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[1987] ZASCA 103
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Essop v Abdulah (266/1986) [1987] ZASCA 103 (25 September 1987)
LL
Case No 266/1986
IN THE SUPREME COURT OF SOUTH AFRICA APPELLATE DIVISION
In the matter between:
ISMAIL ESSOP
Appellant
and
ZUBEIDA ABDULLAH
Respondent
CORAM
: RABIE ACJ, JOUBERT, VILJOEN, BOTHA
et JACOBS JJA
HEARD
: 28 AUGUST 1987
DELIVERED
: 25 SEPTEMBER 1987
JUDGMENT
/
BOTHA JA
..
2.
BOTHA JA
:-
This is an appeal against an order made by AARON AJ in the Cape of Good Hope
Provincial Division, in terms of which he dismissed,
with costs, an application
brought on notice of motion by the appellant against the respon-dent for an
interdict restraining the
respondent from dis-posing of certain immovable
properties pending the deter-mination of an action to be instituted by the
appellant
against the respondent. Leave to appeal against the order having been
refused by AARON AJ, the appellant petitioned the CHIEF JUSTICE
and was
thereupon granted leave to appeal to this Court.
The judgment of AARON AJ has been reported; see
Essop v Abdullah and
Another
1986 (4) S A 11
(C). In a passage of his judgment which appears at
13 P-I of the report the learned Judge observed that the papers in the
application
raised several disputes of fact which could not be resolved without
hearing oral evidence, but
/as ...
3.
as the application was one for a temporary interdict it was necessary for the
applicant to show on his own papers,
inter alia
, that
prima facie
he had a right to the relief which he would claim in the main action. The
learned Judge proceeded to point out that the right on
which the appellant
relied was clearly based on contract, according to the allegations contained in
the appellant's founding affidavit,
and recorded that counsel for the parties
were requested to deal first with the question whether the agreement relied upon
was not
illegal and whether, even if the Court were to accept as correct all the
allegations made by the appellant, he would not in any event
be pre-cluded from
founding a cause of action thereon. This question the learned Judge went on to
examine in the rest of his judgment.
He came to a conclusion on it which was
adverse to the appellant. It was upon that footing that the appellant's
application was dismissed.
It is accordingly necessary to advert to
the
/allegations ...
4.
allegations made by the appellant in his founding affida-vit. For convenience
I guote the relevant parts of the affidavit (the respondent
in this appeal is
referred to therein as the first respondent; the second respondent in the Court
a quo
, who was the Registrar of Deeds, is not a party to this
appeal):
"6. On 21st November 1960, I purchased the two erven referred to in prayer
1.1 of the Notice of Motion from one FRANCINA PLAATJIES,
in her capacity as
Executrix Dative in the Estate of the late HENDRIK PLAATJIES, for a purchase
consideration of Rl 100,00. However,
because the said erven were situate in an
area zoned for the Coloured Group only, I, being a mem-ber of the Indian Group,
was unable
to have the said erven registered in my own name. As a result of this
inability, First Respondent and I (First Respondent being my
sister-in-law),
entered into an oral agreement whereby the said erven would be registered in her
name, she to hold the properties
for and on my behalf and as my trustee. It was
agreed that I would pay the full purchase price and all expenses incidental to
the
transfer of the said property into the name of First Res-pondent and also
all expenses, such as rates and taxes, which she, as registered
/owner ...
5.
owner, would incur from time to time. It was further agreed that, when called
upon by me to do so, First Respondent would sign all
documents and take all
steps necessary to enable the said erven to be registered in my name after I had
obtained the requi-site permit,
or in the name of such other person to whom I
had sold the erven.
7. Pursuant to the terms of the aforesaid agreement, the said erven were duly
regis-tered in the name of First Respondent and I paid
the purchase
consideration together with all costs and expenditures referred to in the
preceding paragraph.
8. The aforesaid agreement between First Res-pondent and myself was accepted and
given effect to from the date of registration of
transfer of the said erven into
the name of First Respondent until 1983 when First Res-pondent's husband was
killed in a robbery
attack. Since then, there has been con-tinual friction
between First Respondent and myself. First Respondent has made claims to
ownership
of the aforesaid erven and from time to time threatened to sell the
said erven.
9. Pursuant to First Respondent's threats, I instructed my attorneys to take the
neces-sary steps and to launch the necessary pro-ceedings
to have transfer of
the said erven registered into my name from First Respon-dent. I instructed them
to take such steps
/as ...
6.
as may be necessary to obtain the necessary
permit from the Group Areas Board which would entitle me to have transfer
registered into my name. Should I fail to obtain such permit,
I intend selling
the said erven to a person qualified to take transfer of the said erven.
10. On 23rd October 1984, it came to my attorneys',
and subsequently to
my, attention that First
Respondent had sold the said erven and
that
documents to effect registration of transfer
had been drawn up and
have now been lodged
with Second Respondent. The sale of the
said erven and the steps taken subsequent to the sale in order to register
transfer to the purchaser were taken without my consent
and in fact, without my
being advised thereof.
11. In my respectful submission, First Respondent
is clearly in breach of
the agreement which
was entered into between her and myself, the
terms of
which have been fully set forth
above. It is my respectful submission
that
she is not entitled to sell and transfer the
said erven except with
my consent and fór my
benefit.
12. It is, with respect, clear that I will suffer
irreparable prejudice
should the transfer of
the said erven be effected. I have no de-
sire to
sell the erven and am, in fact, averse
to the sale of the said erven at the
present
time. Should my application for the re-
quisite permit be
successful, I submit that
there will then be no bar to my acquiring
/registration ...
7.
registration of ownership of the said erven into my name.
13
14
15. I have instructed my attorneys to take the necessary steps, including
taking such steps as may be necessary to obtain the requisite
permits, and
thereafter to institute such proceedings as may be necessary to obtain
registration of transfer of the said erven from
First Respondent to myself. In
fact, I am advised that Counsel has been instructed to draft Particulars of
Claim to give effect to
the aforegoing."
In paragraph 1.1 of the notice of motion the appellant
claimed an interdict restraining the (first) respondent
"from registering the transfer of the herein-
after mentioned properties to any person pend-
ing the final determination of an action which
Applicant is to institute against Pirst Respon-
dent in which Applicant seeks an order,
inter
alia, that First Respondent
effect transfer of
the hereinafter mentioned properties to Appli-
cant on the requisite permit being obtained in
terms of the provisions of the Group Areas Act,
No.
36 of 1966:
1.1.1
Erf 12097, Parow, Cape
Division, held by Deed of Transfer No. T.17596/1966
1.1.2
Erf 12098, Parow, Cape Division,
held
/by ...
8. by Deed of Transfer No. T. 17596/1966."
In this
Court, at the commencement of the hear-ing of the appeal, counsel for the
appellant applied for an amendment of paragraph
1.1 of the notice of motion, as
quoted above, by the addition at the end of it of certain words comprising a
proposed alternative
cause of action for relief in the contemplated action to be
instituted by the appellant against the respondent. This Court's decision
on the
application for amendment was deferred and counsel for the appellant was allowed
to argue the appeal both on the basis on
which the case was decided in the Court
a quo
and on the basis of the amendment sought here. It will be
convenient to leave the amend-ment applied for in abeyance until later
in this
judgment and to deal first with the appeal on the record as it stands.
In November 1960, when the agreement between the appellant and the respondent
is alleged to have been entered
/into ...
9.
into, the Group Areas Act 77 of 1957 was in force. The question of the
illegality of the agreement, AARON AJ said (at 13 I), arose
because of the
provisions of sec-tion 36 of the 1957 Act, which read:
"No person shall acquire or hold on behalf or in the interest of any other
person any immovable property which such other person
may not lawfully acquire or hold in terms of this
Act."
The 1957 Act was repealed by the Group Areas
Act 36 of 1966, but the provisions of section 36 of the 1957 Act were re-enacted
in section
40 of the 1966 Act, which ap- ' plied at the time when the
application was heard in the Court
a quo
. Other provisions of the 1957
Act which are relevant in this case were also re-enacted in the 1966 Act, as
will be noted in due course.
In the re-sult the legal position in which the
parties found them-selves was the same at all relevant times.
An analysis of the judgment of AARON AJ reveals
that his reasoning rested crucially on the finding that,
/in ...
10.
in terms of the agreement alleged by the appellant, the appellant and the
respondent had agreed that the respon-dent should do precisely
that which was
forbidden by sec-tion 36 of the 1957 Act and section 40 of the 1966 Act, namely;
that she should acquire and hold
the immovable property on his behalf- see the
reported judgment at 14 D,
14 F, 16
D/E and 17 B-C (in the first-mentioned
passage at 14 D the reference to section 11 is an obvious error; the learned
Judge clearly
intended to refer to section 36 of the 1957 Act). This finding was
the main target of attack of counsel for the appellant on the
judgment of the
Court
a quo
. It was contended that the finding was wrong in law, the
argument being that the res-pondent's undertaking in terms of the alleged
agreement did not constitute a contravention of the prohibition contained in
section 36 of the 1957 Act and section 40 of the 1966
Act. This argument was
based on the provisions of section 24 (1) (a) of the 1957 Act and its
counterpart,
/section ...
11.
section 27 (1) (a) of the 1966 Act. The latter section
is wider in ambit
than the former, but that is of no sig-nificance in the context of the present
case. The word-ing on which counsel
relied in support of his argument is the
same in both sections. In both it is provided.that, in an area which has been
proclaimed
a group area for ownership,
"no disqualified person .... shall .... acquire any immovable property situate
within that area ....
except under the authority of a
permit
The words I have emphasized formed the
crux of counsel's argument. Before I proceed to deal with it, however, it is
advisable to say
something about the applicability of the provisions in question
to the facts of this case.
In his judgment AARON AJ said (at 13 J - 14 A) that it was not clear on the
papers whether the two erven in question were situated
in a group area, although
that appeared to be the case, but that it would have made no
/difference ...
12.
difference if they were in the controlled area, and in this regard he
referred to the prohibitions contained in sections 11 and 24
of the 1957 Act. It
may be observed in passing that the prohibition in section 11 (1) of the 1957
Act was not couched in the same
form as that in sec-tion 24 (1) (a) of the 1957
Act. It is not necessary, however, to examine the view expressed by the learned
Judge
in this regard, for in argument before this Court counsel for the
appellant, in response to questions from the Bench, stated unequivocally
that
the appellant's case was based on the fact that the erven in question were
in-deed situated in a group area, and he submitted
that the allegations in the
appellant's founding affidavit were to be understood in that sense. I accept
this submission. It seems
to me to be clear that the appellant's allegation in
paragraph 6 of his founding affidavit that the erven "were situate in an area
zoned for the Coloured Group only", when read in the context of the affidavit as
a whole, was
/intended ...
13.
intended to be an allegation that the area concerned had been proclaimed a
group area for coloured ownership. Accordingly section
11 (1) of the 1957 Act
can be left out of consideration and we need concern ourselves only with section
24 (1) of the 1957 Act and
section 27 (1) (a) of the 1966 Act. On the wording
which is common to these sections, as quoted above, the appellant, who was and
is a disqualified person as defined in section 1 of the 1957 Act and in section
1 of the 1966 Act, was pro-hibited from acquiring
the erven in question, except
under the authority of a
permit
. As a matter of
fact the appel-lant at no relevant time had such a permit. On the basis of that
factual situation AARON AJ was justified
in saying (at 14 A/B) that it was
common cause that the appellant was unable to acquire the erven himself or to
have them registered
in his name. But the appellant's inability in that respect
is not absolute: it could be removed and would fall away if he obtained
the
requisite
/permit ...
14. permit.
Reverting to the argument of counsel for the appel-lant, it was based, as I
have said, on the words "except under the authority of
a permit" occurring in
section 24 (1) (a) of the 1957 Act and in section 27 (1) (a) of the 1966 Act. It
was always, and still is,
open to the appellant, counsel said, to apply for and
to obtain a per-mit in terms of section 18 of the 1957 Act or section 21 of
the
1966 Act, authorizing him to acquire and to hold the erven in question. There
was nothing in either Act to preclude the issuing
of such a permit to the
appellant, it was said, and upon such issuance the appellant could lawfully
acquire and hold the erven. In
view of that possibility, counsel argued, the
conclusion must follow that the appellant was not a person who could not
lawfully acquire
or hold the erven in terms of the 1957 or the 1966 Act; or, to
use the words of section 36 of the former and section 40 of the latter
Act, the
erven in question
/were ...
15.
were not "immovable property which such other person". -being the appellant
in this case - "may not lawfully acquire or hold in terms
of this Act", with the
result that the agreement alleged by the appellant did not en-tail a
contravention of the prohibition contained
in sec-tions 36 and 40.
In my view this argument cannot be sustained. Its premise is correct, but its
conclusion not.' The possibility of the appellant obtaining
the requisite
per-mit did and does exist by virtue of section 18 (1) (a) (i) of the 1957 Act
and section 21 (1) (a) (i) of the 1966
Act, the relevant provisions of which are
identically worded, as follows:
"(1) The Minister may, subject to the provisions of sub-section (2), in his
discretion, on written application made therefor —
(a) direct that a permit be issued ....
authorizing —
(i) the acquisition or holding of immovable property in a group area
...."
/For ...
16.
For present purposes the prominent feature of these pro-visions is that no
limitation of any kind is placed on who may apply for and
obtain a permit in
terms thereof. Subsection (2) fetters the exercise of the Minister's discretion
in certain respects, but not in
a manner that can have any bearing upon the
present enquiry. Ex
hypothesi
,
any
disqualified person can at any
time apply for a permit of the kind in question. The appellant's position is no
different from that
of any other disquali-fied person. That being so, if, as was
postulated in counsel's argument, the mere possibility of obtaining
the
requisite permit were sufficient to preclude the operation of section 36 of the
1957 Act and section 40 of the 1966 Act, it would
mean that these sections would
be wholly deprived of any efficacy whatever. Counsel sought to meet this
difficulty by suggesting
that the sections would apply if a disqualified person
had applied for but had been refused a permit. I can see no warrant,
however,.
/for ...
17
for interpreting the sections in the manner suggested. In my opinion
the Legislature clearly intended that the concept of a person
who "may not
lawfully acquire or hold" the immovable property in question in a given case,
should be applied with reference to that
moment of time which is relevant in the
particular enquiry which is being under-taken. So, if A acquired immovable
property in a
group . area on behalf of or in the interest of B, and the enquiry
is whether A's conduct constituted a contravention of the statutory
prohibition,
the decisivê question is simply whether B was a disqualified person who
was not in posses-sion of the requisite
permit at the time when A acquired the
property. The word "acquire" is defined in both the 1957 and the 1966 Acts to
mean "become
the owner of", which is related to a particular point of time. The
word "hold" is not defined in either the 1957 or the 1966 Act,
but in the
context of sections 36 and 40 it obviously means "hold as owner", which has a
continuous connotation.
/But ...
18.
But in this context, too, it is possible to test the operation of section 36
or section 40 with reference to a particular time. So,
in the present case, when
the matter was heard in the Court
a quo
, the respondent was holding the
erven in question on behalf or in the interest of the appellant (on the basis of
the latter's allegations);
at that time, the appellant, being a disqualified
person, . did not have the requisite permit, and accordingly he was then a
person
who "may not lawfully acquire or hold" the erven. Consequently the
respondent's holding of the erven at the critical time constituted
a
contravention of the statutory prohibition. Moreover, the respondent's holding
would have continued to be in violation of the prohibition
for as long as the
appellant did not have a permit to acquire or hold the erven for himself. That
position could not be detracted
from by the mere possi-bility of the appellant
obtaining a permit at some time in the future.
/It ...
19.
It follows, therefore, in the first place, that the Court
a quo
was
correct in finding that the respon-dent, in terms of the agreement alleged by
the appellant, undertook to do exactly that which
was and is forbidden by
section 36 of the 1957 Act and section 40 of the 1966 Act respectively; and in
the second place, that the
latter section was being continuously contravened at
the time of the proceedings in the Court
a quo
by the respondent's
ongoing holding of the erven on behalf of the appellant whilst the latter lacked
the requisite permit.
This conclusion is really decisive of the out-come of this appeal, for
reasons which, in the view I take of the matter, can be stated
in a few words.
Under the 1957 Act a contravention of section 36 was made a punish-able offence
by section 42 (1) (a). In the 1966
Act the effect of section 46 (1) (a) is that
a contravention of section 40 constitutes a criminal offence carrying a maximum
penalty
of a fine of R400 or imprisonment for 2
/years ...
20.
years or both. Thus, the contractual performance to
which
the respondent bound herself in terms of the agreement al-
leged by the appellant was to commit an illegality. It is
a fundamental
truism that a contract for the performance
of an unlawful act will not be
enforced by the Courts. The
reason for the principle is self-evident: no Court will
compel a person to perform an illegality. But that is
the very object which the appellant sought to achieve by
means of the interdict that he applied for in the Court a
quo
. The order prayed for, as quoted earlier, was couched
in negative terms, i e restraining the respondent from
passing transfer of the erven in question to any person,
but it could only be justified, in principle, on the basis
that its object was to prevent the respondent from com-
mitting a breach of contract vis-à-vis the appellant,
and that, in turn, of necessity entailed the enforcement
of the contract. In effect, therefore, the appellant
sought an order of the Court compelling the respondent to
/continue ...
21.
continue with the performance of a contract which comprised the doing of an
unlawful act. On that ground alone the Court
a quo
was right in
dismissing the appellant's ap-plication, and the appeal must fail.
On this view of the case it is not necessary to express any opinion on the
validity or otherwise of the cause of action foreshadowed
in respect of the
action which the appellant contemplated instituting against the respondent, and
pending the determination of which
he sought an interdict. Indeed, it would be
wrong to decide that issue now, for further litigation between the parties on
that score
might yet eventuate. During the hearing of this appeal counsel
informed the Court that the sale of the erven by the respondent to
a third party
had fallen through, so that the transfer of the erven out of her name was no
longer imminent; and the appellant alleged
in his founding affidavit that he had
set in train an application for a permit authorizing him to acquire and hold the
erven.
/for ...
22.
for himself. The actual or potential fate of that appli-cation is unknown,
but if it has been successful, or is likely to succeed,
the appellant would
presumably wish to proceed with an action against the respondent. With
that-possibility in mind, I consider that
it should be made clear that I do not
regard the judgment of the Court
a quo
as having decided definitively
that the appellant could not obtain any relief against the respondent in an
action to be instituted,
based on the alleged agreement. It is true that AARON
AJ referred to the relief which the appel-lant would claim in the main action
(at 13 G), and that there are passages in the judgment suggesting that the
ap-pellant was precluded absolutely from obtaining any
relief based on the
agreement (e g at 16 E and 17 E), but on analysis it appears that the learned
Judge, with respect, did not consider
pertinently the situation which would
arise if the appellant succeeded in obtaining the requisite permit (c f at 17
C-D and 18 D),
and that the real
ratio
/
decidendi
...
23.
decidendi
of the Court
a quo
was that the appellant was not
entitled to the interdict he was seeking, as such (see at 14 E-F, 17 B-C and 18
D). Moreover, it would
appear that the learned Judge regarded the alleged
agreement as an illegal contract (see at 13 H, 14 F and 18 E). With respect, I
would not categorize it as such. The contract itself was not prohibited, as the
learned Judge himself pointed out (at 14 B); it was
the performance agreed upon
that was unlawful, and for that reason the contract was unenforceable, at least
as long as the appellant
did not have the requisite permit. The learned Judge
referred also to considerations of public policy (e g at 14 C and 17 E). In
a
broad and general sense it could no doubt be said that public policy will not
allow the enforcement of an illegal contractual undertaking,
but otherwise
con-siderations of public policy do not appear to me to play an active role in
that context. (A conceivable exceptional
case might have presented itself if the
appellant had been
/able ...
24.
able to show, for instance, that his application for a permit had already
been approved and would have been is-sued within a couple
of days; but since
that is not the factual situation here, I express no view on it.) The position
with which we are dealing in this
case is an unusual one. The contractual
performance alleged to have been undertaken by the respondent wasillegal, since
the appellant
did not have the requisite permit. If the appellant can succeed in
obtaining a permit now, can it be found that the respondent's
contractual
undertaking is thereby validated, with the consequence that it
becomes
enforceable by the appellant against the
respondent? As I have indicated, an answer to this question is not called for in
this appeal.
The remarks set out above have been made with the sole object of
showing that this aspect of the matter has not been decided against
the
appellant and that it is left open.
The conclusion as to the narrow basis on which
/this ...
25.
this appeal falls to be decided, as stated earlier, fol-lowed upon a
consideration of the main thrust of the argu-ment of counsel
for the appellant.
In view of the con-clusion reached in that regard, the other arguments ad-vanced
by the appellant's counsel do
not arise for consi-deration. So, for example, the
cases of
Karjieker v Karjieker
1978 (2) S A 499
(C) and
Ornelas v
Andrews Cafe and Another
1980 (1) S A 378
(W), relied on by coun-sel in this
Court as in the Court below, need not be examined, since neither of them touched
upon the vital
issue discussed earlier. Similarly, cases such as
Metro
Western Cape (Pty) Ltd v Ross
1986 (3) S A 181
(A) and the other authorities
cited in Joubert,
General Principles of the Law of Contract
(1987) at 131
note 16, to which counsel referred us, are not in point.
It remains to deal with the amendment to the appellant's notice of motion,
for which his counsel applied, as mentioned earlier. The
amendmeht, as finally
formulated
/by ...
26.
by counsel in the course of his argument, was to substi-tute a comma for the
full stop at the end of paragraph 1.1.2 of the prayer,
as quoted earlier, and to
add there-
after the following words:
"and in which action the Applicant will, in the alternative, claim in terms of
the
con
-
dictio ob turpem vel iniustam causam
against the First
Respondent that transfer of the said properties be effected to the Applicant
upon the Applicant obtaining a permit
or to a person designated by him in terms
of a deed of sale who is qualified in terms of the said Act to take
transfer."
A strange feature of this amendment is
that, although the alternative cause of action postulated for the action to be
instituted is
now a
condictio
, the appellant still seeks to achieve
thereby exactly the same relief as he would have obtained by means of specific
performance
of the contract. But there is no need to dwell on that as-pect of
the amendment, nor on the fact that the respondent has not been
afforded an
opportunity of dealing with the suggested cause of action in her affidavit. In
my view
/the ....
27.
the obviously fatal objection to the amendment is that it does not remove the
obstacle in the way of the appellant being granted the
interdict that he seeks,
as discussed above. Whatever the basis may be of the claim to be put forward in
the main action, the interdict
applied for would still have the effect of
compelling the respondent to continue with the unlawful performance of the
alleged contract,
and that remains the reason why it cannot be granted.
Arguing in support of the amendment, counsel for the appellant relied upon
the decision in
Beg v Lodewick
1945 (2) P H M49. The circumstances of
that case and the nature of the decision giyen therein are explained in the
judgment of the
Court
a quo
(at 17 G - 18 B). The amendment seems to have
been designed to meet the diffi-culty of AARON AJ (at 18 B/C) that the
appellant's
claim, as it was presented on the papers before him, was not a
condictio
. But it does not meet the difficulty in regard
/to ...
28.
to the granting of the interdict as such. That diffi-
culty was not, it seems, addressed in
Beg v Lodewick
,
and on that ground I share the view of AARON AJ that
the case was wrongly decided.
In the result the appeal is dismissed, with costs.
A.S. BOTHA JA
RABIE ACJ
JOUBERT JA
CONCUR
VILJOEN JA
JACOBS JA