, any other administrative body) either
in the Act
itself or in the
Deeds Registries Act, 47 of 1937
, to
extend the period for which a registered praedial servitude is to
operate, Botha J summed up his inability (as a high court
judge) to
grant an extension of the period during which the reserved right
could be enforced, in these simple but effective words:
‘
I simply cannot see how a
court can, without express statutory authorisation, make an order
that will have the effect of adding
to someone’s real right and at
the same time subtracting from someone else’s real right.’
[6] On appeal before us, counsel for the appellant
presented an argument which they had not raised in the lower court.
It is based
on a contention that the reserved right has not lapsed
through effluxion of time (notwithstanding the passage of ten years
since
the date of its registration) and that, consequently, the
application for its extension had been unnecessary. On this basis
counsel
submitted that the appellant should be granted a declaratory
order to the effect that
‘
On a proper interpretation of
s 25(13)
of [the Act] the appellant’s real right of extension in
terms of s 25 of the Act has not lapsed.’
The appellant’s contentions are founded upon a novel
approach to the interpretation of subsecs 25(6) and 25(13). Section
25(13)
reads:
‘
25(13) 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.’
[7] As I understand it, the argument is that s 25(6)
should not be treated as a ‘guillotine’ which terminated the
reserved right
automatically
on
the expiry of the 10 year period referred to in the certificate. The
termination of the reserved right, so the argument runs,
constitutes
a ‘deprivation of property’ in violation of s 25 of the
Constitution. Therefore it is incumbent to approach the
construction
of s 25 of the Act with an eye to the prescripts of s 39(2) of
the Constitution, ie to see whether its provisions
are ‘reasonably
capable’ of being given a meaning which would not result in the
‘deprivation’ of the developer’s ‘property’.
The answer,
the appellant contends, lies in the true meaning of s 25(13).
[8] Counsel submitted that s 25(13) was enacted as much
for the developer as for the unit owner. This view was expressed in
Knoetze v Saddlewood CC
[2001] 1 All SA 42
(SE) at 47. The subsection requires the developer
to carry out the extended phases of the scheme ‘strictly in
accordance with
the documents referred to in subsec (2)’. One of
those documents is the certificate of real right. Bearing this in
mind, so the
submission ran, the qualifying words ‘regard being had
to changed circumstances’ take on a more extensive meaning than
might
at first appear from their limited context in the subsection.
Where the circumstances have been such that the developer has been

delayed, through no fault of his own, in the execution of the work,
that constitutes a ‘changed circumstance’ on the ground
of which
he is entitled to ask the court for relief in the form of an
extension of the period of the reserved right. On the basis
of this
interpretation counsel contended that where the completion of the
scheme extension is delayed by circumstances beyond the
developer’s
control, the reserved right does not lapse at the end of the
stipulated period, but may be discretionally extended
by the court if
application is made to it by an aggrieved unit holder in terms of the
subsection. If the court is not satisfied
that the delay is due to
‘changed circumstances’ it may declare that the developer is not
entitled to an extension and, in
that event, the reserved right will
terminate. The contention is tantamount to a submission that the
right was one in perpetuity
subject to the exercise by the court of a
discretion to declare it terminated.
[9] This argument is riddled with flaws. I do not intend
to identify them all. It will suffice to refer to two, either of
which
is fatal to the contention. The first is that the expiry of the
right by effluxion of time amounts to a deprivation of property.
The
very fact that the developer himself states the period for which his
right is to exist negates any possibility of a suggestion
that he is
‘deprived’ of it at the end of the period. The second is that the
contention confuses the developer’s obligations
to effect the
scheme extension with his registered entitlement to do so. The
subsection deals, at its commencement, with a ‘developer
. . . who
exercises a reserved right referred to in subsection (1)’. The
right is one which the developer has reserved for the
period
expressly stipulated in his application. It is a right to construct
the additional buildings, or extend the existing ones,
on the common
property, to divide them into sections and to confer rights of
exclusive use in respect of them. That is the content
of the right.
It is to be distinguished from the obligation to perform the work
which is defined in s 25(13). The appellant’s
submission is that
because the certificate reflecting the content of the registered
reserved right must be one of the documents
listed in s 25(2), the
time period stated in the certificate is imported, as an obligation,
into s 25(13). The submission is unfounded.
It seeks to invert the
effect of the subsection in favour of the developer. 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. If
the legislator had intended to make such
far-reaching relief
available to an embarrassed developer, it would surely have spelt out
its intention explicitly and not hidden
it subtly in the wording of a
section which, in its literal terms, confers rights on unit owners.
This argument must fail.
[10] As to the claim for the extension of the reserved
period, now relegated to alternative relief in the event of the
declarator
not being granted, the appellant persists in the
contention that Botha J was wrong in holding that he had no power to
grant such
an order. I am not persuaded that there is any substance
in this contention. The case of
Ex parte
Millsite Investment Co (Pty) Ltd
1965 (2) SA
582
(T) which was the foundation for the appellant’s submission is
totally unrelated to the circumstances of this case. Vieyra J was

dealing with the court’s power to make orders to which there was no
objection by affected parties. The situation differs
toto
caelo
from that which applies here, where the
affected parties have expressly objected to an order which would
reduce their rights in
the property which they own.
[11] The appeal is dismissed with costs.
_______________________
N V HURT
ACTING JUDGE OF APPEAL
Appearances:
Counsel for Appellant: S J du Plessis SC
C F van der Merwe
Instructed by
Rooth Wessels Motla Conradie Inc, Pretoria
Rosendorff Reitz Barry, Bloemfontein
Counsel for Respondent: F Saint
Instructed by
Biccari Bollo Mariano Inc, Pretoria
Van der Merwe & Sorour, Bloemfontein
1
‘25(1) A developer may . . . 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 [the extensions] 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.’
2
‘25(6) If no reservation was made by the developer in terms of
subsection (1), or if such a reservation was made and for any
reason
has lapsed, the right to extend a scheme . . . shall vest in the
body corporate which shall be entitled, subject to this
section and
after compliance, with the necessary changes, with the requirements
of paragraphs
(a), (b), (c), (d)
and
(g)
of subsection
(2), to obtain a certificate of real right in the prescribed form in
respect thereof: Provided that the body corporate
shall only
exercise or alienate or transfer such right with the written consent
of all the members of the body corporate as well
as with the written
consent of the mortgagee of each unit in the scheme: Provided
further that a member or mortgagee shall not
withhold such approval
without good cause in law.’