Law of Property Assignemt

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SMITH & CO ATTORNEYS REF: LOP/8/10/12LO2

8 OCTOBER 2012

FARM A P O BOX 552 OMITARA NAMIBIA

ATT: CO-OWNERS OF FARM A RE: LEGAL OPINION REGARDING SELLING OF LAND BY CO-OWNERS, AND THE ENFORCEMENT AND VALIDITY OF THE EXISTING SERVITUDES IN PLACE FOR FARM A

We refer to the above mentioned matter and your formal request for a legal opinion regarding the matter. We are pleased to inform you that we have accepted the mandate for the above mentioned matter.

The technical matters referred to above is defined in Namibia by The Namibian Constitution, the Deeds Registry Act 47 of 1937 made applicable in Namibia on 1 June 1972, as well as various case law. In order to understand and explain the dilemma above it should be clarified what the terms is that define the law of property.

Page 2 of 16 DEFINING OWNERSHIP OF A PROPERTY IN TERMS OF LAW OF PROPERTY Property is no more than a convenient expression to denote the existence of some types of legal relationships between specific persons and legal objects, which in many instances could be classified as things. Land rights in modern societies are recognised by and defined in law. The land title is the legal document that serves as a representation of land for all legal purposes: it can be sold, mortgaged, pass by inheritance or given away.1 Property in the sense of „rights‟ is traditionally seen as either ownership or real rights, but may also be perceived in a wider sense, so as to include patrimonial rights e.g. personal rights and immaterial property rights. Patrimonial rights are those having patrimonial value and are rights to patrimonial objects (which have economical or material value). Things, immaterial property and performances can be patrimonial objects and rights to these are respectively called real rights, personal rights and immaterial property rights. Under the property clause contained in Bill of Rights in the Constitution2, property in the sense of rights may include patrimonial rights such as real rights, personal rights, and immaterial property rights, but also statutory claims (not based on contract) against the state to certain resources or performances such as state pensions, medical aid schemes, subsidies, state jobs and state contracts. These rights are frequently referred to as new property. For a right to be protected as property under the Constitution, it generally must bear patrimonial value and it must be vested and not merely contingent upon a future happening. 1

SK Amoo „Towards Comprehensive Land Tenure Systems and Land Reform in Namibia” (2000) 17 South African Journal on Human Rights 87 2 Contitution of Namibia Article 16 (1) (2)

Page 3 of 16 A vested right, means that the right has accrued to the holder according to the relevant principles of the common law or a stature.3 Constitutional protection of property is generally dependent on a balancing of competing interests of individuals and the public at large, but also of individuals mutually. This might mean that under particular circumstances protection of a right generally acknowledged as property could succumb to protection of another constantly protected interest, or even another type of property right. The Constitution, therefore, doesn‟t protect property in the sense of guaranteeing all existing property interests absolutely against any interference or invasion not authorized or consented to by the owner. In Namibia the land rights are recognized by the Constitution under Article 16 4 guaranteeing the right to all to acquire own and dispose of property alone or in association with others and to equate such property.5 This right to own property is also recognized under international law as stipulated in the Universal Declaration of the Rights and Duties of Man 1948 that everyone has the right to own property alone as well as in association with others and that no-one may be abitriatily deprived of property. Because the right to own property is recognized by law and as seen as fundamental right, the right to deprive an individual of his property can only be granted by law and only on justifiable grounds.6 Thus it is illustrated by Roman Dutch law that „dominium‟, which expresses more vividly that the essence of ownership is the legal ability to control the use of a thing and that owners‟ entitlements to determine the use to which their things may be put will almost invariably affect the satisfaction of the needs and wants of others. E.g. owners may use things for the satisfaction of their own and their family‟s immediate wants and needs, they may use things for their own 3

Consolidated Property of Law Notes p 17 The Namibian Constitution Article 16 5 C Treeger , “Legal analysis of farmland expropriation in Namibia” Konrad Adenhauer Stiftung , 1994 6 Ibid 4

Page 4 of 16 benefit but use them as a means of production, they may make things they own temporarily available to others, they can alienate their things, diminish their dominium and renounce some of entitlements in favour of others and hoard their things and decline to make them available for others. This is evident that the owner of a property has many rights to the property that he/she may exercise as they deem fit. However the social function precipitates that the acquisition and enjoyment of wealth occurs not in isolation, but in a context in which a plurality of people with competing interests have to live in physical proximity. Therefore, a multitude of restrictions on the freedom of property is acknowledged by law7, e.g. an owner‟s ability to erect buildings on his/her land is regulated by building regulations, the ability to alienate or acquire property may be limited by legislative anti-pollution or nature, conservation mechanisms, factory regulations and limitations imposed by private law in the interests of neighbors etc. Thus ownership is described as the most complete right a legal subject can have in relation to an object.8 The right to ownership is generally explained by two distinct theories, ownership may be described as a bundle of rights which has the right to dispose of property (ius disponendi) and the right to use the property (ius utendi) and the right to draw fruits (ius fruendi) and right to neglect property (ius abutendi). The freedom of use is subject to the rights of others and, as such, uis disponendi is, to a certain degree, limited. This was clearly discussed in the Gien v Gien9 Case by Speolstra J to consul that; “Where the unlimited right of one owner to use property conflicts with the right of another owner to the free enjoyment of his property, the rights are limited by the imposition of mutual obligations. An owner's rights of ownership then extend only so far 7

Moster et al , “The Principles of the Law of Property in South Africa” 90 Moster et al , “The Principles of the Law of Property in South Africa” 91 9 Gien v Gien 1979 (2) SA 8

Page 5 of 16 as there rests an obligation on his neighbour to endure the exercise of that right. That involves an obligation on the one owner so to exercise his right that he does not exceed that limit. If it is exceeded, he no longer acts according to the right which his right of ownership accords to him and he infringes the right of his neighbour. That is unlawful conduct which the law does not tolerate and which can form the basis of an interdict.” Thus it should be seen that no legal person has obsolete right although they have a real right and that right can be limited under certain circumstance such as co-ownership, praedial servitude and personal servitude. CO-OWNERSHIP Co-ownership or also referred to as joint tile or ownership in common entails ownership in the same property by more than one person or entity simultaneously. 10 Co-ownership is further categorized into co-ownership derived from common law and statutory co-ownership. Common law co-ownership is divided into free and bound co-ownership to movable and immovable property. Statutory co-ownership relates mainly to immovable property.11 In common law co-ownership each owner acquires an undivided co-ownership share in the property such as the four brothers of Farm A. Thus the undivided share in the property reflects each co-owners interest which may be equal or not, in the property which is immovable in this case. Thus one co-owner cannot burden or alienate the property without the consent of the other co-owners.

12

As the brothers are free co-ownership, as no other legal relationship bounds them

such as marriage or partnership a free co-owner can alienate or burden his undivided co-

10

Moster et al , “The Principles of the Law of Property in South Africa” 96 Ibid 97 12 Ibid 97 11

Page 6 of 16 ownership share in the property independently13 furthermore and the content of the co-ownership as well as how it may be exercised is not dependent on an underlying relationships. Thus if no other agreement is in place to mitigate the trust or the farm then the brothers that wants to sell their shares may sell it to any person that offers to buy it. Leaving it open for any person to buy into the farm, permitting they do not contravene any prior agreement regarding this matter. Coownership must be terminated by agreement or a court may be approached to evaluate the reasonable of co-owners conduct and the feasibility of continued co-ownership. Unreasonable conduct by any co-owner may lead to claim of damages by grieved parties.14 So inevitably it is in everyone‟s best interest to reach an agreement to the sale of the property as all advantages as well as disadvantages to ownership is co-shared by all co-owners.15 If agreement can be reached the land can either be divided among equal shares and the remaining brother that does not want to sell his land can have the option to buy out the shares of the brothers based on some sort of arrangement, or the other co-owners can sell their shares to another person or people. Either way the co-owners will have to agree on the terms and if no agreement can be obtained the matter can be taken to court where damages based on loss of income due to postponement of the sale or any maintenance that has to be done in the time the sale was adjourned can be claimed against the brother not wanting to sell. SERVITUDES It should be noted that there are various forms of real right, where real rights are defined as the exhibiting of power over immovable or movable property based on the ius as mentioned above. It suffices to say that of all real rights the right of ownership in its unrestricted form confers the 13

Ibid 97 Ibid99 15 Ibid 100 14

Page 7 of 16 most comprehensive control over a thing. A right with regard to a thing which belongs to another person is a limited real right in the sense that it is a real right less than ownership in a thing owned by a person other than the holder of such a right. Thus the right of way that was established on Farm B and the access through Farm C to the railway line as well as drawing water from the dam on Farm D, serves as a limited real right vis a vis servitude. Servitude refers to the real rights that are carved out of the full dominium of the owner. 16 Thus servitude is a ius in re aliena.17 It might be expected that whether a right is movable or immovable would depend upon the nature of the object to which it pertains. Thus a distinction should in the first instance be made between real and personal rights, all personal rights being movable (even if performance concerned consists e.g. of transfer of immovable property). As regarding real rights, a further distinction should be made between real rights having immovable and movable things as object respectively, the former being immovable and the latter being movable. Thus mineral rights and praedial servitudes should be classified as immovable while personal servitudes are movable or immovable depending on the nature of their objects. The definition of servitude would be a limited real right to another person‟s thing. It confers specific entitlements of use and enjoyment on the holder who enjoys these entitlements as owner of a particular piece of land (land (praedial) / real servitudes) or in his personal capacity (personal servitude).18 A servitude subtracts from the owner‟s dominium and because there is a rebuttable presumption that ownership should be encumbered and free from servitudes, servitudes are construed in a way 16

Moster et al , “The Principles of the Law of Property in South Africa” 96 Ibid 18 “Property Notes and Cases” 2011, UNISA 17

Page 8 of 16 so as to give the lease onerous (having disadvantageous obligations) to them. If there is doubt whether a servitude is a land or a personal servitude – it will be construed as a personal servitude, since they have a limited duration and are therefore less onerous. Thus it should first be established what type of servitude was established between Farm A, B, C and D regarding the use of their land. A personal servitude benefits someone in his personal capacity or is granted only for a specific period or for the holders lifetime, or, if not granted for a specific period, in the case of legal persons for 100 years. It can be established over movables (e.g. money / sheep / cattle) and immovable (e.g. land) it is however inseparably attached to the holder‟s person and are in no way transferable.19 Servitude for land though can be created in favour of a piece of land and last indefinitely. It can be established over immovable things only and it can be alienated together with the land.20 Similarities of land and personal servitudes are that both are limited real rights, the maxim that no one can establish servitude over his own thing applies to both and the maxim that an servitude cannot be established over another servitude applies to both.21 The servitude established in this case is a land or praedial servitude. This servitude can be defined as a limited real right to the land of another (servient tenement) which confers on the owner of the dominant tenement (tenement in favour of which the servitude is established), in principle, permanent, defined entitlements of use and enjoyment re the servient tenement.22

19 20

21 22

Ibid Moster et al , “The Principles of the Law of Property in South Africa” 236 Ibid 236 Property Notes 2011, UNISA

Page 9 of 16 It was there for established that a praedial servitude should comply with various requirements before it will be recognised as a land servitude, because if land could easily be burdened by all kinds of servitudes such as commercial traffic in land would be affected detrimentally. Firstly there must be at least two properties or pieces of land, dominant and a servient tenement, belonging to different owners. This also corresponds to the nemini res sua servit rule23 and consequently there cannot be a servitude imposed upon servitude. Furthermore the servitude must enhance the use and enjoyment of the dominant tenement and not serve merely to satisfy the owner‟s whims and fancies. This advantage conferred need to be economic , but may also be aesthetic (arts / pleasing in appearance). It should meet the requirements of utility.24 Thus the servitude should be in line with the rule of vicinity and the tenements need not be adjacent. Secondly the tenements must be situated so that the effective exercise of the servitude to the benefit of the dominant tenement is possible but – they need not be adjacent. In De Kock v Hanel & Others25 it was stated that utility is required only for the establishment of the praedial servitude and not for its continued existence. However it cannot be established for a single (non-recurrent) exercise of the right and must be able to satisfy the needs of the dominant tenement on a continual basis (servitutes perpetuas causas habere debent).26 Thirdly a servitude should be passive in nature and cannot place a duty on the owner of the servient tenement to perform a positive act. It can only require that that he endures a particular

23

Moster et al , “The Principles of the Law of Property in South Africa” 240 Ibid 240 25 1999 (1) SA 994 C. 26 Moster et al , “The Principles of the Law of Property in South Africa” 241 24

Page 10 of 16 activity or that he refrains from a particular act. Thus he cannot be obliged to do something for the servitude. As in the case of Schwedhelm v Hauman27Thus the maxim principle of servitus in faciendo consistere nequit applies. Fourthly the servitude should be indivisibility.28 This relates to the entire dominant tenement and burdens the servient tenement. Divisibility of servitude must be distinguished from the physical subdivision of the land to which the servitude applies. The servitude remains vested in each subdivision of the original dominant tenement in so far as the subdivision benefits thereby, and provided that the burden on the servient tenement is not increased. Mere subdivision does not entail a burdening of the servient tenement. A person relying on this must indicate why the subdivision amounts to a burdening of his position of owner.

The same applies to the

subdivision of the servient tenement, except where the servitude is demarcated and relates to a particular portion of the tenement only, such as a right of way29. Those subdivisions which are not crossed by the right of way (e.g. road) are exempted from the servitude in the case of subdivision. It is thus again evident that the servitude relating to the limitations upon the rights of the owners of Farm B. C, and D are in line with the requirements that are set out above and thus can be held up as a real limited right for owners of Farm A. The Deeds Registry Act 6330, allows for registration of the right or condition that impose a positive duty on the owner of a sevient tenement if such right or condition is complementary to the registered condition or right contained in the deed. It should however be noted that land servitudes are designed to survive

27 28

29 30

1947 (1) SA 127 (E) Moster et al , “The Principles of the Law of Property in South Africa” 242 Ibid 242 Deeds Registry Act 47 of 1937

Page 11 of 16 generations of owners of the land as this specific type of limited right is designed to serve the land and not a person. As the servitudes with FARM B and C are flexible31 and the servitude was not specifically defined as such, it should be registered to avoid future confusion and disputes. There are however different classification of land servitudes, rural (servitutes praediorum rusticorum)32 and urban (servitutes praediorum urbanorum)33 that distinguishes the purpose for which the land is designated. For the purpose of this case we will only focus on rural servitudes. There are different types of rural servitudes and for the purpose of this case we will deal with, right of way and right to water. In Mostert et el (2011) the right of way is classified as Iter which is the way to walk or ride on horseback on another‟s land. Via,34 to use all forms of transport over servient tenement. The servitutde however applicable to the Farm A is via necessitatis 35(way of necessity). This implies that the owner of a piece of land which is without access to a public road or rail way ( as in this case) can obtain a right of way over another‟s land, ( over Farm B and C so as to gain such access to the road and railway). This is however a permanent right of way and compensation is paid to the owner of the servient tenement. This way of necessity is acquired by an agreement or a court order, in this case it was through an agreement between the owner of the Far, B and C and the previous deceased owner of Farm A.

31

Ibid 244 UNISA 2011, “Law of Property” Pretoria, 2011, 298 33 Ibid 34 Moster et al , “The Principles of the Law of Property in South Africa” 245 35 Moster et al , “The Principles of the Law of Property in South Africa” 245 32

Page 12 of 16 As the new owners of the Farm A does not intend to deviate from the previous routes on Farm B and C and obey to the principles laid down in Van Rensburg v Coetzee36 that clearly states that the underlying principle of a way of necessity is that it must follow the shortest route and cause the owner of the servient tenement the least possible inconvenience, the owners of the Farm A is not contravening any regulations or requirements regarding the servitude and may thus apply for a permanent way of necessity as per the regulations set in Sanders N.O. and Another v Edwards N.O. and Others.37 In this application the particulars of the claims must allege the particular necessity in this case that the defendant‟s land is situated behind the applicant‟s land and the nearest public road. The nature of the way of necessity must be stated. In that the farmer will be able to exercise his farming activities reasonably. The nature of the terrain over which the way of necessity will run must be determined and that the terrain is such to accommodate the way of necessity. The particular route must be determined as being the most suitable and the width of the road must be stated. A reasonable amount of compensation should be offered to the servient tenement, taking into account factors such as the advantage gained by the applicant. In regards to the way of right to water, the Aquaehaustus38 right is agreed upon which entitles the owner of Farm A to draw water, including a right of access to the source. This specific servitude is defined due to the agreement of the amount of water and unless otherwise agreed upon or if the action of FARM A creates a negative burden on FARM D, should be adhered to. Acquisition and conferment of servituted are done in either by agreement, legislation,court order or prescription. Only an owner may grant a servitude over his property and if theirs is coownership on the property all the co-owners must cooperate and where there is a bond on the 36

1979 (4) SA 655 (A). (A 36/2002) [2002] ZAWCHC 60; [2003] 1 All SA 108 (C) (7 November 2002 38 UNISA “Law of Porperty” Pretoria 2011 296 37

Page 13 of 16 property the bondholder must consent.39 It should be noted that an agreement or a testamentary bequest will not establish a servitude, but merely create a personal right to have the servitude registered. Servitude over immovable is established (vests) on registration of (i) reservation in a grant by the State; (ii) reservation by a transfer in a deed of transfer; (iii) notarial deed.40 Registration of the servitude is endorsed against the title deeds of the dominant and servient tenements. The registration is established by statute, prescription or a court order and serves merely as a correction of the deeds registry records. It should however be noted that under the doctrine of notice a servitude agreement creates a personal right to have the servitude registered. The limited real right is created only on registration and the registration serves to give notice to the world at large of the existence of the limited real right thus presenting all the fact to someone who acquires ownership of the servient tenement, knowing that there is an unregistered servitude agreement in respect of that land, is bound to respect the existence of the servitude agreement. In terms of the doctrine of notice such new owner who has knowledge of the servitude agreement may be bound to register the servitude. Someone who acquires land without paying for it such as a gift or in terms of a will or at a judicial auction, is bound to respect the servitude agreement even if that person does not know of the servitude agreement. Seeing that ownership of the Farms B and D has not changed and per the regulations set out above the new owners of the Farm C, the servitudes in place should be honoured and registered as such.

39 40

Ibid 297 Moster et al , “The Principles of the Law of Property in South Africa” 251

Page 14 of 16 The servitudes can only be terminated41 upon the expiry of the period it was established for or the fulfilment of a resolute condition and, specifically in the case of a personal servitude, by death of the holder or where the holder is a legal person, after 100 years if no time was fixed; by agreement, by prescription, by expropriation, by renunciation (abandonment), by merger, by the impossibility of exercising the right as a consequence of a permanent change in the condition of the dominant or servient tenement such as a servitude to draw water where the well has completely dried up. As it can be noted none of these terms has occurred and for all purposes the servitudes in place with Farm B, C and D are still in place and enforceable. It should be noted that the owner of the servient tenement is entitled to exercise his rights as owner as long as these don‟t conflict with the servitude holder‟s rights.42 Should the owners of Farm B, C and D not comply or adhere to the agreed servitudes and Farms A should be deemed to not be able to exercising hits rights they may apply to the court for a mandatory interdict to prohibit any further disturbance of his rights. The servitude holder can also institute the Aquillian (delictual) action for the recovery of damages. If Farm A however claims servitude rights disputed by the owner of Farm B, C and D they may apply to the court for declaratory order together with a mandatory or prohibitory interdict. CONCLUSION If any one of the co-owners of FARM A should want to sell their shares, unless otherwise stated, may sell his shares to any one of the other owners or the highest bidder. In order to sell the property all co-owners should agree to dissolve the co-ownership of the property. 41 42

Ibid 253 Ibid 256

Page 15 of 16 It can thus be summarized that all servitudes agreed on prior to the new owners of the Farm A has to be honoured and kept in place. Thus FARM B cannot withdraw from the agreements made prior. If he wished to continue to withdraw FARM A owners may claim damages in a court from him. FARM C new owners should as per previous agreement be aware of the servitudes for right of way for FARM C and should register it as such with Registry Deeds office. They should also take this into consideration when building on the property if no new agreement can be established with the FARM A for a new path should their building plans obstruct the path used by FARM A. Regarding the withdrawal of water, if the servitude should be amended, because this servitude was specifically agreed upon, then all co-owners of FARM A as well as the owner of FARM C should be ad idem with the new conditions and terms of the servitude. Should they not be able to agree, a court should be approached with this matter. Should FARM A owners not agree to the new 15 000 gallons of water to be extracted and FARM D can provide that it would be detrimental to his own property if more water is extracted, the court could hold that the servitude is a negative burden on the property and thus could be altered to change the amount of water or if the owner of FARM D so wishes to cancel the servitude. If you should have any other enquiries, please feel free to contact me at any time.

Kind Regards,

Jaime Smith

Page 16 of 16 REFERENCE

ARTICLES____________________________________________________________________ C Treeger , “Legal analysis of farmland expropriation in Namibia” Konrad Adenhauer Stiftung , 1994

CASES_______________________________________________________________________ De Kock v Hanel & Others 1999 (1) SA 994 C. Gien v Gien 1979 (2) SA Sanders N.O. and Another v Edwards N.O. and Other (A 36/2002) [2002] ZAWCHC 60; [2003] 1 All SA 108 (C) (7 November 2002 s Schwedhelm v Hauman 1947 (1) SA 127 (E) Van Rensburg v Coetzee 1979 (4) SA 655 (A).

BOOKS_______________________________________________________________________ Phamodi “Consolidated Property of Law Notes” South Africa, 2008 H Moster, P Badenhorst, J Pienaar, A Pope, W Freedman, J Van Wyk, “The Principles of the Law of Property in South Africa” Cape Town, 2010 UNISA “ Law of Property Notes” Pretoria, 2011

LEGISLATION AND DECLARATIONS__________________________________________ Deeds Registry Act 47 of 1937 The Constitution of The Republic of Namibia Universal Declaration of the Rights and Duties of Man 1948