Law of Property Cases Part TWO completed PDF

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Law of Property Cases Part Standard-Vacuum Refining Co of SA v Durban City Council 1961 (A)............................................................. Theatre Investments v Butcher Brothers 1978 (A)............................................................................................ Melcorp...

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Law of Property Cases Part 2 Standard-Vacuum Refining Co of SA v Durban City Council 1961 (A).............................................................2 Theatre Investments v Butcher Brothers 1978 (A)............................................................................................ 3 Melcorp SA (Pty) Ltd v Joint Municipal Pension Fund 1980 (W).......................................................................4 Konstanz Properties (Pty) Ltd v WM Spilhaus en Kie 1996 (A)........................................................................6 Allan & David (Pty) Ltd v Ingram 1989 (C)........................................................................................................ 7 Dreyer v AXZS Industries (Pty) Ltd 2006 (SCA)...............................................................................................8 Du Plessis v Prophitius 2010 (SCA)................................................................................................................. 9 Barclays Western Bank v Ernst 1988 (A)........................................................................................................10 Southern Tankers t/a Unilog v Pescana D’Oro Ltd (Velmar Ltd Intervening) 2003 (C)....................................11 Transnet t/a National Ports Authority v Owner of MV Snow Crystal 2008 (SCA)............................................12 Chetty v Naidoo 1974 (A)............................................................................................................................... 13 Ndlovu v Ngcobo; Bekker v Jika 2003 (SCA).................................................................................................14 City of Johannesburg Metropolitian Municipality v Blue Moonlight Properties 39 (Pty) Ltd 2011 (SCA).........16 City of Johannesburg Metropolitian Municipality v Blue Moonlight Properties 39 (Pty) Ltd 2012 (CC)..........18 Modderfontein Squatters, Greater Benoni City Council v Modderklip Broerdery (Pty) Ltd 2004 (SCA)..........19 Wormald v Kambule 2006 (SCA).................................................................................................................... 21 Quenty’s Motors (Pty) Ltd v Standard Credit Corproration 1994 (A)...............................................................22 Concor Holdings (Pty) Ltd t/a Concor Technicrete v Potgieter 2004 (SCA)....................................................23 Clifford v Farinha 1988 (W)............................................................................................................................. 24

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Standard-Vacuum Refining Co of SA v Durban City Council 1961 (A) Facts: Appellant owns and operates oil refiner, and respondent (municipality) took the value of oil tanks (which were part of refinery) into consideration when assessing the value of the land for land taxation purposes. Appellant object to the valuation, arguing the tanks were not buildings and not part of the land. Valuation Appeal Board: tanks did not constitute immovable property HC: overturned such finding Legal Question: Were the oil tanks (movables) attached to the land (immovable) that they could be regarded as accessories to the land? Ratio Decidendi: Court cited the MacDonald case for the three factors to be applied. Court held: three factors: a) b) c)

Nature of article Manner and degree of attachment Intention of annexor

Court held: third factor the most important and the first two factors applied in order to ascertain whether the intention was to attach permanently or not [interpretation criticised] Court held: relevant intention is the intention at the time the attachment was made Court held: a) Oil tanks never enjoyed existence separate from land, and their purpose was to help the oil refinery operate (purpose was to serve land) Court held: b) It was possible to move the oil tanks, but it would require them to be broken down (feat of engineering) and during the period the tanks would cease to exist as oil tanks Court held: managing-director stated that the oil tanks were meant to remain permanently on the land Court held: all factors indicated permanency Court Order: Appeal upheld Notes: Objective intention regarded as the most important in casu

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Theatre Investments v Butcher Brothers 1978 (A) Facts: Appellant occupied and used land leased from the respondent for period of fifty years, with right of renewal. In terms of the lease, the lessee undertook to proceed with the erection of a theatre upon the land, and in due course a theatre was built and fitted with seats, carpets, lighting, projection, and a/c. Lease agreement stipulated that upon expiry of the lease, the lessor would acquire ownership of all buildings and improvements on the property without being liable to the lessee for compensation. Upon expiry of the lease, the parties were unable to reach an agreement for renewal, and it was thus terminated. Dispute arose when lessee claimed that certain equipment, particular the seats, emergency lighting, and projection room dimmer board, remained movable and asserted the right as owner thereof to remove them from the theatre. Respondent applied for an interdict restraining the lessee to remove said items. Interdict had been granted but was appealed against. Legal Question: Who owns the theatre parts, particularly because they could all be easily removed? Ratio Decidendi: Court reiterated that intention is the main factor considered [again, criticised] Court held: first two factors are only objective and physical indicators of annexor’s intention (objective intention) Court held: one of factors to be considered is annexor’s own testimony about his intention, which must be weighed and considered with all other relevant facts and circumstances Court held: in absence of direct evidence relating to annexor’s subjective intention, court must consider objective factors and decide what the intention was Court held: objective factors are: a) b) c)

Nature of equipment in question Manner and circumstances of annexation Other factors

Court held: chairs were specifically designed for use in the theatre (purpose was to serve the land) even though they could theoretically be used in another theatre Court held: the chairs could be removed, but it would cause “not inconsiderable” damage to the fabric of the building (as they would need to be unscrewed from the cement) Court held: these above factors indicate permanency Court held: terms of lease strengthened this indication as the terms intended to leave the respondent with a theatre building in good state of repair both externally and internally and able to be used as such and thus leased as such. If any of the three items of essential theatre equipment in issue were removed, this term would not be given effect to. Court held: both emergency lighting and dimmer board are essential features of a theatre (and are thus essential for the building to be handed to the lessor as theatre which is able to be used) Court held: both emergency lighting and dimmer board are firmly bolted to the building, although they could be removed without damage to them or the theatre Court held: these items were, however, attached with the intention to remain part of building indefinitely Court Order: Appeal dismissed Notes: Set out the new approach for inaedificatio Two intentions of equal importance

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Melcorp SA (Pty) Ltd v Joint Municipal Pension Fund 1980 (W) Facts: Plaintiff is a company specialising in the installation of lifts and the defendants is a pension fund. In terms of a contract between the plaintiff and R company, the plaintiff installed two lifts in a building erected by R company. Contract stipulated that apparatus installed in terms of the contract would remain movable and would not become fixtures, and that the plaintiff would retain the right to remove them, until they had been paid in full. The R company financed the erection of the building mostly through a mortgage loan granted by the defendant. When R company encountered financial difficulties it fell in arrears with its payments to both the plaintiff (payment in terms of the installation contract) and the defendant (mortgage bond repayments) and the defendant caused the property to be sold in execution and itself purchased the property on this sale. Before the sale took place, the plaintiff had sent a copy of its agreement with R company to the defendant, who filed it without reading it. The plaintiff then wished to exercise its rights in terms of the contract and remove the lifts, while the defendant contended that the contract gave rise to personal rights only between the plaintiff and R company, and the lifts had become immovable by installation in the building. Legal Question: Were the lifts now attached to the building and thus part of it? Should the objective factors set out in McDonald override the subjective factor (intention)? Ratio Decidendi: The court set out the three McDonald principles: 1. Nature of particular article 2. Degree and manner of its annexation 3. Intention of the person annexing it 1. Nature of particular article: Court held: the elevators were an integral part of the building, and their purpose was to serve it. Court held: the building in question, by law, was required to have at least one lift, and thus could not function without it. 2. Degree and manner of annexation Court held: the elevators were attached to the building permanently however they were designed to be easily removable Court held: however, significant portions could be removed without damage to themselves or the building, and the dismantling is neither a difficult nor unusual task 3. Intention of person annexing it Court held: contract explicitly stated that the apparatus should remain movable, and that the attachment should not be permanent until the apparatus had been paid for. Court held: value of the annexor’s expressed subjective intention will vary from case to case, and in certain cases it must obviously be necessary to ascribe a so-called “real intention” deduced from the physical or objective factors, to the annexor despite her own evidence to the contrary Court held: the fact that the subjective intention of the annexor was expressed very clearly from the beginning and made a term of the contract upon which the annexor was prepared to make the attachment (ie was the very basis on which the plaintiff was prepared to install the lifts) is the decisive factor, which indicates that in casu the subjective intention must override the objective considerations. Court held: original acquisition of ownership is not based on consent or intention of the owner Court held: attachment of a movable to an immovable is a process by which the legal result is prescribed by the law on the basis of a factual situation, irrespective of the intention or will of the owner Court held: this means it is imperative to consider whether the relevant intention is that of the owner or the annexor, since they need not be the same person. Giving priority to the owner, irrespective of who the annexor may be, shall conflate original acquisition with derivative acquisition. Court held: quoted McDonald which stated that an owner can only lose ownership without consent in a small number of exceptional cases, and her intention must as a rule be taken into consideration. Court Order: Plaintiff entitled to relief sought, but order deferred to afford the defendant time to make arangments with its tenants 4

Notes: Original acquisition of ownership is not based on consent or intention of the owner Attachment of a movable to an immovable is a process by which the legal result is prescribed by the law on the basis of a factual situation, irrespective of the intention or will of the owner This means it is imperative to consider whether the relevant intention is that of the owner or the annexor, since they need not be the same person. Giving priority to the owner, irrespective of who the annexor may be, shall conflate original acquisition with derivative acquisition. Court quoted McDonald which stated that an owner can only lose ownership without consent in a small number of exceptional cases, and her intention must as a rule be taken into consideration.

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Konstanz Properties (Pty) Ltd v WM Spilhaus en Kie 1996 (A) Facts: Appellant, through his farm manager, concluded a contract with P, a CC, in terms of which P was to install an irrigation system on the appellant’s farm. P bough the components of the system (pumps, pipes, key pieces, valves) as separate items from the respondent, a wholesaler. In terms of the purchase agreement between P and the respondent, the respondent reserved ownership of each item pending payment of the full purchase price. P installed the system on the farm and was paid by the appellant but failed to pay the respondent for the items purchased. Respondent obtained default judgment against P in terms of which the deputy sheriff was ordered, in the event of non-payment, to attach the equipment. The appellant then applied for a declaratory order to the effect that the appellant was the owner of the items in question. Court a quo: held in favour of respondent and ordered the appellant to allow the respondent to remove the equipment. In an appeal: Legal Question: Had the equipment become part of the appellant’s property through attachment (ie was attachment effected by subjective intention that attachment should be permanent)? Was the respondent prevented on the basis of estoppel from raising its reserved ownership against an innocent purchaser of the property? Ratio Decidendi: Attachment Court held: purpose of movables was to serve land as an irrigation system Court held: the movable could be removed without a feat of engineering Court held: intention of the owner of the movable was decisive, not the intention of the annexor (as held in McDonald). Court held: therefore the intention of the respondent in this case (the wholesaler and owner of the movable) is decisive and not the intention of the annexor (contractor P). Court held: owner of movable reserved ownership, and respondent should not be deprived of object of security Court held: movables did not become part of appellant’s land by attachment because the intention of the owner of the movables was clearly in conflict with such attachment Estoppel Court held: respondent prevented by estoppel from raising the reservation of ownership (in the contract between the respondent and contractor P) against an innocent purchaser of the movables (such as the appellant) Court held: wholesaler providing goods to a retailer on credit has full knowledge that the retailer will sell these items to the public (retailer’s stock fully alienable in normal course of events). Court held: Wholesaler in such a situation makes a representation to any client of the retailer that the retailer is fully entitled to sell the goods and transfer ownership Court held: respondent was negligent in creating the foreseeable possibility than an unsuspecting client would buy the movables from P Court held: the reservation of ownership would only have effect if the movables were still in the possession of P when they were claimed Court Order: Court a quo’s decision regarding attachment upheld, but regarding estoppel the decision is reversed and the appeal succeeds Notes: Court left open the possibility of reconsidering the position it held in future cases.

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Allan & David (Pty) Ltd v Ingram 1989 (C) Facts: Plaintiff instituted action against defendant (who was acting as liquidator for B company) for the recovery of the price of five panel vans. Plaintiff allowed B company to work on five new panel vans belonging to the plaintiff in order to convert them to mobile clinics for C fund, a client of B company. Initially B wanted to purchase panel vans from plaintiff on credit, but plaintiff clearly said the vans would be sold strictly for cash and that it would retain ownership of them until the full purchase price had been paid, and it also retained spare keys, petrol caps, and service and guarantee books of the vans. B was liquidated and the vans sold with the proceeds paid into an account under the control of the defendant for the benefit of the successful party in this action. Defendant contended: vans had been sold to B on credit (thus ownership had transferred and vans fell into B’s estate); or alternatively: plaintiff had not complied with the provisions of the Insolvency Act. S 36(1) of said Act provides that if the purchase, in terms of a contract of sale which provides for payment upon delivery received movable property without paying the full purchase price, the seller could, upon sequestration of the purchaser, reclaim the property if he does so within ten days after delivery (it had been longer than ten days in casu) Legal Question: Was the sale in casu a cash or credit sale (ie had ownership passed or not)? Ratio Decidendi: Court held: confirmed the general rule that ownership of movable will normally not pass to the purchaser in a cash sale until the full cash price has been paid Court held: however, general rule is not a hard and fast rule, and real intention of the parties as indicated by the facts of each case can provide proof that ownership did indeed pass upon delivery, even if the cash price had not been paid yet Court held: in casu it was made clear the ownership would be retained by the claimant until the full price had been paid (ie cash sale) Court held: the above intention was supported by the actions of the parties, as is clear from the claimant’s retention of duplicate keys, petrol caps, and documents Court held: it was not a sale for credit (in which case ownership is usually transferred upon delivery) and it was normal cash sale (ownership retained until cash price paid in full) Court held: therefore ownership did not pass to B company Court held: in terms of S 36(1) of Insolvency Act, seller only has 10 days to reclaim his property which was delivered without payment in cash sale Court held: however, the intention was never to transfer ownership, even upon payment of the purchase price, and instead the intention was that B would rebuild the vans after which they would be delivered and paid for by C fund (the real purchaser) Court held: claimant granted B only a very limited kind of control over the vehicles (to enable their modification) with this kind of control referred to as detention to indicate absence of animus domini and thus there was no intention to receive as owner, which normally accompanies delivery in a sale transaction Court held: thus claimant had not delivered the vehicles in terms of S 36(1) which therefore had no application and claimant was not bound by the time limits of 10 days for recovery of his property Court Order: Plaintiff entitled to the account containing the proceeds from the sale of the vans Notes: Price/payment rules  Sales agreement for cash  ownership does not transfer until owner receives full purchase price  Real agreement  intention to transfer ownership is that it would only transfer upon receiving full purchase price Credit sale  Ownership transfers immediately

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Dreyer v AXZS Industries (Pty) Ltd 2006 (SCA) Facts: Respondent alleged that it had acquired ownership of certain movables pursuant to a post-liquidation auction sale and that, although the conditions of sale had not reflected the goods as forming part of the subject-matter of the sale, respondent and appellant had done so by virtue of a prior oral agreement. Appellants denied that the agent of the owners/sellers had had the authority to sell asset at the auction which were not reflected in the written agreement, denied that the goods had formed part of the subject matter of the sale, and denied the respondent’s ownership of the goods. Court a quo: favour respondent’s witness on the question of the existence of the alleged prior oral agreement and had granted rectification of the written agreement to incorporate the prior oral agreement, and thus found that by delivery accompanied by real agreement, ownership of the goods had passed to the respondent. Legal Question: Was there a valid real agreement accompanying the transfer? Ratio Decidendi: Requi...