The law reports

March 23rd, 2016
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February 2016 (1) South African Law Reports (pp 325 – 641); [2016] 1 All South African Law Reports January no 1 (pp 1 – 312); [2015] 3 All South African Law Reports July no 1 (pp 1 – 114) and no 2 (pp 115 – 257); [2015] 3 All South African Law Reports August no 1 (pp 255 – 386) and no 2 (pp 387 – 521); 2015 (12) Butterworths Constitutional Law Reports – December (pp 1407 – 1513); 2016 (1) Butterworths Constitutional Law Reports – January (pp 1 – 155)

David Matlala BProc (University of the North) LLB (Wits) LLM (UCT) LLM (Harvard) LLD (Fort Hare)HDip Tax Law (Wits) is an adjunct professor of law at the University of Fort Hare.

David Matlala BProc (University of the North) LLB (Wits) LLM (UCT) LLM (Harvard) LLD (Fort Hare)HDip Tax Law (Wits) is an adjunct professor of law at the University of Fort Hare.

 

 

 

 

 

 

 

 

 

 

 

This column discusses judgments as and when they are published in the South African Law Reports, the All South African Law Reports and the South African Criminal Law Reports. Readers should note that some reported judgments may have been overruled or overturned on appeal or have an appeal pending against them: Readers should not rely on a judgment discussed here without checking on that possibility – Editor.

Abbreviations:

CC: Constitutional Court
GJ: Gauteng Local Division, Johannesburg
SCA: Supreme Court of Appeal
WCC: Western Cape Division, Cape Town

Capital gains tax

Determination of the base cost of a pre-valuation date asset: Capital gains tax, which was introduced on 1 October 2001 through the insertion of s 26A and addition of sch 8 (the schedule) to the Income Tax Act 58 of 1962 (the Act), is payable where a capital gain accrues on the disposal of assets in the taxpayer’s possession on or acquired after 1 October 2001. The tax payable is determined by a calculation of the difference between the proceeds of the sale and the ‘base cost’ of the asset disposed of. In Commissioner for the South African Revenue Service v Stepney Investments (Pty) Ltd [2016] 1 All SA 1 (SCA) the respondent taxpayer, Stepney, made a disposal of its assets, namely shares in the ELR company. For the tax years, 2002 and 2003, the appellant, Commissioner for South African Revenue Service (Sars), took the view that the respondent had made capital gain and accordingly made additional assessments for capital gains tax in the amounts of R 2 million and R 2,2 million respectively. The respondent contended that instead of capital gain it had sustained a loss and, should therefore, not have been assessed for tax as its aggregate base cost of the shares exceeded the amount of the disposal proceeds. The shares disposed of were a pre-valuation date asset as defined in para 1 of sch 8 since they were acquired before the introduction of capital gains tax. To arrive at a valuation of the ‘base cost’ the respondent used the discount cash flow (DCF) valuation method, which entailed valuing the business of an entity on its future forecast free cash flow, discounted to present value through the application of a discount factor. The appellant, on the other hand, used the net asset value (NAV) valuation method as a result of which it was determined that the ‘base cost’ was nil.

Before the Tax Court, Cape Town, it was implicitly conceded that usage of the NAV method of valuation was inappropriate. Accordingly, Yekiso J, sitting as President of the Tax Court, set aside the additional assessment raised by the appellant, hence the appeal to the SCA, which appeal was upheld with costs. The additional assessments in respect of the 2002 and 2003 tax years were set aside and the matter remitted to the appellant for further investigation and assessment.

Majiedt JA (Mbha, Navsa, Shongwe JJA and Van der Merwe AJA concurring) held that while usage of the DCF valuation method was correct, it had not been correctly applied in the instant case. The court indicated a number of shortcomings relating to the manner in which the method was applied, as including among others the fact that:

  • The revenue forecast was based on information provided in 2001 and did not include the management accountsof 2004, which would have had a material effect on the figures arrived at as the 2001 figures were unreasonably high.
  • Instead of utilising the valuation date of 1 October 2001 as set out in sch 8, the respondent used a wrong date of 31 March 2002.
  • Incorrect tax calculations, being understatement of tax amount and, which led to overstatement of valuation of assets, were used without verification for reasonableness.
  • The valuation understated projected capital expenditure by not including substantial amounts for ongoing capital expenditure for the maintenance of buildings, furniture and fittings.
  • The projected revenue flows were based on a flow in perpetuity even though the business at issue, a casino hotel, had licence to operate for 15 years.
  • The appellant used a flat discount rate for all the five casinos it had, including the new one at Richards Bay/Empangeni in KwaZulu-Natal, notwithstanding that it was new and characterised by much uncertainty due to litigation, which was underway and untested clientele base.

The court held that it was clear that the valuation of the ‘base cost’ was flawed in a number of ways. A court was entitled to reject a valuation if it was not satisfied with the investigations underpinning it.

Constitutional law

Courts not constitutionally mandated to remove Speaker of National Assembly from office save when requirements of legality call them to do so: Rule 102A of the National Assembly (NA) rules provides, among others, that a member of the NA may propose that a motion of no confidence in the Cabinet or the President be placed on the Order Paper, and that the Speaker of the NA must accord such motion of no confidence ‘due priority’, and before scheduling it, the Speaker is required to consult with the Leader of Government Business and the Chief Whip of the Majority Party. The rule also specifies the requirements that a motion of no confidence should satisfy, as well as the procedure to be followed.

In Tlouamma and Others v Speaker of the National Assembly and Others 2016 (1) SA 534 (WCC), [2016] 1 All SA 235 (WCC) leaders of three minority political parties, namely Agang, Congress of the People and United Democratic Movement approached the WCC for a number of remedies and declarations against the first respondent, Speaker of the NA, and others. Although the applicants were leaders of three minority parties, it was in fact just one party, namely Agang, which was active in the litigation and events leading thereto. Very briefly, the applicants sought an order declaring r 102A unconstitutional, an order removing the Speaker of the NA from office and another directing that a motion of no confidence in the President of the Republic should be scheduled for debate, after which, voting would take place by secret ballot. An order was also sought that the Speaker should recuse herself from presiding at the debate.

The above occurred after a request by Agang to have a motion of no confidence vote in the President in the NA, was not scheduled to take place before the end of the NA session for the 2014 calendar year. Such a request was made on 3 November 2014, whereas the last business day of the NA was 27 November 2014. In short, the request was made on short notice and due to the full schedule of the NA it could not be accommodated. Nevertheless, the Speaker made arrangements for the debate and vote to take place early in the first session of the NA in the following, namely at the beginning of March in 2015.

Goliath J (Henney and Mantame JJ concurring) dismissed the application, ordering each party to pay own costs. The court held that in requiring in broad terms that the Speaker of the NA had to accord a motion of no confidence ‘due priority’ and ensure that it was scheduled within a reasonable time, given the programme of the NA, r 102A was compliant with the Constitution. To prescribe a specific period within which to schedule a debate of no confidence would be duly prescriptive to the Speaker and the NA in a manner, which was in conflict with the principle of separation of powers. The requirement in terms of r 102A that the Speaker should consult with both the Chief Whip of the Majority Party and the Leader of Government Business (all three being members of the ruling party) before scheduling the vote of motion of no confidence did not mean that such was within the gift of the majority party. Since a successful vote of no confidence in the President would entail resignation of the President and Cabinet, such a requirement of consultation was reasonable and rational. The consultation process did not grant the Speaker, the Chief Whip or the Leader of Government Business discretion to deny the scheduling of the motion.

The NA rules dealt extensively with voting, but did not provide for voting by secret ballot. Furthermore, the Constitution did not expressly or implicitly make provision for voting by secret ballot in respect of a motion of no confidence in the President. It was not within the authority of the court to introduce the element of a secret ballot in instances other than those prescribed by the Constitution. Furthermore, the court was not mandated to prescribe to the NA as to how to conduct its voting procedure.

Given that the Constitution expressly stated that the NA was competent authority to remove the Speaker and did nowhere else confer such power on any other person or institution, including the courts, it would be impermissible for any other person or institution to assume that function. Removal of the Speaker on grounds other than those legal bases that would disqualify her to be a member of the NA was a political act. Judicial independence would be adversely affected, should the courts become involved in such a political act, save for those limited instances where legality called on them to do so.

Contracts – specific performance

Specific performance will not be ordered if compliance with the order would be impossible: In Hanna v Basson and Others [2016] 1 All SA 201 (GJ) the first defendant, Basson, was the sole member of a close corporation, the third defendant, which owned immovable property. The plaintiff, Hanna, the first defendant and a third party, and the second defendant, entered into an agreement in terms of which, the first defendant was to develop the property by building three similar residences and an employee’s cottage, which he did. The agreement also provided that the first defendant would sell a third of a member’s interest each in the corporation to the plaintiff and the second defendant. There was also a right of pre-­emption in the contract. When the relationship between the plaintiff and the first defendant soured, the latter repudiated the contract by claiming that it was invalid and unenforceable. The plaintiff sought enforcement of the contract and its specific performance, namely transfer to him of a third of the member’s interest in the corporation. While proceedings for specific performance were underway the first defendant sold the member’s interest to other parties, namely, his brothers, thus making it impossible to sell and transfer same to the plaintiff. As a result the plaintiff amended his claim to seek payment in lieu of performance which he described as ‘damages as surrogate of performance’. The amended claim was granted with costs.

Cilliers AJ held that in accordance with the maxim lex non cogit ad impossibilia specific performance would never be ordered if compliance with the order would be impossible. However, payment of damages in lieu of specific performance was competent. The agreed right of pre-emption placed an obligation on the first defendant to offer his one third membership interest to the plaintiff at the original contract price before it was open for him to sell it in the open market. The existence of the right of pre-emption did not have a sufficient exclusive relation to the true market value (price) of one-third of the membership interest in the corporation to permit of equating the agreed price on exercise of the right. Therefore, the plaintiff would, had the contract been performed in forma specifica, have received a membership interest of which the market value would have been equal to one-third of the objective market value of the total interest in the corporation. Accordingly, the market value of one-third of the membership interest in the corporation was equal to the objective market value thereof as agreed to by the parties. The plaintiff was therefore entitled to payment of a sum of money in lieu of performance in forma specifica in an amount that constituted the difference between the objective market value of one-third of the membership interest in the corporation, less the original price, after deducting payments already made by him.

Fundamental rights (medical treatment)

Right not to be refused emergency medical treatment: In Oppelt v Department of Health, Western Cape 2016 (1) SA 325 (CC); 2015 (12) BCLR 1471 (CC) at the age of 17 years and while playing the game of rugby the applicant, Oppelt, sustained spinal cord injuries. The incident happened at 2:15 pm, after which he was taken to a local hospital, Wesfleur in Atlantis, a small coastal town some 50 km from Cape Town. Wesfleur Hospital did not have the facilities to treat him and as a result he had to be transferred to Cape Town. A helicopter was not available to transfer him and after some delay an ambulance took him to Groote Schuur Hospital in Cape Town, where he arrived at 5:40pm. Although the hospital had the facilities to treat him, it was decided to transfer him to a specialised unit dealing with spinal cord injuries, the Conradie Hospital, which was also in Cape Town but some 7 km from Groote Schuur Hospital. That transfer took place at 12:25 am, after which he arrived at Conradie Hospital at 1:23 am and was taken for a procedure at 3:50 am, being some twelve and half hours after sustaining the injuries. By that time it was too late since as a result of lack of blood supply and oxygen it carried, the applicant suffered permanent paralysis from the neck downwards. The WCC held that the Provincial Department of Health was liable for damage caused by the injuries sustained by the applicant as it failed to provide the required emergency medical treatment. That decision was reversed on appeal to the SCA.

In a further appeal, the CC granted the applicant leave to appeal against the decision of the SCA and upheld the appeal with costs. Reading the majority judgment Molemela AJ (Cameron J and Jappie AJ dissenting in the minority judgment) held that failure by the respondent department’s employees to provide the applicant with reasonable medical attention within four hours, as suggested by a medical expert, denied him a 64% chance of probably making a full or substantial recovery from harm of permanent quadriplegia. The omission of the employees of the respondent to provide the applicant with the appropriate closed reduction treatment within four hours of his injuries was causally linked to his permanent and complete paralysis.

The law required hospitals to provide urgent and appropriate emergency medical treatment to a person in the position of the applicant. Legal convictions of the community demanded that hospitals and healthcare practitioners should provide proficient healthcare services to members of the public. Those convictions also demanded that persons and institutions who failed to do so had to incur liability. There was no doubt that the applicant’s injuries constituted a medical emergency and all concerned employees of the respondent knew it. No reasonable explanation had been advanced for the inordinate delays in performing a simple, brief and inexpensive close reduction procedure that was both available and absolutely necessary. The respondent constructively refused to provide the necessary emergency treatment and breached its legal duty to provide the applicant with medical treatment promptly or within the required four hours, thus acting unlawfully.

Lease

Subtenant is not allowed to raise sub-lessor’s lack of title as a defence to eviction: In Mighty Solutions t/a Orlando Service Station v Engen Petroleum Ltd and Another 2016 (1) SA 621 (CC); 2016 (1) BCLR 28 (CC) the respondent, Engen, entered into a lease agreement, the head lease, with the owner of property and developed it into a filling station with the necessary equipment, signage and trademarks. Thereafter the respondent entered into a sublease with the applicant, Mighty Solutions, to operate the filling station using the respondent’s equipment, signage and trademarks. The sublease was for a period of three years, after which it continued on a monthly basis. The respondent having given the required notice of termination of the sublease, the applicant refused to vacate and continued running its business free of charge without paying rental. Eventually the respondent instituted proceedings for eviction of the appellant, which raised the defence that as by then the head lease had also lapsed the respondent was not allowed to evict it. The GJ, per Matthee AJ, held that in terms of the common law the lessor was allowed to evict the lessee even if the lessor had no title to the property. The SCA dismissed the application for leave to appeal to it. A further leave to appeal was dismissed with costs by the CC.

Reading the unanimous decision of the CC, Van der Westhuizen J held that it was an established common-law rule that when being sued for eviction at the termination of a lease, a lessee could not raise as a defence the issue that the lessor had no right to occupy the property. The rule followed naturally from the principle that a valid lease did not rest on the lessor having any title. The sublessee was in the same position as the lessee. In the instant case there was no reason to develop the common law as the rule did not offend the spirit, purport and objects of the Constitution or the values of constitutional democracy.

Medical aid schemes

Duty of medical aid scheme to pay medical costs incurred at a private hospital: Regulation 8(1) of the regulations promulgated in terms of s 67 of the Medical Schemes Act 131 of 1998 (the Act) provides, among others, that any benefit option that is offered by a medical scheme must ‘pay in full’, without co-payment or the use of deductibles, the diagnosis, treatment and care costs of the prescribed minimum benefit (PMB) conditions. Treatment of open fracture/dislocation of bones or joints is one such prescribed minimum benefit. In Council for Medical Aid Schemes and Another v Genesis Medical Scheme and Others 2016 (1) SA 429 (SCA), [2016] 1 All SA 15 (SCA) the daughter of Ms Joubert, the third respondent, suffered compound fracture of tibia and fibula and was treated at a private hospital. The first respondent, Genesis Medical Scheme (Genesis), refused to pay the medical costs, contending that in terms of its rules, which constituted a contract between it and its members, including the third respondent, it was obliged to pay only if treatment took place at a public or state hospital and not a private hospital. The Registrar of Medical Schemes, the Appeal Committee for the Council for Medical Schemes and the Council’s Appeal board disagreed with Genesis, holding that it had to pay. That decision was set aside by the WCC, which held that Genesis was not obliged to pay for medical treatment received. An appeal against that decision was upheld with costs by the SCA.

Leach JA (Petse, Willis, Mbha and Zondi JJA concurring) held that while the rules of any medical scheme amounted to a contract between it and its members that bound both sides, there was no reason to accept that any obligation imposed by the statute upon a medical scheme to pay certain amounts became unenforceable when its rules, which did not contain any such provision, were registered. Section 29(1)(o) of the Act and reg 8, which read together, required a medical scheme to ‘pay in full’ the costs of treatment of PMB conditions as a scope and level as might be prescribed were clearly designed to ensure that members would not be obliged to bear the cost of providing such treatment. They made no mention of a medical scheme being obliged to do so only in the event of the treatment being obtained from the public sector.

The Minister of Health, in specifying the table of PMBs and the allowable treatment for such conditions, clearly intended to ensure that members of medical schemes would enjoy cover in relation to those specific medical conditions and encourage them to seek treatment in either private or public hospitals. That objective would be defeated by a medical scheme only providing cover for treatment of PMBs if obtained from the public sector, thereby effectively shifting the cost of treating PMBs from medical schemes to the state. Yet that was precisely what Genesis was attempting to do. The relationship between a medical scheme on the one hand and its members on the other, was not governed solely by that scheme’s rules but also by the obligations imposed by the statute on medical schemes. The latter obligations could not be evaded by a medical scheme purporting to contract with its members by prescribing rules having a contrary effect. Briefly, the law obliged medical schemes to pay the costs of treating PMB conditions in full and that was what Genesis had to do.

Patents

Raising defence of invalidity of patent for lack of novelty without claiming for revocation of such patent: In Strix Ltd v Nu-World Industries (Pty) Ltd 2016 (1) SA 387 (SCA) the appellant, Strix, was a registered holder of a patent in respect of a ‘liquid heating vessel’, namely, a kettle, which had two thermally sensitive switches, spaced apart at the base of the kettle, which provided additional safety measure against overheating. Until then kettles only had one thermally sensitive switch and, therefore, lacked the additional safety of a second thermal switch, which was spaced apart and could cut electricity supply to avoid overheating if the kettle was tilted and as a result had a part of the base which was not covered with liquid. A kettle with one thermal switch did not have that additional safety. Alleging that a kettle manufactured and sold by the respondent Nu-World was in breach of its patent rights, the appellant approached the Court of the Commissioner of Patents for a number of remedies including interdict, delivery up of infringing kettles and damages. Preller J dismissed the claim, holding that the appellant’s kettles lacked novelty as the second thermal switch they had formed part of the state of art. An appeal against that order was upheld with costs by the SCA.

Navsa JA (Saldulker, Swain, Dambuza JJA and Van der Merwe AJA concurring) held that even though in its plea the respondent only raised the defence of invalidity of the patent without seeking its revocation, as it could have done, a defence based on the invalidity of a patent on the statutorily recognised ground of lack of novelty was competent without a claim for revocation. In the instant case the patent was novel in that the effect of the second control (thermal switch) was that the control at the part that overheated because it was dry would activate and cut off the electricity supply, something which other kettles could not do. Simply put, the additional safety feature in the form of two thermally sensitive controls spaced apart and in good thermal contact with the base of the kettle to deal with the problem that could present itself when the kettle was tilted did not occur in the prior art and accordingly constituted a novel safety feature.

Pension funds

Initial surplus may be used to reduce future deficit: Section 15H of the Pensions Fund Act 24 of 1956 (the Act), that was introduced in 2001, provides among others, that if a pension fund has credit balances in the member surplus account or employer surplus account and the fund is found to have a deficit following an actuarial valuation, such credit balances shall be reduced in the same proportion by the amount of the deficit. The section does not allow the credit balance to be reduced by more than the amount to which the account is in credit. The section should be read together with s 15D, which provides that any credit balance in the member surplus account may only be used to improve the benefits for existing or former members, to reduce current contributions due from members and meet expenses, which would otherwise reduce proportion of the members’ contribution that are invested for retirement.

In British American Tobacco Pension Fund v Howie NO and Others 2016 (1) SA 398 (GP); [2015] 3 All SA 55 (GP) the applicant Fund had a member surplus account credit balance for the year 2002 but a deficit for the year 2005. The issue was whether that initial credit balance for the year 2002 could be used to reduce a future deficit which occurred in 2005. The Fund allowed it to be done but that decision was rejected by the fourth respondent, the Registrar of Pension Funds. The first to third respondents, being members of the panel of the Financial Services Board Appeal Board (the Appeal Board), upheld the decision of the registrar. The applicant sought a court order reviewing and setting aside the decision of the Appeal Board. The order was granted with costs.

Potterill J held that the Appeal Board had no legal basis to find that the actuarial surplus credited to the member surplus account was not susceptible to s 15H. If the legislature had intended to shield the actuarial surplus from the provisions of s 15H, it would have been so expressed. Without such express provision the legislature had no such intention. The legislature would have been aware that the first credit balances in the surplus account would be vulnerable to the provisions of s 15H. The language of the section was clear and unambiguous. If a fund had a credit balance in the member surplus account and the fund was found to have a deficit, then that credit balance had to be reduced in the same proportion by the amount of the deficit, provided that no credit balance could be reduced by more than the amount to which the account was in credit. If the deficit was more than the credit in the member and employer surplus accounts, then the total of the credit balances was to be applied to the deficits. Considering the language of the section in the light of the ordinary rules of grammar and syntax, there was nothing in its wording remotely suggesting that it only had future application, that is, that only future credit balances, to the exclusion of initial balance, would be used to reduce the deficit. Accordingly, the Appeal Board was not correct in finding that s 15H had future application only.

Revenue (preservation order – curator bonis)

Preservation order and appointment of curator bonis: Section 163(4)(d) of the Tax Administration Act 28 of 2011 (the Act) provides, among others, that ‘the court to which an application for a preservation order is made may … upon application … appoint a curator bonis in whom the seized assets vest’. Section 163(7)(b) adds that a court ‘granting a preservation order, may make any ancillary orders regarding how the assets must be dealt with, including … if not already appointed … appointing a curator bonis in whom the assets vest’. In Commissioner, South African Revenue Service v Van der Merwe 2016 (1) SA 599 (SCA); [2015] 3 All SA 387 (SCA) the applicant for condonation for late filing of appeal was one Ms Van der Merwe. That was after the South
African Revenue Service (Sars) had obtained a preservation order against her. In granting the provisional order the WCC, per Rogers J, did not appoint a curator bonis. Again no curator bonis was appointed when the provisional order was made final by Savage AJ. The preservation order was triggered by the applicant’s receipt of US $ 15,3 million
and two expensive cars worth R 2,5 million at a time when she was earning some
R 20 000 per year in her modelling career. Against her father, the second respondent, Sars had obtained judgment in the amount of some R 66 million in taxes, additional taxes, penalties and interest as a result of tax fraud and claiming false Value Added Tax refunds.

On appeal to the SCA, the condonation application by Ms Van der Merwe was dismissed with costs. The appeal by Sars, for appointment of curator bonis was upheld with costs. The curator bonis was appointed to take control of the assets of the first respondent and the second respondent, her father Mr Van der Merwe.

Ponnan JA (Wallis, Mbha JJA, Fourie and Mayat AJJA concurring) held that the second respondent was closely and intimately involved in managing the applicant’s funds. Indeed there was no single financial transaction involving the funds, ostensibly the property of the applicant, that had not been directed by the second respondent. The apparent situation was that he did whatever he pleased with the funds, while she acquiesced in his decisions. His evident involvement of family members and his obviously close relationship with the applicant, coupled with the extraordinary wealth which she suddenly acquired within two months, required investigation. It was imperative that a curator bonis should investigate how and on what basis those funds were effectively placed at the disposal of the second respondent and whether and how he disposed of the funds. It followed, therefore, that the application for appointment of a curator bonis should have succeeded before the High Court.

Trusts (variation)

Variation of testamentary trust by trustees and beneficiaries: In Hanekom v Voight NO and Others 2016 (1) SA 416 (WCC) in the year 1980 the grandfather, one Dr Marais, created a testamentary trust in terms of which his four granddaughters were appointed beneficiaries. The trustee of the trust was his son, the granddaughters’ father. In 2001, and after his death, the trustee and beneficiaries concluded a memorandum of agreement in terms of which they amended the trust. The terms of the amendment were that together with their father all four beneficiaries became trustees and that decisions were taken by a majority of them. Furthermore, the category of beneficiaries was broadened. Thereafter, one of the beneficiaries, the appellant Hanekom, approached the WCC for an order declaring the 2001 amendment invalid. Cloete J held that the Master of the High Court carried out an administrative action by making a decision that the 2001 amendment was valid and, as a result of the appellant not bringing an application for the review and setting aside of the Master’s administrative action, the 2001 amendment stood as a valid trust deed. The full Bench dismissed, with costs, an appeal against the High Court order. Such costs were to be paid by the appellant in her personal capacity, that is, not out of trust funds.

Dlodlo J (Bozalek J and Riley AJ concurring) held that the general rule regarding amendments to a trust deed was that the trustees and beneficiaries could amend a trust deed. The court also added obiter that where minor or unborn beneficiaries were concerned, ordinarily a court order was required for a valid amendment of the trust deed. In order for the Master to authorise a person as a trustee there should be a specific underlying trust deed, and where there was a choice between two or more trust deeds the Master had as a necessary pre-condition to authorisation to know the trust deed in terms of which, the appointment of that person as trustee occurred. Authorisation without an implicit acknowledgement of the trust deed of which the underlying appointment occurred would be legally untenable and could not be what the legislature intended in terms of s 6(1) of the Trust Property Control Act 57 of 1988.

Unlawful occupation of land

Right of occupation of land trumps that of owner of land: In Hendricks v Hendricks and Others 2016 (1) SA 511 (SCA) the appellant, Mrs Hendricks, was the owner of residential property, which she sold to her son, the second respondent. The parties registered a lifelong right of habitation in favour of the appellant on the property’s title deed. When the second respondent married the first respondent in community of property the two became joint owners of the property. Relations between the parties having soured, the appellant temporarily left the property. As the parties could not live together because of animosity.  The appellant, wishing to exercise her right of habitation, applied for eviction of the respondents from the property. That was essentially eviction of the second respondent and those who depended on her as the first respondent had already left the property. The magistrates’ court, and thereafter, the WCC per Zondi and Samela JJ, held that the appellant’s right of habitation could not trump the second respondent’s right of ownership.

An appeal to the SCA was upheld with costs. The matter was remitted to the magistrates’ court for determination of a just and equitable order as required by s 4(7) of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (the PIE Act). Majiedt JA (Mhlantla, Leach, Tshiqi and Saldulker JJA concurring) held that the courts had long recognised habitatio as a personal servitude, which was a limited real right. The holder of that limited real right was a person in charge of the property in respect of which the habitatio operated and could obtain an eviction order against the owner who occupied the property without his consent. A limited real right detracted from the owner’s dominium. Therefore, in the instant case the owner of the property, the first respondent, could not exercise full dominium over it inasmuch as she could not occupy the property unless the appellant, as the holder of the right of occupation, had consented thereto. Absent such consent, the first respondent’s occupation of the property would be unlawful. The first respondent was, therefore, an ‘unlawful occupier’ within the meaning of s 1 of the PIE Act. The first respondent’s bare dominium as owner of the property would in law yield to the appellant’s right of habitation.

Other cases

Apart from the cases and material dealt with or referred to above the material under review also contained: Dealing with cartel activity and corporate leniency policy, case manager under divorce settlement not authorised to suspend parenting responsibilities, declaration of toll roads, default judgment against taxpayer, effect of business rescue on liquidation proceedings, establishment of city improvement district, government procurement process, investigation into irregularities in executive mayor’s office, one percent negligence rule in Road Accident Fund claims and capping of claims; recognition of dental assistants as professionals, supplementing written agreement by oral agreement and e-mails and use of intermediary while the complainant gives evidence.

This article was first published in De Rebus in 2016 (April) DR 30.