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[2014] ZAFSHC 38
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Basfour 2994 (Pty) Ltd v Registrar of Deeds: Bloemfontein (497/2014) [2014] ZAFSHC 38 (20 March 2014)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No.: 497/2014
In
the matter between:
BASFOUR
2994 (PTY)
LTD
.......................................................................................
Applicant
and
REGISTRAR
OF DEEDS:
BLOEMFONTEIN
....................................................
Respondent
REASONS
FOR JUDGMENT
INTRODUCTION
[1]
On 13 March 2014 I granted the following orders in the unopposed
Motion Court at the request of the applicant, Basfour 2994
(Pty) Ltd:
“
1.
Dit word verklaar word dat subartikel 8(7) gelees met subartikel 8(5)
van die Vrystaatse Ordonnansie op Dorpe, 9 van 1969, nie
kontrakte
wat onderteken is voordat voldoen is aan die vereistes soos gestel in
subartikel 8(5)(b)(iv) van die gemelde Ordonnansie,
maar waarin
voorsiening gemaak is dat die regswerking van sodanige kontrakte
opgeskort is tot tyd en wyl daar wel aan sodanige
voorwaardes voldoen
is, verbied nie en dat sodanige kontrakte dus nie nietig is nie.
2.
Die respondent word verbied om te weier om registrasies van oordragte
te passeer op sterkte daarvan dat kontrakte soos hierbo
vermeld en
geïdentifiseer nietig is.”
As
I was of the view that the application was relatively urgent and
satisfied that a proper case has been made out, I granted relief
whilst indicating that my reasons would be made available in due
course. These are my reasons.
[2]
The papers were drawn in Afrikaans, but I decided to draft my reasons
in English as I have reason to believe that some of the
senior
employees in the employ of the Department of Rural Development and
Land Reform who might have an interest in the matter
are not
conversant in Afrikaans.
[3]
It is indicated in the founding affidavit deposed to by Roelof
Johannes Rossouw, an attorney and conveyancer with 41 years of
experience, that although he was aware that affidavits should not
deal with submissions of a legal nature, the opportunity was
taken to
do so due to the specific nature of the application. I found
this helpful in this specific instance, especially
insofar as the
Registrar of Deeds neither opposed the application, nor filed any
report to assist me in coming to a decision.
I find this
somewhat deplorable in view of the detailed written submissions to
the respondent by Mr Rossouw in an attempt to avoid
this application.
These were attached to his affidavit and showed thorough research and
understanding of the law. The respondent
or her advisors did not,
ex
facie
the documents before me, respond
meaningfully and in writing to any of Mr Rossouw’s submissions.
Mr Pienaar, who appeared
on behalf of applicant in the Motion Court,
presented detailed heads of arguments at my request on short notice.
I appreciate this
greatly and I am indebted to him and Mr Rossouw.
THE
DISPUTE
[4]
At the heart of the matter is a rejection note made on or about 10
January 2014 by an examiner employed at the local Deeds Registry
on
transfer documents lodged for registration purposes which reads as
follows:
“
The
Township was proclaimed on 6/9/2013. The erf cannot be sold
before date of proclamation. Comply with the Ordinance or
lodge court
order-
RCR45/2012.
Redraft all docs.”
The
effect of the rejection note is that the respondent refused to
approve the transfer documents in order for the transfer of the
particular property to be registered in the Deeds Registry.
This rejection of the documents was based on the Registrar of
Deeds’
viewpoint that the underlying deed of sale was null and void due to
the provisions of the Free State Townships Ordinance
9 of 1969
.
[5]
The reference to RCR 45/2012 in the rejection note is a reference to
item 45 of the Registrars’ Conference of 2012, being
RCR
45/2012. I quote from Mr Rossouw’s written response to the
rejection note prior to lodging this application:
“
RCR
45/2012 provides as follows where the purchase date of a first
transfer (is) before the proclamation date of the township:
The question posed
was:
‘
In
terms of the various Provincial Ordinances land in a township cannot
be sold, exchanged, leased or disposed of in any manner
before the
proclamation date. Can the owner based on the Huntrex 148 (Pty)
Ltd v J A van Jaarsveld, case 217/2010 sell property
before the
townships is proclamated (sic)?’”
The
Conference resolved:
“
The
Ordinances must be adhered to alternatively a court order is
required.”
[6]
Notwithstanding Mr Rossouw’s detailed written and oral
presentations to the Registrar of Deeds and other officials with
reference to most of the authorities referred to herein, whilst
pointing out important differences in the wording between the Free
State and Transvaal (now Gauteng) Ordinances, the Registrar of Deeds,
allegedly being provided with advice by a certain Mr Allan
West, was
not prepared to accept the legal position as advanced by Mr Rossouw.
In response to Mr Rossouw’s written
response to the rejection
note and his follow-up written submissions of 28 January 2014, both
documents dealing extensively with
the legal position, he was merely
informed as follows and in the process no authority for the viewpoint
was quoted:
“
Dear
Mr Rossouw
Attached
memo refers.
Section
8(5) of the Free State Townships Ordinance 9 of 1969 is clear that no
sales of land in a township to be established may
take place prior to
township establishment unless the responsible Member approved or
until the services certificate has been issued.
If
the date of transaction therefore is before township establishment or
the issue of the services certificate, the approval of
the
responsible Member must be lodged for registration purposes or in the
absence thereof, a Court order.
You are welcome to
request a report to Court made by a Registrar in terms of section 97
of the Deeds Registries Act when you approach
the High Court.
Regards
Carlise Strydom
Registrar
of Deeds
Bloemfontein”
[7
] The transferor in respect of the particular transaction, Basfour
2994 (Pty) Ltd, a land developer and township establisher,
decided to
lodge an application to obtain a court order as advised by the
Registrar of Deeds and this is the application entertained
by myself.
[8]
According to the undisputed evidence of Mr Rossouw it has been the
practice in the Free State Province over many years until
the end of
December 2013 to allow township developers to enter into contracts
with proposed purchasers of erven in a township to
be established,
subject to a suspensive condition that they shall not come into being
until such time as the MEC shall have declared
the township as an
approved township and satisfied himself that the services and
amenities, which have to be provided in connection
with the relevant
land in terms of the conditions subject to which the establishment of
the said township, was approved, are available
and shall have issued
a certificate to that effect.
[9]
Applicant, the owner of immovable property just outside Bloemfontein
applied in 2011 for permission to establish a township
thereon in
accordance with the aforesaid Ordinance. The township
established on the property of applicant is known as Bloemfontein
(uitbreiding 213), or in English, Bloemfontein (extension 213).
Initially and particularly in respect of this land the Registrar
of
Deeds was prepared to register deeds of transfer in respect of the
erven sold subject to the aforesaid suspensive conditions.
Approximately ten such erven have been transferred prior to the event
on 10 January 2014 when one deed of transfer pertaining to
an erf in
the township was rejected as mentioned
supra
.
[10]
Prior to the establishment of the township, applicant entered into
several contracts with interested purchasers of erven within
the
township to be established. In all these contracts the sales
and thus the rights and obligations of the parties thereto
were made
subject to certain suspensive conditions. I requested a
precedent of a typical suspensive condition which reads
as follows:
“
13.
Suspensive condition:
13.1
It is recorded that:
13.1.1
section 8(5) of the Townships Ordinance No. 9 of 1969 provides that,
after an owner of land has taken steps to establish
a township
thereon, no person shall enter into any contract whereby any land in
such township is sold until the member of the Executive
Council of
the Province responsible for the administration of the said ordinance
(‘the MEC’) shall have declared the
township an approved
township and the MEC shall have satisfied itself that the services
and amenities which have to be provided
in connection with such land
in terms of the conditions subject to which the establishment of such
township was approved, are available
and shall have issued a
certificate to that effect;
13.1.2
the property is situated on land of which the seller has taken steps
to establish a township and regarding which land the
seller shall use
its best endeavours to, at its cost, and within 24 (twenty-four)
months after the signature date provide all the
services and
amenities which have to be provided in connection with the land in
terms of the conditions subject to which the establishment
of the
township in which the property is situated was approved;
13.1.3
the agreement is subject to the suspensive condition that it shall
not come into being until such time as:
13.1.3.1
the MEC shall have declared the township in which the property is
situated as an approved township and;
13.1.3.2
the MEC shall have satisfied himself that the services and amenities
which have to be provided in connection with the relevant
land in
terms of the conditions subject to which the establishment of the
said township was proved, are available and shall have
issued a
certificate to that effect.
13.2
...”
[11]
It is thus clear from the aforesaid suspensive condition that the
sale shall not come into being until such time as (i) the
MEC shall
have declared the township in which the property is situated as an
approved township and (ii) the MEC shall have satisfied
himself that
the services and amenities which have to be provided in connection
with the relevant land are available and shall
have issued a
certificate to that effect.
THE
HISTORY OF EVENTS RELATING TO SECTIONS 8(5) READ WITH SECTION 8(7) OF
THE FREE STATE TOWNSHIPS ORDINANCE (“THE ORDINANCE”)
[12]
The reference to “administrateur” in the Afrkaans version
of the Ordinance is a reference to the administrator
of the Free
State Province in the pre-constitutional era. The Afrikaans version
is outdated and has not been amended in line with
the English
version. “Responsible member” is defined in section 1 of
the Ordinance as the Member of the Executive Council
(“MEC”)
of the province responsible for the administration of this law (the
Ordinance). The amendments to delete
references to
“administrator” and to substitute same with “responsible
member” and the insertion of the
definition were done in 1994
and after the demise of the apartheid government.
[13]
The English version of sections 8(5) and 8(7) read as follows:
“
8.
(5) After an owner of land has taken steps to establish a township
thereon, no person shall –
(a)
enter into any contract whereby any land in
such township is sold, exchanged, leased or disposed of in any other
manner;
(b)
erect a building on such land,
except
with the approval of the responsible member or otherwise than in
accordance with the conditions imposed by the responsible
member when
granting such approval, until –
(i)
……
..; or
(ii)
……
...;
(iii)
……
...; or
(iv)
the responsible member shall have declared
the township an approved township and, in the case of such an owner
who is not a local
authority, the responsible member shall have
satisfied himself that the services and amenities which have to be
provided in connection
with such land in terms of the conditions
subject to which the establishment of such township was approved, are
available and shall
have issued a certificate to that effect.
(6)
…..
(7)
Any contract entered into in conflict with the provisions of
subsection (5) shall be of no force or effect.”
It
should immediately be apparent that section 8(5) of the Ordinance
refers to a contract whereby land in a township to be established
is
sold, exchanged, leased or disposed of in any other manner and that
it contains no reference to contracts subject to suspensive
conditions. Notwithstanding two successive governments being in
power since the
Soja
judgment of the then Appeal Court
referred to
infra,
delivered
on 27 March 1981 and thus exactly thirty three years ago, the
particular Free State Ordinance has not been amended as
is the case
in the old Transvaal province in particular.
[14]
Section 57A(1) of Ordinance 25 of 1965 (T) (the old Transvaal
Ordinance) initially read as follows:
“
After
an owner of land has taken any steps to establish a township thereon,
no person shall, subject to the provisions of section
58, enter into
any contract for the sale, exchange or disposal in any other manner
of an erf in such township or grant an option
to purchase or
otherwise acquire such erf, until such township has been declared an
approved township.”
This
Ordinance was amended immediately after the decision of the then
Appeal Court in
Soja (Pty) Ltd v Tuckers Land &
Development Corporation (Pty) Ltd
1981 (3) SA 314
(A). The
amendment was effected by section 3 of Ordinance 19 of 1982 (T) to
provide that “a contract” for purposes
of section 57A(1)
of Ordinance 25 of 1965 (T), includes any contract subject to any
condition including a suspensive condition.
[15]
It is important to emphasise that section 8(5) of the Free State
Ordinance 9 of 1969 has not been amended accordingly, notwithstanding
Soja
and
several judgments thereafter, some of which will be referred to
herein. The only reasonable conclusion to be drawn from this
is that
the Free State legislature is satisfied with the state of affairs
mentioned
supra
by
Mr Rossouw in his undisputed evidence.
THE
AUTHORITIES
[16]
A contract of sale subject to a condition precedent that has not yet
been fulfilled is not a sale. See Christie and Bradfield,
Christie’s The Law of Contract in
South Africa
, 6
th
Edition, p 147 and the authorities quoted in footnote 72 stretching
as far back as
Quirks Trustees v
Assignees of Liddle & Co
(1885)
3 SC 322.
The authors also cite the well-known and often quoted
judgment of
Corondimas v Badat
1946 AD 548.
[17]
In
Corondimas
Watermeyer CJ expressed himself as
follows at 551:
“
Such
an agreement is clearly subject to a true suspensive condition.
It is an agreement to buy and sell if the Minister grants
a permit to
the parties to enter into it. According to the decision of this
Court in the case of Provident Land Trust v Union
Government
(1911,
AD 615)
, when a contract of sale is subject to a true suspensive
condition, there exists no contract of sale unless and until the
condition
is fulfilled. In other words, the prohibited contract
(e.g., a contract of sale), which is declared null and void by sec
5(2) of the Act unless the Minister consents to it, cannot come into
existence unless and until that condition is fulfilled.
Until
that moment, in the case of a sale subject to a true suspensive
condition, such as this is, it is entirely uncertain whether
or not a
contract of sale will come into existence at some future time.
Until that moment there is certainly a legal relationship,
contractual may be… existing between the parties, which may
ripen into a contract of sale, but, in the particular case in
which
the coming into existence of a contract of sale is made, by agreement
between the parties, to depend upon consent to it having
been given
by the Minister, that relationship is not one which is forbidden by
the Act or declared by it to be of no force and
effect.”
Feetham
AJA, concurred in by Tindall JA, Greenburgh JA and Schreiner JA,
remarked as follows at 558 of
Corondimas
:
“
Where
an agreement of purchase and sale is entered into subject to a
suspensive condition, no contract of sale is there and then
established, but there is nevertheless created ‘a very real and
definite contractual relationship’ which, on fulfilment
of the
condition, develops into the relationship of seller and purchaser.”
[18]
In
Tuckers Land and Development
Corporation v Strydom
1984 (1) SA 1
(A) the court found that the sale of erven in a township yet to be
proclaimed in terms of Ordinance 25 of 1965 (T) subject to a
suspensive condition that the township be duly proclaimed was not hit
by the prohibition in s 57A(1) of the Ordinance. The court
found that
the agreement
in casu
became a valid sale on fulfilment of the suspensive condition and
that the amendment of Ordinance 25 of 1965, referred to
supra
,
did not apply to contracts entered into before the amendment on 13
October 1982. The court considered contracts subject
to
suspensive conditions and stated as follows:
“
Of
‘n verkoop onderhewig aan ‘n opskortende voorwaarde nou
ook al as geen koopkontrak nie, dan wel as ‘n koopkontrak
wat
nog net nie
perfecta
is nie, bestempel word, is daar geen rede waarom die regsgevolge wat
gemeenregtelik aan so ‘n verkoop geheg is nie nog steeds
ten
volle toepassing sal vind nie. En wat wetgewing betref, sal
vermoedelik in die toekoms duidelik aangedui word, soos nou
deur die
wysiging van Artikel 57A(2) geskied het, wat met die gebruik van
bogenoemde begrippe beoog word. Voorts staan dit
natuurlik die
wetgewer vry om, sonder inbreukmaking op bestaande regte, statutêre
bepalings waarin die begrippe reeds voorkom
te wysig indien die
huidige stand van die regspraak en hierdie uitspraak meebring dat nie
gevolg gegee word aan die wetgewer se
werklike maar onvoldoende
uitgedrukte bedoeling nie. Dit is dan ook insiggewend dat, na
verloop van onderskeidelik vyf en
vier jaar na die beslissings in die
Wallis- en Nieuwoudt-sake, Artikel 3(e) van Wet 70 van 1970 ongewysig
bly voortbestaan.”
[19]
The Supreme Court of Appeal followed the judgment in
Corondimas
,
supra
,
more recently in
Thorpe and Another
NO v BOE Bank and Another
[2006] ZASCA 30
;
2006 (3)
SA 427
(SCA) and I quote from para [12] p 431:
“…
when
a contract of purchase and sale is entered into subject to a
suspensive condition no contract of sale is then and there
established
and the binding contractual relationship which does arise
is not a contravention of a statute prohibiting the conclusion of a
contract
of purchase and sale
and only
matures into such a contract on fulfilment of the condition
.”
(emphasis
added)
[20]
Rampai J considered several of the authorities mentioned herein in
Huntrex 145 (Pty) Ltd v Van Jaarsveld
and Another
, Case No 217/2010, Free
State, a judgment delivered on 1 July 2010. He, based on these
authorities, rejected a submission
that a contract subject to a
suspensive condition as
in casu
was invalid and held it to be good in law. In that case the
deed of sale was also subject to a similar suspensive condition
as
in
casu
which condition had eventually
been fulfilled. This judgment led to the discussion and
eventual decision reflected in RCR45/2012.
[21]
In 1981, probably in reaction to the
Soja
judgment, the legislature amended the definition of “sale”
in the Subdivision of Land Act 70 of 1970 to include a sale
subject
to a suspensive condition. The legislature also extended the
definition of “alienate” in the
Alienation of Land Act 68
of 1981
to read as follows:
“’
Alienate’
in relation to land, means sell, exchange or donate, irrespective of
whether such sale, exchange or donation is
subject to a suspensive or
resolutive condition, and…”
Prior
to the amendment of Act 70 of 1970 our courts accepted the validity
of sales subject to a suspensive condition that ministerial
consent
be given for the subdivision of the land which was the subject of the
sale. See
Sentraalwes Personeel
Ondernemings (Edms) Bpk v Nieuwoudt
1979 (2) SA 537
(C) at 543 - 545 and authorities quoted such as
Corondimas
and
Palm Fifteen (Pty) Ltd v Cotton
Tail Homes (Pty) Ltd
1978 (2) SA
872
(A).
[22]
In
Geue and Another v Van der Lith
and Another
[2003] ZASCA 118
;
2004 (3) SA 333
(SCA)
the court considered whether a contract subject to a suspensive
condition was a contract for the sale of property as set
out in Act
70 of 1970. With reference to relevant authority some of which I have
referred to above, the court found as follows
at 340H:
“
In
all these cases it was held that contracts subject to these
suspensive conditions were not hit by the legislative enactments
concerned. The reason that formed the basis of these decisions was
essentially that the agreement prohibited by both enactments
was a
sale whereas, in accordance with the decision of this Court in
Corondimas, an agreement of sale subject to a suspensive condition
cannot, pending fulfilment of the condition, be regarded as a ‘sale’.
It only becomes a sale when a condition is fulfilled,
in which event
there is no contravention of the statutory provisions involved.”
The
SCA found that the agreement in
Geue
was the very kind that the legislature wished to include in the
provision of section 3(e)(i) of Act 70 of 1970 when it specifically
extended the definition of sale in 1981, that it was settled
principle that a contract which contravenes a statutory provision
was
not
ipso iuro
void, unless of course it contained an express statement to that
effect, but in line with several decisions of the High Court it
was
apparent that the legislature’s intention was to the effect
that agreements prohibited by the section should be visited
with
invalidity and therefore it found that the agreement was null and
void.
[23]
Through the decades and notwithstanding the amendment of the
Transvaal Ordinance 25 of 1965, the Subdivision of Land Act 70
of
1970 and the introduction of the
Alienation of Land Act 68 of 1981
in
1981, as well as the authorities referred to above, the Free State
Provincial legislature has refrained from amending the Free
State
Townships Ordinance 9 of 1969 to be in line with any of the aforesaid
legislation.
CONCLUSION
[24]
I endorse the judgment of Rampai J in
Huntrex
148
,
supra
.
Insofar as respondent and her advisors are of the view that the
judgment in
Huntrex 148
does not have to be followed, I trust that this judgment is clear.
The Free State Townships Ordinance 9 of 1969 must be interpreted
as
the Appeal Court did in respect of the Transvaal Ordinance 25 of 1965
and the Subdivision of Land Act 70 of 1970 prior to their
amendments.
The resolution adopted at the Registrar’s conference of 2012,
RCR 45/2012, is based on an erroneous understanding
of the legal
position, is wrong and cannot be endorsed. It has clearly been
shown that the Free State and Transvaal Ordinances
differ
comprehensively, that the Transvaal Ordinance was amended since the
judgment of
Soja
,
but that the Free State Provincial legislature failed to do
likewise. Therefore the legal position pertaining to the Free
State Townships Ordinance 9 of 1969 is exactly as set out in
Soja
and
Strydom
supra
in
which judgments it was found that a contract pertaining to the sale
of land in a township to be established, subject to a suspensive
condition similar to the one
in casu,
is
valid. Therefore the respondent may not refuse to register
deeds of transfer based on underlying deeds of sale subject
to
suspensive conditions as
in casu,
once
these conditions have been fulfilled.
[25]
For these reasons I granted the relief to applicant as set out in
paragraph [1]
supra.
J.
P. DAFFUE, J
On
behalf of applicant: Adv T Pienaar
Instructed
by:
Rossouws
Attorneys
BLOEMFONTEIN