Business Aviation Corporation (Pty) Ltd and Another v Rand Airport Holdings (Pty) Ltd

• Jurisdiction: South Africa
• Citation: 2006 (6) SA 605 (SCA)

Business Aviation Corporation (Pty) Ltd and Another v Rand Airport Holdings (Pty) Ltd
2006 (6) SA 605 (SCA)

2006 (6) SA p605

Citation	2006 (6) SA 605 (SCA)
Case No	179/05
Court	Supreme Court of Appeal
Judge	Howie P, Farlam JA, Brand JA, Cloete JA and Lewis JA
Heard	May 4, 2006
Judgment	May 30, 2006
Counsel	K Bailey for the appellants.; E L Theron for the respondent.

Flynote : Sleutelwoorde G

H Landlord and tenant — Ejectment — Lessee of urban immovable property having lien or right of retention over property for improvements to property effected during currency of lease for which not compensated. I

Landlord and tenant — Lease — Termination — Improvements — Lessee's right of retention — Provisions of Placaeten of 1658 and 1659 that lessee has no right of retention not applicable to urban property — Urban lessee having lien or right of retention for improvements for which he was not compensated. J

2006 (6) SA p606

Headnote : Kopnota

In an action by the respondent for the eviction of the appellants from an urban property owned by it, the appellants raised A the defence, inter alia, that they were entitled to retain the property under an enrichment lien as they had expended money on necessary and useful improvements, for which they had not been compensated, to the property. The respondent met the appellants' defence with the contention that the lien purportedly relied upon by the appellants had been abolished by two Placaeten, specifically B article 10, promulgated by the Estates of Holland in the 17th Century. The appellants' defence was dismissed in the magistrates' court and an order of eviction granted. The magistrate's order was upheld on appeal to the High Court. On appeal to the Supreme Court of Appeal on the question of whether the enrichment lien claimed by the appellants formed part of the South African law, the Court held that while the provisions of article 10 had become part of South African law, they had C never applied to urban leases, and that article 10 therefore did not provide an answer to the appellants' reliance on an enrichment lien. The appeal was upheld and the matter referred back to the magistrate's court for continuation of the trial on the outstanding issues. (Paragraphs [11], [37] and [46] at 610F, 618C - D and 620G.) D

The decision in Business Aviation Corporation (Pty) Ltd v Rand Airport Holdings (Pty) Ltd 2006 (2) SA 95 (W) reversed.

Cases Considered

Annotations

Reported cases

Brooklyn House Furnishers (Pty) Ltd v Knoetze and Sons 1970 (3) SA 264 (A): referred to E

Burrows v McEvoy 1921 CPD 229: referred to

Business Aviation Corporation (Pty) Ltd v Rand Airport Holdings (Pty) Ltd 2006 (2) SA 95 (W): reversed on appeal

Cullinan v Noordkaaplandse Aartappelkernmoerkwekers Koöperasie Bpk 1972 (1) SA 761 (A): referred to F

De Beer's Consolidated Mines v London & SA Exploration Co (1893) 10 SC 359: criticised and not followed

De Vries v Alexander (1880) Foord Rep 43: referred to

Du Plessis NO v Strauss 1988 (2) SA 105 (A): referred to

Fletcher & Fletcher v Bulawayo Waterworks Co Ltd 1915 AD 636: referred to

Glazer v Glazer NO 1963 (4) SA 694 (A): referred to G

Goudini Chrome (Pty) Ltd v MCC Contracts (Pty) Ltd 1993 (1) SA 77 (A): referred to

Holmes' Executor v Rawbone 1954 (3) SA 703 (A): referred to

Horowitz v Brock 1988 (2) SA 160 (A): referred to

Lechoana v Cloete 1925 AD 536: referred to

Lessing v Steyn 1953 (4) SA 193 (O): referred to H

Leyds NO v Noord-Westelike Koöperatiewe Landboumaatskappy Bpk 1985 (2) SA 769 (A): referred to

London & South African Exploration Co Ltd v De Beer's Consolidated Mines Ltd (1895) 12 SC 107 (1895 PC 348; 1895 AC 451): referred to

Nortje en 'n Ander v Pool NO 1966 (3) SA 96 (A): referred to

Palabora Mining Co Ltd v Coetzer 1993 (3) SA 306 (T): not followed I

Rubin v Botha 1911 AD 568: referred to

Spies v Lombard 1950 (3) SA 469 (A): dictum at 483H applied

Syfrets Participation Bond Managers Ltd v Estate and Co-op Wine Distributors (Pty) Ltd 1989 (1) SA 106 (W): criticised and not followed

United Building Society v Smookler's Trustees and Golombick's Trustee 1906 TS 623: referred to J

2006 (6) SA p607

Van Wezel v Van Wezel's Trustee 1924 AD 409: not followed A

Webster v Ellison 1911 AD 73: dictum at 92 applied

Weilbach en 'n Ander v Grobler 1982 (2) SA 15 (O): referred to.

Case Information

Appeal from a decision in the Witwatersrand Local Division (Goldstein J and Khampepe J). The facts appear from the judgment of Brand JA. B

K Bailey for the appellants.

E L Theron for the respondent.

In addition to the authorities cited in the judgment of the Court, counsel for the parties referred to the following:

Barnard v Colonial Government (1887) 5 SC 122 C

Buzzard Electrical (Pty) Ltd v 158 Jan Smuts Avenue Investments (Pty) Ltd en 'n Ander 1996 (4) SA 19 (SCA)

Habib Motan v Transvaal Government 1904 TS 404 at 421

John Bell & Co Ltd v Esselen 1954 (1) SA 147 (A)

Magna Alloys and Research (SA) (Pty) Ltd v Ellis 1984 (4) SA 874 (A) D

McCarthy Retail Ltd v Shortdistance Carriers CC 2001 (3) SA 482 (SCA)

Weilbach en 'n Ander v Grobler 1980 (3) SA 998 (O).

Cur adv vult. E

Postea (May 30).

Judgment

Brand JA:

[1] This appeal has its origin in the magistrates' court for the district of Germiston. The respondent (plaintiff) is the owner of the Rand Airport near Johannesburg. The appellants (defendants) F occupied parts of that property (the property) in terms of an oral lease agreement. Proceedings commenced when the plaintiff sought an eviction order against the defendants on the basis that the lease was a monthly tenancy, terminable on one month's notice, and that the defendants had failed to vacate the property despite proper notice having been duly given to them on its behalf. G

[2] The defendants raised two defences in the alternative. First, that the lease was not a monthly tenancy, but a long-term lease that entitled them to occupy the property for at least another five years. Alternatively that they had expended an amount of several million rand on necessary and useful improvements to the property for H which they had not been compensated and that they were consequently entitled to retain the property under an enrichment lien.

[3] The outcome of the main defence depended on issues of credibility, which the magistrate decided in favour of the plaintiff. I The alternative defence was also dismissed by the magistrate, essentially on the acceptance of the plaintiff's contention that the lien relied upon by the defendants had been abolished by two Placaeten that were promulgated by the Estates of Holland during the 17th Century. In the result, the magistrate granted an eviction order against the defendants. J

2006 (6) SA p608

Brand JA

[4] The appeal against the magistrate's order was dismissed by the Johannesburg High Court (Goldstein J, Khampepe J concurring). Its A judgment has since been reported sub nom Business Aviation Corporation (Pty) Ltd v Rand Airport Holdings (Pty) Ltd 2006 (2) SA 95 (W). As appears from the reported judgment, Goldstein J first examined the magistrate's credibility findings underlying the rejection of the defendants' main defence of a long-term lease (in paras [4] - [10]). On this issue he decided (in para [10]) that the defendants' criticism of these credibility findings could not B be sustained. He then proceeded to consider the alternative defence, based on a right of retention arising from an improvement lien (in paras [11] - [15]), and concluded that the magistrate's dismissal of this defence should also be upheld. C

[5] Though the defendants sought leave to pursue a further appeal to this Court against the rejection of both their defences, the Court a quo granted them leave to appeal only 'in respect of the existence in law, or not, of the lien for which [they] contend'. The magistrate's finding that the lease under which the D defendants were entitled to occupy the property had been duly terminated by one month's notice, therefore, stands.

[6] An appropriate starting point for a discussion of the questions raised by the appeal appears to be a statement of the generally accepted principle that in Roman-Dutch law, following Roman E law, lessees were originally in the same position as bona fide possessors as far as claims for improvements to leased properties were concerned. It follows that absent any governing provisions in the contract of lease, lessees, like bona fide possessors, had an enrichment claim for the recovery of expenses that were necessary for the protection or preservation of the property F (called impensae necessariae), as well as for expenses incurred in effecting useful improvements to the property (called impensae utiles). (See eg Nortje en 'n Ander v Pool NO 1966 (3) SA 96 (A) at 131.) More pertinent for present purposes, lessees, like bona fide possessors, who were still in possession of the leased property, also had an enrichment lien (a G ius retentionis) that allowed them to retain the property until their claims for compensation had been satisfied (see eg Digest 19.2.55.1; De Groot Inleydinge tot de Hollandsche Rechtsgeleerdheid 2.10.8; Van der Keessel Praelectiones Iuris Hodierni ad Grotium 2.10.8; Van der Keessel Theses Selectae Iuris Hollandici et Zelandici Th 213 (Lorentz's translation 2 ed (1901) at 73); De Beer's H Consolidated Mines v London and SA Exploration Company (1893) 10 SC 359 at 367; Lechoana v Cloete 1925 AD 536 at 549; Lessing v Steyn 1953 (4) SA 193 (O) at 199C - D; Syfrets Participation Bond Managers Ltd v Estate and Co-op Wine Distributors (Pty) Ltd 1989 (1) SA 106 (W) at 110F - H; Bodenstein Huur van Huizen en Landen volgens het Hedendaagsch I Romeinsch-Hollandsch Recht at 116; R W Lee An Introduction to Roman Dutch Law 5 ed at 304; Van...