1998 Ann Surv SAfrican L284

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LAW OF PROPERTY (INCLUDING REAL SECURITY) C G

VAN DER MERWE*
PIENAARt
J M
LEGISLATION
DEEDS
The Deeds Registries Act 47 of 1937 was amended by the Deeds Registries Amendment Act 93 of 1998. The amendment was aimed at addressing various aspects of the Act, amongst others, the appointment of officials and an exposition of the minimum required qualifications for them; the consolidation of title; certain provisions relating to minerals; and aspects concerning state-owned land. With regard to the appointment of officials, it is interesting to note that in the case of the Assistant Registrar of Deeds, it is not the qualifications of the person that are important, but the capacity to acquire, within a reasonable time, the ability to perform the necessary functions of the office (s 2(1B) inserted by s 1 of the Amendment Act). In the case of the appointment of a Chief Registrar, Registrar or Deputy Registrar, the required qualifications are specifically set out in the amended version of the Act (s 2(2) as amended by s 1 of the Amendment Act). New developments regarding state land, or land where the state is the responsible institution, include the creation of an obligation to annex a diagram of the relevant land to the deed of grant when land is transferred (s 18 substituted by s 4 of the Amendment Act); and measures providing for the separation of rights to minerals from the ownership of the land (s 72(2) amended by s 9 of the Amendment Act). The Amendment Act also provides for circumstances in which the title deeds of two or more pieces of land may be superseded by a certificate of consolidated title (s 40 (1) of the Act amended by s 6 of the Amendment Act). An amendment of s 67 of the main Act now provides for a reservation of a personal servitude by way of a condition in a deed of cession of rights to minerals, whereas the section previously only referred to transfer deeds relating to land (amended by s 8 of the Amendment Act).
* BA LLB (UOFS) BA (Hons) BCL (Oxon) LLD (SA), Advocate, Professor of
Private Law and Roman Law, University of Stellenbosch. t Bluris LLB LLM LLD (PU vir CHO), Professor of Private Law and Roman Law, University of Stellenbosch.
HeinOnline -- 1998 Ann. Surv. S. African L. 278 1998
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An amendment to regulations under the Deeds Registries Act 47 of 1937 was published in GN R740 GG 18924 of 22 May 1998 (Reg Gaz 6192). The amendments set out a new schedule of fees of office, with the proviso that no fees are to be levied by a Registrar in respect of the performance of any act prescribed in s 3(1) (w) of the Act (relating inter alia to notices and court orders that have been lodged by the Registrar in terms of any legal measure). Government Notice R762 provides for an amendment of regulations under the Deeds Registries Regulation Board, in terms of s 10 of the Act (GG 18939 of 5June 1998). The regulations were further amended by GN R906 GG 19039 of 3 July 1998.
EXPROPRIATION
A notice of intention to expropriate a list of properties in the jurisdictional area of the Durban Transitional Metropolitan Council was published under s 7(5) of the Expropriation Act 63 of 1975 (Board Notice 38 GG 18728 of 13 March 1998). The purposes of the respective expropriations were listed as follows: for underground electric cable servitudes, pipeline servitudes, sewer and rain servitudes and the acquisition of land for reservoir and road development purposes. A further notice and list of properties to be expropriated were published in May (Board Notice 81 GG 18916 of 29 May 1999). Extensive expropriation was due to major infrastructural improvements in the area and included the expropriation of land for road development purposes, parks and open spaces, as well as for sewer, drain and pipeline servitudes. Two expropriation notices were published regarding land in KwaZulu-Natal: immovable properties with improvements and the mineral rights were expropriated on behalf of the state (GN 1140-1141 GG 19222 of 11 September 1998). The compensation amounted to R4 598,00 and RI 11,40 respectively. No reasons for the expropriation were given. In view of the purposes of the Provision of Certain Land for Settlement Amendment Act 26 of 1998 (the designation of land for settlement as well as providing measures relating to the subdivision thereof and the rendering of financial services), the Minister of Land Affairs is specifically authorized to expropriate land (s 12 of the principal Act, 126 of 1993). Two requirements for expropriations in these cases are set out: that the land owner be given a hearing and that compensation be paid as prescribed by the Constitution (s 12(2) of the principal Act).
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ANNUAL SURVEY OF SA LAW
HISTORICAL MONUMENTS, WRECKS AND GRAVES
During 1998 twenty-eight new national monuments were declared under s 10(1) of the National Monuments Act 28 of 1969 and five national monuments were provisionally declared under s 5 (1) (c) of the Act. Interesting permanent declarations include the property with the Albert Luthuli House on it in Groutville, Lower Tugela district (GN 715 GG 18901 of 22 May 1998) and the site of the aeroplane accident in which President Machel died (GN 1409 GG 19429 of 6 November 1998). Areas can be earmarked as conservation areas on the grounds of their historical, aesthetic or scientific importance under s 5(9) of the Act. This usually occurs after consultation with the relevant local authority. During 1998 four conservation areas were declared, all of which coincided with the publication of by-laws regulating the conservation of the specific area, for example the Clifton, Glen Beach and Bakoven areas in Cape Town (GN 1287 GG 19337 of 16 October 1998). The placement of any immovable property on the Register of Immovable Conservation-Worthy Property due to its cultural, historical and/or aesthetic importance occurs after consultation with the local authority involved. Although the property may be worthy of conservation, it does not necessarily qualify for monument status. During 1998 only one entry was made (GN 716 GG 18901 of 22 May 1998). Four declarations of national cultural treasures occurred, namely that of the South African Mint Collection (GN 371 GG 18743 of 20 March 1998) as well as the HamiltonWelsh and Malan ethnographic collections, and the contemporary South African art collection at the University of Fort Hare (GN 1168 GG 19245 of 18 September 1998). On the provincial level the promulgation of the KwaZulu-Natal Heritage Act 10 of 1997 was significant. The promulgation of the Act is directly linked to the process of transferring heritage management to the various provinces, inevitably affecting the functions of the National Monuments Council. The Amafa aKwaZulu-Natali Council (the statutory body provided for in s 2 of the Act) is responsible for the care, maintenance, repair and management of historically important sites, architecturally important buildings, public monuments and memorials, military cemeteries and other important graves, traditional burial places, archaeological and palaeontological sites and artefacts, shipwrecks, important cultural objects and the traditional building techniques of the people of the province (see s 7). Other aims of the Act are to integrate protective measures in the planning and developmental processes (s 17) and establish education and training projects within the province. A list
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of all the formal protections available in the province is set out in s 19 of the Act. The names of persons to be appointed as members of the Council were finally published during June 1998 (General Notice 15 KwaZulu-Natal Gazette 5279 of 4 June 1998).
HOUSING
The Housing Act 107 of 1997 came into operation on 1 April 1998 (Proc RIO GG 18683 of 20 February 1998 (Reg Gaz 6099) - see the discussion of the Act in 1997 Annual Survey 288). The Housing Consumer Protection Measures Act 95 of 1998 was also passed (GN 1398 GG 19418 of 2 November 1998). Sections 2-9 of the Act provide for the establishment, functions, objects, composition, powers and staff of the National Home Builders' Registration Council. In view of numerous complaints against building companies ranging from corruption to unprofessional conduct, the Act now provides for the registration of home builders (ss 10-12) and the protection of housing consumers (ss 13-14). Development concerning housing on the provincial level included the appointment of members to the Free State Housing Board (Provincial Notice 45 Free State Gazette 17 of 16 March 1998) and the promulgation of the Gauteng Housing Act 6 of 1998 (Provincial Notice 53 GautengGazette522of 1 September 1998). The aim of the Act is to promote and facilitate housing development within the province. General principles applicable in all housing developments are set out (s 3). The infrastructure for housing in Gauteng includes the establishment of a provincial housing advisory board and fund (ss 5, 12). The specific duties and powers of the member of the executive council responsible for housing and land affairs are set out in s 4. The responsibilities relate inter alia to local authorities, housing corporations, tenure security and the provision of rental and social housing. The power to promulgate regulations to further the aims of the Act is provided for in s 25. The existing Housing Board and its executive council were abolished in ss 18- 19. In brief, the other sections relate to the constitution of the new Advisory Board (s 6), its powers and duties (s 7), meetings (s 11) and the functions of the member of the executive council and the head of the department in relation to the fund to be established (ss 13-14). Mpumalanga also issued its own housing legislation (Act 15 of 1998, Provincial Notice 42 Mpumalanga Gazette 395 of 14 December 1998) as did the North West Province (North West Housing Development Act 11 of 1998 - Official Notice 13 North West Extraordinary Gazette 5337 of 29 December 1998). Both these Acts are aimed at providing for the promotion and facilitation of housing development
in the provinces. The legislation also sets out the roles, responsibilities, powers and functions of members of the executive council and provides for the establishment of housing boards. Although the following provincial bills were published during 1998, they were still in the process of finalization: the Free State Provincial Housing Bill (General Notice 19 Free State Gazette 84 of 18 September 1998) and the Draft Eastern Cape Province Housing Bill (General Notice 155 Eastern Cape Gazette 355 of 23 November 1998).
LAND USE PLANNING
PlanningProfession The rules of the South African Council for Town and Regional Planners were amended three times during 1998 in terms of s 28 of the Town and Regional Planners Act 19 of 1984 (Board Notice 10 GG 18635 of 30January 1998, Board Notice 58 GG 18825 of 17 April 1999 and Board Notices 180-1 GG 19565 of 11 December 1998). The South African Council for Town and Regional Planners appointed members in terms of the Town and Regional Planners Act (General Notice 280 GG 18728 of 13 March 1998). The registration and annual fees payable by Town and Regional Planners and Town and Regional Planners in training and Regional Planning Technicians were announced by the South African Council for Town and Regional Planners in terms of the Town and Regional Planners Act (Board Notice 58 GG 18825 of 17 April 1998). Designationand Subdivision The Provision of Certain Land for Settlement Amendment Act 26 of 1998 was promulgated to provide for the designation of land for settlement and to regulate its subdivision; to make provision for the rendering of financial assistance for the acquisition of land; and to secure tenure rights. The relevance of this Act to planning in general lies in the fact that the general planning laws governing the subdivision of land, and the establishment of townships, are not specifically excluded when state land is involved (s 2(4)). The Minister of Land Affairs is empowered to apply funds made available by Parliament to further the objects of the Act, in general to facilitate the planning of any development (s 10(1) (b) (vi) of the principal Act 126 of 1993) and, in particular, for the planning and development of land designated for settlement purposes (s 10(1) (b) (vii) of the principal Act).
LAW OF PROPERTY
The importance of these developments is that land use planning and township development in general are closely interwoven with land reform measures. In reality these matters cannot be separated from each other, with the result that planners in all spheres of government are confronted with an all-encompassing approach towards planning. Townships The Townships Ordinance Amendment Act 10 of 1988 (Free State) was assented to on 10june 1998 and came into operation on 18 June 1998 (Provincial Notice 10 Free State Gazette 48 of 18 June 1998). The object of the Amendment Act was to extend the application of the Townships Ordinance 9 of 1969 to the whole of the Free State Province. The implementation of the Amendment Act coincided with the repeal of various statutory measures, most notably the repeal of the Land Regulations (Proc 188 of 1969). Before the repeal, the Land Regulations made provision for land tenure in the rural areas. With the extension of the Provincial Ordinance to the whole of the Free State, the distinction between formerly 'white' and 'black' tenure forms is formally abolished. AgriculturalLand The prohibition on the subdivision of agricultural land was lifted with the commencement of the Subdivision of Agricultural Land Act Repeal Act 64 of 1998. The original motivation behind the prohibition was to prevent the uneconomic division of valuable agricultural land. The publication of the South African Land Policy during April 1997 emphasized that the prohibition on subdivision was a stumbling block in the process of effective land reform. The lifting was seen as essential for an efficient land redistribution programme where the development of small farms is a priority. Alienation of Land Another interesting development concerning land in general, and agricultural land in particular, was the promulgation of the Alienation of Land Amendment Act 103 of 1998, which amended the Alienation of Land Act 68 of 1981. A definition of agricultural land was inserted to the effect that agricultural land means any land used or intended to be used for commercial farming operations. For the purposes of the Act, it can be inferred that land used for smallscale farming is excluded. A further definition of land for purposes of section 29A of the Act is also provided. Section 29A is inserted by
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s 3 of the Amendment Act: it confers on the purchaser a right to revoke or terminate a deed of alienation. This right is to be exercised with regard to land used mainly for residential purposes; any housing interest, as defined in s I of the Housing Development Schemes for Retired Persons Act 65 of 1988; any share in a share block company, as well as any unit as defined in s 1 of the Sectional Titles Act 95 of 1986; but excluding agricultural land (s 1(d) inserted by s I of the Amendment Act). In terms of this new development a purchaser or prospective purchaser may, within five days of signing an offer to purchase land, or a deed of alienation in respect of land, revoke the offer or terminate the deed by written notice delivered to the seller or agent within the five-day period (s 29A(1)). A description of the five-day period is set out in s 29A(2). The written notice will be effective only if it states that revocation or cancellation is claimed, if it is signed by the purchaser or agent and if it is unconditional (s 29A(3)). Any money already paid has to be refunded within 10 days of receipt of the notice mentioned above (s 29A(4)). The general right of revocation or cancellation is inapplicable in the following cases: where the purchase price or the price offered for the land exceeds R250 000; where the purchaser is not a natural person; where the land has been purchased at a publicly advertised auction; if the seller and purchaser have previously entered into a deed of alienation in respect of the same land on substantially the same terms; if the purchaser has reserved the right to nominate or appoint another person to take over the rights and obligations connected with the offer or deed of alienation; and if the purchaser has purchased the land by the exercise of an option open for a period of at least five days (s 29A(5) (a)-(f)). Any waiver of these rights is void (s 29A(7)(b)). So too is any provision or agreement, irrespective of whether it was orally made or written, in terms of which a penalty or fee is directly or indirectly imposed for the exercise of the revocation or cancellation of rights (s 29A(7) (a)).
SURVEY
The process of rationalization and restructuring of the survey offices, started during 1997, was continued during 1998. See, for example, the establishment of the Surveyors-General Offices in the various provinces during 1998 (General Notice 1314 GG 19049 of 17 July 1998). Other developments during 1998 were connected mainly with the efficient functioning of the amended infrastructure, and the introduction of new technology. Examples of the former included the amendment of fees and tariffs (in the offices of the
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Chief Surveyor-General and the Surveyors-General (GN 275 GG 18689 of 26 February 1998), and of the Federation of Institutes of Professional Land Surveyors of Southern Africa (Board Notice 132 GG 19145 of 21 August 1998). The implementation of a new geodetic datum which is based on the World Geodetic System 84 (WGS-84) was published by the Chief Directorate: Surveys and Mapping as witness to advancement in the field of technology (GN 1186 GG 19265 of 18 September 1998). With regard to the profession, decisions reached by the South African Council for Professional and Technical Surveyors Committee of Inquiry were published in terms of the Professional and Technical Surveyors' Act 40 of 1984 (Board Notices 149-150 GG 19245 of 18 September 1998). Several sections of the Land Survey Act 8 of 1997 were also amended by theLand Affairs General Amendment Act 61 of 1998. These amendments were generally aimed at streamlining the functions and responsibilities of certain officials and correcting differences between the English and Afrikaans texts of the Act (s 2 amended by s 9 of the Amendment Act). With regard to the firstmentioned matter, the Amendment Act now specifically provides for a division of survey-related responsibilities between the Chief Surveyor-General and the Chief Director: Surveys and Mapping (ss 3, 6, 8, 45 and 50 amended by ss 11, 13, 14, 17 and 18 of the Amendment Act respectively). A new s 3A was inserted (by s 12 of the Amendment Act) listing all the duties of the Chief Director who is generally in charge of geodetic and topographical survey and geospatial information services. CASE LAW
NATURE OF INCORPOREAL PROPERTY
MV Snow Delta; Discount Tonnage Ltd v Serva Ship Ltd 1998 (3) SA 636 (C), which deals with the attachment of a ship ad fundandam jurisdictionem, contains the following interesting remarks on the nature of incorporeal property (at 653B-E):
'It must be borne in mind that the attribution of locality to incorporeals is, by its nature, an artificial if sometimes legally necessary exercise... and that the logic which renders it impossible for a single item of corporeal property to be in more than one place at the same time does not apply to incorporeals: there seems to me to be no reason in logic or in law why an incorporeal should not be capable of existing in several places simultaneously. For instance, a debtor company which has its registered office in one place and its principal place of business at another may competently be sued at either place: the creditor's claim, it seems to me, may, on the strength of the above authorities and the reasoning underlying them, be located at both places at the same time.
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The right which constitutes the incorporeal property in question may be "dealt with effectively" at either place.' In Badenhorst v Balju, PretoriaSentraal 1998 (4) SA 132 (T) the court held that an incorporeal movable asset (in this case, members' interests in a close corporation) could not be attached merely by the intention or decision of the sheriff. Notwithstanding the fact that the right was incorporeal, some document or similar item representing the right had to be attached. In the circumstances of the case, the sheriff would have had to attach the certificate issued in terms of s 31 of the Close Corporation Act 69 of 1984 or the founding statement referred to in s 12 of the Act. The sheriff had not attached the necessary documents and taken them into his custody, nor had he made any attempt to find such documents. The fact that he had affixed the writ of execution and notice of attachment to the outside gate of the property of the close corporation was not regarded as sufficient compliance with Rule 45(8) of the Uniform Rules. The attempted attachment had therefore been invalid (at 138H-I, 139D-E and 1391-J).
SPOLIATION
In Marais v EnglerEarthworks (Pty) Ltd; Engler Earthworks (Pty) Ltd v Marais 1998 (2) SA 450 (E) the respondent had enlisted the services of a firm of private investigators to repossess two vehicles in the applicant's possession. After removal of the vehicles, the applicant applied ex parte for a mandament van spolie. In an application for a rule nisi the court granted an interim order for the return of the vehicles and inter alia called on the respondent to show cause why it should not restore the vehicles. The respondent filed a counter-application for the immediate return of the vehicles, and, in the alternative, for an order that the vehicles be held, pending the result of an action for the restoration of the vehicles. On the return day of the rule nisi, the respondent objected in limine to the locus standi of the applicant, who was an unrehabilitated insolvent. Relying on Nino Bonino v De Lange 1906 TS 120 at 122 and Ness v Greef 1985 (4) SA 641 (C) at 647F, the court found that the mandament van spolie protects natural possession irrespective of whether the property in question belongs to a third party or the alleged spoliator. The applicant need only prove factual possession; his right to possession is irrelevant. Since an insolvent has the physical and mental ability to possess, he has a right to protect his possession by means of the mandament van spolie. No principle of common law or the Insolvency Act 24 of 1936 denies him locus standi to exercise that right (at 453B-D).
LAW OF PROPERTY
The court rejected the respondent's claim that the applicant had consented to the handing over of the vehicles (at 457B) and found that the respondent's further claim that the applicant was obliged to hand over the vehicles, but had unlawfully failed to do so, afforded no defence. Citing Bon QueUe (Edms) Bpk v Munisipaliteit van Otavi 1989 (1) SA 508 (A) at 512A-B in support, the court repeated the age-old maxim 'spoliatus ante omnia restituendus est' and stated that possession had to be restored regardless of the merits of the case, that is of the actual rights of the parties to possess (at 457D). The court held, finally, on the authority of Burger v Van Rooyen 1961 (1) SA 159 (0) at 162A-B and Stocks Housing (Cape) (Pty) Ltd v Chief Executive Director, Department of Education and Culture Services 1996 (4) SA 231 (C) at 244B-D that if the applicant went further than claiming spoliatory relief, he would force an investigation into the issues relevant to the further relief he claimed. Once he did this, the respondent's defence was to be considered and, if such a defencejustified the respondent's position, a court would not order the restoration of the status quo ante. The court found, however, that the applicant sought simply to compel the respondent to restore possession. The averments relating to his entitlement to the vehicles were made to establish his locus standi and did not open the door for a counter-application to establish the respondent's right to the vehicles (at 457-8). This case confirms the principle that no one is allowed to take the law into his own hands, and that even an owner will be compelled to restore possession taken by him from another without the intervention of the court. The decision on the facts of the case also impliedly confirms the decision in Administrator,Cape v Ntshwaqela 1990 (1) SA 705 (A), that a principal who has authorized spoliation through his agents should be treated as a co-spoliator. In Minister ofFinance v Ramos 1998 (4) SA 1096 (C) the Minister of Finance opposed an application for a mandament van spolie. He relied upon a statutory provision (s 114 of the Customs and Excise Act 91 of 1964) in support of an averment that his seizure of a vehicle was lawful. He argued that the provision that constitutes a lien in favour of the state entitled him to dispossess the applicant of the vehicle without recourse to due process of law. The court found that such statutory provision had to be restrictively interpreted, and that the party who invoked the provision had to prove that he acted strictly within its terms (at 1101F-H). It also found that a defence on the merits of any dispute between the parties as to who is entitled to possession was irrelevant in an application for a mandament (at 1101I-J). The court therefore held that the magistrate was correct
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in finding that the elements necessary to found a mandament van spolie had not been proved, and dismissed the appeal. This case shows how difficult it is to draw the line between the rule that there is no defence on the merits of the case and the requirement of the mandament that dispossession must have been unlawful.
NEIGHBOUR LAW
Nuisance In Rademeyer & others v Western Districts Council & others 1998 (3) SA 1011 (SE) interesting findings were made concerning the adjustment of the law of nuisance by recent land reform legislation, notably the Extension of Security Tenure Act 62 of 1997. The respondents had erected informal housing structures on the land of the first respondent. The applicants, who occupied various properties surrounding or adjacent to the first respondent's land, instructed their attorney to request the first respondent to abate the nuisance created by the erection of the structures. When these demands failed the applicants applied to the local division for an urgent interdict prohibiting the first respondent from allowing any person to erect housing structures on its land, and instructing the first respondent to remove the occupants from the property as they were causing a nuisance to the applicants. At the time of the erection of the structures, the first respondent had not granted permission for such erection. The court held that although the initial occupation of the property had taken place without the consent of the first respondent, its attitude, on becoming aware of the presence of the occupiers, had been that they could remain on the property until alternative housing arrangements could be made. Since this constituted at least tacit consent to the residence of the other respondents on the property at the time the application was brought, the court found that the matter fell within the ambit of the Extension of Security of Tenure Act, and that the application could thus not succeed. Interestingly the court went further and decided that even if the Act were not applicable, the application would still be dismissed. The applicants contended that the presence of the other respondents and their families constituted a nuisance. This contention was apparently founded on fears that a large squatter camp would be established on the land and that this would in turn result in a security risk, the risk of criminal activity and a health risk to people in the vicinity. The court found, however, that at that time only 14 families occupied the property and that the respondent had undertaken not to allow any further persons to occupy the property. It also accepted
LAW OF PROPERTY
a statement of the occupants that the fears that they would turn to crime were unfounded and that the provision of water and sanitation had diminished the health hazard. In all these circumstances, the court held that the applicants had failed to prove a nuisance. The applicants failed to prove that there was a persistent interference with their rights to the reasonable enjoyment of their property. The court conceded, however, that the situation might have been different if the applicants could have shown, as a matter of probability, that the whole of the first respondent's property (approximately 1,5 hectares and potentially suitable for providing housing for up to 100 families) was going to be utilized for informal housing. NaturalFlow of Water In Harrisv Williams 1998 (2) SA 263 (W) the applicant applied for a final interdict, embodying four prayers. The first prayer was that the respondent, the owner of a neighbouring urban property, be prohibited from allowing storm water to flow from his property on to that of the respondent. The second prayer was that the respondent should be directed to construct a drain on his side of their common boundary. This had to be done in accordance with a registered servitude of drainage of storm and spring water over the respondent's property. The third prayer was that the respondent should be directed to perform these works within two months of the granting of the order. The fourth prayer was that the respondent be compelled to remove the branches of an ivy plant that had grown over into the applicant's property. The court found that the properties concerned were urban properties in an urban area. It further found that building and other structural developments had disturbed the original contours of these tenements. This disturbance was so substantial that whatever right may have existed at common law, entitling the owner of higher-lying land to allow the water from his land to flow on to another's lower-lying land, had come to an end. The sole source of any right which the respondent had to allow rainwater falling on his property to flow on to the applicant's land was a servitude registered in his favour to erect a drain to deal with the overflow. If the respondent intended to exercise this servitudal right, he was obliged to provide the drain contemplated by the servitude. The applicant (the owner of the lower-lying property) was therefore granted an order that the owner of the higher-lying property (the respondent) construct a suitable drain on the applicant's side of their common boundary. This had to be done in accordance with the registered
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servitude for the discharge of the storm water over the applicant's property to the street (at 271B-C, 274D-E and 265G-I). He was further obliged not to allow water from his property to flow beyond the area demarcated in the servitude. The court found that on a proper analysis of the affidavits there was no real dispute as to whether or not rainwater from the respondent's land had flowed or would flow onto the applicant's land, or as to whether it had flowed or would flow beyond the area covered by the servitude. The court also found that the drain required by the servitude had not been provided. If the existing drain had indeed been installed in purported compliance with the servitude, the court found that it was not adequate, for it failed to restrict water emanating from the respondent's land to the area encompassed by the servitude. With regard to the overgrown ivy, the court found that despite the removal of some of it by the respondent since the institution of the proceedings, there remained a substantial amount of overgrown foliage, to which the applicant could not gain access in order to remove it. The respondent was further not prepared to cut away the ivy nor to give the applicant access to his property to remove the ivy. In the circumstances the court found that the applicant was entitled to an order compelling the respondent to remove the offending foliage (at 275A-D). In an appeal to the Supreme Court of Appeal, Williams v Harris 1998 (3) SA 970 (SCA), the court considered the relief prayed for in the application for a final interdict brought by the respondent (the applicant in the court a quo). It noted that the court a quo had granted the orders applied for on the premiss that at common law no rainwater at all which emanated from the appellant's property had to be tolerated by the respondent. In his judgment MaraisJA pointed out that the respondent's case rested upon an assertion of the legal position and three related allegations of fact. The legal principle relied upon was that the appellant had no right to allow rainwater to flow from his property to the respondent's property, except in accordance with the servitude registered in favour of his property. The allegations of fact were the following. First, the appellant allowed the rainwater that fell on his property to flow on to the property of the respondent. Secondly, the water was flowing on to her property beyond the strip of land that was burdened by the servitude. Thirdly, the water that flowed over or collected upon the strip of land burdened by the servitude was not being led away in the manner provided for by the servitude, namely by means of a drain of the kind envisaged in the servitude. Marais JA expressed reservations about taking a position on a proposition of law when the authorities had neither been collected
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nor fully debated by counsel. He considered, however, that he had to go into the proposition in order to deal with the case. After citing the most important case law and academic literature on this aspect of the law (at 981E-F), he emphasized that an important distinction had always been drawn between urban and rural tenements. In historical times the distinction affected not only the substantive rights and obligations of adjoining owners but also the choice of a procedural remedy. Although the latter became less critical with the demise of formulary procedures, the greater tolerance which an owner of rurallower-lying land was expected to show towards water flowing on to his land from his neighbour's higher-lying land persisted. The degree of forbearance required from his urban counterpart was not on the same level. Nevertheless Marais JA cited numerous cases (at 981-2) for the basic proposition, common to both rural and urban tenements, that surface water flowing naturally from one property to another by reason of their natural locality (natura loci) could give no legitimate cause for complaint (at 981G-I). On the basis of persuasive case law (at 982B) the court qualified this proposition by showing that the situation changed where there had been human interference with the natural setting, which artificially diverted the rainwater from its course, or increased its quantity or rapidity. MaraisJA took trouble to point out that such changes affected urban tenements to a greater extent than rural tenements. The upper owner of a rural tenement could in certain circumstances increase the velocity or the volume of water to the detriment of the lower owner. Such change or increase was allowed if occasioned in the ordinary course of draining, ploughing or irrigating the upper land and if it was not more burdensome than was reasonable under the circumstances (at 982A-D). The judge pointed out that it was not important to decide whether the upper owner's power in this regard should be characterized as a servitude, or whether it should be classified as a right or merely as a liberty (at 982D-E). MaraisJA then went on to show that the cases relied upon by the respondent for the proposition that 'in an urban residential area the owner of the lower property is not obliged to receive stormwater from a higher property' do not actually support such a proposition (at 982-3). He also demonstrated that the passage of Grotius cited in support of the proposition could be explained in a different way. Grotius 2.34.16 in The Jurisprudenceof Holland (Lee's translation) reads as follows: 'For by the common law every one must lead his water on his own land, or over his own land on to a street or road.' MaraisJA was of the opinion that this passage does not deal with naturally flowing rain water but with water (whether it be rain water
or not) which has been artificially collected by the upper owner and which is sought to be discharged on to the lower owner's property. He pointed out that such an interpretation is in harmony with Grotius 2.35.17: 'By common law any one may let his water flow in its natural course, from which comes the old proverb "if water hurts you, you may turn it away".' Although this passage appears under the rubric 'rustic servitudes' and not, as the first passage does, under the rubric 'urban servitudes', Marais JA maintained that Grotius was not confining his observation in the first passage to rural situations. If a fundamentally different principle applied in urban situations, he considered that Grotius would have pointedly drawn attention to the contrast. MaraisJA then reiterated that he had researched the law in order to identify the relevant factual issues and to consider whether they could be resolved on the affidavits. According to him the following questions arose. First, was rainwater flowing and would it continue to flow on to the respondent's property? Secondly, if it was, was it flowing beyond the area to which the servitude related? Thirdly, if so, was it flowing in quantities, or in a manner, or with a frequency, which would exclude the operation of the maxim de minimis non curat lex? Fourthly, if so, was the rainwater in question, or the manner of its arrival, more than would have to be tolerated if it had flowed there natura loci? If it was, then Marais JA considered that, subject to the de minimis rule, and possibly to a rider confining the interdict to water in excess of the historical natural flow, or the addition of such other rider as might be appropriate, he would probably have granted the first prayer. Fifthly, if it was not, but the provision of the drain contemplated by the servitude would have prevented any water from flowing beyond the area burdened by the servitude, was the first prayer inappropriate and was the respondent's remedy, if any, confined to the second prayer? Sixthly, a question which might be anterior to all the other questions, was the agreement of servitude an exhaustive statement of the rights and obligations of the parties in regard to storm water and spring water, or did the common law still govern their relationship? Marais JA drew attention to two important principles of the common law. The first is that an applicant cannot be granted final relief in motion proceedings if the respondent seriously disputes allegations the proof of which is critical to the applicant's case. The second principle pertains to the case where there is no real dispute, in the sense that the formalistic denials entered by the respondent are more apparent than real, or it is clear that the denials are not made bona fide, or are so palpably unfounded as to be incapable of
LAW OF PROPERTY
being correct. In such a case it is open to a court to disregard them (at 980H-J). Marais JA reluctantly decided that any attempt to resolve the disputes solely by reference to the affidavits could result in an injustice being done to one or other of the parties. The court a quo should mero motu have ordered the hearing of oral evidence. Accordingly the court made such an order on appeal. The court emphasized that the court dealing with the case subsequently should take into account that the court a quo approached the case on the mistaken premiss that at common law the respondent need not have tolerated any rainwater emanating from the appellant's property. For the rest, the court declined to comment either upon the affidavits or any of the other points of law involved in the resolution of the dispute. The court therefore upheld the appeal to the extent that all the orders made by the court a quo were set aside. In addition, it remitted the matter for the hearing of oral evidence on all relevant disputes of fact which arose from the affidavits (at 985D-E and 986B-C). The court also gave judgment on the overgrowing ivy. It concluded that even if there remained some areas in which the ivy protruded despite the trimming that took place after the commencement of proceedings, there was more than ample room for the respondent to gain access to it from the western side and to trim it herself. In a separate judgment Plewman JA pointed out that a proper discussion and application of the principles was bedevilled by serious factual uncertainty. First, the scope of the registered servitude was uncertain since there was no clarity as to the source and the precise flow of the water. Secondly, the law in the cases referred to had always been considered in the light of a specific factual situation. Similarly, a specific factual matrix had to be supplied before one could speculate on the contents of Grotius 2.34.6 and Digest 3.1.7. What then is the significance of this decision? First, it seems that our courts are moving away from the generally accepted view that South Africa has a few so-called traditional instances of neighbour law, each with its own set of requirements. Instead, all these instances are gradually recognized as mere examples of instances governed by the broader principle of reasonableness. Such an approach has already been adopted by the recent decision in Rand Waterraadv Bothma 1997 (3) SA 120 (0) (discussed in 1997 Annual Survey 304). This case dealt with buildings and structures encroaching on neighbouring land. In the Harriscase the principle is apparently extended to the sphere of the disturbance of the natural flow of surface water.
A peculiar set of requirements or circumstances no longer seems to regulate this area of the law. Formerly, the rule was, for instance, that once a tenement had, by building and other structural operations on the land, been converted into an urban tenement, the lower-lying tenement could in no circumstances be expected to accept surface water emanating from the higher-lying tenement. Instead one now has to enquire whether the owner of the higherlying tenement has exercised his powers of ownership reasonably. This involves a delicate weighing up of the interests of the neighbouring owners in which the principle of give-and-take has some role to play. Secondly, Harris affords some authority on the remedies available in the case of overgrowing trees, branches and foliage in addition to the dicta in Malherbe v Ceres Municipality 1951 (4) 510 (A) at 518G-H and Francisv Roberts 1973 (1) SA507 (RA) at 509B, 511 and 514G. In Harristhe court a quo held that the applicant was entitled to an order compelling the respondent to remove the ivy. The facts that prompted this order were twofold. First, the applicant was unable to cut away the ivy herself because there was not sufficient space for her to gain access to it, and, secondly, the respondent had neither tendered to cut away the ivy nor tendered the applicant access to the ivy to cut it away herself. By the time of the appeal the appellant (respondent in the court a quo) had already trimmed the ivy on his side to such an extent that the respondent (applicant in the court a quo) had ample room to gain access to it and to trim it herself.
IMPROVEMENTS TO LAND
For improvements effected to immovable property not pursuant to a contract with the owner, but pursuant to a contract with another party who has failed to pay the contractor, see Hubby's Investments (Pty) Ltd v Lifetime Properties (Pty) Ltd 1998 (1) SA 295 (W).
TRANSFER OF OWNERSHIP
TraditioBrevi Manu In Info Plus v Scheelke & another 1998 (3) SA 184 (SCA) the appellant had entered into a written instalment sale agreement with F bank for the purchase of a motor vehicle. F bank then ceded its rights in terms of the agreement to Wesbank. The vehicle was delivered to the appellant and registered in its name. In terms of the instalment sale agreement, ownership was, however, to remain vested in the seller until receipt of the full purchase price. The
LAW OF PROPERTY
appellant's (purchaser's) authorized representative, M, then reached an agreement with G, a representative of S Motors, that the vehicle would be delivered to the premises of S Motors, and that G would attempt to find a purchaser for the motor vehicle at a stipulated price. The agreement stipulated that a prospective purchaser was first to be introduced to the appellant, after which the purchaser would pay the full price to the appellant, which would then pay S Motors its commission. The motor vehicle was then delivered to S Motors. However, neither G, nor anyone else acting on behalf of S Motors, introduced a purchaser to the appellant. On his return from an overseas trip, M discovered that G had left the employ of S Motors, and that the motor vehicle had been registered in the name of the first respondent. It appeared that G had sold the vehicle to the second respondent for substantially less than the stipulated price. G furnished the second respondent with a registration certificate, together with the vehicle, in which it was stated that S Motors was the registered owner of the vehicle. Subsequently the second respondent sold and delivered the vehicle to the first respondent. Wesbank then undertook to repossess the vehicle. However, instead of this, it concluded an agreement with the second respondent in terms of which the second respondent paid the total amount outstanding under the instalment sale agreement in exchange for remaining in possession of the vehicle. The appellant instituted action against the first respondent on the basis that it was the owner of the vehicle. After the second respondent was granted leave to intervene as co-defendant, the respondents filed pleas denying the appellant's ownership of the vehicle, and pleaded the defence of estoppel in the alternative. In dismissing the appellant's claim, the court a quo found that delivery had not taken place by means of traditio brevi manu. The reason for the decision was that the vehicle was neither in the possession of the appellant nor held on its behalf at the time when the second respondent made payment to Wesbank. In an appeal, Van Heerden DCJ stated that it was trite law that transfer of ownership of a corporeal movable required transfer of possession of the property by the owner to the transferee, coupled with a real agreement to transfer and to acquire ownership. Transfer can be either actual or constructive and an agent can act for either the owner or the transferee. Van Heerden DCJ analysed the decision in Pennefatherv Gokul 1960 (4) SA 42 (N) and concluded that since the purchaser in Pennefatherwas not in possession of the vehicle when the condition was fulfilled, he could not have become the owner of it by virtue of traditio brevi manu. Commenting on the decision ofJamesJ in ForsdickMotors Ltd v Lauritzen 1967 (3) SA 249
(N) at 253E-H, Van Heerden DCJ concluded that the judge had
held the view that ownership of a thing sold in terms of a hirepurchase agreement could not pass to the purchaser by mere fulfilment of the condition. The parties still had to agree after that that the purchaser as detentor would henceforth possess the merx as his own. Van Heerden DCJ then stated (at 190-1): 'The requirement that subsequent to delivery of the merx under a hire-purchase contract there should be a further agreement between the parties, in the sense of a mutual intention at the time of fulfilment of the condition that ownership shall be transferred to the purchaser, with due respect strikes me as somewhat artificial. I would indeed be surprised if a substantial number of sellers give any consideration to the passing of ownership when the condition is fulfilled. And even if a seller should prior to fulfilment inform the purchaser that he no longer intends transferring ownership to the latter, that by itself would surely not preclude a transfer from taking place. It follows that.. . no further real agreement, concluded subsequent to delivery of the merx under a hire-purchase contract, is required (cf Trust Bank van Afrika Bpk v VanJaarsveldten 'n ander; Trust Bank van Afrika Bpk v Bitzeren 'n ander1978 (4) SA 115 (0) at 121F). The real agreement reached when delivery takes place, suffices. Because of the conditional term in the hire-purchase contract that agreement is also conditional. Notwithstanding delivery, ownership of the thing sold therefore does not pass prior to fulfilment of the condition.... But when that happens ownership passes without more, at any rate if the purchaser is then in possession of the merx.' Van Heerden DCJ then considered whether a different position obtained if the purchaser was no longer in possession at the relevant time. He gave three examples of rather curious consequences that would follow if the reply were positive. The last example is the following (at 191E-F): 'A sells and delivers his horse to B subject to the stipulation that ownership will only pass a month later. B pays the purchase price but before the end of the stipulated period the horse is stolen from him and remains stolen. I cannot perceive any reason why, in the context under consideration, a distinction should be drawn between delivery subject to, on the one hand, a time stipulation and, on the other, a condition. If, therefore, a purchaser under a hire-purchase contract does not become owner if he is not in possession of the merx when the condition is fulfilled, then neither does B at the expiry of the agreed period. In my view, however, this is not the law.' In view of this, Van Heerden DCJ could not see why a second form of delivery should be required at the material time. Pendente conditione, ownership of the thing sold remained with the seller. Nevertheless, a transfer of possession, which is one of the requirements
LAW OF PROPERTY
of transfer of ownership, does take place. Such transfer of possession is effected in terms of a real agreement embodying the intention of both parties that at the material time the purchaser would without more ado become owner of the vehicle. At that time both requirements for a transfer of ownership are satisfied inasmuch as the conditional delivery ipso iure becomes an unconditional one. Since a second real agreement need not be concluded conditio existente, it is not necessary that the purchaser must be in possession of the vehicle at the material time. That being accepted, Van Heerden DCJ considered that there was no warrant for insisting that one of the requirements of a traditio brevi manu, namely that the transferee must be in possession at the material time, must nevertheless be satisfied (at 191H-J). Van Heerden DCJ then raised two further arguments to advance his view. First, he suggested that if ownership did not pass to the purchaser on the fulfilment of the condition, it was not clear on what principle ownership could later pass to the purchaser if he regained possession. Secondly, he mentioned the case where the seller was contractually bound to insure the vehicle for as long as he remained the owner. In such a case, the seller would perforce retain ownership, with its concomitant obligation, if possession at the material time is required and fortuitously the purchaser was not in possession of the vehicle when the condition was fulfilled (at 191-2). Finally, Van Heerden DCJ found that the fact that the final payment had been made not by the purchaser but by the second respondent was immaterial for the passing of ownership. What mattered was that the payment to Wesbank extinguished the appellant's indebtedness and thus fulfilled the condition and opened the door for the appellant to become the owner of the vehicle (at 192C, 192D and 193B-C). The intriguing question here is whether one should recognize a new instance of constructive delivery in the case of eventual delivery in terms of a hire-purchase agreement. Registration In Knysna Hotel CC v CoetzeeNO 1998 (2) SA 743 (SCA) interesting questions were raised about South Africa's so-called negative system of registration and the relationship between the true owner and the registered owner as far as deeds registry practice is concerned. An erf in Knysna had been registered in the names of B and his wife, who were married in community of property. Upon their divorce an order was made directing that the assets in their joint estate be divided. However, the registration of the property remained
MiU4
unchanged. When both B and his former wife were subsequently sequestrated, the respondent and C respectively were appointed as trustees of their estates. The respondent had, without the knowledge of Mrs B or her trustee (C), sold the property to the appellant. After the respondent had falsely given the Registrar of Deeds to understand that he was acting on behalf of the insolvent estates of both B and his former wife, transfer of the property was registered in the name of the appellant on 21 September 1990. On obtaining knowledge of the sale and transfer, C brought an application against both the present respondent and the appellant for the cancellation of the registration. In a settlement reached on 7 May 1993 the appellant promised the 'undisputed right, title and interest' in respect of the property against payment of a certain amount, leaving the registration intact. In an action by the seller (the respondent) to claim the purchase price, the purchaser (the appellant) raised a special plea that the money due in terms of the contract had become due on 21 September 1993 and that any claim for it had prescribed three years later. In the court a quo the special plea of prescription was dismissed and leave to appeal to the Supreme Court of Appeal was granted. The appellant (respondent in the court a quo) contended inter alia that the purchase price had become due on 21 September 1990, on registration of transfer, and that prescription had started running on that date. After finding that the debt indeed became due on 21 September 1990, and that prescription began running on that date, the court pointed out that South Africa has a 'negative' system of registration in contrast to a 'positive' system where registration was irrefutable proof of ownership. On account of this it could not simply be accepted that a person in whose name a property was registered was necessarily the owner of the property. If, for example, another person had become owner by acquisitive prescription, this would not be reflected in the deeds registry. Such person could, on proof of prescription, challenge the registration in the name of the original owner and have it amended. In the present case the transfer could be challenged on the ground that Mrs B and her trustee had not consented to the registration (at 753C). The court considered, however, that the respondent had simply undertaken to register transfer in the name of the appellant and not to transfer ownership in the property (at 752A-E). The court explained that the reference to the 'owner of the land' in s 20 of the Deeds Registries Act 47 of 1937 had to be understood in the light of the definition of 'owner' in s 102. There an owner is defined as 'the person registered as the owner or holder thereof and includes the trustee in an insolvent estate'. In view of this, it must
LAW OF PROPERTY
be accepted that the common-law owner could not on his own give a power of attorney for the registration of transfer. The cooperation of the registered owner was required for any transfer, irrespective of whether he was the true owner or not (at 752E-I). The court accordingly held that since all the formalities had been complied with, and accepted by the Registrar, and since he had registered the transfer in the deeds registry, a formally valid transfer had taken place. Although subject to amendment on a number of grounds, it remained valid until set aside by an order of court. Since the only challenge brought against the registration had been settled without affecting the registration, the registration remained intact and valid. The court thus concluded that prescription had commenced running on the date of registration (21 September 1990) and that nothing had happened subsequently to interrupt or suspend it (at 754B-E and 755C). An intriguing aspect of the case is that the representation by the trustee that he was acting on behalf of both former spouses would definitely render the real agreement necessary for the passing of ownership invalid.
LIMITATIONS ON THE REI VINDICATIO: ESTOPPEL
In Info Plus v Scheelke 1998 (3) SA 184 (SCA) (also discussed above under 'Transfer of Ownership') Van Heerden DCJ quoted Quenty's Motors (Pty) Ltd v Standard Credit CorporationLtd 1994 (3) SA 188 (A) at 198-9 in setting out the requirements for estoppel in the context under consideration. The first requirement was that there must be a representation by the owner (or possessor) that the person who disposed of his property (the defrauder) was the owner, or entitled to dispose of it. Since in most cases the defrauder makes the ultimate representation, the real question was whether the conduct of the owner effectively contributed to the making of that representation. He found that the mere delivery of property by one person to another did not by itself constitute a representation that the latter was the owner or entitled to dispose thereof. He then went even further and accepted that the fact that the transferee was a dealer or trader in that very commodity was not sufficient to convert the mere transfer of possession into such a representation. In support of this statement Van Heerden DCJ (at 195B) quoted the following passage from the judgment of TrollipJ in Electrolux (Pty) Ltd v Khota 1961 (4) SA 244 (W) at 247-8:
'... [T]o create the effective representation the dealer or trader must, in addition, deal with the goods with the owner's consent or connivance in such a manner as to proclaim that the dominium or ius disponendi
is vested in him; as for example, by displaying, with the owner's consent or connivance, the articles for sale with his own goods. It is that additional circumstance that provides the necessary "scenic apparatus" for begetting the effective representation.' The appellant had done nothing, apart from placing the vehicle in the possession of S Motors, that could have created the impression vis-i-vis the second respondent that the dominium in the vehicle vested in S Motors. The court accordingly found that the requirements for a successful reliance on estoppel had not been met. In Worldwide Vehicle Supplies Ltd v Auto Elegance (Pty) Ltd & others 1998 (2) SA 1075 (W) the applicant company had supplied the first respondent, a dealer in second-hand cars, with two motor vehicles on consignment. Its function was to attempt to sell the motor vehicles as the applicant's agent. The first respondent refused to honour the agency agreement but claimed retention of the vehicles as security for its costs and expenses. Subsequently, the first respondent sold the vehicles in an apparent effort to recoup its losses. The applicant therefore brought an urgent application for the delivery of the vehicles by the second and third respondents, who had bought the vehicles. Only the second respondent opposed the application, claiming inter alia that the applicant was estopped from asserting ownership. From the documentation recording the transaction between the applicant and the first respondent, it appeared that the applicant had actually acted as an agent in the sale of the vehicles by introducing sellers to buyers. The applicant accepted that estoppel would have prevented it from asserting ownership against the second respondent if nothing more had happened than that it had sold the vehicle on assignment to the first respondent, or appointed the first respondent as its agent to sell the vehicle on its behalf, and the first respondent had sold the vehicle to the second respondent. However, supervening events had, in the opinion of the applicant, changed the situation. The agency agreement had been terminated and the applicant could not reasonably have foreseen that the first respondent would unlawfully sell the vehicle to recoup its losses. The proximate cause of the prejudice to the second respondent was therefore the dishonest act on the part of the possessor, the first respondent. In the course of his judgment WunshJ set out the requirements for a successful claim of estoppel against the rei vindicatio of an owner (at 1081E-G) and also quoted from the judgment of TrollipJ in Electrolux (Pty) Ltd v Khota (supra) at 247B-E (at 1081-2). Negligence in this context meant, according to him, the foresight that if one acts reasonably, a prospective purchaser might act on the representation to his prejudice, without one having taken
LAW OF PROPERTY
reasonable steps to prevent the prejudice (at 1082B-C). Wunsh J proceeded to find that, if the goods remained at the first respondent's premises after the termination of the agreement between the applicant and the first respondent, the termination could not affect third parties that were not even aware of such an agreement. When the agency agreement was terminated, the apparent ius disponendi of the first respondent remained in the eyes of the public (at 10831-J and 1084F-G). The first respondent still exercised control over the vehicle and it was still displayed as part of its stock-in-trade after the termination of the agency or consignment agreement. The applicant should have foreseen that a third party could have been misled, to his disadvantage, into buying and paying for the vehicle. What is more, the applicant should have taken prompt action to recover the vehicle. The court therefore concluded that the applicant was estopped from claiming the vehicle (at 1084G-H and I).
EXPROPRIATION
The cases reported with regard to expropriation in 1998 all dealt with the determination of compensation. Randburg Town Council v Kerksay Investments (Pty) Ltd 1998 (1) SA 98 (SCA) continued the legal battle concerning the amount of compensation payable on expropriation that had been started in 1997 (see the discussion of Kerksay Investments (Pty)Ltd v Randburg Town Council1997 (1) SA 511 (T) in the 1997 Annual Survey 310). By notice of expropriation the Town Council expropriated a road widening servitude and offered RI 401 as compensation, which was refused. After an unsuccessful application to the (now defunct) Compensation Court, the respondent appealed successfully to the Transvaal Provincial Division, which awarded an amount of R40 000. The appellant then appealed to the present court. The sole question in issue was whether the admitted depreciation in the value of the property caused by the 1976 town-planning scheme was to be disregarded for the purpose of determining the compensation payable to the claimant in 1990 (at 104C). This involved the interpretation of s 12(5)(f) of the Expropriation Act 63 of 1975. The main argument advanced by the appellant in this case can be summed up as follows (at 106B-C). The words of the section could not be given their ordinary meaning, since that would mean that, when valuing the property for the purposes of determining the amount of compensation payable, any depreciation in value due to the purpose of expropriation would have to be disregarded. This would be the case even if the owner had previously been compensated for such depreciation, or if his failure to receive compensation on a previous occasion had been
due to his failure to lodge a claim timeously. It was consequently necessary to read into the section such words as were required to avoid such a result. It was pointed out that the owner could have recovered compensation in terms of s 45 of Ordinance 25 of 1965. The double payment of compensation would be an absurdity and contrary to the whole scheme of the Act (at 106E). ScottJA confirmed the general approach to interpretation that words have to be attributed their own, ordinary, literal, grammatic meaning (at 107B). Language can, however, be modified to avoid payment of compensation twice. The issue was whether there was justification for departing from the ordinary meaning of language so as, in effect, to preclude an owner from receiving compensation under the Act on the ground that he or she could have recovered some compensation under another statutory enactment for the same deprivation (at 1071). Thejudge was not convinced that such an approach would be justified (at 107J). He concluded that the court a quo had been correct in coming to the conclusion that the depreciation in the value of the property attributable to the 1976 town-planning scheme had to be disregardedfor the purposes of determining compensation payable under the Act (at 108B). The appeal was accordingly dismissed with costs. The calculation of compensation resulting from an expropriation of mineral rights was the issue in KangraHoldings (Pty) Ltd v Minister of WaterAffairs 1998 (4) SA 330 (SCA). The appellant, the owner of registered coal rights, appealed against a decision of the Transvaal Provincial Division upholding an exception taken by the respondent. The coal rights were in respect of portions of a farm which were expropriated, in terms of the Water Act 54 of 1956, in advance of inundation of the land by the waters of a major dam then under construction. The appellant had calculated an amount for compensation on the basis that it would have mined and sold the coal, or, alternatively, that it would have entered into a mineral lease or similar agreement for the exploitation of the rights (at 335B-I). The respondent excepted to these particulars of claim on the grounds that neither claim reflected and quantified actual financial loss caused by the expropriation and that neither alternative claim was for actualfinancial loss within the meaning of s 12 of the Expropriation Act (at 336B-D). The appellant contended that it was not confined to claiming compensation for market value, but was entided also to compensation on the basis of the present value of the fully realized commercial potential inherent in the rights. In the circumstances, the challenge raised by the exception was whether the sum representing the latter value constituted actual financial loss caused by the expropriation and, in any event whether the loss
LAW OF PROPERTY
claimed was compensable under the Act at all (at 337D). In order to determine this, Howie JA discussed the meaning of the words 'loss' and 'damage' (at 338F). In view of the fact that the words were not defined in the Act, he found that the ordinary meaning should prevail, namely that 'damage' was a word of wide and general import and ordinarily embraced physical damage and pecuniary loss. There was therefore no warrant for inferring a legislative intention to confine 'indirect damage' to physical damage. Indirect financial loss was consequently also excluded by s 12(5) (e) and therefore not compensable (at 339B). According to the court the loss suffered by the appellant was also not caused directly by expropriation, but by the loss of the coal rights as such. One has to keep in mind that the appellant had, at the time of the expropriation, not made use of the rights (in other words had not exploited them). Before the profits could have been earned, the appellant would have had to take various steps to establish its income-producing structure. These steps were all links in the chain of causation of the loss and could not be accorded to the act of expropriation only (at 339D). Howie JA concluded that the claim in question sought compensation for a type of loss for which the Act made no provision and could not succeed. The exception was duly upheld. Van Heerden DCJ agreed with the finding that the appeal should not succeed, but emphasized the underlying intention of the legislature that, in the case of expropriation of rights, the ordinary common-law measure of damages ought to apply (at 3441-J). That meant that the expropriatee should be entitled and confined to the market value of the right concerned unless it could be shown that the measure was not appropriate due to special circumstances. It followed that, in general, the expropriatee could not claim for loss of profits in lieu of the value of the expropriated rights (at 344J).
SECTIONAL TITLES
In Body CorporateofBrenton ParkBuilding No 44/1987v Brenton Park CC 1998 (1) SA 441 (C) the applicant (a body corporate) applied for a declaratory order that a 99-year lease concluded between it and the respondent (the owner of the adjoining holiday resort) on 30 October 1987 was invalid. The disputed lease concerned a portion of the common property of the applicant on which a sewerage plant and two cottages were erected. During 1984 the owner of the adjoining property applied to the Divisional Council to develop a holiday resort on his property. The Health Inspector required that a sewerage disposal works should be provided to serve both the adjacent caravan park (the sectional title scheme) and the proposed
holiday resort. For this reason rule 63 was included as part of a completely new set of rules at the inaugural meeting of the applicant body corporate. It read: '63. Sewerage plant 63.1 Brenton Holiday Resort which is adjacent to the property shall be entitled to the use of the sewerage plant subject to it being liable for a pro rata share of the costs of maintaining and repairing the sewerage plant from time to time. 63.2 The body corporate will enter into an agreement of lease with the owners of Brenton Holiday Resort regularizing the use of the sewerage plant as contemplated in 63.1 in terms of the draft lease agreement attached hereto and marked D' (quoted at 445E-F). On 30 October 1987 an agreement of lease was concluded between the applicant and the defendant and the sewerage plant was operated in accordance with the terms of the lease. The attorneys of the applicant attempted to register the lease notarially against the title deeds of the property. A dispute arose as to whether there had been a unanimous resolution authorizing the conclusion of the lease as required by s 13 of the then applicable Sectional Titles Act 66 of 1971. The applicant's case was that the adoption of the rules at the inaugural meeting incorporating a direction to it to enter into an agreement of lease fell short of the express provisions of s 13 of the Act. It contended that the requirement of a notice, specifying the proposed unanimous resolution for the purpose of letting part of the common property, could not be complied with by mere reference to the adoption of rules in substitution of rules contained in the Schedules to the Act. This was especially so since the new rules contained 63 clauses, only one of which concerned the lease of the common property. The applicant argued that s 13 required a separate notice specifying the proposed unanimous resolution to enter into an agreement of lease in respect of the common property. By contrast, the respondent contended that the adoption of the rules, and more particularly the adoption of rule 63 (2) by unanimous resolution, constituted a valid direction to the applicant in terms of s 13 to enter into the lease agreement. The court found that the aim of the legislature in promulgating s 13 was to ensure that the alienation and letting of the common property should require strict compliance with the provisions of s 13 (at 447F-G). It further found that the notice of the proposed unanimous resolution to adopt the rules was timeously sent to each of the sectional owners. In it they were adequately informed of the proposal to pass a unanimous resolution adopting the rules (including rule 63) at the inaugural meeting. The resolution was then unanimously passed. The court accordingly found that the owners
LAW OF PROPERTY
were given fair notice of the substance of the resolution to be dealt with at the meeting. The notice included the proposal directing the body corporate to conclude a lease with regard to the common property. The substance of the intended resolution referred to in the notice and the resolution actually passed was also absolutely identical (at 448C-E). The court therefore concluded that the resolution passed at the inaugural general meeting of the applicant body corporate on 30 October 1987, adopting the rules, constituted a resolution directing the body corporate to conclude the lease as required by s 13(1) of the Act (at 448F-G). The court further considered the requirement in s 13(2) of the Act that any transaction in terms of s 13(1) had to be accompanied by a copy of the relevant resolution, certified by two trustees of the body corporate. The court held that this was not a prerequisite for the validity of the lease. Since s 13(2) was procedural, the resolution had only to accompany the transaction when either (1) alienation of the common property was registered at the Deeds Office or (2) a lease was notarially executed when it was retained in the protocol of the notary (at 448H-J). The court accordingly ordered the applicant to execute the lease in compliance with its rules. In the course of his judgment, McClarty AJ accepted that guidance could be sought from cases dealing with the convening of meetings, and the passing of resolutions, in general, and in the company-law context in particular. He concluded that while a notice convening the meeting and informing the members of the proposed resolutions should not be construed with excessive strictness, it must give members fair notice of the matters to be dealt with and any resolution beyond the notice is invalid (at 446-7). The significance of this decision is that an up-front resolution to alienate or to let part of the common property in terms of s 13 of the Act can now validly be taken in one of the following two ways. First, a clause can be inserted in the initial contract of sale of all units binding the purchasers to agree to such alienation or lease at a future general meeting. Secondly, a rule to that effect can unanimously be adopted at the inaugural meeting of the body corporate. Whether the developer can obtain a similar result by inserting such a clause as a special rule in the model rules that he offers for registration is still an open question.
COMPETING LEASES
In Croatia Meat CC v Millennium Properties (Pty) Ltd (Sofokleous Intervening); Sofokleous v Millennium (Pty) Ltd & another 1998 (4) SA 980 (W) competing applications were instituted for the specific
performance of certain leases. These leases contained clauses which prohibited the lessor from letting any premises in its complex for the purpose of conducting a similar business to that of another lessee in the complex. The lessor concluded the first lease with a lessee who conducted a business of a composite nature. It then concluded a lease with the second lessee, permitting the latter to conduct a business that competed with a section of the first lessee's business. Entering into the second lease clearly amounted to a breach of the first lease. Both the lessees applied for what amounted to orders for specific performance of their respective leases. The court found that there was no overriding equity that favoured either lessee. Therefore the court, in the exercise of its discretion, applied the rule qui prior est tempore potior est iure to these double leases, distinguishing Barnhoorn NO v Duvenage 1964 (2) SA 486 (A) (at 988F). The court accordingly granted the application of the first lessee and dismissed the application of the second lessee.
SERVITUDE
In BerdurProperties(Pty)Ltd v 76 CommercialRoad (Pty) Ltd 1998 (4) SA 62 (D) the applicant and the respondent occupied adjoining commercial properties which had a narrow passage, eight feet in width, straddling both properties in equal width and length. The applicant obtained a rule nisi on the basis that the passage was a private road that could be used only by the owners or occupiers of the adjacent properties for their mutual benefit. It then sought a further declarator that the respondent was not entitled to allow or invite any person to use the private road other than for the benefit of the properties adjacent to the passage. This particular order was primarily designed to prevent the use of the passage by customers of Liberty Liquors (a liquor-selling business) situated on property owned by the respondent immediately adjacent to the property with the passage. This created problems relating to security, littering and poor hygiene. In lodging a counter-application, the respondent sought an order entitling it to permit its employees and invitees to use the four-foot portion of the private road which was on the respondent's property for any purpose whatsoever, provided that it did not interfere with the applicant's use of the private road. The court studied the title deeds of the properties to ascertain the origin of the private road. In the submission of the applicant the relevant deeds of transfer showed that a reciprocal servitude of passage had been created benefiting and burdening both the applicant's and the respondent's land, and regulating their respective use (at 67B). The respondent alleged that the reference to a servitude
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5I1S
in the title deed was to the applicant's property and not its own. Hence it could not be registered in terms of the Deeds Registries Act 47 of 1937 (at 67G). The respondent argued that the true nature of the right was that of via, namely the unrestricted right to use a road, including all the rights embodied in the concepts of iter and actus, together with the right of conveying goods over the servient land (at 68A-B). The court found that the existence of a servitude over the respondent's property could properly be inferred from the reference in its title deed to the corresponding servitude over the applicant's property (at 67J). In the opinion of the court, the servitudes of iter, actus and via had to be regulated in such a way as to cause the least damage or inconvenience to the servient tenement (at 68D). However, the court found that the relevant title deed of 1894 bore witness not of a via, but of a private road, to be used by the owners of the adjacent properties (at 66G-H and 68F). Citing Krugerv Downer 1976 (3) SA 172 (W) at 178H in support, the court pointed out that where the parties had been precise in determining the scope and the nature of their agreement, the court is bound to accept the consequences of their language. The court then consulted dictionaries to determine the meaning of the phrase 'private road', and concluded that the applicant's interpretation, that this was a road to be used only for the benefit of the two properties through which it runs, was the correct interpretation (at 68-9). The court distinguished Rabie vDe Witt 1946 CPD 346 and Louw v De Villiers (1893) 10 SC 324, relied upon by the respondent. It stressed that the servitude was designed to serve the use of the two adjacent properties and not the use of somebody else (at 68-70). The court therefore concluded that the road was not a public passage that gave unrestricted access to pedestrians on their way to and from other properties or even the street. On the contrary, it was a private road that in its entire width had been created for the exclusive use of adjacent owners such as the applicant and the respondent and which could not be used to serve the interests of others (at 72H-I). South African law does not have a numerus clausus of praedial servitudes. As long as a right complies with certain requirements it can parade as a praedial servitude. Whenever an innominate (untraditional) servitude is established, as in the case of the private road, it stands to reason that the words employed must be carefully scrutinized to determine the exact scope of application of such servitude. AlexanderJ, who delivered the judgment in Berdur Properties,has done this admirably.
REAL SECURITY
Mortgage During the third quarter of 1998 two decisions, NBS Bank Ltd v Badenhorst-SchnetlerBedryfsdienste BK 1998 (3) SA 729 (W) and NBS Boland Bank Ltd v One Berg RiverDrive CC 1998 (3) SA 765 (W), dealt with mortgage bonds which contained similar clauses, providing that the interest rate was variable at the instance of the mortgage creditor. Both courts found that the clause conferred an unfettered discretion on the mortgage creditor to vary interest rates at will and that no factual determination based on objectively ascertainable criteria was required. Both courts therefore held that the provision that conferred such unilateral discretion on the mortgage creditor to vary the interest rate was void for vagueness. In the NBS Bank case counsel for NBS referred to ABSA Bank Bpk v Saunders1997 (2) SA 192 (NC). There it was pointed out that banks were by long-standing usage entitled unilaterally to vary interest rates on overdrawn accounts. Counsel argued that the same principle applied to the money-lending contract in the instant case. The court found that the contract between banker and customer pertaining to overdraft facilities was unique and dependent upon banking practices by which the customer agreed to be bound even though he might not know what they were. The court was, however, not prepared to accept that this feature was inherent in every money-lending contract (at 734C-D and 735-6). The court explained that the rate of interest in a money-lending contract was such an essential feature that these contracts would be void for vagueness if the rate was not certain (at 376B-E). It pointed out that lending agreements could expressly or tacitly provide that the interest rate was to be determined by law or custom, or by reference to an objectively ascertainable market rate or other rate that was not dependent on the will of either party (at 723D-E). The court also accepted that the parties could agree on a variable interest rate. To be valid, such an agreement had to set out objectively definable criteria according to which the interest rate was to be varied, so that it could be determined without reference to the will of either party (at 736-7). In the NBS Boland Bank case counsel for the defendant referred to the NBS Bank case as well as to Boland Bank Bpk v Steele 1994 (1) SA 259 (T). In the latter case the court had invoked the principle that contracts had to be interpreted in favour of their validity. It had held that a similar clause was valid subject to the limitation that the powers it conferred had to be exercised in a reasonable manner. Counsel for the plaintiff argued that this simply meant that the
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discretion had to be exercised arbitrium boni viri. The court found that two general principles were applicable in the present case: first, that contractual obligations had to be defined and ascertainable and. second, that terms that conferred an unfettered discretion on one of the parties to determine the extent of performance of either party were void for vagueness (at 773H-J). The court then found that it was clear that the clause concerned conferred an unfettered discretion on NBS. This appeared from the use of the words 'at any time and from time to time', which were not related to any objectively ascertainable criteria and from the fact that any increase was subject only to the maximum provided for (at 774C-D). The court agreed with the conclusion reached in the NBScase, and declined to follow the reasoning in the Steele case.
Landlord's Tacit Hypothec vs NotarialBond ParadiseLost Properties (Pty) Ltd v Standard Bank of South Africa & another1998 (4) SA 1030 (N) was an appeal from a decision of a local division, dismissing the applicant's application for an order that it had perfected a landlord's hypothec over certain movable property in the premises that it had let to one W. The application was opposed by the first respondent (Standard Bank). It contended that the movable property had been hypothecated to it under a general notarial bond passed by a previous tenant. It further alleged that it had obtained judgment against the former tenant and had caused the property to be attached by the sheriff. On appeal, the central issue was whether the applicant had perfected a landlord's hypothec and whether or not the first respondent could rely on its notarial bond. On the basis of Bloemfontein Municipality vJacksons Ltd 1929 AD 266 and FreshMeat Supply Co v Standard Trading Co (Pty) Ltd 1933 CPD 550 the applicant averred that it was unaware that the goods did not belong to the tenant as a crucial element in its claim. The court found that a landlord usually acquires knowledge of the true position by way of notice from the owner. Such knowledge could, however, be inferred from other facts. Examples were where an owner left his goods on the leased premises of an auctioneer for sale (Henderson v Waldron & Co (1885) 6 NLR 89 at 91) or where the name of the owner of a piano was affixed to the piano on the leased premises (Lazarus vDose (1884-5) 3 SC 42 at 45). On the facts of the ParadiseLost case the court found that such knowledge could be inferred from a clause in an agreement between the lessee and the owner of the goods, a copy of which was received by the landlord. The clause provided that ownership in the goods was reserved to
the owner, despite the fact that they would be in the lessee's possession. Broome DJP stated (at 1036B-C): 'I find that Engar, in receiving the draft agreement as he did, had notice of the reservation of ownership. Although the agreement did not come to Engar in the form of a formal notice from the Hodgsons, it was an agreement in respect of which the Hodgsons required Engar's consent. Furthermore, even if the fact and effect of such reservation did not register in his mind, or even if he did not read clause 24 of the agreement, this is a case of the type of constructive notice found by the learned judge a quo.' Quoting from Standard Bank of South Africa Ltd v Stama (Pty) Ltd 1975 (1) SA 730 (A) at 742-743, Broome DJP found that the applicantwas probably confused and did not understand the implications of what he was reading. Nevertheless, he had the means to acquire the knowledge, and was aware that the movable property did not belong to the tenant. In conclusion Broome DJP referred to a remark of CombrinkJ in the court a quo at 816A-B. He pointed out that the judge did not intend to modify the basic principles governing the existence of a hypothec by suggesting that the landlord, in the ordinary course of events, had to take steps to enquire into the question of ownership before he enforced his hypothec. All that Combrink J was saying was that the landlord could not heedlessly turn a blind eye to the facts which were before him. Transfer of Ownership in SecuritatemDebiti In Nedcor Bank Ltd v ABSA Bank Ltd 1998 (2) SA 830 (W) a 'floor-plan agreement' was concluded between a motor-vehicle dealer and a financial institution. In terms of the agreement, the motor dealer obtained a cash advance from the financial institution in respect of a vehicle owned by the dealer. The advance had to be repaid if the vehicle was sold or within a stipulated period if the vehicle was not sold. While the dealer retained the right to sell or lease the vehicle, the financial institution sought to obtain transfer of the ownership of the vehicle (by means of constitutum possessorium) as security for the money advanced. The financial institution intended to exercise its right of ownership only if this was necessary to protect its investment. The court found that the agreement was nothing more than a simulated transaction, which concealed its real character: to secure a loan against the security of the motor vehicle. Since it was not envisaged that the financial institution should take possession of the vehicle, this in fact amounted to a form of non-possessory pledge, which was not recognized in South African law. In the opinion of the court it made no
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difference that both parties to the agreement were bona fide and that, far from being secretive about the dealings between them, they had acted in terms of an agreement in standard form (at 838C-E). The court pointed out that as matters stand at present, South African law does not recognize the validity of a pledge without possession (at 839B). On this basis the court concluded that the financial institution did not acquire ownership of the vehicle concerned (at 839C-D). The court conceded, however, that floor-plan agreements had been in use in South Africa in various forms since the 1960s. This meant that there had for some time been, and there still remained, a commercial need for the recognition of a form of pledge without possession (at 838G-H). The main problem with the floor-plan agreement concerned lies with the sale and resale mechanism employed to transfer ownership of the vehicle to the financial institution, leaving the possession (detention?) of the vehicle with the dealer for resale. Only a form of fictitious delivery, namely constitutum possessorium, can in South African law effect delivery of ownership in circumstances such as these. Because of the possibility of deception of third parties, with the vehicle remaining with the dealer, this mode of delivery is regarded with suspicion and the courts insist on the utmost good faith. The transaction must therefore be scrutinized to find out whether it was the genuine intention of the parties to enter into a contract of sale instead of to disguise a loan transaction secured by a non-possessory pledge, which is not recognized in South African law. In the instant case it was argued that the transaction between the motor dealer and the financial institution was a simulated transaction that did not have the effect of transferring ownership in the vehicle to the defendant (at 839C). In our submission this conclusion evinces a misconception of what a simulated transaction is. The actual intention of the parties was to obtain and to grant ownership of the vehicle to the financial institution as security for a loan. Their intention was to empower the financial institution to repossess the vehicle on default of payment by the dealer and to dispose of it to cover the loan extended to the dealer. It was never the intention to create a non-possessory pledge. The financial institution did not seek to be placed in a position where it could demand that the 'pledged' vehicle should be sold in execution so that it might satisfy its advance out of the proceeds of a sale in execution. What really happens in terms of the type of floor-plan agreement under discussion is that the parties, by the sale and resale (or leaseback) mechanism, achieve the same or even better results than under a non-possessory pledge. The crucial question then is whether such
a transaction is legally permissible. Against this background the designation of transactions in terms of this particular type of agreement as negotia simulata is misconceived. The crucial question is whether it was the intention of the parties to conclude a contract of sale or a pledge. This will in turn depend on the facts leading up to the contract and the provisions embodied in the contract. With reference to surrounding facts and circumstances, the financial institution must prove on a balance of probabilities that a sale was intended. More particularly, it must prove that it was the intention of the parties that ownership in the vehicle should pass to the financial institution on its sale (see Vasco Dry Cleaners v Twycross 1979 (1) SA 603 (A) at 616H and 621A-B). The decisions relied upon in the Nedcor case, in finding that transactions in terms of the floor-plan agreement amounted to simulated transactions, did not deal with floor-plan agreements. Furthermore, they can be distinguished in view of their special features and peculiar attendant circumstances. The transaction in Zandbergv Van Zyl 1910 AD 302 was described by CloeteJ as a 'very unusual transaction'. The same can be said of the transactions in K&DMotorsv Wessels 1949 (1) SA 1 (A) (see at 14), Vasco Dry Cleaners v Tvycross (supra) (see at 620-1) and Bank Windhoek Bpk v Rajie 1994 (1) SA 115 (A) (at 142D-G, 146B, 148A, 148C-D, 148F, 148-9, 149F-G and 149-50). This is also true of the transaction in Delport v Srydom 1977 (3) SA 325 (0) (see at 328-9) which was not referred to in the Nedcorcase. The lesson to be learnt from these decisions is that if the floor-plan agreement is structured in such a way that a minimum of the unusual circumstances referred to in the above cases are present, it could be accepted as a valid basis for the transfer of ownership to the financial institution in securitatem debiti. The transfer of ownership by means of constitutum possessorium is therefore not an unworkable anachronism which cannot be utilized in modern-day commercial transactions. If an agreement is carefully drafted and implemented, it is in our submission a valuable mechanism to avoid the limitations of a legislative enactment like the Movable Property Act 57 of 1993 (see the case note by Professor Sonnekus in favour of the Nedcor case in 1998 TSAR 776). In addition, the validity of constitutum possessorium as a means of transferring ownership as security in a sale and resale scenario was upheld in Parton& Colam NNO v GM Pfaff (SA) (Pty) Ltd 1980 (4) SA 485 (N). What is more, the validity of floor-plan agreements has been approved in certain dicta in the Appellate and Provincial Division decisions, notably Boland Bank Bpk vJoseph 1977 (2) SA 82 (D) at 88B-D and 89E-G, K&D Motors v Wessels 1949 (1) SA I (A) at 13, Bank Windhoek Bpk v Rajie 1994 (1) SA 115 (A) at 141-2 and
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Quenty's Motors (Pty) Ltd v StandardCredit Corporation1994 (3) SA 188 (A) at 196G. The floor-plan agreement concerned is therefore not typically a simulated transaction. The intention is that the financial institution should acquire ownership in the vehicle as security for the finance extended to the dealer. Although it is not the intention of the financial institution to use the vehicle, its intention is indeed to repossess the vehicle on default of the dealer and to dispose of it at as favourable a price as possible. This is not to say that the parties intended a non-possessory pledge, which has not been countenanced in South Africa. What the parties usually intend is the transfer of ownership as security, which resembles the Roman law institution of fiducia cum creditore, in terms of which ownership in land could be transferred as security for a loan. By accepting this, one recognizes transfer of ownership by way of security as a causa for constitutum possessorium. This is still problematic since possession remains with the dealer and there is no publication of the transfer of rights and the change of status of the dealer from owner to mere holder on behalf of the financial institution. However, the objection falls away if it is insisted that an adequate notice must be displayed on individual vehicles in the showroom that a finance institution finances that particular vehicle. Finally, legal policy considerations dictate that one should not allow archaic principles and traditional ideas about fictitious delivery to stand in the way of commercial development. RomanDutch law is still 'a virile living system of law, ever seeking, as every system must, to adapt itself consistently with its inherent basic principles to deal effectively with the increasing complexities of modern organized society' (per Lord Tomlin in PearlAssuranceCo v Union Government 1934 AD 560 (PC) at 563). Floor-plans in one form or another have been used, as indicated, for some decades. The continued existence of the motor industry relies heavily on the validity of floor-plan arrangements. The courts are 'likely to recognize this reality if the particular agreement under'scruiny enables them to come to a commercially acceptable solution. Security in Terms of the AgriculturalCreditAct Regering van die Republiek van Suid-Aftika v Disotto en andere 1998 (1) SA 728 (SCA) dealt with the transfer of ownership of movable property as security in terms of s 38 of the Agricultural Credit Act 28 of 1966. The appellant (the state) applied in a Provincial Division for a declaratory order against the first, second and third respondents. It claimed that it was the owner of R56 529,89 of the amount
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(the proceeds of a certain crop) paid in trust to the third respondent, pending an action to be instituted by the second respondent against the first respondent. This claim was based on s 38 of the Agricultural Credit Act, read with the definition of 'movable property' in s 1, and the agreements concluded between it and the first respondent. The appellant claimed that it was entitled to the R56 529,89 by virtue of the ownership in the crop that it had obtained as security for a loan advanced by it to the first respondent. The appellant alleged that since the first respondent had cultivated the crop concerned, it was entitled to the money paid into the trust account of the third respondent. The second respondent alleged that in order to recoup money in terms of a loan extended to the first respondent, he had specifically agreed with the first respondent, amongst other things, to establish a crop on the first respondent's farm at his own cost. He also alleged that he had for this purpose furnished the first respondent with two tractors, seed, diesel, fertilizer, mealies and insecticides. He therefore denied that the first respondent had any claim to the crop. The court a quo found that the crop concerned had been cultivated with the supplies provided by the second respondent and that the first respondent's only involvement was to make his property available for such purpose. Therefore the first respondent had no direct claim to, or financial interest in, the proceeds of the crop. The appellant argued that it had become owner of the crop irrespective of whether it was cultivated for the first respondent's own account or for the benefit of a third party, and regardless of whether the movables which were transferred to it as security were used in the cultivation. The second respondent replied that the Act should be interpreted restrictively, and that only crops cultivated with the movables transferred as security qualified as objects of security. On the basis that the Act presented a radical interference with common-law principles with regard to the transfer of ownership, the court reasoned that the Act should be interpreted restrictively (at 735D). It therefore found that the interpretation proposed by the appellant was neither in line with such restrictive interpretation nor with the usual grammatical meaning of the words used by the legislature, and that it could lead to results not envisaged by the legislature (at 735E-F). Correctly interpreted, only crops cultivated after the conclusion of the agreements by the first respondent himself (or on his behalf and not on behalf of a third party) could be transferred to the state in terms of s 38 of the Act (at 735G). Under the circumstances the court found that the crop had not
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been cultivated by the first respondent, as required by s 38 and the agreements between himself and the appellant. On the contrary, the first respondent had cultivated the crop harvested for the benefit of the second respondent (at 735H-J). In dismissing the appeal, the court held that the appellant did not become the owner of the crop and could therefore not claim the proceeds paid into the trust account of the third respondent (at 7351-J).
LIEN
In NBS Bank Bpk v Dirma BK en 'n ander 1998 (1) SA 556 (T) the applicant bank (supported by the second respondent, the ownerdeveloper of the site) applied for the ejectment of the first respondent, a builder, from a building site. The bank had advanced the money for the building to the second respondent against the registration of a mortgage over the property. At the conclusion of the loan, the appellant bank and the second respondent (property owner) agreed to certain additional conditions that were not incorporated in the bond. In terms of these conditions, the second respondent (property owner) undertook to arrange that the subcontractors and builders working on the site would renounce their rights of lien in favour of the applicant bank. In compliance with this undertaking the first respondent, on his appointment as builder by the second respondent, signed a 'waiver of builder's lien'. In this agreement he acknowledged that the bond to be passed by the owner would take priority over any building lien for work done. He further undertook not to enforce his right of lien against any right conferred on the applicant bank by the bond, or against the owner, to the detriment of the applicant bank. A dispute arose between the owner (second respondent) and the builder (first respondent) early in 1997. As a result of this, the first respondent refused to continue performing until he was paid for the work already done. The second respondent retaliated by refusing to pay the first respondent because, so he claimed, the building contract had been legitimately cancelled. The first respondent then invoked his common-law builder's lien and refused to vacate the site. The court decided that the applicant's entitlement to the order was dependent on the correct interpretation of the 'waiver of builder's lien' read with the provisions of the mortgage bond (at 561D). It found that the waiver did not amount to a general renunciation of his rights by the first respondent. On the contrary, it only amounted to a waiver of his right of lien with respect to those rights acquired by the applicant under the mortgage bond. This was coupled, once again, with reference to the rights acquired by the
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applicant in terms of the bond, to an undertaking not to exercise any such right against the applicant or the owner to the detriment of the applicant (at 561-2). The court therefore found that the waiver would apply only if the applicant decided to foreclose the bond. In such a case, the waiver would preclude the first respondent from enforcing his right of lien to the detriment of the applicant. The judge pointed out that the first respondent's lien would in the normal course of events take precedence over the applicant's rights under the bond, to the extent that the value of the property had been enhanced by his building activities. Should the applicant decide to enforce its rights under the bond, the waiver would have resulted in the relinquishment of those rights by the first respondent (at 562B-E). The court further held that the waiver did not strip the first respondent of his right of lien so as to enable the applicant to, implement the provisions of the 'additional conditions'. The waiver did not refer to those conditions, but only to the provisions of the bond and to the applicant's rights under it (at 262E-F/G). Since the applicant did not exercise its rights under the bond, the court dismissed the application for the ejectment of the first respondent. MinisterofFinance v Ramos 1998 (4) SA 1096 (C) concerned a lien in favour of the state in terms of s 114 of the Customs and Excise Act 91 of 1964. In terms of this provision the state was entitled to detain a vehicle for the failure to pay duty on imported goods.. In this case the lien was established over the vehicle, but the vehicle was not removed to a place of security. Instead the debtor was, in terms of a settlement, allowed to continue using the vehicle. When the debtor eventually sold the vehicle to a third party, the Controller of Customs and Excise relied on the state's lien in terms of s 114 to seize the vehicle. Section 114(2) provides that the lien continues to operate even though the goods are no longer held by the state but are used by the debtor. The court found, however, that on a strict interpretation of the provision, the fact that a lien was established over the vehicle did not entitle the state to take the law into its own hands and to dispossess a third party without the intervention of the courts. The mandament van spolie (discussed above under 'Spoliation') granted by a magistrate was thus confirmed.
LAND USE PLANNING
Township Establishment During 1998 six cases reported related to townships in general and township establishment in particular. The majority related to the contravention of zoning schemes, more particularly the use of residential properties for business or commercial purposes. A very
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interesting case was that of Municipality, City of Port Elizabeth v Rudman & another [1998] 2 All SA 147 (SE), in which the question addressed was whether two different sets of legislative measures (pertaining to land use planning in general and zoning in particular) for different categories of persons contravened the equality principle established in s 8 of the interim Constitution. The properties concerned were zoned for primary use as 'dwelling houses' with certain specified secondary uses. Although the respondents had been using their garage as a shop since 1992, with the applicant's permission, the property had not been rezoned (at 15lf). The respondents had, however, since 1992 applied for the rezoning from 'residential' to 'business' twice, and had in the meantime expanded the facilities to include a bakery, a take-away counter and a games centre (at 151-2). Despite the applications having been refused twice, the respondents continued operating their business. With regard to the property in question, hardly any residential component remained (at 152d). The applicant consequently applied for an interdict restraining the respondents from using their properties for any purpose other than residential accommodation. The respondents reacted on two grounds. First they argued that they were being discriminated against since the Land Use Planning Ordinance 15 of 1985 did not apply to the former 'black urban areas' and that the legislative measures applicable there (the 1986 regulations issued in terms of the Black Communities Development Act 4 of 1984) were more flexible regarding planning issues. Secondly, they averred that the Provincial Ordinance did not comply with the stated principles of the Reconstruction and Development Programme (RDP) regarding land usage when dealing with rezoning applications. As a point of departure the court found that the use of the properties by the respondents was directly in conflict with the provisions of the Port Elizabeth zoning scheme (at 153f). The building's appearance and apparent use were more in line with the appearance and use of business premises than a dwelling house (at 153h). The court proceeded to determine whether the first ground concerning the contravention of the equality clause had any merit. Because the application had been instituted at the time when the interim Constitution was in operation, the court judged the issue with reference to the interim and not the final Constitution. The first step was to determine whether the relevant provisions differentiated between people or categories of people. If there was a differentiation, the next step would be to determine whether there was a rational connection between the. differentiation and a legitimate governmental purpose it was designed to achieve. With
reference to case law, MelunskyJ found that a rational connection entailed that the purpose of differentiation should not be arbitrary or capricious. The court concluded that the present case was indeed one where the relevant provision differentiated between categories of people. It was furthermore established that there were indeed substantial differences between the legislative measures applicable in 'white' and 'black' urban areas (at 155g). On the other hand, both sets of regulations were intended to regulate the orderly development and use of immovable property (at 157e). However, keeping in mind the reason for and the history regarding the different sets of legislative measures, the court found that the differentiation did not arise out of a desire to discriminate against the specific inhabitants. MelunskyJ said (at 157 g): 'I think it can be said with reasonable certainty that the differentiation
which exists between the different sets of regulations does not arise out of a perverse desire to discriminate against the inhabitants of the areas that were previously controlled by the Port Elizabeth Municipality. In fact the equality clause needs to be interpreted in the light of the history of discrimination against Black people in political, social and economic life.' And further (at 158b-d): 'In essence, the issue in this case relates only to the existence of different town planning regulations in different parts of the city. And it does not follow that all inhabitants in the areas governed by the 1986 regulations necessarily benefit from the more flexible approach towards town planning. Many residents may have the view that it is desirable to control trading activities more stringently. For the same reason residents of areas controlled by the zoning regulations, who wish to preserve the residential character of their neighbourhoods, may be thankful for town planning controls that are in force in their neighbourhoods.' The court found that the differentiation referred to by the respondents was neither discriminatory nor unfair: consequently it did not amount to a violation of s 8 of the interim Constitution (at 158d). With regard to the second ground, the court established that the RDP principles referred to were contained in the Development Facilitation Act 67 of 1995. In accordance with the definition of 'land development' the court found that the Act applied only to the future development of land and not to existing town planning schemes (at 159i). The second ground was therefore rejected. In view of this, the interdicts sought were granted against the respondents. The next four cases dealt with the contravention of zoning
schemes. In Huisamen & others v PortElizabeth Municipality 1998 (1)

SA 477 (E) the appellants appealed against the granting of an
LAW OF PROPERTY
3zD
interdict by the court a quo. The appellants were owners of property which was zoned 'residential 1', specifically excluding it from being used for business purposes. The property was let to a company that used the buildings on the property as its offices. Despite the fact that the contravention of the zoning scheme was never in dispute (at 479G), the appellants claimed that the interdict restraining their conduct should never have been granted. The appellants based their claim on four grounds. First, it was submitted that the judge had erred in holding that the town clerk who instituted the proceedings in the name of the respondent had enjoyed the requisite authority to do so (at 480B). However, from the papers of both the appellants and the respondent it was clear that both sides accepted the fact that the clerk was indeed the person duly authorized to launch the application (at 4801). Furthermore, a written delegation to the clerk authorized him to take whatever action he might deem necessary. It was consequently implicit that if the clerk launched the application, he had formed the opinion that such action was necessary, particularly since the appellants were acting in flagrant disregard of the zoning regulations (at 481A-C). The second contention of the appellants was that the zoning scheme created under the Land Use Planning Ordinance could only be enforced if the necessary hierarchy and structure envisaged by the Ordinance still existed, which was not the case since the new provincial dispensation resulted in the transfer of various responsibilities to new functionaries. According to the appellants this resulted in the zoning regulations being unenforceable (at 481F). In addressing this matter, LeachJ commented on the fact that the appellants were unable to refer to any authority and the argument was 'certainly a novel one' (at 481G). He then referred to the use of savings clauses and cited the Interpretation Act 33 of 1957. He concluded that the zoning scheme remained in force and effect, as if it had been made by a person competent to make it, by virtue of the assignment of the administration of the Ordinance (at 482B). The third ground raised by the appellants was that they ought to have been given notice by the respondent of its intention to launch an application, and they contented that their legitimate expectations had been affected or threatened. The cases referred to by the appellants all stressed the importance of giving notice. However, these cases dealt with a local authority's obligation to give notice of its intention to consider taking administrative action affecting the interests of other persons. These cases were distinguishable from the present case where no such decision was taken by the respondent, which merely decided to seek an injunction preventing the appellants from unlawfully using the property (at 482H). It was thus
a decision to institute legal proceedings during the course of which the court would be called upon to decide upon the lawfulness of the appellants' actions. Moreover, the notice of motion used in launching the proceedings in effect gave them notice of the respondent's intention to seek relief in court (at 483A). The last contention was that the court a quo, based on the specific facts, had erred in exercising its discretion in favour of the respondent. The facts on which the appellants had relied were that the building was used for office purposes only and was never visited by clients; the building had become dilapidated and had been restored and modernized by the appellants; numerous other businesses were already situated in the vicinity of the property; and the future planning of the area was generally being reconsidered (at 483H-I). The court considered, however, that the refusal of an interdict in the case of criminal conduct (contravention of the zoning regulations constituted an offence punishable by way of a fine up to RIO 000 or imprisonment not exceeding five years) would result in sanctioning such conduct. In this regard, LeachJ found (at 484C) that:
'In a case where offensive action will continue if relief is not granted, the
discretion to refuse an interdict will be exercised only in exceptional

cases where the following prerequisites are satisfied - firstly, the injury to the legal rights of the person offended must be small, secondly, the injury must be one capable of being estimated in money, thirdly, the injury must be capable of being adequately compensated by a small money payment and fourthly, the case must be one in which it would be oppressive to the offender to grant an interdict. In the event of all these prerequisites being found to exist, damages in substitution of an interIn the present case none of those prereqdict may then be given .... uisites seems to me to be present.' The appeal was thus dismissed with costs.
Esterhuyse vJanJoosteFamily Trust & another 1998 (4) SA 241 (C) concerned an application for a declaratory order that the construction of a certain building by the first respondent amounted to an unlawful contravention of the zoning scheme regulations. Further relief claimed included the review and setting aside of the respondent's approval, as well as an application for an interdict prohibiting any further construction (at 243B-D). The applicant and the first respondent were the owners of two adjacent properties, both zoned for agricultural use. Both property owners conducted forms of
businesses on their properties, the applicant a broker's business,
and the respondent an engineering practice and guest house, with the initial consent from all parties concerned. The first respondent applied for the relaxation of the building line and permission to construct four additional guest cottages. Both these applications
LAW OF PROPERTY
were successful despite the applicant's objection. The existing moratorium on the extension of the guest cottage business was lifted, after which the first respondent embarked on constructing the new cottages. The applicant successfully applied for an interdict prohibiting the construction pending a review application by the applicant. After a successful review application, the respondent renewed its application to construct additional cottages. Again the application was met with objections from the applicant. With regard to this matter, the locus standi of the applicant was questioned by the respondent. The court found that, although the applicant had not suffered any personal loss or damage due to the building operations, he still had the right to attack such conduct on the basis that it was in conflict with the co-ordinated and harmonious development of land, which, in the present case, had been zoned for agricultural purposes (at 253-4). The applicant's rights were further protected by s 33 of the final Constitution, since objections may be raised against administrative actions which are perceived to be unjust, unfair or unreasonable in that they might affect or threaten rights or legitimate expectations (at 254C). The non-agricultural improvements to the first respondent's land were detrimentally changing the character of the area. However, although the applicant clearly established locus standi to lodge the application (at 254D), it was dismissed on various grounds. The main point was that the proposed extensions were merely extensions to already existing developments and had to be evaluated as such (at 255F). Van Zyl J repeatedly pointed out that the respondent's application to extend the guest facilities and to relax the building line was duly considered by the second respondent (local authority). There was no indication of any irregularity, impropriety or failure by the authority to apply its mind to the matter (at 256G). The application was therefore dismissed. In Chapmans Peak Hotel (Pty) Ltd & another v South Peninsula Municipality & others [1998] 4 All SA 619 (C) two applications and one counter-application were instituted. The applicants were the registered owners of properties adjacent to the second respondent's property (the property in issue). The respondent's property was originally zoned for general residential use. The respondent successfully applied for a rezoning to commercial use. The applicants were not notified of the application and had no knowledge of it, and became aware of the redevelopment only at a later stage. They consequently brought an urgent application interdicting the commercial use of the property until all the conditions of the rezoning had been properly met. The first respondent reacted by submitting an amended consolidated site development plan that reflected the building as it had been erected and not in the form when the
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original application was made. The applicants again objected and brought a second urgent application declaring the approval of the site development plan invalid. The second applicant instituted a counterclaim against the first applicant and the first respondent. (The counterclaim was referred for oral evidence and will not be discussed further.) With regard to the applications, the court held that a proper case was made out for the matter being one of urgency. On the issues, the court found that the central question was whether the approved site development plan, and the use to which the property was put, conformed to the development which was approved when the application for rezoning was granted (at 635g). That entailed various aspects, such as whether the Chief Director: Engineering Services had the authority to approve the plans (at 636-7) and whether the applicants had failed to exhaust all their 7 domestic remedies, inter alia the right to appeal (at 63 g). Van ReenenJ found that the Chief Director had acted outside the scope of his authority and that the approval was invalid. It was also found that the erroneous approval was not subject to appeal by the applicants and the argument that all the remedies were not exhausted could therefore not stand. The court's final decision was that the decision to approve the application for rezoning was invalid. In New Garden Cities IncorporatedAssociation Not for Gain v Adhikarie 1998 (3) SA 626 (C) the applicant applied for a final interdict restraining the respondent from conducting his business from his property. The contract of sale restricted the use of the property to residential purposes only (clause 13 of the contract). The property was also subject to the town-planning scheme in terms of which the area was specifically zoned for single residential purposes. Despite this, the respondent operated a shop on his property in contemplation of an application for a temporary departure from the scheme regulations. After the application was denied an appeal was instituted. It was during that appeal that the applicant sought an interdict prohibiting further business on the respondent's property. The interdict was opposed on the following grounds, (a) that the respondent had received informal permission to conduct his business, (b) that clause 13 was unlawful since it was in breach of the township establishment conditions and (c) that clause 13 was furthermore unlawful because it prohibited the free use of property and was not useful to the applicant as such. Rose InnesJ, who also gave the decision in the Beck case discussed below in the section on 'Removal of Restrictions', again emphasized the importance of people's interests and vested rights when conditions were concerned. It was never in issue that the respondent had contravened the scheme regulations (at 632C-D). Although the respondent had applied for temporary
LAW OF PROPERTY
departure from the regulations, no such permission had been granted. The respondent could consequently not rely on 'informal permission' (at 632G). With regard to the allegation that clause 13 was invalid, the court found that the clause restricted the use of the property in accordance with the town planning scheme (at 633F). As mentioned above, the respondent also submitted that the clause was unlawful, because the owner's 'free right' to deal with his property was restricted, and that the condition served no purpose for the applicant. However, on the facts it was clear that the applicant, as developer of the properties, did in fact have a very real interest in terms of clause 13 (at 6331). It was clear that not only the developer, but also all purchasers of properties in the development, gained by the enforcement of the condition. Consequently Rose InnesJ found that 'the applicant has established that it has a clear right to the relief sought. The other requisites for the grant of a final interdict are present' (at 6341). In the last reported case, Grobbelaar& anotherv Walvis Bay Municipality & another 1998 (3) SA 408 (Nm), the applicants sought an order that the decision of the first respondent council relating to the payment of a certain amount of money be reviewed, and to have the money refunded. The first applicant bought and developed a property for the purposes of a shop and office complex within the respondent's jurisdictional area. The property was later sold to the second applicant. The fact that the development did not provide for parking led to a dispute between the applicants and respondent. The dispute culminated in the adoption of a resolution by the Municipality that the applicants had either to provide the necessary parking or pay a certain amount of money that would be used for the further development of parking facilities by the respondent. The validity of the respondent's decision was challenged on the following grounds, namely (a) that the Council had no authority to have made the decision, (b) that the town-planning scheme, on which the respondent relied, was not in force or had not been complied with, (c) that the applicants were not afforded an opportunity to be heard regarding the resolution, and (d) that the resolution was invalidly passed with retrospective effect (at 411B-C). In discussing the various allegations, Maritz AJ emphasized that municipalities were creatures of statute with no inherent powers. On the facts itwas found that such empowering legislative provisions existed in the form of the Town Planning Ordinance 18 of 1954 and the existing town-planning scheme. It was furthermore established that the development contravened the provisions of the Ordinance due to the absence of parking bays. Provision was made for the erection of buildings on the condition that land was acquired for
parking or that a sum of cash was paid to the local authority. The local authority was entitled to calculate a levy in accordance with the formula prescribed in the town-planning scheme. The local authority did not follow the prescribed formula, but used an alternative formula instead. Because it did not have the authority to do that, the decision in relation to the determination and calculation of the payment was ultra vires and had to be set aside. The matter was referred back to the Council to determine the correct levy and the respondent was ordered to repay the balance of the amount after the levy had been recalculated. Removal of Restrictions In one of the two reported cases dealing with restrictive conditions, the imposition of conditions was constitutionally challenged in view of the equality clause in the interim Constitution. Nyangane v Stadsraadvan Potchefstroom 1998 (2) BCLR 148 (T) concerned the imposition and removal of restrictive conditions as part of a township development. The applicant bought an erf in a township from the respondent, a local authority and developer of the township. The deed of sale included a condition that any residential building was to have a minimum floor area of 90 square metres. The condition was registered against all the title deeds relevant to the development, with the exclusion of eight properties. Three local authority resolutions were relevant to the case: Resolution 22 of 1993 in which the minimum floor area was set out (at 152F), Resolution 55 of 1995 in which the said floor-area requirement was dispensed with (at 153E), and Resolution 70 of 1955 which was responsible for the reinstatement of the requirement (at 1531). During the sevenmonth period in which the restriction had been limited, only eight plans had been approved (at 153A). The applicant sought an order declaring that Resolution 70 was invalid and striking out the restrictive conditions registered against the title deeds in view of s 8 (2) of the interim Constitution, which guaranteed the right not to be unfairly discriminated against. He contended that the Resolution discriminated unfairly between him and the other owners who bought properties during the period in which the restriction had been lifted. It furthermore had the effect of discriminating against a certain category of persons, namely black persons of the working class who had not previously owned immovable property and who were dependent on government subsidies. Thus, persons who could not afford to build homes with a floor area of at least 90 square metres, were discriminated against (at 160C-G). The court observed that it was the general function and duty of local authorities to develop the
LAW OF PROPERTY
areas under their administration in a co-ordinated and harmonious way (at 1551). The court emphasized that the imposition of restrictive conditions was a recognized, legitimate way of achieving that. The restrictive conditions were for the reciprocal benefit of all the property holders and were aimed at maintaining the character and nature of the specific neighbourhood. Any variation of the conditions would involve interference with the rights of holders of neighbouring lots and could not simply be removed. It was imperative that registered title-holders be granted the opportunity to object to the removal of the restrictions (at 156A-G). With regard to the resolutions, the court found on the facts that Resolution 55 was ab initio invalid (at 1571), with the effect that the earlier Resolution 22 had to continue in force. Resolution 70 was therefore superfluous. What the applicant needed to do was to challenge Resolution 22. Because the fundamental rights contained in the interim Constitution did not operate retrospectively (at 158C), the application had to fail. However, even if Resolution 70 were the operative source for the restrictive conditions, the challenge would not necessarily be successful. In this regard Stafford J again emphasized the accepted system in modern law that local authorities have the power to impose restrictive conditions to ensure co-ordinated and harmonious development and town-planning. He was of the opinion that the imposition of the restrictions in question was justifiable and legitimate. The restriction operated equally on all groups in that every purchaser bore the same burden (at 160F-G). He also referred to the fact that other suitable property within the applicant's financial means was available in the area (at 160G). The application was thus dismissed. Beck & others v Premier Western Cape, & others 1998 (3) SA 487 (C) concerned review proceedings of the decision of the Planning Advisory Board and the Western Cape Minister of Agriculture, Planning and Tourism to approve the removal of title deed restrictions. The relevant property, erf 1483, had been zoned for 'general residential use R4', which included utilizing the erf for the erection of blocks of flats, double dwelling houses, groups of dwelling houses, places of worship and residential buildings. However, despite the zoning scheme, the relevant title deed also included certain restrictive conditions that the erf was not be divided and that no more than one dwelling house was to be built on the property. The applicant applied for the removal of the restrictions in terms of the Removal of Restrictions Act 84 of 1967. The correct application procedure was followed (which was rather complicated, bearing in mind that the powers of the former provinces had in the meantime been assigned to new functionaries in accordance with the new provincial
332
dispensation). The purpose for which the property would be used, if the application were successful, was stated as 'for the erection of townhouses'. The required publication of the application notice was initially met with objections that it could give rise to the erection of multiple storey buildings. In answer to that fear, architectural sketch plans linked to the contract of sale indicated that the proposed building would comprise only two levels. The removal of the restrictions was recommended. The initial contract of sale was then cancelled and replaced by a new one indicating that the proposed development would consist of a five-storey block of flats. When the Minister finally consented to the cancellation of the restrictions in the title deed, the purpose was entirely different from the purpose of the application which had initially been advertised, objected to and approved. Interested parties first realized the nature of the construction when the building operations began. The question to be decided in the review proceedings was whether the applicants had established that the removal of the restrictions was ultra vires, illegal and void, or so affected by grave irregularity that the removal of the restrictions had to be set aside. During the review proceedings, Rose Innes J emphasized the importance of giving notice of all applications relating to the removal of conditions (at 5 1OG). In view of the fact that vested rights might be affected, it was imperative that the notice had the correct content, including information regarding the proposed development and the reasons for the application in the first place. In the present case, neither the interested parties (surrounding property owners) nor the relevant authorities were made aware of the full picture. The decision of the Minister to remove the conditions was gravely irregular in view of the fact that there had been no proper notice as required by the Act. Because the application that had been considered and granted was substantially different from the initial application (and had in actual fact not been considered by the Planning Advisory Board) the requirements of recommendation and consultation in respect of the application could not be said to have taken place (at 517A-E). Consequently the decision of the Minister was ultra vires and had to be set aside (at 517G). With regard to the submission that the Minister had not applied his mind to the matter, Rose InnesJ found
that:
'Had he read the documents before him he must have realized that the proposal for the townhouse development considered by the local authority was not the development which was subsequently proposed and placed before him for his consideration but which had never been considered by the local authority. The inference is inescapable that the Minister did not properly read the documents placed before him.
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The unavoidable and unfortunate conclusion is that the Minister did not in terms of s 4(2) of the Act consider the relevant documents and particulars relating to the application as the Act expressly requires him to do' (at 520D-F). The application was consequently granted.
STATUTES
FencingAct 31 of 1963 Kate's Hope Game Farm (Pty) Ltd v Terblanchehoek Game Farm (Pty) Ltd 1998 (1) SA 235 (SCA) concerned the erection of a fence on a give-and-take line in terms of s 16 of the Fencing Act 31 of 1963. The respondent, the owner of farm T and two other farms, and the appellant, the owner of an adjacent farm, K, formed an association in January 1992 for the purpose of establishing a large game farm through the pooling of these farms. The appellant subsequently decided to withdraw from the association. This led to a dispute regarding the erection of a fence between T and K. It appeared that it was impractical to erect a fence on the official boundary line, namely down the centre of a river. The respondent therefore proposed a give-and-take line between the farms, that is, part on T and part on K, crossing the river in two places and thus balancing the loss to each farm with a gain from the other. The appellant rejected the respondent's proposal on the basis that s 16 of the Fencing Act was not applicable because the constitution of the association in clauses 5.10 and 9.7 contained an agreement with regard to the boundary line between the two properties. Clause 5.10 stipulated that 'the association . . . may erect on [members'] property . . . a game-proof fence'. Clause 9.7 stipulated that members should not without consent erect fences within or around their land enclosing more than five per cent thereof. The court held that clause 5.10 conferred no enforceable right on the respondent and was therefore not an 'agreement' for the purposes of s 16. The appellant's reliance on clause 9.7 was also rejected because there was no allegation or evidence that the members did not consent to a give-and-take line as proposed by the respondent. The court accordingly found that s 16 was applicable.
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Grove, N J 'NBS Bank Ltd v Badenhorst-SchnetlerBedryfsdienste BK en Badenhorst-Schnetler (saakno 97/015379 (W)); NBS Boland Bank Limited v One Berg River Drive CC (saakno 97/19700 (W)).' (1998) 31 DeJure 190. Jonker, P G 'The Cost of Our Heritage: The National Monuments Council and the Property Clause in the Constitution.' (1998) 6Juta's Business Law 85. Maree, Tertius 'The Wrong Oil? A More Critical Look at the Latest Amendments to the Sectional Titles Act.' 1998 368 DeRebus 31. Naldi, GJ 'Constitutional Challenge to Land Reform in Zimbabwe.' (1998) 31 CILSA 78. Ng'ong'ola, Clement 'Challenging the Legality of a Notice of Expropriation in Botswana.' (1998) 115 SALJ616. Otto, J M 'Kontraktuele Afstanddoening van Bevrydende Verjaring en Verlengde Verjaringstermyne.' (1998) 31 DeJure 127. Pienaar, J M 'Labour Tenancy: Recent Developments in Case Law.' (1998) 9 Stellenbosch Law Review 311. Scheepers, T E & Du Plessis, W 'Extension of Security of Tenure Act - A Bone of Contention.' (1998) 61 THRHR 473. Smit, D 'Die Invloed van die Ligging van 'n Grondstuk op die Reels ten Opsigte van die Natuurlike Afvloei van Water - Harris v Williams.' (1998) 61 THRHR 727. Smith, Alastair 'A Floor Plan Agreement Floored: Possession is Crucial for a Valid Pledge.' (1998) 6Juta'sBusiness Law 78. Sonnekus, J C 'Tyddeelgeregtigdes en Televisie-ontvangs.' (1998) 61 THRHR 634. Sonnekus, J C 'Stilswyende Hipoteek van die Verhuurder en Verassings uit die Ligging van die Bewyslas.' 1998 TSAR 292. Sonnekus,J C 'Uitsettingsbevel teen Gade uit Egtelike Woning?' 1998 TSAR 647. Sonnekus,J C 'Vloerplanooreenkomste en 'n Sober Klank van die Regbank Daarteen? Nedcor Bank Ltd v ABSA Bank Ltd.' 1998 TSAR 776. Stander, A L, van der Merwe, A P S, Jansen van Rensburg, L, Badenhorst, G J & Stockmann, F 'Real Estate Tax in South Africa: A Comparative Study with Particular Reference to Germany.' 1998 TSAR 450. Stoop, B C 'Qui Habet Commoda Ferre Donera (You Cannot Have Your Cake and Eat It): The Relevance of Fault in Breach of Contract.' (1998) 61 THRHR 1. Van den Bergh, R 'Geld die Stelreol Plures Eandem Rem in Solidum Possidere Non Possunt Nog in die Suid Afrikaanse Reg?' (1998) 61 THRHR 42. Van der Merwe, C G & Blumberg, Matthew 'For Whom the Bell Tolls - A Solution in Neighbour Law.' (1998) 9 Stellenbosch Law Review 351. Van der Merwe, C G 'A Critical Analysis of the Innovations Introduced by the Sectional Titles Amendment Act of 1997.' (1998) 61 THRHR 171. Van der Spuy, P de W 'NedcorBank Ltd vABSA Bank Ltd 1998 2 SA 830 (W).' (1998) 31 DeJure390.
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Van der Walt, AJ ' "Double" Property Guarantees: A Structural and Comparative Analysis.' (1998) 14 SA1HR 560. Van der Walt, AJ 'Roman Law, Fundamental Rights, and Land Reform in Southern Africa.' (1998) 61 THRttR 400. Van Schalkwyk, LN 'Harris v Williams 1998 2 SA 263 (W).' (1998) 31 DeJure 384. Van Schalkwyk, L N 'Olivierv Olivier 1998 1 SA 550 (D).' (1998) 31 DeJure 185.

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LAW OF PROPERTY (INCLUDING REAL SECURITY) C G

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HeinOnline -- 1998 Ann. Surv. S. African L. 291 1998

ANNUAL SURVEY OF SA LAW

HeinOnline -- 1998 Ann. Surv. S. African L. 292 1998

HeinOnline -- 1998 Ann. Surv. S. African L. 293 1998

ANNUAL SURVEY OF SA LAW

HeinOnline -- 1998 Ann. Surv. S. African L. 294 1998

HeinOnline -- 1998 Ann. Surv. S. African L. 295 1998

ANNUAL SURVEY OF SA LAW

HeinOnline -- 1998 Ann. Surv. S. African L. 296 1998

HeinOnline -- 1998 Ann. Surv. S. African L. 297 1998

ANNUAL SURVEY OF SA LAW

HeinOnline -- 1998 Ann. Surv. S. African L. 298 1998

HeinOnline -- 1998 Ann. Surv. S. African L. 299 1998

ANNUAL SURVEY OF SA LAW

HeinOnline -- 1998 Ann. Surv. S. African L. 300 1998

HeinOnline -- 1998 Ann. Surv. S. African L. 301 1998

ANNUAL SURVEY OF SA LAW

HeinOnline -- 1998 Ann. Surv. S. African L. 302 1998

HeinOnline -- 1998 Ann. Surv. S. African L. 303 1998

ANNUAL SURVEY OF SA LAW

HeinOnline -- 1998 Ann. Surv. S. African L. 304 1998

HeinOnline -- 1998 Ann. Surv. S. African L. 305 1998

ANNUAL SURVEY OF SA LAW

HeinOnline -- 1998 Ann. Surv. S. African L. 306 1998

HeinOnline -- 1998 Ann. Surv. S. African L. 307 1998

ANNUAL SURVEY OF SA LAW

HeinOnline -- 1998 Ann. Surv. S. African L. 308 1998

HeinOnline -- 1998 Ann. Surv. S. African L. 309 1998

ANNUAL SURVEY OF SA LAW

HeinOnline -- 1998 Ann. Surv. S. African L. 310 1998

HeinOnline -- 1998 Ann. Surv. S. African L. 311 1998

ANNUAL SURVEY OF SA LAW

HeinOnline -- 1998 Ann. Surv. S. African L. 312 1998

HeinOnline -- 1998 Ann. Surv. S. African L. 313 1998

ANNUAL SURVEY OF SA LAW

HeinOnline -- 1998 Ann. Surv. S. African L. 314 1998

HeinOnline -- 1998 Ann. Surv. S. African L. 315 1998

ANNUAL SURVEY OF SA LAW

HeinOnline -- 1998 Ann. Surv. S. African L. 316 1998

HeinOnline -- 1998 Ann. Surv. S. African L. 317 1998