Business Aviation Corporation (Pty) Ltd and Another v Rand Airport Holdings (Pty) Ltd (179/05) [2006] ZASCA 68; [2007] 1 All SA 421 (SCA); 2006 (6) SA 605 (SCA) (30 May 2006)

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Business Aviation Corporation (Pty) Ltd and Another v Rand Airport Holdings (Pty) Ltd (179/05) [2006] ZASCA 68; [2007] 1 All SA 421 (SCA); 2006 (6) SA 605 (SCA) (30 May 2006)

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THE
SUPREME COURT OF APPEAL
OF
SOUTH AFRICA
REPORTABLE
Case number : 179/05
In the
matter between :
BUSINESS
AVIATION
CORPORATION
(PTY) LTD FIRST APPELLANT
ORPHEUS
PANAYIOTOU SECOND APPELLANT
and
RAND AIRPORT HOLDINGS
(PTY)
LTD RESPONDENT
CORAM : HOWIE P, FARLAM, BRAND, CLOETE
et
LEWIS JJA
HEARD : 4 MAY 2006
DELIVERED
: 30 MAY 2006
Summary
: Enrichment lien arising from
improvements effected by lessee to leased property during currency of
lease – question whether abolished
in respect of urban leases by
placaeten
of 1658 and 1696.
Neutral citation
: This judgment may be referred
to as
Business Aviation Corporation v Rand Airport Holdings
[2006]
SCA 72 (RSA)
_____________________________________________________
JUDGMENT
BRAND JA
/
BRAND JA
:
[1] This appeal has its origin in the magistrate’s
court for the district of Germiston. The respondent (‘plaintiff’)
is the
owner of the Rand Airport near Johannesburg. The appellants
(‘defendants’) occupied parts of that property (‘the property’)
in terms of an oral lease agreement. Proceedings commenced when the
plaintiff sought an eviction order against the defendants on
the
basis that the lease was a monthly tenancy, terminable on one month’s
notice and that the defendants had failed to vacate
the property,
despite proper notice having been duly given to them on its behalf.
[2] The defendants raised two defences in the
alternative.
First, that the lease was not a monthly tenancy, but
a long term lease which entitled them to occupy the property for at
least another
five years. Alternatively, that they had expended an
amount of several million rand on necessary and useful improvements
of the property
for which they had not been compensated and that they
were consequently entitled to retain the property under an enrichment
lien.
[3] The outcome of the main defence depended on issues
of credibility, which the magistrate decided in favour of the
plaintiff. The
alternative defence was also dismissed by the
magistrate, essentially on the acceptance of the plaintiff’s
contention that the
lien relied upon by the defendants had been
abolished by two
placaeten
that were promulgated by the
Estates of Holland during the 17
th
century. In the result,
the magistrate granted an eviction order against the defendants.
[4] The appeal against the magistrate’s order was
dismissed by the Johannesburg High Court (Goldstein J, Khampepe J
concurring).
Its judgment has since been reported
sub nom Business
Aviation Corporation (Pty) Ltd v Rand Airport Holdings (Pty) Ltd
2006 (2) SA 95
(W). As appears from the reported judgment, Goldstein
J first examined the magistrate’s credibility findings underlying
the rejection
of the defendants’ main defence of a long term lease
(paras 4-10). On this issue he decided (in para 10) that the
defendants’
criticism of these credibility findings could not be
sustained. He then proceeded to consider the alternative defence
based on a
right of retention arising from an improvement lien (paras
11-15) and concluded that the magistrate’s dismissal of this
defence
should also be upheld.
[5] Though the defendants sought leave to pursue a
further appeal to this court against the rejection of both their
defences, the
court
a quo
granted them leave to appeal only
‘in respect of the existence in law, or not, of the lien for which
[they] contend’. The magistrate’s
finding that the lease under
which the defendants were entitled to occupy the property had been
duly terminated by one month’s
notice, therefore stands.
[6] An appropriate starting point for a discussion of
the questions raised by the appeal appears to be a statement of the
generally
accepted principle that in Roman Dutch Law, following Roman
Law, lessees were originally in the same position as
bona fide
possessors as far as claims for improvements to leased properties
were concerned. It follows that, absent any governing provisions
in
the contract of lease, lessees, like bona fide possessors, had an
enrichment claim for the recovery of expenses that were necessary
for
the protection or preservation of the property (called
impensae
necessariae
) as well as for expenses incurred in effecting useful
improvements to the property (called
impensae utiles
). (See eg
Nortje v Pool NO
1966 (3) SA 96
(A) at 131.) More pertinent
for present purposes, lessees, like
bona fide
possessors, who
were still in possession of the leased property, also had an
enrichment lien (a
ius
retentionis
), that allowed them
to retain the property until their claims for compensation had been
satisfied (see eg Digest 19.2.55.1; De Groot
Inleydinge tot de
Hollandsche Rechtsgeleerdheid
2.10.8; Van der Keessel
Praelectiones Iuris Hodierni ad Grotium
2.10.8; Van der
Keessel
Theses Selectae Iuris Hollandici et Zelandici
Th. 213
(Lorentz’s translation 2 ed (1901) p 73);
De Beers Consolidated
Mines v London and SA Exploration Company
(1893) 10 SC 359
at
367;
Lechoana v Cloete
1925 AD 536
at 549;
Lessing v Steyn
1953 (4) SA 193
(O) at 199C-D;
Syfrets Participation Bond Managers
Ltd v Estate and Co-op Wine Distributors (Pty) Ltd
1989 (1) SA
106
(W) at 110F-H; Bodenstein
Huur van Huizen en Landen volgens
het Hedendaagsch Romeinsch-Hollandsch Recht
p 116; R W Lee
An
Introduction to Roman Dutch Law
5 ed p 304; Van der Merwe
Sakereg,
2 ed p 164; A J Kerr
The Law of Sale and Lease
3
ed p 466; Ellison Kahn (ed)
Principles of the Law of Sale and
Lease
p 89. As to enrichment liens in general, see also eg
United Building Society v Smookler’s Trustees and Golombick’s
Trustee
1906 TS 623
at 626-629;
Brooklyn House Furnishers
(Pty) Ltd v Knoetze and Sons
1970 (3) SA 264
(A) at 270-272 and
Goudini Chrome (Pty) Ltd v MCC Contracts (Pty) Ltd
[1992] ZASCA 208
;
1993 (1) SA
77
(A) at 84J-85D).
[7] Malpractices amongst lessees led, however, to
legislation by the Estates of Holland on two occasions, which
severely restricted
their right to compensation for improvements. The
first enactment was promulgated on 26 September 1658. It is to be
found in the
Groot Placaet-Boeck
part 2 cols 2515-2520 under
the rubric ‘
Placaet vande Staten van Hollandt, tegens de
Pachters ende Bruyckers vande Landen
’. The provisions of this
placae
t were re-enacted in almost identical terms on 24
February 1696 in a ‘
Renovatie-placaet’
(see GPB part 4
cols 465-7). Because the provisions of the two
placaeten
were
so similar, reference is often made to ‘the
placaet
’,
singular, meaning the earlier one of 1658 (see eg
De Beers
supra
at 368;
Rubin v Botha
1911 AD 568
at 579;
Spies v
Lombard
1950 (3) SA 469
(A) at 473A and 476D-E).
[8] Four articles of the
placaeten
dealt with
claims for improvements, namely, articles 10 to 13. Of these the most
important for present purposes was art 10, which
is translated as
follows by W E Cooper
Landlord and Tenant
2 ed p 329 note 3:
‘
Provided,
nevertheless, that whenever the owner of any lands, takes them for
himself, or lets them to others, he is bound to pay the
old lessee,
or his heirs, compensation for the structures, which the lessee had
erected with the consent of the owner, as well as
for ploughing,
tilling, sowing and seed corn, to be taxed by the court of the
locality, without, however, the lessees being allowed
to continue
occupying and using the lands, after the expiration of the term of
the lease, under the pretext of (a claim for) material
or
improvements, but may only institute their action for compensation
after vacating (the lands).’
(For
the original Dutch, see eg Cooper loc cit
; Syfrets Participation
Bond Managers
supra
at 110I-111A). For other, very
similar, translations, see Lee
Commentary
92 and George Wille
Landlord and Tenant in South Africa
, 5 ed at p 270.
[9] The import of art 10 is clear. Though lessees
retained their right to claim compensation for improvements, the
claim was limited
to improvements effected with the landlord’s
consent. Moreover, they lost their right of retention in the form of
a lien. At the
end of the lease period they first had to vacate the
property before they could institute their claim for compensation.
Articles
11, 12 and 13 limited the lessees’ right to compensation
even further. Under art 11 compensation payable for ‘structures’
was
restricted to bare materials, not including sand and lime, and
excluding the costs of labour. Article 12 dealt with structures
erected
without the landlord’s consent. In respect of these,
lessees had no claim for compensation at all, though they were
allowed to
break down the structures and remove the material before
termination of the lease. In terms of art 13, the lessee’s right to
claim
compensation for plantings and trees was virtually abolished,
in that it was limited to those planted on the instructions of the
owner and then only for the original cost of the plants (see eg
Cooper op cit p
329-330).
[10] The question whether the
placaeten
ever
became part of South African law and, if so, to what extent, was
pertinently raised and discussed by this court in
Spies v Lombard
supra. The article relied on by the appellant in that matter,
Spies, was art 9 of the
placaeten
which essentially rendered
it unlawful for lessees to sublet the property or assign the lease
without the owner’s written consent.
The argument raised in answer
by the respondent, Lombard, was that the p
lacaeten
were
promulgated by the Estates of Holland, which had no legislative
powers outside that province. Consequently, so Lombard’s argument
went, these legislative enactments could have no application
proprio
vigore
to the other provinces of the Netherlands or to the Dutch
possessions beyond the seas, including the Cape Colony (see
481G-482A).
Van den Heever JA, with the other two members of the
court concurring, agreed with this argument as far as it went (see
482H). However,
so he held, although the
placaeten
did not
apply to South Africa
proprio vigore
, some of the rules
derived from the
placaeten
had become part of our law through
reception by the courts. These rules he then summarised as follows
(at 484C-D):
‘
(1)
that it is unlawful to sub-let rural land without the landlord’s
consent and that consequently the sub-lessee cannot invoke
his
contract against the landlord and (2) one, not now relevant, relating
to improvements on leased land.’
The
rules in category (2) were subsequently identified as those contained
in articles 10, 11, 12 and 13 of the
placaeten
(see eg in
Lessing v Steyn
1953 (4) SA 193
(O) 201C-H; De Wet & Van
Wyk
Kontraktereg & Handelsreg
5 ed p 361 note 37; Cooper
op cit p 330).
[11] At this stage it can therefore be accepted as being
beyond controversy that the provisions of art 10 relied upon by the
plaintiff
did become part of our law. What remains controversial,
however, is the question which is pivotal to the appeal, namely,
whether
the provisions of art 10 are limited to rural properties or
whether they extend to urban tenements as well. It is pivotal because
the property involved, which forms part of the Rand Airport, can, of
course, not be described as ‘rural’. If art 10 should therefore
be confined to rural tenements, as argued by the defendants, the
provisions of the article will have no impact on the availability
of
the enrichment lien for which they contend.
[12] The historical background to the pivotal question
thus arising dates back to the judgment of De Villiers CJ in
De
Beers Consolidated Mines v London and SA Exploration Company
supra. While the Chief Justice earlier held the view, in
De Vries
v Alexander
(1880) Foord Rep 43 at 47), that the prohibition
against sub-letting without the owner’s written consent in art 9 of
the
placaeten
was restricted to agricultural tenements or
‘country lands’, he stated in
De Beers
(at 369 and 370),
obiter
, as it turned out, that art 12 of the same legislative
enactments applied to urban leases as well. As appears from the
judgment in
De Vries
(at 47), the view that Lord de Villiers
held with regard to art 9 was based on the express statement by Van
der Keessel Th. 674 that
this article only applied in
praediis
rusticis
, which was translated by the Chief Justice himself as
‘country lands’ (see also Lorenz op cit at 242). With reference
to his
earlier judgment, Lord de Villiers said in
De Beers
(at
369-370):
‘
The
9
th
article had never been accepted in Holland as altering
the civil law in regard to the sub-letting of urban tenements, but it
does
not follow that some of the other articles may not have been
accepted as generally applicable. Some of the later writers, notably
Van der Keessel (Thes. 213), accept the 10
th
, 11
th
and 12
th
articles as having been incorporated into the
common law of Holland and Friesland relating to landlord and tenant.’
[13] The Chief Justice’s first reason for holding that
the application of articles 10 to 12 also extended to urban leases,
was therefore
that Van der Keessel did not specifically refer to
lessees of agricultural property, but to lessees in general, when he
dealt with
these four articles in his
Theses Selectae
at
Th. 213 (ad Grotium 2.10.8), which is in contrast with his
discussion of art 9 in Th. 674. The second reason for his view,
the
Chief Justice formulated as follows (at 369):
‘
The
Placaat
does not mention urban tenements, but it clearly was
not intended to place agricultural lessees in a better position than
urban lessees.
Every article of it restricts the ancient common law
rights of lessees.’
[14] I find myself in respectful agreement, however,
with academic authors who are of the view that neither of the two
reasons for
the Chief Justice’s
obiter
statement can be
sustained (see eg Bodenstein
op cit p
111-112; De Wet &
Van Wyk op cit p
362 note 47; Cooper op cit p
335-6;
Kerr op cit p
472-4; Van der Merwe op cit p
166; Kahn
op cit p 91). His last mentioned consideration, that the
placaeten
were not intended to place agricultural lessees in a
better
position, cannot be taken literally. After all, as Lord de Villiers
himself pointed out in the final sentence of his statement quoted
above, the very purpose and effect of the
placaeten
were to
impose severe restrictions on the ancient common law rights of the
lessees involved. The statement as it stands must therefore
be
ascribed to a slip of the pen.
[15] What the Chief Justice clearly intended to say was
that there is no apparent reason why the Estates of Holland would
have intended
to place lessees of agricultural properties in a
worse
position than their urban counterparts. Even so, the answer to
this consideration seems to be the one suggested by Bodenstein (op
cit p 112) and endorsed by the later authors to whom I have referred
(in para 14 above). It is based on the premise that the
placaeten
were Dutch statutes of the 17
th
century and they are
therefore to be given the meaning they bore at the time of their
promulgation. Accordingly, the search for a
potential reason for
discrimination against agricultural lessees must be confined to
circumstances prevailing at that time. Fortunately
for succeeding
generations, the ancient legislature had deemed it necessary to
describe the evil or mischief that the
placaeten
were aimed at
quite explicitly in the introductory preamble to the enactments. The
reason for promulgation of the
placaeten,
so the
preamble
stated, was to curb the
moetwilligheden
(malpractices or
abuses) by ‘
pachters ende huyrluyden
’ (lessees) which led
to quarrels between them and the owners of the leased properties and
eventually caused violent unrest amongst
the populace. One of these
malpractices, described in the preamble, was that the lessees
retained and continued to occupy the leased
property after the
expiration of the lease period, without entering into a new lease and
against the will of the owners, ‘
onder pretext
’, inter
alia, of ‘
beterschappe
’ (improvements) and ‘
timmeragie
’
(erection of structures). (See also
Spies v Lombard
supra at
478F-479H.) What the lessees actually did in practice, so we are told
by Bodenstein (op cit p
120), was to abuse their common law
right of retention arising from an enrichment lien by deliberately
effecting costly improvements
to the leased property, for which they
knew the owners could not afford to compensate them, so as to
effectively deprive the owners
of their property permanently. (See
also
Lessing v Steyn
supra
at 199D-E.) Against this
background, the reason suggested by Bodenstein (op cit p 112) as to
why the Estates of Holland did not extend
the
placaeten
to
lessees of urban properties, was that ‘
van huurders van huizen
hooren wij die klacht nooit
’ (because the same complaints were
never made against lessees of urban tenements).
[16] The Chief Justice’s further reason for holding
that articles 10 to 12 should not be restricted to agricultural
leases, was,
as I have said (in para 13 above) that when Van der
Keessel discussed these articles in his
Theses Selectae
Th.
213 he drew no distinction between urban and agricultural tenements,
as he had done with reference to art 9 (in Th. 674). However,
as is
pointed out by academic authors, when Van der Keessel explained the
import of articles 10 to 12 in his more comprehensive
Praelectiones
(
ad Grotium
2.10.8 – Gonin’s translation (1963) Vol 2 at
162-3) he stated quite clearly that they applied only to ‘
colonis
sive conductoribus agrorum
’, ie lessees of agricultural land.
(See also Bodenstein op cit p
112; Cooper op cit p
335;
Kerr op cit p 472.)
[17] Further support for the proposition that, in
Holland, the provisions of the
placaeten
as a whole – and
not only those of art 9 – were limited to agricultural property,
appears from the following
dictum
by Van den Heever JA in
Spies v Lombard
supra
476H:
‘
The
prohibition is directed against “
Bruyckers ofte Pachters
”.
“
Pachters
” are of course lessees of rural land. A
‘
bruycker
’ is according to the ‘
Woordenboek der
Nederlandsche Taal’
. . . “
In’t bijzonder “Houder”’,
gebruiker (hetzij als pachter, hetzij anderzins) van eene boerderij
met bijbehoorende landerijen
”.’
(See
also
Burrows v McEvoy
1921 CPD 229
at 233.)
[18] The conclusion is therefore unavoidable: the
statement in
De Beers,
that articles 10 to 12 of the
placaeten
were not intended to be limited to agricultural property and
therefore also extended to urban leases, was clearly wrong.
Fortunately,
as I have said, that statement was
obiter
. This
is so because the determination of the issue between the parties in
De Beers
turned on the interpretation of clause 4 of their
lease agreement. In fact, Innes QC for the appellants, who were
eventually successful,
is recorded to have argued expressly (at 363)
that ‘the whole case must turn on section 4 of the lease; it
is not to be decided
on the common law, but on the terms of a
definite agreement’. And, as Lord de Villiers himself said (at
370), the position of the
appellants would have been even better if
art 12 of the
placaeten
did not apply to urban tenements.
[19] The appeal to the Privy Council against the
judgment of the Cape Supreme Court in
De Beers
was
unsuccessful (see
The London and SA Exploration Company Ltd v De
Beers Consolidated Mines Ltd
(1895) 12 SC 107
;
[1895] AC 451
(PC); Taitz: Privy Council Reports 348). The Judicial Committee of
the Privy Council also concluded, however, that the case turned
on an
interpretation of clause 4 of the lease. Consequently it was found
unnecessary to express any view on the principles of South
African
common law. This much appears clearly from the following observations
by Lord MacNaghten (at 108) – with reference to the
conclusions of
the High Court of Griqualand, which were contrary to those arrived at
by Lord de Villiers:
‘
A
most able argument on the Roman-Dutch Law in force in the Colony was
addressed to their Lordships by [counsel for the appellant]
in
support of the view which commended itself to the High Court of
Griqualand. Their Lordships, however, see no reason to think that
the
conclusions at which the Supreme Court arrived are in any respect
erroneous. In their Lordships’ opinion, it is not necessary
to say
more on this part of the case, because it appears to them, as it
appeared to the Supreme Court, that provisions in the lease,
which
were certainly not forbidden by law, authorised the respondents to
remove the buildings as they did.’
[20] In the circumstances I find myself in respectful
agreement with Van den Heever JA in
Spies v Lombard
supra (at
483H) when he found the following remarks by Innes J in
Rubin v
Botha
supra at 579 rather surprising:
‘
[B]ut
the claims of a tenant have been much simplified by the application,
at the instance of the Cape Supreme Court (with the subsequent
approval of the Privy Council), of many of the provisions of the
Placaat of 1658 to urban as well as rural leases (
De Beers v
London and SA Exploration Co
. . . .).’
The
statement in
Rubin
was again
obiter
, because, as Innes
J went on to point out immediately after the quoted statement (at
579):
‘
The
facts of the present dispute, however, take it quite outside the
ordinary lines of similar inquiries. We have here to do with
a
claimant who is neither a possessor nor an ordinary lessee . . . .’
[21] In
Burrows v McEvoy
supra at 233-4 Kotzé
JP (with Van Zyl J concurring) obviously held the view, rightly, I
think, that
De Beers
did not preclude him from deciding that
art 12 of the
placaeten
‘does not directly affect the
question of an urban lease which is the case with which we have to
deal’. With reference to the
judgment of Lord de Villiers in
De
Beers
he said the following (at 234):
‘
The
late Chief Justice . . . remarked that, while the placaat does not
mention urban tenements, it was not intended to place agricultural
lessees in a better position than urban lessees. That the latter
should not be in a worse position than the former may be conceded;
but I have always considered that this placaat was rather intended to
curb and restrict the pretended claims of lessees of land in
the
country (
ten platten lande
) than introduced in order to ease
and improve their position; and I notice that Professor Bodenstein in
his well reasoned Thesis
‘
Huur van Huizen en Landen
’, page
111ff., also holds this view.’
[22] Three years later, however, this court came to the
conclusion, without any reference to the judgment of Sir John Kotzé
in
Burrows
or to Bodenstein, that the applicability of art 12
of the
placaeten
to urban properties had been finally decided
in
De Beers
. The case was
Van Wezel v Van Wezel’s Trustee
1924 AD 409
, where Wessels JA expressed himself as follows (at 416):
‘
The
Placaat of 1658, sec. 12, G.P. 13, Vol. 2, p. 2515, altered the civil
law in regard to “Pachters en de Bruijckers van Landen”
and
allowed these to remove, during the currency of the lease, all
structures erected by them on the leased lands. . . . It is
questionable
whether the Placaat altered the civil law in respect of
every kind of lease or whether it only referred to certain
agricultural leases,
but be that as it may, the Cape Supreme Court,
in a decision approved of by the Privy Council, decided that it
referred to all leases
so that lessees of both rural and urban
properties who, annex materials . . . to the soil . . . have the
right to remove the materials
during the currency of the lease.
De
Beers Consolidated Mines
v
London & SA Exploration Co.
(10 S.C. 359).’
(See also the further statements to the same effect at
418.)
[23] For reasons that should by now be evident, the
statement by Wessels JA with regard to urban leases is insupportable
in at least
three respects. First, it was never really ‘questionable’
whether the
placaeten
applied to urban leases as well. They
were clearly limited to leases of agricultural properties. Secondly,
the statement to the contrary
by Lord de Villiers in
De Beers
cannot be regarded as authoritative, because it turned out to be both
obiter
and erroneous. Thirdly, that statement had not been
approved by the Privy Council in a considered judgment.
[24] Nevertheless, the
dictum
by Wessels JA in
Van Wezel
quoted above became the nub of the court
a quo
’s
judgment in this matter. Though the
dictum
only referred to
art 12, Goldstein J held (in para 15 at 98H-I), that it must, because
of the interrelationship between articles
10, 11 and 12, be
understood to refer to art 10 as well. With respect, I think this
must be so. It is the further conclusion by Goldstein
J that the
statement by Wessels JA concerning urban leases was part of the
ratio
decidendi
and therefore not
obiter
(see para 13 at 97H-I
and para 15 at 98I-99B) that requires further investigation.
[25] There
is a difference of opinion amongst academic authors as to whether the
statement in
Van Wezel
regarding urban lessees was
obiter,
or not. While J A van der Walt
(1989) 52
THRHR
590
p 595) is
of the view that it was
obiter
, Cooper (op cit p 335) clearly
thought that it was not (see also, eg Wille & Millin
Mercantile
Law of South Africa
18 ed p 336). The answer to the debate
clearly lies in the identification of the issues that were decided in
Van Wezel
. From the summary of the facts (at 412-413) it
appears that there were three properties involved. Their description
seems to indicate
that, in combination, they constituted a dairy farm
and were thus all intended for agricultural use. But this is not
clear and Wessels
JA found any specific classification unnecessary.
The question is: why? In the court
a quo,
Goldstein J
expressed the view (in para 15 at 98H-I) that it was because Wessels
JA had already decided that there was no difference
in the position
of urban and agricultural tenants and that any classification would
therefore be of no consequence. I do not believe,
however, that the
answer is that simple.
[26] As also appears from the summary of the facts, one
Leendert van Wezel had hired the three properties from De Beers
Company.
Although the leases were monthly tenancies, Leendert, like
other tenants of De Beers, relied on the practice of the lessor never
to terminate these leases. Consequently, Leendert erected structures
of a permanent nature on the leased properties. In 1920 he sold
his
dairy together with these improvements on the properties to his son,
Rudolph. He also delivered the improvements to Rudolph,
as far as
physical delivery could be made. Thereafter Leendert’s estate was
sequestrated. Competing claims to the improvements
were brought by
Rudolph and by the trustee in Leendert’s insolvent estate. The
trustee’s argument was that the structures had,
through attachment,
become part of the immovable property on which they stood and that
they could therefore not have been transferred
by Leendert. Rudolph
denied that the structures became attached to the leased property and
contended that they therefore remained
movable. The first issue for
determination was therefore whether the structures erected by
Leendert did in law become part of the
leased property or whether
they remained movable. On this issue Wessels JA held that, because
‘all these structures are fixed to
the soil and were placed there
for a permanent purpose’ they became immovable property in law (at
415).
[27] For his second argument, Rudolph relied on art 12
of the
placaeten,
which, it will be remembered, allows the
lessee to break down structures that were erected without the
landlord’s consent and to
remove the materials prior to the expiry
of the lease. The effect of this article, so Rudolph’s argument
went, is that, as between
lessor and lessee, even things that were
affixed to the soil are always in law to be regarded as movable.
According to this argument,
the article therefore constituted an
exception to the principle of Roman-Dutch law which is encapsulated
in the maxim
quicquid inaedificatur solo cedit
; ie whatever is
built on the soil accedes to the soil.
[28] Wessels JA considered this argument (at 416-418)
and found himself unable to agree with the notion that art 12 was
intended to
alter so fundamental a principle of civil law as
quicquid
inaedificatur solo cedit
. Despite the article, he said, the
principle therefore remains that structures erected by lessees on a
permanent basis assume the
character of the immovable property to
which they acceded and the lessee therefore did not remain the owner
of these structures.
The only effect of art 12 was to afford lessees
the right to break down structures erected by them and to remove the
material during
the currency of the lease.
[29] Leendert therefore did not retain ownership of the
structures. They became the property of De Beers when he attached
them to
the soil. All he could sell to his son, Rudolph, was the
right to break down these structures and remove the materials before
the
expiry of his lease. But, so Wessels JA held (at 419-420):
‘
[T]he
right to come upon the property, to break down the structures and to
remove them can only be exercised by the lessee as long
as he himself
has control of the leased plot; this right cannot be divorced from
the lease. As soon, therefore, as Leendert van Wezel
became insolvent
the control over the leased property passed to his trustee and after
that Leendert himself had no longer a right
to break down the
structures and take to himself the materials;
a
fortiori
,
therefore, Rudolph had no right to come upon the property and break
down the structures. What Rudolph van Wezel got for his money
was not
a right of ownership in the structures together with a right to come
upon the property and remove them, but only a right
to come upon the
plot so long as Leendert had control over it, and there to break down
the structures and to make himself the owner
of each part as it was
severed from the immovable property.’
[30] To sum up: In
Van Wezel
it was the successor
in title to the lessee, and not the lessor, who relied on the
provisions of the
placaeten.
This in itself was rather
exceptional, having regard to the limitations that the
placaeten
imposed on the common law rights of lessees. What Wessels JA
eventually held, however, was that art 12 of the
placaeten
did
not advance the successor in title’s cause, because the lessee
ceased to have control over the property prior to the removal
of the
materials. Whether art 12 of the
placaeten
applied or not
could therefore make no difference to the outcome of the case.
A
fortiori,
it would make no difference whether the
placaeten
applied to urban properties. That is why it was found unnecessary to
decide whether the properties under consideration should be
classified as urban or agricultural. The statement to the effect that
the
placaeten
also applied to urban properties was therefore
not part of the
ratio decidendi
; it was
obiter
and thus
not binding on the court
a quo
.
[31] After
Van Wezel,
it was held by this court
in
Spies v Lombard
supra
that art 9 of the
placaeten
applied only to agricultural leases. This in itself was not new.
As I have said (in para 11 above), Lord de Villiers himself held
the
same view about art 9, nearly 80 years before
Spies
, in
De
Vries v Alexander
supra. More significant for present purposes,
however, as pointed out by several academic authors (see eg Kerr op
cit
p
475
et seq
; Kahn op cit p 91), is
that the underlying reasoning of Van den Heever JA in
Spies
cannot be reconciled with the notion that other articles of the same
legislative enactments, could have applied to urban leases as
well.
First, Van den Heever JA demonstrated (at 476H), with reference to
the dictionary meaning of ‘
Bruyckers ofte pachters’,
that
the
placaeten
as a whole were directed exclusively at the
lessees of rural properties. Secondly, he explained (at 478G-H), that
according to the
preamble to the
placaeten,
the perpetrators
of the malpractices they were intended to curb, were the same lessees
of agricultural tenements.
[32] Without any reference to
Spies
, however, it
was held in two subsequent decisions of the High Court that art 10
did in fact extend to urban leases. This occurred
in
Syfrets
Participation Bond Managers v Estate & Co-op Wine Distributors
(Pty) Ltd
supra
and in
Palabora Mining Co Ltd v Coetzer
1993 (3) SA 306
(T). In
Syfrets
, Van Zyl J referred to the
criticism of the proposition in question by academic authors as well
as in the judgment of Kotzé
JP in
Burrows
. He then
commented as follows (at 111I-112C):
‘
I
must respectfully differ from the criticism aforesaid and the
suggestion in the
Burrows
case. It is true that the placaeten
deal specifically with rural land but that does not, to my mind,
exclude land situated in urban
areas on the basis, as it were, of the
maxim
inclusio unius est exclusio alterius
. The abuses which
were taking place in respect of lessees of rural land or tenements
might equally have been perpetuated in respect
of urban land or
tenements. The common denominator would be the land ('landen') and
not the examples given of abuses perpetrated
on such land. Land or
'landen' is the rendition of the Latin
solum
, which means
land, earth, ground, soil or the like and is not limited to that
situated in any particular area. It is this
solum
which
figures in the maxims
omne quod inaedificatur solo cedit
(
Just
Inst
2.1.29) and
superficies solo cedit
(
Gai Inst
273) in regard to
inaedificatio
as a means of acquiring
ownership by the accession of movable to immovable things. In any
event it would, in my view, be most inequitable
to grant the lessee
of an urban tenement a lien but to deny it to the lessee of a rural
tenement. In modern law there is no justification
for making such a
distinction.’
[33] The reference by Van Zyl J to the
inclusio
unius
maxim is, with respect,
difficult to understand. Urban lessees are not excluded from the
operation of the placaeten because of any
reliance on this maxim.
They are excluded because the wording of the placaeten clearly
restrict their operation to agricultural lessees.
The further
proposition that the abuses by the agricultural lessee referred to in
the placaeten ‘might equally have been perpetrated
in respect of
urban land or tenements’, cannot prevail. Although, of course, this
might have happened, it is evident that it did
not. This is clear
from the exposition of Bodenstein (see para 14); from the reference
to ‘pachters’ in the preamble of the placaeten;
and from the
omission of any reference to urban lessees in both placaeten. If
urban lessees were guilty of the same malpractices
this would surely
have been mentioned when the placaet of 1658 was re-enacted in 1696.
[34] The theory espoused by Van Zyl J that the term
‘
landen
’ was the Dutch rendition of the Latin ‘
solum
’,
which means land or soil, is, with respect, equally insupportable.
The reference in the
placaeten
is not merely to ‘
landen
’
but to ‘
pachters en bruyckers van landen
’ who were lessees
of rural tenements. What is more, the theory would be in conflict
with Van der Keessel who does not translate
the Dutch term ‘
landen
’
in the
placaeten
as ‘
solum
’ but uses the expression
(in both Th. 674 and
Praelectiones ad Grotium
13.19.10)
‘
praediis rusticis
’ which means rural property.
[35] As to the final consideration adopted by Van Zyl J,
that it would be inequitable and unfair to deny agricultural lessees
a lien
which is afforded to their urban counterparts, I again find
myself in respectful disagreement. The severe limitations (and not
only
the denial of a lien) imposed by the
placaeten
on the
common law rights of agricultural lessees to claim compensation for
improvements, are by their very nature inequitable and
unfair to
whomever they apply. But these limitations were grafted upon our
common law for reasons of ancient origin which no longer
exist. It
would hardly improve the position of agricultural lessees if this
unfair discrimination against them were to be extended
to another
group. To help them the
placaeten
would have to be abolished
.
Whether or not that should be done is, however, not the question in
this case. Moreover, as had been pointed out by academic authors
(see
eg Van der Walt (1984) 101
SALJ
p 257 at p 258 and (1989) 52
THRHR
p 590 at 596) the extension of the disadvantages imposed
by the
placaeten
to the further category of urban lessees
would not resolve their inherent anomalies and inequity. So, for
example, they will still
not apply to putative lessees (see eg
Lechoana v Cloete
supra;
Fletcher & Fletcher v Bulawayo
Waterworks Co Ltd
1915 AD 636
;
Nortje v Pool NO
supra at
129-130;
Weilbach v Grobler
1982 (2) SA 15
(O) 26). In
consequence, the ‘lessee’ under an invalid lease will still be in
a substantially better position than one with a
valid lease.
[36] In
Palabora Mining Co Ltd v Coetzer
supra
Mahomed J also concluded, as I have said, that art 10 of the
placaeten
extended to urban leases. In the main, he was
persuaded by the reasoning of Van Zyl J in
Syfrets
,
particularly by the consideration that the contrary view would result
in unfairness to and discrimination against agricultural lessees
(at
308F-J). For the reasons I have given, I do not consider, however,
that the anti-discrimination argument can prevail.
[37] It follows that, in my view, the provisions of the
placaeten
relied upon by the plaintiff never applied to urban
leases. Furthermore, I am not persuaded by the arguments advanced in
Syfrets
and
Palabora Mining
that these inherently
anomalous provisions should be extended to a broader category of
lessees. I therefore find myself in disagreement
with the court
a
quo’
s conclusion that art 10 of the
placaeten
provides
an answer to the defendants’ reliance on an enrichment lien.
[38] The plaintiff’s final argument was, however, that
even in the event of this conclusion, this court should nonetheless
not interfere
with what was described as a well-established rule of
our law. Support for this argument was sought in a number of cases
where this
court showed a clear reluctance to interfere with settled
legal principles, even where those principles were shown to have
their
origin in incorrect interpretations of the law (see eg
Holmes’
Executor v Rawbone
1954 (3) SA 703
(A) at 711;
Glazer v Glazer
NO
1963 (4) SA 694
(A) at 706H-707A;
Cullinan v
Noordkaaplandse Aartappelkernmoer-kwekers Koöperasie Bpk
1972
(1) SA 761
(A) at 767F-768E;
Leyds NO v Noord-Westelike
Koöperatiewe Landboumaatskappy Bpk
1985 (2) SA 769
(A) at
780E-G;
Horowitz v Brock
1988 (2) SA 160
(A) at 186F-187D). As
appears from these cases, the reason for such reluctance was that,
for example testators or parties to contracts
would have arranged
their affairs on the basis that the legal principles concerned were
settled.
[39] According to the plaintiff’s argument, the
likelihood is that this also happened in the case of the hypothesis
that the
placaeten
apply to urban leases. Even though the
hypothesis now turns out to be based on a misinterpretation of the
law, so the argument went,
parties to urban leases had probably
acted for years on the basis of legal advice that their contracts
were subject to the provisions
of these ancient enactments. On this
basis, the plaintiff contended, lessors would have thought it
unnecessary to impose contractual
limitations on their lessees’
right to claim compensation for improvements or to provide for the
exclusion of enrichment liens.
This likelihood, it was further
argued, was borne out by the fact that the question regarding the
application of the
placaeten
to urban leases only arose in
three reported cases, including the present, during the last 80
years.
[40] What the plaintiff’s argument amounts to, in my
view, is a reliance on the maxim which had been described by Innes J
in
Webster v Ellison
1911 AD 73
at 92 as ‘that dangerous
maxim
communis error facit ius
’, which can only find
application, Innes J said, if the usage based on error can be
described as ‘uniform and unbroken’. The
mere fact that decisions
based on a wrong interpretation of the law were given many years ago,
would not be sufficient reason for
refusing to correct the error,
because, so Innes J said (at 93):
‘
If it were otherwise, the result would be an
unfortunate one. For when does a decision become so venerable that
its original error
is to be regarded as modifying the law?’
(See also Solomon J in
Webster v Ellison
supra
at 98-99;
Du Plessis NO v Strauss
1988 (2) SA 105
(A)
141F-142H.)
[41] Acceptance of the thesis that the
placaeten
also extended to urban tenements cannot, in my view, be described as
either uniform or unbroken. I believe that this appears from
the
historical evolution which I have described earlier in this judgment.
After the
obiter dictum
of Lord de Villiers in
De Beers
,
which started it all, there was the commentary by Bodenstein which
showed that Lord de Villiers had been mistaken. Then came the
statement in
Rubin,
which was again
obiter
,
that
the Privy Council had confirmed the
obiter dictum
by Lord de
Villiers in
De Beers
. But after
Rubin
came
Burrows
where Sir John Kotzé not only disagreed with Lord de Villiers
– on the basis of Bodenstein – but obviously held the view
that
he was not prevented by either
De Beers
or
Rubin
from
arriving at this contrary conclusion.
[42] Quite understandably, the plaintiff relied heavily
on the statement by Wessels JA in
Van Wezel
(quoted in para 22
above) to the effect that, because
De Beers
had been
confirmed by the Privy Council, the extension of the
placaeten
to urban properties must be accepted as part of our law. I say quite
understandably because it was primarily on the basis of this
statement by Wessels JA that a number of earlier textbooks on the
subject presented this as a settled principle of our law (see eg
R W
Lee & A M Honoré
South African Law of Obligations
1
ed (1950) p 102; R W Lee
An Introduction to Roman-Dutch Law
5
ed (1953) p 305; George Wille
Landlord and Tenant in South Africa
5 ed (1956) p 270; H R Hahlo & Ellison Kahn
The Union of South
Africa, The Development of its Laws and Constitution
(1960) p
693; A J Kerr
The Law of Lease
(1968) p 150).
[43] However, as I have endeavoured to demonstrate
earlier, a proper analysis of the judgment in
Van Wezel
would
have shown that the oft cited statement by Wessels JA was not part of
the
ratio decidendi
in that case. Moreover, that
obiter
statement lost its persuasive force because of the later judgment of
Van den Heever JA in
Spies
. What appeared clearly from
Spies
was that the
placaeten
as a whole – including articles
10 to 13 – were only directed at ‘
bruyckers, ofte pachters
vande landen
’ who were lessees of agricultural land and that
the
obiter dictum
in
De Beers
was therefore patently
wrong. What is more, it was pointed out by Van den Heever JA (at
483H), that this
obiter dictum
had not been approved by the
Privy Council. It should be evident that this final remark
effectively deprived the
obiter
statement by Wessels JA in
Van
Wezel
of its whole substructure.
[44] In the circumstances it hardly comes as a surprise
that, after
Spies
, virtually all the textbooks on the subject
aligned themselves with the position that the
placaeten
did
not apply to urban leases. (See eg Van der Merwe
Sakereg
2 ed
p 166; De Wet & Van Wyk
Kontrakte- en Handelsreg
Vol 1 5
ed p 362 n 47; De Vos
Verrykingsaanspreeklikheid
3 ed p
105 n 52; A J Kerr
The Law of Sale and Lease
3 ed p 471 et
seq; W E Cooper
Landlord & Tenant
2 ed p 335 et seq;
Ellison Kahn (ed)
Principles of the Law of Sale and Lease
p
91; 9
LAWSA
2 ed p 135 n 5; Reinhard Zimmerman, Daniël
Visser and Kenneth Reid (eds)
Mixed Legal Systems in Comparative
Perspective, Property and Obligations in Scotland and South Africa
p
320. Contrast Wille & Millin
Mercantile Law of South Africa
18ed p 337-338; J T R Gibson S
outh African Mercantile and Company
Law
8ed p 189.)
[45] It
is true that judicial authority again went the other way in both
Syfrets
and
Palabora Mining
. The point is, however,
that in the circumstances, acceptance of the hypothesis that the
placaeten
also applied to urban leases could hardly be said to
be either unbroken or uniform. It follows that those who concluded
their contracts
on the basis of this hypothesis did so at their
peril. But I would be surprised if many had done so. The plaintiff’s
contention
that they did is based on the fact that the issue under
consideration arose in only three reported cases (including the
present matter)
in the last 80 years. This, in my view, amounts to a
non sequitur
. A much more likely explanation is that, because
of the uncertainty surrounding the issue, matters pertaining to
claims for improvements
and resulting enrichment liens had been and
still are expressly regulated in most contracts of lease. (See eg J
P Naude (ed)
6 Butterworths Forms and Precedents
Part 1
‘
Leases
’ p 36.) It follows that the plaintiff’s argument
premised upon long-standing and uniform practice must also fail.
[46] For these reasons:
1. The appeal is upheld with costs.
2. The order of the court
a quo
is set aside and
replaced by the following:
‘(a) The appeal is upheld with costs.
(b) The matter is referred back to the magistrate’s
court for continuation of the trial on the outstanding issues.’
………………
.
F
D J BRAND
JUDGE
OF APPEAL
Concur
:
HOWIE
P
FARLAM
CLOETE
LEWIS
JJA