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[2018] ZASCA 57
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Rajah and Another v Balduzzi (076/2017) [2018] ZASCA 57 (16 May 2018)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case No: 076/2017
In the matter
between:
DEVANAYAGY RAJAH
FIRST APPELLANT
STANLEY
BRASG
N.O
SECOND APPELLANT
and
ORESTE
BALDUZZI
RESPONDENT
Neutral
citation:
Rajah
v Balduzzi
(076/2017)
[2018] ZASCA 57
(16 May 2018)
Coram:
Navsa,
Leach and Wallis JJA and Mothle and Hughes AJJA
Heard:
16
March 2018
Delivered:
16
May 2018
Summary:
Immovable
property purchased by disqualified person in contravention of the
Group Areas Act 36 of 1966 – registered owner
seeking eviction
of testamentary heir of purchaser – defence that registered
owner holding property as nominee on behalf
of purchaser – such
a claim in terms of s 3 of
Restitution of Land Rights Act 22 of
1994
– exclusive jurisdiction of Land Claims Court –
eviction action stayed in terms of
s 19
(d)
of
Superior Courts Act 10 of 2013
pending action before Land Claims
Court
ORDER
On
appeal from:
Gauteng
Division of the High Court, Johannesburg (Wepener J and Matojane J,
each sitting
as
courts of first instance):
The
following order is made:
1
The
application for condonation for the late filing of the application
for leave to appeal against both judgments is granted and
the first
and second appellants are ordered to pay the costs of the application
for condonation, the one paying the other to be
absolved.
2 Leave to
appeal against both judgments is granted.
3 The appeals
are upheld with costs,
including
the costs of two counsel and including the costs of both applications
for leave to appeal in the High Court and the application
for leave
to appeal in this Court.
4 The orders
of Wepener J and Matojane J in the high court are set aside.
5 The
following order is made:
(a) The
action under case number 17136/2007 in the Gauteng Local Division is
stayed pending finalization and determination
of an action to be
instituted in the Land Claims Court by the appellants.
(b)
The first and second appellants are directed to institute that action
within six months from the date of this order,
failing which the
second appellants’ counter-claim in case number 17136/2007 will
lapse and the respondent will be entitled
to enrol the said action
for trial.
JUDGMENT
Hughes
AJA (Navsa, Leach and Wallis JJA and Mothle AJA concurring):
[1]
Under the Group Areas Act 36 of 1966 (the Act) and its predecessor,
the Group Areas Act 41 of 1950, black people wishing to
live or trade
in white group areas were compelled due to racial segregation to
resort to the mechanism of a white person fronting
as the registered
owner or occupier of immovable property. Simply put, the white owner
or occupier was a nominee for the black
beneficial owner or occupier.
This was done to circumvent the effects of those racially based laws
that precluded black people
from owning or occupying immovable
property in areas designated for ownership and occupation by white
people. Since 1991 remedial
legislation has been passed to address
these situations of nominee ownership. Whether the respondent, Mr
Balduzzi, entered into
such an arrangement with Mrs Rajah, the first
appellant’s, late husband, Mr Manogaram Rajah, and whether the
second appellant,
Mr Brasg, an attorney and the executor of Mr
Rajah’s estate (the executor), could take advantage of that
remedial legislation,
gives rise to the principal issues in this
appeal.
[2]
There was before us an application for leave to appeal, referred for
oral argument in terms of
section 17(2)
(f)
of the
Superior Courts Act 10 of 2013
. The parties were directed to
be prepared, if called upon to do so, to address us on the merits. We
heard argument on the application
and the merits. The application
concerns two orders of the Gauteng Local Division, Johannesburg,
arising in eviction proceedings
brought by Mr Balduzzi against Mrs
Rajah, in which the executor counter-claimed for transfer of the
property in question to the
estate. The first order (Wepener J),
issued on 4 April 2014, upheld a special plea of prescription to the
executor’s counter-claim.
The second (Matojane J), issued
on 10 July 2015, and varied on 7 December 2015, ‘confirmed’
that the special
plea of prescription had been upheld and that the
issue of prescription was
res
judicata
.
The background, as it emerges from an affidavit deposed to by
Mrs Rajah in opposition to an application for summary judgment
and the executor’s affidavit in support of the application for
leave to appeal, is reflected in the pleadings and is set
out
hereafter. For the purposes of adjudicating the issues in the high
court and this court these facts are to be treated as correct
without
reaching any conclusion on their correctness.
[3]
Mr Oreste Balduzzi and Mr Manogaram Rajah were members of Ital
Machinery CC, a close corporation. During the course of 1986,
and by
way of a loan advanced by the close corporation, the respondent
purchased residential property described as Portion 1 of
Erf 1979
Orange Grove Township, also known as 127 17
th
Street, Orange Grove, Johannesburg (the property). In 1990 he
purchased another property in Houghton. At the same time, according
to Mr Balduzzi, Mr Rajah and his family moved to Johannesburg for the
purposes of the business.
[4]
According to Mrs Rajah, in 1990 Mr Balduzzi offered to sell the
property to her husband, who accepted and took occupation of
the
property. Mrs Rajah said that the deceased and Mr Balduzzi reached an
agreement facilitating the adjustment of their respective
loan
accounts with the close corporation, thereby enabling Mr Rajah to pay
for the property. In 1999, the close corporation, made
a substantial
profit in a business transaction, and the deceased paid the
outstanding balance on the mortgage bond registered over
the
property. As a result, the bond was cancelled on 4 October 1999.
[5]
Thereafter Mr Balduzzi provided Mr Rajah with the original title deed
which is currently in the possession of the executor.
The property
was in a white residential area and Mrs Rajah said that ‘[o]wing
to the existence at that time of relevant apartheid
legislation which
prevented my husband from taking transfer of the property into his
own name, Mr Balduzzi agreed to keep the property
registered in his
name, as my husband’s nominee. He was the ‘white front’
for my husband.’ On 22 October
1990 Mr Rajah obtained a
permit in terms of section 21 of the Act, allowing him to occupy the
property.
[6]
Mrs Rajah stated that from the time she and her husband took
occupation of the property they never paid any rental to the
respondent
nor were they ever called upon to do so. She said that
they paid all the expenses in respect of the property i.e. municipal
charges,
rates and taxes, water and electricity and maintenance
costs. She insisted that he had been the beneficial owner of the
property,
whilst the respondent stood in as the ‘white front’,
enabling them to secure the property as their own in the white
residential area.
[7]
Mr Rajah died testate in November 2000 leaving the property and its
entire contents to Mrs Rajah. Thereafter, court proceedings
were
instituted, to validate the will, which was being disputed by Mr
Rajah’s sister. The first appellant stated that
she had
sought the assistance of the respondent who was subpoenaed to give
evidence. In September 2005 she succeeded in having
the will declared
valid. According to Mr Brasg during those proceedings the
respondent gave him an undertaking that he would
sign the necessary
documents for the property to be transferred to the estate of the
deceased. This is disputed by Mr Balduzzi.
[8]
Mr Balduzzi issued summons on 31 July 2007, seeking Mrs Rajah’s
eviction from the property. Mr Balduzzi pleaded that he
was the owner
of the property and that Mrs Rajah ‘is in occupation of the
property and, despite demand, has failed and/or
refused to vacate
same’. He sought summary judgment, which was resisted on the
basis set out above. The claim that Mr Balduzzi
was only a nominee
for Mr Rajah was advanced at that stage as it has been at all times
during the litigation.
[9]
Mrs Rajah also raised the non-joinder of Mr Brasg the executor of the
deceased’s estate, he was subsequently joined as
a party on 11
June 2013. Mr Brasg pleaded that the deceased estate was the
beneficial owner of the property and that Mr Balduzzi
was a
nominee. In a counter-claim he sought transfer of the property into
the name of the deceased estate. This brought about the
special plea
of prescription raised by Mr Balduzzi, which was decided in his
favour by Wepener J.
[10]
Mr Brasg, in his counter-claim, pleaded that Mr Balduzzi was ‘a
nominee or “front” for’ Mr Rajah. He
alleged that
Mr Rajah had paid off the purchase price in 1999; that the mortgage
bond over the property was paid off; and that
Mr Balduzzi handed the
title deed to Mr Rajah. He also pleaded – and this was the
source of much of the confusion in this
case – that Mr Rajah
became entitled to transfer of the property into his name in terms of
section 48(3) of the Abolition
of Racially Based Land Measures Act
108 of 1991(the Abolition Act). Section 48(3) of the Abolition Act
required the principal seeking
to have property registered in their
own name to seek such registration within thirty months from its
commencement, which was 30
June 1991. The special plea raised by Mr
Balduzzi contended that Mr Brasg’s claim was subject to a
prescriptive period, and
because a period of twenty-two years had
elapsed since the promulgation of the Abolition Act, the claim had
prescribed, in terms
of both that Act and the Prescription Act 68 of
1969 (the
Prescription Act).
[11
]
It is necessary, to have regard to the provisions of section 48(2) of
the Abolition Act which reads:
‘
Any
transaction whereby a person (hereinafter referred to as a nominee
owner) acquired property contrary to section 40 of the Group
Areas
Act, 1966, on behalf of another person (hereinafter referred to as
the principal) shall, from the commencement of this section,
be
deemed not to be an illegal transaction or a transaction which
constitutes an offence.’
It
will be recalled that Mr Balduzzi had initially acquired the property
for himself and according to Mrs Rajah later agreed to
sell it to her
late husband. The property continued to be registered in Mr
Balduzzi’s name. Whether that fell within the
terms of this
section is doubtful because Mr Balduzzi had sold his own property to
Mr Rajah, not bought it on behalf of Mr Rajah,
but what is relevant
is that Mr Brasg relied on this section in raising the defence set
out above.’
[12]
In determining the special plea and distracted by the approach
adopted by the parties in dealing with Mr Brasg’s claim,
namely, that the claim was one that properly resorted under section
48(2) of the Abolition Act, Wepener J reasoned that the failure
to
follow the procedural steps prescribed by section 48(3) did not
preclude a claim for registration of the property into the name
of
the principal. He went on to consider whether the
Prescription Act
applied
. In his view,
section 11(3)
of that Act applied and the claim
would have prescribed after a period of three years. He reasoned that
a claim for the enforcement
of the right of ownership to the property
was purely a personal right. In this regard, he relied on the dicta
of Brand JA in
Barnett
v Minister of Land Affairs and Others
2007 (6) SA 313
(SCA)
(Barnett)
at para
19. In
Barnett
the vindicatory relief sought was considered to be a debt as
contemplated by the
Prescription Act. Brand
JA gave a wide and
general meaning to the word debt to include ‘an obligation to
do something or refrain from doing something’.
He further
concluded that this would include ‘a claim for the enforcement
of an owner’s rights to property’.
[13]
Wepener J accordingly upheld the plea of prescription and refused
leave to appeal against that order. Undeterred by this Mr
Brasg
amended his claim in reconvention by altering the reference to
section 48(2) of the Abolition Act to a reference to
section 48(3) of the Abolition Act. This brought forth two
further special pleas, the one of
res
judicata
and the other a repeated plea of prescription. The matter then came
before Matojane J for the adjudication of these special pleas
and two
others raised separately by Mrs Rajah, which are not relevant at this
stage. Matojane J upheld the special plea that the
issue of
prescription was
res
judicata
as
a result of the order of Wepener J and ruled that the claim had
prescribed. He dismissed an application for leave to appeal.
[14]
According to Mr Brasg, he thought that the judgments on prescription
did not preclude him from continuing to defend the eviction
claim on
the basis that Mr Balduzzi was not the owner of the property, but a
nominee for Mr Rajah. He continued on his own and
Mrs Rajah’s
behalf to defend the action on that basis. In preparing to defend the
action two relevant judgments on prescription,
ABSA Bank Ltd v
Keet
2015 (4) SA 475
(SCA)
(Keet)
and
Makate v Vodacom
(Pty) Ltd
2016 (4) SA 121
(CC)
(Makate),
were reported and
it was thought that these could be invoked in favour of the defence.
In
Keet
, at para 16, this court pointed out that although
Brand JA was prepared to accept in
Barnett
that the
vindicatory relief the government had sought to enforce was a ‘debt’
as contemplated by the
Prescription Act, the
prescription point was
dismissed on the basis of a continuing wrong. In
Keet
this
court went on, at para 25, to hold that the view that a vindicatory
action is a ‘debt’ as contemplated by the
Prescription
Act which
prescribes after three years is ‘contrary to the
scheme of the Act’. It said the following:
‘
To
equate the vindicatory action with a ‘debt’ has an
unintended consequence in that by way of extinctive prescription
the
debtor acquires ownership of a creditor’s property after three
years instead of 30 years that is provided for in
s 1
of the
Prescription Act. This
is an absurdity and not a sensible
interpretation of the
Prescription Act.’
In
Makate
the Constitutional Court in paras 85 and 86 warned against too broad
an interpretation of the word ‘debt’ in the
Prescription
Act.
[15
]
At the pre-trial conference, Mr Brasg received a rude awakening when
Mr Balduzzi’s lawyers indicated that in light
of the two
judgments ownership of the property was no longer in issue and that
it would be for Mrs Rajah to commence giving evidence
in support of
her claim to remain in occupation of the property. Hence, the present
application for leave to appeal to this Court
against the two orders
referred to above. Mrs Rajah and Mr Brasg seeks condonation for the
late filing of the application for leave
to appeal. The application
was filed on 6 February 2017, some twenty-three months after Wepener
J refused leave to appeal and one
year and a month after Matojane J
refused leave to appeal.
[16]
When the special plea was adjudicated by Wepener J, the Restitution
of Land Rights Act 22 of 1994 (the Restitution Act) was
in place.
Section 3 of the Restitution Act provides as follows:
‘
Claims
against nominees
:
‘
Subject
to the provisions of this Act a person shall be entitled to claim
title in land if such claimant or his, her or its antecedent
–
(a)
was prevented from
obtaining or retaining title to the claimed land because of a law
which would have been inconsistent with the
prohibition of racial
discrimination contained in section 9(3) of the Constitution had that
subsection been in operation at the
relevant time; and
(b)
proves that the registered
owner of the land holds title as a result of a transaction between
such registered owner or his, her
or its antecedents and the claimant
or his, her or its antecedents, in terms of which such registered
owner or his, her or its
antecedents held the land on behalf of the
claimant or his, her or its antecedents.’
In
ordering that the application for leave to appeal be set down for
hearing before this Court the attention of the parties was
drawn to
this provision and submissions were invited and received on its
relevance to the litigation. That emerges from what follows.
[17]
The claim for registration of the property into the name of the
estate was a claim to title of property that, as a result of
the
alleged arrangement between Mr Rajah and Mr Balduzzi, was held by Mr
Balduzzi as nominee on behalf of Mr Rajah. It was accordingly
one
that ought to have been brought under section 3 of the Restitution
Act rather than under the Abolition Act. Mr Brasg gave no
consideration thereto and understandably Wepener J and Matojane J
both overlooked the provisions of the Restitution Act, to which
they
were not referred. The result was that the prescription issue was
considered in relation to the incorrect legislative provision,
instead of on the basis of a claim under the Restitution Act. It is
therefore apparent that the order by Wepener J was granted
on an
incorrect basis and cannot stand. It stands to reason that Matojane
J’s conclusions likewise cannot stand.
[18]
There was a further material problem which was not addressed.
Section 22(1)
(c)
of the Restitution Act gives the Land Claims Court jurisdiction to
adjudicate a claim under section 3 of the Restitution Act and
section
22(1) provides that its jurisdiction is exclusive of that of any
other court. Therefore neither Wepener J nor Matojane
J had
jurisdiction to hear the claim by Mr Brasg or to adjudicate any
defence to that claim. Counsel for the parties were constrained
to
concede that the conclusions referred to above meant that the dispute
had to be adjudicated in the Land Claims Court.
[19]
Mr Brasg was required to demonstrate on all possible readings of his
the counter-claim that he had a claim sustainable in law
against Mr
Balduzzi. I am persuaded from the facts set out above and the
pleadings before us that this has been demonstrated. That
leaves the
issue of condonation.
[20]
In addressing the issue of condonation I have already alluded to the
lengthy delay in seeking leave to appeal from this court,
but that is
but one of the factors to be taken into account in exercising a
discretion whether to grant or refuse condonation.
As the main action
is premised on an eviction it would be remiss of me not to take into
account section 26(3) of the Constitution
in the exercise this
discretion. Section 26(3) states: ‘
No
one may be evicted from their home,
or
have their home demolished
,
without an order of court made after considering all the relevant
circumstances. No legislation may permit arbitrary evictions
.’
(Emphasis added).
[21]
It is therefore pertinent in terms of section 26(3) to consider all
the relevant circumstances in the face of any applicable
legislation.
In this instance the legislation concerned is section 22 of the
Restitution Act. It needed to be considered before
Mrs Rajah’s
fundamental human right to housing was removed. As the estate is
claiming title to the property, section
25 of the Constitution may
also be implicated. Mrs Rajah and Mr Brasg, have at all times,
advanced the same case and there
is nothing in the affidavit
delivered on behalf of Mr Balduzzi by his attorney, or in his
pleadings, to contradict her case or
to provide some other plausible
explanation for her and her late husband taking occupation of the
property in 1990; being put in
possession of the title deed in 1999
and remaining there undisturbed at least until 2006 after Mr Rajah’s
death. In
my view the interests of justice dictate that condonation
be granted
[22]
The issue of peremption was raised by Mr Balduzzi. The law on
peremption is trite and restated in
South African Revenue Service
v Commission for Conciliation, Mediation and Arbitration and others
2017 (1) SA 549
(CC) at para 26:
‘
Peremption
is a waiver of one’s constitutional right to appeal in a way
that leaves no shred of reasonable doubt about the
losing party’s
self resignation to the unfavourable order that could otherwise be
appealed against.
Dabner
articulates principles that govern peremption very well in these
terms:
“
The
rule with regard to peremption is well settled, and has been
enunciated on several occasions by this Court. If the conduct of
an
unsuccessful litigant is such as to point indubitably and necessarily
to the conclusion that he does not intend to attack the
judgment,
then he is held to have acquiesced in it. But the conduct relied upon
must be unequivocal and must be inconsistent with
any intention to
appeal. And the
onus
of establishing that position is upon the party alleging it.”
The
onus to establish peremption would be discharged only when the
conduct or communication relied on does “point indubitably
and
necessarily to the conclusion” that there has been an
abandonment of the right to appeal and a resignation to the
unfavourable
judgment or order.’ (Footnotes omitted).
[23]
Mrs Rajah and Mr Brasg in their endeavours to sustain the
counter-claim were consistent in seeking the transfer and
registration
of ownership of the property to the deceased estate on
the premise of Mr Balduzzi being the nominee. In light of the history
of
the matter set out above there can be no doubt that there was no
acquiescence by Mrs Rajah and Mr Brasg in the orders of Wepener
J and
Matojane J. Indeed the matter reached trial stage on the basis
that they were persisting with the claim that Mr Balduzzi
was a mere
nominee.
[24]
However, in light of the inordinately long delays that have occurred,
in order to bring this case to finality, it is necessary
to place a
time limit on when an action may be brought to vindicate that claim.
In my view, it will be reasonable to direct in
terms of this Court’s
powers under
section 19
(d)
of the
Superior Courts Act 10 of 2013
that the claim in the Land
Claims Court be filed within six months of this order, failing which
Mr Brasg’s claim against
the Mr Balduzzi will lapse.
[25]
Finally, It is necessary to deal with the issue of Mr Brasg being a
witness, a litigant and at the same time representing Mrs
Rajah. This
in my view may have contributed to the vacillating advice provided to
Mrs Rajah. Our courts have repeatedly said that
it is undesirable for
an attorney, who is also an important witness in the case, to
continue to act as attorney of record. (
Hendricks
v Davidoff
1955
(2) SA 369
(C);
Elgin
Engineering Co (Pty) Ltd v Hillview Motor Transport
1961
(4) SA 450
(D) at 454E I;
Wronsky
en ń Ander v Prokureur-Generaal
1971
(3) SA 292
(SWA) at 293G-294B.) By doing so they imperil their
independence and where, as here, the attorney is also a litigant,
albeit in
the capacity of an executor, the undesirability is
compounded.
[24]
The following order is made:
1
The
application for condonation for the late filing of the application
for leave to appeal against both judgments is granted and
the first
and second appellants are ordered to pay the costs of the application
for condonation, the one paying the other to be
absolved.
2 Leave to
appeal against both judgments is granted.
3 The appeals
are upheld with costs,
including
the costs of two counsel and including the costs of both applications
for leave to appeal in the High Court and the application
for leave
to appeal in this Court.
4 The orders
of Wepener J and Matojane J in the high court are set aside.
5 The
following order is made:
(a) The
action under case number 17136/2007 in the Gauteng Local Division is
stayed pending finalization and determination
of an action by to be
instituted in the Land Claims Court by the appellants.
(b)
The first and second appellants are directed to institute that action
within six months from the date of this order,
failing which the
second appellants’ counter-claim in case number 17136/2007 will
lapse and the respondent will be entitled
to enrol the said action
for trial.
___________________
W Hughes
Acting Judge of Appeal
APPEARANCE
For
the Appellants:
S M Katzew with him H R Liphosa
Instructed
by:
Stanley Brasg & Associates. Johannesburg
Lovius
Block, Bloemfontein
For
the Respondent:
Estelle Kilian SC, with her C McKelvey
Instructed
by:
Ellis Coll Attorneys, Johannesburg
Azar &
Havenga Attorneys, Bloemfontein