Introduction to the Law of Property
Page 1 of 1
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Cover-print-1532465817.xhtml
24-Jul-18
AboutJutasPropertyLawLibrary
Page 1 of 1
Page vi
have to play a large part in this process, but legislation cannot do all the work and therefore
judicial and doctrinal development of the common law and customary law is equally
important. It is therefore necessary to consider the direct and indirect effect and the
implications of the Constitution for the whole of existing property law, including uncodified
common law, case law and legislation.
Juta’s South African Property Law Library is aimed at revisiting and reassessing the whole
of South African property law, including the uncodified common law that is mostly embodied
in case law and academic writing, in order to establish how each aspect of property law was
influenced by apartheid law, how it responds to the new constitutional dispensation
(including land reform), and whether it could make a contribution towards the
transformation of South African law and society. For this purpose, the South African Property
Law Library will eventually consist of a number of monographs, each of which is focused on
one specific aspect of property law.
Recently published titles
GJ Pienaar Sectional Titles and other Fragmented Property Schemes (2010)
AJ van der Walt The Law of Neighbours (2010)
AJ van der Walt Constitutional Property Law (2nd ed 2011)
Jeannie van Wyk Planning Law (2nd ed 2012)
JM Pienaar Land Reform (2013)
AJ van der Walt & GJ Pienaar Introduction to the Law of Property (2016)
AJ van der Walt & GJ Pienaar Inleiding tot die Sakereg (2016)
AJ van der Walt Law of Property Casebook for Students / Sakereg Vonnisbundel vir Studente
(2016)
Forthcoming titles
AJ van der Walt The Law of Servitudes (2016)
ZB Temmers Property Remedies (2016)
R Brits Real Security (2016)
S Viljoen The Law of Landlord and Tenant (2016)
E van der Schijff Mineral and Petroleum Resources (2016)
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/AboutJutasPropertyLawLibrary-pri...
24-Jul-18
PrefacetotheSeventhEdition2016
Page 1 of 1
Page vii
Preface to the seventh edition 2016
The seventh edition of Introduction to the Law of Property was revised and updated to
include new developments until July 2015.
This seventh edition of the Introduction is published as part of the series Juta’s Property
Law Library. Since the Introduction is primarily intended for use by students, it differs from
other volumes in the Property Law Library: no footnotes, no extensive doctrinal, analytical or
comparative analysis and no critical assessment in the constitutional context. It is after all a
student text. The Introduction is nevertheless not entirely dissimilary from the other
volumes in the series to the extent that it also explicitly and purposely places the material in
a constitutional and transformation-oriented perspective.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/PrefacetotheSeventhEdition2016-pri... 24-Jul-18
PrefacetotheSixthEdition2009
Page 1 of 1
Preface to the sixth edition 2009
The sixth edition of Introduction to the Law of Property was revised and updated to include
new developments until July 2009.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/PrefacetotheSixthEdition2009-print-... 24-Jul-18
PrefacetotheFifthEdition2006
Page 1 of 1
Page ix
We would like to thank the colleagues and students who made helpful suggestions and
comments about the previous editions of the book. Our research assistant Bradley
Greenhalgh provided untiring and valuable assistance in preparing this new edition. Cases
and legislation for this edition have been updated until June 2006.
André van der Walt, Stellenbosch
Gerrit Pienaar, Potchefstroom
30 June 2006
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/PrefacetotheFifthEdition2006-print-... 24-Jul-18
Preface
Page 1 of 1
Page x
Preface
Introduction to the Law of Property was written specifically for second year students in a first
course on this subject, and therefore the authors decided to restrict the book to what is
essential for these students. Consequently, footnotes and references were left out
altogether. However, that does not mean that the authors did not consult other sources or
that they do not wish to acknowledge the contribution of other authors in this field. The
sources in the Bibliography were used or consulted when writing this book, and the authors
gratefully acknowledge their contribution. In certain cases the contribution of a specific
author or source is deemed so important that it is referred to by name in the text, although
no reference is provided there. These sources are included in the Bibliography.
Ms Mariette Postma, Ms Denise Prevost and Ms Irma Kroeze assisted the authors in
translating various sections of the text. Ms Melinda Hattingh and Ms Denise Prevost provided
valuable assistance with proofreading and preparation of the final manuscript. Ms Denise
Prevost compiled the lists of Cases and Legislation and the Bibliography. The authors wish to
express their gratitude for this assistance, without which the book would have been
impossible. Gino Frantz and Ernst Marais provided excellent assistance in preparing the sixth
edition 2009.
In the second edition a number of recent cases and new statutes were incorporated, as
well as the Constitution of 1996. A few smaller changes and corrections were introduced to
improve the readability of the text. The authors would like to express their gratitude for
helpful suggestions in this regard from students and colleagues.
Andre van der Walt, Pretoria
Gerrit Pienaar, Potchefstroom
30 April 1997
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Preface-print-1532465919.xhtml
24-Jul-18
TableofContents
Page 1 of 2
Page xi
Table of Contents
About Juta’s Property Law Library
Preface to the seventh edition 2016
Preface to the sixth edition 2009
Preface to the fifth edition 2006
Preface
Part I: Introduction
Chapter 1:
Introduction to the law of property
Chapter 2:
Things as legal objects
Chapter 3:
Property rights, real rights and creditor’s rights
Part II: Ownership
Chapter 4:
Introduction to ownership
Chapter 5:
Co-ownership
Chapter 6:
Statutory land use
Chapter 7:
Limitations on ownership
Chapter 8:
Original acquisition of ownership
Chapter 9:
Derivative acquisition of ownership
Chapter 10:
Protection of ownership
Chapter 11:
Termination of ownership
Part III: Possession and holdership
Chapter 12:
Introduction to possession and holdership
Chapter 13:
Acquisition of possession and holdership
Chapter 14:
Protection of possession and holdership
Chapter 15:
Termination of possession and holdership
Part IV: Limited real rights and other rights in property
Chapter 16:
Introduction to limited real rights and other rights in property
Chapter 17:
Servitudes and restrictive conditions
Chapter 18:
Real security: pledge and mortgage
Chapter 19:
Real security rights created by law
Chapter 20:
Other property rights
Part V: Constitutional property law
Chapter 21:
Introduction to constitutional property law
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/TableofContents-print-1532465935.... 24-Jul-18
TableofContents
Page 2 of 2
Chapter 22:
Property rights: section 25
Chapter 23:
Reform of property law
Chapter 24:
The future of property law
Bibliography
Cases
Legislation
Index
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/TableofContents-print-1532465935.... 24-Jul-18
PartI
Page 1 of 1
Part I
Introduction
Chapter 1:
Introduction to the law of property
Chapter 2:
Things as legal objects
Chapter 3:
Property rights, real rights and creditor’s rights
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/PartI-print-1536070061.xhtml
04-Sep-18
Chap01
Page 1 of 10
Page 1
Chapter 1
Introduction to the law of property
1.1
1.2
1.3
Scope and content of the law of property
Background, sources and current development
1.2.1 Sources of traditional law of things
1.2.2 Sources of current law of property
Terminology
Summary
Overview
Where does the law of property fit into the legal system?
•
Where do property rules come from?
•
How must the terms used in this book be understood?
•
1.1 Scope and content of the law of property
In the widest sense the law of property deals with ‘property’, including all assets that form
part of a person’s estate, or what is referred to in non-legal terminology as a person’s
‘possessions’. In this sense property includes immovable assets such as a house, movable
assets such as a motor car or cattle, immaterial property such as a patent or copyright in a
book, and a variety of other assets. However, for purposes of the law curriculum this
definition is too wide, and the law of property, as it is understood for purposes of this book,
is defined more restrictively.
Although this book does not deal with the specialised aspects of property such as
immaterial and commercial property, it will be necessary to refer to certain aspects of these
topics now and again to illustrate the common aspects of all property rights. This book also
refers to areas which are not dealt with in the traditional law of things curriculum, such as
the constitutional protection of property rights (which is dealt with in separate courses on
constitutional law), which does not fit into the traditional private law
|
Page 2
scheme. The inclusion of these topics has become unavoidable due to legal, socio-economic
and political developments in South Africa.
It is usually said that private law concerns itself with legal relationships and transactions
between private subjects operating on a more or less equal footing. For this purpose private
law is distinguished from public law, which deals with the so-called vertical relationship
between the state (or various state organs) and private individuals. However, although this
distinction is important, it has become impossible to ignore public law when discussing
property rights. Section 25 of the Constitution of the Republic of South Africa of 1996
provides protection for rights in property, and consequently the law of property must take
note of constitutional principles and their effect upon private law. Constitutional property
rights are discussed in chapters 21 and 22.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap01.xhtml
24-Jul-18
Chap01
Page 2 of 10
Current scope of the law of property
As a result of the developments described in the paragraphs above, it has become
impossible to restrict the law of property to corporeal assets or things, and therefore the
term ‘law of property’ is currently more appropriate than ‘law of things’.
Apart from rights in property, the law of property also traditionally deals with a number of
relationships that do not qualify as rights at all. Although these relationships do not qualify
as rights, they are important for the law of property because of their legal implications.
These relationships are described as unlawful control of property, to which the person in
question has no right.
Page 3
Example
When a thief steals a motor car, the thief can obviously not be said to acquire any
right with regard to the car. The relationship between the thief and the car is
nevertheless important for the law of property. The thief may, in certain
circumstances, claim the car back from a second thief who steals it from the first
thief. This claim cannot be based upon a right on the first thief’s part, and is an
exceptional implication which is prescribed by the principles of property law in
order to prevent and discourage lawlessness.
Similarly, when unlawful occupiers who are homeless settle on private or public
land to erect shelters for themselves, the law of eviction might protect them
(perhaps only temporarily) against what is known as arbitrary eviction. Once
again, this protection cannot be based on any right since they have no right to
settle on the land, but the fact that they are protected against eviction (even
temporarily) is significant for the law of property, for instance because it affects
the rights of the landowner.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap01.xhtml
24-Jul-18
Chap01
Page 3 of 10
These unlawful property relationships are important in property law because of the
implications attached to them, and they must be distinguished carefully from property rights.
The definitions pertaining to unlawful property relationships are discussed in the section on
terminology at the end of this chapter, and the nature, acquisition, protection and loss of
these property relations are explained in chapters 12-15.
1.2 Background, sources and current development
1.2.1 Sources of traditional law of things
Traditionally the background and sources of the law of things were described within the
restricted ambit of Roman-Dutch private law. In this context the sources of the law of things
were described as (mainly Roman-Dutch) common law, complemented by South African
legislation and case law. Roman-Dutch common law is found in the writings of the great
Roman-Dutch lawyers of the seventeenth and eighteenth centuries, such as Grotius, Voet
and Van der Linden. Legislation consists of statutes or Acts promulgated by, especially, the
national legislature or parliament. Examples of pre-1994 legislation which are important to
the law of property are the Sectional Titles Act 95 of 1986 and the Security by Means of
Movable Property Act 57 of 1993; while perhaps the most important new legislation is the
Constitution of the Republic of South Africa of 1996. Case law (or precedent) consists of the
authoritative decisions of the high courts, and important examples of pre-1994 cases are Ex
parte
Page 4
Geldenhuys 1926 (O), which deals with the distinction between real rights and creditor’s
rights; and Setlogelo v Setlogelo 1914 (A), which deals with the requirements for obtaining
an inderdict.
Obviously these pre-1994 sources of law left their impression on the development of
property law, and to a very large extent the writings of the Roman-Dutch authors, legislation
of South African legislative authorities and earlier decisions of South African courts still
constitute a major part of the written tradition upon which the law of property is built.
Summary
Sources of traditional law of things before 1994:
(a) (Roman-Dutch) common law (Grotius, Voet, Van der Linden)
(b) Statutory law (legislation) (Sectional Titles Act 95 of 1986)
(c) Case law (precedent) (Ex parte Geldenhuys 1926 (O))
However, as a result of legal, socio-political and economic developments and changes, the
sources of the law of property must be seen in a new perspective, namely the transition
from a society dominated by a largely white, privileged minority to a ‘society based on
democratic values, social justice and fundamental human rights’ (as it is described in the
preamble to the Constitution of 1996). This transition means that old discriminatory laws
shall be abolished, and that new democratic laws shall be promulgated, but it also means
that the whole existing legal system and its tradition, its background and its sources must be
re-evaluated and, where necessary, amended. Section 39(2) of the Constitution provides
that all the principles of existing common law and customary law shall, as far as possible, be
interpreted and applied with due regard to the spirit and objectives of the Constitution,
which embodies the aspirations and ideals of the new, democratic legal order.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap01.xhtml
24-Jul-18
Chap01
Page 4 of 10
In line with this process of transition the traditional background and sources of the law of
property in common law and customary law have to be re-evaluated and reconsidered.
Existing common-law and customary law principles have to be interpreted and applied with
sensitivity, and with recognition of the fact that the background against which they were
created and developed has changed, in some respects dramatically. Similar considerations
apply with regard to the authority of existing pre-1994 legislation and case law – they must
be understood and applied against the background of their origin and with due regard for
their future role in the transition to a new kind of society.
Page 5
1.2.2 Sources of current law of property
Summary
Sources of the current law of property since 1994:
(a) (Roman-Dutch) common law
(b) Statutory law (legislation)
(c) Case law (precedent)
(d) Customary law
(e) Constitution (chapter 2)
(a) Common law
Roman-Dutch common law was always considered the most important source of the
traditional law of things. However, as a result of the changes taking place in South African
society, the role and value of common-law rules must be reconsidered. This does not mean
that common law is abolished, but rather that it must be applied with great care and
circumspection in every case, considering the question whether it will promote or frustrate
the ideals of human dignity, freedom and equality set out and protected by the Constitution.
The following example shows that the mere abolition of apartheid laws cannot guarantee
that future applications of the common law would automatically result in or promote justice
and equality.
Example
In terms of the common-law tradition the owner of a house is free to use and
dispose of her property as she sees fit. In principle this freedom includes the right
to lease the property to the lessee of her choice, and if the owner did not wish to
lease the property to someone of a specific race group, she could not be forced to
do so. Ironically, this freedom was restricted by apartheid laws, which actually
forced the owner to lease the property to people from her own race group only.
However, in view of the non-discrimination provision in the Constitution this
common law ‘freedom to discriminate’ should not be revived; it would be
unconstitutional. The common-law authorities can, therefore, not be accepted as
they are – they have to be re-evaluated in view of the current context to see
whether they can still apply and how they should apply.
(b) Legislation
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap01.xhtml
24-Jul-18
Chap01
Page 5 of 10
Legislation has played an increasingly important role in the traditional law of things, and no
doubt it will continue to play an important role in future.
Page 6
During the apartheid era legislation was often used to introduce and enforce segregatory
policies with regard to property, and many people still see apartheid as something that was
upheld through legislation. Consequently, they also think that apartheid can be eradicated
simply by abolishing the old apartheid laws. Since most of the apartheid laws have now been
abolished, many people think that legislation no longer creates a problem.
Example
The new Prevention of Illegal Eviction from and Unlawful Occupation of Land Act
19 of 1998 provides for the eviction of unlawful occupiers of land. However, the
predecessor to this Act, the Prevention of Illegal Squatting Act 52 of 1951, was
one of the most draconian apartheid laws, and consequently the new law will
inevitably be applied and enforced with great circumspection.
New legislation can change the face of the law of property entirely, but even new laws have
to be evaluated against the recognised and established values and aspirations that are
embodied in the Constitution. The constitutional court has the authority to evaluate both old
and new laws and to declare them invalid if they are in conflict with the Constitution. This
process is called constitutional review. (The effect of the Constitution on property law is
considered in chapter 22.)
(c) Case law
Case law (prior decisions of the high courts) always formed an important source of the law of
things, especially in the sense that it indicated how common-law principles should be
interpreted and applied or how legislation should be interpreted. Obviously many cases that
were decided before 1994 were informed by the then still prevailing laws and spirit of
apartheid, and such decisions can no longer be accepted as authority.
Example
A good example is the infamous decision in Minister of the Interior v Lockhat 1961
(A), where it was said that the discrimination and injustice brought about by the
application of the Group Areas Act 36 of 1966 was an inevitable result of the
‘colossal social experiment’ of apartheid. In this and other similar cases the plight
of individuals was often disregarded in order to promote subsequently discredited
political programmes.
In terms of section 26(2) of the Constitution, the Lockhat decision will at present
Page 7
be unconstitutional. Accordingly the authority of most of the pre-1994 decisions will have to
be evaluated in terms of their current acceptability. New decisions, especially those of the
constitutional court, are a very important source of the new law of property, since they will
probably embody the new aspirations and spirit of the 1993 Constitution. However, even
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap01.xhtml
24-Jul-18
Chap01
Page 6 of 10
these new decisions may be unacceptable or become outdated very quickly because of rapid
social, political and legal developments.
(d) Customary law
During the apartheid era customary law property rights were often regarded as primitive
legal relationships, and they enjoyed little recognition and protection from the courts. In
view of the Constitution it is clear that customary law cannot just be ignored, and that it
must be awarded its proper place and recognition in the law of property. On the other hand,
certain precepts of customary law might come into conflict with principles laid down by the
Constitution, especially with regard to equality.
Example
The holders of customary law land rights are usually men, while women are
awarded land rights only in exceptional cases. This might come into conflict with
the principle of equality laid down in the Constitution, and in particular cases the
courts may have to balance the values of customary social practice against the
constitutional value of equality. In the Bhe case (2005 (CC)) the constitutional
court decided that the customary law principle of male primogeniture in succession
was unconstitutional because it discriminated against women and extramarital
children.
The value and authority of the customary law principles regarding property rights must,
therefore, be upheld and promoted in the current law of property, but at the same time they
will have to be re-evaluated with due regard to the present context.
(e) Constitutional law
All the sources of property law mentioned above, insofar as they are still applicable and
authoritative, must be interpreted and applied with due regard to the spirit and objectives of
the Constitution of 1996. This means that general values of the Constitution such as equality
will have to be taken into account when interpreting and applying any of the other sources.
In Ex Parte President of the Republic of South Africa: In re Pharmaceutical Manufacturers
Association of South Africa 2000 (CC) the constitutional court
Page 8
decided that there is only one system of law, shaped by the Constitution, which is the
supreme law, from which all law, including the common law, customary law and legislation,
derives its force and to which all law is subject.
Example
Section 39(2) of the 1996 Constitution provides that the courts shall have due
regard for the spirit and objectives of chapter 2 of the Constitution (which deals
with fundamental rights) when interpreting any law and when applying any
principle of common law and customary law. Section 8(1) provides that the
chapter on fundamental rights applies to all law; and section 8(3) states that the
courts have to amend the common law where necessary to accommodate
fundamental rights. Section 211(3) states that customary law is applied subject to
the Constitution.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap01.xhtml
24-Jul-18
Chap01
Page 7 of 10
It is usually said that these provisions of the Constitution are supposed to ensure that the
whole of South African law will be permeated by the spirit of the Constitution. The idea is
that the Constitution embodies and signals a new departure in South African history, and
that the ideals, hopes and aspirations of the South African people are entrenched in the
Constitution. In order to help realise and promote these ideals and aspirations it is necessary
that the law should reflect them as they are expressed in the Constitution. In the process
the Constitution becomes the guiding principle for all legal development, including the law of
property.
1.3 Terminology
The law of property deals with the rights and actions of persons with regard to things and
other forms of property, as well as other relations between persons and property. It
describes the ways in which property rights can be acquired and exercised lawfully and the
remedies by which they are protected against infringement, as well as the legal results and
implications of other relations between persons and property.
Definition
A person is a legal subject who can acquire and exercise rights and obligations in
law. A legal subject can be either a natural person (any individual person) or a
juridical person (groups or bodies operating and recognised as a single legal
entity).
People can acquire and hold property rights individually, as in the case of
Page 9
an individual’s right to her own pen; but they can also do so in groups, as in the case of a
sport club’s right to its facilities. In legal theory the people who acquire and hold rights in
property are referred to as persons. Any individual is a natural person, whereas a group of
people who act together in acquiring and holding property rights is referred to as a juridical
person.
Definition
An object is anything with regard to which a person can acquire and hold a right.
A legal object is anything with regard to which a person can acquire and hold a right. There
are different kinds of rights for different categories of objects. (The objects of property rights
are discussed in chapter 2.)
Definition
Property is everything which can form part of a person’s estate, including
corporeal things and incorporeal interests and rights.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap01.xhtml
24-Jul-18
Chap01
Page 8 of 10
The object of property rights is property, which assumes various forms for various categories
of property rights. The most important categories of property are physical or corporeal
things and incorporeal or immaterial property. Examples of corporeal things are a book or a
car (movable things) and a piece of land or a house (immovable things). Examples of
incorporeal property are a patent or copyright (intellectual property) and shares in a
company or a usufruct of a mineral lease (incorporeal things). Other forms of property are
real security rights and servitudes (limited real rights), claims against a pension fund or a
medical fund and a government trade licence or concession. (Property and things are defined
and discussed more fully in chapter 2.)
Definition
A thing is a specific category of property, which is defined with reference to its
characteristics: a corporeal object outside the human body, and an independent
entity capable of being subjected to legal sovereignty by a legal subject for whom
it has use and value.
Traditionally the most important category of objects for purposes of the law of things was
corporeal things. Corporeal things are, however, not the only objects of the modern law of
property, although they are important. Corporeal things are defined as independent parts of
nature which can be controlled
Page 10
by humans and which have some use or value for humans. For practical reasons incorporeal
things are also in certain circumstances recognised as legal objects. (The definition,
characteristics and classification of things are discussed more fully in chapter 2.)
Definition
A right is a legally recognised and valid claim by a subject to a certain object. Not
all relations between a person and an object are recognised and protected by law.
The most important relation between a person and a legal object is a right. Rights exist
when a particular relation between a person and a legal object is recognised and protected
by the law. In such a case the law is satisfied with the way in which that particular relation
between the person and the object was established and the way in which it is exercised, and
therefore the law attaches protection to the relation, which is then described as a right.
When a thief steals a bicycle, the law will not approve the relation that was established
between thief and bicycle in this manner, and it will not recognise or protect this relation,
and the thief will not establish a right. However, when a person buys and pays for a bicycle
and satisfies all the requirements for the establishment of ownership the law will recognise
and protect that relationship as a right.
Definition
A property right is any legally recognised claim to or interest in property.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap01.xhtml
24-Jul-18
Chap01
Page 9 of 10
A right in property is called a property right. Such a right can be described as a relation
between a person and property which was established and is held in accordance with the
applicable legal requirements, and is therefore recognised and protected by the law.
The term ‘rights in property’ is used interchangeably with ‘property rights’. Both terms can
be used to refer to all real, personal and constitutional rights with regard to all kinds of
property.
Definition
A claim or action is lawful when it is acknowledged and protected by existing legal
principles; unlawful when it is in conflict with or not acknowledged by the law.
Page 11
A property relation or an action with regard to property is lawful when it is recognised by the
legal order; unlawful when it is not. An owner of a bicycle has established a lawful property
relation with regard to the bicycle; a bicycle thief has established an unlawful relation with
the bicycle. All property rights are lawful property relations, and no unlawful property
relation can be a property right. That does not make unlawful property relations irrelevant to
the law of property, because although the law does not recognise or protect these relations
it still attaches certain implications to them.
Definition
A remedy is a legal procedure provided by the legal system to protect a right
against infringement or to control the effects of an unlawful act or situation.
The law makes use of remedies to protect lawful rights against infringement, and to regulate
the results and implications of unlawful property relations. The owner of a bicycle will obtain
a remedy to protect her against infringements of her right, whereas the law will prescribe
certain remedies to regulate the implications of the thief’s unlawful property relation with the
stolen object. The first kind of remedy is used to protect the holders of property rights; the
second kind is used to protect and regulate the legal order. A thief cannot obtain a remedy
to ‘protect’ her ‘rights’, since she has no rights, but in certain exceptional circumstances she
might benefit indirectly from the remedy which regulates the legal effects of theft. (The
various property remedies are discussed in chapters 10, 14 and 22, as well as several other
chapters.)
Summary
The law of property as described in this book deals with rights in property, as well
as unlawful control of property. It excludes property rights traditionally dealt with
in specialised courses, but it includes property rights in constitutional law.
The main sources of the law of property are common law, legislation, case law
and customary law, all of them as interpreted and applied with due regard to the
spirit and objectives of the Constitution of 1996.
The law of property deals with the rights and actions of persons with regard to
things and other forms of property, as well as other relations between persons and
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap01.xhtml
24-Jul-18
Chap01
Page 10 of 10
property. It describes the ways in which property rights can be acquired and
exercised lawfully and the remedies by which
Page 12
they are protected against infringement, as well as the legal results and
implications of other relations between persons and property.
A person is a legal subject who can acquire and exercise rights and obligations
in law. A legal subject can be either a natural person (any individual person) or a
juridical person (groups or bodies operating and recognised as a single legal
entity).
An object is that with regard to which a person can acquire and hold a right.
Property is everything which can form part of a person’s estate, including
corporeal things and incorporeal interests and rights.
A thing is a specific category of property, which is defined with reference to its
characteristics as a corporeal object outside the human body, and an independent
entity capable of being subjected to legal sovereignty by a legal subject for whom
it has use and value.
A right is a legally recognised and valid claim by a subject to a certain object.
A property right is any legally recognised claim to or interest in property. A
claim or action is lawful when it is acknowledged by existing legal principles;
unlawful when it is in conflict with or not acknowledged by the law.
A remedy is a legal procedure provided by the legal order to protect a right
against infringement or to control the effects of an unlawful act or situation.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap01.xhtml
24-Jul-18
Chap02
Page 1 of 9
Page 13
Chapter 2
Things as legal objects
2.1
2.2
2.3
2.4
Property and things
Definition of a thing
Characteristics of a thing
2.3.1 Corporeality
2.3.2 External to humans
2.3.3 Independence
2.3.4 Subject to juridical control
2.3.5 Useful and valuable to humans
Classification of things
2.4.1 Negotiable and non-negotiable things
2.4.2 Singular and composite things
2.4.3 Movable and immovable things
2.4.4 Fungible and non-fungible things
2.4.5 Consumable and non-consumable things
2.4.6 Divisible and indivisible things
Summary
Overview
What is the relationship between property and things?
•
What is a thing?
•
What are the characteristics of a thing?
•
How are things classified?
•
What is the purpose and value of this classification?
•
2.1 Property and things
In ordinary language usage the term property includes a wide variety of assets that make up
a person’s estate or belongings, which serve as objects of the rights that such a person
exercises in respect thereof and which are constitutionally protected (see chapter 1 above).
An important part of a person’s
Page 14
assets is tangible and perceptible, for instance a car or a house. There are, however, also
assets that are not tangible or perceptible but which are, nevertheless, part of a person’s
assets, for instance an amount of money owed in terms of a contract (creditor’s right) or the
copyright in respect of a book (intellectual property). All of these assets are objects of the
rights that people exercise, but not all of these assets are important in the law of property.
However, it is necessary to define rights in property more broadly than was done previously.
The rights that a traditional indigenous tribe exercises in respect of their kraal property are
examples of the broader category of property rights which deserve attention.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap02.xhtml
24-Jul-18
Chap02
Page 2 of 9
2.2 Definition of a thing
A thing is the legal object of a real right and is therefore, for the purposes of the law of
|property, the most important legal object. The value of a thing lies in the fact that it is
juridically destined to satisfy the needs of a legal subject.
Traditional definition
A thing can be defined, in terms of its traditional characteristics, as a corporeal or
tangible object external to persons and which is, as an independent entity, subject
to juridical control by a legal subject, to whom it is useful and of value.
2.3 Characteristics of a thing
In terms of the traditional (narrow) definition a thing (as legal object) has certain
characteristics.
Characteristics of a thing
(a) Corporeality
(b) External to humans
(c) Independence
(d) Subject to juridical control
(e) Useful and valuable to humans
2.3.1 Corporeality
A thing is usually defined as being corporeal or tangible; in other words it is an entity that is
part of corporeal reality because it can be sensorially observed (with any one of the five
senses) and it occupies a certain space.
Page 15
Examples
A horse; a motor bike; a residential site (with a house on it); a cylinder with
oxygen.
Forces of nature like gravity, heat, radio activity, light, sound and electricity can be
sensorially observed, but cannot be described in terms of space and are therefore, in South
African law, excluded from the definition of corporeal things. In some foreign legal systems
practical requirements made it necessary to regard forces of nature, such as electricity and
atomic energy, as things. It is foreseen that this development will also eventually occur in
South Africa.
However, several incorporeal or intangible things have been recognised by statute and
case law as things, where the object of the real right is not a corporeal thing, but another
subjective right. The following subjective rights are currently distinguished in South African
law: real rights (with things as objects); intellectual property rights (with intellectual
property as objects); personality rights (with aspects of personality as objects) and
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap02.xhtml
24-Jul-18
Chap02
Page 3 of 9
creditor’s rights (with obligations as objects). However, if any of these subjective rights itself
serves as the object of a real right, it is regarded, in terms of common law, as an incorporeal
or intangible thing. It was held in Ex parte Optimal Property Solutions CC 2003 (C) that a
registered servitude can be included in the concept constitutional property in the form of an
incorporeal thing. For a discussion of the meaning of constitutional property see 22.2(b)
below.
Examples
(a) In Ben-Tovin v Ben-Tovin 2001 (C) it was decided that shares in a company,
which provide the shareholder with a claim against the company, are
incorporeal things. For the purposes of the law of property they therefore
form part of the shareholder’s estate (or property), although they are neither
tangible nor perceptible. The shareholder can utilise the shares (as
incorporeal things) as objects in various ways. She can, for instance, grant a
usufruct in respect of the shares, that is, the shares (creditor’s rights against
the company as incorporeal things) can be the objects of a limited real right
(usufruct) (see 17.3.2.2 below).
(b) In Badenhorst v Balju Pretoria Sentraal 1998 (T) it was held that the
membership interest in a close corporation (creditor’s right against the close
corporation) is an incorporeal movable that can be attached by the sheriff.
Page 16
(c)
(d)
(e)
The loan account of a director of a company (creditor’s right against the
company) is an incorporeal thing which can be ceded to another person –
Graf v Buechel 2003 (SCA).
Another example of an incorporeal thing is the creditor’s right to the use of a
telephone and bandwidth system which is installed on business premises –
Telkom SA Ltd v Xsinet (Pty) Ltd 2003 (SCA).
Ex parte Optimal Property Solutions CC 2003 (C) – a registered praedial
servitude is recognised as constitutional property in the form of an
incorporeal thing.
2.3.2 External to humans
A human being cannot be a legal object. These days human beings are always regarded as
legal subjects. Human corpses or parts of corpses can possibly be classified as legal objects,
but then as legal objects which fall outside legal commerce. Parts of bodies which can no
longer be connected to a human being, can be regarded as negotiable things, for instance
hair used to make a wig. This is, however, subject to the provisions of the Human Tissue Act
65 of 1983, especially regarding the availability of human reproductive cells and organs for
the purposes of artificial reproduction and organs for the purposes of organ transplantation.
2.3.3 Independence
It is a requirement that a thing must be a definite and distinct entity that exists separately.
Examples
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap02.xhtml
24-Jul-18
Chap02
(a)
(b)
(c)
Page 4 of 9
Water, land, sand and air must first be separated by human activity into
recognisable and manageable entities before they will be regarded as things
which fall within legal commerce. Air and oxygen become negotiable things
only if they are contained in cylinders.
Immovable things come into being after demarcation on an approved and
registered surveyor’s plan, diagram, aerial photo or general plan – Deeds
Registries Act 47 of 1937 and Land Survey Act 8 of 1997 (see 8.3.3 below).
A building erected on land usually forms part of the immovable thing.
A sectional title unit as immovable thing is described in terms of the
registered sectional plan (see 6.2.3 below) – Sectional Titles Act 95 of 1986.
Page 17
In the case of composite things the object is composed of various components. It is
sometimes difficult to determine whether the components form part of the composite thing
or exist as separate entities. This is discussed in 2.4.2 below.
2.3.4 Subject to juridical control
Corporeal entities which are not susceptible to juridical control cannot be classified as things.
These include heavenly bodies like the sun, moon and other planets and aspects of nature
like the sea and air (when it is not separated into manageable units).
2.3.5 Useful and valuable to humans
It is a characteristic of a thing that it must be useful and valuable to a legal subject and
must be destined to satisfy the needs of a legal subject. No legal relationship can exist
between a corporeal thing and a legal subject if it is not useful and valuable to the legal
subject. It need not necessarily have economic value, but can also have sentimental value.
However, the usefulness and value are determined objectively.
Example
A dead leaf in my garden may, in my subjective evaluation, be without value to
me and cannot conceivably satisfy my needs if it is merely a nuisance. Objectively
evaluated it is, however, valuable because it can be used as compost or in a
scientific study. It remains a thing because it satisfies someone’s needs.
2.4 Classification of things
2.4.1 Negotiable and non-negotiable things
The following things are regarded as negotiable things in law:
(a) Things owned by a natural or legal person or things in a deceased or insolvent estate –
res alicuius.
(b) Things capable of being owned but which, at a particular stage, are not owned by
anyone – res nullius. Wild animals, birds, fish and insects which are wild by nature and
have never been owned by any person, are examples of res nullius. Ownership of these
things may be acquired through appropriation (see 8.2 below).
(c) Things no longer within the physical control of an owner and in respect of which the
owner no longer has the intention to be owner (animus
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap02.xhtml
24-Jul-18
Chap02
Page 5 of 9
Page 18
(d)
domini) – res derelictae. Such things can also be acquired by another person by means
of appropriation (see 8.2 below).
Things lost and no longer within the physical control of the owner but in respect of
which the owner has not lost the intention to be owner (animus domini) – res
deperditae. Such things cannot be acquired by another person by means of
appropriation.
The following things are not negotiable:
(a) Natural resources falling outside legal commerce and which are available to all people,
for example air and running water (res communes omnium). There are, however,
certain statutory limitations regarding these things in terms of the National Water Act
36 of 1998 and the National Environmental Management: Air Quality Act 39 of 2004.
(b) Things owned by the state and used directly for the public’s benefit, for instance public
roads, national parks, the sea and the beach (res publicae). However, not all state
property falls outside legal commerce and state land and public buildings are usually
negotiable.
2.4.2 Singular and composite things
Singular things exist as independent units without being composed of particular components,
for instance a brick, a coffee mug or a tennis ball. On the other hand, composite things are
compositions of different components, consisting of independent things in a new unit, for
example a motor bike, a house or a tennis racquet. Although a composite thing consists of
various components, these components have lost their individuality through their
combination and the composite thing is, for the purposes of property law, regarded as one
thing.
In the case of composite things a distinction is made between the principal thing and the
components.
Elements of composite things
(a) Principal thing
(b) Accessory thing
(c) Auxiliary thing
(d) Fruits
(a) Principal thing
A principal thing is a thing which exists independently and which can, as such, be the object
of real rights. It does not form part of another thing either as component (accessory thing)
or as supplement (auxiliary thing). In Khan
Page 19
v Minister of Law and Order 1991 (T) it was decided that the component of a composite
thing which provides the thing with its identity, is the principal thing. The owner of the
principal thing is owner of the composite thing, which includes the accessory and auxiliary
things to the principal thing.
Examples
A motor car, an egg beater or an electric drill.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap02.xhtml
24-Jul-18
Chap02
Page 6 of 9
(b) Accessory thing
This is a thing which can exist independently of the principal thing but which has merged
with or been mixed with the principal thing to such an extent that it has lost its
independence. All attachments which do not help to determine the composite thing’s
identity, can be classified as accessory things – Khan v Minister of Law and Order 1991 (T).
Examples
A wooden beam built into a ship; a brick built into a house; the roof carrier of a
car. In JL Cohen Motors (SWA) v Alberts 1985 (SWA) it was (wrongly) held that
the tyres of a truck are not physically and mechanically connected to the truck in
such a way that they lose their independence and that therefore they are not
accessory things. It was, however, never considered whether the tyres might not
be a functional or economic part of the principal thing which enhances the
usefulness of the principal thing. A broader criterion should be used with reference
to modern technological developments.
(c) Auxiliary thing
An auxiliary thing is a thing which exists separately and independently of the principal thing,
but which, because of its economic value, destination or use, is no longer regarded as an
independent thing for purposes of property law. There need not be a real physical connection
with the principal thing.
Examples
Examples of auxiliary things are the key to a door and a set of tools marketed with
a motor car. In Senekal v Roodt 1983 (T) it was decided that separate bar stools,
made of the same wood as a built-in bar and meant to be part of the bar, were
part of the bar as auxiliary things.
Page 20
(d) Fruits
Fruits are produced by the principal thing without that principal thing being consumed or
destroyed thereby. Before separation from the principal thing, fruits are accessory things to
the principal thing, but fruits are destined to be separated from the principal thing and to
exist separately and independently.
Examples
(aa) Natural fruits like the young of animals, birds and insects; fruit of trees,
plants or wheat; young trees growing after a plantation has been chopped
down and organic and inorganic things which renew themselves (wool, milk,
salt in a salt pan). In the case of natural fruits a further distinction is made
between hanging fruits (fructus pendentes), separated fruits (fructus
separati) and gathered fruits (fructus percepti).
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap02.xhtml
24-Jul-18
Chap02
Page 7 of 9
(bb) Civil fruits, like rent, interest on capital, profit from an undertaking and
dividends on shares.
2.4.3 Movable and immovable things
Immovable things are units of land and everything permanently attached to them by means
of attachment (accessio – see 8.3 below), as well as sectional title units (see 6.2.2 below).
All things that cannot be classified as immovables, are movables. The distinction between
movable and immovable things is of practical importance in, amongst others, the following
circumstances:
(a) Transfer of ownership in movable things takes place by means of delivery of the thing
to the receiver (with the intention that ownership be transferred) (see 9.2 below),
while transfer of ownership in immovable things takes place by means of registration of
the transfer (with the intention of transferring ownership) in the deeds registry (see
9.3 below).
(b) A contract to alienate immovable things must meet the formalities prescribed in terms
of the Alienation of Land Act 68 of 1981 (and, in certain circumstances, the
requirements set out in the Property Time-sharing Control Act 75 of 1983 and the
Sectional Titles Act 95 of 1986), while credit agreements in respect of movable things
must meet the formalities prescribed by the National Credit Act 34 of 2005. No other
formalities are required for the alienation of movable things.
(c) Real security in the case of immovable things is provided by means of the registration
of mortgages, while, in the case of movable things, security is provided by means of
pledge or the registration of a notarial bond (see 18.3 below).
Page 21
(d)
In cases where a debtor’s assets are sold in execution, his movables must first be
attached and then his immovables.
Immovables can be classified as either corporeal or incorporeal.
Examples
(a) A piece of land as indicated on a map, diagram or general plan registered in
the deeds office (corporeal immovable thing) (see 9.3.3 below).
(b) Everything attached permanently to the land by means of building or
planting (corporeal immovable things) (see 8.3.3 below).
(c) Things that can exist independently as accessory or auxiliary things, but
which form part of the piece of land or its permanent attachments through
physical attachment or purpose and use (corporeal immovable things) (see
2.4.2 above).
(d) A sectional title unit (corporeal immovable thing) (see 6.2.2 below).
(e) Real and personal servitudes in respect of immovable things (incorporeal
immovable things) (see chapter 17 below).
Registered long-term leases in respect of land (incorporeal immovable
(f)
things) (see chapter 20 below).
(g) A registered lease regarding mineral rights (incorporeal immovable things)
(see chapter 20 below).
In the same way movables can be either corporeal or incorporeal.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap02.xhtml
24-Jul-18
Chap02
Page 8 of 9
Examples
(a) All tangible things which are not immovable, for example a car, an aeroplane
or a horse (corporeal movable things).
(b) Shares in a company (incorporeal movable things).
(c) The goodwill of a business (incorporeal movable thing).
2.4.4 Fungible and non-fungible things
Fungible things belong to a certain class or kind (genus) and can, therefore, be replaced by
similar things. Such a thing does not have individual characteristics which make it
irreplaceable, for example, a light bulb or roll of wire can be replaced by a similar light bulb
or roll of wire. Fungible things are often things which are referred to in trade with reference
to weight, measure or number. In contrast non-fungible things have individual
characteristics or value which make them irreplaceable, for example an original painting
Page 22
or a hand-woven table cloth. In certain circumstances, however, a fungible thing can,
because of additional reasons, become non-fungible, for instance a family bible.
The distinction is important in the following circumstances:
(a) Parties to an agreement can determine the fungibility of a thing by means of contract,
which might influence the consequences of such a contract. If the parties agree that
the thing is irreplaceable, it cannot be replaced by a similar thing if it is destroyed
before transfer, but, in relevant cases compensation may be claimed.
(b) A fungible thing cannot be pledged with the intention that it may be replaced by a
similar thing (see chapter 18 below).
(c) A non-fungible thing which is due to a legatee in terms of a legacy, cannot be replaced
by a similar thing. If such a thing is therefore destroyed, the legacy lapses.
(d) Money is classified as a fungible thing – Commissioner of Customs and Excise v Bank of
Lisbon International Ltd 1994 (N).
2.4.5 Consumable and non-consumable things
Consumable things are depleted in value or consumed by normal use, as in the case of food,
wine or fuel. Non-consumable things are essentially maintained even if normal wear and tear
occurs through use. Examples of these are houses and motor bikes. The distinction is
important in the following circumstances:
(a) Since consumables are destroyed through use, it can be deduced that the parties to an
agreement concerning the loan or lease of consumables intended that the borrower or
lessor consume the thing and replace it with a similar thing when the agreement comes
to an end.
(b) A usufruct can (except in the case of money) only be given regarding nonconsumable
things, since, in the case of consumable things, the requirement that the thing must be
kept in the same condition (salva rei substantia) cannot be met (see chapter 17
below). A quasi-usufruct can be given regarding consumables, in which case the holder
of the right is compelled, upon termination of the agreement, to return things of the
same amount and quality as those consumed. This will, of course, apply to
consumables only.
(c) Money is regarded as a consumable thing. A quasi-usufruct can be given in respect of
money – Cooper v Boyes 1994 (C).
2.4.6 Divisible and indivisible things
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap02.xhtml
24-Jul-18
Chap02
Page 9 of 9
A thing is divisible if it can be divided into smaller components whilst retaining its nature and
function and without the value of the components being
Page 23
less than the original value, for instance a piece of land or a sack of mealies can be divided
into two or more parts. Indivisible things cannot be divided without changing the value,
nature or function of a thing, for instance in the case of a painting or a chair.
Summary
Various types of assets can form part of a person’s property and can,
consequently, serve as the objects of the rights she exercises in respect thereof.
Not all of these assets are important to the law of property and the emphasis is on
corporeal (tangible and perceptible) things as the objects of real rights and other
rights in property.
Corporeal things have certain set characteristics and are categorised in a
certain way for practical purposes. The most important divisions are between
singular and composite things; movable and immovable things; fungible and nonfungible things; consumable and non-consumable things and divisible and
indivisible things.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap02.xhtml
24-Jul-18
Chap03
Page 1 of 13
Page 24
Chapter 3
Property rights, real rights and creditor’s rights
3.1
3.2
Background
3.1.1 Property rights
3.1.2 Real rights in corporeal property
3.1.3 Ownership and limited real rights in corporeal property
The distinction between real rights and creditor’s rights in immovable corporeal
property
3.2.1 The problem with this distinction
3.2.2 Theoretical approaches
3.2.3 Case law: the subtraction from the dominium test
3.2.3.1
The Geldenhuys case 1926 (O)
3.2.3.2
The Lorentz case 1978 (T)
3.2.3.3
The Pearly Beach Trust case 1990 (C)
3.2.3.4
Cases concerning mining and mineral rights
3.2.3.5
Registration of rights other than real rights
Summary
Overview
•
What is the difference between property rights and real rights, and between the law of
property and the law of things?
•
Why and how are real rights divided into ownership and limited real rights?
•
Why is the distinction between real rights and creditor’s rights so difficult?
•
How does one distinguish between real rights and creditor’s rights in terms of the
subtraction from the dominium test?
Page 25
3.1 Background
3.1.1 Property rights
The law of property deals with ‘property’ in its widest sense, including all assets that form
part of a person’s estate, or what is referred to in non-legal terminology as a person’s
‘possessions’. This includes rights in corporeal things (movable and immovable), rights in
immaterial property and rights deriving from obligations such as contract or delict.
The only right in a corporeal or incorporeal thing belonging to oneself – ownership – is a
real right, while the right in a corporeal or incorporeal thing belonging to another person is
called a limited real right. Therefore a real right or limited real right is always a right in a
corporeal or incorporeal thing. A right against a person, on the other hand, is called a
creditor’s or personal right. One’s creditor’s right against a person entails that such a person
must do something, refrain from doing something, pay someone money or give someone
something. The obligation to give someone something may pertain to corporeal or
incorporeal things, but it is always a consequence of one’s right against a person.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap03.xhtml
24-Jul-18
Chap03
Page 2 of 13
Examples
In the widest sense, a person’s property may include the following assets:
(a) A motor car (ownership is a real right in the motor car).
(b) A house (ownership is a real right in the house).
(c) A flat in a sectional title scheme (ownership is a real right in the sectional
title unit).
(d) A time-sharing interest in a shareblock scheme (shares in the shareblock
company are creditor’s rights against the company).
(e) Shares in a mining company (shares are creditor’s rights against the
company).
Short-term lease of an office suite (the lease is a creditor’s right against the
(f)
owner of the building).
(g) Registered long-term lease of a factory (the registered lease is a limited real
right in the factory).
(h) Registered right of way over a neighbour’s farm (the servitude is a limited
real right in the farm).
Mineral rights in the family farm (the mineral rights are limited real rights in
(i)
the farm).
Usufruct of implements on the family farm (the servitude is a limited real
(j)
right in the implements).
Page 26
(k)
Registered bond over a neighbour’s farm for a cash loan forwarded to the
neighbour (the real security right is a limited real right in the farm).
(l)
Copyright to a book on the family history (immaterial property right in the
contents of the book).
(m) Right to a state pension and medical scheme to which the person contributed
for ten years (a creditor’s right against the state pension fund and medical
scheme).
All the rights mentioned above are property rights in the sense that they form part of the
person’s estate, and therefore they are all important in the law of property in the wide
sense. In this sense they all might also qualify for the protection afforded to property in
terms of section 25 of the Constitution of 1996. (The constitutional protection of property
rights is dealt with in chapters 21 and 22.)
The law of things, as it used to be defined traditionally in the narrower sense, deals with
only some of these rights, namely those that relate to corporeal things, while rights to
incorporeal things are recognised only in exceptional circumstances. (You can refer back to
chapter 2, where the characteristics of things are discussed.) In this narrower sense ‘things’
do not include the rights mentioned under (d), (e), (f), (l) or (m) above, since (d), (e), (f)
and (m) are creditors’ rights and (l) is an immaterial property right. In this narrower sense it
was usually said that the law of things was restricted to real rights pertaining to corporeal
things.
However, since the introduction of the Constitution of 1996 it has become impossible to
restrict the scope of the law of property in this way. Even before the introduction of the
interim Constitution in April 1994 some property lawyers argued that there were many
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap03.xhtml
24-Jul-18
Chap03
Page 3 of 13
exceptions to the traditional rule that the law of things related to corporeal things only,
specifically with reference to a number of property rights in incorporeal things. Furthermore,
since 1994 it has become necessary to extend the attention of property lawyers to all kinds
of property that might be protected in terms of the Constitution. For practical reasons some
property rights cannot be dealt with extensively in the law of property course at university,
since they are the object of specialised courses such as immaterial property law or company
law. However, the law of property course has to recognise the fact that these rights are
rights in property, even though they do not relate to corporeal things.
In this book we use the term ‘law of property’ and not ‘law of things’, because we deal
with a number of rights that do not relate to corporeal things. However, we will not discuss
creditor’s rights, customary land rights,
Page 27
corporate property rights or immaterial property rights, since they are discussed in other law
courses.
There is one part of the law of property which does not deal with property rights, but with
property-related interests and relations (referred to as unlawful property relations) that
cannot qualify as rights. This area of the law of property is important because, even though
the law does not recognise them as rights, these property relations do have certain legal
implications. (This aspect is explained briefly in chapter 1, and dealt with in chapters 12 to
15.)
In conclusion it can be said that the law of property as discussed in this book is concerned
with real rights to corporeal things, as well as other property rights not related to corporeal
things. It also includes a number of property relations that are not regarded as rights.
3.1.2 Real rights in corporeal property
It follows from the previous section that the law of property deals with all property rights,
even if some of them are mentioned only in passing, because they are discussed more
extensively in specialised law courses.
It was pointed out in the previous section that the traditional law of things was mainly
concerned with real rights pertaining to corporeal things. However, not all rights with regard
to corporeal things are real rights – it is possible to acquire either real or creditor’s rights
with regard to corporeal things. In the traditional law of things syllabus it was extremely
important (and often difficult) to distinguish between creditor’s rights which relate to things
and real rights. This distinction is, for the most part, important with regard to corporeal
things, and does not apply to other property rights. However, even in the current law of
property, which also deals with property rights relating to incorporeal property, the
distinction between real rights and creditor’s rights with regard to things is still important.
Although both real rights and creditor’s rights with regard to corporeal property might now
be classified as rights in property, they are acquired, exercised and protected in different
ways.
Although both rights could concern the same thing, they belong to different areas of the
law. The law of contract deals with contract-based creditor’s rights, while the law of property
is concerned with real rights.
Although both real rights and creditor’s rights with regard to corporeal things are classified
as rights in property, they are acquired, exercised and protected in different ways. For
purposes of the law syllabus the law of property course is more interested in real rights and
creditors’ rights with regard to corporeal things, whereas other creditors’ rights are usually
dealt with in the law of obligations (contract and delict). Other creditors’ rights (for example
deriving from a labour contract) do not concern the law of property at
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap03.xhtml
24-Jul-18
Chap03
Page 4 of 13
Page 28
all. The distinction between real rights and creditor’s rights and their place in property law
can be illustrated by the following diagram:
Real rights and creditor’s rights
The old common-law law of things are restricted to category (A).
The new property law includes categories (A), (B) and (D), but not category (C).
3.1.3 Ownership and limited real rights in corporeal property
Real rights are classified as either ownership or limited real rights. Ownership is described as
the most complete real right, in the sense that it is the only real right in one’s own property
– the real right ‘ownership’ means that the thing in question belongs to the owner. The same
cannot be said with regard to limited real rights, since they are limited rights to specified
uses of property which belongs to someone else.
Example
When you want to raise a small loan, you can use your movable property (such as
a wristwatch) to provide the necessary security. Usually this is done by way of a
pledge: you leave the watch in the care of the pawnbroker, who retains it to
secure repayment of the loan. The watch still belongs to you, and you retain your
real right of ownership, but you temporarily lose some of the entitlements of use
and enjoyment. At the same time you provide the pawnbroker with a limited real
right, in this case a real security right, with regard to a thing belonging to
yourself. In this case the pawnbroker acquires the right to retain the watch
pending repayment of the loan, and (in certain circumstances) to sell the watch in
order to raise money to repay the loan, should you fail to repay the loan as
agreed. At the same time your ownership of the watch is diminished temporarily in
the sense that your use of it is suspended until the limited real right is
extinguished.
Page 29
A similar situation arises when a servitude is established. If you grant your neighbour the
right to use an access road over your farm, the neighbour acquires the right to a certain
limited use of your property, while your ownership of the farm remains intact, although it is
restricted temporarily by the existence of the servitude. Obviously you can still use the road
yourself (unless the servitude excludes that possibility), but your ownership is restricted in
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap03.xhtml
24-Jul-18
Chap03
Page 5 of 13
the sense that you can no longer exclude the neighbour from using the road as determined
by the servitude.
The important point is that limited real rights are limited rights to use and enjoy property
belonging to someone else, and that they conversely imply a certain restriction of the
owner’s entitlements of use and enjoyment. The most important traditional categories of
limited real rights are servitudes and real security rights, each of which includes a number of
well-established subcategories. (The servitudes are dealt with in chapter 17, and the real
security rights in chapters 18 and 19.) Apart from servitudes and real security rights, other
categories of real rights such as mineral rights, long-term leases and others have been
established over the years. (Some of these limited real rights are dealt with in chapter 20).
All real rights in corporeal property can, therefore, be classified as either ownership (the
only real right with regard to one’s own property) or a limited real right (which entails
limited rights to use and enjoyment of property belonging to someone else).
3.2 The distinction between real rights and creditor’s rights in
immovable corporeal property
3.2.1 The problem with this distinction
As was already pointed out earlier, the distinction between real rights and creditor’s rights
with regard to immovable corporeal things is important, even though both are property
rights, because they are acquired, exercised and protected in different ways. Generally
speaking the problem is to decide whether certain rights with regard to immovable things
are real rights or creditor’s rights. Various theories and approaches have been followed in an
attempt to make this distinction easier, and some of them are dealt with below. However,
before studying the theories and cases dealing with the distinction between real and
creditor’s rights, it is necessary to identify the exact nature and scope of the problem posed
by this distinction. In many cases the distinction is fairly easy to make, and therefore it is
important to identify the areas in which the distinction is problematic. The following points
will help to define the problem more accurately.
Page 30
(a) The problem is largely restricted to corporeal property
The first important point is that this problem is largely restricted to corporeal property – with
a few exceptions it does not affect rights in incorporeal property. The incorporeals with
regard to which limited real rights can be registered, such as long-term leases and mineral
rights, are registered as immovable incorporeal property. The principles which apply with
regard to land are, therefore, also followed in such cases.
(b) The problem is restricted to limited real rights
Secondly, the distinction between real rights and creditor’s rights does not really affect
ownership either – generally speaking ownership of corporeals is easy to identify, and it is
always a real right. The problem is to decide whether certain other rights in corporeal things
are limited real rights or creditor’s rights. This problem is caused by the fact that South
African law does not restrict the categories of limited real rights. Even within traditionally
well-established categories of servitudes and real security rights new subcategories and
forms may be created, most often by way of contract or in a will. But, and this causes the
problem, creditor’s rights in corporeal things are also created by contract or in a will, thereby
making it difficult to decide whether rights which were created in a contract or a will, and
which pertain to corporeal things, are limited real rights or creditor’s rights.
(c) The problem is largely restricted to immovable property
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap03.xhtml
24-Jul-18
Chap03
Page 6 of 13
The third important point is that this problem is largely restricted to rights in immovable
property. The acquisition of a real right with regard to movables (such as a motor car)
usually follows upon delivery. In the case of immovable property, however, the situation is
more complex. As a rule real rights in immovable property (land and everything attached to
it permanently) are acquired upon registration of the right in the deeds registry. The Deeds
Registries Act 47 of 1937 governs the registration of deeds pertaining to rights in immovable
property in South Africa. According to section 63(1) of the Act only real rights in immovable
property may be registered, and consequently lawyers and the courts are often faced with
the question as to whether a particular condition in a deed may be registered or not. If it
amounts to a real right the condition may be registered, and in such a case registration will
effect transfer or acquisition of a real right; but if the right is a creditor’s right it may not be
registered. In these cases the question whether the right is real or personal can obviously
not depend upon the fact of registration, since the question is whether or not the right may
be registered! It is exactly this kind
Page 31
of dilemma which makes the distinction between real rights and creditor’s rights a difficult
one.
(d) The problem is limited to rights created in a will or a contract
Analysis of case law shows that the majority of situations where this distinction creates
problems concerns rights that were created either in a will or in a contract of sale of
immovable property. In these cases it was unclear whether certain conditions in the deed of
|sale amounted to limited real rights, which should be registered, or to creditor’s rights,
which may not be registered. The problem is, therefore, to determine whether certain rights
with regard to immovable property and created in a contract are limited real rights (for
which registration is a requirement) or creditor’s rights (which may not be registered).
By way of summary it can be said that the distinction between real rights and creditor’s
rights is not problematic in general – it causes problems only in the area where new rights in
immovable corporeal property are created by will or contract, and where it is not
immediately clear whether these rights are creditor’s rights or limited real rights. In the case
of immovable property such rights must be registered in order to obtain real effect, whereas
creditor’s rights may not be registered.
3.2.2 Theoretical approaches
The classical theory emphasises the difference between the objects of a real right and a
creditor’s right respectively. In terms of this theory it is said that a real right is a right of a
person in a thing, whereas a creditor’s (or personal) right is a right of a person against
another person. In the case of a real right the thing itself is the object of the right, and in
the case of a creditor’s right the object is the action (to give something, to do something or
to refrain from doing something) which must be performed by the debtor. The classical
theory was stated, with approval, by the supreme court of appeal in National Stadium South
Africa (Pty) Ltd v Firstrand Bank Ltd 2011 (SCA).
The personalist theory is based upon the ways in which real rights and creditor’s rights are
enforced. It is said that a real right is absolute, and can be enforced against anybody (‘the
whole world’), whereas a creditor’s right is relative and can be enforced against a specific
person (or group of persons) only. What is meant by this statement is the following: a
creditor’s right is always based upon an obligation of one person (the debtor) to perform a
certain action (give something, do something or refrain from doing something) for the
benefit of the holder of the right (the creditor). This obligation usually derives from a
contract between the two parties, and performance of the obligation is enforced, on the
authority of the contract, between the parties
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap03.xhtml
24-Jul-18
Chap03
Page 7 of 13
Page 32
to the contract. In the case of a real right there is no debtor, because the right does not rest
upon a contract: it is a direct relationship between the holder of the right and the thing (as
explained by the classical theory). A real right allows the holder of the right to use the
property, and also to exclude all other persons from interfering with it, and it is with
reference to this general power to exclude others from interfering with the property that it is
said that the real right is absolute or enforceable against ‘the whole world’.
Generally speaking, neither the classical nor the personalist theory has provided a simple
and consistent solution to the practical problems presented by the distinction between real
and creditor’s rights.
3.2.3 Case law: the subtraction from the dominium test
3.2.3.1 The Geldenhuys case 1926 (O)
In addition to the theoretical approaches to the distinction between real and creditor’s rights
the South African courts have developed their own approach to this problem. This approach,
known as the ‘subtraction from the dominium’ test, was first formulated in 1926 in the
authoritative case Ex parte Geldenhuys.
Ex parte Geldenhuys 1926 (O)
In a mutual will a husband and wife left a piece of land to their children in
undivided shares (co-ownership). The will determined that the surviving spouse
should, upon the eldest child reaching majority, cause the land to be divided
amongst the children in equal portions by drawing of lots. The child who drew the
portion upon which the homestead was built should compensate the other children
by paying an amount of money to each of them. The registrar of deeds refused to
register the conditions imposed by the will, arguing that they were not concerned
with real rights in land.
(a) Facts of the Geldenhuys case
The facts of the Geldenhuys case are interesting and illuminating with regard to the
distinction between real and creditor’s rights. The registrar of deeds argued that the two
conditions contained in the will did not create any real rights, and therefore refused to
register either of them. Obviously the children already had real rights (in the form of
undivided co-ownership shares, which is a form of ownership) in the farm, and once the
subdivision had been completed each of them would acquire individual ownership of a
portion of the farm – there is no question about these rights of co-ownership and individual
Page 33
ownership being real rights. The two conditions that created problems are the following:
(aa) The will stipulated specific conditions with regard to the time and manner of subdivision
of the farm. Usually co-owners are free to decide when and how they want to subdivide
the common property. The condition places a restriction upon this common-law
freedom to subdivide, and simultaneously creates rights (in favour of each child against
the others) to enforce these prescriptions. The first question is whether these rights to
have the subdivision done at a specific time (when the eldest child reached majority)
and in a specific manner (in equal portions to be determined by drawing lots) create
real or creditor’s rights.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap03.xhtml
24-Jul-18
Chap03
Page 8 of 13
(bb) The will also stipulated that the child drawing the most valuable portion (with the
house on it) should compensate the others by paying them a sum of money. The
second question is whether the right of the other children to claim this sum of money is
a real or a creditor’s right.
(b) The problem with the registration of rights
The question as to whether these rights are real or creditor’s rights arose in the context of
registration. The Deeds Registries Act 47 of 1937 provides in section 63(1) that only real
rights in land may be registered, and the registrar of deeds refused to register the rights
enumerated above because he thought that they were creditor’s rights and not real rights.
The question whether these rights are real or creditor’s rights is also important for their
enforcement, because if they are creditor’s rights they can be enforced only against a
specific debtor (the other children), but if they are real rights they can be enforced against
any person (such as subsequent owners, should one of the children sell his/her share).
(c) Formulation of the subtraction test
The court approached the problem in a very practical manner. In order to facilitate matters it
was said that one should look at the obligation created by the right in question. The
obligations implied by the two rights identified above are the following:
(aa) An obligation was placed upon all the co-owners to exercise their right of subdivision at
a certain time (when the oldest child reached majority) and in a specific manner (by
drawing lots for portions of equal size).
(bb) An obligation was placed upon the child who drew the portion with the house on it to
compensate the others by paying them a specified amount of money.
Page 34
Secondly, the court proposed to determine the effect and intention of those obligations:
(aa) If the obligation is a burden upon the land it is said to be a subtraction from the
dominium or ownership, and then the corresponding right is a real right and it may be
registered. By saying that the obligation is a burden upon the land the court indicates
that the obligation affects any owner of that piece of land, irrespective of her personal
identity, and irrespective of any contract. Subsequent owners are, therefore, bound by
the obligation, just like the original owner.
(bb) If the burden is placed upon a specific person in her personal capacity, however, the
corresponding right is a personal or creditor’s right, and it may not be registered. The
result is that such an obligation does not affect subsequent owners of the land,
because the burden is placed upon the specific person in her personal capacity and not
in her capacity as owner of that piece of land.
In effect the court’s approach implies that a real right is concerned with and accompanies
the property (the land), whereas a creditor’s right is concerned with and accompanies the
person. If the person upon whom the obligation rests sells the land to a different person, a
real right would ‘follow the land’ and would still be enforced against the new owner, whereas
a creditor’s right would ‘follow the person’ and will be enforced against the original person,
but not against the new owner.
(d) Application to the facts of the case
Finally, the court applied the subtraction from the dominium test to the facts of the case:
(aa) The first set of obligations diminished the co-owners’ normal right of subdivision, and
was intended to do so. This obligation was meant to affect all co-owners and all
subsequent co-owners. It meant that the co-owners would lose some of their normal
entitlements, and therefore it was a burden upon the land, a subtraction from the
dominium. The corresponding right was, therefore, a real right which should (and may)
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap03.xhtml
24-Jul-18
Chap03
Page 9 of 13
be registered. The registrar of deeds was instructed to register the condition
concerning the time and manner of subdivision.
(bb) The second set of obligations placed a burden upon one child only, namely the one who
drew the portion with the house on it, and it was clearly a one-off burden which was
intended to restore the balance once the portions had been distributed. It was,
therefore, a burden which rested upon a specific person in her personal capacity only
(as the
Page 35
person who benefited from the division), and the corresponding right did not subtract
from the dominium itself. The corresponding right was a creditor’s right which could
not be registered. However, that part of the condition in the will was so closely
connected with the first part that the court decided that both should be registered
together for convenience, without thereby affecting the personal nature of the
creditor’s right in any way. The rights of the other children to demand payment from
the one who received the house were creditors’ rights, and it was registered by way of
an exception, without changing the nature of the right.
(e) Obligations to pay money to someone
In subsequent cases the second aspect of the Geldenhuys case, concerning the right to
payment of a sum of money, proved to be one of the major problem areas concerning the
distinction between real and creditor’s rights. In view of the decision in Geldenhuys it was
clear that one-off payments of money which affected one person personally and not as
owner of the land in question could never be real rights, but that still left the question open
with regard to other rights to receive payment of money (rights to sums of money which are
not one-off payments, for example periodic payments; and rights to either one-off or
periodic payments that rest upon a person as owner of the land in question and not
personally). This question was addressed in several later cases. (Two of these cases are
discussed below.)
(f) Intention of the parties
A further aspect of the Geldenhuys decision which is important in relation to the distinction
between real and creditor’s rights is the role of intention – what is the situation if the
testator or the parties who concluded the contract intended the right to be a real right? From
the Geldenhuys decision it may be inferred that such an intention cannot override principles
of law: regardless of the intention it is impossible to create a real right if the right in
question clearly places the obligation upon the debtor in her personal capacity. However,
wherever possible the intention of the parties is an important clue which may help the court
in deciding whether the obligation was supposed to be real or personal.
Page 36
3.2.3.2 The Lorentz case 1978 (T)
Lorentz v Melle 1978 (T)
In this case two parties bought a farm together as co-owners. Before doing so
they concluded a contract to the effect that they would subdivide the farm into
three portions, and then transfer ownership of one portion to each of them while
remaining co-owners of the third portion. They further agreed that, should one of
them establish a township on his separate portion, the other party would acquire a
right to one half of the profits from selling the stands in the township. These
conditions were embodied in a notarial deed and registered together with the title
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap03.xhtml
24-Jul-18
Chap03
Page 10 of 13
deed of the farm with the intention of establishing them as a burden against that
title. Eventually the farm was subdivided into several smaller portions, and the
parties in this case were owners of such portions. One of the parties claimed that
the conditions, that were still registered against the title deed of each portion,
created creditors’ rights and not real rights, and that they were registered by
mistake. In an earlier decision an order to this effect was granted, and the other
party appealed.
(a) Facts of the Lorentz case
Several differences between this case and the Geldenhuys case should be noted. In
Geldenhuys the conditions were created in a will, whereas the conditions in Lorentz were
agreed upon in a contract. Secondly, in Geldenhuys the question was whether these
conditions could be registered, whereas in Lorentz they were registered together with the
title deed, and the question was whether the registration of these conditions had been a
mistake.
Apart from these differences one similarity between the two cases is important: both the
second condition in Geldenhuys and the condition in Lorentz are concerned with a right that
implies that one person must pay a sum of money to another person. In Geldenhuys it was
decided that the second condition rested upon a specific person only and that it was a
creditor’s right, and it was registered together with the rest of the conditions only as a
matter of convenience. The question that had to be answered in Lorentz was whether the
condition which laid down the obligation to pay the sum of money (and which had already
been registered) in that case created a real right or a creditor’s right.
(b) Application of the subtraction test
The application of the subtraction test in Lorentz is somewhat curious, because of the way in
which the test was interpreted. The court found that
Page 37
the obligation in question did amount to a subtraction from the dominium, and that the
parties had intended that it establish such a subtraction, but that this obligation did not
affect the owner’s right to the use of the land in the physical sense. This last consideration,
which was never raised in the Geldenhuys case, in fact amounts to a substantial amendment
of the test as set out in Geldenhuys, and sets a much narrower and more restricted standard
for the creation of limited real rights. In effect it means that limited real rights can be
created only when they result in a subtraction from the owner’s right to the physical use of
the property – a result which conflicts with the nature and effect of many traditionally
recognised limited real rights such as mortgage bonds and mineral rights.
This decision was confirmed by the supreme court of appeal in Erlax Properties (Pty) Ltd v
Registrar of Deeds 1992 (A) and Cape Explosive Works v Denel 2001 (SCA).
(c) Obligations to pay money to someone
The court in Lorentz effectively decided that an obligation to pay a sum of money could
never constitute a real right, and that it would always amount to a creditor’s right. As is
pointed out above, this decision is premised upon the idea that a real obligation must place a
physical burden upon the owner’s entitlements of use and enjoyment. This additional test is
questionable, as it never formed part of the original test as formulated in Geldenhuys, and
was obviously motivated by the court’s wish to prevent a proliferation of burdens upon
landownership. In the Denel case, the burden imposed on the landowner included a physical
burden (use restriction) and a non-physical burden (right of first refusal upon realisation of a
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap03.xhtml
24-Jul-18
Chap03
Page 11 of 13
certain condition). The restrictive test of the Lorentz decision, therefore, does not seem to
exclude a wider application of the subtraction test. (The Denel case is discussed below.)
(d) Intention of the parties
A further problem with the Lorentz decision is that it creates the impression that the
intention to create a real right is of no consequence whatsoever. In this case the intention of
the parties was clearly to create a real right, and the right was registered as such, but the
court was still willing to override that intention. It does not seem as if the intention to create
a real right was contrary to specific legal principles either, and it is possible that the court
awarded the intention of the contracting parties too little weight in this decision. In the
Denel case it was made clear that the intention to create a real right was as important as the
question as to whether the burden was capable of registration.
Page 38
3.2.3.3 The Pearly Beach Trust case 1990 (C)
In the Pearly Beach Trust case, the Lorentz decision was rejected. In the Pearly Beach case
the subtraction from the dominium test was reinstated in its traditional formulation, and it
was decided that some obligations to pay a sum of money could in fact constitute limited
real rights.
Pearly Beach Trust v Registrar of Deeds 1990 (C)
A condition in a deed of sale of land provides that a certain third party is entitled
to receive from the purchaser and his successors one third of the consideration
received if the property should be expropriated or if mining rights should be
granted over the land. The registrar of deeds refused to register the condition,
arguing that it created a creditor’s right and not a real right.
(a) Facts of the Pearly Beach Trust case
In this case the condition had been created in a contract, but the condition had not yet been
registered, and the question was whether it could be registered. Once again the condition
created an obligation to pay a sum of money to someone.
(b) Application of the subtraction test
In terms of the Geldenhuys case the right created in this contract would be a creditor’s right
if it placed an obligation upon a specific person in her personal capacity, and a real right if it
placed an obligation upon a person as owner of the land, which was actually burdened with
the obligation. In terms of the Lorentz case such a right could never be a real right, since it
did not restrict the owner’s right to use the property physically, and therefore it had to be a
creditor’s right.
In the Pearly Beach Trust decision the court reverted to the traditional formulation of the
subtraction from the dominium test, and rejected the Lorentz approach and the extra
requirement of physical restriction implied by it. The court decided that the condition in this
case placed a burden upon the owner’s right to dispose of the property and enjoy the full
fruits of such disposal, and that this burden rested upon the land and not just on any specific
person. It was therefore a real right, which could be registered.
(c) Obligations to pay money to someone
The Pearly Beach Trust decision that an obligation to pay a sum of money to someone could
constitute a real right was criticised by various authors. The
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap03.xhtml
24-Jul-18
Chap03
Page 12 of 13
Page 39
most common criticism was that obligations to pay someone a sum of money should never
be treated as real rights, since that might result in the creation of too many financial
burdens upon ownership of land – a situation which might have an adverse effect upon the
economy. As the Pearly Beach Trust decision stands at the moment it might well be
interpreted to imply that real rights to payment of money can be created freely and
registered against the title deed of land, and such a result will indeed have economic
repercussions. However, it can be argued that the intention of the court in the Pearly Beach
Trust case was that the sum of money must be a direct product of the land itself, so that the
obligation to pay the sum of money to someone reduces the owner’s benefit in the use and
enjoyment of the land itself. This qualification is never mentioned in the decision as such,
but can be inferred from the court’s application of the subtraction from the dominium test. If
the decision is read and applied in this way only certain obligations to pay money could
create a real right which can be registered against the title to land.
The Denel case is more authoritative than the others because it is a decision of the
supreme court of appeal, but the case did not concern payment of a sum of money at all and
therefore did not bring about greater clarity on this issue. In the Denel case the supreme
court of appeal apparently confirmed the Lorentz decision that the condition, to constitute a
limited real right, must impose a physical burden on the use of the land. In Denel one
condition did indeed restrict actual use of the land and that condition could be registered as
a limited real right. However, since Denel did not deal with a condition that imposes a duty
to pay money, the decision does not settle that dispute.
(d) Intention of the parties
In the Pearly Beach decision proper weight was attached to the intention of the parties, who
clearly intended to create a real right. What they intended was not contrary to the law, and
therefore their intention was taken into account.
The position in case law isn’t entirely clear. The Geldenhuys case, a decision of the old
Free State court, does not give a clear answer to the question as to whether an obligation to
pay money could ever qualify as a real burden on land. The Lorentz case, which suggests
that an obligation to pay money could never establish a real right, is a decision of the old
Transvaal court. The Pearly Beach case, which suggests that an obligation to pay money
could establish a real right in some cases, is a decision of the old Cape court.
3.2.3.4 Cases concerning mining and mineral rights
Several older cases in which the distinction between real and creditor’s rights was discussed
dealt with mining and mineral rights. Although some of these
Page 40
cases (such as Registrar of Deeds (Transvaal) v The Ferreira Deep Ltd 1930 (A) and
Odendaalsrus Gold, General Investments & Extensions Ltd v Registrar of Deeds 1953 (O))
are quite important for this distinction, they should be read in their proper context. Generally
speaking the various rights with regard to mining and minerals are unique, and their
classification as limited real rights might be misleading in a different context.
3.2.3.5 Registration of rights other than real rights
Section 63(1) of the Deeds Registries Act 47 of 1937 provides that only real rights in land
may be registered. Generally registration is required for real rights in land to be created or
transferred. Real rights in movables are usually (with a few exceptions) not registered, since
real rights in movables are created and transferred by way of delivery.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap03.xhtml
24-Jul-18
Chap03
Page 13 of 13
Creditor’s rights in land may not be registered, and if registered by mistake they are not
transformed into real rights – in Lorentz v Melle it was made clear that they remain
creditor’s rights. There are exceptions to the rule that creditor’s rights in land may not be
registered. One exception has already been mentioned with reference to the Geldenhuys
case, where a creditor’s right was registered together with a real right because they were so
closely related. In many cases creditor’s rights are registered for practical purposes. When
registered in these exceptional cases creditor’s rights are not transformed into real rights –
they remain creditor’s rights.
Summary
The law of property as discussed in this book is concerned with real rights to
corporeal things, as well as other property rights not related to corporeal things. It
also includes a number of property relations that are not regarded as rights.
Although both real rights and creditor’s rights with regard to corporeal things
are classified as rights in property, they are acquired, exercised and protected in
different ways. For purposes of the law syllabus the law of property course is
interested in real rights and creditor’s rights with regard to corporeal things,
whereas other creditor’s rights are usually dealt with under the course in the law
of obligations (contract and delict).
All real rights in corporeal property can be classified either as ownership (the
only real right with regard to one’s own property) or a limited real right (which
entails limited rights to use and enjoyment of property belonging to someone
else).
Page 41
The distinction between real rights and creditor’s rights is not problematic in
general – it causes problems only in the area where new rights in immovable
corporeal property are created by will or contract, and where it is not immediately
clear whether these rights are creditor’s rights or limited real rights. In the case of
immovable property such rights must be registered if they are real rights, whereas
creditor’s rights may not be registered. The subtraction from the dominium test
was devised in case law to facilitate the distinction between limited real rights and
creditor’s rights in immovable corporeal property. In terms of this test one should
look at the obligation created by the right: if the obligation rests upon the land
itself (that is, on every owner of the land, whoever they might happen to be) it
creates a subtraction from the ownership, and then the right is real; but if the
obligation rests upon a specific person in her personal capacity the right is a
creditor’s right. Only real rights in land may be registered, and creditor’s rights
which are registered by mistake or by way of exception do not become real rights.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap03.xhtml
24-Jul-18
PartII
Page 1 of 1
Page 43
Part II
Ownership
Chapter 4:
Introduction to ownership
Chapter 5:
Co-ownership
Chapter 6:
Statutory land use
Chapter 7:
Limitations on ownership
Chapter 8:
Original acquisition of ownership
Chapter 9:
Derivative acquisition of ownership
Chapter 10:
Protection of ownership
Chapter 11:
Termination of ownership
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/PartII-print-1536070143.xhtml
04-Sep-18
Chap04
Page 1 of 8
Page 45
Chapter 4
Introduction to ownership
4.1
4.2
4.3
4.4
Introduction
Definition in common law
Content of ownership
4.3.1 Entitlements
4.3.2 Limitations on ownership in the public interest
Definition of ownership
Summary
Overview
•
What is ownership?
What is the difference between property rights, ownership and the concept of
•
ownership?
•
What is the origin of the South African concept of ownership?
•
What is the content of ownership?
•
What is the relationship between an owner and the community? How is ownership
defined?
4.1 Introduction
In South African law different rights in property are recognised and constitutionally protected
(see 1.1 above), one of which is ownership as a real right. Therefore, ownership is not the
only right in property which is constitutionally protected (see 22.2(b) below). Ownership
fulfils an important function in most legal systems.
It is notable that the perception of ownership, or the concept of ownership in a society, is
usually reflected in the political and juridical system of such a society. In this way the
distinction between capitalism, socialism, communism and African communalism is, to a
large extent, based on the difference of opinion regarding ownership (in particular ownership
of immovable things). The reason for this is that the concept of ownership in each
Page 46
community provides a unique way in which the relationship between legal subjects regarding
the control of things is recognised. This results in differences between the various legal
systems regarding the nature and extent of the legal relationship between legal subjects in
respect of things which, in turn, results in a variety of political, economic and juridical
|systems.
Concept of ownership
The concept of ownership in a certain society is formed by legal-sociological,
historical, economic, religious, political and philosophical considerations and ideas
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap04.xhtml
24-Jul-18
Chap04
Page 2 of 8
regarding ownership. The concept of ownership forms the point of departure in
describing the nature and extent of ownership in any given legal system.
The description of ownership cannot be based on a simple, uniform definition, since the
concept of ownership is based on different points of departure in different legal systems. The
description of ownership will, therefore, depend on the emphasis placed on particular
aspects of the concept of ownership and historical, philosophical, religious, economic,
political, social and juridical factors co-determine what ownership means in terms of a
particular system of ownership. These are all factors which must be considered in defining
ownership.
4.2 Definition in common law
The common-law description of ownership is found in South African case law where
ownership is defined in various decisions as the most complete real right that a legal subject
can have regarding a thing, or as the real right which gives the owner the most complete
and absolute entitlements to a thing. Even so, it is a right which can be limited by objective
law and by the rights of others (limited real rights or creditor’s rights).
Van der Merwe v Taylor NO 2008 (CC)
‘Ownership potentially confers upon the owner the most complete or comprehensive right
in or control over a thing. In Gien v Gien, ownership was defined as –
the most comprehensive real right that a person can have in respect of a thing. The
point of departure is that a person can, in respect of immovable property, do with
and on his property as he pleases. This apparently unfettered freedom is, however,
a half-truth. The absolute power of an owner is limited by the restrictions imposed
thereupon by the law. . . .
Page 47
The most comprehensive control over the property does not imply unfettered freedom to
do with the thing as one pleases. However comprehensive, and although protected
against arbitrary deprivation under s 25(1), ownership, like any other right, is not
absolute.’
This means that ownership has to do with both the relationship between a legal subject and
the thing and with the relationship between legal subjects regarding the thing. These
relationships are indeterminate and therefore abstract. They are indeterminate because they
may differ from time to time or from relationship to relationship (see 4.3.1 below).
The owner’s rights are also increasingly determined by the interests of the community and
are, therefore, also influenced by social factors (see 4.3.2 below). The content of ownership
is described in terms of the owner’s exercise of entitlements regarding the thing.
The communal form of ownership traditionally applied by most indigenous peoples in
South Africa, forms the basis of the views of a large part of the South African population on
ownership. This was largely ignored by jurists in the past, but is currently regarded as
important. In terms of section 39(3) of the Constitution the existence of rights and freedoms
that are recognised or conferred by customary law is not denied by the fundamental rights of
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap04.xhtml
24-Jul-18
Chap04
Page 3 of 8
chapter 2 of the Constitution to the extent these customary rights and freedoms are
consistent with the fundamental rights. Several other rights in property are currently
recognised as constitutional property in terms of section 25 of the Constitution (see 4.3.2
and 22.2(b) below, as well as Port Elizabeth Municipality v Various Occupiers 2005 (CC).
4.3 Content of ownership
With the said common-law descriptions of ownership based on entitlements, as found in
South African case law, as point of departure, the content of ownership must be determined
within the context of each individual case. Two aspects must be taken into consideration in
this regard, namely the entitlements of the owner and limitations on ownership.
4.3.1 Entitlements
Entitlements of the owner
The following entitlements are usually distinguished:
(a) Entitlement to control is the entitlement to physically control and keep a
thing.
Page 48
(b)
(c)
(d)
(e)
Entitlement to use is the entitlement to use and benefit from a thing.
Entitlement to encumber is the entitlement to grant limited real rights in
respect of the thing.
Entitlement to alienate is the entitlement to transfer the thing to someone
else.
Entitlement to vindicate is the unique entitlement of the owner to claim the
thing from another person.
These entitlements of the owner arising from ownership can be limited by statutory
measures, limited real rights of other persons regarding the thing or creditors’ rights of other
persons against the owner personally. The extent of the owner’s entitlements is therefore
limited by the use rights of other persons arising from:
(a) limited real rights of such persons regarding the thing and which, as a burdens on the
thing, limit the owner’s dominium in terms of the subtraction from the dominium
principle and which are enforceable against the owner’s successors in title (see 3.2.3
above); or
(b) creditors’ rights that such persons may have against the owner personally, which do
not imply real burdens on the thing in terms of the subtraction from the dominium
principle and which are not enforceable against successors in title, but which may limit
the owner’s entitlements to the thing (see 7.3 below).
Third parties can, therefore, have entitlements based on limited real rights or creditors’
rights which limit the owner’s entitlements. In the case of a limited real right the thing is
encumbered while, in the case of creditor’s rights, there is a claim against the owner
personally.
Examples
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap04.xhtml
24-Jul-18
Chap04
(a)
(b)
Page 4 of 8
The owner of agricultural land’s entitlement to control the land is limited by
the provisions of the Spatial Planning and Land Use Management Act 16 of
2013 (see chapter 7 below).
Entitlements of the owner can be limited by limited real rights of other legal
subjects regarding the thing. In this way the use rights of the owner of a
farm (and his successors in title) can be limited by the use rights of a
usufructuary exercised in terms of a usufruct (see chapter 17 below).
Page 49
(c)
Creditors’ rights of third parties against the owner personally can limit the
owner’s entitlements (but not the entitlements of the owner’s successors in
title), while the holder of the right acquires certain entitlements in terms of
the right – Mitchell NO v Meridian Bay Restaurant (Pty) Ltd 2011 (SCA). A
leases B’s car and exercises use rights in terms of the contract of lease in
respect of the car, which limits B’s use rights regarding the car. This is
discussed more fully in chapter 7 below.
Because ownership is described in terms of its entitlements, it is often argued that
ownership ceases to exist if all the entitlements of the owner regarding a thing are limited.
The question then arises which entitlement(s) is/are necessary for the continued existence of
ownership, or, which entitlement(s) can be seen as the essence of ownership and which can,
therefore, not be limited by the entitlements of others.
This kind of argumentation is, however, flawed. Ownership does not consist of a bundle of
entitlements which can be separated and limited piecemeal. Ownership is an abstract
concept which is more than the sum total of certain entitlements regarding the thing, in that
it always implies a subject-object and a subject-subject relationship. The abstract nature of
ownership refers to the fact that, apart from the relationship between owner and thing, it
also includes a relationship between the owner and other legal subjects regarding that thing.
These relationships are (in general) indeterminate because their contents vary. The content
of ownership varies because the entitlements of the owner vary from time to time regarding
the same relationship and are also different in every legal relationship. Even so, ownership
without any entitlements is unimaginable, since such an empty right would be meaningless
for the owner. Although entitlements are not the essence of ownership, they determine the
extent of the legal relationship between the owner and the thing at a certain time.
Chetty v Naidoo 1974 (A)
‘It may be difficult to define dominium comprehensively, . . . but there can be little
doubt . . . that one of its incidents is the right of exclusive possession of the res, with the
necessary corollary that the owner may claim his property wherever found, from
whomsoever holding it. It is inherent in the nature of ownership that possession of the
res should normally be with the owner unless he [the non-owner] is vested with some
right enforceable against the owner (eg, a right of retention or a contractual right).’
Page 50
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap04.xhtml
24-Jul-18
Chap04
Page 5 of 8
In Chetty v Naidoo 1974 (A) the owner’s entitlement to control was of great importance, but
this is not the case where the owner’s entitlement to control the thing is legally limited by
the rights of another person (such as a lessee) who has acquired the entitlement of control.
If the owner’s entitlement to control is limited (for instance by leasing the thing), he can still
alienate the thing (often subject to the entitlement of control of the controller (lessee) – see
chapter 20 below). Even if the owner’s entitlement to alienate is limited (for instance by a
restrictive condition or a fideicommissum), the owner retains the general entitlement of
disposition regarding the thing. This means, primarily, that the owner can see to it that the
holders of limited real rights do not exceed the entitlements resulting from their rights and
that the owner’s entitlements can, once again, be exercised in full when the limitations fall
away.
4.3.2 Limitations on ownership in the public interest
Ownership is sometimes wrongly characterised as absolute and individualistic. The
absoluteness of ownership is ostensibly found in the owner’s entitlement to do with the thing
‘what he wants’ within the bounds of objective law, that is to say to have absolute and
unlimited control of the thing by using it as he sees fit. The individuality of ownership is
ostensibly found in the fact that the owner’s right is ‘enforceable against the whole world’,
which indicates exclusive entitlements of disposition and enjoyment. The conclusion then is
that ownership provides the holder of the right with unlimited and exclusive control over the
thing. However, the above-mentioned point of view is wrong. The definition of ownership
referred to in 4.2, above all, emphasises the fact that it must be exercised subject to the
requirements of objective law and the rights of third parties. In this respect the Romans
already protected the rights of neighbours of an owner of land against the arbitrary exercise
of his use rights regarding the land, as is clear from the maxim sic utere tuo ut alienum non
laedas, which means that an owner must use his property in such a way that another person
is not burdened or prejudiced (see 7.5 below).
Increasing emphasis is placed upon the characteristic of ownership which requires that
entitlements must be exercised in accordance with the social function of law in the interest
of the community. Furthermore, the inherent responsibility of the owner towards the
community in the exercise of his entitlements is emphasised. The balance between the
protection of ownership and the exercise of entitlements of the owner regarding third
parties, on the one hand, and the obligations of the owner to the community, on the other
hand, must be maintained throughout. This might, in certain circumstances, even mean that
an owner’s entitlements could be limited or infringed upon in
Page 51
the interest of the community. In such cases the infringement must always be reasonable
and equitable. Examples of the limitation of entitlements in the interest of the community
are the following:
(a) The economic interests of owners must be weighed against the interests of the
community and can be infringed upon or limited in the interest of the general public,
for instance in the case of nature conservation.
Corium (Pty) Ltd v Myburgh Park Langebaan (Pty) Ltd 1993 (C)
‘The balance of convenience is perhaps the most difficult part of this decision. The first
respondent (owner) will suffer loss if an interdict is granted. On the other hand, I am
called upon to consider not only the interests of the applicants, but those of the general
public whose members may be affected . . . . Looking at the matter in this way, it is
apparent that the grant of the permit which . . . effectively negated the earlier
proclamation of the land as a nature area (with a view to its eventual incorporation into
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap04.xhtml
24-Jul-18
Chap04
Page 6 of 8
the West Coast National Park) is a matter of great public importance. Nature parks are a
national asset of immense value, perhaps the most valuable natural resource we have.’
(b)
In the case of Diepsloot Residents’ and Landowners’ Association v Administrator
Transvaal 1994 (A) it was decided that the interests of neighbouring landowners are
subject to the rights of inhabitants of an informal settlement who, in terms of the Less
Formal Township Establishment Act 113 of 1991, were resettled by the Administrator
of Transvaal in the vicinity of the landowners, and that the potential harm of smoke,
dust, pollution and noise (nuisance) would have to be tolerated by the landowners.
Diepsloot Residents’ and Landowners’ Association v Administrator
Transvaal 1994 (A)
‘I have previously mentioned that the Act was enacted against the background of the
repeal of discriminatory legislation, increased urbanization and the resultant squatter
problem. There was an urgent need to provide for the speedy and orderly settlement of
homeless persons . . . . In the circumstances the settlement of persons next door to – or
close to – established residential areas is unavoidable . . . . It must therefore have been
within the contemplation of the Legislature that the exercise by
Page 52
the Administrator of his powers (including the exercise of any discretion vested in him)
with regard to the settlement of homeless persons might result in interference with the
common-law rights of third parties. Inherent in the grant of such powers is statutory
authority for any such interference. It follows from the aforegoing that the reasonably
apprehended interference with the rights of the Diepsloot residents as a result of the
proposed settlement of the Zevenfontein squatters at the Diepsloot site is authorised by
the Act and not wrongful. The appellants (owners) are consequently not entitled to the
interdict sought.’
(c)
In terms of the Prevention of Illegal Eviction and Unlawful Occupation of Land Act 19 of
1998 the interests of landowners have to be weighed up against the interests of
squatters during eviction applications. In Port Elizabeth Municipality v Various
Occupiers 2005 (CC) it was held that the circumstances of vulnerable unlawful
occupiers (especially in the case of small children, single-parent families and elderly
people) and the human dignity of such people must be considered before an eviction
order is granted. The court must also determine whether suitable alternative housing is
available. But it was also emphasised that the interests of the landowner must be
considered and that it is not impossible to evict unlawful occupiers. If it appears just
and equitable in all the circumstances, the landowner’s interests must be protected and
an eviction order must be granted.
Port Elizabeth Municipality v Various Occupiers 2005 (CC)
‘In sum, the Constitution imposes new obligations on the courts concerning rights relating
to property not previously recognised by the common law. It counterposes to the normal
ownership rights of possession, use and occupation, a new and equally relevant right not
arbitrarily to be deprived of a home. The expectations that ordinarily go with title could
clash head-on with the genuine despair of people in dire need of accommodation. The
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap04.xhtml
24-Jul-18
Chap04
Page 7 of 8
judicial function in these circumstances is not to establish a hierarchical arrangement
between the different interests involved, privileging in an abstract and mechanical way
the rights of ownership over the right not to be dispossessed of a home, or vice versa.
Rather, it is to balance out and reconcile the opposed claims in as just a manner as
possible, taking account of all the interests involved and the specific factors relevant to
each case.’
Page 53
(d)
Economic, social and political considerations also led to the concept of ownership (also
with regard to immovables) being radically amended and developed in the interest of
the whole community. Examples of this are the promulgation of, amongst others, the
Spatial Planning and Land Use Management Act 16 of 2013, the Land Reform (Labour
Tenants) Act 3 of 1996, the Extension of Security of Tenure Act 62 of 1997 and the
Prevention of Illegal Eviction and Unlawful Occupation of Land Act 19 of 1998 which, in
theory, make ownership of immovables accessible to all population groups (see also
chapter 23). But the social responsibility of an owner is not unlimited. In President of
the RSA v Modderklip Boerdery (Pty) Ltd 2005 (CC) it was held that the state cannot
shift its responsibility to supply homeless people with housing to individual landowners.
A landowner’s entitlements can be limited in the interest of nature conservation in
terms of the Environment Conservation Act 73 of 1989. In Petro Props (Pty) Ltd v
Barlow 2006 (W) a landowner was prohibited from building a fuel service station in an
ecologically sensitive wetland.
4.4 Definition of ownership
Definition
Ownership can be described as an abstract legal relationship, which implies that:
(a) a legal relationship exists between the owner and a thing (object) in terms of
which the owner acquires certain entitlements; and
(b) a relationship exists between the owner and other legal subjects in terms of
which the owner can require that others respect his entitlements regarding
the object.
The relationship:
(c) consists of indeterminate entitlements in that they vary from time to time
regarding the same relationship or regarding different relationships; and
(d) is limited by statutory measures, limited real rights, creditors’ rights of third
parties and the interests of the community.
Ownership without entitlements is impossible, since a real right cannot be without content.
There is, however, no single entitlement that can be seen as the essence of ownership, since
the entitlements determine only the extent of ownership as a real relationship.
The acquisition of limited real rights regarding the thing or of patrimonial rights against
the owner is usually of a temporary nature, while the
Page 54
duration of ownership is indeterminate. As soon as the limitations fall away, the owner’s
ownership reverts to its original unlimited form. This characteristic is known as the elasticity
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap04.xhtml
24-Jul-18
Chap04
Page 8 of 8
of ownership and confirms that the extent of ownership is to be determined with reference to
the owner’s entitlements.
Summary
In South African law various rights in property are recognised, of which ownership
(as real right) is one. Although the absolute and individualistic nature of ownership
was emphasised in the past, current thinking increasingly stresses the exercise of
entitlements in the interest of the community. For this reason the emphasis is not
exclusively on the protection of the owner’s exercise of entitlements, but the
owner’s obligation to the community in the exercise of his entitlements is also
emphasised. The criterion for weighing the interests of the community against that
of the owner, is reasonableness and equity.
Ownership is a real right that is often defined on the basis of entitlements.
Although entitlements determine the extent of the owner’s ownership and
although ownership without entitlements is empty and impossible, ownership is
more than the sum of entitlements. Ownership is a legal relationship between an
owner and a thing or things, which implies that the owner can exercise certain
entitlements in respect of the thing or things. It is, however, a legal relationship of
an abstract nature, because it can vary from time to time in respect of the same
relationship or from relationship to relationship.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap04.xhtml
24-Jul-18
Chap05
Page 1 of 9
Page 55
Chapter 5
Co-ownership
5.1
5.2
5.3
5.4
Nature of co-ownership
5.1.1 Establishment of co-ownership
5.1.2 Bound common ownership
5.1.3 Free co-ownership
Rights and obligations regarding the property
Entitlements regarding the undivided share
Remedies
5.4.1 Damages or division of profit
5.4.2 Interdict
5.4.3 Subdivision
Summary
Overview
How is co-ownership established?
•
How does co-ownership differ from individual ownership?
•
What forms of co-ownership exist in South African law?
•
What are the rights and obligations of co-owners regarding the property?
•
What is the meaning of the undivided share of co-owners?
•
Which remedies do co-owners have at their disposal?
•
5.1 Nature of co-ownership
Two or more persons cannot simultaneously exercise different kinds of ownership regarding
the same object, but two or more persons can be co-owners of a thing at the same time.
This does not mean that the thing is divisible or that the ownership is distinguishable – in
the case of co-ownership the thing is simply owned by several persons in undivided coownership shares. It is only one ownership which vests in several persons in idealised,
undivided shares. Consequently the co-owners cannot divide the thing physically while
Page 56
the co-ownership still exists and a co-owner cannot alienate or encumber the thing without
the consent of the other co-owner(s). It is, however, possible for a co-owner to alienate or
encumber his undivided co-ownership share. The entitlements to the thing are, likewise, not
divisible, but the co-owners must exercise the entitlements jointly in accordance with the
undivided shares.
5.1.1 Establishment of co-ownership
Ways of establishment
(a) Inheritance
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap05.xhtml
24-Jul-18
Chap05
|
(b)
(c)
(d)
(e)
(f)
Page 2 of 9
Conclusion of a marriage in community of property
Mixing
Estate holdership
Voluntary association without legal personality
Contract
Co-ownership is established in the following ways:
(a) Inheritance
When a testator leaves an indivisible thing to two or more persons or leaves a divisible thing
to two or more persons provided that it may not be divided, it is owned by the heirs in coownership.
(b) Conclusion of a marriage in community of property
The conclusion of a marriage in community of property implies that the parties to the
marriage are co-owners of all things in the common estate in equal, undivided shares as
long as the marriage exists.
(c) Mixing (commixtio)
When movable things of different owners are mixed, without the permission of the owners,
in such a way that the mixture creates a new thing, it is owned by the owners in coownership (see 8.5 below). The previous owners of the mixed things become co-owners of
the new thing in the relation in which their property contributed to the new thing (mixture).
(d) Estate holdership
The surviving spouse in a marriage in community of property continues the community of
property together with the heirs of the deceased spouse.
Page 57
(e) Voluntary association without legal personality
The members of such an association are co-owners of the assets of the association in
undivided shares. Such a member may, however, not alienate or encumber his undivided
share because of the unique consequences flowing from his contract of membership of the
association.
(f) Contract
By means of a contract two or more persons can jointly buy a thing and have the ownership
transferred in undivided shares through delivery or registration.
Application
In the case of a partnership the legal relationship between the co-owners
regarding the partnership assets is distinguishable from that of two or more
persons who become co-owners of a thing through contract and delivery or
registration. The difference lies in the fact that the latter are free co-owners
regarding the thing, while the former are bound common owners.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap05.xhtml
24-Jul-18
Chap05
Page 3 of 9
5.1.2 Bound common ownership
Definition
Bound common ownership exists between common owners as a result of an
underlying legal relationship between them, which forms the basis for their
common ownership of the thing or things and which implies that the common
owners cannot terminate the common ownership while the legal relationship is still
in existence.
In the case of bound common ownership there exists an underlying legal relationship
between the common owners which forms the basis for the common ownership of the thing
or things. There are several examples of underlying legal relationships on which bound
common ownership can be based.
Examples
(a) A marriage in community of property (Ex parte Menzies et Uxor 1993 (C)),
where the underlying legal relationship between the parties to the marriage
is determined by matrimonial property law.
Page 58
(b)
(c)
A partnership, where the underlying legal relationship between the partners
is determined by the law of partnerships and the partnership contract
between the partners.
A voluntary association, where the underlying legal relationship is
determined by the law of associations and the membership contract between
the members.
Bound common ownership has the following implications:
(a) A common owner can usually not alienate or encumber his share of the common
ownership as long as the underlying legal relationship exists. While a partnership is in
existence, partners cannot transfer their common ownership share in the assets of the
partnership to a person who is not a partner.
(b) The joint exercise of entitlements of ownership is determined by the underlying legal
relationship. During the existence of a marriage in community of property the law of
matrimonial property determines the way in which the spouses may exercise their
entitlements regarding the communal assets.
(c) The common ownership cannot be terminated unilaterally by a common owner while
the underlying legal relationship still exists. A particular form of bound common
ownership exists in the case of a sectional title scheme. The sectional owners are
bound common owners of the common property of the sectional title scheme and a
sectional owner cannot give up her undivided share in the common property while she
is still the owner of a section of the building – see, in this regard, 6.2.2 below.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap05.xhtml
24-Jul-18
Chap05
Page 4 of 9
Since bound common ownership is studied fully in subjects like the law of partnerships, law
of associations, matrimonial property law and law of succession, the rest of this chapter
concentrates on free common ownership.
5.1.3 Free co-ownership
Definition
Free co-ownership means that the only legal relationship which exists between the
parties, is the co-ownership of the thing or things. No other (underlying) legal
relationship exists between the parties.
Free co-ownership has the following implications:
Page 59
(a)
(b)
(c)
A co-owner can alienate or encumber his undivided co-ownership share independently.
The co-ownership can be terminated unilaterally because no other legal relationship
exists between the parties which would make such a termination impossible.
The joint exercise of entitlements is not determined by an underlying legal relationship
between the co-owners.
Because there is no underlying legal relationship which determines the joint exercise of
entitlements by the free co-owners, the co-owners can arrange it by contract.
Application
In Oblowitz v Oblowitz 1953 (C) the distinction between such a contract and a
partnership agreement, which regulate the entitlements of free co-owners and
bound common owners respectively, was explained as follows:
(a) Co-ownership is not necessarily established by contract, while the basis of a
partnership is always a contract.
(b) Co-ownership does not necessarily include a community of profit and loss,
while that is always the case with partnerships.
(c) A co-owner can alienate his undivided co-ownership share without the
permission of his co-owner(s), while a partner may not.
(d) One co-owner is not automatically the representative of another co-owner,
while partners are.
(e) Co-ownership does not necessarily have a basic profit motive, while
partnerships do.
5.2 Rights and obligations regarding the property
In the case of co-ownership the thing is not physically divisible for the purposes of alienation
or encumbering of portions thereof by individual co-owners, but it can be divided for the
purpose of its use. The exercise of entitlements resulting from co-ownership and all legal
actions pertaining to the thing, must be performed by the co-owners jointly. The co-owners
have certain rights and obligations regarding the thing.
Page 60
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap05.xhtml
24-Jul-18
Chap05
Page 5 of 9
Rights and obligations
(a) Alienation and encumbrance
(b) Use
(c) Profit, income and fruits
(d) Maintenance and expenses
(e) Right of veto
(a) Alienation and encumbrance
Co-owners must give permission before a thing can be alienated or encumbered – Van der
Merwe v Van Wyk 1921 (EC).
(b) Use
The co-owners must decide jointly how the thing is to be used. This permission can be given
by means of a use agreement, but it can also be given informally. Every co-owner is entitled
to use the thing reasonably and in accordance with the size of his share. This reasonable use
means that the thing may not be used to the detriment of the other co-owners.
Erasmus v Afrikander Proprietary Mines 1976 (W)
‘In the event of any dispute about the conduct of a co-owner and the manner in which he
has made use of the joint property, the Court would have to consider whether the
conduct complained of constitutes an unreasonable use, inconsistent with the use to
which the property was destined and to the detriment of the rights of the other co-owner,
and, unless a co-owner’s use of the property can be so described, interdict proceedings
against him will not succeed.’
Unreasonable use takes place by changing the use of agricultural land or allowing third
parties to also use the thing without the permission of the other co-owners – Pretorius v
Nefdt and Glas 1908 (T).
The use of a thing by a co-owner must be in accordance with the size of his share in the
joint property. This does not mean that a co-owner can claim the use of a part of the thing,
but it means that his use of the whole thing must be in accordance with the size of his share
while taking into consideration the use rights of the other co-owners.
Page 61
Oosthuyzen v Du Plessis 1887 (C)
‘She was entitled to make a reasonable use of the farm, proportionable to her interest
therein. As to any houses standing on the farm, and not in the actual use of coproprietors she had, to say the least, rights of ingress and egress equal to theirs. As to
cattle, she could, in the absence of any special agreement, depasture on the farm any
number that would not be disproportionate to the extent of her share, and she was
clearly entitled to use a reasonable share of wood and water for her domestic purposes.’
(c) Profit, income and fruit
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap05.xhtml
24-Jul-18
Chap05
Page 6 of 9
The co-owners are entitled to an equal share of the fruit, income or profit regarding the
property proportionate to every co-owner’s share. This principle applies even if the profit or
income was initiated by one co-owner, except in the case where the co-owners have agreed
that every co-owner may appropriate the fruit of the use of the property proportionate to his
share. In this case the other co-owners share only in the profit that accrues as a result of
unreasonable use or use disproportionate to the co-owner’s share. One co-owner cannot,
therefore, appropriate for himself the full profit of the property through independent use and
exploitation thereof.
Example
Where the land was leased without the permission of the other co-owners either
partially or in full, the co-owner who received the rent was obliged to share it with
the other co-owners in accordance with their share in the joint property –
Sauerman v Schultz 1950 (O).
(d) Maintenance and expenses
The co-owners are obliged to contribute to the maintenance of and expenses regarding the
property proportionate to their shares. The co-owners are, of course, not liable to contribute
to luxurious improvements made without their approval by another co-owner. The obligation
to contribute is applicable only to necessary expenses for the conservation of the property.
(e) Right of veto
The decision of the majority of co-owners regarding the use of the property is not
necessarily binding on the minority. This means that a minority can veto the decision of the
majority. In these circumstances the co-ownership can be terminated or the reasonableness
of the co-owners can be tested by
Page 62
the court in that a declaratory order or prohibitive interdict, depending on the case, can be
sought by the aggrieved co-owners – Pretorius v Nefdt and Glas 1908 (T).
5.3 Entitlements regarding the undivided share
The co-ownership share in the joint property is an idealised, undivided share in the
ownership of a thing, and not an actual division of the thing. A co-owner can, in the case of
free co-ownership, at any time alienate or encumber his share of the joint property without
the co-operation of the other co-owners and even against their will – it is, after all, one of
the most important characteristics distinguishing free co-ownership from bound common
ownership. The share in the joint property can be encumbered by a limited real right given
by the co-owner to a third party regarding the thing proportionate to the co-owner’s share.
Encumbrance
It is possible to pledge the share; in the case of immovables to encumber the
share with a mortgage (provided such a mortgage does not infringe upon the
rights of the other co-owners); to encumber it with a personal servitude such as
usufruct; to lease it or to bequeath it. Since real servitudes are indivisible, such
servitude cannot be given regarding a co-ownership share in the joint property.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap05.xhtml
24-Jul-18
Chap05
Page 7 of 9
It must be emphasised that a co-owner’s share does not entitle him to use a proportional
part of the property. He is, proportionate with the extent of his share, entitled to the
reasonable use of the whole thing, except if otherwise agreed to by the co-owners (see 5.2
(b) above). This use is subject to the reasonable exercise of the use rights of the other coowners. A person with a share of 20% cannot claim 80% of the grazing on a farm for his
animals.
If the thing is divisible, the co-owners may agree that a co-owner may exercise his use
right in terms of his share regarding a specific part of the property. If the property is
indivisible, the co-owners may agree to divide the use of the thing on the basis of time. This
is a principle of common law (Grotius Inleidinge 3.28.8) which is specifically applied to timesharing (see 6.4 below). The use agreement entered into by the co-owners is, however,
enforceable only against the co-owners who were parties to the agreement and not against
their legal successors. If, therefore, a co-owner should alienate his share, the use agreement
is not enforceable against the new co-owner. The co-owners will then have to conclude a
new use agreement.
Page 63
The shares in the joint property need not be equal. A co-owner can, by subdividing his
share, alienate a part of his share to a third party who then becomes a co-owner himself,
while he himself retains a share. The share is, however, always an idealised, undivided share
in the ownership of the thing and never in a divided part of the property. Co-owners cannot
object to a new co-owner as a result of alienation. What can be objected to is a co-owner
giving use rights in the property to a third party without the permission of the other coowners, but a co-owner can lease his share to a third party without the permission of the
other co-owners. In this way a use right in accordance with his share can be given to a third
party – Sauerman v Schultz 1950 (O).
5.4 Remedies
Although the control and use of the property are usually regulated by means of a mutual
agreement between co-owners, it can happen that the agreement of division or use is not
complied with or that the parties cannot agree on the content of such an agreement. In
these circumstances it is necessary to approach the court for assistance.
Remedies
(a) Damages or division of profit
(b) Interdict
(c) Subdivision
5.4.1 Damages or division of profit
If a co-owner should exceed the reasonable use of the thing, in terms of his share, by using
the thing for a purpose not previously used or intended or if the extent of his use should be
larger than his share, the other co-owners can claim damages or the division of profit
resulting from the use (whichever is appropriate) from such a co-owner – Oosthuyzen v Du
Plessis 1887 (C). The division of profit and damages can be claimed from the co-owner in
the usual manner by instituting an action. Considerations like the income of the co-owner
from such use, the expenses, the profit made and the extent of the share will contribute to
determining the extent of the other co-owners’ claim.
5.4.2 Interdict
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap05.xhtml
24-Jul-18
Chap05
Page 8 of 9
A co-owner who exceeds his entitlements of use in terms of his share by using the property
unreasonably, can, by means of an interdict, be prohibited by the other co-owners from
continuing this use – Pretorius v Nefdt and Glas 1908 (T). The basis of the interdict is the
co-owner’s right of veto regarding
Page 64
the use of the thing (ius prohibendi) which is a common law principle. A co-owner cannot,
however, prohibit the use of the thing by other co-owners for any reason, since these coowners are entitled to use the property because they are co-owners. The interdict will thus
be successful only if it can be proved that the use was unreasonable.
5.4.3 Subdivision
If the property is divisible any co-owner can at any time claim the subdivision of the
property in accordance with every co-owner’s share. It is a requirement that the co-owners
must first attempt to divide the thing amongst themselves in accordance with everyone’s
share, but if such a division is not achieved the court is asked, by means of the actio
communi dividundo to make such a division – Robson v Theron 1978 (A). Co-owners can
agree not to subdivide the property for a period of time, but an agreement that the coownership will be perpetual is not enforceable and cannot prevent the introduction of the
actio communi dividundo.
If the co-owners do conclude an agreement of subdivision, one of the co-owners cannot
attack the agreement on the ground that it is not in accordance with the sizes of the shares
or that it is inequitable. Such an agreement can be enforced by means of a court order if
some of the co-owners refuse to honour it.
If the court is approached with the actio communi dividundo to subdivide the property, it
is usually expected of the co-owners to submit a proposed subdivision and in appropriate
cases the court can postpone the application to enable the co-owners to prepare such a
proposal. If it is, however, absolutely impossible for the co-owners to agree on the division
of the property, the court will order a division.
If it would be uneconomical or detrimental to physically divide the property or if the thing
is indivisible, the court may order that the property be sold and that the proceeds be divided
among the co-owners in accordance with their shares (such a sale usually takes place by
means of a public auction, unless a substantiated request to the contrary is approved by the
court) or the court may order that one co-owner compensate another co-owner in
accordance with their shares after the property has been evaluated in the prescribed
manner.
Example
In Kruger v Terblanche 1979 (T) it was ordered that an immovable thing be sold
at a private auction, at which only the two co-owners could be present, to the
highest bidder and that the purchase price then be divided between the two coowners according to their shares.
Page 65
If immediate division would be to the detriment of the co-owners, the court may in
appropriate cases postpone the division or sale of the property for a determinate or
indeterminate period. The actio communi dividundo is not only an application to divide the
property, but also an application that a final calculation of expenses and losses be provided.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap05.xhtml
24-Jul-18
Chap05
Page 9 of 9
The legal relationship between co-owners is terminated when the property is delivered to the
new owner(s) (in the case of movables) or when the registration of transfer of an immovable
thing to a new owner takes place in the deeds registry.
Summary
Co-ownership implies that two or more persons are co-owners of a thing (or
things) simultaneously in that they own the thing(s) in idealised, undivided coownership shares. The thing or the ownership of the thing is, however, not
divisible.
A distinction is made between free co-ownership and bound common ownership.
In the case of free co-ownership a co-owner’s co-ownership share is alienable,
since the co-ownership of the thing is the only legal relationship in existence
between the co-owners. However, the use, alienation or encumbrance of the
thing, division of profit and income, duty to maintenance and obligations regarding
maintenance and expenses, are determined with reference to the size of each
owner’s co-ownership share. All decisions regarding these matters must be made
jointly by the co-owners and every co-owner has a right to veto in this regard.
In the case of bound common ownership, there is an underlying legal
relationship between the common owners which forms the basis for their common
ownership. Such a relationship can be, for instance, a partnership, a marriage in
community of property, a voluntary association without legal personality or a
sectional title scheme. A bound common owner cannot alienate his undivided coownership share or terminate the common ownership as long as the underlying
legal relationship still exists.
A number of remedies can be employed by co-owners. Examples of these are a
claim for the division of profit, a claim for damages, an interdict or a claim for
subdivision.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap05.xhtml
24-Jul-18
Chap06
Page 1 of 21
Page 66
Chapter 6
Statutory land use
6.1
6.2
6.3
6.4
6.5
Introduction
Sectional titles
6.2.1 Amendment of common law principles
6.2.2 Legal nature of sectional ownership
6.2.3 Formal requirements
6.2.4 Body corporate and rules
6.2.4.1
Introduction
6.2.4.2
Aims and activities
6.2.4.3
Entitlements and obligations of sectional owners
6.2.4.4
Rules
6.2.5 Extension of scheme
6.2.6 Destruction of building
6.2.7 Advantages and disadvantages
6.2.8 Future legislation
Shareblocks
6.3.1 Functioning of shareblock scheme
6.3.2 Protective measures
6.3.3 Advantages and disadvantages
Time-sharing
6.4.1 Introduction
6.4.2 Legal nature
6.4.3 Protection of purchaser
6.4.4 Time-sharing on the basis of a club
6.4.5 Levies
Housing development schemes for retired persons
Summary
Overview
Which new forms of land use are regulated by statute?
•
How is this different from common law ownership?
•
What is a sectional title unit?
•
Page 67
•
•
•
•
•
•
•
•
How is a sectional title scheme established?
How do sectional titles function in South African law?
What are shareblocks?
How is a shareblock scheme established?
How do shareblocks function in South African law?
What is time-sharing?
How does time-sharing function in South African law?
Which forms of housing development schemes for retired persons can be
distinguished?
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
•
Page 2 of 21
What is the nature of the right that a retired person has in a housing development
scheme?
6.1 Introduction
Common-law ownership of immovables has in the past forty years been extended by the
statutory introduction of sectional titles, shareblocks, time-sharing and housing development
schemes for retired persons. Statutory provisions regarding leasehold are discussed in
chapter 20 below.
With all these statutory extensions of ownership of immovables the emphasis on the
exercise and protection of use rights is much greater than before. Furthermore the exercise
of entitlements is limited by the entitlements of other users to a much larger extent than
with common-law ownership. This confirms the principle that ownership is not individualistic,
but must always be exercised by taking the rights of others into consideration.
6.2 Sectional titles
The statutory provisions regarding sectional ownership currently make it possible for an
individual sectional owner to own a part (section) of a building (flat, shop or office), while all
the sectional owners jointly own the common property in bound common ownership. The
common property includes the land and all parts of the building which do not form part of
the sectional owners’ sections, for instance lifts, staircases and corridors of the building. For
many reasons this is a better alternative for acquiring an entitlement of use in offices, shops
or flats than by means of shareblock, co-ownership or lease.
6.2.1 Amendment of common law principles
With the commencement of the Sectional Titles Act 66 of 1971 in 1973 and the Sectional
Titles Act 95 of 1986 on 1 June 1988 several common law principles regarding ownership of
immovables were amended.
Page 68
|
Common law principles
(a) The owner of a piece of land is also the owner of everything permanently
attached to the land (superficies solo cedit).
(b) The owner of a piece of land is also owner of the air space above the land
(cuius est solum).
(c) The owner of a piece of land may exercise his entitlements of use and
enjoyment without interference (plena in re potestas).
(d) Free co-ownership implies that co-owners can, at any time, divide the land
or alienate an undivided co-ownership share.
Although the above-mentioned common law principles are still applicable to ownership of
ordinary urban and agricultural land, they have in the case of sectional titles been amended
in the following ways:
(a) The rule that the owner of land is also owner of everything permanently attached to
the land (superficies solo cedit – see 8.3.3 below), was repealed in the case of
sectional ownership. The common owners (or joint owners) of the land, which can be
described as the common property, are not co-owners of everything attached to the
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
(b)
(c)
(d)
Page 3 of 21
land, but everyone is the sole owner of a part (section) of the building. However, they
are co-owners of the common property (see 6.2.2(b) below).
The principle that the owner of land is also owner of the air above the land (cuius est
solum), was repealed in the case of sectional ownership. The section of the building
which the sectional owner owns, is not only described in terms of vertical boundaries
(length and breadth), but also in terms of horizontal divisions (height).
The principle that the owner can, in principle, exercise undisturbed entitlements of use
and control regarding the object (plena in re potestas), is to a large degree obviated by
the joint exercise of entitlements by the sectional owners regarding the common
property (subject to the rules of the sectional title scheme and the supervision of the
body corporate).
The joint ownership of sectional owners regarding the common property, which is
regarded as a particular form of bound common ownership, is in many respects
different from common law free co-ownership:
(aa) A sectional owner cannot claim separation and division of the common property
by means of the actio communi dividundo during the existence of the sectional
title scheme.
(bb) The sectional owner’s entitlement to alienate his share in the common property is
much more limited than in the case of co-ownership; it is inseparably linked to
ownership of a section of the building.
Page 69
(cc) A sectional owner’s participation in legal actions regarding the common property
is determined by rules and statutory measures and a sectional owner does not
necessarily have a right to veto as is the case with normal co-ownership.
(dd) In the case of sectional ownership the legal actions are performed by a body
corporate, which is not necessarily the case with normal co-ownership.
(ee) In the case of sectional ownership the sectional owner’s share in the common
property is linked to his ownership of a particular section of the building, while a
co-ownership share is of an idealised nature and not linked to ownership of a part
of the object.
6.2.2 Legal nature of sectional ownership
Definition
A sectional title unit is described in the Sectional Titles Act 95 of 1986 (section 1)
as a composite immovable thing consisting of a section (of a building) along with
an undivided share in the common property which is apportioned to a unit on the
basis of the participation quota.
A sectional title unit is described as ‘land’ (section 3(4)) and ownership of such a unit can be
transferred only by means of registration in the deeds registry. A sectional title unit is a
composite, immovable thing. It is not possible to transfer ownership in the section without at
the same time transferring the undivided share in the common property. The section is a
corporeal principal thing, while the undivided share in the joint property is a real right (joint
ownership or a particular form of bound common ownership), which is added to the principal
thing as an incorporeal accessory thing. The correct juridical explanation is that the section
(as corporeal principal thing) and the undivided share in the common property (as
incorporeal accessory thing) have been combined by statute and that it is impossible to
acquire or alienate the one without the other.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
Page 4 of 21
Components
A sectional title unit consists of the following components:
(a) a section together with
(b) an undivided share in the common property
(c) apportioned on the basis of the participation quota.
Page 70
(a) A section
Definition
A section is a part of the building which is indicated as such on the sectional plan
and in respect of which separate ownership can be acquired. More than one owner
may obtain ownership of a section, in which case they are co-owners of the
section.
The section can be described in terms of the sectional plan:
(aa) with reference to the floors, walls and ceilings thereof;
(bb) which includes parts like a porch, lobby, balcony, forecourt or projection belonging to
the section.
(b) Common property
Definition
The common property includes the land and all parts of the building not included
in the sections.
This includes areas like stairs, lifts, corridors, service areas and so on. All sectional owners
are bound common owners of the common property. The sectional owner’s undivided share
in the common property is calculated with reference to the participation quota.
(c) Participation quota
Definition
The participation quota in the case of residential units is calculated, in terms of
sections 1 and 32(1), by dividing the floor area (measured to the middle of the
separating wall) of a specific section with the combined floor area of all the
sections together, calculated to 4 decimal points.
In terms of section 32(3), as confirmed in Kennaway (Pty) Ltd v Controlling Body of the
Kennaway Court Building 1988 (E), the participation quota determines the following:
(aa) The extent (size) of the sectional owner’s undivided share in the common property.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
Page 5 of 21
(bb) The value of a sectional owner’s vote at meetings.
(cc) The extent of a sectional owner’s contribution to the maintenance and administration of
the common property (levy) and the relationship in which the sectional owner can be
held responsible for the payment of
Page 71
debts of the body corporate incurred in the maintenance of the sectional title scheme.
In the case of commercial units (eg shops and offices) it is not necessary to use the floor
area method to determine the participation quota, but the developer of the sectional title
scheme can at the time of registration of the scheme determine what the participation quota
of every unit will be. The sectional owners can also in terms of section 32(4) change the
value of a sectional owner’s vote or her levy as determined by the participation quota by
special resolution (see 6.2.4.2 below) with the written consent of the sectional owner.
6.2.3 Formal requirements
The procedure to be followed to establish a sectional title scheme is prescribed by the
Sectional Titles Act 95 of 1986.
Procedure
(a) Draft sectional plan
(b) Notice to tenants
(c) Approval of sectional plan by surveyor-general
(d) Opening of sectional title register and registration of sectional plan
(e) Alienation of sectional title units
(a) Draft sectional plan
A draft sectional plan must be drawn up by an architect or land surveyor in terms of the
requirements of sections 5 and 6. The draft sectional plan must:
(aa) Set out the boundaries of the land and the position of building(s) on the land.
(bb) Indicate the name of the building(s).
(cc) Include a scale plan of every floor in the building(s).
(dd) Describe the boundaries of every section and identify each section by means of a
number.
(ee) Indicate the floor area measured to the middle of the external walls of every section
and the total floor surface of all the sections.
(ff) Indicate any part(s) of the common property contained in the sectional plan which
has/have been set aside for the exclusive use of any sectional owner. A sectional
owner obtains a limited real right to the exclusive use area which can be encumbered
with a mortgage bond or personal servitude.
(gg) Indicate the participation quota of every section.
Page 72
(b) Notice to tenants
If one or more sections of an existing building are being leased by the developer for
residential purposes at the time of the drawing up of the sectional plan, the developer must,
before he may apply, give notice in writing to all such tenants of a date (at least 14 days
after delivery or sending of the letter) of a meeting of such tenants (section 4(3)). At the
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
Page 6 of 21
meeting the developer or his agent must provide the tenants with particulars of the said
scheme.
(c) Approval of the sectional plan
The architect or land surveyor must submit the draft sectional plan and other required
documents on behalf of the developer to the surveyor-general for approval. If the sectional
plan does not meet statutory requirements, the surveyor-general may order the architect,
surveyor or developer to change the sectional plan or to submit a new sectional plan.
(d) Opening of sectional title register
Following the approval, the developer applies to the deeds registry for the registration of the
sectional plan and the opening of a sectional title register. The developer must, among other
things, hand in the following documents:
(aa) The sectional plan (two copies).
(bb) Schedules, certified by a conveyancer, setting out all servitudes and conditions of title.
(cc) The deed of transfer of the land.
(dd) Existing mortgages and permission for the cancellation thereof.
(ee) A certificate of a conveyancer regarding the rules applicable to the scheme.
(ff) A certificate of sectional title regarding every section in the scheme.
(e) Alienation of sectional title units
After a sectional title register has been opened and a sectional plan has been registered, the
sectional title units come into being as immovable things. A certificate of sectional title for
every unit is issued and at this point it is possible to register sectional mortgages and other
real rights against the sectional title unit. The developer of the scheme is at this stage the
owner of all the sectional title units and can alienate (sell, exchange or donate) the units by
means of a written agreement. The sectional title unit has to be described in the agreement
according to its deeds registry description, or the three components as stated in 6.2.2
above. The ownership of a sectional title unit is transferred by means of a deed of transfer in
accordance with the normal procedure for deeds registration (see 9.3 below).
Page 73
Protection of tenants
Tenants of flats or business premises in cases where an existing building is
transformed into a sectional title scheme are protected in two ways:
(aa) There is a prescribed notification and compulsory information procedure –
see 6.2.3(b) above.
(bb) In terms of section 10 a procedure was introduced in terms of which
developers must first offer a sectional title unit for sale to the tenant (either
before or after opening of the sectional title register) before offering it to
other persons.
6.2.4 Body corporate and rules
6.2.4.1 Introduction
As soon as a sectional title register has been opened and a sectional title scheme comes into
existence, the developer may alienate sectional title units. On transfer of the first sectional
title unit to another sectional owner than the developer, a body corporate of which all
sectional owners are members comes into existence and it manages the sectional title
scheme according to the rules of the scheme – J de Moor (Edms) Bpk v Beheerliggaam
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
Page 7 of 21
Outenikwa 1985 (T). The body corporate is responsible for the enforcement of the rules of
the sectional title scheme in terms of section 35 and for the control, administration and
management of the common property for the benefit of all the sectional owners.
Furthermore the body corporate has the capacity to act and to litigate on behalf of the
sectional owners. It was held in Stadsraad van Pretoria v Body Corporate Faeriedale 2002
(T) that the body corporate’s capacity to claim damages is not limited to damages to the
common property, but the body corporate may also claim on behalf of individual sectional
owners when individual sections are damaged. In these circumstances the trustees of the
body corporate are acting on behalf of the sectional owners. This body corporate differs in
many respects from legal persons in common law and in statutory law. The most important
difference is the fact that sectional owners, who are members of the body corporate, can be
held liable individually (proportionally according to everyone’s participatory quota) for debts
which the body corporate cannot pay (section 47). However, all sectional owners who are up
to date with their levies cannot be joined as co-debtors with regard to the body corporate’s
outstanding debts.
Page 74
6.2.4.2 Aims and activities
Object of body corporate
The object, capacities and activities of the body corporate are aimed at the
management and maintenance of the common property and the enforcement of
the rules of the sectional title community.
In terms of section 37 this implies, amongst others, the following:
(a) To establish a fund for the maintenance, management and administration of the
common property, which include amongst other things the payment of taxes, water,
electricity, insurance and other services.
(b) To collect the levies and contributions for expenses relating to the common property
from sectional owners according to their participation quotas. In the case of
outstanding levies, the body corporate can refuse to furnish a sectional owner with a
clearance certificate, which is required when transferring the sectional title unit to a
new owner. Therefore a sectional title unit cannot be transferred before all outstanding
levies have been paid – Barnard NO v Regspersoon van Aminie 2001 (SCA).
(c) To open a bank account.
(d) To insure the building(s).
(e) To maintain the common property.
To repair, without delay, any damage caused with insurance money.
(f)
(g) To see to it that all statutory requirements regarding the common property are met.
(h) To inform the registrar of deeds and the local authority of the official address
(domicilium citandi et executandi) of the body corporate.
To maintain all instruments and machines (including lifts) which form part of the
(i)
common property.
In terms of section 39 the activities are performed by the trustees of the body corporate in
accordance with their capacity in terms of section 38. The trustees are elected by a general
meeting of sectional owners and are in a fiduciary position toward the body corporate. The
trustees may perform actions to alienate or encumber the common property only if the
sectional owners consent thereto in terms of a unanimous resolution.
Page 75
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
Page 8 of 21
Definition
A unanimous resolution is a resolution taken unanimously by all the members
present at a general meeting at which at least 80% of the total number of
members of the body corporate (calculated in numbers and value) are present or
represented, or a resolution accepted in writing by all the members or their
proxy/proxies or their representatives.
Written notification of the meeting must be given 30 days in advance and the proposed
unanimous resolution must be mentioned in the notice. In circumstances determined by the
rules a meeting of the body corporate can be convened within 30 days or less after notice
has been given to all the members.
All other management activities of the body corporate are performed in accordance with
special resolutions.
Definition
A special resolution is a resolution taken by the majority of at least 75% of the
votes (calculated according to value and number) of the members of the body
corporate present or represented at a general meeting, or a resolution accepted in
writing by 75% of all the members of a body corporate (calculated according to
value and number) or their proxy/proxies or their representatives.
For this meeting written notice 30 days beforehand is required and the said special
resolution must be mentioned in the notice.
6.2.4.3 Entitlements and obligations of sectional owners
The body corporate’s entitlement to control the common property and to enforce the rules
pertaining to the community of sectional owners as well as the statutory duties of sectional
owners, result in each sectional owner’s entitlements regarding his own unit. Although this
restricts the common law principle of plena in re potestas to some degree, this is a result of
the unique development regarding sectional ownership and the community of sectional
owners. Ownership was, in any case, not applied as absolutely and individualistically in
common law as is often assumed.
In terms of section 44 sectional owners have various duties. These entail mainly that the
sectional owner must properly maintain his section, that he must use the section and the
common property while taking the other sectional owners’ use rights into consideration, that
he must comply with the rules and that he must see to it that the structure of the building is
not weakened by the use of a section.
Page 76
6.2.4.4 Rules
The sectional title scheme is controlled and managed, from the date of the coming into being
of the body corporate, by means of rules. Two types of rules are distinguished, namely
management rules and conduct rules.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
Page 9 of 21
(a) Management rules
Definition
Management rules regulate the activities of the trustees and members of the body
corporate and are prescribed by means of regulation. The developer can (at the
time of application for the opening of a sectional title register) replace them with
other rules. These may be supplemented, amended or repealed by the body
corporate from time to time by means of a unanimous resolution. The rules can,
however, be amended only to the extent allowed by the regulations, and some
rules cannot be amended at all.
The management rules deal with matters such as:
(aa) The choice of an official address (domicilium citandi et executandi) for the body
corporate (rule 3).
(bb) Qualifications, election, appointment, office and remuneration of trustees (rules 4-14).
(cc) Meetings of trustees (rules 15-27).
(dd) Duties of trustees (rules 28-49).
(ee) Meetings of sectional owners (rules 50-67).
(ff) Duties of owners and tenants (rules 68-70).
(b) Rules of conduct
Definition
Rules of conduct determine the entitlements of use and duties of sectional owners
regarding individual sections and the common property. The rules are prescribed
by means of regulation and can be replaced by the developer with other rules at
the time of application for the opening of a sectional title register. These rules can,
from time to time, be supplemented, amended or repealed by special resolution of
the body corporate. A rule of conduct replaced by the developer, or a supplement
or amendment by the body corporate, may not be irreconcilable with the
prescribed management rule.
Page 77
Rules of conduct deal with matters such as:
(aa) The keeping of animals, reptiles or birds with the permission of the trustees (rule 1).
(bb) Refuse removal (rule 2).
(cc) Parking of vehicles on the common property (rule 3).
(dd) The prohibition of changes that would be detrimental to the structure or aesthetically
undesirable for the outside of the building (rules 4 and 5).
(ee) No flammable matter may be kept in the sections and no actions performed which
would affect the insurance contract for the building (rule 9).
(ff) Every sectional owner is obliged to keep his section pest-free at his own cost (rule 11).
Any management rule or rule of conduct made by the developer or the body corporate must
be reasonable and is equally applicable to all owners who use units for essentially the same
purposes.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
Page 10 of 21
Wiljay Investments v Body Corporate Bryanston Crescent 1984 (T)
In this case the legal nature of the rules was described as being of a contractual
nature, and this contract was said to come into being between the sectional
owners inter se and between the sectional owners and the body corporate. It is,
however, more correct to describe the legal nature of the rules as rules created by
the community of sectional owners as an autonomous private law community. This
indicates that the rules can be classified as the internal law of the community of
sectional owners as body corporate, and consequently these rules are not of a
contractual nature.
6.2.5 Extension of scheme
In his application for the registration of a sectional plan the developer may reserve the right,
for his own benefit and within a period mentioned in the condition, to erect and complete a
further building or a horizontal or vertical extension of existing buildings on a specified
portion of the common property of a scheme and to manage and market such building(s) as
a sectional title scheme – section 25.
Page 78
Legal nature of right of extension
A right of extension thus reserved, is a registrable limited real right which
•
may be encumbered by a mortgage bond or ceded by means of a notarial
cession – section 25(4). This means that, on completion of the extension of
the building, the new sectional owners will also acquire undivided shares in
the common property.
In Erlax Properties (Pty) Ltd v Registrar of Deeds 1992 (A) it was held that a
•
right of extension in terms of the Sectional Titles Act 66 of 1971 is also a
limited real right, but that that right was not transferable. In terms of the
Sectional Titles Amendment Act 15 of 1993 (section 4) this position was
amended so that a right of extension in terms of the previous Act also
became a transferable limited real right. This judgment was confirmed in
Body Corporate of Savannah Park v Brainwave Projects 1147 CC 2012
(SCA).
Furthermore the body corporate, empowered thereto in writing by all its members, may buy
land to extend the common property for the purposes of providing amenities and facilities for
all its members. This land forms part of the common property and is held in common
ownership by the sectional owners in the particular scheme in the same relationship as their
participation quotas.
6.2.6 Destruction of building
The building(s) forming part of the sectional title scheme is/are regarded as destroyed in
terms of section 48 if:
(a) the building(s) is/are physically destroyed;
(b) the owners decide so by unanimous resolution and all holders of registered sectional
mortgages and persons with registered real rights agree thereto in writing;
(c) the court is convinced that, taking into consideration all the circumstances, it would be
right and fair to regard the building(s) as destroyed and issue an order to this effect.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
Page 11 of 21
In these circumstances the court may impose such conditions and make such orders as
deemed necessary to regulate the effect of the court order between the body corporate and
the owners and between the owners, the holders of registered sectional mortgages and
persons with registered real rights. The sectional owners can adopt a unanimous resolution
to rebuild the building or the court may order them to do so, taking into consideration the
way in which the insurance money regarding the building is to be used. The court may also
in certain circumstances order that the owners of the destroyed sections
Page 79
must be compensated by the other sectional owners and, in this way, they transfer their
sectional ownership to the other sectional owners.
If the building is deemed to be destroyed in any of the ways mentioned above, the
sectional owners can also unanimously decide not to rebuild the building or the court may
issue an order to this effect on application – section 49. Thereafter the registrar of deeds is
informed in the prescribed manner, the sectional title register is closed and the land is
transferred to the land register. The sectional owners become free co-owners of the land and
attachments according to the participation quota of each owner.
6.2.7 Advantages and disadvantages
A sectional title scheme has several advantages for a sectional owner:
(a) The owner of a sectional title unit is the owner of immovable property registered in his
name in the deeds registry.
(b) The sectional owner can obtain financing to buy a sectional title unit by registering a
sectional mortgage in favour of a financial institution.
(c) Sectional title units can be marketed before the building is ready for occupation, which
is advantageous for the developer. The buyer of such a future sectional title unit is
protected in that the purchase price must be paid into a trust account with an attorney
or estate agent or a guarantee must be provided by a bank, building society or
insurance company to the buyer that the purchase price will be repaid by such
institution to the buyer should the unit not be completed in such a way that it is
suitable for occupation.
(d) The interests of the sectional owner in the common property, as well as the use of his
sectional title unit and the common property are regulated and protected by various
statutory measures. The duties and entitlements of the body corporate, trustees and
sectional owners respectively are regulated by the Act.
(e) The extension and termination of a sectional title scheme is clearly and carefully
provided for in the Act.
However, a sectional title scheme also has disadvantages:
(a) The establishment of a sectional title scheme is an expensive and lengthy process
because of the fact that the sectional plan must be approved by the surveyor-general,
the sectional plan must be registered in the deeds registry and a sectional title register
must be opened. Therefore there are many more formalities and requirements to be
met than in the case of a shareblock scheme.
Page 80
(b)
(c)
(d)
The application of sectional titles is limited because the developer must be the owner of
the land or hold a leasehold in respect of the land.
Despite the extensive provisions dealing with the termination of a scheme, it will often
be the task of the court to finally end the scheme, for instance in cases where the
building is destroyed and a unanimous resolution to rebuild cannot be reached.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
Page 12 of 21
Although the expenses of a sectional title scheme regarding the maintenance of the
common property must be paid by the body corporate from the common levy fund,
section 47 provides that a sectional owner can be held personally liable for a proportion
(in accordance with his participation quota) of the debt not paid by the body corporate.
The sectional owner may reclaim such amounts from the body corporate, but this is a
time-consuming and inconvenient process.
6.2.8 Future legislation
In 2011 two new Acts were promulgated, but have not commenced yet, namely the
Sectional Titles Schemes Management Act 8 of 2011 and the Community Schemes Ombud
Service Act 9 of 2011. With the first-mentioned Act it is planned to split the existing
Sectional Titles Act 95 of 1986 after section 31 and to retain all aspects dealing with the
registration and establishment of a sectional title scheme in the Sectional Titles Act 95 of
1986, while all aspects dealing with the management and administration of a sectional title
scheme, for instance the establishment and functioning of the body corporate and the
application of the rules, form part of the new Sectional Titles Schemes Management Act.
With the Community Schemes Ombud Service Act the establishment of an ombud service for
sectional title schemes, shareblock schemes, time-sharing schemes and retirement schemes
is envisaged. It is planned that all documentation regarding these schemes will be supplied
to and kept at the office of the ombud so that the ombud can deal with all disputes in these
schemes by means of a suitable order to solve a particular dispute.
6.3 Shareblocks
6.3.1 Functioning of shareblock scheme
Definition
A shareblock scheme is a scheme in terms of which a shareholder in a shareblock
company, which is the owner or lessee of a building or building complex, acquires
a use right based on his shareholding in respect of a part of the particular building
or building complex (usually a flat, office or shop).
Page 81
In contrast with a sectional title scheme a shareblock scheme can be operated in respect of
immovable property leased by the company and ownership of immovable property is not a
requirement for the establishment of a shareblock scheme – see Rosslare v Registrar of
Companies 1972 (D).
In De Villiers v Kinsale Properties Shareblock Ltd 1988 (D) the functioning of a shareblock
scheme was summarised as follows:
(a) The shareblock company acquires ownership of or concludes a registered long-term
lease of the building to be marketed as a shareblock scheme.
(b) The share capital of the shareblock company to be issued is divided into shareblocks.
Every shareblock gives the holder thereof the sole right to use or occupy a particular
part or section of a building.
(c) The shareblocks, to which is attached the use right to a certain part of the building, are
then sold and transferred to shareholders by the shareblock company.
(d) The holder of the right is, therefore, a shareholder in the shareblock company and as a
result of his shareholding he acquires a creditor’s right to use and occupy a part of the
building.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
(e)
(f)
(g)
Page 13 of 21
The use right of the shareholder derives from the memorandum of incorporation of the
shareblock company, but an additional use agreement is entered into between the
shareblock company and the shareholder that sets out the rights and obligations of the
various parties.
If the buyer is unable to buy the shareblock for cash, the shareblock is usually pledged
to the seller by the buyer until the purchase price is paid in full.
Apart from the purchase price of the shareblock (which usually also includes a pro rata
part of the loan obligations of the shareblock company), the shareholder’s most
important financial obligation toward the shareblock company is the payment of an
annual, quarterly or monthly levy for the conservation and maintenance of the
property.
Originally there were many risks attached to the acquisition of use rights as a result of
shareholding in a shareblock company, which led to the legislature regulating the situation
by statute, primarily in order to protect the shareholder in a shareblock company.
6.3.2 Protective measures
The primary aim of the Share Blocks Control Act 59 of 1980 is to protect buyers of
shareblocks and shareholders of the shareblock company.
Page 82
Protective measures
(a) Main object and capacity
(b) Doctrine of ultra vires
(c) Memorandum of incorporation of company
(d) Shareholders as directors
(e) Limitation on acceptance of payment
Use of funds
(f)
(g) Increase in loan obligations
(h) Formalities of contract
(a) Main object and capacity
Definition
The main object and capacity of a shareblock company must be to manage a
shareblock scheme in respect of immovable property bought or leased by it. The
capacity of the shareblock company to perform legal actions is determined by its
main objectives, as described in section 7(1), and the objectives ancillary to the
main objective included therein.
A shareblock company has, in terms of section 8(1), only those capacities necessary to
enable it to achieve the set primary and ancillary goals. Furthermore, a shareblock company
is not entitled, unless given permission by a special resolution of a general meeting of the
shareblock scheme, to alienate immovable property which it owns or to cede the rights in
immovable property of which it is not the owner and in respect of which it runs a shareblock
scheme – see, in this regard, Van Staden v Fourie 1989 (A).
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
Page 14 of 21
(b) Doctrine of ultra vires
Definition
Any action of a shareblock company which exceeds its abilities or capacity is void.
In the case of such an invalid action the person who performed this act on behalf
of the company, is personally liable toward a third party injured as a result of the
fact that the company is not bound by the action, provided the third party acted
bona fide and reasonably.
This provision relates to the application of the doctrine of ultra vires, which, in the case of
other companies, has largely fallen into disuse. The biggest risk in respect of shareholding in
a shareblock company is the fact that the
Page 83
shareholder can lose his use rights and shareholding if the company is liquidated. In these
circumstances the shareholder has only a concurrent claim against the liquidated estate of
the shareblock company. It is therefore important to prevent a shareblock company from
becoming involved in risky business ventures. An important protective measure for
shareholders is therefore to limit the main objective of the shareblock company in terms of
section 7(1) to the management of a shareblock scheme in respect of immovable property
and the provision of section 8(1) that the abilities of the shareblock scheme be determined
by its main and ancillary objectives.
(c) Memorandum of incorporation
Definition
The memorandum of incorporation of a shareblock company must provide that a
member is entitled to use a specified part of the immovable property in respect of
which the shareblock scheme is in operation, subject to provisions and conditions
contained in a use agreement concluded between the company and that member.
A copy of every signed use agreement and any amendments thereto must be kept by the
company at the immovable property in respect of which the shareblock scheme is operated.
An example of the use agreement to be used by the company must, before any agreement is
concluded, be submitted by the company to the registrar of companies in the prescribed
manner. The requirements relating to the formalities of the use agreement and the
shareholders’ use rights appear in section 16.
(d) Directors
If a shareblock company has ten shareholders (excluding the shareblock developer), the
shareholders have the right to appoint at least one of the directors of the company, and if
there are more than ten shareholders, the shareholders have the right to appoint at least
two of the directors of the company.
(e) Limitation on acceptance of payment
A limitation is placed on the acceptance of payment in respect of shares by the developer of
the shareblock company before the incorporation of the company. Before incorportation any
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
Page 15 of 21
sum received may be paid into a trust account of an attorney or estate agent for the benefit
of the person to whom the consideration is due. It may also be paid directly to such a person
provided
Page 84
an irrevocable and unconditional guarantee is provided by a bank, building society or
insurance company to the effect that the bank, building society or insurance company
undertakes to repay such an amount to the person making the payment, should the
company not be incorporated within a period stated in the guarantee.
(f) Use of funds
Sections 13 to 15 lay down certain requirements for and limitations on the use of funds of
the shareblock company. The most important protective measure for the shareholder is that
funds for the payment of the shareblock company’s loan obligations which are not
immediately utilised, must be held in trust. All money paid for this purpose must
immediately be deposited in a separate trust account opened by the shareblock company at
a bank or building society or paid into a trust account of an attorney or estate agent. There
are, furthermore, important control mechanisms to ensure that funds are used for the
purpose for which they were intended. Levies may, for instance, be used only for running
expenses – Adrich Investment Holdings CC v Triple Thirteen Investments Shareblock (Pty)
Ltd 1994 (C).
(g) Increase in loan obligations
A shareblock company may not increase its loan obligations or encumber any of its assets,
unless the increase or encumbrance has been approved by a resolution of 75% of the
number of members of the company (excluding the members of the shareblock developer)
who have the right to vote at the meeting and who together hold at least 75% of the total
votes of all those members – Bisset v Boland Bank Ltd 1991 (D).
(h) Formalities of contract
A contract to acquire a share, a use agreement and an amendment or cession of such a
contract or agreement, must be in writing and signed by the parties thereto or their
representatives acting in accordance with their written mandate. Non-compliance with this
requirement will make the contract, agreement, amendment or cession void. Section 17 and
schedule 2 to the regulations contain provisions dealing with the content of a contract to
acquire a share and section 18 contains particulars regarding consequences and
requirements for actions in case of non-compliance with formalities of contract – Handel v
Josi 1986 (D) and Van Staden v Fourie 1989 (A).
6.3.3 Advantages and disadvantages
A shareblock scheme has several advantages for shareholders:
Page 85
(a)
(b)
(c)
It can be used in cases where a sectional title scheme cannot be launched. That would
be the case where the developer is not the owner of the land or in the case of
agricultural land, where it is possible to develop a shareblock scheme with the consent
of the Minister of Agriculture.
A shareblock company can start marketing shareblocks immediately after registration
even if the building has not been erected. The shareholders are protected in that all
payments not used immediately to pay loan obligations, are held in trust for the buyer.
There are fewer formalities for establishing a shareblock scheme than in the case of
sectional title schemes. For instance, a shareblock scheme is not subject to the
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
(d)
Page 16 of 21
approval of the local authority (except for the approval of building plans) or of the
registrar of deeds. The establishment of a shareblock scheme is therefore faster and
cheaper than in the case of sectional title schemes.
The Share Blocks Control Act contains several protective measures to safeguard the
position of shareholders.
There are, however, also certain disadvantages for shareholders in a shareblock scheme:
(a) The shareholder acquires only a creditor’s right against the shareblock company and
the object of his right is not an independent, immovable object in respect of which
ownership or another real right can accrue. This creditor’s right implies that the
shareholder can claim to use a part of the building for a specific period. The ownership
of the land and the building still vests in the shareblock company.
(b) Financing to buy a shareblock creates various problems. Since shareholders are not
holders of real rights, they will have difficulty in obtaining financing from financial
institutions. If shares are sold for cash only, this limits the market for the scheme. The
only solution is for the buyer to pay the purchase price of the shareblock in
instalments. Since the shareblock company’s main objective is limited to the control
and management of property, the shareblock company’s only sources of income in
such a case are the payments of shareholders in respect of their shareblocks, the levies
for the maintenance of the scheme and the leasing of units not yet sold. The danger
exists that companies with large loan obligations may become insolvent if a number of
shareholders should fail to make their instalment payments. The above-mentioned
problem does not exist where shareblocks are sold for cash.
(c) If the shareblock company should become insolvent, the shareholder is not protected
as the holder of a real right. He has only a concurrent claim against the loan account of
the company and also loses his use right in respect of the unit.
Page 86
6.4 Time-sharing
6.4.1 Introduction
Originally several objections were raised against time-sharing, mostly dealing with the
submission that it fragments ownership to such a degree and limits the entitlements to use
and control of the concerned parties to such an extent, that one can scarcely speak of the
entitlements which were traditionally the result of ownership. This criticism is, however, to a
large extent unfounded. Ownership has never been absolute or individualist in terms of
common-law standards, and the statutory extension of ownership in the South African law is
necessary due to social and economic considerations (see 6.1 above).
6.4.2 Legal nature
Definition
A time-sharing interest is described in the Property Time-sharing Control Act 75 of
1983 (section 1) as any right to or interest in the exclusive use or occupation,
during determined or determinable periods in any year, of accommodation, which
always indicates the use or occupation of immovable property in terms of a real
right or a creditor’s right.
In terms of the definition of a time-sharing scheme in section 1 of the Act, the right of an
interested party is determined with reference to the type of scheme in operation, and a
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
Page 17 of 21
distinction is made between schemes based on real rights and schemes based on creditor’s
rights.
Nature of right: types of schemes
(a) An indivisible co-ownership share in a sectional title unit in terms of the
Sectional Titles Act 66 of 1971 or 95 of 1986 (real right).
(b) A shareblock in a shareblock scheme in terms of the Share Blocks Control
Act 59 of 1980 (creditor’s right).
(c) Membership of or participation in a club which operates a time-sharing
scheme (real or creditor’s right).
(d) Any scheme, measure or undertaking declared by notice in the Gazette to be
a time-sharing scheme. Some time-sharing schemes based on registered
long-term leases (and thus limited real rights) can be found in South Africa.
Time-sharing is sometimes described as ownership of time. This is not correct. In the first
place there are several ways of getting a use right for the
Page 87
purposes of time-sharing without the holder of the right acquiring ownership in a part of the
building, for instance in the case of a time-sharing interest based on a shareblock scheme or
by means of membership of a club or by means of a long-term lease. In the second place an
interested party in time-sharing in a sectional title scheme does not acquire ownership in
time, but an undivided co-ownership share in a sectional title unit, and the use right (as
entitlement of the co-ownership) is divided on the basis of time. The holder of the right is
therefore a co-owner of a sectional title unit on a continuous basis, but the use right is
divided on the basis of time between the co-owners. In South African law, therefore,
ownership of time can under no circumstances be said to exist.
6.4.3 Protection of purchaser
Purpose of the Act
The primary purpose of the Property Time-sharing Control Act is to protect the
purchaser of a time-sharing interest. The protection will, necessarily, depend on
the nature of the time-sharing scheme, which will imply that the protective
measures of the Share Blocks Control Act 59 of 1980; the Alienation of Land Act
68 of 1981 and the Sectional Titles Act 95 of 1986 might, in certain cases, also be
applicable.
The following protective measures are contained in the Property Time-sharing Control Act:
(a) Formalities regarding the contract as prescribed in sections 2 to 5.
(b) The advertisement of a time-sharing interest must contain prescribed particulars, and
non-compliance with these provisions is punishable with a maximum fine of R1 000 or
one year’s imprisonment or both.
(c) Section 7 limits the acceptance of consideration before the building is ready for
occupation. This prohibition does not apply to the acceptance of an amount paid by the
buyer to an attorney or estate agent in trust for the benefit of the seller or if the seller
provides an irrevocable and unconditional guarantee from a bank, building society or
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
(d)
Page 18 of 21
insurance company to the buyer in which it is undertaken that the amount will be
returned to the buyer if the building is not ready for occupation within the agreed time.
In terms of the provisions of section 8 the court may, in cases where the contract does
not meet the formalities and requirements set out in the Act, reduce the rate of
interest on the outstanding amount owed by the buyer, rectify the contract or declare
the contract void ab initio. Such
Page 88
application to the court must be made within two years after conclusion of the
contract. Every party is entitled to reclaim that which has already been performed and
both parties may claim damages, as set out in section 9, from the other party.
6.4.4 Time-sharing on the basis of a club
Regulations 2 and 6 to 13 contain provisions for time-sharing on the basis of a club or on
any basis other than a sectional title scheme or a shareblock scheme. The provisions in the
regulations deal primarily with the introduction of a management association for the scheme
and sets out the rights, entitlements and duties of this management association and of the
persons who acquire use rights.
(a) Club without legal personality
In the case of a club without legal personality, the members’ time-sharing interests are
determined by the nature of their rights as members.
Club without legal personality
(aa) All members are common owners of the assets of the club (except if the
assets are held by a trust).
(bb) Members can be held personally liable for the obligations of the club.
(cc) All legal relations between members are of a contractual nature.
(dd) A member may not alienate or encumber his share in the common property
while the club exists (except if such alienation is specifically provided for in
the rules of the club).
(ee) A member’s common ownership is terminated if he resigns from the club and
is shared by the remaining members in equal shares (except if alienation of
the common ownership is specifically provided for in the rules).
(b) Club with legal personality
In the case of a time-sharing scheme run by a club with legal personality, the members’
rights will differ from those in a club without legal personality.
Club with legal personality
(aa) On the basis of their rights being membership rights, members will acquire
creditors’ rights only regarding the use of the club’s property.
Page 89
(bb)
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
Page 19 of 21
The members are not the owners of the club’s assets, but the club (as a
body corporate) is the owner of all assets. The legal relationships between
members and between members and the club are therefore not real rights,
but creditors’ rights resulting from the relationship between the members
and the club as legal person.
(cc) Members cannot be held personally liable for the club’s obligations.
6.4.5 Levies
Levies must be paid by the buyers of an interest in time-sharing on the basis of timemodules sold and the developer pays levies on the same basis for unsold time-modules.
6.5 Housing development schemes for retired persons
Definition
In terms of the Housing Development Schemes for Retired Persons Act 65 of 1988
(as amended) a housing interest in respect of a housing development scheme for
retired persons (persons older than 50 years) is a right to occupy a specific part of
the immovable property managed in terms of the scheme, which right to occupy is
based on ownership or a creditor’s rights.
A housing development scheme is managed on the basis of conferring a right to occupy in
terms of either ownership, a limited real right or a creditor’s right.
Types of housing development schemes
A housing development scheme can be managed in any of the following ways:
(a) A sectional titles scheme in terms of the Sectional Titles Act 95 of 1986, in
which case the right to occupy is based on ownership.
(b) A shareblock scheme in terms of the Share Blocks Control Act 59 of 1980, in
which case the right to occupy is based on a creditor’s right.
(c) Membership of or participation in a club, association or organisation which
manages a housing development scheme, in which case the right to occupy
is based on a creditor’s right.
Page 90
(d)
(e)
A registered or unregistered long-term lease, in which case the right to
occupy is based on a limited real right or a personal right respectively. It is
normally in the form of a so-called life-right agreement in terms of which the
occupier has the right to occupy the unit for the duration of his or her life
against payment of a one-time payment at the commencement of the
agreement.
However, a housing development scheme cannot assume the form of timesharing in terms of a time-sharing scheme.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
Page 20 of 21
Therefore, in addition to ownership, all forms of rights of occupation are protected. The right
to occupation can be given against the payment of a single sum of money or instalments
paid over a period of time in addition to or instead of a levy. Such a sum may be paid back
in full or in part on the death of the buyer.
Legal nature of right to occupy
(a) In terms of section 4A the right to occupation, contained in a contract as
prescribed in section 4 of the Act, provides a limited real right to the
occupier similar to a registered long-term lease. This is a statutory limited
real right, irrespective of the question whether the right to occupy is based
on ownership, a limited real right or a creditor’s right. Such a right to
occupation prevails over all other rights regardless of the time at which such
other right came into being or whether it is registered against the land or
not.
(b) Section 4B provides that the right of occupation prevails over registered
mortgages in case of alienation of land, even in the case where the
mortgages were registered before the right to occupation came into being.
(c) In Boland Bank Bpk v Engelbrecht 1996 (A) it was held that the preferential
right of the occupier in terms of sections 4A and 4B is based on the
endorsement of the title deed of the land to the effect that a housing
development scheme is conducted on the property. Until the endorsement
has been registered against the title deed, no preferential right is created.
The preferential right does not prevail over a mortgage bond registered
before the promulgation of the Housing Development Schemes for Retired
Persons Amendment Act 70 of 1990 on 29 June 1990, unless the mortgagee
has given her written consent.
Page 91
Several other protective measures and formalities of contract are prescribed for the
alienation of housing interests to retired persons. The most important of these are:
(a) the limitation on the acceptance of any payment for the alienation of a housing interest
in a housing development scheme to a retired person before the seller has complied
with certain preconditions; and
(b) the meeting of certain contractual formalities in the deed of alienation of a housing
interest to a retired person.
Summary
Use rights to immovable property have been extended by statute in the past thirty
years to such an extent that these rights are based on ownership as well as
creditor’s rights. The emphasis throughout is on the protection of use rights,
irrespective of the nature of the right.
Sectional title schemes are based on an adaptation of common law principles. A
sectional owner is owner of a section of the building (flat, shop or office), attached
to an undivided share in the common ownership (bound common ownership). The
size of the undivided share is determined with reference to the participation quota.
Time-sharing on the basis of sectional titles and housing development schemes for
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap06
Page 21 of 21
retired persons on the basis of sectional title are also based on the abovementioned principles.
In the case of a shareblock company the shareholder acquires shares in the
company and, on the basis of that, creditor’s rights against the company. The
most important creditor’s rights are use rights in respect of a part of the building
owned or leased by the company, as well as creditor’s rights in respect of the use
of the assets of the company by the directors. Time-sharing and housing
development schemes for retired persons on the basis of shareblocks are based on
the same principles.
Other kinds of rights on which time-sharing schemes and housing development
schemes for retired persons are based include long-term leases, membership of
clubs (with or without legal personality) or agreements pertaining to occupation
rights.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap06.xhtml
24-Jul-18
Chap07
Page 1 of 15
Page 92
Chapter 7
Limitations on ownership
7.1
7.2
7.3
7.4
7.5
Introduction
Statutory limitations
7.2.1 Taxation
7.2.2 Immovable property in general
7.2.2.1
The Expropriation Act 63 of 1975
7.2.2.2
The Spatial Planning and Land Use Management Act 16 of 2013
7.2.3 Rural land
7.2.4 Urban land
7.2.5 Movable property
Creditor’s rights of third parties against the owner
Limited real rights of third parties in the property
Neighbour law
7.5.1 General
7.5.2 Nuisance
7.5.2.1
Nuisance in the narrow sense
7.5.2.2
Nuisance in the wider sense
7.5.2.3
Nuisance and abuse of rights
7.5.3 Lateral and surface support
7.5.4 Encroachments
7.5.4.1
Buildings
7.5.4.2
Branches, leaves and roots
7.5.5 Interference with the natural flow of water
7.5.6 Elimination of danger
Summary
Overview
•
How is ownership limited?
•
What are the most important statutory limitations regarding ownership?
Page 93
•
•
•
•
•
•
•
Why is there a distinction between limitations on urban and rural immovable property?
What recent legislation limits ownership of immovable property?
Is ownership of movable property also limited?
What is the difference between limitations based on real rights and limitations based
on creditor’s rights?
What limitations are there on the ownership of neighbours?
What principles apply in the case of nuisance?
What are the obligations of neighbours regarding lateral support, encroachments and
the flow of water?
7.1 Introduction
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap07.xhtml
24-Jul-18
Chap07
Page 2 of 15
Although ownership often provides the owner with comprehensive power regarding a thing,
this power is not of an absolute nature. This means that ownership does not provide an
owner with absolute and unlimited entitlements regarding his property (see chapter 4
above). There are several limitations on an owner in the exercise of his entitlements of
ownership.
Limitations on ownership
(a) Statutory limitations
(b) Creditor’s rights of third parties against the owner
(c) Limited real rights of third parties in the property
(d) Provisions of neighbour law
7.2 Statutory limitations
A number of statutory provisions limit the owner’s entitlements regarding his property. The
reason for these statutory limitations is usually that it is expected of an owner to exercise his
entitlements in the interest of the community (see 4.3.2 above).
7.2.1 Taxation
The best-known provision which indicates an interference by the government in the
patrimonial rights of individual owners, is the levying of taxes.
Page 94
Examples
(a) In terms of property law all immovable property within the jurisdiction of a
local government is taxed by the local authority (property taxation), and tax
by means of the payment of transfer duties or value-added tax on all sales of
immovable property is levied by the state.
(b) In the case of movable property, motor vehicles are taxed by the provincial
government in the form of motor licences as an important source of income
for these institutions, while owners of television receivers pay taxes in the
form of television licences.
7.2.2 Immovable property in general
control mechanisms exist in the case of immovable property. An important example
|Several
is the statutory provisions regarding the restoration of land rights in terms of the Restitution
of Land Rights Act 22 of 1994. These are discussed more fully in chapter 23 below.
The Expropriation Act 63 of 1975 and the Spatial Planning and Land Use Management Act
16 of 2013, in particular, are far-reaching provisions which influence the entitlements of land
owners (rural and urban) in various ways. Other examples of legislation in respect of
immovable property are the Land Reform (Labour Tenants) Act 3 of 1996; the Extension of
Security of Tenure Act 62 of 1997 and the Prevention of Illegal Eviction from and Unlawful
Occupation of Land Act 19 of 1998 (see also the examples in 4.3.2 above and chapter 23
below).
7.2.2.1 The Expropriation Act 63 of 1975
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap07.xhtml
24-Jul-18
Chap07
Page 3 of 15
The Constitution of the Republic of South Africa of 1996 (section 25) contains the general
principles and the Expropriation Act 63 of 1975 contains specific measures pertaining to the
expropriation of urban and rural land – Du Toit v Minister of Transport 2006 (CC).
Definition
Through expropriation:
(a) ownership of the land vests in the public interest in the expropriator;
(b) the previous owner’s ownership is terminated without his consent;
(c) against payment of compensation.
The procedure for expropriation is prescribed by the Expropriation Act 63 of 1975 (see 8.7
below for a comprehensive discussion). The Constitution, on the
Page 95
other hand, contains, in section 25(3), general principles for the determination of
compensation (see chapter 22 below). In order to comply with the requirements of section
25(2) and (3) of the Constitution, an Expropriation Bill was published in 2015 and is now
under consideration
7.2.2.2 The Spatial Planning and Land Use Management Act 16 of 2013
The Spatial Planning and Land Use Management Act 16 of 2013 contains the statutory
framework for the management of spatial planning and land use in South Africa. It provides
for inclusive, reasonable and efficient spatial planning and land development on national,
provincial, regional and local government levels.
In terms of section 7 of the Act the following planning principles are stated:
(a) Spatial justice is introduced, whereby historical development imbalances must be
redressed through improved access to and use of land. Spatial planning on national,
provincial, regional and local government levels must be focused on persons and areas
that were previously excluded, with emphasis on informal settlements, formal
homeland areas and urban and rural areas characterised by widespread poverty and
deprivation.
(b) Spatial sustainability must be improved, which entails that fiscal, institutional and
administrative capacities must be maintained on all levels of government; high
potential agricultural land must be protected; environmental management instruments
must be applied; equal access to the property market must be improved and the cost
on infrastructure and social services must be taken into consideration.
(c) Efficient use of existing resources and infrastructure must be improved and negative
financial, social, economic and environmental consequences must be taken into
consideration in all decision-making processes.
(d) Spatial resilience and flexibility must be accommodated in spatial plans, policies and
land use management systems to ensure sustainable livelihoods for communities most
likely to suffer the impact of economic and environmental shocks.
(e) The principle of good administration must be maintained on all levels of government to
ensure that an integrated approach to land use and development is guided by the
spatial planning and land use management system; all state departments must comply
with the stated requirements during the development of land planning measures and
the development processes must at all times be transparent, inclusive and with public
participation.
Page 96
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap07.xhtml
24-Jul-18
Chap07
Page 4 of 15
Chapter 4 of the Act is divided into sections B, C and D, which sections provide the
framework for spatial development on national level (sections 13 and 14), provincial level
(sections 15 to 17), regional level (sections 18 and 19) and municipal level (sections 20 and
21) respectively.
7.2.3 Rural land
One of the most important statutory measures regarding rural land is the Environment
Conservation Act 73 of 1989 and the National Environmental Management Act 107 of 1998.
These Acts provide that measures to effectively protect and control the use of land can be
drafted and enforced. In the case of rural land the following measures are important:
(a) A region can be declared a protected nature area by means of a notice in the Provincial
Gazette for the purposes of maintaining ecological processes, natural systems, natural
beauty, species of indigenous wild-life or biological diversity – section 16(1)(a) of the
Environment Conservation Act 73 of 1989.
(b) The Minister of Environmental Affairs can, by notice in the Government Gazette,
declare any region in the Republic, including the territorial waters, to be a special
nature reserve for the purpose of protecting the environment in or particular
characteristics of that region – section 18(1)(a) of the Environment Conservation Act
73 of 1989.
These measures can severely limit the entitlements of the owner or other holders of real
rights (for instance a holder of mineral rights) in respect of the land.
Corium (Pty) Ltd v Myburgh Park Langebaan (Pty) Ltd 1993 (C)
The respondent acquired a permit from the Administrator of the erstwhile Cape
Province in terms of section 8(1)(a) of the previous Physical Planning Act 88 of
1967 to develop property in a nature area adjacent to the West Coast National
Park. The applicant applied for an interdict to stop the respondent from continuing
with this property development until an application for review of the
Administrator’s granting of the permit had been finalised. The court granted the
interdict and decided:
‘Nature parks are a national asset of immense value, perhaps the most valuable natural
resource we have. I would be loath to permit the first respondent to continue with any
activities in the nature area which might have the effect of making it more difficult for the
applicants, after having made their voices known, to have the development in the nature
area reversed.’
Page 97
In terms of section 28(1) of the National Environmental Management Act 107 of 1998 any
landowner or controller of land is obliged to prevent pollution or degradation of the
environment, or if it has already been polluted, take reasonable steps to prevent further
degradation or restore the land.
Other Acts pertaining to agricultural land are, amongst others, the Fencing Act 31 of
1963; the Agricultural Pests Act 36 of 1983, the Conservation of Agricultural Resources Act
43 of 1983 and the National Veld and Forest Fire Act 101 of 1998, to name but a few.
7.2.4 Urban land
Statutory provisions dealing with the nature and standard of buildings on urban land are
contained in the National Building Regulations and Building Standards Act 103 of 1977.
Other statutory provisions are, amongst others, the National Environmental Management:
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap07.xhtml
24-Jul-18
Chap07
Page 5 of 15
Air Quality Act 39 of 2004; the Health Act 63 of 1977; the Environment Conservation Act 73
of 1989 and the Housing Act 107 of 1997.
Verstappen v Port Edward Town Board 1994 (D)
In terms of section 20(1)(d) of the Environment Conservation Act 73 of 1989 a
dumping site may not be operated without a permit from the Minister of Water
Affairs. The Minister must, in terms of section 20(2), promulgate regulations for
the procedure in applying for a permit. At the time of the application for a permit
by the respondent the regulations had not been promulgated. The court decided
that the fact that procedures had not been established by regulation did not
detract from the fact that the operation of a dumping site without a permit was
wrongful.
7.2.5 Movable property
In the case of movable property statutory limitations also limit the owner’s entitlements. The
use of motor vehicles is regulated by the National Road Traffic Act 93 of 1996. Several Acts
prohibit the possession of certain things, for instance the Drugs and Drug Trafficking Act 140
of 1992 and the Prevention of Organised Crime Act 121 of 1998 prohibit the possession and
distribution of and trading in substances defined in these Acts; and the Films and
Publications Act 65 of 1996 prohibits the possession or distribution of objectionable
publications or objects. The Animals Protection Act 71 of 1962 prohibits an owner to abuse,
neglect, overburden, overwork or frighten his animals and such actions by an owner are a
crime which is punishable in terms of the Act, while the Dangerous Weapons Act 71 of 1968
and the Firearms Control Act 60
Page 98
of 2000 limit the entitlements of an owner of a weapon or of ammunition in various ways.
7.3 Creditor’s rights of third parties against the owner
It is possible to limit the exercise of any entitlement by the owner of a thing contractually.
Such a contractual limitation does not imply a real burden on the thing in terms of the
subtraction from the dominium principle (see chapter 3 above), because:
(a) the contractual limitation, being a creditor’s right, is enforceable only against the
owner in his personal capacity and does not encumber the thing as such;
(b) it cannot be enforced against the owner’s successors in title.
Another person can, in the same way, acquire certain entitlements (for instance a use right)
regarding the property by means of a contract with the owner. These rights, as creditor’s
rights, are enforceable only against the owner personally and do not encumber the property.
Therefore such rights are not enforceable against the successors in title of the owner. (For
the application of the doctrine of notice, see 17.6.1 below.)
If such a creditor’s right which a third party acquires in terms of a contract is closely
related to a registrable limited real right in respect of immovable property, it can be
registered in the deeds registry without the creditor’s right thereby becoming a real right –
Ex parte Geldenhuys 1926 (O) and see also 3.2.3.5 above. If it is not closely related to a
registrable real right, such a creditor’s right is not registrable.
Examples
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap07.xhtml
24-Jul-18
Chap07
(a)
(b)
(c)
(d)
Page 6 of 15
An owner’s entitlements of use and control regarding an immovable thing
can be limited by a lessee or occupier acquiring and exercising certain
entitlements of use and control in respect of the thing by means of an
unregistered short lease or an occupation agreement.
The owner’s entitlement to alienate a thing can be limited by means of an
option or right of first refusal which is conferred contractually.
The granting and limitation of the entitlement to use part of a building in a
shareblock scheme, as set out in the use agreement, limit the use rights of
the owner (the shareblock company) – see 6.3 above.
The division of the use of a thing by co-owners by means of a use
agreement; or the division of the use of a sectional title unit on a time basis
by means of an agreement in the case of a time-sharing scheme on the basis
of sectional titles – see 6.4 above.
Page 99
7.4 Limited real rights of third parties in the property
An owner’s exercise of entitlements can be limited by the limited real rights that other
people may have regarding the thing. These limitations differ from those arising from
creditor’s rights in the following ways (see 7.3 above):
(a) It limits the owner’s ownership (dominium) since it is a real burden on the thing
(subtraction from the dominium – see chapter 3 above).
(b) It is enforceable against the owner and his successors in title (subsequent owners).
(c) It is created in the case of immovable property by registration in the deeds registry
and in the case of movable property by delivery of the thing to the holder of the limited
real right (see 9.2 and 9.3 below).
Examples
(a) Real servitudes (praedial servitudes) such as a right of way, a right of
aqueduct or grazing rights registered against the land – see chapter 17
below.
(b) Personal servitudes, such as a usufruct or use right registered against the
land – see chapter 17 below.
(c) Real security rights, such as the granting and registration of a mortgage over
immovable property or the registration of a notarial bond over movable
property or the pledge of a movable, which limits the owner’s entitlements to
alienate, control and use and which gives the holder of the right real security
– see chapter 18 below.
7.5 Neighbour law
7.5.1 General
In the case of neighbour law the owner’s exercise of entitlements in respect of his land is
limited, not in the interest of the community, but in the interest of landowners or users of
adjacent or nearby land.
Purpose
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap07.xhtml
24-Jul-18
Chap07
Page 7 of 15
The purpose of neighbour law is the harmonisation of neighbouring owners’ or
users’ interests by weighing their rights and obligations in the exercise of
entitlements against each other in order to balance conflicting ownership interests.
On the one hand the landowner must exercise his entitlements in respect of his
land reasonably and, on the other hand, the neighbour must tolerate this within
reasonable bounds.
Page 100
7.5.2 Nuisance
The basis of neighbour law is that land must be used in such a way that another person is
not prejudiced or burdened (sic utere tuo ut alienum non laedas). If an owner or occupier of
land, in the exercise of his entitlements, should inconvenience a neighbouring owner or
occupier by creating or allowing a situation as a result of which his neighbour suffers
damage or if the neighbour is disturbed in the use and enjoyment of his property, he acts
unreasonably – Gien v Gien 1979 (T).
Remedies
(a) If a land user (owner or occupier) through his unreasonable actions causes
patrimonial loss or personal injury to his neighbour and, therefore, commits
a delict, the neighbouring owner or occupier has recourse to delictual
remedies.
(b) Such actions will also give the owner or occupier common law property law
remedies since they constitute an infringement of ownership or the right of
occupation (or the entitlements arising from ownership or the right of
occupation).
These remedies are discussed at chapter 10 below.
The one approach need not, however, exclude the other. The infringement can, in certain
circumstances, be of a delictual nature (the causing of patrimonial loss or infringement of a
personality right), while, in other circumstances, it can be an infringement of entitlements of
the owner or occupier only and, therefore, an infringement of a real right.
7.5.2.1 Nuisance in the narrow sense
Definition
Nuisance in the narrow sense consists in an infringement on the neighbour’s use
and enjoyment of his land, which constitutes an infringement of a personality right
(for instance his health) or an entitlement of use (for instance his right to the
undisturbed enjoyment of his property), by means of noise, smells, gases and so
on. These infringements can normally be prohibited by means of an interdict.
The criterion of reasonableness is used as point of departure – see in this regard Rand
Waterraad v Bothma 1997 (O). The following principles are taken into consideration in the
application of the criterion of reasonableness:
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap07.xhtml
24-Jul-18
Chap07
Page 8 of 15
Page 101
(a)
(b)
(c)
The nuisance must usually be repetitive or continuous, since a single action of short
duration must be tolerated, except if there is a reasonable expectation that the activity
will be repeated.
Only annoying actions which would be unreasonable in the opinion of the community
can be seen as an unusual activity.
The action or activity must be a nuisance according to a normal person.
Prinsloo v Shaw 1938 (A)
‘The standard to be taken must not be that of the perverse or finicking or overscrupulous
person, but of the normal man of sound and liberal tastes and habits.’
(d)
Aspects like the location of the properties, the zoning of the properties as residential,
business or industrial areas, the habits of the inhabitants and the question whether the
health of the neighbour might be affected, are important in the determination of the
reasonableness of the actions.
Examples
The following cases illustrate the application of the criterion of reasonableness:
(a) Leith v Port Elizabeth Museum Trustees 1934 (EC): the keeping of seals on
the museum grounds in a suburban residential area was prohibited by an
interdict because of the noise the seals made.
(b) Prinsloo v Shaw 1938 (A): the holding of noisy religious exercises several
times per day, which were usually accompanied by the clapping of hands and
the stamping of feet, was prohibited by an interdict.
(c) Van der Heever v Hanover Municipality 1938 (C): trees planted by the
municipality darkened the applicant’s home. His application for an interdict
to have the trees removed was refused because the municipality did not act
unreasonably and the applicant could not prove that any right had been
infringed.
(d) De Charmoy v Day Star Hatchery 1967 (D): the keeping of chickens which
caused such a noise that the applicant’s use and enjoyment of his property
was disturbed, was prohibited by means of an interdict.
(e) Gien v Gien 1979 (T): the respondent was prohibited by means of an
interdict to use an apparatus which, by means of a cracking noise, was
intended to scare away monkeys and baboons from his garden, because of
the nuisance which the cracking sound caused for the neighbour.
Page 102
(f)
Laskey v Showzone CC 2007 (C): an interdict was granted to prevent loud
noise from a restaurant, which noise was in contravention of municipal noise
control regulations. The interdict was temporarily suspended to enable the
respondent to comply with the noise control regulations. In Intercape
Ferreira Mainliners v Minister of Home Affairs 2010 (WC) an interdict was
granted against the Minister for the use of a building as a refugee centre in a
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap07.xhtml
24-Jul-18
Chap07
(g)
Page 9 of 15
residential area in contravention of the zoning regulations. The centre was
ordered to be closed due to the nuisance it caused by the flocking together
of refugees in the street in front of the building. On the other hand it was
held in Wingaardt v Grobler 2010 (EC) that Christmas lights which attracted
a crowd of spectators at night did not constitute nuisance. The difference is
that no extraordinary conduct or unreasonable act was exercised in the lastmentioned case, while the use of a building as refugee centre in
contravention of the zoning regulations was not reasonable conduct.
Allacas Investments (Pty) Ltd v Milnerton Golf Club 2008 (SCA): golf balls
from a neighbouring golf course infringed on the landowner’s enjoyment of
his property. A mandatory interdict that the Golf Club must prevent such
infringement was granted.
7.5.2.2 Nuisance in the wider sense
Definition
Nuisance in the wider sense consists in the infringement of the neighbour’s
exercise of entitlements in general, or actions by the neighbouring owner or
occupier that cause damage. In such circumstances compensation can be claimed
or the infringement can be prohibited by means of an interdict.
Compensation for damages is claimed with the actio legis Aquiliae. The requirements for this
action are discussed at 10.3.3 below, and the requirements for an interdict are discussed at
10.2.3 below.
Examples
(a) Kirsch v Pincus 1927 (T): the planting of willow trees by the defendant next
to the boundary of a malt manufacturer caused the willow leaves to fall
amongst the wheat on the cement floors where it was being dried. Because
of the nuisance caused by the leaves, the defendant was ordered to pay
compensation to the plaintiff.
Page 103
(b)
(c)
(d)
Van der Merwe v Carnarvon Municipality 1948 (C): the municipality allowed
oil to seep from reservoirs onto the plaintiff’s land and the plaintiff succeeded
in a claim for damages based on nuisance.
Malherbe v Ceres Municipality 1951 (A): leaves from oak trees next to the
street blocked the gutters of appellant’s building and he alleged that the
roots had damaged the foundations and walls of the building. His application
for an interdict was denied because respondent had not acted unreasonably
and because it is normal practice to plant oak trees next to streets.
PGB Boerdery Beleggings (Edms) Bpk v Somerville 62 (Edms) Bpk 2008
(SCA): the court refused to grant an interdict to restrain an owner to keep
blue wildebeest on his farm, because the applicant could not prove that the
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap07.xhtml
24-Jul-18
Chap07
Page 10 of 15
wildebeest would pose an unreasonable risk to his farming operations on the
adjacent farm.
Nuisance in the wide sense which causes damage to the neighbour, constitutes a delict. The
elements of a delict are the following:
(a) an act or an omission (in circumstances where there is a legal duty on a person to
act);
(b) which violates the law (unlawfulness);
(c) committed in a culpable way (intent or negligence);
(d) which action caused (causality);
(e) damage or injury to the injured party.
Regal v African Superslate 1963 (A)
The legal predecessor of the respondent allowed slate waste to accumulate in a
place from where it was being washed onto appellant’s land. The omission to
prevent this spillage of the slate was unlawful, but because of the fact that it
would have been extraordinarily expensive and unpractical (and therefore
unreasonable) to expect respondent to prevent the slate from accumulating
further, the appellant’s application was denied. In the decision a number of
important aspects were touched upon.
(a) The English law regarding nuisance does not form part of the South African
common law and the determination of reasonableness must be made on the
basis of Roman-Dutch principles, even if these principles are not as clear as
the English precedents.
Page 104
(b)
(c)
Reasonableness is the determining criterion in the weighing of the interests
of the various neighbouring owners and occupiers. The exercise of
entitlements must be within reasonable limits and the neighbour must
tolerate this within reasonable limits. There are, therefore, mutual
obligations on neighbours.
Where the unlawful actions of the neighbouring owner or occupier cause
damage to his neighbour, liability must be determined with reference to the
requirements of the actio legis Aquiliae (see 10.3.3 below). Culpability in the
form of intent or negligence is a requirement for this action. This aspect was
not discussed fully in the decision, since culpability is not a requirement for
an interdict (as was applied for), but it can nevertheless be deduced from
the decision that culpability is a requirement for delictual liability in terms of
the actio legis Aquiliae.
From Foentjies v Beukes 1977 (C) it can be deduced that delictual liability is not applicable in
the case of encroachments, lateral support and the natural flow of water, since principles of
English law are applied in these cases. Damages may in these circumstances be claimed
without having to prove culpability in the form of intent or negligence (see also 10.3.3
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap07.xhtml
24-Jul-18
Chap07
Page 11 of 15
below). In Three Rivers Ratepayers Association v Northern Metropolitan Local Council 2000
(W) it was again confirmed that culpability is not a requirement for an interdict.
7.5.2.3 Nuisance and abuse of rights
The question arises whether an owner who causes nuisance for his neighbour, is abusing his
rights (entitlements). If the owner acts with the exclusive purpose of harming his neighbour
(animo vicino nocendi) and it results in real damage or prejudice to his neighbour, his
actions are unlawful and can no longer be regarded as the exercise of an entitlement of
ownership.
Examples of such conduct are the construction of a building with the express purpose of
blocking the neighbour’s view or the planting of deciduous trees with the express purpose of
allowing leaves to fall into the neighbour’s swimming pool or onto his threshing floor. In such
circumstances it is inappropriate to speak of abuse of right, since the unlawful activity
cannot be classified as any kind of right. The disposition of the actor is of cardinal
importance to determine whether he intended only to harm the neighbour. An otherwise
lawful action becomes unlawful if it is done with an improper motive (animo vicino nocendi)
toward the neighbour, if the actor derives no benefit from it and if the neighbour is injured.
Page 105
Sometimes, however, the conduct of the owner is lawful in that his exclusive purpose is
not to injure his neighbour, even though his actions cause his neighbour injury. An example
is where the addition of a chimney to a house is a necessity, but the smoke from the
chimney is a nuisance for the neighbour. The criterion of reasonableness is also applied
here. If it is reasonably possible to move the chimney without unduly high costs, and this
move would diminish the nuisance for the neighbour, the enforcement of the interests of the
neighbour will settle the matter. In this case it is also improper to speak of abuse of rights,
since neither of the neighbours acted unlawfully.
7.5.3 Lateral and surface support
A landowner is entitled to the support supplied by the land of the neighbour to his land.
Consequently, there is an obligation on neighbours to use their own land in such a way that
the lateral and surface support of neighbouring land is not undermined by excavations for
building or mining or other purposes. The obligation to provide lateral support does not have
a clear common-law origin, but it is a South African development influenced by English law –
Elektrisiteitsvoorsieningskommissie v Fourie 1988 (T).
The obligation exists in respect of the support given by the land to a neighbouring piece of
land in its natural state and it does not include support in respect of building or other
additions which form an additional burden to neighbouring land. Damage to additions on
neighbouring land does not, therefore, give the owners of the neigbouring land any
remedies, except in cases where it can be proved that reduced lateral support of the
neighbouring land in its natural state caused the damage to buildings on the neighbouring
land. It is an inherent characteristic of ownership of the land that the owner is entitled to the
support of his land by the land of his neighbour in its natural state.
The following principles apply to lateral and surface support:
(a) It is necessary only to prove that the neighbour has disturbed the lateral and surface
support, and not to prove culpability in the form of either intent or negligence –
Demont v Akal’s Investments 1955 (D).
(b) The plaintiff need not prove wrongfulness, but must simply prove that the damage had
been caused by the removal of lateral support by the defendant – Gijzen v Verrinder
1965 (D).
(c) Liability of the actor is not based on delict, but on the interference with a right
(entitlement) of the owner – Foentjies v Beukes 1977 (C).
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap07.xhtml
24-Jul-18
Chap07
(d)
Page 12 of 15
The duty of lateral support applies only to land in its natural state and not in respect of
buildings and additions. If excavations on the neighbouring land cause damage to
buildings, the owner of the land on which the
Page 106
building is situated has no claim for compensation unless he can prove that the
excavation has increased the burden on the land in its natural state. If this is the case,
compensation for damage to additions (like an orchard) can be claimed. To prevent
problems in urban areas, building regulations contain provisions dealing with the
support of buildings – East London Municipality v South African Railways and Harbours
1951 (EC).
7.5.4 Encroachments
Encroachments can be of two kinds, namely encroachments from buildings and those from
the branches and roots of plants planted on the neighbouring land. The rule that the
landowner’s entitlements extend into the air above the land and into the earth below the
land (cuius est solum eius est usque ad coelum et usque ad inferos) is recognised in South
African law (see 6.2.1 above). Interference with these entitlements of the owner can result
in various remedies.
7.5.4.1 Buildings
In common law the landowner’s entitlement to build on his land was virtually unlimited,
although it is currently limited by several statutory measures – see 7.2.4 above. However,
because of the application of the cuius est solum rule, a landowner may not exceed the
vertical boundaries of his land. The foundations of buildings or additions may therefore not
exceed the boundaries under the ground, nor may such additions exceed the boundaries in
the air.
If such encroachments do take place, the landowner has the following remedies:
Remedies
(a) Removal of the encroachment.
(b) Compensation to the owner.
(c) Transfer of the encroaching section to the encroacher and compensation to
the owner.
(d) Termination of occupation of the encroaching section by the encroacher and
compensation by the owner to the encroacher.
(a) Removal
The owner may demand that the encroaching parts of the building be removed, although he
may not remove them himself – Smith v Basson 1979 (W). The factors to be taken into
consideration in deciding whether the encroachments must be removed, are reasonableness
and fairness. The court must
Page 107
exercise its discretion within the criteria of reasonableness of neighbour law – Rand
Waterraad v Bothma 1997 (O). These factors are determined by the following: the lapse of
time since the owner became aware of the encroachment, the nature and degree of
encroachment and the cost of removing the encroachment in relation to the damages
suffered by the owner.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap07.xhtml
24-Jul-18
Chap07
Page 13 of 15
(b) Compensation
Compensation can be awarded to the landowner if he did not exercise his right to removal or
if it would, in the circumstances, be unreasonable to demand removal. The court has a wide
discretion to award compensation in circumstances where it will be unreasonable or unjust to
order removal – Trustees Brian Lackey Trust v Annandale 2004 (C). The basis of the
reasonableness criterion must, however, be clearly set out in the written defence if the
defendant offers payment of compensation instead of removal.
(c) Transfer and compensation
The defendant can be ordered to take transfer of the part of the land on which the
encroachment took place as an additional order to the payment of compensation. In these
circumstances the compensation includes the cost of transfer of the part of the land, the
value of the part without the encroaching improvement and payment of damages because
the encroaching action took away part of the landowner’s land – Meyer v Keiser 1980 (D).
The defendant cannot, however, claim transfer of the whole property on which the
encroachment took place against payment.
(d) Termination and compensation
The landowner can terminate the defendant’s occupation of the encroaching building, but
must then compensate the defendant for the value of the improvements made on his land –
see 19.6.3 below for the way in which the value of improvements is calculated. Because of
the application of the criterion of reasonableness, this order will only be made if the
encroachment is such that it constitutes an independent building and not in circumstances
where the encroachment is slight and forms part of the building on the neighbouring land.
7.5.4.2 Branches, leaves and roots
In the circumstances where the branches and leaves of plants encroach on the air space
above a landowner’s land or if the roots of plants encroach on the land under the surface,
the remedies are not the same as in the case where buildings encroach.
Page 108
Remedies
The following principles are applied in these circumstances:
(a) The landowner can request that the owner of the neighbouring land cut off or
remove the encroaching branches and leaves. If the neighbour does not do
this within a reasonable time, the landowner can ask for an order to remove
or remove the encroachments himself – Malherbe v Ceres Municipality 1951
(A). An order to remove will, however, be given only if the landowner has
given the neighbour a reasonable time to remove the encroachments. The
landowner may not keep the chopped off branches, except if the owner of
the trees gives permission or neglects to remove the branches, leaves and
fruit.
(b) If the plants are planted on the neighbour’s land, these plants, after taking
root, will become the property of the neighbour through implantatio (see
8.3.3 below) and he can then remove or keep them at will. The neighbour
can, however, not insist that these plants should be removed by the
defendant on the neighbour’s land – Smith v Basson 1979 (W).
(c) lf the roots of trees planted on the neighbour’s land encroach on the land of
a landowner, he can remove the roots himself – Bingham v City Council of
Johannesburg 1934 (W). There is, however, no authority (either in common
law or otherwise) that a landowner can get an order for removal against the
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap07.xhtml
24-Jul-18
Chap07
Page 14 of 15
neighbour. The possibility exists that the landowner can, based on the
nuisance caused by the trees, get an order for the removal of the trees.
7.5.5 Interference with the natural flow of water
A distinction is made between urban and rural land regarding the obligation between
neighbours in respect of the natural flow of water. An owner of lower-lying rural land is
obliged to show greater tolerance for water flowing onto his land from his neighbour’s
higher-lying land than his urban counterpart. The flow of water to a neighbour’s land may, in
the case of rural land, be influenced by the reasonable cultivation of and building on the
land. Reasonable cultivation of the land, however, implies that the interests of the neighbour
must always be kept in mind – a vlei on one piece of land may not be filled in such a way
that it results in a vlei on the neighbouring land.
In the case of urban land every landowner is also obliged to accept the natural flow of rain
water from higher-lying land. In Williams v Harris 1998 (A) It was held that several factors
have to be taken into consideration to determine whether the natural flow was unreasonably
disturbed by building
Page 109
or construction, namely whether the concentration, volume or direction of the flow was
disturbed to such an extent that it caused damage or nuisance to the lower-lying owner. In
Pappalardo v Hau 2010 (SCA) it was held that the burden of proof rests on the owner of the
higher-lying land if it is alleged that building activities on his property have disturbed the
natural flow of water to the lower-lying property.
7.5.6 Elimination of danger
There is an obligation on landowners to eliminate dangers that originate from their land
within reasonable limits. An example is that landowners who keep wild or dangerous animals
or poisonous plants on their land, must take reasonable precautions that neighbours or
visitors are not threatened. If the animals escape or the plants spread, the landowner is
liable to compensate his neighbours for any resulting damage. An owner of cattle which
strayed on a road is liable for damages to a vehicle which collided with the cattle. In Enslin v
Nhlapo 2008 (SCA) it was held that the damage could be prevented by locking the gate to
the farm, preventing the cattle from straying. A landowner of urban land who electrifies a
common wall between two neighbouring properties for his personal safety does not
unreasonably create a dangerous situation – Dorland v Smuts 2002 (C). The landowner’s
conduct in protecting his property is objectively seen as reasonable. Furthermore, not only is
there an obligation on a landowner to prevent nuisance, but he must also combat dangers of
a temporary nature, such as the spreading of a veld fire which originated on his land in
terms of the National Veld and Forest Fire Act 101 of 1998. Damages can be claimed from
landowners in the case of fires which originated on or spread from their land — Van der
Eecken v Salvation Army Property Co 2008 (NG).
Summary
It is a recognised principle of property law that ownership does not confer absolute
and unlimited entitlements on the owner, but that various limitations exist in the
interest of the community and for the benefit of other people.
The most important limitation on the owner in the interest of the community as
a whole is the payment of taxes to the state in respect of certain movable and
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap07.xhtml
24-Jul-18
Chap07
Page 15 of 15
immovable property. In the case of immovable property several measures make
land available to a larger section of the community, which imply that the
restitution of land rights and provision of land will require measures for
expropriation. Furthermore, a number of
Page 110
provisions deal with environmental conservation and physical planning which limit
the owner’s entitlements in the interest of the community. Limiting measures in
the case of movable property prohibit the use of such property to the detriment of
the community, for instance motor vehicles, firearms and dependence-producing
substances.
There are also measures which limit the owner’s entitlements, not in the
interest of the community, but in the interest of other individuals. The best known
example in this case is neighbour law, which implies that the owner may not use
his land in such a way that it constitutes an unreasonable burden on his
neighbours. The criterion of reasonableness determines that, in these
circumstances, the owner of immovable property must exercise his entitlements
within reasonable bounds, but that the neighbouring owner or occupier must
tolerate the owner’s exercise of his entitlements within reasonable bounds.
Other examples of the application of the criterion of reasonableness in the case
of neighbour law are the obligation to lateral and surface support, measures
dealing with encroachments, the mutual obligation regarding the natural flow of
water and the elimination of danger.
Other people beside the owner can acquire entitlements (for instance use
rights) in respect of the movable or immovable property of the owner. Holders of
limited real rights acquire entitlements in respect of the thing which limit the
owner’s ownership (dominium) as they burden the property. They are, therefore,
enforceable against the owner and his successors in title. Certain creditors’ rights
can also result in people acquiring entitlements in respect of the owner’s property.
These rights are, however, enforceable only against the owner personally and do
not burden the property as such. Therefore they are not enforceable against
successors in title.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap07.xhtml
24-Jul-18
Chap08
Page 1 of 23
Page 111
Chapter 8
Original acquisition of ownership
8.1
8.2
8.3
8.4
8.5
8.6
8.7
8.8
8.9
8.10
Introduction
Appropriation (occupatio)
8.2.1 Physical control (corpus)
8.2.2 Intention (animus)
8.2.3 Object
Accession (accessio)
8.3.1 Definition
8.3.2 Accession of immovables to immovables
8.3.3 Accession of movables to immovables
8.3.4 Accession of movables to movables
Manufacture (specificatio)
Mixing and fusing (commixtio et confusio)
Acquisition of fruits
Expropriation
8.7.1 Introduction
8.7.2 Expropriation procedure
8.7.3 Compensation
Forfeiture and confiscation
Statutory passing of ownership
Prescription
8.10.1 Definition and purpose
8.10.2 Prescription Act 18 of 1943
8.10.3 Prescription Act 68 of 1969
8.10.4 Consequences of prescription
Summary
Overview
•
What is the difference between original and derivative methods of acquiring ownership?
•
What is appropriation?
•
Which forms of acquisition of ownership by means of accession are distinguished?
Page 112
•
•
•
•
•
•
•
Which principles are applied in case of acquisition of ownership by means of planting
and building?
What is manufacture?
How is ownership acquired by mixing?
When is the ownership of the fruits of a thing acquired?
How does expropriation take place?
What are the requirements for acquisition of ownership through prescription?
What are interruption and suspension of prescription?
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 2 of 23
8.1 Introduction
In South African law a distinction is made between original and derivative acquisition of
ownership:
(a) Original acquisition of ownership is not dependent on the lawful ownership of a legal
predecessor, while this is required for derivative acquisition of ownership. This means
that the benefits and obligations of the previous owner are not usually passed to the
new owner in the case of original acquisition of ownership (they can, in extraordinary
circumstances, be passed to the acquirer – see 8.9 and 8.10 below). If there is no
previous owner (legal predecessor) acquisition of ownership takes place through
appropriation (occupatio) of a thing that is not owned (res nullius) or of a thing that
has been abandoned by its owner (res derelicta) – see 2.4.1 above.
(b) In the case of the original acquisition of ownership the co-operation of the previous
owner is not necessary, but derivative acquisition of ownership can take place legally
only with the previous owner’s co-operation. In certain cases of original acquisition of
ownership there is a legal predecessor who is the owner, but ownership is passed to
the new owner without the legal predecessor’s co-operation. This takes place by means
of accession, prescription and expropriation. Acquisition of ownership in these cases
takes place by operation of law and ownership is not transferred.
Original acquisition of ownership
(a) Appropriation
(b) Accession
(c) Manufacture
(d) Mixing and fusing
(e) Acquisition of fruits
Expropriation
(f)
(g) Prescription
Page 113
8.2 Appropriation (occupatio)
Definition
Appropriation is the unilateral exercising of physical control over a corporeal thing
that can be owned (res in commercio), but which is not owned by anyone (res
nullius or res derelicta) with the intention of becoming the owner.
Several requirements for this form of acquisition of ownership are specified.
|
Requirements
(a) Physical control (corpus);
(b) with the intention of the owner (animus domini);
(c) of a corporeal thing not belonging to anyone.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 3 of 23
8.2.1 Physical control (corpus)
It must be possible to physically control the thing. The nature of the physical control
depends on the circumstances of the case and, especially, on the nature of the object, and is
objectively determined (see, in particular, 13.3.2 below). The physical control need not be
lawful. Although the exercise of unlawful physical control might be a crime, the controller
can become owner of the object, for instance in the case of pornographic material. In some
cases, however, the acquisition of ownership is prohibited by statute, for example in the
case of uncut diamonds.
Reck v Mills 1990 (A)
The respondent attached a rope with a buoy to the condenser of a shipwreck to
indicate that he had physical control over the condenser for the purpose of
salvaging it. The court found that the rope with the buoy was not an adequate
indication of the physical control of the respondent over the condenser, since
control must place the controller in the position where he can use the thing as he
wishes. An indication of physical control would have been the loosening of the
condenser from the wreck and the subsequent attachment of the buoy to the
condenser.
8.2.2 Intention (animus)
The physical control must be exercised with the intention of the controller to be owner
(animus domini). The animus requirement is discussed fully at 13.3.3 below.
Page 114
8.2.3 Object
The control must be exercised in respect of a corporeal thing, which does not belong to
anyone. A distinction is made between things which are not owned by anyone (res nullius)
and things which have been abandoned by the owner (res derelictae) (see 2.4.1 above).
(a) Things with no owners (res nullius)
Definition
Things with no owners (res nullius) are things which can be owned, but which are
not owned by anyone at a particular moment. Ownership of these things can be
acquired by appropriation.
The following principles apply in the case of things with no owners:
(aa) According to principles of common law, wild animals, birds, reptiles, fish and insects
have no owners (res nullius) if they are in their natural state or if they were under
control but have now escaped and cannot be caught again, have disappeared from
sight or are within sight but cannot be pursued. In the case of exercising physical
control over a wild animal with the intention to become owner, the controller becomes
owner by appropriation – Mathenjwa NO v Magudu Game Co (Pty) Ltd 2010 (SCA).
(bb) In terms of section 2(1) of the Game Theft Act 105 of 1991 an owner of wild animals
held for commercial or hunting purposes on land fenced in accordance with section 2
(2), or held in a cage, kraal or vehicle on the land, does not lose his ownership of these
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 4 of 23
animals should they escape from the cage, kraal or vehicle or be removed without the
owner’s permission.
(cc) Domesticated animals are animals which are wild by nature, but which are owned by
someone because they are in the habit of returning to the owner. As soon as they no
longer have the habit of returning, they are no longer owned and can be appropriated.
(dd) Domestic animals are animals which are not, in the eyes of the community, wild
animals, for instance dogs, cats, horses, chicken, cattle, sheep and so forth. Such
animals remain the property of the owner, irrespective of where they are. They cannot
be appropriated, except where the owner abandons his ownership and such animals
become res derelictae or where such animals become so wild that they can no longer
be regarded as domestic animals. The fruit of such animals, such
Page 115
as the honey from bees and the young of animals, belong to the owner of the animals
by means of appropriation.
(ee) Renewable or replaceable products of the sea have no owner and can be appropriated.
This includes things like sea grass, shells, shell fish and fish, but not substantial parts
of the sea or shore, as these belong to the public in general (res publicae – see 2.4.1
above).
(b) Things that have been abandoned (res derelicta)
Definition
Abandoned things are lost or thrown away by the previous owner with the
intention of renouncing his ownership. In these circumstances ownership can be
acquired by appropriation.
If an object is merely lost without the owner giving up his ownership (res deperdita), the
person who finds the thing cannot become owner through appropriation, since the thing was
never abandoned. The intention to abandon a thing is not lightly assumed when a thing is
lost. If a ship’s cargo is thrown overboard during a storm, it cannot be seen as an intention
to abandon the cargo, but must be seen as an attempt to lighten the ship (unless the
contrary becomes clear). A shipwreck that has not been salvaged by its owner is a good
example of a res derelicta. The legal position of shipwrecks is now determined by the Wreck
and Salvage Act 94 of 1996, which provides for the application of the International
Convention of Salvage of 1989.
In some instances things do not become res derelictae after being abandoned by their
owner, but become the property of the state, for example assets of a company which had
not been transferred at the time of dissolution of the company (Rainbow Diamonds (Edms)
Bpk v SA Nasionale Lewensassuransiemaatskappy 1984 (A)).
8.3 Accession (accessio)
8.3.1 Definition
Definition
Accession takes place when two corporeal things or parts of things (usually a
principal and an accessory thing) are combined either through human activities or
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 5 of 23
natural processes in such a way that the one thing or part of a thing loses its
physical or economic independence and becomes a component of another thing.
The thing which remains essentially
Page 116
independent is called the principal thing, while the thing which is merged or
combined in such a way that it loses its independence, is called the accessory
thing. The owner of the principal thing becomes the owner of the new thing by
operation of law without him necessarily being aware of the accession.
Strictly speaking, accession is not a way in which ownership passes from one owner to
another, but a process by which the accessory thing loses its independence and the principal
thing is extended as a result of the merger. However, since it usually takes place without the
co-operation of the owner of the accessory thing, it is regarded as original acquisition of
ownership. Ownership of the accessory thing is not transferred, but the accessory thing
becomes part of the composite thing and is no longer an independent object capable of
being owned.
Passing of ownership through accession takes place only if:
(a) the composite thing is not easily divisible;
(b) the principal and accessory things can be distinguished;
(c) the accession does not amount to manufacture (specificatio).
Test
The test for determining which is the principal thing and which the accessory
thing, is based primarily on the question of which thing has lost its independence
(accessory thing) and has become part of the other thing (principal thing). Other
factors are also taken into consideration, such as which has the greater mass
(principal thing) or value (principal thing) and which serves merely as decoration
(accessory thing).
There are a number of exceptions to these criteria, which are discussed below. In the case of
immovable property, land is always the principal thing and the things attached are the
accessory things, except in the case of sectional title ownership (see 6.2 above).
8.3.2 Accession of immovables to immovables
Definition
Accession of two immovables usually takes place naturally without human
activities or interference by the gradual adding of soil to a piece of land by alluvion
or the sudden addition to a piece of land through flooding (avulsion).
Page 117
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 6 of 23
The following cases are distinguished:
(a) Alluvion (alluvio)
This is the gradual and unnoticeable adding of soil to a piece of land by water (through
deposits of mud, soil and silt). In the case where the surface of the land is not enlarged
because the soil was deposited on top of existing land, the owner of the land becomes the
owner of the mud, silt or soil added to his land in this way.
(b) Avulsion (avulsio)
Avulsion is the extension of a piece of land through the sudden addition of a piece of land
through flooding or the flow of water. In this case the addition is clearly visible and takes
place through a sudden and violent avulsion of a piece of land to the existing land.
(c) Forming of islands
If an island is created in the river-bed through the natural flow of water, it accrues to the
riparian owners in relation to the location of the island in the river-bed. The borders of
riparian owners’ land in the case of land bordered by a river is regarded, in the case of ager
non limitatis, to be the middle of the river. In Pocock v De Oliviera 2010 (W) it was held that
alluvio and avulsio are only applicable to natural accession, and not in the case of the
combination of two tracts of land by registration of a notarial deed.
8.3.3 Accession of movables to immovables
Definition
The accession of movables to immovables usually takes place through human
activity whereby a movable is permanently attached to an immovable. The owner
of the immovable (principal thing) becomes the owner of the composite thing
where the movable accessory was permanently attached to the principal thing,
and must in certain circumstances compensate the previous owner of the movable
accessory.
In cases of the accession of a movable to an immovable the movable thing is always
regarded as the accessory thing and the land is regarded as the principal thing and, by
application of the doctrine of superficies solo cedit (see 6.2.1 above), the movable accessory
thing becomes immovable.
Page 118
Accession of movable and immovable things
(a) Planting and sowing (plantatio et satio)
(b) Building (inaedificatio)
(a) Planting and sowing (plantatio et satio)
Definition
Planting and sowing is the process whereby growing movable things are attached
to the land and become the property of the landowner. Everything growing in the
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 7 of 23
soil becomes part of the land as soon as it takes root and gets nourishment from
the soil.
The following principles apply:
(aa) If a plant is removed from the soil, it remains the property of the landowner, because it
obtained nourishment from the soil. In the same way a tree that stands on A’s land but
which gets nourishment from B’s land, is the property of B – Secretary for Lands v
Jerome 1922 (A).
(bb) Plants on the boundary between the land of A and B are the property of the landowner
in whose soil most roots can be found and, if the roots are distributed equally, they are
both owners of equal undivided shares in the plant. If most roots occur on A’s land the
few roots on B’s land do not give him any rights to the tree, except that B can insist
that the encroaching roots be removed.
(cc) The above-mentioned principles in respect of the acquisition of ownership of plants
through accession are applied irrespective of the intention of the person planting or
sowing. However, in the case of particular legal relationships between the landowner
and the sower or planter, it can be regulated by contract. Examples are where the
landowner and planter or sower agree that the plants are later to be removed or where
the lessee removes shrubs or a harvest before the expiry of a contract of lease in
terms of a right to removal (ius tollendi).
Gore v Parvatas (Pty) Ltd 1992 (C)
In the case of flower bulbs which were intended to be removed later by the lessee
of the land, the court decided that the landlord did not become owner of the bulbs.
The parties can thus agree contractually that the landowner shall not acquire
ownership of the bulbs.
Page 119
(b) Building (inaedificatio)
Definition
Building is the process whereby a movable thing (as accessory thing) is attached
to the land (as principal thing) in such a way or with the intention that it becomes
part of the land and, as a result thereof, becomes the property of the landowner.
In terms of the rule superficies solo cedit the accessory thing is, after attachment,
merely a part of the composite thing and this composite thing belongs to the
landowner.
Previously three criteria were taken into consideration to determine whether a movable thing
had been attached to the land in such a way as to be a permanent part of the land and thus
the property of the landowner – see especially MacDonald v Radin and The Potchefstroom
Dairies and Industries Co 1915 (A).
Criteria
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 8 of 23
(aa) Nature and purpose of the attached thing (objective)
(bb) Manner and degree of attachment (objective)
(cc) Intention of the annexor (subjective)
(aa) Nature and purpose of the attached thing (objective)
The thing must be of such a nature that it can be permanently attached to the immovable
thing and the purpose of the attachment must be to be of use to the land on a permanent
basis, for example bricks, cement and roof tiles. If the thing is such that it is not necessarily
clear whether it can be permanently attached to the land, for example where it is not clear
whether the accessory thing has lost its independence, the other two criteria must be used
to determine whether the thing forms part of the land.
Application
(i) In Standard-Vacuum Refining Co of SA v Durban City Council 1961 (A) oil
tanks weighing up to 450 ton which were not attached to the land were
regarded as immovable because they were manufactured on the land, could
not be moved and thus were ‘attached’ by their weight.
Page 120
(ii) On the other hand, in Mpisi v Trebble 1994 (A) it was decided that the
materials used to build squatter shacks and the ease with which they could
be torn down and rebuilt, indicated that there had been no intention of
permanently attaching a squatter shack to the land.
(bb) Manner and degree of attachment (objective)
If the manner and degree of attachment is such that this indicates that the accessory thing
is permanently attached to the land, it is not necessary to investigate the (subjective)
intention behind the attachment: see in particular Standard-Vacuum Refining Co of SA v
Durban City Council 1961 (A). The most important test to determine whether the manner
and degree of attachment is such that the accessory thing is permanently attached to the
land, is the question whether the accessory thing can be removed without damage to the
land. This is question of fact that has to do with the common-law requirement that the
accessory thing must be attached ‘aardvast’ (as firmly as the soil) or ‘nagelvast’ (as firmly as
a nail) to the land.
(cc) Intention of the annexor (subjective)
If the nature and purpose of the thing and/or degree and manner of attachment do not
decide the question whether the accessory thing has been attached permanently and with
loss of independence to the immovable thing, the subjective intention of the annexor must
be investigated. In Standard-Vacuum Refining Co of SA v Durban City Council 1961 (A) it
was decided that a distinction should be made between the objective intention of the
annexor, which becomes clear from the nature and purpose of the thing and/or the manner
and degree of attachment, and the subjective intention of the annexor which must be
determined if the objective intention cannot be determined.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 9 of 23
Application
(i) The intention of the annexor was qualified in the appellate decision Theatre
Investments v Butcher Brothers 1978 (A) to the effect that the intention can
be inferred from the physical circumstances such as the nature and purpose
of the thing and/or the manner and degree of attachment (objective
purpose), but the subjective will (ipse dixit) of the annexor was emphasised
when determining his intention; and for this purpose both direct and
derivative evidence had to be considered.
Page 121
(ii) In Melcorp SA v Joint Municipal Pension Fund (Transvaal) 1980 (W) it was
decided that the subjective will (ipse dixit) of the annexor should be regarded
as more important than the physical circumstances (objectively determined)
in order to determine the intention of the annexor. The court found that a lift
was indeed physically part of the building, but that the intention of the
annexor, as could be established from the contract between the annexor and
the owner of the building, was that ownership of the lift did not pass before
the purchase price had been paid in full.
The emphasis on the subjective intention of the annexor is criticised by a number of authors.
The question is whether more attention should not be given to the physical characteristics of
the thing and the accompanying objective criteria than to the subjective intention of the
annexor. Emphasis on this last-mentioned aspect is inherently in conflict with the principles
of inaedificatio as an original way of acquiring ownership. In Sumatie (Edms) Bpk v Venter
1990 (T) it was decided that the primary investigation is to decide whether the purpose
(causa) of the attachment indicates that the accessory thing is attached to the land for a
fixed period in such a way that a new, independent entity comes into being and that the
movable accessory thing therefore becomes immovable through attachment. The purpose
(causa) of the attachment can be determined with reference to facts like:
(i) the nature and function of the attached thing;
(ii) the manner of attachment;
(iii) the subjective intention (intentio) or purpose (destinatio) of the owner of the
attachment at the time of attachment;
(iv) the actions or conduct (factum) of the owner of the attachment; and
(v) all other relevant facts or circumstances.
In case of contradiction or uncertainty regarding the relevant factors the standard of proof
for the determination of the purpose is a balance of probabilities.
The decision in Sumatie v Venter is correct because the common-law principles were
applied correctly. The subjective intention of the owner of the attachment is not regarded as
more important than the objectively determinable physical factors, but all the relevant
factors are taken into consideration. However, this approach was not followed by the
supreme court of appeal. In Unimark Distributors (Pty) Ltd v Erf 94 Silvertondale (Pty) Ltd
1999 (T) the judge referred with approval to the Sumatie decision, but stated that he was
bound by decisions of the supreme court of appeal.
Page 122
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 10 of 23
Konstanz Properties (Pty) Ltd v WM Spilhaus (WP) Bpk 1996 (A)
The court held that in the specific circumstances of the case the subjective
intention of the owner of the movables attached was decisive. In this case a
wholesaler sold a number of loose components of an irrigation system with the
explicit reservation of ownership until the purchase price was fully paid. Before the
purchase price was paid, the components had been attached to the land by the
landowner. The court decided that the subjective intention of the owner of the
movables prevailed in these circumstances and that ownership of the components
did not pass to the landowner by accession. The possibility that in other
circumstances the subjective intention of the owner may not prevail and that the
approach in the Melcorp case may be reconsidered in future, was left open.
For the purpose of the law of property, separate auxiliary things which do not form part of
an immovable through attachment, lose their independence if they are destined to form part
of or to be used as part of the immovable. In Senekal v Roodt 1983 (T) it was decided that
separate bar stools, which were auxiliary parts of a built-in bar, had lost their independence
because of their purpose.
The owner of the movable thing who loses his ownership because of inaedificatio to the
landowner, is not without remedy.
Remedies
(i) A bona fide and a mala fide possessor or occupier (see 12.4 below) of an
immovable have enrichment and other remedies against the owner of the
immovable by means of which they can claim compensation for the loss of
the attached movable thing – see 14.9 below.
(ii) The lessee of an immovable has a right to removal (ius tollendi) of certain
attachments before the lease expires – see chapter 20 below.
8.3.4 Accession of movables to movables
Definition
If a movable is attached to another movable in such a way that a single thing is
formed, the owner of the principal thing acquires ownership of the composite thing
and the owner of the accessory thing loses his ownership.
Page 123
The requirements are:
(a) the various elements of the composite thing (principal and accessory thing) must still
be recognisable;
(b) the composite thing must be difficult to separate; and
(c) it must not amount to the forming of a new thing with someone else’s materials
(specificatio).
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 11 of 23
In the case of movables it is often difficult to determine which is the principal and which the
accessory thing. The general principles are that the biggest, heaviest or most valuable thing
is the principal thing and that a decoration is usually the accessory thing. In Khan v Minister
of Law and Order 1991 (T) it was decided that the component or components which give a
composite thing its identity, is the principal thing and all other attachments are accessory
things (see 2.4.2 above).
Examples
(a) Weaving in of materials (intextura): the owner of the material becomes the
owner of the weaving thread even if the thread is more valuable than the
material. However, the owner of the weaving thread has a claim for damages
or enrichment.
(b) Writing (scriptura): if a person writes on someone else’s paper, the writer is
the owner of the written piece and he must compensate the previous owner
of the paper in a suitable manner.
(c) Painting (pictura): the painter becomes the owner of the cloth or board of
someone else on which he painted, provided that the painting is more
valuable than the cloth or board.
(d) Welding (ferruminatio): the owner of the biggest or heaviest thing (such as a
statue) becomes the owner of the part (such as a hand or foot) welded to it,
except if that part is more valuable than the statue.
(e) Wheels added to a wagon become part of the wagon through accession. In
JL Cohen Motors (SWA) v Alberts 1985 (SWA) it was, however, wrongly
decided that the tyres of a truck do not become part of the truck through
accession, since they are not mechanically built onto or attached to the
truck. The question is whether attachment needs to be mechanical and if the
purpose of the tyres is not such that they became part of the truck.
Technological advances require one to look beyond the real, physical
attachment and that a broader criterion of functional and economic
attachment should be used.
Page 124
8.4 Manufacture (specificatio)
Definition
Manufacture is the acquisition of ownership in a manufactured thing by a person
using the materials or thing of another person, without the owner’s permission, to
manufacture a completely new thing.
The requirements for passing of ownership through manufacture are the following:
(a) The material must be used to manufacture a new thing. If the thing of one person is
used to mend another person’s property, the principles of accession must be applied
because this is not the use of material to manufacture a totally new thing. The question
whether a new thing was created must be determined objectively with reference to the
nature, appearance and function of the thing.
(b)
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
(c)
(d)
Page 12 of 23
The product must be such that it cannot be changed back into its original form, as with
wine from grapes, beer from malt or a ship from planks. Metals which can be returned
to their original form after manufacture cannot be acquired by means of manufacture.
In common law the position is that, even if the new thing should be much more
valuable than the material (for instance a silver work of art), ownership does not pass
to the manufacturer, except in cases where it would be difficult to return it to its
original state.
Although there is authority in common law for the requirement that the manufacturer
must have been under the impression in good faith that he was the owner of the
material, and although this idea is supported by some jurists, the contrary view is that
the passing of ownership is the reward to the manufacturer for his work and that, in
any case, the owner of the material can claim compensation for the loss of the
material. Consequently, because of practical reasons, it is better if good faith is not
required.
The thing must be manufactured without the permission of the owner of the material.
If the thing was manufactured with the owner’s permission, ownership does not pass to
the manufacturer and he has only a claim in respect of his labour (if this was agreed
upon) or an enrichment claim for services rendered.
The owner of the material has a claim against the owner of the new thing. In the case of a
person who in good faith thought that he was using his own material, an enrichment claim
for the value of the material or a claim for
Page 125
damages in terms of the actio legis Aquiliae can be instituted – see chapter 14 below. In the
last-mentioned case, however, negligence on the part of the manufacturer will have to be
proved. In the case of bad faith damages can be claimed with the actio legis Aquiliae. If the
manufacturer acted in good faith, but ownership did not pass because the requirements for
manufacture were not met, the manufacturer can institute a claim against the owner of the
material for compensation for his labour.
8.5 Mixing and fusing (commixtio et confusio)
Definition
Mixing (commixtio) takes place when solids of different owners are mixed and
fusing (confusio) takes place when liquids and liquid solids of different owners are
mixed without their permission and without it constituting either the attachment of
an accessory thing to a principal thing or the manufacture of a new thing. The
joint ownership of the mixed entity is determined on the basis of the ratio of the
constituent elements (of which the mixed entity consists).
The mixed thing must be indivisible in the sense that it is no longer possible to determine
which elements belong to which owner. If the thing is divisible (for instance a flock of
sheep), mixing does not take place.
The mixing must take place without the permission of the owners. If the owners agreed to
the mixing, they become joint owners of the mixture and the above-mentioned principles are
not applied. If money is mixed with other money so as to be unidentifiable, ownership of the
money is acquired through commixtio.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 13 of 23
8.6 Acquisition of fruits
Definition
Acquisition of ownership in fruits takes place by means of separation or gathering.
Before separation from the fruitbearing thing the hanging fruits (fructus
pendentes) are accessory things to the principal thing and therefore ownership
vests in the owner of the principal thing. After separation a distinction is made
between fruits separated from the principal thing naturally (fructus separati) and
gathered fruits (fructus percepti).
Page 126
A distinction is made between:
(a) natural fruits, such as the young of animals, birds and insects; the fruit of trees, plants
and grain which can be harvested; young trees which grow after a plantation is felled
and organic and inorganic materials that renew themselves (wool, milk, salt in a salt
pan and river sand); and
(b) civil fruits such as rent, interest on capital, profit from an undertaking and dividends on
shares.
After separation and gathering the fruits are usually the property of the owner of the
principal thing (or fruitbearing thing). There are, however, a number of exceptions to this
general principle:
(a) A bona fide possessor (see 12.4 below) becomes the owner of all separated fruits after
gathering. A mala fide possessor is not entitled to fruits.
(b) A usufructuary is entitled to fruits after gathering – see chapter 17 below. The
usufructuary is always obliged to maintain the fruitbearing property.
(c) A lessee is also only entitled to the fruits after gathering them.
8.7 Expropriation
8.7.1 Introduction
Definition
Through expropriation
(a) the ownership of a thing, movable or immovable, vests in the expropriator;
(b) while the previous owner loses his ownership without consenting thereto;
(c) against payment of compensation to him.
In terms of section 25 of the Constitution of the Republic of South Africa of 1996 the state
may expropriate rights in property for public purposes or in the public interest. This is
discussed in chapter 22 below.
Page 127
Principles
(a)
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
(b)
(c)
(d)
Page 14 of 23
Institutions which wish to expropriate, must have the necessary statutory
capacity to do so.
The extent and limits of an institution’s capacity to expropriate, are
prescribed by the empowering statute. Examples of empowering statutes are
the Broadcasting Act 73 of 1976; the Post Office Act 44 of 1958; the
Electricity Act 41 of 1987; the National Environmental Management:
Protected Areas Act 57 of 2003; the Aviation Act 74 of 1962; the
Conservation of Agricultural Resources Act 43 of 1983; the Land Affairs Act
101 of 1987; the Legal Succession to the South African Transport Services
Act 9 of 1989; the Restitution of Land Rights Act 22 of 1994; the Housing Act
107 of 1997 and the National Water Act 36 of 1998.
Compensation must be calculated in terms of the general provisions of
section 25(3) of the Constitution and the specific provisions of the
Expropriation Act.
An entitlement of an owner can be expropriated without ownership itself
being affected – Sandton Town Council v Erf 89 Sandown Extension 2 1988
(A).
Although this capacity to expropriate is granted to the state or particular institutions by
various Acts, the general principles of section 25 of the Constitution and the provisions of
the Expropriation Act 63 of 1975 must be complied with regarding the extent of the
compensation – Du Toit v Minister of Transport 2006 (CC).
An important example is the restoration of land rights in terms of the Restitution of Land
Rights Act 22 of 1994 – see chapter 23 below.
8.7.2 Expropriation procedure
The following procedures must be complied with in terms of the Expropriation Act:
(a) The decision to expropriate is a purely administrative one and, if taken in compliance
with the provisions of the authorising statute, it may not be tested by the courts
(section 6).
(b) The notice of expropriation is served on the owner. Section 7 contains provisions
dealing with the content and serving of this notice and requires that the object must be
described properly, the date of expropriation must be specified and that an amount of
compensation or a request to hand in a claim for compensation within 60 days must be
included in the notice.
Page 128
(c)
(d)
(e)
The passing of ownership does not take place by means of registration (in the case of
immovables), but takes place automatically on the date mentioned in the notice of
expropriation. The passing of physical control is regulated by section 8. The ownership
passed to the expropriator is subject to all the limited real rights existing in the thing,
except if those rights are also expropriated.
The procedure for the claiming of, negotiations pertaining to and payment of
compensation is set out in sections 7(2)(c) and (d) and (9) to (12). If the owner and
the expropriator cannot come to an agreement regarding compensation, it can be
determined by a compensation court, the land claims court or a provincial division of
the supreme court.
A new Expropriation Act is envisaged in order to harmonise the expropriation
procedure in the Act with the requirements of section 25(2) and (3) of the Constitution
– see the Expropriation Bill of 2015.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 15 of 23
8.7.3 Compensation
In terms of section 25 of the Constitution the amount of compensation must be determined
by means of an agreement. If such an agreement cannot be reached, the court has to
determine what amount of compensation is just and equitable, reflecting an equitable
balance between the public interest and the interests of those affected (Haffejee NO v
Ethekwini Municipality 2011 (CC)). Relevant factors to be taken into account in this regard
are:
(a) the current use of the property;
(b) the history of the acquisition and use of the property;
(c) the market value of the property, that is, the amount for which a willing seller would
have sold the property to a willing buyer;
(d) the extent of direct state investment and subsidy in the acquisition and beneficial
capital improvement of the property; and
(e) the purpose of the expropriation.
The provisions of the Expropriation Act have to be applied with due regard to these
principles. In terms of the Expropriation Act and the decision in Kangra Holdings v Minister of
Water Affairs 1998 (A) compensation for the real financial loss suffered may be claimed. If a
residence is expropriated, it includes the cost of looking for a new house, transport costs,
moving costs and the costs of new curtains and furniture (if the previous ones do not fit into
the new house). Consolation money (solatium) of 10% of the total amount, but to a
maximum of R10 000, may also be claimed. The dispossessed owner must only be
compensated for her loss and should not be advantaged by the expropriation – City of Cape
Town v Helderberg Park Development (Pty) Ltd 2007 (SCA).
Page 129
8.8 Forfeiture and confiscation
Forfeiture
Things used by or with the consent of the owner to commit a crime, can be
declared forfeit to the state in terms of a court order if it is authorised by statute.
The forfeiture takes place without any compensation to the owner and ownership passes to
the state at the moment on which the order for forfeiture is made. The Criminal Procedure
Act 51 of 1977 provides for the forfeiture of weapons and other objects (for instance
vehicles) used in connection with the relevant crime. In terms of the Films and Publications
Act 65 of 1996, the Drugs and Drug Trafficking Act 140 of 1992 and the Prevention of
Organised Crime Act 121 of 1995 orders of forfeiture are authorised. In National Director of
Public Prosecutions v Rebuzzi 2002 (SCA) it was held that orders of forfeiture are not aimed
at enriching the state, but to deprive criminals of the proceeds of their crimes. The main
purpose of this legislation is to prevent racketeering, money laundering and criminal gang
activities.
The drug Acts authorise forfeiture of not only the dependence-producing substances, but
also immovables and cash to the credit of the accused at a financial institution. In National
Director of Public Prosecutions v Parker 2006 (SCA) it was held that two factors must be
taken into consideration in the case of forfeitures: was the money or were the goods
instrumental to the commitment of the crime, and was the owner of the money or goods
aware of the fact that they were used in the commitment of the crime or formed part of the
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 16 of 23
proceeds of the crime. In the case where game is hunted out of season or without a permit,
the carcasses of the game are declared forfeit.
Confiscation
Property is confiscated by the state if it is regarded as being in the public or
state’s interest to do so. This will usually be the case in a declared state of
emergency or during a period regarded as an emergency or in self-defence in
common law.
Compensation is usually payable by the state, except if this is excluded by the relevant
emergency legislation. In terms of section 25 of the Constitution confiscation may only take
place by means of law of general application, which has to comply with strict requirements.
In the case of a declared state of emergency section 37(4) of the Constitution determines
that any legislation enacted in consequence of the state of emergency may derogate from
Page 130
fundamental rights only to the extent that the derogation is strictly required by the
emergency and the legislation is consistent with international law in this regard.
8.9 Statutory passing of ownership
Definition
In the case of the statutory passing ownership passes without the previous
owner’s co-operation, but the limitations of this previous owner’s ownership are
also passed on to the new owner. In this it differs from the other forms of original
acquisition of ownership and it is often described as a derivative form of passing of
ownership by means of general title.
The following cases are distinguished:
(a) In terms of section 20(1)(a) of the Insolvency Act 24 of 1936, the assets of a
sequestrated estate pass to the master of the high court immediately after the
sequestration order and to the curator after appointment – De Villiers NO v Delta
Cables (Pty) Ltd 1992 (A). In terms of section 21 the assets of the solvent spouse of
the insolvent also pass temporarily to the master or the curator – Harksen v Lane NO
1998 (CC).
(b) In terms of section 80(5) of the Companies Act 71 of 2008 the ownership of the assets
of a liquidated company pass to the liquidator in his official capacity in terms of the
liquidation order. Before the appointment of the liquidator, the master of the high court
is in physical control of the assets.
8.10 Prescription
8.10.1 Definition and purpose
Definition
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 17 of 23
Acquisitive prescription is an original way of acquisition in terms of which a real
right (ownership or a limited real right) is acquired in respect of movable or
immovable things by means of the open and undisturbed possession thereof
(ownership) or the exercise of rights in respect thereof (limited real right) for an
uninterrupted period of 30 years.
The purpose of acquisitive prescription is not only to punish the previous holder of the right
for not exercising the right but also to ensure legal certainty regarding the de facto position
which has existed for a long period (Pienaar
Page 131
v Rabie 1983 (A)). Therefore the negligence of the inattentive owner need not be claimed or
proved in order to establish prescription. Legal certainty is not only in the interest of the
person in whose favour prescription runs, but also in the interest of third parties such as
creditors. Furthermore it prevents extended litigation regarding ownership of the thing.
Since the primary purpose of acquisitive prescription is to promote legal certainty, it is not
important to establish whether the person who wants to acquire ownership knows that he is
not the owner of the thing. Acquisitive prescription therefore runs in favour of both the bona
fide and mala fide possessor. Both the bona fide and mala fide possessors are unlawfully in
control of the thing since their control is not recognised in law (see 12.4 below).
Nevertheless it is in the public interest that legal recognition is given to a factual state of
affairs that has existed for some time.
Two Acts apply to acquisitive prescription, namely the Prescription Act 18 of 1943 and the
Prescription Act 68 of 1969. The last-mentioned Act commenced on 1 December 1970 and,
in all cases where the period of prescription started before 1 December 1970, the provisions
of the Prescription Act 18 of 1943 apply for the term until 30 November 1970 and the
provisions of the Prescription Act 68 of 1969 for the term from 1 December 1970. It is
therefore possible that the provisions of both Acts need to be used and that a distinction
needs to be made between the requirements for prescription up to 30 November 1970 and
from 1 December 1970 regarding the same period of prescription. All periods of prescription
started after 1 December 1970 need only meet the requirements of the Prescription Act 68
of 1969.
8.10.2 Prescription Act 18 of 1943
The requirements of the Prescription Act 18 of 1943 apply to all prescriptive terms started
before the commencement of the new Prescription Act 68 of 1969 on 1 December 1970 and
all requirements must be met continually up until 30 November 1970.
Requirements
In terms of section 2(1) the requirements for acquisitive prescription are:
(a) the possession of someone else’s movable or immovable things; or
(b) the exercise of a servitude in respect of immovable things;
(c) continuously for 30 years;
(d) without force (nec vi);
(e) openly (nec clam) and
without the owner’s consent (nec precario).
(f)
Page 132
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 18 of 23
(a) Possession
One of the most important requirements of prescription is the possession of another person’s
movable or immovable property. The requirement of possession implies the following:
(aa) In the case of possession a distinction is made between the physical element (corpus)
and the mental element (animus) – see chapter 13 below.
(bb) The physical element implies physical control of the thing and this is inferred from the
real circumstances judged objectively for the purpose of determining if there was real
occupation or control.
(cc) The mental attitude required in the case of prescription is the intention to be the owner
(animus domini). This intention is not dependent on the good or bad faith of the
possessor, but can occur with both.
(dd) Possession for the purposes of acquisitive prescription is described as possessio civilis,
which includes the above-mentioned two elements. This implies that the possessor
must possess the thing as if he is the owner, which is discussed more fully in 8.10.2(e)
and 8.10.3(c) below. The mala fide possessor knows that he is not the owner, but this
does not prevent him from possessing the thing with the intention to be the owner
(animus domini).
(b) Without force (nec vi)
If a person needs to keep physical control of a thing with force, prescription will not run in
his favour. This does not mean that the acquisition of the thing must occur without violence.
(c) Openly (nec clam)
The nec clam requirement means that the person must possess the thing openly and not
secretly. This does not mean that the possessor must possess openly toward the owner, but
that he must use and enjoy the thing as openly as an owner would do and that the owner
would have been aware of this had he shown reasonable attentiveness regarding his
property. It is determined objectively whether the reasonable man could have concluded
from the possessor’s actions that he possesses as if he were the owner. As in the case of the
nec vi requirement this requirement need be met only during the period of prescription and
not in respect of the acquisition of the thing.
(d) Without consent (nec precario)
This means that the possessor does not possess the thing in accordance with the will or
wishes of the owner. If any aspect of the possessor’s use of the thing indicates that he
acquired the right with the consent or co-operation
Page 133
of the owner, he possesses precariously and prescription cannot run against the owner. It
can, however, be that the possession was originally in accordance with the will of the owner,
but that this consent fell away and that the possessor at this stage possesses the thing nec
precario.
(e) Adverse use
In Malan v Nabygelegen Estates 1946 (A) it was required that the possession must be
exercised ‘adverse to the true owner’.
Malan v Nabygelegen Estates 1946 (A)
‘In order to avoid misunderstanding, it should be pointed out here that mere occupation
of the property ‘nec vi nec clam nec preecario’ for a period of thirty years does not
necessarily vest in the occupier a prescriptive title to the ownership of that property. In
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 19 of 23
order to create a prescriptive title, such occupation must be a use adverse to the true
owner and not occupation by virtue of some contract or legal relationship such as lease or
usufruct which recognises the ownership of another.’
(f) Period of 30 years
The period of prescription must run continuously for 30 years, but the possessor can add the
terms of his predecessors (who met the above-mentioned requirements) to his (coniunctio
temporum). If one of the predecessors (possessors) did not meet all these requirements, the
prescription is interrupted and the predecessors’ terms cannot be added to the current
possessor’s period.
(aa) Interruption
Definition
Interruption of prescription takes place when an event terminates the run of the
prescription, so that a period of 30 years must run anew.
A distinction is drawn between:
(i) Natural interruption: the possessor loses his possession of the thing either by giving it
up voluntarily or by having it taken from him forcibly by the owner, another person or
by a superior power as in a war situation. Simple protest by the owner is not enough –
real removal of possession must take place.
Page 134
(ii) Civil interruption: serving of a process (warrant, notice of motion, interdict) in which
the owner’s claim to ownership is clearly stated to the possessor. A mere claim for rent
or compensation because of unlawful occupation is not enough.
(bb) Suspension
Definition
Suspension occurs when the period of prescription is suspended for a period of
time because of an event or situation, but is thereafter resumed for the rest of the
30-year period.
In terms of common law prescription does not run against persons who are unable to
enforce their rights. This includes persons like minors (persons younger than 18 years),
mentally deficient persons, persons under curatorship, absent persons, fideicommissarii and
persons in general unable to handle their own affairs. As soon as the impending situation or
event falls away, the period of prescription for the rest of the 30 years is continued.
8.10.3 Prescription Act 68 of 1969
This Act is applicable to prescription terms that were already running on 1 December 1970
or started thereafter for the part of the term from 1 December 1970.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 20 of 23
Requirements
In terms of section 1 a person by prescription becomes owner of a thing:
(a) which he openly and
(b) as if he were the owner
(c) has possessed
(d) for an uninterrupted period of 30 years or for a period that, together with the
periods for which the things have been possessed in this way by his
predecessors in title, would constitute an uninterrupted period of 30 years.
The requirements for prescription which are therefore applied since 1 December 1970 are
the following:
(a) Possession
The same requirements set out in the previous Act in respect of possessio civilis, that is
physical control with owner’s intent (animus domini), apply here.
Page 135
(b) Openly
The same requirement applies as with nec clam.
(c) As if he were the owner
This requirement means that one should reasonably be able to deduce from the way in
which the possessor acts, that he possesses the thing as if he were the owner. Both
elements of possession, that is physical control (corpus) and the animus domini, must be
clear from the possessor’s conduct – Kruger v Joles Eiendomme (Pty) Ltd 2009 (SCA).
Examples
The following are indications of physical control with the animus domini:
(a) Du Toit v Furstenberg 1957 (O): the possessor effected permanent
improvements.
(b) Pienaar v Rabie 1983 (A): the use of a part of a neighbouring farm because
of a bona fide mistake regarding the boundary.
(c) Campbell v Pietermaritzburg City Council 1966 (N): the use of a part of a
neighbouring property as an integral part of the user’s land, knowing that it
is not the user’s property.
(d) Ploughmann NO v Pauw 2006 (C): the control of land in terms of an
agreement of perpetual occupation is not an indication of control with the
animus domini.
(d) For 30 years
The uninterrupted period of 30 years need not be exercised absolutely and in respect of the
whole thing. It must, however, be uninterrupted. The adding of periods of possession of
previous owners who also met the requirements for acquisitive prescription (coniunctio
temporum) is specifically provided for.
In this Act provision is also made for interruption and suspension of the prescription term.
However, it differs from the provisions of the 1943 Act.
(aa) Interruption
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 21 of 23
In the case of natural interruption section 2 provides:
‘2.
The running of prescription shall not be interrupted by involuntary loss of possession if
possession is regained at any time by means of legal proceedings within six months after such
loss for the purpose of regaining possession, or if possession is lawfully regained in any other
way within one year after such loss.’
Page 136
Application
If possession is lost and regained in the following circumstances, prescription
continues to run without interruption:
(i) Through instituting the mandament van spolie within six months after the
loss of possession – see also chapter 14 below.
(ii) If the thing is restored to the possessor within twelve months after loss of
possession by the person who disturbed his possession or anyone else.
(iii) If the situation of force by a superior power changes to such an extent that
the loss of possession falls away.
In the absence of the above-mentioned circumstances or if the possessor voluntarily
abandons his possession, the prescription is interrupted and, consequently, terminated.
In the case of civil interruption, section 4 provides:
‘(1) The running of prescription shall, subject to the provisions of subsection (2), be interrupted by
the service on the possessor of the thing in question of any process whereby any person claims
ownership in that thing.
(2) Any interruption in terms of subsection (1) shall lapse, and the running of prescription shall not
be deemed to have been interrupted, if the person claiming ownership in the thing does not
successfully prosecute his claim under the process in question to final judgment or if he does so
prosecute his claim but abandons the judgment or the judgment is set aside.
(3) If the running of prescription is interrupted as contemplated in subsection (1), a new period of
prescription shall commence to run, if at all, only on the day on which the final judgment is given.’
Application
If the prescription has therefore been temporarily interrupted by the serving of a
process, but it is not finally interrupted by a final judgment or the judgment is set
aside, the prescription continues as if the period were never interrupted.
(bb) Suspension
In terms of section 3 the prescription is postponed (suspended) in certain circumstances and
resumes when these circumstances come to an end. Section 3 provides:
Page 137
‘3(1) If –
(a) the person against whom the prescription is running is a minor (a person below the age of
18) or is insane, or is a person under curatorship, or is prevented by superior force from
interrupting the running of prescription as contemplated in section 4; or
(b) the person in favour of whom the prescription is running is outside the Republic, or is
married to the person against whom the prescription is running, or is a member of the
governing body of a juristic person against whom the prescription is running; and
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 22 of 23
(c)
the period of prescription would, but for the provisions of this subsection, be completed
before or on, or within three years after, the day on which the relevant impediment
referred to in paragraph (a) or (b) has ceased to exist, the period of prescription shall not
be completed before the expiration of a period of three years after the day referred to in
paragraph (c).
3(2) Subject to the provisions of subsection (1), the period of prescription in relation to
fideicommissary property shall not be completed against a fideicommissary before the expiration of a
period of three years after the day on which the right of that fideicommissary to that property vested
in him.’
Method of calculation
If the impeding situation or circumstance comes to an end longer than three years
before the completion of the period of prescription, prescription is not suspended
in terms of section 3, but it runs unsuspended for a period of 30 years. Should the
impeding situation or circumstance continue after, until or three years before the
completion of the period of prescription, the period of prescription is completed
only three years after the impeding situation or circumstance has ceased to exist.
The above-mentioned principles regarding suspension can be illustrated as follows:
(i) A, the owner of a farm, is a minor of three years old. B takes possession of the farm
with the animus domini. At the point when A attains majority (15 years later) there are
still 15 years of the 30-year prescription period remaining. Since the impediment
ceases to exist longer than three years before the end of the period, A’s minority has
no effect on the completion of the period of prescription and the period is 30 years.
(ii) A, the owner of a farm in South Africa, is a major living in Hawaii. B takes possession
of the farm with the animus domini. After B has been
Page 138
in possession of the farm for 15 years, A dies and the farm is inherited by A’s three
year old son C, who returned to South Africa with his mother. Since the impediment,
namely C’s minority, will cease to exist after a period of 15 years (the same year as
the completion of the 30-year period), the prescription needs to run for a further three
years after C attained majority. The fact that A lives in Hawaii has no effect on the
completion of the prescription, since it is not a suspending situation if the person
against whom the prescription runs is abroad.
(iii) If C, in the previous example, were five years old at the time of his father’s death (at
which stage B had already had possession of the farm for 15 years) and he returned to
South Africa, the impediment (C’s minority) falls away after 13 years. Since this,
however, is less than three years before the completion of the 30-year prescription
period, the completion of prescription is still postponed until three years after C’s
majority. If C were six when he inherited the farm, the impediment falls away after 12
years. Since this is three years before the normal completion of the 30-year
prescription period, the completion of prescription is not postponed. In none of these
examples was A’s absence from South Africa taken into consideration, since only the
absence of the person in whose favour prescription runs leads to suspension.
(iv) If any of these impediments existed before 1 December 1970, prescription would be
suspended until 30 November 1970. Thereafter the prescription runs normally for the
remaining period of 30 years, but, in terms of the 1969 Act the completion of
prescription is postponed until three years after the impediment falls away if it falls
after, on or within three years after the normal course of the period of prescription.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap08
Page 23 of 23
8.10.4 Consequences of prescription
After completion of the period of prescription and if all the requirements of prescription are
met, the possessor becomes the owner of the thing. In the case of movables ownership
passed (and was not transferred by delivery); in the case of immovables ownership passed
without registration of the immovable thing. The new owner can then, in terms of section 33
of the Deeds Registries Act 47 of 1937 apply for a court order to have the property
registered in his name. In terms of sections 33(8) and (9) all existing (registered) limited
real rights must be included in or endorsed on the new title deed, unless such limited real
rights have been cancelled in terms of the court order. Although section 19 of the
Prescription Act 68 of 1969 provides that prescription can run against the state, it is qualified
by the provision of section 18 that the
Page 139
Act does not influence any other Act which prohibits prescription. Section 3 of the State Land
Disposal Act 48 of 1961 provides that, from 20 June 1971, ownership of state land cannot be
acquired by prescription.
Summary
Original acquisition of ownership takes place if the acquisition is not dependent on
the lawful ownership of a previous owner. This includes cases where the property
did not previously belong to anyone, for instance things without owners (res
nullius) or things abandoned by the owner (res derelictae). In these circumstances
ownership is acquired by means of appropriation (occupatio). This implies that
acquirer usually does not acquire the advantages and obligations of a previous
holder of the right (if any) too.
Original acquisition of ownership can also take place by operation of law. In this
case the property was owned by a previous owner, but ownership is passed to the
acquirer without the previous owner’s permission or co-operation. Examples
include accession (accessio), manufacture (specificatio), mixing and fusing
(commixtio et confusio), acquisition of fruits, expropriation, forfeiture,
confiscation, statutory passing of ownership (especially in the case of the
insolvency of natural or legal persons), and prescription. Expropriation,
prescription, forfeiture, confiscation and statutory passing of ownership are
regulated by statute, while the other ways of passing of ownership function on the
basis of common-law requirements.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap08.xhtml
24-Jul-18
Chap09
Page 1 of 18
Page 140
Chapter 9
Derivative acquisition of ownership
9.1
9.2
9.3
Introduction
9.1.1 Requirements for transfer of ownership
9.1.2 Abstract system of transfer of ownership
9.1.3 Cash and credit sales
Delivery
9.2.1 Introduction
9.2.2 Actual delivery (traditio vera)
9.2.3 Constructive delivery (traditio ficta)
9.2.3.1
Clavium traditio
9.2.3.2
Delivery with the long hand (traditio longa manu)
9.2.3.3
Delivery with the short hand (traditio brevi manu)
9.2.3.4
Constitutum possessorium
9.2.3.5
Attornment
Registration
9.3.1 Publicity principle
9.3.2 Characteristics of the registration system
9.3.3 Registration procedure
Summary
Overview
What is the difference between passing and transfer of ownership?
•
What are the requirements for derivative acquisition of ownership?
•
What is the difference between a causal and an abstract system of transfer of
•
ownership?
What are the requirements for payment of the purchase price in the case of cash sales
•
and credit sales respectively?
Which forms of transfer can be distinguished?
•
What is constructive transfer?
•
What are the requirements for constitutum possessorium and why is this form of
•
transfer applied with caution?
How is attornment applied in practice?
•
How does transfer of ownership of immovable things take place?
•
Page 141
9.1 Introduction
In the case of the derivative transfer of ownership the co-operation of the transferor (current
owner) is required. A bilateral juridical act is required in terms of which the ownership is
transferred by the current owner to the new owner and accepted by the new owner.
As a result the new owner accepts all the rights that derive from his predecessor’s
ownership, but he must also accept certain obligations or limitations (with real effect) that
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap09.xhtml
24-Jul-18
Chap09
Page 2 of 18
exist in respect of ownership of the thing. In terms of the nemo plus iuris rule no person can
transfer more rights in respect of the thing than he himself has, and all limitations with real
effect are transferred to the new owner.
9.1.1 Requirements for transfer of ownership
The requirements for the transfer of ownership according to the derivative method are the
following (see in particular Concor Construction (Cape) (Pty) Ltd v Santambank Ltd 1993
(A)):
(a) The thing must be negotiable (res in commercio) (see 2.4.1 above), which means that
it must be a thing in respect of which real rights can be acquired and transferred.
(b) The transferor must have contractual capacity, which means that he must have the
capacity to transfer ownership. The capacity of a transferor is determined on the basis
of factors like his age, mental health and marital status. Owners with limited
contractual capacity must be assisted by a parent, a legal guardian or a curator.
(c) The transferor must be the owner of the thing. In terms of the nemo plus iuris rule, no
person can transfer more rights than he himself has and the owner is therefore the
only person who can transfer ownership – Desai NO v Desai 1996 (A). The owner need
not undertake the transfer himself, and it can be undertaken on his behalf by an agent
or nominee.
(d) The transferee must have the contractual capacity to accept the transfer of ownership.
Factors like age, mental health and marital status play a role here. A transferee with
limited contractual capacity must be assisted by a parent, a legal guardian or a
curator.
(e) The ownership must be accepted by the transferee or his nominee or his agent.
Transfer of ownership in the case of movables takes place only if the thing is delivered
(f)
to the transferee in a legally accepted way (traditio). In the case of immovables
transfer of ownership takes place by means of registration in the deeds registry. This is
known as the objective aspect of transfer of ownership and is a manifestation of the
common-law requirement that publicity must be given to transfer of ownership.
Page 142
(g)
The delivery (movables) and registration (immovables) must take place with the
intention of the owner to transfer ownership and with the intention of the transferee to
accept ownership. The reciprocal intention of the transferor and transferee embodies
the subjective aspect of transfer of ownership and this intention must exist in the
minds of both parties at the time of transfer of ownership. The subjective intention of
the parties that transfer of ownership must take place must be apparent from the real
agreement – Dreyer v AXZS Industries (Pty) Ltd 2006 (SCA).
Air-Kel h/a Merkel Motors v Bodenstein 1980 (A)
|
‘Blote ooreenkoms kan dus nie eiendomsreg oordra nie – traditio (oorhandiging) moet
ook geskied; en omgekeerd, blote oorhandiging is ook nie voldoende nie – dit moet
gepaard gaan met ’n ooreenkoms tussen oorhandiger en ontvanger dat daarmee
eiendomsreg gegee en geneem word. Hier kan van ’n “saaklike ooreenkoms” gepraat
word.’
(Mere agreement is insufficient for the transfer of ownership – traditio (delivery) is also
required; and conversely mere delivery is also insufficient – it must be accompanied by
an agreement between transferor and transferee that ownership is thereby transferred
and accepted. This is known as a ‘real agreement’.)
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap09.xhtml
24-Jul-18
Chap09
(h)
(i)
Page 3 of 18
In Legator McKenna Inc v Shea 2010 (SCA) it was held that it is important to
distinguish between the preceding obligatory agreement (for instance a contract of
sale, donation or exchange) and the real agreement. In the case of the real agreement
there must be consensus between the parties in respect of the transfer and receipt of
ownership and the real agreement must meet all the common-law requirements for a
valid contract (such as the contractual capacity of parties, consensus regarding the
thing, absence of error, and so forth), but it need not meet all the requirements for the
preceding obligatory agreement (contract of sale, donation or exchange). Therefore, in
the case of credit agreements or the alienation of land, the real agreement need not
meet the formal statutory requirement that it must be in writing. In the Legator case it
was confirmed that the principles regarding the real agreement are also applicable to
the transfer of ownership of immovable property.
There must be a legal cause (causa) for the transfer of ownership. This aspect is
discussed in more detail in the section on the abstract system of transfer of ownership
(see 9.1.2 below).
If ownership is transferred on the basis of a preceding contract of sale, it is transferred
to the buyer only if the full purchase price has been
Page 143
paid, unless credit was granted by the seller to the buyer. This indicates that the
intention of the owner that ownership must be transferred can be made subject to a
suspensive condition. This is discussed in 9.1.3 below.
9.1.2 Abstract system of transfer of ownership
Since the decision in Commissioner of Customs and Excise v Randles, Brothers and Hudson
1941 (A) the abstract system of transfer of ownership has been followed in South African
law. This means that the invalidity of the preceding obligatory agreement (contract) does
not affect the validity of the transfer of ownership, and that ownership can be transferred in
spite of the invalidity of the obligatory agreement if there was a valid real agreement
coupled with delivery (movables) or registration (immovables).
Commissioner of Customs and Excise v Randles, Brothers and Hudson
1941 (A)
‘From these passages it is clear, I think, that a wide meaning must be given to the words
iusta causa or causa habilis (Voet, 41.1.35), and that all that these words mean in the
context I am at present considering is that the legal transaction preceding the traditio
may be evidence of an intention to pass and acquire ownership. But there may be direct
evidence of an intention to pass and acquire ownership and if there is, there is no need to
rely on the preceding legal transaction in order to show that ownership has, as a fact,
passed. To put it more briefly it seems to me that the question whether ownership passed
depends on the intention of the parties and such intention may be proved in various
ways.’
This principle has been confirmed in several decisions, of which Air-Kel h/a Merkel Motors v
Bodenstein 1980 (A), Cape Explosive Works Ltd v Denel (Pty) Ltd 2001 (SCA) and Legator
McKenna Inc v Shea 2010 (SCA) (regarding immovable property) are the best known.
However, this does not mean that there is no legal cause (causa) for the transfer of
ownership. Usually the cause will be contained in a preceding obligatory agreement such as
a contract of sale, exchange or donation. A valid obligatory agreement is, however, not
required as legal cause. Should the obligatory agreement be invalid, the parties’ intention to
transfer and receive ownership can be deduced from other circumstances. In these cases the
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap09.xhtml
24-Jul-18
Chap09
Page 4 of 18
legal cause for the transfer of ownership can be found in the circumstances from which the
intention is deduced. It may, for instance, be the signing of the transfer documents or the
payment of the transfer costs or purchase
Page 144
price. In Quartermark Investments (Pty) Ltd v Pinky Mkhwanazi 2014 (SCA) it was held that
an invalid obligatory agreement in the case of fraud automatically results in an invalid real
agreement. It is suggested that a court must in every instance of an invalid obligatory
agreement determine whether the invalidity of the obligatory agreement has the
consequence that the parties do not have the intention to transfer ownership. If such
intention is present, a valid real agreement exists in spite of the invalid obligatory
agreement – Du Plessis v Prophitius 2010 (SCA).
In these circumstances the bona fide recipient is protected at the expense of the previous
owner. The previous owner’s only remedy in these circumstances is a personal action
(usually in the form of an enrichment claim or condictio) against the bona fide recipient in
the case where the transferee was enriched as a result of the invalidity of the obligationcreating agreement. The previous owner cannot institute a claim based on a real action,
since ownership was transferred to the bona fide recipient.
9.1.3 Cash and credit sales
Ownership is transferred in the case of a cash sale only once the purchase price has been
paid in full, except in those cases where the parties intended that the seller would grant
credit to the buyer and that ownership is transferred before the full payment of the purchase
price (credit sale): Grosvenor Motors (Potchefstroom) v Douglas 1956 (A) and Concor
Construction (Cape) (Pty) Ltd v Santambank Ltd 1993 (A). If there is no explicit provision
that credit is granted to the buyer, there is a rebuttable presumption that it is a cash sale
(see also 9.2.3.4 and 10.2.1 below).
The presumption can be rebutted by the circumstances that existed at the time the
contract was concluded, for instance, if the seller agreed to accept payment on a date after
delivery of the thing, or if the seller accepted security for the payment of the purchase price.
In Eriksen Motors (Welkom) v Protea Motors Warrenton 1973 (A) it was decided that the rule
does not apply in all cases and that the circumstances of every case must determine
whether the parties intended a cash or a credit transaction.
In the case of a credit transaction the parties may also agree that ownership will not be
transferred until the purchase price has been paid in full. Delivery is then subject to a
suspensive condition and ownership is transferred only once the conditions of payment are
met. Some credit agreements subject to the provisions of the National Credit Act 34 of 2005
also fall into this category and ownership is not transferred until the last instalment has been
paid by the credit buyer to the credit seller. See in this regard Info Plus v Scheelke 1998
(SCA).
Page 145
9.2 Delivery
9.2.1 Introduction
In the case of transfer of ownership of movables delivery of the thing is required in addition
to the real agreement between the transferor and the transferee.
Definition
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap09.xhtml
24-Jul-18
Chap09
Page 5 of 18
Delivery (traditio), as an element of transfer of ownership, is the transfer of the
physical control of a movable to the transferee in order to enable him to exercise
control of the movable with the intention to be owner (animus domini). This has to
do, primarily, with the principle of publicity in that the physical control, in the
context of transfer of ownership, indicates that the transferee receives the
movable with the intention of acquiring ownership of the movable.
Delivery can have two meanings. On the one hand it means the delivery of the physical
control of the thing with the intention that ownership in the thing vests in the transferee. On
the other hand it means the mere delivery of physical control over the thing without any
intention that ownership is transferred to the transferee. The requirements regarding the
intention of the parties are discussed at 13.3.3 below.
In common law delivery was developed in such a way that it refers not only to physical
delivery (traditio vera), but also to cases where less publicity is attached to the act of
transfer. In these circumstances, due to the lack of a real or clear act of transfer, it is
accepted that delivery takes place when something happens which enables the transferee to
exercise physical control over the thing with the intention to be owner. This is known as
fictional or constructive delivery.
9.2.2 Actual delivery (traditio vera)
Definition
Actual delivery indicates that the movable is actually handed over to the
transferee in such a way that the transferee is able to exercise physical control
with the intention to be owner.
The delivery need not be made to the transferee in person, but can also be made to a
representative or employee of the transferee. It can even take place in the transferee’s
absence by, for instance, driving cattle into his kraal or delivering sand at his home. If the
necessary intention regarding the transfer
Page 146
and receipt of ownership is present, it is regarded as transfer of ownership through actual
delivery.
9.2.3 Constructive delivery (traditio ficta)
Definition
Constructive delivery (traditio ficta) takes place where the act of transfer is not as
explicit as in the case of actual delivery, but where a change occurs in the
intention with which the thing is controlled which indicates the intention that
ownership is transferred.
This can take place if the transferee was in physical control of the thing, but previously did
not hold it with the intention to be owner. As soon as the intention of both parties change
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap09.xhtml
24-Jul-18
Chap09
Page 6 of 18
and the transferee controls the thing in terms of a real agreement with the intention to be
owner, constructive delivery has taken place. Another way in which constructive delivery can
take place is where the transferor retains control of the thing, but the intention of the parties
change so that the transferor controls the thing on behalf of the transferee or in terms of a
valid legal cause without the intention to be owner, while the transferee has the intention to
be owner in respect of the thing.
Categories of constructive delivery
(a) Clavium traditio
(b) Delivery with the long hand (traditio longa manu)
(c) Delivery with the short hand (traditio brevi manu)
(d) Constitutum possessorium
(e) Attornment
9.2.3.1 Clavium traditio
Definition
A thing is delivered by clavium traditio if, due to its nature or size, it cannot be
actually handed over to the transferee, but an instrument by means of which the
transferee is enabled to exercise physical control is handed to him.
It is important that this has nothing to do with the handing over of a symbol, but that it
deals with the delivery of an instrument which enables the transferee to exercise physical
control.
Page 147
Examples
(a) By delivering the keys, registration certificate and/or licence disk of a car
(with the intention of transferring ownership) to the transferee, she is
enabled to exercise physical control of the car with the intention to be
owner, and delivery of the car has therefore taken place – Unitrans
Automotive (Pty) Ltd v Trustees of the Rally Motors Trust 2010 (FS).
(b) The delivery of the registration certificate of the car does not always
constitute delivery for purposes of transfer of ownership, but it enables the
transferee to register the car in his name. This registration, however, does
not necessarily indicate transfer of ownership – Nkosana v Rondalia
Assurance Corporation 1976 (T); ABSA Bank Ltd v Van Eeden 2011 (SG).
(c) The delivery of the keys to a warehouse (with the necessary intention)
indicates the delivery of the content of the warehouse to the transferee, in
that he is able to exercise control over the content of the warehouse with the
intention to be owner.
(d) In the case of bills of lading or consignment notes documents are delivered
to the transferee which certify that ownership of a specified cargo is
transferred to the transferee – Numill Marketing CC v Sitra Wood Products
Pty Ltd 1994 (C).
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap09.xhtml
24-Jul-18
Chap09
(e)
Page 7 of 18
In the case of cost-insurance-freight contracts it is agreed that the
dispatcher will deliver the goods as described in the bill of lading to the
recipient. The recipient of the bill of lading does not immediately acquire
physical control of the cargo, but, based on the delivery of the bill of lading,
ownership is transferred to him and thereafter he can alienate the goods to
third parties by delivering the bill of lading.
9.2.3.2 Delivery with the long hand (traditio longa manu)
Definition
Delivery with the long hand takes place when, due to its nature, size and weight, a
thing cannot be delivered physically, but instead the thing is pointed out (literally
longa manu or with the long hand). The thing is indicated to the transferee so that
he can exercise physical control thereof, for instance in the case of a heap of
bricks, a herd of cattle or farm implements.
The important qualification is that the pointing out of the thing must enable the transferee to
exercise physical control of the thing. If physical control
Page 148
cannot be exercised, delivery did not take place. In Groenewald v Van der Merwe 1917 (A)
the following requirements were set for this type of delivery:
(a) The intention of the parties to effect delivery in this way must be clear, especially in
the case of things which can be delivered physically.
(b) The thing must be pointed out by the transferor to the transferee in the presence of
the thing.
(c) The transferee must be enabled to exercise physical control of the thing.
Eskom v Rollomatic Engineering (Edms) Bpk 1992 (A)
The plaintiff’s claim that he acquired ownership of steel towers by means of
delivery with the long hand, was rejected because he could not prove that he had
physical control of the steel towers, which had been erected on the defendant’s
land. The main reason why ownership could not be transferred to the plaintiff, was
that the towers were still attached to the land and did not exist as independent
movables.
(d)
It is not sufficient to merely separate the thing from other things (for instance by
herding the cattle into a separate pen belonging to the transferor), but the transferee
must be able to exercise physical control (for instance by placing the cattle under the
control of the transferee’s own cattleherd).
The thing must be identified clearly. It is not sufficient to merely point out the thing
‘with the eyes’, but, if it is mixed with other things, it must be separated – gravel must
be separated from other gravel belonging to the transferor and identified as such. See
also Eskom v Rollomatic Engineering (Edms) Bpk 1992 (A) regarding this requirement.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap09.xhtml
24-Jul-18
Chap09
Page 8 of 18
9.2.3.3 Delivery with the short hand (traditio brevi manu)
Definition
Delivery with the short hand takes place when the transferee is already in physical
control of the thing, but without the necessary intention to be owner, so that
(constructive) delivery takes place when the intention of both parties change to
such an extent that the transferee in future exercises physical control with the
intention to be owner.
The change of intention of the parties in terms of the real agreement therefore indicates
when ownership was transferred and no physical delivery is required.
Page 149
Example
(a) In the case of Consolidated Factors v National Cash Register Co 1973 (T) a
thing was previously delivered to the lessee’s physical control in terms of a
contract of lease, and subsequently bought by the lessee. It need not be
delivered again, and the mere change in intention of the parties
(accompanied by the meeting of the requirement of payment if credit is not
granted) is sufficient to transfer ownership.
(b) Delivery in the case of some credit agreements in terms of the National
Credit Act 34 of 2005 where ownership was retained by the credit seller is
delivery with the short hand on payment of the last instalment although
physical control was transferred to the buyer on conclusion of the contract –
Info Plus v Scheelke and Another 1998 (SCA). It is not necessary to conclude
a new real agreement to transfer ownership, but the initial real agreement is
subject to the condition that ownership will pass to the purchaser only once
the final instalment has been paid.
9.2.3.4 Constitutum possessorium
Definition
In the case of constitutum possessorium ownership is transferred without the
thing being actually delivered to the transferee. Transfer takes place by means of
a change of intention of the parties in respect of ownership. The thing remains in
the physical control of the previous owner, who exercises the physical control for
or on behalf of the new owner or for another valid legal cause (causa) for
continued physical control.
In a certain sense this is the exact opposite of traditio brevi manu, but since there is no
publicity regarding this type of delivery and, because of the danger of misleading third
parties, it will not be readily accepted that transfer of ownership took place by means of
constitutum possessorium.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap09.xhtml
24-Jul-18
Chap09
Page 9 of 18
Example
A garment bought and paid for is left with the seller for alterations. Although
physical delivery did not take place, it is regarded that delivery and transfer of
ownership did take place because of the change of intention of the parties – the
transferee has the intention to be owner, while the previous owner exercises
physical control on behalf of the transferee without the intention to be owner.
Page 150
The requirements for constitutum possessorium are:
(a) The transferor must be in control of the thing as owner.
(b) The previous owner’s intention to be owner is terminated by means of a change of
intention. The new owner intends to be owner in respect of the thing, but the previous
owner exercises physical control over the thing on behalf of the new owner on the
basis of a valid legal cause to which the new owner has explicitly consented – Epol
(Edms) Bpk v Sentraal-Oos (Koöp) Bpk 1997 (O).
(c) There is no presumption in favour of constitutum possessorium, and parties relying on
it will have to prove that the intention of the parties was that ownership should be
transferred in spite of the fact that the transferor controls the thing on behalf of the
transferee – see, in particular, Bank Windhoek Bpk v Rajie 1994 (A).
(d) The reason (causa) why the thing remained in the transferor’s control after transfer of
ownership must be explicitly identified. This requirement is meant to prevent fraud.
An example of the fraudulent application of constitutum possessorium is when the parties
conclude a simulated contract of sale and claim that delivery took place by means of
constitutum possessorium. The true intention of the parties is to conclude a contract of
pledge, but they want to circumvent the delivery requirement for the pledge by presenting it
as a contract of sale where delivery took place by means of constitutum possessorium.
Simulated transactions
A simulated transaction or contract is concluded when the parties thereto intend to
conclude a specific kind of contract, but, for fraudulent purposes, ostensibly
conclude another kind of contract (simulated transaction).
Parties sometimes conclude a simulated agreement without the intention of transferring
ownership, for instance in the case of certain money lending transactions (granting of
credit). If the creditor wishes to establish real security in respect of movables of the debtor
for repayment of the loan, this can be done by means of pledge. A pledge in respect of a
movable thing can be established only by means of the transfer of the physical control of the
thing to the pledgee (creditor) – see chapter 18 below. However, if an owner of a movable
thing transfers the thing to the creditor as security for the loan, the thing is removed from
the pledgor’s control and, in the circumstances where the pledgor wants to use the thing,
this makes a pledge unpractical. To avoid
Page 151
this requirement, the parties often conclude a simulated contract of sale, which stipulates
that the owner ‘sells’ the thing to the creditor for the same amount as that loaned to him.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap09.xhtml
24-Jul-18
Chap09
Page 10 of 18
The thing is then re-leased to the ‘seller’ by the creditor and ownership of the thing reverts
to the ‘seller’ as soon as the loan is paid back in full. All these transactions imply that the
‘seller’ never loses physical control of the thing and the parties allege that delivery took
place by way of constitutum possessorium. However, if the parties never had the intention of
transferring ownership, but used the transaction merely to avoid complying with the
requirements for pledge, ownership will not be transferred by means of constitutum
possessorium – see, in particular, Quenty’s Motors (Pty) Ltd v Standard Credit 1994 (A) and
ABSA Bank Ltd t/a Bankfin v Jordashe Auto CC 2003 (SCA).
However, all re-leasing agreements are not simulated transactions. In the case of a leaseback agreement, where the owner of a thing sells it to a financing institution and then leases
it from the financing institution, ownership is transferred to the financing institution (despite
the fact that the original owner retains physical control of the thing) if it is proven that both
parties had the actual intention of transferring ownership to the financing institution. If this
is not proven, ownership is not transferred. In the case of the so-called floor plan
agreements of car dealers, it must be proved that there was the intention to transfer
ownership to the financial institution – Roshcon (Pty) Ltd v Anchor Auto Body Builders CC
2014 (SCA).
Quenty’s Motors (Pty) Ltd v Standard Credit Corporation Ltd 1994 (A)
The claimant Q, a car dealer from Pretoria, provided L, a second-hand car dealer
doing business in Durban, with two motor cars for sale with the explicit condition
that ownership would not be transferred until the full purchase price had been paid
to Q. L concluded an agreement with the defendant S that the vehicles were sold
to S and immediately re-sold to L in terms of a so-called floor plan agreement. At
no time did either L or S intend that the vehicles should be removed from the
physical control of L at his business premises. L further agreed that the re-sold
vehicles would be held by L on behalf of S until the full purchase price had been
paid by L. L disappeared and consequently his estate was sequestrated without
the purchase price being paid to S. S had the vehicles removed from L’s business
premises. The court found that ownership did not pass to S by way of constitutum
possessorium, since neither L nor S had the intention of transferring ownership.
The parties in fact intended that S would acquire real security by means of a
simulated contract of sale to avoid
Page 152
the requirement of delivery for a pledge. The court was not prepared to recognise
the validity of the simulated contract of sale and decided: ‘The object of the used
goods floor plan agreement was manifestly to enable Love Motors to obtain
finance from Stannic against the security of the vehicles sold.’
9.2.3.5 Attornment
Definition
Delivery by attornment takes place if ownership of a movable must be transferred
by owner A to B, but at the time of delivery the movable is in the physical control
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap09.xhtml
24-Jul-18
Chap09
Page 11 of 18
of C, who exercises physical control in terms of a valid legal cause. Ownership is
transferred to B if C agrees to exercise physical control on behalf of B and no
longer on behalf of A.
This form of delivery is often used by a dealer (A) who sells merchandise to buyers by
arranging financing for the buyers with a financial institution (B). The financial institution (B)
usually insists on acquiring ownership of the merchandise in order to have security for the
financing until the full purchase price is repaid by C. If dealer A has already sold and
delivered a thing (part of the merchandise) to buyer C by means of a credit agreement while
reserving ownership (see 9.1.3 above), the financial institution (B) will insist that the
ownership be transferred to him and that the credit agreement with buyer C be ceded
(discounted) to him. However, the property cannot be physically delivered to B, since buyer
C already has physical control thereof in terms of the credit agreement. The parties then use
attornment as a method of delivery. Ownership is only transferred to B when C has agreed
to control the thing on behalf of B, and not on behalf of A anymore.
Discounting transaction
This transaction has certain consequences for the parties:
(a) Dealer A and financial institution B both have the intention that ownership of
the property is transferred from A to B, while C exercises physical control
thereof.
(b) Dealer A acquires the full purchase price from the financial institution B on
cession (discounting) of the credit agreement to B.
Page 153
(c)
(d)
(e)
Buyer C, who exercises physical control of the property on behalf of A, must
agree to exercise this control on behalf of financial institution B in future
before ownership is transferred by means of attornment from dealer A to
financial institution B.
The cession (discounting) of the credit agreement by dealer A to financial
institution B furthermore implies that credit buyer C will, in future, pay the
instalments in terms of the credit agreement to financial institution B
(instead of dealer A) and that ownership in the thing is transferred to credit
buyer C from the financial institution B when the full purchase price is paid.
The transaction in Southern Tankers (Pty) Ltd t/a Unilog v Pescana D’Oro Ltd
2003 (C) is a good example of a discounting transaction.
The requirements for attornment are the following:
(a) The parties to the transfer, that is the transferor, transferee and the person exercising
physical control of the thing, must be in agreement that physical control of the thing
would in future be exercised on behalf of the transferee in terms of his intention to be
owner.
(b) The person in physical control must have been in control or had the right to exercise
control at the time when the transferor and transferee had the intention to transfer
ownership – Barclays Western Bank Ltd v Ernst 1988 (A). The controller need not be in
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap09.xhtml
24-Jul-18
Chap09
Page 12 of 18
control of the thing when he is informed that he must control it on behalf of the
transferee, as long as he was in control at the time when the change of intention
regarding the transfer of ownership from transferor to transferee took place.
Caledon en Suid-Westelike Distrikte Eksekuteurskamer v Wentzel 1972
(A)
A and B concluded a discounting agreement in terms of which B would sell
vehicles on credit to third parties and then cede the credit agreements to A and
transfer ownership of the vehicles to A along with cession of the contracts. B sold
a vehicle to C on credit, transferred physical control of the vehicle to C, ceded the
credit agreement to A and received the full purchase price from A in terms of the
discounting agreement. A then informed C that ownership of the vehicle had
passed to A and that C exercised physical control on behalf of A and not B. Before
this notification reached C, however, C had already sold and delivered the vehicle
to D and D to E. The court found that ownership had been transferred by
attornment to A since C had already agreed in the credit agreement that,
Page 154
after cession of the contract, he would exercise physical control on behalf of A and
not B. At the time of cession of the contract, C had still been in physical control of
the vehicle, but when A’s notice reached B he was no longer in physical control.
The court a quo found that C had to be in physical control at the time of the
notification and the permission to control the vehicle on behalf of A (which was not
the case in these circumstances). The appellate division, however, found that it is
only a requirement that C must have been in physical control at the time of
cession of the credit agreement. Therefore ownership had been transferred to A.
In the Caledon case it was also mentioned obiter that C need not even have been in physical
control at the time of cession of the agreement, and that it would have been enough if he
had previously agreed to exercise physical control on behalf of A and not B after cession of
the contract. This extension of attornment is criticised by several writers.
Both the transferor and the transferee of ownership must instruct the person in physical
control of the thing to hold the property on behalf of the transferee and not the transferor.
In Air-Kel h/a Merkel Motors v Bodenstein 1980 (A) the court decided that, because of the
fact that the person in physical control of the thing had not received any notification from
the transferor, but received only an order from the transferee to hold on his (the
transferee’s) behalf, the requirements for delivery by attornment had not been met.
9.3 Registration
9.3.1 Publicity principle
Publicity principle
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap09.xhtml
24-Jul-18
Chap09
Page 13 of 18
Because of the application of the publicity principle registration is required for the
creation, transfer and termination of all real rights in immovable property (see
9.1.1(f) above). The transfer of ownership in immovables therefore takes place by
means of registration in the deeds registry – Simpson v Klein 1987 (W). This is a
manifestation of the delivery requirement for the transfer of ownership of
immovables.
The publicity principle has its basis in history. The common-law custom was to draft written
transfer documents when transferring land and to formally hand these to the holder of the
right. Later on this document was registered by the authorities as proof of transfer of
ownership of land. Since the seventeenth century this procedure has been applied at the
Cape in accordance with the registration procedure then applicable in the Netherlands. This
Page 155
procedure, with its historical basis and extensions based on local custom, forms the basis of
the Deeds Registries Act 47 of 1937.
9.3.2 Characteristics of the registration system
(a) Registration of deeds
In terms of section 16 of the Deeds Registries Act 47 of 1937 the South African registration
system is based on the registration of deeds (documents). Initially registration of deeds in
its simple form implied that the deeds document was registered at face value and that a
registered deed did not in all circumstances serve as conclusive evidence of a person’s
ownership or other real right. The registration authorities were usually not prepared to
guarantee the accuracy of the registered details. Although the South African deeds
registration system pertaining to land is one of deeds (documents), the procedure has been
refined in the course of time so that it provides security, to a large extent, in respect of
ownership or limited real rights regarding immovables. For instance, the transport
documents are not registered at face value any more, but are thoroughly checked by the
deeds registry staff; registration takes place only if all documents are correct and meet the
requirements set by the Deeds Registries Act 47 of 1937; the information in the deeds
documentation must agree with the cadastral information (land surveyor’s maps); linking of
all relevant registration activities takes place and the registrar of deeds and his staff are
statutorily obliged to see to it that deeds registers are correct and complete. Transfer of title
(ownership or another limited real right) is confirmed by the registration of deeds
(documents).
(b) Negative registration system
In the case of a negative registration system the correctness of the registered information is
not guaranteed. Furthermore, no protection is given to bona fide acquirers of deficient ‘real
rights’ which result from incorrect registered information, and the staff of the deeds registry
cannot be held liable by such persons. In this case the real owner or holder of a right is
protected against all other persons. The reason why the correctness of registered
information cannot be guaranteed, is that there are several ways in the South African
system by which real rights can pass without the deeds records being simultaneously
amended. The best known example of this is the original acquisition of ownership by
accession, prescription and marriage in community of property where the registered deeds
documents do not reflect or confirm such passing of ownership. The reason for this is that
ownership is passed by legal operation without the previous owner’s co-operation. This
means that the South African system can be described as negative and that deeds records
do not
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap09.xhtml
24-Jul-18
Chap09
Page 14 of 18
Page 156
provide an absolute guarantee regarding the correctness of the registered information –
Cape Explosive Works Ltd v Denel (Pty) Ltd 2001 (SCA).
Knysna Hotel CC v Coetzee NO 1998 (SCA)
B and C were married in community of property and the property known as
Knysna Hotel was registered in their common estate. Subsequently they were
divorced and each retained a half undivided share in the property. After their
divorce both their separate estates were sequestrated and different trustees were
appointed for each insolvent estate. Coetzee, the trustee of B’s estate, sold
Knysna Hotel to the appellant Knysna Hotel CC. Coetzee could in terms of his
appointment as trustee deal only with B’s undivided share in the property, but
without any authority he also sold C’s undivided share in the property and signed
all the documents as trustee for B and C’s insolvent estates. The property was
transferred in the name of Knysna Hotel CC in 1990. During 1994 Coetzee issued
summons against Knysna Hotel CC for the balance of the purchase price. One of
Knysna Hotel CC’s defences was that the claim was not enforceable because of
prescription (extinctive prescription takes place after three years). Coetzee alleged
that the transfer of the property to Knysna Hotel CC was invalid because of lack of
authorisation by C’s trustee, and that the transaction was ratified by C’s trustee
only during 1993, from which date prescription started to run. The court held that
the property was registered in the name of Knysna Hotel CC during 1990. The
transaction was formally in order in that the deeds registry did not know that
Coetzee did not have authorisation to act on behalf of C’s estate. Because of the
negative registration system the deeds registry does not guarantee the
correctness of the registered documents, but relies on such documents until the
documents are rectified by way of a formal court order. Therefore prescription
started running during 1990.
In terms of sections 99 and 100 of the Deeds Registries Act 47 of 1937, the registrar of
deeds and his staff are not liable for any mistakes regarding registration, except in the case
of mala fide or malicious acts of the deeds registry staff resulting in damages. This is not in
itself an indication that the deeds registers are unreliable. In spite of the fact that the
registration authority does not guarantee the correctness of the registered information,
attention has already been drawn to those statutory measures introduced to make the deeds
registers as complete and reliable as possible and to ensure and promote the correctness of
the registered information.
Page 157
9.3.3 Registration procedure
Procedure
(a) Map or general plan
(b) Statutory requirements
(c) Obligation-creating and real agreements
(d) Deed of transfer
(e) Supporting documents
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap09.xhtml
24-Jul-18
Chap09
(f)
(g)
Page 15 of 18
Linking of transactions
Sequence of relative causes
(a) Map or general plan
Immovable property can be registered in the deeds registry only by means of a map,
diagram or general plan. The map must be an approved surveyor’s map or aerial photograph
drawn up in accordance with the requirements of the Land Survey Act 8 of 1997. In the case
of sectional titles, every unit must be described on the basis of a sectional plan as set out in
sections 5 and 6 of the Sectional Titles Act 95 of 1986 – see 6.2.3 above.
(b) Statutory requirements
Several statutory limitations on subdivision and alienation must be kept in mind – see, for
example, the provisions of the Spatial Planning and Land Use Management Act 16 of 2013,
as discussed in chapter 7 above. Various provincial ordinances still regulate the
establishment of towns, but provincial legislation to replace existing ordinances is in
preparation by the nine provinces in terms of the Constitution of 1996. Several other
provisions dealing with township establishment are also applicable. The Spatial Planning and
Land Use Management Act 16 of 2013 contains provisions to simplify and consolidate
township establishment in these areas. The Sectional Titles Act 95 of 1986 regulates the
establishment of sectional title schemes.
(c) Obligatory and real agreements
In the case of derivative acquisition in terms of a sale, exchange or donation, registration
usually takes place after the conclusion of a valid and enforceable obligatory agreement
(contract) and real agreement in accordance with the requirements of the Alienation of Land
Act 68 of 1981 (and in applicable situations the Sectional Titles Act 95 of 1986 and the
Property Time-sharing Control Act 75 of 1983). Registration can also take place after
ownership has already passed by means of original acquisition (for instance prescription,
expropriation or marriage in community of property), in which case no
Page 158
preceding obligatory and real agreement are required, but a court order (in the case of
prescription), an application (in the case of marriage) or a notice (in the case of
expropriation) is required by the deeds registry. Since the abstract system of transfer of
ownership is applied (see 9.1.2 above), derivative transfer also takes place in the case of an
invalid obligatory agreement, as long as a valid real agreement exists – Legator McKenna
Inc v Shea 2010 (SCA). The real agreement is not included in the deed of transfer (the deed
of transfer forms part of the registration procedure), but is apparent from surrounding
circumstances, such as the signing of powers of attorney and sworn statements for the
purpose of the giving and receiving of transfer, the payment of transfer fees and/or payment
of the purchase price.
(d) Deed of transfer
A deed of transfer is drawn up in accordance with the provisions of section 20 of the Deeds
Registries Act 47 of 1937. In schedule 3 to the regulations several forms are set out to which
deeds of transfer must conform in various circumstances. The general form of a deed of
transfer includes the following:
(aa) A preparation certificate: in terms of section 15 only a conveyancer practising in the
province in which the deeds office is situated, may sign the preparation certificate.
(bb) The heading: in the case of a deed of transfer it is merely ‘Deed of Transfer’.
(cc)
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap09.xhtml
24-Jul-18
Chap09
Page 16 of 18
The preamble: the full names, identity numbers and marital status of the transferor (in
the case of natural persons) or prescribed particulars of legal persons in order to
identify such persons sufficiently, are contained in the preamble, which also indicates
that the transferor gives the conveyancer power of attorney to handle the transfer.
(dd) Recital: the legal cause (causa) for the transfer (for instance a contract of sale or a
donation) is set out.
(ee) Vesting clause: the description of the transferee (full names, identity numbers and
marital status of natural persons and prescribed particulars of legal persons necessary
to identify such persons) is set out with the confirmation that ownership is transferred
to such a person.
(ff) Description of property: the land is described in terms of the provisions of regulation
28(1) in accordance with the cadastral information (usually land surveyor’s maps,
aerial photographs or sectional plans) so as to be identifiable. In terms of regulation 28
(2) only the land and its size are mentioned and no attachments are described.
(gg) Extending clause: in this reference is made to the original deed to which the map of
the land is attached, as well as the deed of transfer of the transferor.
Page 159
(hh) Conditions clause: included herein are the conditions and limitations registered in
respect of the land. Praedial servitudes, personal servitudes, conditions of township
establishment, reservation of mineral rights, statutory conditions and other restrictive
conditions are included (see chapter 17 below).
(ii) Divesting clause: the transferor divests himself of his ownership in favour of the
transferee.
(jj) Consideration clause: the purchase price or amount on which transfer duties have been
paid is mentioned.
(kk) Execution clause: the signatures of the registrar of deeds and the transferor or his
empowered conveyancer are to be found here.
(ll) Registration clause: this contains a reference to the register in which the information is
to be noted.
(e) Supporting documents
The following documents are usually required with the deed of transfer:
(aa) A power of attorney that the conveyancer may sign the deed of transfer on behalf of
the transferor – section 95.
(bb) A clearance certificate of the local authority which certifies that all taxes and levies due
to them have been paid on the date of transfer.
(cc) A transfer duty receipt which certifies that all transfer duties (a form of taxation) have
been paid to the receiver of revenue in accordance with the requirements of the
Transfer Duty Act 40 of 1949. The transfer duty is determined on the basis of the
purchase price or value of the property, whichever is the highest. If the transferor
alienates property as part of his business, value-added tax is payable, but in this case
transfer duty need not be paid – section 7(1) of the Value-Added Tax Act 89 of 1991.
(dd) The existing deed of transfer of the transferor.
(ee) Consent to the registration of servitudes and other restrictive covenants, or consent by
the person in whose favour the servitude or restrictive covenant is, that the restriction
may be cancelled.
(ff) If the transferor had encumbered the property with a mortgage, the mortgage bond
and the consent to cancellation of the mortgage by the mortgagee. Strictly speaking
these are not accompanying documents to the deed of transfer, but a related
transaction which is registered separately.
(gg)
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap09.xhtml
24-Jul-18
Chap09
Page 17 of 18
If the transferee wants to encumber the property with a mortgage, the mortgage bond
and power of attorney to register the mortgage. This is also a related transaction which
is registered separately.
Page 160
(f) Linking of transactions
The deed of transfer and accompanying documents, along with all related transactions
registered with or after transfer of ownership, are submitted to the deeds registry in the
province in which the land is situated. The deeds documents are linked to determine the
sequence of the consecutive registration proceedings. The importance of the linking of the
deeds documents lies in the consequences of the registration proceedings, which usually
have financial implications.
Example
An existing mortgage over land must be cancelled before the ownership of the
land can be transferred and a new mortgage can be registered only after transfer
of the land.
(g) Sequence of relative causes
Section 14 prescribes that deeds must follow the sequence of their relative causes. This
implies that transfer of land and cession of real rights must follow the sequence of the
consecutive legal acts or succession in terms of which they are performed – section 14(1).
The purpose of section 14 is, on the one hand, to prevent the avoidance of the payment of
transfer duties and other taxes and, on the other hand, to ensure that the registration
procedure is a written reflection of the real course of transactions. It forms one of the
cornerstones of the South African system of registration whereby the entitled person’s right
(title) is made secure and uncontested.
Examples
(a) X inherits a farm from his deceased father. Before the farm is registered in
X’s name, X has sold the farm to Y. The farm cannot be transferred out of
the estate directly to Y, but has to be transferred first to X and thereafter
with a separate deed of transfer from X to Y.
(b) X is the registered owner of a sectional title unit. X is subsequently married
in community of property to Y. Three years later they sell the sectional title
unit to Z. Before the sectional title unit can be transferred by X and Y to Z,
the title deed in the deeds registry has to be endorsed to the effect that the
property is held in the common estate of X and Y and is therefore registered
in the name of X and Y.
Page 161
Summary
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap09.xhtml
24-Jul-18
Chap09
Page 18 of 18
In the case of the derivative acquisition of ownership, the co-operation of the
previous owner is required. In terms of the nemo plus iuris rule no more rights
than the previous owner had can be transferred. Consequently the property is
transferred to the new owner subject to all the existing real restrictions.
The requirements for the transfer of movable property are the existence of a
valid real agreement and delivery of the property. The real agreement indicates
the intention of the previous owner to transfer the property and the intention of
the new owner to acquire the property. Since South Africa has an abstract system
of transfer of ownership, a valid obligation-creating agreement is not a
requirement for transfer of ownership, but a valid real agreement is required.
Delivery (traditio) satisfies the publicity principle and takes place in various
ways. Apart from real or actual delivery, various forms of constructive delivery are
recognised, namely clavium traditio, delivery with the long hand, delivery with the
short hand, constitutum possessorium and attornment.
Transfer of immovable property also takes place in terms of a valid real
agreement. Satisfaction of the publicity principle in the case of immovable
property takes place by means of registration of transfer in the deeds registry. A
deed of transfer in a prescribed form is registered and the Deeds Registries Act 47
of 1937 contains provisions pertaining to the deeds documents which must be
registered and the registration procedure.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap09.xhtml
24-Jul-18
Chap10
Page 1 of 14
Page 162
Chapter 10
Protection of ownership
10.1
10.2
10.3
10.4
Introduction
Real remedies
10.2.1 Rei vindicatio
10.2.2 Actio negatoria
10.2.3 Interdict
10.2.4 Declaratory order
Delictual remedies
10.3.1 Actio ad exhibendum
10.3.2 Condictio furtiva
10.3.3 Actio legis Aquiliae
Enrichment action
Summary
Overview
How can one distinguish between the various remedies for the protection of ownership?
•
Which requirements must be met before the rei vindicatio can be instituted?
•
What are the most important defences available against the rei vindicatio?
•
In what circumstances would estoppel be a defence against the rei vindicatio?
•
•
Which delictual remedies are used to protect ownership?
•
What are the requirements for the actio legis Aquiliae?
•
When can the owner institute an enrichment claim?
10.1 Introduction
If ownership or the entitlements of the owner of a thing are infringed upon, several remedies
are available to the owner.
Page 163
Remedies
(a) Real remedies: The purpose of these remedies is to restore physical control
of the thing or to remove any infringement of the owner’s exercise of his
entitlements to the thing.
(b) Delictual remedies: These are actions of the owner against a person aimed
at compensation for damages or loss to the owner’s property resulting from
the unlawful and culpable actions of such person. Because delictual remedies
form part of the law of delict, they are mentioned only briefly in this chapter.
(c) Enrichment remedies: These remedies are aimed at the payment of
compensation by a person who was enriched at the expense of the owner
without a legal ground for the enrichment. This is also not discussed in
detail, since the law of enrichment deals with this fully.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap10.xhtml
24-Jul-18
Chap10
Page 2 of 14
10.2 Real remedies
10.2.1 Rei vindicatio
(a) Definition
|
Definition
The rei vindicatio is the action whereby an owner can recover an existing and
identifiable thing from any person who is exercising unlawful physical control over
it.
The owner of a thing who was deprived of his physical control of the thing against his will or
in an unlawful way, can recover it from any controller, irrespective of the fact that such
person acquired control of the thing in good faith or paid for it. The owner need not
compensate the controller for the money paid to the third party – Grosvenor Motors
(Potchefstroom) v Douglas 1956 (A).
This remedy is based on the principle that ownership is transferred by the derivative
method only if the owner intended transferring ownership. The bona fide acquirer of a thing,
who for instance paid a thief for the thing, does not become owner of the thing since the
owner never intended to transfer ownership to him. In these circumstances the owner can
recover the thing from the bona fide acquirer with the rei vindicatio irrespective of the
compensation paid to the thief. The reason is that the owner’s real right to the thing is so
strong that the thing held by a third party without legal cause, can be recovered by the
owner – Dreyer v AXZS Industries (Pty) Ltd 2006 (SCA).
Page 164
It also makes no difference to the institution of the action whether the owner lost control
involuntarily or if he transferred it to another person in terms of a legal cause that later fell
away. It is not necessary for the owner to prove that the thing is controlled unlawfully by the
controller, but the owner will obviously not be successful with the rei vindicatio if the person
in control of the thing can prove that he is in lawful control thereof (see also (b) (cc) below).
The rei vindicatio can be instituted against any person who controls the thing without the
owner’s consent. It can be instituted in respect of movable and immovable things. In the
case of immovable things it usually assumes the form of an eviction order. In President of
the RSA v Modderklip Boerdery (Pty) Ltd 2005 (CC) it was held that there is an obligation on
a landowner to prevent the unlawful occupation of her land and that the obligation to
remove unlawful occupiers cannot be left entirely to the state.
Although the rei vindicatio is usually instituted to restore the thing to the owner’s physical
control, it can in exceptional circumstances be used by the owner to claim the value of the
thing at the time of institution of the action or the delivering of judgment if the controller
fraudulently alienated or destroyed the thing so that it can no longer be recovered. Damages
can be claimed with the rei vindicatio only from a bona fide controller in the exceptional
circumstances of the fraudulent alienation or consumption of the thing by such bona fide
controller. If the thing is lost or destroyed through negligence, the value thereof can be
claimed only from a mala fide possessor and not from a bona fide possessor – see also 10.4
below. The rei vindicatio as an action is not a monetary debt or claim which becomes
prescribed after three years – ABSA Bank Ltd v Keet 2015 (SCA).
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap10.xhtml
24-Jul-18
Chap10
Page 3 of 14
(b) Requirements
Requirements
(aa) The owner must prove ownership of the thing.
(bb) Only an existing and identifiable thing can be reclaimed.
(cc) The property must be in the control of the defendant when the action is
instituted.
(aa) Ownership
The claimant must prove that he is the owner. The onus of proof resting on the claimant is
that he must prove, on a balance of probabilities, that he acquired ownership.
Page 165
Ebrahim v Deputy Sheriff, Durban 1961 (D)
The test whether the claimant has discharged the onus of proving his ownership of
movable property which is not in his possession is whether in the result, the
probabilities are balanced in his favour. The strength of the evidence which he has
to produce to succeed depends upon the circumstances of the particular case.
Once the claimant has established acquisition of ownership on a balance of probabilities, a
rebuttable presumption that he is still the owner is created. In the case of immovable
property it is sufficient to prove that the property is registered in the name of the claimant,
but in the case of movable things the onus of proof is much heavier, since there is a
presumption that the person who is in physical control of the thing is also the owner. To
satisfy this onus of proof, the claimant will have to rebut this presumption. The rei vindicatio
is not available to the leaseholder of a registered leasehold, but statutory measures for
protection do exist.
(bb) Existing and identifiable thing
The thing must still exist and be identifiable. If the thing no longer exists, the owner will
have to use a delictual or enrichment action. In extraordinary circumstances, however,
damages can be claimed with this action – see (a) above. In the case where the thing is not
easily identifiable, for instance where it has been mixed with other things, it is also not
possible to use this action. If ownership has passed because of mixing, for instance in the
case of money, the action can also not be instituted.
(cc) Control
The claimant must prove that the defendant was in control of the thing at the time the
action was instituted – Mehlape v Minister of Safety and Security 1996 (W). It is not
necessary for the owner to allege and prove that the property is unlawfully controlled by the
defendant, but the claimant will obviously not be successful with the rei vindicatio if the
defendant can prove that he was in lawful control of the thing. It is also not necessary for
the claimant to prove that the defendant had a limited real right or a creditors’ right to
control the thing which has lapsed. However, if the claimant avers the existence of such a
right, he must prove that the right in terms of which the defendant controlled the thing has
lapsed – Chetty v Naidoo 1974 (A) and De Villiers v Potgieter 2007 (SCA). The defendant
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap10.xhtml
24-Jul-18
Chap10
Page 4 of 14
must therefore prove that he was lawfully in control of the thing at the time of institution of
the action, but if the claimant avers that this right has lapsed, he must prove it.
Page 166
(c) Defences
The defendant can raise the following defences against the rei vindicatio:
(aa) The defendant can prove that the claimant is not the owner of the thing. This will
usually be the case where the claimant acquired ownership of the thing but lost it
shortly thereafter (by means of, for instance, prescription), or where the claimant’s
predecessor in title was not the owner and could, therefore, not transfer ownership to
the claimant.
(bb) If the thing has been destroyed or is unidentifiable, that can be raised as a defence.
(cc) A further defence would be that the defendant was not in physical control of the thing
when the rei vindicatio was instituted.
(dd) The defendant can show that he has a limited real right or creditor’s right in terms of
which he exercises physical control and that this right is still valid. The right claimed by
the defendant must be a right enforceable against the owner. If, for instance, the
owner transferred physical control to another person, that person would be the only
one who can raise that as a defence against the rei vindicatio and the defence is not
available to persons who acquired the thing from the original controller. If the
defendant has paid part of the purchase price in terms of an invalid sale agreement,
the owner does not have to tender repayment, because the defendant has an
enrichment claim against the owner – Rhoode v De Kock 2013 (SCA).
(ee) The defendant with a lien over the thing remains in physical control of the thing until
the obligation which gave rise to the lien has been fulfilled by the owner – see chapter
19 below. The lien of a bona fide possessor, mala fide possessor, bona fide occupier,
mala fide occupier, usufructuary and lessee can, in various circumstances, be raised as
a defence against the rei vindicatio of the owner – see Bombay Properties (Pty) Ltd v
Ferrox Construction 1996 (W).
(ff) An occupier in terms of the Land Reform (Labour Tenants) Act 3 of 1996, the Extension
of Security of Tenure Act 62 of 1997 or the Prevention of Illegal Eviction and Unlawful
Occupation of Land Act 19 of 1998 may raise this as a defence until such an occupier’s
claim has been dismissed by an appropriate court – Khuzwayo v Dludla 2001 (LCC).
(gg) Relevant circumstances
Section 26(3) of the Constitution provides that no one may be evicted from a home without
a court order, which may not be granted unless all relevant circumstances have been taken
into account. It raises the question whether this provision (and similar anti-eviction
provisions in the Extension of Security of Tenure Act 62 of 1997 and the Prevention of Illegal
Eviction and Unlawful Occupation of Land Act 19 of 1998) brings about an amendment
Page 167
of the common-law position and, in effect, a limitation to the rei vindicatio in the sense that
the landowner must prove, in addition to the common-law burden of proof, that the eviction
order will be justified in view of the relevant circumstances. Relevant circumstances include
issues such as whether there are small children or elderly people among those who would be
evicted, and the availability of alternative accommodation. Obviously the landowner’s right
to obtain an eviction order will be limited dramatically if the burden of proof would be
amended in this way. In Brisley v Drotsky 2002 (SCA) it was held that section 26(3) does
not amend the common-law provisions regarding evictions, but is applicable only to evictions
in terms of the statutory measures mentioned above. In a later case Ndlovu v Ngcobo;
Bekker v Jika 2003 (SCA) the supreme court of appeal decided that the common-law
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap10.xhtml
24-Jul-18
Chap10
Page 5 of 14
provisions regarding evictions were not amended by the Constitution, but by the Prevention
of Illegal Eviction and Unlawful Occupation of Land Act 19 of 1998 to the extent that relevant
circumstances have to be taken into account before an eviction order is granted.
Furthermore, in Port Elizabeth Municipality v Various Occupiers 2005 (CC) the constitutional
court decided that in the case of evictions a court must find a just and equitable balance
between the protection of the rights of a landowner and the interests of an unlawful
occupier. All relevant circumstances have to be taken into account and an eviction order will
be granted only in just and equitable circumstances. See further 23.6 below. The court must
determine whether suitable alternative housing is available for the occupier, even in the case
where the occupied building is not safe for habitation any more – City of Johannesburg
Metropolitan Municipality v Blue Moonlight Properties 39 (Pty) Ltd 2012 (CC).
(hh) Estoppel
Estoppel is a defence which can be raised against the rei vindicatio of the owner, if the
owner acted in a specific way.
Requirements
If the owner of a thing (or the owner’s empowered representative)
(i) culpably (intentionally or negligently)
(ii) created the impression that ownership was transferred to the physical
controller of the thing
(iii) and the controller, relying on this impression, exercises physical control with
the owner’s intent (animus domini)
(iv) to his detriment
(v) the controller can raise estoppel as a defence against the rei vindicatio of the
owner.
Page 168
The requirements to raise estoppel as a defence were set out as follows in Oakland
Nominees v Gelria Mining and Investment Co 1976 (A) and Quenty’s Motors (Pty) Ltd v
Standard Credit Corporation Ltd 1994 (A):
(i) The owner or his empowered representative must make a representation or create the
impression that the intention is to transfer ownership to the physical controller – see,
in this regard, especially Electrolux v Khota 1961 (W). The mere transfer of physical
control over the thing by the owner does not, in itself, indicate that such an impression
has been created. In the case of B & B Hardware Distributors (Pty) Ltd v Administrator,
Cape 1989 (A), building materials were delivered to a building site. The court held that
such conduct does not create the impression that ownership of the material is
transferred to the building contractor.
(ii) The representation must have been made culpably (intentionally or negligently).
(iii) The person raising estoppel must have relied on this representation. If such person did
not rely on the representation, but on other documents, the defence of estoppel will
not be successful – ABSA Bank Ltd t/a Bankfin v Jordashe Auto CC 2003 (SCA).
(iv) The action taken because of the representation must have been to the controller’s
detriment.
(v) The representation must have been sustainable. The consequences of the raising of
estoppel must, therefore, not be unlawful or against public policy.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap10.xhtml
24-Jul-18
Chap10
Page 6 of 14
Grosvenor Motors (Potchefstroom) v Douglas 1965 (A)
A (Douglas) sells his car to B for R500 cash. B does not have his cheque book with
him and Douglas sends his employee C with B to get the cheque from B at his
house after which the car is delivered to B. B has requested Douglas to provide
him with a document stating that he has sold the car to B. B thereafter sells and
delivers the car to Grosvenor Motors and shows them the document provided by
A. B’s cheque is then dishonoured by the bank against whom it has been drawn,
being a bank in another town. Douglas (A) institutes the rei vindicatio against
Grosvenor Motors to recover physical control of the car. Grosvenor Motors raises
estoppel against the action and avers that the document provided by A to B
negligently created the impression that A had transferred ownership to B.
Furthermore, Grosvenor Motors avers that A is no longer the owner
Page 169
of the car and that ownership had been transferred to B before the purchase price
was paid, since the acceptance of the cheque drawn on the bank in the other town
indicates an intention to grant credit. The court finds that ownership was not
transferred to B, since the rule of payment of the purchase price was not complied
with. The acceptance of a cheque drawn on a bank in another town does not
indicate an intention to grant credit and ownership was therefore not transferred
before payment of the purchase price. The court also finds that Grosvenor Motors
cannot raise estoppel against the rei vindicatio of A, as the document provided by
A to B did not create the impression that ownership had been transferred to B, but
merely confirmed that the car had been sold to B.
Johaadien v Stanley Porter (Paarl) 1970 (A)
A (Johaadien) buys a vehicle from B. B declares that he is the owner of the vehicle
and refers A to C (the car dealer Stanley Porter) from whom he had bought the
vehicle. An employee of C declares that B has bought the vehicle from C, has paid
the full purchase price and that ownership of the vehicle has been transferred to
B. After delivery of the vehicle by B to Johaadien, C finds out that the purchase
price has not been paid in full. C cannot recover the purchase price from B and
institutes the rei vindicatio against Johaadien to recover physical control of the
vehicle. C avers that ownership has not been transferred to B because the
purchase price was not paid. Johaadien raises estoppel and avers that C created
the impression that ownership had been transferred to B and that Johaadien has
acted to his detriment on the basis of this impression. However, Johaadien does
not aver in his pleadings that C has acted negligently and the court a quo as well
as the appellate division find that the negligence of the person creating the
impression must be proved before the defence of estoppel can succeed.
Kia Motors (SA) (Edms) Bpk v Van Zyl en ’n Ander 1999 (O)
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap10.xhtml
24-Jul-18
Chap10
Page 7 of 14
The applicant, Kia Motors, applies for an order to recover a vehicle from the
respondent, Van Zyl, with the rei vindicatio. The vehicle was sold and delivered by
Kia Motors to N, a car dealer. In terms of the sale agreement with N the
ownership of the vehicle would not be transferred to N until the purchase price
had been paid to Kia Motors. N paid the purchase price with a postdated cheque.
Subsequently N sold the vehicle to Van
Page 170
Zyl, who paid the purchase price to N, and the vehicle was delivered to Van Zyl.
Van Zyl insisted on a trade guarantee, which was supplied to Van Zyl by Kia
Motors. Thereafter the cheque by N to Kia Motors was dishonoured. Kia Motors is
applying for an order to recover the vehicle from Van Zyl with the rei vindicatio,
averring that ownership was not transferred to N because the purchase price had
not been paid. Van Zyl raises the defence of estoppel against the rei vindicatio on
the following grounds:
Kia Motors delivered the vehicle to N, a car dealer, knowing that N was going
•
to display the vehicle in his showroom, without making any attempt to
inform the general trading public that ownership of the vehicle had not been
transferred to N. Thus Kia Motors made a negligent misrepresentation to Van
Zyl that N was the owner of the vehicle.
Kia Motors knew of the sale agreement between N and Van Zyl and even
•
supplied Van Zyl with a trade guarantee. They negligently omitted to notify
Van Zyl that Kia Motors, and not N, was the owner of the vehicle.
The court upholds the defence of estoppel.
Estoppel can be raised as a defence only and it cannot be used as the basis for an
independent action. The impression created by the owner is that the owner transferred
ownership (dominium) or the right to transfer ownership to the person from whom the
aggrieved person received physical control.
In B & B Hardware (Pty) Ltd v Administrator Cape 1989 (A) it was decided that the actions
of the owner must indicate clearly and unambiguously that the controller is entitled to
transfer ownership of the thing or to acquire ownership, and the courts should not lightly
infer the creation of such an impression from the owner’s actions, however negligent. If the
creation of an impression can be inferred, it must be proved that the creation of the
impression contributed to the aggrieved person’s belief that the controller had the dominium
or the entitlement to alienate the thing. If the impression was not a result of the
representation by the owner, but resulted from the owner’s conduct, the following must be
proved (Concor Holdings (Pty) Ltd t/a Concor Technicrete v Potgieter 2004 (SCA)):
(i) The owner must have reasonably foreseen that the controller would be misled by his
conduct.
(ii) The controller’s interpretation of the control must be based on reasonable inference.
Page 171
There is difference of opinion on the question whether a successful defence of estoppel
against the rei vindicatio of the owner means that ownership is transferred to the controller
of the thing. Although obiter remarks were made regarding this in Johaadien v Stanley
Porter (Paarl) 1970 (A), it was not decided explicitly.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap10.xhtml
24-Jul-18
Chap10
Page 8 of 14
(ii) Stolen money
If stolen money has become unidentifiable as a result of mixing (commixtio) (see 8.5
above), the owner can, in any case, not institute the rei vindicatio, since the thing has been
lost – Commissioner of Customs and Excise v Bank of Lisbon International Ltd 1994 (N). If it
has not been mixed, the rei vindicatio cannot be instituted if it was acquired in good faith
and for value.
(jj) Money confiscated lawfully in terms of section 20 of the Criminal Procedure Act 51 of
1977 cannot be reclaimed with the rei vindicatio. In Van der Merwe v Taylor 2008 (CC)
it was decided, though, that the unlawful confiscation of money is no defence to the rei
vindicatio.
10.2.2 Actio negatoria
Definition
The actio negatoria is a real action aimed at protecting the exercise of an owner’s
entitlements arising from his ownership of movable or immovable property.
There are a number of requirements for the institution of the actio negatoria as a real action.
Requirements
(a) It is a real action which can be instituted only by the owner of a thing.
(b) It can be instituted as a result of infringement of the entitlements of an
owner or if a holder of a servitude exceeds his entitlements.
(c) It can be instituted in respect of movable and immovable property.
(d) This real action can result in either a declaratory order or damages.
The actio negatoria was traditionally employed against a person attempting to enforce a
servitude which he does not have or a person exceeding the entitlements arising from a
servitude. In due course it developed so that it was used by the owner against any
infringement of his entitlements, whether
Page 172
or not the transgressor relied on a servitude or another limited real right or not. It was also
extended to infringement against movables, but remains an action that can be instituted
only by the owner.
By using this action it is possible to get a declaratory order to have structures on the
owner’s land erected or torn down, to get a declaration of rights or to recover damages
(without having to meet all the requirements for delictual liability). In South African law this
action has, to a large extent, fallen into disuse, since the required protection is now provided
by interdicts or declaratory orders – see, in this regard, 10.2.3 and 10.2.4.
10.2.3 Interdict
Definition
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap10.xhtml
24-Jul-18
Chap10
Page 9 of 14
An interdict is a summary court order, usually issued upon urgent application, by
which a person is ordered to either do something, stop doing something or refrain
from doing something, in order to stop or prevent an infringement of property
rights.
Requirements
(a) Proof of a clear right with regard to property.
(b) Proof that the respondent infringes upon the right unlawfully and in an
ongoing and continuing way, or that there is a reasonable expectation that
such an infringement will occur in future; and that it will cause the applicant
damage.
(c) Reasons why there is no other effective remedy available to the applicant.
For a full exposition on the requirements for an interdict, see 14.4.2 below.
10.2.4 Declaratory order
Definition
A declaratory order is a court order, issued upon application, in which the court
sets out the rights and obligations of parties to a dispute before an actual
infringement takes place.
Page 173
Requirements
(a) Proof of an actual, existing or future right or obligation with regard to
property.
(b) Proof of an existing and real dispute about the right or obligation in question.
(c) Convincing reasons why the circumstances make it necessary for the court to
make a declaratory order to solve the dispute by setting out the rights and
obligations of the parties.
For a full exposition on the requirements for a declaratory order, see 14.3.2 below.
10.3 Delictual remedies
These remedies differ from real remedies in the sense that they do not aim to restore
physical control over a thing, but they are aimed at a person in order to claim compensation
from such a person for damage or injury that the owner experienced in respect of his
property as a result of the actions of the person.
10.3.1 Actio ad exhibendum
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap10.xhtml
24-Jul-18
Chap10
Page 10 of 14
Definition
The actio ad exhibendum is instituted by the owner against the controller of a
thing who has fraudulently lost physical control of the thing, in which case the
value of the thing can be claimed from such a controller.
According to RMS Transport v Psicon Holdings (Pty) Ltd 1996 (T) specific requirements must
be met before the actio ad exhibendum can be instituted.
Requirements
(a) The thing must have been destroyed or alienated on purpose. It is not
sufficient to prove negligent behaviour by the controller.
(b) It could have been consumed or destroyed or alienated in any other way.
(c) The controller must have been mala fide at the time of destruction or
alienation of the thing in that she had knowledge of the owner’s rights at
that stage. This includes the thief and any mala fide controller of the thing
who became aware during or after receipt of the thing that she controls the
thing mala fide.
(d) This remedy is available only to the owner of destroyed or alienated property
and the owner is entitled to recover the market value of the thing from the
mala fide controller.
Page 174
10.3.2 Condictio furtiva
Definition
The condictio furtiva is instituted by the owner or lawful controller of a thing
against a thief or a thief’s heirs and is an action with which the thing or the
highest value of the thing since the theft can be claimed.
If the thing is still in the control of the thief or his heirs, it should, however, rather be
claimed with the rei vindicatio, while the actio ad exhibendum would be used if the thing has
been destroyed or consumed on purpose. The last-mentioned action can, however, not be
used if the thing was destroyed by accident or removed from his control against his will, in
which case the condictio furtiva will be the best action that an aggrieved party can institute.
Requirements
(a) The owner, lawful holder or any other person with a lawful interest in the
thing can institute the condictio furtiva only if he retained his ownership or
interest in the thing from the date of the theft until the date of institution of
the action.
(b) If the thing is destroyed and the owner’s ownership is terminated thereby,
the (previous) owner retains the remedy.
(c) The action can be instituted only against the thief or his heirs and not
against accessories or later bona or mala fide acquirers and controllers of the
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap10.xhtml
24-Jul-18
Chap10
(d)
(e)
Page 11 of 14
thing. For the purpose of this action, theft need not meet all the
requirements for criminal liability, but it should be sufficient if the claimant
can prove that the defendant removed the thing from his physical control
with fraudulent purposes. In Crots v Pretorius 2010 (SCA) it was held that
intent by foresight (or constructive intention) (dolus eventualis) is sufficient
to prove theft for the purposes of instituting the condictio furtiva.
If the thing itself can no longer be claimed, the claim will be for the highest
value of the thing since the theft.
The action cannot be instituted together with the rei vindicatio, but only in
the alternative.
In Minister van Verdediging v Van Wyk 1976 (T) it was held that the thing cannot be
reclaimed with the rei vindicatio while compensation for damage to it is claimed with the
condictio furtiva. In certain circumstances it will be better to use the condictio furtiva,
because the highest value since the removal from the owner’s control can be claimed. If the
thing has been
Page 175
alienated, consumed or destroyed by the thief and can therefore no longer be found, the rei
vindicatio can no longer be used and, if the thief did not consume, destroy or alienate the
thing on purpose, the actio ad exhibendum cannot be used either. In both these cases the
owner can, however, institute the condictio furtiva against the thief.
10.3.3 Actio legis Aquiliae
Definition
If a thing has been damaged or destroyed in an unlawful and culpable (intentional
or negligent) way, the owner can claim damages with the actio legis Aquiliae for
patrimonial loss from the person who caused the damage.
The normal requirements for delictual liability must be met if the actio legis Aquiliae is
instituted.
Requirements
(a) An action pertaining to a thing
(b) which in an unlawful way and
(c) performed with a culpable disposition (intent or negligence)
(d) resulted in
(e) damage or injury to the owner.
Delictual liability can arise from either an act or an omission.
Van der Merwe Burger v Munisipaliteit van Warrenton 1987 (NC)
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap10.xhtml
24-Jul-18
Chap10
Page 12 of 14
The municipality of Warrenton failed to keep a water furrow clean. This caused the
neighbouring property to be flooded. The court held the municipality liable for
compensation in respect of the flooded property, because there was a duty on the
municipality to clean the water furrow.
In South African law compensation for damages can be claimed with the actio legis Aquiliae
for pure economic loss, that is where the damage sustained is not a direct consequence of
the damage to the owner’s property. For instance, if A damages B’s buoy negligently which
results in economic loss because C’s tanker cannot be unloaded, C can claim compensation
from A – McLelland v Hulett 1992 (D). In these cases there is usually non-compliance with a
legal duty to avoid damage, and this non-compliance is unlawful.
Page 176
The application of the actio legis Aquiliae is not limited to loss resulting from actual
damage to or destruction of the thing, but it can also be used where the unlawful control of
the thing leads to patrimonial loss. This would, for instance, be the case where a lawful
occupier was deprived of his physical control of immovable property. It has also been
extended to owners who did not have physical control of the thing for a time, but who can
institute an action against the unlawful occupier for damages as a result of the loss of
control. The owner instituting such a claim, must prove that he would have exercised the
physical control himself if he had not been deprived of it, or that his ownership was infringed
upon unlawfully and that this resulted in damage to him even if the owner was not in control
of the thing.
Hefer v Van Greuning 1979 (A)
In this case the question is whether the owner can institute the actio legis Aquiliae
on the basis of such unlawful actions. As mentioned, there can be no objection in
principle. It is clear that if such a holder (occupier) or user damaged the thing, the
owner would be entitled to institute the actio. So, to be consistent, he must be
able to institute the actio if he suffers damage as a result of the fact that the
lawful control and use that the owner is entitled to is denied him without damage
to the thing. In fact, the damage would then be purely economic, but that is not a
problem. If it should be accepted, for the sake of argument, that, because of
policy considerations, our law balks at acknowledging a general liability on the
basis of the actio legis Aquiliae for such damage there would be no danger here of
unlimited liability on the basis of, for instance, negligence. The liable person is
indicated by the unlawful possession, holdership (occupation) or use of a certain
thing.
In Regal v African Superslate 1963 (A) it was mentioned obiter that, in the case of nuisance,
compensation for damage can be claimed with the actio legis Aquiliae. It was, however, not
necessary to decide whether culpability (in the form of either intention or negligence) was
required in this case, since the legal aid requested had been an interdict for which culpability
need not be proved. It is emphasised that the reference to the actio legis Aquiliae as remedy
in the case of nuisance was obiter and that this does not exclude the possibility that the
normal remedies of neighbour law may be used to claim compensation in the case of
nuisance, where it is not necessary to prove culpability. If damages are claimed with the
actio legis Aquiliae, however, culpability is a requirement (see also 7.5.2.2 above).
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap10.xhtml
24-Jul-18
Chap10
Page 13 of 14
Page 177
10.4 Enrichment action
Definition
With an enrichment action the owner of a thing can claim from the controller the
amount with which the controller’s estate has been enriched without cause if that
enrichment was the result of the consumption or alienation of the thing.
It was mentioned at 10.2.1 above that a bona fide controller cannot be held liable with the
rei vindicatio for compensation of the value of the thing if the thing has been consumed or
alienated by him, but that a mala fide controller can be held liable in this way. It is also not
possible to claim compensation with the actio legis Aquiliae from such a controller. However,
if the bona fide controller alienated the thing for value or derived benefit from the
consumption of the thing, the question arises whether the owner can institute an enrichment
claim against the bona fide controller for the purchase price for which the thing was
alienated or the benefit that the controller derived from the use or consumption of the thing.
The enrichment claim that can possibly be used here is the condictio sine causa.
Requirements
(a) The controller must have been enriched, that is the controller’s estate must
have been enlarged.
(b) The owner must have been impoverished, that is the owner’s estate must
have been diminished.
(c) The enrichment of the controller must have been at the expense of the
owner’s impoverishment.
(d) The shift in value must have been without legal cause (sine causa) which
means that there may not have been any legal basis for the shift.
(e) The owner must have transferred the control of the goods to the controller,
who must have alienated or consumed them bona fide.
The balance of the purchase price for which the controller sold the thing and
(f)
which, at the time of institution of the condictio sine causa, remained in the
controller’s possession or the value of the goods as at the institution of the
condictio can be claimed.
If the thing is still identifiable and can be recovered with the rei vindicatio from the person to
whom the controller alienated it, the owner cannot use the condictio sine causa. It is not
possible to use the condictio sine causa against
Page 178
a controller who acquired the thing for consideration (ex causa onerosa). If the controller
acquired the thing without consideration (ex causa lucrativa), the condictio sine causa can
be used – Buzzard Electrical (Pty) Ltd v 158 Jan Smuts Avenue Investments (Pty) Ltd 1996
(A). If it is money that was acquired without consideration by the bona fide controller and
then used, the owner will also be able to use the condictio sine causa – Commissioner of
Customs and Excise v Bank of Lisbon International Ltd 1994 (N).
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap10.xhtml
24-Jul-18
Chap10
Page 14 of 14
Summary
The owner of property has recourse to several remedies if his entitlements in
respect of the thing are infringed upon or if the thing is damaged. A distinction is
made between real remedies, delictual remedies and enrichment remedies.
Four real remedies are important. The rei vindicatio aims at the restoration of
physical control over the thing if the owner was deprived of his physical control.
There are several possible defences to the rei vindicatio, of which estoppel and
relevant circumstances of the occupier of immovable property are the most
important. If an owner’s entitlements are infringed upon or if the holder of a
servitude exceeds his entitlements, the owner can institute the actio negatoria.
The owner can also approach the court for a declaratory order or an interdict in
order to enforce or protect his entitlements.
Delictual remedies differ from real remedies in that they are actions against a
person to claim compensation for damage or injury to the owner as a result of
such a person’s actions. A distinction is made between the actio ad exhibendum,
the condictio furtiva and the actio legis Aquiliae. The last-mentioned action is the
best known delictual action with which compensation can be claimed in the case
where the owner’s property was damaged or the owner experienced loss as a
result of the unlawful use or alienation of the property by the controller.
An enrichment claim can be instituted if the controller’s estate was enriched
without cause to the detriment of the owner because of the use or alienation of
the owner’s property by the controller. The condictio sine causa is instituted in
these circumstances.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap10.xhtml
24-Jul-18
Chap11
Page 1 of 4
Page 179
Chapter 11
Termination of ownership
11.1
11.2
11.3
11.4
Introduction
Death of owner
Object no longer exists
Termination of legal relationship
11.4.1 Transfer of ownership
11.4.2 Loss of physical control
11.4.3 Operation of law
Summary
Overview
In what ways can ownership be terminated?
•
What happens to an owner’s assets when she dies?
•
Can ownership continue to exist if the thing is destroyed?
•
Does an owner lose his ownership if he no longer controls the thing physically?
•
What requirements must be met for the transfer of ownership?
•
In what circumstances is ownership terminated by operation of law?
•
11.1 Introduction
Ownership is terminated in several ways. It is terminated when the owner of the property
dies, when the property is destroyed or if the owner loses the intention to be an owner.
Termination of ownership
(a) Death of the owner
(b) Destruction of the property
(c) Termination of physical control of the thing with the intention to be owner
(animus domini). This happens in one of the following ways:
Page 180
(aa)
(bb)
Transfer of ownership by the owner
Passing of ownership by operation of law in that either physical
control of the thing or the intention to be owner (or both) is
terminated
|11.2 Death of owner
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap11.xhtml
24-Jul-18
Chap11
Page 2 of 4
The death of the owner of a thing terminates his ownership of the thing. It is not certain who
then becomes the owner. In Greenberg v Estate Greenberg 1955 (A) it was held that, at the
moment when the inheritance arises (dies cedit), an heir acquires only a creditor’s right
against the executor of the estate to claim delivery or transport of the assets of the estate.
Ownership is transferred to the heir only after delivery (in the case of movables) or
registration (in the case of immovables). There is no clear answer to the question of who the
owner of the estate is during the period between the date of death and the date of delivery
or registration.
11.3 Object no longer exists
If a thing is destroyed or, in any way, becomes a thing that falls outside commerce (res
extra commercium), ownership of the thing is terminated. If a thing loses its independent
character, that usually leads to loss of ownership – see, however, the exceptions to this rule
in the case of mixing (commixtio) and fusing (confusio) at 8.5 above.
11.4 Termination of legal relationship
Ways of termination of legal relationship
(a) Transfer of ownership
(b) Loss of physical control
(c) Operation of law
11.4.1 Transfer of ownership
A person’s ownership of a thing is terminated if it is transferred to another person in terms
of a real agreement by means of delivery (in case of movables) or registration (in case of
immovables) – see chapter 9 above. In these circumstances the recipient becomes the new
owner as he controls the thing with the intention to be the owner.
Page 181
11.4.2 Loss of physical control
Ownership is terminated if the thing is no longer owned (becomes res nullius), for instance
through the loss of control over wild animals or if domesticated animals lose the habit of
returning to their owners – see 8.2 above. It can also happen that the owner abandons the
physical control of the thing with the intention of abandoning his ownership (res derelicta).
The mere loss of physical control over the thing without relinquishing the intention to be
owner (res deperdita) cannot result in the termination of ownership. The intention to
relinquish the thing can be explicit or implicit, but the loss of physical control does not
necessarily indicate an intention to relinquish the thing. A thing lost without the owner
relinquishing the intention to be owner as well, does not become the property of the person
finding it – under these circumstances finders do not become keepers. The person who
acquires ownership will only become owner by prescription or in the case where the owner
relinquishes the intention to be owner after a while and the thing becomes res derelicta at
that stage.
11.4.3 Operation of law
In the case of loss of ownership through operation of law, the owner always loses his control
over the thing, although he does not necessarily abandon the intention to be owner (animus
domini).
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap11.xhtml
24-Jul-18
Chap11
Page 3 of 4
Operation of law
(a) Acquisitive prescription
(b) Accession (accessio)
(c) Manufacture (specificatio)
(d) Insolvency of the owner
(e) Attachment and sale in execution
Forfeiture
(f)
(g) Confiscation
(h) Expropriation
Abandonment condition
(i)
(a) Acquisitive prescription
Acquisitive prescription is an original method of acquiring ownership whereby ownership of
the thing of the owner is passed to the possessor who possesses the thing openly and as if
he is the owner with the intention to be owner (animus domini) for an uninterrupted period
of 30 years – see 8.10 above.
Page 182
(b) Accession (accessio)
Accession takes place when a thing which, through human activity or natural elements, is
added as accessory thing to a principal thing as a result of which the owner of the accessory
thing loses his ownership because the thing does not exist independently anymore, and the
owner of the principal thing becomes the owner of the new composite thing – see 8.3 above.
(c) Manufacture (specificatio)
Ownership of material or a thing is terminated by means of manufacture if it is transformed
into a new thing by someone – see 8.4 above.
(d) Insolvency of the owner
The assets of a sequestrated estate pass, in terms of section 20(1)(a) of the Insolvency Act
24 of 1936, to the master of the high court immediately after the sequestration order and,
after appointment of a curator, to the curator – De Villiers NO v Delta Cables (Pty) Ltd 1992
(A).
(e) Attachment and sale in execution
(aa) After attachment of a debtor’s assets in terms of a court order for execution or
excussion, physical control of the assets passes to the sheriff and after the judicial sale
the ownership passes to the buyer by means of operation of law and delivery (in case
of movables) or registration (in case of immovables), without the co-operation of the
debtor. If the judgment or warrant of execution is deficient, ownership does not pass
to the purchaser – Campbell v Botha 2009 (SCA).
(bb) In terms of section 20 of the Criminal Procedure Act 51 of 1977 the South African
Police Service is authorised to attach a movable if they have reason to believe that the
movable was used in committing a crime. If the complaint is withdrawn the movable
may, in terms of section 31(1) be returned only to the person who controls it lawfully –
Khan v Minister of Law and Order 1991 (T). The onus to prove that the person from
whose control the vehicle was removed is not entitled to have it returned, rests with
the state. A person who, at the time of the attachment, was in lawful possession of the
vehicle in terms of a lien, can claim the vehicle from the SAPS. The lien revives as soon
as physical control is restored – Minister van Wet en Orde v Erasmus 1992 (A).
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap11.xhtml
24-Jul-18
Chap11
Page 4 of 4
(f) Forfeiture
Things used by or with the consent of the owner to commit a crime, can be declared forfeit
in favour of the state by means of a court order if that is
Page 183
authorised by statute. Such provisions can be found in section 35(1) of the Criminal
Procedure Act 51 of 1977; the Films and Publications Act 65 of 1966 and the Drugs and Drug
Trafficking Act 140 of 1992 – see Boland Bank Ltd v Attorney-General Cape of Good Hope
1994 (C) and 8.8 above.
(g) Confiscation
Property was previously confiscated by the state if this was regarded as being in public or
national interest. This was usually the case during a declared state of emergency or during
common law situations of self defence or emergency. In terms of section 25 of the
Constitution of the Republic of South Africa of 1996, property may be confiscated only in
terms of enabling legislation, which must comply with strict requirements. Compensation
must usually be paid by the state, except if excluded by the relevant emergency legislation.
(h) Expropriation
By means of expropriation ownership of a thing, movable and immovable, vests in the
expropriator, while the previous owner loses his ownership without his consent, usually
against payment of compensation – see 7.2.2.1 and 8.7 above.
(i) Abandonment condition
A condition of abandonment is usually included in insurance agreements. This provides that
ownership of the insured goods passes to the insurer if a payment is made to the insured
after theft of the goods and the goods are thereafter recovered. It is, however, doubtful if, in
these circumstances, the requirement of delivery is met.
Summary
Ownership is terminated in various ways. It is, of course, terminated if the thing is
destroyed or lost. Furthermore, ownership in the assets of an owner passes to his
heirs after the death and the administration of his estate. The owner can,
however, co-operate in the transfer of ownership to another person. This happens,
in the case of movable property, by means of delivery of the thing and, in the case
of immovable property, by means of registration of the transfer in the deeds
registry.
Ownership can also be terminated by operation of law if the physical control of
the thing or the intention to be owner or both are terminated. Examples are
acquisitive prescription, accession (accessio), manufacture (specificatio),
insolvency of the owner, sale in execution, forfeiture, confiscation, expropriation
and abandonment.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap11.xhtml
24-Jul-18
PartIII
Page 1 of 1
Page 185
Part III
Possession and holdership
Chapter 12:
Introduction to possession and holdership
Chapter 13:
Acquisition of possession and holdership
Chapter 14:
Protection of possession and holdership
Chapter 15:
Termination of possession and holdership
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/PartIII-print-1536070166.xhtml
04-Sep-18
Chap12
Page 1 of 9
Page 187
Chapter 12
Introduction to possession and holdership
12.1
12.2
12.3
12.4
12.5
Introduction: example
Rights in property and control of corporeal things
Lawful control
12.3.1 What is lawful control?
12.3.2 Good faith (bona fides) and bad faith (mala fides)
12.3.3 Legal implications of lawful control
12.3.4 Categories of lawful control
Unlawful control
12.4.1 What is unlawful control?
12.4.2 Good faith (bona fides) and bad faith (mala fides)
12.4.3 Legal implications of unlawful control
12.4.4 Categories of unlawful control
Ownership, possession, holdership
Summary
Overview
•
Are possession and holdership of all kinds of property possible?
•
How is control over corporeal things established?
•
When is control lawful?
•
When is control unlawful?
•
What is the distinction between ownership, possession and holdership?
12.1 Introduction: example
In earlier chapters of this book the nature, acquisition, protection and loss of ownership are
discussed. However, besides ownership the law of property is also concerned with a variety
of other property relations, and these relations are different from ownership with regard to
their nature, acquisition, protection and loss. The following example illustrates the most
obvious differences.
Page 188
Example
In your home you have a television set. You lease this set from a rental company,
who in turn bought the television set, together with a few hundred others, from a
retail outlet in terms of a credit agreement. The credit agreement transaction was
financed by a major bank. One night the television set is stolen from your home. A
few days later it is found in the possession of a suspected criminal and confiscated
by the police.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap12.xhtml
24-Jul-18
Chap12
Page 2 of 9
In this example a number of persons have established different property relationships with
the television set. Each of these property relationships is unique, and each has its own legal
implications. Each of these relationships can be based on a real right or on a personal right,
or it can be unlawful – see chapter 1.
(a) First owner: retail outlet
The television set originally came from the retail outlet, who was the original owner. This
outlet sold the television set to the rental company in terms of a credit agreement. As soon
as the credit agreement was concluded ownership was transferred to the bank as credit
grantor, and thereafter the retailer lost all interest and involvement with the television set.
The retail outlet was the owner, but now retains no further property relation with the
|television set.
(b) Current owner: bank
The National Credit Act 34 of 2005 provides that ownership of the object vests in the credit
grantor (the bank) until the last instalment of the purchase price had been paid (see 9.1.3
and 9.2.3.5 above). If you assume that the last instalment had not yet been paid, the bank
is still the owner of the receiver. The bank has a property right, namely ownership.
(c) Credit purchaser: rental company
The rental company bought the set in terms of a credit agreement, and is therefore the
credit receiver, who will become owner of the object upon payment of the last instalment.
Until then, however, the rental company is not the owner, although it is allowed to use the
set as part of its business stock. This right derives from and depends upon the ownership of
the bank. The rental company has a property right, namely the right of use.
(d) Lessee: yourself
You are the person who leases the set, and who is allowed to actually use it. Your right
derives from and depends upon the position of the rental company
Page 189
and, ultimately, the bank. You have a property right, namely the (secondary) right of use.
The property relationship in this instance is based on a creditor’s right (the lease
agreement). (See chapter 1.)
(e) Thief
The thief who stole the set established a property relation by physically taking control of it.
This relation is unlawful, and it does not amount to a property right. (See chapter 1.)
(f) Confiscating authority: police
The police have established a property right in terms of their statutory power to confiscate
stolen property. This right does not allow them to use the property, but only to hold it in
safety until the legal situation can be established in court.
This analysis of the various property relations involved in the example shows that various
categories of property relations have to be distinguished, especially with regard to corporeal
property. Some categories are lawful while others are unlawful; and various categories
involve different entitlements with regard to the property. Not all of these relations amount
to rights, and when they do the content of various rights differ. The categories of property
relations with regard to corporeal things are usually divided into three main groups, namely
ownership, possession and holdership. Of the property relations in the example the bank can
claim ownership, the rental company, yourself and the police have various forms of lawful
holdership and the thief had possession before the receiver was confiscated.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap12.xhtml
24-Jul-18
Chap12
Page 3 of 9
12.2 Rights in property and control of corporeal things
The distinction between ownership, possession and holdership is largely based upon the
question of actual physical control, and consequently the absence or presence of physical
control is of great importance in making these distinctions.
Definition
Physical control of corporeal things is generally defined as actual, physical holding
or domination of a corporeal thing.
The elements of physical control are discussed in chapter 13. In the example above the
rental company, the person who rented the television set, the thief and the police all
established physical control of the television set at
Page 190
some stage, thereby making it necessary to distinguish between their rights. Because of its
involvement with actual physical control, the distinction between ownership, possession and
holdership is important only with regard to property which can be held or controlled
physically, in other words corporeal things. Rights in incorporeal property are not classified
in these terms because incorporeals usually cannot be held or controlled physically. Since
the question of physical control does not arise in the case of incorporeals it can be said that
one either has one of these rights or one does not have it, and therefore it is unnecessary to
distinguish between various categories of rights.
12.3 Lawful control
12.3.1 What is lawful control?
The most important question to ask with regard to any property relation that is based upon
physical control is whether the control is lawful or unlawful. The implications of any property
relation based upon physical control are determined primarily by the answer to this question.
Control of corporeal things (and a property relation based upon such control) is lawful
when it was acquired and is held in accordance with the applicable legal rules and principles.
If it was acquired and is held according to the applicable property rules, the control and the
property relation based on it will be recognised and protected by law. If it was acquired or is
held in contravention of the applicable property rules, the control and the property relation
based on it will not be recognised or protected by law, although the law might still attach
certain consequences and implications to that relation.
In the example in the introduction above the property relations which are based upon
control are those of the rental company, the person who leased the set, the thief and the
police. Of these only the rental company, the person who leased the set and the police have
established control in accordance with the applicable legal principles, while the thief
established control in contravention of the law. The control of the first group was lawful,
while the thief’s control was unlawful.
Defintion
Control of corporeal things (and a property relation based upon such control) is
lawful when it was acquired and is held in accordance with the applicable legal
rules and principles.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap12.xhtml
24-Jul-18
Chap12
Page 4 of 9
Page 191
12.3.2 Good faith (bona fides) and bad faith (mala fides)
When control of corporeal property is established and held lawfully the intentions of the
controlling person (bona fides or good faith, and mala fides or bad faith) are irrelevant. The
law is not interested in the intentions of the rental company or of the police, and will attach
the normal consequences to their control as long as it was established in accordance with
the law. There is, therefore, no such thing as an owner or a lawful holder in good or in bad
faith – the mere fact that their control is lawful is already sufficient to determine the
consequences of the control.
12.3.3 Legal implications of lawful control
If control is established and held lawfully, the law will attach all the consequences and
implications which are normally associated with that form of control to it. The nature of the
specific form of lawful control (such as ownership or a form of lawful holdership) will
determine exactly what those consequences are.
In the example above the control exercised by the person who leased the television set
and the control of the police were both lawful, but their consequences are different. The user
of the television set may not only hold it in her house, but may also use it to watch
television programmes. The police may hold the set in safe custody, but may not use it. The
differences between these two categories of lawful control are determined by the
entitlements acquired by the holder in each case (see 4.3.1 above).
The most important consequence of lawful control is that it is protected by law. This
protection usually takes the form of a remedy, which is a legal action or procedure provided
to persons in order to protect their property interests against interference. In the example
above the person from whose home the set was stolen may have a remedy to have it
returned, and the police may have a remedy to ensure that nobody interferes with their duty
to hold the receiver in safe custody until the situation has been cleared up. Each remedy
must be awarded on the basis of specific requirements that have to be proved. (The most
important remedies are discussed in chapters 10 and 14.)
12.3.4 Categories of lawful control
For practical purposes all forms of lawful control of corporeal things are divided into two
main categories, namely ownership and lawful holdership. Lawful holdership is nothing more
than a form of lawful control of corporeal property that belongs to somebody else. In the
example above the person who leased the set and the police both exercised forms of lawful
holdership, because although they were entitled to control it, the set belonged to somebody
other than themselves (the bank).
Page 192
Categories of lawful control
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap12.xhtml
24-Jul-18
Chap12
Page 5 of 9
By way of summary, one can say that physical control of corporeal things is either lawful or
unlawful, depending upon the question whether or not it was established and is exercised in
accordance with the relevant legal principles. If it is lawful the law will attach the normal
consequences and protection associated with the particular form of control to it, regardless
of the mental attitude of the controller. Lawful control is either ownership or lawful
holdership, the latter being lawful control of property belonging to somebody else.
12.4 Unlawful control
12.4.1 What is unlawful control?
In the previous section it was said that control of corporeal things (and a property relation
based upon such control) is lawful when it was acquired and is held in accordance with the
applicable legal rules and principles. If the control was acquired or is held in contravention of
the applicable property rules it will not be recognised or protected by law, and then it would
be unlawful control. Unlawful control is not recognised or protected, although the law might
still attach certain consequences and implications to it.
In the example in the introduction above, the control established and exercised by the
thief was unlawful because it was acquired and held in contravention of the law, and not in
accordance with it. Although the law will not recognise or protect the thief’s control it might
still attach certain consequences to it.
Definition
Unlawful control of a corporeal thing is physical control which was acquired or is
held in contravention of the applicable property rules, and will not be recognised
or protected by law. The law may attach certain implications to unlawful control,
even though it is not recognised or protected.
Page 193
12.4.2 Good faith (bona fides) and bad faith (mala fides)
In the case of lawful control the intentions of the lawful holder are irrelevant, and therefore
it was said that there is no such thing as an owner or a lawful holder in good faith or in bad
faith. The consequences of lawful control result simply from its being lawful.
However, in the case of unlawful control the intentions of the controller are relevant. This
is the case because, in some cases, the law attaches different consequences to unlawful
control exercised in good or in bad faith.
The intentions, the good or bad faith, of unlawful holders actually refer to the mental
attitude with which they exercise their unlawful control. If the unlawful holder is aware of the
fact that her control is unlawful she acts in bad faith; but if she is unaware of the
unlawfulness of her control she acts in good faith. The thief in the example in the
introduction above is an unlawful holder in bad faith, since a thief is well aware of the
unlawfulness of her control. However, if someone picks up the wrong umbrella when leaving
the classroom, under the mistaken impression that it is her own umbrella, she acts in good
faith, although her control of the umbrella is still not in accordance with the law (the
umbrella does not belong to her) and is therefore unlawful.
12.4.3 Legal implications of unlawful control
It was pointed out above that the law does not recognise or protect unlawful control, but
that it nevertheless attaches certain implications and consequences to it. These
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap12.xhtml
24-Jul-18
Chap12
Page 6 of 9
consequences are usually aimed at preserving the peace. If absolutely no consequences
were attached to the unlawful property relation between the thief and the stolen television
set it would mean that anybody could go and steal the set from the original thief, and that
would result in chaos and anarchy. In order to preserve the peace, therefore, the law does
not allow anybody else to commit further unlawful acts against the original thief. Although
the law will not protect the thief, it does protect the legal order, and therefore certain
consequences are attached to the thief’s unlawful control.
There are special remedies used for the protection of certain legal values such as public
peace, and the most important remedies of this nature are discussed in chapter 14. These
remedies must be distinguished carefully from the remedies which protect property rights.
Page 194
12.4.4 Categories of unlawful control
The various forms of unlawful control of corporeal things are divided into four main
categories. All four categories are distinguished on the basis of the unlawful holder’s
intention or mental attitude towards the object.
Categories of unlawful control
(a) Unlawful possessors in good faith.
(b) Unlawful possessors in bad faith.
(c) Unlawful holders in good faith.
(d) Unlawful holders in bad faith.
The first distinction is between unlawful controllers who act as if they were the owners of the
property and those who do not act as if they were the owners. Neither group are in fact the
owners, because their control is unlawful in both cases, but some unlawful controllers
nevertheless act as if they were the owners of the property. This category is usually
described as unlawful possessors. The second category of unlawful controllers does not act
as if they were the owners, but as if they had some other right to the property. They are
usually described as unlawful holders. Stated very simply these two categories could be
compared to the two categories of lawful controllers: the possessors are unlawful controllers
who act as if they were owners, and the unlawful holders are unlawful controllers who act as
if they were lawful holders.
Both the possessors and the unlawful holders are subdivided according to their good or
bad faith, so that a possessor in good faith is an unlawful holder who acts in good faith as if
she were the owner of the property, based upon the mistaken belief that she actually is the
lawful owner. The person who picks up the wrong umbrella when leaving the classroom is a
good example of this category. A possessor in bad faith is an unlawful controller who acts as
if she were the lawful owner while knowing full well that she is not – a thief is the best
example of this category.
An unlawful holder in good faith is an unlawful controller who believes in good faith but
mistakenly that she has some right to control the property, but not as owner – an example
is somebody who rents property unaware of the fact that the lease contract is void. An
unlawful holder in bad faith is aware of the fact that she has no lawful right to control the
property, but nevertheless acts as if she had such a right – an example is the lessee who
remains on the property after the term of lease had expired. An example of an unlawful
occupier (holder) of land in good faith is the appellant in Mobile Telephone Networks (Pty)
Ltd v SMI Trading CC 2012 (SCA): MTN previously occupied
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap12.xhtml
24-Jul-18
Chap12
Page 7 of 9
Page 195
SMI’s land in terms of a lease agreement that had lapsed, and thus it became an unlawful
occupier. MTN mistakenly thought that it now occupied the land lawfully in terms of
legislation, and therefore it was an unlawful occupier in good faith.
Categories of unlawful control
12.5 Ownership, possession, holdership
On the basis of the distinctions set out in this chapter ownership, possession and holdership
of corporeal property can be classified as distinctive categories of physical control. The
illustration and examples provide a picture of the distinctions.
(a) Lawful or unlawful
The first distinction would be on the basis of lawfulness: ownership and lawful holdership are
the only forms of lawful control, whereas possession and unlawful holdership are forms of
unlawful control.
(b) As owner or for own benefit
The distinction between ownership and possession on the one hand and the two forms of
holdership (lawful and unlawful) on the other is based on the fact that holdership, whether
lawful or unlawful, is control of somebody else’s property. The owner and the unlawful
possessor control the property as owners, while the holders control someone else’s property
for their own benefit, but not as owner.
(c) Good or bad faith
Finally, the forms of unlawful control are further divided according to the good or bad faith of
the controller in each case.
Page 196
The distinction between various forms of control over corporeal things
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap12.xhtml
24-Jul-18
Chap12
Page 8 of 9
These distinctions are often confused by the terminology used, especially in the courts. The
term ‘possession’, for instance, is sometimes used in the restricted sense set out above, and
sometimes in a wider sense very much like the term ‘control’, which includes all forms of
physical control. This causes confusion, and it is preferable to use the terms as clearly as
possible. The Prescription Act 68 of 1969 uses the term ‘possessed openly and as if he were
the owner’ in section 1 in the same restricted context of unlawful possession that is used in
this book.
In the example given at the beginning of this chapter the position of the various parties
can be described exactly in terms of the distinction between ownership, possession and
holdership. The position of each party is as follows:
(d) Retail outlet: was owner
The retail outlet was the owner, but now retains no further property relation with the
television set.
(e) Bank: current owner
The bank has a property right, namely ownership. This right is a real right. The bank can
claim the television set back from the thief or from the police.
(f) Rental company: lawful holder
The rental company has a property right, namely the right of use, which is a form of lawful
holdership. This right is a creditor’s right which depends upon the contract with the owner,
and therefore the rental company can claim the television set back from the bank once it is
returned to the owner.
(g) Yourself: lawful holder
You have a property right, namely the (secondary) right of use, which is a
Page 197
form of lawful holdership. Your right is a creditor’s right which depends upon the contract
with the rental company, and therefore you can claim the set back from the rental company
once it has been returned to them.
(h) Thief: unlawful possessor in bad faith (mala fide possessor)
The thief who stole the set does not have a property right. A thief usually steals to
appropriate the property, and is therefore an unlawful possessor in bad faith.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap12.xhtml
24-Jul-18
Chap12
Page 9 of 9
(i) Police: lawful holder
The police have established a property right in terms of their statutory power to confiscate
stolen property. This right does not allow them to use the property, but only to hold it in
safety until the legal situation can be ascertained in court. This is a form of lawful holdership
established by law.
Since the distinction between ownership, possession and holdership is concerned with the
absence or presence of actual physical control the retention of a certain property relation
often depends upon continued retention of control. In chapter 13 the elements of control and
the requirements for the acquisition and retention of control are discussed in more detail.
Summary
The distinction between ownership, possession and control of property is based
largely upon the absence or presence of actual physical control of the property,
and is therefore restricted to property which can be controlled physically, namely
corporeal things.
Physical control of corporeal things is either lawful or unlawful, depending upon
the question whether or not it was established and is exercised in accordance with
the relevant legal principles.
If control is lawful the law will attach the normal consequences and protection
associated with the particular form of control to it, regardless of the mental
attitude of the controller.
If control is unlawful the law will neither recognise nor protect it, but it might
still attach certain consequences to it in order to protect peace and public order.
The consequences of unlawful control might be influenced by the good or bad
faith of the controller.
Lawful control is either ownership or lawful holdership, the latter being lawful
control of property belonging to somebody else.
Page 198
Unlawful control is either possession or unlawful holdership, and both of these
can be in either good or bad faith, depending upon the controller’s awareness of
the fact that the control is unlawful. Unlawful possession is exercised with the
mental attitude of being the owner, while unlawful holdership is exercised with the
mental attitude of not being the owner, but still having a right to control the
property.
Ownership, possession and holdership are all forms of control of corporeal
things. They are distinguished on the basis of the lawfulness of the control and the
controller’s mental attitude. The controller’s mental attitude refers firstly to the
question whether the controller is acting as owner or as a controller of property
which belongs to someone else, and secondly, only in cases of unlawful control, to
the question whether or not the controller is aware of the unlawfulness of the
control.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap12.xhtml
24-Jul-18
Chap13
Page 1 of 16
Page 199
Chapter 13
Acquisition of possession and holdership
13.1
13.2
13.3
13.4
Introduction
Corporeal things and rights in property
Elements of possession and holdership
13.3.1 Control
13.3.2 The corporeal element (corpus)
13.3.3 The mental element (animus)
13.3.4 Direct and indirect control
13.3.5 Shared control
Acquisition of possession and holdership
13.4.1 Recap: original and derivative acquisition
13.4.2 Original acquisition of possession and holdership
13.4.3 Derivative acquisition of possession and holdership
13.4.4 Chain acquisitions
Summary
Overview
•
How are the principles regarding acquisition of possession and holdership affected by
the distinction between different objects?
•
What is the difference between possession and holdership?
What are the elements of possession and holdership?
•
When is a person effectively in control of property?
•
•
What is the difference between original and derivative acquisition?
How is possession acquired?
•
How is holdership acquired?
•
•
How does the acquisition of possession and holdership relate to the acquisition of
ownership?
13.1 Introduction
The definitions of, and the distinction between, possession and holdership are discussed in
chapter 12, and are summarised below. It is pointed out
Page 200
in chapter 12 that these property relations are important because of their involvement with
control of corporeal things. The purpose of this distinction is to differentiate between various
property relations on the basis of control, and therefore the acquisition of each form of
control is very important. The basic principle is that two persons cannot physically control
the same thing in the same way but independently at the same time. This principle is based
upon a literal interpretation of physical control, and in that literal sense it is said that two
persons cannot sit on the same chair at the same time. (The English word ‘possession’
derives from the Latin sedere, ‘to sit’.)
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap13.xhtml
24-Jul-18
Chap13
Page 2 of 16
However, this literal approach is too unsophisticated for the purposes of a dynamic society
characterised by complex commercial and legal relations. The following example illustrates
the problem.
Example
You own a house in Mamelodi Gardens. In this house you have a lounge suite, a
dining room suite and a bedroom suite, as well as a fridge, a washing machine and
a microwave oven. In the garage you have a motor car and a racing bicycle.
During the week you commute to your office in an attorneys’ firm in Pretoria by
car, and you leave the car in a rented bay in a commercial parking garage. The
bicycle is used for weekend excursions.
A number of problems relating to physical control are raised by this example.
(a) It is easy enough to establish that you are in actual, literal physical control of your car
while travelling to your office in the morning, but are you also in control while it is
locked up in the garage during the night; or when it is parked in the parking garage
during the day?
(b) Physical control of your easy chair is equally easy to establish while you are sitting in
it, relaxing with the newspaper after work, but are you also in control of the other
chairs and the couch while sitting in the easy chair? Are you in control of the lounge
suite while you are at work, or while you are asleep in the bedroom? Who is in control
of your bed while you are sitting at the dining table? And who controls the dining room
| suite
while you are washing the dishes? And who controls your bicycle during the week,
when you are too busy to even look at it?
(c) Does it make any difference whether you bought and paid for any of the items
mentioned above; or whether you bought any of them on the basis of a credit
agreement and still have to pay some of the instalments; or whether you just
borrowed the microwave oven from your parents until you can afford a new one?
Page 201
These questions are important in the law of property, and the distinction between various
forms of control (ownership, possession and holdership) of corporeal things is designed to
help answer them. From the example it is immediately apparent that the literal
interpretation of physical control does not help much. It is all very well to say that two
people cannot sit on the same chair at once, but it is much more difficult to determine
whether one person, who can sit on only one chair at a time, can control a whole lounge
suite in the process! It is necessary, therefore, to work out a more sophisticated set of rules
which can help to establish whether a person is in control of corporeal things in specified
circumstances.
The literal or narrow interpretation which restricts control of corporeal things to actual,
physical holding of an object is, therefore, too narrow to be workable in a complex social and
commercial environment. As a collective name for all forms of ownership, possession and
holdership of corporeal property, ‘control’ will have to be interpreted less literally and more
functionally.
13.2 Corporeal things and rights in property
The discussion of possession and holdership does not affect all rights in property. From the
example in the introduction above it should appear that possession and holdership are
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap13.xhtml
24-Jul-18
Chap13
Page 3 of 16
property relations that apply specifically with regard to one kind of property, namely
corporeal things.
In chapter 12 the distinction between ownership, possession and holdership is explained
with reference to lawfulness and the intention of the controller in each case. To recap briefly:
ownership and lawful holdership are lawful forms of control, whereas possession and
unlawful holdership are unlawful forms of control. (Refer back to chapter 12 for a full
discussion of these property relations.)
The distinction between various forms of control over corporeal things
Page 202
It is natural enough to discuss property relations in terms of the physical holding of an
object when the object is a pencil, or a chair, or even a house; but it loses all significance
when the object is an incorporeal such as the copyright to a book or a claim against a
pension fund. The concept of physical control does not apply to rights in incorporeal
property, and it is not necessary either, because these rights in property are held and
exercised in an abstract manner, not physically. Consequently the whole section below
dealing with possession and holdership applies only with regard to property rights in
corporeal things.
13.3 Elements of possession and holdership
13.3.1 Control
It has already been pointed out in chapter 12 that the term ‘control’, which is concerned with
physical holding of objects, was devised with reference to corporeal things, which can be
held and controlled physically. All holding relations share one common element, namely
physical control, which is required in one form or another for all property relations with
regard to corporeal things. In this sense ownership, possession and holdership of corporeal
things can be described as various categories of control. What distinguishes them from one
another, and what determines their different legal implications, is the intention with which
control is exercised in each case. The law attaches great importance to this intention
element, which is referred to as the mental element of control. In short, all property
relations with regard to corporeal things can be described as various forms of control, and all
forms of control consist of two elements, namely a physical or corporeal element and a
mental element.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap13.xhtml
24-Jul-18
Chap13
Page 4 of 16
Definition
Control of corporeal things consists of two elements, namely a physical or
corporeal element and a mental element. The physical element is the way in which
the thing is actually held, and the mental element is the mental attitude with
which it is held.
13.3.2 The corporeal element (corpus)
The physical or corporeal element of control refers to the actual holding of a corporeal thing.
As was stated earlier, this element is based upon actual, tangible or perceptible power over
or holding of a thing, such as sitting in a chair or driving a car. It was also pointed out earlier
that this literal interpretation
Page 203
is too restricted for the complex commercial and social relations between people and
property.
In an effort to make the literal interpretation of physical control somewhat more flexible, a
number of rules or guidelines have been developed over the years, according to which the
presence or absence of control can be established in more complicated situations. These
guidelines or indicators are often said to derive from commercial custom and legal practice.
In accordance with existing custom and practice the following considerations have to be
taken into account when determining whether the corporeal element of control is present or
not in a specific case.
(a) Nature of the thing
The nature of a specific thing can determine what kind of control is required for that thing,
as well as the measure of actual corporeal control that is needed. It is common sense that
size is an important factor in determining how a person can exercise physical control over an
object. A pencil can be put in one’s pocket or held in one’s hand, but an oil tanker is slightly
more difficult to control in such a literal sense. Both the manner and the degree of actual
physical control are consequently determined by the size of the object.
Apart from size, other aspects of an object’s nature can also influence the possibilities of
controlling it physically. Related to this aspect is the distinction between movable and
immovable property. Movables can usually be controlled more easily and more directly than
immovables, provided they are not too big. Immovables such as a house or a farm are not
controlled in the same way as movables, because their nature is different. In fact, even
amongst various kinds of immovable property the nature of the object can determine a
different form of control in different cases: a house is not controlled in the same way as a
farm, because a house can be locked up quite thoroughly, but a farm cannot (or at least not
so easily).
Because of the importance of the size and nature of a thing for the nature and scope of
the corporeal element of control, the test for control must be a flexible one which takes the
nature of a thing into account in every individual case. In this regard a number of principles
have already crystallised with regard to special categories of things such as game, bees, fish
and birds; shipwrecks; motor vehicles; buildings and building sites. (See the discussion of
original acquisition of ownership in chapter 8.)
Buildings and vehicles are usually controlled by way of keys, especially when the keys
include a device which controls an alarm or (in the case of vehicles) an immobiliser. The
nature of these things is such that it is possible to control them by means of a key and/or an
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap13.xhtml
24-Jul-18
Chap13
Page 5 of 16
alarm, and consequently such control is deemed sufficient. In effect the nature of the thing
determines the
Page 204
way in which the thing can be controlled, thereby giving an indication of the kind of control
that might be deemed sufficient for that thing.
(b) Purpose or use of the thing
In addition to its nature and size the purpose and use of a thing must also be taken into
account when determining the requirements for controlling it. In a sense this aspect is
closely related to the nature and size of the object, since the nature and size of a thing is
usually relevant to its purpose or use. In this regard it may be said that the principle
regarding control of a building or vehicle by way of a key and/or alarm reflects not only the
nature of the thing, but also its use: both a building and a vehicle are used with the help of a
key, and therefore the key is important in controlling them.
A good example of the way in which the use or purpose of a thing can determine how it
should be controlled is the case of agricultural land. It is often impossible and unnecessary
to physically visit certain parts of farms on a continuous or regular basis, and in some cases,
a farmer will seldom or never visit certain areas of the farm. That does not necessarily mean
that the farmer does not control the farm, since the use and purpose of the property, being
a farm, might not require the farmer’s physical presence on certain areas of the farm. In the
case of so-called summer and winter farms, which can be cultivated or used only in a
specific season, the farmer need not be present on the farm at all during the off-season. The
purpose and use of the property also determine that cultivated crop-bearing farmland should
be visited more frequently than a game farm. Similarly, a suburban homeowner need not
take out and clean the lawnmower during the winter months to maintain control over it – the
normal use or purpose of a lawnmower is restricted to the summer months, and control
during these months is sufficient for the whole year, as long as the owner is capable of
resuming control at will. Similar considerations apply to control over a ski boat during the
winter or over a pair of snow skis during the summer. The purpose for which a thing is used
and the way in which it is used will, therefore, determine whether a certain type and degree
of physical control is sufficient for that thing.
(c) Specific customs in special fields
On the basis of the considerations mentioned in previous paragraphs (nature, size and use of
the object) specific principles and customs have developed with regard to control over
special categories of commercial property such as merchant ships, building sites and farms.
In these cases custom plays an important role in determining whether a certain type and
degree of control is sufficient for specific purposes. The example of summer and winter
farms mentioned above is relevant in this regard. Further examples are the custom
Page 205
that a building contractor can establish and maintain sufficient control over a building site by
installing a watchman or supervisor, or the special rules that apply to control over ships in
shipping docks and aeroplanes at an airport. In Builder’s Depot CC v Testa 2011 (GSJ) it was
decided that installing a lock that prevented access to a building site and keeping control of
the only key might not, in the absence of other measures such as signs or security guards,
be enough to ensure that the builder would retain effective control of the site. Whenever the
question of corporeal control over these special kinds of property arises in court, evidence
has to be presented to establish the special customs that apply to each case.
(d) Control need not be comprehensive
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap13.xhtml
24-Jul-18
Chap13
Page 6 of 16
One of the most important principles regarding the type and degree of control that is
required for specific things developed from the considerations regarding the nature, size and
use of property: control need not necessarily be comprehensive. In other words, depending
upon the nature, size and use of a thing, control over it need not extend to every single bit
or part of the object – control over one part may be sufficient to qualify as control over the
whole. This applies especially to large and unwieldy objects such as ships or land, which
cannot be occupied comprehensively.
With regard to big, unmanageable or immovable things a person need not maintain a
comprehensive physical presence over all parts of the object, provided the presence or
control there is over one aspect is sufficient to provide or imply effective control over the
whole. The question is whether the nature and use of the thing is such that control over one
part or piece is sufficient to justify the inference that control extends over the whole.
In view of this principle, a farmer can establish and maintain control over a whole farm
without being present on each part of it simultaneously, and a person can control a whole
lounge suite (or all the furniture in a house) without physically sitting on all pieces of it at
once. This formulation of the principle provides the answer to some of the problems
mentioned in the introduction to this chapter: you can establish and maintain control over
the whole lounge suite even though you can sit on only one chair at a time; in fact, you can
maintain control over the lounge suite while sitting at the dining room table, or while you are
in bed, as long as your actual control over one part of the larger object (for instance, the
house) is sufficient to justify the conclusion that it establishes or maintains control over the
whole (all the contents).
(e) Control need not be continuous
Closely related to the principle that control need not necessarily be
Page 206
comprehensive is the principle that control need not necessarily be continuous. Just as it is
unnecessary to be on all parts of the farm at once, is it unnecessary to be on the farm all the
time. In other words, once control is established it may be interrupted, as long as it is still
possible to resume control without help or interference from someone else. The nature, size
and use of the property will usually indicate how long such an interruption can last before it
amounts to loss of control. Usually, though, the rule is that an interruption becomes loss of
control as soon as anybody else establishes a closer or stronger form of control over the
thing in question.
Examples of the application of this principle are numerous. Retention of your car keys
ensures that you retain control over the car when it is locked up in the garage, or when it is
parked in the parking garage at work, or even when it is parked on a street in town. In fact,
you need not even physically hold the keys in your pocket all the time to retain control over
the car. You retain control over the car while the keys are left lying in your drawer, and
perhaps even when you have lost them, provided that you can find or retrieve the keys
quickly enough and without having to rely on somebody else in the process.
Similarly, a builder who leaves the building site temporarily to complete another job does
not necessarily lose control of the building site, provided that control can be resumed easily
and without assistance from somebody else. If a different contractor takes control of the site
during the first builder’s absence it is clear that the first builder has lost control to the
second one. Absence of weeks or months might also in itself indicate loss of control,
depending upon the circumstances. The continuity of control which is required will be
determined with reference to the nature and size of the object, its use or purpose and the
customs developed and adhered to in the area.
(f) Control need not be exercised personally
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap13.xhtml
24-Jul-18
Chap13
Page 7 of 16
Control need not be exercised personally – it can be acquired and exercised for and on
behalf of the controller by an agent. An employee can, therefore, acquire and hold
something for the principal. It is important, however, to distinguish very clearly between an
employee or attendant who controls for the employer or principal, and the employee or
attendant who controls for her own interest. A chauffeur who drives you around in your own
car is not in the same kind of control of the car as a cab driver who drives you around in her
(or her company’s) car – in the first case the chauffeur might very likely be in control on
your behalf, but in the second case you are not in control at all. (A good example in this
regard is found in Clifford v Farinha 1988 (W), where the plaintiff actually lost control as
soon as the defendant took control without permission. When the car was stolen the
defendant’s control was
Page 207
also lost.) This aspect is closely related to the mental aspect of control, which is discussed in
the next section.
A similar, and more complex, situation arises in the case of parking garages. Consider the
differences between the following examples.
Example
You drive to work in your car, park it in the parking garage where you rent a
parking space, lock the car and go to your office. In the afternoon you get in your
car and drive home. You enter and exit the parking garage with the aid of your
security card. You pay the parking bill monthly.
In this situation the indications are very strong that you retain control of your car while it is
parked in the parking garage. You retain the power to resume your temporarily suspended
physical presence whenever you want to, because the keys and the security card allow you
to get into your car and drive off whenever you choose to do so. The same is not true in the
following example.
Example
You drive to work in your car, stop at the entrance of the parking garage where
you rent a parking space, and give the keys to the parking attendant, who parks
the car while you go to your office. In the afternoon you pay the daily fee and
show your identity card to the parking attendant, who collects the car for you,
gives you the keys and allows you to get into the car and drive home. You are not
allowed to enter and exit the parking garage on your own.
In this second example it is clear that the question of control is at least more problematical
than in the first example because, once you have given the keys to the attendant, you are
no longer in a position to simply resume control on your own – you are forced to enlist the
assistance of the attendant to get the car. In this case it is possible that the attendant, as an
employee of the parking garage enterprise, might refuse to return the car unless you pay
your outstanding bill.
(g) Strict requirements for acquisition of control
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap13.xhtml
24-Jul-18
Chap13
Page 8 of 16
For practical reasons the requirements for the initial acquisition of control are stricter than
for the continuation of existing control. The reason for this change in approach is the fact
that control fulfils a so-called publicity function – it serves to show the world that you have a
property relation with this
Page 208
thing. For the same publicity purposes it is better to set the initial requirements for the
establishment of control high, and to relax them once control is established. This relaxation
should be applied with circumspection in cases where the continuation of control is a specific
requirement for the retention of a right, such as a pledge or a lien. (See chapters 18 and
19.)
The principles enumerated in (a)-(g) above can be summarised as follows:
Considerations to be taken into account when determining whether
physical control is present
(a) The nature of the specific object can influence the nature and extent of
control required.
(b) The purpose and use of the specific object can determine the nature and
extent of control required.
(c) Specific customs in special fields such as agriculture or mining can influence
the nature and extent of control required.
(d) Control need not necessarily be comprehensive.
(e) Control need not necessarily be continuous.
Control need not be exercised personally, and can be exercised through an
(f)
agent.
(g) The requirements for the establishment of control are stricter than for its
retention once acquired.
The result of these considerations is that the physical or corporeal element of control can be
described as effective control: what is required is effective control in the sense that it is the
strongest and most effective corporeal relationship in existence at a specific time.
Effective control is a purely factual matter, which means that it is determined as a matter
of fact and not with reference to laws or legal principles. Firstly the person who has physical
control should be in a closer and stronger physical relationship with the thing than anybody
else; and secondly the person in control should be in a position to resume interrupted
control without help from or reference to anybody else. If anybody else establishes a closer
or stronger physical relationship with the object, physical control is lost to that person; and,
similarly, if anybody else’s help or interference is required in order to resume interrupted
control of the object, physical control is lost to that person.
The case of Van Rhyn NO v Fleurbaix Farms (Pty) Ltd 2013 (C) is a good example of the
principle of effective control. The fact that one party occasionally drove on or jogged along a
private gravel road was insufficient to establish effective control over that road, and
therefore the owners of the
Page 209
land could close the road without thereby interfering with any control the complainant might
have thought that he had established.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap13.xhtml
24-Jul-18
Chap13
Page 9 of 16
With this redefined concept of physical control in mind it is possible to solve the problems
mentioned at the beginning of the chapter.
(a) Obviously your control of your car is most evident while you are driving it, but you also
retain control while it is locked up in your garage, or while it is parked in the parking
garage, because (and as long as) you retain a closer physical relation to it than
anybody else, and you retain the ability to resume your interrupted control without
help or interference from someone else. This power is ensured by your retention of the
keys and the remote control of the immobiliser. However, if the car is stolen from your
garage or from the parking garage you obviously lose physical control, because then
the thief establishes a closer physical relationship than you have, and you need the
help and interference of the police to resume control.
(b) The same argument holds for the rest of the lounge suite while you are sitting in one
chair, or for the dining room suite while you are asleep: as long as you (or your family
as a whole) retain a closer physical relationship to the things in your house than
anyone else you retain physical control of it, even if you are not physically sitting on
each item at once. The main question is whether, as a matter of fact, you can resume
actual corporeal control of each item as and when you want to.
(c) The question whether you are actually the owner, or a lawful holder in the form of a
credit purchaser, or a lawful holder in the form of a borrower does not influence the
question of physical control. The reason for that is that the corporeal aspect of control
is a factual and not a legal matter.
13.3.3 The mental element (animus)
In the previous section it was said that the corporeal element of physical control is a matter
of fact referring to the actual or visible corporeal holding or control of a thing. This aspect is
common to all forms of control, whether it be ownership, possession or holdership.
The second element of physical control is the mental element, which is also a matter of
fact, and which refers to the mental attitude or intention with which the thing is held or
controlled. The following example illustrates the differences between various attitudes with
which the same thing can be held.
Page 210
Example
Five people are all in actual corporeal control of diamonds. All five of them carry
the diamonds in their pockets.
(a) The first person is a two year old baby, whose parent placed the diamond in
the baby’s pocket for luck.
(b) The second person is 30 years old, and is unaware of the presence of the
diamond in her pocket. In this case the diamond was placed in her pocket by
the person next to her, who is afraid that the police might search them and
find the diamond.
(c) The third person is also 30 years old, and holds the diamond in her pocket in
the firm belief that it is her property.
(d) The fourth person is also 30 years old, and is well aware of the fact that the
diamond belongs to her friend, who gave it to her as a pledge for a debt.
(e) The fifth person is also 30 years old, and is carrying the diamond for her
friend, who owns the diamond, but whose pocket has a hole in it through
which the diamond might be lost.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap13.xhtml
24-Jul-18
Chap13
Page 10 of 16
It is clear that the mental attitudes of the five people in the example towards control over
the diamonds differ. In the first case there is no intention, since a small baby cannot form a
will regarding the holding of objects. The second person is unaware of the presence of the
diamond, and therefore has no intention towards it either. The third, fourth and fifth persons
have the intention to control the diamonds in their pockets, but their intentions are different:
the third one controls something which she thinks is hers, while both the fourth and the fifth
persons control something which they know belongs to someone else. The difference
between the fourth and fifth persons is that the fourth person holds the diamond for her own
benefit, while the fifth person holds it for someone else’s benefit.
The mental element of control is a matter of fact, and therefore it is irrelevant whether
the third person is indeed the owner of the diamond, and whether the fourth and fifth
persons are indeed carrying diamonds that belong to someone else – the point is that, in
fact, they think that this is the situation. When establishing the mental aspect of control the
focus is on the actual mental attitude of the person in question, not on whether they are
right in what they think. Such a mental attitude or intention towards control can be
established factually by asking the person what her intention was, or by establishing her
intention from her actions. As a rule the law is more interested in intentions that can be
established by appearances or actions
Page 211
than in merely subjective intentions, because the latter are not made clear to the outside
world.
The differences between the five cases in the example illustrate the most important
aspects of the mental element of control.
Aspects of the mental element of control
(a) Mental capacity is required.
(b) Conscious control is required.
(c) Intention to hold for a principal is insufficient for own control.
(d) A specific intention with regard to control is required, namely,
(aa) intention to hold as owner, or
(bb) intention to hold for one’s own benefit.
(e) Nobody can change the nature of control simply by means of a change in the
intention.
(a) Mental capacity is required
Without the mental capacity to form a will or intention which can be established, recognised
and given effect by the law, no mental or intention element towards control is possible. This
is a topic dealt with in the law of persons, but as a rule small babies cannot form such an
intention. For purposes of property law the baby in the example has no intention and
therefore no control over the diamond – the mental aspect which transforms mere corporeal
presence into actual control is absent. Control will probably be ascribed to the parent who
placed the diamond in the baby’s pocket, or to the person accompanying the baby.
(b) Conscious control is required
Even when the person in question is mentally capable of forming a legally relevant intention
to control, it is still necessary for that person to be aware of the corporeal element of control
before the mental element can be formed. The second person in the example, who was
unaware of the diamond in her pocket, may well be mentally capable of exercising control
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap13.xhtml
24-Jul-18
Chap13
Page 11 of 16
over a diamond, but as long as she is unaware of the presence of the diamond in her pocket
she cannot form the mental intention to control it. It is likely that control in this case would
be ascribed to the person who placed the diamond in her pocket, provided this person is able
to retrieve it at will (in other words, exercise the corporeal element as well).
There are a few well-established exceptions to the principle that a person must be aware
of the corporeal aspect of control before the intention to control
Page 212
can be formed. It is fairly widely accepted that in certain circumstances a person can acquire
control before being aware that the corporeal aspect of control was established.
Example
A person sets a trap for birds and goes home. While this expert hunter is soundly
asleep and dreaming of mince pies a bird is caught in the trap. Since the hunter
has already formed the intention to establish control as soon as a bird is caught in
the trap, the elements of control are both present as soon as a bird is actually
caught, and therefore the mental element is considered to be present as soon as
the corporeal element is established. The hunter acquires control as soon as the
bird is caught.
The same principle applies to a person who owns (or rents) a postbox. The intention to
establish control over mail as soon as it is placed in the mailbox has already been formed
before, namely by acquiring and having the mailbox (or the trap). As soon as the corporeal
element is established (when the bird is caught or the letter placed in the mailbox) control is
complete. These exceptions have evolved through custom, and cannot be extended
indefinitely.
In certain cases the law, especially as set out in certain statutes, regulates mere corporeal
presence of certain things even in the absence of any mental intention to control the object.
This is usually because the holding of the things in question is a criminal offence, as is the
case with illicit diamonds, pornography or forbidden drugs. These statutory exceptions also
apply in the absence of conscious control.
(c) Intention to hold for a principal is insufficient for own control
The fifth person in the example above did have the capacity and the conscious control to
form a mental intention towards control over the diamond in her pocket, but for most
practical purposes her control would be irrelevant to property law. The reason is that she is
not the actual controller of the diamond – she is just a representative who exercises control
for and on behalf of her principal who is the real controller. In certain cases her position
might become relevant, especially when a conflict develops between principal and agent.
However, for most other purposes the principal is the real controller.
(d) A specific intention towards control must be established
Once a person with the required mental capacity is conscious of corporeal control, a specific
intention or mental attitude towards control over the thing
Page 213
must be formed. This intention can take either one of two forms, as illustrated by the third
and fourth persons in the example above.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap13.xhtml
24-Jul-18
Chap13
Page 12 of 16
The two main categories into which the intention to control is divided are distinguished on
the basis of the controller’s attitude towards ownership of the thing.
Definition
Mental attitude or intention with which a thing is controlled:
(aa) Intention to hold as owner: If the controller’s attitude is that the thing
belongs to herself it is called the intention of an owner.
(bb) Intention to hold for one’s own benefit: If the controller’s attitude is that the
thing belongs to someone else, but the controller holds for a different
interest of her own, the attitude is called the intention to hold (something
that belongs to someone else) for one’s own benefit.
(aa) The intention to hold as owner (animus domini)
The intention of an owner is best defined in terms of the requirements of the Prescription Act
68 of 1969 (see chapter 8). This Act provides that a person can acquire property originally
by acquisitive prescription if she exercises a certain form of possession for 30 years. This
form of possession is identical to the definition of possession in chapter 12: it consists of
open corporeal control coupled with a specific intention, namely ‘as if she were the owner’ of
the property. (The intention element is discussed in Nienaber v Stuckey 1946 (A).) Common
sense dictates that this intention can occur in either one of two cases:
(i) The person who is the owner of property obviously controls it (lawfully) with this
intention, but the owner’s intention is irrelevant, since it does not determine the
implications of her right. (See chapter 12.) The implications of ownership result from
the presence of ownership, and not from what the owner thinks about it. For this
reason it is logically senseless to describe an owner as a (lawful) possessor – it has no
legal meaning that is not already present in the fact of ownership itself. The fact that
the owner controls her own property with the owner’s intention is, therefore, not of
much interest.
(ii) The second kind of person who exercises control with the intention of an owner is the
unlawful possessor, who acts as if she were the owner while in fact she is not. As was
pointed out in chapter 12, this can occur either in good or in bad faith. The person who
honestly but mistakenly believes that she is the owner is an unlawful possessor in good
faith
Page 214
(bona fide possessor), while the person who acts as if she were the owner while she
knows full well that she is not, is an unlawful possessor in bad faith (mala fide
possessor). The thief is the best example of an unlawful possessor in bad faith. Both
unlawful possessors control the property with the intention of an owner.
(bb) The intention to hold for one’s own benefit (animus sibi habendi)
The intention to hold property (belonging to someone else) for one’s own benefit is based on
the fact that someone else is the actual owner, and that the holder is aware of that and
recognises the owner’s right. Usually (but not always) the intention to hold such property for
one’s own benefit is based upon the owner’s permission to do so, for instance when the
property is leased or pledged. Both the lessee and the pledgee recognise the ownership of
another person, and they do not contest it (as the unlawful possessor in bad faith does).
Their intention is to exercise control for a different purpose which benefits them, without
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap13.xhtml
24-Jul-18
Chap13
Page 13 of 16
being in conflict with the owner’s interests. (The intention element is discussed in Nienaber v
Stuckey 1946 (A).)
In this respect this category must be distinguished carefully from the person who holds
property for someone else, like the fifth person in the example above. The fifth person held
the diamond not for her own benefit, but for the benefit of the principal. The fourth person,
however, recognised the ownership of the owner, but nevertheless held the diamond for her
own benefit, namely as a pledge. Once again this intention to hold for one’s own benefit can,
if the control is in fact unlawful, be either in good or in bad faith, depending upon the
holder’s awareness of the unlawfulness of the control. (See chapter 12.)
(e) Nobody can change the nature of control simply by means of a change in the intention
A very important principle regarding physical control is that nobody can change the nature of
control by simply changing the intention with which she exercises it. It was already pointed
out earlier that physical control over corporeal things serves a publicity purpose, to show
other people that a certain property interest exists. Intentions with regard to control are only
recognised, therefore, inasfar as they are reflected in exterior facts or actions.
13.3.4 Direct and indirect control
In the introduction to this chapter it was said that the basic principle with regard to control
over movable things is that only one person can control a specific thing at a time – two
people cannot sit in the same chair at the same time. However, this principle is somewhat
oversimplified, and actually
Page 215
applies only in its strict sense to people who want to control a thing for conflicting interests.
In certain cases it is possible for different kinds of control to be exercised by more than one
person. One such example is where one person exercises direct control and another person
exercises indirect control.
An example of direct and indirect control is a long-distance truck driver who exercises
direct control over the truck that she drives, while the company that owns the truck and
employs the driver exercises indirect control through the driver (its employee), and perhaps
with the assistance of an electronic motor fleet monitoring system. For a further example
see Sanyati Building (Pty) Ltd v Energy X-Ray Trading Co KZN (Pty) Ltd 2010 (D) (applicant
cannot succeed with the spoliation remedy if it held the spoliated property as a
representative on behalf of someone else).
Definition
(a) Control of a corporeal thing is direct when actual physical control is exercised
immediately by a person.
(b) Control of a corporeal thing is indirect when it is not exercised immediately
by the indirect controller herself, but by someone else. The indirect controller
retains indirect control through the direct control of the other person (the
direct controller).
Direct control is also referred to as immediate control, and indirect control is also
referred to as mediate control.
13.3.5 Shared control
Shared control is also an example of control which is exercised by more than one person at
the same time. In this case, however, there is no direct and indirect control – all the sharing
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap13.xhtml
24-Jul-18
Chap13
Page 14 of 16
controllers exercise direct control simultaneously. The reason why this form of control does
not violate the principle is that only one person can exercise control at a time is that they
share the control – they do not compete for it. As soon as disagreement causes the sharing
controllers to compete for control the basic rule will come into play, and one person might
oust the control of another.
A good example of shared control is the control exercised by husband and wife over the
family home and its contents. Both partners have control at all times, and neither acts as an
agent or for the benefit of the other – they share full control at the same time.
Page 216
13.4 Acquisition of possession and holdership
13.4.1 Recap: original and derivative acquisition
The acquisition of ownership is discussed in chapters 8 and 9. In those two chapters a very
important distinction is made, namely, between original and derivative acquisition. As
explained in chapter 8, the distinction between original and derivative acquisition depends
upon the source of ownership: if it is derived from and with the co-operation of a previous
owner, it is acquired in a derivative fashion. However, if the thing did not belong to anybody
before, or if it is acquired without the co-operation (even against the will) of the existing
owner, the thing is acquired in an original fashion. In the one case ownership is transferred
from one person to another, and in the second case ownership vests in the new owner by
operation of law and any existing right of ownership is extinguished. This same distinction
applies to the acquisition of possession and holdership, albeit in a slightly different way.
13.4.2 Original acquisition of possession and holdership
Certain forms of lawful holdership can be established in an original way, for example when a
real security right is established by law (see chapter 19 with regard to liens), or when a
servitude is established through prescription (see chapter 17 with regard to servitudes). In
both cases lawful holdership is established regardless of the rights and without the cooperation of existing holders or of the owner.
Possession and unlawful holdership can also be established in an original way, in the
sense that they can be established physically against the will of the owner. Unlawful
holdership is established originally when someone starts using a private road over your land,
without a right or permission to do so. Possession is established when a thief unlawfully
takes your property and uses it as her own. Of course, no right is acquired in the process,
unless it forms part of a chain acquisition as explained below, but as was said at the
beginning of this chapter, control is a factual matter which is not concerned with lawfulness
or with the presence of rights. In both these cases the unlawful property relation (possession
or unlawful holdership) is simply factual control established by an act of the possessor or
holder.
In all these cases the same basic requirements must be met as in the case of original
acquisition of ownership. The person who acquires possession or holdership in this original
fashion must establish a suitable form and measure of corporeal control over the object,
together with the required mental attitude towards such control. If a right is acquired (lawful
holdership) other requirements (such as a certain period of control) must also be satisfied.
Page 217
13.4.3 Derivative acquisition of possession and holdership
Lawful holdership can be established derivatively by transfer from one person to another, for
example when a pledge or a servitude is constituted by agreement and delivery or
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap13.xhtml
24-Jul-18
Chap13
Page 15 of 16
registration (see chapters 18 and 17 respectively). When lawful holdership is acquired in this
derivative fashion the same basic requirements must be met as in the case of transfer of
ownership. The suitable form and measure of corporeal control must be transferred from one
person to another, together with the mental intention to transfer and to accept the right in
question. In some cases further requirements (such as registration of rights in land) might
have to be met as well for the establishment of a right.
Unlawful holdership and possession do not constitute rights, and as such they cannot be
transferred in the sense of transferring rights. However, as factual corporeal property
relations, these forms of control can also be transferred from one unlawful controller to
another by simply transferring the actual control. A good example is a thief who ‘sells’ the
stolen object to an accomplice or to another person: actual control is transferred, although
no rights are transferred. (The basic principle which applies here is that one can transfer
only the rights that one has; if you have no rights you cannot transfer any rights. This is
known as the nemo plus iuris rule.)
13.4.4 Chain acquisitions
The original establishment of unlawful possession can, when the other requirements are
satisfied, be one of the steps towards the original acquisition of either ownership or lawful
holdership. The acquisition of ownership or of a servitude through prescription are examples
of such a chain acquisition. (See chapters 8 and 17 respectively.) In this case the original
establishment of the unlawful property relation forms the first step in a chain acquisition,
which results in the original acquisition of a lawful right.
The relationship of ownership, possession and holdership to one another is important in
this regard. In many cases the establishment of one form of control (for example,
possession) may, under specific circumstances, be one of the requirements for the
acquisition of one of the other forms of control (for example, ownership). A survey of
chapter 8 shows that possession, as it is defined in chapter 12, is one of the requirements
for many of the original methods of acquisition of ownership. Similarly, the requirements for
the transfer of ownership by way of derivative acquisition in chapter 9 include the acquisition
of physical control with the intention of accepting transfer of ownership, which is practically
the same thing as corporeal control with the intention of an owner. (Of course, in the
context of transfer of ownership the
Page 218
control is not unlawful, while possession as defined for all other purposes in chapter 12
above is unlawful.)
Summary
The distinction between various forms of control is mainly concerned with control
of corporeal things, and is therefore not applicable to incorporeal property, which
cannot be controlled physically in any sense.
Ownership, possession and holdership are all forms of control over corporeal
things. They are, therefore, all based upon an element of physical control, and the
distinction between them is determined by the mental attitude with which this
control is exercised.
The literal or narrow interpretation which restricts physical control of corporeal
things to actual, physical holding of an object is too narrow to be workable in a
complex social and commercial environment.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap13.xhtml
24-Jul-18
Chap13
Page 16 of 16
The literal interpretation of the corporeal aspect of control is extended and
made more functional by way of considerations or indicators, usually deriving from
commercial practice, which might indicate a specific interpretation or application of
the corporeal element in a specific case.
The mental element of physical control is a factual matter which distinguishes
between possession and holdership. A controller’s mental intention towards control
of corporeal property must be conscious, and it assumes the form of either the
owner’s intention or the intention to hold someone else’s property for one’s own
benefit.
The distinction between the original and derivative acquisition of rights also
applies to possession and holdership, even if this application is limited. In principle
these forms of control can, therefore, be established either originally or
transferred from one person to another.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap13.xhtml
24-Jul-18
Chap14
Page 1 of 23
Page 219
Chapter 14
Protection of possession and holdership
14.1
14.2
14.3
14.4
14.5
14.6
14.7
14.8
14.9
Introduction
Protection of rights and other remedies
Declaratory order
14.3.1 Definition
14.3.2 Requirements
14.3.3 Nature and extent of relief
Interdict
14.4.1 Definition
14.4.2 Requirements
14.4.3 Nature and extent of relief
Spoliation remedy
14.5.1 Definition
14.5.2 Requirements
14.5.3 Defences
14.5.4 Nature and extent of relief
Possessory action
14.6.1 Definition
14.6.2 Requirements
14.6.3 Nature and extent of relief
Action for delictual damages
14.7.1 Definition
14.7.2 Requirements
14.7.3 Nature and extent of relief
Condictio furtiva
14.8.1 Definition
14.8.2 Requirements
14.8.3 Nature and extent of relief
Extended enrichment action
14.9.1 Definition
14.9.2 Requirements
14.9.3 Nature and extent of relief
Page 220
14.10 Constitutional protection of rights in property
14.11 Land reform
Summary
Overview
•
What does the protection of possession and holdership entail?
•
What is the difference between remedies for the protection of rights and other
remedies?
•
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
•
•
•
•
•
•
•
•
Page 2 of 23
What property interest is protected by the declaratory order, and what are the
requirements for this remedy?
What property interest is protected by the interdict, and what are the requirements for
this remedy?
What property interest is protected by the spoliation remedy, and what are the
requirements for this remedy?
What property interest is protected by the possessory action, and what are the
requirements for this remedy?
What property interest is protected by the Aquilian action for damages, and what are
the requirements for this remedy?
What property interest is protected by the condictio furtiva, and what are the
requirements for this remedy?
What property interest is protected by the extended enrichment action, and what are
the requirements for this remedy?
What property interest is protected by the Constitution, and what are the
requirements?
What property interest is protected by land reform measures, and what are the
requirements?
14.1 Introduction
In chapter 1 remedies are described as legal procedures provided for the protection of
property rights against infringements or for the control of the effects of unlawful actions with
regard to property relations. Ownership is protected by its own set of dedicated remedies –
see chapter 10. The protection of possession and holdership is promoted by a number of
remedies. Some of the remedies are aimed at prohibiting or preventing infringements,
others at restoring property relations which have been infringed upon and still others at
providing compensation for damages suffered as a result of infringements.
Page 221
14.2 Protection of rights and other remedies
From what is said in the introductory paragraph above and from the definition of a remedy in
chapter 1 it appears that remedies are not only used to protect property rights against
infringements, although that is an important aspect of the protection of possession and
holdership. Certain property relations described as lawful holdership in chapter 12 constitute
property rights, and they are protected against infringements by specific remedies. However,
other property relations described as unlawful holdership and possession in chapter 12 are
also protected by remedies; not because they constitute rights (because they do not), but
because the law does not allow unlawful interferences with property relations, even if those
property relations are unlawful.
Example
Your bicycle is stolen from your garage one Saturday night while you are out on
the town. You report the theft to the police, but hear nothing from them for
weeks. Then, a few weeks later, you spot a man riding your bicycle in the street.
You rush up to the man, push him from the bicycle by force and take your bicycle
back. The man reports the incident to the police, who come to your house and
take the bicycle back.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 3 of 23
What happens in this example might seem a little unfair to you. After all, when the bicycle
was stolen from you the police did not seem to do much, but now that you find the bicycle
again, they come and take it from you again! Yet that is exactly how the protection of
possession and holdership works. Two related but different goals are aimed at by remedies
for the protection of possession and holdership.
Purpose of remedies for the protection of possession and holdership
(a) To protect property rights, in the form of lawful holdership, against
infringement. Remedies aimed at this goal will require proof of a property
right.
OR
(b) To protect the community against chaos and anarchy by preventing people
from disturbing existing property relations, whether lawful or unlawful, by
self-help. Remedies aimed at this goal will not require proof of a property
right.
(a)
The first aim is to protect property rights against infringement. As owner a remedy
would have been available to you against anyone found in
Page 222
|
(b)
possession of your bicycle. (See 10.2.) When you found the man riding your bicycle
you should have taken this legal route and claimed the bicycle back from him with one
of these remedies. Certain remedies are specially designed for this protection of
property rights, and their requirements are formulated accordingly; you first have to
prove your right.
The second aim is to protect the community against chaos and anarchy resulting from
people taking the law into their own hands. That is why you are not allowed to take
and keep the bicycle when you find it in the street – suppose you made a mistake and
it was not really your bicycle? Furthermore you cannot be allowed to use force to take
the bicycle back yourself – if everybody did that law and order would degenerate into
chaos and war. Therefore, you are required to use the legal way and institute an action
through the courts; you cannot use force to uphold your rights unless it is absolutely
unavoidable. Certain remedies are not supposed to protect property rights as such, but
rather to prevent and discourage people from using self-help and force. The
requirements for these remedies are formulated accordingly; they do not require proof
of a right.
To summarise: remedies for the protection of possession and holdership are sometimes
aimed at the protection of property rights, and then they require proof of such a right. At
other times these remedies are aimed at preventing and discouraging unlawful self-help with
regard to property relations, and then they do not require proof of a right; for the sake of
peace and order even unlawful property relations are protected against self-help.
14.3 Declaratory order
14.3.1 Definition
Definition
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 4 of 23
A declaratory order is a court order, issued upon application, in which the court
sets out the rights and obligations of parties to a dispute before an actual
infringement takes place. This declaration of rights binds the parties once it is
given.
Page 223
14.3.2 Requirements
Requirements for a declaratory order
(a) Proof of an actual, existing or future right or obligation with regard to
property.
(b) Proof of an existing and real dispute about the right or obligation in question.
(c) Convincing reasons why the circumstances make it necessary for the court to
make a declaratory order to solve the dispute by setting out the rights and
obligations of the parties.
(a) An actual right in property
A person who approaches the court for a declaratory order must convince the court of her
interest in the matter, and therefore she must prove her right or obligation in the matter. If
there is no right or obligation that can be proved, the court will not entertain the matter. The
right or obligation concerned must be an actual right or obligation and not just theoretical.
However, the order can be granted with regard to future rights which have not yet
materialised, in the sense that the rights themselves have not yet come into existence or
become enforceable, even though it is already clear when and how they will become
enforceable and what their effect will be.
(b) A real dispute about such right
The courts will not grant a declaratory order just for the fun of it. There must be a real
dispute about the right or obligation, and the dispute must be of such a nature that the
parties can be bound by the order once it is given. In other words, the order must be able to
solve a real dispute. This requirement does not mean that an opponent must have already
been identified – it means that the applicant’s interests must clearly be capable of conflicting
with the interests of (as yet unidentified) other persons: Ex parte Nell 1963 (A); Reddy v
Decro Investments CC t/a Cars for Africa and Others 2004 (D).
(c) Reason for the court to issue the order
The court grants a declaratory order only if it is convinced that there is good reason to do
so, and it has a discretion to refuse to make such an order if it is not convinced of its
necessity. Usually it will be sufficient to prove that the order will prevent an actual
infringement of rights or damage to property.
14.3.3 Nature and extent of relief
The most important aspect of this remedy is that it can be obtained before
Page 224
an infringement takes place; in other words, it can be used to prevent an infringement. This
makes it a useful remedy in cases where there is an indication that rights may be infringed
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 5 of 23
upon because of a dispute about the existence of a right. By settling the dispute the court
avoids the infringement. The benefit of the remedy is restricted to those who can prove a
right to the property, which means that only lawful property relations can be protected with
it. Consequently it is a remedy for the protection of rights, and not for the protection of all
property relations against unlawful disturbance.
14.4 Interdict
14.4.1 Definition
Definition
An interdict is a summary court order, usually issued upon urgent application, by
which a person is ordered to either do something, stop doing something or refrain
from doing something, in order to stop or prevent an infringement of property
rights.
An interdict is a summary court order, which means that it is usually given at short notice
and urgently. In this order the court does not set out only the rights of parties (as with the
declaratory order), but also orders one of the parties (usually the respondent) to do
something (mandatory interdict) or to refrain from doing something (prohibitory interdict).
The purpose of an application for an interdict is usually either to stop an ongoing
infringement of rights or to prevent an imminent infringement, and therefore it cannot be
used once an infringement is completed.
14.4.2 Requirements
The requirements for an interdict were set out in Setlogelo v Setlogelo 1914 (A), a classic
decision which is still the main source of authority.
Requirements for an interdict
(a) Proof of a clear right with regard to property.
(b) Proof that the respondent infringes upon the right unlawfully and in an
ongoing and continuing way, or that there is a reasonable expectation that
such an infringement will occur in future; and that it will cause the applicant
damage.
(c) Reasons why there is no other effective remedy available to the applicant.
Page 225
(a) A clear right
The remedy requires that the applicant must have a clear right to property, in other words
that the applicant can show proof of such a right. As a rule the court does not expect
absolute proof of this right for purposes of the temporary interdict, for which prima facie or
superficial proof of an existing right is sufficient; but then the applicant must also prove that
the damage which might result for her from the denial of the temporary interdict is greater
than the damage that might result for the respondent from the granting of the temporary
interdict. Better proof of the right is then required upon the return day, when the final
interdict is considered. In Chapman’s Peak Hotel (Pty) Ltd v Jab and Annalene’s Restaurants
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 6 of 23
t/a O’Hagans 2001 (C) it was held that proof of a person’s use of property in contravention
of local planning or building laws, regulations and plans established a clear right for an
applicant who wishes to oppose such use, because it triggered a public law right to enforce
compliance with the zoning scheme.
(b) Ongoing or impending unlawful infringement
The interdict is meant to stop ongoing infringements or to prevent imminent infringements,
and not to repair the results of past infringements which have already been completed.
Therefore the court must be convinced that the unlawful infringement is still going on, or
that it has not yet started, but is reasonably expected to start in the near future. An interdict
is a discretionary remedy, and the court will grant it only if the unlawful infringement will
actually cause harm or damage.
(c) No other effective remedy
The third requirement ensures that the interdict retains its character as a remedy of last
resort – if any other effective remedy is available that remedy should be used and not the
interdict. However, the interdict is also a preventive remedy, which means that the other
effective remedy must be able to prevent the infringement. In Candid Electronics v
Merchandise Buying Syndicate 1992 (C) it was decided that this requirement does not mean
that the interdict should be denied because the applicant could always, if the infringement
takes place and damage is caused, wait and claim damages with a different remedy at a
later stage. The Candid Electronics decision is discussed in the next section.
14.4.3 Nature and extent of relief
The interdict is meant to protect property rights against infringement, and therefore a right
must be proved. It can, therefore, be used only by lawful controllers of property, who can
prove a right to the property.
Page 226
The interdict is used either to stop ongoing infringements upon property rights, or to
prevent imminent infringements from taking place. It cannot be used to do anything about
infringements that have been completed – they have to be addressed by means of other
remedies.
The fact that the interdict is a remedy of last resort does not mean that the applicant
must wait for the infringement to take place and the damage to result from it if she can
obtain a remedy to rectify the damage – the interdict can and should be used to prevent or
stop the infringement if possible. No other effective remedy must be able to do the same, if
so the interdict will not be available. If refusal of the application for an interdict would
amount to judicial condonation of illegal acts, the interdict should also be granted
(Chapman’s Peak Hotel (Pty) Ltd v Jab and Annalene’s Restaurants t/a O’Hagans 2001 (C)).
Candid Electronics v Merchandise Buying Syndicate 1992 (C)
The applicant borrowed money from the respondent, and pledged a large number
of video cassette recorders (VCRs) as security. The idea was, as is usual with a
pledge, that the applicant would repay the debt and retrieve the VCRs in due
course. However, soon afterwards the applicant discovered that the respondent
was selling the VCRs unlawfully, and it applied for an interdict to prohibit the sale
of further VCRs. The respondent argued that the interdict should be denied,
because the applicant could always use the delictual action for damages at a later
stage to recover any damage that was caused. The court rejected this argument,
pointing out that the interdict can and should be used to prevent the damage from
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 7 of 23
being caused in the first place. Any other effective remedy should be able to do at
least the same.
14.5 Spoliation remedy
14.5.1 Definition
Definition
The spoliation remedy is a summary remedy, usually issued upon urgent
application, aimed at restoring control of property to the applicant from whom it
was taken by unlawful self-help, without investigating the merits of the parties’
rights to control.
From the definition above it is immediately apparent that this remedy is unique (compare
the explanation in Nienaber v Stuckey 1946 (A)), because it
Page 227
is not used to protect rights at all. The spoliation remedy, also known as the mandament van
spolie, is a unique remedy aimed at undoing the results of (and discouraging) the taking of
property by means of unlawful self-help. The term spoliation means unlawful dispossession
through self-help. The idea is that people should enforce and protect their property rights by
legal means and procedures, and not by self-help and force, because self-help eventually
results in chaos and anarchy. For this reason it is usually said that this remedy is based upon
the principle that nobody is allowed to take the law into her own hands.
Because of its aim of restoring peace and order and discouraging self-help, the spoliation
remedy does not investigate the merits of any of the parties’ interests in the property –
neither of the parties is allowed to raise the question of rights at all. The court is simply
interested in a factual investigation, namely whether there is in fact proof of existing control
(whether lawful or not), and proof of unlawful spoliation of that control. If there was in fact
existing control and unlawful spoliation the court will order the spoliator to restore the
spoliated control to the applicant immediately, regardless of whether the applicant’s control
was in fact unlawful or even illegal.
Because the spoliation remedy is aimed at preserving peace and order in the community,
people cannot be permitted to circumvent the remedy by contract. Parties to a contract
cannot agree that one of them will be permitted to take property from the other without
proper legal procedure.
Example
Many businesses attempt to evade the remedy by inducing their clients to sign a
contract in terms of which the client agrees that the business can repossess
property from the client without legal procedure if the client should fail to pay on
time. In court decisions such as Nino Bonino v De Lange 1906 (T) it was stated
clearly that these contracts are against public policy and therefore void.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 8 of 23
Availability of the spoliation remedy is affected by land reform laws in certain instances. The
Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 sets out
strict requirements for the eviction of unlawful occupiers of land (see 23.6). In City of Cape
Town v Rudolph 2004 (C) it was decided that landowners cannot choose to rather make use
of common law remedies (like the spoliation remedy) when evicting unlawful occupiers – if
the Act applies, common law remedies such as the spoliation remedy are excluded to
prevent frustration of the purposes of the legislation. See further Ngqukumba v Minister of
Safety and Security 2014 (CC). The National Road
Page 228
Traffic Act 93 of 1996 allows for confiscation of illegally possessed motor vehicles and also
declares possession of vehicles illegal when their engine or chassis numbers have been
tampered with. The police and lower courts took the position that an applicant could not
succeed with the spoliation remedy when a vehicle, the engine number of which had been
tampered with, was confiscated unlawfully because the correct procedure was not followed.
Returning the vehicle, they argued, would be illegal because it was illegal to possess such a
vehicle. The constitutional court held that the spoliation remedy could not be refused on a
ground that involved the merit (unlawfulness) of the applicant’s control. However that does
not preclude the courts from deciding that the spoliation remedy might be unavailable
because restoration is impossible if it can be shown that possession of the restored property
would be illegal.
14.5.2 Requirements
The requirements for this remedy were set out in two classic decisions that are still the most
important authorities in this regard, namely Nino Bonino v De Lange 1906 (T) and Yeko v
Qana 1973 (A).
Requirements for the spoliation remedy
(a) Proof that the applicant was in peaceful and undisturbed control of the
property.
(b) Proof that the respondent took or destroyed that control by means of
unlawful self-help or spoliation.
(a) Peaceful and undisturbed control
The first requirement means that the applicant had control over the property in question. For
purposes of the spoliation remedy this control must have existed ‘peacefully and
undisturbed’ for a period long enough, and in a manner stable enough, to qualify any
unlawful disturbance as a breach of the peace. The requirement that the control must have
been peaceful and undisturbed does not refer to its legal merits, but simply to the fact that it
must have been relatively stable and enduring – if not there can hardly be a question of a
disturbance of the situation.
The existing control must have included the normal corporeal element as set out in
chapter 13. The mere intention to control is insufficient. The criteria which usually indicate
the existence of effective control in the corporeal sense also apply in this case, so that the
control need not have been continuous, comprehensive or exercised personally. However,
even though control need not have been exercised comprehensively or continuously there
must
Page 229
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 9 of 23
have been effective control as set out in chapter 13: the applicant must prove that she was
in a better and stronger corporeal relationship with the property than anybody else. In
Pinzon Traders 8 (Pty) Ltd v Clublink 2010 (EC) the court decided that access to a loading
bay where a supermarket received deliveries was so closely related to its use of the
supermarket premises that any action depriving it of that access would effectively prevent it
from exercising its control of the premises itself.
The control which is required for the spoliation remedy may also be shared control as
explained in chapter 13; in which case spoliation usually consists of one partner ousting the
other from his existing shared control. In this regard it is possible for partners or married
people to commit spoliation against each other when one of the partners or spouses uses
unlawful self-help to take exclusive control, thereby ousting the existing shared control of
the other partner or spouse. Thus, in Manga v Manga 1992 (ZA) the Zimbabwean Supreme
Court decided that spouses can commit spoliation against each other with regard to joint
property of the common household, which is used and controlled by both spouses. This
principle also applies in South African law: Mans v Mans (formerly Richens, born Maddock)
1999 (C).
The corporeal element of control often causes confusion with regard to cases where socalled quasi control of incorporeals (or rights) is concerned. An example illustrates the
problems encountered in these cases.
Zulu v Minister of Works, KwaZulu 1992 (D)
The applicant was a senior prince in the royal Zulu family, and lived in a private
house near the royal residence. When the royal residence was built the applicant
installed a water pipe to provide water from the royal house to his own house.
This was done at his own cost, but in consultation with the relevant authorities. He
was allowed to draw water free of charge from this pipe as long as surplus water
was available, but when the water supply became insufficient, the water supply to
the pipe was terminated by the authorities without notice. Initially the supply was
cut off by closing a stopcock, but when the applicant opened the stopcock the
authorities severed the pipe. Applicant applied for a spoliation remedy to have the
water supply restored.
The facts in this example are typical of cases where so-called quasi control of a right is
concerned: the control in question is the kind of control usually associated with the exercise
of a right such as a servitude. Because of the fact that rights are not investigated in a
spoliation case the question arises as to what form the control should take in these cases. In
some older decisions
Page 230
the courts confused the matter by requiring proof of a right, but that is clearly wrong.
In the Zulu case the matter was initially approached correctly: the court stated that the
applicant must prove the existence of control by proof of acts which, if they were conducted
lawfully, would constitute the exercise of a right of servitude. The question is not whether
there was such a right, but simply whether there is proof of the acts usually associated with
such a right. In this case it means that the applicant did not have to prove a right to use the
water, but simply that he in fact used the water from the pipeline. However, in its application
of this principle the court was not quite consistent, and eventually it seems that the
application was denied because the applicant did not have the right to use the water. If the
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 10 of 23
principle were applied correctly, the fact that the water was actually used should have been
decisive.
The spoliation remedy was granted in several interesting cases where quasi control was at
stake. The first case, Xsinet (Pty) Ltd v Telkom SA Ltd 2002 (C), is a complex example.
Telkom, the holder of an exclusive licence to provide public switched telecommunications
services, supplied Xsinet (an internet provider) with a telephone system and a bandwidth
system in order for Xsinet to conduct its business. Xsinet allegedly owed Telkom money and
refused to pay, whereafter Telkom disconnected the service, rendering Xsinet’s business
inoperative. Xsinet applied for and obtained a spoliation order on the basis that the
disconnected service was an incident of the occupation and use of the premises in Xsinet’s
control. On appeal this decision was correctly overturned by the supreme court of appeal:
Telkom SA v Xsinet (Pty) Ltd 2003 (SCA). The court held that it would be artificial and
illogical to conclude that Xsinet’s use of the telephone connections or electrical impulses
established control of the link or connection between Xsinet’s equipment and Telkom’s
systems. This decision suggests that the spoliation remedy may no longer be available to
counter termination of telephone services.
It was initially unclear whether earlier decisions concerning water and electricity services
are also affected by this result. In First Rand Ltd t/a Rand Merchant Bank v Scholtz NO 2007
(SCA) the supreme court of appeal decided that a unilateral discontinuation of water
supplied in an irrigation scheme did not constitute spoliation because the supply was based
on a contractual agreement that had come to an end, and because the parties had not
contracted for a continuation. The receiver was never in control of the mechanisms (the
pipeline and distribution equipment) that regulated the water supply, which places this
decision on the same footing as Telkom SA v Xsinet (Pty) Ltd 2003 (SCA). However, in
Impala Water Users Association v Lourens NO 2008 (SCA) the supreme court of appeal
decided that, on the facts, the receivers’ use of water was not merely a contractual right but
an incident
Page 231
of their use of the land. The case confirms that one should now distinguish between cases
where use of water (or electricity, or another service) forms an incident of possession of the
land on the one hand, and cases where the supply of water is merely a personal right to
receive the service but not an incident of possession of the premises. The authority of prior
decisions in Bon Quelle (Edms) Bpk v Munisipaliteit van Otavi 1989 (A) and Telkom SA v
Xsinet (Pty) Ltd 2003 (SCA) indicates that the spoliation remedy might apply in the former
but not in the latter case. This trend was confirmed in ATM Solutions (Pty) Ltd v Olkru
Handelaars CC 2009 (SCA), where the right to receive or use a service was once again
linked to possession and use of the premises.
Some important qualifications of these principles have developed in view of constitutional
and land reform principles, especially as far as the basic right of access to water is
concerned. In terms of section 27 of the Constitution, the right of access to a basic quantity
of water per day is granted to everyone by section 3 of the Water Services Act 108 of 1997.
In City of Johannesburg v Mazibuko 2009 (SCA) the supreme court of appeal decided that a
person who cannot afford to pay for water has a right of access to water for basic needs and
that a local authority may not restrict such access merely on the basis of non-payment. By
extention this means that termination of access to basic water would establish unlawful
spoliation even if the person had failed to pay. (For further confirmation of this approach see
City of Cape Town v Strümpher 2012 (SCA).) According to the decision in Darries v City of
Johannesburg 2009 (GPJ) this does not apply to supply of electricity, where the supplier is
entitled to terminate services because of non-payment, provided that the proper procedures
are adhered to. This conclusion was apparently confirmed by the constitutional court in
Rademan v Moqhaka Local Municipality 2013 (CC).
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 11 of 23
In Tigon Ltd v Bestyet Investments (Pty) Ltd 2001 (N), the application of the remedy in
quasi control situations was taken even further. In this case, the applicant obtained a
spoliation order because the respondent removed its name from the register of shareholders
in the company. Although the removal undoubtedly constituted self-help, it is doubtful
whether this action could result in physical conflict and violence, and the link between
physical control of property and spoliation which usually characterises the quasi control
cases was absent. Consequently the extension of the spoliation remedy to this case was
probably unwarranted.
The peaceful and undisturbed control required for the spoliation remedy must also include
the usual mental element of control. All that is required is the intention to use the property
for the applicant’s own benefit, although a possessor (and even the owner) with the
intention of an owner can also use this remedy. The biggest problem in this regard is to
distinguish between
Page 232
people who control the property for their own benefit, and people who control the property
for someone else’s benefit. In the latter case the principal is the one with control, and
therefore the one who should apply for the remedy, while agents and representatives who
control on behalf of a principal can apply for the remedy only on behalf of the principal and
not in their own names.
(b) Spoliation
The second requirement for the spoliation remedy is that the existing peaceful and
undisturbed control must have been unlawfully spoliated by the respondent. This
requirement includes two elements.
Firstly the respondent must have spoliated the applicant’s control. This does not mean
that the respondent must actually take control – it will suffice that the applicant’s control is
effectively destroyed. The respondent can, therefore, spoliate by destroying the object,
which would also put an end to the applicant’s control without the respondent taking control.
In Ntshwaqela v Chairman, Western Cape Regional Services Council 1988 (C) it was
confirmed that any act which effectively terminates the applicant’s control can constitute
spoliation, even if the respondent did not take control from the applicant. Partial deprivation
of control can also constitute spoliation, although mere disturbances of the applicant’s
control would generally not be sufficient to constitute spoliation – the disturbance must be
substantial enough to effectively end or frustrate the applicant’s control. This point was
confirmed in Minister of Land Affairs v Gqiba 2008 (Tk), where it was decided that activities
of a state organ that did not actually deprive the applicant of possession and did not
constitute a significant interference was not spoliation. It can be said, consequently, that the
applicant’s control is spoliated if the thing or a substantial part of the thing is taken from the
applicant, whether it is taken by the spoliator or destroyed, and also when the spoliator acts
in such a manner that it becomes substantially impossible for the applicant to exercise
control. (In this regard see further Pienaar v Matjhabeng Plaaslike Munisipaliteit 2012 (FS).)
For purposes of the spoliation remedy the spoliation must be unlawful. When the action of
the respondent is authorised by a law or by a court order it is lawful and does not constitute
spoliation, unless it exceeds the limits of the authorisation. In African Billboard Advertising
(Pty) Ltd v North and South Central and Local Councils, Durban 2004 (N) the Natal high
court correctly held that legislation which apparently grants a local authority power to take
the law into its own hands should be interpreted restrictively by assuming that the authority
should obtain a court order before entering upon private land to demolish illegal structures.
Even though legislation authorises the authority to demolish illegal structures, doing so
without a court order would
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 12 of 23
Page 233
amount to unlawful spoliation. In Impala Water Users Association v Lourens NO 2008 (SCA)
the supreme court of appeal confirmed that the respondent can only rely on statutory
authority for the act of dispossession if it can prove that it acted ‘within the four corners’ of
its statutory authority. In Manina v Minister of Safety and Security 2008 (EC) it was held
that a motor vehicle seized during a properly authorised and operated road block was not
dispossessed unlawfully if the police had sufficient reason to believe that it might be a stolen
vehicle. In Ngqukumba v Minister of Safety and Security 2014 (CC) the constitutional court
held that a vehicle can be reclaimed with the spoliation remedy if it was confiscated
unlawfully (because the correct procedures were not followed), even if possession of the
vehicle was illegal because its engine or chassis numbers had been tampered with.
Usually it is said that an action of the respondent amounts to unlawful spoliation when it is
not properly authorised by proper legal authority and implemented according to prescribed
legal procedure, and if it deprives the applicant of control without her knowledge or against
her will. In Stocks Housing (Cape) (Pty) Ltd v Chief Executive Director, Department of
Education and Culture Services 1996 (C) it was pointed out correctly that the required
unlawfulness of the spoliation does not concern the lawfulness of the applicant’s control, but
refers to the manner in which the spoliation took place. Spoliation is always (in the absence
of an authorising law or court order) unlawful if it takes place without the applicant’s
permission or against her will.
14.5.3 Defences
A defence is an answer which may be raised against the applicant’s claim for a spoliation
order. Defences are raised by the respondent and must be proven by her. If she does so
successfully the application will be dismissed.
(a) Inadmissible defences
In view of the unique character of the remedy certain defences are not allowed against the
spoliation remedy. In some cases these defences are disallowed because they raise the
merits of the parties’ rights to the property, which are not investigated for purposes of this
remedy; in other cases the inadmissable defences are based upon a misinterpretation of the
requirements.
Defences not allowed against the spoliation remedy
(aa) Defences based upon the merits:
(i) Respondent is the owner of the property.
(ii) Respondent has a stronger claim to the property.
(iii) Applicant’s control was (or would be, if returned) illegal or unlawful.
Page 234
(iv) The balance of convenience favours the respondent.
(v) Respondent was entitled to commit spoliation.
(vi) Respondent has a counterclaim.
(vii) Respondent is married to or a partner of applicant.
(bb) Defences based upon misinterpretations:
(i) Respondent did not take control of the thing.
(ii) Respondent acted as someone else’s agent.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 13 of 23
(iii) Respondent did not commit violence or fraud.
(iv) Respondent acted in good faith.
(v) Applicant derives no benefit from control.
An important implication of the fact that the merits of the parties’ claims to possession
(control) are not considered in deciding a spoliation case is that an application for the
spoliation remedy cannot be combined or even heard together (in the alternative) with an
application for an interdict (for which the merits are relevant because the applicant must
prove a right, see 14.4 above). The courts nevertheless sometimes combine or confuse the
two remedies; see for example Dryer v Duncan 2010 (EC).
(b) Admissible defences
Defences allowed against the spoliation remedy
(aa) Applicant did not have the requisite control.
(bb) Respondent did not commit spoliation.
(cc) Unreasonable delay in bringing the application.
(dd) Impossibility of restoration.
(ee) Counter-spoliation.
(ff) Special plea based on spoliation.
(aa)-(bb) Counterproof
Admissible defences are based upon good reasons why the spoliation remedy, given its
unique character, should not be granted to the applicant. Firstly the respondent can offer
counterproof to prove that the applicant did not in fact satisfy the requirements.
(cc) Unreasonable delay
In view of the urgent nature of the spoliation remedy the applicant is expected to bring the
application as soon as possible after spoliation took place. If the applicant delays too long in
bringing the application it may be
Page 235
assumed that she permitted or consented to the respondent’s action, thereby making it
lawful. In Jivan v National Housing Commission 1977 (W) a rough rule of thumb was
formulated with which delays in bringing the spoliation remedy can be judged: if the delay is
shorter than one year it can still be unreasonably long, but then the respondent must show
reasons why it is too long; if the delay is longer than one year it may still be reasonable, but
then the applicant must show reasons why it is still reasonable and not too long.
(dd) Impossibility
When it is impossible to restore the applicant’s control the spoliation remedy loses its
impact, since the courts cannot force the respondent to do something which is impossible.
Therefore it is usually said that impossibility is a valid defence against the spoliation remedy.
Impossibility is usually accepted as a defence where the property is either destroyed or
damaged beyond repair or transferred to an innocent third party from whom it cannot be
claimed back.
There are decisions which make it clear that the court can do more than just order
restoration of control. Usually the respondent is required to restore the property in its former
state, which includes reasonable reparations and re-assembly. Where such re-assembly and
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 14 of 23
reparations are possible and still within the limits of reasonable repairs they should be
included in the restoration order. (See Burger v Oppimex (Edms) Bpk 2011 (WC); Fisher v
The Body Corporate Misty Bay 2012 (GNP).)
In Rikhotso v Northcliff Ceramics (Pty) Ltd 1997 (W) it was decided that the defence of
impossibility must succeed when squatters’ huts were completely destroyed by fire, and that
replacement cannot be effected by the spoliation remedy in such a case. However, in Ierse
Trog CC v Sultra Trading CC 1997 (C) it was confirmed that the rebuilding of a wall that had
been demolished could form part of a spoliation order, even though some replacement
materials might be required. This trend was terminated when the supreme court of appeal
returned decisively to the Rikhotso tradition in Tswelopele Non-Profit Organisation v City of
Tshwane Municipality 2007 (SCA), where it was decided that Rikhotso v Northcliff Ceramics
(Pty) Ltd 1997 (W) was ‘undoubtedly correct’ and that the spoliation order could not be used
when replacement materials were required to restore the property to its former state. This
decision has already been followed in Zululand Gas and Outdoor CC v Morris Centre (Pty) Ltd
2009 (KZP) to reach the opposite result than in Ierse Trog, namely that an order for
rebuilding of a wall could not be given. However, in City of Tshwane Metropolitan
Municipality v Mamelodi Hostel Residents Association 2011 (SCA) the supreme court of
appeal apparently gave a conflicting judgment, without explicitly reconsidering Tswelopele.
The court granted a restoration order that clearly required replacement of a
Page 236
building’s roof, probably in part with replacement materials, on the basis of the spoliation
remedy. Tswelopele created the impression that such an order is possible only on the basis
of a constitutional remedy.
(ee) Counter-spoliation
Counter-spoliation is a defence based upon the assertion that the respondent’s action
amounted to lawful rather than unlawful self-help. It is accepted that a limited and
reasonable measure of self-help in the defence of one’s property against unlawful intrusions
is permissible, provided it occurs during the original intrusion and does not constitute a new
or separate occasion of violence or self-help. The following example illustrates the difference.
Example
You come home from work one night and see a thief running from your house with
a set of silver candlesticks under her arm. You jump from the car, bring the thief
to the ground with a splendid rugby tackle and retrieve your candlesticks. The
thief runs away. The next morning you discover that a set of silver teaspoons is
also missing. Fortunately for you, on your way to the police station to report the
crime you spot the thief, give chase and once again capture her. You force her to
take you to her home, where you break down the door, search the premises and
retrieve your teaspoons. The thief applies for a spoliation remedy against you. Can
you rely on the defence of counter-spoliation?
The court hearing the application should grant the spoliation remedy against you with regard
to the teaspoons, but not with regard to the candlesticks. You defended your property by
means of self-help in both cases, but this self-help is allowed by the law only in the case
where your action formed part of the original unlawful intrusion – when stopping the thief
when she ran from your house you did not create a new situation of violence. However, by
forcing the thief to take you to her home the next day and by breaking the door down you
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 15 of 23
actually started a new situation of violence, which is not allowed – in this case you should
have called in the help of the police. The first act of self-help was lawful counter-spoliation
which formed part of the original act of violence started by the thief; but the second act of
self-help started a separate chain of violence which is unlawful.
For an act of counter-spoliation to be lawful, the counter-spoliation should occur close
enough to the original spoliation in time to form part of the same chain of violence – see the
previous paragraph. However, the act of counter-spoliation should also fit the original
spoliation in intensity and scope and not
Page 237
exceed it. In Bosman NO v Tworeck 2000 (C) it was therefore held that an act of spoliation
consisting of locking a gate that provided access to a farm road could perhaps justify
counter-spoliation in the form of removal of the lock, but not removal of the whole gate.
(ff) Special plea based on spoliation
A further defensive procedure based upon spoliation is the special plea based upon spoliation
(or exceptio spolii), which works exactly like the spoliation remedy, except that it is raised
only in defence against another action with regard to the same property. Normally this
special plea would be raised against a person who (according to your version) first removed
a thing from your control unlawfully (spoliation) and then also claims damages from you. If
successful, the special plea should suspend the claim for damages until the thing has been
returned to you. The requirements are exactly the same as in the case of the spoliation
remedy.
14.5.4 Nature and extent of relief
The spoliation remedy is a summary remedy, which is instituted urgently, and which
provides no more than temporary relief. It is not meant to protect rights, it does not require
the court to investigate the presence of rights, and it cannot grant rights. All it does is to
restore the situation as it was before the unlawful spoliation took place, so that any dispute
can be solved properly by a court of law or by legal procedures. If the applicant had no right
to the property before the spoliation, the fact that the property is restored does not grant
such a right – it simply restores the factual control which was spoliated unlawfully. For this
reason it is often said that the spoliation remedy provides nothing more than temporary
relief – the property can immediately, subsequent to return of the thing, be claimed back by
the spoliator or anybody else, provided they use proper legal procedures to do so and not
unlawful self-help.
14.6 Possessory action
14.6.1 Definition
Definition
The possessory action is an action based upon the merits of a stronger right to
control of a corporeal thing, and used to claim either the thing itself or its value
from anyone with a weaker right.
Page 238
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 16 of 23
The possessory action is a remedy based upon the merits of the plaintiff’s right to a
corporeal thing. The plaintiff uses this remedy to recover the thing or its value, on the basis
of her stronger right to control of it, from anybody with a weaker right than herself.
14.6.2 Requirements
Requirements for the possessory action
(a) Proof that the plaintiff has a right in the property, and that this right is
stronger than any right which the defendant might have.
(b) Proof that the defendant is in control of the property or was responsible for
its unlawful removal from the plaintiff’s control.
(c) If the plaintiff wants to claim damages (when the property is destroyed) the
normal requirements for the delictual action for damages must be satisfied.
(a) Proof of a stronger right
This action is specifically based upon a stronger right to control the thing in question, and
therefore that right must be proved. The plaintiff’s right need not be ownership, as long as it
is stronger than the defendant’s right.
(b) Proof that the respondent is in control
The second requirement is that the thing in question must be in the control of the defendant,
who can then return it to the plaintiff. However, if the property was destroyed it can
obviously not be in the control of the defendant. The plaintiff can then use this action to
recover damages in the form of the value of the property – in this regard this action is
different from (and sometimes more useful than) the rei vindicatio (see chapter 10).
(c) Normal requirements for delictual damages
The third requirement arises only when the plaintiff wants to claim additional damages for
damage above and beyond the value of the lost property. In such a case the claim for
further damages is a normal delictual claim for damages, and it requires the normal proof for
that action.
14.6.3 Nature and extent of relief
It is clear from the requirements that this action is available only to those who can prove a
right to control property, namely the owner or a lawful holder. If you have no right at all
(the unlawful possessors and holders) you cannot prove a stronger right than anybody else,
and therefore the action is not available.
Page 239
In actual fact the plaintiff can claim three things with this action, two of them in the
alternative. (i) Firstly, the claim is for return of the property which was removed or taken
unlawfully. (ii) If the property was destroyed and cannot be returned the second claim
comes into the picture as an alternative to the first, namely for the value of the destroyed or
lost property. (iii) Thirdly, and in addition to either the first or the second claims, the plaintiff
can claim additional damages for further or additional losses suffered in the process.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 17 of 23
14.7 Action for delictual damages
14.7.1 Definition
Definition
The delictual action for damages is an action used to claim compensation
(damages) for losses (damage) suffered as a result of the defendant’s unlawful
actions.
The action for delictual damages (also known as the actio legis Aquiliae) is a repairing
action; whereas remedies like the declaratory order and the interdict prevent or stop
infringements and remedies like the spoliation remedy and the possessory action restore lost
property, this action comes into operation once it is clear that the infringement cannot be
reversed. In such a case the guilty party who caused the infringement is ordered to pay a
sum of money (damages) to compensate the loss (damage) suffered by the plaintiff.
14.7.2 Requirements
This action can be used in all instances where damage is caused by unlawful action, but the
requirements as set out apply to cases where the damage concerns rights in property.
Requirements for the delictual action for damages
(a) Proof of a patrimonial right or interest in property.
(b) Proof of damage (patrimonial loss) suffered as a result of an unlawful and
culpable action of the defendant.
(c) Proof of a causal connection between the unlawful action of the defendant
and the loss.
14.7.3 Nature and extent of relief
The action for delictual damages is used to claim monetary compensation for damage which
cannot be repaired in any other way. When an infringement on
Page 240
property rights is complete and cannot be prevented or halted, and when the property itself
cannot be recovered, at least some of the damage or loss can be recovered by means of
payment of a sum of money, known as damages.
14.8 Condictio furtiva
14.8.1 Definition
Definition
The condictio furtiva is a special delictual remedy used to recover the value of a
thing from the thief or the thief’s heirs, in situations where the property was
damaged or lost after being stolen.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 18 of 23
This remedy is especially useful because it is still available when the stolen property has
been destroyed. In principle this is an action for the protection of ownership, but in Clifford v
Farinha 1988 (W) it was extended to a lessee (and probably other lawful holders as well).
Clifford v Farinha 1988 (W)
The plaintiff was the lessee of a motor car, and bore the risk for damage to the
car. The plaintiff went on holiday and left his house in the care of a family
member. The family member took the car without the plaintiff’s permission and
drove it to a shopping centre, where she parked and locked it. The car was stolen
from the parking lot, and the plaintiff instituted an action against the family
member for damages.
This case provides an interesting comparison between various remedies, because it shows
how the condictio furtiva can be available when other remedies are not.
Reasons for various remedies not being available in Clifford v Farinha
1988 (W)
(i) Rei vindicatio: The plaintiff was not the owner of the car. The defendant was
also not in control of the car when the action was instituted.
(ii) Actio ad exhibendum: The defendant did not part with the car voluntarily; it
was stolen, and its loss was not caused intentionally or negligently by the
defendant.
(iii) Action for delictual damages: Loss of the car was not caused by the fault of
the defendant.
Page 241
In these circumstances, where all the other possibilities would have failed, the lessee was
said to have the condictio furtiva available to claim the value of the stolen vehicle from the
original thief (the family member who used the car without permission). It may be useful to
have this remedy against the original thief (the family member) because the eventual thief
who stole the car from the shopping centre cannot be found.
14.8.2 Requirements
Requirements for the condictio furtiva
(a) Proof of ownership or any other lawful interest which is not automatically
terminated when the property is stolen.
(b) Proof that the thing was stolen by the defendant or that the defendant is an
heir of the thief.
(c) Proof that the thing was destroyed, lost or disposed of and not recoverable.
(a) Ownership or another lawful interest
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 19 of 23
Initially this was an action especially for owners of stolen property, but it was extended to a
lessee (and therefore probably other lawful holders) in Clifford v Farinha 1988 (W).
(b) Stolen by and claimed from the thief or her heirs
The second requirement is that the thing was stolen by the defendant, or that the defendant
must be an heir of the thief. It is not necessary to prove theft in the technical criminal law
sense; proof that the defendant removed the thing from the plaintiff’s control unlawfully and
with some sort of fraudulent intent will be sufficient. In Clifford v Farinha 1988 (W) the
family member used the car without permission (unlawfully), which was sufficient to satisfy
this requirement.
(c) The thing is destroyed or lost
The condictio furtiva is used only when the rei vindicatio, the actio ad exhibendum and the
claim for delictual damages are not available, for example when the thing was lost or
destroyed and the eventual thief or possessor, if any, cannot be found.
14.8.3 Nature and extent of relief
The condictio furtiva is used to claim the value of the stolen thing from the thief or her heirs,
because it was lost or destroyed and cannot be returned.
Page 242
What makes the action useful is that the highest value of the stolen object since the theft is
claimed – if its value has risen since the theft the plaintiff may benefit from it.
14.9 Extended enrichment action
14.9.1 Definition
Definition
The extended enrichment action is a remedy with which the plaintiff can recover
compensation for unjustified enrichment from the owner of property which was
improved without legal cause by the plaintiff.
The extended enrichment action is based upon the principle that unjustified enrichment must
be compensated. Unjustified enrichment (for purposes of property law) takes place when the
property of one person is improved by another person without legal cause, so that the owner
is enriched at the cost of the improver. Improvement can take the form of either actual
physical improvement or prevention of loss by expenditure of money. If there is a good legal
cause (such as contract) the improver can reclaim her expenses on the basis of the contract,
but in the absence of contract there is no claim, which is unfair.
This action is not aimed at protecting a right – in fact, it is awarded to possessors and
holders who improved the property of others without a right. Consequently proof of a right is
not required, and both lawful and unlawful holders and possessors can use the remedy. The
calculation of compensation will, however, be determined by the actual position of each
plaintiff, as is indicated in a separate section below.
14.9.2 Requirements
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 20 of 23
Requirements for the extended enrichment action
(a) Proof of action or expenses undertaken by the plaintiff to improve the
defendant’s property or save it from damage.
(b) Proof that there is no contract or other legal cause for such action or
expenses being undertaken.
(c) Proof that the defendant is enriched without legal cause and at the plaintiff’s
expense.
(a) Proof of action or expense
The plaintiff must have undertaken some physical improvement or expense with regard to
the defendant’s property. The improvements or expenses
Page 243
are usually classified into three categories according to their nature and value.
Categories of improvement or expenditure
(aa) Necessary improvements or expenses (impensae necessariae), which are
essential for the preservation or maintenance of the property. If they are not
undertaken the property is sure to be destroyed or damaged. As a rule the
owner would have taken exactly the same steps to preserve or protect the
property. Example: taking a sick or hurt animal to the veterinarian.
(bb) Useful improvements or expenses (impensae utiles), which are not
necessary, but still enhance the property and increase its market value.
Example: building a bathroom in a house without one. In the important
decision in Nortje v Pool 1966 (A) it was said that useful improvements must
be of a physical nature, and not in the form of purely financial expenditure.
(cc) Luxurious improvements or expenses (impensae voluptuariae), which are
neither necessary nor useful, and even when they might increase the market
value they are undertaken purely for personal whim or taste. Example:
replacing the seat covers in a car with white fluffy woollen covers.
(b) Absence of legal cause
If there is a valid legal cause for the claimant’s action (such as a contract or a service or
agency relationship), the plaintiff must claim her compensation on the basis of that contract
or obligation, and no enrichment action is available. The enrichment action is aimed
specifically at the situation where property was improved without legal cause, so that the
plaintiff has no legal action available. See Singh v Santam Insurance 1997 (A); Buzzard
Electrical (Pty) Ltd v 158 Jan Smuts Avenue Investments (Pty) Ltd 1996 (A).
(c) Enrichment at the plaintiff’s expense
The third requirement is that the defendant must be enriched at the plaintiff’s expense,
which means that the plaintiff is poorer and the defendant richer as a result of the plaintiff’s
action. The requirement is that the defendant’s enrichment and the plaintiff’s loss or expense
must be directly related – the one must be caused by the other. See Buzzard Electrical (Pty)
Ltd v 158 Jan Smuts Avenue Investments (Pty) Ltd 1996 (A).
Page 244
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 21 of 23
(d) Application to possession and holdership
It was stated above that this remedy is provided especially for people who improve property
of others, and therefore it is of special interest to possessors and holders of property, both
lawful and unlawful. It is not aimed at protecting a right, but rather at ensuring that anybody
who improves another person’s property is compensated; therefore it can be used by both
lawful and unlawful controllers of property. However, the calculation of the compensation is
affected by the situation of each individual plaintiff.
14.9.3 Nature and extent of relief
The plaintiff who is awarded an enrichment action has three different forms of relief
available, but not all of them need necessarily apply in every case.
Relief available in enrichment action
(a) A claim for payment of compensation, which is the sum, calculated when the
action is instituted, by which the defendant is enriched or the plaintiff
impoverished (whichever is the smaller of the two).
(b) In some cases the plaintiff may be allowed to simply remove the
improvements (in the form of attachments), if that is feasible and does not
cause damage to the property (ius tollendi).
(c) In some cases the plaintiff’s claim might be enforced by way of a right of
retention or lien, which allows the plaintiff to retain control of the
defendant’s property until the compensation is paid. (The liens are discussed
in chapter 19.)
Because the claim for compensation is based upon unjustified enrichment, necessary
expenses can usually be claimed in full. In the case of useful expenses the amount of
enrichment is determined by the actual increase of the market value. As a rule luxurious
expenses cannot be recovered at all, since they would in all probability not have been
undertaken by the owner – if the owner accepts the improvements the court may grant
some measure of relief. In general the courts take note of the question whether the owner
would have incurred the same useful and luxurious expenses, because it is unfair to expect
an owner to accept and pay for foolish and ineffective expenses. If improvements were
undertaken against the express wish of the owner they will still be reasonable (and
compensated for) if it is clear that the owner would have undertaken exactly the same
expenses if she were there.
If no compensation is available the plaintiff might have the right (ius tollendi) to remove
the improvements, provided such removal is possible and
Page 245
will not damage the property. As a rule the right of removal has to be exercised while the
improver is still in control of the property.
14.10 Constitutional protection of rights in property
Definition
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 22 of 23
Constitutional protection of rights in property derives from section 25 of the 1996
Constitution. This guarantee protects property rights from unlawful interference by
the state.
Rights in property are guaranteed by the Constitution, which means that these rights are
protected against unlawful interference by the state. State interference with property is
allowed only within the framework of a properly promulgated statute or other law of general
application, and even statutes may be declared invalid by the constitutional court if they are
in conflict with the Constitution. (The constitutional protection of property is discussed in
chapters 21 and 22). The rights in property protected by the Constitution include not only
ownership but all rights in property, including at least lawful holdership of corporeal and
incorporeal things. Unlawful holdership and possession cannot qualify as rights at all, and
will not necessarily be included in this protection, although some unlawful occupiers of land
could be protected in terms of the Constitution and land reform laws. These cases are
discussed in chapters 10 and 23.
14.11 Land reform
Definition
Land reform is a process whereby a specific category of property rights, namely
rights in land, are restored, upgraded or redistributed in order to rectify the
imbalance in the current distribution of land rights.
Land reform is a government programme aimed at rectifying the imbalance in the current
distribution of land rights. It can assume the form of restoration of land rights which were
infringed upon during the apartheid era, or upgrading of land rights which were neglected or
awarded an inferior status during the apartheid era, or the redistribution of land rights to
those who have no such rights at all. These actions are undertaken in accordance with
specific laws promulgated specifically for the purpose, and they either create new land rights
or improve existing ones, thereby improving the situation of those who benefit from the
programme of land reform. (The laws and procedures by which land reform is promoted are
discussed in chapter 23.)
Page 246
Summary
The protection of possession and holdership is concerned with remedies which can
be used to protect property rights or to control the effects of unlawful actions
against other property relations.
Remedies for the protection of possession and holdership are sometimes aimed
at the protection of property rights, and then they require proof of such a right. At
other times these remedies are aimed at preventing and discouraging unlawful
self-help with regard to property relations, and then they do not require proof of a
right; for the sake of peace and order even unlawful property relations are
protected against self-help.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap14
Page 23 of 23
A declaratory order is a court order, based upon proof of an actual dispute
about rights, in which the rights and obligations of the parties are set out by the
court in order to prevent infringements.
An interdict is a summary court order, based upon proof of a right and ongoing
or imminent infringement, in which the court orders one party to stop or refrain
from such infringement.
The spoliation remedy is a summary remedy granted upon urgent application in
order to summarily restore control which has been spoliated unlawfully, without
investigating the merits of the parties’ rights to the property.
The possessory action is an action, based upon a stronger right to the property
in question, with which the plaintiff can claim either the return of the property or
its value, as well as additional damages, from any defendant with a weaker right
who was responsible for the unlawful removal of the property from the plaintiff’s
control.
The claim for delictual damages is an action, based upon a patrimonial interest
in property, for damages in compensation for loss caused by an unlawful and
culpable action of the defendant.
The condictio furtiva is a delictual action used by the owner or a lawful holder of
property that was stolen and subsequently lost or destroyed, to claim the highest
value of the property since the theft from the thief or her heirs.
The extended enrichment action is based upon the principle that unjustified
enrichment should be compensated, and allows the plaintiff to recover
compensation from an owner who was enriched when her property was improved
without just cause by the plaintiff.
Page 247
Rights in property, including all forms of lawful control of corporeal things, are
guaranteed against unlawful state interference by section 25 of the Constitution.
Land reform is a process by which new land rights are created and existing land
rights improved in order to rectify the imbalance in land distribution and access to
land.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap14.xhtml
24-Jul-18
Chap15
Page 1 of 3
Page 248
Chapter 15
Termination of possession and holdership
15.1
15.2
15.3
15.4
15.5
15.6
15.7
Introduction
Death of the subject
Object destroyed or lost
Physical element terminated
Mental element terminated
Transfer of control
Loss through operation of law
Summary
Overview
When is possession (or holdership) terminated?
•
What happens when the possessor (or holder) dies?
•
Is possession (or holdership) lost when the object is destroyed or lost?
•
Can possession (or holdership) be retained if one of the elements (physical or mental)
•
is terminated?
How is possession (or holdership) affected when it is transferred to another person?
•
Can possession (or holdership) be lost when the elements (physical and mental) are
•
still present?
15.1 Introduction
Both possession and holdership are terminated as soon as one or both of their elements (the
physical and mental elements) are lost permanently, and sometimes even while both
elements are still present. The primary rule is that both elements must be present for
possession and holdership to be retained.
Page 249
Causes of loss of possession and holdership
(a) The possessor or holder dies.
(b) The thing which is possessed or held is destroyed or permanently lost.
(c) The physical element of control is lost.
(d) The mental element of control is lost.
(e) Control is transferred to someone else.
(f)
Possession or holdership is terminated by operation of law.
15.2 Death of the subject
A person’s possession or holdership of a thing is lost when that person dies, because both
the physical and mental elements of control are terminated when the person is dead. Of
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap15.xhtml
24-Jul-18
Chap15
Page 2 of 3
course the thing is usually still controlled by somebody, but no longer by the person who
died, and therefore that person’s possession or holdership is terminated summarily upon
death.
15.3 Object destroyed or lost
|Possession and holdership are lost when the thing which was possessed or held is destroyed
or lost permanently, because the physical element of control is thereby terminated. With
reference to the test of effective control set out in chapter 13, it may be said that effective
control becomes impossible when the object is destroyed or lost permanently, since the
person who had possession or holdership is then no longer in a position to resume control of
the object at will. Of course this principle applies to movables only, since immovable
property (land) cannot be lost or destroyed in its entirety. A building or other structure
permanently attached to land (see chapter 8 with regard to attachments to land) can be
destroyed, but even then the land itself, which is the principal thing, will remain as object of
possession or holdership.
Possession and holdership are terminated only if a movable object is lost permanently.
The mere misplacement of an object does not cause such loss, unless the possessor or
holder gives up and abandons all hope and intention of finding it again. Even then
possession and holdership might not be lost, depending upon the place where the object was
lost. If it was lost on a public beach loss would result more easily than when it is merely lost
somewhere in one’s storeroom.
15.4 Physical element terminated
Possession or holdership is lost when the possessor or holder permanently loses or abandons
the physical element of physical control. It is immaterial
Page 250
whether this loss of physical control was in accordance with or against the person’s will – as
long as the loss of physical control is final, possession or holdership is terminated. In this
regard it is important to note that the physical element of control is lost permanently, and
control is accordingly terminated, when the person in control dies or when the object is
destroyed or lost permanently, as set out in the paragraphs above.
The indicators used to test for effective control (see chapter 13) may be used to
determine whether the physical aspect of control was lost in a specific case. Obviously
movables can be lost more easily than immovables, and mere temporary interruption of
control will not amount to loss if the person can resume it at will. Every individual case will
have to be decided with specific reference to the nature of the object, the purpose for which
it is used, custom with regard to its use and the circumstances of the case.
15.5 Mental element terminated
Possession or holdership is terminated when the mental element of control is lost
permanently. As was explained in chapter 13, the presence of this mental element is a
factual matter which can be ascertained with regard to either a person’s declared intention
or the person’s outward actions from which such intention may be deduced. In this regard it
is important to note that control is terminated by the loss of mental intention to control
when the subject dies, as explained in the paragraphs above.
15.6 Transfer of control
Possession or holdership of an object is lost when control of the object is transferred to
someone else by one of the derivative methods. In order to transfer control to someone else
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap15.xhtml
24-Jul-18
Chap15
Page 3 of 3
it is necessary that physical control must be transferred to the other person, coupled with
the reciprocal intention to transfer and to accept whatever right to the object is transferred
(ownership or lawful holdership). (See chapter 9). Inevitably this process terminates both
the physical and the mental elements of the possession or holdership relation which existed
before, and therefore possession or holdership is terminated.
15.7 Loss through operation of law
Possession or holdership can also be destroyed or lost by operation of law, regardless of the
presence or absence of either the physical or the mental elements of control. In this case a
law determines that any existing property relation (including possession or holdership) is
terminated. As a general rule legislation would more likely terminate the existence of a right
like ownership or some kind of lawful holdership, but it is less likely that legislation would
Page 251
end (or attempt to end) a factual relation such as actual physical control of an object.
Summary
Possession and holdership are terminated when one or both of the essential
elements of control are lost.
Death of the subject is an example of a case where possession or holdership is
lost because both the physical and the mental elements of control were
terminated.
Loss or destruction of the object is an example of loss of possession and
holdership because of the termination of the physical element of control. Apart
from destruction or permanent loss of the object, possession and holdership are
also terminated when the physical element of control is terminated permanently in
any way which makes it impossible for the subject to resume effective control at
will.
Possession or holdership is lost permanently whenever the mental element of
control is terminated or abandoned permanently and with the required publicity.
Transfer of control to another person involves the loss of both the physical and
mental elements of control, and therefore terminates possession or holdership.
Possession and holdership can be terminated by operation of law without any
change in the actual physical or mental aspects of control taking place.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap15.xhtml
24-Jul-18
PartIV
Page 1 of 1
Page 253
Part IV
Limited real rights and other rights in property
Chapter 16:
Introduction to limited real rights and other rights in property
Chapter 17:
Servitudes and restrictive conditions
Chapter 18:
Real security: pledge and mortgage
Chapter 19:
Real security rights created by law
Chapter 20:
Other property rights
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/PartIV-print-1536070190.xhtml
04-Sep-18
Chap16
Page 1 of 3
Page 255
Chapter 16
Introduction to limited real rights and other rights in
property
16.1
16.2
16.3
16.4
16.5
Introduction
Overview of real rights in property
Limited real rights
Other rights in property
Customary law rights in property
Summary
Overview
•
Which rights in property are discussed in chapters 16 to 20?
•
How do these rights relate to the other sections of the book?
•
What is the nature of these rights?
16.1 Introduction
In chapters 1, 3, 4 and 12 the classification of rights in property was set out briefly. For
purposes of this section, which deals with limited real rights and other rights in property, it is
necessary to refer to that classification once again. Some of the rights in property, known as
ownership and related rights, are discussed in chapters 4 to 11. In this section, chapters 16
to 20, rights in property that have to be distinguished from ownership are discussed
together. It is important to understand the reasons why these rights are grouped together in
this section.
16.2 Overview of real rights in property
The one thing which all property rights discussed in this book have in common is that they
are rights in property, all of which are protected in terms of section 25 of the Constitution.
Page 256
|
Definition
Rights in property include all rights, claims and interests with regard to property,
both corporeal and incorporeal, that form part of a person’s wealth or estate and
are recognised and protected either by private law or by the constitutional
property guarantee in section 25 of the Constitution.
All the rights in property that are important for this course can be classified in two main
groups, namely ownership and the rest. Ownership is discussed in chapters 4 to 11
(although some of the rights in chapter 6 are creditor’s rights in property, which are
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap16.xhtml
24-Jul-18
Chap16
Page 2 of 3
discussed there only because they relate so closely to the forms of ownership in that
chapter). All other property rights are discussed in chapters 16 to 20. Some of the rights
that feature in this section of the book are also discussed in chapters 12 to 15 in the form of
lawful holdership, but that was just to distinguish them from unlawful property relations. The
most important common feature of the rights in property in this section of the book is,
therefore, that they are distinguished from ownership for one reason or another. Some (the
limited real rights) are distinguished from ownership because they are limited property rights
with regard to things that belong to someone else, whereas ownership is a property right in
one’s own property. Other rights in property are discussed in this section (in chapter 20)
because they do not fit into the traditional classification, or because they are mentioned only
very briefly. Most of them are creditor’s rights in property, but some of the rights in chapter
6 are similar to them (shareblock schemes, some club and retirement schemes).
Categories of rights in property in this book
(a) Ownership (chapters 4-11)
(b) Limited real rights (chapters 17-19, parts of chapter 20). (Also discussed as
lawful holdership in chapters 12-15)
(c) Other rights in property (chapter 20, parts of chapter 6)
16.3 Limited real rights
Limited real rights form a special and important category of rights in property. They are
distinguished from creditor’s rights on the one hand because they are real rights, meaning
that they create direct entitlements towards a thing, and that they are enforced against any
owner of the thing and not just against a specific debtor. On the other hand they are
distinguished from ownership because ownership is a real right with regard to one’s own
property,
Page 257
whereas limited real rights are real rights with regard to property that belongs to somebody
else. The most important limited real rights are servitudes (chapter 17) and real security
rights (chapters 18 and 19), although mineral rights and some leases of land (chapter 20)
are also limited real rights. The mineral rights and registered leases are discussed in chapter
20 rather than in chapter 17 because, although they are limited real rights, they should not
be confused with servitudes.
Places where limited real rights are discussed
(a) Chapter 1 (overview of all rights in property)
(b) Chapter 3 (distinguished from creditor’s rights)
(c) Chapter 4 (distinguished from ownership)
(d) Chapter 6 (right to extend scheme: section 25 Sectional Titles Act)
(e) Chapters 12-15 (lawful holdership)
Chapter 17 (servitudes)
(f)
(g) Chapters 18-19 (real security rights)
(h) Chapter 20 (mineral rights, registered leases)
16.4 Other rights in property
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap16.xhtml
24-Jul-18
Chap16
Page 3 of 3
Apart from ownership and limited real rights, there are other rights in property that need to
be discussed or at least mentioned in this course. Most of them are creditor’s rights with
regard to property, and since these rights are usually dealt with in courses in the law of
contract, they are just mentioned very briefly here (in chapter 20). Some of the rights
discussed in chapter 6 (shareblock schemes, some club and retirement schemes) do not
amount to ownership, and are actually creditor’s rights in property that belong in chapter 20.
They are discussed in chapter 6 because they relate so closely to the forms of ownership
that are explained there.
Nature of rights in property in chapter 20
(a) Limited real rights (mineral rights, registered leases)
(b) Creditor’s rights (other leases)
16.5 Customary law rights in property
Customary law rights in property cannot really be described as real rights or as ownership or
as limited real rights, because their nature and function are so uniquely tied in with the
social structure which underlies customary relationships. They are rights in property, but
they are unlike any of the
Page 258
other rights in property. These property rights are not discussed in this book because they
are dealt with extensively in separate courses on customary law.
Summary
The rights in property discussed in chapters 16 to 20 are characterised by their
common distinction from ownership: they are all rights in property that are not
ownership.
These rights must, therefore, be distinguished from ownership in the first place.
Secondly, some of them are forms of lawful holdership which are distinguished
from unlawful property relations in chapters 12 to 15. Thirdly, they are all rights in
property as guaranteed by the Constitution, which are discussed in chapters 21 to
24.
Some of these rights in property are limited real rights, others are creditor’s
rights in property.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap16.xhtml
24-Jul-18
Chap17
Page 1 of 24
Page 259
Chapter 17
Servitudes and restrictive conditions
17.1
17.2
17.3
Introduction
Definition of servitudes
Categories of servitudes
17.3.1 Praedial servitudes
17.3.1.1 Characteristics
17.3.1.2 Categories of praedial servitudes
17.3.2 Personal servitudes
17.3.2.1 Characteristics
17.3.2.2 Categories of personal servitudes
17.4 Interpretation of servitudes
17.5 Criterion of reasonableness
17.6 Acquisition of servitudes
17.6.1 Registration
17.6.2 Delivery
17.6.3 Legislation
17.6.4 Court order
17.7 Remedies
17.8 Termination of servitudes
17.9 Restrictive conditions
17.10 Public servitudes
Summary
Overview
What is a servitude?
•
How is ownership limited by servitudes?
•
Which entitlements does the holder of a servitude acquire?
•
What kinds of servitudes are there?
•
What is the distinction between praedial and personal servitudes?
•
What criteria are used if there is uncertainty regarding this distinction?
•
Which principles govern the exercise of servitude entitlements?
•
Page 260
•
•
•
•
•
•
•
•
•
•
What are the requirements for the creation of praedial servitudes?
Which categories of praedial servitudes are distinguished?
What are the requirements for the creation of personal servitudes?
Which categories of praedial servitudes are distinguished?
What is usufruct and what are the parties’ respective rights and obligations?
How are servitudes acquired?
Can unregistered servitudes be enforced?
What legislation applies to the acquisition of servitudes?
How are servitudes terminated?
What is the legal nature of restrictive conditions?
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
•
Page 2 of 24
How do restrictive conditions differ from servitudes?
17.1 Introduction
Ownership is never absolute or unlimited, and is limited in the interest of the community, of
neighbours (in the case of immovables) and of other holders of rights, either by statutory
provisions, or by limited real rights to the property or by personal rights against the owner
of the property (see chapters 4 and 7 above). A servitude is a good example of the way in
which an owner’s ownership is limited by the limited real right of another person in respect
of the thing.
In chapter 3 it was stated that there are a number of limited real rights that are exercised
by persons other than the owner in respect of the thing. Such limited real rights provide the
holder of the right with one or more entitlements in respect of the thing. The number of
categories of limited real rights is not restricted in South African law and, apart from the
limited real rights in common law (such as servitudes, real security rights and long-term
leases), a number of new limited real rights have been created by statute, such as the real
right to extension that the developer of a sectional title scheme can reserve in terms of
section 25 of the Sectional Titles Act 95 of 1986 (see 6.2.5 above).
17.2 Definition of servitudes
Definition
A servitude is
(a) a limited real right to the movable or immovable property of another person
(owner),
Page 261
(b)
(c)
which grants the entitled person (holder of the servitude) certain specific
entitlements (usually the entitlements of use and enjoyment),
and these entitlements limit the entitlements of the owner in respect of the
thing in one way or another.
In Pearly Beach Trust v Registrar of Deeds 1990 (C) it was emphasised that the entitlements
of the owner are limited by the entitlements of the servitude holder on the basis of his
limited real right. The owner does not transfer his entitlements to the servitude holder, but
the granting of a servitude results in the owner’s entitlements being limited in the sense that
he may not exercise them. The holder of the servitude can acquire and exercise entitlements
resulting from his servitude in respect of the thing.
It is important to emphasise that a servitude is always a limited real right. In South
African law it is a requirement for the creation or transfer of a limited real right in immovable
property that registration in the deeds registry must take place in terms of section 63(1) of
the Deeds Registries Act 47 of 1937 (see 9.3 above). However, it often happens that a
landowner grants rights of use and enjoyment to another person by means of agreement. In
these circumstances the entitlements of use and enjoyment derive from a creditor’s right
based on the contract between the owner and the holder of the right (see, in this regard,
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
Page 3 of 24
Willoughby’s Consolidated Co Ltd v Copthall Stores Ltd 1918 (A)). If these entitlements meet
the requirements of the subtraction from the dominium test (see 3.2.3 above), the right can
be registered and, in this way a servitude (a limited real right) is created. The difference
|between a servitude established by registration and an unregistered agreement is that, in
the first case, the entitlements are based on a limited real right and as a real burden, they
are enforceable against the owner, his legal successors and all third parties, but, in the
second case, they are based on creditor’s rights and as such are enforceable against the
current owner only (and not his successors in title).
It is also possible for the rights to be so closely related to registered limited real rights
that, even though they are creditor’s rights, they may be registered together with the limited
real right in terms of the proviso contained in section 63(1) of the Deeds Registries Act 47 of
1937. In these circumstances the creditor’s rights are not transformed into limited real rights
through registration, but they remain creditor’s rights which are registered as exceptions to
the rule.
Page 262
Example
A, the owner of a farm, concludes an agreement with B, his neighbour, that:
(a) B and all his successors in title will be allowed to use an access road over A’s
farm indefinitely. The intention is that this agreement will be enforceable
also against A’s successors in title.
(b) B, in his personal capacity, will maintain the road for as long as he is the
owner of the neighbouring farm, provided that A, in his personal capacity,
contributes to the maintenance costs proportional to his use of the road.
This right of way of B over A’s land ((a) above) is a registrable right, since it
meets the requirements of the subtraction from the dominium test. After
registration a servitude of right of way is established in favour of B, and this
servitude is a limited real right. The servitude is enforceable not only between A
and B, but by B and all B’s successors in title, against A and all A’s successors in
title and all third parties.
If the condition pertaining to the maintenance is also registered, it remains a
creditor’s right, since it is enforceable only between A and B on the basis of the
agreement between A and B. It can be registered only because it is related to the
registrable limited real right.
If neither the right of way nor the condition pertaining to maintenance is
registered, no servitude or limited real right is established. The creditor’s rights
arising from the agreement between A and B ((a) use right and (b) maintenance),
however, result in A’s entitlements (as owner) being limited by B’s entitlements
(arising from his rights in terms of the contract). The limitations do not burden the
property and, in this instance, the legal successors of A and B and third parties are
not bound by the agreement between A and B (except for the doctrine of notice:
see 17.6.1 below).
If a registered servitude is cancelled by mistake, it is still valid and enforceable, as decided
in Cape Explosives Works Ltd v Denel (Pty) Ltd 2001 (SCA). The reason for this lies in the
application of a negative registration system in South Africa, which does not guarantee the
correctness of the registered data or documents (see 9.3.2(b) above). Such an error can be
rectified by a court order and the servitude as limited real right is still enforceable.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
Page 4 of 24
In general, servitudes have the following characteristics:
(a) The holder of the servitude acquires a limited real right in the property of another legal
subject, which he can protect and enforce with a real
Page 263
(b)
(c)
(d)
(e)
remedy (the actio confessoria). The servitude is enforceable against the owner of the
property and all his successors in title.
The holder of the servitude cannot expect the owner of the property to do anything
positively as a result of the servitude. The servitude grants only entitlements of use
and enjoyment to the holder of the servitude which must be respected and tolerated by
the owner.
No person can acquire a servitude over his own property.
The holder of a servitude may not transfer the servitude to another person – Lorentz v
Melle 1978 (T) and Erlax Properties (Pty) Ltd v Registrar of Deeds 1992 (A) (see
17.3.1.1(c) and 17.3.2.1(b) below).
The entitlements must be exercised reasonably by the holder of the servitude. The
criterion is the actions of a reasonable man (bonus paterfamilias) – see 17.5 below.
17.3 Categories of servitudes
Categories
(a) Praedial servitudes
(b) Personal servitudes
17.3.1 Praedial servitudes
Definition
A praedial servitude is
(a) a limited real right
(b) in the land of someone else (the servient tenement)
(c) which grants the holder of the servitude certain entitlements of use and
enjoyment
(d) in his capacity as owner of the dominant tenement.
17.3.1.1 Characteristics
A praedial servitude has the following characteristics:
(a) It can be granted only in respect of immovable property (hence the term praedial
servitude).
(b) There are always two pieces of land involved, namely a dominant and a servient
tenement. The holder of the servitude is the owner of the dominant tenement, and he
exercises the entitlements of use and enjoyment resulting from the servitude with
regard to the servient tenement in his
Page 264
capacity as owner of the dominant tenement. The owner of the servient tenement must
tolerate this exercise of entitlements by the holder of the servitude.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
Page 5 of 24
The limited real right vests in the holder of the servitude in his capacity as owner of the
dominant tenement (and not in his personal capacity). This means that the successors
in title of the owner of the dominant tenement are automatically entitled to the
servitude – the servitude ‘runs with the land’. A servitude is not transferable in the
sense that it is transferred from one person to another.
The burden on the servient tenement is transferred automatically to the new owner (in
his capacity as owner) when the land is transferred. It is therefore a burden on the
property and enforceable against the owner of the servient tenement and all his
successors in title.
In principle praedial servitudes are perpetual, but in terms of section 76(1)bis of the
Deeds Registries Act 47 of 1937 it can be made subject to a resolutive condition or
term.
The dominant and servient tenements must be located next to or near each other.
A benefit which increases the value and usefulness of the dominant tenement must
vest in the owner of the dominant tenement and his successors in title. In principle,
this must hold a perpetual benefit for the dominant tenement. This is called the utilitas
requirement. In De Kock v Hänel 1999 (C) it was decided that a praedial servitude
must offer a permanent benefit to the dominant tenement and not merely serve the
personal pleasure or caprice of the owner of the land.
In principle servitudes are indivisible. The only exception is in the case of subdivision of
the servient tenement which can lead to partial liberation since not all parts of the
servient tenement normally serve the dominant tenement, or not all parts of the
dominant tenement normally derive benefit from the servitude.
The entitlements of the servitude holder can never be such that the owner of the
servient tenement is compelled to perform a positive act. There can only be an
obligation on the owner of the servient tenement to tolerate the holder of the
servitude’s entitlements (positive servitude) or to allow a certain situation on the
servient tenement to continue for the benefit of the holder of the servitude (negative
servitude). See, in this regard, particularly Cillie v Geldenhuys 2009 (SCA).
It usually comes into being by registration in the deeds registry as a conditional clause
in the title deed of the servient tenement. It can also be created by means of a notarial
deed registered in the deeds registry and by making an endorsement against the title
deed of the servient
Page 265
tenement (for exceptions to the requirement of registration, see 17.6.3 and 17.6.4
below).
Example
(a) A grants B, the owner of the neighbouring farm, a right of way. This implies
that A must allow B to drive over his farm (positive servitude), but B cannot
expect of A to maintain the road.
(b) A grants B the right to draw water from the fountain on A’s farm. B can
expect of A only to allow the natural situation to continue and not to
interfere with the flow of the fountain (negative servitude).
(c) If A and B should, in any of the above-mentioned circumstances, agree that
A is compelled to perform some act, this does not form part of the servitude
and grants only creditor’s rights between A and B. Such creditor’s rights are
enforceable between A and B only, except if they are registered together
with the servitude because they are related to the servitude, in which case
they remain creditors’ rights – see 3.2.3.3 above. Once registered, such
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
Page 6 of 24
creditor’s right can, in certain circumstances, bind successors in title and
third parties on the basis of the doctrine of notice – see 17.6.1 below.
17.3.1.2 Categories of praedial servitudes
The categories of praedial servitudes are unlimited. If a person acquires entitlements in
respect of the nearby land of a landowner which meet the requirements set out in 17.3.1.1
above, a praedial servitude is created as a limited real right.
Categories of praedial servitudes
A distinction is made between
(a) rural praedial servitudes;
(b) urban praedial servitudes; and
(c) statutory praedial servitudes.
Examples of rural praedial servitudes are the following:
(a) A right of way – see, in particular, Nach Investments (Pty) Ltd v Yaldai Investments
(Pty) Ltd 1987 (A). This includes the right of the owner of the dominant tenement to
drive, walk, herd cattle and transport products over the servient tenement within
reasonable bounds. It means,
Page 266
(b)
(c)
furthermore, that members of the family and visitors also have access to the dominant
tenement over the servient tenement. In Smith v Mukheiber 2001 (SCA) it was held
that every new owner in the case of a subdivision of the dominant tenement acquires
the same right of way over the servient tenement as the right of way that the original
owner of the dominant tenement exercised over the servient tenement. If it was
agreed that the owner of the servient tenement also has an obligation to maintain the
access road, this does not form part of the servitude but is merely a creditor’s right
that the owner of the dominant tenement has against the owner of the servient
tenement (see 17.3.1.1 above). Usually it is agreed that a specific route must be used.
A road of necessity is granted if a landowner can have access to his land only over the
land of a nearby landowner (see 17.6.4 below). The owner of the servient tenement
has the reasonable use of the servitude road. The erection of an electronic gate which
can also be opened by the holder of the servitude is not per se an indication of
unreasonable interference with the entitlements of the holder of the servitude –
Roeloffze NO v Bothma NO 2007 (C). In Linvestment CC v Hammersley 2008 (SCA) it
was held that a servitude over the servient tenement can be relocated without
agreement between the owner of the dominant tenement and the owner of the servient
tenement if the owner of the servient tenement can prove necessity.
A right to lead water (aqueduct) and to draw water – see, in particular, De Witt v
Knierim 1994 (A). This includes the right to water livestock on the servient tenement;
the right to lead water over the servient tenement to the dominant tenement; the right
to fetch water on the servient tenement; the right to draw fountain or river water from
the servient tenement or the right to store water (GJO Boerdery Ondernemings (Edms)
Bpk v Bloemfonteinse Munisipaliteit 1988 (A)). The holder of the servitude is entitled to
access to the servient tenement for the purpose of maintaining a water-furrow –
Zeeman v De Wet 2012 (SCA).
A right of outspan or grazing.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
(d)
Page 7 of 24
A right to fetch wood.
Examples of urban praedial servitudes are the following:
(a) The right of the holder of the servitude that his building may be supported by a
building on the servient tenement.
(b) The right of the holder of the servitude to insert a beam of his building into the building
on the servient tenement.
(c) The right of the holder of the servitude that his building may encroach on the boundary
of the two tenements.
Page 267
(d)
(e)
(f)
The right to have pipes or electrical cables installed over the servient tenement (either
above or below the ground).
The right to influence the normal flow of rain water and to divert it to the servient
tenement. In terms of the criterion of reasonableness, however, rain water must be
diverted to the street as far as possible.
Servitudes dealing with light and view. These servitudes are seldom used anymore
because building regulations have solved many of the problems in respect of light and
view.
Examples of statutory servitudes are the following:
(a) The right to dam, drain, store and lead water in terms of the National Water Act 36 of
1998.
(b) The servitude in respect of support in terms of section 28 of the Sectional Titles Act 95
of 1986.
(c) The right to extend a scheme in terms of section 25 of the Sectional Titles Act 95 of
1986 is extraordinary (see 6.2.5 above). It is exercised by a particular person in his
personal capacity (a characteristic of a personal servitude), but it is transferable.
17.3.2 Personal servitudes
Definition
A personal servitude is
(a) a limited real right
(b) to the movable or immovable property of someone else
(c) which grants entitlements (use and enjoyment rights) in respect of the thing
(d) to the servitude holder in his personal capacity.
17.3.2.1 Characteristics
Personal servitudes display the following characteristics:
(a) A personal servitude accrues to the holder of the right in her personal capacity, but as
it is a limited real right it must meet the requirements for the creation and exercise of
limited real rights. It must therefore limit the entitlements (dominium) of the owner
and must be enforceable against the owner, his successors in title and third parties
(see 3.2.3 above, as well as Erlax Properties (Pty) Ltd v Registrar of Deeds 1992 (A)).
(b) Since it accrues to the servitude holder in her personal capacity, the servitude is not
transferable – Willoughby’s Consolidated Co Ltd v Cop
Page 268
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
(c)
Page 8 of 24
thall Stores Ltd 1913 (A) and Durban City Council v Woodhaven Ltd 1987 (A). The
holder of the servitude can allow another person to exercise certain entitlements to the
thing in terms of an agreement, but this is terminated by operation of law when the
servitude is terminated – Armstrong (Lloyds Underwriters) v Bhamjee 1991 (A).
Although it vests in the holder of the servitude in her personal capacity and is not
transferable, it is not a creditor’s right but a limited real right. The reason for this is
that the entitlements that the holder of the servitude can exercise are burdens on the
property. Consequently they limit the entitlements of the owner and his successors in
title and all third parties.
The error of confusing a personal servitude with a personal right is quite common,
and even the courts have made this error in the past, as is illustrated by the decision in
Cowley v Hahn 1987 (EC).
Cowley v Hahn 1987 (EC)
‘A usufruct is a personal right, held by the usufructuary only, to the use of the property
and its fruits. It does not diminish the rights of ownership such as a real or praedial
servitude does, and which confers on the holder of the servitude a right in the property
adverse to the dominium holder. The existence of the usufruct may well limit or restrict
the enjoyment of the owner of certain rights of possession, and of the benefits accruing
from the property, but it does not diminish in any way any of the rights of ownership or
dominium.’
The decision in Cowley v Hahn is wrong in two respects:
(aa) A usufruct does constitute a burden on the property which limits the ownership
(the dominium) of the owner, her successors in title and third parties. It confers
entitlements to the usufructuary in respect of the thing which, in all respects,
meet the requirements of the subtraction from the dominium test (see 3.2.3
above).
(bb) Since it limits the owner’s dominium and is enforceable against his successors in
title and third parties, it is a limited real right and not a creditor’s right (personal
right), although it vests in the holder of the servitude in his personal capacity.
See in the regard especially the decision in Erlax Properties (Pty) Ltd v Registrar
of Deeds 1992 (A).
The confusion which led to this decision in Cowley v Hahn was caused by two
different uses of the word personal: in the phrase personal right, the word
personal means that the right can be
Page 269
(d)
(e)
enforced against only one person, the debtor. In the phrase personal servitude,
the word personal means that the servitude (which is a limited real right) can be
enforced by only one person, the servitude holder against the owner of the thing,
all the owner’s successors in title and third parties.
A personal servitude can be granted in respect of movable or immovable property.
Since it vests in the holder of the servitude in her personal capacity, there is no
dominant tenement. Even in the case where the holder of the servitude is the owner of
immovable property, ownership of this property is irrelevant and the limited real right
vests in her not in her capacity as the owner of immovable property, but in her
personal capacity.
In the case of a servitude over movable property the holder of the servitude may,
usually, not consume the property but must return it after termination of the servitude
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
(f)
(g)
Page 9 of 24
with its essence intact (salva rerum substantia), taking normal wear and tear into
consideration. It can also be granted in respect of consumable movable property
(quasi-usufruct), in which case different principles are applied (see 17.3.2.2(a) below).
A personal servitude in respect of an incorporeal movable thing (see 2.1 and 2.3.1
above) is also possible, for instance a use right in respect of business rights –
Armstrong (Lloyds Underwriters) v Bhamjee 1991 (A).
In the case of movable property, a personal servitude can be granted orally. Usually
corporeal movable things must be delivered to the holder of the servitude. However, in
the case of an oral servitude, it is difficult for the holder of the right to satisfy the
burden of proof – Du Randt v Du Randt 1992 (E). Personal servitudes in respect of
immovable property are established by registration of the servitude in the deeds
registry.
Personal servitudes terminate at the death of the holder of the servitude or on
completion of the term for which the servitude was granted (whichever comes first). In
the case of the servitude holder being a legal person, the personal servitude lapses
after 100 years if no specific term is set.
17.3.2.2 Categories of personal servitudes
The categories of personal servitudes are also unlimited, and if entitlements exercised by the
holder of a right comply with the requirements set out in 17.3.2.1, there is an indication that
the holder of the right exercises a personal servitude.
Page 270
Categories of personal servitudes
A distinction is made between:
(a) Common law personal servitudes (usufruct; use; habitation).
(b) Servitudes which resemble real servitudes but which vest in the holder of the
right in his personal capacity.
(c) Statutory personal servitudes.
(a) Common law personal servitudes
Common law personal servitudes
(aa) Usufruct
(bb) Use
(cc) Habitation
(aa) Usufruct
Definition
Usufruct is a personal servitude which, as a limited real right, grants the holder
the right to use someone else’s property (including the fruits) and to return the
thing substantially intact to the owner on termination of the usufruct.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
Page 10 of 24
(aaa) Requirements in respect of the property
(i) Usufruct can be granted in respect of movables or immovables or a combination of
both.
Example
A dies. In his will he leaves his farm with the cattle and implements to his
•
son, subject to the lifelong usufruct of A’s wife. This implies that A’s wife
may use the farm for as long as she lives and is entitled to the yield of the
farm, although A’s son is the owner of the farm.
B is the owner of a sectional title unit in an office building which is, fully
•
furnished and equipped as an attorney’s office, rented out for a period of 10
years. B donates the furnished sectional title unit to his son C (who is busy
studying law) subject to a usufruct of 10 years in favour of B’s daughter D.
This means that C is the owner of the sectional title unit, but that D is
entitled, for a period of 10 years, to the rent (civil fruits).
Page 271
(ii) Usufruct can be granted in respect of both non-consumables and consumables. In the
latter case, which is known as quasi-usufruct, ownership of the consumables vests in
the usufructuary together with the obligation to return property of equal quantity and
quality to the owner upon termination of the usufruct.
(iii) Usufruct can be granted in respect of minerals which renew themselves (like salt), in
which case the minerals become the property of the usufructuary once collected. In the
case of minerals which do not renew themselves (like coal), the usufructuary is entitled
to the interest resulting from the investment of the proceeds.
(iv) Usufruct can also be granted in respect of incorporeal things (see 2.1 and 2.3.1
above), for instance usufruct in respect of shares in a company (Ben-Tovin v Ben-Tovin
2001 (C)).
(bbb) The content of the right
(i) The primary entitlement of a usufructuary is the use and enjoyment of the thing.
(ii) The usufructuary is entitled to the fruits of the thing. By collection he becomes owner
of certain fruits (for instance fruits from a tree or rent of property), while he becomes
owner of other kinds of fruits by separation (for instance interest on investment or the
small of animals).
(iii) The use, enjoyment and acquisition of fruits must take place within reasonable limits
(see 17.5 below).
(iv) Usufruct is not transferable, although certain entitlements resulting from the usufruct
can be exercised by a third party in terms of an agreement between the usufructuary
and such third party. A usufructuary may, for instance, lease out the farm or grant a
right of grazing to another person and keep the rent or compensation himself, but this
exercise of the entitlement lapses on termination of the usufruct.
(v) A usufructuary may mortgage the immovable property or pledge movable property
with the consent of the owner.
(vi) A usufruct can be granted conditionally, for instance subject to the personal occupation
of the property by the usufructuary.
(ccc) Obligations of the usufructuary
(i) A non-consumable thing must be returned substantially intact (salva rerum substantia)
to the owner upon termination of the usufruct, allowing for reasonable wear and tear.
In the case of consumables things of equal quantity and quality must be returned.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
Page 11 of 24
(ii) The usufructuary must use the thing reasonably and must maintain the thing with the
necessary care.
Page 272
(iii) In the case of movables the usufructuary must compile an inventory of all things
subject to the usufruct.
(iv) If required by the owner, the usufructuary must provide security as guarantee that the
thing will be returned to the owner substantially intact on termination of the usufruct.
(v) The usufructuary is obliged to maintain the thing at his own cost, except in cases
where the owner undertakes or consents to pay the maintenance costs. Extraordinary
expenses relating to the maintenance of the thing (such as replacing a roof of a house
that is in danger of collapsing) can be reclaimed by the usufructuary from the owner.
Ordinary maintenance expenses, such as rates, painting of a house or the service of a
vehicle, cannot be reclaimed. Useful and luxurious expenses will not be reclaimable
either.
(bb) Use
Definition
Use is a limited real right in terms of which the holder of the right acquires the
entitlement to use the property for the benefit of himself and his household while
keeping it substantially intact.
(i) Use is a more limited right than usufruct. The entitlements of the use right may not be
exercised by anyone else than the holder of the servitude.
(ii) The user is entitled to collect as much fruit as is necessary for his and his household’s
daily consumption. Fruits may not be sold or given to third parties.
(iii) The thing must be returned to the owner substantially intact on termination of the use
right.
(iv) Use may be granted in respect of movables (for instance farming implements) or
immovables (for instance a sectional title unit).
(v) In National Stadium South Africa (Pty) Ltd v Firstrand Bank Ltd 2011 (SCA) it was held
that the use of a name for a stadium can be registered as a personal servitude.
(cc) Habitation
Definition
Habitation is a limited real right in terms of which the holder of the right is entitled
to occupy a home belonging to the owner while leaving it substantially intact.
Page 273
(i) Unlike usufruct and use, the holder of the right is not entitled to fruits.
(ii) The holder of the right may allow third parties to exercise certain entitlements resulting
from the right to occupation in terms of an agreement, but the personal servitude itself
is not transferable.
(iii) In Kidson v Jimspeed Enterprises CC 2009 (NGP) it was decided that the habitation
right is not automatically terminated when the building it pertains to is destroyed. The
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
Page 12 of 24
right ‘revives’ when the building is repaired or replaced, and the landowner must allow
rebuilding. Unless it is clear that the holder of the right abandons it, the right of
habitation does not terminate purely because of temporary (even lengthy) absence.
(iv) Alienation or donation of a servitude of habitation must be in writing, as the right can
only be created by registration in a deeds registry – Janse van Rensburg v Koekemoer
2011 (SG).
(b) Servitudes which resemble praedial servitudes
A right which resembles a praedial servitude can in fact be a personal servitude if the right
can be exercised only by the holder of the servitude in his personal capacity. It is still a
limited real right since it can be enforced against the owner and all his successors in title,
but it vests in the holder of the servitude in his personal capacity and not in his capacity as
owner of a dominant tenement.
Example
A grants B, the owner of the neighbouring farm, in his personal capacity, a lifelong
right of aqueduct over A’s farm. This right of aqueduct is enforceable against A,
his successors in title and all third parties after registration (it is a limited real
right). However, since B is the holder of the right in his personal capacity, and his
successors in title do not become servitude holders in his stead, it is a personal
servitude. B’s ownership of his farm is irrelevant in this case, since no dominant
tenement is required.
(c) Statutory personal servitudes
Examples of statutory personal servitudes are:
(aa) A right to install electrical cables over land – section 19 of the Electricity Act 41 of
1987.
(bb) A right to extend in terms of section 25 of the Sectional Titles Act 95 of 1986. Although
this right vests in a particular servitude holder, it is transferable, unlike other personal
servitudes.
Page 274
17.4 Interpretation of servitudes
It is sometimes difficult to establish whether a servitude agreement or will creates a praedial
or a personal servitude. It is therefore important that a servitude agreement or will should
be drafted in language which makes the parties’ intention clear – see, in particular,
Willoughby’s Consolidated Co Ltd v Copthall Stores Ltd 1918 (A).
Example
A grants B a right of aqueduct over his farm to B’s neighbouring farm. If the right
of aqueduct was granted to B in his personal capacity, it is a use right resulting
from a personal servitude and, after registration, it is enforceable against A, his
successors in title and third parties. However, if the right of aqueduct was granted
to B and his successors in title in their capacity as owners of the dominant
tenement, it is a praedial servitude and, after registration, it is enforceable against
A and his successors in title as owners of the servient tenement.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
Page 13 of 24
If there is doubt whether a servitude is praedial or personal in nature, the following rules
and presumptions apply (Hotel De Aar v Jonordon Investment 1972 (A)):
(a) The general rule is that servitudes should be interpreted restrictively – Glaffer
Investments (Pty) Ltd v Minister of Water Affairs and Forestry 2000 (T). The onus of
proof is on the person alleging that a servitude exists to prove it on a balance of
probabilities, since there is a rebuttable presumption that ownership is unencumbered.
(b) In terms of the rules of interpretation, words are given their ordinary, grammatical
meaning.
(c) If there is doubt as to the nature of the agreement between the parties, that is
whether they intended to create creditor’s rights (personal rights) only between the
parties or whether they intended to create a servitude after registration, the rebuttable
presumption that they intended to create a personal right (the least encumbering
interpretation) applies.
(d) In the case where there is doubt whether a praedial or a personal servitude was
created, the rebuttable presumption that a personal servitude was created (the least
encumbering interpretation) applies.
(e) The least encumbering interpretation is followed only where there is uncertainty – De
Kock v Hänel 1999 (C).
17.5 Criterion of reasonableness
The criterion of reasonableness in the exercise of the entitlements of servitudes means that
the holder of the servitude must exercise the entitlements
Page 275
within reasonable bounds (civiliter modo), while the owner must tolerate it within reasonable
bounds. As in the case of neighbour law, the yardstick is the way in which the reasonable
man (bonus paterfamilias) would have acted. The balancing of the interests of both parties
is, therefore, always the criterion. This has the following implications:
(a) The owner of the land is entitled to use his land in the normal manner, provided this is
not in conflict with the entitlements of the servitude holder – De Witt v Knierim 1991
(C).
(b) The holder of the servitude is entitled to exercise his entitlements within reasonable
bounds (civiliter modo) – Brink v Van Niekerk 1986 (T). However, if there is a conflict
of interests, the interests of the holder of the servitude will have precedence over that
of the owner, subject to the criterion of reasonableness – Kakamas Bestuursraad v
Louw 1960 (A).
(c) Where there is no uncertainty in the wording of a servitude regarding the exercise of
specific rights of use and enjoyment, such rights will not be in contradiction with the
civiliter modo principle – De Kock v Hänel 1999 (C).
17.6 Acquisition of servitudes
Ways of acquisition
(a) Registration of praedial and personal servitudes in respect of immovable
property in terms of the Deeds Registries Act 47 of 1937.
(b) Delivery in the case of personal servitudes in respect of movables.
(c) Statutory establishment.
(d) Creation by court order.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
Page 14 of 24
17.6.1 Registration
Limited real rights in respect of immovable property are established in terms of section 63
(1) of the Deeds Registries Act 47 of 1937 by means of registration thereof in the deeds
registry (see 9.3 above; for exceptions to the requirement of registration, see 17.6.3 and
17.6.4 below).
Willoughby’s Consolidated Co Ltd v Copthall Stores Ltd 1918 (A)
‘Now a servitude, like any other real right, may be acquired by agreement. Such an
agreement, however, though binding on the contracting parties, does not by itself vest
legal title to the servitude in the beneficiary, any more than a contract of sale of land
passes the dominium to the
Page 276
buyer. The right of the beneficiary is to claim performance of the contract by delivery of
the servitude, which must be effected coram lege loci by an entry made in the Register
and endorsed upon the title deeds of the servient property. Whether a contractual right
amounts in any given case to a servitude – whether it is real or only personal – depends
upon the intention of the parties to be gathered from the terms of the contract construed
in the light of the relevant circumstances. In case of doubt the presumption will always be
against a servitude, the onus is upon the person affirming the existence of one to prove
it.’
From the above quotation it becomes clear that an agreement creating a servitude between
two parties and which is not registered, results only in creditor’s rights between the parties,
which are not enforceable against their successors in title or third parties. In Van den Berg v
Van Tonder 1963 (T) it was decided that, in such a case, the owner of the servient tenement
must tolerate the other person’s entitlement to use, must co-operate in the registration of
the servitude (if the parties had intended that registration take place) and is liable to pay
compensation if he does not perform.
Third parties are usually not bound by unregistered servitutal agreements between the
contracting parties. However, in terms of the doctrine of notice a third party (as successor in
title of the owner of the servient tenement) who had knowledge (real or constructive) of the
agreement in terms of which entitlements were granted, can be held to the terms of the
agreement (to which such successor was not a party). Before registration of the property in
the name of a new owner (who may or may not have knowledge of the unregistered
servitutal agreement) the doctrine of notice is not applicable, as the parties’ rights are
determined by the prior in tempore principle (the preference of creditor’s rights in the
sequence of the origin of such rights). In Wahloo Sand BK v Trustees Hambly Parker Trust
2002 (SCA) it was held that the doctrine of notice is applicable only in the case of an
unregistered servitutal agreement where the property is registered in the name of a new
owner with knowledge of the servitutal agreement before date of transfer of the property. It
was confirmed in Cillie v Geldenhuys 2009 (SCA) that the doctrine of notice is only
applicable to personal (creditors’) rights and not to limited real rights.
Page 277
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
Page 15 of 24
Grant v Stonestreet 1968 (A)
‘Although, unlike English Law, the doctrine of constructive knowledge has, in our law,
little or no application in enquiries of this kind, . . . the statement . . . that, if a person
wilfully shuts his eyes and declines to see what is perfectly obvious, he must be held to
have actual notice, appears to me to be sound in principle and to merit the approval of
this Court.’
The facts in Grant v Stonestreet 1968 (A) clearly illustrate the application of the doctrine of
notice. A right of aqueduct was created during 1865 by means of an agreement between the
owners of farm A (the ‘dominant tenement’) and farm B (the ‘servient tenement’), but it was
never registered in the deeds registry. The successor in title of the contracting owner of farm
B (the ‘servient tenement’) had no knowledge of the right of aqueduct and it was never
enforced against him. The next successor in title of farm B, however, did have knowledge of
the written agreement. When the owner of farm A (the ‘dominant tenement’) tried to enforce
it by means of a court order, he claimed that the right of aqueduct was only a creditor’s right
in terms of the unregistered servitutal agreement. As a creditor’s right it was enforceable
only between the original contracting parties and, in any case, it had been terminated since
the successor in title of the contracting owner of farm B had no knowledge of the agreement.
The court decided:
(a) The unregistered servitutal agreement was enforceable between the contracting
parties.
(b) Because the successor in title to the contracting owner of farm B had no knowledge of
the agreement, it was not enforceable against him. If he had had knowledge it would
have been enforceable against him in terms of the doctrine of notice.
(c) The next successor in title of farm B did have knowledge of the agreement and,
consequently, it was enforceable against him because of the doctrine of notice. The
agreement had not been terminated because of the previous owner of B’s lack of
knowledge of the agreement.
(d) The doctrine of notice would be applicable only if the contracting parties intended to
bind their successors in title.
(e) In Hassam v Shaboodien 1996 (C) it was decided that the mere fact that the purchaser
of property was aware that another person had a right to the property, was sufficient
to enforce such a right against the purchaser. It was not necessary for the third party
to prove any fraudulent conspiracy between the seller and the purchaser in order to
enforce the right against the purchaser.
Page 278
(f)
The doctrine of notice was not applicable to creditor’s rights of a purely personal
nature, but only to rights in personam ad rem acquirendam, which are rights against
an owner to obtain a real right by registration – Vansa Vanadium SA Ltd v Registrar of
Deeds 1997 (T).
Servitudes (praedial and personal) are registered in the following ways in the deeds registry:
(a) The inclusion of the entitlement or allowance resulting from a will or agreement in the
conditional clause of the deed of transfer of the immovable property that is
encumbered. This will usually be the case where the condition was established during
the transfer of the immovable property.
Example
(aa) A is the owner of two neighbouring farms X and Y. He sells farm X to B and
provides in the contract of sale that the owner of farm Y will always be
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
Page 16 of 24
entitled to draw water from the fountain on farm X. This condition is included
as a praedial servitude in the conditional clause of the deed of transfer of
farm X during registration in the deeds registry.
(bb) A provides in his will that his farm is inherited by his son C, subject to a
lifelong usufruct in favour of A’s wife B. The usufruct is included in the
conditional clause of the deed of transfer during the registration of the
transfer of the farm from A’s estate to C.
(b)
The registration of a notarial deed in the deeds registry in which the praedial or
personal servitudes are set out. A notarial deed is a written document in which the
agreement is set out and which is signed by the parties before a notary. The
registration of the notarial deed must be noted in the title deed of the servient
tenement (in the case of praedial servitudes) or the encumbered land (in the case of
personal servitudes) by means of an endorsement. In the case of praedial servitudes it
is usually also noted in the title deed of the dominant tenement, but this is not a
requirement.
17.6.2 Delivery
In the case of a personal servitude in respect of movable property the property must be
made available to the holder of the servitude in such a way that it enables him to exercise
his entitlements. The owner of the thing at all times retains the intention to be owner
(animus domini), but delivers the thing with
Page 279
the intention that the holder of the servitude can exercise his entitlements. In these
circumstances a written agreement is not required for the establishment of the personal
servitude, but an oral agreement makes it more difficult to satisfy the burden of proof – Du
Randt v Du Randt 1992 (E).
17.6.3 Legislation
(a) Prescription
In terms of section 2(1) of the Prescription Act 18 of 1943 and section 6 of the Prescription
Act 68 of 1969 a praedial or personal servitude can be established by means of prescription.
Definition
Section 6 provides:
‘Subject to the provisions of this Chapter and of Chapter IV, a person shall acquire a
servitude by prescription if he has openly and as though he were entitled to do so,
exercised the rights and powers which a person who has such a right to such a servitude
is entitled to exercise, for an uninterrupted period of thirty years or, in the case of a
praedial servitude, for a period which, together with any periods for which such rights and
powers were so exercised by his predecessors in title, constitutes an uninterrupted period
of thirty years.’
The same requirements that govern original acquisition of ownership by means of
prescription (see 8.10 above), also apply to the creation of a servitude by prescription. The
only difference is that, for the acquisition of ownership, possession in the form of possessio
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
Page 17 of 24
civilis is required while, in the case of servitudes, possession assumes the form of quasi
possessio. This means that
(i) the exercise of the entitlements of the servitude must be as if the person is entitled
thereto.
(ii) with the intention to exercise it like the holder of a servitude – Kruger v Joles
Eiendomme (Pty) Ltd 2009 (SCA).
(iii) The use of another person’s property with her consent is in contradiction to the nec
precario requirement and prescription cannot run during the period of consent – Pezula
Private Estate (Pty) Ltd v Metelerkamp 2014 (SCA).
A servitude established by prescription need not be registered in the deeds registry to have
real effect (as limited real right) in respect of successors in title of the owner of the
encumbered thing or third parties – Cillie v Geldenhuys
Page 280
2009 (SCA). To ensure legal certainty, it is, however, preferable to register such a servitude
in the deeds registry after establishment thereof (at the end of the period of prescription).
(b) Expropriation
In terms of section 25 of the Constitution and sections 4 and 5 of the Expropriation Act 63 of
1975 a servitude can be created through expropriation. The same requirements must be met
as those set for acquisition of ownership through expropriation – see 8.7 above, as well as
GJO Boerdery (Edms) Bpk v Bloemfonteinse Munisipaliteit 1988 (A).
(c) Other legislation
Other legislation in terms of which servitudes can be established include the National Water
Act 36 of 1998; the Sectional Titles Act 95 of 1986 (sections 28 and 31); the Electricity Act
41 of 1987 (section 19) and the Legal Succession to the South African Transport Services
Act 9 of 1989 (schedule 1 items 7 and 9).
17.6.4 Court order
A servitude created by prescription is often enforced by means of a court order. Similarly, a
person who neglects to register a servitude arising from an agreement, can be compelled to
do so by means of a court order. It is now accepted that the courts also have the power to
change the route of a fixed-route servitude of right of way, even against the will of the
owner of the servient tenement, if changed circumstances justify such an order: Linvestment
CC v Hammersley 2008 (SCA). Furthermore, the owner of land who does not have access to
a public road, can apply to the court for a court order to grant a way of necessity.
Definition of way of necessity
A landowner who has no or insufficient access to a public road, can acquire a way
of necessity over neighbouring land to the nearest public road by means of a court
order.
The following guidelines were laid down by precedent (Van Rensburg v Coetzee 1979 (A)):
(a) Claim to way of necessity
A landowner of landlocked land is entitled to access to the nearest public road over the land
of neighbour. This applies not only to land without any access to a public road, but also
where available alternative routes are not
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
Page 18 of 24
Page 281
economically satisfactory. It is not relevant whether the reason for the way of necessity
arose recently or whether it has existed for some time.
(b) The nature of way of necessity
The court can, depending on the circumstances, issue an order that the way of necessity
may be used only in emergency situations (ius viae precario) or on a continuous basis (ius
viae plenum). Because of the requirements of modern methods of farming it is, however,
unlikely that a route will be needed only in emergency situations.
(c) Determination of land over which way of necessity runs
The general principle that applies is that the nearest route, causing the least amount of
damage or burden to the owner of the encumbered land, must be indicated as way of
necessity.
(d) Determination of route and width of way of necessity
As with the determination of the land, the principle is that the route that causes the least
damage to the owner of the encumbered land, should be followed. Both landowners’
interests must be taken into consideration to determine the route and width of the road. If
an alternative route is available, but it is inconvenient for farming purposes, the court will
not allow a way of necessity in the case of unreasonable detriment to the owner of the land
over which the way of necessity is sought – English v CJM Harmse Investments CC 2007
(W).
(e) Compensation
Compensation is not usually payable in the case of ius viae precario, but in the case of ius
viae plenum compensation must usually be paid.
(f) Registration
Registration is not required for the real effect of a way of necessity that is created by court
order. It is, however, recommended to ensure legal certainty.
(g) Changed conditions
The route of the servitude road can be changed by an order of court without the agreement
of the parties due to changed conditions: Linvestment CC v Hammersley 2008 (SCA).
Page 282
17.7 Remedies
The following remedies are available to the holder of a servitude.
(a) The actio confessoria is a real remedy by means of which the holder of a servitude can
prohibit any limitation or impediment to the reasonable exercise of his entitlements by
means of a court order. Compensation for damages can also be claimed with this
action.
(b) An interdict (see 14.4 above).
(c) A declaratory order (see 14.3 above).
(d) A spoliation order to effect restoration of control (see 14.5 above).
(e) A delictual claim for damages (see 10.3 above).
The owner of the encumbered property has the following remedies available:
(a) The actio negatoria (see 10.2.2 above) is an action against the holder of the servitude
who exceeds his entitlements or any other person who wrongfully claims entitlements
in terms of a servitude.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
(b)
(c)
(d)
Page 19 of 24
An interdict (see 14.4 above).
A declaratory order (see 14.3 above).
A delictual claim for damages (see 10.3 above).
17.8 Termination of servitudes
Termination of servitudes
(a) Fulfilment of condition or term
(b) Merger
(c) Abandonment
(d) Impossibility
(e) Prescription
(f)
Expropriation
(a) Fulfilment of condition or term
Both praedial and personal servitudes granted subject to the fulfilment of a condition or
granted for a certain period are terminated if the condition is fulfilled or if the period ends.
Personal servitudes lapse at death (natural person) or dissolution (legal person) of the
servitude holder or after 100 years (legal person).
(b) Merger
In terms of the principle that no person can have a servitude over his own property, a
servitude is terminated if the holder of the servitude becomes the owner of the encumbered
property. For instance, a person cannot keep a right
Page 283
to aqueduct over a farm after becoming the owner of the farm or exercise a usufruct over a
farm given to him.
(c) Abandonment
A holder of a servitude can explicitly or implicitly abandon the servitude in favour of the
owner. Implicit abandonment takes place if the holder of the servitude allows the owner or a
third party to act in such a way that it becomes impossible to exercise the servitude and if
the servitude holder does not take any steps to protect his servitude. If it is a registered
servitude over immovable property, cancellation of the servitude in the deeds registry is
required in the interest of legal certainty – Cowley v Hahn 1987 (E). Cancellation in the
deeds registry takes place by means of a notarial deed.
(d) Impossibility
This happens if a non-consumable encumbered thing is destroyed (movable thing) or if the
nature of the thing changes to such an extent that it becomes impossible to exercise the
entitlements any further (for instance if the fountain on the servient tenement dries up
permanently). In the case of consumables in respect of which a quasi-servitude was granted,
the servitude is not terminated by the destruction of the thing, but there is still an obligation
on the holder of the servitude to return property of the same quality and quantity to the
owner on termination of the servitude. In the case of immovable property the servitude
lapses if the benefit for the dominant tenement was terminated permanently – Pickard v
Stein 2015 (SG).
(e) Prescription
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
Page 20 of 24
In terms of section 7 of the Prescription Act 68 of 1969, extinctive prescription takes place if
the servitude is not exercised for an uninterrupted period of 30 years. A positive servitude
lapses if the servitude holder does not exercise it for 30 years and a negative servitude
lapses if the owner of the encumbered thing acted contrary to the servitude for 30 years.
The prescription must be proved by the owner of the servient tenement. A servitude is
indivisible and if the holder of the servitude refrains from exercising some entitlements, but
exercises other entitlements of the servitude, the servitude does not lapse through
prescription – Joles Eiendomme (Pty) Ltd v Kruger 2007 (C).
(f) Expropriation
A servitude can be terminated by expropriation in terms of section 25 of the Constitution and
the Expropriation Act 63 of 1975 or other legislation.
Page 284
17.9 Restrictive conditions
Definition
Restrictive conditions are
(a) limitations (in certain cases limited real rights)
(b) based on succession or contract and which can be registered against urban
or rural land (restrictive conditions in the wide sense) or
(c) which are registered against the stands in a specific township by the original
township owner or developer at the time of township establishment
(restrictive conditions in the narrow sense) or
(d) which are made applicable to urban and rural land by statute without
registration (statutory restrictive conditions) and
(e) which limit the entitlements of the owner of such land.
In the case of restrictive conditions in the narrow sense a distinction is made between
(a) personal restrictive conditions, where the benefit derived from the restrictive condition
vests in the person in his personal capacity; and
(b) real restrictive conditions, where the benefit vests in all the other owners of stands in a
township in their capacity as owners of stands.
Examples
(a) Restrictive conditions in the wide sense:
(aa) A testamentary disposition that the farm of testator A is inherited by
his daughter E, but excluded from any joint estate of which E may be
a partner or may become a partner as a result of a marriage in
community of property (which condition is included in the deed of
transfer to E).
(bb) A provision in a deed of donation of a stand donated by A to
congregation E, prohibiting alienation of the stand for twenty years
(which prohibition is included in the deed of transfer to E).
(b) Restrictive conditions in the narrow sense:
(aa) Real restrictive conditions: no house in a certain township may be
smaller than 250 square metres and no corrugated iron roofs are
allowed.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
Page 21 of 24
(bb)
Personal restrictive conditions: A acquires the sole right to operate a
petrol station in a certain township and no other owner may operate a
petrol station on his property.
Page 285
(c)
Statutory restrictive conditions:
In terms of the conditions laid down in section 22 of the Higher Education
Act 101 of 1997 the immovable assets of a university may not be alienated
without the consent of the department of education.
Restrictive conditions in the wide sense are, in certain circumstances, limited real rights, but
there are many examples of restrictions which are not limited real rights since no holder or
beneficiary of the right can be identified. Similarly, certain statutory restrictive conditions are
not limited real rights either. Statutory requirements for use or prohibition, for instance, limit
the owner’s exercise of ownership only without their being exercised in the interest of a
specific person as holder of the right and, therefore, they cannot be regarded as limited real
rights. On the other hand, restrictive conditions in the narrow sense (whether real or
personal) have the same legal status and effect as limited real rights – Campsbay
Ratepayers and Residents Association v Minister of Planning, Culture and Administration,
Western Cape 2001 (C). The following discussion will concentrate on restrictive conditions in
the narrow sense. Municipal regulations and zoning may not infringe upon registered
restrictive conditions for maintaining the character of a residential area – Van Rensburg NO v
Naidoo NO 2011 (SCA).
Definition
Restrictive conditions in the narrow sense
(a) are limited real rights
(b) registered at the time of township establishment by the original owner or
developer against all or certain of the stands in a specific township area
(c) which limit the free use and enjoyment by the owner of such land
(d) to the benefit of the other owners in their capacity as owners of stands (real
restrictive conditions) or
(e) to the benefit of a person in his personal capacity (personal restrictive
conditions).
In the case of restrictive conditions in the narrow sense a distinction is made between real
restrictive conditions and personal restrictive conditions.
(a) Real restrictive conditions
The following principles apply in respect of real restrictive conditions:
Page 286
(aa) In this case a benefit arising from the restrictive condition vests in all or certain of the
owners of stands in a certain township area in their capacity as owners of stands,
while, at the same time, it is registered against all the encumbered stands to the
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
Page 22 of 24
benefit of the other stands. An example of this is a condition that no house smaller
than 250 square metres may be built.
(bb) A real restrictive condition is juridically classified as a stipulation in favour of a third
party (stipulatio alteri) in the sense that the original township owner or developer
negotiates with every owner of a stand to the benefit of the other stand owners. The
same piece of land is benefited and encumbered at the same time in respect of the
other stands in the township – Malan v Ardconnel Investments 1988 (A).
(cc) It is established at the time of township establishment in that it is registered against
the title deeds of stands in the township and is imputed to every individual owner in
this way. The most common method of establishment is by means of conditions
proclaimed by the provincial or local government.
(dd) The normal rules of interpretation applicable to servitudes (see 17.4 above), also apply
in the case of restrictive conditions, for instance the principle of interpretation in
favorem libertatis (the least encumbering interpretation) is followed. An important
guideline in establishing whether a restrictive condition has been created, is the fact
that all the stand owners (or their predecessors in title) bought from the same seller.
(b) Personal restrictive conditions
The following principles apply in the case of personal restrictive conditions:
(aa) If a condition is registered against all or certain stands at the time of township
establishment to the benefit of a certain person (natural or legal person), it is a
personal restrictive condition, for instance, a prohibition against anyone other than the
beneficiary operating a liquor store in the township area.
(bb) In this case the construction of a stipulation in favour of a third party is not applied to
explain the legal nature, since every stand is not at the same time encumbered and
benefited. This is to the benefit of a person in his personal capacity by means of which
all the stands or certain stands are encumbered.
(cc) Personal restrictive conditions are also established during township establishment and
the same rules of interpretation and requirements for registration apply as in the case
of real restrictive conditions – see,
Page 287
in particular, Hotel De Aar v Jonordon Investments 1972 (A) in respect of the principle
of in favorem libertatis.
(c) Remedies
The following remedies are available in the case of non-compliance with restrictive
conditions:
(aa) An interdict.
(bb) A delictual claim for compensation of damages.
(cc) An application to the provincial government to abolish the restrictive condition/s in
terms of the Removal of Restrictions Act 84 of 1967.
Restrictive conditions must be distinguished from town-planning conditions. Town-planning
conditions are creditor’s rights originating from public law for the benefit of the local
government – Stadsraad van Vanderbijlpark v Uys 1989 (A). They are not real rights and
therefore not registrable.
17.10 Public servitudes
Definition
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
Page 23 of 24
A public servitude grants certain entitlements to the general public in respect of
certain land, which limits the owner’s entitlements.
Examples of public servitudes are a right to use a road, outspan, trek road, to cut wood for
own use or the right to picnic in certain spots. These are neither praedial nor personal
servitudes. Since they are not registered in favour of a certain person (natural or legal
person), they are not personal servitudes. There is also no dominant or servient tenement
and, therefore, they are not praedial servitudes.
Public servitudes are established in one of the following ways:
(i) A reservation for the benefit of the public in the grant or alienation of state land.
(ii) The use of a road by the general public in terms of the National Road Traffic Act 93 of
1996 and related provincial legislation.
(iii) Registration of a notarial deed.
(iv) Registration of a testamentary disposition in the deed of transfer from the deceased
estate to the heir.
(v) Immemorial use (vetustas), which indicates the exercise of the entitlement in respect
of land by the public for such a long time that there is no knowledge of any other state
of affairs – Forellendam Bpk v Jacobsbaai Coastal Farms (Pty) Ltd 1993 (C).
Page 288
Summary
A servitude is a limited real right which grants the holder certain entitlements to
the property of someone else. It is a burden on the property which is enforceable
against not only the current owner, but also against all successors in title and third
parties.
A distinction is drawn between praedial and personal servitudes. Praedial
servitudes can be granted in respect of immovable property only and always
involve two pieces of land, a dominant and a servient tenement. The owner of the
dominant tenement and all her successors in title, in their capacity as owners,
acquire certain entitlements in respect of the servient tenement, and this
servitude is enforceable against and must be tolerated by the owner of the
servient tenement and all his successors in title. It is, therefore, a burden on the
servient tenement. Praedial servitudes, as limited real rights, are established by
registration in the deeds registry. If owners grant reciprocal use rights in respect
of immovable property to each other, these are creditor’s rights before registration
and are enforceable against each other only in their personal capacity.
A personal servitude can be established in respect of movable or immovable
property. In the case of immovable property, a limited real right is established by
registration in the deeds registry by which a burden is placed on the land, but this
accrues to the holder of the right (holder of the servitude) in her personal capacity
and is therefore not transferable. It is, however, a limited real right, because it
grants the holder of the servitude a right to the burdened property which is
enforceable against the owner and all her successors in title.
Sometimes it is difficult to determine whether it is a praedial or a personal
servitude from the wording of a servitude agreement or will. That is why rules of
interpretation exist which can be applied in case of doubt. Basically it means that,
in case of doubt, the least encumbering interpretation should be followed.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap17
Page 24 of 24
Servitudes must always be exercised within reasonable bounds by the holder of
the right and must be tolerated by the owner of the thing. However, this criterion
of reasonableness will differ from case to case depending on the type of servitude.
There is no limited number of praedial or personal servitudes. If a right meets the
requirements for the establishment of a servitude (praedial or personal), such a
right will be recognised as a servitude. Several common-law and statutory
servitudes have been recognised, but servitudes are not limited to these
categories.
Page 289
A requirement for the establishment of servitudes in respect of immovable
property (praedial and personal), is that the servitude must be registered against
the deed of transfer of the burdened property. It can be included as a condition in
the deed of transfer of the burdened property or registered by means of a notarial
deed and this notarial deed is then endorsed against the deed of transfer.
However, on the basis of an unregistered servitutal agreement only creditor’s
rights between the parties are created. Other ways of establishing servitudes are
prescription, expropriation and court order (way of necessity). In the case of
movable property the thing must usually be delivered to the holder of the
servitude to enable her to exercise the entitlements arising from the servitude.
Restrictive conditions are not servitudes. They are limited real rights registered
in the deeds registry during township establishment by the original owner against
all the stands or certain stands in a specific township area in favour of all the
owners or certain owners of stands in the same township area (real restrictive
conditions) or in favour of a specific person in his personal capacity (personal
restrictive conditions).
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap17.xhtml
24-Jul-18
Chap18
Page 1 of 16
Page 290
Chapter 18
Real security: pledge and mortgage
18.1
18.2
18.3
18.4
18.5
18.6
18.7
18.8
Introduction
Personal security
Real security
Pledge
18.4.1 The pledge object
18.4.2 Delivery
18.4.3 Rights of the pledgee
18.4.4 Obligations of the pledgee towards the pledgor
Mortgage
18.5.1 The object
18.5.2 Registration requirements
18.5.3 Categories of mortgages
18.5.4 Rights of the mortgagee
Unenforceable conditions
Termination of pledge and mortgage
Cession in securitatem debiti
Summary
Overview
•
What forms of security are distinguished?
•
What forms of personal security are distinguished?
•
What forms of real security are distinguished?
•
What does the fact that real security is an accessory legal relationship mean?
•
What does pledge mean?
•
What requirements must be met regarding the object of pledge?
•
What requirements must be met regarding control in the case of pledge?
•
What are the rights and duties of the pledgee?
•
What does mortgage mean?
•
What requirements must be met regarding the object of mortgage?
•
What requirements must be met for the registration of a mortgage?
Page 291
•
•
•
•
•
What is the distinction between the various categories of mortgages?
What are the rights of a mortgagee?
What conditions are unenforceable in the case of mortgage and pledge?
How can mortgage and pledge be terminated?
Why is pledging of documents not a form of personal security?
18.1 Introduction
A creditor who acquires a creditor’s right against a debtor has a claim against the debtor in
his personal capacity only (see chapter 3 above). The basis of the creditor’s right may be a
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap18.xhtml
24-Jul-18
Chap18
Page 2 of 16
contract between the creditor and debtor, or a delict committed against the creditor, or the
unjustified enrichment of the debtor at the cost of the creditor. The amount owing by the
debtor to the creditor in terms of the creditor’s right is called the principal debt. To ensure
that the debtor performs in terms of the creditor’s right (pays the principal debt), the
creditor can require that the debtor provide security in respect of the performance due to the
creditor.
Examples
(a) A sells his car to B, but B cannot pay the purchase price to A immediately. In
terms of the contract of sale A delivers the car to B, but C (B’s father)
concludes a contract of suretyship with A in terms of which C undertakes to
pay the amount due to A if B should fail to do so. This is an example of
personal security, since A now acquires a creditor’s right against C on the
basis of the contract of surety with C, as security for B’s payment of the
purchase price (principal debt) to A.
(b) A and B are involved in a collision as a result of B’s negligence. B undertakes
to pay A’s damages, namely the repair costs to his car, but cannot do so
immediately. As security for B’s payment of the repair costs, B pledges his
motorcycle to A. This is an example of real security, since A acquires a
limited real right to B’s motorcycle as security that B will perform his
obligation (settle the principal debt).
Therefore, two kinds of security exist:
Categories of security
(a) Personal security
(b) Real security
Page 292
18.2 Personal security
Definition
Personal security implies that a creditor, on the basis of a performance due to him
as a result of a creditor’s right against a debtor (the principal debt), also acquires
a creditor’s right against another person as security for the payment of the
principal debt.
|
Suretyship is a good example of personal security. In terms of a contract of surety between
the creditor and a third party, the third party undertakes to perform the debtor’s obligation
in terms of the principal debt to the creditor if the debtor should fail to do so. The creditor
therefore acquires a creditor’s right against the third party (personal security) as security for
the principal debt. Surety is a specialised part of the law of contract.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap18.xhtml
24-Jul-18
Chap18
Page 3 of 16
18.3 Real security
Definition
In the case of real security the creditor acquires a limited real right in the property
of the debtor as security for the payment of the principal debt by the debtor to the
creditor, until payment of the principal debt.
Various kinds of real security are distinguished. The most important distinction is based on
the nature of the object of security, namely movable or immovable property.
Categories of real security
(a) Pledge (in the case of movable property)
(b) Mortgage (usually in the case of immovables)
(c) Cession in securitatem debiti
(d) Security granted by operation of law in respect of property of the debtor to
the creditor. The following cases are distinguished and are discussed in
chapter 19 below:
(aa) Tacit hypothecs of the landlord and credit grantor
(bb) Judicial pledge
Statutory security rights
(cc)
(dd) Liens
Page 293
The following general principles apply in respect of real security:
(a) The real security is enforceable only against the property of the debtor as long as the
debtor owes the creditor an amount in terms of a valid principal debt (creditor’s right).
If the principal debt lapses or is paid in full, the real security is terminated
automatically. The real security is therefore accessory to the principal debt – Thienhaus
v Metje & Ziegler Ltd 1965 (A).
(b) In terms of the real security the creditor obtains a limited real right to the property of
the debtor (the object of security) which is enforceable against the debtor personally
and all third parties. Therefore a double legal relationship exists:
(aa) a creditor’s right of the creditor against the debtor as a result of the principal
debt between them;
(bb) a limited real right of the creditor to the movable or immovable property of the
debtor as security for the principal debt.
(c) If the debtor doesn’t settle the principal debt as agreed, the creditor has a preferential
claim to the proceeds if the property is sold in execution or insolvency.
(d) The real security exists in respect of the principal debt and all interest, except if
otherwise agreed upon by the debtor and creditor.
(e) The creditor does not usually acquire any entitlements of use and enjoyment in respect
of the property, and may hold it only for the purpose of the security. Movable property
must be returned to the debtor if the principal debt is paid. However, the parties may
agree by means of a pactum antichreseos that the creditor may enjoy the fruits of the
encumbered property in lieu of the interest on the principal debt.
(f)
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap18.xhtml
24-Jul-18
Chap18
Page 4 of 16
The property of the debtor is usually used as security for the principal debt, but it is
also possible to use the property of a surety as security in terms of a contract or
mortgage of surety (see 18.5.3(d) below).
18.4 Pledge
Definition
Corporeal or incorporeal movable property of a pledgor (the debtor or surety in
terms of a valid principal debt), given to a creditor in pledge as real security for
the payment of the principal debt, grants the pledgee (creditor in terms of the
principal debt) a limited real right to the property as security until the principal
debt has been paid in full.
Page 294
18.4.1 The pledge object
The object of pledge must meet the following requirements:
(a) Only movable property can be delivered as security by the pledgor to the pledgee.
(b) In the case of corporeal movable property, a single object or a collection of objects can
be used as security, for instance a painting, a flock of sheep or all the farming
equipment of a farmer.
(c) Incorporeal movable property (see 2.3.1 above) can also be used as security, for
instance shares in a company (Britz v Sniegocki 1989 (D)), bills of exchange and
insurance policies.
(d) The fruits of an object (both hanging and separated fruits) form part of the object of
pledge. If the right to fruits is granted to the pledgee in lieu of interest on the principal
debt in terms of a pactum antichreseos (see 18.3 above), the pledgee can consume
and alienate the fruit.
18.4.2 Delivery
In order to establish and retain security in the form of a limited real right to the pledgor’s
property, the object of a pledge must be delivered to the pledgee and controlled by him. The
recognised methods of delivery include real delivery (traditio vera) and delivery with the
short hand (traditio brevi manu) (see 9.2 above).
Constitutum possessorium is not a recognised method of delivery to establish a pledge.
Since the property remains in the control of the owner in the case of constitutum
possessorium, this can mislead other creditors of the owner to their detriment. To overcome
this problem, the parties (the debtor and creditor in terms of the principal debt) often
represent the pledge as a simulated contract of sale, which could cause injury to the other
creditors of the pledgor (Quenty’s Motors (Pty) Ltd v Standard Credit Corporation Ltd 1994
(A); see also 9.2.3.4 above). Such simulated contracts of sale were regarded as void and
unenforceable in various court cases.
The pledgee must continuously exercise control in respect of the property in order to
retain his limited real right to the property (mobilia non habent sequelam). If the pledgee
willingly loses control of the property, his limited real right is terminated. If the property is
removed from his control without his permission and the pledgee gets the pledged property
back with or without legal process (by means of a spoliation order (see 14.5 above) or the
actio quasi Serviana), he can still exercise his limited real right to the property.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap18.xhtml
24-Jul-18
Chap18
Page 5 of 16
A contract of pledge without delivery of the object is not enough to establish pledge as a
limited real right in respect of the property. If the property is alienated bona fide to a third
party after conclusion of the contract but
Page 295
before delivery, the creditor of the principal debt has no remedy against the third party.
However, if the third party was aware of the agreement, he must, because of the doctrine of
notice (see 17.6.1 above), deliver the property to the creditor so that pledge can be
established.
18.4.3 Rights of the pledgee
(a)
(b)
(c)
(d)
(e)
The pledgee obtains a limited real right to the pledge object as security for the
payment of the principal debt and interest by the pledgor. This right exists as long as
the pledgee controls the property and a part of the principal debt remains unpaid.
If the pledgor does not pay the principal debt as agreed, the pledgee, after summons,
judgment and the issuing of a warrant of execution by the court, has a preferential
claim to the proceeds of the pledge object at the sale in execution. If the proceeds are
not enough to cover the debt and interest, the pledgee has a concurrent claim against
the proceeds from the other assets of the pledgor (debtor).
If the pledgor’s estate is sequestrated, the pledgee has, in terms of section 95 of the
Insolvency Act 24 of 1936, a preferential claim to the proceeds of the pledge object in
terms of a judicial sale. If this is not enough to cover the principal debt and interest,
the pledgee has only a concurrent claim against the remains of the pledgor’s
(insolvent’s) estate.
The pledgee can institute an enrichment claim against the pledgor for all necessary
expenses for the conservation or maintenance of the object, as well as for useful
expenses that enhance the market value of the property (see 19.6.2 below). If the
principal debt is paid in full and the pledgee’s right is terminated, the pledgee can
exercise an enrichment lien (limited real right – see 19.6.2 below) in respect of the
property as security for payment of the enrichment claim. However, in the case of
luxurious expenses, the pledgee has no enrichment claim or lien.
The principle of prior in tempore, potior in iure (earlier in time, stronger in law) (see
18.5.2(h) and 18.5.4(c) below) is also applicable in the case of pledge. Any limited real
right to the property established later, is subject to the right of pledge of the pledgee.
If the pledge object is removed from the pledgee’s control without his permission and
pledged to another person, the first pledgee’s right has preferential status if his
physical control is re-established.
18.4.4 Obligations of the pledgee towards the pledgor
(a)
The pledgee must take care of the property like a reasonable man (bonus
paterfamilias) and, on termination of the pledge, return it to the
Page 296
(b)
(c)
pledgor. In Simon NO v Mitsui and Co Ltd 1997 (W) it was held that a pledgee who
accepts a running concern (business) from a pledgor, must continue the management
of the business in good faith and is obliged to report to the pledgor at the return of the
business to the pledgor.
The pledgee does not have the right to use, enjoy or alienate the property. The right to
consume or alienate fruit comes into being only if the pledgor granted the right to the
fruit to the pledgee (pactum antichreseos).
The pledgor can require that the pledgee provide security in the case of neglect of the
property.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap18.xhtml
24-Jul-18
Chap18
(d)
(e)
Page 6 of 16
The pledgee is liable to pay compensation to the pledgor if the property is damaged or
destroyed as a result of his intentional or negligent actions. If the damage is not the
result of his intentional or negligent actions or omissions, the pledgee is not liable.
In terms of the National Credit Act 34 of 2005 the pledgee has the following liabilities:
(i) The date on which the credit agreement ends must be specified.
(ii) The pledged goods are held by the pledgee at his own risk and must be handed
back to the pledgor on the termination of the credit agreement.
(iii) If the pledged goods are damaged or destroyed by an intervening cause outside
the control of the pledgee, the pledgee must pay the pledgor an amount equal to
the fair market value of the goods, less the settlement value at the time of the
failure to deliver those goods. In any other case of failure to deliver the property
to the pledgor, the pledgee must pay the pledgor an amount equal to double the
fair market value of the goods minus the settlement value at the time of failure.
18.5 Mortgage
Definition
A mortgage registered in respect of the movable or immovable property of the
mortgagor (debtor or surety in terms of a valid principal debt), grants the
mortgagee (creditor in terms of a principal debt) a limited real right to the
movable or immovable property as object of security until the principal debt has
been paid in full.
Page 297
18.5.1 The object
The mortgaged property (object of security) must meet the following requirements:
(a) The object of security in the case of movables is a single or a collection of corporeal
property in terms of section 1(1) of the Security by Means of Movable Property Act 57
of 1993. This Act provides for the registration of a notarial bond over defined and
specified movables of the debtor without the requirement that they be delivered to the
creditor. They can, for instance, be a single tractor, a flock of sheep or all the farming
equipment of a farmer, provided that they are defined and specified in the mortgage
bond in such a way that they are identifiable – Ikea Trading and Design AG v BOE Bank
2005 (SCA). The object of security cannot, however, be the merchandise of a dealer in
general, which is not specified and defined.
(b) In the case of immovable property, a mortgage can be registered in respect of
corporeal and incorporeal property. Examples of incorporeal immovable property that
can be encumbered by a mortgage are mineral rights, a registered long-term lease
over immovable property and a right of extension in terms of section 25 of the
Sectional Titles Act 95 of 1986 (see 2.3.1 and 6.2.5 above; as well as Lief NO v
Dettmann 1964 (A)).
(c) The fruits of a movable or immovable form part of the object of the mortgage, except
in the case where a right to fruits is granted to the mortgagee in terms of a pactum
antichreseos. If the mortgagee is in control of the property and gathers fruit, she must
report to the owner regarding the value of the gathered fruit – Bismath NO v ABSA
Bank Ltd 2008 (SCA). In the case of immovable property all attachments by means of
accession (see 8.3.3 above) form part of the object of the mortgage.
18.5.2 Registration requirements
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap18.xhtml
24-Jul-18
Chap18
(a)
(b)
(c)
Page 7 of 16
The creditor acquires a limited real right to the object of the mortgage after
registration of the mortgage bond in the deeds registry.
In the case of movables a notarial bond is registered and a limited real right is
established without delivery to the creditor – section 1(1)(b) of the Security by Means
of Movable Property Act 57 of 1993.
Immovable property is mortgaged by means of a registered mortgage bond.
Functions of mortgage bond
In Thienhaus v Metje and Ziegler 1965 (A) It was held that a mortgage bond
performs the following functions:
(aa) It serves as confirmation of the limited real right of the creditor to the
property as security for the payment of the principal debt.
Page 298
(bb) It serves as written acknowledgement of the principal debt.
(cc) It serves as record regarding the conditions pertaining to the interest,
payment, term and default of the principal debt.
(d)
(e)
(f)
A mortgage bond must be drawn up by a conveyancer and contains the following
information:
(aa) The prescribed description of the mortgagor (debtor in terms of the principal
debt) and mortgagee (creditor in terms of the principal debt). In the case of a
natural person the name, identity number and marital status and, in the case of a
legal person, the registered name and registration number (if applicable) are
required.
(bb) A complete description of the immovable property as prescribed in the deeds
regulations.
(cc) An admission that the principal debt is owing, the reason (causa) for the principal
debt as well as the requirements regarding the amount owing, rate of interest,
and the term of payment. If there is a discretion in the loan agreement in favour
of the mortgagee to raise the interest rate unilaterally in accordance with the
prevailing interest rate, such variation of the interest rate is valid and enforceable
– NBS Boland Bank Ltd v One Berg River Drive CC 1999 (SCA).
(dd) Any other conditions of the contract of mortgage (loan agreement), such as the
location for payment, official address (domicilium citandi et executandi) of the
parties, method of payment and consequences of default, are registerable in
terms of section 63(2) of the Deeds Registries Act 47 of 1937.
The mortgage is noted in the mortgage register and endorsed on the deed of transfer
of the encumbered immovable property after the owner of the land has signed it and it
is attested to (signed) by the registrar of deeds. If the mortgage is not endorsed on the
deed of transfer after registration, the mortgage is still valid and enforceable as a
limited real right – Standard Bank SA v Breitenbach 1977 (T).
An unregistered agreement to mortgage property does not grant the creditor a limited
real right to the property. However, if the property is alienated to a third party who
had real or constructive knowledge of the unregistered agreement to mortgage
property, such a third party is compelled, because of the doctrine of notice, to co-
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap18.xhtml
24-Jul-18
Chap18
Page 8 of 16
operate in the registration of the mortgage, although she was not a party to the
principal debt.
Page 299
(g)
(h)
Immovable property encumbered with a mortgage can be transferred to a new owner
only after cancellation of all existing mortgages – section 56(1) of the Deeds Registries
Act 47 of 1937. If the property is transferred without cancellation of existing
mortgages (even in the case where the mortgages were not endorsed against the deed
of transfer of the encumbered property) the mortgage does not lapse. Because the
registered mortgage grants the creditor a limited real right to the property in terms of
the principal debt, the mortgage is enforceable against the new owner. Although the
new owner is not a party to the principal debt (the previous owner is the debtor in
terms of the principal debt), the mortgage serves as real security until the principal
debt is paid in full – Barclays Nasionale Bank v Registrateur van Aktes, Transvaal 1975
(T). This is also the position in the case of the original acquisition of ownership of
immovable property burdened by a registered mortgage bond – see section 33(8) and
(9) of the Deeds Registries Act 47 of 1937.
Various mortgages can be granted to different mortgagees (creditors) by the
mortgagor (debtor) at the same time in respect of the same property. In terms of the
principle of prior in tempore, potior in iure the time of registration of the mortgage
determines the order of real security granted to the mortgagee. A mortgage that was
registered first, therefore, gives the relevant mortgagee a preferential claim in case of
execution or insolvency of the mortgagor (debtor).
18.5.3 Categories of mortgages
(a) Kustingsbrief
Definition
A kustingsbrief is a mortgage in favour of a seller of land as security for the
unpaid balance of the purchase price or in favour of any other person or financial
institution who advanced the balance of the purchase price to the buyer
(mortgagor).
A kustingsbrjef is registered simultaneously with transfer of the property to the buyer and is,
in terms of the principle of prior in tempore, potior in iure, the strongest kind of mortgage as
real security. Mortgages in favour of financial institutions which advance money to the buyer
in respect of the balance of the purchase price are usually registered in the form of
kustingsbriewe.
Page 300
(b) Money lent and advanced
Definition
A mortgage for money lent and advanced is registered as security for money lent
and advanced by the mortgagee (creditor) to the mortgagor (debtor) for other
purposes than the payment of the balance of the purchase price.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap18.xhtml
24-Jul-18
Chap18
Page 9 of 16
The fact that the mortgage serves as security for money lent and advanced must be
mentioned as causa in the mortgage bond. The amount of money lent and advanced must
also be mentioned.
(c) Covering bond
Definition
A covering bond is a mortgage registered as security for an amount that will be
lent or advanced to the mortgagor by the mortgagee in future or for future debts
in general. It serves as continuous covering security to the maximum amount
mentioned in the mortgage bond.
A covering bond is an exception to the requirement that a valid principal debt must already
exist before a mortgage can be registered as security. In terms of section 51(1)(a) of the
Deeds Registries Act 47 of 1937 the following must be mentioned explicitly in the mortgage
bond:
(aa) that the mortgage serves as security for future debt(s);
(bb) the maximum amount of the future debt for which the mortgage serves as security –
see Kursan v Eastern Province Building Society and Another 1996 (A).
A covering bond can be registered as either a mortgage bond in respect of immovables or a
notarial bond in respect of movables. It gives security to the mortgagee from the date of
registration (and not from the date on which the principal debt came into being). However,
the mortgagee must prove that the principal debt indeed came into being after the date of
registration.
(d) Surety bond
Definition
A surety bond is registered against the property of a surety of the debtor, who
undertakes to give security to the creditor for the payment of the principal debt by
the debtor.
Page 301
The surety bond is granted by the surety (mortgagor) over his movable or immovable
property in favour of the creditor (mortgagee). The causa of the mortgage must be
mentioned in the surety bond.
(e) Participation bond
Definition
A participation bond is registered, in terms of the requirements of the Collective
Investment Schemes Control Act 45 of 2002, in favour of participants in a
collective investment scheme, in the name of a nominee company as mortgagee
over the immovable property of the mortgagor who was granted a loan by the
nominee company.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap18.xhtml
24-Jul-18
Chap18
Page 10 of 16
Money acquired by a nominee company as investments from participators in a collective
investment scheme of the nominee company, is lent by the nominee company to the
debtors. A collective investment scheme in participation bonds is a scheme where the assets
are held in the form of participation bonds, and the participants to the investment scheme
acquire an interest in the scheme secured by participation bonds. Without the participant’s
name being included in the participation bond the debt secured by the participation bond is
owed to the participants of the investment scheme and not the nominee company (section
57).
In terms of section 56(1) of the Collective Investment Schemes Control Act 45 of 2002 it
must be mentioned explicitly in the mortgage bond that it is a participation bond and that
the nominee company acts as the representative of the participants.
(f) Notarial bonds
Definition
A notarial bond is registered against specific corporeal movable property of the
mortgagor (debtor in terms of the principal debt) as security for the payment of
the principal debt to the mortgagee (creditor in terms of the principal debt) and,
after registration, this grants the mortgagee a limited real right to the objects of
the security without these objects being delivered to the mortgagee.
Section 1(1) of the Security by Means of Movable Property Act 57 of 1993 determines that a
mortgagee in terms of a notarial bond obtains a limited real right of security over the
corporeal movable property of the mortgagor
Page 302
if it is described in the mortgage bond in such a way that it can be recognised. Without
delivery the mortgagee obtains a security right similar to pledge – Farmsecure Grains
(Edms) Bpk v Du Toit 2013 (FS). It is still possible to register a notarial bond over a debtor’s
incorporeal property (for instance share certificates, book debts or liquor licences) or the
debtor’s movable property in general, but this will not provide the mortgagee with real
security as provided for in the Act. In this instance the bond must first be perfected by
delivery of the property to the mortgagee before the insolvency of the mortgagor –
Chesterfin (Pty) Ltd v Contract Forwarding (Pty) Ltd 2003 (SCA).
A notarial bond in terms of the Act provides the creditor (mortgagee) with a limited real
right over the defined movable property of the debtor without the property being delivered
to the creditor – section 1(1)(b); and see Bokomo v Standard Bank of SA Bpk 1996 (C). In
terms of section 2(1) the tacit hypothec of a landlord or a creditor (see 19.3 below) does not
vest in respect of property that are security objects in terms of a notarial bond.
(g) Land bank mortgages
Definition
Land bank mortgages serve as security for money advanced to farmers by the
land bank for agricultural purposes. Only agricultural land can serve as object of
security.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap18.xhtml
24-Jul-18
Chap18
Page 11 of 16
In terms of the Land and Agricultural Development Bank Act 15 of 2002 the following
requirements must be met in the case of a land bank mortgage:
(aa) It can be registered only in respect of agricultural land.
(bb) It has to be a first bond, except in the cases listed in (cc).
(cc) The holders of existing bonds have to relinquish their preferent right, with the
exception of a mortgage in favour of the Republic of South Africa as security for the
balance of a purchase price owing to the state for the purchase of state land or another
land bank mortgage.
(dd) The agricultural land must be usefully cultivated, except for land used exclusively for
grazing.
(ee) The mortgagor must be the owner of the land. The only exception to this is where the
mortgagor is a tenant of state land in terms of a registered long-term lease.
Page 303
18.5.4 Rights of the mortgagee
A mortgagee has the following rights:
(a) The mortgagee does not usually acquire physical control of the encumbered property,
but the mortgagor controls the property subject to the limited real security right of the
mortgagee.
(b) A mortgage bond is a liquid document. This means that, based on the registered bond,
the mortgagee can get a provisional sentence against the mortgagor in the high court.
If the mortgagor cannot prove that the principal debt has been paid or that it is not yet
claimable or no longer claimable on the return day, the judgment becomes final and a
warrant of execution regarding the object is issued by the high court. After attachment
of the object by the sheriff in terms of the warrant of execution, the encumbered
property can be sold in execution. Provisional sentence cannot be granted by a
magistrate’s court. If the mortgagor is sued in a magistrate’s court, judgment must be
obtained against him and thereafter the warrant of execution is issued in terms
whereof the sheriff attaches the encumbered property and sells it in execution –
Firstrand Bank Ltd v Jaypee Properties (Pty) Ltd 2002 (W). In Jaftha v Schoeman; Van
Rooyen v Stoltz 2005 (CC) it was decided that immovable property may be sold in
execution only after a court order has been obtained and not in terms of an eviction
order obtained from the clerk or registrar of a court in the course of the regular debt
collection procedure. A sale in execution of immovable property is an infringement of
the owner’s right to housing in terms of section 26 of the Constitution and the court
has to take into consideration all the circumstances (like the human dignity and
vulnerability of the owner) in deciding whether such a sale is just and equitable (see
23.6 below). In this particular case it was an application for an eviction order based on
a small personal debt, and the court refused to grant an eviction order in those
circumstances. The same principle should be applicable where the application is based
on arrear mortgage repayments. In Menqa v Markom 2008 (SCA) it was held that a
writ of execution based on arrear mortgage repayments is invalid if it was granted
without judicial oversight by a court. This was confirmed in Gundwana v Steko
Development 2011 (CC).
(c) In terms of the principle of prior in tempore potior in iure, in the case of various
mortgages, priority is given to mortgages in the order of their registration. If a second
mortgage is foreclosed because of the non-payment of the principal debt, the limited
real right of the first mortgagor has priority over subsequent mortgages. If the first
mortgage is not yet due and the property is sold in execution, the sale takes place
subject
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap18.xhtml
24-Jul-18
Chap18
Page 12 of 16
Page 304
(d)
(e)
to a reserve price for the balance of the principal debt owing to the first mortgagee –
Impendle Properties CC v Comrie 1993 (N). Mortgagees can, however, mutually agree
to amend the priority order of the mortgages and the amended order is then registered
in the deeds registry with the permission of the mortgagees.
In the case of a sale in execution, priority is given to the claims of mortgagees in the
order that their mortgages were registered. As soon as the principal debt (and interest)
of the first mortgagee has been paid in full, the rest is paid out to the second
mortgagee, and so forth. If an enrichment lien is exercised by a third party in respect
of the property (see 19.6 below), the principle of prior in tempore is applied in such a
way that enrichment liens which were established before the registration of mortgages,
have priority over registered mortgages and vice versa – Lubbe v Volkskas Beperk
1992 (A).
In the case of insolvency of the mortgagor, the encumbered property becomes part of
the insolvent estate. In terms of the prior in tempore principle, the mortgagees acquire
a preferent claim against the insolvent estate for the proceeds of the property in the
order that the mortgages were registered. If the proceeds are not enough to pay the
principal debt and interest in full, the mortgagee(s) acquire(s) an additional,
concurrent claim against the rest of the insolvent estate (the proceeds of all
unencumbered property). This means that such a mortgagee, along with all the other
concurrent creditors, acquires only a proportional part of his claim. If an enrichment
lien arose before the registration of a mortgage, it has priority over registered
mortgages in terms of the prior in tempore principle and vice versa – Lubbe v Volkskas
Beperk 1992 (A). Arrear municipal taxes for the period of two years before insolvency
of the owner has priority over registered mortgage bonds – City of Johannesburg v
Kaplan NO 2006 (SCA).
18.6 Unenforceable conditions
In certain circumstances the following conditions in agreements of pledge and mortgage are
unenforceable:
(a) Pactum commissorium
Definition
A pactum commissorium is a condition in an agreement of pledge or mortgage in
terms of which the ownership of the object of security passes to the creditor if the
principal debt is not paid in full.
Page 305
In the following circumstances, this would be an unenforceable condition (Graf v Buechel
2003 (SCA)):
(aa) If the principal debt is not paid in full by the debtor, the mortgagee or pledgee
becomes the owner of the encumbered property.
(bb) The encumbered property is sold if the principal debt is not paid in full and the
proceeds of the sale accrue to the pledgee or mortgagee, irrespective of whether they
are more or less than the amount owing on the principal debt.
(cc) On default the pledgee or mortgagee takes over the encumbered property against an
agreed amount. This condition will be enforceable only if the agreed price is a
reasonable value of the thing at the time when the principal debt becomes payable.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap18.xhtml
24-Jul-18
Chap18
Page 13 of 16
(b) Execution without recourse to the court (parate executie)
Definition
A condition that execution may take place without recourse to the court indicates
that the pledgee or mortgagee (creditor of the principal debt) may, on default, sell
the object of security without recourse to the court and be entitled to the proceeds
thereof.
If the pledgor or mortgagor (debtor of the principal debt) should fail to pay the amount
owing, the pledgee or mortgagee must usually first acquire a civil judgment against the
debtor (see 18.4.3 and 18.5.4 above). Thereafter a warrant of execution is issued by the
court in terms of which the sheriff attaches the object of security and sells it in execution.
According to the common-law application of parate executie the creditor could without
recourse to court sell the security object by private sale if the debtor did not settle the
principal debt in time, on condition that the parties had agreed to parate executie at the
conclusion of the loan agreement.
In Bock v Duburoro (Pty) Ltd 2004 (SCA) it was confirmed that parate executie is applied
as follows:
(aa) A condition of parate executie of movable property in a pledge agreement is normally
valid, on condition that the debtor’s right to recourse to the court is not completely
excluded. Consequently a pledgor can seek the protection of the court if she is
prejudiced by the private sale.
(bb) If the movable property is not in the control of the creditor, for instance in the case of
a notarial bond or statutory security rights (see 19.5 below) any statutory condition or
agreement to the effect that the secured
Page 306
property may be removed from the control of the debtor without her consent or
recourse to the court is invalid. The debtor may reclaim such property from the creditor
with a spoliation order.
(cc) A condition of parate executie of immovable property in a mortgage agreement is
invalid if the protection of the court or the consent of the debtor to the private sale is
excluded. However, the creditor may sell the mortgaged property by private sale if the
debtor gives her consent to the sale at the time she falls in arrears with the repayment
of the principal debt.
(dd) In First National Bank of South Africa v Land and Agricultural Bank of SA 2000 (CC) it
was held that it is in contravention of the debtor’s constitutional right of access to court
(section 34 of the Constitution) if the debtor’s recourse to court is completely excluded
by legislation or agreement. The decision dealt with the Land and Agricultural Bank as
an organ of state and is not necessarily applicable to the common-law application of
parate executie. However, it is clear that the unconditional exclusion of access to the
court in the case of prejudice is contrary to public policy and therefore invalid and
unenforceable – SA Bank of Athens v Van Zyl 2006 (SCA).
(ee) The debtor is entitled to the remains after the full payment of the principal debt.
(ff) The debtor’s right to recourse to the court in the case of prejudice is confirmed by
section 164 of the National Credit Act 34 of 2005.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap18.xhtml
24-Jul-18
Chap18
Page 14 of 16
18.7 Termination of pledge and mortgage
Termination
(a) Destruction of the property
(b) Payment of principal debt
(c) Loss of physical control (pledge)
(d) Cancellation of bond (mortgage)
(e) Sale of the security object
(f)
Creditor becomes owner of security object
(g) Court order
(a)
Termination of real security by the destruction of the property usually only applies to
pledge or notarial bonds, since corporeal immovable property (land) is indestructible. If
the attachments to the land are destroyed, the mortgage still exists, since the object of
the security is the land and not the attachments. A mortgage given in respect of
corporeal
Page 307
(b)
(c)
(d)
(e)
(f)
(g)
immovable property is terminated if the object is destroyed, for instance if a registered
long-term lease or servitude is terminated. In the case of a sectional title unit, section
49(3)(b) of the Sectional Titles Act 95 of 1986 requires that all sectional mortgages be
cancelled if a sectional title scheme is de-registered.
Payment or termination of the principal debt causes the termination of the mortgage or
pledge. Since mortgage and pledge are, as real security, accessory to the existence of
a principal debt, they are terminated if the principal debt has been paid or no longer
exists.
Voluntary loss of physical control over the property terminates the pledge.
Cancellation of the mortgage bond in the deeds registry terminates the mortgage. The
transfer of the ownership of the object of security does not terminate the mortgage. In
terms of section 56(1) of the Deeds Registries Act 47 of 1937, it is required that all
mortgages be cancelled before ownership of the land is transferred to a new owner. If
the existing mortgages are not cancelled before transfer of the ownership, the
mortgages as limited real rights are still enforceable against the property. The land can
therefore be excussed even if there is a new owner if the principal debt of the previous
owner still exists – Barclays Nasionale Bank v Registrateur van Aktes, Transvaal 1975
(T).
Sale of the object of security as a result of execution or insolvency terminates the real
security.
Where the pledgee or mortgagee becomes owner of the property, the real security is
terminated automatically.
Real security can be terminated by court order.
18.8 Cession in securitatem debiti
Cession in securitatem debiti is a special form of real security by means of incorporeal
property, specifically in the form of security rights to creditor’s rights. Two kinds are
distinguished, namely the pledging of creditor’s rights as security for a debt and general
security cession.
(a) The pledging of creditor’s rights as security for a debt
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap18.xhtml
24-Jul-18
Chap18
Page 15 of 16
A debtor (in terms of a principal debt) can pledge a creditor’s right against a third party as
security to the creditor (in terms of the principal debt). The creditor’s right of the debtor is
pledged to the creditor as security for performance of the debtor to the creditor. The
creditor’s right is not ceded to the creditor. The debtor retains the ‘ownership’ of his
creditor’s right, but cannot dispose of it. Since creditor’s rights are defined as incorporeal
property (see
Page 308
chapter 2 above, as well as Britz v Sniegocki 1989 (D)), the pledging of creditor’s rights is
seen as a form of real security.
(b) General cession of security
The debtor (in terms of the principal debt) can transfer or cede his creditors’ rights against
third parties to the creditor (in terms of the principal debt) as security for the payment of
the principal debt of the debtor to the creditor in such a way that the creditor becomes the
holder of the right instead of the debtor on the basis of the contract of cession. The creditor
therefore acquires the right to enforce the debtor’s creditor’s right against the third party for
his (the creditor’s) own benefit if the debtor does not perform. An example of this is the
cession to the creditor of a book debt due to the debtor – Densam (Pty) Ltd v Cywilnat (Pty)
Ltd 1991 (A); Goudini Chrome (Pty) Ltd v MCC Contracts (Pty) Ltd 1993 (A). In this case
‘ownership’ (instead of pledge) of the creditor’s rights (as incorporeal property) is
transferred to the creditor for the purpose of security. This form of security is therefore also
regarded as real security.
Summary
Real security means that, on the basis of a creditor’s right against the debtor
(principal debt), a creditor acquires a limited real right in the property of the
debtor as security for the payment of the creditor’s right (principal debt) by the
debtor. Real security differs from personal security in that a creditor does not
acquire a limited real right in the property of the debtor in the case of personal
security, but acquires only a creditor’s right against a third party as security for
the payment of the principal debt by the debtor. Such a third party is normally a
surety of the debtor.
A requirement for real security is the existence of a valid and enforceable
principal debt. The real security is accessory to the principal debt; in other words
the real security is terminated automatically if the principal debt is paid in full.
If the object of security is movable property, real security can be in the form of
either pledge or notarial bond. In the case of pledge the object of pledge
(corporeal or incorporeal movable property) must be delivered by the pledgor
(debtor) to the pledgee (creditor). Physical control of the pledge object is a
requirement for the establishment and continuation of a limited real security right
to the security object. The pledgee has the obligation to maintain the pledged
property within reason and, on termination, to return the property to the pledgor.
A notarial bond can
Page 309
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap18.xhtml
24-Jul-18
Chap18
Page 16 of 16
be registered in respect of specified, corporeal movable property of the debtor
(mortgagor) in favour of the creditor (mortgagee) in the deeds registry. After
registration of this bond, the mortgagee acquires a limited real right to the
encumbered property without delivery thereof to the mortgagee.
Immovable property of the debtor serves as object of security in that a
mortgage is granted by the debtor (mortgagor) to the creditor (mortgagee) and
registered in the deeds registry. A mortgage is a liquid document which grants the
mortgagee a limited real right in respect of the immovable property of the
mortgagee without the physical control of the property being passed to the
mortgagee. More than one mortgage can be registered over the same immovable
property at the same time. Priority is given, in this case, to mortgagees in the
order that the mortgages were registered (prior in tempore potior in iure).
The pledgee or mortgagee (creditor) can, if the principal debt is not paid in full
by the mortgagor or pledgor (debtor), have the security object sold in execution
and is entitled to the proceeds of the sale in execution for payment of the principal
debt. In the case of insolvency of the pledgor or mortgagor, the pledgee or
mortgagee acquires a preferent claim to the proceeds of the sale of the security
object.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap18.xhtml
24-Jul-18
Chap19
Page 1 of 12
Page 310
Chapter 19
Real security rights created by law
19.1
19.2
19.3
19.4
19.5
19.6
Introduction
Tacit hypothec of the lessor
Tacit hypothec of the credit grantor
Judicial pledge
Statutory security rights
Liens
19.6.1 Definition
19.6.2 Categories
19.6.3 Acquisition
19.6.4 Enforcement
Summary
Overview
When are real security rights created by law?
•
When is a real security right granted to the lessor of immovable property?
•
When is a real security right granted to a credit grantor with regard to movable
•
property?
What is a judicial pledge?
•
What other security rights are granted by statute?
•
What is a lien?
•
19.1 Introduction
Real security rights (and other security rights) are sometimes granted to a person by
operation of law, that is, in the absence of any agreement to this effect between the parties
and even against their wishes. These security rights arise automatically (by operation of law)
if certain preconditions are present, in order to protect interests that are considered
important for the legal order. Some of these security rights apply to immovable property and
others to movables. In some cases they assume the form of a pledge over movables,
Page 311
but as a rule these security rights are unique as far as their requirements and content are
concerned. Some of them are referred to as tacit hypothecs (a hypothec can be any kind of
security right, and in this case it is called ‘tacit’ because it is created by law) or liens (a term
referring specifically to non-statutory security rights created by operation of common law).
19.2 Tacit hypothec of the lessor
One of the most well-known security rights created by operation of law is the hypothec of
the landlord (or lessor of immovable property) over the movable property of the lessee who
is in arrears with rent payments. This hypothec secures the landlord’s claim for rent in
arrears, and it is created by law as soon as the lessee is in arrears with rent payments. As
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap19.xhtml
24-Jul-18
Chap19
Page 2 of 12
soon as the outstanding rent payments are made the hypothec is also extinguished by
operation of law.
Although the lessee’s property becomes subject to the hypothec as soon as the rent is in
|arrears, it is usually said that the landlord has to perfect the hypothec by attaching the
property in terms of a court order. Thereafter the property is subject to a real security right
and can be used, in accordance with proper execution procedures, to raise money to cover
the landlord’s claim for outstanding rent.
Definition
The landlord’s hypothec is a real security right created by operation of law (and
perfected by a court order, followed by attachment) to secure the landlord’s claim
against the lessee for rent in arrears. The hypothec applies to movables of the
lessee on the premises.
As a rule the hypothec applies to movable property belonging to the lessee and present on
the premises, but in certain circumstances it can include property of third parties. The
requirements for subjecting property belonging to third parties to the hypothec were set out
in the classic Bloemfontein Municipality v Jacksons 1929 (A) case, and later confirmed in the
equally important TR Services v Poynton’s Corner 1961 (D). In the absence of these
requirements property belonging to third parties will not be subject to the landlord’s
hypothec. It is important to note that these requirements apply only with regard to
movables which do not belong to the lessee.
Bloemfontein Municipality v Jacksons 1929 (A)
Jacksons sold furniture to a hire-purchaser (the old form of the modern credit
agreement) and retained ownership until payment of the last instalment. The
purchaser then removed the furniture from the premises
Page 312
where it was usually kept to premises leased from the municipality, without
informing the seller or the landlord of the situation. When the rent fell in arrears
the furniture was attached by the municipality as landlord for sale in execution.
When Jacksons objected to the furniture being attached the court had to decide
when property belonging to third parties would be subject to the landlord’s
hypothec. The following requirements were set out by the court:
(a) The property must be on the landlord’s premises with the knowledge of its
actual owner.
(b) The property must be on the premises with some degree of permanence,
and not merely temporarily.
(c) The property must be on the premises for the lessee’s own use and benefit.
(d) The landlord must have been unaware of the fact that the property belonged
to someone else and not to the lessee. In Paradise Lost Properties v
Standard Bank of South Africa 1997 (N) it was said that the landlord cannot
claim ignorance when the exercise of reasonable care would have established
that the movables belonged to someone other than the lessee. In Eight Kaya
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap19.xhtml
24-Jul-18
Chap19
Page 3 of 12
Sands v Valley Irrigation Equipment 2003 (T) the court decided that the
lessor cannot apply for an attachment order after the point at which the
owner of the movables has proclaimed her ownership, even if the hypothec
came into existence earlier. The hypothec gives the lessor the right to
establish a limited real right through attachment, but that right has to be
exercised before the lessor realises that the movables belong to another
person (not the lessee). In Halstead v Durant NO 2002 (W) the court held
that an attachment order in terms of section 32 of the Magistrates’ Courts
Act 32 of 1944, issued to secure the lessor’s claim for rent in arrears by
preventing the lessee from removing the movables from the premises, is an
interlocutory order that merely stabilises the status quo temporarily, and
against which an appeal does not lie.
The first and last requirements mentioned above are especially important in cases where the
landlord’s tacit hypothec, applied to movables on the premises but belonging to third parties,
might come into conflict with the tacit hypothec of a credit grantor. This aspect is discussed
in the next section.
The problem caused by application of the landlord’s hypothec to third parties’ property has
been more or less solved by an amendment to section 2 of the Security by Means of Movable
Property Act 57 of 1993, inserted in terms of section 2 of the National Credit Act 34 of 2005.
Page 313
Section 2, Security by Means of Movable Property Act 57 of 1993 as it
now reads:
‘2(1) Notwithstanding anything to the contrary in the common law or in any other law,
movable property–
(a) which, while hypothecated by a notarial bond mentioned in section 1(1), is in
the possession of a person other than the mortgagee; or
(b) to which an instalment agreement, as defined in section 1 of the National
Credit Act, 2005 (Act 34 of 2005), relates,
shall not be subject to a landlord’s hypothec.
(2) The provisions of subsection (1) in respect of movable property hypothecated by a
notarial bond mentioned in section 1(1) shall not apply if such bond is registered after the
landlord’s hypothec has been perfected.’
19.3 Tacit hypothec of the credit grantor
According to the National Credit Act 34 of 2005 the credit grantor retains ownership of
movable property sold in terms of a credit agreement transaction until the credit receiver
pays the last instalment of the purchase price (see 9.1.3 above). Upon payment of the last
instalment ownership is transferred to the purchaser. However, should the credit receiver
become insolvent before payment of the last instalment, ownership of the property passes to
the trustee of the insolvent estate, and in that case the credit grantor (who then loses
ownership) is protected by a hypothec in terms of section 84 of the Insolvency Act 24 of
1936. This tacit hypothec is a real security right which secures the credit grantor’s claim
against the insolvent estate for outstanding payments in terms of the credit agreement.
In Potgieter NO v Daewoo Heavy Industries (Edms) Bpk 2003 (SCA) the supreme court of
appeal confirmed that the tacit hypothec in terms of section 84 applies to all transactions
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap19.xhtml
24-Jul-18
Chap19
Page 4 of 12
that fit the definition of ‘instalment sales’ in section 84 and not only to transactions that fall
under the National Credit Act 34 of 2005.
Definition
The tacit hypothec of a credit grantor is a real security right with regard to
movables, and it secures the credit grantor’s claim for outstanding payments in
terms of a credit agreement in cases where the credit receiver becomes insolvent
(and ownership vests in the trustee of the insolvent estate) before payment of the
last instalment.
Page 314
Section 84 of the Insolvency Act, which creates this tacit hypothec, is aimed at protecting
the interests of other creditors. If the debtor becomes insolvent when the debt on the
property which was bought in terms of the credit agreement is much smaller than the value
of the property, the fact that the credit grantor retains ownership as security might be unfair
towards other creditors with larger claims. For that reason the credit grantor’s claim is
secured by a tacit hypothec, while ownership is transferred to the trustee, who can then use
the property for the benefit of as many creditors as possible.
Section 84 also provides a possibility for the creditor to claim physical control of the
property from the trustee, in order to transform the tacit hypothec into a pledge, which is a
much stronger form of security than the tacit hypothec. In terms of the Insolvency Act the
tacit hypothec is not a very strong form of security, and therefore the credit grantor would
rather obtain a pledge by claiming physical control. In fact, however, the trustee would not
usually be willing to provide such control to the credit grantor, because that would mean loss
of control over the property, which might be worth much more than the amount of the credit
grantor’s claim. In such a case the trustee would rather provide judicial security to the
amount of the credit grantor’s claim, which would mean that the credit grantor is sure that
her claim will be satisfied if she can prove it. This is much stronger security than the tacit
hypothec.
The most problematic aspect of this tacit hypothec often is a clash which arises between
the claims of the credit grantor on the one hand and the lessor of premises on which the
movables were kept by the insolvent on the other. If the insolvent was in arrears with rent
payments before insolvency the landlord might claim a real security right in the form of the
landlord’s hypothec (see the previous section), if all the requirements as set out in the
Bloemfontein Municipality case are met.
The question is, whose tacit hypothec is stronger; that of the landlord for rent in arrears,
or that of the credit grantor for outstanding instalments? This problem has largely been
solved by amendment to the Security by Means of Movable Property Act 57 of 1993 (see
19.2 above).
19.4 Judicial pledge
Any creditor who has no real security to secure her claim against the debtor can obtain real
security in the form of a judicial pledge (or mortgage) by way of attachment in terms of a
writ of execution. Upon attachment the creditor acquires a real security right similar to a
pledge over movables or a mortgage over immovable property. In terms of the writ of
execution and upon attachment the creditor can have the property sold in execution by the
sheriff, and the creditor’s claim then enjoys preference, which means that it must be
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap19.xhtml
24-Jul-18
Chap19
Page 5 of 12
Page 315
satisfied first from the proceeds of the sale. Real security rights established before the
attachment will, however, enjoy preference on the basis of their being created earlier.
Definition
A judicial pledge is a real security right which secures a creditor’s claim against a
debtor, and is established by obtaining a writ of execution against the debtor and
attaching the property.
19.5 Statutory security rights
A wide variety of statutory security rights are created in legislation dealing with specific
debtor-creditor relations. Each statute creates its own form and kind of security according to
the circumstances, but generally speaking the security rights created by statute can be
classified as either statutory mortgages, statutory liens, statutory fictitious pledges or
preferent rights.
Categories of statutory security rights
(a) A statutory mortgage is created when a real security right over movables or
immovables is established without the normal requirements for such a right.
(Examples: section 118(3) of the Local Government: Municipal Systems Act
32 of 2000; section 60(1) of the National Water Act 36 of 1998; section 31
of the Land and Agricultural Development Bank Act 15 of 2002.)
(b) A statutory fictitious pledge is created when a right of pledge over movables
is created in the absence of real delivery or control of the property subjected
to the pledge. (Examples: Schedule 1 part 4 item 4 of the Co-operatives Act
14 of 2005; section 30 of the Land and Agricultural Development Bank Act
15 of 2002; Security by Means of Movable Property Act 57 of 1993.)
(c) A statutory lien is a special kind of lien, created by statute, over movable or
immovable property. (Example: Customs and Excise Act 91 of 1964.) In the
recent case of First National Bank of SA Ltd t/a Wesbank v SARS 2002 (CC)
the constitutional court held that such a statutory lien could be
unconstitutional and invalid for constituting an arbitrary deprivation of
property, if it allowed attachment and sale of property not belonging to the
debtor. See chapter 22 below. The Customs and Excise Act 91 of 1964 has
been amended to bring it in line with the FNB decision.
Page 316
(d)
Preferent rights are security rights which do not amount to real security, but
which nevertheless provide a preferent claim to the property. (Examples:
section 15B(3)(a)(i)(aa) of the Sectional Titles Act 95 of 1986; section 118
(1) of the Local Government: Municipal Systems Act 32 of 2000). Compare
further section 118 of the Local Government: Municipal Systems Act 32 of
2000; City of Tshwane Metropolitan Municipality v Mathabathe 2013 (SCA).
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap19.xhtml
24-Jul-18
Chap19
Page 6 of 12
The Security by Means of Movable Property Act 57 of 1993 is discussed separately with the
notarial bonds in chapter 18.
19.6 Liens
19.6.1 Definition
Liens are created by operation of law to secure outstanding debts. Liens, or rights of
retention, come into operation when one person is in control of movable or immovable
property of another person, who owes the controller money for improvements to or costs
incurred in relation to the property. In certain circumstances the controller is then allowed
by law to refuse to return the property to the owner unless the owner pays the outstanding
debt. The right to withhold the property from its owner to enforce payment of a debt is a
lien.
Definition
A lien or right of retention allows the holder of movable or immovable property to
refuse to return the property to the owner unless the owner pays an existing
principal debt, which arose from expenditure by the holder with regard to the
property.
A lien is a right to withhold property from the owner to enforce payment of a principal debt,
and as such it depends upon the actual existence of such a debt. (See Singh v Santam
Insurance 1997 (A), as well as Buzzard Electrical (Pty) Ltd v 158 Jan Smuts Avenue
Investments (Pty) Ltd 1996 (A).)
19.6.2 Categories
Liens are classified into two main groups, namely enrichment liens and debtor-creditor liens,
according to the origin of the debt which is secured by the lien.
Page 317
Categories of liens
(a) Debtor-creditor liens
(b) Enrichment liens
(a) Debtor-creditor liens
If the principal debt arose from contract the lien is called a debtor-creditor lien, which is
enforced against other contract parties only. The basis for the lien is the contract, and the
amount for which it is valid is the amount due in terms of the contract. This kind of lien
cannot be enforced by or against anybody who was not a party to the contract from which
the principal debt arose. In Singh v Santam Insurance 1997 (A) Santam, who paid for
repairs to Singh’s car, was not allowed to enforce a lien against Singh because the actual
contract for the repairs was not concluded by Santam.
Definition
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap19.xhtml
24-Jul-18
Chap19
Page 7 of 12
A debtor-creditor lien is a lien which secures payment of a debt incurred in terms
of a contract, and is therefore based upon a personal obligation that can be
enforced against the contractual debtor only.
(b) Enrichment liens
If the principal debt arose from unjustified enrichment, in other words where the owner was
enriched at the cost of the controller without good legal cause, the lien is called an
enrichment lien, which is enforced against anybody, and not against a specific person only.
In this case the lien is a real burden upon the property itself, and it affects anybody who
happens to be the owner at a specific time. The basis for the lien is unjustified enrichment,
and the amount for which the lien can be enforced is the amount of enrichment. In Singh v
Santam Insurance 1997 (A) it was decided that there was no proof of unjustified enrichment
(and thus no enrichment lien) because there was a valid legal justification for the expenses
incurred: Santam was responsible to pay for repairs in terms of the insurance policy. (See
further Buzzard Electrical (Pty) Ltd v 158 Jan Smuts Avenue Investments (Pty) Ltd 1996
(A).)
Definition
An enrichment lien is a lien which secures payment of a debt incurred by way of
unjustified enrichment, and which is therefore a real burden upon the property
that can be enforced against any person who happens to be the owner of the
property.
Page 318
Enrichment liens are usually classified with regard to the kinds of expense or improvement
that can cause unjustified enrichment. For purposes of unjustified enrichment, expenses or
improvements are classified as either necessary, useful or luxurious.
Categories of expense or improvement of property
(aa) Necessary expenses or improvements (impensae necessariae) are necessary
for the maintenance or continued existence of the property: unless these
expenses or improvements are undertaken the property will be destroyed or
damaged, or it will be rendered totally useless.
(bb) Useful expenses or improvements (impensae utiles) are not strictly
necessary in the sense described above, but they nevertheless improve the
property, as is indicated by the fact that they usually increase its market
value.
(cc) Luxurious expenses or improvements (impensae voluptuariae) are neither
necessary nor useful, and although the value of the property may be
increased, are undertaken only in pursuance of personal taste or whim.
Enrichment liens are classified according to the kind of expense or improvement from which
the enrichment debt arose. Since unjustified enrichment and the accompanying obligation to
compensate are limited to necessary and useful expenses or improvements, no enrichment
lien is possible for luxurious expenses or improvements. Enrichment liens are, therefore,
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap19.xhtml
24-Jul-18
Chap19
Page 8 of 12
meant to enforce an enrichment debt arising from either necessary or useful expenses or
improvements.
Categories of enrichment liens
(aa) Salvage liens secure payment of enrichment debts arising from necessary
expenses or improvements.
(bb) Improvement liens secure payment of enrichment debts arising from useful
expenses or improvements.
In conclusion, therefore, it can be said that there are three main categories of liens: debtorcreditor liens, salvage liens and improvement liens. The first category is based upon a
contract, whereas the second and third categories are based upon unjustified enrichment.
Page 319
Categories of liens
19.6.3 Acquisition
Since the whole point of a lien is that the controller wants to refuse to give property back to
the owner, it is logical that liens usually occur in a situation where an owner wants to get her
property back from the lien holder, who is in control of the property.
Liens are established and enforced through control of the property. Without such control
there can be no lien; which means that the lien holder must have acquired control of the
property at some stage, and that the lien holder must retain control for the lien to have any
effect. The physical control requirement means that the lien holder would have to exercise
and retain really effective control – she would have to be able to effectively exclude others
from taking control away from her. The mental element of control must be to withhold
control until the debt is paid, which is a specific form of the intention to control for one’s own
benefit.
As soon as the lien holder voluntarily loses physical control the lien is terminated, and it
cannot be revived by subsequent recovery of the property. In some cases the property can
be transferred to another person (such as a sheriff) against security, in which case the lien is
actually replaced by the new security as provided. If the lien is lost involuntarily, for instance
as a result of violence or fraud, it is said that the lien may be revived upon recovery. The
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap19.xhtml
24-Jul-18
Chap19
Page 9 of 12
lien is, of course, also extinguished by payment of the debt or, alternatively, by provision of
another form of security for the debt.
An interesting example of how the control requirement functions is the case of Singh v
Santam Insurance 1997 (A).
Page 320
Singh v Santam Insurance 1997 (A)
Singh was the owner of a car which was damaged in an accident. In terms of the
insurance contract Santam had to pay for repairs, which were effected by X. Once
the repairs had been completed and paid for, Santam found out that the insurance
premiums had never been paid. They cancelled the insurance policy and took
control of the car from X, and refused to return it to Singh, claiming a lien for
improvements.
The court denied the claim for a lien and ordered Santam to return the car to
Singh. Santam was not in control when the repairs were effected, and X’s possible
lien was extinguished when the repairs were paid for, which was before Santam
took control. No further repairs or costs were incurred once Santam was in control
and therefore there was no further expense, no unjustified enrichment, no
principal debt and consequently no basis for a lien.
19.6.4 Enforcement
Liens are defence mechanisms, and do not form the basis of an independent claim or action.
In other words, they are used merely defensively when the owner claims her property back
with the rei vindicatio (see chapter 10). The lien holder then responds by refusing to return
the property until the outstanding debt is paid. If the court agrees that the respondent has a
lien the defence will succeed, and the owner will be forced to pay the debt (or at least
provide other security for paying it, pending a possible court case about the debt) before the
property can be claimed back.
In principle anybody can rely on a lien if the requirements are met, but it is important to
note that a lien is always a discretionary remedy, which means that the court has a
discretion in allowing it or not. The court will exercise its discretion in recognising a lien by
looking at all the circumstances of each case and deciding whether it would be just to
enforce the lien. The requirements for the lien must, therefore, include proof of reasons why
the court should exercise its discretion by awarding the lien. The courts have already
indicated a general unwillingness to grant a lien to a holder in bad faith and to holders who
improved the property against the direct and explicit wishes of the owner.
To prevent abuse legislation (known as Placaaten) was already promulgated in the
common law to protect lessors of land. These Placaaten provide that lessees who bring about
improvements to the land without permission are precluded from relying on a lien. The
Placaaten apply to both rural and urban land and still form part of modern South African law:
Van Wezel v Van Wezel’s Trustee 1924 (A); Syfret’s Participation Bond Managers Ltd v
Estate
Page 321
and Co-op Wine Distributors (Pty) Ltd 1989 (W); Palabora Mining Co Ltd v Coetzer 1993 (T);
Business Aviation Corporation (Pty) Ltd v Rand Airport Holdings (Pty) Ltd 2006 (W).
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap19.xhtml
24-Jul-18
Chap19
Page 10 of 12
Requirements for a lien
(a) The owner of property must be claiming it back from the defendant.
(b) The defendant must be in control of the property.
(c) The defendant must retain the property in order to secure payment of a
principal debt owed to the holder by the owner.
(d) This principal debt can arise from either contract or unjustified enrichment
resulting from improvements to or costs incurred in relation to the owner’s
property while it was in the defendant’s control.
(e) The court must be convinced that, in the circumstances, it would be justified
to exercise its discretion and recognise the lien. The courts also have a
discretion to allow, upon application, that the lien be substituted by security
(deposit of a sum of money). This possibility is in the discretion of the court,
has temporary effect, and cannot strengthen the holder’s position legally
(Mancisco & Sons CC (In Liquidation) v Stone 2001 (W)).
It has already been mentioned in the introduction above that the debtor-creditor liens are
enforced against other contracting parties only, while the enrichment liens are enforced
against anybody who happens to be the owner of the property. The reason is that debtorcreditor liens are based upon a contractual debt, which is a personal obligation enforced
against a specific debtor, and therefore the lien can also be used against that specific debtor
only. An enrichment debt, on the other hand, is created by the fact of unjustified
enrichment, and is not a personal obligation enforced against a specific debtor – it is
enforced against any person who happens to be the owner of the property. This can create a
number of problems, as is illustrated by the examples and cases referred to in the following
paragraphs. In all these cases, the question is whether a third party, who has no contract
with the owner, can enforce an enrichment lien against the owner.
In the case of enrichment liens it is important to distinguish between two different
situations. In the first situation, the owner X contracts with Y to effect improvements to the
property, and Y subcontracts Z to do the work. When Z has completed the work it appears
that Y has disappeared, and Z cannot enforce the contract for payment (there was no
contract between Z and X, and Y disappeared). The question is whether Z can then enforce
an enrichment claim (and possibly a lien) against the owner X.
Page 322
In Buzzard Electrical (Pty) Ltd v 158 Jan Smuts Avenue Investments (Pty) Ltd 1996 (A) it
was decided that, in the case above, there can be no enrichment claim or lien against the
owner. The owner concluded a contract with Y in terms of which the owner is entitled to the
work and responsible to pay Y for it, and therefore the owner is not enriched when Z does
the work. Moreover, even if the owner gets the work done while Z gets no payment because
Y has disappeared, this does not constitute enrichment at the cost of Z – it is an unfortunate
position caused by Z’s contract with Y. This problem should not be placed upon the owner’s
shoulders, in the court’s view. This decision changes the position as it was set out before in
Brooklyn House Furnishers v Knoetze and Sons 1970 (A). Academic authors such as Visser &
Miller (2000 SALJ 594) are critical of this decision, arguing that it is too rigid and does not
allow for a more contextual and relational policy approach.
In the second situation, the owner of the property never contracts with anybody, and the
property is repaired or improved without her knowledge and perhaps even against her
wishes. Consider the following example.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap19.xhtml
24-Jul-18
Chap19
Page 11 of 12
Example
You are the owner of a garage which sells second-hand motor cars. As many of
your clients are unable to pay cash, you sell the cars to them on the basis of credit
agreements, which means that they pay for the cars in instalments. Until the last
payment is made you retain ownership. One of your clients in terms of such a
credit agreement takes the car to a service station to have certain repairs and
work done. Assume that these repairs and work include necessary improvements
(repairing a burst engine block), useful improvements (installing a radio/tape) and
luxurious improvements (spray painting the bodywork a lurid pink). The client
never mentions the fact that the car was bought on credit agreement and that you
are still the owner. Then, just as the work is completed, your client decides to
leave the country. She still owes you a number of instalments amounting to
several thousands of Rand, and she owes the service station money for the repairs
and work done on the car. When you find out that your client has left the country
you claim the car back from the service station, who relies on a lien.
In this example, which was not applicable in Buzzard Electrical (Pty) Ltd v 158 Jan Smuts
Avenue Investments (Pty) Ltd 1996 (A), the service station is in a bad position. It has done
all the work, it has spent money on the car, and now the client who requested the work has
disappeared and you, the owner, want the car back. The service station cannot demand
payment for the work
Page 323
from you, because you were not a party to the contract – they can demand payment in
terms of the contract only from the person who concluded the contract with them. Similarly,
they have no lien for the improvements in terms of the contract against you – the debtorcreditor lien based upon the contract is limited to the person who concluded the contract,
and that was not you. However, the only person from whom they can claim on the contract
has now disappeared. The courts have sometimes come to the rescue of people in this
position by granting them an enrichment claim and an enrichment lien in the place of their
useless contractual claim and lien. In fact, the decision in Brooklyn House Furnishers (Pty)
Ltd v Knoetze and Sons 1970 (A) is an example of this situation, which has to be
distinguished from the situation in the Buzzard Electrical case. Since this situation differs
from the position in Buzzard Electrical, it is possible that the service station might still be
able to claim compensation from and exercise a lien against the owner. This possibility was
confirmed in Hubby’s Investments v Lifetime Properties 1998 (W) and ABSA Bank t/a
Bankfin v Stander t/a CAW Paneelkloppers 1998 (C).
Although debtor-creditor liens are usually enforced to secure payment of a contractual
debt and enrichment liens to secure payment of an enrichment debt, it is sometimes
possible for both categories of liens to arise from the same situation. In this situation,
according to the courts, the service station in the example has lost its normal contractual
claim and lien by the disappearance of the debtor, and consequently they are now actually in
the position of an enrichment creditor. Therefore they can rely on an additional claim for
compensation, based on unjustified enrichment and backed up by an enrichment lien. This
claim, based on unjustified enrichment, is not limited to the contract, and can be enforced
against anybody who was enriched at the claimant’s expense. Usually that would be the
owner of the property, because the owner is usually enriched when the property is
improved.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap19.xhtml
24-Jul-18
Chap19
Page 12 of 12
However, this does not mean that the service station can now effectively enforce the claim
it had against the disappearing client against you. The basis of the two claims are different,
and consequently the amount of the debt is different in each case. In a normal contractual
claim the debt is the amount stipulated in the contract, but in an enrichment claim the debt
is the actual amount of the enrichment at the time when the action is instituted. Usually this
will be less than the contract price. In addition the enrichment will include necessary and
useful expenses, but not luxurious expenses, so that the service station cannot claim
anything for the paint job from you. Effectively their enrichment claim will be limited to the
amount by which you as owner are enriched by the repair work to the engine block and the
installation of the radio, and nothing else. If the court grants them a lien to enforce this
claim against you the lien will be limited to payment of this amount, and
Page 324
not the full contract price which was originally quoted to the disappearing client.
Liens are, therefore, enforced as a defensive measure against the owner’s rei vindicatio
when the court considers it just that the owner should first pay a debt, arising from contract
or enrichment, owing to the holder of the property. The origin of the debt will determine the
amount of the debt for which the lien can be exercised as well as the scope of its
enforcement. The court will consider the availability of the lien in any particular case with
due regard to all the circumstances. This point is illustrated by the decision in Singh v
Santam Insurance 1997 (A). In that case, Singh’s claim for return of her car was successful
because Santam could not establish the existence of unjustified enrichment, and therefore
there could be no lien.
Summary
Real security rights are created by law when the law provides a security right to
secure a debt, in the absence of agreement.
The lessor’s tacit hypothec is created by operation of law as soon as rent is in
arrears, and is perfected by attachment. It covers all movables of the lessee on
the premises and allows the lessor to attach the property to secure payment of
the rent in arrears. In certain circumstances it can apply to movables of third
parties on the premises as well.
The credit grantor’s tacit hypothec is created upon insolvency of the credit
receiver, and secures the credit grantor’s claim for outstanding payments. A
judicial pledge or mortgage is created by way of a writ of execution and
attachment, and provides a real security right to enforce an outstanding debt.
Statutory security rights of various kinds are created by statutes to secure
specific debts in the form of statutory mortgages, statutory liens, statutory
fictitious pledges or preferent claims.
Liens are rights of retention which allow the controller of property to refuse to
return it to the owner unless the owner repays an outstanding principal debt to
the controller. Enrichment liens are enforceable as real burdens on the property,
whereas debtor-creditor liens are enforceable as personal obligations.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap19.xhtml
24-Jul-18
Chap20
Page 1 of 8
Page 325
Chapter 20
Other property rights
20.1
20.2
20.3
20.4
Introduction
Landlord and tenant
Common-law land-use rights
Mineral rights
Summary
Overview
What possibilities are there for creating other property rights besides the ones
•
discussed in earlier chapters?
•
What are the property rights of the tenant with regard to land?
Are there other common-law land rights which are important?
•
•
How do mineral rights work?
20.1 Introduction
Ownership and the limited real rights discussed in earlier chapters are not the only or even
the most important property rights there are, especially now that section 25 of the
Constitution protects a wide range of property rights. (The constitutional protection of
property rights is discussed in chapter 22). It is necessary, therefore, to take note of other
property rights besides the ones already discussed. Not all these property rights are equally
common, and some of them are fairly technical and specialised subjects on their own. These
rights will be mentioned only very briefly here.
The most important property rights that are discussed in this chapter are the rights of
lease (particularly with regard to immovable property), a number of other common-law land
rights, and mineral rights.
Page 326
20.2 Landlord and tenant
|
Definition
Lease is a use-right, in the form of either a limited real right or a creditor’s right,
in terms of which the lessee is entitled to occupy and use the property of the
lessor against payment.
A lessee is a user of property, and the nature and content of the right to use the property
are usually described in the lease contract. If there is no clear agreement on this point the
right to use is restricted to the normal use of that property in the past, or by custom with
regard to the normal use of the property in question. Normally the lessee may not change
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap20.xhtml
24-Jul-18
Chap20
Page 2 of 8
the nature or use of the property, and the property must be restored to the owner in its
original condition at the end of the lease term. Usually the owner is responsible for the
maintenance of the property, but this may be changed by agreement in the contract of
lease. The owner is also responsible, in terms of an implied residual term that cannot be
changed easily by agreement, to ensure that the property is in a condition reasonably fit for
the purposes for which it is let (Pete’s Warehousing and Sales CC v Bowsink Investments CC
2002 (E)). The lessee must pay the rent as agreed in the contract of lease. Once the rent
with regard to immovable property is in arrears the landlord automatically obtains a tacit
hypothec over the lessee’s movables in order to secure the landlord’s claim for outstanding
rent. (This hypothec is discussed in chapter 19).
Normally a contract of lease creates contractual obligations only, with the result that the
lessee obtains a creditor’s right with regard to the object of the lease, and not a real right.
In the case of immovable property, especially residential property, this can cause serious
problems for the lessee if the lessor sells the property to someone else, who is not party to
the contract and not bound by it. To protect the lessee against this event the rule developed
that an existing lease overrides a sale: huur gaat voor koop. This rule means that an
existing lessee cannot be evicted by a new owner of the property, because the new owner is
bound by the lease even if she was unaware of it. This rule forms part of South African law.
However, it is necessary to distinguish between different categories of lease of immovable
property. The protection of the lessee is different in each case. The following categories
should be distinguished:
Categories of lease of immovable property
(a) Lease of immovable property for a term shorter than ten years (short-term
lease).
Page 327
(b)
(c)
Lease of immovable property for a term of ten years or longer (long-term
lease).
Lease of immovable property for a term of ten years or longer and registered
in the deeds office (registered long-term lease).
(a) Short-term lease
A short-term lease creates creditor’s rights only, but traditionally it is said that the lessee
acquires something that resembles a real right as soon as she occupies (‘takes possession
of’) the leased premises. Accordingly, the lessee is protected against new owners of the
property in two cases. Firstly, the contract and all rights resulting from it will be enforced
against new owners who were aware of the contract as if they were parties to the contract.
This enforcement of the contract against non-parties is based upon the doctrine of notice
(see chapter 17), and it means that the lessee can keep the new owner (who was aware of
the lease before purchasing the property) to the lease contract as if it were concluded
between them.
Secondly, the lessee is protected against all other new owners of the property, even if
they are unaware of the lease, on the basis of the rule that an existing lease overrides a new
sale (huur gaat voor koop). It is often said that this rule provides the lessee with a limited
real right in the property, but it is probably better to say that the lessee has a specially
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap20.xhtml
24-Jul-18
Chap20
Page 3 of 8
protected creditor’s right, which is enforced against new owners of the property as if they
were parties to the lease agreement. Although it is sometimes said that the protection of the
lessee is restricted to lessees who are already in occupation because the lessee acquires a
real right upon occupation, this approach seems questionable: the fact of physical control
cannot create a limited real right in immovable property – delivery or control creates real
rights with regard to movables only. Real rights with regard to immovable property are
usually created by registration. Because of the cost involved and practical considerations
short-term leases are not registered.
The protection which the lessee gets from the rule that an existing lease overrides a new
sale means that she is able to demand that the new owner honour the existing lease
agreement on the same basis as before the sale, for the rest of the original lease term. If
the contract gave the lessee the option to extend the lease the new owner would also be
held to that. However, the protection of this principle does not extend beyond the landlordtenant relationship. Where the original lease included an option to purchase the property,
the tenant cannot rely on the huur gaat voor koop principle to enforce that option against a
new purchaser of the property: Spearhead Property Holdings Ltd v E & D Motors (Pty) Ltd
2010 (SCA).
Page 328
Genna-Wae Properties v Medio-Tronics (Natal) 1995 (A)
The huur gaat voor koop rule is explained as follows:
(a) The alienation of leased immovable property does not bring the lease to an
end.
(b) The purchaser of the land is substituted for the original lessor by operation
of law.
(c) The new owner acquires all the rights and all the obligations of the original
lessor, including the obligation to allow the lessee to continue the lease,
provided that the lessee pays the rent and observes all other obligations
under the lease.
(d) The lessee, in turn, is bound by the lease, and as long as the new lessor
recognises the lease the lessee cannot resile from the lease.
(b) Unregistered long-term lease
The Deeds Registries Act 47 of 1937 describes long-term leases as leases for ten years or
longer. The Formalities in Respect of Leases of Land Act 18 of 1969 provides that
unregistered long-term leases are enforced against new owners in two cases only.
(aa) Firstly, an unregistered long-term lease is enforced on the basis of the huur gaat voor
koop rule for the first ten years of its existence, but for no longer than that. In this
case, as with short-term leases, the lessee must already be in occupation to get the
benefit of the rule.
(bb) Secondly, an unregistered long-term lease is enforced against new owners with prior
knowledge of the lease, on the basis of the doctrine of notice. In this case the lease will
be enforced for the whole period agreed to in the contract, and not for ten years only.
As was pointed out earlier, the doctrine of notice is applied to the lessee’s position on
the basis of the argument that a lessee acquires a real right upon occupation. (The
doctrine of notice does not normally apply to mere personal rights: Vansa Vanadium
SA v Registrar of Deeds 1997 (T).)
(c) Registered long-term lease
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap20.xhtml
24-Jul-18
Chap20
Page 4 of 8
Registered long-term leases create limited real rights and are protected as such. This means
that they are enforced against any new owner of the property as a real burden, a limited real
right, whether the new purchaser was aware of the lease or not. In this case the protection
of the lease is exactly the same as that of any other registered limited real right.
The Rental Housing Act 50 of 1999 now provides that tenants of rental housing may be
evicted only once the lease has been terminated lawfully in terms
Page 329
of the Act and the lease agreement. (The Act applies to residential property only.) The Act
prescribes certain conditions that must be included if the lease is in writing, but writing is not
required for the validity of a short-term lease. Once the lease has been terminated lawfully,
the owner can approach the court for an eviction order. However, the Act must be read in
line with section 26(3) of the Constitution, which prohibits arbitrary eviction from one’s
home. See Maphango v Aengus Lifestyle Properties (Pty) Ltd 2012 (CC).
20.3 Common-law land-use rights
A variety of common-law land rights provides alternatives for ownership of land. Not all
these rights are equally common, and some of them have virtually disappeared, but they
might become more useful again. Some alternative land-use rights, such as the servitudes of
usufruct, use and occupation (chapter 17) and lease (earlier in this chapter) have already
been discussed, but there are still other land-use rights that are often overlooked. Just a few
of these rights are mentioned briefly here.
Alternative common-law land-use rights
(a) Partiarian lease
(b) Labour tenancy
(c) Leasehold
(d) Quitrent
(a) Partiarian lease
Definition
A partiarian lease is a special kind of land lease which applies to the use of
agricultural land, in terms of which the landowner and the lessee agree that the
lessee shall farm the land (or a part of it) against payment in the form of a certain
percentage of the crop or produce.
In this way potential farmers with no money and existing farmers who cannot exploit all
their land can come to a mutually satisfactory agreement from which both can benefit. The
partiarian lease is a true lease, which means that the normal principles regarding lease apply
to it. These principles were confirmed by the appellate division of the supreme court in
Lubbe v Volkskas 1992 (A).
Page 330
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap20.xhtml
24-Jul-18
Chap20
Page 5 of 8
(b) Labour tenancy
Definition
Labour tenancy is a common-law form of land-use deriving from a contract with
regard to agricultural land. The contract provides the labourer with a right to
occupy and use land (a house or a piece of land) belonging to the employer for
purposes as agreed in the contract, in exchange for providing labour to the
landowner.
In 1996 the government introduced legislation (the Land Reform (Labour Tenants) Act 3 of
1996) to protect the rights of labour tenants, and to enable them to purchase the land they
occupy from the farm owner. (See chapter 23). The definition of a labour tenant (section 1
of the Act) was explained and distinguished from other farmworkers in Zulu v Van Rensburg
1996 (LCC).
(c) Leasehold
Definition
Leasehold can be described as a limited real right to use land for a long period. In
most cases the owner of the land held in leasehold is the state.
By far the greatest part of leasehold rights are held by black people, who were prevented
from obtaining full ownership to land during the apartheid era. Part of the current land
reform programme of the government is aimed at upgrading existing rights in state land to
full ownership. In this process a number of leaseholds have been upgraded to ownership.
Leasehold is a common-law form of land-use which resembles lease, but it is usually for a
long period.
(d) Quitrent
Definition
Quitrent is a form of land-use which was known to common law, and can be
described as a limited real right similar to a perpetual lease. For all practical
purposes quitrent is similar to full ownership.
This form of land right was used on a limited scale during the apartheid era to provide black
people with land rights less than full ownership, especially with regard to surveyed land. In
view of current plans to facilitate and extend land surveys the distinction between leasehold
and quitrent might become
Page 331
blurred. Some of the existing quitrent rights have already been upgraded to ownership, and
others will be upgraded in the process of land reform. Quitrent is especially strong in view of
its unlimited term. Usually this kind of land-use right is particularly useful with regard to
state land that cannot be sold.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap20.xhtml
24-Jul-18
Chap20
Page 6 of 8
20.4 Mineral rights
Definition
Prospecting and mining rights provide their holder with the entitlements to
prospect for minerals on the land, to mine for them and to dispose of the
extracted minerals. All these entitlements must be exercised within the limits
prescribed by the applicable legislation and with due regard for the rights of the
landowner.
Mineral rights constitute a unique form of property right which developed in the context of
South Africa’s mineral wealth. Since 1 May 2004, the new Mineral and Petroleum Resources
Development Act 28 of 2002 governs all matters pertaining to minerals and mining. The Act
establishes a completely new framework within which the focus is no longer on ownership
and mineral rights, but rather on permits and licences granted and regulated by the state.
The fundamental idea is that the state acts as custodian of the country’s mineral wealth,
which is in future no longer to be exploited for private wealth and profit only but also for the
benefit of the whole country and with due regard for historical imbalances and the
responsible management of a limited resource.
In the past all mineral rights originated in ownership of the land. The landowner was
automatically owner of the minerals in the land and also holder of the mineral rights in the
land, unless mineral rights were separated from landownership and transferred to someone
else. Exploitation and mining of minerals therefore always started with separation of the
mineral rights, whereafter different rights to prospect for and mine the minerals could be
granted to other persons.
The Deeds Registries Act provides different ways in which mineral rights could be
separated from ownership of the land before the minerals had been removed from the land.
In future the acquisition and vesting of mineral and mining rights will be regulated by the
2002 Act.
Mineral rights, once they are separated from ownership of the land, are unique in the
sense that they remain separated from ownership even if the same person is owner of the
land and holder of the mineral rights. Other
Page 332
limited real rights cannot be held by the landowner, and disappear as soon as the land itself
is acquired by the holder of these rights. (Compare chapter 17 on servitudes and chapters
18 to 19 on real security rights.) Mineral rights differ from praedial servitudes in that they do
not require a dominant and a servient tenement; they can be held by any person regardless
of ownership of land. They also differ from personal servitudes in that they are not limited to
a specific person and can be transferred freely (see chapter 17).
Minerals belong to the owner of the land as long as they form part of the land. By
obtaining the mineral rights the mineral rights holder did not obtain ownership of the
minerals – in the old system that happened only once the minerals had actually been
separated from the land through mining. Mineral rights provided the holder with the
entitlements to prospect for minerals on the land, to mine for them and to dispose of the
extracted minerals. All these entitlements had to be exercised within the limits prescribed by
various mining and mineral laws and with due regard to the rights of the landowner.
In the new system introduced in 2004, mineral rights are systematically replaced by socalled ‘new order’ rights. These new rights consist mainly of prospecting and mining rights
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap20.xhtml
24-Jul-18
Chap20
Page 7 of 8
that are granted, by way of temporary grants, by the state. Acquisition and exercise of these
rights are controlled by the 2004 Act. Transitional provisions govern the conversion of ‘old
order’ mining and mineral rights to ‘new order’ rights.
As a unique right which is deemed important for the national economy, mineral rights as
well as the ‘new order’ rights replacing them can be exercised and exploited even when the
landowner’s rights are affected in the process – it is generally accepted that the exploitation
of minerals takes precedence over the rights of the landowner in cases of irreconcilable
conflict. Usually the mining company will be restricted only in its exploitation of the minerals
by the provisions of the relevant legislation and the requirement that they act reasonably.
Reasonable use means that the minerals must be mined in the most effective yet least
onerous way. However, unless the agreement that separated and transferred the mineral
rights provides differently, reasonable exploitation of minerals does not make it physically
impossible for the landowner to use the surface of the land normally: Anglo Operations Ltd v
Sandhurst Estates (Pty) Ltd 2006 (T). The reasoning behind the wide powers of exploitation
given to the mineral rights holder is that the effects of exploitation on the rights of the
surface owner should have been reflected in the purchase price of the mineral rights, but in
the absence of a clear agreement to such effect, the courts will not easily accept that the
exercise of mineral rights automatically means that normal use of the land surface can be
rendered impossible.
Page 333
The word ‘mineral’ is used in various statutes and in contracts pertaining to mining and
mineral rights, and generally speaking its exact meaning and scope has to be determined in
every individual case with regard to the intention of the legislator or the contracting parties.
This meaning can be either wide, in which case it will include substances such as clay, river
sand or gravel, or narrow, in which case it will be limited to a narrower category of
substances such as precious stones or precious metals. In the Mineral and Petroleum
Resources Development Act 28 of 2002 ‘minerals’ is defined rather widely.
Definition
The Mineral and Petroleum Resources Development Act 28 of 2002 defines
minerals widely to include materials in a solid, liquid or gaseous form, found
naturally in or on the earth or in water and formed by geological processes,
including sand, stone, rock, gravel and clay and minerals occurring in slag heaps
or deposits, but excluding water, petroleum and peat.
This definition does not necessarily apply to contracts or other statutes. The context of
specific statutes or contracts must indicate whether the minerals dealt with in that statute or
contract are defined widely or narrowly. In Finbro Furnishers v Registrar of Deeds,
Bloemfontein 1985 (A) and Minister of Land Affairs v Rand Mines 1998 (SCA) it was
confirmed that the word ‘mineral’ has a fluid content, admitting of a variety of meanings.
When interpreting this word in a contract, the meaning that was commonly accepted at the
time of drafting the contract is relevant, and not the meaning that is accepted at the time of
the litigation.
The Mineral and Petroleum Resources Development Act 28 of 2002 changes the whole
picture with regard to minerals, mineral rights and mining dramatically. The Act abolishes
the notion of mineral rights and the principle that mineral rights and ownership in minerals
find their origin in landownership. Instead, the state is proclaimed custodian of all mineral
wealth, and all rights relating to mining and minerals originate in state grants of the right to
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap20.xhtml
24-Jul-18
Chap20
Page 8 of 8
prospect for and mine minerals. Special transitional provisions allow current landowners and
holders of mineral rights and mining rights a limited opportunity to gain entry into the new
system by converting their so-called ‘old order’ existing rights into ‘new order’ prospecting
and mining rights in accordance with the Act. Unconverted and unused rights lapse after the
prescribed periods, and then the rights may be awarded to someone else. The Act, which is
intended to open up access to the mining industry to
Page 334
previously disadvantaged individuals and groups, changes the face of mining rights quite
dramatically. For all practical purposes, all rights to prospect for, mine and exploit minerals
will in future consist of temporary state grants and permits that are acquired and exercised
under strict state control.
Summary
Besides ownership and the limited real rights already discussed in earlier chapters,
there is a wide variety of other property rights that also deserve attention, even
though they might be less common or more specialised subjects. The most
important ones discussed here are the rights of landlord and tenant, common-law
land rights and mineral rights.
The lessee obtains a right to use the lease property as described in the contract
of lease. In the case of immovable property this right is protected against new
owners of the property by registration, the doctrine of notice and the rule that an
existing lease overrides a new sale.
Leasehold and quitrent are long-term limited real rights in land, and both offer
security of tenure, but in view of the use that was made of these rights during the
apartheid era they are associated with the kind of inferior land rights given to
black people during the era of apartheid land law.
Mineral rights are real rights of a unique kind which allow the holder to prospect
for, extract and remove minerals on the land in question within the confines of
legislation pertaining to mining and minerals. Ownership of the actual minerals is
obtained only upon extraction and separation from the land. The mineral rights
holder must act reasonably in exploiting the minerals, but in the case of
irreconcilable conflict the mineral rights take precedence over the rights of the
landowner. Since 1 May 2004 all rights to minerals are subject to strict state
control.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap20.xhtml
24-Jul-18
PartV
Page 1 of 1
Page 335
Part V
Constitutional property law
Chapter 21:
Introduction to constitutional property law
Chapter 22:
Property rights: section 25
Chapter 23:
Reform of property law
Chapter 24:
The future of property law
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/PartV-print-1536070215.xhtml
04-Sep-18
Chap21
Page 1 of 6
Page 337
Chapter 21
Introduction to constitutional property law
21.1
21.2
21.3
21.4
21.5
Constitutional law and private law
Overview of the Constitution
The values of the Constitution
Interpretation
Limitation of rights
Summary
Overview
What is the role of the Constitution in private law?
•
What are the most important features of the Constitution?
•
Which values are entrenched in the Constitution?
•
How must the Constitution be interpreted?
•
When can the rights protected in Chapter 2 be limited?
•
21.1 Constitutional law and private law
The Constitution of the Republic of South Africa of 1996 is important in private law, and
particularly with regard to property law. A constitution is a document which contains the
most important principles according to which the organisation and functions of the state and
of the government are controlled, which means that, strictly speaking, it is part of public
law. Private law, on the other hand, is usually said to be concerned with the relation
between private individuals, and not with state functions. However, there is widespread
recognition of the fact that the private and public spheres cannot be separated so easily.
This fact was demonstrated very clearly in the old South African law, where apartheid
principles and practices, which were introduced as part of public law and on the basis of
government policy, had enormous implications for and effects upon private law. Millions of
people were prevented from buying or renting houses where they wanted, or from
Page 338
establishing businesses in the location of their choice, simply because it was prohibited by
apartheid laws. In other words, apartheid demonstrated very clearly that there is no clear
division between the private and the public spheres, and that the two often overlap.
Similarly, many of the reform programmes introduced by the new government do not
operate within the private or the public sphere only, but operate in both areas at once. Land
restitution, the establishment of housing schemes and the promotion of access to
agricultural land are all examples of state actions which affect both private and public
interests.
|
The Constitution is meant to bring about a new era in South African history, and therefore
it concerns itself with both the public and the private spheres in order to address the
problems of both. In Gardener v Whitaker 1994 (E), which was concerned with the law of
defamation (which is part of private law) Judge Froneman stated this principle very clearly.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap21.xhtml
24-Jul-18
Chap21
Page 2 of 6
Gardener v Whitaker 1994 (E)
‘Our Constitution is also, obviously, primarily concerned with the protection of individual
rights against State action . . . But the Constitution is also concerned that the entire legal
system, including the common law and customary law, should accord with the broader
values of the Constitution . . . After all, the “past of a deeply divided society characterised
by strife, conflict, untold suffering and injustice” (words used in the “unity and
reconciliation” section of the Constitution) is not merely a history of repressive State
action against individuals, but it is also a history of structural inequality and injustice on
racial and other grounds, gradually filtering through to virtually all spheres of society
since the arrival of European colonists some three and a half centuries ago, and it will
probably take generations to correct the imbalance.’
In the preamble and in section 1 the purpose of the Constitution is also stated to be to
create a new legal order in which all South Africans will be entitled to a common citizenship
in a sovereign and democratic constitutional state in which there is equality between all
people, so that everybody shall be entitled to enjoy and exercise their fundamental rights. In
the preamble it is stated that the Constitution is aimed at healing the divisions of the past,
and building a future characterised by the recognition of human rights, democracy, equality
and peaceful co-existence. In order to do so the Constitution must make its influence felt in
both the public and the private spheres.
The same principle was recognised by the constitutional court in the Pharmaceutical
Manufacturers case.
Page 339
Ex parte President of the RSA: In re Pharmaceutical Manufacturers
Association of South Africa 2000 (CC)
‘There is only one system of law. It is shaped by the Constitution, which is the supreme
law, and all law, including the common law, derives its force from the Constitution and is
subject to constitutional control.’
In view of these considerations private law has entered a new phase in South Africa. In
future the private law, consisting of civil or common law, customary law and legislation, will
have to be interpreted and applied with due consideration of the values and principles of the
Constitution, in order to promote the ideals entrenched in the Constitution. Section 39 of the
Constitution states that the common law and customary law shall be interpreted and applied
in this way.
The implication of this development is that students of private law can no longer ignore
public law or the Constitution – it has effects and implications in every field of private law as
well.
21.2 Overview of the Constitution
The Constitution of the Republic of South Africa of 1996 can be characterised with reference
to a number of features. Some of these features are more important for private law than
others. Only the most important features are mentioned here.
Features of the Constitution
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap21.xhtml
24-Jul-18
Chap21
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Page 3 of 6
The Constitution is the supreme law.
The Constitution is entrenched.
The Constitution contains a bill of rights.
The Constitution is enforced by an independent judiciary.
The Constitution acknowledges the validity of common and customary law.
The Constitution embodies important values and principles.
The Constitution protects property.
The Constitution makes provision for horizontal application.
(a) The Constitution is the supreme law (section 2)
The fact that the Constitution is the supreme law means that all other laws, case law and the
common law, have to be reconcilable with it. The constitutional court has the power of
constitutional review, which means that it
Page 340
can evaluate other laws to determine whether they are reconcilable with the Constitution. If
an Act is found to be irreconcilable with the Constitution the constitutional court can declare
it invalid (at least inasfar as it is irreconcilable) or require the legislator to amend the Act.
According to the Constitution the rules of common law have to be developed to bring them
in line with constitutional objectives and principles. This development takes place in the
courts, where the common law is interpreted and applied. See (e) below.
(b) The Constitution is entrenched (section 74)
The rigidity of the Constitution means that it cannot be changed easily. A two-thirds majority
of all members of the national assembly and six provinces in the national council of
provinces is required to amend certain provisions of the Constitution.
(c) The Constitution contains a bill of rights (chapter 2)
Chapter 2 of the Constitution contains a so-called bill of rights or guarantee of fundamental
rights. Such a bill of rights is primarily aimed at the protection of these rights against
improper state interference, but as was pointed out above, in the South African situation it
will also affect private law.
(d) The Constitution is enforced by an independent judiciary (section 165)
One of the main features of the Constitution is the fact that it ensures the independence of
the judiciary, and actually reinforces it by means of the constitutional court, which is the
highest court in the land with regard to constitutional matters. All divisions of the high court
have, in addition to their normal jurisdiction, the ability to adjudicate constitutional matters.
The constitutional court is the highest court with regard to all issues.
(e) The Constitution acknowledges the validity of common and customary law (section 39)
The Constitution acknowledges the authority and validity of the principles of both common
law and customary law, inasfar as they do not contradict the principles of the Constitution
itself, and especially the rights protected in chapter 2. The principles of common law and
customary law have to be interpreted and applied with due regard for the values and
principles of the Constitution. See (a) above.
(f) The Constitution embodies important values and principles (section 1)
One of the most important aspects of the Constitution is that it is regarded
Page 341
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap21.xhtml
24-Jul-18
Chap21
Page 4 of 6
as a document which does not simply contain a number of legal rules and regulations; it
embodies important values and principles related to the transformation of South African
society. These values and principles are important not only for the interpretation of the
Constitution itself, but for the interpretation of all other laws as well. This aspect is dealt
with separately below.
(g) The Constitution protects property (section 25)
One of the fundamental rights which is protected in chapter 2 is property. This aspect is
dealt with separately in chapter 22 below.
(h) The Constitution makes provision for horizontal application (section 8)
Because the Constitution is the highest law with which all other law has to conform, it affects
more than just the vertical relationship between the state and legal subjects. There is room
for so-called horizontal application, which means that the Constitution could also be enforced
in so-called horizontal or private disputes between private persons. Horizontal application of
the property clause (section 25) is debatable, but in other areas the courts have already
adopted horizontal application of fundamental rights.
21.3 The values of the Constitution
The values and principles said to be entrenched in the Constitution form the background
against which it has to be interpreted and applied, and against which all other laws have to
be interpreted and applied as well. These values and principles are so important because the
Constitution is aimed at the transformation of South African society. The values and
principles themselves are concerned with the transformation process: from injustice to
justice, from inequality to equality, from oppression to democracy, from conflict to
reconciliation. In order to promote this transformation the Constitution and all other laws
have to be read in view of these values.
Values and principles embodied in the Constitution
(a) National unity and reconciliation
(b) Limited government in an open democracy
(c) A just and open society based on dignity, freedom and equality
(d) Political and cultural pluralism
(e) Constitutionalism
21.4 Interpretation
The interpretation of the Constitution is determined by the provisions of section 39.
Page 342
Section 39 of the Constitution
Interpretation of Bill of Rights
‘39 (1) When interpreting the Bill of Rights, a court, tribunal or forum –
(a) must promote the values that underlie an open and democratic society based
on human dignity, equality and freedom;
(b) must consider international law; and
(c) may consider foreign law.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap21.xhtml
24-Jul-18
Chap21
Page 5 of 6
(2) When interpreting any legislation, and when developing the common law or
customary law, every court, tribunal or forum must promote the spirit, purport and
objects of the Bill of Rights.
(3) The Bill of Rights does not deny the existence of any other rights or freedoms that
are recognised or conferred by common law, customary law or legislation, to the extent
that they are consistent with the Bill.’
(a) Interpretation of chapter 2
Section 39(2) states clearly that chapter 2 itself has to be interpreted with due regard to the
values of the Constitution, in other words the values which underlie an open and democratic
society based on human dignity, freedom and equality. This provision creates the spirit and
tone for the interpretation of the whole chapter.
(b) International law
According to section 39(1)(b) a court which interprets chapter 2 must consider international
law related to the protection of the fundamental rights entrenched in chapter 2. The courts
have no choice in this matter – they have to consider the applicable international law.
(Compare section 233.)
(c) Comparable foreign law
Section 39(1)(c) further provides that a court interpreting chapter 2 may consider foreign
law. In this case the matter is in the discretion of the court, and applicable foreign law can
be used if it will facilitate the interpretation. This provision makes it possible to take note of
other countries with constitutional property clauses similar to section 25 of the South African
Constitution, and of their case law in this regard. In the case of First National Bank of South
Africa Ltd t/a Wesbank v Commissioner for SARS 2002 (CC) the constitutional court referred
extensively to the law in Germany, Australia, the United States and the European Union.
This is the first important case on property in the Constitution, and it is discussed more fully
in chapter 22.
Page 343
(d) Restricted interpretation of laws
The provision in section 39(2) ensures that laws are not simply invalidated when they
appear to contradict the protection of rights in chapter 2. If these laws can be interpreted
more narrowly so that they do not restrict these rights, the narrow interpretation must be
followed, so that the law itself is still valid. This process is known as ‘reading down’ of a law.
(e) Application of common law and customary law
Section 39(3) is extremely important, because it lays down the principle that all laws,
including common law and customary law principles, have to be interpreted, applied and
developed in accordance with the spirit and objectives of chapter 2. That means that the
normal legislation, common-law rules and customary law rules all have to be interpreted and
applied to promote the protection of fundamental rights, in the general spirit of the
Constitution. The quotation from a decision of Judge Froneman at the beginning of this
chapter is a good example of the kind of approach envisaged by section 39(3).
21.5 Limitation of rights
None of the constitutional rights is absolute, and the Constitution makes provision for the
limitation of these rights (including property), provided that the general requirements of
section 36 are satisfied.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap21.xhtml
24-Jul-18
Chap21
Page 6 of 6
Permissible limitations of the fundamental rights: section 36(1)
According to section 36(1) of the Constitution the fundamental rights may be
limited only under the following conditions:
(a) They may be limited by law.
(b) The law must apply generally and not only to some people.
(c) The limitation must be reasonable.
(d) The limitation must be justifiable in an open and democratic society based on
human dignity, freedom and equality.
(e) The question whether a limitation is reasonable and justifiable in an open
and democratic society is answered with reference to all relevant factors;
including the nature of the right, the importance of the purpose of the
limitation, the nature and extent of the limitation, the relation between the
limitation and its purpose, and whether there are less restrictive means to
achieve the same purpose.
Page 344
Summary
The South African Constitution is so important for the transformation of South
African society that its effect is not restricted to public law. It is seen as a
constitution which functions in public law, with important implications and effects
in private law.
The most important features of the Constitution, as far as property law is
concerned, are the following: the Constitution is the supreme law; it is entrenched
or rigid; it contains a bill of rights; it is enforced by an independent judiciary; it
acknowledges the validity of common and customary law; it embodies important
values and principles; and it protects property. The Constitution strives towards
the transformation of South African society through the entrenchment and
promotion of specific constitutional values and principles. The most important
principles are national unity and reconciliation; limited government in an open
democracy; the creation of a just and open society based on freedom and
equality; political and cultural pluralism; and constitutionalism.
The interpretation of the Constitution is determined by section 39: chapter 2
shall be interpreted according to the values of the Constitution, that applicable
international law shall be taken into account when applying chapter 2, that
comparable foreign law may be taken into account, that laws which restrict the
fundamental rights must be interpreted more narrowly to bring them in line with
chapter 2, and that all existing laws, common law and customary law have to be
interpreted and applied with due regard for the spirit of chapter 2.
The limitation of constitutionally protected rights (including property) is
controlled by section 36 of the Constitution: no right is absolute, and any
constitutional right may be limited, provided such limitation satisfies the general
requirement that it is reasonable and justifiable, and any specific requirement that
may be laid down in the Constitution.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap21.xhtml
24-Jul-18
Chap22
Page 1 of 11
Page 345
Chapter 22
Property rights: section 25
22.1
22.2
22.3
22.4
Introduction: function of a property clause
The nature and scope of the property guarantee
Deprivations clause: section 25(1)
Expropriation clause: section 25(2) and 25(3)
Summary
Overview
What is the function of a property clause such as section 25?
•
Which property rights are guaranteed in section 25?
•
How does section 25 provide for regulation of property?
•
When is expropriation permitted in terms of section 25?
•
How will section 25 work in practice?
•
22.1 Introduction: function of a property clause
Section 25 of the Constitution of the Republic of South Africa of 1996 contains the property
clause; the clause which provides for the protection of property as a constitutional right. The
inclusion of this clause in chapter 2 and its formulation has caused controversy, since it is
not universally accepted that property should be protected constitutionally. The property
clause in section 25 of the Constitution of 1996 is, however, in line with an established
worldwide tradition of human rights’ protection.
The function of a property clause is usually to provide a guarantee for the existence and
protection of individual property rights on the one hand, and to provide the possibility and
the limits for state interference with those same property rights on the other. Although these
two functions might seem to be in conflict or even contradictory at first, they make sense
when it is taken into account that no individual right is or can be guaranteed absolutely. An
individual’s freedom of speech cannot be upheld to such an extent that it amounts to
freedom of slander or defamation, and similarly, the property guarantee cannot be upheld so
absolutely that the state can never limit with
Page 346
it. For one thing, the state cannot allow an individual to use her property in such a way that
it causes harm or damage for others, and therefore there are laws which limit property
rights in order to protect other people and the general public against nuisance and damage.
To mention another example: in essence taxation is a form of state interference with a
individual’s property rights or wealth, yet nobody would argue that all taxation is
|private
unlawful, because no state government can function or even exist without taxation.
Similarly, the state has to take steps to promote health and sanitation, even though these
health and sanitation regulations, which usually take the form of building and health laws,
limit people’s property rights. Environmental conservation laws can also limit people’s
property rights, but the state has to enforce these measures for everybody’s benefit.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap22.xhtml
24-Jul-18
Chap22
Page 2 of 11
In order for the state to control the way in which people live together it is necessary to
regulate the use and exploitation of property, and that will always imply some form of state
interference with property rights. Consequently the constitutional guarantee of property
rights is never absolute, and the only question is where the line between the protection of
private property and legitimate state regulation of property must be drawn. This is the most
important and the most difficult question of constitutional property law, and the answer to it
has to be found in the interpretation and application of the property clause.
22.2 The nature and scope of the property guarantee
(a) Nature of the guarantee
Section 25 of the Constitution contains a negative property guarantee, which means that
property or property rights may not be restricted, unless certain requirements are satisfied.
The state may not restrict these rights unless the requirements are met. The property
guarantee in section 25 therefore has two aspects: on the one hand it allows for state
regulation of the use of property, and on the other hand it protects private property by
ensuring that state interference will take place only under certain circumstances and subject
to certain requirements.
(b) Scope of the guarantee
Section 25 guarantees a wide range of property rights. It is not absolutely clear what should
be included in this term, but it seems likely that it includes all kinds of rights (both real and
personal rights) with regard to all kinds of property (movable and immovable corporeal
property, immaterial or intellectual property, and incorporeal property). If this wide
interpretation is followed the South African concept of property will be extended appreciably,
Page 347
at least for the purposes of the Constitution. Extension of what is regarded as property for
purposes of the Constitution does not necessarily change the private law notion of property,
but it could influence private law. The traditional civil law concept of property is traditionally
restricted to real rights with regard to corporeal things (plus certain exceptions – see chapter
2), but section 25 seems to include both real and personal rights (creditor’s rights) with
regard to both corporeal and incorporeal property. A wide range of rights and interests will
therefore be included under the guarantee in section 25. In the First Certification Case (In
re: Certification of the Constitution of South Africa, 1996 1996 (CC)) the constitutional court
had to decide whether the property clause complied with established international human
rights standards. The court decided that there was no single established formulation that
described property for such a clause, and it held by implication that the general term
‘property’ in section 25 allowed sufficient scope to include all rights and interests that had to
be protected according to international standards. It therefore looks as if a wide range of
rights will be included under ‘property’ in section 25.
Property in terms of section 25
(a) Ownership of movables (ownership of a car)
(b) Ownership of immovables (ownership of a house)
(c) Limited real rights in movables (pledge of a wristwatch)
(d) Limited real rights in immovables (servitude over a farm)
(e) Personal rights with regard to movables (contractual right to delivery of a
car) (?)
Personal rights with regard to immovables (contractual right to transfer of a
(f)
house) (?)
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap22.xhtml
24-Jul-18
Chap22
(g)
(h)
(i)
(j)
Page 3 of 11
Other creditor’s rights based on contractual and delictual claims (shares in a
company, claim against a pension fund)
Immaterial property rights (patent, copyright in a book)
Labour rights (right to unionise, right to participate in management of a
company) (?)
Claims against state wealth (housing, state pension schemes) (?)
It is still uncertain whether all these property rights will qualify for purposes of section 25.
The rights in the list of examples above which are marked (?) might or might not be included
– in the United States and other countries some of them were included, while others were
not. Even if all the examples in the list above are not recognised as property rights for
purposes of section 25 the scope of South African property law will still be extended. In
Page 348
First National Bank of SA Ltd t/a Wesbank v Commissioner for SARS 2002 (CC) it was
confirmed that ownership of movable and immovable tangibles is definitely included under
section 25; in Ex parte Optimal Property Solutions CC 2003 (C) it was decided that
registered praedial servitudes in the form of restrictive conditions (chapter 17) are also
property for purposes of section 25. Rights in property will definitely include at least some
rights with regard to immaterial property (patents, copyright) and probably at least some
rights with regard to incorporeal things (shares in a company), neither of which was
traditionally regarded as part of property. In Laugh it Off Promotions CC v South African
Breweries International (Finance) BV t/a Sabmark International 2006 (CC) the constitutional
court simply accepted that trademarks are objects of property rights for purposes of section
25. In National Credit Regulator v Opperman 2013 (CC) the court confirmed that a
contractual claim for payment of money (a money debt) is also property for purposes of
section 25. In Shoprite Checkers (Pty) Ltd v Member of the Executive Council for Economic
Development, Environmental Affairs and Tourism, Eastern Cape 2015 (CC) the court decided
that a liquor trading licence, once granted, was also property for constitutional purposes.
This extension of the property concept will probably not affect or change the ‘purely’ private
law principles (such as registration of real rights in immovable property), but it brings a new
perspective (such as the question of state interference with private property) that cannot be
ignored in private law.
In Lebowa Mineral Trust Beneficiaries Forum v President of the RSA 2002 (T) the court
held that (‘old order’ – see chapter 20) mineral rights were not ‘property’ for purposes of
section 25 and that they were therefore not protected by the Constitution. This decision is
based on an unnecessarily restrictive interpretation of section 25. With reference to the First
Certification Case (above) it rather appears that the wide framing of section 25 leaves
enough room to include at least all rights that are recognised as real rights in private law
(like mineral rights – see chapter 20). The constitutional court decision in Agri South Africa v
Minister for Minerals and Energy 2013 (CC) confirmed that the new statutory rights (like
prospecting and mining rights in the new order established by Act 28 of 2002 – see chapter
20) are also included.
(c) Enforcement of the guarantee
It should be clear that the main purpose of the constitutional guarantee of fundamental
rights, including rights in property, is to protect private rights against improper state
interference. This protection on the normal vertical level of enforcement of section 25 will
usually take the form of a court action against the state, aimed at obtaining an order to the
effect that either the state action is unlawful or the legislation which authorises it is invalid,
because it
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap22.xhtml
24-Jul-18
Chap22
Page 4 of 11
Page 349
is in conflict with the guarantee provided in section 25 of the Constitution. In certain cases
the property guarantee in section 25 might also be enforced on the horizontal level, between
private individuals. This horizontal enforcement will be allowed only in order to promote the
values and spirit of chapter 2 of the Constitution in the sphere of private civil law or
customary law.
22.3 Deprivations clause: section 25(1)
Section 25(1) of the Constitution: the deprivations clause
‘25(1) No one may be deprived of property except in terms of law of general
application, and no law may permit arbitrary deprivation of property.’
(a) Regulation by way of due process of law
This subsection ensures that all state interferences with private rights in property shall be in
accordance with law (in accordance with due process of law). That means that state
interferences shall only be permissible if they are authorised by a properly promulgated law
of the legislator, and with proper legal procedures in terms of that law, or by principles of
(unwritten) common law or customary law. Section 25(1) ensures that deprivations of
property occur only in accordance with an authorising statute, and that they are not
arbitrary. Deprivations will be arbitrary when they affect just one person (or group of
persons) and not the public in general, or when there is insufficient reason for them – they
have to serve a legitimate purpose that is in the public interest and their effects may not be
disproportionate. (See First National Bank of SA Ltd t/a Wesbank v Commissioner for SARS
2002 (CC).)
A clause such as this one has two functions. In the first place it recognises the fact that
some state limitations of private rights in property are unavoidable, and therefore it permits
such limitations. Secondly, it prescribes the requirement that these permissible limitations
must conform with proper legal procedures.
‘Regulation’ is the general term which refers to all permissible state limitations of private
rights in property. In US law this function of the state is also referred to as the police power,
which indicates that these limitations are the result of state actions undertaken for the public
benefit or for public purposes. Regulatory state actions have to serve the general welfare of
the whole community. This will usually take the form of regulations that restrict the use of
property in order to protect the rights of others or to promote public health or safety (such
as building or health regulations or traffic laws).
In summary it can be said, therefore, that state limitations of private property are
permitted by the deprivations clause, provided these limitations
Page 350
occur in accordance with due process of law, serve the public welfare and that there is
sufficient reason for them.
(b) Deprivations
In an earlier paragraph it is pointed out that the general word for state actions which
legitimately limit private rights in property is ‘regulation’, because it refers to the state’s
function in controlling or regulating, for the sake of the whole community, the use and
exploitation of property. State actions concerned with town planning, building regulations,
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap22.xhtml
24-Jul-18
Chap22
Page 5 of 11
physical planning, environmental conservation, health and sanitation and so on are all
examples of such regulation, and all these actions might limit private property to some
extent.
In the formulation of section 25(1) the word ‘regulation’ could have been used to refer to
the state actions limit private rights in property, but instead the word ‘deprivation’ was used.
The word ‘deprivation’ is potentially misleading, because it can be confused with the word
‘expropriation’ in section 25(2). The difference between the two is explained in the following
section of this chapter. For the moment it is sufficient to note that ‘deprivation’ in the sense
of section 25(1) must be understood in the sense of a limitation which, in the public interest,
subjects the use and enjoyment of property to certain restrictions. These limitations are of a
general nature and have roughly the same benefits and the same disadvantages for
everybody, and no compensation is paid for them. A regulation that prevents me from
running a lumber-mill in a quiet residential area does ‘deprive’ me of the freedom to do as I
like, but it does not take my property away (I can still live there), and it also protects me
against similar actions of other people.
In First National Bank of SA Ltd t/a Wesbank v Commissioner for SARS 2002 (CC) it was
decided that the notion of deprivation should be interpreted widely so as to include all legally
significant state interferences with or limitations of property. Since then the constitutional
court has more or less consistently followed this wide interpretation.
(c) Arbitrary
Deprivations of property are allowed only when and insofar as they are in accordance with
section 25(1). As was pointed out above, the first requirement is that deprivations have to
take place in terms of generally applicable law that applies equally to everybody involved,
and not only to one or a small group of persons. This requirement ensures that deprivations
are fair and serve the public in general.
The second requirement is that even a general law may not permit arbitrary deprivations
of property. In First National Bank of SA Ltd t/a Wesbank v
Page 351
Commissioner for SARS 2002 (CC) the meaning of this requirement was made clear.
According to the decision, a deprivation would be arbitrary in terms of section 25(1) if there
was insufficient reason for it or if it was procedurally unfair.
First National Bank of SA Ltd t/a Wesbank v Commissioner for SARS 2002
(CC)
The FNB case concerned section 114 of the Customs and Excise Act 91 of 1964,
which allowed SARS to detain and eventually sell property in the possession of tax
and duties debtors. In this case, SARS detained and intended to sell certain motor
vehicles in the possession of a company that owed SARS tax and duties in arrears.
The vehicles belonged to FNB, a financing institution. The question was whether
the 1964 Act (a law of general application) could legitimately allow the state
(SARS) to deprive a property owner (FNB) of its property in this way.
The constitutional court pointed out that the effect of section 114 of the Act had
to be distinguished from a ‘normal’ common law lien, because there was no nexus
between the property owner (FNB) and the customs debtor – simply stated, FNB
did not owe SARS anything, and the motor cars in question were completely
unrelated to the tax and duties owed. In other words, if the detention and sale of
the property had a direct bearing on the tax debt (eg if the property was part of
the imported goods on which duties were owing) the deprivation might have been
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap22.xhtml
24-Jul-18
Chap22
Page 6 of 11
in order. However, in the absence of such a nexus or link between the debtor and
the property, it was unacceptable to allow the tax authorities to detain and sell
property belonging to someone who was not the tax debtor and who had no link
with the debt. To allow such a way of debt enforcement would be similar to an Act
that allowed the SARS to confiscate and sell your property in order to pay your
lecturer’s outstanding tax debts.
Because of the absence of a link or nexus between the tax debtor and the
owner of the property, the constitutional court described the effect of section 114
of the Act in FNB as an arbitrary deprivation of FNB’s property. Section 25(1) of
the Constitution prohibits any law that provides for arbitrary deprivation of
property and therefore section 114 of the Customs and Excise Act 91 of 1964 was
declared unconstitutional and invalid. The Act has since been amended to bring it
in line with the decision.
Apart from the FNB case (above) the following cases also dealt with deprivation of property
in terms of section 25(1):
(a) Regulations containing restrictive prescriptions regarding the quality, nature and even
appearance of houses in a particular area do not
Page 352
(b)
(c)
(d)
(e)
(f)
(g)
necessarily establish arbitrary deprivation, as long as they remain within the ambit of
the authorising statute: Nyangane v Stadsraad van Potchefstroom 1998 (T).
Decisions of a local government taken in terms of legislation that regulates building
and development projects could amount to arbitrary deprivation if they deprived
someone of a registered real right: Oudekraal Estates v City of Cape Town 2004 (SCA).
Local ordinances that authorise a local government to remove illegal structures without
permission could amount to arbitrary deprivation and should therefore be interpreted
restrictively as if they require a court order for such removal: African Billboard
Advertising (Pty) Ltd v North and South Local Councils, Durban 2004 (N).
Restraint and forfeiture orders in terms of chapter 6 of the Prevention of Organised
Crime Act 121 of 1998 place extraordinary restrictions on private property. To avoid
these orders constituting arbitrary deprivation the Act has to be interpreted and
applied restrictively and with care: National Director of Public Prosecutions v (1) R O
Cook Properties (Pty) Ltd; (2) 37 Gillespie Street Durban (Pty) Ltd; (3) Seevnarayan
2004 (SCA); National Director of Public Prosecutions v Rautenbach 2005 (SCA);
Prophet v National Director of Public Prosecutions 2006 (SCA).
Land reform measures are authorised by specific constitutional provisions and do not
necessarily bring about arbitrary deprivation, even when they place a direct physical
restriction on a landowner’s rights (by allowing occupiers, under certain conditions, to
bury their family members on land without the landowner’s permission), provided that
the legislation establishes a fair and reasonable balance between the conflicting
interests: Nhlabati v Fick 2003 (LCC).
Legislation that restricts landownership by making the landowners responsible for
payment of municipal charges for use of water and electricity on the premises (even if
the services were used by another person) does not permit arbitrary deprivation,
because the link between the owner, the property and the consumption of services on
the premises is close enough: Mkontwana v Nelson Mandela Metropolitan Municipality;
Bissett v Buffalo City Municipality; Transfer Rights Action Campaign (KwaZulu-Natal
Law Society and Msunduzi Municipality as Amici Curiae) 2005 (CC).
Legislation that prevents a private-law creditor from recovering his claim for payment
from a debtor allows for arbitrary deprivation (and is invalid) insofar as it exceeds the
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap22.xhtml
24-Jul-18
Chap22
Page 7 of 11
legitimate aim of the legislation (consumer protection) and affects a creditor who
should not have been
Page 353
included under the statutory scheme: National Credit Regulator v Opperman 2013
(CC).
22.4 Expropriation clause: section 25(2) and 25(3)
Section 25(2)–(3) of the Constitution: the expropriation clause
‘25(2) Property may be expropriated only in terms of law of general application–
(a) for a public purpose or in the public interest; and
(b) subject to compensation, the amount of which and the time and manner of
payment of which have either been agreed to by those affected or decided or
approved by a court.
‘(3) The amount of the compensation and the time and manner of payment must be
just and equitable, reflecting an equitable balance between the public interest and the
interest of those affected, having regard to all relevant circumstances, including–
(a) the current use of the property;
(b) the history of the acquisition and use of the property;
(c) the market value of the property;
(d) the extent of direct state investment and subsidy in the acquisition and
beneficial capital improvement of the property; and
(e) the purpose of the expropriation.’
(a) Expropriation and deprivation
In contrast with section 25(1), which refers to deprivation of property, section 25(2) deals
with expropriation. The first problem emerging from the combination of subsections (1) and
(2) is a vital one: what is the difference between them? The distinction is not easy to make,
but stated simply it boils down to the fact that deprivations restrict the owner’s use and
enjoyment of property in the public interest (such as road safety or pollution control),
without necessarily taking the property away; whereas expropriation takes the property
away from the owner for public use (such as building a dam). Compensation is paid for
expropriation only, because it places the burden (loss of a farm) on one person only, but for
the common benefit (building a dam) of everybody; whereas the burden and the advantages
of deprivations (pollution control, building regulation) affect everybody more or less equally.
This distinction is not easy to make, and there will be cases where it will be very difficult
to decide whether a state interference amounts to a deprivation or to expropriation. (For
instance a traffic regulation that prohibits all private taxi businesses.) A good idea is to see
all state interferences with
Page 354
private property as deprivations, and to regard the deprivations that actually acquire the
property of one person for state use, public use or another use that serves a public purpose
or is in the public interest as expropriations. More or less the same approach was followed in
First National Bank of SA Ltd t/a Wesbank v Commissioner for SARS 2002 (CC): first test all
interferences with property against the requirements for valid deprivation in section 25(1),
and then determine whether it was an expropriation that should also satisfy the
requirements of section 25(2)–(3). To date, the few decisions of the constitutional court that
deal with expropriation did not follow this approach but went straight to the requirements in
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap22.xhtml
24-Jul-18
Chap22
Page 8 of 11
section 25(2)–(3): Du Toit v Minister of Transport 2006 (CC); Agri South Africa v Minister for
Minerals and Energy 2013 (CC). In the Agri South Africa the court further decided that
expropriation always involves state acquisition of the disputed property. It is unclear
whether this decision makes the distinction between deprivation and expropriation much
clearer, since some deprivations (such as taxation or criminal forfeiture) also involve state
acquisition of the property.
This distinction means, for South African law, that all interferences with or deprivations of
property have to be in accordance with law in terms of section 25(1), and that some of them
also have to be accompanied by compensation if they amount to an expropriation of the
property for a public purpose or in the public interest.
The distinction between deprivations and expropriations in South African law appears from
the following summary.
The distinction between deprivations and expropriations
(aa) Deprivations include all legitimate state limitations of private rights in
property in terms of section 25(1). Deprivations that do not amount to
expropriations do not require compensation, but they must comply with the
proper legal procedures and they may not be arbitrary (First National Bank
of SA t/a Wesbank v Commissioner for SARS 2002 (CC)).
(bb) Expropriations include only those deprivations that amount to expropriation
or forced sale of the property for public purposes in terms of section 25(2).
Expropriation is said to be characterised by state acquisition of the property
(Agri South Africa v Minister for Minerals and Energy 2013 (CC)).
Expropriations must be accompanied by compensation as prescribed by
section 25(3).
Page 355
(b) Expropriation of property
Because of the fact that compensation is paid for state interferences with private property
which amount to expropriations, private individuals would like to characterise as many state
actions as possible as expropriations. However, generally speaking it is accepted that an
expropriation is characterised by the fact that the state does not simply regulate or restrict
the use of property (as in the case with the ‘normal’ deprivations, such as building
regulations), but actually acquires the property, usually for public use. The most common
example is the expropriation of land for building a road or a dam. Because of the fact that
the state acquires the property for public use in these cases, it is expected (in contrast with
‘normal’ deprivations) that the owner’s loss shall be compensated.
The distinction between ‘normal’ deprivations and expropriation is often very difficult, and
there are cases where the courts find it hard to decide whether a limitation that is placed on
property should be seen as a ‘normal’ regulatory deprivation (without compensation) or as
an expropriation (against compensation). In the important case of Harksen v Lane NO 1998
(CC) the constitutional court decided that section 21 of the Insolvency Act 24 of 1936 does
not bring about an expropriation, but a ‘normal’ deprivation. Section 21 provides that the
separate property of one spouse vests in the trustee of the insolvent estate, should the other
spouse become insolvent (to protect creditors against fraud). The argument is that the state
does not take the solvent spouse’s property away, but merely take temporary control over it
to protect the interests of creditors. This temporary taking of control over property is typical
of the regulation of property, a deprivation in terms of section 25(1) of the Constitution, and
compensation is not paid for it.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap22.xhtml
24-Jul-18
Chap22
Page 9 of 11
In the FNB case discussed in 22.3(c) above, it was also possible to argue that the Act
which allowed SARS to detain and sell property belonging to non-debtors (but found in the
possession of tax debtors) amounted to an expropriation without compensation, which would
be unconstitutional and invalid in terms of section 25(2) of the Constitution. The lawyers for
FNB used that argument to support their case, but the constitutional court eventually
decided that the relevant act did not amount to an expropriation without compensation, but
rather to an arbitrary (and therefore unconstitutional) deprivation in terms of section 25(1).
A similar argument might have been successful in Harksen v Lane NO as well, but was not
investigated.
In Steinberg v South Peninsula Municipality 2001 (SCA) the appellant also argued that a
proclaimed road scheme amounted to an expropriation of her property. The road scheme is
a potential or provisional plan for roads development, and if it is put in effect it will affect the
property of landowners
Page 356
in the area. However, it is not certain that such a plan will ever come into operation. Of
course this places certain restrictions on the intermediate use of the affected land. The
supreme court of appeal held that this was a valid deprivation rather than an expropriation
of property, because the land was not taken from the landowner, who could still use it
(within certain restrictions) in the meantime. On a comparable set of facts, the constitutional
court decided in Reflect-All 1025 CC v MEC for Public Transport, Roads and Works, Gauteng
Provincial Government 2009 (CC) that such a road scheme constitutes a legitimate
deprivation (not expropriation), provided it was imposed fairly.
(c) For a public purpose or in the public interest
Expropriations are permissible only for a public purpose or in the public interest. This means
that private property can be taken away only in the form of an expropriation to serve some
public purpose or for the public benefit, such as building a dam or a road. This qualification
already existed in the pre-1994 South African expropriation law, and it has always caused
problems because it is not entirely clear. There is a large number of possible state uses of
property where it is very difficult to say whether they are for public purposes or not. A good
example is the expropriation of land for redistribution purposes in terms of the land reform
programme: is land expropriated for public purposes if the state gives or sells it to other
private individuals? To clarify the situation section 25(4) states specifically that ‘the nation’s
commitment to land reform’ and ‘to reforms to bring about equitable access to all South
Africa’s natural resources’ will qualify as being in the public interest.
Many questions about the public purpose requirement remain open. In Harvey v
Umhlatuze Municipality 2011 (KZP) the court held that a former owner did not have the right
to re-acquire property that was expropriated but never used for the intended public purpose.
In Bartsch Consult (Pty) Ltd v Mayoral Committee of the Maluti-A-Phofung Municipality 2010
(FS) the court was confronted with the question whether the state can expropriate more
property than is strictly required for the public purpose. In the related area of development
contributions, the constitutional court decided that if a local authority demands a
contribution of more land than is strictly required for the building of roads and public
facilities in the new development, it must compensate the developer for the additional land
(Arun Property Development (Pty) Ltd v City of Cape Town 2015 (CC)).
(d) Subject to payment of compensation
The last element of the expropriation clause prescribes that expropriations must be
accompanied by payment of compensation, and also how the
Page 357
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap22.xhtml
24-Jul-18
Chap22
Page 10 of 11
compensation has to be calculated. It seems likely that a new (or at least adapted)
expropriation Act will have to be promulgated to provide the detail for the regulation of
expropriations, but in the meantime section 25(3) states the broad framework, together with
the more detailed provisions of the Expropriation Act 63 of 1975.
The starting point is that all expropriations have to be accompanied by compensation. In
principle the compensation and the time and manner of payment must be just and equitable
and must reflect an equitable balance between the public interest and the interests of those
affected by the expropriation. To be more precise it has to be just and equitable taking into
account all relevant factors, including the use of the property, the history of its acquisition
and use, its market value, the value of state investment and subsidy in it and the interests
of those affected by the expropriation. These factors are clearly meant to give the court a
broad discretion to determine compensation according to the individual circumstances of
each case. Within the broad framework as set out in section 25(3) many of the old principles
that applied to the calculation of compensation in pre-1994 expropriation law might still be
useful in the calculation process. In Du Toit v Minister of Transport 2006 (CC), the
compensation order was based on a technical interpretation of the relevant legislation and
nothing significant was said about section 25(3).
The rest of section 25 consists of additional and ancillary provisions relating to land
reform. Section 25(5)–(9) contains explicit authority for and instructions that enable the
legislature, the executive and the courts to initiate and implement various land reform
programmes. A number of land reform laws have been promulgated in accordance with this
constitutional duty. (The most important aspects of land reform are set out in chapter 23.)
The apparent contradiction between subsections (1)–(3) (protecting private property) and
subsections (5)–(9) (authorising land reform) is important. Combining these two sets of
provisions in the same section indicates that constitutional protection of property and
constitutional promotion of land reform are not two conflicting goals, but that, in fact, they
go hand in hand. Property rights are not unlimited and are protected as far as public goals
and policy (such as public health and safety, but also land reform) permit. On the other
hand, land reform is important, but it has to be accomplished with due respect for private
property. The message of section 25 is that a healthy and fair balance between the two has
to be found and maintained: Port Elizabeth Municipality v Various Occupiers 2005 (CC).
Page 358
Summary
The function of a property clause is to provide a guarantee for private property
rights against improper state interferences, while still leaving room for
unavoidable and proper interferences.
Section 25 of the Constitution provides a negative guarantee for property. This
concept will probably be interpreted and applied with regard to a very wide range
of property interests, which would be protected against improper state
interferences.
Section 25(1) ensures that unavoidable state limitations of private property are
legitimate as long as they are not arbitrary and comply with proper legal
procedures in terms of general law. Section 25(2) provides that a certain category
of legitimate state interference with private property, which amounts to an actual
acquisition by the state or expropriation of the property, must not only comply
with the due process requirement but is also restricted to cases where it serves a
public purpose, and that it must be accompanied by payment of compensation in
terms of section 25(3).
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap22.xhtml
24-Jul-18
Chap22
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap22.xhtml
Page 11 of 11
24-Jul-18
Chap23
Page 1 of 13
Page 359
Chapter 23
Reform of property law
23.1
23.2
23.3
23.4
23.5
23.6
23.7
Introduction: the situation before 1991
The constitutional framework
The categories of reform
Restitution of land rights
Redistribution of land
Tenure reform
Effect of the reform process
Summary
Overview
What is land reform and why is it necessary?
•
What is the role of the Constitution?
•
How is land reform subdivided into categories?
•
Which practical reform steps have been taken up to now?
•
23.1 Introduction: the situation before 1991
During the apartheid era racial segregation was established by laws enforcing the separation
of race groups in different areas. Because of the close connection between land law and
apartheid policies it was to be expected that land reform would be one of the major issues in
the political reforms since 1990. Now, in the post-apartheid era, many lawyers and
politicians think that the new South African legal order was completed and in place when the
apartheid laws were abolished. In their view everything is in order now and the law can
continue ‘normally’, without political interference. However, apartheid land law is not
reformed so easily. Property relationships were disturbed and skewed fundamentally during
the apartheid era. To rectify the situation and to establish a measure of normality and
fairness as far as property is concerned will take time, and in the meantime a measure of
political activism is unavoidable. An important aspect of the processes through which greater
normality and fairness regarding property distribution
Page 360
are promoted is land reform. In order to get a more comprehensive overview of what land
reform entails it is necessary to sketch the outlines of apartheid land law as it existed before
|1991.
Outline of apartheid land law
(a) The Land Acts of 1913 and 1936
(b) Customary land rights
(c) Residential land rights in urban areas
(d) Criminalised land use: group areas and squatting
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap23.xhtml
24-Jul-18
Chap23
(e)
Page 2 of 13
Western civil law land rights
(a) The Land Acts of 1913 and 1936
Grand apartheid in the rural areas was established by the Black Land Act 27 of 1913, in
which so-called ‘traditionally black’ land was ‘identified’ and ‘reserved’ for exclusive use and
occupation by black groups, while all other land in the country was reserved for exclusive
white use and occupation. The ‘reserved’ land was extended with the addition of so-called
‘released’ land by the Development and Trust Land Act 18 of 1936. All rural land which was
‘reserved’ for blacks in these two statutes (13% of the land in the country, ‘reserved’ for
more than 80% of the population) was held either according to customary law or in terms of
special land rights created by these laws. These rights rarely amounted to full ownership,
and large tracts of land were in fact owned by the state, which held them in trust for the
tribal communities actually living on the land.
The physical effects of grand apartheid were cruel. The amount of land ‘reserved’ was
simply not enough for the people living off it, especially when millions of people were forced
to return to what were supposed to be their origins. Lack of opportunities for expansion and
development made it impossible for a growing number of people to survive on the land they
had, and lack of facilities (transport, markets, finance) made it impossible to transform the
rural economy from a subsistence to a production process. Large scale poverty,
overcrowding, overgrazing and lack of social services were forcing male family members to
relocate to the urban areas, where job opportunities (especially in the mining industry) were
available for unskilled labour. However, labourers were initially, at least, not allowed to take
their families with them. The results of this policy for families and for society were often
disastrous.
(b) Customary land rights
During the apartheid era customary law became known as the inferior law
Page 361
of the black homelands, as opposed to the superior law of the white urban areas. In the
process the integrity of customary law was compromised, and the customary tradition was
discredited.
This raised the question as to whether customary law should be abolished together with
apartheid. Tribal customary land use is often seen as a backward and inefficient form of
landholding, and blamed for the poverty of rural communities and for environmental damage
resulting from poor agricultural techniques. On the other hand the tribal structures have
done much, even in the extremely difficult situation which prevailed during the apartheid
era, to hold groups and families together, and to see to it that individuals were cared for and
kept alive.
(c) Residential land rights in urban areas
In the urban areas, special residential areas were set aside by the Group Areas Act 36 of
1966 for black, coloured and Indian groups as identified by the Population Registration Act
30 of 1950. The temporary land rights which could be obtained in these urban townships
were prescribed and controlled by regulations issued in terms of the Black Local Authorities
Act 102 of 1982, the Black Communities Development Act 4 of 1984 and the Blacks (Urban
Areas) Consolidation Act 25 of 1945, and held by permission from the white controlled
township administrations. These insecure land rights consisted of site permits, residential
permits, lodgers’ permits, certificates of occupation and hostel permits. All these forms of
landholding were temporary and insecure.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap23.xhtml
24-Jul-18
Chap23
Page 3 of 13
One of the most important results of the strict control over urbanisation and housing in
group areas was the growth of squatter settlements or informal settlements. Despite strict
controls squatter communities increased enormously since the 1980s. These communities
usually consisted of people who moved to the urban or peri-urban areas because of poverty,
lack of opportunities and overcrowding in the rural areas, or people who moved to these
areas in an attempt to unite with family members working in the mines as labourers.
(d) Criminalised land use: group areas and squatting
One of the aspects of the apartheid land law which created most problems was the
criminalisation of certain forms of land use, especially through the Group Areas Act 36 of
1966 and the Prevention of Illegal Squatting Act 52 of 1951.
The Group Areas Act of 1966 designated segregated residential areas within the white
areas for each race group. The designation of land as a
Page 362
group area implied that only people belonging to that race group were allowed to own,
occupy and use land in that area for any purpose.
The Prevention of Illegal Squatting Act 52 of 1951 was by far the most draconian of all
apartheid land laws. The Act forced private landowners and public authorities to demolish
and remove all buildings and structures erected without consent of the landowner or in
contravention of planning provisions and building regulations.
A number of lenient and creative judgments during the late 1980s and early 1990s
attempted to soften the impact of the Prevention of Illegal Squatting Act. Most important in
this regard is the courts’ requirement, for which there does not appear to be any authority
but the courts’ own interpretation of what is fair and just, that people may be evicted only if
there is alternative housing available for them. While these judgments obviously created
some room for justice to be done, and while individual applicants benefited from them, they
did little to change the larger picture.
(e) Western civil law land rights
The recent development of the western, Roman-Dutch civil law tradition of ‘white’ property
law in South Africa offers a startling contrast to what has been said about apartheid land
law. The standard view is that no other part of private law remained so close to its origins in
classical Roman law as property law (‘law of things’) did. In keeping with this view the
content of property courses and textbooks is traditionally dominated by civil law principles,
while many property lawyers tended to ignore apartheid land law. Usually the statutes and
cases dealing with apartheid land law were not regarded as part of property law.
23.2 The constitutional framework
The erstwhile De Klerk Government introduced its land reform programme by way of a White
Paper on Land Reform in March 1991. This White Paper set out broad policy decisions with
regard to land reform and proposed a set of Bills to promote those policy objectives. The
central purpose of these Bills was the abolition of all so-called racially based (apartheid)
legislation.
Land reform statutes promulgated in terms of the 1991 White Paper
(a) The Abolition of Racially Based Land Measures Act 108 of 1991: abolished
most apartheid laws.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap23.xhtml
24-Jul-18
Chap23
Page 4 of 13
Page 363
(b)
(c)
The Upgrading of Land Tenure Rights Act 112 of 1991: provides for
upgrading of weak black land rights to full ownership.
The Less Formal Township Establishment Act 113 of 1991: provides for
quicker and cheaper development of new residential areas and housing.
The most important Act resulting from the White Paper was the Abolition of Racially Based
Land Measures Act 108 of 1991. It repealed the Land Acts of 1913 and 1936, the Group
Areas Act 36 of 1966 and a host of other apartheid statutes; but not the Prevention of Illegal
Squatting Act 52 of 1951. One of these Acts, the Abolition of Racially Based Land Measures
Act 108 of 1991, introduced the idea of land restitution – an important step in the process of
land reform.
The 1993 Constitution contained two sections dealing with property, section 28 in chapter
3 (the chapter on fundamental rights), and sections 121 to 123 in a separate chapter.
Section 28 was a property clause that provided constitutional protection for property.
Sections 121 to 123 laid down a number of general principles and provided for the
promulgation of a special land restitution Act, which was supposed to govern the whole
process of land restitution in more detail.
Land reform: 1993 Constitution
(a) Section 28: a property clause that protected property and provided for valid
limitations and for expropriation.
(b) Sections 121-123: provided for an Act to control restitution of land rights.
The 1996 Constitution replaced the 1993 Constitution early in 1997. The property clause in
section 28 of the 1993 Constitution was replaced by section 25 of the 1996 Constitution (see
chapter 22), and the previous sections 121 to 123 were left out altogether. The 1996
Constitution contains new provisions for land reform in section 25(4)-25(9). The most
important of these new provisions ensure that land reform will be considered as being in the
public interest for the sake of expropriation (section 25(4)(a)); that the state should take
legislative and other steps to ensure equitable access to land (section 25(5)); that persons
whose tenure of land is legally insecure because of apartheid are entitled to secure tenure or
equitable redress as provided for by an Act of parliament (section 25(6)); and that persons
who have lost their land as a result of discriminatory land law in the past are entitled to
restitution
Page 364
or equitable redress as provided for in an Act of parliament (section 25(7)). Section 25(8)
further states that the property guarantee contained in section 25 shall not impede the state
from taking legislative and other measures to promote land, water and similar reforms in
order to address the imbalances created by past racial discrimination, provided the
departures from section 25 are in accordance with the provisions of section 36 (the limitation
provision). In addition, section 26 of the Constitution provides for greater access to and
security of housing. Section 26(3) in particular provides that no one may be evicted from
their home without a court order, which may not be granted without considering all relevant
circumstances.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap23.xhtml
24-Jul-18
Chap23
Page 5 of 13
Land reform provisions: 1996 Constitution
(a) Section 25(4) provides that land reform is included in the public interest for
purposes of expropriation, and that property is not limited to land.
(b) Section 25(5) places a duty on the state, within its available resources, to
take steps to promote equitable access to land.
(c) Section 25(6) provides that those people whose land rights are insecure
because of past discriminatory laws or practices are entitled to security of
tenure as provided by law, or to comparable redress.
(d) Section 25(7) provides the basis for restitution of land rights (or equitable
redress) as foreseen in the Restitution of Land Rights Act 22 of 1994.
(e) Section 25(8) ensures that any state action aimed at land, water and similar
reforms aimed at redressing past inequalities, will be justified in terms of
section 25 as long as these measures conform with section 36.
Section 25(9) places a duty on parliament to enact the security of tenure
(f)
legislation foreseen in section 25(6).
(g) Section 26(3) provides that no one may be evicted without a court order,
which may not be granted without taking into account all relevant
circumstances.
23.3 The categories of reform
In policy documents distinctions are made between the three main aspects of the land
reform programme, namely restitution of land rights, redistribution of land and tenure
reform.
Page 365
The main aspects of land reform
(a) Restitution of land rights
(b) Redistribution of land
(c) Improving the security of tenure of existing land rights
(a) Restitution of land rights
Land restitution is the most restricted category, and is based upon specific historical land
claims. This process is aimed at restitution of specific lands that were taken away from
specific people in the apartheid era. The Restitution of Land Rights Act 22 of 1994 provides
for restitution claims and various kinds of restitution orders. Restitution claims had to be
submitted before 31 December 1998, and all claims were supposed to be dealt with by the
end of 2007. This date was subsequently extended several times, and eventually the
restitution claims process was reopened by the Restitution of Land Rights Amendment Act 15
of 2014. This Amendment Act substituted section 2(1)(e) of the original Act, which required
all restitution claims to be lodged by 31 December 1998, with a new requirement that
extends the claim period to 30 June 2019. The Act is discussed separately below.
(b) Redistribution of land
Land redistribution is a wider category, which is not based upon historical land claims as
such, but on the general need for land amongst the poor in both rural and urban areas. This
involves various programmes and processes aimed at obtaining land and making it available
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap23.xhtml
24-Jul-18
Chap23
Page 6 of 13
quickly and cheaply, both for residential purposes in the urban areas and for other purposes
in the rural areas. Where necessary private land should be purchased or expropriated
against compensation for redistribution. This programme will not be restricted to historically
black areas, and existing planning restrictions which impede the programme of redistribution
will be revised if necessary. A rural infrastructure will be installed as part of the reform
programme to ensure that land can be used effectively. The Housing Act 107 of 1997 and
the Land Reform (Labour Tenants) Act 3 of 1996, discussed separately below, are aimed at
this process of redistribution. The main purpose of redistribution is to make land and access
to land (rights to use land) available, in an equitable manner, to a larger number of people
who previously had no land or insufficient land.
(c) Improving the security of tenure of existing land rights
The upgrading of security of tenure involves legislation and other steps to improve the
quality and the security of existing land rights, especially in cases where security of tenure
was undermined or prevented by apartheid policy.
Page 366
The Land Reform (Labour Tenants) Act 3 of 1996, the Interim Protection of Informal Land
Rights Act 31 of 1996, the Extension of Security of Tenure Act 62 of 1997 and the Prevention
of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998, all of which are
discussed separately below, are all aimed at this process in various ways. The main purpose
is to make existing land rights more secure by protecting the holders of those rights against
unfair evictions. Section 26(3) of the Constitution also plays an important role in this regard.
The tenure policy of the government is to recognise diverse forms of land rights and promote
innovative new forms of land rights that may help to secure and extend land holding.
23.4 Restitution of land rights
As indicated earlier, the restitution of land rights is a limited process that consists of an
opportunity for specific persons, whose land was taken away during the apartheid years, to
claim their land back. The Restitution of Land Rights Act 22 of 1994 was promulgated on the
basis of sections 121 to 123 of the 1993 Constitution to control this process. The 1993
Constitution provided the principles which demarcate the limits of the restitution process,
and the Act sets out the detailed procedures that form the heart of the restitution process.
Sections 121 to 123 of the 1993 Constitution were replaced by section 25(7) of the 1996
Constitution as the constitutional authorisation of the restitution process. Aspects of the
process have been changed by the Amendment Acts of 1995, 1997, 1999, 2003 and 2014.
The 2014 Amendment Act extended the claims process to 30 June 2019.
(a) Persons entitled to restitution
In the 1996 Constitution section 25(7) provides that a person or community dispossessed of
property after 19 June 1913 as a result of past racially discriminatory laws or practices is
entitled to restitution of that property or equitable redress, as provided by an Act of
parliament. The process of restitution is, therefore, aimed at claims against the state rather
than between individuals or groups. It is also aimed at land claims based upon specific
historic dispossessions in terms of the apartheid land laws since 1913; the date when the
first Land Act was introduced. From this it is clear that the restitution is a limited process
aimed at rectifying a specific set of historic injustices, and not at all land related claims and
problems with land rights in general.
In section 1 of the Restitution of Land Rights Act of 1994 ‘rights in land’ is defined very
widely to include any rights, whether registered or not, and specifically including the
interests of labour tenants, sharecroppers, customary land interests, and beneficial
occupation for not less than ten years.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap23.xhtml
24-Jul-18
Chap23
Page 7 of 13
Page 367
Both natural and juridical persons can claim under the Act; the latter applies particularly
when groups were dispossessed of land they held in common. Claimants must have been
dispossessed of a right in land, but they do not have to prove physical dispossession. The
dispossession must have been the result of previously race-based laws or practices, even if
the ostensible reason for it was apparently neutral or apolitical. Recent decisions show that
the courts are willing to pierce the veil of apparently neutral reasons for dispossessions
during the apartheid era in an effort to identify the real cause for the action. In Richtersveld
Community v Alexcor Ltd 2003 (SCA) and Alexcor Ltd and the Government of the RSA v
Richersveld Community 2004 (CC) both the supreme court of appeal (in the first judgment)
and then constitutional court looked past the apparently neutral economic reasons for the
dispossession and focused on the real political backdrop and implications. The result was
that the restitution claim succeeded.
However, even though the definition of rights that might be reclaimed in terms of the Act
is formulated widely, claims are in fact restricted by the provision that this section shall not
apply to rights in land expropriated in terms of the Expropriation Act 63 of 1975 if just and
equitable compensation was paid for such expropriation.
(b) Procedures
Chapter II of the 1994 Act provides for the establishment of a commission on the restitution
of land rights to administer restitution claims. This commission, consisting of a chief
commissioner and regional commissioners, was appointed early in 1995. The commission
screens all land claims, identifies those that qualify in terms of the Constitution and the Act,
and then attempts to solve these claims by administrative or mediation procedures.
Restitution claims should be solved by the commission if possible, and are referred to the
land claims court only if it is impossible to solve them administratively or by mediation.
Sections 22-38 of the Act provide for the establishment of a special land claims court. The
president of the land claims court must be a judge of the supreme court, and the judges
must either be judges of the supreme court or legal practitioners or academics with
experience and expertise in legal and land matters.
The closing date for submission of claims for the restitution of land rights was 31
December 1998, but the 2014 Amendment Act extended this date to 30 June 2019. New
claims can therefore again be submitted, while a number of pre-1998 claims are still being
finalised.
Page 368
(c) Remedies
Remedies provided in terms of the Restitution of Land Rights Act
(a) Restitution of land of which the claimant was dispossessed
(b) Provision of alternative land
(c) Compensation
The possibilities for restitution include restoring the land or the right in question to the
claimant, providing alternative land or payment of compensation. Restitution of state land is
possible if the state certifies that restoration is feasible. Private land can also be bought or
expropriated for the purpose, if the state certifies that the restoration is feasible, and if it is
just and equitable to do so, taking into account all relevant factors such as the history of its
acquisition, its use, the hardship caused and the interests of the parties involved.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap23.xhtml
24-Jul-18
Chap23
Page 8 of 13
Section 33 of the Act provides specifically for matters to be considered by the court in
deciding restitution claims: the desirability of making provision for restitution or
compensation to people who have been dispossessed of land rights by racially based laws
and practices; the desirability of remedying past violations of human rights; the
requirements of equity and justice; the desirability of avoiding major social disruption; any
provision which already exists for the land in question to be dealt with in a manner designed
to promote equality; any other factor which the court considers relevant and consistent with
the spirit and objectives of the Constitution. The land claims court can review and set aside
decisions of the commission. Appeals from the land claims court lie to the constitutional
court.
The principles and guidelines according to which compensation (as opposed to restitution
of the land itself) has to be calculated were set out in the case of Hermanus v Department of
Land Affairs: In re Erven 3535 and 3536, Goodwood 2001 (LCC). The court decided that
compensation could include both compensation for the value of the land and for additional
direct financial loss caused by the original dispossession, as well as an amount for hardship
such as emotional suffering.
23.5 Redistribution of land
As was indicated earlier, the redistribution of land consists of various laws and programmes
aimed at making land (or access to land) available to people who had no land or insufficient
land. The purpose is to establish a more equitable distribution of land. This aspect of land
reform finds its authority in section 25(5) of the 1996 Constitution, which provides that the
state must take reasonable measures, within its available resources, to foster conditions
Page 369
which enable citizens to gain access to land on an equitable basis. Various laws and state
programmes have been introduced for this purpose.
(a) The Land Reform (Labour Tenants) Act 3 of 1996
This Act is aimed at regulating the position of labour tenants, who are distinguished from
farm labourers and who enjoy certain residential and grazing rights on agricultural land in
return for labour. The Act stabilises the relationship by preventing unjust evictions of labour
tenants and by emphasising the obligation of the labour tenant to provide labour (not
necessarily personally) in exchange for the land rights. This stabilising effect of the Act
actually belongs to the discussion of the tenure reform laws (see 23.6 below), rather than
the redistribution of land. However, the Act also has a redistribution function. Labour tenants
are entitled to apply, within four years from the commencement of the Act, to acquire the
land which they occupy or use in terms of the labour tenancy. By making it possible for the
labour tenants to acquire their own land, the Act promotes a more equitable distribution of
land. The other aspects of the Act are discussed below.
(b) The Housing Act 107 of 1997
The Housing Act was promulgated in 1997 to promote and co-ordinate the building and
provision of housing. The Act lays down general principles, and most of the practical
implementation aspects will be controlled by provincial legislation. Overarching principles are
aimed at providing safe, humane and affordable housing for as many people as possible,
without necessarily placing the financial burden on the state.
(c) The Rental Housing Act 50 of 1999
The Rental Housing Act 50 of 1999 was promulgated specifically to protect the rights of
residential tenants. The Act contains prescriptions regarding landlord-tenant contracts, the
reciprocal rights and duties of landlords and tenants and eviction.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap23.xhtml
24-Jul-18
Chap23
Page 9 of 13
(d) Positive right to land and housing?
The most difficult question with regard to redistribution of land and the right of access to
land (section 25(5)) and housing (section 26(1)-(3)) is whether the Constitution creates a
positive right to claim land or housing from the state. Generally it is accepted that the
Constitution does not create such a positive right, but merely a negative right that prevents
the state from interfering with existing access to land and housing (see 23.6), as well as a
positive duty to do as much as possible within its available resources to provide people with
fair access to land and housing.
Page 370
(e) The Land Reform: Provision of Land and Assistance Act 126 of 1993
This Act is intended to provide financing and powers to give effect to the land reform
objectives in section 25, among other things by allowing for the acquisition, subdivision,
transfer and settlement of designated land.
(f) The Spatial Planning and Land Use Management Act 16 of 2013
This Act (SPLUMA) replaces the previously fragmented legislation and policy relating to land
use management with a single, overarching management system that also includes the
planning and management of land involved in land reform initiatives. Instead of the previous
distinction between urban and rural land, SPLUMA distinguishes between land use
management on the national, regional, provincial and municipal levels.
23.6 Tenure reform
As was explained earlier, the purpose of tenure reform is to increase the value and security
of existing land tenure rights. Most laws in this category serve this purpose by providing
strict rules, requirements and procedures that have to be met before an occupier’s or user’s
right may be terminated and before the occupier or user may be evicted. This aspect of land
reform is authorised by section 25(6) of the 1996 Constitution, which provides that a person
or community whose tenure of land is insecure because of past racially discriminatory laws
or practice is entitled to secure tenure or other redress as provided for in a law of
parliament. Section 26(3) of the Constitution also provides protection against eviction and
obviously plays an important role in this regard, although it was decided in Brisley v Drotsky
2002 (SCA) that this provision does not directly amend common law.
(a) The Land Reform (Labour Tenants) Act 3 of 1996
As indicated above, this Act regulates the special position of labour tenants, who have
special rights to the agricultural land they occupy. A labour tenant is distinguished from a
farm labourer by the fact that the latter is paid predominantly in cash and has to provide his
or her services in person. A labour tenant’s main remuneration consists of the right to use
the land for grazing and/or cropping, and a labour tenant does not have to provide labour in
person (the agreement usually provides that the group must provide a certain number of
labourers each day). In Zulu v Van Rensburg 1996 (LCC) the land claims court decided that
a person has to satisfy all three requirements in section 1 of the Act to qualify as a labour
tenant. This was confirmed in Ngcobo v Salimba CC; Ngcobo v Van Rensburg 1999 (SCA).
The Act protects labour tenants against unfair eviction. In exceptional cases labour tenants
Page 371
can also acquire a right to land in terms of the Act, in which cases the landowner is entitled
to compensation. The main thrust of the Act is, however, to settle disputes between
landowners and labour tenants. A labour tenant can waive the statutory rights granted in the
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap23.xhtml
24-Jul-18
Chap23
Page 10 of 13
Act, but such a waiver (eg in a service contract) has to comply with the requirements in
section 3(6) and (7) of the Act (Mosehla v Sancor CC 2001 (SCA)).
For purposes of tenure reform, the most important function of the Act is to protect labour
tenants against unfair or unlawful evictions. In Woerman and Schutte NNO v Masondo 2002
(SCA) the supreme court of appeal found it unnecessary to decide whether section 26(3) of
the 1996 Constitution (which provides that no one may be evicted from their home without a
court order, which may not be granted without taking into account all relevant
circumstances) required of a landowner who applies for an eviction order to prove anything
more than ownership and that the defendant was in occupation of the land. However, it has
since then become clear in a number of cases that proof of ownership is never enough to
justify eviction of any occupier, whether lawful or unlawful, without a court considering all
the relevant circumstances. See 10.2.1. See the section on land reform provisions under the
Constitution in 23.2 above. Actions that interfere with a labour tenant’s grazing rights can
also amount to evictions.
(b) The Communal Property Associations Act 28 of 1996
This Act provides a relatively simple procedure and framework within which groups or
communities can acquire, hold and manage land as a group. It also provides for the
implementation of land reform programmes where the beneficiaries are groups who acquire
the land as a group. The Act creates a new statutory legal person, known as a communal
property association, within which the rights and duties of people belonging to a group are
regulated and controlled. Communal property associations have to register as a legal person,
and the association has to draw up and adhere to a written constitution in terms of the Act.
The most important function of this Act is to secure land rights in a group context (such as
customary land rights); both against the state and other outsiders, and internally among the
group members. The position of women is improved by anti-discrimination provisions.
Unfortunately the Act has been only partially successful to date, with relatively few
associations being registered. In cases where communities succeed with restitution claims
(see 23.4) the land is usually restored to them on the provision that an association be
established to hold the land.
(c) The Interim Protection of Informal Land Rights Act 31 of 1996
This law provides interim security of tenure (in terms of section 25(6) of the
Page 372
1996 Constitution) to those whose land tenure rights are insecure for some reason. These
include customary land rights, beneficial occupation of land, and rights of access to, use or
occupation of land in terms of certain customs, practices and usages in a certain area. The
Act protects the rights of these land holders by prohibiting any deprivation of these rights
without the holder’s consent. The rights of tenants, sharecroppers, labour tenants and
employees are specifically excluded when those rights are of a contractual nature. The Act
also excludes land rights based on a temporary, revocable permission issued by the
landowner. The protection provided by this Act was merely temporary and was meant to
lapse on 31 December 1998, but in the meantime it is regularly extended.
(d) The Extension of Security of Tenure Act 62 of 1997
This Act is an important link in the provision of security of tenure to all occupiers, residents
and users of land who are not protected by the earlier laws. The Act applies to all persons
(excluding labour tenants) who occupy land outside the urban areas with the permission of
the landowner (in other words lawfully). However, in Venter NO v Claasen 2001 (LCC) it was
held that the Act does not apply to spouses of occupiers separately – a spouse acquired his
or her right of occupation from a marriage relationship with another occupier, and not as an
independent right against the landowner. When one spouse was evicted lawfully the other
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap23.xhtml
24-Jul-18
Chap23
Page 11 of 13
spouse did not have an independent right of occupation, unless such right was based on an
independent agreement with the owner. In Van Zyl NO v Maarman 2001 (LCC) it was held
that the Act does not apply where the occupier resides on land pursuant to an employment
contract, although it can apply when the right of occupation derives from a lease agreement
or another right in law.
Protection of occupiers’ rights follows in terms of the Act in two stages: the permission to
occupy the land may be revoked only according to the procedures laid down in the Act; and
once the permission has been revoked, the occupier can be evicted only according to
procedures provided in the Act. The Act distinguishes between persons who already occupied
land with permission on 4 February 1997 and those who occupied land with permission after
that date – in the former category it could be more difficult to evict the occupiers. These
provisions are applied strictly: Karabo v Kok 1998 (LCC).
In 2001 the Act was amended to grant lawful occupiers of rural land the right under
certain circumstances, to bury family members on the land without the landowner’s
permission. In Nhlabati v Fick 2003 (LCC) it was argued that the amendment was
unconstitutional for practically authorising private expropriation without compensation, but
the court decided that the Act protected the landowner’s rights adequately and was valid. In
Dlamini v Joosten
Page 373
2005 (SCA) the supreme court of appeal confirmed that the established practice to allow
burials related to the land and not to a specific family or group and that the landowner
cannot unilaterally revoke permission to bury once such a practice had been established.
(e) The Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998
In contrast with the other laws above, this law applies to people who occupy land unlawfully
(without permission). Because some of these people have occupied the land for a long time,
or because the reason for the occupation is sometimes a technicality, the Act provides strict
requirements and procedures for the eviction of these occupiers from the land. The Act also
contains provisions to prevent further unlawful occupation of land, and revokes the old
Prevention of Illegal Squatting Act 52 of 1951. In City of Cape Town v Rudolph 2004 (C) it
was decided that common-law remedies like the spoliation remedy (chapter 14) could not
find application together with the Act – if the Act applies, the common-law remedies are
disqualified and the landowner cannot choose rather to make use of the common-law
remedies. If landowners were afforded this choice, they could frustrate the purposes of the
Act.
Since the Act also imposes strict anti-eviction provisions, the question arises whether
these provisions affect the common-law position (see 23.2 and paragraph (d) above). In
ABSA Bank v Amod 1999 (W) the Witwatersrand court interpreted the Act restrictively by
holding that it does not apply in situations where the occupation was originally lawful and
then became unlawful (eg when a lease lapses), with the result that the common-law
situation remains unaffected by the Act unless the land was invaded unlawfully. The same
approach was followed in Betta Eiendomme (Pty) Ltd v Ekple-Epoh 2000 (W) and in Ellis v
Viljoen 2001 (C). However, in Bekker v Jika 2002 (EC) the Eastern Cape high court adopted
a different approach and decided that the Act (which clearly amends the common-law of
eviction) applies to all unlawful occupations of land, regardless of whether the occupation
was originally lawful or not. In Ndlovu v Ngcobo; Bekker v Jika 2003 (SCA) the supreme
court of appeal decided that the Act does apply when originally lawful occupation becomes
unlawful. This decision appears to contradict the same court’s finding in Brisley v Drotsky
2002 (SCA), where it was said that section 26(3) of the Constitution does apply horizontally
(in other words, between landlord and tenant), but that the constitutional provision does not
grant courts the discretion or prescribe the circumstances in which they can divert from the
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap23.xhtml
24-Jul-18
Chap23
Page 12 of 13
common-law provision. The 1998 Act does prescribe explicitly that the courts may grant an
eviction order only if it is fair and equitable, with reference to circumstances like the age or
health of the occupiers and
Page 374
the availability of alternative accommodation. Read together, these two decisions mean that
section 26(3) of the Constitution does not amend the common law directly, but the 1998 Act
does.
In 2005 the constitutional court handed down a very important decision on the 1998 Act:
Port Elizabeth Municipality v Various Occupiers 2005 (CC). The court confirmed that the
Constitution obliges the courts to find a reasonable and just balance between the rights of
landowners and the interests of even unlawful occupiers. Unlawful occupiers do not have any
occupation rights according to the common law, but their vulnerable position and human
dignity must still be taken into account. Therefore an order to evict them should not be
given too easily, and definitely not without taking all the circumstances into account. At the
same time the court emphasised that eviction is not impossible – even if eviction would
render the occupiers homeless, the landowner’s rights must also be protected and, if it
appears just and equitable in all the circumstances, an eviction order should be granted. In
Occupiers of Olivia Road, Berea Township, and 197 Main Street, Johannesburg v City of
Johannesburg 2008 (CC) the constitutional court decided that a municipality that evicts
people from their homes without first meaningfully engaging with them acts against the
spirit and purpose of its own constitutional obligations, even if it followed all legislative
procedures and requirements. Meaningful engagement means interacting with those
involved to establish the possible consequences of eviction, any obligations that the local
authority might have towards the occupiers, ways to avoid or postpone the eviction and so
on. In Residents of Joe Slovo Community, Western Cape v Thubelisha Homes 2009 (CC) the
court continued this trend in allowing the eviction and removal of the community from state
land earmarked for developing formal housing, but on the condition that the municipality
must engage with the community to establish how the removal could be executed with the
least possible discomfort, and on the further condition that at least 70% of the new housing
built on the site must be reserved for members of the community who are evicted to make
the development possible.
23.7 Effect of the reform process
The land reforms can have dramatic and potentially detrimental results for existing owners
and users of land. In some cases the reform laws will allow the state to expropriate land
(against compensation) to give or sell it to someone else. In other cases land will not be
expropriated, but the current owner’s use and enjoyment will be subjected to substantial
restrictions (such as restrictions on the owner’s right to terminate the occupation rights of
tenants or labourers and to evict them from the land). However, in view of our history it is
important that the unequal and inequitable distribution of land should be
Page 375
rectified, and therefore these reform measures will be valid and enforceable, provided that
they comply with the requirements (sections 25 and 36) in the Constitution. Every law and
every individual application of the law will, for the purpose, be tested against the
requirements of section 25 and section 36 to determine whether it is a valid, fair, reasonable
and justifiable deprivation or expropriation of property.
Summary
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap23.xhtml
24-Jul-18
Chap23
Page 13 of 13
The background for the land reform programme is the situation of inequality and
injustice caused by decades of apartheid land law. Apartheid land law was initiated
by the Land Acts of 1913 and 1936, and extended to both customary landholding
in the rural areas and residential landholding in the urban areas. It resulted in
temporary or insecure land rights, as well as the criminalisation of land use, which
contrasts sharply with the technical refinements and developments of western civil
law property rights.
The former De Klerk government introduced a number of land reforms in 1991,
the most important of which was the abolition of most of the apartheid land laws.
The 1993 Constitution contained a special set of land reform provisions in
sections 121 to 123. These sections provided the formal framework for a land
restitution process, which is controlled by the Restitution of Land Rights Act of
1994, promulgated specially for the purpose. The 1996 Constitution replaced the
1993 Constitution, and now land reform, the protection of property and the right
of access to housing are governed by sections 25 and 26.
Land reform consists of three main pillars, namely restitution of land rights,
redistribution of land rights, and improving security of a wide range of tenure
forms.
The 1996 Constitution provides the final framework within which the protection
of property rights and land reform initiatives are combined.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap23.xhtml
24-Jul-18
Chap24
Page 1 of 5
Page 376
Chapter 24
The future of property law
24.1
24.2
24.3
24.4
24.5
24.6
The concept of property
Common law
Customary law
Legislation
The Constitution
Methodology
Summary
Overview
•
How will the concept of property develop in future?
How will common-law principles of property change?
•
•
How will customary law property principles develop?
•
Which legislative developments can be expected in future?
•
What will the role of the Constitution be?
•
What will happen to property law methodology?
24.1 The concept of property
The concept of property has changed quite dramatically as a result of the introduction of
section 25 of the Constitution, and these changes will no doubt affect the future of property
law. As a result of these changes the constitutional concept of property has been and still is
being extended far beyond its traditional common-law meaning. However, even before the
introduction of the Constitution the private law concept of property was in a process of
development, which also involved an extension of its meaning. The general tendency seems
to be to move away from a concept of property which is restricted to tangible, corporeal
things, towards an increasingly wide category of incorporeal property. In American law this
development has been described as the dephysicalisation of property.
One of the results of this dephysicalisation process is that the traditional dominance of
ownership and real rights is diminished, because new forms
Page 377
of property which cannot really be described in these traditional terms are developed and
introduced. The attention is shifted away from ownership and real rights in corporeal things,
towards patrimonial interests in various forms of wealth. When patrimonial interests such as
shares in a company or copyright in a book are included in the broad category of property
the distinction between real and creditor’s rights becomes less important, although of course
it is still relevant for specific purposes, such as the registration of limited real rights in land.
|The distinction between real and creditor’s rights is not eradicated, but the focus is changed,
and it becomes important to judge property rights which are not real rights on their own,
unique merits. It becomes important to take a new look at property rights, whether they are
real or personal, that were traditionally neglected.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap24.xhtml
24-Jul-18
Chap24
Page 2 of 5
24.2 Common law
It is unlikely that common-law property rights and principles will be abolished in the process
of property reform that accompanies the current phase of social and legal transformation in
South Africa. Unquestionably common law will be reformed and transformed during the
general transformation process, but at least some of the common-law tradition will remain
part of South African law. The advent of the process of transformation, which started when
the 1993 Constitution came into force on 27 April 1994, seems like a good time to move
away from referring to the common-law tradition as Roman-Dutch law, and now is the
perfect time to start talking about a new South African law.
The most dramatic effects of the transformation for the common-law tradition will perhaps
develop from the fact that it now seems to adopt a more realistic position as one part,
instead of pretending to be the only or the major element, of South African law. Even before
the start of the social and political transformation the common-law tradition was changed
substantively by legislation, especially with regard to land use. Now, during the
transformation, both customary law and constitutional law will create even more additions
and changes to common law.
24.3 Customary law
Customary law developed and still functions as an important aspect of traditional tribal
society, especially in the rural areas. Its lack of commercial focus renders this tradition
unsuitable for fast-track property transactions in the market economy, but that does not
mean that customary land law is not suitable for its more traditional role in social and family
settings. For this reason customary property law should be retained whenever it is suitable,
and when the relevant community wishes to live according to its principles. Where necessary
commercial dealings and other situations require additional or
Page 378
different principles, customary law can either be adapted or complemented to satisfy the
need. At the same time the traditional customary social property ethic, which ties property
rights to the position of a person in society, can offer a salutary lesson for the liberalist and
individualist property ethic of the common-law tradition.
24.4 Legislation
Property law has been changed and adapted by many non-racial laws over the years, and
will no doubt be adapted by further laws in future. Some of these laws will be promulgated
to promote social upliftment and development programmes of the government, but others
will be needed simply to make provision for changing needs and circumstances. During the
1970s and 1980s the development of sectional title and time-sharing legislation provided a
suitable legislative framework for the development of highly successful new rights in
immovable property, and no doubt similar initiatives and developments can offer solutions
for some of the remaining problems related to property, especially with regard to land and
housing. A measure of original thinking and creativity is required to develop, by way of
legislation, suitable and secure forms of landholding for those who most need it, especially in
the very poor and landless communities. In addition, legislation has to be reconsidered on an
ongoing basis to ensure that it is in accordance with the Constitution. In Zondi v MEC for
Traditional and Local Government Affairs 2005 (CC) it was decided that old pounds
legislation, which enabled landowners to impound and sell stray cattle, played a role in
creating the unequal relationship between white landowners and black cattle owners, and
that certain provisions of this legislation were unconstitutional and invalid, even though
other sections still serve a legitimate purpose.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap24.xhtml
24-Jul-18
Chap24
Page 3 of 5
24.5 The Constitution
The Constitution does not form part of private property law as such, even though section 25
contains property principles of immense importance which will change the face of property
law. The Constitution, including section 25, is a fundamentally public law document which
serves as the link between public and private law, between the public and the private
spheres, between public interests and private rights. Section 25 of the Constitution defines
the way in which private property rights are seen and protected in the public sphere, and
also the way in which public property interests are seen and accommodated in the private
sphere. It defines the relationship between the individual and the community.
In view of the values and principles embodied in the Constitution this relationship between
the individual and the community should be defined in terms of
Page 379
participation and accommodation, and not in terms of threat and defence. The Constitution
is not meant to provide a shield of defence for the helpless individual against a threatening
state, but much rather to provide and define the ways in which the individual participates
and shares in the community. The Constitution promotes reconciliation and peaceful coexistence, not only between race groups, but also between every individual and society
itself. Consequently the relationship between society and the individual should be redefined
and reconstrued in the light of the Constitution, to strive for mutual accommodation. This
idea was formulated and explained clearly in Port Elizabeth Municipality v Various Occupiers
2005 (CC), where the constitutional court decided that the Constitution requires a fair and
justifiable balance between the protection of property rights and the combating of poverty
and homelessness.
In view of this redefined relationship between the individual and society property assumes
a new role, as described in section 25 of the Constitution. Property can no longer be seen, as
it was defined in the common-law tradition, as an island of sovereignty where the individual
can do whatever she likes. Private property has implications for and responsibilities towards
the public sphere, and has to be used and exploited accordingly. Simultaneously, state
actions with regard to property have implications for and responsibilities towards private
interests, and have to be executed accordingly. In this way, and in the spirit of reconciliation
embodied in the Constitution, the individual and the community can both be served by
property interests as provided for in section 25.
24.6 Methodology
The common-law tradition provided the methodology of property law as it is employed by
almost all lawyers, academics and the courts. This methodology, which is nothing else than a
way of thinking and arguing about property rights, can be described as conceptualist,
abstract and individualist. It is conceptualist because it is based upon the distinction and
content of a number of well-defined property concepts such as ownership, real rights and
possession. It is abstract because it is based upon the abstract logic of the relations between
these concepts: ownership is defined with regard to its differences from possession and real
rights, and so on. It is individualist because the concepts and the abstract logical relations
between them are defined in such a way that they provide maximum protection for
individual property interests against interference from other persons or from the state.
This common-law methodology does not take much notice of the circumstances or
surrounding facts of a conflict situation. If a homeless person finds temporary shelter from
the elements on a vacant piece of land, the common-law methodology provides a clear,
abstract and neutral answer to
Page 380
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap24.xhtml
24-Jul-18
Chap24
Page 4 of 5
the solution: one of the main entitlements of ownership is that the owner can evict anybody
from her land unless that person has a right to be there, which the homeless person
obviously does not have, and therefore she must be evicted. The fact that the owner does
not use the land and that the homeless person is in dire straits makes no difference, because
the logic is abstract – it relies purely on the logical relations between the concepts. Of course
this methodology works fine when a robber breaks into another person’s house and
threatens her personal safety, but the weakness of this methodology is that it cannot
distinguish between cases where the plight of the homeless person might have been taken
into account without any harm to the owner – it simply puts the owner’s rights first without
any further questions.
In view of the values and spirit of the Constitution this methodology has to change. A new
approach to property rights, which is more sensitive to individual circumstances and the real
effects of property rights, will have to be developed in view of the Constitution and the
values it promotes. In terms of this methodology the homeless person will probably still be
evicted when her actions really cause harm to the owner, but it might just be possible that
this new method is more sensitive to cases where there is no real harm, so that the
circumstances and the plight of the homeless person might be taken into account in
providing her with some comfort, or in applying the laws to her with some leniency. Court
decisions such as Port Elizabeth Municipality (referred to above) show that the courts are
taking this shift seriously and are working on it. Perhaps this new methodology will create a
little more room for justice, which is what property law should be concerned with.
Summary
The future development of property law will tend towards the extension and
dephysicalisation of the concept of property, away from its traditional attachment
to corporeal things and towards the inclusion of all patrimonial assets and
interests.
Common law will still form an important part of the new South African property
law, but it will have to adapt to its new role as one of the constituent elements of
a new legal order.
Customary law will remain a part of the new South African property law, and
will serve to control customary property relations when and where it is required,
but it might have to develop or adapt to changing circumstances. Legislation will
play a major role in transforming South African property law to adapt it to its
position and function in the new legal order. It will be used to redress
unacceptable imbalances in property distribution, and to develop and reinforce
suitable property rights.
Page 381
The Constitution forms the background against which the new South African
property law has to develop. The values and spirit of the Constitution indicate how
society and property relations have to be transformed to reflect the new
relationship between property holders individually and between individual property
holders and society. This relation is described in terms of co-operation and
accommodation rather than conflict.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap24.xhtml
24-Jul-18
Chap24
Page 5 of 5
The old common-law methodology based upon abstract concepts and the
protection of individual rights has to be replaced by a new methodology which
assumes a more suitable attitude towards the relationship between individuals and
society, and which takes note of individual circumstances and surrounding facts
when finding the proper balance between property interests.
http://e.pub/g7kzbgdtsno79e7w0k0u.vbk/OEBPS/Text/Chap24.xhtml
24-Jul-18
Bibliography
Page 1 of 1
Page 382
Bibliography
Badenhorst PJ, Mostert H & Pienaar JM Silberberg and Schoeman’s The law of property 5th
ed 2006 Butterworths
Budlender G, Latsky J & Roux T Juta’s new land law 1997 Juta & Co
Carey Miller DL & Pope A Land title in South Africa 2000 Juta & Co
De Vos W Verrykingsaanspreeklikheid in die Suid-Afrikaanse reg 3rd ed 1987 Juta & Co
Eiselen S & Pienaar GJ Unjustified enrichment – a casebook 3rd ed 2008 Butterworths
Nel HS Jones Conveyancing in South Africa 4th ed 1991 Juta & Co
Olivier NJJ, Pienaar GJ & Van der Walt AJ Law of Property students’ handbook/Sakereg
studentehandboek 2nd ed 1992 Juta & Co
Pienaar GJ Sectional titles and other fragmented property schemes 2010 Juta & Co
Pienaar JM Land reform 2014 Juta & Co
Sonnekus JC ‘Sekerheidsregte – ’n nuwe rigting?’ 1983 TSAR 97-117, 230-257
Sonnekus JC & Neels J Sakereg vonnisbundel 2nd ed 1994 Butterworths
Van der Merwe CG Sakereg 2nd ed 1989 Butterworths
Van der Merwe CG & Butler DW Sectional titles, share blocks and time-sharing 1995
Butterworths
Van der Walt AJ Constitutional property law 3rd ed 2011 Juta & Co
Van der Walt AJ Constitutional property clauses 1999 Juta & Co
Van Wyk D ‘The South African bill of rights: an evaluation’ 1994 SAPL 278-286
Van Wyk D et al Rights and constitutionalism: the new South African legal order 1994 Juta &
Co
Visser D & Miller S ‘Between principle and policy: indirect enrichment in subcontractor and
“garage-repair” cases’ 2000 SALJ 594-617
http://e.pub/37xo34qekwc38jrkupdt.vbk/OEBPS/Text/Bibliography-print-1532467582.xhtml 24-Jul-18
Cases
Page 1 of 3
Page 383
Cases
A
ABSA Bank Ltd v Amod [1999] 2 All SA 423 (W)
— 373
ABSA Bank Ltd v Keet 2015 4 SA 474 (SCA)
— 164
ABSA Bank Ltd v Van Eeden 2011 4 SA 486 (SG)
— 147
ABSA Bank Ltd t/a Bankfin v Jordashe Auto CC 2003 1 SA 401 (SCA)
— 151, 168
ABSA Bank Ltd t/a Bankfin v Stander t/a CAW Paneelkloppers 1998 1 SA 939 (C)
— 323
Adrich Investment Holdings CC v Triple Thirteen Investments Shareblock (Pty) Ltd 1994 2
SA 81 (C)
— 84
African Billboard Advertising (Pty) Ltd v North and South Central Local Councils, Durban
2004 3 SA 223 (N)
— 232, 352
Agri South Africa v Minister for Minerals and Energy 2013 4 SA 1 (CC)
— 348, 354
Air-Kel (Edms) Bpk h/a Merkel Motors v Bodenstein 1980 3 SA 917 (A)
— 142, 143, 154
Allacas Investments (Pty) Ltd v Milnerton Golf Club 2008 3 SA 134 (SCA)
— 102
Armstrong (Lloyd’s Underwriters) v Bhamjee 1991 3 SA 195 (A)
— 268, 269
Anglo Operations Ltd v Sandhurst Estates (Pty) Ltd 2006 1 SA 350 (T)
— 332
Arun Property Development (Pty) Ltd v City of Cape Town 2015 2 SA 584 (CC)
— 356
ATM Solutions (Pty) Ltd v Olkru Handelaars CC 2009 4 SA 337 (SCA)
— 231
B
B & B Hardware Distributors (Pty) Ltd v Administrator, Cape 1989 1 SA 957 (A)
— 170
Badenhorst v Balju Pretoria-Sentraal 1998 4 SA 132 (T)
— 15
Bank Windhoek Bpk v Rajie 1994 1 SA 115 (A)
— 150
Barclays Nasionale Bank Bpk v Registrateur van Aktes, Transvaal 1975 4 SA 936 (T)
— 299, 307
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Cases-print-1536070394.xhtml
04-Sep-18
Cases
Page 2 of 3
Barclays Western Bank Ltd v Ernst 1988 1 SA 243 (A)
— 153
Barnard NO v Regspersoon van Aminie 2001 3 SA 973 (SCA)
— 74
Bartsch Consult (Pty) Ltd v Mayoral Committee of the Maluti-A-Phofung Municipality [2010]
ZAFSHC 11 (4 February 2010)
— 356
Bekker v Jika [2002] 1 All SA 156 (EC)
— 373
Ben-Tovin v Ben-Tovin 2001 3 SA 1074 (C)
— 15
Betta Eiendomme (Pty) Ltd v Ekple-Epoh 2000 4 SA 468 (W)
— 373
Page 384
Bhe v Magistrate, Khayelitsha (Commission For Gender Equality as Amicus Curiae); Shibi v
Sithole; South African Human Rights Commission v President of the Republic of South
Africa 2005 1 SA 580 (CC)
— 7
Bingham v City Council of Johannesburg 1934 WLD 180
— 108
Bismath NO v ABSA Bank Ltd 2008 4 SA 92 (SCA)
— 297
Bisset v Boland Bank Ltd 1991 4 SA 603 (D)
— 84
Bloemfontein Municipality v Jacksons 1929 AD 266
— 311, 312
Bock v Duburoro Investments (Pty) Ltd 2004 2 SA 242 (SCA)
— 305
Body Corporate of Savannah Park v Brainwave Projects 1147 CC 2012 2 SA 276 (SCA)
— 78
Bokomo v Standard Bank van SA Bpk 1996 4 SA 450 (C)
— 302
Boland Bank Ltd v Attorney-General, Cape of Good Hope 1994 1 SA 396 (C)
— 183
Boland Bank Bpk v Engelbrecht 1996 3 SA 537 (A)
— 90
Bon Quelle (Edms) Bpk v Munisipaliteit van Otavi 1989 1 SA 508 (A)
— 231
Bosman NO v Tworeck 2000 3 SA 590 (C)
— 237
Brink v Van Niekerk 1986 3 SA 428 (T)
— 275
Brisley v Drotsky 2002 4 SA 1 (SCA)
— 167, 370, 373
Britz NO v Sniegocki 1989 4 SA 372 (D)
— 294, 308
Brooklyn House Furnishers (Pty) Ltd v Knoetze and Sons 1970 3 SA 264 (A)
— 322, 323
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Cases-print-1536070394.xhtml
04-Sep-18
Cases
Page 3 of 3
Builder’s Depot CC v Testa 2011 4 SA 486 (GSJ)
— 205
Burger v Oppimex (Edms) Bpk [2011] ZANWHC 11 (10 March 2011)
— 235
Business Aviation Corporation (Pty) Ltd v Rand Airport Holdings (Pty) Ltd 2006 2 SA 95 (W)
— 321
Buzzard Electrical (Pty) Ltd v 158 Jan Smuts Avenue Investments (Pty) Ltd 1996 4 SA 19
(A)
— 178, 243, 316, 317, 322, 323
C
Caledon en Suid-Westelike Distrikte Eksekuteurskamer Bpk v Wentzel 1972 1 SA 270 (A)
— 153
Campbell v Botha 2009 1 SA 238 (SCA)
— 182
Campbell v Pietermaritzburg City Council 1966 2 SA 674 (N)
— 135
Campsbay Ratepayers and Residents Association v Minister of Planning, Culture and
Administration, Western Cape 2001 4 SA 294 (C)
— 285
Candid Electronics (Pty) Ltd v Merchandise Buying Syndicate (Pty) Ltd 1992 2 SA 459 (C)
— 225, 226
Cape Explosive Works Ltd v Denel (Pty) Ltd 2001 3 SA 578 (SCA)
— 37, 143, 156, 262
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Cases-print-1536070394.xhtml
04-Sep-18
Cases
Page 1 of 3
Page 385
Chairperson of the Constitutional Assembly, ex parte: In re certification of the Amended Text
of the Constitution of the RSA, 1996 2 SA 97 (CC)
— 347
Chapman’s Peak Hotel (Pty) Ltd v Jab and Annalene Restaurants t/a O’Hagans [2001] 4 All
SA 415 (C)
— 225, 226
Chesterfin (Pty) Ltd v Contract Forwarding (Pty) Ltd 2003 2 SA 253 (SCA)
— 302
Chetty v Naidoo 1974 3 SA 13 (A)
— 49, 50, 165
Cillie v Geldenhuys 2009 2 SA 325 (SCA)
— 264, 276, 279
City of Cape Town v Helderberg Park Development (Pty) Ltd 2007 1 SA 1 (SCA)
— 128
City of Cape Town v Rudolph 2004 5 SA 39 (C)
— 227, 373
City of Cape Town v Strümpher 2012 4 SA 207 (SCA)
— 231
City of Johannesburg v Kaplan NO 2006 5 SA 10 (SCA)
— 304
City of Johannesburg v Mazibuko 2009 3 SA 592 (SCA)
— 231
City of Johannesburg Metropolitan Municipality v Blue Moonlight Properties (Pty) Ltd 2012 2
SA 104 (CC)
— 167
City of Tshwane Metropolitan Municipality v Mamelodi Hostel Residents Association [2011]
ZASCA 227 (30 November 2011)
— 235
City of Tshwane Metropolitan Municipality v Mathabathe 2013 4 SA 319 (SCA)
— 316
Clifford v Farinha 1988 4 SA 315 (W)
— 206, 240, 241
Commissioner of Customs and Excise v Bank of Lisbon International Ltd 1994 1 SA 205 (N)
— 22, 171, 178
Commissioner of Customs and Excise v Randles, Brothers and Hudson Ltd 1941 AD 369
— 143
Concor Construction (Cape) (Pty) Ltd v Santambank Ltd 1993 3 SA 930 (A)
— 141, 144
Concor Holdings (Pty) Ltd t/a Concor Technicrete v Potgieter 2004 6 SA 491 (SCA)
— 170
Consolidated Factors (Pty) Ltd v National Cash Register Co (Pty) Ltd 1973 4 SA486 (T)
— 149
Cooper v Boyes NO 1994 4 SA 521 (C)
— 22
Corium (Pty) Ltd v Myburgh Park Langebaan (Pty) Ltd 1993 1 SA 853 (C)
— 51, 96
Cowley v Hahn 1987 1 SA 440 (E)
— 268, 283
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Cases-print-1536070431.xhtml
04-Sep-18
Cases
Page 2 of 3
Crots v Pretorius 2010 6 SA 512 (SCA)
— 174
D
Darries v City of Johannesburg [2009] ZAGPJHC 6 (3 April 2009)
— 231
De Charmoy v Day Star Hatchery (Pty) Ltd 1967 4 SA 188 (D)
— 101
De Kock v Hänel 1999 1 SA 914 (C)
— 264, 274, 275
Demont v Akal’s Investments (Pty) Ltd 1955 2 SA 312 (D)
— 105
Page 386
Densam (Pty) Ltd v Cywilnat (Pty) Ltd 1991 1 SA 100 (A)
— 308
Desai NO v Desai 1996 1 SA 141 (A)
— 141
De Villiers v Kinsale Properties Shareblock Ltd 1988 3 SA 943 (D)
— 81
De Villiers v Potgieter NO 2007 2 SA 311 (SCA)
— 165
De Villiers NO v Delta Cables (Pty) Ltd 1992 1 SA 9 (A)
— 130, 182
De Witt v Knierim 1994 1 SA 350 (A)
— 266, 275
Diepsloot Residents’ and Landowners’ Association v Administrator, Transvaal 1994 3 SA 336
(A)
— 51
Dlamini v Joosten 2006 3 SA 342 (SCA)
— 372
Dorland v Smits 2002 5 SA 374 (C)
— 109
Dreyer NNO v AXZS Industries (Pty) Ltd 2006 5 SA 548 (SCA)
— 142, 163
Dryer v Duncan [2010] ZAECPEHC 28 (15 June 2010)
— 234
Durban City Council v Woodhaven Ltd 1987 3 SA 555 (A)
— 268
Du Plessis v Prophitius 2010 1 SA 49 (SCA)
— 144
Du Randt v Du Randt 1992 3 SA 281 (E)
— 269, 279
Du Toit v Furstenberg 1957 1 SA 501 (O)
— 135
Du Toit v Minister of Transport 2006 1 SA 297 (CC)
— 94, 127, 354, 357
E
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Cases-print-1536070431.xhtml
04-Sep-18
Cases
Page 3 of 3
East London Municipality v South African Railways and Harbours 1951 4 SA 466 (E)
— 106
Ebrahim v Deputy Sheriff, Durban 1961 4 SA 265 (D)
— 165
Eight Kaya Sands v Valley Irrigation Equipment 2003 2 SA 495 (T)
— 312
Electrolux (Pty) Ltd v Khota 1961 4 SA 244 (W)
— 168
Elektrisiteitsvoorsieningskommissie v Fourie 1988 2 SA 627 (T)
— 105
Ellis v Viljoen 2001 5 BCLR 487 (C)
— 373
English v CJM Harmse Investments CC 2007 3 SA 415 (N)
— 281
Enslin v Nhlapo 2008 5 SA 146 (SCA)
— 109
Epol (Edms) Bpk v Sentraal-Oos (Koöp) Bpk 1997 1 SA 505 (O)
— 150
Erasmus v Afrikander Proprietary Mines (Pty) Ltd 1976 1 SA 950 (W)
— 60
Eriksen Motors (Welkom) Ltd v Protea Motors Warrenton Ltd 1973 3 SA 685 (A)
— 144
Erlax Properties (Pty) Ltd v Registrar of Deeds 1992 1 SA 879 (A)
— 37, 78, 263, 267, 268
Eskom v Rollomatic Engineering (Edms) Bpk 1992 2 SA 725 (A)
— 148
Ex parte Chairperson of the Constitutional Assembly: In re Certification of the Constitution of
the Republic of South Africa, 1996 1996 4 SA 744 (CC)
— 347
Ex parte Geldenhuys 1926 OPD 155
— 3, 4, 32, 98
Ex parte Menzies et Uxor 1993 3 SA 799 (C)
— 57
Ex parte Nell 1963 1 SA 754 (A)
— 223
Ex parte Optimal Property Solutions CC 2003 2 SA 136 (C)
— 15, 16, 348
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Cases-print-1536070431.xhtml
04-Sep-18
Cases
Page 1 of 3
Page 387
Ex parte President of the Republic of South Africa: In re Pharmaceutical Manufacturers
Association of South Africa 2000 2 SA 674 (CC)
— 7, 339
F
Farmsecure Grains (Edms) Bpk v Du Toit 2013 1 SA 462 (FS)
— 302
Finbro Furnishers (Pty) Ltd v Registrar of Deeds, Bloemfontein 1985 4 SA 773 (A)
— 333
First National Bank of South Africa v Land and Agricultural Bank of SA 2000 3 SA 626 (CC)
— 306
First National Bank of South Africa t/a Wesbank v Commissioner for SARS 2002 4 SA 768
(CC)
— 315, 342, 348, 349, 350, 351, 354
First Rand Ltd t/a Rand Merchant Bank v Scholtz NO [2007] 1 All SA 436 (SCA)
— 230
Firstrand Bank Ltd v Jaypee Properties (Pty) Ltd 2002 2 SA 384 (W)
— 303
Fisher v The Body Corporate Misty Bay 2012 4 SA 215 (GNP)
— 235
Forellendam Bpk v Jacobsbaai Coastal Farms (Pty) Ltd 1993 4 SA 138 (C)
— 287
Foentjies v Beukes 1977 4 SA 964 (C)
— 104, 105
G
Gardener v Whitaker 1994 5 BCLR 19 (E)
— 338
Genna-Wae Properties v Medio-Tronics (Natal) 1995 2 SA 926 (A)
— 328
Gien v Gien 1979 2 SA 1113 (T)
— 46, 100, 101
Gijzen v Verrinder 1965 1 SA 806 (D)
— 105
GJO Boerdery Ondernemings (Edms) Bpk v Bloemfonteinse Munisipaliteit 1988 4 SA 75 (A)
— 266, 280
Glaffer Investments (Pty) Ltd v Minister of Water Affairs and Forestry 2000 4 SA 822 (T)
— 274
Gore NO v Parvatas (Pty) Ltd 1992 2 SA 363 (C)
— 118
Goudini Chrome (Pty) Ltd v MCC Contracts (Pty) Ltd 1993 1 SA 77 (A)
— 308
Graf v Buechel 2003 4 SA 398 (SCA)
— 16, 305
Grant v Stonestreet 1968 4 SA 1 (A)
— 277
Greenberg v Estate Greenberg 1955 3 SA 361 (A)
— 180
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Cases-print-1536070448.xhtml
04-Sep-18
Cases
Page 2 of 3
Groenewald v Van der Merwe 1917 AD 233
— 148
Grosvenor Motors (Potchefstroom) Ltd v Douglas 1956 3 SA 420 (A)
— 144, 163, 168
Gundwana v Steko Development 2011 3 SA 608 (CC)
— 303
H
Haffejee NO v Ethekwini Municipality 2011 6 SA 134 (CC)
— 128
Halstead v Durant NO 2002 1 SA 277 (W)
— 312
Handel v Josi 1986 4 SA 838 (D)
— 84
Harksen v Lane NO 1998 1 SA 300 (CC)
— 130, 355
Harvey v Umhlatuze Municipality 2011 1 SA 601 (KZP)
— 356
Hassam v Shaboodien 1996 2 SA 720 (C)
— 277
Hefer v Van Greuning 1979 4 SA 952 (A)
— 176
Page 388
Hermanus v Department of Land Affairs: In re Erven 3535 and 3536, Goodwood 2001 1 SA
1030 (LCC)
— 368
Hotel De Aar v Jonordon Investment 1972 2 SA 400 (A)
— 274, 287
Hubby’s Investments (Pty) Ltd v Lifetime Properties (Pty) Ltd 1998 1 SA 295 (W)
— 323
I
Ierse Trog CC v Sultra Trading CC 1997 4 SA 131 (C)
— 235
Ikea Trading and Design AG v BOE Bank Ltd 2005 2 SA 7 (SCA)
— 297
Impala Water Users Association v Lourens NO 2008 2 SA 495 (SCA)
— 230, 233
Impendle Properties CC v Comrie 1993 3 SA 706 (N)
— 304
Info Plus v Scheelke 1998 3 SA 184 (SCA)
— 144, 149
Intercape Ferreira Mainlines v Minister of Home Affairs 2010 5 SA 367 (WC)
— 102
J
J de Moor (Edms) Bpk v Beheerliggaam van Outenikwa 75/80 1985 3 SA 997 (T)
— 73
Jaftha v Schoeman; Van Rooyen v Stoltz 2005 2 SA 140 (CC)
— 303
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Cases-print-1536070448.xhtml
04-Sep-18
Cases
Page 3 of 3
Janse van Rensburg v Koekemoer 2011 1 SA 118 (SG)
— 273
Jivan v National Housing Commission 1977 3 SA 890 (W)
— 235
JL Cohen Motors (SWA) (Pty) Ltd v Alberts 1985 2 SA 427 (SWA)
— 19, 123
Johaadien v Stanley Porter (Paarl) (Pty) Ltd 1970 1 SA 394 (A)
— 169, 171
Joles Eiendomme (Pty) Ltd v Kruger 2007 5 SA 222 (C)
— 283
K
Kakamas Bestuursraad v Louw 1960 2 SA 202 (A)
— 275
Kangra Holdings v Minister of Water Affairs 1998 4 SA 330 (A)
— 128
Karabo v Kok 1998 4 SA 1014 (LCC)
— 372
Kennaway (Pty) Ltd v Controlling Body of the Kennaway Court Building NO SS 14/1981 1988
2 SA 479 (E)
— 70
Khan v Minister of Law and Order 1991 3 SA 439 (T)
— 18, 19, 123, 182
Khuzwayo v Dludla 2001 1 SA 714 (LCC)
— 166
Kia Motors (SA) (Edms) Bpk v Van Zyl 1999 3 SA 640 (O)
— 169
Kidson v Jimspeed Enterprises CC [2009] ZAGPPHC 30 (20 April 2009)
— 273
Kirsch v Pincus 1927 TPD 199
— 102
Knysna Hotel CC v Coetzee NO 1998 2 SA 743 (SCA)
— 156
Konstanz Properties (Pty) Ltd v WM Spilhaus en Kie (WP) Bpk 1996 3 SA 273 (A)
— 122
Kruger v Joles Eiendomme (Pty) Ltd 2009 3 SA 5 (SCA)
— 135, 279
Kruger v Terblanche 1979 4 SA 38 (T)
— 64
Kursan v Eastern Province Building Society 1996 3 SA 17 (A)
— 300
L
Laskey v Showzone CC 2007 2 SA 48 (C)
— 102
Laugh it Off Promotions CC v South African Breweries International (Finance) BV t/a
Sabmark International 2006 1 SA 144 (CC)
— 348
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Cases-print-1536070448.xhtml
04-Sep-18
Cases
Page 1 of 3
Page 389
Lebowa Mineral Trust Beneficiaries Forum v President of the Republic of South Africa 2002 1
BCLR 23 (T)
— 348
Legator McKenna Inc v Shea 2010 1 SA 35 (SCA)
— 142, 143, 158
Leith v Port Elizabeth Museum Trustees 1934 EDL 211
— 101
Lief NO v Dettmann 1964 2 SA 252 (A)
— 297
Linvestment CC v Hammersley 2008 3 SA 283 (SCA)
— 266, 280, 281
Lorentz v Melle 1978 3 SA 1044 (T)
— 36, 40, 263
Lubbe v Volkskas Bpk 1992 3 SA 868 (A)
— 304, 329
M
MacDonald Ltd v Radin and The Potchefstroom Dairies and Industries Co Ltd 1915 AD 454
— 119
Malan v Ardconnel Investments (Pty) Ltd 1988 2 SA 12 (A)
— 286
Malan v Nabygelegen Estates 1946 AD 562
— 133
Malherbe v Ceres Municipality 1951 4 SA 510 (A)
— 103, 108
Mancisco & Sons CC (In Liquidation) v Stone 2001 1 SA 168 (W)
— 321
Manga v Manga 1992 4 SA 502 (ZS)
— 229
Manina v Minister of Safety and Security [2008] ZAECHC 46 (13 May 2008) (EC)
— 233
Mans v Mans (formerly Richens, born Maddock) [1999] 3 All SA 506 (C)
— 229
Maphango v Aengus Lifestyle Properties (Pty) Ltd 2012 3 SA 531 (CC)
— 329
Mathenjwa NO v Magudu Game Co (Pty) Ltd 2010 2 SA 26 (SCA)
— 114
McLelland v Hulett 1992 1 SA 456 (D)
— 175
Mehlape v Minister of Safety and Security 1996 4 SA 133 (W)
— 165
Melcorp SA v Joint Municipal Pension Fund (Transvaal) 1980 2 SA 214 (W)
— 121
Menqa v Markom 2008 2 SA 120 (SCA)
— 303
Meyer v Keiser 1980 3 SA 504 (D)
— 107
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Cases-print-1536070477.xhtml
04-Sep-18
Cases
Page 2 of 3
Minister of Land Affairs v Rand Mines Ltd 1998 4 SA 303 (SCA)
— 333
Minister of Land Affairs v Gqiba [2008] ZAECHC 176 (21 October 2008)
— 232
Minister of the Interior v Lockhat 1961 2 AD 587
— 6
Minister van Verdediging v Van Wyk 1976 1 SA 397 (T)
— 174
Minister van Wet en Orde v Erasmus 1992 3 SA 819 (A)
— 182
Mitchell NO v Meridian Bay Restaurant (Pty) Ltd 2011 4 SA 1 (SCA)
— 49
Mkontwana v Nelson Mandela Metropolitan Municipality; Bisset v Buffalo City Municipality;
Transfer Rights Action Campaign v MEC, Local Government and Housing, Gauteng,
(KwaZulu-Natal Law Society and Msunduzi Municipality as Amici Curiae) 2005 1 SA 530
(CC)
— 351
Mobile Telephone Networks (Pty) Ltd v SMI Trading CC 2012 6 SA 638
— 194
Page 390
Mosehla v Sancor CC 2001 3 SA 1027 (SCA)
— 371
Mpisi v Trebbel 1994 2 SA 136 (A)
— 120
N
Nach Investments (Pty) Ltd v Yaldai Investments (Pty) Ltd 1987 2 SA 820 (A)
— 265
National Credit Regulator v Opperman 2013 2 SA 1 (CC)
— 348, 353
National Director of Public Prosecutions v Parker 2006 3 SA 198 (SCA)
— 129
National Director of Public Prosecutions v Rautenbach 2005 4 SA 603 (SCA)
— 352
National Director of Public Prosecutions v Rebuzzi 2002 2 SA 1 (SCA)
— 129
National Director of Public Prosecutions v (1) RO Cook Properties (Pty) Ltd; (2) 37 Gillespie
Street Durban (Pty) Ltd; (3) Seevnarayan 2004 8 BCLR 844 (SCA)
— 352
National Stadium South Africa (Pty) Ltd v Firstrand Bank Ltd 2011 2 SA 157 (SCA)
— 31, 272
NBS Boland Bank Ltd v One Berg River Drive CC 1999 4 SA 928 (SCA)
— 298
Ndlovu v Ngcobo; Bekker v Jika 2003 1 SA 113 (SCA)
— 167, 373
Ngcobo v Salimba CC; Ngcobo v Van Rensburg 1999 2 SA 1057 (SCA)
— 370
Ngqukumba v Minister of Safety and Security 2014 5 SA 112 (CC)
— 227, 233
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Cases-print-1536070477.xhtml
04-Sep-18
Cases
Page 3 of 3
Nhlabati v Fick 2003 7 BCLR 806 (LCC)
— 352, 372
Nienaber v Stuckey 1946 AD 1049
— 213, 214, 226
Nino Bonino v De Lange 1906 TS 120
— 227, 228
Nkosana v Rondalia Assurance Corporation 1976 4 SA 67 (T)
— 147
Nortje v Pool NO 1966 3 SA 96 (A)
— 243
Ntshwaqela v Chairman, Western Cape Regional Services Council 1988 3 SA 218 (C)
— 232
Numill Marketing CC v Sitra Wood Products Pty Ltd 1994 3 SA 460 (C)
— 147
Nyangane v Stadsraad van Potchefstroom 1998 2 BCLR 148 (T)
— 352
O
Oakland Nominees (Pty) Ltd v Gelria Mining and Investment Co (Pty) Ltd 1976 1 SA 441 (A)
— 168
Oblowitz v Oblowitz 1953 4 SA 426 (C)
— 59
Occupiers of 51 Olivia Road, Berea Townships, and 197 Main Street, Johannesburg v City of
Johannesburg 2008 3 SA 208 (CC)
— 374
Odendaalsrus Gold, General Investments and Extensions Ltd v Registrar of Deeds 1953 1 SA
600 (O)
— 40
Oosthuyzen v Du Plessis 1887 5 SC 69
— 61, 63
Oudekraal Estates v City of Cape Town 2004 6 SA 222 (SCA)
— 352
P
Palabora Mining Co Ltd v Coetzer 1993 3 SA 306 (T)
— 321
Pappalardo v Hau 2010 2 SA 451 (SCA)
— 109
Paradise Lost Properties (Pty) Ltd v Standard Bank of South Africa (Pty) Ltd 1997 2 SA 815
(D)
— 312
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Cases-print-1536070477.xhtml
04-Sep-18
Cases
Page 1 of 3
Page 391
Pearly Beach Trust v Registrar of Deeds 1990 4 SA 614 (C)
— 38, 261
Pete’s Warehousing and Sales CC v Bowsink Investments CC 2000 3 SA 833 (E)
— 326
Petro Props (Pty) Ltd v Barlow 2006 5 SA 160 (W)
— 53
Pezula Private Estate (Pty) Ltd v Metelerkamp 2014 5 SA 37 (SCA)
— 279
PGB Boerdery Beleggings (Edms) Bpk v Somerville 62 (Edms) Bpk 2008 2 SA 428 (SCA)
— 103
Pickard v Stein 2015 1 SA 439 (SG)
— 283
Pienaar v Matjabeng Plaaslike Munisipaliteit [2012] ZAFSHC 213 (22 November 2012)
— 232
Pienaar v Rabie 1983 3 SA 126 (A)
— 130, 135
Pinzon Traders 8 (Pty) Ltd v Clublink 2010 1 SA 506 (ECG)
— 229
Ploughman NO v Pauw 2006 6 SA 334 (C)
— 135
Pocock v De Oliviera 2010 1 SA 514 (W)
— 117
Port Elizabeth Municipality v Various Occupiers 2005 1 SA 217 (CC)
— 47, 52, 167, 357, 374, 379
Potgieter NO v Daewoo Heavy Industries (Edms) Bpk 2003 3 SA 98 (SCA)
— 313
President of the RSA v Modderklip Boerdery (Pty) Ltd (Agri SA and Others, Amici Curiae)
2005 5 SA 3 (CC)
— 53, 164
Pretorius v Nefdt and Glas 1908 TS 854
— 60, 62, 63
Prinsloo v Shaw 1938 AD 570
— 101
Prophet v National Director of Public Prosecutions 2006 1 SA 38 (SCA)
— 352
Q
Quartermark Investments (Pty) Ltd v Pinky Mkhwanazi 2014 3 SA 96 (SCA)
— 144
Quenty’s Motors (Pty) Ltd v Standard Credit Corporation Ltd 1994 3 SA 188 (A)
— 151, 168, 294
R
Rademan v Moqhaka Local Municipality 2013 4 SA 225 (CC)
— 231
Rainbow Diamonds (Edms) Bpk v Suid-Afrikaanse Nasionale Lewensassuransiemaatskappy
1984 3 SA 1 (A)
— 115
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Cases-print-1536070495.xhtml
04-Sep-18
Cases
Page 2 of 3
Rand Waterraad v Bothma 1997 3 SA 120 (O)
— 100, 107
Reck v Mills 1990 1 SA 751 (A)
— 113
Reddy v Decro Investments CC t/a Cars For Africa 2004 1 SA 618 (D)
— 223
Reflect-All 1025 CC v MEC for Public Transport, Roads and Works, Gauteng Provincial
Government 2009 6 SA 391 (CC)
— 356
Regal v African Superslate (Pty) Ltd 1963 1 SA 102 (A)
— 103, 176
Registrar of Deeds (Transvaal) v The Ferreira Deep Ltd 1930 AD 169
— 40
Residents of Joe Slovo Community, Western Cape v Thubelisha Homes [2009] ZACC 16 (10
June 2009) (CC)
— 374
Rhoode v De Kock 2013 3 SA 123 (SCA)
— 166
Richtersveld Community v Alexkor Ltd 2001 3 SA 1293 (LCC)
— 367
Page 392
Rikhotso v Northcliff Ceramics (Pty) Ltd 1997 1 SA 526 (W)
— 235
RMS Transport v Psicon Holdings (Pty) Ltd 1996 2 SA 176 (T)
— 173
Robson v Theron 1978 1 SA 841 (A)
— 64
Roeloffze NO v Bothma NO 2007 2 SA 257 (C)
— 266
Roshcon (Pty) Ltd v Anchor Bay Builders CC 2014 4 SA 319 (SCA)
— 151
Rosslare (Pty) Ltd v Registrar of Companies 1972 2 SA 524 (D)
— 81
S
SA Bank of Athens Ltd v Van Zyl 2006 1 All SA 118 (SCA)
— 306
Sandton Town Council v Erf 89 Sandown Extension 2 1988 3 SA 122 (A)
— 127
Sanyati Building (Pty) Ltd v Energy X-Ray Trading KZN (Pty) Ltd [2010] ZAKZDHC 56 (5
November 2010)
— 215
Sauerman v Schultz 1950 4 SA 455 (O)
— 61, 63
Secretary for Lands v Jerome 1922 AD 103
— 118
Senekal v Roodt 1983 2 SA 602 (T)
— 19, 122
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Cases-print-1536070495.xhtml
04-Sep-18
Cases
Page 3 of 3
Setlogelo v Setlogelo 1914 AD 221
— 4, 224
Shoprite Checkers (Pty) Ltd v Member of the Executive Council for Economic Development,
Environmental Affairs and Tourism, Eastern Cape [2015] ZACC 23 (30 June 2015)
— 348
Simon NO v Mitsui and Co Ltd 1997 2 SA 475 (W)
— 296
Simpson v Klein NO 1987 1 SA 405 (W)
— 154
Singh v Santam Insurance 1997 1 SA 291 (A)
— 243, 316, 317, 319, 320, 324
Smith v Basson 1979 1 SA 559 (W)
— 106, 108
Smith v Mukheiber 2001 3 SA 591 (SCA)
— 266
Southern Tankers (Pty) Ltd t/a Unilog v Pescana D’Oro Ltd 2003 4 SA 566 (C)
— 153
Spearhead Property Holdings Ltd v E & D Motors (Pty) Ltd 2010 2 SA 1 (SCA)
— 327
Stadsraad van Pretoria v Body Corporate Faeriedale 2002 1 SA 804 (T)
— 73
Stadsraad van Vanderbijlpark v Uys 1989 3 SA 528 (A)
— 287
Standard Bank van SA Bpk v Breitenbach 1977 1 SA 151 (T)
— 298
Standard-Vacuum Refining Co of SA (Pty) Ltd v Durban City Council 1961 2 SA 669 (A)
— 119, 120
Steinberg v South Peninsula Municipality 2001 4 SA 1243 (SCA)
— 355
Stocks Housing (Cape) (Pty) Ltd v Chief Executive Director, Department of Educationand
Culture Services, 1996 4 SA 231 (CC)
— 233
Sumatie (Edms) Bpk v Venter 1990 1 SA 173 (T)
— 121
Syfret’s Participation Bond Managers Ltd v Estate and Co-op Wine Distributors (Pty) Ltd
1989 1 SA 106 (W)
— 320
T
Telkom SA Ltd v Xsinet (Pty) Ltd 2003 5 SA 309 (SCA)
— 16, 230
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Cases-print-1536070495.xhtml
04-Sep-18
Cases
Page 1 of 2
Page 393
Theatre Investments (Pty) Ltd v Butcher Brothers Ltd 1978 3 SA 682 (A)
— 120
Thienhaus v Metje and Ziegler 1965 3 SA 25 (A)
— 293, 297
Three Rivers Ratepayers Association v Northern Metropolitan Local Council 2000 4 SA 377
(W)
— 104
Tigon Ltd v Bestyet Investments (Pty) Ltd 2001 4 SA 634 (N)
— 231
TR Services (Pty) Ltd v Poynton’s Corner Ltd 1961 1 SA 773 (D)
— 311
Trustees Brian Lackey Trust v Annandale 2004 3 SA 281 (C)
— 107
Tswelopele Non-Profit Organisation v City of Tswane Metropolitan Municipality 2007 6 SA
511 (SCA)
— 235
U
Unimark Distributors (Pty) Ltd v Erf 94 Silvertondale (Pty) Ltd 1999 2 SA 986 (T)
— 121
Unitrans Automotive (Pty) Ltd v Trustees of the Rally Motors Trust 2011 4 SA 35 (FS)
— 147
V
Van den Berg v Van Tonder 1963 3 SA 558 (T)
— 276
Van der Eecken v Salvation Army Property Co 2008 4 SA 28 (T)
— 109
Van der Heever v Hanover Municipality 1938 CPD 95
— 101
Van der Merwe Burger v Munisipaliteit van Warrenton 1987 1 SA 899 (NC)
— 175
Van der Merwe v Carnarvon Municipality 1948 3 SA 613 (C)
— 103
Van der Merwe v Taylor 2008 1 SA 1 (CC)
— 46, 171
Van der Merwe v Van Wyk 1921 EDC 298
— 60
Van Rensburg v Coetzee 1979 4 SA 655 (A)
— 280
Van Rensburg NNO v Naidoo NNO 2011 4 SA 149 (SCA)
— 285
Van Rhyn NO v Fleurbaix Farm (Pty) Ltd 2013 5 SA 521 (WC)
— 208
Van Wezel v Van Wezel’s Trustee 1924 AD 409
— 320
Van Zyl NO v Maarman 2001 1 SA 957 (LCC)
— 372
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Cases-print-1536070512.xhtml
04-Sep-18
Cases
Page 2 of 2
Vansa Vanadium SA Ltd v Registrar of Deeds 1997 2 SA 784 (T)
— 278, 328
Van Staden v Fourie 1989 3 SA 200 (A)
— 82, 84
Venter NO v Claasen 2001 1 SA 270 (LCC)
— 372
Verstappen v Port Edward Town Board 1994 3 SA 569 (D)
— 97
W
Wahloo Sand Bk v Trustees Hambly Parker Trust 2002 2 SA 776 (SCA)
— 276
Wiljay Investments (Pty) Ltd v Body Corporate Bryanston Crescent 1984 2 SA 722 (T)
— 77
Williams v Harris 1998 3 SA 970 (A)
— 108
Willoughby’s Consolidated Co Ltd v Copthall Stores Ltd 1913 AD 267
— 267
Willoughby’s Consolidated Co Ltd v Copthall Stores Ltd 1918 AD 1
— 261, 274, 275
Wingaardt and Others v Grobler and Another 2010 6 SA 148 (EC)
— 102
Woerman and Schutte NNO v Masondo 2002 1 SA 811 (SCA)
— 371
X
Xsinet (Pty) Ltd v Telkom SA Ltd 2002 3 SA 629 (C)
— 230
Page 394
Y
Yeko v Qana 1973 4 SA 735 (A)
— 228
Z
Zeeman v De Wet 2012 6 SA 1 (SCA)
— 266
Zondi v MEC for Traditional and Local Government Affairs 2005 3 SA 589 (CC)
— 378
Zulu v Minister of Works, KwaZulu, 1992 1 SA 181 (D)
— 229
Zulu v Van Rensburg 1996 4 SA 1236 (LCC)
— 330, 370
Zululand Gas and Outdoor CC v Moris Centre (Pty) Ltd [2009] ZAKZPHC (13 May 2009)
— 235
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Cases-print-1536070512.xhtml
04-Sep-18
Legislation
Page 1 of 5
Page 395
Legislation
National Legislation
A
Abolition of Racially Based Land Measures Act 108 of 1991
— 362, 363
Agricultural Pests Act 36 of 1983
— 97
Alienation of Land Act 68 of 1981
— 20, 87, 157
Animals Protection Act 71 of 1962
— 97
Aviation Act 74 of 1962
— 127
B
Black Communities Development Act 4 of 1984
— 361
Black Land Act 27 of 1913
— 360
Black Local Authorities Act 102 of 1982
— 361
Blacks (Urban Areas) Consolidation Act 25 of 1945
— 361
Broadcasting Act 73 of 1976
— 127
C
Collective Investment Schemes Control Act 45 of 2002
— 301
Communal Property Associations Act 28 of 1996
— 371
Community Schemes Ombud Service Act 9 of 2011
— 80
Companies Act 71 of 2008
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Legislation-print-1536070549.xhtml
04-Sep-18
Legislation
Page 2 of 5
— 130
Conservation of Agricultural Resources Act 43 of 1983
— 97, 127
Constitution of the Republic of South Africa Act 200 of 1993
— 7
Constitution of the Republic of South Africa, 1996
— 2, 3, 94, 126, 183, 337, 339, 345
Co-operatives Act 14 of 2005
— 315
Criminal Procedure Act 51 of 1977
— 129, 171, 182, 183
Customs and Excise Act 91 of 1964
— 315, 351
D
Dangerous Weapons Act 71 of 1968
— 97
Deeds Registries Act 47 of 1937
— 16, 30, 33, 40, 138, 155, 156, 158, 161, 261, 264, 275, 298, 299, 300, 307, 328,
331
Development and Trust Land Act 18 of 1936
— 360
Drugs and Drug Trafficking Act 140 of 1992
— 97, 129, 183
E
Electricity Act 41 of 1987
— 127, 273, 280
Environment Conservation Act 73 of 1989
— 53, 96, 97
Expropriation Act 63 of 1975
— 92, 94, 127, 128, 280, 283, 357, 367
Extension of Security of Tenure Act 62 of 1997
— 94, 166, 366
F
Fencing Act 31 of 1963
— 97
Films and Publication Act 65 of 1996
— 97, 129, 183
Firearms Control Act 60 of 2000
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Legislation-print-1536070549.xhtml
04-Sep-18
Legislation
Page 3 of 5
— 97
Formalities in Respect of Leases of Land Act 18 of 1969
— 328
G
Game Theft Act 105 of 1991
— 114
Group Areas Act 36 of 1966
— 6, 361, 363
H
Page 396
Health Act 63 of 1977
— 97
Higher Education Act 101 of 1997
— 285
Housing Act 107 of 1997
— 97, 127, 365, 369
Housing Development Schemes for Retired Persons Act 65 of 1988
— 89
Housing Development Schemes for Retired Persons Amendment Act 70 of 1990
— 90
Human Tissue Act 65 of 1983
— 16
I
Insolvency Act 24 of 1936
— 130, 182, 295, 313, 355
Interim Protection of Informal Land Rights Act 31 of 1996
— 366, 371
L
Land Affairs Act 101 of 1987
— 127
Land and Agricultural Development Bank Act 15 of 2002
— 302, 315
Land Reform (Labour Tenants) Act 3 of 1996
— 53, 94, 166, 330, 365, 366, 369
Land Reform: Provision of Land and Assistance Act 126 of 1993
— 370
Land Survey Act 8 of 1997
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Legislation-print-1536070549.xhtml
04-Sep-18
Legislation
Page 4 of 5
— 16, 157
Legal Succession to the South African Transport Services Act 9 of 1989
— 127, 280
Less Formal Township Establishment Act 113 of 1991
— 51, 363
Local Government: Municipal Systems Act 32 of 2000
— 315, 316
M
Magistrates’ Courts Act 32 of 1944
— 312
Mineral and Petroleum Resources Development Act 28 of 2002
— 331, 333
N
National Building Regulations and Building Standards Act 103 of 1977
— 97
National Credit Act 34 of 2005
— 20, 144, 149, 188, 296, 306, 312, 313
National Environmental Management Act 107 of 1998
— 96, 97
National Environmental Management: Air Quality Act 39 of 2004
— 18, 97
National Environmental Management: Protected Areas Act 57 of 2003
— 127
National Road Traffic Act 93 of 1996
— 97, 287
National Veld and Forest Fire Act 101 of 1998
— 97, 109
National Water Act 36 of 1998
— 18, 127, 267, 280, 315
P
Physical Planning Act 88 of 1967
— 96
Population Registration Act 30 of 1950
— 361
Post Office Act 44 of 1958
— 127
Prescription Act 18 of 1943
— 111, 131, 279
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Legislation-print-1536070549.xhtml
04-Sep-18
Legislation
Page 5 of 5
Prescription Act 68 of 1969
— 111, 131, 134, 138, 196, 213, 279, 283
Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998
— 6, 52, 53, 94, 166, 167, 227, 366, 373
Prevention of Illegal Squatting Act 52 of 1951
— 6, 361, 362, 363, 373
Prevention of Organised Crime Act 121 of 1998
— 97, 129, 352
Property Time-sharing Control Act 75 of 1983
— 20, 86, 87, 157
R
Removal of Restrictions Act 84 of 1967
— 287
Rental Housing Act 50 of 1999
— 328, 369
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Legislation-print-1536070549.xhtml
04-Sep-18
Legislation
Page 1 of 2
Page 397
Restitution of Land Rights Act 22 of 1994
— 94, 127, 364, 365
Restitution of Land Rights Amendment Act 15 of 2014
— 365
S
Sectional Titles Act 66 of 1971
— 67, 78, 86
Sectional Titles Act 95 of 1986
— 3, 4, 16, 20, 67, 69, 71, 80, 87, 89, 157, 260, 273, 280, 297, 307, 316
Sectional Titles Amendment Act 15 of 1993
— 78
Sectional Titles Schemes Management Act 8 of 2011
— 80
Security by Means of Movable Property Act 57 of 1993
— 3, 297, 301, 312
Share Blocks Control Act 59 of 1980
— 81, 86, 87, 89
Spatial Planning and Land Use Management Act 16 of 2013
— 48, 53, 94, 95, 157, 370
State Land Disposal Act 48 of 1961
— 139
T
Transfer Duty Act 40 of 1949
— 159
U
Upgrading of Land Tenure Rights Act 112 of 1991
— 363
V
Value-Added Tax Act 89 of 1991
— 159
W
Water Services Act 108 of 1997
— 231
Wreck and Salvage Act 94 of 1996
— 115
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Legislation-print-1536070571.xhtml
04-Sep-18
Legislation
Page 2 of 2
Policy Papers, White Papers and Bills
Expropriation Bill of 2015
— 95, 128
White Paper on Land Reform of March 1991
— 362
http://e.pub/z5f9gia0qjn2t787u2hl.vbk/OEBPS/Text/Legislation-print-1536070571.xhtml
04-Sep-18