Ethekwini Municipality v Mounthaven (Pty) Ltd

• Jurisdiction: South Africa

Ethekwini Municipality v Mounthaven (Pty) Ltd
2019 (4) SA 394 (CC)

2019 (4) SA p394

Citation	2019 (4) SA 394 (CC)
Case No	5/2018; [2018] ZACC 43
Court	Constitutional Court
Judge	Mogoeng CJ, Basson AJ, Cameron J, Dlodlo AJ, Froneman J, Goliath AJ, Khampepe J, Mhlantla J, Petse AJ and Theron J
Heard	October 31, 2018
Judgment	October 31, 2018
Counsel	GD Goddard SC (with S Mahabeer and TR Palmer) for the applicant.; DD Naidoo for the respondent.

Flynote : Sleutelwoorde

Prescription G — Extinctive prescription — Debt — What constitutes — Claim for retransfer of property under contractual reversionary clause registered as title condition — Constituting 'debt' for purposes of extinctive prescription — Prescription Act 68 of 1969, ch III.

Land — Rights in — Registered title condition entitling transferor to claim retransfer H of land if transferee not erecting buildings to certain value within certain time — Right to claim retransfer of land constituting personal, not real, right.

Land — Ownership — Restriction — By reversionary right — Binding on landowner in personal capacity — Hence constituting personal, not real, right — Registration against title deed not elevating it to latter.

Land I — Transfer — Registration of transfer — Condition containing reversionary clause — Creating personal obligation — Registration not converting it into real right — Deeds Registries Act 47 of 1937, s 63.

Headnote : Kopnota

On 24 May 1985 the applicant Municipality sold land to the respondent, Mounthaven. In August 1986 the land was transferred to Mounthaven J subject to special conditions (i) requiring it to erect buildings to the value

2019 (4) SA p395

of R100 000 on the land (clause C1); and (ii), if the buildings were not A completed within three years, for ownership to revert to the Municipality (clause C2) (see [4] for the wording of the conditions).

Mounthaven did not complete the buildings within three years. But it was only in 2014 that the Municipality brought a High Court application to compel retransfer in accordance with clause C2. This raised the matter of prescription: the High Court had to decide whether the Municipality's claim for B retransfer was a 'debt' for the purposes of ch III of the Prescription Act 68 of 1969, in which case it would have prescribed by May 1991. [*1] The Municipality argued that the obligation to return the land flowed from a real, not personal, right and could therefore not be termed a 'debt' that was subject to prescription. In the alternative the Municipality argued that C the registration of the reversionary clause created either a real right that did not prescribe or a mortgage bond that prescribed after 30 years. Both the High Court and the Supreme Court of Appeal [*2] agreed with Mounthaven that the Municipality's claim was indeed a debt that had prescribed, thereby extinguishing its cause of action.

In an application for leave to appeal to the Constitutional Court one of the issues D was whether the registration of clause C2 under the Deeds Registries Act 47 of 1937 (the Deeds Act) affected the nature of the claim. Of relevance was s 63, which allows for the registration of a deed containing a personal right if the right in question is 'complementary or otherwise ancillary to a registrable condition or right contained or conferred in such deed' (see [12] – [13]).

Held E

As to the court's jurisdiction: The interpretation of the Prescription Act might affect the fundamental right of access to justice, and raised a constitutional issue for the decision by the court (see [6]).

As to whether the court should grant leave to appeal: A claim to transfer immovable property into the name of another was one for the delivery of F goods, and hence constituted a 'debt' for the purposes of the Prescription Act (see [8]). The Municipality's argument that C2 embodied a real right failed on a factual level because it lacked a provision making it binding on Mounthaven's successors in title (see [11]). Instead it created a personal obligation on Mounthaven to complete buildings to a certain value within a limited time, not a real burden on the property itself (see [20]). Neither G the restriction it imposed on Mounthaven's property rights nor its registration under s 63 of the Deeds Act served to elevate that personal right to a real one (see [14], [16]). And any mortgage bond it might have created would, being accessory, have lapsed when the principal obligation prescribed (see [21]).

Since there were accordingly no reasonable prospects on appeal, H leave to appeal to the Constitutional Court would be refused (see [22]).

Cases cited

Absa Bank Ltd v Keet 2015 (4) SA 474 (SCA) ([2015] ZASCA 81): dictum in para [21] applied

Benoni Town Council v Minister of Agricultural Credit and Land Tenure I 1978 (1) SA 978 (T): compared

2019 (4) SA p396

Brummer v Gorfil Brothers Investments (Pty) Ltd and Others A 2000 (2) SA 837 (CC) (2000 (5) BCLR 465; [2000] ZACC 3): referred to

Cape Explosive Works Ltd and Another v Denel (Pty) Ltd and Others 2001 (3) SA 569 (SCA) ([2001] 3 All SA 321): dictum in para [12] applied

De Reuck v Director of Public Prosecutions, Witwatersrand Local Division, and Others B 2004 (1) SA 406 (CC) (2003 (2) SACR 445; 2003 (12) BCLR 1333; [2003] ZACC 19): referred to

eThekwini Municipality v Mounthaven (Pty) Ltd 2018 (1) SA 384 (SCA): confirmed on appeal

Ex parte Menzies et Uxor 1993 (3) SA 799 (C): dictum at 806F applied

Fine Wool Products of SA Ltd and Another v Director of Valuations 1950 (4) SA 490 (E): dictum at 499A – C applied

Food and Allied Workers' Union obo Gaoshubelwe v Pieman's Pantry (Pty) Ltd C 2018 (5) BCLR 527 (CC) ([2018] ZACC 7): referred to

Fraser v Naude 1999 (1) SA 1 (CC) (1998 (11) BCLR 1357; [1998] ZACC 13): dictum in para [7] applied

Harris v Trustee of Buissine (1840) 2 Menz 105: referred to

Info Plus v Scheelke and Another 1998 (3) SA 184 (SCA) ([1998] ZASCA 21): D referred to

Islamic Unity Convention v Independent Broadcasting Authority and Others 2002 (4) SA 294 (CC) (2002 (5) BCLR 433; [2002] ZACC 3): referred to

Jordaan and Others v Tshwane Metropolitan Municipality and Others 2017 (6) SA 287 (CC) (2017 (11) BCLR 1370; [2017] ZACC 31): dictum in E para [38] applied

Lorentz v Melle and Others 1978 (3) SA 1044 (T): dictum at 1055E applied

Low Water Properties (Pty) Ltd and Another v Wahloo Sand CC 1999 (1) SA 655 (SE): dictum at 662A – H applied

Makate v Vodacom Ltd 2016 (4) SA 121 (CC) (2016 (6) BCLR 709; [2016] ZACC 13): applied

Marshall v Commissioner, South African Revenue Service F 2018 (7) BCLR 830 (CC) ([2018] ZACC 11): referred to

Meridian Bay Restaurant (Pty) Ltd and Others v Mitchell NO 2011 (4) SA 1 (SCA) ([2011] ZASCA 30): compared

Mokone v Tassos Properties CC 2017 (5) SA 456 (CC) (2017 (10) BCLR 1261; [2017] ZACC 25): dictum in para [17] applied

National Education Health and Allied Workers' Union v University of Cape Town and Others G 2003 (3) SA 1 (CC) ((2003) 24 ILJ 95; 2003 (2) BCLR 154; [2002] ZACC 27): referred to

National Stadium South Africa (Pty) Ltd and Others v FirstRand Bank Ltd 2011 (2) SA 157 (SCA) ([2010] ZASCA 164): dictum in para [31] applied

Nel NO v Commissioner for Inland Revenue H 1960 (1) SA 227 (A): dictum at 235A applied

Odendaalsrus Gold, General Investments and Extensions Ltd v Registrar of Deeds 1953 (1) SA 600 (O): referred to

Panamo Properties 103 (Pty) Ltd v Land and Agricultural Development Bank of South Africa 2016 (1) SA 202 (SCA) ([2015] ZASCA 70): compared

Paulsen and Another v Slip Knot Investments 777 (Pty) Ltd I 2015 (3) SA 479 (CC) (2015 (5) BCLR 509; [2015] ZACC 5): dicta in paras [29] – [30] applied

Radio Pretoria v Chairperson, Independent Communications Authority of South Africa, and Another 2005 (4) SA 319 (CC) (2005 (3) BCLR 231; [2004] ZACC 24): referred to

Registrar of Deeds (Transvaal) v The Ferreira Deep Ltd J 1930 AD 169: applied

2019 (4) SA p397

S v Boesak 2001 (1) SA 912 (CC) (2001 (1) SACR 1; 2001 (1) BCLR 36; A [2000] ZACC 25): referred to

Snyders NO v Louistef (Pty) Ltd and Another 2017 (6) SA 646 (CC) (2018 (1) BCLR 19; [2017] ZACC 28): referred to

Willow Waters Homeowners Association (Pty) Ltd v Koka NO and Others 2015 (5) SA 304 (SCA) ([2014] ZASCA 220): dictum in para [18] applied. B

Legislation cited

The Deeds Registries Act 47 of 1937, s 63: see Juta's Statutes of South Africa 2017/18 vol 6 at 4-52

The Prescription Act 68 of 1969, ch III: see Juta's Statutes of South Africa 2017/18 vol 1 at 2-738. C

Case Information

GD Goddard SC (with S Mahabeer and TR Palmer) for the applicant.

DD Naidoo for the respondent.

An application for leave to appeal to the Constitutional Court against the decision of the Supreme Court of Appeal in D eThekwini Municipality v Mounthaven (Pty) Ltd 2018 (1) SA 384 (SCA). The application was refused with costs (see [23] of the judgment).

Judgment

Froneman J (Mogoeng CJ, Basson AJ, Cameron J, Dlodlo AJ, Goliath AJ, Khampepe J, Mhlantla J, Petse AJ and Theron J concurring): E

Introduction

[1] The applicant (the Municipality) seeks leave to appeal against a F decision of the Supreme Court of Appeal. That court confirmed the dismissal in the High Court [1] of the Municipality's application to compel the respondent (Mounthaven) to retransfer a property that it had earlier sold to Mounthaven. The Municipality's case rests on the proper interpretation and effect of a reversionary clause in the original deed of sale and subsequent deed of transfer. The Supreme Court of Appeal G upheld the decision of the High Court that the registered right contained in the clause constituted a 'debt' that had prescribed under the Prescription Act [2] and that the application for a retransfer thus had to be dismissed.

[2] Relying on this court's decision in Makat...