Brief Summary

Property Law — Ownership Rights — Conversion of Certain Rights into Leasehold or Ownership Act 81 of 1988 — Applicant sought to nullify registration of property in respondents' names, claiming ownership based on her late mother's lease agreement — Respondents opposed, asserting valid conversion of rights under the Conversion Act — Court found that the applicant failed to challenge the municipality's decision to grant ownership rights to the first respondent within a reasonable time, and her application for condonation for late filing was flawed — Application dismissed as the applicant did not provide a reasonable explanation for the delay and failed to comply with procedural requirements for review.

Comprehensive Summary

Summary of Judgment

1. Introduction

This matter was brought in the Free State High Court, Bloemfontein, as an opposed motion application in which the applicant sought to undo the registration and subsequent transfers of a residential property and to procure registration of that property in her own name. The application was heard on 6 December 2007 and judgment was delivered on 7 February 2008 by Mocumie AJ.

The applicant was Ms Keitumetse Melody Saila, cited as the duly appointed executrix in the estate of her late mother, Mrs N A Saila. The first and second respondents were Mr Tshediso Kenneth Thulo and Mrs Mathapelo Patience Thulo, who had been granted occupational rights and later ownership rights in relation to the property. The third, fourth, and fifth respondents were subsequent purchasers in the chain of transfers, namely Mr Ponane Esau Mahlaba (third respondent) and Mr Molehi Walter Kgaile and Ms Kelebogile Theodoria Kgaile (fourth and fifth respondents). The sixth respondent was the Registrar of Deeds, and the seventh respondent was the Mangaung Municipality, the local authority involved in the administrative decision-making that culminated in conversion to ownership and transfer.

In broad terms, the dispute concerned the administrative conversion and transfer of a municipal residential property from the late Mrs Saila to the first respondent, and the validity and consequences of that conversion and subsequent transfers. Procedurally, the court treated the matter as turning centrally on whether the applicant had properly and timeously invoked any competent procedure (including condonation, and whether the matter could be approached as an appeal or a review) to impugn the municipality’s decision and the registration that followed.

2. Material Facts

Mrs Saila and her husband began residing at the property (described in the notice of motion as Erf 42992, Mothibi Street, Rocklands, Bloemfontein) in 1982. During 1987/1988 they relocated to Bloemspruit to pursue farming. The applicant’s father died on 21 January 1998, and her mother died on 5 January 2005.

At some stage, the late Mrs Saila concluded an oral lease arrangement with the first respondent. The first and second respondents took occupation of the property sometime in 1998. Towards the end of 1998, after having been in occupation for approximately twelve months, the first respondent reported to the Mangaung Municipality that he had a lease contract with the late Mrs Saila, who was no longer residing at the property. The municipality then cancelled Mrs Saila’s residential permit and granted occupational rights to the first respondent, which were converted to ownership rights in terms of the Conversion of Certain Rights into Leasehold or Ownership Act 81 of 1988. The conversion to ownership rights is recorded in the judgment as having occurred on 12 March 1998.

The property was transferred into the names of the first and second respondents on 5 February 1999. Thereafter, they sold the property to the third respondent for an undisclosed amount. The papers did not show when registration into the third respondent’s name occurred. The third respondent later sold the property to the fourth and fifth respondents, and registration into their names was effected on 23 January 2006 under Title Deed No. T1063/2006 (as cited in the relief sought).

The late Mrs Saila was informed of the municipality’s decision on 16 March 1998. She lodged an internal appeal with the municipality on 30 March 1998, which was unsuccessful. A dispute was then declared regarding the rightful occupier before the first respondent was granted ownership. The dispute was heard by an Adjudication Committee, which on 14 May 1998 ratified the earlier decision that the first respondent was the rightful occupier and consequently the owner under the R7 500 rebate scheme applicable at the time. The late Mrs Saila was informed of further adverse reasoning (including the view that she was in breach of conditions such as subletting without consent and failure to pay amounts due) on 15 May 1998. Despite dissatisfaction, there was no judicial challenge by way of appeal or review brought in court at that time against the procedural validity of the municipality’s decision.

It was confirmed by the Registrar of Deeds that no certificate of leasehold was ever issued to Mr Abram Saila or to Mrs Saila in respect of the property.

The court also identified matters that were common cause or not in dispute, including that Mrs Saila had not been living at the property for a considerable period; she did not pay rent to the municipality at R89 per month; she did not pay for services during that period; she received money from the first respondent described as rent (albeit on different asserted bases); she had not applied for conversion of her residential rights into ownership rights in the prescribed form under the rebate scheme; and the municipality’s decision to grant the first respondent a certificate of ownership had not been set aside in any appeal or review and therefore stood as an extant administrative act with legal consequences.

3. Legal Issues

The court identified two principal issues for determination. The first was whether condonation should be granted for the late launching of the application, which was sought from the bar on the footing that the application should be treated as an appeal. The second was whether, assuming procedural obstacles could be overcome, the substantive relief sought—namely the retrospective setting aside of registration and transfers and the compelled registration of the property in the applicant’s name—could be granted.

The dispute was not confined to pure fact-finding. It primarily concerned the application of procedural and administrative-law principles to the facts, including compliance with procedural requirements (notably Rule 53 for reviews), whether there had been an unreasonable delay (under both common-law principles and PAJA), and whether the applicant’s claim had prescribed under the Prescription Act 68 of 1969. It also involved an evaluative judgment as to the effect of delay, prejudice, and finality in administrative decisions.

4. Court’s Reasoning

On condonation, the court held that the application was “extremely flawed” because the applicant sought condonation from the bar without having brought a substantive condonation application, supported by properly set out grounds, filed with the Registrar and served on the respondents. On the authorities cited, the court treated the procedural steps of filing and service as necessary for an application to be regarded as having been “made”. The court further emphasised that failure to lodge an appeal within the prescribed time and form could not be condoned without good cause, and that the applicant bore a duty to explain the lengthy delay. On the facts, a delay of approximately seven years had elapsed before approaching the court, and the applicant did not provide a reasonable explanation for that delay. For that reason alone, the court found that condonation could not be granted.

The court also considered whether the matter could be approached as a review. It concluded that it could not, because the application did not comply with the requirements of Rule 53, “in particular”. The court then addressed delay in the context of review more generally. Under the common law, review proceedings must be brought within a reasonable time, and under section 7 of PAJA review must be instituted without unreasonable delay and, in any event, not later than 180 days after the person concerned was informed of the administrative action where no internal remedies were available. The court explained that these time constraints serve, among other things, to secure finality in administrative acts and to avoid litigation being brought many years later when reconstruction and recollection may be practically impossible. Applying those principles, the court regarded the applicant’s delay as inordinate and unjustified.

In dealing with the consequences of the municipality’s decision to grant ownership to the first respondent, the court relied on the principle that an administrative act—even if unlawful—produces legally valid consequences until it is set aside by a court. Because the municipality’s decision had never been attacked by way of judicial review or appeal, the certificate and ensuing transfers were treated as having continued legal effect. The court considered that this consequence could not be ignored in the analysis of the relief sought.

The court further assessed the applicant’s delay in light of when she should have acted. It expressed the view that the applicant ought to have launched proceedings earlier, referring specifically to correspondence from 7 November 2000 as indicating a point by which she was aware of the relevant issues, and in any event before the death of her mother. The court also noted internal inconsistencies and improbabilities in the versions placed before it (including the late Mrs Saila’s own admissions regarding renting out the house, contrasted with later allegations of misrepresentation), and observed that the death of Mrs Saila made it impossible to test the veracity of certain averments. This fed into the court’s assessment of prejudice and the difficulties caused by late litigation.

Prejudice to respondents played a further role in the court’s evaluative reasoning. The court highlighted that the property had passed through multiple hands and that the fourth and fifth respondents had purchased bona fide and, on the papers, had not occupied the house for a lengthy period while the dispute remained unresolved. The court considered that undoing the chain of transactions at that late stage would cause serious prejudice to persons involved, and that the prejudice could have been avoided had appropriate action been taken timeously.

Separately, the court held that the applicant’s claim to set aside the transfer and to demand registration of the property in her name had prescribed by 2003 by operation of section 11 of the Prescription Act 68 of 1969, read with sections 10 and 11. Relying on authority, the court characterised a claim of this kind (to set aside transfer and procure re-registration) as constituting a “debt” for purposes of prescription. The court concluded that, given prescription and delay, granting the application would serve no useful purpose.

Having reached conclusions on delay and prescription, the court considered it unnecessary to decide other matters raised in argument. It nevertheless added that, on the evidence before it, the late Mrs Saila resided under a regulation 6 residential permit that conferred residential rights only, not leasehold rights, and that even if the applicant’s contentions on entitlement were accepted, the property might revert to the municipality in terms of the title deed—leading to a result inconsistent with the applicant’s demand to have registration effected in her name. The overall conclusion was that the applicant had not made out a case entitling her to the relief sought.

On costs, the court considered the question (though it was not fully argued) and held that, in the “peculiar circumstances” of the case, it was not necessary to make any costs order.

5. Outcome and Relief

The application was dismissed.

No order as to costs was made.

Cases Cited

Tyhopho v Santam Insurance Co Ltd 1984 (2) SA 73 (Tk).

Jacobs v Polmed Medical Fund 2001 (2) SA 502 (T).

Wolgroeiers Afslaers (Edm) Bpk v Munisipaliteit van Kaapstad 1978 (1) SA 13 (A).

Qqweta v Transkei Development Corporation Ltd and Others 2006 (2) SA 603 (SCA).

Nzimande v Nzimande 2005 (1) SA 83 (WLD).

Nzimande v Nzimande and Another 2005 (1) SA 83 (WLD).

Oudekraal Estates (Pty) Ltd v City of Cape Town and Others 2004 (6) SA 222 (SCA).

Radebe v Government of the Republic of South Africa and Others 1995 (3) SA 787 (NPD).

Legislation Cited

Conversion of Certain Rights into Leasehold or Ownership Act 81 of 1988.

Promotion of Administrative Justice Act 3 of 2000.

Prescription Act 68 of 1969.

Rules of Court Cited

Uniform Rule of Court 53.

Held

The court held that the applicant’s attempt to obtain condonation for late institution of proceedings could not succeed because no substantive condonation application had been filed and served, and because no reasonable explanation was given for the lengthy delay.

The court held further that the matter could not properly be treated as a judicial review, as the application did not comply with Rule 53, and that in any event review proceedings must be brought without unreasonable delay, with PAJA prescribing a 180-day outer limit in the circumstances described.

The court held that the municipality’s decision to grant the first respondent ownership, having never been set aside on review or appeal, continued to exist in fact and to have legal consequences, and that the chain of transfers and the prejudice to subsequent purchasers weighed against the relief sought.

The court held that the applicant’s claim to set aside the transfer and to compel re-registration in her name had, on the court’s analysis, prescribed under the Prescription Act 68 of 1969, and that for these reasons the relief sought could not be granted. The application was dismissed, with no costs order.

LEGAL PRINCIPLES

A party seeking condonation for late prosecution of proceedings must bring a proper application in accordance with the rules and must show good cause, including a reasonable explanation for the delay; an informal request from the bar is not a substitute for a properly filed and served application.

A purported review of administrative action must comply with the procedural requirements of the rules, including Uniform Rule 53 where applicable, and must be instituted within a reasonable time at common law and, where PAJA applies, within the statutory framework requiring institution without unreasonable delay and, in the circumstances described in section 7, not later than 180 days after the applicant was informed of the administrative action.

An administrative act that has not been set aside by a court may produce legally effective consequences in the interim; it cannot simply be disregarded by a litigant who considers it invalid.

A claim framed as setting aside transfer and compelling re-registration may constitute a debt for purposes of the Prescription Act 68 of 1969, with the consequence that such a claim may become unenforceable if not pursued within the applicable prescriptive period.

Saila v Thulo and Others (1535/2006) [2008] ZAFSHC 41 (7 February 2008)