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[2017] ZASCA 170
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Wierda Road Wrst Properties (Pty) Ltd v SizweNtsalubaGobodo Inc (1156/2016) [2017] ZASCA 170; 2018 (3) SA 95 (SCA) (1 December 2017)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 1156/2016
In
the matter between
WIERDA
ROAD WEST PROPERTIES (PTY) LTD
APPELLANT
and
SIZWENTSALUBAGOBODO
INC
RESPONDENT
Neutral
citation:
Wierda
Road West Property (Pty) Ltd v SizweNtsalubaGobodo Inc
(1156/16)
[2017] ZASCA 170
(1 December 2017)
Coram
:
Cachalia and Majiedt
JJA and Plasket, Meyer and Mbatha AJJA
Heard:
22 November 2017
Delivered:
1 December 2017
Summary:
Lease –
National Building Regulations and Building Standards Act 103 of 1977
– lease agreement not rendered invalid
and unenforceable by ss
(4)(1) and 14(1), read with s 4(4) and s 14(4)(a) of the Act.
ORDER
On
appeal from:
Gauteng
Local Division, Johannesburg (Francis J, sitting as court of first
instance):
1.
The appeal is upheld with costs.
2.
The order of the high court is set aside and substituted with the
following:
‘
Judgment
is granted in favour of the plaintiff in the sum of R7 867 548.78
together with interest at 8% per annum from
1 December 2014 to
date of payment and costs’.
3.
The cross-appeal is dismissed with costs.
JUDGMENT
Majiedt
JA (Cachalia JA and Plasket, Meyer and Mbatha AJJA concurring):
[1]
The appellant, Wierda Road West Properties (Pty) Ltd, instituted
action against the respondent, SizweNtsalubaGobodo Inc, for
the
amount of R7 867 548.78 in respect of rentals and municipal
charges for the lease of its property at 41 West Street,
Houghton,
Johannesburg (the property). Francis J, sitting as a court of first
instance in the Gauteng Local Division, Johannesburg
(the high
court), dismissed the action with costs. This appeal is with the
leave of the high court, which also granted the respondent
leave to
cross-appeal against the finding that the lease agreement was not
invalid, but merely unenforceable.
[2]
The action was based on a written lease agreement concluded between
the parties on 3 August 2012. Although the duration of the
agreement
was for five years, the claim was for the period July 2014 to March
2016, as the appellant had sold and transferred the
property, in
March 2016. The quantum of the claim was not in issue. The respondent
raised a number of defences and also instituted
a counterclaim for an
order declaring the lease agreement to be void ab initio, and for the
repayment of the rentals paid during
the period of its occupation of
the property. During the trial the respondent withdrew its claim for
repayment and persisted only
with its claim for the declaratory
order.
[3]
The respondent’s defences were premised on its counterclaim,
namely that the lease agreement was void ab initio and that
the
appellant was consequently precluded from enforcing its terms. The
defence of the invalidity of the agreement was based on
the following
grounds, each one pleaded as an alternative to the other:
(a)
that the agreement contravened s 14 of the National Building
Regulations and Building Standards Act 103 of 1977, (the Act) in
that
no occupancy certificate had been issued prior to the occupation
thereof;
(b)
that the appellant had made a fraudulent misrepresentation by failing
to inform the respondent of the fact that no occupancy
certificate
had been issued; and
(c)
that the property was not suitable for the purposes for which it was
let, as it would have constituted an offence for the respondent
to
have remained in occupation in the absence of an occupancy
certificate.
[4]
The high court partially upheld the first defence by finding that
even though the agreement was not invalid, it was unenforceable.
As
stated, this finding prompted a cross-appeal by the respondent. The
high court dismissed the second and third defences above.
During
argument in this court, the respondent abandoned the fraudulent
misrepresentation defence. It became evident during the
trial that
there were no approved building plans for part of the property, as is
required by s 4(1) of the Act. This non-compliance
was advanced by
the respondent as a further ground to invalidate the agreement. The
fact of the non-compliance with sections 4(1)
and 14(1) is common
cause. The issues in this appeal are therefore:
(a)
Whether the agreement is void ab initio due to the contraventions of
s 4(1), read with s 4(4) or s 14(1), read with s 14(4)
of the Act;
(b)
Whether the failure to obtain an occupancy certificate rendered the
property not suitable for the purposes for which it was
let; and
(c)
In respect of the cross-appeal, whether the high court erred in its
finding that the agreement was not invalid, but merely unenforceable.
[5]
A brief narration of the factual matrix is necessary for a proper
understanding of the issues. Almost all the background facts
were
common cause or not seriously disputed. The respondent is a merged
entity, comprising Gobodo Incorporated (Gobodo) and SizweNtsaluba
VSP
(Sizwe). The appellant is a property-owning company entirely owned by
the shareholders of the erstwhile Gobodo. It purchased
the property
in 2009 on auction with a view to house Gobodo, whose premises at
that time had become too small. The appellant undertook
the
refurbishing of the property at Godobo’s instance to meet its
requirements. On 1 August 2010 Gobodo moved in. In the
course of the
refurbishment it was discovered that there were no building plans in
respect of the new wing added to the property
by the previous owner.
The original property consisted of a two storey residential dwelling.
The new wing, also built by the original
owner, comprised three
floors, namely the ground, mezzanine and first floors. Despite
concerted efforts, the appellant was unable
to get building plans
from the seller. Consequently, the appellant instructed its
architects to draw plans for the new three storey
wing and to submit
them to the City Council of Johannesburg (City Council).
[6]
The appellant concluded a lease agreement with Gobodo for a period of
12 years, commencing 1 August 2010. On 1 June 2011 Gobodo
merged with
Sizwe to form the respondent, which concluded a new lease agreement
in respect of the property with the appellant on
3 August 2012. The
duration of the original lease was reduced from 12 years to 5 years.
The appellant experienced serious problems
getting the plans
approved. There were as many as 12 separate approvals required. The
building plans were finally approved during
mid-2015, almost five
years after their submission to the City Council. Without approved
plans the appellant could not obtain an
occupancy certificate. This
is because s 14(1)(
a
)
of the Act rendered the granting of an occupancy certificate subject,
amongst others, to the requirement that the building concerned
was
erected in accordance with the provisions of the Act and with any
conditions under which approval was granted.
[1]
One of the relevant provisions for present purposes is s 4(1).
[2]
[7]
Pursuant to the conclusion of the lease, the respondent occupied the
property from 1 August 2012 until June 2014, when it vacated
the
premises without notice to the appellant. During this period, the
respondent paid the monthly rentals and municipal utility
charges in
accordance with the terms of the lease.
[8]
As the issues in dispute are largely a question of law, it is not
necessary to refer in detail to the evidence of the witnesses
at the
trial. The high court, understandably, did not deem it necessary to
make any credibility findings on the oral evidence.
For present
purposes the discussion can be restricted to a brief summary of the
evidence on the central issues, namely the lack
of building plans and
an occupancy certificate.
[9]
Mr Dayalan Manikum Naicker was the main witness for the appellant. He
was a shareholder and director of the appellant and, until
his
retirement in December 2010, a shareholder of Gobodo. All the
shareholders in Gobodo were shareholders of the appellant and
five of
them, including Mr Naicker, were appointed as its directors. Mr
Naicker conducted the negotiations regarding the lease
agreement on
behalf of the appellant. Mr Donavan Simpson, who was the chief
financial officer of the respondent and previously
a shareholder in
Gobodo, acted for the respondent during the negotiations. The most
important part of Mr Naicker’s evidence,
relevant to the
central issue, was that Mr Simpson and all the other Gobodo
shareholders were aware of the absence of an occupancy
certificate.
Mr Simpson was succeeded as chief financial officer by Mr Gerrit
Prinsloo, who featured prominently in the events
leading up to and
after the respondent vacated the property. According to Mr Naicker,
the City Council was fully aware that the
property was being occupied
without an occupancy certificate; its inspectors came to the property
to make an assessment of the
situation and there was no objection to
occupation.
[10]
Surprisingly, neither Mr Simpson nor Mr Prinsloo testified for the
respondent. Instead, it adduced the evidence only of Mr
Victor
Mazitha Sekese, the chief executive officer. Although he had signed
the lease agreement on behalf of the respondent, he
had not been
involved in the prior negotiations at all. He had delegated all the
negotiations regarding the lease to Mr Simpson.
According to Mr
Sekese he had no concerns about the agreement when it was brought to
him for signature. He said that if he had
known about the absence of
the building plans and an occupancy certificate, he would not have
signed the agreement. It bears emphasis
that it was not the
respondent’s case that the property was not safe for
occupation. What is more, Mr Naicker’s evidence
regarding the
problems about the building plans and the occupancy certificate, was
unchallenged.
[11]
The objective evidence, in the form of e-mail communications between
the parties’ representatives, prior to the respondent
vacating
the property in June 2014, is instructive. At no time during the
parties’ communications during March and April
2014 regarding a
possible subtenancy was the absence of an occupancy certificate
raised as an issue, except to the extent that
the appellant had been
alerted to the fact that it may prove problematic for the respondent
to procure a subtenant. The respondent
did not complain about the
absence of an occupancy certificate. As stated, the respondent only
became aware of the absence of approved
plans during the course of
the trial.
[12]
On 10 June 2014 Mr Naicker wrote to Mr Prinsloo asking him to confirm
the rumours that the respondent would be moving out of
the property.
This was confirmed by Mr Prinsloo, who indicated that the respondent
was to begin looking for a subtenant. On 25
September 2014, after the
respondent had vacated the property, in a letter by the respondent’s
attorneys to the appellant,
the absence of an occupancy certificate
was for the first time pertinently raised as a reason for the
respondent vacating the property.
The attorneys also contended that,
by reason of the lack of a certificate of occupancy, the lease
agreement was invalid, and so
the present litigation ensued.
[13]
The primary thrust of the attack against the lease agreement was, as
stated, the non-compliance with ss 4 and 14 of the Act.
It was
contended that non-compliance rendered the agreement void ab initio
and that this conclusion followed from the penal sanctions
imposed in
these sections.
[3]
The high
court’s finding that the lease agreement was valid but not
enforceable, was based exclusively on the
Hubbard
judgment of this court,
[4]
which
was confirmed on appeal to the Constitutional Court.
[5]
[14]
Hubbard
is plainly distinguishable on the facts and on the law. That case
concerned the provisions of s 10 of the Housing Consumers Protection
Measures Act 95 of 1998 (Housing Act) which expressly prohibits an
unregistered builder from receiving any consideration in terms
of any
agreement with a housing consumer in respect of the sale or
construction of a home. Section 14 of the Act, which was the
focus of
the high court’s judgment, differs quite starkly from that
provision, as it contains no such statutory prohibition.
Section 10
of the Housing Act is plainly intended to protect housing consumers
against unregistered builders – thus the Constitutional
Court
held that ‘the protection of housing consumers is a necessary
and legitimate legislative objective’.
[6]
It is therefore not surprising that the respondent eschewed any
reliance on this case.
[15]
This case was conducted and decided in the high court and argued
before us on the basis of non-compliance with s 4(1) and s
14(1). We
heard extensive argument on these provisions and in the course of the
debate, particularly with the respondent’s
counsel, some
difficulties emerged. As is immediately apparent from the sections
(cited in footnote 1 above), it is questionable
whether either
applies in the present instance. First, s 4(1) applies to a person
who
erects
a building. And the penalty provision in s 4(4) also refers to any
person
erecting
any building. The appellant did not ‘erect’ the building
in question, within the definition of the word ‘erection’
in s 1.
[7]
This much was common
cause. Second, s 14(1)(
a
)
provides that an occupancy certificate may be issued if the local
authority is ‘of the opinion that such building has been
erected
in accordance with the provisions of this Act
. . .’ Section 14(4)(
a
),
which contains the penal sanction, refers to ‘[t]he owner of
any building, or any person having an interest therein,
erected
or being erected with the approval of a local authority
. . .’ It was also common cause that, in the present instance,
the building in question had been erected without the requisite
plans, ie without the approval of the local authority. Section
14(4)(
a
)
therefore deals with instances of occupancy without an occupancy
certificate, but where there are approved plans in place.
[16]
But even if ss 4(1) and 14(1) were to apply here, and I do not find
that they do, there are, in my view, compelling considerations
why
the lease agreement in the present matter is valid and enforceable.
[17]
The respondents placed much reliance on the trite principle that what
the law prohibits it also renders void, and reference
was made to the
well-known dictum in
Schierhout
v Minister of Justice:
[8]
‘[i]t is a fundamental principle of our law that a thing done
contrary to the direct prohibition of the law is void and of
no
effect’.
[9]
And, as
stated, the additional penal sanction in s 14(4)(
a
)
[10]
was said to fortify a conclusion of invalidity in the case of
non-compliance with s 14(1)(
a
).
In this regard we were referred to
Christie
where it is explained that ‘when a contract is not expressly
prohibited but it is penalized, that is the entering into it
is made
a criminal offence, then it is impliedly prohibited and so rendered
void.’
[11]
But, as the
author correctly points out, those are not inflexible rules. What
must ultimately be determined is the purpose of the
legislative
provision. These principles are mere guidelines in ascertaining that
purpose. Solomon JA put it as follows in
Standard
Bank v Estate Van Rhyn:
[12]
‘
The
contention on behalf of the respondent is that when the Legislature
penalises an act it impliedly prohibits it, and that the
effect of
the prohibition is to render the [a]ct null and void, even if no
declaration of nullity is attached to the law. That,
as a general
proposition, may be accepted, but it is not a hard and fast rule
universally applicable. After all, what we have to
get at is the
intention of the Legislature, and, if we are satisfied in any case
that the Legislature did not intend to render
the [a]ct invalid, we
should not be justified in holding that it was. As
Voet
(1.13.16) puts it – “but that which is done contrary to
law is not
ipso
jure
null and void, where the law is content with a penalty laid down
against those who contravene it.” Then after giving some
instances in illustration of this principle, he proceeds: “The
reason for all this I take to be that in these and the like
cases
greater inconveniences and impropriety would result from the
rescission of what was done, than would follow the act itself
done
contrary to the law.” These remarks are peculiarly applicable
to the present case, and I find it difficult to conceive
that the
Legislature had any intention in enacting the directions referred to
in sec 116(1) other than that of punishing the executor
who did not
comply with them.’
[18]
In
Swart
v Smuts
[13]
this Court considered this question in some detail. Referring to the
flexibility of this principle, Corbett AJA observed that ‘[c]areful
consideration of the wording of the statute and of its purpose and
purview may lead to the conclusion that the Legislature did
not
intend invalidity’ (own translation).
[14]
In discussing the aids of interpretation in ascertaining the
intention of the Legislature, the learned Judge referred to the
question
whether the attainment of the Legislature’s purpose
requires the nullification of the prohibited act or whether the
sanction,
penal or otherwise, would sufficiently meet that
objective.
[15]
In the present
instance, this consideration is of particular importance since, as
stated, the respondent relies on the penal sanctions
in the relevant
provisions as proof of the fact that the agreement is rendered
invalid by non-compliance. The sentence to be imposed
for criminal
offences is almost invariably subject to the discretion of a court.
There is thus a substantial measure of flexibility
involved.
[19]
But that is not the case with the law of contract – the
contract is either valid or it is not. If the law has been
contravened,
the contract may be treated as illegal and that is the
end of the matter. As Boshoff JA correctly, with respect,
cautioned
in
Metro
Western Cape v Ross
,
‘[t]he use of contract law to supplement the deficiencies of
the criminal law has serious disadvantages which outweigh any
utility
it has in this respect’.
[16]
Regard must also be had to the probable unintended consequences
(‘greater inconveniences and impropriety’) which
invalidity
can cause when compared to the prohibited act.
[17]
It is axiomatic that each case must be considered on its own facts,
taking into account the language, scope and object of the statute
in
question as well as the consequences in relation to justice and the
convenience of adopting one view rather than the other.
[18]
[20]
In my view, the penalty provision in s 14(4)(
a
) strongly
suggests that the penalty itself was intended by the Legislature to
be an adequate sanction, without the lease agreement
in this instance
also being void. As I see it, the primary purpose of the Act, as its
short title suggests, is to provide for national
building regulations
and standards. The long title of the Act confirms this view: ‘[t]o
provide for the promotion of uniformity
in the law relating to the
erection of buildings in the areas of jurisdiction of local
authorities; for the prescribing of building
standards; and for
matters connected therewith’. The Act is less concerned with
private law relationships between, for example,
lessors and lessees,
but rather with public law relationships between local authorities
and builders, users and occupants. Section
14 is thus concerned in
the main with ensuring compliance with the provisions of the Act and
with conditions of approval. It is
difficult to understand why, over
and above the penalty provisions in s 14(4)(
a
), compliance was
intended to be achieved also by rendering void agreements which
contravene the section. I am fortified in my conclusion
in the
following respects:
(a)
Section 14(1A) provides that permission may be granted by the local
authority to an owner of a building or any person having
an interest
in the building, to use the building prior to the issue of an
occupancy certificate.
[19]
This exemption is strongly indicative of the fact that the
Legislature did not intend agreements which contravene the section to
be void. As I have said, neither the City Council nor the respondent,
both of whom had full knowledge of the facts, had a problem
with the
absence of an occupancy certificate. The Act does not expressly place
a prohibition on the occupation of a building without
an occupancy
certificate having been issued – it merely creates a statutory
offence in respect of the occupation of a building
without the
requisite occupancy certificate. It was open to the appellant or the
respondent to apply for s14(1A) permission if
this had become
necessary.
(b)
Second, there are other remedies available to local authorities to
enforce the provisions of the Act in order to achieve its
primary
purpose, set out above. These include:
(i)
ordering the alteration or demolition of a building which is
dangerous or shows signs of becoming dangerous to life or property
(s
12(1)); and
(ii)
applying to a magistrate’s court for an interdict or the
demolition of a building which contravenes the provisions of
the Act
(s 21).
As
stated, the primary focus of the statute is not on private
contractual relationships, but on those between local authorities
and
builders, users and occupants.
(c)
Lastly, one of the factors to be considered in a determination of the
Legislature’s intention is that the additional sanction
may
have undesirable and unintended consequences.
[20]
This case vividly demonstrates the unjust and undesirable
consequences which may ensue. Through no fault of its own and utterly
oblivious to the absence of any plans, having purchased the property
at an auction, the appellant would find itself in the invidious
position of having a lease agreement declared invalid where it has
fully performed all its obligations and where the tenant was
fully
conversant with all the facts. In addition, the slow grind of the
City Council’s bureaucratic machinery stood in the
way of the
appellant’s efforts to regularize the situation for five years.
[21]
Much of what has been stated in respect of s 14(1)(
a
)
with regard to ascertaining the intention of the Legislature must of
course also apply to s 4(1), read with s 4(4). For the reasons
already outlined, I am of the view that the Legislature did not
intend a further sanction of invalidating agreements which contravene
the section over and above the penal sanction contained in s 4(4).
This conclusion is even more compelling when one considers the
nature
of the penalty in s 4(4). Provision is made for a maximum fine of
‘R100 for each day on which [a person] was engaged
in so
erecting such building [without plans]’ The longer the period
of transgression, the harsher the penalty – something
which, as
already stated, cannot be achieved through invalidating a private
contract.
[22]
In
Friedshelf
113 (Pty) Ltd v Mysty Blue Trading 559 CC,
[21]
an unreported judgment of the South Gauteng High Court, Johannesburg,
a similar conclusion was reached. There the applicant had
sought a
declarator that the lease agreement between it and the respondent was
validly cancelled. The basis for that relief was
the contention that
the respondent had fraudulently failed to disclose that there were no
approved plans and occupancy certificate
for the particular premises.
The respondent also averred that it had an improvement lien over the
premises due to the invalidity
of the lease agreement by reason of
the non-compliance with s 4 and s 14 of the Act. In a closely
reasoned judgment, Van der Merwe
AJ came to the conclusion that there
are no ‘valid or compelling considerations which indicate that
the private lease agreement
in the present instance must be visited
with the sanction of voidness and unenforceability by virtue of the
fact that it relates
to premises in respect of which the requirements
of [the Act] have not been complied with.’
[22]
In reaching that conclusion the learned Judge reasoned that:
(a)
there were no allegations that the premises was unsafe for occupation
and, on the unchallenged evidence, the applicant was attending
to the
outstanding requirements;
(b)
the authorities were aware of the situation and that the applicant
was attending to it;
(c)
there are remedies available to the local authority to address the
non-compliance, should it wish to do so;
(d)
there was ‘no pressing need . . . for the court to impose an
additional sanction on the applicant regarding the private
law
relationship between the applicant and the respondent, which is not
provided for in the relevant legislation’;
(e)
the penal sanction was adequate and more appropriate in its
flexibility to deal with non-compliance.
[23]
I endorse these conclusions and the underlying reasoning of the
learned Judge. This case is on all fours with the present one.
For
the reasons already set out, I therefore hold that the lease
agreement in this instance is valid and enforceable. What remains
is
to consider the judgment of Rogers J in
Berg
River Municipality v Zelpy,
[23]
a matter upon which the respondent placed heavy reliance for its
contention that, due to the lack of approved building plans, the
use
and occupation of the property was impliedly prohibited by s 4(1).
[24]
In
Berg River
Municipality
the
municipality sought a final interdict preventing Zelpy, the
respondent company, as property owner from occupying or using certain
buildings on its property constructed without plans, until an
occupancy certificate had been issued by the municipality. Zelpy
opposed the application and in its counter-application sought an
order directing the municipality to take a decision on Zelpy’s
request for permission to use the building in terms of s 14(1A). The
municipality’s refusal to issue a s 14(1A) certificate
was
based on its stance that an occupancy certificate could, in terms of
s 14(1)(
a
),
only be issued in respect of buildings constructed in accordance with
approved building plans. Zelpy contended that the criminal
sanction
in s 14(4)(
a
)
was adequate, rendering an interdict unnecessary. In the
counter-application the central question was whether s 14(1A)
permitted
a local authority to grant permission for a building to be
used where the building had been erected without its approval.
[25]
In deciding these issues, Rogers J reasoned that, since Zelpy had
been occupying the buildings whithout approved plans, the
erection of
the buildings was unlawful in terms of s 4(1), but that ‘that
section does not state, at least not expressly,
that it is unlawful
to use a building which has been unlawfully erected’.
[24]
The learned Judge reasoned further that the unlawfulness of Zelpy’s
use of the buildings is to be found by implication and
that that
implication is to be found, not in s 14(4), but rather in s 4(1).
Rogers J opined that one of the Act’s main purposes
was to
ensure that buildings will be safe and suitable for the intended use.
He observed that:
‘
[t]he
erecting of a building is not an end in itself; a building is erected
so that it may, upon completion, be occupied and put
to use. The
reason the Act forbids the erecting of buildings without approved
plans and provides for their demolition if they are
unlawfully
erected is to prevent the existence of buildings which, because of
the absence of approved plans, may be unsafe and
unsuitable for use
(even though no enquiry into safety and suitability is required in
order for the act of erecting to be unlawful
or in order to obtain an
interdict or a demolition order). Even when a building has been
erected in accordance with approved plans,
s 4 does not permit it to
be used or occupied without the local authority’s further
approval. This is a further mechanism
to ensure that the building is
safe and suitable for occupation, as is apparent
inter
alia
from the requirement for the certificates specified in ss 14(2) and
14(2A).
’
[25]
[26]
The learned Judge furnished comprehensive reasons for his conclusion
that s 4(1) contains an implied prohibition against the
use or
occupancy of a building in the absence of approved plans. He found
support for his conclusion in the texts of ss 14(1) and
14(1A), the
legislative history of s 14 and the absurdity of reading into the
present wording of the introductory part of s 14(4)(1A)
the words ‘or
without’ (ie that it would then read: ‘. . . erected or
being erected with the approval of a local
authority or without [such
approval]’. Rogers J found further support in the textual
construction of the two penalty provisions
in ss 4(4) and s 14(1)(
a
)
respectively. He reasoned thus: ‘[
t]here
is a further reason for implying the prohibition in s 4(1) rather
than s 14(4)(
a
).
In the case of s 4, there is a prohibition in s 4(1) and an offence
created in s 4(4). In the case of s 14, the prohibition and
offence
are not separately legislated – the sole source of unlawfulness
is the offence created by s 14(4)(
a
).
By implying into s 14(4)(
a
)
words which would extend its operation to buildings erected without
municipal approval one would be establishing a wider criminal
offence
than the one expressly created by the lawmaker. The scope of penal
provisions must be conveyed with reasonable clarity
. . . This
is a further obstacle to implying words into s 14(4)(a), and it is
only by some such implication that s 14(1A)’s
scope could
sensibly be read as including buildings erected without municipal
approval. The same difficulty does not exist in s
4. Although the
prohibition in s 4(1) necessarily implies, in the context of the Act
as a whole, a prohibition against use, it
is not necessary, and . . .
probably not permissible, to make the same implication in s 4(4),
which expressly criminalises the
erecting (not the use) of a building
in contravention of s 4(1)) and authorises a penalty expressed with
reference to the number
of days on which the person was engaged in
erecting (not using) the building.
’
[26]
[27]
While the reasoning in
Berg
River Municipality
appears, on the face of it, rather attractive, the conclusion that s
4(1) contains an implied prohibition against use or occupancy
presents serious difficulties. First, the effect of such an
implication may result in an offending party falling foul of a
criminal
sanction by attributing an implied meaning to a statutory
provision. However, penal provisions must not only be stipulated with
reasonable clarity,
[27]
but
must also be interpreted strictly where there may be ambiguity.
[28]
The second difficulty is that there is no apparent reason why one
must perforce read an implied prohibition against use or occupancy
in
s 4(1) when ss 14(1)(
a
)
and 14(4)(
a
)
expressly deal with unlawful use or occupancy where there are
approved building plans. Where there are none, the local authority
has other remedies available to it to enforce the provisions of the
Act. It is well established that great caution must be exercised
when
seeking to read an implied meaning into a statute. That can only be
done when implication is necessary to give effect to the
statutory
provision as it stands. In addition, the implication must be
necessary so that the ostensible intent of the lawmaker
is realised
or to make the legislation workable. This approach was first laid
down authoritatively by this court in
Rennie
NO v Gordon NO and another,
[29]
and followed thereafter in a long line of cases in this court and in
the Constitutional Court, most recently in
Masetlha
v President of the Republic of South Africa and others.
[30]
I am unable to discern such a need as far as s 4(1) is concerned.
And, importantly, the difficulties outlined above strongly militate
against this implication. A strained interpretation which entails the
implied meaning with its concomitant difficulties, propounded
in
Berg
River Municipality,
points inescapably to a need for legislative review and correction,
if required. Confronted with these difficulties in the course
of the
debate, the respondent’s counsel was driven to concede that the
approach in
Berg
River Municipality
on this aspect presents insurmountable obstacles. Counsel
consequently reverted to what was termed, ‘the respondent’s
principal contention’, namely the lack of an occupancy
certificate and the effect of s 14(1)(
a
),
read with s 14(4)(
a
),
discussed above.
[28]
To sum up with regard to this first issue: non-compliance with ss
4(1) and 14(1) does not render the parties’ lease agreement
void and unenforceable. There is no basis to justify reading an
implied meaning into s 4(1) that the use or occupancy of a building
which has no approved plans is prohibited. I discuss next the
respondent’s alternative contention that the property was not
fit for the purpose for which it had been let, since occupancy would
have rendered the respondent liable to criminal prosecution
under s
14(4)(
a
).
[29]
The respondent was at liberty to request the local authority to
pursue the remedies available to it in terms of the Act, had
the need
arisen to do so. The conclusion is compelling that the respondent,
with full knowledge of the lack of an occupancy certificate,
had
consented to use and occupation under the prevailing circumstances.
The respondent received exactly what it had bargained for
–
office accommodation refurbished to its needs, in a building with an
outstanding occupancy certificate which, to its knowledge,
the owner
(the appellant) was in the process of obtaining. The respondent never
complained of this alleged unfitness for letting,
and only did so
after it had vacated the property and to avoid the consequences of
being held to a contract it had freely entered
into.
[31]
[30]
In the premises, the appeal must be upheld and the cross-appeal must
fail. Although the appellant had in its summons initially
sought
payment from
1 July 2014, in this court it altered that relief,
seeking payment from 1 December 2014. The following order is issued:
1.
The appeal is upheld with costs.
2.
The order of the high court is set aside and substituted with the
following:
‘
Judgment
is granted in favour of the plaintiff in the sum of R7 867 548.78
together with interest at 8% per annum from
1 December 2014 to
date of payment and costs’.
3.
The cross-appeal is dismissed with costs.
________________________
S A
MAJIEDT
JUDGE
OF APPEAL
APPEARANCES
For
Appellant:
D T v R du Plessis SC
Instructed
by:
Mageza Raffee Mokoena Inc,
Johannesburg
Lovius Block Attorneys,
Bloemfontein
For
Respondent:
M
P van der Merwe SC, with C de
Instructed
by:
Villiers
Delport
van den Berg Attorneys,
Pretoria
Honey
Attorneys, Bloemfontein
[1]
Section 14(1)(
a
)
reads:
‘
(1)
A local authority shall within 14 days after the owner of a building
of which the erection has been completed, or any person
having an
interest therein, has requested it in writing to issue a certificate
of occupancy in respect of such building –
(a)
issue such certificate of occupancy if it is of the
opinion that such building has been erected in accordance with the
provisions
of this Act and the conditions on which approval was
granted in terms of section 7 . . .’
[2]
Section 4(1) reads as follows:
‘
(1)
No person shall without the prior approval in writing of the local
authority in question, erect any building in respect of
which plans
and specifications are to be drawn and submitted in terms of this
Act’.
[3]
Section
4(4) reads: ‘Any person erecting any building in contravention
of the provisions of subsection (1) shall be guilty
of an offence
and liable on conviction to a fine not exceeding R100 for each day
on which he was engaged in so erecting such
building.’
Section
14(4)(
a
) reads: ‘The owner of any building, or any
person having an interest therein, erected or being erected with the
approval
of a local authority, who occupies or uses such building or
permits the occupation or use of such building –
(i)
Unless a certificate of occupancy has been issued in terms
of
subsection (1)(
a
) in respect of such building;
(ii)
. . .
(iii)
. . .
(iv)
. . .
shall
be guilty of an offence.’
[4]
Hubbard & another v
Cool Ideas
1186 CC [2013]
ZASCA 71; 2013 (5) SA 112 (SCA).
[5]
Cool Ideas 1186 CC v
Hubbard & another
[2014]
ZACC 16; 2014 (4) SA 474 (CC).
[6]
Ibid para 42.
[7]
‘Erection’ is defined in s 1 as ‘in relation to a
building, includes the alteration, conversion, extension,
rebuilding, re-erection, subdivision of or addition to, or repair of
any part of the structural system of, any building; and
‘
erect’
shall have a corresponding meaning.’
[8]
Schierhout v Minister of
Justice
1926 AD 99
at 109.
[9]
At 109.
[10]
Para 12 above.
[11]
G B Bradfield
Christie’s
The Law of Contract in South Africa
7ed at 395 (footnotes omitted).
[12]
Standard Bank v Estate van
Rhyn
1925 AD 266
at 274 -
275; see also:
Metro
Western Cape (Pty) Ltd v Ross
1986
(3) SA 181
(A) at 188F–189A.
[13]
Swart v
Smuts
1971
(1) SA 819 (A).
[14]
At 829 F: ‘Deeglike oorweging van die bewoording van die
statuut en van sy doel en strekking kan tot die gevolgtrekking
lei
dat die Wetgewer geen nietigheidsbedoeling gehad het nie’.
[15]
Swart
at
830 A-B.
[16]
Metro Western Cape v Ross
above at 191H.
[17]
Swart v Smuts,
footnote
12 above, at 830C.
[18]
Metro Western Cape
footnote
15 above at 188G-H.
[19]
Section 14(1A) reads:
‘
A
local authority shall within 14 days after the owner of a building
of which the erection has been completed, or any person having
an
interest therein, has requested it in writing to issue a certificate
of occupancy in respect of such building –
(a)
issue such certificate of occupancy if it is of the opinion
that such building has been erected in accordance with the
provisions
of this Act and the conditions on which approval was
granted in terms of section 7 . . .’
[20]
Swart v Smuts
,
footnote 12 above.
[21]
Friedshelf 113 (Pty) Ltd v
Mysty Blue Trading
559 CC,
Case no 2008/39429, delivered on 3 April 2009.
[22]
Ibid para 7.
[23]
Berg River Municipality v
Zelpy
2065 (Pty) Ltd
[2013] ZAWCHC 53; 2013 (4) SA 154 (WCC).
[24]
Ibid para 23.
[25]
Ibid para 26.
[26]
Ibid para 38.
[27]
University of Cape Town v
Cape Bar Council & another
1986 (4) SA 903 (A).
[28]
Rex v Milne and Erleigh
(7)
1951 (1) SA 791
(A ) at 823B-F.
[29]
Rennie NO v Gordon NO and
another
1988 (1) SA 1
(A)
at 22E-F.
[30]
Masetlha v President of the
Republic of South Africa & another
[2007] ZACC 20
; ;
2008 (1) SA 566
(CC) para 192.
[31]
Compare:
Odendaal v
Ferraris
2009 (4) SA 313
(SCA).