Rubin v Botha

• Jurisdiction: South Africa
• Judge: Coram Lord De Villiers CJ, Innes J and Maasdorp JP
• Judgment Date: 02 November 1911
• Citation: 1911 AD 568
• Hearing Date: 11 October 1911
• Court: Appellate Division

Rubin Appellant v Botha Respondent
1911 AD 568

1911 AD p568

Citation	1911 AD 568
Court	Appellate Division, Bloemfontein - Cape Town
Judge	Coram Lord De Villiers CJ, Innes J and Maasdorp JP
Heard	October 11, 1911
Judgment	November 2, 1911

Flynote : Sleutelwoorde

Land — Compensation for improvements — Enhanced value — Void lease — Bona fide possessor — Bona fide occupier.

Headnote : Kopnota

The plaintiff and defendant entered into an agreement of lease under which the plaintiff was to have the use and occupation of a portion of the defendant's farm for ten years without payment of rent, and was

1911 AD p569

to erect a building thereon which at the expiration of that period was to become the property of the defendant. After the plaintiff had erected the, building and been in the occupation of the premises for three years the defendant gave him notice to quit on the ground that the agreement was null and void as not having been notarially executed as required by the Transvaal law. Held, (per Lord DE VILLIERS, C. J and MAASDORP, J.) that the plaintiff was entitled to be paid for the improvements to the extent to which the value of the defendant's farm had been improved thereby, less the value of the plaintiff's use and occupation for three years.

(Per INNES, J.) that the plaintiff was entitled to he compensated to the extent of the value of the right of occupation of the improved property from the date of eviction to the date contemplated by the parties as that on which the improvements should pass over to the owner.

The decision oil the Witwatersrand Local Division in Rubin v Botha (1911 W.L.D. 99), fixing the amount of compensation at £300, affirmed.

Case Information

Appeal from the decision of the Witwatersrand Local Division (SMITH, J.), in the case of Rubin v Botha (1911, W.L.D. 99).

On 4th May, 1907, the respondent purported to lease to the appellant and his partner, a piece of ground for the erection of a dwellinghouse, stables and fowl-run, for a period of 10 years, rent free; the buildings erected to become the absolute property of the lessor at the end of the term; the lessees to have the right to make the necessary bricks on the property of the lessor, and also to have certain grazing rights over his property.

The land for the house was chosen and fenced, and a house, outbuildings and fowl-run erected.

Some time in 1910 it was discovered that the agreement was null and void, as not being notarially executed; negotiations for a fresh agreement on the basis of the

1911 AD p570

former document failed, and on 29th November, 1910, Botha gave Rubin notice to quit within three months. Rubin accepted this notice subject to receiving compensation for the buildings erected by him, on the basis of the nett cost.

On December 20th, Botha's attorney enquired what compensation Rubin considered himself entitled to, and on January 9th the plaintiff's attorney demanded £1,000.

On 26th January, the defendant tendered £300, a sum which the plaintiff accepted on account, and he now sued for the balance of £700. He had given tip possession of the property to the defendant.

In his declaration the plaintiff set out that in December, 1907, he and his partner "entered upon and took possession of a certain portion of ground, forming part of defendant's farm, and with the consent and knowledge of the defendant, erected certain buildings and structures thereon, at a total cost of £1,000; that the plaintiff thereafter, and until the 29th November, 1910, continued in bona fide possession of the said land and buildings, and that by erection of the buildings and improvements aforesaid, the said farm has been enhanced in value to the extent of £1,000."

The defendant denied that the plaintiff had been in bona fide possession, and pleaded a tender of £300, without admitting liability.

The Court gave judgment for the defendant with coats;

SMITH, J., in his reasons for judgment, after stating the facts as set forth above, proceeded as follows:

"In my opinion the plaintiff is not a bona fide possessor but is a tenant at will. He entered upon the land intending to become tenant and the defendant gave him possession intending him to become tenant. The law stopped in and said there could be no agreement for the term of 10 years, as they at that time intended, because the document was not notarially executed, but the parties clearly agreed that the one should be landlord and the other tenant and the land was occupied and the buildings erected whilst they stood in that relationship. I do not think that the plaintiff can be regarded otherwise than, as a tenant merely because he was under no obligation to pay rent, but intended that the buildings he erected should become the property of the lessor at the expiration of 10 years and so to compensate the latter for the use

1911 AD p571

and occupation of the land on which the buildings were erected and also in respect of the grazing rights over other land of the lessor which the latter purported to grant him by the document of the 4th May, 1907. The absence of this obligation to pay rent could not in my judgment turn him into a bona fide possessor as he never assumed to hold as dominus. (Oosthuizen v Oosthuizen, 1903, T.S. 688.)

In my opinion his legal position is that of a tenant - it will and he is entitled to compensation upon the same basis as that of a tenant who has effected improvements upon the lessor's property with his consent, and who has given up possession of the property, i.e., he is entitled to the value of the materials annexed by him to the soil . . . . . . .

In my judgment the plaintiff has already recovered from the defendant all that he is entitled to by way of compensation and the present claim must be dismissed with costs."

The plaintiff now appealed.

Stallard (with him M. Nathan), for the appellant: Rubin was a bona fide occupier and was entitled to full compensation for utiles impensae. If the agreement was binding, I admit he would not be entitled to more than the value of materials; see De Beers Consol. Mines v London and SA Exploration Co. (10 S.C. 359; 12 S.C. 107), Bellingham v Blommetje (1874 B. 36). Equity would be done by compensation on the basis of a bona fide possessor; see Henderson's Transvaal Estates, Ltd v Bloom (1911, W.L.D. 88).

[Lord DE VILLIERS, C. J.: How do you ascertain the enhanced value? Would not it amount to the difference between the value of the property, with and without the buildings.?]

Yes. The evidence is overwhelming that the enhanced value is £600 to £700.

[See Pietermaritzburg Corp. v SA Breweries Ltd. (supra p. 501), which shows that the cost of building is not the test of value.]

The parties have come here on the legal question and not on the question of how much the enhanced value is; the case can be referred back for a finding on that point.

[MAASDORP, J.P.: You want to put a person, who thinks he is a lessee, in a better position than an actual lessee?]

1911 AD p572

If he holds precario he has juristic possession; see Savigny on the Civil Law, sects. 27 and 44, Sohm's Institutes (2nd Ed pp. 352,354,355), Hunter's Roman Law (3rd Ed p. 380).

It appears to be an inconsistency, but that is apparently the law. An express decision giving the proper basis of compensation is Parkin v Lippert (12 S.C. 179; 13 S.C. 189).

[INNES, J.: That is based on insolvent law.]

It is possible that when: Rubin had established a connection, his lease would have been worth £1,000, but there is nothing to show that it is worth £100 a year for the first three years, besides, that would be taking the agreement as valid for one purpose.

[INNES, J.: It is difficult to give equitable relief without taking the arrangement into consideration.]

Botha has exercised his legal rights and in therefore not entitled to consideration, and Rubin may fall back upon his position as habens precario, or as bona fide possessor, to get the enhanced value.

The principle is that no one shall be enriched at another's expense; the question is, to what extent has Botha been enriched at the expense of Rubin?

Stratford (with him Van Hoytema), for the respondent: The Court below held that the appellant was a tenant at will, that is, that he held precario. There is no authority that a man holding precario has a right of compensation. He got consideration for what he did, the causa was the use of the house and land. According to the De Beers case there are three classes of persons who are entitled to compensation: -

1.

Bona fide and mala fide possessors.

2.

Lessees.

3.

Tenancies terminating by operation of law, under the Insolvent law.

The nearest position is that of the lessee; see...