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[2011] ZANCHC 9
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Coeromane Beleggings (Pty) Ltd v Alpha Auto Electrical CC (1801/2009) [2011] ZANCHC 9 (3 June 2011)
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IN THE HIGH COURT OF
SOUTH AFRICA
(Northern Cape High
Court, Kimberley)
Case Nr: 1801/2009
Case Heard: 23/05/2010
Date delivered:
03/06/2010
In
the matter between:
Coeromane
Beleggings (Pty) Ltd
…..........................
PLAINTIFF
and
Alpha
Auto Electrical CC
….................................
RESPONDENT
JUDGMENT
Olivier J:
The plaintiff,
Coeromane Beleggings (Pty) Ltd, claims a declaratory order that the
defendant, Alpha Auto Electrical CC, has no
entitlement to occupy
any portion of erf 4250, Kuruman, as well as orders that the
defendant vacate the property, remove all
its improvements and cease
entering upon the property.
It is the plaintiff’s
case that it had granted the defendant temporary consent to use a
portion of the property, that such
consent constituted a
precarium
which was revocable at the will of the plaintiff, that the defendant
had abused the consent and that the plaintiff then terminated
its
consent.
In the defendant’s
plea and counterclaim the following is alleged:
The defendant had
purchased erf 1190 from the local municipality in 1999 (but it had
not yet been transferred into the defendant’s
name);
JGPR Eiendomme (Edms)
Bpk (“JGPR”) purchased erf 3663, Kuruman, during the
following year;
JGPR
1
wanted
to purchase erf 1190 as well, in order to establish a shopping
centre on these two adjacent erven
2
.
During
the year 2000 the plaintiff and the defendant
3
concluded
an oral agreement that the purchase contract between the defendant
and the municipality would be cancelled
4
,
on condition that the plaintiff would cause to be registered a
right-of-way servitude (which would include a parking area)
over
both erf 3663 and erf 1190
5
for
the exclusive use of the defendant, as the owner of the adjacent
erf 1119.
Although the
plaintiff did give effect to this oral agreement to the extent that
provision was made for such a right-of-way
and parking area, which
was utilised and in fact improved by the defendant, the plaintiff
failed to have the servitude registered.
The defendant’s
counterclaim is for:
a declaratory order
that the defendant acquired the exclusive right of that portion of
erf 4250, Kuruman, in terms of the oral
agreement; and
an
order compelling the plaintiff to sign the necessary documentation
to have a servitude
6
registered,
failing which the sheriff is to be authorised to sign such
documentation on behalf of the plaintiff.
In its replication the
plaintiff pleaded,
inter alia
, that it denied that an
agreement as alleged by the defendant could have been concluded and:
“
3.
…. that:
3.1.3 the effect of
the claimed right of exclusive use of a portion of Plaintiff’s
property amounts to an alienation thereof;
and
3.1.2 by the
requirements of the Alienation of Land Act ….. no alienation
is of any force or effect unless in writing and
signed by the parties
thereto; …
”
On
the first day of the trial an “
informal
”
exception
to the defendant’s plea and counterclaim was filed on behalf
of the plaintiff. Such a procedure was condoned in
Edward
L Bateman Ltd v C A Brand Projects (Pty) Ltd
7
and
it was in fact agreed upon by the parties on the first day of the
trial.
The exception reads as
follows:
“
1.
Defendant relies upon an oral agreement in terms whereof it acquired
a servitude over a portion of Plaintiff’s property
and which
servitude entitles Defendant as owner of the adjacent property to the
exclusive use of a portion of Plaintiff’s
property in
perpetuity.
2. The servitude
claimed concerns an interest in land as defined by the alienation
(
sic
)
of Land Act 69 of 1981.
3. In the premises
and by virtue of provisions
(
sic
)
of Section 2 of the
Alienation of Land Act the oral agreement relied upon by Defendant in
its Plea and Counterclaim is of no force
or effect.
4. Defendant’s
Plea and Counterclaim accordingly discloses no defense to Plaintiff’s
claim and no cause of action for
the Counterclaim.
”
The
relevant provisions of s 2 (1) of the Alienation of Land Act
8
(“
the
Act
”
)
are that “
No
alienation of land … shall … be of any force or effect
unless it is contained in a deed of alienation signed
by the parties
thereto …
”
.
For
these purposes the word “
land
”
would
include “
any
interest in land
”
9
.
In my view the creation and granting of such servitude would
undoubtedly constitute a subtraction from the
dominium
of
the plaintiff in erf 4250 and an alienation of an interest in that
property
10
.
It does not matter whether the servitude would be praedial or
personal. Both would amount to the subtraction of a real right
from
the plaintiff’s bundle of rights or
dominium
in
erf 4250
11
.
What has to be
considered, however, is whether an agreement as alleged by the
defendant would have amounted to an alienation as
envisaged in s 2
(1) of the Act.
In s 1 the word
“alienate” is defined as meaning “
sell,
exchange or donate, …
” and it is provided that the
word “’
alienation’ has a corresponding
meaning
”.
The allegations in
this regard in the defendant’s plea, as incorporated into the
counterclaim, cannot in any way be interpreted
to refer to an
agreement of sale.
In
clause 4.5 of the draft servitude deed
12
provision
was made for the payment of an amount of R100,00 by the dominant
owner (“
Hersiende
Eienaar
”
)
to the servient owner (“
Dienende
Eienaar
”
)
upon registration of the servitude.
In the allegations in
the defendant’s plea and counterclaim there is no reference to
the draft deed of servitude. It was
not, for example, alleged that
the agreement had been that the terms of the servitude would be as
set out in the draft deed of
servitude. The only reference thereto
appears in prayer 2 to the counterclaim where, as already mentioned,
the defendant seeks
an order to compel the registration of a
servitude as set out in the draft deed of servitude.
Mr De Koning, counsel
for the defendant, moved for an amendment to strike out clause 4.5
and stated that it had erroneously been
included in the draft deed
and that this would also appear from the discovered documentation.
This was not disputed by Mr De
la Harpe, counsel for the plaintiff,
who also conceded that such an amendment would not prejudice the
plaintiff. The amendment
was accordingly granted and, insofar as the
provisions of clause 4.5 may have been capable of forming a basis
for an argument
that the argument was one of sale, put an end to
that.
Mr De Koning argued
that the alleged argument also did not amount to an agreement of
exchange, as envisaged in s 2 (1) of the
Act. In this regard he
submitted:
that only property in
a thing could form the subject of an exchange and that the
defendant’s right to have erf 1190 transferred
to it by the
municipality would not have been such a “
thing
”;
and
that, in any event,
the agreement, as alleged in the defendant’s plea and
counterclaim, did not entail an undertaking,
on the part of the
defendant, that such a right to claim transfer of erf 1190 would be
ceded or in any way transferred to the
plaintiff, and that the
alleged agreement would therefore not have amounted to an agreement
of exchange.
In
Leonard
Light Investments (Pty) Ltd v Wright and Others
13
,
the case relied upon by Mr De Koning, it was held (at 633 D - E)
that the word “
exchange
”
in
s 2(1) of the Act should be given its common law meaning and that
“
At
common law, ‘exchange’ is a contract for the transfer by
one person of property in a thing to another in return
for a similar
agreement by the latter
”
.
In that case the
alleged agreement had been that the applicant would lend an amount
of money to the respondents for the purposes
of the development of
sectional title units and that the respondents would, upon
completion of the project, transfer three of
the units to the
applicant.
At 633 E – F
Streicher J (as he then was) held as follows:
“
The
applicant did not undertake to transfer a thing to the respondents.
It undertook to lend money to the respondents. The undertaking
to
lend money created a personal right and was not an undertaking to
transfer a personal right to the respondents. The transaction
therefore did not constitute an exchange within the meaning of that
word in the
Alienation of Land Act 68 of 1981
.
”
It
was not, as I understand the judgment, held that a personal right
could not be a “
thing
”
capable
of at being transferred; only that the agreement had not been that a
personal right would be transferred to the respondents
14
.
Under
the heading “
All
things may be exchanged but another’s property
”
Voet
said that “
As
a general rule all things which admit of being sold may be ….
exchanged …
”
15
.
A
claim (in this case to have erf 1190 transferred into the
defendant’s name) would have constituted a personal right
16
,
capable of being sold, and therefore of being exchanged. Claims in
the form of rights of action are movable incorporeal property,
capable of attachment, cession and sale
17
,
and I see no reason why a claim for transfer would be different.
The question is,
however, whether the agreement alleged by the defendant would have
amounted to an exchange at all?
The
common law definition of exchange has to be applied
18
.
I have already referred to the definition of exchange applied in the
Leonard
Light
matter
19
.
The definition applied in the
Hoeksma
case
(at 897) was that an exchange “
marks
a transaction between two people whereby each gives to the other, as
his own, one thing in return for another
”
and
it was held that the reciprocal obligation in an agreement of
exchange was “
the
delivery or transfer of another asset
”
.
In my view the
agreement as pleaded by the defendant was not that the defendant had
undertaken to “
give
”, “
transfer
”
or “
deliver
” anything to the plaintiff. In terms
of the alleged agreement the defendant had merely undertaken to
cancel its agreement
with the municipality, thereby abandoning its
right to claim transfer of erf 1190 into its name.
It was not, for
example, alleged that the defendant had undertaken to cede that
right to the plaintiff, which would arguably,
for the purposes of an
agreement of exchange, have amounted to the giving, transfer or
delivery of something.
The conclusion to
which I have come is therefore that the agreement alleged by the
defendant does not amount to an agreement of
exchange. It entails an
undertaking by the plaintiff to give, transfer and deliver an
interest in its property to the defendant,
but not a reciprocal
undertaking and obligation on the part of the defendant to give,
transfer or deliver anything to the plaintiff.
Mr De la Harpe argued
that, if the agreement does not constitute one of sale or of
exchange, the undertaking to grant and register
the servitude must
necessarily amount to a donation as envisaged in s 2 (1) of the Act.
I
cannot agree. The allegation in paragraph 3.2.4 of the defendant’s
plea is that it had been agreed that the defendant’s
purchase
agreement with the municipality would be cancelled on condition
that
20
the
plaintiff would register the servitude. The
quid
pro quo
or
“
counter-prestation
”
21
for
the servitude would therefore, according to the alleged agreement,
be the cancellation of the purchase agreement between the
defendant
and the municipality, and the concomitant relinquishing by the
defendant of its right to the transfer of erf 1190 into
its name.
In
order to constitute a donation the promise or offer must be “
…
prompted
by sheer liberality or inspired solely by a disinterested
benevolence on the part of the donor …
”
22
On
the terms alleged by the defendant the plaintiff’s undertaking
to have the servitude registered would not have been prompted
by
“
sheer
liberality
”
or
“
disinterested
benevolence
”
,
but rather by an undertaking on the part of the defendant to cancel
the purchase agreement, which would enable the plaintiff
to acquire
erf 1190 itself.
My conclusion is
therefore that the alleged oral agreement would not violate the
provisions of s 2 (1) of the Act, that the allegations
in this
regard do disclose a defence and a cause of action and that the
exception has to be dismissed.
What
remains to consider is the issue of costs. There is no reason why
costs should not follow the result. There is also no reason
why such
costs should be limited to the costs that would have been incurred
had the exception been taken within the normal prescribed
period
23
.
It is the plaintiff who chose not to take the exception then and,
had it not taken the “
informal
”
exception
on the first day of the trial, I would in any event, and in view of
the stand taken in the plaintiff’s replication,
have ordered
this issue to be decided separately and before evidence regarding
the alleged oral agreement was led.
The following order is
therefore made:
The exception is
dismissed with costs.
______________________
C J OLIVIER
JUDGE
NORTHERN CAPE
DIVISION
For the Plaintiff: Adv D H De la
Harpe
Instructed by: Duncan &
Rothman, KIMBERLEY
For the Respondent: Adv L W De
Koning
Instructed by: Van de Wall &
Partners, KIMBERLEY
1
It
is common cause that the plaintiff is the successor in title of
JGPR.
2
It
is also common cause that erf 4250 is the product of a consolidation
(at a later stage) of erf 3663 and erf 1190.
3
It
is furthermore common cause that the defendant had at all times
material hereto been the owner of erf 1119, Kuruman, which
lies
adjacent to erf 4250.
4
which
would (and did) enable JGPR/plaintiff to acquire erf 1190.
5
and
therefore eventually and in effect over erf 4250.
6
As
set out in a proposed or draft deed of servitude, annexure “A”
to the counterclaim.
7
1995
(4) SA 128
(T) at 140F-G, 141G-142D; see also
Herbstein
& Van Winsen – The Civil Practice of the High Courts of
South Africa
, 5
th
edition, volume 1, Cilliers
et
al
, p 645
8
68
of1981
9
Section
1
10
Compare
Felix en ‘n Ander v Nortier NO en
andere
[1996] 3 All SA 143
(SE) at
153F-154B;
Janse van Rensburg v
Koekemoer
2011 (1) SA 118
(GSJ) para’s
[16] – [17].
11
National
Stadium South Africa (Pty) Ltd and Others v Firstrand Bank Ltd
2011 (2) SA 157
(SCA) para’s [30] –
[32].
12
Annexure
A to the counterclaim
13
1991
(4) SA 628
(WLD)
14
Any
personal right created by the undertaking to lend money would in any
event, as I see it, have been that of the respondents.
15
The
Selective Voet being The Commentary on the Pandects
,
translated by Percival Gane, vol 3, p462.
16
Smith
v Carniasaad en Andere
[1998] ZASCA 58
;
1998 (4) SA 877
(SCA) at 882D-E
17
Ormerod
v Deputy Sheriff, Durban
1965 (4) SA
670
(D & CCD) at 673G-H;
Herrigel
NO v Bon Roads Construction
1980 (4)
SA 569
(SWA) at 674D-G;
Nahrungsmittel
GmbH v Otto
1992 (2) SA 748
(CRD) at
753F-G;
Nahrungsmittel GmbH v Otto
[1992] ZASCA 228
;
1993 (1) SA 639
(AD) at 647
18
Leonard
Light Industries (Pty) Ltd v Wright and Others, supra
,
at 633E;
Hoeksma and Another v Hoeksma
[1990] ZASCA 41
;
1990 (2) SA 893
(AD) at 897A-B.
19
Para
[17] above;
See also
Mackeurtan’s
Sale of goods in South Africa
, 5
th
edition, p271
20
“
op
voorwaarde dat
”
21
Leonard
Light Industries (Pty) Ltd v Wright and Others, supra
,
at 633F-G
22
Commissioner
for Inland Revenue v Estate Hulett
[1990] ZASCA 23
;
1990
(2) SA 786
(AD) at 793 G; and also
Kay
v Kay
1961 (4) SA 257
(AD) at 261 A;
Welch’s Estate v Commissioner,
South Africa Revenue Service
2005 (4)
SA 173
(SCA) para [26]
23
Uniform
rule 23 (1), read with rule 25 (1)