About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2015
>>
[2015] ZAGPPHC 310
|
|
Heritage Hill Devco (Pty) Ltd v Heritage Hill Homeowners Association (A541/13) [2015] ZAGPPHC 310; 2016 (2) SA 387 (GP) (24 April 2015)
REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
Case No: A 541/13
Date: 24 April
2015
In the matter
between:
HERITAGE
HILL DEVCO (PTY)
LTD
..................................................................................
APPELLANT
and
HERITAGE HILL
HOMEOWNERS
ASSOCIATION
.......................................................
RESPONDENT
Coram: Rabie J,
Legodi J and Baqwa J
Heard: 18
February 2015
Delivered:
BAQWA J.
JUDGMENT
Summary: In an
action for the payment of levies instituted by a Home Owners
Association (respondent) against the developer (appellant),
the only
question for determination was:
(1) was the
appellant, subsequent to the establishment of the Township and for
the purposes of the Articles of Association of the
Respondent, the
registered owner of individual properties in the Township? If so, it
was accepted by the parties that it would
be liable to pay the
levies.
Alternatively
(2) was the
appellant, the registered owner of the property known as “the
remaining extent of the township Louwlardia Extension
48” and
not as contended for, the registered owner of the individual erven in
the Township of Louwlradia Extensions 48. If
so, it would not be
liable for levies.
Annotations
Case law
1) Florida Hills
Township Ltd v Roodepoort- Maraisburg Town Council 1961(2) SA 368E- H
2) Steelpark Estate
Co Ltd v Vereeniging Town Council
1963 (2) SA 367
(T)
3) Volkstrust Bpk v
Direkteur van Skattings & Andere
1980 (1) SA 760
( C ) at
763-H
4) Kosmos Ridge
Homeowners’ Association v Cosmos Ridge (Pty) Ltd
[2003 JOL
11481
(T)
5) Prospect SA
Investments 42 (Pty) v Lanarco Homeowners Association, case number
13346/12, given on 30 June 2014
Introduction
[1]
This is an appeal against the judgment and order granted by this
Court per Kollapen J. on 14 February 2013. Leave to appeal
was
granted by the Court
a
quo
on
19 March 2013.
[2] The judgment was
given consequent upon an action instituted by the respondent against
the appellant in terms of which it sought
payment in the sum of R2, 5
million which it alleges is due by the appellant as levies in respect
of appellant’s ownership
of various erven situate within the
Heritage Hill Estate located in the Township of Louwlardia Extension
48 of which the appellant
was the developer.
[3] The respondent
is a section 21 company incorporated in terms of the Companies Act 61
of 1973 and its Articles of Association
regulates the relationship
and rights and obligations of the members of the respondent company.
[4]
Due to the fact that the facts giving rise to the actions were common
cause between the parties no evidence was led and the
matter was
proceeded with on the basis of the pleadings and arguments advanced
before the Court
a
quo
.
The pleadings
[5] In its Plea the
appellant denied being the registered owner of any erven referred to
in the respondent’s Particulars of
Claim. It further pleaded
that in terms of the provisions of section 46 of the Deeds Registries
Act 47 of 1937 (“Act”)
an erf in a Township is only
created and commences to exist as an individual erf upon transfer
thereof from the developer into
the name of the purchaser.
[6] Appellant
further pleaded that in terms of clause 9.1 any member of the
respondent shall be liable to pay a levy from time to
time in respect
of each property owned by such member as provided for in clause 9.2
of the Articles of Association and that in
terms of clause 1, the
definition of “The property” as contained in the Articles
of Association means an erf in the
Township to be known and which is
now known as Louwlardia Extension 48. The Appellant pleaded therefore
that there is no obligation
vesting upon it to pay any levies to the
respondent.
The Articles
of Association (Articles)
[7] The Articles of
Association is annexed to appellant’s Particulars of Claim and
it is appropriate to refer to some of the
clauses contained therein.
7.1
In Clause 1, “The property” is defined as
“
an
erf in the Township(s) to be known as Louwlardia Extensions to be
established by the developer on portions of the farm Brakfontein
390,
Registration Division JR, Province of Gauteng ”.
7.
2
Clause 2 provides that any words or expressions not defined in clause
1, shall have the same meaning as that defined in the Act
7.3
Clause 9.1. provides that
u
the
directors shall from time to time determine the levies payable by
members for the purpose of meeting the expenses which the
Association
has incurred
,
or which the
Association will incur, in the furtherance of its of objects. ”
Factual
Background
[8] The appellant
obtained transfer of the property known as Portion 53 of the farm
Brakfontein 390, Registration Division JR, Province
of Gauteng on 6
January 2005 in terms of deed of transfer T/82544/05 registered as
such on 30 June 2005 by the Registrar of Deeds,
Pretoria.
[9] The land
described in the title deed was subdivided into a Township known as
Extension 48 and a General Plan in respect of the
Township was
registered by the Registrar of Deeds on 7 February 2006.
[10] Typically the
plan depicts the erven in the Township, the dimensions thereof and a
specific number is allocated to each erf.
[11] After the
registration of the plan and compliance with all the formalities, the
appellant proceeded to sell and transfer some
of the erven to
individual owners.
[12]
The appellant was incorporated under the name Midnight Masquerade
Properties 78 (Pty) Ltd. The name was again changed on 13
November
2007 to
Heritage
Hill Residential Devco (Pty) Ltd.
[13]
The issues to be decided by the Court
a
quo
were
the following:
13.1 Was the
appellant, subsequent to the establishment of the Township and for
the purposes of the Articles of Association of the
Respondent, the
registered owner of individual properties in the Township? If so, it
was accepted by the parties that it would
be liable to pay the
levies.
Alternatively
13.2 Was the
appellant, the registered owner of the property known “as the
remaining extent of the township Louwlardia Extension
48” and
not as contended for, the registered owner of the individual erven in
the township of Louwlardia Extensions 48. If
so, it would not be
liable for levies.
The Law
[14]
The Deeds Registries Act 47 of 1937 (“The Act”) defines
“erf” as “
Every
piece of land registered an erf, lot
,
plot or stand in a
deeds registry, and includes any defined portion, not intended to be
a public place, of piece of land laid out
as a township, whether or
not it has been formally recognized, approved or proclaimed as such
.
”
[15] The Deeds Act
defines “registered” as registration in the Deeds
Registry. The impact of these two definitions is
therefore such that
every erf depicted in the General Plan is deemed to be registered
upon registration of the General Plan.
[16] Section 46 (1)
of the Deeds Act provides as follows:
“
If
land has been subdivided into lots or erven shown on a general plan,
the owner of land subdivided shall furnish a copy of the
general plan
to the Registrar, who shall, subject to compliance with requirements
of the Section and any other law, register the
plan and open a
register in which all registrable transactions affecting the
respective lots or erven shown on the plan shall be
registered
”
[17] From a reading
of the above, the substratum for registrable transactions is the
General Plan and that substratum comes into
being once the General
Plan is registered in the Deeds Registry.
[18] On the other
hand Section 47 enables an owner of land in respect of which a
register has been opened to transfer the whole
or a portion of such
land provided that if a portion only is sought to be transferred, the
transfer shall be passed in accordance
with a diagram from which
shall be excluded all erven on the land which have already been
transferred and secondly the boundaries
of such portion shall
coincide with one or more of the lines of division shown on the
General Plan and shall not intersect any
of the erven shown thereon.
[19] The purpose of
the provisions of Section 46 and 47 are thus to ensure the
recognition of the existence of each and every individual
erf
depicted on the general plan and adherence to that plan in regard to
all registrable transactions.
[20] It is also
clearly to be understood from the provisions of these sections that
land which existed as a farm ceases to be farmland
upon proclamation
of a Township and upon registration of a General Plan.
Application of
Law to the facts
[21] The appellant
contends that it is no more than the owner of the remainder of the
Township known as Louwlardia Extension 48
and that it was not the
owner of the individual erven situated in that township. The
contention is not sustainable when one considers
the provisions of
the Deeds Act referred to above and the clause which deals with
membership of the respondent.
[22] Clause 4 of the
Articles of Association deals with “membership” of the
respondent and reads as follows:
MEMBERSHIP
4.
4.1
The following
persons shall be members of the Association ”
4.1.1 during the
development period, 7(seven) nominees of the developer who are not
the registered owners of portions of the property,
and
4.1.2
any person including the developer, who is the registered owner of
the property....
”
[23] The imposition
of levies is dealt with in clause 9 which empowers the directors of
the respondent, from time to time, to determine
the levies payable by
the members for the purpose of meeting all expenses which the
respondent has incurred or which the directors
reasonably anticipate
the respondent will incur in the furtherance of the objects of the
respondent. Clause 9.2 provides:
“
Members
shall be liable in respect of any levy determined in terms of 9.1
from time to time in equal shares, in respect of each
property owned
by such member”.
[24]
The appellant bases its submissions on the decision in the matter of
Kosmos Ridge
Homeowners Association
v
Kosmos Ridge (Pty)
Ltd
2003 JOL 11481(T)
Par 5.
In
the Kosmos Ridge Matter the Court determined that an erf is created
when it is transferred from the developer into the name of
the
purchaser and that the balance of the Township remains farmland and
that there is no registered owner in respect of any such
“unsold
erven” in terms of the general plan, which have not been
transferred as yet.
[25]
The incorrectness of the conclusions in the
Kosmos
Ridge
matter
are apparent from the discussion of the provisions of sections 46 and
47 above. The same issues were also discussed and dealt
with in the
Court a quo
and
I am in agreement with the conclusions reached in that regard by the
Court a quo when it pronounced as follows:
[27]
“
If one has
regard to the provisions of section 46 of the Deeds Act then it is
clear that the registration of the general plan had
the effect of
creating separate erven, the ownership of which could only have
vested in the township developer
;
and in this
instance that would have been the defendant.
[28] In the
context of this action there can hardly be any suggestion that the
dispute in question is a dispute around farm land.
Indeed the
membership of the defendant in the plaintiff company is a membership
with a view to the advancement of the township
known as Louwlardia
Extension 48.
[29]
In that context it must accordingly follow that the common interest
of the plaintiff and the defendant which bind them together
in the
plaintiff company is indeed in relation to the township and that the
imposition of levies by the plaintiff is indeed in
respect of
township land and for the benefit of the owners of such land. A
township is defined by its own unique characteristics
distinct from a
farm
.
It consists of
separate erven for residential and other purposes all of them clearly
identified on the general plan and all of them
take on and assume a
separate identity. This is as much evident from the general plan and
from the consequences and effects of
section 47 of the Deeds Act”.
[26]
The Court a
quo
also
discussed two decisions in which the Court expressed itself with
regard to the matter of the remainder of the Township, namely
that
portion where the individual stands have not been sold and
transferred to purchasers. Those matters were:
Florida
Hills Township Ltd v Roodepoort Maraisburg Town Council
1961 (2) SA
368
(T) and Rhynheld Township Ltd V Benoni Township Council and
Others
1950 (4) SA 717
(T).
The
Court
a quo
sought
to distinguish those matters from the present case on the following
basis:
[32]
“The decisions in
Florida Hills and Rhyfield
dealt with the
relationship between a local authority and a township developer and
with the valuation of unsold lots in a township.
The legal nature of
the relationship between the parties in those matters was one that
flowed ex lege and the dispute centered
around the method used to
value such erven. In my view the relationship the parties find
themselves in, in the context of the present
dispute is certainly
distinguishable. The relationship between the parties evidenced by
the Articles of Association is a contractual
relationship underpinned
by membership base inter alia on the ownership of land in the
township and the imposition of levies presumably
to advance the
interests of all land owners in the township
.
The Articles of
Association to that extent evidences a coming together of property
owners for the purpose of their collective benefit.
In this regard,
it could hardly be contended that the defendant's involvement in the
plaintiff was as owner of farmland and not
land in a township. On the
contrary the membership provisions in the Articles of Association
treat the developer, to the extent
that it owns land, in the same way
as any other person who owns land in the township. ”
[33]
For the purposes of the Articles of Association the defendant was in
fact the owner and indeed the registered owner of the
various erven
in the township that came into existence upon the registration of the
general plan and the subdivision of the township.
It must follow that
if the various individual erven depicted on the general plan vested
in the defendant
,
the answer to the
question as to who the registered owner of those erven were for the
purposes of the Articles and the imposition
of levies could only be
that it was the defendant
.
”
[27]
I concur with the reasoning and the conclusion reached by the Court
a
quo.
The
decision of the Court
a
quo
is
quoted with approval in the unreported judgment in the KwaZulu -
Natal High Court:
Prospect
SA Investments 42 (Pty) Ltd v Lanarco Homeowners Association case
number 13346/12
delivered
on 30 June 2014 where Kruger
J
expressed
himself as follows:
[27]
“The conduct rules provide for the payment of levies in respect
of all erven
.
I agree with the
judgment of
Kollapen
J.
in Heritage Hill Home Owners Association v Heritage
Hill Devco (Pty) Ltd
2013 (3) SA 447
(GNP)
where
he held
'
at paragraph 36
that:
“
.....
the
very idea of the formation of the plaintiff is to create a structure
for the benefit of all owners of the land in the township
,
all of whom
automatically become members on account of their ownership of land
and all of whom are entitled on account of their
membership to
participate directly in the decision making process of the plaintiff
with regard to the imposition of levies and
the use to which such
revenue is to be put”.
[28] At paragraph
39 and 40 he elaboratedfurther and held:
“
[39]
....when one has regard to the Articles of Association and indeed to
the purposes to be achieved by the imposition of levies,
then it is
clear.... that levies are ultimately utilized for the benefit of the
township. In this regard such benefits would accrue
to the developer
as owner of the individual erven. The developer’s ability to
market such erven would in large measure be
linked to the manner in
which the township is administered and the manner in which different
issues such as security, aesthetics,
lightning etc. are dealt with.
To the extent that levies ultimately impact on the ability of the
plaintiff to provide such services,
the defendant could hardly be
said to be prejudiced if it were required to pay such levies, as such
levies ultimately redound to
its benefit.
[40]
On the contrary
,
if the defendant
could argue that it was exempt from paying such levies then the
consequence of such a stance would be inequitable,
in that it would
disproportionately place the burden for the services in the township
that are to be funded from levies, on those
individual property
owners who have taken transfer from the developer and not the
developer. Having regard to the fact that such
services as are to be
provided from the levies ultimately accrue to the benefit of all
property owners in the township, the defendant
would be in an unduly
advantageous position if such a stance was sustainable
[28] For the reasons
stated above it becomes quite apparent that from a legal, contractual
or even an equity basis, the stance taken
by the appellant in this
appeal cannot be justified.
[29] I accordingly
find that the Court a quo was correct in its finding that the
appellant is the registered owner of the unsold
erven within the
context of the respondent’s Articles of Association.
In the result I
propose that the following order be made:
29.1 The appeal
against the judgment on 14 February 2013 is dismissed
29.2 The Appellant
is ordered to pay the Respondent’s costs of the appeal which
costs shall include the costs of two Counsel.
S.A.M BAQWA
(Judge of the
High Court)
I agree
M.F.
LEGODI
(Judge
of the
High
Court)
I agree and it is
so ordered.
C. P RABIE
(Judge of the
High Court)
Counsel
for the Appellant:
Adv
Erasmus
Adv J A Venter
Instructed by:
Adriaan Venter & Associates
Counsel
for the Respondent:
Adv
A F Arnoldi SC
Adv J W Schabort
Instructed by: Javis
Jacobs Raubenheimer Inc.