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[1987] ZASCA 128
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Slims (Pty) Ltd. and Another v Morris NO (256/86) [1987] ZASCA 128; [1988] 2 All SA 33 (A) (10 November 1987)
IN THE SUPREME COURT OF SOUTH AFRICA
(
APPELLATE DIVISION
)
In the matter between:
SLIMS (PROPRIETARY) LIMITED
first appellant
REBEL DISCOUNT LIQUOR STORES
TEASTERN CAPE) (PROPRIETARY)
LIMITED
second appellant
and
DAVID MORRIS NO
in his capacity as Trustee in
the Insolvent Estate Juan Ignacio
Marsal
respondent
CORAM
: CORBETT, BOTHA, VAN HEERDEN, NESTADT JJA
et NICHOLAS AJA.
DATE OF HEARING
: 7 September 1987
DATE OP
JUDGMENT:
JUDGMENT
CORBETT
JA:
I have had the privilege of reading the judgments
/ prepared
2
prepared in this matter by my Brothers BOTHA and NICHOLAS. Unfortunately
I am not able to agree with either. In my opinion, for the
reasons which follow,
the appeal should be dismissed with costs.
Like NICHOLAS AJA, I shall confine my considera-tion of the matter to the
case of the Phoenix Hotel on the basis that the position
in regard to the
Swartkops Hotel is no different. The facts are set out in the judgment of my
Brother NICHOLAS and I shall repeat
them only where this is necessary for the
purposes of my reasoning.
The first question to be considered is whether,
apart from the provisions
of sec 37(5) of the Insolvency
Act 24 of 1936, as amended ("the Insolvency Act"), the
first appellant ("Slims"), as sub-lessor of the Phoenix
Hotel, was entitledto an order for the retransfer to it
or its nominee of the hotel liquor licence with off-
consumption authority ("the liquor licence") after the
/ determination
3
determination of the sub-lease in terms of sec 37(2) of the Insolvency
Act. This depends to some extent upon the nature of a liquor
licence and upon
the legal conser quences of the insolvency of the licensee.
The nature of a liquor licence has been discus-sed in a number of cases (see
eg
Fick v Woolcott and Ohlsson's Cape Breweries Ltd
1911 AD 214
;
Pietermaritzburg Corporation v South African Breweries Ltd
1911 AD 501
;
Receiver of Reve-nue, Cape v Cavanagh
1912 AD 459
;
Solomon v Registrar
of Deeds
1944 CPD 319
;
Weintraub and Weintraub v Joseph and Others
1904 (1) SA 750
(W);
Bank Station Hotel (Pty) Ltd v Thomas and Others
1970 (4) SA 411
(T) ). From these judgments it appears that a liquor licence is
a statutory privilege granted to a particular person under the liquor
laws (the
current law being the Liquor Act 87 of 1977 -"the Liquor Act") entitling him to
sell liquor at particular premises. It
is a purely personal privilege. Its
grant
/ involves
4
involves the exercise by the licensing authorities of a
delectus
personae
so that, save to the extent and in the
manner permitted by the
Liquor Act, the licensee cannot
transfer or otherwise deal with his licence.
The law
provides for the strict supervision of the grant, trans-
fer and removal of licences. Nevertheless, as pointed
out by INNES J in
Fick
's case,
supra
, (at p 230) —
"Contractual undertakings on the part of a holder to transfer his licence to
some other person on the happening of certain contingencies
are of frequent
occurrence. But the expression, though convenient, is inaccurate. No holder can
transfer his licence; that is the
sole prerogative of the Licensing Court. So
that the only way to give any effect to such an underta-king is to treat it as
an agreement
by the promisor to exercise in favour of the pro-misee such right
to apply for a transfer as the statute gives him, and to do all
things necessary
on his part to enable the Licen-sing Court to deal with the application. And
that is what, in my opinion, an agree-ment
to transfer a licence amounts
to."
(See also
Solomon v Registrar of Deeds
,
supra
, at p 325;
/
Bank
5
Bank Station Hotel
case,
supra
,
at p 416 A-C). Under
current legislation an application for a transfer of
a
licence is dealt with by the Minister of Industries
Commerce and Tourism
"or a person acting under his direc-
tions" (see sec 45(1) of the Liquor Act,
read with the
definition of "Minister" in sec l); but otherwise the
statement by INNES J is as pertinent today as it was
in 1911. Pertinent too are the remarks of VAN ZYL JP
(with whom JONES J concurred) in
Solomon v Registrar of
Deeds
,
supra
(at p 325):
".... a liquor licence is not merely a privilege but is a right of a
potential commercial value which may sometimes be very considerable,
and a right
which is alienable and can be sold. It is, however, not every sale thereof which
can be given effect to because when
a licence has been sold, transfer thereof to
the purchaser will have to be obtained from the Licensing Board; and if the
Board does
not approve of the purchaser or if the purchaser does not possess one
of the essentials required by law, such as e.g. the right to
occupy the
premises
/to
6
to which the licence relates, transfer of the licence will not be obtained and
the sale will fall through. Although, how-ever, there
are these limitations to
the giving effect to a sale of a liquor licence, the right to sell is there and
it can some-times be a very
valuable right".
(As to
a licence having a commercial value, see also the
Pietermaritzburg
Corporation
case,
supra
, at p 517.)
Moreover, where a licence is
"sold" by its holder to a
person who wishes to conduct the business
elsewhere, it
would appear to be possible to make simultaneous applica-
tion for transfer of the licence to another person and its
removal to other premises (see 15 LAWSA par 190;
Singh
|
and Others v Chairman National Liquor Board and Others
1977
(3) SA 1088 (N)). In
Solomon v Registrar of Deed
s,
supra, it was further held that (see p 326) —
"As a right of a commercial value which can be separately held, alienated and
sold, a liquor licence under our law can also be mortgaged".
This statement was approved in
Nkwana v Hirsch
, 1956 (4)
/ SA
7
SA 450 (A), at p 457 H, by SCHREINER JA, who added that the licence could
accordingly be sold in execution of a judgment on the bond.
As appears from the aforegoing the licence is granted personally to the
licensee and only he can be re-garded as the owner of the
licence (see
Bank
Station Hotel
case,
supra
, at p 416 A). Nevertheless, as already
indi-cated, a person other than the licensee may by contract ac-quire a
jus
in personam
against the licensee requiring the licensee to do all in his
power to have the licence trans-ferred to such person or his nominee.
In
addition to the case of a "sale" of a licence, mentioned above, there is the
situation created by the leasing of licensed premises
and the business conducted
thereon. The facts of the pre-sent caae illustrate the point.
Immediately prior to the sub-letting of the Phoenix Hotel and the off-sales
premises, and the businesses
/ conducted
8
conducted thereon, to Marsal the liquor licence would have
belonged to the
sub-lessor, Slims, as licensee. In terms of the sub-lease (clause 24) the
contract was conditional on permission being
granted for the transfer of the
licence by the relevant authorities. It is implicit in, the sub-lease that the
sub-lessor is obliged
to do all that is re-quired of him to effectuate the
transfer of the licence into the name of the sub-lessee, Marsal. And, as we
know, this was done. Once transferred, the licence no longer belonged to the
sub-lessor, Slims, but became the property of the sub-lessee,
Marsal (see
Weintraub
's case,
supra
, at p 754 C-D). In terms of clause 21 of
the sub-lease the sub-lessee is obliged, upon termination of the sub-lease, to
do all things
necessary to ensure that the licence is transferred back to the
sub-Iessor. This amounts to a
jus
in
pers
onam created in favour of
the sub-lessor against the sub-lessee in the circumstances postulated (see
Weintraub
's case, supra,
/ at
9
at p 754 D;
Bank Station Hotel
case,
supra
, at p 416
A-B).
The provisions of clause 18 of the sub-lease, which in the
event of
a breach of the agreement committed by the sub-
lessee give the sub-lessor the right to terminate the
agreement forthwith
and "repossess the business and all
relevant licences", can thus not be implemented literally.
At most, in those circumstances, the sub-lessor would be
entitled to demand of the sub-lessee that he co-operate
in the transference of the licence by the appropriate li-
censing authority back to the sub-lessor. The provisions
in clause 14 of the sub-lease for the repossession of the
licence, in the event of the sub-lessee endangering the
continuance of the licence, must be similarly interpreted.
Upon sequestration Marsal was divested of his estate, which vested in his
trustee upon the latter's appointment (sec 20(1)(a) of the
Insolvency Act).
Marsal's estate consisted,
inter alia
, of all his property at the
/ date
10
date of sequestration (sec 20(2)(a) ). "Property" means movable or.immovable
property situated within the Republic and includes contingent
interests other
than those of a fideicommissary heir or legatee (sec 2). "Movable property"
means every kind of property and every
right or interest which is not immovable
property (sec 2). It is not neces-sary to refer to the definition of "immovable
property".
It seems to me that the liquor licence in question constitu-ted
movable property of Marsal within this definition and that in terms
of sec
20(1)(a) it vested in Marsal's trustee upon the latter's appointment (cf
Solomon v Registrar of Deeds
,
supra
, at p 324;
Ward v Barrett
N0 and Another NO
1963 (2) SA 546
(A), at pp 551 G, 554 B). Sec 47(1) of the
Liquor Act appears to recognise that upon the sequestration of the estate of the
holder
of a liquor licence the licence vests in his trustee and it empowers the
trustee to carry on the business without formal transfer
of the licence for a
limited period. This was not disputed.
/ The
11
The sequestration of Marsal's estate did not put an end to the
sub-lease (sec 37(1) of the Insolvency Act), but the trustee's failure
to notify
the sub-lessor of his desire to continue the lease caused it to terminate at the
end of three months after his appointment
(sec 37(2) ). Such termination brought
into operation the provisions of clause 21 of the sub-lease with the result that
the sub-lessor
acquired a personal right against the trustee that the latter
should do all things necessary to ensure the re-transfer of the licence
to the
sub-lessor. What the appel-lant in this case is, in effect, claiming is specific
per-formance of the correlative obligation.
The question is: is it entitled to
do so?
It is true that had the sub-lease terminated in
some
way, without the insolvency of Marsal, Marsal would
have been obliged, in terms of clause 21, to do all that
was necessary to ensure the transfer of the licence back
to Slims. But in fact insolvency has supervened and a
/
concursus
4 12
concursus creditorum
has taken place. Generally speaking,
the trustee's duty is, subject to the directions of the
creditors, to liquidate the assets of the insolvent estate
for the benefit of creditors and to distribute the proceeds
among the creditors in accordance with the scheme of pre-
ference laid down by the Insolvency Act. As INNES J once
remarked —
"[A] sequestration order crystallises the insolvent's position; the hand of
the law is laid upon the estate, and at once the rights
of the general body of
creditors have to be taken into consider-ation. No transaction can thereafter be
entered into with regard
to estate matters by a single creditor to the prejudice
of the general body".
(See
Walker v Syfret NO
1911 AD 141
, at p 166.)
In
Consolidated Agencies v Agjee
,
1948 (4) SA 179
(N) SELKE J
referred to the above-quoted
dictum
of INNES J and added (at
p 189):
"It is clear, I think, that, thus, a trustee in insolvency does not stand for
all purposes of contract in the shoes of
/ the
13
the debtor or insolvent whose estate he administers, and that he is not bound
spe-cifically to perform, or to perform in full, executory
contracts made by the
deb-tor before insolvency, if his doing so would operate to the prejudice of the
other cre-ditors by giving
one creditor an improper preference over the other or
others."
(see also
Ward v Barrett NO
and Another NO
,
supra
, at p 552
H - 553 A;
Ex parte Liquidators
of Parity Insurance Co Ltd
1966 (1) SA 463
(W), at p 471 A - C). And in 11 LAWSA par
220 the following statement is made:
"If the trustee decides to abandon or terminate the contract he need not
per-form ahy unfulfilled stipulations of the contract and
the other party has a
concurrent claim against the insolvent estate for any damages he may have
sustained".
Among the assets vesting in Marsal's trustee for the benefit of creditors is
the liquor licence re-lating to the Phoenix Hotel. It
is the trustee's atti-tude
that the licence should be realized, together with
/ the
14
the insolvent's other assets. In this he appears to have the
backing of the majority of the major creditors. In the circumstances
I do not
think that Slims is entitled to obtain specific performance of the right in
personam
arising from clause 21 of the sub-lease. It must content itself
with a concurrent claim for damages.
Although this was disputed on the papers, it was accepted in argument before
us by respondent's counsel that the sub-lease comprehended
not only the hotel
premises (including the off-sales) but also the businesses conduct-ed thereon.
The "lease" of a business creates
problems of legal classification. In 14 LAWSA
par 137 doubt is ex-pressed as to whether incorporeal things can be let. Be that
as
it may, a "business" is a somewhat amorphous concept. It no doubt includes
the right to occupy the premises from or upon which the
business is conducted;
the use of the fittings, fixtures and furniture upon the premises relating
/ to
15
to the business; the existing stock-in-trade; the service
contracts of
employees of the business; the goodwill; the
licences or other permits required for the conduct of the
business; and,
where applicable, the right to use a trade
name, trade mark, design, etc. In a "lease" of a business,
such as the sub-lease in the present case, not all of these
elements of the business are transferred to the "lessee"
on the basis that the "lessee" is only to have the temporary
use and enjoyment thereof, is to pay rent therefor and is
to restore the same upon the termination of the lease. Thus,
for example, clauses 8 and 26 of the sub-lease provide that
the sub-lessee is to take over all the movable assets of
the business such as furniture, crockery, cutlery, linen, etc for an amount
of R40 000 to be paid in four annual
instalments; and clause 11 provides for the sub-lessee to
take over and pay for cash floats, liquor, food and other
consumable stock at a valuation at cost, the amount to
/ be
16
be paid within 90 days. Upon termination the parties are to take stock of all
business assets and to value such stock and movables
at book value; and the
sub-lessor is to pay the sub-lessee the value so determined (clauses 19 and 20).
And, as far as the liquor
licence is concerned, the "lease" itself does not, as
I have explained, cause the licence to be transferred to the sub-lessee.
Accordingly,
the "lease" of the business appears to be some form of innominate
contract rather than a lease in the true legal sense.
I shall assume in favour of Slims that under a "lease" such as this the
lessor retains some form of real right in the goodwiHof the
business which
entitles. him to the restoration of the goodwill, together with the leased
premises, upon the termination of the lease,
even as against the lessee's
trustee in insolvency. Nevertheless, I do not think, with respect, that it
follows from this that in
this
/ case
17
case the trustee is not free to deal with the liquor
licence
otherwise than by transferring it to the sub-lessor. It
is true
that the goodwiHof a licensed business is very
much dependent upon the liquor
licence and, as pointed
out by INNES ACJ in
Receiver of Revenue Cape v
Cavanagh
,
supra
(at pp 464-5), the cases in which they are separately
dealt with must be "few indeed". Nevertheless, they are
separate entities and may be separately dealt with. As
INNES ACJ said (at p 465);
"An hotel proprietor of long standing and wide repute might quite conceivably
dispose on profitable terms of his pre-mises and their
relative licences, while
expressly retaining the good will for himself".
It is also true that without the licence the goodwill is
deprived of much of its value; and that consequently the
restoration to the sub-lessor by the trustee of the good-
will only (the licence being retained for the benefit of
creditors) will cause the sub-lessor loss (for which the
/ sub-lessor
18
sub-lessor would no doubt have a concurrent claim against the insolvent
estate), but it seems to me that this is an inevitable
consequence
ofthe sub-lessee's insolvency. In
short, I am of the view that the vesting of the licence in the trustee for the
benefit of creditors
cannot be re-.conciled with an obligation upon the trustee
to restore the licence to the sub-lessor.
It was argued by counsel for appellant (Slims) that the licence was
"encumbered" by the obligation to restore it to the sub-lessor
upon termination
of the lease and that this obligation was, therefore, binding upon the
sub-lessee's trus-tee. In so far as this
argument involves the proposition that
the obligation to restore is something more than a personal obligation, I can
find no basis
for it. And, as I have explained, upon insolvency a creditor with
a
jus
in
personam
cannot claim specific performance as against the
debtor's trustee where this conflicts with the interests of the gene-
/ ral . .
19
ral body of creditors.
Reference was made by appellant's counsel to the case of
Ohlsson v Kuhr's
Trustee
(1901) 18 SC 205.
Though it (and the case in which it was followed,
Commercial Hotels Co Ltd v Davidson's Trustee
1905 TH 348)
are in point,
they appear to be based upon an acceptance that upon the termina-tion of the
lease neither the lessee nor his trustee
had "any right whatever" to the
licence. These cases were decided before the nature of a liquor licence had been
authoritatively
con-sidered by this Court and I do not think that the
above-stated proposition is sound.
For these reasons the first question posed must, in my opinion, be answered
in the negative.
I turn now to the second question, viz. whether a claim for the restoration
of the licence can be based upon the provisions of sec
37(5) of the Insolvency
Act. The
/ relevant
20
relevant portion of sec 37(5) in the English text of the Act, reads as
follows:
"A stipulation in a lease that the lease shall terminate or be varied upon
the sequestration of the estate of either party shall be
null and void, but a
stipulation in a lease which restricts or prohibits the transfer of any
right under the lease shall bind the
trustee of the insolvent estate of the lessee
, as if he were the
lessee ".,
As originally enacted, in 1936, sec 37(5)
consisted
merely of the first portion, ending with
the words "null and
void". The remainder was added by sec 14 of the Insolvency
Law Amendment Act 16 of 1943. Both the original Act and the
amending Act were signed in Afrikaans.
The corresponding words in the Afrikaans text read:
"'n Beding in 'n huurkontrak dat die huur sal eindig of 'n verandering
ondergaan met die sekwestrasie van die boedel van een of ander
van die partye
tot die huur is nietig, maar n beding in 'n huurkontrak wat die oor-drag van
enige regwat bestaan kragtens die huurkontrak,
beperk of verbied.... verbind die
kurator van die insolvente boedel van die huurder.... asof hy die huurder....
was..".
/ For
21
For present purposes we are concerned only with the quoted portion of sec
37(5) introduced by the amending Act of 1943. I shall refer
to this as the
"latter portion" of sec 37(5).
It was alleged in the founding affidavit that it
was
an implied term of the sub-lease that the sub-lessee was
precluded from transferring the liquor licence to third par-
ties of his own choice, assuming that he could obtain per-
mission to do so from the licensing authority. This was ad-
mitted by the trustee in his opposing affidavit. Upon this
foundation it was argued by appellant's counsel that this
implied term (perhaps more correctly to be described as a
tacit term) constituted —
"..... a stipulation in a lease which re-
stricts or prohibits the transfer
of any
right under the lease "
and
that the tacit term was accordingly binding on Marsal's
trustee. The argument is, in my opinion, fatally flawed.
/ Using,
22
Using, for the moment, the language of the English text, the latter portion
of sec 37(5) refers to two concepts, viz. (i) "a stipulation
in a lease" and
(ii) "any right under the lease"; and provides, in effect, that where the
stipulation "restricts or prohibits the
transfer of" the right, the sti-pulation
is binding on the trustee of the lessee. It is clear, too, that this portion of
sec 37(5)
is concerned only with stipulations of this nature imposed upon the
lessee, or only with such stipulations in so far as they affect
the lessee,
for,it
is only upon the trustee of the lessee that they
are made binding. As pointed out by this Court in
Durban City Council v
Liquidators, Durban Icedromes Ltd and Another
1965 (1) SA 600
(A), at p 612
B-D, prior to the amendment of sec 37(5) by Act 16 of 1943 there had been a
number of decisions in our courts (though
none of this Court) holding that a
provision in a lease prohibiting the sub-letting of the leased property or the
assignment of the
lease without the
/ consent
23
consent of the lessor was, in the event of the insolvency of the lessee, not
binding on his trustee or, in the case of a lessee company,
upon the liquidator
(see
Gardiner NO v London and South African Exploration Company and
Another
7 HCG 190 and, on appeal,
(1895) 12 SC 225
;
Stalson v Brook
1922 WLD 143
;
Heimann v Klempman & Jaspan
1922 WLD 115
;
Himmelhoch
v Liquidators, Fresh Milk and Butter Supply Co Ltd and Others
1925 TPD 958
;
Mahomed's Estate v Khan
1927 EDL 478).
To-wards the end of 1942 this line
of authority was referred to in a judgment of this Court and it was assumed that
these cases were
correctly decided (see
Estate Fitzpatrick v Estate Frankel
and Others
1943 AD 207
, at p 218). In my opinion it is to be inferred that,
in adding the latter portion of sec 37(5) in 1943 by means of the amending Act,
the Legis-lature intended to reverse the effect of the decisions re-ferred to
above. They, or rather the legal situation crea-ted
by them, was the mischief
aimed at by this part of the
/ amending
24
amending Act and the remedy provided was a provision making sucn a
restriction or prohibition binding upon the lessee's trustee in
insolvency. And,
as was hcld in
Durban City
Council v Liquida
tors, Durban Icedromes Ltd
and Another
,
supra
, sec 37(5) also renders such á restriction
or prohibi-tion binding, in the case of the winding up of a lessee com-pany,
upon
the liquidator (ie when read with the relevant sec-tion of the Companies
Act, which was then sec 130(2)(f) of Act 46 of 1926).
The amendment is formulated in general terms. It does not specifically refer
to sub-letting or assignment. No doubt the Legislature
wished to include as well
restric-tions or prohibitions aimed at transfers of rights of a less
comprehensive nature. It is the appellant's
contention that the wording is
general enough to include the tacit term in the sub-lease concerning
transference of the liquor licence.
/ I
25
I shall assume in appellant's favour that the term "stipulation" (Afrikaans:
"beding") includes a tacit term of the lease, though
there is substance in the
view that in the context of sec 37(5) "stipulation" refers to an express term.
The question then is: can
the liquor licence be regarded as a "right under the
lease" ('n reg wat bestaan kragtens die huurkontrak")?
In my view, a liquor licence differs
toto
caelo
from the type of right which the latter
portion of sec 37(5)
was designed to cover, viz the contractual rights of the les-
see under the lease, such as the right to the use and enjoyment
of the leased property. Firstly, such a contractual right
derives its existence and enforceability in law solely from
the lease; whereas the liquor licence is created, not by
contract, but by the act of the licencing authority and
derives its legal efficacy from the Liquor Act. Secondly,
a contractual right under the lease and a liquor licence are
/ jurisprudentially
26
jurisprudentially disparate. Such a contractual right is a
legal right in the strict sense and its correlative is an |
obligation or
duty imposed upon the lessor. A liquor licence,
on the other hand, is in my
view not a legal right in the strict sense but a liberty or privilege of
statutory origin for which there
is no correlative duty. (See generally W N
Hohfeld,
Fundamental Legal Conceptions
(ed by W W Cook) pp 38-50;
Salmond on Jurisprudence
, llth ed, pp 271-3; Paton,
Jurisprudence
,
4th ed, pp 290-4.) Thirdly, sec 37(5) speaks of the "transfer" of rights.
Contractual rights are transferred by agreement, by a
cession or assignment. As
I have shown, the holder of a liquor licence has no power to transfer his
licence by agree-ment. He is
granted the licence by the exercise by the
li-censing authorities of a
delectus personae
and only the appro-priate
licensing authority can effect a transfer thereof and then only in accordance
with a procedure laid down
by the Liquor Act. In my view, these differences
raise serious
/ doubts
27
doubts as to whether the Legislature intended to include within the ambit of
the latter portion of sec 37(5) a "right" such as the
liquor licence held by the
lessee.
The ultimate test, however, is the meaning to be attributed to the words
actually used by the Legislature. In my opinion, the ordinary
meaning of the
words "right under the lease" is a contractual right created by the lease. In
argument counsel for Slims tended to
concentrate on the word "under" and
submitted that it should be given the wider mean-ing of "in pursuance of". I
cannot agree. The
word "under" must be viewed in its context: that is, the
context of rights and the contract of lease. A lease gives rise to contractual
rights and it seems obvious to me that when the Legislature spoke of a "right
under the lease" it meant a right arising from, created
by or having its origin
in, the lease. In other words, a contractual right. And I can see no valid
reason for departing from the
ordinary meaning of the words used by the
Legislature.
/ The
28
The Judge a
quo
, in coming to the conclusion that the liquor licence
was not a right under the lease, relied to some extent on the judgment of this
Court in
Johnstone v Kommissaris van Binnelandse Inkomste
1960 (4) SA 592
(A). The case is admittedly not in
pari materia
- as emphasized by
counsel for Slims - but I do not agree that it is of no assistance. The question
which arose in that case was
whether maintenance payable in terms of an
agreement entered into by parties to a divorce action, by an exchange of
letters, but
not incorporated in the decree of divorce, constituted "'n [be]drag
betaalbaar by wyse van onderhoud.... ingevolge 'n bevel van egskeiding"
in terms
of sec 58(3) of the Income Tax Act 31 of 1941. (The English text read: "Any
amount
payable by way of alimony under any order of divorce".)
Two passages in the judgment of STEYN CJ should be noted. At page 597 B-D he
said:
/ "Die
29
"Die appellant betoog dat die woorde ingevolge' en ,under' in a sinsverband soos
hierdie, nie slegs ,kragtens', ooreenkomstig' of
,luidens' beteken nie, maar ook
kan beteken ,uit hoofde van die bestaan van' of ,as gevolg van' en dat dit die
betekenis is wat hier
aan hul toegeskryf moet word. Die gevolg sou dan wees dat
die bedrag van £1,500, hoewel die betalingsoor-eenkoms nie deel van
die
egskeidingsbevel uitmaak nie, nogtans ,ingevolge' die bevel betaal sou wees,
omdat die bevel die uit-werking gehad het dat die
ooreenkoms van krag geword het
en nagekom moes word".
The learned
Chief Justice rejected this argument and concluded
(at p 599 B);
"Na my oordeel is die engere betekenis die gewone betekenis van ,ingevolge'
(,under') in 'n sinsverband soos die onderhawige. Dit
sou selfs betwyfel kan
word of die aangevoerde wyere betekenis in so 'n samehang 'n moontlike betekenis
is. Ek kan geen voldoende
rede vind om van die gewone betekenis af te wyk
nie".
From the first of the passages quoted it would
appear that STEYN CJ was of the view that in the context
of the subsection the word "kragtens" would have clearly con-
veyed the narrower meaning of maintenance payable in terms of
/ the
30
the order of divorce. This is of importance because in the present case the
Afrikaans (signed) text uses the word "kragtens". I shall
return to this point
in a moment.
The second of the passages quoted above is signifi-cant because of STEYN CJ's
view that the narrower meaning of "ingevolge" ("under")
was the ordinary meaning
in a context such as the one he was considering. Now an order of court, like a
contract, creates rights,
of a particular kind. There is thus, in my view, an
analogy to be drawn between the ordi-nary meaning of "under any order of
divorce"
and "under the lease". Consequently Jo
hnstone
's case is at least
some autho-rity as to the ordinary meaning of "under the lease" in sec 37(5).
And it is to be observed that STEYN
CJ appeared to be doubtful as to whether the
wider meaning was even a possible meaning in the context.
The Afrikaans text of sec 37(5), in my opinion,
/ supports
31
supports the interpretation which I have placed upon the words
"right under the lease". The corresponding words - "reg
wat bestaan
kragtens die huurkontrak"- convey to me, if any-
thing more clearly, the
concept of a right which owes its
existence to the lease; in other words, a
right created by
the lease. And here I would emphasize the use of the
words
"bestaan" and "kragtens". "Bestaan", linked as it is with
"die huurkontrak", shows that the Legislature connected the
existence of the right with the lease. And "kragtens" rein-
forces this perception. The meanings given to "kragtens" by
the
Handwoordeboek van die Afrikaanse Taal
are "Uit krag van,
op gesag van; ingevolge". I have already referred to the
meaning evidently attached to "kragtens" in Johnstone's
case,
supra
. More recently, in
S v Smith
1986 (3) SA 714
(A),
the meaning of the word "kragtens", as conveying the direct
source of a right (in the wide sense), was emphasized. This
case related to the meaning of sec 31(1) of the Road Trans-
/ portation
32
portation Act 74 of 1977. In discussing the words in sec
31(1)(a) "behalwe kragtens 'n permit wat daardie padvervoer
magtig", HEFER
JA stated (at p 718 D and F):
"Padvervoer, dws enige handeling soos be-skryf in die definisie van daardie
woord in art 1, kan slegs geskied 'kragtens 'n permit
wat daardie padvervoer
magtig' indien die besondere handeling deur
die
permit gemagtig is In elk
geval
moet die woord 'kragtens' nie oor die hoof gesien word nie. 'n Handeling kan
nie
kragtens
'n permit verrig word tensy dit deur die permit gemagtig is
nie".
(See also
Spinnaker Investments (Pty) Ltd v Tongaat Group Ltd
1980 (2) SA 245
(W), at p 252 G-H.)
It was argued by counsel for Slims, relying upon
the
principle referred to,
inter alia
, in
Kinekor Films (Pty) Ltd
v Dial-A-Movie
1977 (1) SA 450
(A), at p 461, in regard to
remedial statutes, viz —
".... in expounding remedial laws, it is a settled rule of construction to
extend the remedy as
far as the words will admit
" (my emphasis),
/ that
33
that the word "under" ("kragtens") should be given the more extended meaning
suggested by him. In applying this prin-ciple one must
not lose sight of what it
was that the Legis-lature sought to remedy and of the limitation imposed by the
words which I have emphasized
in the above quotation. In my opinion, the
background to the amending Act of 1943 and also the wording thereof show that
what the
Legislature sought to re-medy was the situation created by judicial
decisions which rendered stipulations in leases restricting or
prohibiting the
transfer of contractual rights under the lease not bind-ing on the lessee's
trustee in insolvency; and I do not think
that the words used will admit of an
interpretation as wide as that contended for by the appellant.
At this point it is appropriate to refer to the line of reasoning upon which
Slims relies. It is the fol-lowing: (i) the sub-lease,
and in particular clause
24 thereof (referred to above), contemplate that the liquor
/ licence
34
licence of the Phoenix Hotel would be transferred from Slims
to Marsal;
(ii) this imposed certain (tacit) obligations
upon Slims to do all thatwas
required of it to present a
proper application for transfer to the
appropriate licensing
authority in terms of sec 45(1) of the Liquor Act; (iii) this
was duly done and Marsal became the holder of the licence; and
(iv) the licence was accordingly a "right" enjoyed by Marsal
"under the lease". It is not disputed that in these circum-
stances the so-called right, the licence, is created not by
the sub-lease but by the grant of the transfer by the licensing
authority. Nor does it necessarily follow that in such cir-
cumstances the licensing authority will grant the application
for transfer. It may refuse it, for some reason. In other
words, the sub-lease does no more than create the rights and
obligations which give the sub-lessee the opportunity to ap-
ply for the transfer. The connection between the sub-lease
and the "right" represented by the licence is thus a tenuous
/ one
tenuous one. Having regard to what I have found to be the
true meaning of the words "right under the lease" ("reg wat bestaan kragtens
die huurkontrak"), there is no doubt that the liquor
licence is not such a
right.
In my view, therefore, the Court a quo correctly concluded that sec 37(5) had
no application in a case such as the present.
This disposes of both bases for the claim by Slims for the retranafer to it
of the liquor licence. In my opinion, therefore, the Court
a
quo
correctly granted judgment for res-pondent (Marsal's trustee) with costs. Should
this be re-garded as an inequitable or undesirable
result, then only the
Legislature can remedy the position.
I would dismiss the appeal with costs, including the costs of two
counsel.
M M CORBETT. NESTADT JA: CONCURS.