Lydenburg Properties Ltd v Minister of Community Development

• Jurisdiction: South Africa
• Citation: 1964 (2) SA 729 (A)

Lydenburg Properties Ltd v Minister of Community Development
1964 (2) SA 729 (A)

1964 (2) SA p729

Citation	1964 (2) SA 729 (A)
Court	Appellate Division
Judge	Steyn CJ, Van Blerk JA, Botha JA, Holmes JA and Hoexter AJA
Heard	March 24, 1964
Judgment	March 26, 1964

Flynote : Sleutelwoorde

Land — Group Areas Act, 77 of 1957, sec. 37 — Sale of forfeited property under — Scope of section — Applies to B property still registered in name of person debarred from holding it — Also applies to immovable property vested in State by virtue of forfeiture provisions of sec. 2 (5) of Act 37 of 1919, as amended.

Headnote : Kopnota

There is no warrant for excluding from the ambit of section 37 of the Group Areas Act, 77 of 1957, property which, although it became State C property (in the true sense or otherwise) by reason of the forfeiture provisions of section 2 (5) of Act 37 of 1919, is at the commencement of Act 77 of 1957 still registered in favour of a person who is in terms of the provisions of the 1919 Act debarred from holding it. Moreover, section 37 of Act 77 of 1957 clearly applies also in relation to immovable property vested in the State by virtue of the forfeiture provisions of section 2 (5) of Act 37 of 1919 as substituted by section 7 of Act 35 of 1932.

D The decision in the Transvaal Provincial Division in Lydenburg Properties Ltd v Minister of Community Development, 1963 (1) SA 167, confirmed.

Case Information

Appeal from a decision in the Transvaal Provincial Division (GALGUT, J.). The facts appear from the judgment of BOTHA, J.A.

T. H. van Reenen (with him I. Mahomed), for the appellant: Appellant, being an Asiatic company, is not the owner of the property. Respondent does not deny ownership. The State, knowing the true position, allowed appellant to occupy the property, knowing that it intended to build and, in fact, gave a consent to such building. Appellant is accordingly a bona fide possessor and, as such, is entitled to be compensated for the F improvements effected by it. The basic enactment prohibiting Asiatics from holding fixed property was Law 3 of 1885 (T). This law, however, applied only to individuals and not to companies; see Reynolds v Oosthuizen, 1916 W.L.D. 103. To apply the law to companies, Act 37 of 1919, was passed; see sec. 2. Originally this Act contained no G definition of 'controlling interest' and sec. 2 was completely redrafted in 1932; see sec. 7 of Act 35 of 1932. As to the effect of these provisions, see R v Hanid Ltd., 1950 (2) SA 587; Collin v Toffie, 1944 AD 456; Robert v Ettlinger and Grimwood, 1937 W.L.D. 28; Minister of the Interior v Estate Roos, 1956 (2) SA 266; Adbro H Investments v Minister of the Interior, 1961 (3) SA 283. From these cases and statutory provisions, appellant was an Asiatic Company on 4th December, 1945, and by mere registration of the property in its name, the property vested in the State. By 'vesting' is meant that the property became the property of the State; see Hanid's case, supra. Appellant submits that it is a bona fide possessor. The State, with knowledge of the facts, voluntarily allowed appellant to be in possession of the property. At the time the permit was granted, appellant contended that it was the owner, whilst the Department concerned E

1964 (2) SA p730

contended that it was not. The Minister seemed to have entertained grave doubts as to the correctness of this view. A bona fide possessor is a person who occupies property under the belief that he is the legal owner or that no one has a better title than he; see Erasmus v Mittel and A Reichman, 1913 T.P.D. at p. 623; Sisson, Legal Dictionary, s.v. 'bona fide possessor'. Where there is a clear doubt as to who is the true owner, the occupier must be considered a bona fide possessor; see Erasmus' case, supra at p. 627. Even if it be found that appellant is not a bona fide possessor, it has rights akin to those of such a B possessor. The occupation and possession were clearly not mala fide; see Kommissaris van Binnelandse Inkomste v Anglo American Housing Co., Ltd., 1960 (3) SA 642; Auby & Pastellides v Glen Anil Investments, 1960 (4) SA at p. 871; Meyer's Trustee v Malan, 1911 T.P.D. at p. 564; Lechoana v Cloete, 1925 AD 536; Fletcher v. C Bulawayo Water Works, 1915 AD 636; Rubin v Botha, 1911 AD 568. Even if appellant was a mala fide possessor, it is entitled to some compensation. In fact, it would seem clear that, no matter what the exact legal nature of appellant's occupation or possession was, it is entitled to be compensated in some measure for the improvements; see Lechoana's case, supra. Even a precario habens is entitled to D compensation; see Theron, N.O v Joynt, 1951 (1) SA 498; Johannesburg City Council v Johannesburg Indian Sports Guild Association, 1964 (1) SA 678; Wessels, Law of Contract in South Africa, para. 3008. Sec. 37 of the Group Areas Act has no application to a case such as the present, for the reason that that section is clearly a penal measure to punish the person contravening Group Area legislation E and to set right what is wrong, as being contrary to such legislation and that the section was not intended to, and cannot, be applied to State property. The acquisition of property by disqualified persons was prohibited by Law 3 of 1885 (T) and its kindred statutes, but originally there were no sanctions against illegal acquisition and no adequate F means of dispossessing the illegal owner; see sec. 2 of Act 37 of 1917; Transvaal Investment Co., Ltd v Springs Municipality, 1922 AD 337. In 1932 it was provided that the registration of property in the name of a person debarred from holding it, vested that property in the State. This vesting in effect deprived the person of the ownership in the property and in consequence amounted to a punishment for the G contravention of the law. Such a person could not be further punished for illegal acquisition; see Hanid's case, ibid, Attorney-General v Devon Properties (Pty.), Ltd., 1952 (2) SA 328. The only sanction is thus the deprivation of property. This deprivation lasted in appropriate cases from 1932 to 1951. Prior to that and subsequently, if the property H was illegally acquired, it nevertheless became the acquirer's property. Hence the need for the machinery of sec. 37; see sec. 38 (2). The purpose of sec. 37 is to withdraw the property from the illegal holder. This is not necessary in those cases in which there is an automatic vesting in the State. It seems always to have been respondent's view that he can sell property which vests in the State, under the section; see Adbro Investments' case, ibid; Minister of the Interior v Toubkin, N.O., 1952 (4) SA 223; but it is submitted that this is wrong in law. In none of these cases was this aspect considered. The disposal of

1964 (2) SA p731

State property has always been strictly controlled; see Act 48 of 1961 and previous legislation; see also Chap. III of the Letters Patent, Ord. 45 of 1902 (T); Ord. 37 of 1907 (T). It is inconceivable and against all rules of interpretation, that by this rather vague and obscure enactment, the Legislature intended that State property could now be A disposed of in this way; see sec. 19 (1) and (3). Sec. 37 (1) (b) can be given an intelligent interpretation without going to the extent of saying that the Minister can sell State property under sec. 37. The vesting provision was only introduced in 1932. Yet Asiatics were debarred from holding property since 1885, and Asiatic companies since 1919. There are thus, or can be, many instances of properties registered B in the names of persons who are debarred from holding them. Several of them have, in fact, come before the Courts. In Mohamed Ebrahim v Minister of the Interior, 1958 (4) SA 388 (see also 1958 (2) SA 531), it was expressly held that 'debarred' referred to those holdings against which no sanctions had been imposed. Sec. 37 (originally sec. C 20) was the first enactment empowering the State to act against such illegal holdings. Prior to 1932 there were no provisions as to what had to be done with property which had been illegally acquired, and the purpose of this provision in sec. 37 was clearly to deal with such properties. But there is no need for such provision regarding properties D registered between 1932 and 1951, since the law then provided most adequately for the necessary sanctions. This sanction was given even greater efficacy in 1949; see sec. 2 (c) of Act 53 of 1949. Full retribution could have been effected by the Minister informing the Registrar of Deeds, and the State then enforcing its rights as owner. E Where the Minister could have done this very simple act the elaborate machinery of sec. 37 was not necessary to deprive the illegal holder of any rights which he may have had in connection with the property. The Minister's action in purporting to sell the property under sec. 37 cannot deprive appellant of his rights under the common law. Appellant's F claim to compensation is a common law right and there is nothing in the Group Areas Act which denies it that right. A statute does not alter the common law right by implication more than is absolutely necessary to give efficacy to the enactment. 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 aright. But that does not derogate G from the fact of the vesting in...