Minister of Local Government and Land Tenure v Inkosinathi Property Developers (Pty) Ltd and Another

• Jurisdiction: South Africa
• Judge: Davies ACJ, Goldin JA and Dumbutshena JA
• Judgment Date: 30 July 1991
• Citation: 1992 (2) SA 234 (TkA)
• Hearing Date: 26 July 1991
• Court: Transkei Appellate Division

Goldin JA:

This is an appeal against an order of the General Division setting aside the refusal by appellant to approve the acquisition of immovable property in terms of s 2(1) of the Acquisition of Immovable F Property Control Act 21 of 1977 as amended ('the Act'). This section reads:

'(a)

no person who is not a citizen of Transkei, no company in which a controlling interest is held by . . . any person who is not a citizen of Transkei . . . shall acquire immovable property, and

(b)

no person shall acquire immovable property from a person . . . G referred to in para (a),

without the approval in writing of the said Minister.''Acquired' is defined in s 1 of the Act as meaning 'to become the owner of such property'.

The relevant facts are as follows. The buildings on erf No 78, Umtata, have been for many years occupied by many shopkeepers who carry on H separate businesses as tenants of premises. During May 1979 the owner of the property, East Griqualand Industries (Pty) Ltd, in which non-Transkei citizens held a controlling interest, decided to sell the building to their tenants who were in occupation of shops. All tenants attended a meeting at which it was resolved by a large majority to register a company to purchase the property and tenants who so wished I would acquire shares in the proposed company, now the first respondent in this case. Upon its registration the first respondent, in which all shareholders were citizens of Transkei, purchased the property for R600 000. The second respondent lent funds required towards the purchase price. Over 20 of the existing tenants agreed to acquire shares in first J respondent.

Goldin JA

A On 7 October 1987 first respondent's attorney, Mr Beer, applied to appellant for his approval of the acquisition of the property in terms of the Act. After six weeks no reply had been received and the sellers, who had other prospective purchasers in the offing, were reluctant to delay the conclusion of the sale and the registration of the property.

B Mr Beer applied to the Registrar of Deeds and explained that no approval had yet been received. The Registrar, who had been registering deeds since about 1980, was fully aware that permits had never been refused to a company which was controlled by Transkeian citizens. Furthermore the Registrar told Mr Beer that he had 'access to the Department of Local Government file on this application and that the C Department has recommended the issuing of this permit' by appellant 'who was away at the time'. It is relevant that appellant does not deny the allegation that such permits 'had never been previously refused'.

The Registrar registered transfer of this property to first respondent on 25 November 1987. On 2 March 1989, about 17 months after the D application for the permit had been made, the appellant notified first respondent that he refused to grant the permit.

The appellant sets out in his affidavit allegations and considerations which he took into account in arriving at his decision to refuse the application. They are, firstly, that representations were made to appellant's department by certain of the tenants. He does not say how E many or on what grounds or the nature or relevance of these representations. Secondly, he says that his department had 'received an offer to purchase the property from an interested party once transfer thereof had been obtained from the South African Development Trust'. He does not say who the interested party or what the amount was. He does F explain that the seller had an option to sell to a Transkeian citizen or to the Development Trust. Thirdly, that he took into account 'the proposed price'. He does not say how this price differed from the price paid by appellant or its significance. Fourthly, he considered the identity of the purchasers. It is common cause that the purchaser was first respondent company, formed to ensure that existing tenants who G purchased shares in it would secure the lease of the shops in which they earned their livelihood. It is not clear whether he took this into account in favour of or against appellant or what is its relevance generally. This consideration also applies to the following items. Fifthly, he...