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[2019] ZAGPPHC 178
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New Invest 263(Pty) Ltd v Investec Ltd and Others (1776A/17) [2019] ZAGPPHC 178 (17 May 2019)
IN
THE REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURTOF SOUTH
AFRICA
(GAUTENG DIVISION,
PRETORIA)
(1)
REPORTABLE:
NO
(2)
OF
INTEREST TO OTHER JUDGES: NO
(3)
REVISED:
YES
CASE NO: 1776A/17
17/5/2019
NEW
INVEST 263 (PTY) LTD
APPLICANT
And
INVESTEC
LTD
1
ST
RESPONDENT
STANDARD
BANK
LTD
2
ND
RESPONDENT
BODY
CORPORATE TUSCAN ON VAAL
3
RD
RESPONDENT
RAND
WATER
4
TH
RESPONDENT
EMFULENI
MUNICIPALITY
5
TH
RESPONDENT
THE
REGISTRAR OF
DEEDS
6
TH
RESPONDENT
JUDGMENT
KHUMALO
J
[1]
The
Applicant, New Invest 263 (Pty) Ltd seeks a declaratory order in the
following terms:
[1.1] That the immovable
properties of the Applicant described
infra
m ay be alienated
in terms of the Alienation of Land Act, 1981 (Act 68 of 1981) ("the
Act") in separate parts;
PART
1
[1.1.1]
A unit consisting of:
(a)
Section no, 2 as shown and more fully
described on Sectional Title Plan No. 55799/2002 in the scheme known
as TUSCANY ON VAAL in
respect of the Land and buildings situated at
Portion 6 of the Farm Northdene 589, Local Authority EMFULENI LOCAL
MUNICIPALITY
of which section the floor area, according to the said
Sectional PLAN IS 168 square metres in extent; and
(b)
an undivided share in the common
property in the scheme apportioned to the said section in accordance
with the participation quota
as endorsed on the said sectional plan .
HELD BY DEED OF TRANSFER NO.
ST145369/06
[1.2]
and an exclusive use area describe as Yard Y2 measuring 355
(THREE
HUNDREND FIFTY FIVE) square metres, being as such a part of the
common property, comprising the land and the scheme known
TUSCANY ON
VAAL, in respect of the land and building or buildings situate at
PORTION 6 OF THE FARM NROTHEDENE 589 LOCAL AUTHORITY
EMFULENI LOCAL
MUNICIPALTY, as shown and more fully described on Sectional Plan No>
55 375/2003 HELD BY DEED OF CESSION SK 0
84635.
PART2
[1.3]
A Unit consisting of:
(a)
Section No. 3 as shown and more fully
described on Sectional Title Plan No> SS799/2002 in the scheme
known as Tuscany on Vaal
in respect of the land and building/
buildings situated at Portion 6 OF THE FARM NORTHEDENE 589 ,
REGISTRATION DIVISION IQ, PROVINCE
OF GAUTENG, Local Authority:
EMFULENI LOCAL MUNICIPALITY, of which Section the floor area,
according to the said Sectional Plan
is 168 (ONE HUNDREND SIXTY
EIGHT) square metres in extent; and
(b)
an undivided share in the common
property in the scheme apportioned to the said section in accordance
with the participation quota
as endorsed on the said sectional plan;
HELD BY DEED OF TRANSFER NO .
ST142656/2002
ST153316/2005
[2]
Both properties described in part 1 and
part 2 and referred to as Section 2 and 3, respectively, are owned by
the Applicant, a private
company with a sole director, Zack Aiden van
Heerden. Section 3 is also known as Unit 7A and Section 2 as Unit 78.
[3]
The Applicant purchased the (2) two
Units (that henceforth I refer to as 7A and 78) separately from two
owners. On 6 June 2005 it
purchased Unit 7A from Mr GP Argirakis and
took transfer on 24 November 2005. A year later on 15 August 2006 it
purchased 78 from
Tuscany on Vaal 78 (Pty) Ltd that was represented
by Mr Donovan Drew and took transfer on 3 November 2006. The
Applicant therefore
holds separate Title Deeds for each of the Units
that are located in one free standing building that is divided into 2
separate
Units.
[4]
A mortgage bond is registered on each of the two Units. Investec Bank
Ltd, cited as
the 1
st
Respondent, is the holder of a bond
on Unit 7A that Applicant registered in 2005, whilst Standard Bank,
cited as the 2
nd
Respondent, is the holder of the bond on
Unit 78 registered in 2006. Both mortgagees have issued a writ of
execution against the
mortgaged Unit. The Applicant and the
mortgagees had sought to alienate the Units separately in terms of
the Title Deeds Applicant
holds. The Registrar of Deeds is an
interested party who is to give effect to the order sought by the
Applicant and therefore cited
as the 6th Respondent. None of these
Respondents opposes the Application.
[5]
The Units form part of a Sectional Title
Scheme of a residential estate known as the Tuscany on Vaal that
falls within the Emfuleni
Local Municipality ("the
Municipality"), the 5
th
Respondent, and within the Vaal River Complex as per s 29 (3) of the
Development Facilitation Act 67 of 1995 ("the Development
Act"
). In terms of s 29 (3), Rand Water, the 4th Respondent, is
responsible for,
inter alia,
the
approval of the development of habit able buildings or structures and
the plumbing facilities below the
flood control line of the Vaal River
like
the Tuscany on Vaal. Therefore Rand Water' s approval is required
prior to any construction , development or otherwise, within
the Vaal
River Complex.
[6]
Rand Water and the Body Corporate of
Tuscany on Vaal, the 3rd Respondent, which is the controlling body in
the Sectional Title Development
Scheme, are against the alienation of
the two Units on their separate title s, insisting that until or
unless the titles are consolidated
and the. Units sold as one
property under one title deed, they would not approve their
alienation. Rand Water insists that the
building is non-compliant
with the plans that it approve , and that the changes made in respect
of the building were without the
necessary written consent and
therefore contrary to the Development Act. They therefore deem such
transfer would be illegal.
[7]
The Municipality is not opposing the Application.
Factual Background
[8]
The Tuscany on Vaal estate is locate d
against the banks of the Vaal River on Portion 6 of the Farm
Northedene 589. The latter was
rezoned as an accommodation
establishment for (15) fifteen residential dwellings in a Sectional
Title Scheme in terms of the Gauteng
Removal of Restrictions
Amendment Act of 1997 on approval by Emfuleni Local Municipality and
Rand Water on 2 July 2002 in accordance
with the Vaal River Complex
Regional Structure Plan of 1996. The Rand Water simultaneously
approved the Tuscany on Vaal Development
plans to
build
above the Flood Control Line nine (9) standalone residential
buildings/dwellings
to the developer
of the scheme, one Mr Dolf van der Merwe (who has since passed away)
("t he developer") in accordance
with Annexure "C"
of the Guide Plan for the Vaal River Complex .
[9]
The development took off and the
residential buildings were subsequently all built accordingly, except
for the second residential
building, which is Section 3. It was built
as a single building but separated into two residential Units {7A and
78) that shared
a common interior wall. The developer registered the
two Units in his certificate of registered sectional title at the
Deeds Office
as separate residences being Section 2 (78) and Section
3 (7A), in accordance with s 11{1) (a) of the Sectional Title Act
1971.
The developer thereafter sold each of the Units to his
successor's in title who are different owners, and registered
accordingly
under their different tit les. Section 2 (78) was sold to
Mr Drew's Tuscany on Vaal 78 (Pty) Ltd held under ST142657 /2002 and
Section 3 (7A) to Mr G P Argirakis under ST142656/2002 accordingly at
the Deeds Office. The Applicant subsequently bought and took
transfer
of 7A from Argirakis in 2005 and 78 from Drew in 2006 held by Deed of
Transfer ST153316/2005 and ST145369/06, respectively.
[10]
On 30 June 2006 the Emfuleni
Municipality approved modified/additional building plans that accord
with the division of Section 3
into two separate residential Units 7A
and Section 2 78 in the Tuscan on Vaal subsequently submitted by the
developer. The additional
plans were not submitted to Rand Water for
further approval/endorsement. Subsequently the developer attempted to
register a 9
th
residential building, it was opposed by Rand Water on the basis that
permission was only granted for the building of only nine
(9)
residential buildings /Units in the scheme but as a result of the
separate Units in the second building, the 9
th
building was going to be registered as the 10th Unit, contrary to the
approved plan. According to Rand Water the number of Units
approved
to be built above the Flood Control Line in the development was
reached. It was the first time a challenge was raised
since the
registration of the scheme in 2002 and the beginning of all the
problems.
[11]
On an attempt to find a way for the 9th
building/dwelling to be registered, the developer and the estate
agent negotiated a sale
between the owners of the 2 Units, for one of
them to buy the other's Unit. The negotiations culminated in the
Applicant buying
Unit 78 from Mr Drew's Tuscan on Vaal 78 and taking
transfer on 3 November 2006. The developer incentivised the deal for
Mr Drew
to sell by paying Drew a further amount of R100 000.00 over
the purchase price to compensate for the costs Drew paid on taking
transfer when he purchased his Unit. The estate agent and the
developer were of the opinion that the two Units could be easily
converted into one residence and be registered as one Unit by
demolishing the common wall, whereupon the scheme would be in
compliance
with the plans of the scheme approved by Rand Water to be
able to register the 9
th
dwelling as the 9
th
Unit. Applicant proceeded with the conversion for the use of the
Units as one residence, but he never correspondently converged
their
titles.
[12]
It was only until 2015, nine years after
the purchase of Unit 78, when the Applicant tried to sell the two
Units that the Body Corporate
's estate agent told the Applicant's
Van Heeden that he cannot sell the Units separately as per their
titles but will have to consolidate
them. On enquiry from Rand Water
he was told that a total of 9 Units were approved above the 1975 Food
Control Line in accordance
with the Site Development Plan (SOP) and
any changes to the approved SOP required Rand Water' s approval,
which include changes
to the number of Units, (which approval the
developer was supposed to have obtained).
[13]
Applicant in January 2017, 14 years
after the developer' s registration of the sectional title register
(which included the two
Units in the second building) launched and
proceeded with this Application for a declaratory order to sell the
two Units separately
as per their original titles since 2002. In the
meantime the 1
st
and 2
nd
Respondents, Investec and Standard Bank, the execution creditors of
both Units were on January 2017 to sell in execution the Units
on
their separate titles.
[14]
In opposing the application, the Body
Corporate in its Answering Affidavit deposed to by Mr Allen van der
Merwe, a trustee of the
Body Corporate since 2003 and an owner in the
scheme since its registration in 2002, alleges that the contract
concluded by the
Applicant and Mr Drew's Co in 2006 states clearly
that the parties were also to enter into a final sectional title
contract, which
contract was to facilitate the consolidation of the
two Units both physically , utilised as one, and by registration in
one title.
Mrs A Van Heerden, a director of the Applicant was aware
that the sale was facilitated forth at purpose. He said it was
therefore
expected that on taking transfer of 78, the Applicant will
proceed with the consolidation of the two Units as one residential
building/dwelling
and their registration under one title, the burden
is as a result on the Applicant to register the consolidation at the
Deeds Office.
[15]
According to the Body Corporate the
Applicant proceeded to physically consolidate the two Units into one
residential dwelling in
contemplation of such consolidation. The
common wall between the Units was demolished, one entrance door
closed, one of the garages
converted into a living room and a guest
toilet install ed. Unit 7A and 78 were to function as one residential
Unit. As a result
the water and electricity account of the two Units
was consolidated into one bill. The common area levies were to be
calculated
for nine residential arrears, instead of 10. However
Applicant never implemented the consolidation of the titles or the
Units to
one dwelling.
[16]
The Body Corporate's contention on the
order as sought by the Applicant is that such order would perpetuate
the non-compliance with
the permission granted by the Rand Water for
only 9 residential buildings that were to be erected in the scheme
and prejudice the
owners of the properties in the Tuscany on Vaal in
their future dealings with the relevant planning authorities,
specifically Rand
Water has already delayed the approval of certain
proposed building plans until the properties comply with certain
necessary requirements.
(for example, the registration of the 10th
dwelling denied). It will also perpetuate the non compliance by
the Applicant with
the
undertaking
it
took to consolidate the properties into one title thus confirm an
illegal registration. The scheme would further continue to
fall foul
of the permission granted by Rand Water.
[17]
The Body Corporate has indicated that it
will nevertheless be amenable to an order sought by the Applicant if
the order is granted
on the basis that the Units can be alienated
separately once Applicant at his own costs had obtained a written
approval of the
10th Unit on the Tuscan on Vaal sectional scheme from
Rand Water and the Municipality, by no later than twelve (12) months
from
the date of the order, which costs include the cost of obtaining
the relevant approvals including but not limited to the costs of
any
applications, environmental impact assessments and new building and
sectional scheme plans.
[18]
Alternatively, failing the above, the
Applicant be ordered to notarially tie the two Units in the Deeds
Registry and make such physical
alterations necessary to comply with
the requirements of the 4t h Respondent. All costs still to be paid
by the Applicant.
Rand Water's Opposition
[19]
Rand Water on the other hand opposes the
Application on the basis that since the approval of the 9
dwelling/Units which were subsequently
all erected it has not
received an application for any other plans for approval in respect
of Tuscan on Vaal Sectional Title Development
nor any notification,
correspondence or application for alterations or additions to the
number of the 9 dwelling Units in the approved
plans.
[20]
Further it argues that any changes,
modifications or alterations to the approved plans which changes
includes the number of dwelling/
units, must be submitted to it for
consideration and further approval. It stated that it expected the
construction of the 9 dwellings
to be in compliance with the approved
plans. Any construction, alteration or change or modifications
effected contrary to the approved
plans therefore illegal and must be
modified to comply with the approved plans.
[21]
It has noted that modification plans
were submitted to the Municipality, and based on the Municipality's
approval, Applicant caused
the registration of two separate units in
the same building, when approval was supposed to be also sought from
Rand Water prior
to modification and registration taking place.
Consequently, in the absence of its written consent the subdivision
is illegal and
the registration of the two units is invalid and
should be set aside. The allegations are made notwithstanding the
documentary
evidence showing that the Units were registered
separately in 2002 and the referred modification plans submitted in
2006 by the
developer. Applicant bought 78 from the developer's
successor in title, Drew's Co on a separate title. Applicant did not
cause
any registration.
[22]
Rand water further alleges that it was
advised, in a meeting held on 19 June 2016
where
all the parties
were represented,
that the Applicant s' Units were built as speculation units which
should not have been registered separately.
The Applicant bought the
other Unit from Mr Drew with the knowledge and undertaking that the
two units will and must be consolidated
as one dwelling unit whereby
the boat house could be sold separately. The transfer costs of the
agreement were paid for by the
developer. The Applicants modified the
two units accordingly however failed to proceed with the
consolidation application. It indicated
that the offer to purchase
any of the Units should be subject to the consolidation of the two
units into a single title. (The allegations
that Applicant bought 78
from Drew are then contrary to the allegations that Applicant
registered the two separate Units in the
same building.
[23]
It is also alleged that the relief
sought by the Applicant amounts to condonation of an illegal act
which the court cannot do, arguing
that the sale of illegal
structures to innocent members of the public cannot be justified. The
illegality arises from the contravention
of the provisions of 2.2 of
Annexure C.
[24]
Rand Water further alleges that
subsequent to the meeting the Applicant submitted subdivisions plans
on or about 24 January 2017
which Rand Water did not approve as it
considered them to be inconsistent with the approved site plans. It
recognises only one
dwelling unit in that residential building and
opposes the sale of the illegal separate Units and seeks that
Applicant rectifies
the contravention. The Applicant submitted the
subdivision plans after the fact and seemingly after further
modifications effected
to consolidate the two units.
Applicant's Reply
[25]
In reply to the Body Corporate
allegations the Applicant briefly highlighted that the erection of
the 10th dwelling exceeded the
9 Units approved in the Site
Development Plan, and not the separation of the second or third
units. The building of the last 7
Units by the developer, following
the completion of the second residential building which comprised of
two Units held in two separate
title deeds constituted a clear
contravention of the Tuscan on Vaal scheme, which allows only 9
Units.
[26]
It is correct to regard the second
residential dwelling as one building/Unit and not two in that regard
only 9 residential dwellings
buildings exist.
[27]
According to Van Heerden, he was not
aware that the reason the developer and the estate agent approached
it to buy Section 3 was
so
that the
developer can comply with the approved plans for the scheme.
At
the time, in 2006 all 10 Units were built. Applicant expressed an
interest to buy 78 provided it would be allowed to break the
common
interior wall and use the two dwellings as one. Consolidation was
discussed only in that context and not for purposes of
registering
the two Units as one. It was also not explained that such
consolidation would enable the developer to comply with the
approved
scheme and if they did, a benefit then could have been negotiated for
the Applicant to the extent that the developer make
a contribution
towards payment of the purchase price and pay for the process of
consolidation. It believes that it was not in the
benefit of the
developer to mention that he was benefitting from the consolidation
and purchase of Drew's Unit.
[28]
He says neither the final sectional
title contract as referred to in the agreement with Mr Drew nor any
other written agreement
between the Applicant and the developer or
the Body Corporate regarding consolidation exists. He argues that the
problem was caused
by the developer by building the 10th Unit and not
because of his failure to register a consolidation. The problem
should therefore
be resolved by the Body Corporate and not by him.
[29]
The Applicant denies that a case has
been made for the order sought by the Body Corporate.
[30]
In respect of the allegations by Rand
Water the Applicant submits that the fact that the scheme contravenes
the provisions of Annexure
"C" in that it sought to
register 10 instead of 9 buildings/ Units does not render the sale of
any of the Units prior
thereto illegal. The approved plans of 9
dwellings include Section 2 and 3 and therefore 2 and 3 are not
illegal. The registration
of Sections 2 and 3 does not constitute
"subdivision" as alleged by Rand Water.
[31]
Furthermore he points out
it is also common cause that the two
Units had already been registered separately prior 2006, which is
since 2002 and
the alleged irregularity obviously caused by the
developer. However seems the Body Corporate and Rand Water
nevertheless expect
the Applicant to rectify the irregularity at its
own expense. Applicant alleges that it seems Mr Drew and the
Applicant were misled
by the developer in 2006, with the knowledge of
van der Merwen when it was not divulged to them that they have
purchased properties
which should not have been registered separately
in order for them to make an informed decision as to how to resolve
the issue.
Instead Applicant was coerced to buy Mr Drew's property so
that he can be made to assume the responsibility of rectifying the
developer's
fault by consolidating the properties at his expense.
[32]
Van Heerden denies that he attended the meeting of 19 June 2016 and
therefore does not know who
are the parties referred to by Rand
Water, what was discussed or decided at the meeting. He also has
never submitted any subdivision
plans and if they do exist he
suspects that they emanated from the developer or the Body Corporate
and the plans must have applied
to the situation before he and Mr
Drew bought the respective properties.
Drew's Affidavit
[33]
In addition to all the disputed facts regarding what transpired
between the Developer, the estate
agent, Mr Drew and the Applicant,
Mr Drew has filed an Affidavit alleging that he and Mrs Anthea Van
Heerden, a director at the
Applicant were approached by the developer
and the Estate Agent, who informed them about Rand Water's approval
of only nine Units
and the developer building of nine freestanding
buildings utilised as residential units but one of the building was
divided into
two units being 7A and 7B. They also indicated that in
order to comply with building permission, Unit 7A and 7B has to be
consolidated
into one Unit. They proposed that either of them buy the
other's Unit and consolidate the two Units into one, which could
easily
be consolidated by breaking down the shared wall between the
Units.
It was also explained that after the consolidation, an
application will have to be made for the properties to be registered
as one
unit.
[34]
Mr Drew says as a consequence a sale agreement was entered into and
the Applicant purchased Unit
7 B and its boat house from him for a
sale price of R2 Million Rand. At all material times before the
conclusion of the agreement
he believed that it was an understanding
by all the parties involved in the transaction that the owner had to
buy out the property
from the other in order to have the property
physically consolidated and the consolidation registered at the Deeds
Office,
so as to comply with the site development plan.
It was
made very clear by the developer that such consolidation was to be
registered and the new owner of the consolidated unit
was to see to
such consolidation.
[35]
Mrs Van Heerden
who is alleged by Mr Drew to have been present
in the meeting, as a director of the Applicant where they were
informed of the non-compliance
of the development and the need for
consolidation filed an affidavit in response to Mr Drew's Affidavit
denying that she was ever present in that meeting.
She alleges
to have had dealings with the developer only in respect of the
transfer of the boat which she was trying to pressurise
him to speed
up.
Outlook on issues to be decided
[36]
The Applicant is seeking in effect an order declaring that the
consequences that flows from ownership
of each of the Units on its
own title are not up for challenge, including the right to sell each
of the Units on its own title.
Either because, inter alia,
[36.1] the scheme was
in compliance in that nine buildings/ residence were sanctioned by
Rand Water and nine were built
in the first phase and registered in
2002, thereafter sold to different buyers from whom the Units were
later bought by the Applicant
in 2005 and 2006. The 10th Unit sought
to be registered in 2006 by the developer was indeed non-compliant,
therefore illegal, alternatively
that;
[36.2] The titles of
the Applicant in 2005 and their predecessors were obtained on an
assumption that the scheme compliant
and legal, the validity of its
registration since then having been never challenged, to be set aside
and/or the subsequent approval
by the municipality of additional
plans in 2006 never having been set aside as invalid, therefore the
question that arises is;
[36.2.1]
whether the titles registered against the Units on an assumption
that
scheme in compliance, are legal?) what is the legitimacy validity of
the acts consequent from the alleged illegal act? (alleged
invalid
separation)
ANALYSIS
Body
Corporate's Opposition
[37] It is
imperative to first address the Body Corporate's opposition and the
order it prays should be
granted in the alternative to Applicant's
declaratory order. I do not understand that to be a cross-
application or that the Body
Corporate has the standing to petition
such an order from the court. It has indicated that it is amenable to
Applicant being granted
the order it seeks if it is made conditional
to the Applicant obtaining an approval from the authorities at its
own costs for the
registration of the 10
th
Unit. It is not
explained why Applicant who was not the developer of the scheme
should be saddled with the scheme's responsibility
to register the
10
th
Unit and the costs thereof, in the process rectifying
the schemes falling foul with Rand Water's approval by exceeding the
9 units.
The developer had the two Units in one building registered
separately in his certificate of registered sectional title prior to
the Applicant acquiring ownership of both Units from the developer's
successors' in title. The Body Corporate subsequently took
over the
responsibilities of the developer when the last of the 9 Units were
sold.
[38]
Remarkably, the Body Corporate conceded in its heads of argument that
it lacks any standing to seek
such a relief. This was however
regrettable since it puts the alleged motive of the Body Corporate's
opposition of the Application
under suspicion.
[39]
It is also significant that the Body
Corporate mentions that in 2006 Rand Water opposed the registration
of the 9
th
building on the basis that the scheme exceeds the number of Units
approved as 9 Units have been registered already, and not that
Rand
Water or the Municipality demanded that the two Units in the second
building be consolidated as they were illegally registered.
However,
the Body Corporate reveals that it was the developer's idea, (who was
looking for a way to get to register the 9
th
building as the 9
th
Unit, even though effectively his 10
th
Unit) that Unit 7A and 78, the two Units in Section 2 and 3 be
consolidated. Hence the developer approached the owners offering
an
incentive for Mr Drew to offer his property for sale to the
Applicant. So the question of consolidation of the Units was never
brought up due to illegal registration having been alleged.
[40] The
words incorporated in the Applicant's and Mr Drew 's Offer to
Purchase (OTP) that reads : "the
final sectional title contract
to be signed by both parties on acceptance hereof are alleged to
indicate the purpose of the agreement
that obligated or burdened the
Applicant to consolidate and register the Units under one title. No
such a. contract was concluded.
The wording on its own does not mean
anything as it does not indicate for what purpose (the terms and
conditions} was the final
contract to be signed. If such intention
was discussed and clear to bot h, one would expect it to be
stipulated in the OTP as a
cond1t1on of sale. Its omission in a
written contract is not explained.
[41]
Furthermore, it does not make sense that not only the Body Corporate
but also Rand Water endeavour
to rely on this alleged undertaking or
fictional obligation, to coerce the Applicant to consolidate his
titles and to challenge
the intended sale of the Units from their
separate titles. The contract was concluded between the Applicant and
Drew . Obviously
the Body Corporate cannot acquire any legal standing
from these meaningless words even if it is agreed that the words
amount to
an undertaking (which it is not}. It is also of interest
that since the conclusion of the contract in 2006, there is no
indication
of the Applicant having been called upon or any steps
taken to hold him to the illusory undertaking until 2015 when
Applicant put
the Units on the market.
[42]
Additionally, the Body Corporate had on
its own proclaimed the separate registration of the two Units in one
building (by the developer}
to have been illegal and to have resulted
in the whole scheme falling foul of the development plan, which it
insisted that such
illegality cannot be perpetuated, and to be the
reason for its opposition of the Applicant's Application. Curiously,
the Body Corporate
was however amenable to let the situation it
alleges to be illegal to be perpetuated in the instance the Applicant
obtains on its
behalf, from the Municipality and Rand Water, at
Applicant's cost , the approval for the Body Corporate to register
the 10th Unit.
This indicates that the Body Corporate is not sincere
in its opposition of the Applicant's Application but more concerned
in getting
its 10th Unit registered, using the situation of the
Applicant's separate titles (which it caused} as a scape goat. It
does not
believe in the authenticity of its opposition. Besides it is
the scheme, by extension the Body Corporate that has been found to
fall foul with the Development Plan by attempting to register a 10
th
Unit and now inexplicably it implores the court to put the
responsibility of obtaining the required approval on the Applicant.
[43]
The Body Corporate's opposition of the
declaratory order is also clearly duplicitous and more self-serving
if considered from the
submissions made in its heads of argument. It
lacks the commitment it prophesies, to enforce the rule of law but
only intends to
attain the registration of its 10
th
Unit. It suggests in its heads of argument that the Applicant may
also apply for the extension of the sectional title scheme, a
responsibility of the Body Corporate that has taken over the control
of the scheme from the developer. So the Body Corporate seeks
to
exonerate itself from falling foul with the law or incurring costs
for getting the 10
th
Unit registered by coercing the Applicant to consolidate its titles
or apply for approval or an extension of scheme. If it is illegal
for
the developer to have registered the two Units separately in 2002,
the Body Corporate unfortunately assumes the responsibility
for
developers' non-compliance. Its challenge must therefore be treated
with utmost circumspection. Applicant has a clear right
emanating
from his ownership to alienate his property from their title. The
Body Corporate has not made a case for the court to
restrict his
competence to dispose (sell and pass ownership) his Units as per
their separate titles.
[44] As
indicated, the Body Corporate carries accountability for both acts
that are criticised and are supposedly
regarded to be non-compliant
by Rand Water. In respect of the deemed undertaking the Body
Corporate lacks the
locus
standi
as
correctly argued by the Applicant as it is not a party thereto. In
Merafong v
Anglogold Ashanti
2017
(2) SA 211
[27) Cameron J acknowledging the conclusion in Oudekraal
that an unlawful act can produce legally effective consequences
stated
that:
"This is because, unless
challenged by the right challenger in the right proceedings, an
unlawful act is not void or non-existent,
but exist as a fact and may
provide the basis for lawful acts pursuant to it. This leads to a
logical corollary, which this court
recognised in
Giant Concerts
that an own-interest litigant may be denied standing even though
the result could be that an unlawful decision stands."
Hence the central conundrum of the
Oudekraal,
that an unlawful act can produce legally effective
consequences, is constitutionally sustainable and indeed necessary.
[45]
The Applicant has also argued that the alleged undertaking is
nevertheless not in writing and
seeks to alienate land, contrary to
the provisions of
s 2
(1) of the
Alienation of Land Act No 68 of 1981
as read with the definitions of "alienate" and "land"
referred to in s 1(1) of the Land Act. I do not think
the argument is
necessary or needs any further consideration.
Rand Water's Opposition
[46]
Rand Water's premise for its contention
is fatally flawed. It alleges that the Applicant's separate
registration of the two units
was in error and that the Applicant
ought to have submitted the plans to it for approval prior to their
registration which it did
not. As pointed out Applicant had nothing
to do with the registration or the so called subdivision of Section 3
into 2 Units. As
a result Rand Water's insistence on that ground that
Applicant is responsible and
therefore has to consolidate
the 2
Units is ill advised.
[47]
Similarly, Rand Water's argument that
the subsequent approval by the Municipality of the modified plans
submitted by the Applicant
in 2006 did not validate the
separation/subdivision as it lacked its endorsement or approval, may
be relevant against the scheme/Body
Corporate but not against the
Applicant since it is
the developer
that applied for approval of the SDP, erected the buildings in the
Tuscany on Vaal
Development Scheme
and was responsible· for the initial registration of the Units
that is alleged to have been erroneous.
The developer also submitted
the modified plans. Ineptly Rand Water does not mention either the
developer or the Body Corp orate,
the body and person legally
responsible for the scheme's compliance with the development plan.
[48]
Rand Water has failed to establish that
the
Applicant had immediate
connection or obligation as regards compliance with the development
plan or consequent registration of the
two Units. At the time
Applicant and Drew's Co bought and took transfer of Unit 7A and 7B,
the alleged illegal or erroneous registration
had already taken place
in 2002 when the certificate of registered sectional title in respect
of the 2 Units were issued to the
developer under separate titles
ST142657/2002 and ST 1 42656/2002.
Coercing
the Applicant to address
the
developer's alleged non-compliance cannot be the right way out, to
afford the scheme to deal with developer's transgression.
[49]
Applicant
and Drew were evidently innocent buyers, following the
Developer's alleged erroneous act. So, if the tit les of their Units
are
regarded as questionable due to their first registration, then
even Drew's sale of Unit 7B to Appellant should be regarded as
illegal
no matter what was envisioned of the transaction. The
illegality cannot be recognised only when the Units are now to be
sold from
Applicant' s titles.
[50]
Challenges are therefore very enormous as, factually, the 2nd
building exists with 2 sectional
titles Units that was from the first
registration of the sectional title development by the developer
registered separately and
thereafter sold and transferred in terms of
those separate titles to his successors in title who later sold to
the Applicant. As
indicated the Units are bonded to separat e banks
who have issued writs of execution . As a result the question of the
alleged
illegality of the initial registration of the Units is not
the only disturbing issue but their subsequent registrations
(consequent
acts}, what is their legal status (what determines their
validity is it their factual existence or rather the validity of
their
initial registration?
[51]
The enquiry to establish what is a justified outcome was expressed in
different terms by Howie
P and Nugent JA in
Oudekraal Estates v
City of Cape Town
2004 (6) SA 222
(SCA), which is whether the
validity of the consequent acts depends on the validity of the
initial act or merely on its factual
existence . Taking into
consideration the tension between the values of legality and that of
certainty. It was pointed out that
the value of certainty would
usually support the view that factual existence is enough, whilst the
rule of law 'dictates that the
coercive power of the state cannot
generally be used against the subject unless the initiating act is
legally valid: see para 37.
This would be more relevant in criminal
matters
[52]
The decision I am requested to pronounce upon as broadly is, whether
the consequences that flow
from owning each of the Units on its own
title can be up for challenge, including the freedom to do as one
pleases with his own
property (like the Applicant or the banks
intention to sell such a property on its own title) as a result of
its first title. It
is also important to recognise that since the
alleged irregular registration in 2002 and or since 2006 when the
alleged non-compliance
became apparent , there was no attempt at all
by either Rand Water or the Body Corporate to get a court order to
set aside the
registration of the Units, that exists as a fact, and
or by Rand Water to contest the subsequent approval by the
Municipality of
the modified plans. Instead separate sales and
transfer of the registration of the Units by the developer to
different owners following
the- alleged erroneous registration were
allowed to happen and recognized without a challenge by both Rand
Water and the Municipality
.
[53]
In
Oudekraal
it was held that until the administrator's
approval (and thus all the consequences of the approval) was set
aside by a court, it
existed in fact and it had legal consequences
that could not simply be overlooked. The court went further and
stated that:
"The proper functioning of a
modern state would considerably be compromised if all administrative
acts could be given effect
to or ignored depending upon the view the
subject too k of the validity of the Act in question. No doubt it was
from this reason
that our law had always recognised that even an
unlawful administration act was capable of producing legally valid
consequences
for so long as the unlawful act was not set aside; see
para 26;
Nzimande v Nzimande
2005 (1) SA 83
(W) para 48.
[54]
It was also enunciated that the rule of law dictates that a public
authority could not justify
a refusal on its part to perform a public
duty by relying, without more, on the invalidity of the originating
administrative act:
It was required to take action to have it set
aside at least. So while a void administrative act is not an act in
law, it is, and
remains an act in fact, and its mere factual
existence may provide the foundation for the legal validity of later
decisions or
acts. In other words an invalid administrative act may,
notwithstanding its non-existence [in law], serve as the basis for
another
perfectly valid decision. Its factual existence, rather than
its invalidity, is the cause of the subsequent act, but that act is
valid since the legal existence of the first act is not a
precondition for the second. It was therefore concluded that if the
validity of consequent acts is dependent on no more than factual
existence of the initial act then the consequent act will have
legal
effect for so long as the initial act is not set aside by a competent
court; see Oudekraal (31] at 243H -244 A/B.
[55]
In
Merafong City v Anglogold Ashanti Ltd
2017 (2) SA 211
(CC)
para 23, it the court also alluded to the fact that so long as an
administrative decision or act has not been set aside, an
organ of
state may not raise its invalidity as a defence to proceedings
against it to enforce that decision. Relying on the invalidity
of an
administrative act as a defence against its enforcement, whilst it
has not been set aside, dubbed a collateral challenge,
was also
censured.
[56]
The process here has gone so far that there are mortgage bonds
registered over the two Units.
Rand Water has done nothing following
the initial registration that it now alleges was irregular but
allowed further transfer registrations
of the two Units to different
owners without challenge barring only the refusal to grant approval
for the registration of the 10th
Unit, six years later and on the
basis that there are 9 Units already registered as in accordance with
its approval and registration
of another Unit will exceed the number
approved.
[57]
It therefore seems the problem of Rand Water is not about the number
of buildings/dwellings or
structures erected in the development but
the disproportion between the registered Units and the number of
buildings/dwellings
approved due to the one building being subdivided
into two Units each held by its own title. Hence the Applicant is
being forced
or coerced to consolidate the two titles. It is however
not correct that the status of the Units affect the integrity of the
development
as the number of structures/buildings built accords with
the number approved. The fact that one building is used as two
residences
does not convert it into two structure or to an additional
building. Rand Water's argument about its statutory obligation to
regulate
and preserve the Vaal River and prevent pollution in the
River Complex is therefore off the mark in this context as the 9
buildings
approved above the 1975 Flood Control Line is what has been
built. I do not see how the Flood Control Line or Rand Water's
Constitutional
obligation to provide clean water is negatively
affected.
[58]
It is therefore significant that the number of buildings that were
erected accord with the number
duly approved by Rand Water to be
constructed on the rezoned land. It seems the alleged non- compliance
is in relation to the ownership
and usage of the building that has
been divided into two resulting in 9 titles being registered
disproportionate to the number
of buildings approved.
[59]
Rand Water as the Body Corporate espouses the same sentiments that
the honourable court cannot
condone an illegality, saying the sale of
Applicant's Unit s on their separate title would be a sale of illegal
structures to innocent
members of the public and cannot be justified.
If the Units are regarded to be illegal structures because the
Developer failed
to conform to the approved plans, it means the Body
Corporate sold illegal structures.
The
Applicant and Drew's ownership would also be tainted with illegality,
which will cascade to the transfer of Drews' Unit to the
Applicant.
However as concluded the registration of the two Units on their
separate titles by the Deeds Office stands as legal
until it has been
set aside by the court of law .
[60]
The Body Corporate now stands in the developer's stead. Applicant's
right or freedom to alienate
cannot be stifled by what is deemed to
have been the developer's transgressions. Indeed the approval of the
Municipality was obtained
after the registration of the Units and
their transfer to the Applicant's predecessor in title and Drew' s Co
was already effected.
Such plans were not submitted to Rand Water for
endorsement, so according to Rand Water the Municipality approval was
insufficient
if not endorsed by it. However it also goes that the
approval was never withdrawn or set aside and therefore stands. So it
is inappropriate
and illogical to allege that the Applicant was
required to have submitted alterations to the plans in terms of
Annexure "C"
to Rand Water prior the separate registration
of the Units.
[61]
Under the circumstances the Applicant as a holder of valid separate
title deeds to the two Units
that it seeks to alienate separately has
made a case for the declaratory order he prays for in hi s not ice of
motion.
[62]
I therefore make the following order:
[1.1] That
the immovable properties of the Applicant described
infra
may
be alienated in terms of the Alienation of Land Act, 1981(Act 68 of
1981) ("the Act") in separate parts;
PART 1
[1.1.1] A unit
consisting of:
(a)
Section no, 2 as shown and more fully
described on Sectional Title Plan No. SS799/2002 in the scheme known
as TUSCANY ON VAAL in
respect of the Land and buildings situated at
Portion 6 of the Farm Northdene 589, Local Authority EMFULENI LOCAL
MUNICIPALITY
of which section the floor area, according to the said
Sectional PLAN IS 168 square metres in extent; and
(b)
an undivided share in the common
property in the scheme apportioned to the said section in accordance
with the participation quota
as endorsed on the said sectional plan.
Held by Deed of Transfer
T145369/06
[1.2] and an
exclusive use area describe as Yard Y2 measuring 355 (THREE HUNDREND
FIFTY FIVE) square metres, being
as such a part of the common
property , comprising the land and the scheme known TUSCANY ON VAAL,
in respect of the land and building
or buildings situate at PORTION 6
OF THE FARM NROTHEDENE 589 LOCAL AUTHORITY EMFULENI LOCAL M
UNICIPALTY, as shown and more fully
described on Section al Plan No>
SS 375/2003 HELD BY DEED OF CESSION SK 0846 35.
PART2
[1.3] A Unit
consisting of:
(a)
Section No. 3 as shown and more fully
described on Sectional Title Plan No> SS799/2002 in the scheme
known as Tuscany on Vaal
in respect of the land and building/
buildings situated at Portion 6 OF THE FARM NORTHEDENE 589,
REGISTRATION DIVISION IQ, PROVINCE
OF GAUTENG, Local Authority:
EMFULENI LOCAL MUNICIPALITY, of which Section the floor area,
according to the said Sectional Plan
is 168 (ONE HUNDREND SIXTY
EIGHT) square metres in extent; and
(b)
an undivided share in the common
property in the scheme apportioned to the said section in accordance
with the participation quota
as endorsed on the said sectional plan;
HELD BY DEED OFTRANSFER NO.
42656/2002 & T153316/2005
1.2
The 3
rd
and 4
th
Respondent to pay the costs of
the Applicant
N
V KHUMALO
JUDGE
OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA
On behalf of
Applicant:
A FF ARNOLDI SC
FJ LABUSCHAGNE
Instructed
by
HILLS INC ATTORNEYS
Tel: 087 944 1800
Fax: 086518 0848 Ref: JB140/14
On
behalf of 3
rd
Respondent:
MARNE STRYDOM
Instructed
by:
MOLENAAR & GRIFFITHS INC
ATTORNEYS
Tel: (012) 3619823
Fax: 012 004 0709
Ref: B KOCH/AT/M9215/MAT9215
On
behalf of 4
th
Respondent : A
MOFOKENG
Instructed
by:
KATAKE ATTORNEYS
C/O RR MABUSELA INC
Tel: 071 697 1033
Fax: 018 786 3941
Ref: TK/KS/INV263-(PTY)
LTD/03-01/2017