NOT REPORTABLE
REPUBLIC OF NAMIBIA
HIGH COURT OF NAMIBIA
MAIN DIVISION, WINDHOEK
JUDGMENT
Case No: I 1119/2009
In the matter between:
THE MINISTER OF
REGIONAL AND
LOCAL GOVERNMENT,
HOUSING AND
RURAL DEVELOPMENT
...............................................................................PLAINTIFF
and
NORTHLAND DEVELOPMENT
PROJECT LTD ............................FIRST
DEFENDANT
HELAO NAFIDI TOWN
COUNCIL
.............................................SECOND DEFENDANT
THE REGISTRAR OF DEEDS
........................................................THIRD
DEFENDANT
Neutral citation:
Minister of Regional and Local Government, Housing and Rural
Development v Northland Development Project Ltd and others
(I 1119-2009) [2013] NAHCMD 145 (31 May 2013)
Coram: VAN NIEKERK
J
Heard: 26
September 2012; 15, 16, 17 October 2012
Delivered: 31 May
2013
Flynote: Local
Authorities Act, 23 of 1992 – Section 30(1)(t) requires
prior approval of Minister when local authority disposes of immovable
property – Section 30(1)(z)(ii) requires prior written
approval of Minister when local authority makes any donation –
In casu local authority donated undeveloped land to first
defendant without such prior written approval – Donation null
and void – Subsequent transfer of land into name of first
defendant also null and void .
___________________________________________________________________
ORDER
___________________________________________________________________
There shall be judgment
for the plaintiff for:
An order declaring the
Deed of Donation dated 10 September 2005 by the second defendant in
favour of the first defendant null and void and of no legal effect.
An order declaring the
transfer of Portion 4 of Helao Nafidi Town and Townlands No. 997
measuring 49 9986 hectares to the first defendant under Deed of
Transfer T7251/2005 null and void and of no legal force.
An order that the first
defendant pays the plaintiff’s costs of suit, such costs to
include the costs of one instructing and one instructed counsel.
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JUDGMENT
VAN NIEKERK J:
[1] The plaintiff is the
Minister of Regional and Local Government, Housing and Rural
Development (‘the Minister’). The first defendant is
Northland Development Project Ltd (‘Northland’), a
company incorporated under the laws of Namibia. It is defending this
matter. With leave of the Court, Northland is represented in these
proceedings by Mr Antoine Mbok, its sole director. The second
defendant is Helao Nafidi Town Council (‘the town council’),
a local authority council established under the Local Authorities
Act, 1992 (Act 23 of 1992), as amended. The third defendant is the
Registrar of Deeds. No relief is claimed against the town council and
the Registrar.
[2] It is common cause –
that the town council
was at all relevant times the owner of a certain piece of land known
as Portion 4 of Helao Nafidi Town and Townlands No. 997 (‘the
property’), measuring 49, 9986 hectares and situated at the
town of Helao Nafidi in the Ohangwena Region;
that on or about 10
September 2005, Northland and the town council concluded a deed of
donation in writing, Northland being represented by Mr Mbok and the
town council being represented by its chief executive officer, Mr
Christiaan Petrus Shivolo;
that in terms of the
deed of donation the town council donated the property to Northland,
who accepted the donation;
that in terms of the
deed of donation Northland would be liable for all services and
development costs of the property, as well as the transfer and
conveyancing costs;
that the third defendant
transferred the property and registered same in the name of
Northland by deed of transfer T7251/2005 on 10 September 2005.
[3] The Minister alleges
that the deed of donation was unlawfully concluded and that the
subsequent transfer and registration was also unlawful because his
prior approval for the transaction was not obtained as required by
statute. This is disputed by Northland. The Minister’s claim is
for an order declaring both the deed of donation and the subsequent
transfer of the property null and void.
[4] The Minister bases
his case on the provisions of section 30(1)(t) and section
30(1)(z)(ii) of the Local Authorities Act. Section 30 provides
for the powers, duties and functions of local authority councils.
Section 30(1)(t) states that a local authority council shall
have the power –
‘...............
to buy, hire or otherwise acquire, with the prior approval of the
Minister and subject to such conditions, if any, as may be determined
by him or her, any immovable property or any right in respect of
immovable property for any purpose connected with the powers, duties
or functions of such local authority council, or to so sell, let,
hypothecate or otherwise dispose of or encumber any such immovable
property’.
[5] Section 30(1)(z)(ii)
provides that a local authority council shall have the power
–
with the prior approval in writing of
the Minister in every particular case and subject to such conditions
as he or she may determine, to make grants or donations’.
[6] Ms Frieda Andreas is
a public servant and senior official in the Ministry’s
sub-division of land management, where she deals with land
administration and land management in terms of the Local Authorities
Act. She testified about the procedure to be followed when a local
authority like the town council in this case wishes to dispose of
land. She stated that the matter is governed by section 30(1)(t)
of the Local Authorities Act. The local authority is required to pass
a resolution at a properly constituted meeting and then to forward a
written request for prior approval via the Permanent Secretary of the
Ministry to the Minister. In the normal course such requests from a
local authority would be directed to her office for scrutiny. She
would check whether the request is complete and accompanied by the
required resolution, the draft deed of sale or donation or joint
venture agreement (if applicable). Once the request is complete she
draws up a submission or report to the Permanent Secretary
recommending approval or disapproval. After consideration by the
Permanent Secretary, a submission will be forwarded to the Minister,
accompanied by a recommendation. The Minister’s decision will
be relayed back in writing via the Permanent Secretary’s office
to the local authority.
[7] During 2009 she was
tasked with other officials to conduct an investigation into certain
affairs of the town council. She checked certain property files held
by the town council and discovered that the file relating to the
property in question was incomplete, inter alia in that it
contained only the deed of donation, but no other documentation, such
as a town council resolution, a written request for the Minister’s
approval for the proposed donation and no prior written approval by
the Minister for the donation. Furthermore, the deed itself was not
co-signed by the chairperson of the management committee or other
authorized staff member as required by section 31A of the Local
Authorities Act. During her investigation she found no evidence that
the Minister had ever given any permission for the property to be
alienated or disposed of in any manner. While she was still busy with
the investigation, she by chance noticed in a local newspaper’s
edition of 20 February 2009 that the particular property was being
advertised for sale by public auction to be held on 7 March 2009. She
alerted her superiors. As a result Mr Johan de Kock, who was the
Chief Regional Planner in the Ministry and who also testified at the
trial, ascertained that the transfer of the property had been
attended to by a conveyancer of Shikongo Law Chambers. He obtained
documentation in this regard from her, where after an urgent
application was launched in this Court to interdict the auction from
taking place.
[8] The plaintiff also
called the Permanent Secretary, Mr Erastus Ipinge Negonga, who served
in that capacity from 30 April 2003 to 31 May 2012, to testify. He
confirmed the procedure to be followed and that no documentation was
anywhere to be found recording that there ever was a request by the
town council for the Minister’s approval or that such a request
was ever handled, considered, commented upon, or forwarded to or
received and considered by the Minister or that he made any decision
on the matter. The conclusion reached was that there had been no
attempt to obtain any prior approval and that none was ever given.
[9] He confirmed that
action in this matter was instituted on 2 April 2009. During October
2009 it came to his attention that Northland again intended to sell
the property to a certain buyer in the United Kingdom. A second
urgent application was launched. On 23 October 2009 a rule nisi
was issued, interdicting the sale of and other transactions in
relation to the property. This rule was confirmed on 27 November
2007.
[10] I understood Mr
Negonga’s evidence to amount thereto that, as a matter of
policy, the donation of land to the private sector would be most
unusual, if not impossible, especially in the case of such a large
portion of valuable land as the property in this case.
[11] Mr Phillipus
Namundjebo, who was a member of the town council from 2004 to 2010,
testified that the donation of the property to Northland was never
discussed at any meeting of the council. He is not aware of any
resolution by the council to donate the property to Northland. He
denied attending any meeting between the council and representatives
of Northland where the issue was discussed and testified that the
council never approached the Minister for approval to donate the
property to Northland.
[12] On the pleadings
Northland’s case amounted to a denial that the deed of donation
and the transfer were unlawfully executed; a lack of knowledge about
the relevant statutory provisions; an allegation that it always acted
in good faith with the town council and that it could not be held
legally accountable for the town council’s actions. Northland
also raised a special plea that the plaintiff’s claim has
prescribed.
[13] At the trial
Northland’s case shifted direction. It no longer denied
knowledge of the relevant statutory provisions, but its
cross-examination and the testimony given on its behalf by Mr Mbok
was to the effect that the town council did in fact approach the
Minister for the required prior approval; that Northland participated
in preparing the town council’s written submission to the
Minister; and, what is more, the required approval was indeed
obtained on or about 16 March 2005. However, Mr Mbok explained, the
particular person who was the Minister at the time that the property
was allegedly donated, had passed away in the meantime and at the
trial the particular holder of the appointment as Minister is not the
same person. The gist of Mr Mbok’s cross-examination on behalf
of Northland was that for some undisclosed and apparently sinister
reason the witnesses before the Court had been instructed to withhold
information about the true position from the Court. Mr Mbok
rhetorically posed the question, ‘Now that the Minister is
dead, who will ever know the true position?’
[14] It is indeed common
cause that the particular Minister did pass away. However, Ms Andreas
testified that she was already working at the Ministry during 2005
and that there was never a request for the Minister’s approval.
Besides, even if the particular holder of the ministerial appointment
did pass away, there should have been a paper trail, which there is
not. In my view it is highly improbable that no shred of evidence
could be found anywhere in any office of the town council, of the
Permanent Secretary, of the sub-division of land administration and
land management or of the Minister that there was an application by
the town council application for approval to donate the property
which had been processed and had been successful.
[15] Mr Mbok suggested to
Ms Andreas that this was merely a matter of the particular property
file of the town council being incomplete because the relevant
documents were deliberately removed by someone. He claimed, to rather
startling effect, that he had all these documents in his possession.
However, these documents were never discovered and there was never
any attempt to place them before the Court, despite counsel for the
Minister inviting Northland to do so.
[16] Northland did file
and use a small bundle of other so-called discovered documents. There
was no objection to these documents being used, but it turned out
that they had in fact not been discovered. Be that as it may, Mr Mbok
presented a document to the court which is a memorandum of
understanding reached between the Town of Helao Nafidi, represented
by its town council members and Northland. He testified that the town
council had offered the property to Northland at the time at no cost
to persuade Northland to establish a development there instead of in
another Region. The document records ‘land transfer and
acquisition conditions’ between the two parties and states that
the town council offers a piece of undeveloped land measuring 50
hectares to Northland for the construction of ‘Northland City’
without cost, based on certain terms and conditions set out in the
memorandum. The document is dated 30 March 2005 and signed by Mr
Handjaba, the mayor, Mr Shivolo, the chief executive officer, Mr
Kennedy, the then chief executive officer of Northland, Mr Mkusa, the
then corporate finance director of Northland and several witnesses,
including Mr Mbok. Significantly, although the name of Mr Namunjebo
appears as a witness on this document, it is not signed by him. He
also denied attending the meeting at which the terms recorded in this
document was allegedly discussed. I accept his evidence.
[17] When he was shown
this document during cross-examination, Mr Negonga described it as
‘false’. However, I do not think that it is a false
document. It is probable that this document was indeed drawn up as a
recordal of a meeting between the town council and Northland where an
understanding along the lines set out in the document had been
reached.
[18] I am also prepared
to accept for purposes of this case that as a result of this
understanding, Northland set in motion the process to apply for the
sub-division of a certain piece of land known as the Remainder of
Helao Nafidi Townlands No. 997 into two portions, namely Portion 4
(the property) and the Remainder. Mr de Kock agreed in
cross-examination that the Namibia Planning and Advisory Board
resorting in the same Ministry granted this application subject to
certain conditions in terms of section 21 of the Townships and
Division of Land Ordinance, 1963 (Ordinance 11 of 1963), as amended,
and that it issued a certificate to this effect on 4 July 2004.
[19] However, as both Mr
de Kock and Ms Andreas emphasised, this approval of the sub-division
is a separate process which does not mean that the Minster has given
the required approval for the donation of the property to Northland.
In the absence of any proof of prior written approval by the
Minister, I am driven to the conclusion on the probabilities that
none was ever given.
[20] In a similar matter,
namely Northgate Properties (Pty) Ltd v The Town Council of the
Municipality of Helao Nafidi and others (High Court Case No.
A350/2008, unreported del. 5 May 2011), Miller AJ had occasion to
consider an application against the same town council as in this case
for an order declaring as null and void an agreement of sale
concluded by the town council without prior approval by the Minister
as required by section 30(1)(t) of the Local Authorities Act.
The Court was also requested to direct the Registrar of Deeds to
cancel the entry in the Deeds Registry indicating that the property
belongs to the purchaser. The Court granted this relief after stating
(at p12-13):
‘[25] As a
general proposition it is correct that in the abstract system of
passing of ownership, the transfer is independent from the underlying
contract, provided that the parties to the transaction have mutual
intention that ownership should pass.
[26] I refer in this regard to the
discussion of the topic by Prof. C G van der Merwe in LAWSA Vol.
27, para. 203 at 110. The learned authors of Silberberg and
Schoeman; The Law of Property, Third Edition, state the following at
p. 84:
“In terms of
the abstract theory the underlying contract and the act of transfer
(consisting of the real agreement plus delivery of registration)
legally from two independent acts, and a defect attaching to the
underlying contract will consequently not necessarily also attach to
the real agreement.”
[27] There are, however, certain
recognized exceptions to the general rule in our law. One of those
exemptions is that non-compliance with a statutory requirement, may
render invalid not only the underlying agreement but also the real
agreement. Whether this is so or not in any given case depends on the
intention of the legislature.
(Oshakati Towers (Pty) Ltd v
Executive Properties CC and Others (2) S009 (1) NR 232 at 245 G –
H).
[28] In this matter the conclusion of
the underlying agreement did not comply with the requirement of the
Local Authorities Act, 1992. It required the prior consent of the
relevant Minister as a peremptory requirement. The State has a vested
interest in the manner in which local authority councils go about
their business and how they dispose of and treat land within their
areas of jurisdiction.
[29] It is for this reason that the
Minister is granted regulatory powers when a town council like the
first respondent wishes to sell land to a third party, inasmuch as
the Minister’s prior consent is a requirement. Plainly it is
the intention of the Legislature that town councils should not be
permitted to alienate its land without the consent of the Minister.
This intention and object of the legislature will be defeated if the
real agreement is allowed to stand, despite the defects in the
underlying agreement.
In this case the defect in the
underlying agreement affects the real agreement rendering it likewise
invalid.’
I am in respectful
agreement with this authority.
[21] As stated before,
Northland also raised a special plea of prescription. It alleges that
the plaintiff’s cause of action arose on 10 September 2005 when
the deed of donation was concluded between the parties and that as
the action was only instituted on 2 April 2009, the plaintiff’s
claim had become prescribed on 9 September 2009. The plaintiff raises
several defences in replication. It is not necessary to deal with all
of them. Suffice it to say that on the probabilities the plaintiff
only became aware of the illegal deed of donation during 2009 and
took immediate action. Any plea of prescription must accordingly
fail.
[22] The result is that
there shall be judgment for the plaintiff for:
An order declaring the
Deed of Donation dated 10 September 2005 by the second defendant in
favour of the first defendant null and void and of no legal effect.
An order declaring the
transfer of Portion 4 of Helao Nafidi Town and Townlands No. 997
measuring 49 9986 hectares to the first defendant under Deed of
Transfer T7251/2005 null and void and of no legal force.
An order that the first
defendant pays the plaintiff’s costs of suit, such costs to
include the costs of one instructing and one instructed counsel.
_____________________
K van Niekerk
Judge
APPEARANCE
For the plaintiff: Adv S
Akweenda
Instr. by
Government-Attorney
For the first defendant:
Mr A Mbok
Director of the first
defendant (with leave of the Court)
Minister of Regional and Local Government Housing and Rural Development v Northland Development Project Ltd and Others (I 1119/2009) [2013] NAHCMD 145 (31 May 2013);