Namundjebo-Tilahun NO and Another v Northgate Properties (Pty) Ltd and Others (SA 33 of 2011) [2013] NASC 12 (07 October 2013);
REPORTABLECASE
NO: SA 33/2011
IN THE SUPREME COURT
OF NAMIBIA
In the matter between:
HADDIS |
Second |
and
MINISTER |
Fourth |
Coram: MARITZ JA,
MAINGA JA and STRYDOM AJA
Heard: 15 November
2012
Delivered: 7
October 2013
APPEAL JUDGMENT
____________________________________________________________________
STRYDOM AJA (MARITZ JA
and MAINGA JAconcurring):
The first respondent
brought an application in the High Court of Namibia for a review in
terms of rule 53, alternatively a declaratory order in which it
claimed the following relief:
'1. Calling upon the respondents 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 first respondent, such property being described
as:
Erf No. 13, Oshikango
In the town of HelaoNafidi
Registration Division “A”
Oshikango Region
(hereafter “the property”)
Should not be declared ultra vires
the powers of the first respondent andaccordingly 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 and of no
force and effect.
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.
2. Ordering the first and second
respondents, and any other respondents who may oppose this
application, to pay the costs of this application jointly and
severally, the one paying the others to be absolved.
3. Further and/or alternative relief.'
At a later stage the
first respondent amended its notice of motion by inserting, after
para 1.4 of its original notice, and in the alternative to its
original notice, the following paragraphs, namely:
'1. Declaring the agreement concluded
between the first and second respondents pursuant to the decision
aforesaid – annexure "HH13" to the finding
affidavit – in terms whereof the second respondent purchased
the property from the first respondent, to be null and void and of no
force and effect;
2. Directing and ordering the third
respondent to cancel the entry in the Deeds Registry indicating that
the property belongs to the second respondent;
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
respect of the property.'
The first respondent’s
application was successful and the following order was granted by
the Court:
‘1. That 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. That the third respondent is
directed to cancel the entry in the Deeds Registry indicating that
the property belongs to the second respondent.
3. That 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. That the conditional counter
application is dismissed.
That the second and third respondents
are ordered to pay the costs of the 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.’
The appellants lodged an
appeal against the whole of the judgment and orders made by the
Court a quo.
In the Court a quo
the second respondent in the appeal was the first respondent.
The first appellant was styled as the second respondent with the
Registrar of Deeds and the Minister of Regional and Local Government
and Housing and Rural Development respectively as third and fourth
respondents. The first respondent in the appeal was the applicant.
Only the first and second appellants appealed the order of the Court
a quo. The second appellant had been joined asa party during
the proceedings. In order to avoid confusion I will refer to the
respondents cited in the appeal as follows:
to the first respondent
as 'Northgate';
to the secondrespondent
as 'the Town Council';
to the third respondent
as 'the Registrar'; and
to the fourth respondent
as 'the Minister'.
Because the appellants
drew a distinction between Namundjebo Northgate Properties (Pty) Ltd
and Northgate Properties (Pty) Ltd I will, wherever I intend to refer
to the first named, refer to 'NamundjeboNorthgate Properties’
Background
Northgate alleged that
it was the holder of a Permission to Occupy (PTO) in regard to Erf
13,Oshikango, situated within the Township of HelaoNafidi. A
certificate, issued in the name of Namundjebo Northgate Properties
(Pty) Ltd, was attached to its application. On 25 July 2008, through
their legal practitioners, Northgate discovered that the property,
known asErf 13, Oshikango, had been transferred to a trust known as
the Namundjebo Family Trust(the Trust) and of which the appellants
were the provisional trustees. Prior to the transfer, Mr Kutzner,
the legal practitioner on behalf of Northgate, had informed the
legal practitioners of the Trust of Northgate’s rights in
regard to Erf 13 and had threatened to bring an urgent interdict to
prohibit the transfer of the Erf in the name of the Trust. However,
it did not make good its threat and Erf 13 was registered in the
name of the Trust. Northgate then brought the present application in
the High Court of Namibia
Before independence, and
until after independence the areas of Municipalities and Village
Councils were delimitated and proclaimed and erven were measured and
set out, no private persons or registered companies could own land
in what is now known as communal areas such as the then Owambo.The
concept of a PTO was established by legislative enactment. (See s 47
of Regulation 188 of 1969.) It granted to the holder thereof certain
rights in regard to the piece of land occupied, of which the most
important was the right of pre-emption of the land whenever it was
possible to own property in that area. The certainty that the holder
of the PTO could, in time, become the owner of the property occupied
by him or her, stimulated development of the areas held in terms of
a PTO. Buildings were erected on the land so held, sometimes to the
value of millions of dollars as is evidenced in this particular
instance. A PTO was granted by the Permanent Secretary in the
Ministry of Regional and Local Government and Housing and Rural
Development and was not transferable without his permission. The
granting of a PTO was also a matter of record and certificates were
issued to the holders thereof setting out the terms under which it
was held. One such condition was that the holder of the PTO could
not transfer any of his rights to another entity or person without
the written consent of the Permanent Secretary of the Ministry. In
regard to the law applicable to PTO’s and the effect and
status of a PTO there is no dispute between the parties.
Mr Hamm, the deponent on
behalf of Northgate, further explained that this particular PTO had
been granted to Mr George Namundjebo, a brother of the first
appellant, on 1stOctober 1996. Thereafter, the company
Namundjebo Northgate Properties was established with a shareholding
of 4000 shares of which only a 100 shares were issued. Of these, 10
shares were held by MrNamundjebo and 90 shares by Namibia Breweries
Ltd (NBL).MrNamundjebo thereafter applied for the transfer of the
existing PTO, held by him in his personal capacity, to Namundjebo
Northgate Properties. Permission was granted and the certificate,
referred to herein before, was issued to reflect the name of the new
holder of the PTO. The property was developed to the tune of N$7,5
million with capital provided by NBL.
It was further explained
that Mr George Namundjebo had entered into various business ventures
of his own without much success and soon found himself deep in debt.
To assist him and to extricate him from his indebtedness NBL bought
his shares in Namundjebo Northgate Properties and in Northgate
Exports (Pty) Ltdfor an amount of N$1,1 million and further advanced
to him a loan of N$58 151,13. This is all reflected in a written
agreement entered into by the parties. NBL was now the only
shareholder of Namundjebo Northgate Properties. On 28 May 2008,
application was made to the Registrar of Companies to drop the word
‘Namundjebo’ from the company name. This was only a
change of name and NBL remained the only shareholder in Northgate.
After the Town Council
of HelaoNafidihad beenestablished a MrShivolo, the CEO of the
Municipality,addressed a letter to Namundjebo Northgate Properties
as the PTO holder of Erf 13 'to offer you the first opportunity to
purchase off such plot/erf'. The letter was dated 24/03/2005 and
furthermore the PTO holder was given 21 days from the date of notice
to indicate its willingness to purchase Erf 13. Namundjebo Northgate
Properties did not respond to this invitation. On the 18th
September 2006 a further letter was addressed, this time to NBL, to
offer them the purchase of Erf 13, and it was given until the 30th
October 2006 to make all the necessary arrangements to buy the erf.
A third letter, dated 9th November 2006, was addressed by
MrShivolo to NBL in which reference was made to a telephonic
communication regarding the payment of the erf and MrShivolo
undertook to take up the concern of NBL, regarding the payment of
the erf, with the Town Council. Thereafter, and on 6th
June 2007, an application to purchase the property was sent to the
Town Council together with a request to inform Namundjebo Northgate
Properties of the purchase price of the erf and an undertaking was
given to transfer such amount to the bank account of the Town
Council, seemingly once the purchase price had been determined.
Further correspondence
followed upon this request but no progress had been made to finalise
the sale. From the correspondence it seemed that the legal
practitioners ofNamundjebo Northgate Propertieswere of the opinion
that there was some unnecessary stalling on the part of the CEO to
finalise the purchase of Erf 13. MrShivolo then informed Namundjebo
Northgate Properties that it had come to his knowledge that there
was a dispute between the company and the Namundjebo family as to
the status of the premises and advise Namundjebo Northgate
Properties that the Municipality did not want to become entangled in
such dispute and 'will wait for clarity before we can act promptly'.
The existence of such a dispute was denied by Namundjebo Northgate
Properties. Whilst the correspondence was still ongoing, and
notwithstanding MrShivolo’s intimation that the Town Council
did not want to become entangled in the dispute, he entered into a
contract of sale with the first appellant, as nominee trustee for
the Trust, whereby he sold Erf 13, Oshikango, to the Trust.
The first appellant
deposed to an affidavit on behalf of the Trust. She stated that for
as long as she could remember, and prior to the proclamation of the
township HelaoNafidi, the land surrounding the area known as
Oshikango was allocated to the Namundjebo family in accordance with
the customs and traditions applicable in that area. This included
the disputed property, Erf No 13. When her father died her brothers
George and Phillip(the latter also being a headman and steeped in
the customary law of that area) had been appointed as joint
executors of the estate. Her late father had various business
interests and himself held various PTO’s in the communal areas
in northern Namibia. The first appellant together with her brothers
and mother were the beneficiaries of the Trust and she and the
second appellant were the first trustees appointed. She stated that
her brother George, as joint executor of the estate of her late
father, attended to the interests of the estate in the Oshikango
area, including Erf 13. It was in that capacity that a PTO was
issued to him. However, it was incorrectly issued in his personal
capacity and should have reflected that he was holding the PTO in
his capacity as a joint executor of the estate.
The first appellant
described how Mr List of the Ohlthaver and List group of companies
had become interested to establish a warehousing and trading
facility for the distribution of the products of NBL to Angola. This
led to the formation of Namundjebo Northgate Properties which was a
defensive name registered by her brother George. She stated thatit
was never the intention of her brother George or the Namundjebo
family that the PTO should have been registered in the name of the
company. According to her brother George, it was contemplated that
NBL would provide capital for the purposes of laying a floor in the
warehouse, which was already partly constructed, and which would
have sufficient strength to accommodate forklifts and other heavy
machinery. As a quid pro quo NBL would not pay rental to the
estate, or later, to the Trust, until the capital costs invested by
it had been applied and set off against such rental and use.
First appellant went on
to state that the registration of the PTO in the name of Namundjebo
Northgate Properties had been a mistake and had never been intended
by the joint executors or the family. Such registration had
therefore been done in error by the Ministry at the time and those
records needed to be rectified. To that extent the first appellant
launched a conditional counter claim for the rectification of the
Ministry's records.
It was further explained
that first appellant’s brother George started a supermarket on
the premises of Erf 13 but, as a result of financial losses, a
company of theOhlthaver and List group under the name of Safeway and
Pick and Pay was subsequently established on the property.
During 2005 Mr George
Namundjebo received a copy of a letter addressed to Namundjebo
Northgate Properties by the Town Council in which the Town Council
had offered to sell the property, Erf 13. This letter was shown to
the first appellant and she then approached MrShivolo, the former
Town Clerk of HelaoNafidi. First appellant explained to him that the
said property had previously been allocated to her family and that
the Trust had succeeded the estate. In her capacity as nominee
trustee of the Trust, the first appellant then applied to purchase
the property. This happened on 6 June 2007. Subsequently an
agreement of sale was concluded and thereafter the property was
transferred by registration to the Trust.
In regard to the
shareholding of Mr George Namundjebo in the company Namundjebo
Northgate Properties, the first appellant denied that that
shareholding had anything to do with the PTO and she stated that it
only related to his participation in the company conducting the
warehousing and trading business on the premises. In regard to the
sale and with reference to the affidavit of MrSheelongo, the acting
CEO of HelaoNafidi, the first appellant submitted that the Town
Council was capable of ratifying the sale and would be approached to
do so in so far as it might be necessary. First appellant further
denied that s 63(1) read with s 63(2) were applicable to the Town
Council. She also denied that improvements to the sum of N$7,5
million had been made on the property.
In regard to the
affidavit by MrSheelongo, the first appellant disputed his authority
to make such affidavit. This was done on the strength of a
communication by her brother, Philip Namundjebo, who was the
Chairperson of the Management Committee of the Town Council, who
stated that no such meeting had been held whereby MrSheelongo was
authorised to make such affidavit.
Although the Town
Council did not oppose the application by Northgate,MrSheelongo, its
acting Chief Executive Officer, filed an affidavit on the
instructions of his Management Committee to set out the facts of
which the Council had knowledge concerning the dispute and which
facts may have been relevant to assist the Court.
MrSheelongo pointed out
that the property known as stand No 13 was formerly administered by
the Ohangwena Regional Council. The HelaoNafidi Town Council was
established on 1st September 2003 by publication by the
Minister in Government Gazette No 3054 of 2003. Prior to its
proclamation the said Regional Counsel had the power to allocate and
distribute land on behalf of the State.
According to the records
a PTO in respect of the stand known as Erf 13, Oshikango, was
granted to Mr George Namundjebo on 1 October 1996. However, on9
October 1996, an application was made by MrNamundjebo for the
transfer of the PTO to a company, Namundjebo Northgate Properties
(Pty) Ltd. In both instances copies of the relevant documents,
evidencing the granting of the PTO to MrNamundjebo and the later
transfer thereof to Namundjebo Northgate Properties, were attached
by MrSheelongo. This change of ownership of the PTO to Namundjebo
Northgate Properties (Pty) Ltdwas duly granted by the Permanent
Secretary and again the deponent attached the relevant documents in
support of this allegation.
Mr Sheelongo continued
to state that a valid offer was extended to Namundjebo Northgate
Properties on 24 March 2005 to buy the said stand but itdid not take
up the offer and did not exercise its right of pre-emption of the
stand.
MrSheelongo then
explained the procedure followed by the Municipality where a
property was sold privately. A Land Allocation Committee was
established by the Town Councilto consider applications for land.
All land within the Town Council’s jurisdiction could only be
sold or allocated through the Land Allocation Committee. This
committee considers applications and, if satisfied that all the
requirements of the Council had been met, it recommends the sale of
land by public or private tender to the Town Council for approval.
If the sale is by private tender, permission of the Minister to sell
the land is obtainedafter the Council has resolved to sell the land.
MrSheelongo further
stated that the Town Council did not take a decision to enter into
an agreement of sale of Erf 13, Oshikango, to the first appellant.
He stated that MrShivolo, the then CEO of the Town Council, was
fully aware that Namundjebo Northgate Properties was the lawful
holder of the PTO over the property. The Town Council had been aware
of the dispute between the holder of the PTO and the Namundjebo
family concerning Erf 13 and Council was not prepared to sell the
property to either party until the dispute had been resolved.
The deponent further
stated that the Town Council was unaware of the sale of the Erf by
MrShivolo to the first appellant. For this reason the Town Council
conceded that the sale was null and void. MrSheelongo further
explained that because of serious allegations of mismanagement of
the assets of the Town Council, including his dealings in regard
toErf 13, MrShivolo had since been suspended from his position as
CEO of the Town Council. He stated that the Council was fully aware
of Namundjebo Northgate Properties’ right of pre-emption but
had as yet not resolved to sell the property to either of the
contestants because of the dispute.
MrSheelongo went on to
state that it was common cause that MrShivolo did not have the
consent of the Town Council to sell the property to first appellant,
nor did he follow the procedure to refer the matter to the Land
Allocation Committee for their consideration and recommendation to
the Council. However, he was aware that the Town Council’s
legal practitioners, LorentzAngula Incorporated, were instructed by
Shivolo to attend to the transfer of the property to the first
appellant and once they had received a duly signed Power of Attorney
by the CEO they were, in his opinion, obliged to give effect
thereto.
The deponent further
stated that he was informed by a MsGreyvenstein, the Town Council’s
legal practitioner, that she was contacted by a MrKutzner, the legal
practitioner for Northgate, who enquired about the status of the
transfer of the property and that he advised MsGeyvenstein that they
would prepare an urgent application to stop the transfer.MrSheelongo
then advised MsGreyvenstein that the Town Council would only
consider stopping the transfer if Northgate brought an urgent
application setting out their reasons why the transfer should not
proceed.
MrSheelongo ended his
affidavit by again conceding, on behalf of the Town Council, that
the sale between itself and the first appellant was invalid and
should be set aside.
What is clear from the
affidavit of MrSheelongo is that the previous CEO of the Town
Council acted from the start without any authority by the Town
Council as the Town Council, because of the existing dispute, was
not willing to even consider a sale of Erf 13 until the dispute had
been resolved one way or the other.Not only did he not have any
authority for his dealings in this regard but he also did not follow
the procedure laid down by the Council, namely to refer the matter
first to the Land Allocation Committee for their recommendation to
the Council.The fact that he had offered to sell the stand to
Northgate is a clear indication that he had no ilntention to obtain
the prior approval of the Minister for the sale. This is further
strengthened by the fact that it is common cause that MrShivolo also
did not obtain the prior approval of the Minister for the sale of
Erf 13, Oshikango, to the Trust. The bestMrShivolo could do was
perhaps to invite Northgate to make an offer to purchase the stand
but he himself did not have any authority to offer Erf 13 for sale
to Northgate.
The issues to be
decided
Although various points
in limine were foreshadowed in the affidavit of the first
appellant these, with the exception of the review point, either fell
away because of the Court a quo’s finding that the
matter was not reviewable or were rejected by the Court a
quo.Before us the only preliminary point that we were addressed
upon was the standing of Northgate to bring the application.I will
deal with this issue at a later stage.
It seems to me that
there are only two main issues, with some subordinate points,to be
decided by this Court. The main issues are firstly the question of
who the rightful owner of the PTO was and with that, the issue of
the standing of Northgate to have brought this application, The
second main issue is the validity of the sale agreement signed by
MrShivolo, purportedly on behalf of the Town Council, and flowing
from that also the issues of the alleged lapsing of the offer to buy
the property, the effect of the registration in the name of the
Trust and the issue of estoppel.
The granting of a PTO
was a matter of record. Mr van der Nest SC, assisted by Mr Corbett,
pointed out that in terms of s 25(1) of the Black Administration
Act, No 38 of 1927, read with s 21(1) and 48(1) of the Black Trust
and Land Act, No 18 of 1936 and in terms of Government Notice R188
of 1969, the then State President of South Africa issued certain
Black Areas Land Regulations which also applied to the then South
West Africa. In terms of Regulation 47(1) a person could apply for a
'trading allotment' in the form of a PTO. Regulation 47(5) provided:
'(5) No person shall occupy any Trust
land (read:“communal land”) within a black area unless he
has been or has been deemed to have been duly authorised to do so
under these regulations or any other law.'
The occupation of land
for business purposes was provided for in terms of s 6(1) of the
Regulations and stated as follows:
'6(1) No person shall remain in
occupation of any portion of land acquired by the Trust after the
commencement of these regulations except with the permission in
writing of the Bantu Affairs Commissioner and on such terms and
conditions as such Bantu Affairs Commissionermay specify in such
permission.'
In terms of Article
140(1) of the Namibian Constitution this statutory regime of
pre-independence laws, survived the independence of Namibia and
Article 140(4) stated that 'any reference in such laws to the
President, the Government, a Minister or other official or
institution in the Republic of South Africa shall be deemed to be a
reference to the President of Namibia, or to a corresponding
Minister, official or institution of the Republic of Namibia . . .
'. The corresponding officer to the‘Bantu Affairs
Commissioner’ in R 6(1) is now the Permanent Secretary in the
Ministry.
As far as communal land
was concerned, Article 100 of the Namibian Constitution vested the
ownership of land 'if they were not otherwise lawfully owned' in the
State. See further s 17(1) of the Communal Land Reform Act, Act No 5
of 2002 which provides that communal land is held in trust by the
State for the benefit of the traditional communities residing in
those areas. It furthermore provides that no right conferring
freehold ownership is capable of being granted in respect of
communal land. (See s 17(2).)
In regard to the PTO
held by Northgate there is a clear paper trail leading up to the
granting of the PTO to Namundjebo Northgate Properties. The first
PTO granted in respect of Erf 13, Oshikango, was on a pro forma
application form in which Mr George Namundjebo applied, in his
personal capacity, on 1 October 1996 for the right to occupy this
Erf in order to conduct a business thereon. Written permission was
granted by the Permanent Secretary of the Ministry. On 8 October Mr
George Namundjebo applied for the transfer of the PTOto Namundjebo
Northgate Properties. Again written permission was granted by the
Permanent Secretary of the Ministry and a written certificate in the
name of Namundjebo Northgate Properties, containing also the
conditions for such occupation, was issued.
In contrast to the
above, the appellants’ claim to be the rightful owner of the
PTO in regard to Erf 13 is, to say the least, confusing.The claim is
firstly based on the allegation that land, including Erf 13,
Oshikango, was allocated to the family, and more particularly the
late father of the first appellant, in terms of the traditions and
customs of the people of that area. In this regard there is the
affidavit of Mr Julius Shelunga, a headman in the area, supporting
the allegation by the first appellant. This however, did not
constitute, in the light of the legislation referred to above, a PTO
and, as was pointed out by Mr van der Nest SC, at best only allowed
for the use of the property. Later on the first appellant contended
that her late father was granted the particular PTO either expressly
or tacitly. This claim was based on the final liquidation account of
her late father’s estate which, under the heading immovable
property, referred to various properties, inter alia, also a
shop at Oshikango. The reference to immovable property is a misnomer
as at that stage no private person was allowed to possess immovable
property in communal areas. The first appellant’s evidence in
this regard is also contradicting. She firstly stated that her
brother, Mr. George Namujndjebo had started a supermarket on Erf 13,
Oshikango, which was unsuccessful and now she claimed that her late
father, the holder of the PTO, ran a shop on the same premises. The
requirement that the PTO mustbe in writingseems to me to exclude the
granting thereof tacitly or expressly unless it had been reduced to
writing. The first appellant was not able to produce any written PTO
granted to her late father in regard to the property. In my opinion
there is no such PTO otherwise a PTO could not have been granted to
Mr George Namundjebo over a property which had already been held by
another person. I am satisfied that on the evidence the first PTO
which had been granted over the property, Erf 13,Oshikango, had been
the PTO granted to Mr George Namundjebo.
However, it was also
contended by the appellants that Mr George Namundjebo, being an
executor in the estate of their late father, should have applied for
the PTO in the name of the estate of her late father or should have
reflected that he applied for it in his capacity as an executor of
the estate. It was further explained that the company Namundjebo
Northgate Properties was supposed to only deal with the shareholding
of the company, of which Mr.Namundjebo was a shareholder,and was
separate of, and did not also include, the land on which the
business was to be conducted. It was alleged that the name of the
company, Namundjebo Northgate Properties, was only registered as a
defensive name.
All the documentary
evidence placed before the Court gainsaid the above allegations. The
applications for the PTO and the transfer thereof to Namundjebo
Northgate Properties were made in the personal capacity of
MrNamundjebo, unqualified as is alleged above. What is more there is
no explanation by MrNamundjebo why he applied for the PTO in his
personal capacity when he was supposed to have acted only as an
executor of their late father’s estate. Likewise there is no
explanation why he applied for the transfer of the PTO to Namundjebo
Northgate Properties if the company had nothing to do with the land
and was something separate from the holding of the land. As a person
involved in business, he should have been well aware of the
significance and the effect of acquiring a PTO and its further
transfer thereof in the name of the company. Similarly, when he had
sold his shareholding in the company, he should have realisedthat he
had effectively divested himself of having any say in regard to the
PTO. Why did he or the family not take any steps to rectify the
situation if it was all along the intention to separate the holding
of the land from the shareholding of MrNamundjebo in the
company?MrNamundjebo’s silence on all these issues raises
doubt as to the veracity of such allegations.
The fact that Namundjebo
Northgate Properties, and later Northgate, did not pay any rent for
their occupation of Erf 13 was explained as a set off against the
capital loaned by NBL to construct the floor of the warehouse.
Again, there is only the bare allegation made without any detail in
regard to such agreement. The information about the said agreement
could only have come from Mr George Namundjeboand the Court would
have expected him to provide details concerning the terms of such
agreement i.e. what the amount of the loan was, at what rate per
month the loan was paid off etc. Such evidence would have been
important because it could have explained why no rent was ever paid
by Namundjebo Northgate Properties to the Namundjebo family or the
estate and could have strengthened the case for the appellants.
Again,the bare allegation of such an agreement raises more questions
than answers.
After the Township was
proclaimed, the ownership of the land within its jurisdiction became
the property of the Township subject to existing rights. (See s
3(3)(a) and (b) of Act 23 of 1992.) It is common cause
that those existing rights are representedby PTOs issued before
Independence or since by the Permanent Secretary of the Ministry. As
there was no PTO in existence in regard to Erf 13, Oshikango, there
was no legal impediment which prohibited the granting of the PTO to
Mr George Namundjebo and its further transfer to Namundjebo
Northgate Properties. It is also not alleged by the appellants that
the granting of such PTO to Mr George Namundjebo was unlawful.
For the reasons set out
above I am satisfied that the evidence presented by the appellants
do not raise a genuine or bona fide dispute in regard to who
is the rightful holder of the PTO in regard to Erf 13, Oshikango,
and I find that Northgate is the rightful holder of the said PTO.
For the same reasons set out above it follows that the conditional
counterclaim of the appellants must also be dismissed.
MrBokaba SC, assisted by
Mr Rajan and Mr Namandje, challenged the standing of Northgate to
have brought the application on the basis that it was a different
entity fromthat of Namundjebo Northgate Properties (Pty) Ltd in
whose name the PTO had been issued. He referred to the allegation by
MrSheelongo that he had no knowledge of Northgate being the holder
of the PTO. Counsel submitted that there had never been a cession by
Namundjebo Northgate Properties (Pty) Ltd to Northgate or any other
entity and that Northgate therefore lacked the necessary standing to
have brought the application.
In support of his
submissions counsel referred the Court to the case of Maasdorp
and Another v Haddow NO and Another, 1959 (3) SA 861(C) where
the following was stated at 866A-E, namely-
'It is essential throughout that it be
borne in mind that applicants’ contract was not with the
company but with certain private individuals and that,
notwithstanding the confused language of clause 2, it related
toshares and not to the immovable property of the company. A change
in the personality of the shareholders would not ordinarily affect
the legal rights of a company in and toits immovable property, for it
would remain vested with the ownership and would continue in
possession and occupation thereof. All that would be changed would be
the control of the company. Shareholders could not, without the
consent of the company, merely by selling their shares, give the
purchasers in their private capacities a possession and occupation of
the immovable property adverse to that of the company.'
Counsel submitted
therefore that the PTO remained vested in Namunjebo Northgate
Properties (Pty) Ltd and that, whatever rights flowed from the PTO,
could only have been exercised by Namundjebo Northgate Properties
(Pty) Ltd and no other entity.
After its standing had
been challenged Northgate attached a notice in terms of s 44(1)(b)
of the Companies Act, 61 of 1973,whereby the name of the company was
changed by dropping the name 'Namundjebo'from the name of the
company. What happened constituted only a change of name. The
company and its structure were not altered and NBL remained the only
shareholder of the issued shares in Northgate. Where, as in this
instance, the name of a company is changed without change of its
structure, no cession of rights or assignment of obligations are
necessary. The change of name of the company did not affect any
rights, debts, liabilities or obligations of the company. It did
also not render defective any legal proceedings by or against the
company instituted or defended by such company. (See s 44(3) of Act
61 of 1973.)
In regard to the second
main issue namely, the validity of the sales contract concluded
between MrShivolo, purportedly acting on behalf of the Town Council
of HelaoNafidi, and the appellants, on behalf of the Trust, I am
satisfied that any selling of immovable property which forms part of
the Townlands of that Township is subject to the prior approval of
the Minister in terms of s 30(t) of the Act. This section provides
as follows:
'30(1) Subject to the provisions of
subsections (2) and (3), a local authority council shall have the
power-
"(t) subject to the provisions of
part X111, to buy, hire or otherwise acquire, with the prior approval
of the Minister and subject to such condition, 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;”'.
Subsections (2) and (3)
are not relevant to the issues to be decided in this matter. S 63(1)
of the Act renders the provisions of s 30(t) subject to the
provisions of s 63(1)(a) and (b) and provides that a
local authority council has the power to let immovable property
provided that the period of lease does not exceed one year. (Ss(a)).
Furthermore the Municipalities mentioned in Schedule 1 of the Act,
namely Windhoek and Swakopmund, have the power to let, sell,
encumber or hypothecate townlands without the prior approval of the
Minister(ss(b)). It is further clear from the definition of the
words 'local authority council' in s 1 of the Act that that includes
'any municipal council, town council or village council'. Therefore
where s 30(t) refers to a local authority it included, by
definition,a town council and so far as the sale of immovable
property by a Town Council was concerned s 30(1)(t) was not
altered by s 63 and the sale of such property still required the
prior approval of the Minister.
I am furthermore
satisfied that the words 'or to so let, sell etc.' (my
emphasis) can only be a reference to the manner in which it can be
let or sold, namely with the prior approval of the Minister
otherwise the word ‘so’ would have no meaning and would
be redundant.As was stated in the case of City of Cape Town v
Premier, Western Cape and Others, 2008(6) SA 345 at 376 para
[70],it is a trite principle of statutory interpretation that a
statute should not be construed so as to render any part thereof
superfluous.(See also Commissioner for Inland Revenue v Golden
Dumps (Pty) Ltd, 1993 (4) SA 110 (A) at 116F–117B.) The
above interpretation is also supported by the context of the Act
because, if a local authority had the power to let and sell
immovable property without the prior approval of the Minister,then
it would not have been necessary for the Legislator to enact s
63(1)(a) and (b) whereby the provisions of s 30(1)(t)
were specifically made subject to this section in regard to the
letting and selling,etc of property.
It is common cause that
in this particular instance the prior approval for the sale of Erf
13, Oshikango, to the Trust was not obtained before the sale and,
for that matter, also not thereafter. The appellants contended that
s 30(1)(t) was not applicable to this issue but that the sale was
subject to s 68. Section 68 is enacted under Part XIV of the Act and
deals with the valuation of rateable property within local authority
areas and the section establishes a valuation court which has, after
due advertisement of the session of the court, to consider the
valuation roll and any objections thereto. It has in my opinion
nothing to do with the selling of immovable property by a local
authority.
It follows therefore
that the sale of Erf 13, Oshikango, did not comply with the
provisions of the Act, and more particularly s 30(1)(t)
thereof. The question is now what the effect of such
non-complianceis.
I am satisfied that it
was the intention of the Legislator to visit such non-compliance
with invalidity. I say so for the following reasons:
The Minister can, in
terms of s 30(1)(t), grant his approval subject to any
conditions imposed by him. It follows that to by-pass the Minister,
before the contract of sale was concluded,may render the power of
the Minister to impose conditions nugatory.
The members of a Town
Council may not always have the necessary commercial expertise to
deal with and to enter into contracts to the advantage of the
Township with its most valuable asset, namely its land. This may be
especially so in the areas where previously no Town Councils existed
and where no land could be owned by private individuals or
companies. In those instances the members of the Town Council, as
well as their officials, may lack the necessary experience and
expertise to deal with valuable assets such as the landed property
of the Council. There would also not be any guidelines which could
be followed to determine i.e. the value of land. That the Legislator
was mindful of this problem is further demonstrated by the exception
that was made in this regard to the Municipalities of Windhoek and
Swakopmund, both of which are old and long established institutions
well versed in commercial dealings with land and with easy access to
experts in regard to these aspects when and if necessary.
The inexperience of
Councils could lead to the commission of serious irregularities and,
without the necessary control by the Minister, the system was also
open to exploitation as was proven in this particular instance.
It follows therefore
that the agreement entered into by Shivolo, purportedly on behalf of
the Town Council, and the appellants, on behalf of the Trust, is
null and void ab initio and the registration of the property
in the name of the Trust must be set aside. Both counsel addressed
us on the effect of our abstract system of registration of landed
property. I agree with counsel that after the registration of the
transfer of such property not every defect in the contract giving
rise to the real agreement will necessarily vitiate the real
agreement. (See the article by C.G. van der Merwe: 27 Lawsa(1st
re-issue) under the heading 'Things' paragraphs 362, 363 and 365,
and Kriel v Terblanche 2002 (6) SA 263 (NC).)
However, in the case of
Farren v Sun Service SA Photo Trip Management (Pty) Ltd 2004
(2) SA 146 (CPD) the applicant in that matter applied for specific
performance in terms of a written agreement of sale of immovable
property. The respondent relied on the provisions of s 228 of the
Companies Act, Act 61 of 1973, to avoid transfer of the property to
the applicant. The section prohibits the disposal of the undertaking
or greater part of the assets of a company by its directors unless
such sale was ratified in a general meeting of the shareholders of
the company. No such ratification occurred in this instance. It is
generally accepted that s 228 was introduced for the protection of
shareholders (p 153A-C). The learned Judge Cleaver, J, dismissed the
application. At 155A-B the following is stated:
'I agree with him that the issue is
not so much whether a transaction entered into in contravention of
section 228 is void or voidable. It is clearly unlawful in the sense
that it is concluded in contravention of the section. It also has no
legal effect, but that can be cured by subsequent ratification by the
shareholders in general meeting.'
The same sentiment was
expressed by the learned Judge when he stated at 157J–158A,
namely:
'As far as section 228 is concerned an
agreement concluded on behalf of the company in contravention of the
section has no legal effect unless and until it is ratified by the
shareholders.'
To the same effect is the
article by Professor van der Merwe where he stated at para 365,
supra, as follows:
'In certain types of contract the
vitiating element attaches to both the preceding contract and the
real agreement. Thus not only contracts aimed at achieving an illegal
object, for example, illicit diamond dealing, are void but also the
real agreements and transfers which are affected in terms of such
contracts. Certain contracts are unenforceable because they do not
comply with certain statutory requirements: thus writing, official
approval or a certain manner of achieving an object may be
prescribed. Whether a real agreement or performance in terms of such
an unenforceable contract is vitiated by the defect in the preceding
contract depends on the intention of the legislature in rendering
such a contract void on the ground of non-compliance with a certain
requirement.'
For the reasons set out
above there is no doubt in my mind that it is the intention of the
Legislator to visit non-compliance of the provisions of s 30(1)(t)
with invalidity.
Notwithstanding the
clear evidence of MrSheelongo that Shivolo had no authority for any
of the actions taken by him, each of the parties still attempted to
extract from MrShivolo’sirregular and unauthorised acts some
advantage to bolster their claims. So it was submitted on behalf of
Northgate that the offer to sell Erf No 13, Oshikango, was a valid
offer which they had accepted and that the process must continue
from there. In turn MrSheelongo tentatively wanted to rely on the
lapsing of the time afforded to Northgate by MrShivolo within which
they were required to accept the offer. On behalf of the appellants
the point was taken that the offers made to Northgate had been valid
offers and by not exercising its right within the time period
stipulated in the letters the offers had lapsed and Northgate had no
further rights. It was furthermore also argued byMrBokaba SC, on
behalf of the appellants, that the Town Council, when it allowed the
transfer of the property to go forward notwithstanding its knowledge
that Northgate was the holder of the PTO, and that they disputed
transfer of the property to the Trust, thereby, ratified any
unauthorised acts by MrShivolo. It was also submitted by counsel
that the Town Council was estopped to now rely on the unauthorised
acts of their former CEO.
In my opinion none of
the above submissions can be sustained. I have already pointed out
that MrShivolo had no authority to offer to sell the Erf 13,
Oshikango, to anybody and consequently its offer to Northgate to
sell the property could not bind the local authority. If Northgate
is correct that the offer by Shivolo was valid then acceptance of
the offer could have resulted in a binding contract of sale which,
because of the provisions of s 30(1)(t), would in any event
have been null and void. For the same reasons no reliance could
therefore be placed on the time schedule within which the offer to
sell had to be exercised. If the offer was invalid it follows that
its terms met the same fate. As was pointed out by Mr van der Nest
SC a nullity cannot be ratified. In this instance we do not only
deal with an unauthorised act by MrShivolo but also an unlawful one
which cannot be ratified in any way. However, it is not open for the
appellants to rely on either the doctrine of estoppel or the rule in
Turquandas that would have the effect of perpetuating an
unlawful act because of the non-compliance with s 30(1)(t) of
the Act. Although I am of the opinion that the learned Judge a
quo was correct that estoppel could not be raised in these
proceedings against the Town Council I will for purposes of this
judgment accept that it could. However, in the matter of City of
Tswane Metropolitan Municipality v RPM Bricks Ltd, 2008 (3) SA 1
(SCA)the following was stated in regard to the defence of estoppel
at 5F – 6A, namely:
‘[11] It is
important at the outset to distinguish between two separate, often
interwoven, yetdistinctly different ‘categories’ of
cases. The distinction ought to be clear enough conceptually. And
yet, as the present matter amply demonstrates, it is not always truly
discerned. I am referring to the distinction between an act beyond or
in excess of the legal powers of a public authority (the first
category), on the one hand, and the irregular or informal exercise of
power granted (the second category), on the other. That broad
distinction lies at the heart of the present appeal, for the
successful invocation of the doctrine of estoppels may depend upon
it.
[12] In the second category, persons
contracting in good faith with a statutory body or its agents are not
bound, in the absence of knowledge to the contrary, to enquire
whether the relevant internal arrangements or formalities have been
satisfied, but are entitled to assume that all the necessary
arrangements or formalities have indeed been complied with. Such
persons may then rely on estoppels if the defence raised is that the
relevant internal arrangements or formalities were not complied with.
[13] As to the first category: failure
by a statutory body to comply with provisions which the legislature
has prescribed for the validity of a specified transaction
cannot be remedied by estoppel because that would give validity to a
transaction which is unlawful and therefore ultra
vires.’(Reference to authorities omitted).
(See further the
Kriel-case, supra; Klerck N.O. v Van Zyl and Maritz N.N.O.,
1989 (4) SA 263 (SECLD); Strydom v Die Land en Landbou Bank
van Suid-Afrika, 1972 (1) SA 801 (A) and Stand 242
HendrikPotgieter Road Ruimsig (Pty) Ltd v Gobel, 2011 (5) SA
1(SCA).)
I respectfully agree with
the exposition of the law as set out above.
In the result I have
come to the conclusion that the appeal cannot succeed. Because I
have come to the conclusion that the offer to sell Erf 13,
Oshikango, was unauthorized and did not bind the Town Council, the
third order granted by the Court a quo must be slightly
amended.
The appeal is dismissed
with costs, including the costs of one instructing and two
instructed counsel. The third order issued by the Court a quo is
set aside and the following order is substituted therefore:
‘(3)
The Town Council of HelaoNafidi is ordered to comply with their
contractual obligations in terms of the PTO issued in respect of Erf
13, Oshikango to the holder thereof, Northgate Properties (Pty) Ltd.’
_________________________
STRYDOM AJA
________________________
MARITZ JA
________________________
MAINGA JA
APPEARANCES
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