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[2019] ZAFSHC 90
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Maluti-a-Phofung Municipality v Bibi Cash & Cash Supermarket (Pty) Ltd and Others (688/2017) [2019] ZAFSHC 90 (6 June 2019)
IN THE HIGH COURT
OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No: 688/2017
In
the matter between:
MALUTI-A-PHOFUNG
MUNICIPALITY
and
BIBI
CASH & CARRY SUPERMARKET
(PTY)
LTD
FREE
STATE DEVELOPMENT
CORPORATION
THE
REGISTRAR OF
DEEDS
THE
MINISTER OF RURAL DEVELOPMENT
AND
LAND REFORM
THE
SURVEYOR GENERAL, FREE STATE
PROVINCE
PLAINTIFF
1
ST
DEFENDANT
2
ND
DEFENDANT
3
RD
DEFENDANT
4
TH
DEFENDANT
5
TH
DEFENDANT
THE
MINISTER FOR AGRICULTURE AND
LAND
REFORM
MEMBER
OF THE EXECUTIVE COUNCIL
FOR
CO-OPERATIVE GOVERNMENT AND
TRADITIONAL
AFFAIRS, FREE STATE
PROVINCE
6
TH
DEFENDANT
7
TH
DEFENDANT
HEARD
ON:
14 MARCH 2019
DELIVERED ON
:
6 JUNE 2019
RAMPAI
ADJP
[1]
These were interlocutory proceedings. They were initiated at the
special instance of 4 of the 7 defendants. The remaining 3
defendants
were dormant, not only in these proceedings but even in the main
action proceedings as well. The primary relief sought
is an
absolution from the instance. The plaintiff opposed the absolution
application.
[2]
The hearing of the main action started on Tuesday, 12 February 2019.
On Friday, 15 February 2019, the plaintiff’s case
was closed.
Thereupon the 4 defendants, at the halfway station, signalled their
common intention to apply for an absolution
from the instance.
I then directed all the parties to file written heads of argument,
determined formal deadlines for the filing
thereof and postponed the
matter to Thursday, 14 March 2019 for the necessary oral argument.
[3]
Come 14 March 2019, I could not entertain the proposed oral argument
as was previously envisaged. There were two reasons for
that
unfortunate turn of events. The first was that I had to preside in
the motion court where the customary inauguration ceremony
of Judge
CJ Musi as the judge president was held. These ceremonial proceedings
endured for almost an hour.
The
second reason was that I was obliged to resume the hearing in a
criminal trial – S v Mabaso & Others at 11:30 that
very
same morning. As a matter of fact, the entire week had been allocated
to that criminal case as far back as 30 October 2018.
Three of the
five counsels involved in that case came from outside the province.
So were four of the accused persons as well as
the key prosecution
witness, Ms Zandile Ngcobo.
[4]
At 10:30 the hearing of the absolution application could not
immediately commence. By 11:00 it became quite apparent that argument
by four counsels would not be presented and completed before 11:30.
In view of all those practical hassles the parties unanimously
agreed
to dispense with the envisaged oral argument and to let me decide the
application on the strength of the written heads of
argument. I am
indebted to the four counsels for their understanding of my
predicament.
[5]
Now let me turn to the task at hand. I think a brief description of
the five parties participating in the action will not be
a bad idea.
5.1. The plaintiff is Maluti-a-Phofung
Municipality, a local municipality with legal personality duly
established as a local government
in terms of the statutes of the
Republic of South Africa
5.2. The first defendant is Bibi Cash
and Carry Supermarket (Pty) Ltd, a private corporate entity with
legal personality and capacity
to sue and to be sued duly established
in terms of the Companies Act , No 61 of 1973.
5.3. The second defendant is the Free
State Development Corporation, a public business enterprise with
legal personality and capacity
to sue and to be sued duly constituted
in terms of the Free State Development Corporation Act, No 6 of 1995.
5.4. The fourth defendant is the
Minister of Rural Development and Land Reform.
5.5. The fifth defendant is the
Surveyor General: Free State Province.
[6]
The following three parties, though cited as the defendants, did not
defend the action:
6.1. The third defendant, namely the
Registrar of Deeds, Free State Province;
6.2. The sixth defendant, namely the
Minister for Agriculture and Land Affairs;
6.3. The seventh defendant, the Member
of the Executive Council for Co-operative Government and Traditional
Affairs, Free State
Province.
[7]
The historical background of events which precipitated the current
dispute is essential.
The
township of Phuthaditjhaba, which includes erf 9091, was initially
situated in the self-governing territory of the Qwa-Qwa Homeland
Government (QHG) as contemplated and declared under section 26 of the
Self-Governing Territories Constitution Act, No 21 of 1971,
read with
Proclamation R293 of 1962 (“Proclamation R293”)
At
all relevant times prior to 7 July 1988, the ownership of erf 9091
vested in the QHG in terms of the provisions of section 36(1)
of the
Self-Governing Territories Constitution Act, No 21 of 1971.
[8]
On 15 June 1988 erf 9091 was sold by the QHG to QwaQwa Development
Corporation (QDC). The transaction was facilitated by the
Department
of Development Aid.
On
16 June 1988, the office of the QHG Service approved the transfer of
the property to QDC.
[9]
Pursuant to the above transaction, a deed of grant 333/88/259 QQ was
issued to QDC on 17 July 1988.
The
registration of erf 9091 and the subsequent transfer to QDC have been
recorded in the land register as provided for in Proclamation
R293.
[10]
On 24 January 1990, the Director General: Department of Development
Aid approved the subdivision of erf 9091 into three portions,
being
portion 1, portion 2, and portion 3.
[11]
On or about 14 September 2001, Maluti-A-Phofung Local Municipality
(MAP) and the Free State Government (FSG) concluded
a written
deed of donation in terms of which part of the Farm Witsieshoek North
1922, situated in the district of Harrismith, in
the province of the
Free State, was donated to the plaintiff (MAP). Certain
pieces of farmland, as fully specified
and listed on pages 1-10 of
the annexure to the deed of donation, were excluded from the
donation.
[11]
On 16 October 2002, the Registrar of Deeds transferred various
immovable properties from the FSG to the plaintiff pursuant
to the
above deed of donation.
[12]
On 22 February 2006, the Surveyor General: FSP approved subdivision
of erf 9091 into portions 5,6 and 7 in accordance with
diagrams LG
No. 100/2006, LG No. 103/2006 and LG No. 104/2006.
[13]
On 13 March 2013 the Registrar of Deeds: FSP registered an
endorsement against the title deed regarding the Township of
Phuthaditjhaba-A.
Through the endorsement, it was recorded that the
township has been established in terms of section 9(2) of Act 112 of
1991. The
endorsement was embodied in a separate document labelled
“introductory folio.”
On
9 December 2014, the Registrar of Deeds made an endorsement to the
1988 deed of grant, reflecting the change of the name of the
transferee from Qwa-Qwa Development Corporation to Free State
Development Corporation.
[14]
On 9 December 2014 the third defendant, the Registrar of Deeds,
issued a Certificate of Registered Title in favour of the second
defendant, FDC in respect of Portion 5 of erf 9091. The deed in
question was evidenced by Certificate No.T4075/2014. The certificate
was issued in terms of
section 43
of the
Deeds Registries Act 47 of
1937
. That first transaction represented the first partial alienation
of erf 9091.
Still
on 9 December 2014 the third defendant issued a further Certificate
of Registered Title in favour of the second defendant
in respect of
portion 6 of erf 9091. The deed in question was evidenced by
Certificate No.T14076/2014. The certificate was also
issued in terms
of
section 43
Act No. 47 of 1937. That particular transaction
represented the second partial alienation of erf 9091.
[15]
On 24 February 2016, the second defendant, FDC concluded a written
deed of sale with the first defendant, Bibi Cash and Carry
Supermarket (BCS) in terms of which the second defendant sold
portions 5 and 6 of erf 9091 to the first defendant.
[16]
On 3 March 2016, the first defendant applied to this court for an
interdict against, inter alia, the plaintiff. The purpose
of the
interdictory relief sought was to prohibit and to restrain the
plaintiff from proceeding with certain construction works
on portions
5 and 6 of erf 9091.
[17]
On 23 June 2016, the Registrar of Deeds transferred portion 6 of erf
9091 from the second defendant, FDC, to the first defendant,
BCS, in
terms of deed of transfer T7699/2016.
On
24 June 2016, the Registrar of Deeds transferred portion 5 of erf
9091 from the second defendant, FDC, to the first defendant,
BCS in
terms of deed of transfer T7859/2016.
[18]
On 8 December 2016, by agreement between the plaintiff and the first
defendant, the court issued an order directing the plaintiff
to
institute action against all concerned on or before 10 February 2017.
The whole idea underlying the mutual agreement was to
have
registration of the properties in dispute cancelled in order to have
ownership thereof determined. At the heart of the dispute
was the
ownership of portions 5 and 6 of erf 9091.
[19]
The plaintiff issued summons in this matter out of this court against
the defendants on 10 February 2017, pursuant to the above
order of
the court.
[20]
The relief sought by the plaintiff in the main action proceedings is,
in essence, the nullification of the purported transfer
of parts of
erf 9091 by QHGQ to QDC. The relief is sought on the ground
that the 1988 deed of grant, which underlined such
transfer by QHG
and its ultimate registration by the third defendant, the Registrar
of Deeds, in favour of the second defendant,
QDC was null and void
ab
initio.
The erstwhile QDC is the forerunner of the current
FDC.
[21]
The essence of the defence raised by the defendants in the main
action proceedings is that the purported transfer of erf 9091
by the
FSG to MAP Municipality, the plaintiff, and its ultimate registration
by the third defendant, the Registrar of Deeds, was
legally an
exercise in futility. The foundation of their defence is that the FSG
had no right in law to transfer ownership of erf
9091 to MAP
Municipality; that such real right of ownership still vested in the
FDC at the time of the purported transfer, being
16 October 2002 and
that MAP Municipality, therefore, never became the lawfully
registered owner of erf 9091 in terms of the deed
of transfer
T25155/2002 dated 16 of October 2002.
[22]
The cardinal question in the main case is in whom did ownership of
the piece of land, technically known as erf 9091 Witsieshoek
North
Farm, vest as at 16 October 2002 when the plaintiff, MAP Municipality
was issued with the title deed by virtue of the deed
of transfer.
[23]
At this juncture the question in these interlocutory proceedings is
different. When a plaintiff’s case is closed at a
halfway
station but the defendant’s case is not, the cardinal question
is whether the plaintiff has, by way of evidence adduced,
crossed the
low threshold of proof that the law sets at this midstream point of
the proceedings.
[24]
A cursory exposition of some principles of law applicable to
applications for absolution from the instance appears necessary.
In
Claude Neon Lights (SA) Ltd v Daniel
1976 (4) SA 403
(A)
at
409 G-H Miller AJA laid down the tests to be applied to an
application for absolution. He said:
“
When absolution
from the instance is sought at the close of the plaintiff’s
case,
the test to be applied is
not
whether the evidence led by the plaintiff establishes what would
finally be required to be established,
but
whether there is evidence upon which a court, applying its mind
reasonably to such evidence, could or might
but
(not should or ought to)
find for the
plaintiff
.”
(my
emphasis)
[25]
In
Gordon Lloyd Page and Associates v Rivera and another
2001 (1)
SA 88
(SCA)
para [2] the court, per Harms JA, approved the
principle as laid down in
Claude Neon
,
supra
. The court
added that the absolution principle implies that a plaintiff is to
make out a
prima facie
case against the defendant; that such a
prima facie
case entails that there be evidence adduced
relating to all the basic elements of the claim in order to survive
the absolution
attack; that without such
prima facie
evidence
no court could correctly find for the plaintiff -
Marine Trade
Insurance Co Ltd v Van der Schyff
1972
(1) SA 26
(A) at
37G-38H
Still
in Gordon,
supra
, Harms JA went further to say:
“
Having said
this, absolution at the end of the plaintiff’s case,
in
the ordinary course of events
,
will
nevertheless be granted sparingly
but
when the occasion arises, a court should order it in the interest of
justice.”
(my
emphasis)
[26]
In
De Klerk v ABSA Bank Limited and Others
2003 (4) SA 315
(SCA)
para [10]
the court, per Schutz JA
said:
“
Counsel
who
applies for absolution from the instance at the end of the
plaintiff’s case
takes a risk,
even though the plaintiff’s case may be
weak
….
The question in this case is whether the plaintiff has crossed the
low threshold of proof that the law sets the plaintiff’s
case
is closed but the defendants is not.”
(my
emphasis)
[27]
In
McCarthy v Absa Bank Limited
2010 (2) SA 321
(SCA)
para
[21]
the court, per Nugent JA
reaffirmed
the principle that when absolution from the instance is sort in terms
of rule 39(6) at the close of the plaintiff’s
case, the test to
be applied is not whether the evidence presented by the plaintiff
established what would finally be required
to be established by the
plaintiff, but whether there is evidence upon which a court,
reasonably applying its mind to such evidence,
could or might find
for the plaintiff. See also
Hanger Regal and Another
2015 (3) SA
115
(FB) para [7-9]
per Murray, AJ.
[28]
In deciding whether to grant or refuse absolution at the close of the
plaintiff’s case, it must be ordinarily assumed
that the
evidence adduced by or on behalf of the plaintiff is true unless very
special considerations dictate otherwise. Consequently,
questions of
credibility are not ordinarily supposed to be raised by the defendant
and, if they are raised, are not ordinarily
supposed to be
entertained by the trial court at this midstream stage of the
proceedings, unless it is undoubtedly clear that the
evidence adduced
by the plaintiff or witness for the plaintiff is untrue. See
South Coast Furnishers CC v Secprop Investments (Pty) Ltd
2012 (3)
Sa 431
(KZP) par [15]. See also Atlantic Continental Assurance
Co of SA v Vermaak
1973 (2) SA 525
(E)
at
527C-D
.
[29]
The high watermark of the argument raised by the defendants is
premised on the contentions that the FSG was not the lawful
owner of
erf 9091; that the FSG could not, therefore, transfer ownership of
that piece of land to the plaintiff, MAP Municipality;
that the
plaintiff as the transferee could not, therefore, have lawfully
acquired the real right of ownership from the FSG as the
transferor;
that in view of all these legal hassles, the purported registration
of the relevant erven in the name of the plaintiff
was a serious
mistake and that the plaintiff never juridically became a lawfully
registered owner of the immovable property in
question.
[30]
The evidence, concerning the relevant facts and circumstances
relative to the registration of the erven in question namely
10029,
10030 and 10031 in the name of the plaintiff, was given by Mr M.S
Nyembe. His current designation is: Director: Human Settlement,
Spatial Development, Capital planning and Traditional Affairs under
the auspices of MAP.
[30]
He gave
viva voce
evidence which, among others, traversed
historic correspondence of the current subject matter. The relevant
correspondence was
written by the attorney on behalf of the 4
th
and 5
th
defendants. The same attorney was the conveyancer
who actually passed the transfer of the erven in question from the
FSG to MAP.
[31]
Moreover, the witness also testified about the relevant historic
correspondence written by a certain BJ Steenkamp on behalf
of the
Surveyor General: FSG, the 5
th
defendant. Such historic
correspondence was disclosed, not only by the plaintiff, but also by
the first defendant. Probably the
first defendant, BCS, obtained such
correspondence from the second defendant, FDC. How can the
unchallenged evidence adduced on
behalf of the plaintiff shows that
the 4
th
and 5
th
defendants were instrumental to
the transfer of the properties to the plaintiff, way back in 2002.
[32]
The following facts are either common cause or facts which though
denied, could not be seriously disputed.
·
The first defendant relies on a deed of grant number TG 333/1988 QQ
registered on 7 July 1988, on the strength of which
erf 9091,
Phuthaditjhaba-A was transferred to the QDC by the QHG.
·
Such type of ownership was referred to in
Western Cape Provincial
Government and Others In Re: DVB Behuising (Pty) Ltd v North West
Provincial Government and Another
[2000] ZACC 2
;
2001 (1) SA 500
(CC)
by
Goldstone J, O’Reagan J and Sachs J as an insecure form of
ownership as opposed to a secure form of outright
ownership.
[33]
Later on erf 9091 was surveyed, measured and subdivided into three
portions. The subdivisions were described as portions 1/9091,
2/9091
and 3/9091.
See
p14-19 first defendant’s trial bundle
Those
three portions formed part and parcel of Farm Witsieshoek North 1922
District Harrismith measuring in extent 432,2625ha. Before
the
subdivision, the particular piece of the farm was described as
portion 21. It was only that particular portion of the farm
which was
subdivided into three portions.
[34]
On 11 February 1999 the entire Farm Witsieshoek North 1922 was
registered as an unalienated property of the State. The Certificate
of Registered State Title was then issued under Title Deed 2523/1999.
That particular deed of transfer still stands to this day.
See
p55 – 58 first defendant’s trial bundle
[35]
On 20 September 200, just over seven months later, Portion 21 of Farm
Witsieshoek North 1922 District Harrismith in extent
432,2625ha was
surveyed, measured and laid out in General Plan LG889/2000. The plan
had been previously approved by both the Surveyor
General as well as
the Director General: FSP to establish Phuthaditjhaba-A Township. The
approval of the plan by such senior public
functionaries in a way
provided some kind of quality assurance. All this was done in
accordance with the provisions of the Upgrading
of Land Tenure Rights
Act 112 of 1991.
The
endorsement whereby the township was established, is appended to the
deed of transfer, labelled as an introductory folio, signed
by the
Registrar of Deeds and dated 13 March 2003.
[36]
On 16 October 2002 certain fixed properties owned by the State were
alienated. Now Portion 21 of Farm Witsieshoek North
1922
District Harrismith was among the properties which were held under
Title Deed 2532/ 1999 all of which were transferred and
registered in
the name of the plaintiff.
The
Deed of Title, T025155/2002, was discovered by the first defendant as
well as the plaintiff.
See
p66 - 82 first defendant’s trial bundle.
See
p8 - 14 plaintiff’s trial bundle.
That
transfer too has never been cancelled.
[37]
Among others, the approved General Plan 889/2000 included three
erven. Those three properties were described as erven 10029,
10030
and 10031. Before the year 2000 the same properties were described as
portions 1/9091, 2/9091 and 3/9091of the erstwhile
undivided portion
21 of Farm Witsieshoek North 1922 District Harrismith in extent
measuring 432,2625ha.
[38]
At this juncture, I have to pause. It is imperative that l express
one significant point of view. Given the above undisputed
historical
backdrop coupled with the relevant statutory provisions, it would
appear that the plaintiff was the registered owner
of the properties
and that it has always been at all times material to the current
dispute. It further appears that this will probably
remain the state
of affairs until the properties are either sold or until they are
donated, transferred and their ownership passed
to a third, in other
words, to another person or entity. Whether sold or donated, the
plaintiff will have to be instrumental to
the transaction to alienate
the properties. This is the one side of the coin.
In
the event of the plaintiff exercising none of the two options, the
court may be approached to have the earlier transfers of the
properties to the plaintiff and their registrations in its name
nullified and set aside. This then is the other side of the coin.
Unless and until any of those two possible events occurs, the
plaintiff will remain the lawfully registered owner of the
properties.
[39]
The views that I have expressed in the preceding paragraph, have
their legal foundation in
sec 6(1)
of the
Deeds Registries Act 47 of
1937
. The heading of the section captures the gist of the matter
quite well. It reads: “Registered deeds not to be cancelled
except
upon an order of court.” It is prohibitive.
[40]
The subsection provides as follows:
(1)
Save as is provided in this Act or any other law no registered deed
of grant, deed of transfer, certificate of title, or other
deed
conferring or conveying title to land or any real right in land other
than a mortgage bond, and no cession of any registered
bond not made
as security,
shall be cancelled by a registrar except upon an
order of court.”
(my
emphasis)
[41]
It is undisputed that the deed of donation, by virtue of which the
properties were transferred to MAP and the corresponding
registrations effected, still stands. No order of court has been
sought and obtained to have it cancelled. The law is clear. No
registered deed conferring title to land or any real right in land
can be cancelled except upon an order of court. The power
to
cancel real rights in land is the exclusive preserve of a competent
court. No registrar of deeds can arrogate such power unto
himself or
herself. To the extent that the actions of the Registrar of Deeds, or
the Surveyor General or both, subsequent to the
transfers and
registrations in favour of MAP were calculated to circumvent the
section in order to divest the plaintiff of such
real rights in land,
they were unlawful and of no force and effect whatsoever.
[42]
The provisions of sec 6(2)
Deeds Registries Act 47 of 1937
are also
significant to the dispute. The subsection reads:
“
Upon the cancellation of any
deed conferring or conveying title to land or any real right in land
other than a mortgage bond as
provided for in subsection (1), the
deed under which the land or such real right in land was held
immediately prior to the registration
of the deed which is cancelled,
shall be revived to the extent of such cancellation, and the
registrar shall cancel the relevant
endorsement thereon evidencing
the registration of the cancelled deed.”
[43]
Let me assume firstly, that the properties were erroneously
transferred to the plaintiff, as the defendants contend, which
contention the plaintiff denies, and that the court subsequently
cancelled such deed of title. The section makes it abundantly
clear
that, even in the event of a mistaken transfer of real rights in
land, the deed by virtue of which the real right was held,
immediately prior to the mistaken registration of the deed that has
been cancelled by the court,
shall
be revived by the
cancellation.
In other words, the cancellation will not have the
effect of conferring upon the second defendant (FDC) the real rights
taken away
from the plaintiff (MAP) and thus validate their transfer
to the first defendant (BCS).
[44]
As I have earlier alluded, the transfer of the properties to the
plaintiff was registered. It is our law and it has always
been our
law that deeds attested or executed by a registrar of deeds are
deemed to be registered upon the actual affixing of the
registrar’s
signature thereon. Deeds and supporting documents lodged with the
registrar for registration are deemed to be
registered when the deeds
registry endorsement in respect of the registration thereof is signed
- Section 13 of the Deeds Registry
Act 47 of 1937.
The
plaintiff took transfer of the properties years ago. Notwithstanding
threats by the second defendant to challenge the validity
of such
transfers and the related registrations, nothing came out of those
threats. They remained empty threats. As of now,
no
counterclaim by any of the defendants pends for the cancellation of
the alleged erroneous transfers. It will also be readily
appreciated
that, apart from the glaring absence of a counterclaim, no
declaratory order of any sort is sought by any of the defendants.
[45]
It is an undisputed fact that, at some stage during the year 2004,
the second defendant became aware of the registration of
the
properties in the name of the plaintiff. Such constructive knowledge
notwithstanding, the second defendant sat back, relaxed
and did
nothing about it until now. An inordinately long period of almost 12
years has gone by since then.
[46]
The second defendant reckons that it, the FDC, is the outright
successor in title of the dissolved QDC by virtue of the provisions
of the Free State Development Corporation Act 6 of 1995.
We
need to take a closer look at Sec 23 Free State Development
Corporation Act 6 of 1995. It reads as follows;
“
23
Repeal of laws and saving
(1) Subject to the
provisions of subsections (2) and (3), the laws referred to in the
Schedule are hereby repealed.
(2) At the
commencement of this Act -
(a) all assets,
liabilities, rights and obligations of a dissolved agency shall vest
in the Corporation: Provided that the responsible
Member may by
notice in the Provincial Gazette further regulate matters relating to
the assets, liabilities, rights and obligations
of the Corporation,
including the transfer thereof to any entity, person or body:
Provided further that such administrative records
and other documents
of a dissolved agency as may be determined by the responsible Member
shall be transferred to the Corporation,
or such entity, person or
body;”
[47]
Obviously the second defendant’s succession claim hinges on the
main clause of ss 2(a). The main clause states that at
the
commencement of this particular legislation, all assets, liabilities,
obligations and rights of the dissolved QDC shall vest
in the FDC.
However, it does not all end there. The section goes further than
that. It contains two important provisos.
[48]
The first proviso is that the responsible Member of the Executive
Council: FSG may regulate matters relative to the assets,
liabilities, obligations and rights of the FDC and that the
regulation of these matters includes the transfer thereof from the
FDC to any other entity, person or body. Put differently, the MEC and
not the FDC itself has the final say as regards the transfer
of
assets, liabilities, obligations and rights of the FDC.
[49]
The second proviso states that such administrative records and other
documents of the dissolved QDC, as may be determined by
the
responsible MEC, shall be transferred from QDC to any other entity,
person or body including but certainly not limited to FDC.
It is
significant to point out that the second defendant has not discovered
such administrative records and other official documents
on which it
relies in support of its succession claim.
[50]
I have to mention that the first defendant’s trial bundle
contains no such records or documents that
prima facie
underscore its alleged succession claim. He who alleges has to prove.
That is the basic principle of the law of evidence. The failure
of
the first defendant to discover such records and documents for the
purpose of cross-examination drastically watered down its
succession
claim. Moreover, the decision of the responsible MEC to transfer the
properties to MAP Local Municipality by itself
strongly militates
against the first defendant’s claim. Even if it is accepted
that the four crucial matters, being the assets,
liabilities,
obligations of the dissolved QDC, had automatically vested in
the FDC in 1995 by operation of law, the subsequent
conduct of the
responsible MEC strongly suggests that in 1999 the responsible MEC
probably transferred those four crucial
matters from FDC to
MAP.
[51]
All along the second defendant was discontent about the 2002 transfer
of the properties to the plaintiff and the registration
of the real
rights in those pieces of land in the name of the plaintiff.
Aggrieved by those legal transactions, FDC caused a letter
to be
addressed to the fifth defendant. It sought to have the Deed of
Transfer 25155/2002 immediately cancelled. Through its attorneys
it
threatened to seek a
mandamus
against the Surveyor
General unless the Surveyor General: FSP instructed the State
Attorney: FSP without delay to cancel the deed
of transfer whereby
the properties were transferred to the plaintiff, MAP. It is
significant to bear in mind that the letter in
question was dated 9
September 2004, some 11.5 years back before the first defendant, with
the ostensible backing of the second
defendant, applied to this court
in an attempt to interdict the plaintiff from developing the
properties.
[52]
From the above, it follows that the second defendant appreciated and
anticipated, quite correctly so, that in order to have
the alleged
mistaken transfer of the properties to the plaintiff cancelled, set
aside or rectified an application to court necessarily
had to be
made. The power of the high court to dispense with such remedies is
envisaged in Sec 6,
supra.
[53]
In response to the above letter of the second defendant, the State
Attorney assured a certain Mr Steenkamp, the second defendant’s
attorney, that should the second defendant apply to court, as
intimated in its letter, to have the deed of transfer rectified,
the
State Attorney would advise the Survey General and the Registrar of
Deeds to abide by the court order. Again it is significant
to note
that the State Attorney replied on the same day, 9 September 2004.
Yet the second defendant took its time to approach this
court.
Certain
incorrect assumptions concerning the history of the properties were
made by the State Attorney. However, those did not really
affect the
substantive merits of the dispute. Therefore, I deem it unnecessary
to dwell on them here.
[54]
The plaintiff, as earlier indicated, acquired the properties by
virtue of a deed of donation. The deed was fully described
as the
Deed of Donation
Inter Vivos
. The immovable property,
Farm Witsieshoek North 1922, District Harrismith was partially
donated to the plaintiff excluding
properties listed on pages
1-10 of the annexures attached to the deed of transfer.
[55]
The Surveyor General was of the opinion that the deed of donation did
not indicate who owned erf 9091. So did the State Attorney.
However,
the annexure to the above deed of donation proved that their opinions
were incorrect.
Firstly,
erf 9091 no longer existed in 2004. By then it had already been
subdivided and renumbered. By then its subdivisions were
known as
erven 10029, 10030 and 10031 on Mr Steenkamp’s own version as
evidenced by the undisputed correspondence already
alluded to.
Secondly,
page 5 of the annexure to the deed of donation deals with FDC
Properties. The properties so explicitly identified and
scheduled
were specifically excluded from the donation in accordance with
Schedule 6 of the 1996 RSA Constitution. Among
those
constitutional exclusions was
erf 10029.
[56]
It logically follows that of the three erven mentioned above, only
one was transferred to FDC. The remaining two, erven 10030
and 10031
were not. Therefore, they, unlike erf 10029, remained as unalienated
properties of the State. As such they were not excluded
from the
donation. Consequently they were legitimately transferred to MAP.
This puts to rest the submission of the defendants that
owing to some
kind of an error, it was not known that erf 10029 belonged to FDC. It
did and it was so recorded. Because it belonged
to FDC, it was not
donated to MAP.
[57]
The aforesaid excluded property, in other words erf 10029, was also
transferred to the plaintiff by virtue of a negotiated
agreement
between the plaintiff, MAP, and the second defendant, FDC. I
have to stress that neither erf 10030 nor erf 10031
were excluded
from the donation. Since they were not identified and mentioned in
Schedule 6 to the 1996 RSA Constitution as erf
10029 was, they were
not listed as the properties of the FDC. Had these two properties
also been regarded as property belonging
to FDC at the time the deed
of donation was executed, they too would have been pertinently listed
along with their twin property,
namely: erf 10029.
[58]
The second defendant will have to explain why only erf 10029 was
listed as the property of FDC but the other two not so listed
if all
three of them belonged to FDC. The second defendant has not
discovered any administrative records or documents to beef up
its
contention that all three belong to FDC. In view of the omission,
oral evidence as to how FDC acquired full ownership of erven
10030
and 10031 would be of vital importance in the proper adjudication of
the main dispute. It would appear that during the upgrading
of the
land tenure rights FDC did not acquire the alleged real rights in
respect of the two properties.
[59]
I deem it expedient to recap the position thus far. It is common
cause now that the three properties were transferred to the
plaintiff; that the transfer and the registration are currently
extant; that such transfer and registration can be cancelled by
the
registrar of deeds only on the strength of a court order and that no
court order was sought and obtained to have the transfer
and
registration cancelled.
Consequently,
it has to be accepted that in the absence of a court order the real
rights in the immovable properties remain vested
in the plaintiff.
Therefore, unless a competent court cancels, rectifies or declares
the second defendant to be the lawful
owner of the properties the
status quo
deserves to be respected and protected by law. Lest
we forget, the properties concerned are erven 10029, 10030 and 10031.
[60]
The defendants reckoned that the solution to the present impasse
entailed bypassing the cancelling of the deed of transfer
registered
in favour of the plaintiff as Sec 6(1) requires; amending the General
Plan by abolishing or discarding the numerical
identities of the
properties, to wit erven 10029, 10030 and 10031; by consolidating the
three properties into a single undivided
property; by renumbering it
once again as erf 9091as was previously the case and the upgrading of
the second defendant’s
deed of grant to deed of title.
The latter is a secure form of ownership. The former is an insecure
form of ownership.
[61]
The above proposal as a possible resolution of the problem can be
gleaned from two historical sources.
The
first source is a letter from the State Attorney to the Surveyor
General dated 7 September 2005.
See
p90 first defendant’s trial bundle.
The
second source is a letter from the State Attorney to the second
defendant’s attorneys, namely: Messrs Mthembu & Van
Vuuren
dated 19 June 2006.
See
p92 first defendant’s trial bundle.
I
deem it unnecessary to extract passages from the above two letters.
Both letters by one Ms CE Cawood contained lamentable misgivings
as
regards the correct legal position.
[62]
The proposed action plan was ill-conceived because it would not bring
about the necessary cancellation in terms of Sec 6(1)
or revocation
of the real rights of ownership the plaintiff had acquired. The
registration of the properties in the name of the
plaintiff occurred
in terms of an approved Diagram and General Plan.
The
Surveyor General may only cancel or amend a General Plans in
accordance with the law. That law - the principle of legality -
includes the provisions of Sec 6
Deeds Registries Act 47 of 1937
.
[63]
The provisions of
Sec 22
of the
Land Survey Act 8 of 1997
though
applicable, did not authorise actions taken by the Survey General.
Those actions could not divest the plaintiff of its rights
of
ownership. Those rights were and are still protected by law. The
Surveyor General, the fifth defendant, did not follow the
requirements of the section on which the defendants apparently rely.
The section concerns land represented by an incorrect diagram.
In the
present matter, there is no insinuation, let alone an averment, that
the land or property in dispute is incorrectly represented
in the
official diagram. Accordingly the section relied upon by the
defendants does not apply.
[64]
The properties were registered in the name of the plaintiff. The
State Attorney knew it. Mr Steenkamp of the office of the
Surveyor
General also knew it. Their knowledge notwithstanding, no notice was
given to the plaintiff about the invasive actions
the Surveyor
General intended taking. Without the knowledge of the plaintiff, the
land was renumbered, new diagrams were framed
and the land was
upgraded and the land in question, erf 909, was subdivided. It
eventually became erven 10029, 10030 and 10031.
The plaintiff was
unaware of the unfolding drama concerning its property. During the
course of his oral evidence, Mr Nyembe repeatedly
said the plaintiff
was ambushed. I think the fifth defendant has some explaining to do.
[65]
As regards the second defendant, the only issue is that it has been
divested of its ownership. The divestment occurred when
the land was
transferred to and registered in the name of the plaintiff. Its
remedy was to approach the court in terms of
Sec 6
, as it initially
threatened to do.
[66]
The plaintiff commenced with the improvement of its property. The
improvement entailed the development of a taxi rank thereon.
It will
be recalled that the property was registered in its name way back in
2002. It would appear that the plaintiff’s taxi
rank project
precipitated the purported withdrawal of the General Plan 889/2002 as
well as the purported framing of the General
Plan LG 100/2006 to
104/2006. Subsequent to those changes, Mr Steenkamp embarked upon
several invalid processes. The original deed
of grant was varied in
certain respects.
Firstly
the name of the transferee was changed from Qwa-Qwa Development
Corporation (QDC) to Free State development Corporation
(FDC). The
change was then endorsed on the original deed of grant on 9 December
2014.
Secondly,
an endorsement was effected showing that the property had been
divided into portions 4 - 7. The deed of grant was so endorsed
on 9
December 2014
Thirdly,
Certificates of Registered Title were then issued to the second
defendant in respect of two portions 4 - 7 of the newly
framed erf
9091.The certificates were also issued on 9 December 2014. It is not
clear why the certificates were issued. Whatever
the underlying
reason could have been the issue, could not cancel the plaintiff’s
real rights of ownership.
[67]
On the strength of the above new subdivision and renumbering of the
property, the second defendant purported to sell the property
to the
first defendant. FDC did that with the full knowledge that the
property was registered in the name of MAP. Similarly, BCS
took the
purported transfer of the property from FDC with the full knowledge
that there was a pending dispute in connection with
the ownership of
the property. The expectations were that the dispute between FDC and
MAP would be ventilated in this court under
application number
1040/2016. The application of FDC was contested by MAP. The relief
sought by the latter by way of a counter-application
was twofold. MAP
successfully applied that the main application be stayed
sine die
pending the outcome of a declaratory process to determine the
question of ownership of the property in dispute. The current action
proceedings stemmed from that order.
[68]
Once again l deem expedient to stress a vital point in order to clear
up possible misunderstanding. By virtue of upgrading,
the property
was transferred to the State. None of the defendants before me has
put up a defence in their pleadings or in any documentary
evidence in
their trial bundles to show or to even suggest that the transfer of
the property to the State was invalid or irregular.
The property
formed part of the Farm Witsieshoek North 1922. Ownership of that
particular farm vested in the State. It is important
to understand
this. The State then donated the property to the plaintiff, MAP,
subject to the terms and conditions as stated in
the deed of donation
inter vivos
. Neither the second defendant nor its
predecessor ever became the holder of outright ownership rights in
respect of the property.
Each of them became nothing more than the
holder of limited ownership rights. The foundation of their rights
was not a deed of
title but rather a deed of grant. There is a huge
difference. Those limited ownership rights were never subsequently
upgraded to
comprehensive ownership rights.
[69]
It must be readily appreciated that all the re-layouts done by Mr
Steenkamp during 2002, 2004 and 2006 were done subsequent
to the
transfer of the property to and its registration in the name of the
plaintiff. In the circumstances, the second defendant
could not pass
transfer of the property to the first defendant as it purported to do
since the property was not registered in its
name. The salient
principle of the law of property is that one cannot transfer greater
rights than he has. That principle
applies to the facts of the
instant matter.
[70]
In view of the above the purported transfer from FDC to BCS stands to
be nullified. The court has inherent power, implicit
in
Sec 6
of the
Deeds Registries Act 47 of 1937
, to order cancellation of real rights
registered in violation of the principle of legality.
See:
Ex Parte: Raulstone NO
1959 (4) SA 606
(N)
See
also
Indurjith v Naidoo
1973 (1) SA 104
(D)
[71]
The contravention of
Sec 6
Act No 47 of 1937 epitomised the violation
of the principle of legality. However, it did not all end there. The
actions of the
Surveyor General were also seriously tarnished in
another manner. His re-layouts and subdivisions were also done in
contravention
of the empowering or authorising legislation. He gave
no notice to the plaintiff of his intention do re-layouts and
subdivision
of the property. He was legally obliged to do so either
in terms of the
Land Survey Act 8 of 1997
or the Bloemfontein
Township Ordinance. The ordinance applies throughout the Free State
Province. Worst still, the prescribed public
notices were not even
published as the law requires. At this midway juncture of the
hearing, no contrary evidence pends before
me.
Moreover,
it does not appear that the necessary consent, as required by Sec
37(2) and (3)
Land Survey Act, No 8 of 1997
,
for the subdivision was done by Mr Steenkamp.
[72]
The registration of a new General Plan by Mr Steenkamp, in and by
itself, could not and did not bring about a change in the
ownership
of the property. Only a court order could do so.
See:
EM & EM Enginering (Pty) Ltd v Kwa-Dukuza Municipality and 2
Others (2015) ZAKD ZHC 55
The
Certificate of Registered Title could not cancel the plaintiff’s
ownership.
[73]
The primary defence of the defendants appears to be wanting. They
primarily dispute the authority of the FSG to transfer the
property.
The argument does not really assist them. It does not constitute a
substantive defence to the relief sought by the plaintiff.
The
plaintiff’s case is that the property was transferred and
registered in its name; that such registration has never been
cancelled by a court and that no counter-claim for such relief is
currently pending. All this is common cause.
It
appears to me that the FSG, as the responsible organ of the State,
had the requisite intention to transfer its real rights of
ownership
in the properties; that MAP had the corresponding intention to
acquire such real rights of ownership in the properties
and that the
FSG ultimately delivered the properties to MAP through registration
in the provincial deeds registry.
[74]
I deem it necessary to deal with the second defendant’s
predecessor, QHG. The transfer from QHG to QDC is legally irrelevant
in the light of what I have said earlier on. In passing, l
point out that no certificate issued by a competent authority
as
envisaged in
Sec 28
of Schedule 6 to the RSA Constitution was
produced. At any rate, such a certificate would not have resolved the
problem of the
defendants in any event. The fact of the matter is
that the property was lawfully transferred to and registered in the
name of
the plaintiff,
cadit quaestio.
[75]
It has to be borne in mind also that the QHG unlike the TBVC states,
was never an autonomous state. At the time of the purported
transfer
of the properties to QDC, it was still in its embryonic stage of
political development. Whereas Transkei, Bophuthatswana,
Venda and
Ciskei were independent states in their own right, QHG was merely a
self-governing territory, along with Gazankulu, Kangwane,
Kwandebele, Lebowa and Kwazulu. All those territories were
still dependent on the RSA. They were still subject to its effective
control in many ways.
See:
2015 (78) THRHR
[76]
QHG administered the land or territory placed at its disposal on
behalf of the landowner, the then RSA State. It did not own
the land
concerned. Therefore the property it purported to transfer to QDC was
an integral part and parcel of an unalienated land
owned by the
State, the RSA.
[77]
But even if I am wrong, my mistake would not alter the fact that QHG
as the holder did not have completely full real rights
of ownership.
It never acquired full-house ownership of the properties. It merely
acquired limited real rights of ownership. At
best for the
defendants, QHG was a holder of some tenuous rights which would
necessarily need to be upgraded at some point
before QHG could become
a complete holder of unlimited real rights in the properties in
question. However, its limited real rights
of ownership were never
upgraded, on the defendants’ own case. On the contrary, the
properties were transferred and registered
in the plaintiff’s
name. The transferor was the FSG, the holder of unlimited real rights
of ownership in the properties.
[78]
At some stage prior to 1988, there were 10 self-governing territories
in this country. Of those, four opted for independence
from the RSA
State. The four were Transkei, Bophuthatswana, Venda and Ciskei. When
they opted to become independent, both the land
and the minerals in
their respective territories were transferred to their respective
governments. Four legislations and four territorial
constitutions
were enacted to underpin their independence.
[79]
After the independence of the four, six self-governing territories
remained, namely:
Gazankulu,
Kangwane, Kwandebele, Kwazulu Lebowa and QwaQwa. In their case, land
rights and the mineral rights remained in the hands
of the RSA State.
In principle such rights would have remained so held for as long
those self-governing territories remained dependent
on the RSA State.
[80]
The argument of the defendants is that the properties belonged to the
QHG and that QHG lawfully transferred it to QDC, the
predecessor to
FDC, the second defendants during 1988. The properties formed part of
the land formerly administered by the South
African Development
Trust, (SADT). The SADT was created under the provisions of the
Development Trust and Land Act, 18 of 1936.
On 30 June 1991
legislation with the title Abolition of Racially Based Land Measures
Act, 108 of 1991, was enacted. In terms of
Sec 11(1) (a) thereof the
Development Trust and Land Act, 18 of 1936 was repealed. Consequently
the SADT were thereby dismantled.
[81]
On 31 March 1992 all unalienated land owned by the State within the
self-governing territories was transferred to those remaining
self-governing territories by the RSA Government. Before that
particular date, QHG merely administered the territory for and on
behalf of the RSA State. From this it follows that between 1988
and 1992 QHG could not have transferred to QDC full real
rights of
ownership because QHG itself was not the holder of such
rights.
See:
Proclamation No. R28 of 1992 published in the Regulation Gazette
No. 4852, Government Gazette No. 13906.
See:
Khoete v Dimbaza (A448/07) ZAFSHC 129 (12 November 2009) FB per
Van Zyl J
et
Mocumi J
[82]
From the above the evidence of the plaintiff that the assets and
liabilities of the QHG vest in the FSG through the RSA Government
would appear to be correct. In any event, at this midstream point of
the action proceedings, the defendants have produced no evidence
to
the contrary, as yet.
[83]
If l am wrong in the way l have reasoned the matter, it is quite
evident that the second defendant would nonetheless
still be
obliged to institute action proceedings in the future to have the
transfers set aside. There is simply no other alternative
avenue
open. As matters stand, the second defendant’s cause of
action or possible claim of ownership in respect of
the properties
appears to have prescribed way back in 2007.
See:
Desai N.O
v
Desai Others
[1995] ZASCA 113
;
1996 (1) SA 141
(A)
[84]
Given all the considerations traversed above, at this juncture
of the action proceedings, l am persuaded that the plaintiff
has
crossed the threshold of the required evidence –
De Klerk,
supra
; that notwithstanding the attack launched by the
defendants, the plaintiff’s witness stood firm; that the attack
on his credibility
was not permissible at this stage; that
absolution from the instance is a remedy sparingly granted –
Gordon Lloyds, supra
; that at this halfway station, the
plaintiff is not required to present such evidence as would be
required at the final station
after all the evidence would have been
heard and all the burning issues ventilated –
McCarthy,
supra
and
Hanger, supra;
that any court reasonably
applying its mind to the evidence, so far adduced and tested but
unbroken, would not be inclined
to absolve the defendants from
the instance -
Claude Neon, supra
and
Hanger, supra
;
that, in view of the peculiar circumstances of this case,
a
prima facie case
has been made out which calls for an answer
–
Marine Trade, supra
and finally that, l have to sound
a fair warning to all the defendants of the possible risk ahead,
should they elect to give no
oral evidence -
De Klerk, supra.
It follows, therefore, that the plaintiff passes the test.
[85]
I accordingly I make the following order:
85.1 The application for absolution
from the instance is dismissed with costs;
85.2 The first, second, fourth and
fifth defendants pay the costs jointly and severally, the one paying
the others to be absolved.
______________
MH RAMPAI ADJP
Obo
the plaintiff: Adv N Snellenburg SC
Instructed
by: Ponoane Attorneys
Bloemfontein
Obo
the 1st defendant: Adv CD Pienaar
Instructed
by: Cloete & Nevelling
Harrismith
Obo
second defendant: Adv MA Mavodze
Instructed
by: Rampai Attorneys
Bloemfontein
Obo
the 4
th
and 5
th
defendant: Adv LT Sibeko SC
Instructed
by: State Attorney
Bloemfontein