About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Kwazulu-Natal High Court, Pietermaritzburg
SAFLII
>>
Databases
>>
South Africa: Kwazulu-Natal High Court, Pietermaritzburg
>>
2019
>>
[2019] ZAKZPHC 21
|
|
Majola and Another v Country Cloud Trading 221 CC and Others (AR161/2018) [2019] ZAKZPHC 21; 2019 (5) SA 195 (KZP) (15 April 2019)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN THE HIGH COURT
OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
APPEAL CASE NO:
AR161/2018
In
the matter between:
SIBUSISO
BONIFACE MAJOLA
First Appellant
RUTH
NOKWETHEMBA MAJOLA
Second Appellant
and
COUNTRY
CLOUD TRADING 221 CC
First Respondent
CRAIG
SCOTT WALKER
Second Respondent
CATHRYN
WALKER
Third Respondent
ORDER
On
appeal from:
Pietermaritzburg
High Court (sitting as court of first instance):
The
appeal is upheld;
(a)
The decision of the court a quo is set aside and the appeal succeeds
with costs; and
(b)
The counter-appeal is dismissed with costs and the judgment of the
court a
quo is
confirmed.
APPEAL JUDGMENT
Delivered:
15 April 2019
Mbatha
J (Madondo DJP et Hadebe J concurring)
Introduction
[1]
The appellants’ appeal against the judgment of Mnguni J,
delivered on 31 May
2017, granted in favour of the respondents. The
respondents were also granted leave to cross-appeal on one issue
which was not
granted in their favour. The appeals are before us with
leave of the court a quo.
Relief sought in the
court order
[2]
The respondents in the court a quo sought the following orders:
2.1
An order compelling the appellants to sign forthwith all the
documents required by the Registrar
of Deeds, KwaZulu-Natal in terms
of s 4(1)(
b
)
of the Deeds of Registries Act
[1]
(the Act) to correct Title Deed T23005/2013 in the following
respects:
(a)
By substitution of the word “Seller” in Clause G with the
name of the first respondent
(Country Cloud Trading
221 CC);
(b)
By inserting in line 1 of Clause G of the phrase “or its
Successors-in-title, or”
between the phrase “221 cc”
and the word “assigns”;
(c)
By substituting the figure of “8 495 (EIGHT FOUR NINE FOUR
FIVE) square
meters” in Clause H with the figure “8 945
(EIGHT NINE FOUR FIVE) square meters”;
(d)
By insertion of the phrase “as created in T54593/2006” at
the end of Clauses
G and H.
2.2
An order directing the appellants to forthwith, but by no later than
seven (7) days from
having been required to do so, sign all documents
required to effect the subdivision of Erf 73, the consolidation of
the component
portions to form the new erven and the registration of
the title deeds evidencing the above;
2.3
An order, in the event of the respondents failing to comply with the
orders set out in paragraphs
2.1 and 2.2 above, that the Sheriff of
this Honourable Court, be and is hereby authorised to sign all such
documents set out in
paragraphs 2.1 and 2.2 above on behalf of the
appellants.
2.4
Directing the appellants to pay the costs of the application on the
scale as between attorney
and own client.
[3]
The court a quo granted the respondents the relief sought in the
notice of motion
save for an order for the substitution or the change
in the number of square meters that needed to be transferred to the
respondents.
The applicants appeal against all the orders made
against them and the cross-appeal lies against the refusal of the
court for the
substitution of the figure of 8 495 square meters
to 8 945 square meters.
The respondents’
case (applicant in the main application)
[4]
According to Terry Stark (Stark), the sole member of the first
respondent Country
Cloud Trading 221 CC (Country Cloud), and the
deponent to the founding affidavit, the first respondent purchased
property known
as Block H Sakabula Golf Estate (Sakabula). It was a
term of the agreement, with the owner of Block H that Country Cloud,
had to
also purchase Erf 73 and Erf 74, within a year from the
purchase of the property known as Block H. The purchase of Erven 73
and
74 was concluded and registered in the name of Country Cloud as
per Title Deed T13815/2006. It is stated in the founding affidavit
that the intention was to redesign Block H, and Erven 73 and 74 into
four properties with new boundaries and sizes. To achieve
this
purpose this required the reconfiguration of the layout of Block H,
so that the view of Block H, over the golf estate, would
not be
disturbed by the erection of another house on Erf 74, which erf lies
between Block H and the golf estate. The result which
was envisaged
by Stark, was that the reconfiguration would make it possible for
him, his life partner and their children to have
views of the golf
estate and a direct access to the bottom internal road.
[5]
Stark stated that Block H and Erf 74 are just in excess of 3 hectares
in size and
Erf 73 is the smaller one in size, with about 2, 8945
hectares in extent. He stated that in order to be in a position to
attend
to his dream of subdividing and consolidating the properties
to form a new erven, he decided to sell Erven 73 and 74 owned by
Country
Cloud.
[6]
Special reversionary title conditions were made when Erven 73 and 74,
were sold, to
provide him with the right to claim re-transfer of the
portions of the properties so defined upon approval of the
subdivision of
the properties. A further condition was added stating
that no consideration would be paid to the purchaser for such a
transfer
back to Country Cloud. The two conditions were endorsed on
the deeds of transfer of the two erven.
[7]
Erf 74 was subsequently sold to JC & L Construction CC, who sold
it to one Karamchand
Modilal Gayadin. This is evidenced by Title Deed
T16232/2008. Erf 74 was repossessed by Nedbank from Mr Gayadin and
purchased by
the second and third respondents (Craig Scott Walker and
Cathryn Aimee Walker, respectively) from Nedbank as evidenced by
Title
Deed T25795/2013. The second respondent is married to the third
respondent. The third respondent is the brother to the life partner
of Stark, namely, Shayleen Jane Spiers and thus there are no issues
with Erf 74. Erf 73 was repossessed by FirstRand Bank and sold
in
execution by the Sheriff and transferred to the purchaser Rumila
Gayadin as evidenced by Title Deed T34374/2008. Later on, Erf
73 was
sold by Rumila Gayadin to the first and second respondents as
evidenced by Title Deed T23005/2013.
[8]
When the properties were transferred pursuant to such sale the
following conditions
of title were entered into the deeds of
transfer; Title Deed T54594/2006 in respect of Erf 74 and Title Deed
T54593/2006 in respect
of Erf 73. The exact wording of the conditions
appears in both deeds of transfer as follows (there is a difference
in size between
the numbers expressed in words and numbers, this will
be dealt with later):
‘
G. Subject to a right in favour
of the SELLER, or its Successors-in-title or assigns, that upon
approval of sub-division of the
property then the SELLER or its
Successors-in-title or assigns shall be entitled to obtain
re-transfer of that portion so
sub-divided.
H. There will be no consideration paid
to the purchaser for such transfer, provided however that the portion
that the SELLER may
reclaim shall be restricted to no more than 8 495
(EIGHT FOUR NINE FOUR FIVE) square meters and shall exclude the
portion
on which the dwelling and other improvements have been
erected.’
The only difference lies
in the number of the extent of the square meters that were to be
re-transferred in respect of Erf 74.
[9]
Stark stated that an error occurred when transfers were made to the
two Gayadin purchasers
in that the reversionary right referred to the
“Seller” instead of “Country Cloud”. He
stated that the
error was partially corrected, particularly in
respect of the sale of Erf 73 to the appellants. The clauses of
conditions appear
as follows on the Erf 73 Deed of Transfer (there is
once again a difference in size between the numbers expressed in
words and
numbers, this will be dealt with later):
‘
G. Subject to a right in favour
of Country Cloud Trading 221cc assigns, that upon approval of
sub-division of the property then
the SELLER or its Successors in
title or assigns shall be entitled to obtain re-transfer of that
portion so sub-divided.
H. There will be no consideration paid
to the purchaser of such transfer however provided that the portion
that the Country Cloud
Trading 221cc may reclaim shall be restricted
to no more than 8 495 (EIGHT FOUR NINE FOUR FIVE) square meters
and shall exclude
the portion on which the dwelling and other
improvements have been erected.’
He further stated that
though there was a partial correction, the conveyancers failed to
specify that such conditions were corrected
in Title Deed T54593/2006
and that the phrase “the Seller” still erroneously
remained in the third line of Clause G.
This according to Stark could
be rectified in terms of s 4(1)(
b
) of the Act, as a correction
of an error.
[10]
Stark stated that in order for the reconfiguration to be according to
their proposed plans of
subdivision, attached to the founding
affidavit, it would be necessary to take off an area of 1, 0046
hectares from Erf 74 and
an area of 0, 8 945 hectares from Erf
73. The effect would be that Erven 73 and 74 would be slightly over 2
hectares and Block
H would be slightly over 3 hectares. The persons
to benefit from this would be the first respondent and the Stark’s
family
members as their properties would increase to approximately 5,
0011 hectares.
[11]
Stark further stated that an error occurred with regard to Erf 73, in
that the maximum area of
the portion to be deducted therefrom was to
be 8 945 square meters instead of 8 495 square meters as
reflected in Clause
H of the conditions. The size differs as
expressed in words and numerals. In that regard he believed that s
4(1)(
b
) of the Act should be used to rectify the errors. The
application to correct such errors could only occur with the
co-operation
of the appellants as they became aware of such errors
when the issues arose and they engaged with the appellants, who
refused to
co-operate.
[12]
In strengthening his case Stark relied also on the deed of sale
concluded between Ms Gayadin
and the appellants, in particular Clause
7 therefore, which reads as follows (respondents’ emphasis):
‘
VOETSTOOTS: The property is
sold voetstoots and absolutely as it stands and Difference as to
quantity, quality, description or otherwise
notwithstanding and the
PURCHASER acknowledges that he has thoroughly inspected the Property
and acquainted himself with its nature,
extend (sic), locality,
conditions of title
,
servitudes, leases, any conditions to be lawfully imposed at the
instance of a government and/or provincial and/or local authority
and
other encumbrances
including the applicable statutory and other rules relating
thereto and still have no claim whatsoever against the SELLER
or the
AGENT for any defects in the Property whether latent or patent.’
The abovementioned clause
appears from the deed of sale between Rumila Gayadin and the
appellants dated 24 April 2013. He asserted
that the applicants
failed to acquaint themselves with the conditions of title and other
encumbrances as required in terms of Clause
7 above. At the same time
he stated that he also became aware of the error when the current
issues arose with the respondents.
[13]
Stark has since November 2014 obtained approval from the Provincial
authorities to create a township
on Block H, Erf 73 and Erf 74. He
states that the process took him over six years to finalise. The
Department of Co-operative Governance
and Traditional Affairs
(COGTA), approved of all ‘new erven’ in excess of 2
hectares in size. It will require the correction
of Clause H of Title
Deed T23005/2013, failing which it will not comply with the approved
plans. He approached the respondents,
who have refused to co-operate.
He asserted that they were bound to co-operate with the subdivision
because of the conditions of
title in Clauses G and H registered
against their title deed and that their refusal was unlawful,
malicious and prejudicial to
the respondents.
[14]
Stark stated that they were entitled to the re-transfer of the
portion of the land registered
in the names of the appellants, on the
basis of the registered conditions of Clause G and H, which are
registered reversionary
rights. He asserted that the appellants could
address their displeasure and concerns to Rumila Gayadin, as the
person who sold
the property to them.
[15]
Stark stated that the second and third respondents have been unable
to build on Erf 74, though
the property was registered in their names
since 2 August 2013, as their house plan encroaches on the part of
the land falling
under Erf 73, owned by the appellants. That portion
of land needs to be transferred to form a part of Erf 74. The
position has
been exacerbated by the conditions imposed by COGTA,
particularly Clause 4 thereof, which reads as follows:
‘
4.
Building and selling
prior to approval
The owner’s attention is drawn
to the provisions of section 36 of the Ordinance, which prohibits:
(a) the erection of any building, tent
or structure upon any land forming part of the private township;
and
(b) the sale, purchase, lease,
advertising for sale or lease, or disposing of in any way of more
than one lot in a private township.
until such private township has been
established as an approved private township, the MEC for Co-operative
Governance and Traditional
Affairs has issued the certificate
contemplated by section 28(1) and the reserved lots have been
transferred or, alternatively,
the prior written approval of the MEC
for Co-operative Governance and Traditional Affairs has been
obtained.’
According to Stark the
prejudice being that the second and third respondents, cannot build
the house of their dreams, having obtained
diagrams for the
subdivision from the Surveyor-General, which needs the appellants’
signature thereto.
The appellants case
(respondents in the court a quo)
[16]
First, the appellants challenged the relief sought by the respondents
on the basis that the powers
envisaged in s 4(1)(
b
),
require the written consent of the interested parties, in effecting a
rectification on the deed of transfer, and that where consent
is
withheld, the court can be approached in terms of s 4(1)(
b
),
and such a party should bear the costs thereof as the error was made
by their conveyancers. Secondly, they asserted that what
was sought
to be rectified by the respondents were not a correction of errors in
terms of s 4(1)(
b
)
but they sought to substitute ‘Seller’ for Country Cloud,
‘or successors-in-title’ and amend the extent
of the
property. The registrar was only empowered to rectify such errors if
the requirements in s 4(1)(
b
)(ii)
to (iv) were met. Thirdly, it appeared that the conditions first
appeared in the Deed of Transfer No T54593/2006, when the
Moetanalos
(the first purchasers) took transfer of the property from the first
respondent. The said conditions referred to a seller
and purchaser
and not to the first respondent, which meant that the right was
enforceable against the purchaser and not against
successors-in-title. Fourthly, they acquired the property from Rumila
Gayadin, in the ordinary course of Gayadin’s business,
a
well-known speculator in property, and that such transaction was
protected in terms of the Consumer Protection Act.
[2]
They took transfer of the property on 26 July 2013; the respondents
never informed them about their reversionary right to claim
part of
the property. Fifthly, the respondents sought to enforce a personal
right, which should never have been registered against
Erf 73’s
title deed. Lastly, on appeal, they have challenged the
constitutionality of the provisions of s 4(1)(
b
)
of the Act.
[17]
The replying affidavit by the respondents, also highlighted that
Stark had been unable to locate
a copy of the said sale between
Country Cloud and the first purchaser, the Moetanalos, but had a full
recollection of the terms
thereof. It is clear to this court that the
appellants were only engaged by the respondents after the approval of
the plans as
per letter dated 27 November 2014 from COGTA.
Finding by the court a
quo
[18]
The court a quo held that it appeared to it that the title
conditions, which appeared in all
subsequent deeds of transfer, were
real rights, enforceable against all future owners until exercised by
Country Cloud. It also
held that there was no evidence presented
before it as to the errors in the hectare figures and declined to
substitute 8 495
square meters for 8 945 square meters. The
appellants were also directed to pay the costs of the application.
Evaluation of the
evidence
[19]
In the appeal before us, the appellant contended that rectification
cannot be inconsistent to
the contract, as the application was based
on an assumption that a title deed could be ‘rectified’
in terms of s 4(1)(
b
) of the Act, regardless of the underlying
contract. It was submitted further that the respondents failed to
show that there was
a common intention between the contracting
parties, as the party seeking rectification of the contract has to
show that it will
give effect to the common intention between the
contracting parties. Lastly, the rectification should not be
permitted in circumstances
whereupon it will adversely affect the
rights of the innocent parties, as it was the case with the
appellants who were not parties
to the initial contract with Country
Cloud.
[20]
The respondents’ challenged this as a new ground raised for the
first time on appeal. I
find this not to be a new ground as
challenged by the respondents. The appellants relied on
Bester
NO & others v Schmidt Bou Ontwikkelings CC
,
[3]
where it was held that the rectification of a title deed is permitted
to allow ‘the true contract under which the land is
held to be
reflected on the register.’ The common intention of the parties
is required where a rectification is required.
I am of the view that
it is not a new ground on the basis that the respondents sought to
correct ‘errors’ on the title
deed, whereas, the nature
of the corrections amount to a rectification of the title deed.
[21]
In support of the aforementioned contention the courts are enjoined
by s 39(2) of the Constitution
that ‘when interpreting any
legislation, and when developing the common law or customary law,
every court, tribunal or forum
must promote the spirit, purport and
objects of the Bill of Rights.’ Rectification refers to the
competence of rectifying
an incorrect party description in a contract
which is required to be done in writing and signed.
[4]
In
Osborne
& another v West Dunes Properties
176
(Pty) Ltd & others
,
[5]
where the court
was requested to determine if a written sale of land, which named the
wrong party as the buyer, was capable of rectification.
The judge in
Osborne
referred to the principle in
Magwaza
v Heenan
[6]
that rectification of a contract, which a statute requires to be in
writing and signed, is possible only, if the document on the
face of
it, complies with the statutory requirements. The identity of the
parties, as in this matter, is an essential part of correction
or
rectification and needs to be identified in a deed of sale. A deed of
sale has not been produced by Stark to confirm that indeed
the
conditions referred to the first respondent, and not to the seller in
general, and that it contained the references to successors-in-title
and assigns. Stark has not taken this court into his confidence as he
never mentioned the sale to the Moetanalos in his founding
affidavit.
Stark refers only to the sale to Ms Gayadin. He never made any
attempt to trace the Moetanalos and there is a likelihood
that they
still have a copy of the deed of sale.
[22]
The provisions of s 39(3) also provide that ‘[the] Bill of
Rights does not deny the existence
of any other rights or freedoms
that are recognised or conferred by common law, customary law or
legislation to the extent that
they are consistent with the Bill.’
Therefore the interpretation given to the said conditions of title
should also accord
with the provisions of s 25(1) ‘no one may
be deprived of property except in terms of law of general
application, and no
law may permit arbitrary deprivation of
property.’ The relevant part of s 25(2) provides that
‘
Property may be expropriated
only in terms of law of general of application:
(a)
…
;
and
(b)
subject
to compensation, the amount of which and the time and manner of
payment of which have either been agreed to by those affected
or
decided or approved by a court.’
The conditions appearing
in Clause H appear not to be in line with the provisions of s 25 of
the Constitution as it requires that
the appellants should simply
transfer their property to the respondents without any form of
compensation. The significance of this
lies in that the appellants’
were not the original purchasers of the property from the
respondents. They are the third purchasers
of the property. Clause H
is ultra vires the law, unconstitutional and invalid as it is not in
line with s 25 of the Constitution.
[23]
The appellants never entered into any contract with the respondents
and their rights need to
be protected, particularly as the property
is mortgaged for the entire value of the property. The court
has the power to
decide on legal issues not pertinently raised in the
affidavits, where it is satisfied that all the relevant facts have
been canvassed
in the affidavits so that none of the parties is
prejudiced.
[7]
The issue
relating to the common intention of the parties, which has been
raised by the appellants, though not pertinently raised
in the
appellants’ papers, however, arises out of the established
facts. This issue may be considered by the court and may
form the
basis of its judgment.
[8]
I do
not see how the consideration of common intention would prejudice the
respondents, as it is related to the interpretation
of the provisions
of s 4(1) of the Act. Section 39(2) of the Constitution is also
applicable to the interpretation of legislation,
like s 4(1) of the
Act, which should not be used to achieve an unconstitutional end.
[24]
Even if it can be regarded as new evidence introduced at the appeal
stage, it is trite that the
court can in exceptional circumstances,
deal with new evidence.
[9]
The
exceptional circumstances in this instance being the deprivation of
the appellants of their rights to property without compensation,
this
is a Constitutional issue. This is not evidence on new facts. The
rectification issue arises from the question whether the
relief
sought by the respondents was a correction of an error or not.
[25]
The second issue for consideration is whether a correct
interpretation was given to the provisions
of s 4(1)(
b
):
Section 4(1)(
b
)
deals with the Powers of the Registrar in respect of the
rectification of errors, of an incorrect property description in the
title deed or in the conditions affecting any such property. The
Supreme Court of Appeal (the SCA) in
Bester
NO & others v Schmidt Bou Ontwikkelings CC
,
[10]
endorsed the application of s 4(1)(
b
)
as a remedy to rectify the mistakes in the transfer of property.
Section 4 provides as follows:
‘
4. Powers of registrar.
—
(1) Each registrar shall have power—
(
a
) to require the production
of proof upon affidavit or otherwise of any fact necessary to be
established in connection with any
matter or thing sought to be
performed or effected in his registry;
(
b
) whenever it is in his
opinion necessary or desirable to rectify in any deed or other
document, registered or filed in his registry,
an error in the name
or the description of any person or property mentioned therein, or in
the conditions affecting any such property
to rectify the error:
Provided that —
(i) every person appearing from the
deed or other document to be interested in the rectification has
consented thereto in writing;
(ii) if any such person refuse to
consent thereto the rectification may be made on the authority of an
order of Court;
(iii) if the error is common to two or
more deeds or other documents, including any register in his or her
registry, the error shall
be rectified in all those deeds or other
documents, unless the registrar, on good cause shown, directs
otherwise;
(iv) no such rectification shall be
made if it would have the effect of transferring any right;
(v) . . . . . .
(
c
) to issue, under conditions
prescribed by regulation, certified copies of deeds or other
documents registered or filed in his registry;
(
d
) if in his opinion any deed
or other document submitted to him has become illegible or
unserviceable, to require that a certified
copy thereof be obtained
to take its place.
(2) ………’
[26]
Section 4(1)(
b
) requires the consent of ‘interested
persons’ when such an application is made to the Deeds Office
to amend certain
errors. Section 4(1)(
b)
(iv) categorically
states that no such rectification shall be made if it would have the
effect of transferring any right. Therefore,
the rectification which
has not been substantiated by any consent or proof of the existence
of a real right, should not be effected
in this fashion as it would
amount to a transfer of rights. Section 4(1)(
c
) and (
d
)
call for certified documents or other documents to prove the
existence or ascertain the intention of the parties, which the
respondents
have failed to provide.
[27]
The respondents sought a substitution of the word ‘Seller’
with ‘Country Cloud’
in Clause G; insertion of the phrase
‘or its successors-in-title’ or between the phrase
‘221cc’ and the
word ‘assigns’; substitution
of ‘8 945 square meters’ instead of ‘8 495
square meters’;
and in Clauses G and H the insertion of the
phrase ‘as created in T45493/2006’ at the end of these
clauses. If the
insertions are made Clauses G and H would read as
follows:
G. SUBJECT to a right in
favour of the SELLER, or its Successors-in-title or assigns, that
upon approval of sub-division of the
property then the SELLER or its
Successors-in-title or assigns shall be entitled to obtain
re-transfer of that portion so
sub-divided, as created in
T45493/2006.
H. There will be no
consideration paid to the purchaser for such transfer, provided
however that the portion that the SELLER may
reclaim shall be
restricted to no more than 8 495 (EIGHT FOUR NINE FOUR FIVE)
square meters and shall exclude the portion
on which the dwelling and
other improvements have been erected, as created in T45493/2006.
[28]
The changes have the effect of transferring rights to the
respondents. The common intention of
the parties to the contract,
should have evidenced that effect. Stark has not produced the source
document showing the alleged
missing errors. He has not even
attempted to trace the first purchaser to whom he sold the property
to when these conditions were
created in favour of the first
respondent. He came to court with an expectation that his word would
be accepted. Stark sold the
property for his own reasons and entered
into a contract with the first purchaser, and created reversionary
rights for an indefinite
period. On 11 June 2015 in a letter
addressed to Stark’s attorneys of record, the appellants’
attorneys were the first
persons who pointed out that they noted that
Erf 73 was first sold to Mr and Mrs Moetanalos in 2006, who in turn
sold it to Ms
Rumila Gayadin in 2008, and in 2013 the property was
sold to the appellants. The appellants’ attorneys requested
proof that
the first purchasers were informed of the existence of the
condition, in a form of a sale agreement in which the condition was
inserted, when exactly the condition was created and endorsed on the
title deed and who the owner of the property was at that time.
The
respondents’ attorneys’ response, dated 23 June 2015,
referred the appellants to the deeds of transfer, but a sale
agreement was not attached. They were referred to their earlier
response of 24 April 2015, which the respondents unfortunately
did
not attach to the founding affidavit,
[29]
I therefore conclude that s 4(1)(
b
) is not applicable to the
rectifications and corrections sought by the respondents, as it does
not correct errors but creates rights
without any conclusive proof of
the existence of such rights. Stark as the person who had an interest
in Erf 73 should have ensured
that the endorsements on the title
deeds were correct from the time he sold the property to the
Moetanalos.
[30]
Another question which arose was also whether the conditions created
in the title deed were personal
rights or real rights. The
respondents contended that they were entitled to invoke the
reversionary rights clause, in the conditions
of title and demanded
re-transfer of the extensive portion of the property, without making
any payments to the appellants. Ownership
is a real right, and avails
the holder of the right to a
rei vindicatio
, that is a right
to recover the property from anyone who is in possession thereof. Can
it be said that the first respondent had
a real right enforceable in
terms of the law against the current holders in title?
[31]
The court a quo found that the conditions in Clauses G and H created
a real right. The test for
real rights as set out in
Willow
Waters Homeowners Association (Pty) Ltd v Koka N.O.
[11]
was
stated as follows (references omitted):
‘
To
determine whether a right or condition in respect of land is real,
two requirements must be met:
(a)
the intention of the person who creates the right must be to bind not
only the present owner of the land, but also successors in
title; and
(b)
the nature of the right or condition must be such that its
registration results in a 'subtraction from dominium' of the
land
against which it is registered. Whether the title condition
embodies a personal right or a real right which restricts the
exercise
of ownership is a matter of interpretation. The intention of
the parties to the title deed must be gleaned from the terms of the
instrument, ie the words in their ordinary sense, construed in the
light of the relevant and admissible context, including the
circumstances in which the instrument came into being. The
interest the condition is meant to protect or, in other words,
the object of the restriction, would be of particular relevance.
’
[32]
According to Stark the conditions of title were created during
negotiations when a sale between
the first respondent and the
Moetanalos was concluded.
Stark
stated that the conditions referred to on Erven 73 and 74 created
‘special reversionary title conditions’, giving
the first
respondent a right to reclaim and re-transfer that portion of the
properties so defined, upon approval of the subdivision
of the
properties and for no consideration to be paid to the purchaser for
such a transfer. Notably, the original conditions refer
to a seller
and purchaser and not to any assigns or successors-in-title. This can
be construed to have been agreed between the
seller and the purchaser
then.
[33]
I have noted that Stark stated that the purpose of the sale of Erf 73
was to raise funds for
the subdivision and consolidation of all the
erven. I have noted that there is no time frame within which he
should have claimed
re-transfer of the property. In the absence of
the sale agreement the court can only speculate that the Moetanalos
may have offered
to the first respondent the exercise the
reversionary right, before they sold the property to Ms Gayadin. A
personal right cannot
exist in perpetuity.
[34]
It is my view that this was a personal right enforceable only against
the first purchaser of
Erf 73. In
Absa
Bank Ltd v Keet
,
[12]
the distinction was made between a limited real right and a personal
right. The court held that real rights are primarily concerned
with a
relationship between a person and a thing and personal rights are
concerned with a relationship between persons; a person,
entitled to
a real right over a thing, can by way of a
rei
vindicatio
,
claim the thing from any person who interferes with his right; such a
right is a right to ownership. If a right is not absolute,
but a
relative right to a thing, so that it can only be enforced against a
determined individual or a class of individuals, then
it is a
personal right. The obligation which the law imposes on a debtor does
not create a real right (
jus
in rem
)
but gives rise to a personal right.
[35]
Section 63 of the Act, provides that no condition in a deed of
transfer, purporting to create
or embody any personal right, nor one
which does not restrict the exercise of any right of any ownership,
in respect of immovable
property, is capable of registration.
However, it carries a proviso which states that ‘a deed
containing such a condition
may be registered if, in the opinion of
the registrar such a condition is complimentary or otherwise
ancillary to a registrable
condition or right contained or conferred
in such deed.’ The question which arises is whether the
registration of the reversionary
rights in favour of the seller
created a real right. In
eThekwini
Municipality v Mounthaven (Pty) Limited
,
[13]
the Constitutional Court settled this
issue, on the basis that it ‘rests on the proper interpretation
and effect of a reversionary
clause in the original deed of sale and
subsequent deed of transfer’ whether a reversionary right
creates a personal or a
real right. It confirmed the distinction of
real and personal rights, as stated in
Absa
Bank Limited v Keet
.
[14]
In para 11 of the judgment it re-affirmed what the SCA stated, ie
that two requirements must be met: (1) the person who created
the
right must have intended the present owner as well as
successors-in-title to be bound; (2) the right must result in the
subtraction
from the dominium of the land against which it is
registered.
[15]
[36]
The court in
Mounthaven
held that a reversionary right may be registered properly or
registered by mistake, but it does not translate a personal right
into a real right. It went on to state that a reversionary right
restricts the exercise or full enjoyment of the right to ownership
and it remains a personal right. A fideicommissum, pre-emption right
or any other personal rights are registered for practical
purposes.
It held further that if a reversionary right is registered, it does
not get elevated to a real right. It is my view that
in this case it
is clear that this was a personal right, which cannot translate to a
real right. I have taken into account the
intention of the parties as
stated by Stark, that the property was sold to the first purchaser
for purposes of raising funds to
create the consolidation of title
and subdivision of the properties. Secondly, the unique proviso, that
a certain portion thereof
would be re-transferred to the first
respondent without any payment of consideration to the purchaser and
that a specified number
of hectares is stated in the conditions. In
interpreting the relevant clauses of the conditions, the factors to
be considered include
the language used, in the light of the ordinary
context in which the word or phrase is found; the purpose to which
the provision
is directed; the knowledge of the parties, where more
than one meaning is possible, it must be considered against the
background
of the above facts and whether the process of
interpretation is an objective one. Furthermore, a sensible meaning
is to be preferred
to one that would lead to absurdity.
[16]
The only conclusion I can come to is that a personal right was
created in the conditions of title.
[37]
It is noted that the property had exchanged hands a number of times
before the respondents asserted
their rights to it. The appellants’
purchased the property from Ms Gayadin and not the first respondent.
The respondents
rely on Clause 7, a voetstoots clause, appearing in a
contract between the appellants and Ms Gayadin, particularly where
the clause
states that they acknowledge to have satisfied themselves
as to the conditions of title and other encumbrances. This is a
standard
clause in an agreement of sale between the seller and the
purchaser. Ms Gayadin had enjoyed the use of the property without any
claim from the first respondent, and sold it as it is to the
appellants. Binding agreements are a cornerstone of such contracts
or
conditions. The rights to be exercised by the respondents appear to
be open-ended. The court a quo’s interpretation, with
due
respect, is not without difficulty as there appears to be no
meaningful parameters to exercise the pre-emptive right.
[38]
In
Bondev Midrand (Pty)
Limited v Ramokgopa
,
[17]
a Gauteng judgment, states that developers often include a clause in
their agreements requiring the purchaser to erect buildings
within a
specified period or to establish a township, insert a clause that the
developer has a right to claim re-transfer of the
property, if the
property is not developed within a certain period, as a result that
such a right to claim re-transfer prescribes
in terms of the
Prescription Act.
[18]
This was also the case in
Mounthaven
where the municipality lost the right to exercise a reversionary
right within a certain period. It is very unusual in this case
that
the exercise of the reversionary right is infinite. I am not raising
the issue of prescription, but it is one of the disturbing
features
of these conditions.
[39]
In the
Bondev
judgment, one of the issues before the court was
whether registration of the condition in the title deed meant that it
was a real
right and incapable of prescription, alternatively whether
it was a personal servitude that expires after 30 years. This is a
factual
question. casein the case before this, I find that it was a
personal right.
[40]
The court held that on a proper reading of the Deeds Registries Act,
that registration of conditions
which create personal obligations in
a title deed do not elevate them to real rights, that a personal
right does not limit the
right of ownership in the property. The
holder thereof has a right to claim specific performance from another
person. The right
may be created by agreement; the mere fact that a
personal right has been registered in the deed of transfer does not
change it
to a real right. The seller in this matter was no longer
the first respondent. I find that the reversionary right was only
enforceable
upon the first transferee of the property, particularly
as that would have been without any payment. The reduction of the
area
in the property of the appellants impacts in the decrease in the
value of the title, without the reduction of the mortgage bond
to the
bank. It also amounts to a deprivation of property without
compensation, in conflict with the provisions of s 25 of the
Constitution.
[41]
The respondents’ argument was that the rectification of the
conditions of title, was a
mere correction of errors made by their
conveyancer, it did not affect any transfer of rights, the appellants
never had a full
title to the land and the procedure provided by s
4(1)(
b
)(iv) of the Act was not arbitrary, and should not be
rejected by this court. I am of the view that where one seeks to
excise a
portion of the land, without any compensation, it does not
fall within the ambit of s 4(1), instead it amounts to a
contravention
of s 25 of the Constitution.
[42]
For the same reasons, which I have alluded to above the
counter-appeal by the respondents is
not competent. Accordingly I
make the following order:
The appeal is upheld;
(a)
The decision of the court a quo is set aside and the appeal succeeds
with costs; and
(b)
The counter-appeal is dismissed with costs and the judgment of the
court a quo is confirmed.
Mbatha J
Date
of hearing
: 1
February 2019
Date
delivered
: 15
April 2019
Appearances
:
For
the Appellants
: Adv DP
Crampton
Instructed
by
:
Tomlinson Mnguni James Inc Attorneys
VCCE Office Park
Pietermaritzburg
For
the Respondent
:
Adv CG van der Walt
Instructed
by
:
Leslie Smith & Company Inc
332 Jabu Ndlovu Street
Pietermaritzburg
[1]
Deeds Registries Act 47 of 1937
.
[2]
Consumer Protection Act 68 of 2008
.
[3]
Bester NO & others v Schmidt
Bou Ontwikkelings CC
2013
(1) SA 125
(SCA) para 8, quoting
Weinerlein
v Goch Buildings Ltd
1925
AD 282
at 293 with approval.
[4]
Osborne & another v West Dunes
Properties 176 (Pty) Ltd & others
2013 (6) SA 105 (WCC).
[5]
Osborne & another v West Dunes
Properties 176 (Pty) Ltd & others
2013 (6) SA 105 (WCC).
[6]
Magwaza v Heenan
1979 (2) SA 1019 (A).
[7]
Minister van Wet en Orde v
Matshoba
[1990] 1 All SA
425
(A) 428-429;
1990 (1) SA 281
(A) 285E-H.
[8]
Van Rensburg v van Rensburg &
andere
1963 (1) SA 505
(A)
509H-510B;
Minister of
Justice v Nationwide Truck Hire (Pty) Ltd
1981 (4) SA 826
(A) at 833G;
Cabinet
for the Territory of South West Africa v Chikane & andere
1989
(1) SA 349
(A) at 260F-G.
[9]
The court has power under
s 19
(b)
of the
Superior Courts’ Act 10 of 2013
to receive further
evidence.
[10]
Bester NO & others v Schmidt
Bou Ontwikkelings CC
2013
(1) SA 125
(SCA) para 8.
[11]
Willow Waters Homeowners
Association (Pty) Ltd v Koka NO
2015 (5) SA 304
(SCA) para 16.
[12]
Absa Bank Ltd v Keet
2015 (4) SA 474 (SCA).
[13]
eThekwini Municipality v
Mounthaven (Pty) Ltd
[2018] ZACC 43
;
2019 (2) BCLR 236
(CC) para 1.
[14]
Absa Bank Ltd v Keet
2015 (4) SA 474 (SCA).
[15]
William Waters Homeowners
Association (Pty) Limited v Kok N.O.
[2014] ZASCA 220
;
2015 (5) SA 304
(SCA) para 16;
eThekwini
Municipality v Mounthaven (Pty) Ltd
[2018] ZACC 43; 2019 (2) BCLR 236 (CC).
[16]
See the principles succinctly stated
in Natal Joint Pension Fund
v Endumeni Municipality
2012 (4) SA 593
(SCA) para 18.
[17]
Bondev Midrand (Pty) Limited v
Ramokgopa & others: In re Bondev Midrand (Pty) Ltd v Pulling
Pulling
[2017] ZAGPPHC
600, confirmed in
Bondev
Midrand (Pty) Ltd v Puling & another & a Similar Case
[2017] ZASCA 141; 2017 (6) SA 373 (SCA).
[18]
Prescription Act 68 of 1969
.