Lydenburg Properties Ltd v Minister of Community Development

• Jurisdiction: South Africa
• Judgment Date: 16 October 1962
• Citation: 1963 (1) SA 167 (T)

Lydenburg Properties Ltd v Minister of Community Development
1963 (1) SA 167 (T)

1963 (1) SA p167

Citation	1963 (1) SA 167 (T)
Court	Transvaal Provincial Division
Judge	Galgut J
Heard	August 15, 1962
Judgment	October 16, 1962

Flynote : Sleutelwoorde G

Asiatic — Land — Company formed as a European company — In law at all times an Asiatic company — Land illegally held and State claiming ownership — Company thereafter effecting improvements with knowledge and consent of Minister — Minister H taking steps under sec. 37 of Act 77 of 1957 — Company not a bona fide possessor — Not entitled to compensation for improvements.

Headnote : Kopnota

Applicant company, which had been formed with the intention of forming a European company, had subsequently accepted that it was in law at all times an Asiatic company. It now sought an order declaring that certain immovable property registered in its name was the property of the State; that the applicant was in bona fide possession of the property and the improvements thereon, and accordingly that applicant was entitled to be

1963 (1) SA p168

compensated for the improvements effected by it on the property, with the knowledge and consent of the Minister of the Interior.

Held, that the applicant was not a bona fide possessor at any time from the date when it knew that the State claimed the property under section 37 of Act 77 of 1957.

A Held, further, as the improvements had been effected after that date, that its rights could be no greater than those of a person holding precario, and that it had erected the buildings at its own peril.

Held, further, that section 37 of the Act did not call upon the Minister to compensate the registered owner who acquired unlawfully on any basis whatsoever: he was merely called upon to proceed in terms of the section.

Held, accordingly, that the application should be dismissed with costs. B

Case Information

Application for a declaratory order. The facts appear from the reasons for judgment.

T. H. van Reenen, for the applicant: The basic enactment prohibiting Asiatics from holding fixed property is Law 3 of 1885, which applied C only to individuals and not to companies, Reynolds v Oosthuizen, 1916 W.L.D. 103. For the effect of amendments to this legislation, see R v Hanid Ltd., 1950 (2) SA 587. See also Collin v Toffie, 1944 AD 456; Robert v Ettlinger and Greenwood, 1937 W.L.D. 28; Minister of the Interior v Estate Roos, 1956 (2) SA 266; the Adbro Investment case, D 1961 (3) SA 283. It is clear that applicant was an Asiatic company on 4/12/45, and that by registration of the property in its name, the property vested in the State, i.e. it became the property of the State, Hanid's case. The State allowed applicant to occupy the property. As to bona fide occupier, see Erasmus v Mittel & Reichman, 1913 T.P.D. 617. Where there is a doubt as to who the real owner is, the occupier must be E considered a bona fide possessor. Even if applicant is not a bona fide possessor, it is clearly not a mala fide possessor and is entitled to compensation, cf. Lechoana's case, 1925 AD 536; Auby and Pastellides (Pty.) Ltd v Glen Anil Investments, 1960 (4) SA 865. Sec. 37 of the Group Areas Act does not apply. If the Minister wishes to sell State F property, that is no concern of the applicant, but the Minister's action in purporting to sell under sec. 37 cannot deprive applicant of its rights. Applicant's claim for compensation is a common law right and there is nothing in the Act which deprives it of that right. The fact that the property is still registered in the name of the company must be ascribed to the failure of the Minister to have the matter set right. But G that does not derogate from the fact of the vesting in the State - that it is an automatic consequence, Hanid's case, supra.

F. Viljoen, Q.C. (with him L. L. Esselen), for the respondent: There is no valid and admissible proof that applicant at any time was a bona fide H possessor. As to a bona fide possessor, see de Beer's case, 10 S.C. 373 at pp. 376, 372. Applicant's whole case is based on a belief. It is not even hearsay evidence. It is an inference drawn from an omission by the State to claim the property as its own or otherwise to indicate its rights. On this ground alone, applicant's application should be dismissed. Furthermore, although the State's attitude prior to and also subsequent to the settlement was that the property was illegally held, it could not be sure that its attitude would prevail upon the matter going to trial. Applicant at all material times maintained that it held the property legally. In this state of mind the State entered

1963 (1) SA p169

into the settlement. From the time that the State claimed that the property was held illegally, the applicant, being aware of all the facts, was not a bona fide possessor. Its state of mind was that of doubt. Moreover, a man who possessed in an honest though mistaken view A of the law was not a bona fide possessor as the grounds for his belief, being wrong in law, could not be said to be reasonable, Levy v Meresky, 1939 G.W.L.D. 21; B. C v Commissioner of Taxes, 1958 (1) SA at p. 179. Assuming that the State knew and was certain that it was the owner, as alleged by the applicant, the most that can be said for the applicant B is that it enjoyed occupation at the pleasure of the State. A precario habens is not entitled to a lien or right of retention and it is doubtful if he is entitled to compensation, Urtel v Jacobs, 1920 CPD 487; Maharaj v Maharaj, 1938 NPD 128; Lechoana v Cloete, 1925 AD 536; Rubin v Botha, 1911 AD 579. Applicant was never an occupier as explained in Rubin's case. The principle in that case is not likely to C be extended, cf. Fletcher v Bulawayo Waterworks, 1915 AD 647. On a proper construction of the law and the facts, the applicant erected the buildings and effected the improvements at its peril. In any event, the...