1998AnnSurvSAfricanL284

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Citation: 1998 Ann. Surv. S. African L. 284 1998

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LAW OF PROPERTY(INCLUDING REAL SECURITY)C G VAN DER MERWE*J M PIENAARt

LEGISLATIONDEEDS

The Deeds Registries Act 47 of 1937 was amended by the DeedsRegistries Amendment Act 93 of 1998. The amendment was aimedat addressing various aspects of the Act, amongst others, the ap-pointment of officials and an exposition of the minimum requiredqualifications for them; the consolidation of title; certain provisionsrelating to minerals; and aspects concerning state-owned land. Withregard to the appointment of officials, it is interesting to note thatin the case of the Assistant Registrar of Deeds, it is not the qualifica-tions of the person that are important, but the capacity to acquire,within a reasonable time, the ability to perform the necessaryfunctions of the office (s 2(1B) inserted by s 1 of the AmendmentAct). In the case of the appointment of a Chief Registrar, Registraror Deputy Registrar, the required qualifications are specifically setout in the amended version of the Act (s 2(2) as amended by s 1 ofthe Amendment Act). New developments regarding state land, orland where the state is the responsible institution, include thecreation of an obligation to annex a diagram of the relevant land tothe deed of grant when land is transferred (s 18 substituted by s 4of the Amendment Act); and measures providing for the separationof rights to minerals from the ownership of the land (s 72(2)amended by s 9 of the Amendment Act). The Amendment Act alsoprovides for circumstances in which the title deeds of two or morepieces of land may be superseded by a certificate of consolidatedtitle (s 40 (1) of the Act amended by s 6 of the Amendment Act). Anamendment of s 67 of the main Act now provides for a reservationof a personal servitude by way of a condition in a deed of cession ofrights to minerals, whereas the section previously only referred totransferdeeds relating to land (amended by s 8 of the AmendmentAct).

* BA LLB (UOFS) BA (Hons) BCL (Oxon) LLD (SA), Advocate, Professor ofPrivate Law and Roman Law, University of Stellenbosch.

t Bluris LLB LL M LLD (PU vir CHO), Professor of Private Law and Roman Law,University of Stellenbosch.

HeinOnline -- 1998 Ann. Surv. S. African L. 278 1998


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LAW OF PROPERTY 285An amendment to regulations under the Deeds Registries Act 47of 1937 was published in GN R740 GG 18924 of 22 May 1998 (Reg

Gaz 6192). The amendments set out a new schedule of fees of office,with the proviso that no fees are to be levied by a Registrar in respectof the performance of any act prescribed in s 3(1) (w) of the Act(relating inter alia to notices and court orders that have been lodgedby the Registrar in terms of any legal measure). Government NoticeR762 provides for an amendment of regulations under the DeedsRegistries Regulation Board, in terms of s 10 of the Act (GG 18939of 5June 1998). The regulations were further amended by GN R906GG 19039 of 3 July 1998.EXPROPRIATION

A notice of intention to expropriate a list of properties in thejurisdictional area of the Durban Transitional Metropolitan Councilwas published under s 7(5) of the Expropriation Act 63 of 1975(Board Notice 38 GG 18728 of 13 March 1998). The purposes of therespective expropriations were listed as follows: for undergroundelectric cable servitudes, pipeline servitudes, sewer and rain servi-tudes and the acquisition of land for reservoir and road develop-ment purposes. A further notice and list of properties to beexpropriated were published in May (Board Notice 81 GG 18916 of29 May 1999). Extensive expropriation was due to major infrastruc-tural improvements in the area and included the expropriation ofland for road development purposes, parks and open spaces, as wellas for sewer, drain and pipeline servitudes. Two expropriationnotices were published regarding land in KwaZulu-Natal: immov-able properties with improvements and the mineral rights wereexpropriated on behalf of the state (G N 1140-1141 GG 19222 of11 September 1998). The compensation amounted to R4 598,00 andRI 11,40 respectively. No reasons for the expropriation were given.In view of the purposes of the Provision of Certain Land forSettlement Amendment Act 26 of 1998 (the designation of land forsettlement as well as providing measures relating to the subdivisionthereof and the rendering of financial services), the Minister ofLand Affairs is specifically authorized to expropriate land (s 12 ofthe principal Act, 126 of 1993). Two requirements for expropria-tions in these cases are set out: that the land owner be given ahearing and that compensation be paid as prescribed by theConstitution (s 12(2) of the principal Act).



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286 ANNUAL SURVEY OF SA LAWHISTORICAL MONUMENTS, WRECKS AN D GRAVES

During 1998 twenty-eight new national monuments were declaredunder s 10(1) of the National Monuments Act 28 of 1969 and fivenational monuments were provisionally declared under s 5 (1) (c) ofthe Act. Interesting permanent declarations include the propertywith the Albert Luthuli House on it in Groutville, Lower Tugeladistrict (GN 715 GG 18901 of 22 May 1998) and the site of theaeroplane accident in which President Machel died (GN 1409GG 19429 of 6 November 1998).

Areas can be earmarked as conservation areas on the grounds oftheir historical, aesthetic or scientific importance under s 5(9)of the Act. This usually occurs after consultation with the relevantlocal authority. During 1998 four conservation areas were declared,all of which coincided with the publication of by-laws regulating theconservation of the specific area, for example the Clifton, GlenBeach and Bakoven areas in Cape Town (GN 1287 GG 19337 of16 October 1998). The placement of any immovable property onthe Register of Immovable Conservation-Worthy Property due to itscultural, historical and/or aesthetic importance occurs after consulta-tion with the local authority involved. Although the property maybe worthy of conservation, it does not necessarily qualify for monu-ment status. During 1998 only one entry was made (GN 716GG 18901 of 22 May 1998). Four declarations of national culturaltreasures occurred, namely that of the South African Mint Collec-tion (GN 371 GG 18743 of 20 March 1998) as well as the Hamilton-Welsh and Malan ethnographic collections, and the contemporarySouth African art collection at the University of Fort Hare (GN 1168GG 19245 of 18 September 1998).

On the provincial level the promulgation of the KwaZulu-NatalHeritage Act 10 of 1997 was significant. The promulgation of theAct is directly linked to the process of transferring heritage manage-ment to the various provinces, inevitably affecting the functions ofthe National Monuments Council. The Amafa aKwaZulu-NataliCouncil (the statutory body provided for in s 2 of the Act) isresponsible for the care, maintenance, repair and management ofhistorically important sites, architecturally important buildings,public monuments and memorials, military cemeteries and otherimportant graves, traditional burial places, archaeological andpalaeontological sites and artefacts, shipwrecks, important culturalobjects and the traditional building techniques of the people of theprovince (see s 7). Other aims of the Act are to integrate protectivemeasures in the planning and developmental processes (s 17) andestablish education and training projects within the province. A list



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LAW OF PROPERTYof all the formal protections available in the province is set out ins 19 of the Act. The names of persons to be appointed as membersof the Council were finally published during June 1998 (GeneralNotice 15 KwaZulu-NatalGazette 5279 of 4 June 1998).HOUSING

The Housing Act 107 of 1997 came into operation on 1April 1998(Proc RIO GG 18683 of 20 February 1998 (RegGaz 6099) - see thediscussion of the Act in 1997 Annual Survey 288). The HousingConsumer Protection Measures Act 95 of 1998 was also passed(GN 1398 GG 19418 of 2 November 1998). Sections 2-9 of the Actprovide for the establishment, functions, objects, composition,powers and staff of the National Home Builders' Registration Coun-cil. In view of numerous complaints against building companiesranging from corruption to unprofessional conduct, the Act nowprovides for the registration of home builders (ss 10-12) and theprotection of housing consumers (ss 13-14).

Development concerning housing on the provincial level in-cluded the appointment of members to the Free State HousingBoard (Provincial Notice 45 Free State Gazette 17 of 16 March 1998)and the promulgation of the Gauteng Housing Act 6 of 1998(Provincial Notice 53 GautengGazette522of 1September 1998). Theaim of the Act is to promote and facilitate housing developmentwithin the province. General principles applicable in all housingdevelopments are set out (s 3) . The infrastructure for housing inGauteng includes the establishment of a provincial housing advisoryboard and fund (ss 5, 12). The specific duties and powers of themember of the executive council responsible for housing and landaffairs are set out in s 4. The responsibilities relate inter alia to localauthorities, housing corporations, tenure security and the provisionof rental and social housing. The power to promulgate regulationsto further the aims of the Act is provided for in s 25. The existingHousing Board and its executive council were abolished in ss 18- 19.In brief, the other sections relate to the constitution of the new AdvisoryBoard (s 6), its powers and duties (s 7), meetings (s 11) and thefunctions of the member of the executive council and the head ofthe department in relation to the fund to be established (ss 13-14).

Mpumalanga also issued its own housing legislation (Act 15 of1998, Provincial Notice 42 MpumalangaGazette 395 of 14 December1998) as did the NorthWest Province (North West Housing Develop-ment Act 11 of 1998 - Official Notice 13 North West ExtraordinaryGazette 5337 of 29 December 1998). Both these Acts are aimed atproviding for the promotion and facilitation of housing development



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ANNUAL SURVEY OF SA LAWin the provinces. The legislation also sets out the roles, responsibili-ties, powers and functions of members of the executive council andprovides for the establishment of housing boards.

Although the following provincial bills were published during1998, they were still in the process of finalization: the Free StateProvincial Housing Bill (General Notice 19 Free State Gazette 84 of18 September 1998) and the Draft Eastern Cape Province HousingBill (General Notice 155 Eastern Cape Gazette 355 of 23 November1998).LAND USE PLANNING

PlanningProfessionThe rules of the South African Council for Town and RegionalPlanners were amended three times during 1998 in terms of s 28 ofthe Town and Regional Planners Act 19 of 1984 (Board Notice 10GG 18635 of 30January 1998, Board Notice 58 GG 18825 of 17 April1999 and Board Notices 180-1 GG 19565 of 11 December 1998). TheSouth African Council for Town and Regional Planners appointedmembers in terms of the Town and Regional Planners Act (GeneralNotice 280 GG 18728 of 13 March 1998). The registration andannual fees payable by Town and Regional Planners and Townand Regional Planners in training and Regional Planning Techni-cians were announced by the South African Council for Town andRegional Planners in terms of the Town and Regional Planners Act(Board Notice 58 GG 18825 of 17 April 1998).Designationand Subdivision

The Provision ofCertain Land for Settlement Amendment Act 26of 1998 was promulgated to provide for the designation of land forsettlement and to regulate its subdivision; to make provision for therendering of financial assistance for the acquisition of land; and tosecure tenure rights. The relevance of this Act to planning in generallies in the fact that the general planning laws governing the sub-division of land, and the establishment of townships, are not specifi-cally excluded when state land is involved (s 2(4)). The Minister ofLand Affairs is empowered to apply funds made available by Parlia-ment to further the objects of the Act, in general to facilitate theplanning of any development (s 10(1) (b) (vi) of the principalAct 126 of 1993) and, in particular, for the planning and develop-ment of land designated for settlement purposes (s 10(1) (b) (vii) ofthe principal Act).



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LAW OF PROPERTYThe importance of these developments is that land use planningand township development in general are closely interwoven with

land reform measures. In reality these matters cannot be separatedfrom each other, with the result that planners in all spheres ofgovernment are confronted with an all-encompassing approachtowards planning.Townships

The Townships Ordinance Amendment Act 10 of 1988 (FreeState) was assented to on 10june 1998 and came into operation on18 June 1998 (Provincial Notice 10 Free State Gazette 48 of 18 June1998). The object of the Amendment Act was to extend the appli-cation of the Townships Ordinance 9 of 1969 to the whole of theFree State Province. The implementation of the Amendment Actcoincided with the repeal of various statutory measures, most nota-bly the repeal of the Land Regulations (Proc 188 of 1969). Beforethe repeal, the Land Regulations made provision for land tenure inthe rural areas. With the extension of the Provincial Ordinance tothe whole of the Free State, the distinction between formerly 'white'and 'black' tenure forms is formally abolished.AgriculturalLand

The prohibition on the subdivision of agricultural land was liftedwith the commencement of the Subdivision of Agricultural LandAct Repeal Act 64 of 1998. The original motivation behind theprohibition was to prevent the uneconomic division of valuableagricultural land. The publication of the South African Land Policyduring April 1997 emphasized that the prohibition on subdivisionwas a stumbling block in the process of effective land reform. Thelifting was seen as essential for an efficient land redistributionprogramme where the development of small farms is a priority.Alienationof Land

Another interesting development concerning land in general,and agricultural land in particular, was the promulgation of theAlienation of Land Amendment Act 103 of 1998, which amendedthe Alienation of Land Act 68 of 1981. A definition of agriculturalland was inserted to the effect that agricultural land means any landused or intended to be used for commercial farming operations. Forthe purposes of the Act, it can be inferred that land used for small-scale farming is excluded. A further definition of land for purposesof section 29A of the Act is also provided. Section 29A is inserted by



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290 ANNUAL SURVEY OF SA LAWs 3 of the Amendment Act: it confers on the purchaser a right torevoke or terminate a deed of alienation. This right is to be exercisedwith regard to land used mainly for residential purposes; any hous-ing interest, as defined in s I of the Housing Development Schemesfor Retired Persons Act 65 of 1988; any share in a share blockcompany, as well as any unit as defined in s 1 of the Sectional TitlesAct 95 of 1986; but excluding agricultural land (s 1(d) inserted bys I of the Amendment Act). In terms of this new development apurchaser or prospective purchaser may, within five days of signingan offer to purchase land, or a deed of alienation in respect of land,revoke the offer or terminate the deed by written notice deliveredto the seller or agent within the five-day period (s 29A(1)). Adescription of the five-day period is set out in s 29A(2). The writtennotice will be effective only if it states that revocation or cancellationis claimed, if it is signed by the purchaser or agent and if it isunconditional (s 29A(3)). Any money already paid has to be re-funded within 10 days of receipt of the notice mentioned above(s 29A(4)). The general right of revocation or cancellation is in-applicable in the following cases: where the purchase price or theprice offered for the land exceeds R250 000; where the purchaseris not a natural person; where the land has been purchased at apublicly advertised auction; if the seller and purchaser have pre-viously entered into a deed of alienation in respect of the same landon substantially the same terms; if the purchaser has reserved theright to nominate or appoint another person to take over the rightsand obligations connected with the offer or deed of alienation; andif the purchaser has purchased the land by the exercise of an optionopen for a period of at least five days (s 29A(5) (a)-(f)). Any waiverof these rights is void (s 29A(7)(b)). So too is any provision oragreement, irrespective ofwhether it was orally made or written, interms of which a penalty or fee is directly or indirectly imposed forthe exercise of the revocation or cancellation of rights(s 29A(7) (a)).SURVEY

The process of rationalization and restructuring of the surveyoffices, started during 1997, was continued during 1998. See, forexample, the establishment of the Surveyors-General Offices in thevarious provinces during 1998 (General Notice 1314 GG 19049 of17 July 1998). Other developments during 1998 were connectedmainly with the efficient functioning of the amended infrastructure,and the introduction of new technology. Examples of the formerincluded the amendment of fees and tariffs (in the offices of the



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LAW OF PROPERTY

Chief Surveyor-General and the Surveyors-General (GN 275GG 18689 of 26 February 1998), and of the Federation of Institutesof Professional Land Surveyors of Southern Africa (Board Notice132 GG 19145 of 21 August 1998). The implementation of a newgeodetic datum which is based on the World Geodetic System 84(WGS-84) was published by the Chief Directorate: Surveys andMapping as witness to advancement in the field of technology(G N 1186 GG 19265 of 18 September 1998). With regard to theprofession, decisions reached by the South African Council forProfessional and Technical Surveyors Committee of Inquiry werepublished in terms of the Professional and Technical Surveyors' Act 40of 1984 (Board Notices 149-150 GG 19245 of 18 September 1998).Several sections of the Land Survey Act 8 of 1997 were alsoamended by theLand Affairs General Amendment Act 61 of 1998.These amendments were generally aimed at streamlining the func-tions and responsibilities of certain officials and correcting differ-ences between the English and Afrikaans texts of the Act (s 2amended by s 9 of the Amendment Act). With regard to the first-mentioned matter, the Amendment Act now specifically providesfor a division of survey-related responsibilities between the ChiefSurveyor-General and the Chief Director: Surveys and Mapping(ss 3, 6, 8, 45 and 50 amended by ss 11, 13, 14, 17 and 18 of theAmendment Act respectively). A new s 3A was inserted (by s 12 ofthe Amendment Act) listing all the duties of the Chief Director whois generally in charge of geodetic and topographical survey andgeospatial information services.

CASE LAWNATURE OF INCORPOREAL PROPERTY

MV Snow Delta;Discount TonnageLtd v Serva Ship Ltd 1998 (3) SA636 (C), which deals with the attachment of a ship ad fundandamjurisdictionem, contains the following interesting remarks on thenature of incorporeal property (at 653B-E):

'It must be borne in mind that the attribution of locality to incorporealsis, by its nature, an artificial if sometimes legally necessary exercise...and that the logic which renders it impossible for a single item ofcorporeal property to be in more than one place at the same time doesnot apply to incorporeals: there seems to me to be no reason in logic orin law why an incorporeal should not be capable of existing in severalplaces simultaneously. For instance, a debtor company which has itsregistered office in one place and its principal place of business atanother may competently be sued at either place: the creditor's claim,it seems to me, may, on the strength of the above authorities and thereasoning underlying them, be located at both places at the same time.



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29t! ANNUAL SURVEY OF SA LAWThe right which constitutes the incorporeal property in question maybe "dealt with effectively" at either place.'In Badenhorst v Balju, PretoriaSentraal 1998 (4) SA 132 (T) the

court held that an incorporeal movable asset (in this case, members'interests in a close corporation) could not be attached merely by theintention or decision of the sheriff. Notwithstanding the fact thatthe right was incorporeal, some document or similar item repre-senting the right had to be attached. In the circumstances of thecase, the sheriff would have had to attach the certificate issued interms of s 31 of the Close Corporation Act 69 of 1984 or thefounding statement referred to in s 12 of the Act. The sheriff hadnot attached the necessary documents and taken them into hiscustody, nor had he made any attempt to find such documents. Thefact that he had affixed the writ of execution and notice of attach-ment to the outside gate of the property of the close corporationwas not regarded as sufficient compliance with Rule 45(8) of theUniform Rules. The attempted attachment had therefore beeninvalid (at 138H-I, 139D-E and 1391-J).

SPOLIATIONIn Maraisv EnglerEarthworks (Pty) Ltd;Engler Earthworks(Pty) Ltd

v Marais 1998 (2) SA 450 (E) the respondent had enlisted theservices of a firm of private investigators to repossess two vehicles inthe applicant's possession. After removal of the vehicles, the appli-cant applied ex parte for a mandament van spolie. In an applicationfor a rule nisi the court granted an interim order for the return ofthe vehicles and inter alia called on the respondent to show causewhy it should not restore the vehicles. The respondent filed acounter-application for the immediate return of the vehicles, and,in the alternative, for an order that the vehicles be held, pendingthe result of an action for the restoration of the vehicles. On the returnday of the rule nisi, the respondent objected in limine to the locusstandi of the applicant, who was an unrehabilitated insolvent.

Relying on Nino Bonino v De Lange 1906 TS 120 at 122 and Ness vGreef1985 (4) SA 641 (C) at 647F, the court found that the manda-ment van spolie protects natural possession irrespective of whetherthe property in question belongs to a third party or the allegedspoliator.The applicant need only prove factual possession; his rightto possession is irrelevant. Since an insolvent has the physical andmental ability to possess, he has a right to protect his possession bymeans of the mandament van spolie. No principle of common lawor the Insolvency Act 24 of 1936 denies him locus standi to exercisethat right (at 453B-D).



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LAW OF PROPERTYThe court rejected the respondent's claim that the applicant had

consented to the handing over of the vehicles (at 457B) and foundthat the respondent's further claim that the applicant was obligedto hand over the vehicles, but had unlawfully failed to do so ,afforded no defence. Citing Bon QueUe (Edms) Bpk v Munisipaliteitvan Otavi 1989 (1) SA 508 (A ) at 512A-B in support, the courtrepeated the age-old maxim 'spoliatus ante omnia restituendus est'and stated that possession had to be restored regardless of the meritsof the case, that is of the actual rights of the parties to possess (a t457D).The court held, finally, on the authority of Burger v Van Rooyen1961 (1) SA 159 (0) at 162A-B and Stocks Housing (Cape) (Pty) Ltd vChief Executive Director, Department of Education and Culture Services1996 (4) SA 231 (C) at 244B-D that if the applicant went furtherthan claiming spoliatory relief, he would force an investigation intothe issues relevant to the further relief he claimed. Once he did this,the respondent's defence was to be considered and, if such adefencejustified the respondent's position, a court would not orderthe restoration of the status quo ante. The court found, however,that the applicant sought simply to compel the respondent torestore possession. The averments relating to his entitlement to thevehicles were made to establish his locus standi and did not openthe door for a counter-application to establish the respondent'sright to the vehicles (at 457-8).

This case confirms the principle that no one is allowed to takethe law into hisown hands, and that even an owner will be compelledto restore possession taken by him from another without the interven-tion of the court. The decision on the facts of the case also impliedlyconfirms the decision in Administrator,Capev Ntshwaqela1990 (1) SA705 (A), that a principal who has authorized spoliation through hisagents should be treated as a co-spoliator.

In Minister ofFinancev Ramos 1998 (4) SA 1096 (C) the Ministerof Finance opposed an application for a mandament van spolie. Herelied upon a statutory provision (s 114 of the Customs and ExciseAct 91 of 1964) in support of an averment that his seizure of a vehiclewas lawful. He argued that the provision that constitutes a lien infavour of the state entitled him to dispossess the applicant of thevehicle without recourse to due process of law. The court found thatsuch statutory provision had to be restrictively interpreted, and thatthe party who invoked the provision had to prove that he actedstrictly within its terms (at 1101F-H). It also found that a defenceon the merits of any dispute between the parties as to who is entitledto possession was irrelevant in an application for a mandament (a t1101I-J). The court therefore held that the magistrate was correct



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294 ANNUAL SURVEY OF SA LAWin finding that the elements necessary to found a mandament vanspolie had not been proved, and dismissed the appeal. This caseshows how difficult it is to draw the line between the rule that thereis no defence on the merits of the case and the requirement of themandament that dispossession must have been unlawful.NEIGHBOUR LAWNuisance

In Rademeyer & others v WesternDistrictsCouncil& others 1998 (3)SA 1011 (SE) interesting findings were made concerning the adjust-ment of the law of nuisance by recent land reform legislation,notably the Extension of Security Tenure Act 62 of 1997. Therespondents had erected informal housing structures on the landof the first respondent. The applicants, who occupied variousproperties surrounding or adjacent to the first respondent's land,instructed their attorney to request the first respondent to abate thenuisance created by the erection of the structures. When thesedemands failed the applicants applied to the local division for anurgent interdict prohibiting the first respondent from allowing anyperson to erect housing structures on its land, and instructing thefirst respondent to remove the occupants from the property as theywere causing a nuisance to the applicants. At the time of the erectionof the structures, the first respondent had not granted permissionfor such erection. The court held that although the initial occupa-tion of the property had taken place without the consent of the firstrespondent, its attitude, on becoming aware of the presence of theoccupiers, had been that they could remain on the property untilalternative housing arrangements could be made. Since this consti-tuted at least tacit consent to the residence of the other respondentson the property at the time the application was brought, the courtfound that the matter fell within the ambit of the Extension ofSecurity of Tenure Act, and that the application could thus notsucceed.

Interestingly the court went further and decided that even if theAct were not applicable, the application would still be dismissed.The applicants contended that the presence of the other respon-dents and their families constituted a nuisance. This contention wasapparently founded on fears that a large squatter camp would beestablished on the land and that this would in turn result in a securityrisk, the risk of criminal activity and a health risk to people in thevicinity. The court found, however, that at that time only 14 familiesoccupied the property and that the respondent had undertaken notto allow any further persons to occupy the property. It also accepted



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a statement of the occupants that the fears that they would turn tocrime were unfounded and that the provision of water and sanita-tion had diminished the health hazard. In all these circumstances,the court held that the applicants had failed to prove a nuisance.The applicants failed to prove that there was a persistent inter-ference with their rights to the reasonable enjoyment of theirproperty. The court conceded, however, that the situation mighthave been different if the applicants could have shown, as a matterof probability, that the whole of the first respondent's property(approximately 1,5 hectares and potentially suitable for providinghousing for up to 100 families) was going to be utilized for informalhousing.NaturalFlow ofWater

In Harrisv Williams 1998 (2) SA 263 (W) the applicant appliedfor a final interdict, embodying four prayers. The first prayer wasthat the respondent, the owner of a neighbouring urban property, beprohibited from allowing storm water to flow from his property onto that of the respondent. The second prayer was that the respon-dent should be directed to construct a drain on his side of theircommon boundary. This had to be done in accordance with aregistered servitude of drainage of storm and spring water over therespondent's property. The third prayer was that the respondentshould be directed to perform these works within two months ofthe granting of the order. The fourth prayer was that the respondentbe compelled to remove the branches of an ivy plant that had grownover into the applicant's property.The court found that the properties concerned were urbanproperties in an urban area. It further found that building and otherstructural developments had disturbed the original contours ofthese tenements. This disturbance was so substantial that whateverright may have existed at common law, entitling the owner ofhigher-lying land to allow the water from his land to flow on toanother's lower-lying land, had come to an end. The sole source ofany right which the respondent had to allow rainwater falling on hisproperty to flow on to the applicant's land was a servitude registeredin his favour to erect a drain to deal with the overflow. If therespondent intended to exercise this servitudal right, he was obligedto provide the drain contemplated by the servitude. The applicant(the owner of the lower-lying property) was therefore granted anorder that the owner of the higher-lying property (the respondent)construct a suitable drain on the applicant's side of their commonboundary. This had to be done in accordance with the registered



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29b ANNUAL SURVEY OF SA LAWservitude for the discharge of the storm water over the applicant'sproperty to the street (at 271B-C, 274D-E and 265G-I). He wasfurther obliged not to allow water from his property to flow beyondthe area demarcated in the servitude. The court found that on aproper analysis of the affidavits there was no real dispute as towhether or not rainwater from the respondent's land had flowedor would flow onto the applicant's land, or as to whether it hadflowed or would flow beyond the area covered by the servitude.The court also found that the drain required by the servitude hadnot been provided. If the existing drain had indeed been installedin purported compliance with the servitude, the court found that itwas not adequate, for it failed to restrict water emanating from therespondent's land to the area encompassed by the servitude.

With regard to the overgrown ivy, the court found that despitethe removal of some of it by the respondent since the institution ofthe proceedings, there remained a substantial amount ofovergrownfoliage, to which the applicant could not gain access in order toremove it. The respondent was further not prepared to cut away theivy nor to give the applicant access to his property to remove the ivy.In the circumstances the court found that the applicant was entitledto an order compelling the respondent to remove the offendingfoliage (at 275A-D).

In an appeal to the Supreme Court of Appeal, Williams v Harris1998 (3) SA 970 (SCA), the court considered the relief prayed forin the application for a final interdict brought by the respondent(the applicant in the court a quo). It noted that the court a quo hadgranted the orders applied for on the premiss that at common lawno rainwater at all which emanated from the appellant's propertyhad to be tolerated by the respondent.

In hisjudgment MaraisJA pointed out that the respondent's caserested upon an assertion of the legal position and three relatedallegations of fact. The legal principle relied upon was that theappellant had no right to allow rainwater to flow from his propertyto the respondent's property, except in accordance with the servi-tude registered in favour of his property. The allegations of fact werethe following. First, the appellant allowed the rainwater that fell onhis property to flow on to the property of the respondent. Secondly,the water was flowing on to her property beyond the strip of land thatwas burdened by the servitude. Thirdly, the water that flowed overor collected upon the strip of land burdened by the servitude was notbeing led away in the manner provided for by the servitude, namelyby means of a drain of the kind envisaged in the servitude.

Marais JA expressed reservations about taking a position on aproposition of law when the authorities had neither been collected



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LAW OF PROPERTY 297nor fully debated by counsel. He considered, however, that he hadto go into the proposition in order to deal with the case. After citingthe most important case law and academic literature on this aspectof the law (at 981E-F), he emphasized that an important distinctionhad always been drawn between urban and rural tenements. Inhistorical times the distinction affected not only the substantiverights and obligations of adjoining owners but also the choice of aprocedural remedy. Although the latter became less critical with thedemise of formulary procedures, the greater tolerance which anowner of rural ower-lying land was expected to show towards waterflowing on to his land from his neighbour's higher-lying land per-sisted. The degree of forbearance required from his urban counter-part was not on the same level. Nevertheless Marais JA citednumerous cases (at 981-2) for the basic proposition, common toboth rural and urban tenements, that surface water flowing natu-rally from one property to another by reason of their natural locality(natura loci) could give no legitimate cause for complaint (a t981G-I). On the basis of persuasive case law (at 982B) the courtqualified this proposition by showing that the situation changedwhere there had been human interference with the natural setting,which artificially diverted the rainwater from its course, or increasedits quantity or rapidity. MaraisJA took trouble to point out that suchchanges affected urban tenements to a greater extent than ruraltenements. The upper owner of a rural tenement could in certaincircumstances increase the velocity or the volume of water to thedetriment of the lower owner. Such change or increase was allowedif occasioned in the ordinary course of draining, ploughing orirrigating the upper land and if it was not more burdensome thanwas reasonable under the circumstances (at 982A-D). The judgepointed out that it was not important to decide whether the upperowner's power in this regard should be characterized as a servitude,or whether it should be classified as a right or merely as a liberty (a t982D-E).MaraisJA then went on to show that the cases relied upon by therespondent for the proposition that 'in an urban residential areathe owner of the lower property is not obliged to receive stormwaterfrom a higher property' do not actually support such a proposition(at 982-3). He also demonstrated that the passage of Grotius citedin support of the proposition could be explained in a different way.Grotius 2.34.16 in The Jurisprudenceof Holland (Lee's translation)reads as follows: 'For by the common law every one must lead hiswater on his own land, or over his own land on to a street or road.'

MaraisJA was of the opinion that this passage does not deal withnaturally flowing rain water butwith water (whether it be rain water



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ANNUAL SURVEY OF SA LAWor not) which has been artificially collected by the upper owner andwhich is sought to be discharged on to the lower owner's property.He pointed out that such an interpretation is in harmony withGrotius 2.35.17:

'By common law any one may let his water flow in its natural course, fromwhich comes the old proverb "if water hurts you, you may turn it away".'Although this passage appears under the rubric 'rustic servitudes'

and not, as the first passage does, under the rubric 'urban servi-tudes', Marais JA maintained that Grotius was not confining hisobservation in the first passage to rural situations. If a fundamentallydifferent principle applied in urban situations, he considered thatGrotius would have pointedly drawn attention to the contrast.

MaraisJA then reiterated that he had researched the law in orderto identify the relevant factual issues and to consider whether theycould be resolved on the affidavits. According to him the followingquestions arose. First, was rainwater flowing and would it continueto flow on to the respondent's property? Secondly, if it was, was itflowing beyond the area to which the servitude related? Thirdly, ifso, was it flowing in quantities, or in a manner, or with a frequency,which would exclude the operation of the maxim de minimis noncurat lex? Fourthly, if so, was the rainwater in question, or themanner of its arrival, more than would have to be tolerated if it hadflowed there natura loci? If it was, then Marais JA considered that,subject to the de minimis rule, and possibly to a rider confiningthe interdict to water in excess of the historical natural flow, or theaddition of such other rider as might be appropriate, he wouldprobably have granted the first prayer. Fifthly, if it was not, butthe provision of the drain contemplated by the servitude wouldhave prevented any water from flowing beyond the area burdenedby the servitude, was the first prayer inappropriate and was therespondent's remedy, if any, confined to the second prayer? Sixthly,a question which might be anterior to all the other questions, wasthe agreement of servitude an exhaustive statement of the rightsand obligations of the parties in regard to storm water and springwater, or did the common law still govern their relationship?Marais JA drew attention to two important principles of thecommon law. The first is that an applicant cannot be granted finalrelief in motion proceedings if the respondent seriously disputesallegations the proof of which is critical to the applicant's case. Thesecond principle pertains to the case where there is no real dispute,in the sense that the formalistic denials entered by the respondentare more apparent than real, or it is clear that the denials are notmade bona fide, or are so palpably unfounded as to be incapable of



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being correct. In such a case it is open to a court to disregard them(at 980H-J).Marais JA reluctantly decided that any attempt to resolve the

disputes solely by reference to the affidavits could result in aninjustice being done to one or other of the parties. The court a quoshould mero motu have ordered the hearing of oral evidence.Accordingly the court made such an order on appeal. The courtemphasized that the court dealing with the case subsequently shouldtake into account that the court a quo approached the case on themistaken premiss that at common law the respondent need not havetolerated any rainwater emanating from the appellant's property.For the rest, the court declined to comment either upon the affida-vits or any of the other points of law involved in the resolution ofthe dispute.The court therefore upheld the appeal to the extent that all theorders made by the court a quo were set aside. In addition, itremitted the matter for the hearing of oral evidence on all relevantdisputes of fact which arose from the affidavits (at 985D-E and986B-C).The court also gave judgment on the overgrowing ivy. It con-cluded that even if there remained some areas in which the ivyprotruded despite the trimming that took place after the commence-ment of proceedings, there was more than ample room for therespondent to gain access to it from the western side and to trim itherself.In a separate judgment Plewman JA pointed out that a properdiscussion and application of the principles was bedevilled by seriousfactual uncertainty. First, the scope of the registered servitude wasuncertain since there was no clarity as to the source and the preciseflow of the water. Secondly, the law in the cases referred to had alwaysbeen considered in the light of a specific factual situation. Similarly,a specific factual matrix had to be supplied before one couldspeculate on the contents of Grotius 2.34.6 and Digest 3.1.7.What then is the significance of this decision? First, it seems thatour courts are moving away from the generally accepted view thatSouth Africa has a few so-called traditional instances of neighbourlaw, each with its own set of requirements. Instead, all these instancesare gradually recognized as mere examples of instances governedby the broader principle of reasonableness. Such an approach hasalready been adopted by the recent decision in Rand WaterraadvBothma 1997 (3) SA 120 (0) (discussed in 1997 Annual Survey 304).This case dealt with buildings and structures encroaching on neigh-bouring land. In the Harris ase the principle is apparently extendedto the sphere of the disturbance of the natural flow of surface water.



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ANNUAL SURVEY OF SA LAWA peculiar set of requirements or circumstances no longer seems toregulate this area of the law. Formerly, the rule was, for instance,that once a tenement had, by building and other structural opera-tions on the land, been converted into an urban tenement, thelower-lying tenement could in no circumstances be expected toaccept surface water emanating from the higher-lying tenement.Instead one now has to enquire whether the owner of the higher-lying tenement has exercised his powers of ownership reasonably.This involves a delicate weighing up of the interests of the neigh-bouring owners in which the principle of give-and-take has somerole to play.

Secondly, Harris ffords some authority on the remedies availablein the case of overgrowing trees, branches and foliage in additionto the dicta in Malherbe v Ceres Municipality 1951 (4) 510 (A) at518G-H and Francis Roberts 1973 (1) SA507 (RA) at 509B, 511 and514G. In Harris he court a quo held that the applicant was entitledto an order compelling the respondent to remove the ivy. The factsthat prompted this order were twofold. First, the applicant wasunable to cut away the ivy herself because there was not sufficientspace for her to gain access to it, and, secondly, the respondent hadneither tendered to cut away the ivy nor tendered the applicantaccess to the ivy to cut it away herself. By the time of the appealthe appellant (respondent in the court a quo) had already trimmed theivy on his side to such an extent that the respondent (applicant inthe court a quo) had ample room to gain access to it and to trim itherself.IMPROVEMENTS TO LAND

For improvements effected to immovable property not pursuantto a contract with the owner, but pursuant to a contract with anotherparty who has failed to pay the contractor, see Hubby's Investments(Pty)Ltd v Lifetime Properties (Pty)Ltd 1998 (1) SA 295 (W).TRANSFER OF OWNERSHIPTraditioBreviManu

In Info Plus v Scheelke & another 1998 (3) SA 184 (SCA) theappellant had entered into a written instalment sale agreement withF bank for the purchase of a motor vehicle. F bank then ceded itsrights in terms of the agreement to Wesbank. The vehicle wasdelivered to the appellant and registered in its name. In terms ofthe instalment sale agreement, ownership was, however, to remainvested in the seller until receipt of the full purchase price. The



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LAW OF PROPERTYappellant's (purchaser's) authorized representative, M, thenreached an agreement with G, a representative of S Motors, that thevehicle would be delivered to the premises of S Motors, and that Gwould attempt to find a purchaser for the motor vehicle at astipulated price. The agreement stipulated that a prospective pur-chaser was first to be introduced to the appellant, after which thepurchaser would pay the full price to the appellant, which wouldthen pay S Motors its commission. The motor vehicle was thendelivered to S Motors. However, neither G, nor anyone else actingon behalf of S Motors, introduced a purchaser to the appellant. Onhis return from an overseas trip, M discovered that G had left theemploy of S Motors, and that the motor vehicle had been registeredin the name of the first respondent. It appeared that G had soldthe vehicle to the second respondent for substantially less than thestipulated price. G furnished the second respondent with a registra-tion certificate, together with the vehicle, in which it was stated thatS Motors was the registered owner of the vehicle. Subsequently thesecond respondent sold and delivered the vehicle to the first respon-dent. Wesbank then undertook to repossess the vehicle. However,instead of this, it concluded an agreement with the second respon-dent in terms of which the second respondent paid the total amountoutstanding under the instalment sale agreement in exchange fo rremaining in possession of the vehicle.The appellant instituted action against the first respondent onthe basis that it was the owner of the vehicle. After the secondrespondent was granted leave to intervene as co-defendant,the respondents filed pleas denying the appellant's ownership of thevehicle, and pleaded the defence of estoppel in the alternative. Indismissing the appellant's claim, the court a quo found that deliveryhad not taken place by means of traditio brevi manu. The reasonfor the decision was that the vehicle was neither in the possession ofthe appellant nor held on its behalf at the time when the secondrespondent made payment to Wesbank.In an appeal, Van Heerden DCJ stated that it was trite law thattransfer of ownership of a corporeal movable required transfer ofpossession of the property by the owner to the transferee, coupledwith a real agreement to transfer and to acquire ownership. Transfercan be either actual or constructive and an agent can act for eitherthe owner or the transferee. Van Heerden DCJ analysed the decisionin Pennefatherv Gokul 1960 (4) SA 42 (N ) and concluded that sincethe purchaser in Pennefatherwas not in possession of the vehiclewhen the condition was fulfilled, he could not have becomethe owner of it by virtue of traditio brevi manu. Commenting on thedecision ofJamesJ in ForsdickMotorsLtd v Lauritzen1967 (3) SA 24 9



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ANNUAL SURVEY OF SA LAW

(N) at 253E-H, Van Heerden DCJ concluded that the judge hadheld the view that ownership of a thing sold in terms of a hire-purchase agreement could not pass to the purchaser by merefulfilment of the condition. The parties still had to agree after thatthat the purchaser as detentor would henceforth possess the merxas his own. Van Heerden DCJ then stated (at 190-1):

'The requirement that subsequent to delivery of the merx under ahire-purchase contract there should be a further agreement between theparties, in the sense of a mutual intention at the time of fulfilment ofthe condition that ownership shall be transferred to the purchaser, withdue respect strikes me as somewhat artificial. Iwould indeed be surprisedif a substantial number of sellers give any consideration to the passingof ownership when the condition is fulfilled. And even if a seller shouldprior to fulfilment inform the purchaser that he no longer intendstransferring ownership to the latter, that by itself would surely notpreclude a transfer from taking place.

It follows that.. . no further real agreement, concluded subsequentto delivery of the merx under a hire-purchase contract, is required (cfTrustBank van AfrikaBpk v VanJaarsveldt n 'nander;TrustBank vanAfrikaBpk v Bitzeren 'nander1978 (4) SA 115 (0) at 121F). The real agreementreached when delivery takes place, suffices. Because of the conditionalterm in the hire-purchase contract that agreement is also conditional.Notwithstanding delivery, ownership of the thing sold therefore doesnot pass prior to fulfilment of the condition.... But when that happensownership passes without more, at any rate if the purchaser is then inpossession of the merx.'Van Heerden DCJ then considered whether a different position

obtained if the purchaser was no longer in possession at the relevanttime. He gave three examples of rather curious consequences thatwould follow if the reply were positive. The last example is thefollowing (at 191E-F):

'A sells and delivers his horse to B subject to the stipulation thatownership will only pass a month later. B pays the purchase price butbefore the end of the stipulated period the horse is stolen from him andremains stolen. I cannot perceive any reason why, in the context underconsideration, a distinction should be drawn between delivery subjectto, on the one hand, a time stipulation and, on the other, a condition.If, therefore, a purchaser under a hire-purchase contract does notbecome owner if he is not in possession of the merx when the conditionis fulfilled, then neither does B at the expiry of the agreed period. In myview, however, this is not the law.'In view of this, Van Heerden DCJ could not see why a second form

of delivery should be required at the material time. Pendenteconditione, ownership of the thing sold remained with the seller.Nevertheless, a transfer of possession, which is one of the requirements



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LAW OF PROPERTYof transfer of ownership, does take place. Such transfer of possessionis effected in terms of a real agreement embodying the intention ofboth parties that at the material time the purchaser would withoutmore ado become owner of the vehicle. At that time both require-ments for a transfer of ownership are satisfied inasmuch as theconditional delivery ipso iure becomes an unconditional one. Sincea second real agreement need not be concluded conditio existente,it is not necessary that the purchaser must be in possession of thevehicle at the material time. That being accepted, Van Heerden DCJconsidered that there was no warrant for insisting that one of therequirements of a traditio brevi manu, namely that the transfereemust be in possession at the material time, must nevertheless besatisfied (at 191H-J).

Van Heerden DCJ then raised two further arguments to advancehis view. First, he suggested that if ownership did not pass to thepurchaser on the fulfilment of the condition, itwas not clear on whatprinciple ownership could later pass to the purchaser if he regainedpossession. Secondly, he mentioned the case where the seller wascontractually bound to insure the vehicle for as long as he remainedthe owner. In such a case, the seller would perforce retain owner-ship, with its concomitant obligation, if possession at the materialtime is required and fortuitously the purchaser was not in possessionof the vehicle when the condition was fulfilled (at 191-2).Finally, Van Heerden DCJ found that the fact that the final pay-ment had been made not by the purchaser but by the secondrespondent was immaterial for the passing of ownership. Whatmattered was that the payment to Wesbank extinguished the appel-lant's indebtedness and thus fulfilled the condition and opened thedoor for the appellant to become the owner of the vehicle (at 192C,192D and 193B-C).The intriguing question here is whether one should recognize anew instance of constructive delivery in the case of eventual deliveryin terms of a hire-purchase agreement.Registration

In KnysnaHotelCC v CoetzeeNO 1998 (2) SA 743 (SCA) interestingquestions were raised about South Africa's so-called negative systemof registration and the relationship between the true owner and theregistered owner as far as deeds registry practice is concerned. Anerf in Knysna had been registered in the names of B and his wife,who were married in community of property. Upon their divorce anorder was made directing that the assets in their joint estate bedivided. However, the registration of the property remained



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MiU4 ANNUAL SURVEY OF SA LAWunchanged. When both B and his former wife were subsequentlysequestrated, the respondent and C respectively were appointed astrustees of their estates. The respondent had, without the knowl-edge ofMrs B or her trustee (C), sold the property to the appellant.After the respondent had falsely given the Registrar of Deeds tounderstand that he was acting on behalf of the insolvent estates ofboth B and his former wife, transfer of the property was registeredin the name of the appellant on 21 September 1990. On obtainingknowledge of the sale and transfer, C brought an application againstboth the present respondent and the appellant for the cancellationof the registration. In a settlement reached on 7 May 1993 theappellant promised the 'undisputed right, title and interest' inrespect of the property against payment of a certain amount, leavingthe registration intact. In an action by the seller (the respondent)to claim the purchase price, the purchaser (the appellant) raised aspecial plea that the money due in terms of the contract had becomedue on 21 September 1993 and that any claim for it had prescribedthree years later. In the court a quo the special plea of prescrip-tion was dismissed and leave to appeal to the Supreme Court ofAppeal was granted.

The appellant (respondent in the court a quo) contended interalia that the purchase price had become due on 21 September 1990,on registration of transfer, and that prescription had started run-ning on that date. After finding that the debt indeed became dueon 21 September 1990, and that prescription began running on thatdate, the court pointed out that South Africa has a 'negative' systemof registration in contrast to a 'positive' system where registrationwas irrefutable proof of ownership. On account of this it could notsimply be accepted that a person in whose name a property wasregistered was necessarily the owner of the property. If, for example,another person had become owner by acquisitive prescription, thiswould not be reflected in the deeds registry. Such person could, onproof of prescription, challenge the registration in the name of theoriginal owner and have it amended. In the present case the transfercould be challenged on the ground that Mrs B and her trustee hadnot consented to the registration (at 753C). The court considered,however, that the respondent had simply undertaken to registertransfer in the name of the appellant and not to transfer ownershipin the property (at 752A-E).The court explained that the reference to the 'owner of the land'in s 20 of the Deeds Registries Act 47 of 1937 had to be understoodin the light of the definition of 'owner' in s 102. There an owner isdefined as 'the person registered as the owner or holder thereof andincludes the trustee in an insolvent estate'. In view of this, it must



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LAW OF PROPERTYbe accepted that the common-law owner could not on his own givea power of attorney for the registration of transfer. The cooperationof the registered owner was required for any transfer, irrespective ofwhether he was the true owner or not (at 752E-I).The court accordingly held that since all the formalities had beencomplied with, and accepted by the Registrar, and since he hadregistered the transfer in the deeds registry, a formally valid transferhad taken place. Although subject to amendment on a number ofgrounds, it remained valid until set aside by an order of court. Sincethe only challenge brought against the registration had been settledwithout affecting the registration, the registration remained intactand valid. The court thus concluded that prescription had com-menced running on the date of registration (21 September 1990)and that nothing had happened subsequently to interrupt or sus-pend it (at 754B-E and 755C).An intriguing aspect of the case is that the representation by thetrustee that he was acting on behalf of both former spouses woulddefinitely render the real agreement necessary for the passing ofowner- ship invalid.LIMITATIONS ON THE REI VINDICATIO: ESTOPPEL

In InfoPlusv Scheelke 1998 (3) SA 184 (SCA) (also discussed aboveunder 'Transfer of Ownership') Van Heerden DCJ quoted Quenty'sMotors (Pty)Ltd v StandardCreditCorporationLtd 1994 (3) SA 188 (A)at 198-9 in setting out the requirements for estoppel in the contextunder consideration. The first requirement was that there must bea representation by the owner (or possessor) that the person whodisposed of his property (the defrauder) was the owner, or entitledto dispose of it. Since in most cases the defrauder makes the ultimaterepresentation, the real question was whether the conduct of theowner effectively contributed to the making of that representation.He found that the mere delivery of property by one person toanother did not by itself constitute a representation that the latterwas the owner or entitled to dispose thereof. He then went evenfurther and accepted that the fact that the transferee was a dealeror trader in that very commodity was not sufficient to convert themere transfer of possession into such a representation. In supportof this statement Van Heerden DCJ (at 195B) quoted the followingpassage from the judgment of TrollipJ in Electrolux (Pty)Ltd v Khota1961 (4) SA 244 (W ) at 247-8:

'... [T]o create the effective representation the dealer or trader must,in addition, deal with the goods with the owner's consent or connivancein such a manner as to proclaim that the dominium or ius disponendi



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ANNUAL SURVEY OF SA LAWis vested in him; as for example, by displaying, with the owner's consentor connivance, the articles for sale with his own goods. It is that addi-tional circumstance that provides the necessary "scenic apparatus" forbegetting the effective representation.'The appellant had done nothing, apart from placing the vehicle

in the possession ofS Motors, that could have created the impressionvis-i-vis the second respondent that the dominium in the vehiclevested in S Motors. The court accordingly found that the require-ments for a successful reliance on estoppel had not been met.

In Worldwide Vehicle Supplies Ltd v Auto Elegance (Pty) Ltd & others1998 (2 ) SA 1075 (W) the applicant company had supplied the firstrespondent, a dealer in second-hand cars, with two motor vehicleson consignment. Its function was to attempt to sell the motorvehicles as the applicant's agent. The first respondent refused tohonour the agency agreement but claimed retention of the vehiclesas security for its costs and expenses. Subsequently, the first respon-dent sold the vehicles in an apparent effort to recoup its losses. Theapplicant therefore brought an urgent application for the deliveryof the vehicles by the second and third respondents, who hadbought the vehicles. Only the second respondent opposed theapplication, claiming inter alia that the applicant was estopped fromasserting ownership. From the documentation recording the trans-action between the applicant and the first respondent, it appearedthat the applicant had actually acted as an agent in the sale of thevehicles by introducing sellers to buyers. The applicant acceptedthat estoppel would have prevented it from asserting ownershipagainst the second respondent if nothing more had happened thanthat it had sold the vehicle on assignment to the first respondent,or appointed the first respondent as its agent to sell the vehicle onits behalf, and the first respondent had sold the vehicle to thesecond respondent. However, supervening events had, in the opin-ion of the applicant, changed the situation. The agency agreementhad been terminated and the applicant could not reasonably haveforeseen that the first respondent would unlawfully sell the vehicleto recoup its losses. The proximate cause of the prejudice to thesecond respondent was therefore the dishonest act on the part ofthe possessor, the first respondent.

In the course of his judgment WunshJ set out the requirementsfor a successful claim of estoppel against the rei vindicatio of anowner (at 1081E-G) and also quoted from the judgment ofTrollipJin Electrolux (Pty) Ltd v Khota (supra) at 247B-E (at 1081-2).Negligence in this context meant, according to him, the foresightthat if one acts reasonably, a prospective purchaser might act onthe representation to his prejudice, without one having taken



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reasonable steps to prevent the prejudice (at 1082B-C). Wunsh Jproceeded to find that, if the goods remained at the first respon-dent's premises after the termination of the agreement between theapplicant and the first respondent, the termination could not affectthird parties that were not even aware of such an agreement. Whenthe agency agreement was terminated, the apparent ius disponendiof the first respondent remained in the eyes of the public (at 10831-Jand 1084F-G). The first respondent still exercised control over thevehicle and it was still displayed as part of its stock-in-trade after thetermination of the agency or consignment agreement. The appli-cant should have foreseen that a third party could have been misled,to his disadvantage, into buying and paying for the vehicle. What ismore, the applicant should have taken prompt action to recover thevehicle. The court therefore concluded that the applicant wasestopped from claiming the vehicle (at 1084G-H and I).EXPROPRIATION

The cases reported with regard to expropriation in 1998 all dealtwith the determination of compensation. RandburgTown Council vKerksay Investments (Pty) Ltd 1998 (1) SA 98 (SCA) continued thelegal battle concerning the amount of compensation payable onexpropriation that had been started in 1997 (see the discussion ofKerksay Investments (Pty)Ltd v RandburgTown Council1997 (1) SA 511(T) in the 1997 AnnualSurvey 310). By notice of expropriation theTown Council expropriated a road widening servitude and offeredRI 401 as compensation, which was refused. After an unsuccessfulapplication to the (now defunct) Compensation Court, the respon-dent appealed successfully to the Transvaal Provincial Division,which awarded an amount of R40 000. The appellant then appealedto the present court. The sole question in issue was whether theadmitted depreciation in the value of the property caused by the1976 town-planning scheme was to be disregarded for the purposeof determining the compensation payable to the claimant in 1990(at 104C). This involved the interpretation of s 12(5)(f) of theExpropriation Act 63 of 1975. The main argument advanced bythe appellant in this case can be summed up as follows (at 106B-C).The words of the section could not be given their ordinary meaning,since that would mean that, when valuing the property for thepurposes of determining the amount of compensation payable, anydepreciation in value due to the purpose of expropriation wouldhave to be disregarded. This would be the case even if the ownerhad previously been compensated for such depreciation, or if hisfailure to receive compensation on a previous occasion had been



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ANNUAL SURVEY OF SA LAWdue to his failure to lodge a claim timeously. It was consequentlynecessary to read into the section such words as were required toavoid such a result. It was pointed out that the owner could haverecovered compensation in terms of s 45 of Ordinance 25 of 1965.The double payment of compensation would be an absurdity andcontrary to the whole scheme of the Act (at 106E). ScottJA con-firmed the general approach to interpretation that words have tobe attributed their own, ordinary, literal, grammatic meaning (at107B). Language can, however, be modified to avoid payment ofcompensation twice. The issue was whether there was justificationfor departing from the ordinary meaning of language so as, in effect,to preclude an owner from receiving compensation under the Acton the ground that he or she could have recovered some compensa-tion under another statutory enactment for the same deprivation(at 1071). Thejudge was not convinced that such an approach wouldbe justified (at 107J). He concluded that the court a quo had beencorrect in coming to the conclusion that the depreciation in thevalue of the property attributable to the 1976 town-planning schemehad to be disregarded or the purposes of determining compensationpayable under the Act (at 108B). The appeal was accordingly dis-missed with costs.The calculation ofcompensation resulting from an expropriationof mineral rights was the issue in KangraHoldings (Pty)Ltd v MinisterofWaterAffairs 1998 (4) SA 330 (SCA). The appellant, the owner ofregistered coal rights, appealed against a decision of the TransvaalProvincial Division upholding an exception taken by the respon-dent. The coal rights were in respect of portions of a farm whichwere expropriated, in terms of the Water Act 54 of 1956, in advanceof inundation of the land by the waters of a major dam then underconstruction. The appellant had calculated an amount for compen-sation on the basis that it would have mined and sold the coal, or,alternatively, that it would have entered into a mineral lease orsimilar agreement for the exploitation of the rights (at 335B-I). Therespondent excepted to these particulars of claim on the groundsthat neither claim reflected and quantified actual financial losscaused by the expropriation and that neither alternative claim wasfor actualfinancial loss within the meaning of s 12 of the Expropria-tion Act (at 336B-D). The appellant contended that it was notconfined to claiming compensation for market value, but was enti-ded also to compensation on the basis of the present value of thefully realized commercial potential inherent in the rights. In thecircumstances, the challenge raised by the exception was whetherthe sum representing the latter value constituted actual financialloss caused by the expropriation and, in any event whether the loss



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LAW OF PROPERTYclaimed was compensable under the Act at all (at 337D). In orderto determine this, Howie JA discussed the meaning of the words'loss' and 'damage' (at 338F). In view of the fact that the words werenot defined in the Act, he found that the ordinary meaning shouldprevail, namely that 'damage' was a word ofwide and general importand ordinarily embraced physical damage and pecuniary loss.Therewas therefore no warrant for inferring a legislative intention toconfine 'indirect damage' to physical damage. Indirect financial losswas consequently also excluded by s 12(5) (e) and therefore notcompensable (at 339B). According to the court the loss suffered bythe appellant was also not caused directly by expropriation, but bythe loss of the coal rights as such. One has to keep in mind that theappellant had, at the time of the expropriation, not made use of therights (in other words had not exploited them). Before the profitscould have been earned, the appellant would have had to takevarious steps to establish its income-producing structure. Thesesteps were all links in the chain of causation of the loss and couldnot be accorded to the act of expropriation only (at 339D).Howie JA concluded that the claim in question sought compensa-tion for a type of loss for which the Act made no provision and couldnot succeed. The exception was duly upheld. Van Heerden DCJagreed with the finding that the appeal should not succeed, butemphasized the underlying intention of the legislature that, in thecase of expropriation of rights, the ordinary common-law measureof damages ought to apply (at 3441-J). That meant that the expro-priatee should be entitled and confined to the market value ofthe right concerned unless it could be shown that the measure wasnot appropriate due to special circumstances. It followed that, ingeneral, the expropriatee could not claim for loss of profits in lieuof the value of the expropriated rights (at 344J).SECTIONAL TITLES

In Body CorporateofBrentonParkBuildingNo 44/1987v BrentonParkCC 1998 (1) SA 441 (C) the applicant (a body corporate) appliedfor a declaratory order that a 99-year lease concluded between it andthe respondent (the owner of the adjoining holiday resort) on30 October 1987 was invalid. The disputed lease concerned a por-tion of the common property of the applicant on which a sewerageplant and two cottages were erected. During 1984 the owner of theadjoining property applied to the Divisional Council to develop aholiday resort on his property. The Health Inspector required thata sewerage disposal works should be provided to serve both theadjacent caravan park (the sectional title scheme) and the proposed



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ANNUAL SURVEY OF SA LAWholiday resort. For this reason rule 63 was included as part of acompletely new set of rules at the inaugural meeting of the applicantbody corporate. It read:

'63. Sewerage plant63.1 Brenton Holiday Resort which is adjacent to the property shall beentitled to the use of the sewerage plant subject to it being liablefor a pro rata share of the costs of maintaining and repairing thesewerage plant from time to time.63.2 The body corporate will enter into an agreement of lease withthe owners of Brenton Holiday Resort regularizing the use of thesewerage plant as contemplated in 63.1 in terms of the draft leaseagreement attached hereto and marked D' (quoted at 445E-F).On 30 October 1987 an agreement of lease was concluded be-tween the applicant and the defendant and the sewerage plant wasoperated in accordance with the terms of the lease. The attorneysof the applicant attempted to register the lease notarially against the

title deeds of the property. A dispute arose as to whether there hadbeen a unanimous resolution authorizing the conclusion of thelease as required by s 13 of the then applicable Sectional TitlesAct 66 of 1971. The applicant's case was that the adoption of therules at the inaugural meeting incorporating a direction to it toenter into an agreement of lease fell short of the express provisionsof s 13 of the Act. It contended that the requirement of a notice,specifying the proposed unanimous resolution for the purpose ofletting part of the common property, could not be complied with bymere reference to the adoption of rules in substitution of rulescontained in the Schedules to the Act. This was especially so sincethe new rules contained 63 clauses, only one of which concernedthe lease of the common property. The applicant argued that s 13required a separate notice specifying the proposed unanimousresolution to enter into an agreement of lease in respect of thecommon property. By contrast, the respondent contended thatthe adoption of the rules, and more particularly the adoption ofrule 63 (2) by unanimous resolution, constituted a valid direction tothe applicant in terms of s 13 to enter into the lease agreement.

The court found that the aim of the legislature in promulgatings 13 was to ensure that the alienation and letting of the commonproperty should require strict compliance with the provisions of s 13(at 447F-G). It further found that the notice of the proposedunanimous resolution to adopt the rules was timeously sent to eachof the sectional owners. In it they were adequately informed of theproposal to pass a unanimous resolution adopting the rules (includ-ing rule 63) at the inaugural meeting. The resolution was thenunanimously passed. The court accordingly found that the owners



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LAW OF PROPERTYwere given fair notice of the substance of the resolution to be dealtwith at the meeting. The notice included the proposal directing thebody corporate to conclude a lease with regard to the commonproperty. The substance of the intended resolution referred to inthe notice and the resolution actually passed was also absolutelyidentical (at 448C-E). The court therefore concluded that theresolution passed at the inaugural general meeting of the applicantbody corporate on 30 October 1987, adopting the rules, constituteda resolution directing the body corporate to conclude the lease asrequired by s 13(1) of the Act (at 448F-G).

The court further considered the requirement in s 13(2) of theAct that any transaction in terms of s 13(1) had to be accompaniedby a copy of the relevant resolution, certified by two trustees of thebody corporate. The court held that this was not a prerequisite fo rthe validity of the lease. Since s 13(2) was procedural, the resolutionhad only to accompany the transaction when either (1) alienationof the common property was registered at the Deeds Office or (2)a lease was notarially executed when it was retained in the protocolof the notary (at 448H-J). The court accordingly ordered theapplicant to execute the lease in compliance with its rules.In the course of his judgment, McClarty AJ accepted that guid-ance could be sought from cases dealing with the convening ofmeetings, and the passing of resolutions, in general, and in thecompany-law context in particular. He concluded that while a noticeconvening the meeting and informing the members of the pro-posed resolutions should not be construed with excessive strictness,it must give members fair notice of the matters to be dealt with andany resolution beyond the notice is invalid (at 446-7).The significance of this decision is that an up-front resolution toalienate or to let part of the common property in terms of s 13 ofthe Act can now validly be taken in one of the following two ways.First, a clause can be inserted in the initial contract of sale of all unitsbinding the purchasers to agree to such alienation or lease at afuture general meeting. Secondly, a rule to that effect can unani-mously be adopted at the inaugural meeting of the body corporate.Whether the developer can obtain a similar result by inserting sucha clause as a special rule in the model rules that he offers fo rregistration is still an open question.COMPETING LEASES

In CroatiaMeat CC v Millennium Properties (Pty) Ltd (SofokleousIntervening); Sofokleous v Millennium (Pty)Ltd & another1998 (4) SA980 (W) competing applications were instituted for the specific



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ANNUAL SURVEY OF SA LAWperformance of certain leases. These leases contained clauses whichprohibited the lessor from letting any premises in its complex fo rthe purpose of conducting a similar business to that of anotherlessee in the complex. The lessor concluded the first lease with alessee who conducted a business of a composite nature. It thenconcluded a lease with the second lessee, permitting the latter toconduct a business that competed with a section of the first lessee'sbusiness. Entering into the second lease clearly amounted to abreach of the first lease. Both the lessees applied for what amountedto orders for specific performance of their respective leases. Thecourt found that there was no overriding equity that favoured eitherlessee. Therefore the court, in the exercise of its discretion, appliedthe rule qui prior est tempore potior est iure to these double leases,distinguishing Barnhoorn NO v Duvenage 1964 (2) SA 486 (A ) (a t988F). The court accordingly granted the application of the firstlessee and dismissed the application of the second lessee.SERVITUDE

In BerdurPropertiesPty)Ltd v 76 CommercialRoad (Pty) Ltd 1998 (4)SA 62 (D) the applicant and the respondent occupied adjoiningcommercial properties which had a narrow passage, eight feet inwidth, straddling both properties in equal width and length. Theapplicant obtained a rule nisi on the basis that the passage was aprivate road that could be used only by the owners or occupiers ofthe adjacent properties for their mutual benefit. It then sought afurther declarator that the respondent was not entitled to allow orinvite any person to use the private road other than for the benefitof the properties adjacent to the passage. This particular order wasprimarily designed to prevent the use of the passage by customersof Liberty Liquors (a liquor-selling business) situated on propertyowned by the respondent immediately adjacent to the property withthe passage. This created problems relating to security, littering andpoor hygiene. In lodging a counter-application, the respondentsought an order entitling it to permit its employees and invitees touse the four-foot portion of the private road which was on therespondent's property for any purpose whatsoever, provided that itdid not interfere with the applicant's use of the private road.The court studied the title deeds of the properties to ascertainthe origin of the private road. In the submission of the applicant therelevant deeds of transfer showed that a reciprocal servitude ofpassage had been created benefiting and burdening both the appli-cant's and the respondent's land, and regulating their respective use(at 67B). The respondent alleged that the reference to a servitude



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LAW OF PROPERTY 5I1Sin the title deed was to the applicant's property and not its own.Hence it could not be registered in terms of the Deeds RegistriesAct 47 of 1937 (at 67G). The respondent argued that the true natureof the right was that of via, namely the unrestricted right to use aroad, including all the rights embodied in the concepts of iter andactus, together with the right of conveying goods over the servientland (at 68A-B).

The court found that the existence of a servitude over the respon-dent's property could properly be inferred from the reference in itstitle deed to the corresponding servitude over the applicant's prop-erty (at 67J). In the opinion of the court, the servitudes of iter, actusand via had to be regulated in such a way as to cause the least damageor inconvenience to the servient tenement (at 68D). However, thecourt found that the relevant title deed of 1894 bore witness not ofa via, but of a private road, to be used by the owners of the adjacentproperties (at 66G-H and 68F). Citing Krugerv Downer1976 (3) SA172 (W ) at 178H in support, the court pointed out that where theparties had been precise in determining the scope and the natureof their agreement, the court is bound to accept the consequencesof their language. The court then consulted dictionaries to deter-mine the meaning of the phrase 'private road', and concluded thatthe applicant's interpretation, that this was a road to be used onlyfor the benefit of the two properties through which it runs, was thecorrect interpretation (at 68-9). The court distinguished Rabie vDeWitt 1946 CPD 346 and Louw v De Villiers (1893) 10 SC 324, reliedupon by the respondent. It stressed that the servitude was designedto serve the use of the two adjacent properties and not the use ofsomebody else (at 68-70). The court therefore concluded that theroad was not a public passage that gave unrestricted access topedestrians on their way to and from other properties or even thestreet. On the contrary, it was a private road that in its entire widthhad been created for the exclusive use of adjacent owners such asthe applicant and the respondent and which could not be used toserve the interests of others (at 72H-I).

South African law does not have a numerus clausus of praedialservitudes. As long as a right complies with certain requirementsit can parade as a praedial servitude. Whenever an innominate(untraditional) servitude is established, as in the case of the privateroad, it stands to reason that the words employed must be care-fully scrutinized to determine the exact scope of application ofsuch servitude. AlexanderJ, who delivered the judgment in BerdurProperties,has done this admirably.



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ANNUAL SURVEY OF SA LAWREAL SECURITYMortgage

During the third quarter of 1998 two decisions, NBS Bank Ltd vBadenhorst-SchnetlerBedryfsdienste BK 1998 (3) SA 729 (W ) and NBSBolandBank Ltd v One BergRiverDriveCC1998 (3) SA 765 (W), dealtwith mortgage bonds which contained similar clauses, providingthat the interest rate was variable at the instance of the mortgagecreditor. Both courts found that the clause conferred an unfettereddiscretion on the mortgage creditor to vary interest rates at will andthat no factual determination based on objectively ascertainablecriteria was required. Both courts therefore held that the provisionthat conferred such unilateral discretion on the mortgage creditorto vary the interest rate was void for vagueness.

In the NBS Bank case counsel for NBS referred to ABSA Bank Bpkv Saunders1997 (2) SA 192 (NC). There it was pointed out that bankswere by long-standing usage entitled unilaterally to vary interestrates on overdrawn accounts. Counsel argued that the same princi-ple applied to the money-lending contract in the instant case. Thecourt found that the contract between banker and customer per-taining to overdraft facilities was unique and dependent uponbanking practices by which the customer agreed to be bound eventhough he might not know what they were. The court was, however,not prepared to accept that this feature was inherent in everymoney-lending contract (at 734C-D and 735-6). The court ex-plained that the rate of interest in a money-lending contract wassuch an essential feature that these contracts would be void forvagueness if the rate was not certain (at 376B-E). It pointed out thatlending agreements could expressly or tacitly provide that theinterest rate was to be determined by law or custom, or by referenceto an objectively ascertainable market rate or other rate thatwas notdependent on the will of either party (at 723D-E). The court alsoaccepted that the parties could agree on a variable interest rate. Tobe valid, such an agreement had to set out objectively definablecriteria according to which the interest rate was to be varied, so thatit could be determined without reference to the will of either party(at 736-7).

In the NBS Boland Bank case counsel for the defendant referredto the NBS Bank case as well as to Boland Bank Bpk v Steele 1994 (1)SA 259 (T). In the latter case the court had invoked the principlethat contracts had to be interpreted in favour of their validity. It hadheld that a similar clause was valid subject to the limitation that thepowers it conferred had to be exercised in a reasonable manner.Counsel for the plaintiff argued that this simply meant that the



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LAW OF PROPERTYdiscretion had to be exercised arbitrium boni viri. The court foundthat two general principles were applicable in the present case: first,that contractual obligations had to be defined and ascertainable and.second, that terms that conferred an unfettered discretion on oneof the parties to determine the extent of performance of either partywere void for vagueness (at 773H-J). The court then found that itwas clear that the clause concerned conferred an unfettered discre-tion on NBS. This appeared from the use of the words 'at any timeand from time to time', which were not related to any objectivelyascertainable criteria and from the fact that any increase was subjectonly to the maximum provided for (at 774C-D). The court agreedwith the conclusion reached in the NBScase, and declined to followthe reasoning in the Steele case.

Landlord's Tacit Hypothec vs NotarialBondParadiseLost Properties (Pty) Ltd v StandardBank of South Africa &

another1998 (4) SA 1030 (N) was an appeal from a decision of a localdivision, dismissing the applicant's application for an order that ithad perfected a landlord's hypothec over certain movable propertyin the premises that ithad let to one W. The application was opposedby the first respondent (Standard Bank). It contended that themovable property had been hypothecated to it under a generalnotarial bond passed by a previous tenant. It further alleged that ithad obtained judgment against the former tenant and had causedthe property to be attached by the sheriff. On appeal, the centralissue was whether the applicant had perfected a landlord's hypothecand whether or not the first respondent could rely on its notarialbond. On the basis of Bloemfontein Municipality vJacksonsLtd 1929AD 266 and FreshMeat Supply Co v StandardTradingCo (Pty)Ltd 1933CPD 550 the applicant averred that it was unaware that the goodsdid not belong to the tenant as a crucial element in its claim. Thecourt found that a landlord usually acquires knowledge of the trueposition by way of notice from the owner. Such knowledge could,however, be inferred from other facts. Examples were where anowner left his goods on the leased premises of an auctioneer for sale(Henderson v Waldron & Co (1885) 6 NLR 89 at 91) or where thename of the owner of a piano was affixed to the piano on the leasedpremises (Laz

Documents

1998AnnSurvSAfricanL284