CASE
NO. A 350/2008

REPORTABLE

IN
THE HIGH COURT OF NAMIBIA

In
the matter between:

NORTHGATE
PROPERTIES (PTY) LTD
….................................................APPLICANT

and

THE
TOWN COUNCIL OF THE MUNICIPALITY OF

HELAO
NAFIDI
….........................................................................1^ST
RESPONDENT

MARTHA
NAMUNDJEBO-TILAHUN N.O. …....................................2^ND
RESPONDENT

THE
REGISTRAR OF DEEDS
…....................................................3^RD
RESPONDENT

THE
MINISTER OF REGIONAL AND LOCAL

GOVERNMENT
& HOUSING & RURAL DEVELOPMENT …..............4^TH
RESPONDENT

HADDIS
TILAHUN
…....................................................................5^TH
RESPONDENT

CORAM:
MILLER, AJ

Heard
on: 01 April 2011

Delivered
on: 05 May 2011

JUDGMENT

MILLER,
AJ : [1] In Namibia certain areas of land are known as
communal land. Their distinguishing feature is that the ownership
thereof vests in the State who currently deals with the land
according to the provisions of the Communal Land Reform Act, Act No.
5 of 2002. The statutory regime pre-dates the independence of Namibia
at a time when Namibia was still administered by the Republic of
South Africa. Although the State is the owner of the land, it holds
the land in trust on behalf of traditional communities and their
members who live there. The Communal Land Reform Act is administered
on behalf of the State by the Ministry of Lands, Resettlement and
Rehabilitation. As part of its functions the Ministry grants rights
to occupy specific areas within the communal land to specific
individuals who reside at or wish to conduct business from the
specific areas. In common parlance this authority is referred to as a
“Permission To Occupy” or in its abbreviated form as a
“PTO”. I will, when I refer to this, likewise, use the
abbreviated form “PTO”.

When
circumstances require it, the Local Authorities Act, Act 23 of 1992
entitles the Minister of Local Government and Housing to establish by
notice in the Gazette any area as a local authority and to declare
that area to be a municipality, town or village under the name
specified in that notice.

If
the area of a local authority thus established is in an area of
communal land the ownership of the immovable property vests
henceforth in the local authority so established. The rights of
ownership insofar as they concern amongst others the alienation of
such immovable property is not unlimited but curtailed by several
provisions contained in the Local Authorities Act. I will refer to
some of those, relevant to this case at the appropriate time.

[2]
Thus it came about that on 1 September 2002 the Helao Nafidi Town
Council was established and its establishment was published in
Government Gazette No. 3054 of 2003. Prior to the establishment of
the council the area upon which it was established formed part of
communal land and was occupied by virtue of PTO’s issued to
those who resided there. A specific piece of land now known and
described as Erf 13, Oshikango was likewise occupied in terms of a
PTO, which was renewed from time to time, the latest renewal being
issued on 24 October 2006.

It
is common cause that the PTO was issued to Namundjepo Northgate
Properties (Pty) Ltd. That name was changed to Northgate Properties
(Pty) Ltd on 28 May 2008. It is this entity which features as the
Applicant on these proceedings. Clause 10 of the PTO forms the
cornerstone upon which the Applicant bases its claim for relief and
it reads as follows:

“10. Options

Should title to
the allotment become possible, the Government of Namibia shall give
the said holder the first option of purchase thereof, the price being
equivalent to the average of two sworn valuators, one to be appointed
by the Government of Namibia and the other by the holder.”

[3]
It is common cause that Erf 13, as I will continue to refer to it was
sold by Deed of Sale dated 13 June 2007, to Martha Namundjepo-Tilahun
acting in her capacity as the nominee trustee for the Namundjepo
Family Trust to be formed. On 3 July the Erf 13 was transferred to
the Trustees for the time being of the Namundjepo Family Trust. This
entity was cited in these proceedings through the second respondent
who was cited in her capacity as a trustee. The fifth respondent who
is likewise a trustee was joined to the proceedings at a later stage.

It
is this transaction comprising the sale of Erf 13 and it subsequent
transfer which precipitated the present proceedings which the
Applicant launched.

Relief
claimed

[4]
The relief claimed by the Applicant, in its amended form is the
following. The respondents were called upon to show cause why -

“1.1 The
decision of the first respondent taken on or about 13 June 2007 to
enter into an agreement of sale with the second respondent for the
purchase of immovable property belonging to the first respondent such
property described as

Erf 13, Oshikango

In the town of
Helao Nafidi

Registration
Division “A”

Oshikango Region

(hereinafter
referred to as “the property”)

should not be
declared ultra vires the powers of the first respondent and
accordingly null and void, alternatively be reviewed and set aside in
terms of Rule 53 (1).

1.2 declaring the
agreement concluded between the first and second respondents pursuant
to the decision aforesaid – Annexure “HH13”
to the founding affidavit – in terms whereof the second
respondent purchased the property from the first respondent to be
null and void.

1.3 directing and
ordering the third respondent to cancel the entry in the Deeds
Registry indicating that the property belongs to the second
respondent.

1.4 directing that
the matter be referred back to the first respondent and that the
first respondent consider applicant’s exercise of its right of
pre- emption in respect of the property.

Alternatively

2.1 declaring the
agreement concluded between the first and second respondent aforesaid
– Annexure “HH13” to the founding affidavit –
in terms whereof the second respondent purchased the property from
the first respondent to be null and void.

2.2 directing and
ordering the third respondent to cancel the entry in the Deeds
Registry indicating that the property belongs to the second
respondent.

2.3 directing that
the matter be referred back to the first respondent and that the
first respondent consider applicant’s exercise of its right of
pre- emption.”

In addition the
applicant seeks a cost order against those of the respondents who
oppose the application.

The
applicant was represented at the hearing by the Mr van der Nest SC
who was assisted by Mr Corbett.

The
response of the respondents

[5]
The third and fourth respondents did not oppose the application.

Although
the first respondent indicated that it would not oppose the
application and would abide the decision of this Court, it
nonetheless filed an affidavit by its Chief Executive Officer, Mr
Michael Pandeni Sheelongo, “….. to set out the facts
which are within the Councils knowledge and which may be relevant in
assisting the Court to come to its decision”. The facts
disclosed were indeed relevant and helpful and assisted me to come to
a decision.

[6]
The second and fifth respondents opposed the application. It took
issue with the applicant on the following:

1)
It was contended that the Trust was not properly before the Court,
because the fifth respondent had not been cited. As I had indicated
the fifth respondent was subsequently joined at the behest of the
second respondent. Nothing more was made of the issue at the hearing
and the point was not pursued.

2)
The decision to sell the property does not constitute administrative
action. It remains a purely commercial transaction to which the
principles articulated in Open Learning Group v Secretary Ministry
of Finance and Others 2006 ( 1) NR 275 find no application.

3)
Even though the impugned decision may be administrative action and
thus capable of review there was inordinate delay in instituting
these proceedings with the result that I should decline to exercise
this court’s power of review.

4)
The agreement of sale was indeed a valid and binding transaction.
During argument before me this point was transformed somewhat to the
effect that whether valid or not, the first respondent is estopped
from denying the validity of the sale.

5)
As a fall back position it was contended that even though the sale
might have been invalid ab initio, that fact became one of academic
interest because the property had subsequently been transferred in
the Deeds Registry. Thus, so the argument went, by virtue of the
abstract theory of transfer, recognized in our law, the validity of
the transfer of the property did not depend on the validity or
otherwise of the agreement that preceded the transfer.

6)
Lastly, it was contended that absent a prayer to set aside the
transfer as invalid, the applicant was not entitled to the relief
claimed in prayer 1.3 of the notice of motion or the alternative.

Mr
Bokaba SC, assisted by Mr Namandje appeared for the second and fifth
respondents.

The
Review Application

[7]
A convenient and indeed decisive starting point is to be found in the
affidavit deposed to by Mr Sheelongo on behalf of the first
respondent, and more particularly the facts surrounding the
conclusion of the agreement of sale. These facts were not placed in
issue by the applicant nor by the second and fifth respondents and I
accept the facts as correct.

[8]
According to Mr Sheelongo the first respondent established a Land
Allocation Committee towards the end of 2005. Its function was to
consider applications for the purchase and sale of immovable property
and to make recommendations about these to the Town Council. Once the
first respondent resolved the sell a portion of land by way of
private treaty, the permission of the Minister of Regional and Local
Government and Housing is required before the transaction proceeds.
This latter requirement is in accordance with section 31 (t) of the
Local Authorities Act I pause to mention, which requires that a local
authority council, which by definition includes a municipality, a
township and a village may not, subject to the provisions of Part
XIII of that Act sell, hypothecate or otherwise dispose of or
encumber any immovable property, without the prior approval of the
Minister and then subject to such conditions, if any, as may be
determined by the Minister. The provisions of Part XIII of the Act do
not apply to the first respondent. Those provisions exempt a
municipality, which the first respondent is not, from obtaining the
prior permission of the relevant Minister.

[9]
Mr Sheelongo states that the former Chief Executive Officer of the
first respondent, Mr Shivolo, entered into the deed of sale with the
second respondent without the consent and knowledge of the first
respondent. The first respondent had in any event resolved at that
time not to sell the property until certain claims to the land by the
Namundjepo family had been resolved.

[10]
I conclude on these undisputed facts that the first respondent did
not take a decision to sell Erf 13 to the second respondent.
Accordingly there is no decision subject to review and the relief
claimed in this regard must fail. To the credit of the applicant, the
fact that the first respondent did not take a decision to sell Erf 13
was probably not known to the applicant when the proceedings were
launched.

The
validity of the Agreement

[11]
My finding that Mr Shivolo did not have the authority of the first
respondent to sell and the consent of the relevant Minister, leads to
the inevitable finding that the sale was null and void ab initio. To
that I must add that in terms of section 31 A of the Local
Authorities Act, any contract entered into shall be signed by the
Chief Executive Officer of the Local Authority Council and shall be
co-signed in the case of a municipality or a town council by the
chairman of the management committee or any staff member of that
council generally or specifically authorized thereto. This provision
is plainly cast in peremptory terms and the failure in the instant
case to comply with the provision provides a further basis upon which
the agreement is null and void.

[12]
Mr Bokaba, in argument contended that the agreement can not be
declared invalid as the first respondent is estopped from denying the
validity of the agreement. I do not agree with this argument.

[13]
In Union Government v Viannin Ferro-concrete (Pty) Ltd 1941 AD 43
the court accepted the definition of estoppel stated in Spencer
Bowes; The Law Relating to Estoppel as being part of South-African
Law and now part of our law.

[14]
The definition reads as follows:

“Where one
[person (i.e. representor) has made a representation to another
person (i.e. representee) in words or by acts or conduct (being under
a duty to the representee to act or speak) by silence or inaction,
with the intention (actual or presumptive) and with the result, of
inducing the representee on the faith of such representation to alter
his position to his detriment, the representor, in
any litigation which may take place afterwards between him and
representee,
is estopped as against the representee from making or attempting to
establish by evidence, any averment substantially at variance with
the former representation, if the representee, at the proper time,
objects thereto.”

(Emphasis
added).

[15]
The issue of estoppel plainly does not arise within the framework of
this case. There is no litigation between the second and fifth
respondent on the one hand and the first respondent on the other. The
issues that arose in this matter are issues between the applicant and
the second and fifth respondents. Whatever representation the first
representation may have made can not be raised as a defence against
the applicant.

[16]
The second and fifth respondents have further difficulties in this
regard. They did not raise the issue of estoppel on the papers, as
they should have done. The matter of estoppel was raised for the
first time during argument before me. This is not permissible (J C
Sonnekus; The Law of Estoppel in South Africa; Second Edition, p.
17).

[17]
Moreover the second and fifth respondents bear the onus of proving
the defence. There are simply no facts sufficient to discharge that
burden of proof.

The
validity of the transfer

[18]
Mr Bokaba relies on two pieces of evidence in support of his argument
that the first respondent validly caused Erf 13 to be transferred in
the Deeds Registry.

[19]
Firstly, he points to the fact that on 3^rd of July 2008,
Mr Shivolo executed a power of attorney authorizing the conveyancer
to effect the transfer of the property. There is however not a shred
of evidence that Mr Shivolo when he executed the power of attorney,
did so with the knowledge and consent of the first respondent. The
probabilities are that he had no such authority.

[20]
Secondly, Mr Bokaba refers to a series events which took place at the
time when the applicant became aware that Erf 13 had been sold and
the transfer of the property was about to take place. Initially the
first respondent on 24 March 2005 addressed a letter to the
applicant. The text of the letter reads as follows:

“Re: Offer
to purchase

1. Helao Nafidi
Town Council was established in terms of the Local Authorities Act,
Act 23 of 1992 as amended and it administers the civic administration
for Oshikango, Engela/Emafo, Ohangwena and Oshona. All land within
the town of Helao Nafidi belongs to the Town Council.

2. Currently you
are the PTO holder of PLOT/ERF No. 13 measuring 20,435 m².
We wouldlike to take this opportunity to offer you the
first opportunity to purchase off such PLOT/ERF

(details available
at the office).

You are humbly
requested to purchase off your PLORT/ERF within a reasonable period
of 21 days from the date of this notice.

We count on your
usual support and co-operation.”

The
letter was signed by Mr Shivolo.

[21]
Thereafter followed an exchange of correspondence between the
applicant and the first respondent and on 5 June 2007 the applicant
submitted an offer to purchase the property and to enquire what the
purchase price was, which it offered to deposit to the first
respondent’s bank account. Unbeknown to the applicant Mr
Shivolo entered into the deed of sale with the second respondent some
days later. The applicant continued to make enquiries regarding
progress to no avail. Remarkably Mr Shivolo did not advise the
applicant that Erf 13 had in fact been sold.

[22]
It is apparent from the affidavit filed by Mr Shivolo that on or
about the 24^th of July 2008 the legal representatives of
the applicant telephoned both himself and the conveyancer, Mrs
Greyvenstein, and threatened to bring an urgent application to
prevent the transfer of the property. By then the necessary documents
had been lodged in the Deeds Registry and the transfer was imminent.
Mr Sheelongo adopted the stance that the Council would only consider
stopping the transfer once such application was launched. As matters
turned out the transfer took place the next day.

[23]
Mr Bokaba points to the stance adopted by Mr Sheelongo when the
applicant threatened to institute legal proceedings. This, he argues,
is sufficient evidence that the first respondent had resolved to
transfer the property. I do not agree. On the facts in their totality
it is clear that no such decision was taken. I would have expected Mr
Sheelongo to disclose the resolution by the first respondent to
authorize the transfer, had such a resolution been taken. Mr
Sheelongo attached to his affidavit all the documents in possession
of the first respondent relevant to Erf 13. There is no resolution to
transfer Erf 13 amongst those documents

[24]
Even if my findings on the facts are wrong, on this issue, the point
taken must fail as a matter of law.

[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 the
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 form 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 that 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) 2009 (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 the 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 Minster’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.

[30]
I turn to the last point raised by Mr Bokaba which is to the effect
that there ought to have been a prayer declaring the transfer
invalid. My finding that the act of transferring the property is
invalid is not dependent on a prayer seeking such relief in specific
terms. It is sufficient that I in that event grant the applicant the
relief claimed in paragraph 1.3 of the Notice of Motion.

[31]
It follows that the applicant is entitled to relief which I will
grant in the order issued at the conclusion of this judgment.

[32]
It is for that reason that I must decide upon the Conditional Counter
Application filed by the second and fifth respondents. In essence
they claim that the records of the fourth respondent should be
rectified to reflect the holder of the PTO in respect of Erf 13 to be
George Namundjepo in his capacity as joint executor in the estate of
the late Eliakim David Namundjepo, alternatively the Namundjepo
Family Trust.

[33]
The application is premised on the fact that the transfer of the PTO
to the applicant was done in error inasmuch as the PTO issued to Mr
George Namundjepo on 1 October 1996 and issued to him in his personal
capacity, should have been issued to him in his capacity as the
executor in the estate of the late Eliakim David Namundjepo.

[34]
It is apparent, however, that this is a belated attempt on the part
of the Trust to acquire rights in and to Erf 13. The fact that Mr
George Namundjepo acquired the PTO in his own name and that it was
subsequently transferred to the applicant was known by the second
respondent and the Namundjepo family for many years prior to the
counter claim application being launched. So was the fact that the
applicant was conducting business on Erf 13. On the evidence as a
whole and the probabilities the second and fifth respondents fail to
make out their case. It follows that the counter application must be
dismissed.

[35]
In the result I make the following orders:

1.
The agreement of sale concluded between the first and second
respondents signed on 13 June 2007 in terms whereof Erf 13, Oshikango
was sold to the second respondent is declared null and void and of no
force and effect.

2.
The third respondent is directed to cancel the entry in the Deeds
Registry indicating that the property belongs to the second
respondent.

3.
The matter is referred back to the first respondent to consider the
applicant’s exercise of its right of pre-emption in respect of
the property.

4.
The conditional counter application is dismissed.

5.
The second and fifth respondents are ordered to pay the costs of this
application and the conditional counter application, jointly and
severally, the one paying the other to be absolved such costs to
include the costs of one instructing and two instructed counsel.

_____________

MILLER,
AJ

ON
BEHALF OF THE APPLICANT ADV. VAN DER NEST, SC, ASSISTED BY ADV.
CORBETT

Instructed
by: ENGLING, STRITTER & PARTNERS

ON
BEHALF OF THE 2^ND& 5^TH
RESPONDENTS: ADV. BOKABA, SC ASSISTED BY MR NAMANDJE

Instructed
by: SISA NAMANDJE & CO.