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
>>
2009
>>
[2009] ZAGPPHC 160
|

|

South African National Roads Agency Ltd v Chief Registrar of Deeds and Others (9447/09) [2009] ZAGPPHC 160 (31 March 2009)

IN
THE HIGH COURT OF SOUTH AFRICA
/ES
(
NORTH
GAUTENG HIGH COURT. PRETORIA
)
CASE
NO: 9447/09
DATE:
13/03/2009
IN
THE MATTER BETWEEN
SOUTH
AFRICAN NATIONAL ROADS AGENCY LTD APPLICANT
AND
THE
CHIEF REGISTRAR OF DEEDS 1
ST
RESPONDENT
THE
MINISTER OF AGRICULTURE AND LAND AFFAIRS 2
nd
RESPONDENT
THE
MINISTER FOR PROVINCIAL AND
LOCAL
GOVERNMENT 3
rd
RESPONDENT
JUDGMENT
MAKGOBA.
J
This
matter came before me in the urgent court on 13 March 2009. After
argument I gave an order on the following terms:
1.
that the application be heard as an urgent application in terms of
Rule 6(12) and that the applicant's non-compliance with the
forms,
time limits and forms of service prescribed by the Uniform Rules of
Court be condoned;
2.
that the first respondent, in his capacity as provided for in section
2(1 )(a) of the
Deeds Registries Act 47 of 1937
be and is hereby
ordered to instruct all the Registrars of Deeds to continue with the
execution of properly prepared deeds of transfer
in terms of
section
31(1)
of the
Deeds Registries Act 47 of 1937
in respect of properties
which vested in and passed to the applicant by virtue of section 7(2)
of the South African National Roads
Agency Ltd and National Roads Act
7 of 1998. without insisting on the production of a certificate as
contemplated by
section 118
of the
Local Government: Municipal
Systems Act 32 of 2000
;
3.
that the order in prayer 2
supra
will
serve as an interim order pending the outcome of the decision of the
application by the Minister of Transport to the third
respondent to
exempt the applicant from the provisions of
section 2(1)
of the
Local
Government: Municipal Property Rates Act 6 of 2004
;
4.
that the resolution adopted by the Registrars of Deeds of South
Africa on 14 December 2008 requiring the production of a certificate

contemplated by section 118 of the LocalGovernment: Municipal Systems
Act 32 of 2000 in respect of Deeds of Transfer in terms of
section
31(1)
of the
Deeds Registries Act 47 of 1937
relating to the
properties which vested in and passed to the applicant by virtue of
section 7(2) of the South African
National
Roads Agency Ltd and National Roads Act 7 of 1998 be and is hereby
reviewed and set aside;
5.
that the resolution adopted by the Registrars of Deeds during 2005
(under reference number RCR13/2005) and 2007 (under reference
number
RCR9/2007) in respect of properties expropriated by the Minister of
Transport on behalf of the applicant by virtue of section
41 of the
South African National Roads Agency and National Roads Act 7 of 1998
be and is hereby set aside;
6.
that the first respondent shall pay the costs of this application,
such costs to include the costs of two counsel.
I
indicated to the parties that my reasons for judgment would follow in
due course. The following are my reasons:
[1]
The applicant launched this urgent application in which it seeks
temporary interdictory relief as well as a review of certain

decisions made by the first respondent. The second respondent is
cited in these proceedings also by virtue of the provisions of

section 2(1 )(a) of the
Deeds Registries Act 47 of 1937
in that the
supervisory function of the first respondent is dependent upon the
directions of the second respondent. However, no
substantive relief
is sought against the second and third respondents. They are joined
in these proceedings as a result of them
having a direct and
substantial interest in the subject matter of these proceedings.
[2]
The matter concerns the applicability or otherwise of section 118(1)
of the Local Government: Municipal Systems Act 32 of 2000
("the
MSA") on the transfers of properties of which the applicant has
become the owner through vesting (so-called "vesting
transfers")
and of which it has become owner through expropriation on its behalf
(so-called "expropriation transfers")
by the Registrars of
Deeds in various deeds registries in South Africa.
[3]
The acquisition of ownership of the properties by the applicant
through:
vesting,
occurred by virtue of section 7(2) of the South African National Road
Agency and National Roads Act 7 of 1998 ("the
SANRAL Act");
expropriation, occurs by way of section 41 of the SANRAL Act read
with sections 7 to 24 of the Expropriation
Act, 63 of 1975 ("the
Expropriation Act").
Section
118(1) of the Local Government: Municipal Systems Act 32 of 2000
("the MSA") which came into operation on 1 March
2001,
provides:
"(1)
A Registrar of Deeds may not register the transfer of property
except
on production to the Registrar of Deeds of a prescribed certificate-
issued
by the municipality or municipalities in which that property is
situated; and
which
certifies that all amounts that became due in connection with that
property for municipal service fees, surcharges on fees,
property
rates and other municipal taxes, levies and duties during the two
years preceding the date of application for the certificate
have been
fully paid."
[4]
In order to answer the question as to the applicability of section
118(1) of MSA on the vesting transfers and/or expropriation
transfers
as well as to review certain decisions/resolutions made by the first
respondent it is appropriate to set out the factual
background
leading to such decisions/resolutions made or adopted by the
Registrars of Deeds in various deeds registries in the
country.
[5]
The applicant was established by virtue of section 2(1) of the South
African National Roads Agency Ltd and National Roads Act
("the
SANRAL Act"). It was incorporated on 19 May 1998 as a public
company, the State being the sole member and shareholder.
In terms of
section 7(2) of the SANRAL Act ownership in all immovable property of
the South African Roads Board consisting of land,
and in the
servitude on or over land, on which national roads are situated
passed and vested in the SANRAL on the incorporation
date. In terms
of section 7(5) of the SANRAL Act, the immovable property which so
passed and became vested in
SANRAL.
that is the applicant, had to be registered in its name in terms of
section 31 of the Deeds Registries Act 47 of 1937 ("the
DR
Act").
[6]
SANRAL's predecessor, the South African Roads Board, was not subject
to the payment of rates on its properties consisting of
national
roads. It was exempted from such payment by virtue of the provision
of section 3(3)(c) of the Rating of State Property
Act 79 of 1984.
The latter Act was repealed in its entirety by the Local Government:
Municipal Property Rates Act 6 of 2004 ("the
MPRA") which
commenced on 2 July 2005. SANRAL was also exempted from the payment
of rates by virtue of the provisions of the
Rating of State Property
Act. Accordingly, SANRAL was not subject to the payment of rates to
any municipality until the advent
of the MPRA. In terms of MPRA.
therefore. SANRAL
prima
facie
became
liable for payment of rates.
[7]
Since 19 May 1998 registration of transfer of the land on which
national roads are situated commenced in earnest and is still

on-going. SANRAL has indeed embarked on a massive drive to ensure
registration of these properties in its name. On 14 December
2008 the
Registrars of Deeds of South Africa resolved that rates clearance
certificates required by section 118(1) of the MSA had
to be procured
by SANRAL before the various Registrars will register transfer of the
properties vested in SANRAL in terms of section
7(2) of the SANRAL
Act. Those transfers had and still have to be effected in terms of
section 31 of the Deeds Registry Act 47 of
1937. The resolution
adopted by the Registrars is a direct consequence of the provisions
of the MPRA and its perceived application
to national roads in
particular.
[8]
Since 19 May 1998 (the date upon which all assets of the South
African Roads Board were transferred to SANRAL) until 2 January
2009
(being the date upon which the resolution by the Registrars of Deeds
became effective) no rates clearance certificate as prescribed
by
section 118 of MSA was required to be submitted by SANRAL in respect
of the registration of transfer of SANRAL's newly acquired
ownership
of the property of the South African Roads Board.
It
stands to reason that registration of transfer of properties
previously registered in the name of the South African Roads Board

into the name of SANRAL is of critical importance. The resolution
adopted by the Registrars of Deeds has thus put an abrupt end
to
those transfers. It is against this background that the applicant has
resorted to the present court proceedings for the relief
sought in
the notice of motion and obtained the subsequent order in terms of
prayer 2 of the order I granted on 13 March 2009.
[9]
In terms of section 15 of the MPRA each municipality has a discretion
to exempt certain categories of owners of properties from
payment of
rates. On 17 July 2008 and again on 17 February 2009 the Minister of
Transport wrote letters to the third respondent
requesting for such
an exemption. As at the date of my order, that is on 13 March 2009,
no response had been received from the
third respondent, hence I
granted an order in terms of prayer 3.
[10]
A uniform practice existed in deeds registries since about 2004
regarding the requirement to produce a certificate in terms
of
section 118(1) of the MSA with regard to expropriation transfers,
which practice was adopted and confirmed by various registrars'

resolutions namely 1/2004, 13/2005 and 9/2007 (the latter two
resolutions having taken effect on 2 January 2006 and 2 January 2008

respectively). The effect of these resolutions was that the
production of certificates in terms of section 118(1) of the MSA was

required. No uniform practice used to apply to vesting transfers
regarding the production of the certificates in terms of section

118(1) of the MSA - it was a requirement of some deeds registries but
not others and also variously within a particular deeds registry.
It
was at the Registrars' conference on 14 December 2008 and by
resolution 10/2008 which came into effect on 2 January 2009 that
the
registrars purported to effect uniformity. Since that resolution
virtually all vesting transfers without the production of
a
certificate in terms of section 118(1) of the MSA have been refused.
In these proceedings the applicant sought an order reviewing
and
setting aside the aforesaid resolutions, hence I granted an order in
terms of prayers 4 and 5.
[11]
At the start of the argument in this matter counsel for the
respondents raised a point
in
limine
regarding
non-joinder. His argument is that the applicant merely cited the
first respondent when he ought to have cited all the
individual
Registrars of Deeds in various deeds registry offices in the country.
The question is whether this merits the dismissal
of the application.
In my opinion, it does not.
In
Safcor
Forwarding (Johannesburg) (Pty) Ltd
v
National
Transport Commission
1982
3 SA 654
(AD) at p673 CORBETT. J A. as he then was, quoted with
approval the view of SCHREINER, JA in
Trans-African
Insurance Co Ltd
v
Maluleka
1956
2 SA 273
(A) at 278G that-
"...
technical objections to less than perfect procedural steps should not
be permitted, in the absence of prejudice, to interfere
with the
expeditious and. if possible, inexpensive decision of their real
merits."
[12]
In my view there is no merit in the point
in
limine
raised
by counsel. In any event the first respondent, being the chief
Registrar of Deeds in the country, has supervisory functions
over all
the individual Registrars of Deeds and that he, together with the
other registrars, were parties to the adoption of the
resolution
sought to be reviewed and set aside.
[13]
I have already made reference to section 7(2)(a) of the SANRAL Act
which provides that on the incorporation date of the applicant
(ie 19
May 1998) the immovable property of the South African Roads Board
consisting of land and any servitude on or over land on
which
national roads are situated passed to and vested in the applicants.
However, in order to register the applicant's newly
acquired
ownership or entitlement to immovable property which has passed to
and become vested in it, section 7(5) of the SANRAL
Act provides that
section 31
of the
Deeds Registries Act
("the DR Act")
applies. Section 31(1) of the DR Act provides:
"...
whenever the ownership of any land has by statute vested in ... any
corporate body .... the registrar shall, upon lodgment
with him of a
deed of transfer in the prescribed form prepared by a conveyancer in
favour of the transferee, execute the same."
[14]
This brings me to a question whether in the process of registering
transfer of ownership of its newly acquired immovable property
the
applicant is required to produce a rates clearance certificate as
prescribed by section 118(1) of the MSA. It should be noted
that
section 118(1) of MSA prohibits the registration of the transfer of
the property except on production to the Registrar of
Deeds of a
clearance certificate. The purpose of section 118(1) of the MSA, it
seems, is to furnish a form of security to municipalities
for the
payment of amounts due in respect of rates or services rendered.
[15]
The applicant argues that it could never have been the intention of
the legislature that the provisions of section 118(1) of
the MSA
should be applicable to vesting transfers. The argument goes thus: a
vesting transfer stands in contradistinction to a
private sale. With
vesting, such as the present, ownership passes immediately on
incorporation of the applicant and the registration
of transfer
serves only one purpose namely to confirm a historical fact, that is
the transfer of ownership which has already occurred.
With a private
sale the purchaser has acquired no proprietary rights in the property
which forms the subject thereof before registration
of transfer of
ownership of that property. It presupposes the transfer of ownership
from one person to another by a deed of transfer.
It could therefore
not have been the intention of the legislature to regulate that an
existing owner (being the applicant, who
acquired ownership through
vesting) is not in arrears with the payments of rates. In my view,
the applicant's argument in this
regard is laudable and I am inclined
to accept same.
[16]
The constitutional court in
Mkontwana
v Nelson Mandela Metropolitan Municipality and Another (including
other parties)
2005
1 SA 530
(CC) explained the purpose behind section 118(1) of the MSA.
The
ratio
behind
section 118 is to ensure that a purchaser (transferee) does not take
transfer of an immovable property from a seller (transferor)
with an
existing outstanding account with the relevant local authority or
municipality. This does not only protect the purchaser
but also
assists the municipality in recovering an outstanding debt prior to
the property being registered in the name of the purchaser.
[17]
It should be noted that the applicant
in
casu
had
acquired ownership of the property on 19 May 1998, that is before the
commencement of the two statutes, namely the MSA and the
MPRA. In
vesting transfers the deed of transfer referred to in section 31 of
the DR Act serves only one purpose, that is to say
it confirms a
historical fact ie the transfer of ownership which had already
occurred on 19 May 1998. Therefore on the dates on
which the MSA and
MPRA became effective the applicant was already the owner of the
properties which form the subject matter of
the vesting transfers. On
this supposition it follows that the provisions of section 118 of the
MSA could never have been intended
to be applicable to the
registration of transfer of ownership. To echoe the words of
applicant's counsel, the provisions of section
31 of the DR Act and
section 118 of the MSA are not conterminous.
[18]
The upshot of all the aforegoing is that the Registrars of Deeds
erred in resolving that a rates clearance certificate in terms
of
section 118 of the MSA is required before registration of a vesting
transfer may occur.
[19]
I now deal with the applicability of section 118(1) of the MSA on
expropriation transfers. In terms of section 41(1) of the
SANRAL Act
the Minister of Transport may, if satisfied on reasonable grounds
that the applicant reasonably requires any land for
a national road,
expropriate that land for the applicant. Once such expropriation has
been effected, the applicant becomes owner
of the land so
expropriated on the dates of the expropriation of the land concerned
[see section 41(4) of the Act]. In terms of
section 41(5) the
provisions of section 7 to 24 of the Expropriation Act 63 of 1995
("Expropriation Act") will apply
with regard to any
expropriation in accordance with subsection (1).
[20]
In terms of section 8(1) of the Expropriation Act the ownership of
property expropriated shall on the date of expropriation
vest in the
applicant. The date of expropriation is the date referred to in
section 7(2)(b) of the Expropriation Act.
[21]
The provisions of section 31 of the DR Act are applicable to
expropriation transfers in the same manner as they do apply in

respect of the vesting transfers. Therefore the same argument made by
applicant's counsel in regard to vesting transfers applies
to
expropriation transfers. It would therefore mean that the deed of
transfer referred to in section 31(1) of the DR Act does not
in
itself transfer ownership in the expropriated property. It merely
confirms a historical fact which had already happened.
[22]
For the same reasons already advanced when dealing with vesting
transfers I accordingly find that the provisions of section
118 of
the MSA cannot be applicable to the expropriation transfers.
[23]
The resolutions adopted by the various Registrars of Deeds (ie
resolution 10/2008 in respect of vesting transfers and resolutions

13/2005 and 9/2007 in respect of expropriation transfers) clearly
fall within the ambit of the definition of an "administrative

action" in the Promotion of Administrative Justice Act 3 of 2000
("PAJA"). The action falls to be reviewed under
the
provisions of section 6(2)(d) of PAJA. The Registrars of Deeds
clearly erred in law in adopting the resolutions which they
did.
[24]
In
Hira
& Another v Booysen and Another
1992
4 SA 69
(AD) CORBETT, CJ said the following at page 93C-D in regard
to the reviewability of a decision where the decision-maker committed

an error of law:
"(3)
Where the complaint is that the tribunal has committed a material
error of law, then the review ability of the decision
will depend,
basically, upon whether or not the legislature intended the tribunal
to have exclusive authority to decide the question
of law concerned.
This is a matter of construction of the statute conferring the power
of decision."
In
terms of section 6(2)(d) of PAJA this court has the power to
judicially review an administrative action if the action was
materially
influenced by an error of law. It is my finding that the
Registrars of Deeds
in
casu
have
committed an error of law.
[25]
This application was brought on an urgent basis and the order was
granted likewise. Since counsel for the respondents argued
that the
matter should be dismissed for lack of urgency, I deem it appropriate
to decide on the issue of urgency.
[26]
The gist of the applicant's contention that this application should
be heard on an urgent basis is that it requires, over the
next two
years, approximately R25 billion to fund major constructions which
are currently under way. It includes the Gauteng Freeway
Improvement
project as well as the Dube Trade Port Interchange, amongst others.
It is common cause that South Africa hosts the
2010 Soccer World Cup.
It is also common cause that the aforementioned projects saw the
light with that international event in
mind. These allegations are
not disputed by the respondents. The first respondent merely noted
the contents of those allegations.
In the light of the decision in
Moosa
and Another v Knox; Paruk v Knox
1949
3 SA 327
(N) at 331 I shall, for purposes of this application, accept
the applicant's allegations as correct.
[27]
In order to be able to raise the aforementioned capital, the
applicant's international credit rating is of critical importance.
If
the applicant's financial statements for the year ending 31 March
2009 are qualified by the Auditor-General, it will have a
disastrous
impact on the applicant's credit rating which in turn will affect its
ability to fund construction of the aforementioned
National Road
System. This evidence is not denied by the first respondent. On the
basis of the
Moosa
decision
(supra)
these
allegations should therefore for purposes of this application be
accepted as correct.
[28]
The importance of this application cannot be over-emphasised. In
order for the applicant to maintain its credit rating and
to raise
the funding (R25 billion) the vesting transfers are of critical
importance, the reason being that the vesting transfers
and the
properties affected thereby are put up as security. It therefore
follows that if the vesting transfers cannot be effected
speedily, it
will lead to a qualification of the applicant's financial statements
for the year ending 31 March 2009. Such qualification
will directly
impact on the applicant's international credit rating, which in turn
will imply that the applicant will not be able
to successfully raise
the aforesaid amount or funding. This will have a direct impact on
the projects embarked upon by the applicant.
This will materially and
unreasonably affect national economic policies, economic activities
across municipal boundaries and national
mobility of goods, services,
capital and labour.
[29]
The applicant's case on urgency appears to be based on commercial
interests. In
Twentieth
Century Fox Film Corporation v Anthony Black Films (Pty) Ltd
1982
3 SA 582
(W) at 586G it was held that urgency of commercial interests
may-justify the invocation of Rule 6(12) no less than any other
interests.
See also
Bandle
Investments (Pty) Ltd v Registrar of Deeds
2001
2 SA 203
(SELD) at 213B-Cand D-F.
[30]
I therefore hold that the application is urgent and that the
applicant's non-compliance with the rules should be condoned,
hence
the order was granted on 13 March 2009
E
M MAKGOBA
JUDGE
OF THE
NORTH
GAUTENG HIGH COURT
9447-2009
HEARD
ON: 13 MARCH 2009
FOR
THE APPLICANT: A C FERREIRA SC AND I ELLIS INSTRUCTED BY: VAN DER
MERWE & VAN DER MERWE ATTORNEYS FOR THE RESPONDENTS: J
H DREYER
SC INSTRUCTED BY: THE STATE ATTORNEY