Northwest Townships (Pty) Ltd v the Administrator, Transvaal and Another

• Jurisdiction: South Africa
• Judge: Cillié JP, Colman J and Davidson J
• Judgment Date: 12 June 1975
• Court: Transvaal Provincial Division
• Hearing Date: 07 May 1975
• Citation: 1975 (4) SA 1 (T)

Northwest Townships (Pty) Ltd v the Administrator, Transvaal and Another
1975 (4) SA 1 (T)

1975 (4) SA p1

Citation	1975 (4) SA 1 (T)
Court	Transvaal Provincial Division
Judge	Cillié JP, Colman J and Davidson J
Heard	May 7, 1975
Judgment	June 12, 1975

Flynote : Sleutelwoorde

Land — Defeasible interests — Removal of Restrictions Act, 84 of 1967 — Plots sold by township owner subject to condition that no buildings to be erected thereon without its E consent — Plotholder applying for removal of such restriction under sec. 2 of Act — Township owner claiming compensation under sec. 4 (3) — "May" in section not meaning "shall" — Discretion of Administrator to grant application with or without compensation — Administrator concluding that township owner's real rights valueless — F Such decision set aside and matter remitted to Administrator — Review — When Court will interfere with quasi-judicial or administrative decisions — Law on subject comprehensively restated — Contract — Implied term — When not justified.

Headnote : Kopnota

When the second respondent had bought erf 42 in a township from a Mrs. G, the appellant township owner, had acted as selling G agent. There was a dwelling on the erf and second respondent at the time had been concerned to preserve an unobstructed view from that dwelling across plots with business rights between it and the main road. One C, a now deceased representative of the township owner, had allegedly assured second respondent that these business rights would be cancelled. Second respondent had, however, purchased two of such plots adjoining erf 42, and H had been persuaded by C to take transfer of them subject to a condition in favour of the township owner that no buildings could be erected on the erven without the consent of the township owner. After business premises had, however, been erected on the other plots, second respondent, since his view had been partly obstructed, contended that his two erven should no longer be burdened with the special condition. He accordingly applied to the Administrator, first respondent, under section 2 of the Removal of Restrictions Act, 84 of 1967, for the removal of the restrictions created by the special Condition. Appellant township owner, however, contended, inter alia, that, if granted, it was entitled to compensation under section 4 (3) of the Act. The Administrator, after hearing evidence, decided to grant the application and subsequently informed the appellant that he had decided that no condition

1975 (4) SA p2

requiring compensation to be paid should be imposed. His apparent reason was that in his opinion the appellant's real rights were valueless. The appellant having unsuccessfully applied to a Local Division for the setting aside on review of the Administrator's decision, in an appeal.

Held, that the unexplained conclusion by the Administrator that A the appellant's real rights were either valueless or had a value which was not materially diminished by the removal of the restriction was so gravely erroneous as to be explicable only on the footing that the Administrator had misconceived the nature of his duty or had fallen into some error or misconception of law or fact so fundamental that he could not be said to have applied his mind to the real problem assigned to him by the Legislature: accordingly his decision had to be set aside.

B Held, further, however, as the word "may" in section 4 (3) of the Act did not mean "shall" and as the Administrator had a discretion as to whether to grant compensation or not, that the matter should be remitted to the Administrator in order that he might exercise his discretion.

Held, further, that, as between the appellant and the second respondent, there was no implied term in the original contract C of sale in terms whereof the second respondent had bound himself not to build on the plots without the appellant's consent.

The rules of administrative law relating to the right of the Courts to overrule quasi- judicial or administrative decisions comprehensively restated.

Case Information

Appeal from a decision of F. S. STEYN, J., reported in 1975 (2) SA 288. D The facts appear from the reasons for judgment.

M. Horwitz, S.C . (with him D. M. Ettlinger), for the appellant: First respondent's decision is attacked on the grounds that: (a) in finding that the appellant's rights to withhold or grant the right to build and erect premises on the stands had no commercial value, his decision was so inexplicable that it could only have resulted from a failure to bring his mind to E bear on the problem or a serious misdirection in law and was not based on proper legal principles. Alternatively in the event of its being held that first respondent acted on the basis that even though the right had a commercial value he had a discretion to withhold compensation, that view is wrong as the Act enjoins first respondent to determine compensation and F to order it should the parties not be able to agree on the amount. Cf. The Administrator, Transvaal and The Firs Investment (Pty.) Ltd . v Johannesburg City Council, 1971 (1) SA at p. 80; Union Government v Union Steel Corporation, 1928 AD at p. 234; (b) there is a further ground for relief which applies to second respondent only and that is that he is still contractually bound to the appellant in terms of the G original agreement of sale despite first respondent's decision. The learned Judge a quo was wrong in holding that, on a proper construction of sec. 4 (3) of the Act, first respondent had a discretion not to order the payment of compensation once the value of a real right in land was shown to have been materially affected adversely. A complete abolition or destruction of a right must a fortiori materially H affect the value of the right adversely and it is therefore submitted that once the right is shown to have been materially affected adversely first respondent is bound to order compensation to be paid. The Act refers to "in the opinion of the Administrator" but such opinion must be formed in accordance with recognised legal principles, that is, it must not be capricious, unreasonable, etc. It is not clear whether the learned Judge found that first respondent had formed the opinion that the condition constituted a real right of commercial value and whether he found that first respondent thereafter, in the exercise of his discretion, had concluded that it was not a proper case to award compensation. If the

1975 (4) SA p3

learned Judge intended to say that the Administrator was entitled to and did take into account the public interest involved and the fact that he might have taken the public interest into consideration was a justification of the Administrator's decision, this was wrong. The public interest is not a factor which the Administrator is entitled to take A into account when awarding compensation. The right which appellant lost was a real right in land having a monetary value and first respondent was bound to make it a condition of the removal of the right that second respondent pay compensation. The right which was retained by appellant is a real right. See Registrar of Deeds Transvaal v The Ferreira Deep Ltd., 1930 B A.D.. at p. 180; Odendaalsrus Gold, General Investments and Extensions Ltd . v Registrar of Deeds, 1953 (1) SA at p. 609; Norbreck (Pty.) Ltd . v Rand Townships Registrar, 1948 (1) SA at pp. 1039, 1043; Ex parte Geldenhuys, 1926 OPD at p. 155; Deeds Registries Act, 47 of 1937, secs. 63, 65, 67 and 10; definition of real right, "'real right' includes any right which becomes a real right upon registration". The use of the C word "may" where it first occurs in sec. 4 (3) means "might". Cf. the Afrikaans version which supports this and where it occurs the second time the word "may" governs the granting or withholding of an application but it does not confer a discretion in the granting of compensation if it is shown that the right was materially adversely affected. The learned Judge D a quo was wrong in finding that: "To equate "may" where it is used for the first time with must or shall would make grammatical nonsense of the phrase, but it would offend against the basic tenet of construction of a statute to give two different meanings to the word 'may' used in the same statute and in the same clause and sentence." In Rex v Mitchell: Ex parte Livesay, (1913) 1 K.B. 561 at p. 568, the word "may" is given three different meanings in one section. See Appendix D E at pp. 836 - 7 of Jones and Buckle, Civil Practice of the Magistrate's Court in South Africa, 6th ed.; Steyn, Uitleg van Wette, 3rd ed., p. 64, note 40. The word "may" in certain circumstances means "must" or better expressed in certain circumstances and particularly in the present case the word "may" confers a power which the person to whom it is given is F under a duty to use. See Rex v Mitchell: Ex parte Livesay, supra at pp. 566, 568; Commissioner for Inland Revenue v I.H.B. King, 1947 (2) SA at p. 209; Custodian of Enemy Property v Brakpan Mines, 1922 T.P.D. at p. 188; S.A.R. & H . v Transvaal Consolidated Land and Exploration Co. Ltd., 1961 (2) SA at pp. 479 - 480C; S . v Ntuli, 1967 (4) SA at pp. 351A - 352; Charmfit of Hollywood v Registrar of Companies, G 1964 (2) SA at p. 757H; Western Credit v Kajee, 1967 (4) SA at pp. 390 in fine to 391B; Hall v Military Pensions, 1963 (3) SA at pp. 409A - 410G; Die Uitleg van Wette, 3rd ed., p. 64; 4th ed., p. 66. The permissive terms of the statute, in so far as the award of compensation is concerned, imposed a duty in relation to a private interest upon first respondent. This factor together with the use of the word H "shall" ("compensation in an amount which in the absence of agreement between such applicant and objector shall be determined by the Administrator") means that there is an obligation on first...