Erlax Properties (Pty) Ltd v Registrar of Deeds and Others

• Jurisdiction: South Africa
• Judge: Joubert JA, E M Grosskopf JA, Friedman JA, Nienaber JA and Kriegler AJA
• Judgment Date: 29 November 1991
• Citation: 1992 (1) SA 879 (A)
• Hearing Date: 21 May 1991
• Court: Appellate Division

Joubert JA:

This is an appeal against a judgment of Goldblatt AJ in the Witwatersrand Local Division dismissing an application of the appellant for a declaratory order against the respondents. The judgment of the Court a quo is fully reported in Erlax Properties (Pty) Ltd v Registrar E of Deeds and Others 1990 (3) SA 262 (W). With leave of the Court a quo the appellant appeals to this Court.

The appellant ('Erlax') is the developer of a sectional title scheme, known as Chelsea Square (the 'scheme'), which was established on erf 1514 situated in Berea Township, Johannesburg, in accordance with the F provisions of the Sectional Titles Act 66 of 1971. The scheme was registered in the Deeds Registry, Johannesburg, on 10 September 1985. This was effected in terms of s 8(1)(a) by the registration of sectional plan No SS 171/1985 (the 'sectional plan') and the opening of a sectional title register relating to the land subject to the scheme. Simultaneously therewith the Registrar of Deeds closed certain entries G in the land register with reference to erf 1514 (s 8(2)(a)). In law erf 1514 ceased to exist. The Act provides for the creation of units, each consisting of a section, as defined, together with an undivided share in the common property. 'Common property' refers to the land on which the buildings are situated and such parts of the buildings are not included in a section. Thus it is stated in Joubert (ed) Law of South Africa vol H 24 sv 'Sectional Titles and Shareblocks' para 218:

'All lands included in a sectional title scheme, whether it is the soil under the building, the land for the yet undeveloped parts of the scheme or developed land, is considered to be common property.'

I Erlax, as developer, envisaged that the development of the scheme was to proceed in two phases. Technically such a development is referred to as a 'phased development' of a scheme. According to the first phase development the scheme would initially comprise eight units. Each unit was to consist of a duplex flat together with a carport (the 'section') and an undivided share in the common property apportioned in accordance with the participation quota of its section. See s 1 sv 'unit'. The J second phase

Joubert JA

A development was to be undertaken in the future by the development of an additional 14 units on the common property in accordance with the provisions of s 18(1). Section 18(1) reads as follows:

'Where a building, in respect of which a sectional plan has been registered under this Act, is to be extended in such a manner that an B existing section is to be added . . . the developer or, if the developer has ceased to have any share in the common property, the body corporate, with the consent in writing of all the owners of sections and of all holders of sectional mortgage bonds shall -

(a)

prepare a scheme in respect of the extension and, in terms of s 4, submit that scheme to the local authority for approval;

(b)

if the scheme in question is approved by the local authority, upon the extension being certified by an architect or a land-surveyor as C being sufficiently complete for occupation, apply to the Registrar for the registration of a plan in respect of the relevant extension.'

(My emphasis.) Section 18(1) prescribed the procedure to be followed by a developer in implementing his right of extension of an existing development scheme.

D On 10 September 1985 the Registrar of Deeds, acting under s 8(2)(d), simultaneously with the opening of the sectional title register, issued to Erlax, as developer, a certificate of registered sectional title in respect of each of the initial eight units comprised in the scheme. A duplicate of each sectional title deed was incorporated by the Registrar of Deeds in the sectional title register. See s 1 sv 'sectional title E register'. After the opening of the sectional title register Erlax in accordance with the provisions of s 8A(1) sold and transferred to purchasers all the units in the scheme, except for unit No 7 of which it has remained the registered owner. Transfer of the sold units to the purchasers was effected by means of endorsements made by the Registrar of Deeds in the prescribed form on their sectional title deeds (s F 11(1)(a)).

By divesting himself of the ownership of all units comprised in a scheme a developer would cease to have any share in the common property (s 26(2)). He would accordingly cease to have any say in the affairs of the scheme. In order to secure its right as developer to extend the scheme for the second phase development of the additional 14 units on G the common property, Erlax retained the ownership of unit No 7.

Furthermore, simultaneously with the opening of the sectional title register on 10 September 1985, Erlax in terms of s 5(3)(d)(i) caused the sectional plan to be endorsed with certain conditions of sectional title

'burdening the sections and common property and binding the owner/s from time to time, his/their heirs, executors, administrators, successors or H assigns as well as the holders of sectional mortgage bonds and other registered real rights, namely:

1.

No person whose consent is required in terms of s 18 of the Sectional Titles Act shall be entitled to withhold his/her/its written consent to the developer as owner of unit No 7, preparing and submitting a scheme to the local authority in terms of the said section for approval and upon such approval, taking all necessary I steps to erect additional buildings on the land in terms of and as indicated on the sketch plan filed of record in my Sectional Titles Protocol, and thereafter applying for the registration of a sectional plan, provided such additional buildings shall harmonise with the existing buildings on the land and shall not exceed two storeys in height nor a total bulk of 1 600 square metres. Furthermore, not more than 14 units shall be comprised in the said J additional building.

Joubert JA

2.

A All persons having an interest in the sections and common property shall be obliged to allow the developer to exercise his positive right to proceed with the development in the manner envisaged herein, and no persons having an interest in the sections and common property shall be entitled to interfere with or obstruct the developer from erecting on the common property the additional buildings in terms of and as indicated on the said sketch plan; nor shall such persons have any rights of access to or use of that B portion of the common property described and identified on the said sketch plan as "the remaining extent" until such time as the aforesaid additional buildings have been completed and the sectional plan/s thereof registered, provided that the developer shall pay all rates and taxes and imposts due in respect of such portion while this condition remains applicable.

3.

C No person mentioned in para 2 above shall have any right to or in any unit comprised in the said additional buildings, of which units the developer shall be the sole owner, and the certificate of registered sectional title shall be issued to and in the name of the developer who will be entitled to dispose of or otherwise deal with such units for his own and exclusive benefit and account.

4.

D The owners shall not be entitled to refuse to acknowledge and accept that upon registration of the sectional plan/s of the aforesaid additional buildings their participation quotas will be reviewed and adjusted as provided for in the Sectional Titles Act 66 of 1971.'

(My emphasis.)

In the certificates of registered sectional titles in respect of each E of the eight units comprised in the scheme reference was made, inter alia, to the aforementioned conditions of sectional title in the following manner:

'. . . (A)nd that the said owner's title to the said section and undivided share in the said common property is subject to or shall benefit by -

(i)

F the servitudes, other real rights and conditions, if any, endorsed on the said sectional plan and the servitudes referred to in s 19 of the Sectional Titles Act of 1971; and

(ii)

. . . .'

(My emphasis.) Accordingly all the sections and the common property comprised in the scheme were made subject to the said registered G conditions of sectional title. Moreover, the 14 additional sections to be erected on the common property were indicated on a sketch plan as a schedule to the sectional plan.

Although Erlax originally intended itself to undertake the development of both phases of the scheme it decided, after the completion of the first phase development, to dispose of its ownership of unit No 7 as H well as its rights as developer under s 18(1) and (8) to extend the scheme for the second phase development of the additional 14 units on the common property (as provided for in the aforementioned conditions of sectional title), to a third party. The latter, however, requires transfer of the developer's right of extension to be effected to it by registration in a Deeds Office. In order to do so Erlax claims to be I entitled in terms of s 64(1) of the Deeds Registries Act 47 of 1937 to a certificate of registration of a real right in respect of its developer's right of extension.

The said s 64(1) reads as follows:

'Any person who either before or after the commencement of this Act has transferred land subject to the reservation of any real right in his J favour (other than

Joubert JA

A a right to minerals) may on application in writing to the Registrar accompanied by the title deed of the land obtain a certificate of registration of that real right as nearly as practicable in the prescribed form.'

Form Y is the prescribed form.

Since the attitude of the Registrar of Deeds, Johannesburg, was that B Erlax was in the circumstances not entitled to a certificate of registration without the authority of an order of Court...