Property Notes A

Property Law A Proff Mqeke

1. Meaning, Function and the Changing Face of the Law of Property 1.1 The meaning of property The BoR states that property is not limited to land, s25 (4) (b), but on the same hand, it does not define the meaning of property. Property has various alternative means, and can be described as a thing – ownerships, property as patrimonial

interests

acquired

through

1

personal endeavour, or property as comprising of patrimonial interests. According to Badenhorst, the word property signifies varies, different but distinct legal concepts. -

1st it may signify a right of ownership in

a legal object -

2nd it may also refer to the legal object,

(or thing) to which this right relates. -

3rd it may denote a variety of legal

relationships qualifying for the protection as such under the Constitution. Therefore in these three instances, property implies the existence of rights and duties among individuals mutually, and between specific individuals and the state.

2

Property in the broad sense may include patrimonial rights and objects. In order to distinguish LoP from the Law of Obligations, the law must be limited to include only the various legal norms that regulate those legal relationships

between

legal

subjects

concerning things, hence the emphasis on real rights, things and patrimonial rights serving as the object of limited real rights. Under common law, the expression property embraces both the object of real rights (corporeal and incorporeal things) and real rights themselves. In South African modern law, contractual rights to performances (e.g. shares in a company), apart from the rights of a lessee where the huur gaat voor koop rule

3

applies, are generally not regarded as property rights, as illustrated in the Diepsloot Case.

The private law concept of property is described as a bundle of rights in corporeal things: - Right of alienation - Right to exclude others - Right to derive an income All three in RDL form a dominion, where the owner has all three rights; he has the absolute and exclusive right to property.

4

1.Right of alienation: this is a right to do as you please with your property (sell, donate etc) -

Geyser v Msunduzi Municipality 2003: s118 of the Act, stresses the provision of restrained transfer of removable goods. The Registrar of Deeds may not register transfers of removable goods unless there is an order of the court, e.g. if the owner wants to sell the property, one must ensure that nothing is owed on the property (e.g. water and electricity). The plaintiff sold the house for R100 000 but never stayed in the house, she always rented the property out. When it was time to sell, she could not as she owed the state R63 000 more than the selling price.

5

-

Mkontwana case: the house could not be transferred without the amount owing to the state being settled. The CC dealt with the matter in a later case.

2.

Right to exclude others: there are means to

legal remedies, namely, rei vindication which is a remedy which allows the owner to regain their land if it has been taken without their consent. -

Diepsloot Case, an association of concerned residence

brought

this

case

forward,

concerning homeless people who had been evicted elsewhere during land reforms in 1991 and now established a squatter camp in Diepsloot. Residence saw that this would devalue their land. The CC found in favour of the state, finding that the administrator

6

had acted in terms of the law and thus there was no wrongfulness. -

Kayalami case: The government established a transit camp on State-owned land, which had previously been used as a prison farm. The purpose of the transit camp was to house people from Alexandra Township who had been displaced by severe floods. The intention was that the persons to be accommodated

there

would

move

to

permanent housing when such became available, and that the transit camp would then be dismantled. This plan was made without any prior discussions with residents in the vicinity. A residents’ association called on the relevant Minister to suspend operations. The Court a quo had found that the scheme was not one for temporary 7

shelter, but rather “a development for an indefinite period which on the probabilities would be utilized on a permanent ongoing basis, either by the proposed occupants or by the government”. It set aside the decision, finding that such could not be validly implemented without complying with the various

statutes,

laws,

by-laws

and

regulations. In a unanimous judgment (per Chaskalson P) the Court upheld the appeal and substituted for the order of the Court a quo an order dismissing the application. The Court held that there was no reason why the government as owner of property should not have the same rights as any other owner. If it asserted those rights within the framework of the Constitution and the restrictions of any relevant legislation, it acted lawfully. 8

The contentions to the contrary advanced by the residents had therefore to be rejected. 3.Right to derive an income: this is also the right to make profit from your property (e.g. rent it out) -

FNB case: certain FNB vehicles were leased to partners. One was sold in terms of an instalment sale (ownership is only passed when the last instalment is paid). The right to derive an income was interfered with, by the Commissioner of SARS.

LoP is constitutionalised and protected in the BoR, this means protection can only be obtained on the basis of the Constitution itself, taking into account the purpose of the Constitution and the property clause.

9

1.2 Persons and institutions bound by the LoP As stated in the FNB case, no one may be deprived of property. Such is stated in the - Property clause s25 (1) in the Constitution: o No one may be deprived of property except in terms of the law of general application and no law may permit arbitrary deprivation of property. - The Interim Constitution 10

o

In

the

Transkei

Public

Services

Association Case, the IC affected the new Public Services Act which reduced the benefits

enjoyed

by

the

Transkei

Association. They challenged the new code, stating it is unconstitutional as it took away benefits without consultation. The benefits, which included employment benefits,

were

fundamental

rights;

therefore the new code was in conflict with s28 of the IC. The courts stated the meaning of property had to be extended to encompass state housing subsidies – the court assumed this without deciding it as it referred to the Reich article. 

The Reich article stated that new property consists of various types of state

benefits,

e.g.

employment 11

benefits, welfare grants and housing benefits. These benefits can not be taken away without due process, i.e. there must be a hearing. Furthermore, the court held that the existing notions were inadequate as they did not recognise

the

benefits

of

new

property. o

The courts set out the basic test for new property in the Logan v Zimmerman Brush case: it stated that the hallmark of property is the individual integrity (entitlement) granted in state law which cannot be removed apart from in the courts.

o

Bell v Burson dealt with the suspension of a driver’s license. Statutes allowed for the suspension if the driver caused an accident. The court stated that the Act 12

allowed

for

suspension

without

due

process. -

The new Constitution: o s25 (1-9) – Meaning of property: This section is written in negative terms (no one may…)  s4 (a) – states that the public interest, includes the nations interest to land reform, and to reforms to bring about equitable access to all SA’s natural resources; and  (b) – property is not limited to land o The legal significance of meaning: With regards to the FNB case, para 46 – 49, the court sets out the property challenge (test) and considers the meaning of s25 more broadly.  The test comprises of 7 issues: 13

•

A) – does that which is taken away from FNB by the operation of s114 (Customs and Excise Act) amount to ‘property’?

• B) – has there been a deprivation of

such

property

by

the

Commissioner? • C) – if there has, is such deprivation consistent with the provisions of s 25(1)? •

D) - if not, is such deprivation justified

under

s36

of

the

Constitution (limitation clause)? •

E) - if it is, does it amount to expropriation for the purpose of s25 (2)?

14

• F) – if so does the deprivation comply with the requirements of s25 (2) (a & b)? • G) – if not is expropriation justified under s36? 

S25 embodies a negative protection of rights

and

does

not

expressly

guarantee the right to acquire, hold and dispose of property.  Ss 4 – 9, underline the need for and aim at redressing one of the most enduring

legacies

of

racial

discrimination of the past, i.e. the grossly unequal distribution of land in SA. Under the new Constitution, the protection of property as an individual right is not absolute but is subject to societal considerations. 15

o Deprivation 

Mkontwana Case, para 65 states: It was held in the FNB case that the law that results in a deprivation of property must, in addition to showing an appropriate relationship between means and ends, be procedurally fair.

1.3 Deprivation A) The Constitution allows for deprivation of land as long as there is rationality and legislative context. The word deprivation may be

misleading,

distinguished

and from

must

therefore

expropriation.

be Any 16

interference with enjoyment with property involves a degree of deprivation to the holder. -

In the Mkontwana case there was a minority judgment by O’Regan and a majority by Jacob J. o Majority said that it was not necessary to define deprivation. It depends on the extent of the interference of equipment or use of property. This was taken from the FNB case which dealt with ownership. o Minority, didn’t discuss the issue of interference with property or ownership, therefore neither did it consider the capacity nor ability of the owner.

B) Deprivation leads to expropriation as stated in s25 (2)

17

- The word expropriate is used to describe the process

where

the

Public

Office

(government) takes away property for a public purpose against the failure of payment o

The Harksen Case: The husbands’ estate was sequestrated by the Master of the HC, which arose to expropriation of the wife’s estate. The aim was to temporarily inconvenience the wife, not to take away property. The court held therefore, that there was no expropriation. Expropriation is permanent and in this case it was only a temporary inconvenience.

- FNB case para 57-59 states expropriation is a subset, therefore s25 (1) deals with all property

and

deprivations

(including

expropriation). If the deprivation infringes 18

(limits) s25 (1) and cannot be justified under s36, that is the end of the matter i.e. the provisions is unconstitutional. However, if the deprivation passes the scrutiny under s25 (1), then it can be asked whether or not it is expropriation. If it is expropriation, then it must pass scrutiny under s25 (2) (a) and make provisions for compensation under s25 (2) (b). -

S25

(3)

deals

with

the

manner

of

expropriation mentioning a balance between public interest and those affected by the expropriation, by means of compensation.

C)

Constructive

Expropriation

(CE)

or

Regulatory Taking

19

- CE is done in terms of state powers to regulate the use of property in the public interest for the protection of others. It states that expropriation must be accompanied by compensation. CE is the middle ground between expropriation and deprivation. E.g. If the construction of roads cuts across a farm, the road is for the public, but the farm is privately owned. The owner now carries the burden which the state must dually compensate. -

Steinberg Case: the plaintiff bought property in 1994, but only occupied it much later. There was a construction scheme to build a road affecting the property, which was known to her. The local municipality proclaimed and approved the scheme which meant the plaintiff could not sell her land. 20

The plaintiff recognised that the scheme did not amount to expropriation but could be seen as CE under s25. The application was dismissed.

The

difference

between

expropriation and deprivation was found to be fundamental to the case. The court held that the application was an advanced notification and therefore premature. The plaintiff had suffered no loss as nothing had physically happened yet. There was mere deprivation. -

The Van Der Walt article pg 464 – 471 states that foreign sources recognise CE. The court says CE blurs the distinction between expropriation and deprivation and is seen as undesirable. Steinberg is the only case to recognise this doctrine. CE is treated as if

21

expropriation has already taken place and therefore compensation needs to be made. D) Arbitrary Deprivation -

The Constitution allows for deprivation but it cannot be arbitrary. In the FNB case para 62, the word arbitrary depending on its statutory context, may only impose a low level of judicial scrutiny, requiring nothing more than the absence of bias, or bad faith to satisfy such scrutiny. It was stated that arbitrary, as used in s25, is not limited to non rational deprivations, in the sense of there been no rational connection between means and ends. It refers to a wider concept and a broader controlling principle that is more demanding than an enquiry into mere rationality. At the same time, it is a narrower 22

and less intrusive concept than that of the proportionality evaluation required by s36. This is because the standard set in s36 is ‘reasonableness and justifiability’, whilst the standard set in s25 is ‘arbitrariness’. o Procedural fairness also means that the state should exercise its power in terms of clear rules and principles set out in advance. Exercise of state power is arbitrary, if it does not follow rules or is unpredictable. o Substantive arbitrariness, falls between rationality and proportionality. 1.4 Search and Seizures This is the power relating to the criminal and civil forfeiture of property.

23

Park-Ross and Another v Directors Office of serious Offences 1995 (2) BCLR 198l, This case challenged the constitutionality of s5 and 6 of Act 117 of 1991. - S5 states that, if the director has reason to suspect a criminal offence has taken place, he has the power to hold an enquiry and the suspect is to appear - S6 states that the director may enter and search premises of accused and seize books etc without any notice. This section was said to be in violation of s28 (2) of the IC which dealt with deprivation of property. The court held that it was in accordance with law, and in fact the only way deprivation may be done. Under the new Constitution must be done in terms of general application

24

o Rationality: this means that there must be a rational relationship between the means employed (deprivation) and the end sought to be achieved. o

Proportionality: forfeiture must not be disproportionate when measure against the gravity of the offence. There must be a proven offence and something specially connecting commissioner

the of

property

to

the

offence.

the

25

1.5 Law of Property and Things -

The law of things is manifested in private law. In the past, this branch of law is known as the law of things, not it is the law of property. Property refers to a large variety of assets that make up a persons estate or belongings and which serve as objects of the rights that such a person exercises in respect thereof. Things merely denote the object of the right in the restricted meaning of referring only to corporeal or material objects.

- Rights in terms of Land Reform Legislation (ESTA), identifies an occupier as a person who lives on another’s land with the

26

consensus of the owner. These people have rights protected by the Constitution. o

In the Nkosi case, the issue put forward is whether the right of residence included the right to bury without notification to the owner. The court stated that this right does not exist.

o

Nhlabathi case, this case came before the land claims court, challenging s6 (2) of ESTA. A widow and her children were denied the burial of her husband, they wanted permission for the deceased to be buried where he worked all his life. They stated that s6 (2) (da) was an infringement to the right not to be arbitrary deprived of property; right not to have property expropriated without compensation; and was also an intrusion by parliament on 27

private property. The court said that the establishment of a grave was a minor intrusion of land and would therefore devalue the farm. The courts had to balance the rights of the owner with the rights of the occupiers (vulnerable people) 1.6 The Social Function and Substance of LoP - LoP seeks to ensure that the right of ownership is not used in a manner that harms society, e.g. restrictions placed on the owners ability to erect buildings on his land; anti

pollution

regulations,

factory

regulations and sanitary regulations. - Limitations may be imposed by private law. In the interest neighbours e.g. the law relating to nuisance.

28

-

In the P.E Municipality case, the court enforced the importance of s26 (3) read together with s25. It acknowledges that a home is more than just shelter, as it is also a zone of personal intimacy and security. To demolish a home there needs to be an order from the court.

1.7 The New Property Framework -

Since

1994,

parliament

has

enacted

legislation aimed at development such as the Development Facilitation Act (DF A) 67 of 1995. This Act created new concepts such a beneficial occupation and initial ownership o

Beneficial occupation – there are several Acts which protect the precarious title (Alexkor case), e.g. Restitution of Land Rights Act, Informal Land Rights Act, 29

Communal Land Rights Act, and DFA. Beneficial occupation states that people settled for more than 5 years have a protected tenure and cannot be removed; the DFA concept is that this beneficial occupier makes a living off of that land. Parliament has thus extended the concept of real rights. o

Initial ownership – s 61 of the DFA gives s62 its right. Land can be registered in order to create a structure of the land without

going

through

the

Deeds

Registration Act.

30

2. Sources of Law of Property There are 4 main sources of current law of property: - Common law - Legislation - The Constitution - Case Law 2.1 Common Law 31

A)

RL

–

many

of

the

concepts

and

terminology used today is from RL. E.g. the notion of dominion is taken from RL. The Romans used the word dominius to describe the owner of things, and the right of ownership was absolute. There was a distinction between ownership (real rights) and possessions (holding of things). As stated

ownership

was

the

most

comprehensible right with absolute power. B)

Germanic Customary Law – this was derived from the Netherlands in the 16th century. An important aspect is the law relating to the registration of real rights. This was brought in through the Harris case: it was stated that the transfer of immovables may only take place by an 32

order of a Magistrate – coram legi loci. The case explains the system of land registration

through

the

Deeds

Registration Act to accommodate the current trends served to modernise the current system in SA. Germanic customs have some distinction in SA in terms of movables and immovables. C)

English Law – SA has borrowed from English Law, e.g. the recognition of atonement as a mode of delivery of movables. In Kusa Kusa CC v Mbele 2003 (2) BCLR 222 (LCC), Gildenhys AJ stated that under the Common Law any owner of land is entitled to apply to a court for an eviction order, by simply alleging his ownership of the land and stating that someone else in occupying the land. 33

All the above are still being used but have been

modified

by

legislation

and

the

Constitution. 2.2 Legislation The bulk of LoP come from legislation. A)

The Deeds of Registries Act 47

of 1937 (examinable) S3 – the duties of the Registrar of Deeds S4 – Powers of the Registrar of Deeds S6 – cancellation of deeds (only done by order of court) S7 – inspection of records S13 – when registration takes place S16 – how real rights will be transferred S63 – restriction on registration of rights in immovable property

34

S7 Inspection of records and supply of information (1)

Each

registrar

shall

on

conditions

prescribed and upon payment of the prescribed fees, permit any person to inspect the public registers and other public records in his registry, other than the index to such registers or records, and to make copies of those records or extracts from those registers and to obtain such other information concerning deeds or other documents registered or filed in the registry as prior to the commencement of this Act could, customarily, be made or obtained. (2) Notwithstanding anything to the contrary in any other law contained, no person (including the State) shall be exempted from

35

the payment of the prescribed fees referred to in subsection (1). S63 Restriction on registration of rights in immovable property (1) No deed, or condition in a deed, purporting to create or embodying any personal right, and no condition which does not restrict the exercise of any right of ownership in respect of immovable property, shall be capable of registration: Provided that a deed containing such a condition as aforesaid may be registered if, in the opinion of the registrar, such condition is complementary or otherwise ancillary to a registrable condition or right contained or conferred in such deed.

36

B) The

Expropriation Act 63 of 1975 Act

governs

the

procedure

of

expropriation and states that expropriation must comply with the Promotion of Administration of Justice Act, therefore it must be lawful and procedurally fair. -

Lebowa

Mineral

Trust

Beneficiary Forum case: an act of expropriation

in

Expropriation

Act

additional

terms

of

must

requirements

the satisfy

of

the

Administration Act. The Act designates government officials as expropriators. In terms of the Constitution expropriation can only take place in terms of public interest, s25. Expropriation must follow a strict procedure in terms of the Act, e.g. the expropriatee must be informed 37

and the extent of land to be taken must be stated. C)

Extension of Security of Tenure

Act 62 of 1997 The long title states that the Act is aimed at promoting long term security of tenure for lawful occupiers of rural and protecting them against unfair eviction by: - Establishing a mechanism by which these occupiers can obtain independent land rights (s4 and 6) - Stabilising the day to day ownership between land owners and occupiers of rural land (s5 – 7) - Protecting lawful occupiers against unfair eviction (s1-3 and 8 – 25)

38

Scope: the Act mainly applies to rural and peri-urban areas. It has a restricted scope as it only intends to benefit lawful occupiers who have permission to occupy land belonging to someone else. Further restriction of the scope is that it excludes labour tenants; persons who use or intend to use the land for industrial, mining, commercial or commercial farming purposes; and persons with an income exceeding R5 000 a month. S 6 of the Act is important to take note of: Rights and duties of occupier: 6. (1) Subject to the provisions of this Act, an occupier shall have the right to reside on and use the land on which he or she resided and which he or she used on or after

39

4 February 1997, and to have access to such services as had been agreed upon with the owner or person in charge, whether expressly or tacitly. S6 (2) without prejudice to the generality of the provisions of section S and subsection (1) and balanced with the rights of the owner or person in charge, an occupier shall have the right— (a) to security of tenure: (b) to receive bona fide visitors at reasonable times and for reasonable periods: Provided that— (i) the owner or person in charge may impose reasonable

conditions

that

are

normally

applicable to visitors entering such land in order to safeguard life or property or to

40

prevent the undue disruption of work on the land; and (ii) the occupier shall be liable for any act, omission or conduct of any of his or her visitors causing damage to others while such a visitor is on the land if the occupier, by taking reasonable steps, could have prevented such damage; (c) To receive postal or other communication: (d) to family life in accordance with the culture of that family: Provided that this right shall not apply in respect of single sex accommodation provided in hostels erected before 4 February 1997; (e) Not to be denied or deprived of access to water; and not to be denied or deprived of access to educational or health services. (3) An occupier may not— 41

(a) Intentionally and unlawfully harm any other person occupying the land; (b) Intentionally and unlawfully cause material damage to the property of the owner or person in charge; (c) Engage in conduct which threatens or intimidates others who lawfully occupy the land or other land in the vicinity; or(d) Enable or assist unauthorised persons to establish new dwellings on the land in question. (4) Any person shall have the right to visit and maintain his or her family graves on land which belongs to another person, subject to any reasonable condition imposed by the owner or person in charge of such land in order to safeguard life or property or to

42

prevent the undue disruption of work on the land. D) The Prevention of Illegal Eviction from and Unlawful Occupation of Land Act. This is a very important Act as it has affected common law contents of dominium and ownership

of

land.

This

Act

applies

specifically to unlawful occupiers of land and is concerned with the proper regulation of eviction procedures as they apply to unlawful occupiers. The strategy of the Act is to stabilise existing unlawful occupation of land in order to ensure that eviction of unlawful occupiers only takes place when it if fair and equitable to do so. The Act does not create or strengthen rights but it ensures that unlawful occupiers are evicted by way of proper legal 43

procedures which take into consideration historical, social and human factors. E) Land Reforms Act (Labour Tenants) Act 3 of 1996 This Act is restricted to a very specific and circumscribed category of rural land users known as labour tenants. Labour tenants are distinguished from farm workers on the basis that labour tenants are not primarily salaried labourers (they provide labour to the land owner in exchange for occupying the land). The

Act

excludes

farm

workers.

The

protection of this Act works in two directions: -

The Act provides tenure security for labour tenants by confirming their right to occupy the land in question and ensuring that they cannot be evicted from this land. The Act 44

prohibits labour tenants older than 60, or who can’t provide labour personally and have

no

appointed

successors;

family

members are allowed to continue living on the land for 12 calendar months after the death of such a labour tenant. -

Labour tenants are enabled to acquire ownership and other rights of some of the land. If the requirements in s1 are satisfied, one may applied for land rights or financial assistance. In this instance, the labour tenant forfeits his rights as a labour tenant but now gains rights as a land owner

2.3 The Constitution -

The Constitution is a source which has the power to override the common law, s25 and 26. There is an emphasis on the promotion 45

of the spirit, purport and the objects of the BoR (s39 (2)). 2.4 Case Law -

NB the Transkei Public Servant Association v Government of RSA 1995 BCLR 1235 (TK)

3. The Legal Concept of Property Both the IC and the FC have concepts of property in private law including - The right in a legal object - The object to which that right relates - Property as rights -

And property as objects of rights.

46

The only real right in property is ownership. There are, however, limited real rights, where the owner still retains ownership of the property. Everyone has real rights but these may be limited, such as the following: - Mortgage: this is a right a creditor exercises over a debtor of land. The property is given to a creditor as a securer of debt until the loan is paid out -

Lease: this creates a bilateral relationship between the lessee and the lessor. The lessee exercises some right over the property for some time with the lessor. The lessee can sub-lease with a third person. Before the occupation, the owner has a personal right. After occupation, the owner has limited real rights.

47

- Servitude: a right possessed by one person to use another's property. There are two kinds: personal and praedial (arising from or consequent upon the occupation of land) - Liens: the right to take and hold or sell the property of a debtor as security or payment for a debt or duty. o FNB case: the right of retention until the owner has been compensated for services rendered. There must be continuous possession of property otherwise it is a lost right. 3.1 Property as a Right A right is a claim of a legal subject to a legal object as against other persons. Property in the sense of rights is seen as ownership, real rights

48

or patrimonial rights such as personal rights and immaterial property rights. - Patrimonial

rights

are

rights

having

patrimonial value, whereas personality rights are not capable of forming part of a person’s estate. - Patrimonial objects have economic or material value. Things, immaterial property and performances are patrimonial objects. o The right to a thing is real rights o The right to performance are personal rights o The right to immaterial property is immaterial property rights. Chairman of Public Service Committee v Zimbabwe Teachers Association 1996 BCLR 1189. The PSC of Zimbabwe amended the PS 49

regulations which had stated that bonuses were to be paid to employee employed on 1 January, whose employment was continuous, in November. The amendment now stated that bonuses were to be paid later, or reviewed or not paid at all in 1995. The Teachers Association challenged this in court. The appeal court held that the bonus was a gift and not a right and could therefore be withheld as long as it was done procedurally. 3.2. Definition of a Right A right is legally recognised and is a valid claim by a legal subject in respect to a legal object. - Bearers of rights in terms of the Constitution o FNB case: the applicant was a juristic person. The judge stated that companies or 50

corporations have become very important aspects of the business world, therefore juristic persons do have rights. o S8 (4): the protection of the BoR extends to juristic and natural persons, to the extent required by the nature of the right and the nature of the person. 3.3 Objects of Rights An object is anything that a person can acquire and hold rights, these are both corporeal and incorporeal rights. An object of a right is a thing. Corporeal things are things that can be touched (tangible). Incorporeal things are intangible

51

3.4 Things A thing is a legal object of a real right and is therefore the most important legal object. In terms of its characteristics a thing can be defined as a corporeal or tangible object which is an independent entity subject to juridical control by a legal subject for whom it is useful and of value. There are 5 characteristics of a thing: - Corporeality - External to humans - Independence - Subject to juridical control - Useful and valuable to humans

52

Corporeality In RL corporeals were defined as things that could be felt or touched (it is a thing that can be perceived by any of the 5 sense).

The

modern definition of corporeality includes objects that occupy space such as a cylinder with oxygen. Examples of things that are excluded in SA definition of corporeal things are: gravity, heat, light, sound and electricity. These can be sensorially observed but cannot be described in terms of space. Several incorporeal or intangibles have been recognised as things, where the object of the real right is not a corporeal thing, but another subjective right. E.g. real rights (with things as objects);

intellectual

property

rights

(as

intellectual property as object); personality 53

rights (with aspects of personality as objects); and creditors rights (with obligations as objects).

If any of these subjective rights

serves as the object of the real right, in terms of common law, it is now an incorporeal thing. -

In Badenhorst v Belju Pretoria Sentraal 1998, it was held that the membership interest in a close corporation (creditor’s right against the close corporation) is an incorporeal immovable that can be attached to a sheriff.

External to Humans 54

A human being can not be a legal object as they are legal subjects. Corpses or parts of corpses may be classified as legal objects, but those which fall outside legal commerce. Parts of bodies which can no longer be connected to a human being can be regarded as things (e.g. hair to make a wig) Independence It is a requirement that a thing must be a definite

and

distinct

entity

that

exists

separately. E.g.: -

Water, land, sand and air, must first be separated

by

human

activity

into

recognisable and manageable entities before they will be regarded as things which fall within legal commerce (air and oxygen must be contained in cylinders). 55

-

Immovable things come into being after demarcation on an approved and registered surveyors plane, diagram, aerial photo or general plan – the Deeds Registries Act 47 of 1937. I.e. a building erected on land usually forms part of the immovable thing.

- A sectional title unit as an immovable thing is described in terms of the registered sectional plan – Sectional Titles Act 95 of 1986. Subject to Juridical Control Corporeal entities which are not open to juridical control are not classified as things. E.g. heavenly bodies like the sun and moon as well as aspects of nature like the sea and air. Useful and Valuable to Humans 56

Things must be useful and valuable to legal subjects and must be destined to satisfy their needs. If a thing is not useful and valuable to the legal subject there is no legal relationship. There is no need for economic value but at least must have a sentimental value. The test for value is objective – something will remain a thing as long as it satisfies your or someone else’s needs.

3.5 Classification of Things In order to classify a thing, the question whether it is susceptible to being privately owned is asked. If yes, the thing is res intra commercio. If no, res extra commercium. 57

Negotiable and Non Negotiable Things Res Intra Commercio – negotiable things -

Things owned by a natural or legal person or things in a deceased or insolvent estate – res alicuius.

-

Things capable of being owned but which, at a particular stage, are not owned by anyone – res nullius.

-

Things no longer within the physical control of an owner and in respect of which the owner no longer has the intention to be owner – resderelictae

-

Things lost and no longer within the physical control of the owner but in respect of which the owner has not lost the intention to be owner - res deperditae

58

Res Extra Commercium – non negotiable things -

Natural resources falling outside legal commerce and which are available to all people – res communes omnium (common things). A portion of common things can become private and can be sold.

The

Romans had 3 examples of common things: air, running water, sea and seashore. Any interference in the use of common things would result in a delictual remedy i.e. actio injuriarium. -

Things owned by the state and used directly for the public’s benefit are called res publicae. These public things are state property as they are intended for public use but they are held by the government. E.g.

59

public rivers, national parks, public roads, the sea and the seashore. o

Public rivers – the National River Act 1994. The state is a trustee for national water resources. Individuals may use water for domestic needs but with common law, the public is only entitled to use the public river for navigation purposes i.e. trade or sports. 

Transvaal Canoe Union case: the applicants applied for a declaration, that their members be allowed to use Crocodile River for canoeing and use the land (owned by vicarian owners) adjacent to the river to carry the canoes across. The application was dismissed. The question before the court was whether the right of the 60

public to navigate the river would also, as an off-right, entitle the canoers to carry their canoes across the land along side the river. Van Der Walt stated that the right of navigation on navigable

public

rivers

must

be

interpreted and exercised restrictively with as little encroachment on the rights

of

the

vicarian

owners.

Furthermore he said ‘one of the most important rights of owners of land and as such owners of vicarian land is the right of quiet and undisturbed use of the

property.’

would

be

Therefore

needed,

consent

except

in

emergencies, to cross the land. o The Sea and Seashore Act – the sea and seashore belong to the president as the 61

trustee. No portion of neither may be alienated except in terms of the Act. The local authority may be allowed to let part of the sea if the Mayor is under the impression that the public will not be negatively affected. This also refers to territorial waters (e.g. lakes). There is a limit to the powers of the authorities that has been specified to a 3 mile radius, anything

beyond

is

governed

by

international law. - Religious things – these are things that are dedicated to worship. Some belong to churches, municipalities or families e.g. the use of a cemetery is governed by the municipality. o ESTA secures the rights to bury on another’s property 62



Nkosi and Mhlabathi case

Movable and Immovable Things - Immovable things: these are units of land and everything permanently attached to it by means of attachment, as well as sectional title units. Incorporeals are sometimes described as immovables e.g. real rights – servitude. Movable things: these are things are anything that can be taken from one place to another without causing injury to that thing. They are sometimes known as corporeals. - Movables may become immovables if they are attached to the land, this depends on: o Objectivley the manner of the thing and o

Objectively the manner of its annexation (objective test). 63

o

Subjectively the intention of the owner of the movable at the time of its annexation (subjective test).

-

The McDonalds Case 1950 AD, property was sold to a syndicate, of which Jacobson was part of and had contractual rights for; the payment was due in 4 years. In this case, the

elements

to

determine

whether

immovable has since become an immovable was set out: elements o Each case has to be considered on facts o The nature of a particular thing must be considered o The degree and manner of the attachment must be looked at o

NB - The intention of the person who annexed it must be assessed – was it a permanent or temporary annexation. 64

- There are certain distinctions between movables and immovables, these are set out below: o

Transfer of ownership – in movable things, the transfer takes place by delivery of the thing to the receiver. In immovable things, transfer takes place by registration in the Deeds Registry.

o Alienation of Land Act 68 of 1981 – a contract to alienate immovable things must meet the formalities prescribed in terms of the Act o

Real security – Hypothecation, is the ability to use something as a security of debt. With regards to immovable things real

security

is

provided

by

the

registration of mortgages. With regards to movable things, security is provided by 65

a pledge or the registration of a notarial bond (the debtor cannot do anything with the property) o Execution of assets – where a debtors’ assets are sold in execution, movables must first be attached and then his immovables. o Theft and arson – theft only occurs with movables. Arson can only occur with immovables.

66

Fungible and Non-Fungible Things - Fungible things are a group of things which can be replaced by similar things. This means that they do not have individual characteristics

which

make

them

irreplaceable. They are often things which are referred to in trade with reference to weight, measure or number. - Non-fungible

things

have

individual

characteristics or value that makes them irreplaceable. E.g. an original painting. - A fungible thing can, because of additional reasons become non-fungible. E.g. a family Bible. - The distinction is important in the following circumstances

67

o

In a contract the fungibility of a thing can be determined by the parties. Fungibility might influence the consequences of a contract. E.g. if the parties agree that a thing is irreplaceable, if it is destroyed before transfer, it cannot be replaced and in some instances, the contract may be void or compensation may be claimed.

o A fungible thing cannot be pledged with the intention that it may be replaced by a similar thing. o In terms of legacy a non-fungible thing cannot be replaced by a similar thing. If this thing is destroyed, the legacy lapses. o Money is classified as a fungible thing Consumable and Non-Consumable Things

68

- Consumable things are depleted in value or consumed by normal use e.g. food. - Non-consumable

things

are

essentially

maintained even if normal wear and tear occurs through use e.g. house, car. - The distinction is important in the following circumstances: o

In a contract concerning the loan or lease of consumables, it is intended that the borrower or the lessor consume the thing and replace it with a similar thing when the contract is over.

o

A usufruct can only be given regarding non-consumable things. This is because there is a requirement that a things be kept in

the

same

condition

(salva

rei

substantia).

69

 A quasi usufruct can only be given regarding consumable because then the holder of the right is compelled, upon termination of the agreement to return things of the same amount and quality as those consumed. o Money is regarded as a consumable thing, and a quasi usufruct can be given in respect of money. Divisible and Indivisible Things - A thing is divisible if it can be divided into smaller components whilst retaining its nature and function and without the value of the components been less than the original value. E.g. a piece of land or sack of mealies can be divided into 2 or more parts.

70

o Division is important in the case of joint ownership in property. If the thing is indivisible, the court will order one of the parties to become the owner, but must compensate the others. 

Bennett v Le Roux 1984 (2) 134: The deceased left property in his will to his 6 children in equal and divided share. The administrator wanted to sell the property, but one of the children said no and made an offer to buy the land. Another person wanting to buy the land was prepared to outbid Le Roux. The court said one must be guided by equity therefore one of the joint owners must have the first bid – and the

payment

must

be

used

as

compensation to the other children. 71

- Indivisible things cannot be divided without changing the value, nature or function of a thing. E.g. a painting or a chair.

Single and Complex Things - Single things exist independently without being composed of particular components

72

i.e. they are independent entities and not attached to anything else oBoth corporeal and incorporeal - Complex things are compositions of different components,

consisting

of

independent

things in a new unit e.g. a house, a car etc. These

components

have

lost

their

individuality and are now regarded as one thing. There are 4 elements of complex things: o

Principal thing – this exists independently and can be the object of real rights. It does not form part of another thing either as a component or as a supplement. In Khan v Minister of Law and Order, a principle thing was decided as one that give the ultimate thing its character, form and

73

function. E.g. a diamond that is added to a thing, a car. oAccessory

thing

–

this

can

exist

independently of the principal thing but which has merged with or been mixed with the principal thing to an extent that it has lost it independence. E.g. when a house is bought with furniture inside. oAuxiliary thing – this exists independently and separately of the principle thing but because of its economic value, destination or use, is no longer an independent thing. There is no real physical connection with the principal thing. E.g. a key to a door. 

Senekal v Roodt: the applicant bought a farm with a house and specified furniture. In the study there was a wooden unit matching the panelling of 74

the room. There was also a bar unit with a wooden counter fixed to the floor with loose stools, along with 2 steel cabinets. The old owner put the cabinets in the store room, but the new owner put them back. Ackerman J referred to the McDonald case and stated that none of the things were accessories. It was stated that if one takes view of them as auxiliary things which are there to permanently compliment the principal thing, then they serve the same function as accessories. 

Falch: the plaintiff bought a house with a stove but through negotiations no one mentioned

anything

about

it.

But

however when he moved in, the stove was gone. He claimed the stove was part 75

of the contract of sale and the court held that the seller should have said the stove was excluded in the negotiations but failed to do so. oFruits – these are produced by the principal thing without the principal thing being consumed or destroyed. Before separation from the principal thing, the fruits are accessory things and belong to the owner of the principal thing. However fruits are destined to be separated from the principal thing and exist independently.  Natural fruits: the young of animals, or the fruit of trees.  Civil fruits: rent, interest on capital, profit and dividends.

76

77

Registerability of Real Rights - Section 16 and 63 of the DRA states that ownership of land can only be conveyed from one person to another through the Deed Registrar. - Personal v Real Rights: there is a theoretical distinction between the 2, i.e. classical and personal theories o

Classical: this distinction is drawn from RL. Real and personal rights differ with regard to the object of the right. With real 78

rights there is a close relationship between the holder of the right and the thing itself, and the thing itself is the object of the right. With personal rights there is a relationship between people, and it is the right of a person against another person. In this case the object is the action which must be performed by the debtor to the creditor (e.g. to give something, do something or refrain from doing) o

Personal: the holder of the right can enforce remedies against interference of the right. A real right is absolute and can be enforced against anybody, whereas a personal right (creditor’s right) is relative and can be enforced against a specific person or persons. A personal right is always placed upon an obligation of one 79

person to perform a certain action for the benefit of the holder of the right (the creditor). The obligation usually derives from a contract. In the case of a real right there is no debtor because the right does not rest upon the contract - it is a direct relationship between the holder of the right and the thing. This real right allows the holder to use the property and exclude all others from interfering. Ex Parte Geldenhuys: distinguishing between real and personal rights -

In a mutual will a husband and wife left a farm to their children in undivided shares i.e. co-ownership. Once the eldest child reached majority the land was to be divided amongst the children in equal portions and the child 80

with the portion upon which the homestead was built should monetarily compensate the others. The Registrar of Deeds refused to register the conditions stating that they did not create real rights. The children had real rights in the form of undivided co-ownership shares

and

once

the

subdivision

was

completed each of them would acquire individual ownership of the portion of the farm. However 2 conditions of the will created problems: o

The will stipulated conditions with regard to the time and manner of subdivision when usually the co-owners are free to decide when and how they want to subdivide the common property. This placed a restriction upon the common law freedom to subdivide as well as creating 81

rights to enforce the prescriptions. The issue was whether these rights to have the subdivision done at a specific time (majority) and in a specific manner (equal portions) created real or personal rights. o

The court questioned whether the right of the other children to claim the money from the child with the homestead portion was a real or personal right.

-

The DRA in s63(1) states that only real rights in land may be registered and the Registrar of Deeds refused in this case because he thought these were personal rights. Distinction of the rights is also important in terms of enforceability – only personal rights can be enforced against a specific debtor (the other children); real rights can be enforced against any person 82

(subsequent owners should the child sell their portion). - Subtraction from Dominium Test oFirstly the court must first look at the obligations created by the right oSecondly the court must look at the effect and the intention of the obligations oIf the obligation is a burden upon the land, the right is a real right that may be registered. This obligation affects all owners of that piece of land irrespective of their personal identity. oIf the burden is placed on a specific person, the right is a personal right and may not be registered. The obligation does not affect subsequent owners as the burden is on the specific person’s capacity and not the capacity as the owner of the land. 83

- The first set of obligations (majority and equal portions) affects all co-owners and subsequent co-owners. Because the coowners

loose

some

of

their

normal

entitlements there is a burden upon the land i.e. a subtraction from the dominium. The right is therefore a real right and must be registered. - The second set of obligations places a burden upon one child only and is a one-off burden, which rests upon a specific person in their personal capacity i.e. the right does not subtract from the dominium. The right is therefore a personal right which may not be registered. However the court decided that both rights should be registered together because of the obligations close connection. Lorentz v Melle 84

- Two parties bought a farm together as co owners and concluded a contract that they would subdivide the farm into 3 portions and transfer one portion to each while remaining co-owners of the third. Another term was that if one of them was to establish a township on their portion, the other party would acquire a right to half of the profits. - The issue was whether the obligation to pay the sum of money (which was already registered) created a real or a personal right. -

Application of the subtraction test found that the obligation did amount to a subtraction from the dominium and that the parties intended to establish such a subtraction. However the obligation did not affect the owner’s right to the use of the land in the physical sense. This meant that limited real 85

rights can only be created when they result in a subtraction from the owner’s right to the physical sense of the property. -

The court found that an obligation to pay a sum of money could never constitute a real right but would always be a personal right. This is based on the idea that a real obligation must place a physical burden upon the

owner’s

entitlements

of

use

and

enjoyment.

86

Registration of Personal Rights The General Legal Position S63 (1) of the DRA states that only real rights in land may be registered this allows for real rights in land to be created or transferred. Real rights in movables are usually not registered since they are created and transferred by delivery.

87

Personal rights in land may not be registered and if registered by mistake, they not transformed into real rights – Lorentz case. •

An exception was made in the Geldenhuys case where a personal right was registered together with a real right because they were closely related.

Low Water Properties v Wahloo Sand •

On a piece of land there was a piece of land which was divided into 2 portions. The owner of the land executed a notarial deed granting certain servitudes (including a positive obligation to draw water from a borehole, to supply a pump to extract the water and to maintain a pipeline) over that land in favour of the 2 owners of the portions

88

of the farm as grantees in their respective capacities. • The owner of the land sold his land to W who now became the owner subject to the servitudes in favour of the 2 portions. • The notarial deed created certain real rights in favour of the owners of the farm and that it also created certain personal rights in favour of the farm owners with the correlative obligations upon the grantor (owner of the land). • W complied with the real rights but denied obligation to comply with the personal rights. • This case looks at the amendments to s63 (1) of the DRA which prohibit the registration of personal

rights

unless

they

are

complementary to registerable condition or 89

real rights. Secondly it defines the nature of servitutal

rights

that

are

capable

of

registration. •

A right is capable of being a real right despite the fact that it imposes such an obligation.

•

The court pointed out that the purpose of the amendments of s63 (1) was to accommodate situations that arose in Geldenhuys and authorise actions of the Registrar since Geldenhuys

•

Secondly the provision does not mean personal rights may be registered per se it merely

authorised

a

condition

being

registered. Therefore personal rights may not be elevated to real rights. Schedhelm v Hermain 90

• An owner of a farm maintained a windmill to convey water to anther farm. The main farm was sold and the new owner refused to take on the responsibility of the windmill. •

A full bench found that terms casting obligations in faciendo upon the servient owner (supplier farm) do not constitute real burdens upon the land. The mere fact that becoming an owner of property does not pass on the burden of purely personal obligations. The fact that the rights were registered at the deeds office does not alter them from being mere personal rights into servitutal rights. The court said that the purchaser of the servitude can only be bound if he expressly agreed to be bound by the terms at the time of purchase.

91

Class of Personal Rights Known as: Jura in personam ad acquirendam Registrar of Deeds Transvaal v Ferreria Deep

6. Acquisition of Real Rights: General Principles

92

LoP is characterised by a number of principles that form the basis on which numerous legal rules have developed and the framework within which future developments can take place. They are: -

The principle of Numerus Clausus

- The Absolute Principle - The Publicity Principle - The Specificity Principle - The Transmissibility Principle - The Abstract Principle 6.1. Numerus Clausus This is also known as closed systems. The main aim of this principle is to attain certainty and predictability in LoP. The 2 requirements are:

93

- Only

recognised

real

rights

can

be

constituted; and - The content of a recognised real right is fairly rigid and not susceptible to radical change by the party creating the specific right. SAL does not formally recognise the principle of numerus clausus and is very cautious of recognising new real rights outside the traditional categories, with the consequence that the content of the new real right is strongly influenced by the content of the analogous real right that provides the basis for its recognition. RL adopted this closed system recognising 6 categories of real rights, namely: ownership, 94

servitude, pledge, mortgage, perpetual quick rent and grant. However, during the middle ages there was a change where more real rights were recognised. In the case Ex parte Geldenhuys, the test for recognition of real rights is set out under s63 of the Deeds Registration Act: -

In this case land was bequeathed in coownership of the 5 children of the testator subject to a usufruct in favour of the surviving spouse. The will provided for subdivision of the land into equal portions as soon as the eldest surviving child attained majority, in the form of drawing lots by the surviving testator and the major child. The second provision stated that the child to whom was allotted the portion on which the homestead stood would pay some money to 95

each of the other children within the following 5 years. The Registrar of Deeds refused to register these 2 provisions. The first provision constituted a real burden on the land and the court decided it was registerable. The court found the second provision to be registerable as it gave effect to the intention of the testator and was closely connected to the first condition. The provisions were regarded as merely creating personal rights, under the contingency principle, and the Registrar concluded that only personal rights were created. The contingency principle states that only a vested right may qualify for registration; but not every vested right is real and therefore not registerable.

96

Under

the

DRA,

s3

(1)

contains

a

comprehensive list of registerable rights. S3 (1) (i) states that the Registrar of Deeds may register rights not mentioned in s 3 (1). This illustrates that the Doctrine of Numerous Clausus is not recognised in SA. 6.2 Absolute Character -

In CL real rights were seen to be absolute so no one could interfere with them. This meant that the owner of a real right had the remedy of rei vindication i.e. whenever one finds ones property in someone else’s possession, one can claim it back.

-

The absolute character of a real right finds expression in the notion of ownership as potentially the most extensive power in the respect of a thing. Ownership as the most 97

extensive real right is distinguished from limited real rights which do not give rise to such extensive powers and that an owner cannot simultaneously have ownership as well as a limited real right in respect of the same thing. -

However, under the new Constitution, no rights are absolute and this is justified under s 36. The 2 cases that recognised that no rights are absolute were the FNB and Mkontwana case – this was done through ESTA and PIE. The effect of PIE on the CL concept of ownership is very important (EXAMINABLE).

98

6.3 Publicity Principle (NB) - One aim of LoP is to give publicity to the legal relationship between a person and a thing and to allow correspondence between the legal and the legal and factual situation. -

The publicity element is demonstrated in SA’s system of transfer of ownership: o

Movables: the processor of a movable is deemed to be its owner and transfer of movables is effected only by delivery since delivery publicises a change of ownership.  Various

constructive

modes

of

delivery do not adhere strictly to the principle of publicity. o

Immovables: the publicity principle is served by the fact that the transfer of ownership or a real right in immovables is 99

effected by registration of the transfer in the deeds registry. Since the deeds office is open to the public, anyone can ascertain the owner of a specific piece of land as well as the limited real rights which burden the land. - This principle also plays a role in the institution of prescription by means of which ownership is acquired by a person who possesses a thing without interruption for a period of 30 years as if he was the owner. -

Publicity also limits the applicability of rei vindication by means of estoppel (A bar preventing one from making an allegation or a denial that contradicts what one has previously stated as the truth.). o

If an owner creates an impression that a third party is the owner of his thing or has 100

the power to dispose of the thing, he is estopped from denying that the impression created by him is the truth. 6.4 Specificity Principle -

This principle finds expression in the fact that real rights can only exist in respect of specific thing. Thus, an owner does not have a general right in respect of all the assets of his estate but a specific real right in respect of each individual thing. Moreover, although a person can bind himself by contract to alienate his whole estate, the act of transfer is accomplished by transfer of each separate asset. Furthermore a person is not allowed to pledge his movables in general.

-

The separate real rights in a thing and its components are not permissible, so a 101

notarial lease can not be registered in respect of a portion of a farm only. - The specificity principle can sometimes be relaxed, where: o

A personal servitude of use (usus) can be established in respect of a house on a farm although the house is only a component of the farm.

o A notarial bond is allowed in respect of the movable things of a debtor in general and even in respect of future things. o

A covering bond is only determinable to the extent that the maximum amount of the debt secured must be indicated and cession in securitatem debiti of future debts is to a certain extent allowed.

-

Kain v Khan 1968 (4) SA 251 (C)

102

6.5 Transmissibility Principle - Unlike personality rights, real rights are freely transmissible to heirs and cessionaries subject to only limitations imposed in favour of the transferor, third parties, heirs and creditors. Exceptions to this principle are personal

servitudes

which

are

highly

personal limited real rights and thus inalienable. - The alienation of praedial servitude is also partly restricted because it is a cession to the dominant tenement means that it can only be alienated with the dominant tenement to which it adheres. -

The transmissibility of a thing or a real right can be restricted by the registration of certain conditions in the deeds registry. In the case of mortgage and pledge the parties 103

can agree that alienation of the mortgaged thing will be excluded until the debt is extinguished. 6.6 The abstract Principle -

Under an abstract system of passing of ownership, the mere intention of the parties to pass ownership is sufficient without reference to the underlying causa for the transfer.

-

The

principle

originated

in

RL,

was

developed by lawyers of the 17th century and then was accepted into modern law. -

The

principle

guarantees

certainty

by

disallowing the invalidity of an underlying causa to affect the existence or validity of a transfer.

104

-

The real agreement to pass ownership is treated in abstracto, i.e. totally independent from the contractual agreement which provides the causa for the transfer. Although the system simplifies matters for the transferee, it does not leave the transferor who has transferred an object by virtue of an invalid causa without a remedy. However, he may still claim by condictio on the grounds of unjust enrichment

- The principle is not absolute and has exceptions: o

Certain forms of invalidity of the contract are considered so material that they affect the real agreement, and also where the validity of the transfer will conflict with an absolute statutory prohibition.

105

o

It is possible for the parties to the contract to provide that the transfer of ownership will only be valid if the causa for the transfer is valid.

-

An objection to the principle is that it works unfairly towards the transferor who is left with a condicito on the ground of unjust enrichment instead of a rei vindictio, especially in cases where the transferee is insolvent.

Klerk NO v Van Zyl and Maritz NNO and Another and Related Cases • J had forged the signature of C who did not even know the agreement even existed. Subsequently the registration of transfer of the unit in the name of C was affected in a mortgage bond. The signature of C was 106

forged and the bond passed without C’s knowledge or consent. The application was for the retransfer to the insolvent party because of the conduct of the previous owner. •

The court looked at the abstract and causal theories. It was held that the abstract theory relating to the passing of ownership, i.e. provided that the agreement to transfer ownership was valid, ownership would in general pass irrespective of the defect as long as the intention and cause is to transfer. This applied to movable and immovable property.

• The court held further that the causal theory states that if the cause of transfer is defective, ownership can not be passed irrespective if delivery takes place or the deed is signed. 107

• Although SA CL follows the abstract theory, especially with regard to movables, in this case the judge held that there was no ownership because the other party did not sign (causal theory because of the defect with regard to the cause).

Mvusi v Mvusi •

Mvusi was a wealthy man who died intestate in 1963. He was married in community of property and in terms of choice of law rules; the marriage was compelled by CL. At the time of death, he owned a farm in the Transkei. The magistrate appointed the eldest son as the representative of the other children. The son transferred the property to 108

himself and sold it to Mr Kerso, a relative. Complaints were brought to the magistrate and the magistrate informed the son of the cancellation of appointment. It was held that the son must comply with the rules of the devolution of the estate. However the estate was already transferred and registered in K’s name. The grandson of Mvusi sent an application

against

the

eldest

son

to

retransfer the property to the deceased. In 1991 the eldest son died and the grandson became the executor. • The court applied the abstract theory and subsequently the eldest son was appointed and had the right to do with the land as he pleased. K had the intention to accept the property so that ownership could pass to him.

109

• However in applying the causal theory, there would be misrepresentation on the part of the eldest son and thus no transfer • The court applied the causal theory but stated that the abstract theory should be applied in SA

110

Modes of Acquisition of Real Rights This depends on two factors 1. Whether or not the real right is newly created without the co-operation of a predecessor 2. Whether or not the real right is already in existence and merely transferred from one person to another or created with the co-operation of a predecessor in title Original Acquisition of Real Rights The acquiring of real rights by certain means Occupation in the case of an unowned thing Accession, specification, mingling, mixing and prescription 111

This is constituted with unilateral acts or a series of acts by the acquiring person Title of the acquirer is not derived from any predecessor and so not affected by infirmities in the title of the predecessor Derivative Acquisition of Real Rights This is as a result of bilateral transactions involving the co-operation of the predecessor or a representative 1. Dichotomy Between Contract and Delivery In most cases real rights are already in existence and transferred from one person to another

112

This happens with the co-operation of the owner of the thing concerned The real right is not transferred though until delivery has been made of the thing Transfer does not complete the transaction but gives in effect 2. Essential Elements in the Transfer of Real Rights The connection of the transfer of real rights and the completion of a contract is not totally ignored Essential elements must be present before delivery of a thing or registration has effect of transferring ownership or other real rights

113

a. Thing to which the real right relates is able to transfer or create real rights, a thing in commerce b.

The

transferor

must

be

legally

competent to transfer it c. Transfer must be effected by the holder of the real right concerned or by a duly authorized agent on their behalf d.

Transferee

also

must

be

legally

competent and must register in their name e. Only the transferee can accept the transfer of the real right

114

f. Can only be effected by means of one of the recognized forms of delivery for movables

and

registration

for

immovables g. Physical delivery is never sufficient to transfer a real right to a thing A mental element of intention must be added h. Only passes to the purchaser when the full purchase price is paid unless credit has been granted i. Transfer has to be based on just cause (iusta cuasa) which gives rise to transfer 3. Abstract and Causal Theories of Transfer 115

Abstract The agreement to transfer a real right is valid the real right will usually pass in the pursuance and on implementation thereof The underlying contract and act of transfer (real agreement and delivery or registration) are separate Casual When legal system makes the transfer of a real right dependent on a valid underlying contract Initially casual system applied in South African law but was changed to be abstract system A formulation of just cause (iusta causa) was put into place by the courts 116

This theory gives greater certainty to legal traffic 4. Just Cause Giving Rise to Transfer (iusta causa traditionis) and Theories of Transfer A putative cause is required for the effectiveness of such a transfer There may be direct evidence of an intention to pass and acquire ownership If this is so then there is no need to rely on preceding legal transactions to show ownership has passed 5. Real Agreement – Vitiating Circumstances

117

If

an

underlying

contract

it

does

not

necessarily apply to the real agreement and the transfer of the real right can continue If the real agreement is defective the transfer of the real right cannot continue

118

Good Faith or Doctrine of Notice The DoN is compared with constructive notice •

Constructive Notice – this is the presumption of knowledge, s7 of the DRA.

• The DoN – this has been applied if a purchaser acquires ownership of a thing sold knowing: oThat it has been previously sold to another person; oThat the acquisition is in conflict with a holder’s right of option or pre-emption or with a duty imposed on the seller not to sell without the consent of another person; oOf the right of a lessee to occupy the thing sold •

Application of the DoN takes place by forcing the acquirer of the real right to give

119

affect to the earlier personal rights, as stipulated below: a.

A successive sale – a seller sells a thing to A and then subsequently sells the same thing to B and gives him delivery or transfer thereof. A would be entitled to claim cancellation of the second sale and delivery to B, if B had known of the first sale to A. Situations may arise where B has no knowledge of the fact that the owner is already in a contract. B is known to be acting in good faith. The general rule is that the purchaser’s bona or mala fides must be determined as at the time he takes delivery or transfer (for immovables).

b.

Unregistered Servitude – if A and B enter into an agreement where A 120

becomes entitled to have a servitude registered over the land of B, A now has a personal right to claim that B should co-operate in registration because this is a requirement in the creation of a servitude. Once registration has been completed any subsequent purchaser of the land will automatically be bound by the servitude as the object is the land itself. However if B sells his land to C before registration, C’s knowledge or ignorance of A’s potential real right is important. The object of A’s personal right from his agreement with B is a performance to be done by B only and not the land. If a person is aware of an unregistered servitude when buying property, the third party can apply for 121

that servitude to be registered. But if he is unaware, that application cannot be made. c.

Leases where the Huur

Gaat

Voor

Koop – in a long lease of land a lessee is protected by the HGVK rule once the lease has registered in accordance with the DRA, or in absence of registration, for the first 10 years of the lease when possession is taken place. In the case of a short lease the lessee is protected by the HGVK rule when possession has taken place. In these circumstances the lessee has a real right and a subsequent purchaser will take transfer of the land subject to the lease. However before application of the rule the lessee has a personal right only and performance is 122

to be done by the lessor and not the land itself. d.

Sale in Conflict with an option, preemption or duty not to sell without prior consent will be declared null and void and entitle the holder of the prior personal right to claim transfer or delivery of the thing.

e.

Sale in conflict with a right of security the new owner is bound to perfect real security rights to which the predecessor was bound if he had prior knowledge of it.

•

Foundation

and

Requirements

of

the

Doctrine of Notice – oExistence of prior personal right against holder of a real right

123

oInfringement of a personal right by subsequent acquirer of land oKnowledge of existence of prior personal right by acquirer of real right

124

7. Ownership: General Principles Concept of Ownership Ownership is a real right embracing the power to use (ius utendi), to enjoy the fruits (ius fruendi), consume the fruits (ius abutendi), to possess (ius possidendi), to dispose of (ius dispondendi), to reclaim the thing from anyone who wrongfully withholds it (ius negandi). Ownership is an absolute exclusive and an absolute right. •

Absolute in the sense that an owner can do whatever he pleases with the object of his ownership. However the absolute entitlement exists within the boundaries of the law, restrictions can come either from objective 125

law or restrictions placed upon it by the rights of others. Therefore no owner never has the unlimited right to exercise the entitlements in absolute freedom and in his own discretion (Gien v Gien) The content of ownership is determined within the context of each individual case and 2 aspects must be looked at – entitlements and limitations. 1. Entitlements of the owner: a.

Control allows the owner to physically

control and keep a thing b.

Entitlement to use is the right to use

and benefit from a thing c.

The entitlement to encumber is the

right to grant limited real rights in respect of the thing 126

d.

Entitlement to alienate is the right to

transfer the thing to someone else e.

Entitlement to vindicate is the unique

right of the owner to claim a thing from another person. These entitlements can be limited by statutory measures, limited real rights of other persons or personal rights of other persons against the owner: • Limited real rights limit the owner’s dominium in terms of subtraction and are enforceable against the owner’s successors in title. • Personal rights do dot limit the dominium of the owner and are not enforceable against successors. Ownership does not consist of a bundle of entitlements which can be separated. It is an 127

abstract concept and always implies a subjectobject and a subject-subject relationship. Therefore the content of ownership varies because the entitlements of the owner vary from time to time regarding the same relationship. Entitlements are not the essence of ownership but they determine the extent of the legal relationship between the owner and the thing at a certain time. 2. Limitations imposed on ownership: Ownership must be exercised subject to the requirements of objective law and the rights of 3rd parties. Therefore entitlements must be exercised in accordance with the social function of the law in the interest of the community. This means that ownership may be infringed in the interest of the community 128

but must always be reasonable and equitable. These limitations may be divided into 4 categories: a.

Public Law Limitations

– (statutory

limitations) imposed on all owners of a particular kind of property for the benefit of society of a whole or in the interest of certain sections of society. Ownership may be limited by the state. E.g. mining and water laws and marketing regulations. i. Constitutional limitations allow for deprivation or expropriation (s25) ii.

PE Municipality case – statutory restrictions such as PIE where the interests of landowners have to be weighed up against the interest of the squatters during eviction applications. In this case an eviction order the 129

granted in favour of the landowner, but the order was suspended due to the squatters’ right to housing. iii.

Limited Real Rights of 3rd Parties – these limitations limit the owner’s ownership (dominium) since it is a real burden on the thing (subtraction). It is enforceable against the owner and his

successors

in

title.

These

limitations are created in the case of immovable property by registration in the deeds registry and movables by delivery. E.g. real servitudes such as a right of way or personal servitudes. b.

Private Law Restrictions – ownership is limited

in

the

interest

of

private

individuals. These are found in the sphere of neighbour law which is aimed at 130

achieving harmony between neighbouring landowners. This rule can also fall under delictual liability if damage is negligently caused. In terms of the rules of necessity the window of a neighbour may be broken in order to summons the fire brigade or extinguish the fire. Neighbour Law Neighbour law allows for ownership to be limited not in the interests of the community, but in the interests of neighbours. The Purpose This is to create harmony between neighbours by weighing the rights and obligation in the exercise of entitlements against each other in

131

order

to

balance

conflicting

ownership

interests. Nuisance The basis of neighbour law is that land must be used in such a way that another person is not prejudiced or burdened. E.g. smoke smells, noise, unpleasant displays. Nuisance can be described by 2 instances, a narrow sense or a broad sense. 1. Narrow Sense This is an infringement on the neighbour’s use and enjoyment of his land which constitutes an infringement of a personality right (e.g. his health) or an entitlement of use (e.g. the right to the undisturbed enjoyment of his property). These infringements can be prevented by an 132

interdict. Reasonableness is used as a point of departure: a. The nuisance must be repetitive or continuous because a single action of short duration must be tolerated, except if there is a reasonable expectation that the activity will be repeated. b.Only annoying actions are unreasonable if the community is of that opinion. c.

The action or activity must be a nuisance according to a normal person.

d.The location of the properties and whether they are residential, business or industrial areas

are

important

in

determining

reasonable actions.

133

Case Law •

Dorland v Smit: this case illustrates nuisance of unpleasant display. Two neighbours’ property was divided by a common property wall one owner put up an electric fence with signs. The other owner objected as the fencing causing potential danger to his gardener, visitors and grandchild. The court looked at if the activity of the offending owner exceeds that which the complainer could reasonably be expected to tolerate. The court held that the offender was exercising his rights of ownership.

•

Rademeyer v Western Districts Council: the applicant was not successful with an interdict to prohibit noise, water and air pollution by 134

squatters because he was not able to prove that the nuisance would be permanent. The court also considered ESTA.

•

Gien v Gien: the respondent erected an apparatus producing loud explosives to scare away baboons from his vegetable garden. The machine worked day and night and disturbed the neighbours. The respondent could muffle the machine or switch it off at night without impairing its effectivity. It was decided that there were requirements for interdict oThe applicant must prove a clear right oThe respondent must intrude upon that right oNo

other

remedy

must

provide

satisfactory protection of the right 135

The court also assessed the following questions: oWere the acts of the respondents reasonable and fair? oDid the respondent act in bad faith or with expressed single intention to cause discomfort for the plaintiff? oWas the respondent’s use of his property normal? oWere the respondents actions harmful to the other party because he is an abnormally

sensitive

individual

or

would they have had the same reaction upon the normal and not unduly sensitive person?

136

2. Broad Sense This is an infringement of the neighbour’s exercise of entitlements in general, or actions by the neighbouring owner that caused damage. Compensation can be claimed or the infringement can be prohibited with an interdict. •

Damages are claimed with the Actio Legis Aquiliae

Nuisance in the wide (broad) sense which causes damage to the neighbour constitutes a delict. Delict has 5 elements: o An act or omission; o Which violates the law (unlawfulness); o Committed in a culpable way (intent or negligence); o Which action caused (causality); 137

o Damage or injury to the injured party. Case Law •

Regal v African Superslate: the predecessor of the respondent allowed slate waste to accumulate in a place from where it was being washed onto the appellant’s land. The omission to prevent this spillage was unlawful but because it was expensive and unpractical

(therefore

unreasonable)

to

expect prevention, the appellant’s application was denied. It was decided: o The EL regarding nuisance does not form

part

of

SA

CL,

and

reasonableness must be made on the basis of RD principles. o

Reasonableness is the determining criterion in the weighing of interests 138

of neighbouring owners and occupiers. I.e. the exercise of entitlements must be within reasonable limits and the neighbour must tolerate this within reasonable limits. o

Where the unlawful actions of the neighbouring owner caused damage to his owner, liability is determined with reference to Actio Legis Aquiliae

Lateral and Surface Support A land owner is entitled to the support supplied by the land of the neighbour for land. Therefore there is an obligation on neighbours 139

to use their own land in the way that the lateral and surface support is not undermined by excavations for building or mining. • RL: Roman jurists asked if the offending owner acted unlawfully – fault was not a requirement. Other determining factors were: oThe magnitude and immediacy of the damage oThe question whether the offending use was normal? oThe motive of the offender oThe real advantage of the offender oThe prejudice suffered by the injured party • RDL: the courts found that the very sections used in RL were no longer known by their names but their underlying principles were accepted into RDL. E.g. property should not be used to injure other people 140

• EL: the court stated that the duty of lateral support was inspired by EL. • SAL: the following principles are applied: o

It is only necessary to prove that the neighbour has disturbed the lateral and surface support, and not culpability – Demont v Akal Investments. The plaintiff alleged as a result of the defendant’s excavation, he removed earth from the vicinity of the plaintiff’s house and negatively deprived the plaintiff of lateral support. Consequently the plaintiff’s house subsided, walls cracked and the building was condemned by the local municipality.

o

The plaintiff need not prove wrongfulness, but must prove that the damage has been caused by the removal of lateral support – Gijzen v Verrinder 141

oLiability of the actor is not based on delict but on the interference of the right by the owner. o

The duty of lateral support applies only to land in its natural state and not in respect of buildings and additions. If excavations on neighbouring land caused damage to buildings, the owner of the land on which the building is situated has no claim.

Encroachments These can be from buildings or from the branches or roots from plants planted on the neighbouring land. SAL recognises the rule that the land owners entitlements extend into the air above and the earth below the land.

142

Interference of these entitlements can result in remedies. •

Buildings: CL allows the land owner to build on his land but may not exceed the vertical boundaries of his boundaries. The foundations of the buildings or additions may not exceed the boundaries below the ground nor in the air. The following are remedies for such encroachments: oRemoval of the encroachment – the owner may demand the encroachments to be removed although he doesn’t have to do it himself. Reasonableness and fairness are determined by the lapse of time since the owner became aware of the encroachment; the

nature

and

degree

of

the

encroachment; and the cost of removing

143

the encroachment in relation to damages suffered by the owner. oCompensation – this can be awarded to the land owner if he did not exercise his right to removal or if it would be unreasonable to demand removal. and

oTransfer

compensation

–

the

defendant can be ordered to take transfer of the part of the land on which the encroachment

took

place

for

compensation. The compensation thus includes the cost of transfer, the value of the

part

without

the

encroaching

improvement and payment of damages because the encroaching action took away part of the land owners land. oTermination and compensation – the land owner

can

terminate

the

defendants 144

occupation of the encroaching building but must compensate the defendant for the value of improvements made on his land. This only applies if the encroachment constitutes an independent building and is not a slight encroachment forming part of the building on the neighbouring land. •

Branches, Leaves and Roots: where the branches and leaves of plants encroach on the air above the landowners land or if the roots encroach on the land under the surface, the following remedies are used: oThe landowner can request the owner of the neighbouring land to cut off or remove the encroaching branches. If this is not done

within

a

reasonable

time

the

landowner can ask for an order to remove the encroachments himself. 145

oIf the plants are planted on the neighbours land these will become the property of the neighbour, who can then remove or keep them oIf the roots of trees planted on the neighbours land encroach on the land of a land owner, he can remove the roots himself.

146

147

Co-Ownership Definition Two or more persons cannot simultaneously exercise

different

kinds

of

ownership

regarding the same object, but may be coowners of a thing at the same time. Co-owners cannot divide the thing physically whilst the co-ownership still exists, and a co-owner cannot alienate the thing without the consent of the other co-owner. However a co-owner can alienate his undivided co-ownership share. The entitlements are exercised jointly in accordance with the undivided shares. No one co-owner has the right to change the character of the property e.g. an agricultural farm cannot 148

be changed into a grazing field by a single coowner. Co-ownership is established in the following ways: • Inheritance: when a testator leaves an indivisible thing to more than two people provided that it may not be divided, it is owned by the heirs in co-ownership •

Conclusion of a marriage in community of property: this implies that the parties are coowners of all things in the common estate in equal, undivided shares

• Mixing: this is when different things of different owners are mixed, the mixed thing mixes in such a way that a new thing is created. The previous owners of the mixed things become co-owners in relation to their contribution.

149

• Estate holdership: the spouse of the deceased continues the community of property with their heirs of the deceased spouse • Voluntary

association

without

legal

personality: the members of an association are co-owners of the assets of the association in undivided shares. Such a co-owner may not alienate his undivided share. • Contract: this is a means by which two or more people can jointly buy a thing and have the ownership transferred in undivided shares through delivery or registration Kinds of Co-Ownership There are 3 kinds of ownership, these are: free co-ownership,

bound

co-ownership

and

common co-ownership

150

•

Free Co-ownership: this means that the only legal relationship which exists between the parties is the co-ownership of the thing. oA co-owner can independently alienate his undivided co-ownership share. oThe co-ownership can be terminated unilaterally

because

no

other

legal

relationship exists. oThe joint exercise of entitlements is not determined by an underlying relationship between the co-owners (it can be arranged by contract). oThis undivided share is not necessarily equal, the portion is determined by the instrument creating the co-ownership.

151

• Bound Co-ownership: this results from an underlying

legal

relationship

between

common owners which forms the basis of their common ownership and implies that the owners

cannot

terminate

the

common

ownership while the legal relationship still exists (e.g. marriage or partnership and voluntary

association).

Bound

common

ownership has the following implications: oA common owner can usually not alienate his share of a common ownership as long as the underlying legal relationship still exists. oThe joint exercise of entitlements is determined

by

the

underlying

legal

relationship (e.g. a marriage in community of property follows the law of matrimonial

152

property to determine the way in which the spouses may exercise their entitlements) oThe common ownership can not be terminated unilaterally by a common owner

while

the

underlying

legal

relationship still exists.

•

Common Co-ownership: this exists between two pieces of property. The rules regulating the rights of neighbours with regard to boundary walls are based on 2 concepts: oEither neighbours are the co-owners of the boundary walls or; oThey own the boundary wall up to the middle

153

Rights and Obligations of Co-Owners • Alienation and Burden: co-owners must be given permission before something can be alienated or burdened with real rights •

Use: co-owners must jointly decide how the thing is to be used on the basis of a use agreement. Every co-owner is entitled to use the thing reasonably and in accordance with the portion of his share, this means that the thing may not be used to the detriment of the other co-owners. Erasmus v Afrikander Proprietary Mines: if there is a dispute about the conduct of a co-owner, the court has to consider whether the conduct constitutes an unreasonable user, inconsistent with the user to which the property was destined and to the 154

detriment of the rights of the other coowners. • Profit, income and fruit: co-owners are entitled to an equal share of the fruit, income or profits proportionate to their share. This applies even if the profit was initiated by one co-owner, except in the case where the coowners agreed that every co-owner may appropriate the fruit of the use of the property proportionate to his share. • Maintenance and expenses: co-owners are obliged to contribute to the maintenance and expenses

regarding

the

property

proportionate to their shares. • Right of veto: the decisions of the majority of co-owners regarding the use of the property are not necessarily binding on the minority, as they can veto. Co-ownership can 155

be terminated or the reasonableness of the co-owners can be tested by the court through a prohibitive interdict. Remedies The control and use of the property are usually regulated by means of a mutual agreement between the co-owners but applications for division may be submitted when there is a dispute. • Division puts an end to the co-ownership: if the division is not practical then the property may be sold by a private auction and the proceeds shall be shared. • Interdict: a co-owner which exceeds his entitlements can, by means of an interdict, be prohibited by the other co-owners from continuing his use. 156

•

Subdivision: if the property is divisible any co-owner can at any time claim the subdivision of the property in accordance with every co-owners share, this is done by of the action communi dividundo.

157

158

Modes of Acquisition There is a distinction between original and derivative acquisition of ownership: •

Original does not depend on the lawful ownership of a legal predecessor, this means that the benefits and the obligation of the previous owner are not usually passed to the new owner. If there is no previous owner, acquisition of ownership takes place through appropriation (occupatio) of a thing that is not owned (res nullius) or a thing that has been abandoned (res derelictae). Derivative acquisition depends on the lawful ownership of a previous owner.

• Original acquisition does not require the cooperation of the previous owner but for derivative acquisition ownership can only

159

take place legally with the previous owners is not necessary. Modes of Original Acquisition Appropriation (occupatio) This is defined as the unilateral taking of possession of an unowned thing (corporeal movable or immovable) which is not in the ownership of any other person, with the intention to become the owner of the thing (animus domini). E.g. wild animals, things belonging to the enemy and things that have been abandoned by their owners. Lost items are not included because when lost they are to be reported to the police and when found, given back to the owner.

160

The Game Theft Act is one of the statutes that govern ownership of wild animals which are res nullius. E.g. if the game escapes from land that is sufficiently enclosed or from a pen, kraal or vehicle, the owner does not lose ownership of the game. Accession (accession) This literally means the increase or addition to a thing. Voet describes it as a method of acquiring ownership, by which a thing becomes another’s because it accedes to a more principle thing of that other. The test for an accessory thing is to determine which of the two (principle and accessory) things retains, and who loses, its identity. There are three methods:

161

1. Natural accession – this takes place by the process of natural fusion. a.

Alluvion: this is the gradual adding of

soil to a piece of land by water e.g. silt. b.

Avulsion: this is the extension of a

piece of land through the sudden addition of a piece of land through flooding or the flow of water. c.

The offspring of animals: ownership of a young offspring is vested in the owner of its mother who is prima facie entitled to the ius fruendi. In cases of a usufruct or a lease

the

terms

of

the

relationship

determine who the owner of the offspring will be.

162

2. Industrial accession – this takes place due to human effort a.

Planting and Sowing of Trees: if a

person has planted seeds on another’s land, their ownership is vested in the owner of the land as soon as they have taken root, although the planter may have a claim for compensation against the owner. A tree planted to a boundary of land can also be acquired in ownership by the owner of the adjoining land if its roots penetrate his land. b.

Buildings: this is the permanent

attachment or annexation of buildings, pumps, walls or other structures which become the property of the owner of the land. There are 3 factors which must be considered: 163

i. The nature of the thing ii. The manner or its annexation iii. The intention of the owner of the movable at the time of its annexation In the McDonald case it was decided that an owner cannot be deprived of his property without consent except in very limited circumstances. This case gave rise to 3 approaches: traditional, new and omnibus.

Traditional Approach This is where the subjective intention of the owner becomes important only if the first 2 criteria (nature and function) are not decisive. 164

If this is so, one is now to look to the new approach. But if the first 2 criteria are decisive, there is no need to look to the new approach.

The New Approach The intention of which the attachment is made (3rd factor) is the most important – the first 2 factors

(nature

and

function)

are

only

indicative to the intention.

Omnibus Approach This considers the purpose and causal link of the attachment. This takes into consideration all 3 factors.

165

c.

Other forms of Industrial Accession:

these are inweaving, writing, painting and welding where the owner of the end product needs to be determined i. Inweaving: the owner of the cloth becomes the owner of the thread ii. Writing: the writer becomes the owner but must compensate the owner of the paper with the same quality and type of paper. iii. Painting: ownership depends on the quality of the painting or the value of the material on which it has been painted. iv. Welding: thee attachment must not amount to specification; a principle thing and an accessory thing must be 166

distinguishable and the attachment must not be easily separable.

3. Mixed Accession – this is where there is a mixture of natural and industrial accession e.g. the acquisition of fruits. Fruits belong to the owner of the fruit bearer or to the person who gathered them. Before separation, fruits do not have ownership problems, after separation they can be owned by usufruct or a lease.

4.

Specification – this is where someone used someone

else’s

product

to

produce

something new e.g. grapes into wine. The following

are

the

requirements

for

specification: 167

a.

The new product must be created.

b.

The end product cannot be returned

into original product. c.

The CL provides that the manufacturer

that creates the new product becomes the owner of the thing. There must be no agreement between the manufacturer of the new thing and the owner of the materials used. J Cohen Motors SWA v Alberts – the plaintiff bought a truck from the defendant and fitted 6 new tyres. The truck was being

paid

for

used

dishonourable

cheque’s, the defendant cancelled the contract and repossessed the vehicle with the new tyres. The defendant wanted his types back. The judge held that the 168

plaintiff

had

complied

with

the

requirements of specification.

5. Mingling and Mixing – a.

Mingling – refers to the mixing of

liquids. If separation can reasonably (in light of the value of the liquids and the costs of separation) be effected no change of ownership takes place unless there was consent. If no separation the result is coownership in proportion to the respective contributions. b.

Mixing – when solids are mixed in

such a way that identification of the original elements is impossible, the result is co-ownership if there was consent

169

6.

Prescription – acquisitive prescription is an original way of acquisition in

terms of

which a real right is acquired in respect of movable or immovable things by means of the open and undisturbed position thereof or the exercise of rights in respect thereof for an uninterrupted period of 30 years. It does not matter

if

the

position

is

bone

fide

(intentional) or mala fide (non intentional). The purpose is not only to punish the previous holder for not exercising the right but also to ensure legal certainty regarding the de facto position. Legal certainty is not only for the interest of the person in whose favour prescription runs but also in the interest of 3rd parties as well as preventing extended litigations regarding ownership.

170

Foundations of acquisitive prescription can be found in the Prescription Acts and CL. The CL governed situations not affected by the provisions of the Act therefore it is only used as a residual source. Act 68 of 1969 is applied to prescriptions started from 1 December 1970, whereas Act 18 of 1943 applies to prescription before 30 November 1970. Act 68 only has retrospect in terms of s5 Elements of Possession – s1 of Act 68 •

Possession: this relates to the physical (corpus) control of the thing. It shows relation between the thing and the owner (detention) coupled with the intention to become the owner of the thing (animus domini) which is referred to a civil

171

possession. There is no possession without corpus. •

Possession must be open: this relates to the fact that possession must be blatant for everyone to see. This is referred to nec clam

•

Possession must not be obtained by force: if a person needs to keep physical control of a thing with force (nec vi), prescription will not run in his favour

•

Possession must be without the consent of the previous owner: this is nec precario.

People such as insolvents who are already owners cannot gain from the Act. Interruption of Prescription 172

Interruption can take 2 forms: namely naturally or by civil means • S2 states that in the case of natural interruption if the possessor voluntarily abandons his position, the prescription is interrupted and terminated. Prescription will not be interrupted by involuntary loss of possession if possession is regained within 6 months. • S4 states that in the case of civil interruption if the prescription has been temporarily interrupted by the serving of a process, but it is not finally interrupted by a final judgment the prescription continues

Suspension of Prescription

173

In terms of s3 the prescription is postponed in certain circumstances and resumes when these circumstances come to an end. Examples regarding suspension •

Minority: if the owner of a farm is a minor e.g. 3yrs, a major takes possession of the farm with the animus domini. When the minor attain majority (18yrs later) his minority has no affect on the completion of period of prescription.

• The person in favour of whom the prescription is running is outside SA or is married to the person who the prescription is running against, prescription will be postponed.

Consequences of Prescription 174

After the completion of the period of the prescription, the possessor becomes the owner of the thing. In the case of movables, ownership passed (and was not transferred by delivery); in the case of immovable’s ownership passed without registration. The new owner can in terms of s33 of the DRA apply to have the property registered in his name. Derivative Modes of Acquisition For derivative transfer of ownership the cooperation of the transferor (the current owner) is required. Ownership passes and is acquired by a bilateral legal act between the current owner and the prospective owner, which is fulfilled by either delivery of the thing or registration of the transfer. The result

175

is that the owner accepts all rights and obligations that exist in respect of ownership.

The requirements for transfer of ownership according to the derivative method are: •

The

thing

must

be

negotiable

(res

incommercio),where real rights can be acquired and transferred. •

The transferor and the transferee must have contractual capacity

•

The transferor must be the owner of the thing and no person can transfer more rights than he himself has (nemo plus iuris) and therefore the owner is the only person who can transfer ownership

176

• Ownership

must

be

accepted

by

the

transferee, his nominee, or agent • Transfer of ownership for movables takes place only if the thing is delivered to the transferee in a legally accepted way. For immovable’s,

transfer

takes

place

by

registration in the deeds registry. • Delivery and registration must take place with the intention of the owner to transfer ownership and the intention of the transferee to accept it. •

There must be a legal cause (causa) for the transfer

• If transfer is on the basis of contract of sale ownership is only transferred to the buyer if the full price has been paid unless credit has been granted 177

1. Delivery Delivery (traditio) is the transfer of the physical control of the movable to the transferee so that he can exercise control with the intention to be the owner (animus domini). There are 2 types of delivery: actual (traditio vera) and onstructive (traditio ficta). • Actual delivery indicates that the movable is actually handed over to the transferee • Constructive delivery takes place where the act of transfer is not as explicit as an actual delivery. This can take place if the transferee was in physical control of the thing but did not previously have the intention to be the owner. As soon as the intention of the parties 178

change and the transferee controls the thing with

the intention

to be the

owner,

constructive delivery has taken place.

Categories of Constructive Delivery •

Clavium traditio – this is where due to its nature or size, a thing cannot actually be handed over the transferee, but an instrument by means of which the transferee is able to exercise physical control is handed to him. E.g. delivering the keys to a car, the delivery of the registration certificate of the car.

•

Delivery with the long hand (traditio longa manu) – this is where due to its nature, size and weight; a thing cannot be delivered physically but is instead pointed out. E.g. a

179

heap of bricks or a heard of cattle. There are certain requirements: oThe intention of the parties to effect delivery must be clear oThe thing must be pointed out by the transferor to the transferee in the presence of the thing oThe transferee must be able to exercise physical control. oThe thing must be identified clearly.

•

Delivery with a short hand (traditio brevi manu) – the transferee must already have physical control but without the necessary intention to be the owner, therefore delivery takes place when the intentions of the parties 180

change. No physical delivery is required. E.g. lessee deciding to buy leased property. •

Constitutum Possessorium – this is where ownership is transferred without the thing actually being delivered. The thing remains in the physical control of the previous owner who exercises control for or on behalf of the new owner. E.g. clothes bought and paid for are left with the seller for alterations. Requirements: oThe transferor must be in control of the thing as owner; oThe previous owners intention to be owner is terminated by change of intention; oParties relying on this delivery have to prove the intention of transfer in spite of

181

the fact that the transferor controls the thing; o

The reason (causa) why control is under the transferor after transfer of ownership must be explicitly identified. This prevents fraud.

•

Attornment – this takes place if ownership of a movable is transferred from one party to another, but at the time of transfer the thing is in the physical control of a 3rd party. Ownership is transferred to the transferee if the 3rd party agree to exercise physical control on behalf of the transferee and no longer on behalf of the transferor. The requirements of attornment are as follows: oThe parties to the transfer, A, B and C, must be in agreement that the physical 182

control would in future be exercised on behalf of B in terms of his intention to be owner. o

The person in physical control must have been in control at the time when the transfer took place – Caledon case.

2. Registration The Publicity Principle – the application of the publicity principle registration is required for the creation, transfer and termination of all real rights in immovable property. In CL the custom was to draft written transfer documents and formally hand these to the holder of the right, this documents registered as proof of transfer. 183

The History of Registration of Land The Registrar of Deeds was originally responsible for the preparation of transport of deeds. This responsibility was authorised to advocates and later to qualified conveyances. The SA system of land registration is a gradual

development

from

colonization

which is a contrast with The Torrens System which was properly planned and developed from its onset.

The Structure of the SA System of Land Registration S 16 of the DRA provides that ownership may be conveyed from one person to another only by means of a deed of transfer executed 184

by the Registrar unless otherwise set out in other legislation. Further more other real rights in land may be conveyed from one person to another only by means of a deed of cession attested by a notary public and registered by the Registrar. The cadastral system forms the basis of the broader scheme of registration.

The Cadastral System Efficient land title registration is impossible unless land is divided into units which are properly surveyed and represented on a diagram or a general plan. An approved diagram establishes the description of a specific land unit; the extent and boundaries; and the description, position on or in relation 185

to the unit of any servitude feature already registered or to be registered. The Land Survey Act regulates the survey of land units and the preparation of diagrams and plans by registered land surveyors. •

Every registerable land unit must have its own diagram except if the SurveyorGeneral has approved a specific plan for a specific area. A diagram approved by the SG must be attached to every deed of grant except one in respect of land which has been alienated and reacquired by the state.

• Every diagram deed has a reference which correlates to the deed of transfer or certificate

of

transfer

thus

ensuring

identity of the land. 186

The Deeds Registries Act The aim of the Act is to regulate administrative matter of registration in an orderly, clear and practical fashion to provide the best protection and security through publicity of their land use and control. This Act represents a unification and codification of land transfer principles.

Process of Registration The

whole

process

of

lodgement,

preparation and registration of the deeds of transfer and notification of the parties involved should take 14 days. Regulation 45 (3) to the DRA allows for registration of

187

deeds within 5-6 working days after lodging, if no objection exists.

Lodgement of documents at the deeds registry by all the conveyance’s involved in a

specific

transfer

take

place

simultaneously. The deeds are sent to the deeds examiners-in-chief who determine whether the relevant deeds are accepted or rejected and returned to the conveyancers for revision. A deed is executed by a conveyancer in the presence of the Registrar who attests it.

Roll Players: •

Registrar of Deeds – a Registrar of Deeds heads each deeds registry office in SA and 188

his chief ensures uniformity in practice and procedure throughout SA. The duties and

functions

of

the

Registrar

are

contained in s3 of the DRA: oMake endorsements in connection with the registration of any deed to give affect to registration. oKeep registers containing information necessary for an efficiently secure system of registration and ready for reference to any registered deed. • Conveyancer – this is an attorney admitted by the HC into the profession. He appears before the Registrar on behalf of an owner. Only conveyancers are allowed to prepare and sign certain deeds and documents relevant for registration and lodgement. 189

Protection of Ownership

190

There

are

remedies

available

for

the

infringement of entitlements; 1. Real Remedies – these restore physical control or remove any infringement. o

Rei vindicatio: this is the action where an owner can recover an existing and identifiable thing from any person who is exercising unlawful control. It does not matter if the person acquired control in good faith or paid for it and the owner need not compensate them. Damages can only be claimed from a bone fide controller in exceptional circumstances of fraudulent alienation or consumption of the thing. Requirements:  The owner must prove ownership of the thing 191

 Only an existing and identifiable thing can be reclaimed  The property must be in the control of the defendant. Defences that can be used against rei vindicatio:  The defendant can prove that the claimant is not the owner of the thing  If the thing has been destroyed or is unidentifiable 

If the defendant was not in physical control of the thing when rei vindicatio was instituted.

 The defendant can show that he has a limited real right or a personal right.

192

This right must be enforceable against the owner  The defendant with a lien over the thing remains in physical control until the obligation which gave rise to the lien has been fulfilled by the owner. 

An occupier in terms of the Land Reform or the Labour Tenants Act, ESTA, or PIE may raise this as a defence until such an occupiers claim has been dismissed by a court.

Limitations on rei vindicatio – in the case of CL in circumstances where the occupiers right is not based on statutory occupation of property (PIE, ESTA), the court

does

not

take

the

personal 193

circumstances of the occupier or the availability of alternative housing into consideration when granting eviction orders – s26 (3) of the Constitution. 

Estoppel: is a defence that can be raised against rei vindicatio if the owner acted in a specific way. The requirements are if the owner of a thing:  Culpably

(intentionally

or

impression

that

negligently)  Created ownership

the was

transferred

to

controller  And the controller thus exercises control with the owners intent  To his detriment

194



The controller can raise estoppel against the rei vindicatio



Stolen Money: if stolen money has become unidentifiable as a result of mixing, the owner cannot institute the rei vindicatio since the thing has been lost. If it has not been mixed, the rei vindicatio cannot be instituted if it was acquired in good faith.

o

Actio Negatoria: this is a real action aimed at protecting the exercise of an owners entitlements arising from his ownership. The requirements are:  Can only be instituted by an owner of a thing

195

 Can be instituted as a result of an infringement or a holder of a servitude exceeds his entitlements  Can be instituted in respect of movables and immovable’s  Can result in a declaratory order or damages.

o

Interdict: this is a summary court order where a person is either ordered to do something, stop doing something or refrain from doing something, so a to stop or prevent an infringement of property rights. The requirements are:  Proof of a clear right with regard to property

196



Proof that the respondent infringed upon the right unlawfully in an ongoing and continuing way or there is reasonable expectation thereof

 Reasons why there is no other effective remedy. o

Declaratory Order: this is a court order issued upon application, in which the court sets out the rights and duties of parties to a dispute before the actual infringement takes place. The requirements are: 

Proof of an actual, existing or future right / duty regarding property

 Proof of an existing or real dispute about those rights / duties  Convincing reasons for the order

197

2. Delictual Remedies – these do not aim to restore physical control they are aimed at a person in order to claim compensation for damage or injury, the owner experienced in respect of this property. o

Actio Ad Exhibendum: this is instituted by the owner against the controller of a thing which has fraudulently lost physical control, in which case the value of the thing can be claimed. The requirements are:  The thing must have been destroyed or alienated on purpose  It could have been consumed or destroyed or alienated in any other way

198



The controller must have been mala fide at the time of destruction

 This remedy is only available to the owner of the destroyed property

o

Condictio Furtiva: this is instituted by the owner against a thief or a thief’s heirs and is an action in which the thing or the highest value of the thing can be claimed. If the thing is still in the control of the thief or his heirs it should be claimed with the rei vindicatio and the actio ad exhibendum would be used if the thing was

destroyed

on

purpose.

The

requirements are:  The owner or anyone with a lawful interest in the thing can institute this 199

remedy if he retained ownership or interest in the thing from the date the theft until the date of the action  If the thing is destroyed and the owners ownership is terminated thereby, the previous owner retains the remedy  The claimant must prove that the defendant removed the thing with fraudulent purposes. o

Actio Legis Aquiliae: this is used to claim damages for patrimonial loss is a thing has been damaged or destroyed in a culpable way.

The

normal

requirements

for

delictual liability must b met.  An act or omission pertaining to a thing  Which in an unlawful way and

200

 Performed with a culpable disposition resulted in  Damage or injury to the owner

3.

Enrichment Actions – the owner of a thing can claim from the controller the amount with which the controller’s estate has been enriched

due

to

the

consumption

or

alienation of a thing. If a bone fide controller alienated the thing for value or derived benefit from its consumption, the question arises whether the owner can enforce an enrichment action against the controller for the purchase price or the benefit derived from the consumption of the thing. The enrichment claim that can be possibly be

201

used is the condictio sine causa. The requirements are:  The controller must have been enriched  The

owner

must

have

been

impoverished  The enrichment must have been at the expense of the owner 

The shift of value must have been without legal cause (sine causa)

 The owner must have transferred the control of the goods to the controller who must have alienated them bone fide  The balance of the purchase price that the controllers sold the thing for can be claimed.

202

203