Yellow Star Properties 1020 (Pty) Ltd v MEC, Ddepart of Development Planning and Local Government, Gauteng

• Jurisdiction: South Africa
• Judge: Brand JA, Maya JA, Cachalia JA, Mhlantla JA and Leach AJA
• Judgment Date: 27 March 2009
• Citation: 2009 (3) SA 577 (SCA)
• Docket Number: 549/2007
• Hearing Date: 11 March 2009
• Counsel: AD Wilson (with PJ Blomkamp) for the applicant. PM Kennedy SC (with him M Sello) for the respondent.
• Court: Supreme Court of Appeal

Leach AJA: A

[1] This is an application for leave to appeal under s 21 of the Supreme Court Act 59 of 1959. The applicant, the plaintiff in the court below, brought an action for damages to which the respondent, in pleading, raised two special pleas. When the matter came to trial before Gildenhuys J in the Johannesburg High Court, it was agreed that the special B pleas be decided at the outset in the light of the facts contained in a so-called 'stated case' with the remaining issues to stand over for later decision. Having heard argument, the learned judge upheld both special pleas and dismissed the applicant's claim. He also dismissed a subsequent application C for leave to appeal. The applicant's further application to this court for leave to appeal was set down for argument before this court.

[2] The merits of the appeal are obviously vital to the outcome of the application. The parties therefore agreed to argue the appeal on the understanding that, if this court was of the view that the appeal should D succeed, the application would be granted and the appeal upheld but, if the appeal was found to be without merit, the application would be dismissed. I turn now to consider which order is appropriate.

[3] In order to consider the validity of the special pleas, it is necessary at the outset to set out the somewhat lengthy history of the litigation E between the parties. At the heart of the dispute is a certain piece of immovable property more fully described as 'the remaining extent of erf 137 Dunkeld West' (the property). The respondent, labouring under the mistaken impression that the property vested in the Gauteng Provincial Government and wishing to dispose of it, employed a valuer to ascertain F what it was likely to fetch on the open market. The valuer employed valued it at R300 000. As appears below, this valuation was way off the mark. In June 2000 the respondent put the property up for sale on a public auction at which it was purchased by the applicant for R452 900. The parties thereafter signed a formal deed of sale which reflected the Gauteng Provincial Government as the owner and seller of the property G and which obliged the applicant to pay a deposit of R45 200, to provide a bank guarantee for the balance of the purchase price and to pay various duties, levies and costs.

[4] Despite the applicant having fully complied with all its obligations under the deed of sale, transfer did not take place as it was discovered H that the property, while State land, vested not in the provincial government as had been thought but in the national government. Item 28(1) of Schedule 6 to the Constitution provides for a competent authority to issue a certificate in respect of immovable property owned by the State indicating in which particular branch of government such property is I vested, whereupon a registrar of deeds must make such entries or endorsements necessary to register such property in the name of that sphere of government. In order for the respondent to be able to effect transfer to the appellant, it had to obtain an item 28(1) certificate recording that the property vested in the Gauteng Provincial Government. And in order to obtain such a certificate, it was necessary for the J

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A respondent to first persuade national government to transfer the property to the Gauteng Provincial Government.

[5] However, it then also came to light that the valuation of R300 000 obtained by the provincial government before the auction was wholly unrealistic, probably because the valuer had by mistake only had B regard to a portion of the property while the true value of the whole property was several million rand. The respondent does not appear to have been overly concerned by this as it persisted in attempting to persuade national government to allow the property to be transferred to the applicant. But it is hardly surprising that the Ministry of Public C Works, to whom administration of the property had been assigned, on learning that the property had been sold for but a fraction of its true value, refused to do so. Accordingly, as national government refused to transfer the property to the Gauteng Provincial Government, the respondent could not obtain an item 28(1) certificate relating to the D property and was unable to effect transfer to the applicant.

[6] When despite the passage of time transfer did not take place, the applicant raised the matter with the respondent. In response, in a letter from the head of Gauteng's Department of Development Planning and Local Government dated 12 December 2000, the applicant was E informed that the property in fact vested in the national Department of Public Works and not in the provincial government, and it was suggested that the applicant take the matter up with the legal section of the national department. It can be accepted that until receipt of this letter the applicant did not know that the respondent was not the owner of the property. Despite the applicant then consulting its attorney as well as a F number of other government officials, it was unable to obtain transfer.

[7] Eventually, in June 2001 the applicant launched proceedings in the Pretoria High Court in case 15278/2001 in which it cited the present respondent, as well as the Minister of Land Affairs and the registrar of deeds, as respondents. In its founding affidavit the applicant described G the delays which had taken place and stated that it had established that, if the Minister of Land Affairs - as the competent authority contemplated by item 28(1) - did not provide a certificate under that item, the property could not be registered in the name of the Gauteng Provincial Government which was necessary for transfer to the applicant to take H place. It therefore sought an order, inter alia:

3.

Compelling the (Minister of Land Affairs) to issue a certificate in terms of item 28 of annexure 6 to the Constitution, Act 108 of 1996, on an urgent basis . . . and to provide the (registrar of deeds) with the said certificate.

4.

Compelling the (registrar of deeds) to effect the transfer over the property as a matter of urgency, upon receiving the certificate from the (Minister of Land Affairs).

[8] When the matter came before Van der Walt J on 30 January 2002, both the respondent and the Minister of Land Affairs argued that the applicant lacked locus standi, contending that the individual who had J concluded the sale, one Harding, had represented not the applicant but

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a close corporation still to be formed. They also argued that the parties A had not been ad idem in regard to the property that was the subject of the sale. Both these contentions were rejected by the learned judge, and it has not been suggested that he erred in doing so. During the course of the hearing a copy of a certificate, issued in respect of the property by the Minister of Land Affairs under item 28(1), was handed to Van der Walt B J. In his view, this obviated the need to deal with the relief sought in the application before him. He therefore merely granted an order which authorised the registrar to effect transfer upon receipt of'the certificate' from the Minister of Land Affairs.

[9] At first blush, this is somewhat confusing. In making this order the C learned judge presumably had in mind that 'the certificate' would facilitate transfer to the applicant (viz it would be a certificate reflecting the provincial government as the owner of the property and thereby entitled to transfer it to the applicant). But the document handed in certified that the property vested in the national government and, in D itself, rather than providing the solution to the problem, constituted the very obstacle to the property being transferred to the applicant. The solution to this conundrum is to be found in Van Der Walt J's subsequent judgment of 31 July 2002 dismissing an application for leave to appeal brought by the Minister of Land Affairs in which he expanded on his reasons for judgment. The learned judge said that while the E certificate handed in had been in the name of national government, it had been stated in the papers that the provincial government was in the process of obtaining the property from the national government to enable it to effect transfer to the applicant, and that the stage at which it could do so had not been reached. This observation clearly indicates that the learned judge had not intended his order to authorise transfer F directly to the applicant at that stage. It merely authorised the registrar of deeds to do so when 'the certificate' reflecting...