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1990
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[1990] ZASCA 114
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Armstrong NO v Bhamjee (146/89) [1990] ZASCA 114; 1991 (3) SA 195 (AD); [1991] 3 All SA 725 (AD) (28 September 1990)
IN THE SUPREME COURT OF SOUTH AFRICA
(APPELLATE DIVISION)
In the matter between:
RODERICK BRIAN ARMSTRONG
(in his capacity as representative of
LLOYDS UNDERWRITERS) Appellant
and
SULIMAN M BHAMJEE
Respondent
Coram
: JOUBERT ACJ et
MILNE, STEYN, F H GROSSKOPF JJ A
et NIENABER AJA.
Date of Hearing
: 6 September 1990
Date of Delivery
: 28
September 1990
JUDGMENT JOUBERT
ACJ :
/The
2
The respondent as insured instituted an action based on a fire
insurance policy in the Witwatersrand Local Division against the appellant
as
insurer for payment of the sum of R35 000-00. The matter was heard by LEVY A J,
who gave judgment in favour of the respondent
on 21 June 1988 for the said
amount. With leave of the Court
a quo
the appellant now appeals against
its judgment.
The important facts forming the background to the dispute
between the parties may be summarized as follows:
1. On 27 September 1924 H P Van Nieuwenhuizen by Deed of Transfer No 8791/1924
became the registered owner of Portion 8 of Portion
A of the farm Kromdraai
("the portion of the farm") situate in the district of
Witbank.
2.
On 17 May 1926 H P Van Nieuwenhuizen by
Notarial
Deed of Lease of Trading Rights leased to Mrs
S
/3...
3
R Stein and Mrs A Manasewitz as lessees the sole and exclusive trading rights
over the portion of the farm (clause 1) for 1 year from
February 1926,
automatically renewable from year to year by the lessees (clause 2). The lessees
were granted the right to select
a suitable site 1 morgen in extent for the
erection of suitable business and residential buildings with outbuildings
(clauses 4,
9). The lessees were also granted the right to cede their interests
in the lease to anyone without the written consent of the lessor
(clause 6). At
the termination of the lease the lessees had the right to break down and remove
any of the buildinas erected by them
(clause 10). This agreement of lease was
registered in the Deeds Office, Pretoria, on 25 November 1926 (Vol 4 p
221-227).
/4...
4
3 (i) By Notarial Deed of Cession, executed on 21
September 1945 and registered on 5 March 1946 in the Deeds Office, Pretoria, Mrs
S R Stein ceded her half share in the lease of the sole and exclusive trading
rights over the portion of the farm to the estate of
the late M L Young (Vol 4 p
228-232). (ii) Because M L Young had during his lifetime sold to P F Roux his
half share in the lease
of the sole and exclusive trading rights his executors
by Notarial Deed of Cession, executed on 21 September 1945 and registered
on 5
March 1946 in the Deeds Office, Pretoria, ceded his said half share in the lease
of the sole and exclusive trading rights to
the estate of the late P F Roux (Vol
4 p 238-242). (iii) Because Mrs A Manasewitz had on 6 May 1931 sold
her half share in the lease of the sole and
exclusive
/5...
5
trading rights to the late P F Roux, she by Notarial Deed of
Cession, executed on 21 September 1945 and registered on 5 March 1946
in the
Deeds Office,Pretoria, ceded her said half share in the lease of the sole and
exclusive trading rights to the estate of the
late P F Roux (Vol 4 p 233-237).
(iv) The position then on 21 September 1945 was that
the lease of the sole
and exclusive trading rights over the portion of the farm was held by the estate
of the late P F Roux. 4. By
Notarial Deed of Cession, executed on 17 May
1946 and registered on 14 October 1946 ih the Deeds
Office, Pretoria, Mrs M C E Roux, widow of the
late P F Roux, in her personal capacity as well
as in her capacity as executrix testamentary in
the estate of the late P F Roux, ceded in
favour
/6...
6
of herself as beneficiary all the interest and title of her late husband in the
Notarial Deed of Lease, dated 17 May 1926, in respect
of the sole and exclusive
trading rights over the portion of the farm (Vol 4 p 243-247).
5. By Notarial Deed of Cession, executed on 23 September
1949 and registered
on 6 December 1949 in the Deeds
Office, Pretoria, the estate of the late Mrs
M
C E Roux ceded her interest in the lease of the sole and exclusive trading
rights over the portion of the farm to her son D J E Roux
(Vol 4 p
248-253).
6. In pursuance of a sale entered into by
him H P
Van Nieuwenhuizen on 27 August 1953 by Deed of Transfer No 19194/1953
transferred the portion of the farm to Coronation Collieries
Ltd subject to a
reservation in favour of himself of all the trading rights over
/7...
7
the said property which had been leased in 1926 to Mrs S R Stein and Mrs A
Manasewitz (Vol 4 p 254-257).
7. By Notarial Deed of Agreement No 881/1957 S,
registered on 11 September
1957, D J E Roux, as
the registered holder of the 1926 Notarial Deed
of Lease, entered into an agreement with Coronation Collieries Ltd in terms of
which clauses 4 and 9 of the said Notarial Deed of
Lease were amended. According
to the amendments the lessor under the said Notarial Deed of Lease would have no
further right to select
any further site or sites on the portion of the farm in
addition to the three existing sites on two of which a trading store and
a
dwelling house had been erected. (Vol 4 p
261-266).
8. On 28 February 1964 H P Van
Nieuwenhuizen died.
/8....
8
The date of his death was ascertained by the attorneys in the present
proceedings at the request of this Court and was put before
us by consent.
9. By January 1968 there already existed the business
of a general dealer and
a butchery, known as
Kromdraai Kontant Winkel & Slaghuis, on one
of
the sites on the portion of the farm. (Vol 4 p
280-282).
10. On 7 September 1968 P F Roux (presumably a son of
D J E Roux) as lessor
entered into the following
two separate leases, viz.
(i) with A E Bhamjee and A B E Bhamjee as
lessees of
"sekere konsessie regte" over the portion of the farm for a period óf 5
years from 1 September 1968 (Vol 4 p 283-286);
and
9
(ii) with Kromdraai Cash Store and Butchery
(Pty)
Ltd as lessee of a shop and butchery situated on a site of the portion of the
farm for a period of 5 years from 1 September
1968. (Vol 4 p 287-290). 11. On 7
March 1970 P F Roux (the only heir of the late D J E Roux and executor of the
estate of the latter)
and the respondent entered into a handwritten agreement
with an addendum thereto. In terms of the agreement P P Roux sold to the
respondent the trading rights, which the late D J E Roux held by virtue of the
1949 Notarial Deed of Cession over the portion of
the farm, for an amount of R5
050-00. The addendum recorded that the said purchase price was paid for:
(1) the sale of the trading rights;
(2) the sale of all existing erected
buildings;
/10...
10
(3)
all fixtures
in the buildings;
(4) all right, title and interest in the leases, dated 7 September 1968
between
P F Roux as lessor and
Kromdraai Cash Store & Butchery (Pty)Ltd, A E Bhamjee and A B E Bhamjee as
lessees (Vol 4 p 302-304). The
effect of this provision was that the respondent
was to acquire the rights of P F Roux as lessor against the said three lessees
under
the two leases of 7 September 1968. 12. Disputes arose between the
respondent and the said three lessees concerning the leases which
gave rise to
litigation between them in the Magistrates's Court, Witbank. Details of the
litigation are not relevant to the present
proceedings save to mention that the
settlement of their disputes was
/11...
11
recorded in a Deed of Settlement, dated 19 May
1972, in terms of which the said three lessees
acknowledged that P F Roux had
ceded to the respondent
his rights in the leases, dated 7 September 1968 (Vol 3p 163-165). The result
was that the leases were to continue until their expiry
on 31 August
1973. On their termination the said three lessees
failed to exercise their
options of renewal but
continued to remain in unlawful occupation of
the
shop and the butchery. (Vol 3 p 209).
13. On 9 January 1974 Mrs A C E W Jansen van Nieuwenhuizen, a widow, entered
into a written Agreement of Lease in terms of which
she as lessor leased to A E
Bhamjee (Pty) Ltd the trading and occupation rights over the portion of the farm
for a period of 9 years
and 11 months as from 1 September 1973 with an
option
/12...
12
to renew for a further period of 5 years. (Vol 5 p 320-324).
14. During 1976 a fire destroyed the shop and the butchery.
That was the
first fire. A E Bhamjee (Pty) Ltd
succeeded in recovering from S A Eagle
Insurance
Co Ltd as insurer an amount of R79 000-00. (Vol 2 p 115). A E Bhamjee (Pty) Ltd,
which supplied all the necessary materials, had
the shop and the butchery
rebuilt at its expense.
15. Respondent successfully claimed damages in the
Magistrate's Court,
Witbank, against the said
three lessees for their wrongful holding over
the
building from 1 September 1973 until 31 January
1977. Kromdraai Cash
Store & Butchery (Pty)
Ltd thereafter ceased to exist. A E
Bhamjee
and A B E Bhamjee appealed to
the Transvaal Provincial
/13....
13
Division. A B E Bhamjee, however, ceased to oocupy the shop before 20 November
1981. On 21 November 1981 the Transvaal Provincial
Division as a Court of Appeal
( per Melamet and Nestadt J J) dismissed the appeal of A E Bhamjee against whom
was granted
inter alia
an order for ejectment from the building housing
the shop and the butchery. (Vol 3 p 167-190).
16. On 24 November 1981 A E Bhamjee was evicted from the building which was kept
securely locked as its contents were under order
of attachment in execution
until it was destroyed by fire on 5 December 1981. That was the second fire (Vol
1 p 74 para
(e)).
17.
Respondent on 27 April 1982 successfully
claimed
in the Transvaal Provincial
Division from A E
Bhamjee
/14....
14
payment of R5 800-00 damages for unlawful occupation of the shop and the
butchery from 1 February 1977 to 24 November 1981 (Vol 3
p
197-200).
What rights, if any, did the respondent
have in regard to the building when it was destroyed by the second fire on 5
December 1981
?
Originally H P Van Nieuwenhuizen was the registered owner of
the portion of the farm by virtue of Deed of Transfer No 8791/1924. It
was
qua
owner of the portion of the farm that he by Notarial Deed of Lease of
Trading Rights in 1926 leased the sole and exclusive trading
rights over the
portion of the farm to Mrs S R Stein and Mrs A Manasewitz as lessees. The sole
and exclusive trading rights formed
part and parcel of his ownership of the
portion of the farm. The Notarial Deed of Lease of trading rights created an ex
contractu
relationship between him and Mrs S R Stein and Mrs
/15...
15
A Manasewitz as lessees (including their subsequent
cessionaries who derived their title as lessees from them). The legal position
of H P Van Nieuwenhuizen, however, changed radically when he transferred in 1953
the bare ownership of the portion of the farm by
Deed of Transfer No 19194/1953
to Coronation Collieries Ltd subject to a reservation in favour of himself of
all the trading rights
over the portion of the farm. Such reservation of the
trading rights in favour of himself and not in favour of a dominant tenement
in
law constituted a personal servitude in favour of H P Van Nieuwenhuizen.
Section
67
of the
Deeds Registries Act No 47 of 1937
expressly sanctions the creation of
a personal servitude by way of a deed of transfer in favour of the transferor.
Henceforth H P
Van Nieuwenhuizen was the registered holder of a personal
servitude in respect of the trading rights over the portion of the farm.
It is
trite law that a personal servitude is
/16...
16
inalienable and terminates with the death of the holder
thereof.
See
Willoughby's Consolidated Co Ltd v Copthall Stores
Ltd
,
1913 AD 267
at p 282 per INNES J:
"From the very nature of a personal
servitude, the right which it confers
is inseparably attached to the beneficiary.
Res servit personae
. He cannot transmit
it to his heirs, nor can he alienate
it; when he dies it perishes with him.
(Voet 8.1.4;
Louw v Van der'Post
, etc.)."
See also
Hotel De Aar v Jonordon Investment (Edms) Bpk
,
1972 (2) SA
400
(A) at p 405 F. While H P Van Nieuwenhuizen
as the holder of a personal
servitude was entitled to grant
a lease of the trading rights such a lease
would have no binding
effect on the owner of the portion of the farm after
his death.
Neither Mrs S R Stein and Mrs A Manasewitz as lessees
nor their
cessionaries as their successors in title
/17....
17
could acquire rights to the use of the trading rights
after
the death of H P Van Nieuwenhuizen. Compare Voet 19.2.16:
-- vel fructuarius fundum fructuarium
elocaverit in certum tempus, velut in
guinguennium, & anno forte tertio ususfructus
morte aliove modo finitus ad proprietarium
revertatur; cum scire conductor debuerit
conditionem ejus cum guo contrahebat,
& prospicere hoc posse evenire, adeo
utne sumtus quidem, guos fecit in fundum,
quasi quinquenio fruiturus, recipiat
pro rata. D 19.2.9.1.
(Gane's translation : If a usufructuary
has let out for a definite time, say for
five years, a farm held in usufruct,
and perhaps in the third year the usufruct
has been ended by death or in some other
way [it] goes back to the proprietor.
The lessee ought to have been aware of
the position of him with whom he was
contracting, and have foreseen that such
a thing could happen; so much so that
/18...
18
he does not even recover a proportionate part of the expenses
which he has incurred on the farm in prospect of enjoying it for the
five
years." The effect of registration of the trading rights as a personal
servitude in favour of H P Van Nieuwenhuizen appears from
the following
clear statement by HOEXTER JA in
Frye's (Pty)Ltd
v Ries
,
1957
(3) SA 575
(A) at p 582 A-C:
"As far as the effect of registration is concerned, there is no doubt that
the ownership of a real right is adequately protected by
its registration in the
Deeds Office. Indeed the system of land registration was evolved for the very
purpose of ensuring that there
should not be any doubt as to the ownership of
the persons in whose name real rights are registered. Theoretically no doubt the
act
of registration is regarded as notice to all the world of the ownership of
the real right which is registered.
/19...
19
That merely means that the person in whose name a real right
is registered can prove his ownership by producing the registered deed.
Generally speaking, no person can successfully attack the right of ownership
duly and properly registered in the Deeds Office. If
the registered owner
asserts his right of ownership against a particular person he is entitled to do
so, not because that person
is deemed to know that he is the owner, but because
he is in fact the owner by virtue of the registration of his right of
ownership."
It is clear from the aforegoing that H P Van Nieuwenhuizen's death on 28
February 1964 terminated his personal servitude of trading
rights. Accordingly P
F Roux was in law incapable of binding the owner of the portion of the farm by
purporting to alienate the trading
rights on 7 March 1970. He was also incapable
in law of alienating
/20....
20
the building to the respondent by the same agreement. The
building formed part of the portion of the farm which was owned by Coronation
Collieries Ltd (
superficies solo cedit
). The agreement of 7 March 1970
accordingly conferred no legal title on the respondent vis-a-vis the owner of
the pórtion
of the farm in regard to the trading rights and the building
with its fixtures. He could at the most have been a
bona fide
occupier of
the building and its fixtures when it was destroyed by the second fire on 5
December 1981. Since he did not erect the
building with his materials he had no
rights to the materials comprising the building when it was destroyed on 5
December 1981. Furthermore
no necessary or useful improvements were effected by
the respondent on the portion of the farm. He therefore had no claim for
compensation
of such non-existing improvements. For the same reason he could not
in the circumstances rely on a right
/21...
21
of retention.
On 3 December 1982 the defendant as insured
sued the appellant as insurer under a fire insurance policy which was in force
on 5 December
1981, when the second fire occurred, for payment of the insured
amount of R35 000-00. In terms of the insurance policy (Annexure
"A" Vol 1 p
11-39) the buildings on the farm Kromdraai were the subject matter insured
against damage to the whole or part thereof
by fire "whether resulting from
explosion or otherwise". It was common cause that the reference in the insurance
policy to "the buildings
on the farm Kromdraai" related to the building with the
store and the butchery on the portion of the farm.
Mr
Fine
, on behalf
of the appellant, relied
inter alia
on
Nafte v Atlas Insurance Co
Ltd
,
1924 W L D 239
at pp 245,246 for his contention that inasmuch as the
insurance policy was not a "valued policy", which specified
/22....
22
the agreed value of the subject-matter insured, but an
"unvalued" or "open" fire policy of indemnity the respondent was only entitled
to recover the actual loss sustained by him which was not to exceed the insured
amount of R35 000-00. The onus was on the respondent
to prove the value of his
actual loss subject to the limitation of the insured amount. The substance of
his argument was that the
respondent had failed to discharge the onus.
Mr
Engelbrecht
, on behalf of the respondent, argued that the respondent at
all times honestly thought that he had a right to the building on the
basis of
the agreement of 7 March 1970. While he conceded that the respondent had no
legal claim to the materials of the building
after its demolition or
destruction, he contended that the respondent's interest in the building
consisted of the preservation of
the integrity of the building itself because
the latter enabled
/23...
23
him to generate an income from the rentals obtained from
tenants. He relied strongly on the evidence of the respondent that he had
at all
relevant times until the occurrence of the fire on 5 December 1981 had the use
of the building which enabled him to derive
an income from the rentals collected
from his tenants. Had the fire not destroyed the building the respondent would
have continued
to lease the building to tenants.
In reply Mr
Fine
countered by pointing out that the respondent had failed to insure his interest
in the building, viz to collect rentals from tenants.
Moreover, the respondent
had failed to prove the value of his interest in the building.
All things
considered, I agree with Mr
Fine
's contention that the respondent had
failed to prove the extent of the actual value of his loss occasioned by the
destruction of
the building.
/24...
24
In the result the appeal is allowed with costs. The following
order is substituted for the order of the Court aguo:
"The defendant is absolved from the instance with costs."
C P JOUBERT ACJ.
MILNE JA
STEYN JA Concur.
F H GROSSKOPF JA NIENABER AJA