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CASE NO: 1638/05

IN THE HIGH COURT OF SOUTH AFRICA

(BOPHUTHATSWANA PROVINCIAL DIVISION)

In the matter between:

THE MINISTER OF PUBLIC WORKS APPLICANT

and

C HARRISON RESPONDENT

J U D G E M E N T

LEEUW J:

Introduction:

[1] The Applicant approached this Court seeking an order in the following terms:

1. “THAT: The eviction of the Respondent and all those claiming title through him from ERF NO 1231, 18 JUPITER STREET, REVIERA PARK, MAFIKENG, NORTH WEST is directed;

2. THAT: The date by which the Respondent and all those claiming title through him must vacate the flat is determined;

3. THAT: The date on which the eviction order referred to in paragraph 1 (supra) may be carried out is determined;

4. THAT: The Respondent is directed to pay the costs of

this application; and

5. THAT: Such further and/or alternative relief as this

Honourable Court deems just be granted to the Applicant”.

[2] This application was launched in accordance with the provisions of the Prevention of illegal Eviction from Unlawful Occupation of Land Act No 19 of 1998 (PIE) in view of the fact that the Respondent occupied the property for more than six months prior to this application as it will become clearer later in my judgment. The Respondent has been in occupation of the Erf No 18 Jupiter Street, Riviera Park, Mafikeng (“the property”) since March 1995.

[3] It is common cause between the parties hereto that there is no formal written lease agreement presently in place between the Respondent and the Department of Public Works of the North West Province (“The Department”). The Respondent is not paying any monthly rental for the occupation of the property.

[4] It is further not in dispute that the property is owned by the State and that this property as well as other properties in Mafikeng, are under the custodianship of the Department.

[5] The Respondent has filed a counter-application which forms part of the answering affidavit (affidavit), in terms whereof he seeks an order directing the Department to effect transfer of ownership of the property into his name.

[6] It is imperative to refer to the correspondence between the Applicant’s Department and the Respondent in order to determine whether or not the Respondent is in lawful occupation of the property.

Factual Background

[7] According to the Respondent, he and his family took occupation of the property during the beginning of March 1995. The house was unoccupied and vandalised;

[8] He approached the then South African Embassy (The Embassy) and established that the house was owned by the Republic of South Africa. He negotiated with the officials at the Embassy for the occupation thereof. He and his mother entered into a lease agreement in respect of the property and secured the option to purchase it later;

[9] The Respondent further avers in his Affidavit that he was advised, (he does not state by who), to make future rental payments to the North West Housing Corporation (Housing Corporation); and that he paid the rental amount of R750-00 on the 7 January 2000 by cheque. The cheque was made out to the City Council and the receipt thereof issued by the Housing Corporation.

[10] According to the Respondent, the cheque was returned to Ms Mengel his partner shortly after payment by a Mr Thabedi, at their house. He informed them that the North West Housing Corporation was not prepared to accept cheque payments and consequently advised them to pay rental in cash for the occupation of the property.

[11] An amount of R1 500-00 in cash was given to Mr Thabedi by Ms Mengel, which amount was in respect of the rental for the months of January and February 2000. Mr Thabedi did not issue a receipt for the amount paid.

[12] Mr Thabedi came back again at the beginning of March 2000 for the purpose of collecting rental for March 2000. Ms Mengel refused to pay the amount and demanded a receipt for the R1 500-00 previously paid to him.

[13] When Mr Thabedi could not produce the receipt as aforesaid, Ms Mengel impressed it upon him, Mr Thabedi that she was not prepared to pay any further rental in that regard without being given a receipt. Mr Thabedi left and never came back again.

[14] Subsequently, Respondent and Ms Mengel made several enquiries at the Housing Corporation, the Mmabatho Regional Office of the National Department of Public Works and the Mafikeng Local Municipality, in an effort to establish where rental for the property was to be paid, to no avail.

[15] The effect thereof was that the last rental amount paid in respect of the property was the R750-00 cheque for the rental of February 2000 which was not cashed by the Bank. The Respondent, however, continued to pay monthly consumer services accounts for the property at the Mafikeng Local Municipality.

[16] This state of affairs continued until a meeting was called by a representative of the Department at the beginning of 2001. The occupants of various state properties, the officials of the Mafikeng Local Municipality, as well as the local estate agents, attorneys, valuators and quantity surveyors attended. The Respondent was present as per invitation which was extended to his estate agency business, De Huizenmark.

[17] At the aforesaid meeting, occupants of the State properties were informed that the Government proposed to sell some of the properties, which were to be evaluated, and that the tenants would be granted the option to purchase the properties they each occupied.

[18] Respondent further avers that during April 2002 he received a letter from the Department written by one Vashti Baliram, which letter was not directed at a specific person but referred to the street address of the property. The letter reads as follows:

“OCCUPATION OF STATE OWNED PROPERTY

As State-owned property is allocated only to government officials, you are hereby given thirty days notice to vacate the property, or, the option of purchasing it. Please liaise with the writer to discuss your option.

Please note that failing to comply with our request will lead to further action being taken against you.

Yours sincerely,

________________

VASHTI BALIRAM

02/04/2002

[0828763871]”

[19] According to the Respondent, he decided to exercise the option to purchase the property. He made several attempts to contact the writer of the aforesaid letter without success. He then decided to exercise the option to purchase per letter dated 6 April 2002 which was transmitted by facsimile. The letter stated the following:

“RE: OPTION TO PURCHASE 18 JUPITER AVENUE RIVIERA PARK

Dear Ms Baliram,

Thank you for allowing us the opportunity to purchase the property mentioned above. I have spoken with my bank and they require several things from me.

One of the banks requirements is a Deed of Sale. Please write or phone me and tell me where I can complete this document as I have been unable to contact you either in your office or on your cell phone.

Thank you.

Yours faithfully

C Harrison”

[20] There was no response to this letter. He thereafter sent a letter dated 6 May 2002 and 11 May 2002 respectively by facsimile enquiring about a reply to his letter of the 6 April 2002.

[21] The Department did not respond to the abovementioned letters but instead communicated with the Respondent per letter dated 24 May 2002 from the office of the State Attorney which reads thus:

“RE: ILLEGAL OCCUPATION OF HOUSE NO.18 JUPITER AVENUE RIVIERA PARK

We have been instructed by our client the Department of Public Works to communicate with you in connection with the abovementioned matter.

House No 18 Jupiter Avenue, Riviera Park is the property of our client.

We have been informed by our client that you are occupying the aforesaid house without their permission.

Our client has further informed us that he has not entered into lease agreement with you in respect of the above house.

We have therefore been instructed to inform you to vacate the abovementioned house within 21 days from the date of this letter failing which we shall have no option but to evict you from the said house by means of legal process.

Yours faithfully

………………………………

R M MOKOBANE

OFFICE OF THE STATE ATTORNEY

/Tz”

[22] The Respondent replied by letter dated 3 June 2002 transmitted by facsimile and which stated the following:

“KIND ATTENTION: R M MOKOBANE C/O STATE ATTORNEY

18 Jupiter Ave; Riviera Park, Making.

P O Box 5809, Mmabatho, 2735

Tel/Fax: 018 – 3810531

Cell: 083997777 / 0822532649

YOUR REF: MOKOBANE/0241/02/P10

OUR REF: MRS HARRISON

03/06/2002

RE ALLEDGED ILLEGAL OCCUPATION OF HOUSE No.18

JUPITER AVENUE RIVIERA PARK

Dear Sir/Madam,

I received your letter dated 24/05/2001 which contents are noted.

The property mentioned above was allocated to me nearly nine years ago by the then South African Embassy.

There was a meeting from 18 months ago at the old S.A. Embassy building next to International School where it was made clear in no uncertain terms that the tenant of any State owned property would have the first option to purchase a property that is being rented would have the first option to purchase a property that is being rented from the State. Occupation was taken also with this understanding.

The minutes of this meeting have been noted and I suggest that you look into the matter before you make any further allegations or threats.

Any legal action taken by yourselves will be strongly and vigorously defended.

Yours faithfully

Mrs J D Harrison.”

[23] He again wrote another letter dated 27 September 2003 which was addressed to Ms Vashti Baliram, wherein he persisted on his option to purchase the property and remained in occupation of the property without paying any rental.

[24] A letter from the Department’s Office of the Deputy Director General, dated 1 July 2004 and which he received on 6 July 2004, reminded the Respondent about the rental amount payable as well as arrear rental owing stating the following:

“Office of the Deputy Director General

Ref: 6/3/2/7/414

Enq: D. Lekoloane

Tel: 3872115

Fax: (018) 3872324 email: DLekoloane@nwpg.gov.za

01^ST JULY 2004

ATTENTION: MR HARRISON

HOUSE # 18 JUPITER

REVIERA PARK

MAFIKENG

2745

Our records has (sic) revealed that you have since been occupying the above mentioned property some years ago without proper documentation especially after the new dispensation in 1994.

You are therefore informed that your rental charges has been calculated at 1% of the market value of the house which will be escalated at 10% of the value annually. Please be advised that you are now expected to pay a monthly rental of R2395.80 at our Regional Office situated at 22 Molopo Road, Ayob Gardens in Mafikeng situated effective from July 2004.

Further to that, be reminded that your arrears towards rental of the house amounts to R68400.00, which should be paid at the above address. Finally please be requested to approach this office in order to finalise documentation towards the occupancy of the house.

Your coorporation on this mater will be highly appreciated

SIGNED: PANDORA TLHAKANYE

__________________________________

DIRECTOR: PROPERTY MANAGEMENT

CC: REGIONAL DIRECTOR-CENTRAL REGION: MS J MATHIBE”

[25] The Respondent, in response to this letter, wrote two letters dated 6 July 2004 and 7 July 2004, addressed to the “Director : Property Management c/o the Department of Roads and Public Works North West Province.”

The contents of these letters can be summarized amongst others, as follows:

25.1 That he has made several offers to purchase the property which requests were ignored by the Department;

25.2 That he would not be paying rental from the time the property was offered to him to purchase. He further impressed it upon the Department that a further delay in finalizing the sale transaction would “result in loss of revenue due to the Department.”

25.3 That he still offers to purchase the house at a price of R250 000-00 less the amount expended by him on repairs to the house. The property was valued at R250 000-00 in May 2003;

25.4 That he was prepared to pay rental of R750-00 per month but not the increased rental; and further that

25.5 He was not prepared to pay the alleged arrear rental amount of R68 000-00.

[26] The Department’s Deputy Director, Mrs Keeme-Gaobepe (Gaobepe) wrote a letter to the Respondent on 6 April 2005, informing him amongst others, that it would not be possible to dispose of the property because certain prescribed procedures had to be adhered to before the property could be made available for sale to the private market.

[27] The Respondent replied by stating that the processes referred to have been followed and complied with and that the evaluation was done after he had repaired the house.

[28] The Respondent was subsequently advised by the Director of Property Management of the Department on 31 January 2006 to pay rental at the offices of the National Public Works at Megacity in Mmabatho. The Respondent persisted in his refusal to pay rental.

[29] It is admitted on behalf of the Applicant by Malome Mpho Hlabioa (Hlabioa), the Deputy Director of the Department’s Legal Services and Contract Administration, who deposed to the Founding Affidavit as well as the Replying Affidavit, that the Respondent responded to the letter giving him the option to purchase “by notifying the Applicant and saying that he wanted to buy the property.” He however intimated that the agreement of sale was not concluded.

Submisions

[30] Applicant submits that the Respondent is an unlawful occupier as defined in section 1 of PIE in view of the following:

30.1 That he occupies the property without the express or tacit consent of the Applicant;

30.2 That he persists in occupying the property without paying rental and refuses to pay same for such occupation as well as electricity, water and sanitation services;

30.3 That the Respondent’s continued occupation of the property infringes upon the interests of the North West Government officials and employees for whom State owned houses are being reserved for accommodation purposes in accordance with Resolution 3 of the Executive Council of the North West Provincial government (Resolution 3) read with Chapter DVIII of the Public Service Staff Code (“staff code”); and

30.4 That the Respondent does not fall under the category of persons or circumstances referred to in section 4 (7) of PIE and further that the Applicant’s department does not have any houses available for allocation.

[31] Respondent on the other hand, submits that he is in lawful occupation of the property because:

31.1 He exercised the option to purchase the property; and

31.2 That he was not obliged to pay rental towards the occupation of the property from the date when he elected to purchase the property, which is the 6 April 2002 because there was no agreement between the Department and him on Occupational Rental or interest.

Analyses of Issues

[32] The issues to be decided are:

32.1 Whether there was a valid lease agreement between the Department and the Respondent with an option to purchase the property;

32.2 Secondly, related to the above, whether or not the Respondent is in lawful occupation of the property;

32.3 Thirdly, whether the Respondent is obliged to pay rental towards occupation of the property; and

32.4 Fourthly, whether the Respondent is entitled to the transfer of the property into his name;

32.5 Fifthly whether or not the Applicant is entitled to an order evicting the Respondent from the property with an order for costs.

I will deal with the above issues ad seriatim.

Was there a valid lease agreement?

[33] The circumstances under which the Respondent and his family took occupation of the property are not very clear. The lease contract is neither attached to this application nor could it be furnished to the Applicant’s department on request. The duration of the lease is also not known, save for stating that the rental was R750-00 per month for the occupation of the property, which amount was paid until December 1999 at the Mafikeng Local Municipality. In the absence of a written lease agreement it is not easy to determine what the terms of the purported lease agreement entailed.

[34] The Applicant alleges that the Respondent is occupying the property without having entered into a valid written or oral lease agreement. This is borne out by the letter of eviction dated 2 April 2002 referred to in paragraph [18] above, where the Respondent is given notice to vacate the property and informed that State owned property is allocated to Government officials.

[35] A subsequent letter dated 24 May 2002 from the office of the State Attorney, (the letter is referred to in paragraph [21] above) clearly spells out that the Respondent was given notice to vacate the property and that he was occupying the property without the permission of the Department and further that he had not entered into a lease agreement in that regard.

[36] Respondent has not produced a single receipt to substantiate his allegation that he paid rental prior to January 2000. He alleged that he paid an amount of R750-00 per cheque on 7 January 2000 to the Housing Corporation. A copy of the cheque, was made out to the City Council, but a receipt was issued by the Housing Corporation.

[37] Respondent avers that, an amount of R1 500-00 in a form of cash for the January and February 2000 rental was given to a Mr Thabedi. It is inconceivable that the Respondent, who is conducting an estate agency business, would part with an amount of R1 500-00 without asking for a receipt from Mr Thabedi.

[38] Furthermore, it is clear that Mr Thabedi’s conduct was unlawful and yet Respondent took no action to recover the money from him. No rental was paid for the occupation of the property from that date in March 2000 to the present date. The Respondent is not prepared to pay any rental towards his occupation of the property.

[39] Ms Zwiegelaar, on behalf of the Respondent submited that the Respondent entered into a valid lease agreement with the Department and that the Applicant Department has not shown a proper and valid cancellation of that agreement.

[40] There is no merit in this submission because the Department does not admit that there was an express or tacit lease agreement between itself and the Respondent which granted him the right to occupy the property. It is also not the Respondent’s case that there was an implied lease agreement between himself and the Department from which it can be inferred, from the conduct of the Department, that such a contract existed. See in this regard the dictum of Corbert JA in Standard Bank of South South Africa Ltd & Another v Ocean Commodities Inc and Others 1983 (1) SA 276 (A) at 292B, and the cases therein referred to.

“Moreover, I do not think that the tacit agreements alleged can be inferred from the facts on record. In order to establish a tacit contract it is necessary to show, by a preponderance of probabilities, unequivocal that the parties intend to, and did in fact, contract on terms alleged. It must be proved that there was in fact consensus ad idem”.

[41] In the letter dated 1 July 2004, referred to paragraph [24] above, it can be inferred that the Department wished to enter into a formal lease agreement with the Respondent at a market related rental, which offer was rejected by the Respondent. It would therefore be absurd of the Applicant to allege that the lease agreement was terminated.

[42] The onus is on the Respondent to prove that there was a valid lease agreement between him and the Department. He has to satisfy the Court on a balance of probabilities, that he is entitled to succeed in his claim or defence as this is a matter of substantive law. See Eskom v First National Bank of South Africa Ltd [1994] ZASCA 186; 1995 (2) SA 386 (A) at 390 F – G. During N O v Boesak and Another [1990] ZASCA 51; 1990 (3) SA 661 (A) at 672 H – I.

[43] This issue of onus was clearly adumbrated by Jansen JA in the case of Chetty v Naidoo 1974 (3) SA (AD) at 20 A – G as follows:

“The incidence of the burden of proof is a matter of substantive law (Tregea and Another v Godart and Another, 1939 A.D. 16 at p. 32), and in the present type of case it must be governed, primarily, by the legal concept of ownership. It may be difficult to define dominium comprehensively (cf. Johannesburg Municipal Council v Rand Townships Registrar and Others, 1910 T.S. 1314 at p. 1319). But there can be little doubt (despite some reservations expressed in Munsamy v Gengemma, 1954 (4) S.A. 468 (N) at pp. 470H-471E) that one of its incidents is the right of exclusive possession of the res, with the necessary corollary that the owner may claim his property wherever found, from whomsoever is holding it. It is inherent in the nature of ownership that possession of the res should normally be with the owner, and it follows that no other person may withhold it from the owner unless he is vested with some right enforceable against the owner (e.g. a right of retention or a contractual right). The owner, in instituting a reivindicatio,need, therefore, do no more than allege and prove that he is the owner and that the defendant is holding the res the onus being on the defendant to allege and establish any right to continue to hold against the owner (cf. Jeena v Minister of Lands, 1955 (2) S.A. (A.D.) pp 382E, 383). It appears to be immaterial whether, in stating his claim, the owner dubs the defendant’s holding “unlawful” or “against his will” or leaves it unqualified (Krugersdorp Town Council v Fortuin, 1965 (2) S.A. 335 (T). But if he goes beyond alleging merely his ownership and the defendant being in possession (whether unqualified or described as “unlawful” or “against his will”), other considerations come into play. If he concedes in his particulars of claim that the defendant has an existing right to hold (e.g., by conceding a lease or a hire-purchase agreement, without also alleging that it has been terminated: Boshoff v Union Government, 1932 T.P.D. 345 at p. 351: Henning v Petra Meubels Beperk, 1947 (2) S.A. 407 (T) at p. 412) his statement of claim obviously discloses no cause of action. If he does not concede an existing right to hold, but, nevertheless, says that a right to hold now would have existed but for a termination which has taken place, then ex facie the statement of claim he must at least prove the termination, which might, in the case of a contract, also entail proof of the terms of the contract.” (emphasis added).

[44] I have already alluded to the fact that the Respondent is unable to produce a lease agreement in order to prove that there was such an agreement. Needless to say that it is doubtful whether the Respondent did ever pay any rental towards the occupation of this house in view of the paucity of information with regard to the lease agreement. The fact that the Respondent could not produce a single valid receipt to prove such payment save for the R750-00 cheque payment which was not honoured or cashed at the bank casts doubt on the ingenuity of the Respondent’s allegations with regard to the lease agreement, which is highly questionable in the circumstances.

[45] Because of the absence of a valid oral or written agreement of lease in that regard, I conclude that the Respondent’s occupation of the property was neither in terms of a valid written or oral agreement. Nor can it be implied from the conduct of the Department and the Respondent that such an agreement existed.

Was the option to purchase the property properly exercised?

[46] The issue of the lease agreement is closely related to the question of whether or not the Respondent was granted an option to purchase the property by the Department or the Embassy prior to the letter of the 2 April 2002.

[47] This question could be easily resolved if the written lease agreement referred to by the Respondent was available for perusal. The intention of the parties at the time they entered into the contract is paramount. See Collen v Rietfontein Engineering Works 1948 (1) SA 413 (AD) at 435. The legal consequence of the exercise of an option is that a contract of sale comes into existence immediately upon communication of the exercise of the option to the seller. See Dettmann v Goldfain and Another 1975 (3) SA 365 (AD) of 401 A - E.

[48] However, when one considers the letter dated 2 April 2002, wherein the Respondent was offered the option to purchase the property, the Respondent is informed that he is occupying property which he is not qualified to occupy by virtue of the fact that he is not a Government officials. At the same time, he is granted an option to purchase the very same property, which is State owned and which he does not qualify to occupy.

[49] Mr Hlabioa has admitted in the Replying Affidavit that the Respondent did exercise the option to purchase the property when such offer was made by the Department.

[50] It is submitted by Ms Zwiegelaar that the Respondent is in lawful occupation of the property by virtue of the fact that he exercised the option to purchase the property.

[51] When one looks at the correspondence between the Department and the Respondent, the letter dated 2 April 2002 referred to above was not addressed to the Respondent personally but only the street address appears thereon; the occupier of the property is informed that the property is “allocated only to Government officials.” It would appear as if at that stage the name and occupation of the occupier of the property was unknown to the Department.

[52] I have already alluded to the fact that the Respondent refused to accede to the Department’s proposal to regularize his occupation of the property but instead he demanded that the house be sold and transferred to him at an amount of R250 000-00, less his expenses for renovating the house.

[53] The question, which cannot be clarified from the papers of both parties hereto, is whether the Department, when it granted the option to purchase the property, was concerned with the identity of a particular person or persons who would, in the practical performance of the contract, exercise rights thereunder.

[54] Furthermore, it is not clear from the circumstances of this application, whether the option was intended to be subsidiary to the contract of lease or whether it was inseparable therefrom.

[55] It may well have been that that the option was intended to be subsidiary to the lease in the sense that if the lease agreement were to lapse or be cancelled, the option to purchase would also lapse or be of no force.

[56] Alternatively it may have meant that if the occupier of the property was a Government official who qualified as such under the provisions of Resolution 3 and Chapter DVIII of the Public Service Staff Code referred to in paragraph 30.3 above, such person would have qualified to exercise the option to purchase the property.

[57] The validity of the option is further complicated by the fact that Respondent has continually resisted an attempt by the Department to regularize his occupation of the property. He persisted on his demand that the property be transferred into his name despite the reasons given to him by Gaobepe. I will deal with this issue later in my judgement.

[58] It is trite law that where an option to purchase leased property is offered to a lessee in a lease agreement, and there is no mention of the time within which such option is to be exercised, unless there “is a good reason to hold that the option to purchase is to be regarded as an entirely separate and divisible agreement, although contained in the agreement of lease itself, the conclusion must be that on the termination of the agreement of lease by which the option to buy was created, the option to purchase must itself cease to exit.” Per Smuts AJA in Mittermeier v Skema Engineeging (Pty) 1984 (1) 121 (A) at 126 G – G and C – E.

[59] The fact that the intention of the Department and the Respondent hereto with regard to the option to purchase is not clear and in the absence of considerations which could influence the Court in determining what their intention was makes it difficult for the Court to conclude that the option to purchase was properly exercised by the Respondent. See Collen v Rietfontein Engineering Works supra.

Is the Respondent in lawful occupation of the property?

[60] Section 1 of PIE provides that an “unlawful occupier” “means a person who occupies land without the express or tacit consent of the owner or persons in charge, or without any other right in law to occupy such land, excluding a person who is an occupier in terms of the Extension of Security of Tenure Act, 1977, and excluding a person whose informal right to land, but for the provisions of this Act, would be protected by the provisions of the Interim Protection of Informal Land Rights Act, 1996 (Act No. 31 of 1996).”

[61] The Applicant Department has in this case established that the Respondent is occupying the property without its permission and its right to possess the property is not limited by the Constitution, or a statute or some legal basis on which the occupant can claim the right to occupy the property. See Brisley v Drotsky 2002 (4) SA (SCA).

[62] “It must be borne in mind that the effect of PIE is not to expropriate the landowner and that it cannot be used to expropriate someone indirectly. The landowner retains the protection against arbitrary deprivation of the property under section 25 of the Bill of Rights. PIE serves merely to delay or suspend the exercise of the landowner’s full proprietary right until a determination has been made whether it is just and equitable to evict the unlawful occupier and under what conditions. See Ndlovu v Ncobo; Bekker and Another v Jika 2003 (1) SA 113 (SCA) [2002] 4 All SA 384 in par [17].” Per May AJA (as she then was) in Wormald NO and Another v Kambule 2006 (3) SA 562 (SCA).

[63] These remarks are apposite to the present case. The Respondent has been unlawfully occupying the property for almost twelve (12) years now without paying rental to the Applicant Department.

Is the Respondent obliged to pay rental towards occupation of the property?

[64] The Respondent’s submission is that there was a valid lease agreement between his family and the Department which was effective from March 1995 to the date when he purportedly exercised the option to purchase on 6 April 2002.

[65] Respondent has not paid any rental towards the occupation of the property from January 2000 to date. I have alluded to the fact that there is no proof that he has paid rental from the time he occupied the property until January 2000.

[66] It is also common cause that the Respondent refused to regularize his occupation of the property through entering into a lease agreement with the Department and has also refused to pay the rental determined by the Department during July 2004. He is presently not paying any rental to the Department.

[67] Respondent’s main submission on this issue is that the effect of exercising an option to purchase the property is that in the absence of an agreement between him and the Department with regard to occupational rental or interest, he cannot be expected to pay rental towards such occupation.

[68] Ms Zwiegelaar was granted an opportunity to file additional heads on this issue which additional written submissions were to be filed on or before Friday 10 August 2007 with the Registrar of this Court. Notwithstanding the invitation she has failed to do so and no explanation for such failure was filed by her.

[69] I have however, already made a finding that there is no lease agreement either tacit or express between the Department and the Respondent and further that the Respondent has been occupying the property for almost twelve (12) years now without paying rental to the Department for such occupation.

[70] On the Respondent’s version, and assuming that there was a lease agreement between him and the Department, there is no basis in law that would have entitled him to occupy the property without paying rental.

[71] In a case where a lessee does not vacate leased property after the expiry of the lease agreement, and who unlawfully continues to hold over the property without the consent of the landlord or owner of the property, it is trite law by our Courts that the owner or landlord would be entitled to rent for the actual period of occupation by the lessee. See Arnold v Viljoen 1954 (3) SA 322 (C); Tooth and Another v Maingard and Mayer 1960 (3) (N) at 131 E – F and 132 H; Bourbon-Lettley v Turner 1963 (2) SA 104 (C) and Sapro v Schlinkman 1948 (2) SA 637 (A) at 106 E – F.

[72] Even if it were to be assumed on the Respondent’s version, that the Department was in breach of contract in that it failed to transfer the property into his name after the exercise of the option to purchase, the Department would still be entitled to sue for rent due during the period he enjoyed undisturbed occupation of the property. See Sapro v Schlinkman supra at 643 and 646; and Arnold v Viljoen supra at 330B.

[73] An analogous situation can also be found in the case of Thompson v Scholtz [1998] ZASCA 87; 1999 (1) SA 232 (SCA) at 238 G where the Court dealt with an issue of occupational interest or rent in a situation where the terms of occupation of the premises were unclear in the terms of the agreement dealing with occupation interest. The Court held that in fairness to both parties “occupational interest is the return which the seller of immovable property earns by permitting his purchaser, pending payment, to occupy the property sold”.

[74] The cases cited above are apposite to the present case. They can be appropriately applied where, as in this case, there was no valid contract of sale and the parties did not conclude a formal agreement relating to payment of occupational interest. Otherwise, in this instance, the Respondent would be unduly enriched.

Is the Respondent entitled to the transfer of property?

[75] The reasons for not making the property available for sale to the Respondent were communicated to him per letter dated 9 November 2004, which reasons were, amongst others, that the house was identified for occupation by its “national client departments”. The Respondent was given notice to vacate the property within thirty days of receiving the notice.

[76] Full reasons for not selling the house were subsequently conveyed to the Respondent per letter dated 6 April 2005. The letter reads thus:

“Attention: Mr. C.V. HARRISON

SUBJECT: OFFER TO PURCHASE STATE PROPERTY: STAND NO. 1966

JUPITER AVE, HOUSE NO. 18 RIVIERA PARK: MAFIKENG.

Receipt of your letter regarding the above-mentioned subject is acknowledged.

Please be informed that:

It is not possible to dispose of a property out of hand since disposal of state properties is guided by a prescribed process.

Before the referred property can be confirmed to be available to private market, a certain process should be pursued, including:

► Confirming the current status of the property

► Whether any claims are registered against the property

► Whether any surface right permits issued by the Department of Minerals and Energy affect the property.

► Whether the Land Affairs has identified the property for land reform purposes

► Whether the property was offered to the Provincial government for its former

► Settlement Programme; and

► Whether an Item 28(1) Certificate has been issued in respect of the property.

Above all, once we have exhausted all these processes and still conclude

dispose of the property, we will still have to advertise the property, as it is

not permitted to have an outright disposal without testing the market.

It is therefore, on the basis of the above that the process will be slightly

longer until the status of the property can be known.

Thank you,

-------------------------------------------

M.G. KEEME-GAOBEPE

DD: PROPERTY MANAGEMENT

MMABATHO

06/04/05”

[77] It is apparent from the contents of this letter that certain prescribed processes have to be observed and adhered to before State properties can be disposed of.

[78] The disposal and letting of State assets is governed by the provision of section 76 (I) of the Public Finance Management Act No 1 of 1999 (the PFMA] which provides that:

“(I) The National Treasury must make regulations or issue instructions to departments, concerning -

(a)

(b)

(c) the alienation, letting or other disposal of State assets and

This Act came into effect on 1 April 2000.”

[79] The relevant Treasury Regulation, in terms of the PFMA was issued and came into effect on 9 April 2001. Article 10.2.2 of Part 10 of these Regulations provides that “Any sale of immovable State property must be at market-related value unless the relevant treasury approves otherwise.”

[80] When the purported option to purchase was made on 2 April 2002, these Regulations were in operation. Regulations 10.1. issued in accordance with section 38 (I)(d) of the PFMA behoves an accounting officer of a Government Department, to “ensure that processes (whether manual or electronic) and procedures are in place for the effective, efficient, economical and transparent use of the institution’s assets.”

[81] Respondent simply makes a bold statement to the effect that the procedures referred to by Gaobepe in her letter referred to above have already been followed without further elaborating on the details thereof.

[82] It can therefore not be proper for this Court to declare that the Respondent has properly exercised an option to purchase the property and consequently order the Department to transfer the property to the Respondent without having satisfied itself that the provisions of the PFMA and other processes by the Department have been complied with.

Is the Applicant entitled to evict the Respondent from the property?

[83] Failure by a lessee to pay rental for property occupied in terms of the lease contract, will entitle the owner or lessor to eject him by legal process or claim damages for breach of contract. See Maz v Simmonds’ Assignees 1915 CPD; Phil Morkel Ltd v Lawson & Kirk (Pty) 1955 (3) SA 249 (C); Sandown Park (Pty) Ltd v Hunter Your Wine & Spirit Merchant (Pty) Ltd & Another 1985 (1) SA 248 (W)

[84] The Applicant Department in this matter elected to evict the Respondent from the property, the main reason being that he is not paying rental for such occupation and further that there is no lease agreement between itself and the Respondent for such occupation and that the Respondent is occupying the property without its consent.

[85] However, the Respondent avers that the Court should take certain special circumstances in accordance with section 4(7) of PIE into consideration before granting the order for eviction namely:

85.1 The Circumstances which caused him to stop paying rental;

85.2 The substantial amount of money expended on the property to make it habitable;

85.3 The fact that the property market has escalated considerably since 1994 to date to the extent that a similar house would at present be in the vicinity of R800 000-00 which he cannot afford to pay;

85.4 That he is conducting his estate agency business from the property and from which he is generating income, has four minor children and a wife as well as employees who will be adversely affected by the eviction in that they are likely to loose their employment; and that

85.5 The Applicant was, as a result, obliged to state whether alternative accommodation could be provided by the Mafikeng Local Municipality or another organ of the State.

[86] Although the Respondent falls squarely within the purview of an unlawful occupier as defined in PIE, he cannot claim the benefits enjoyed by those unlawful occupiers for whom PIE was intended to protect.

[87] According to the Respondent , when he took occupation of the property , he and his mother had a farm at Rooigrond , which is not far from Mafikeng .This farm was sold in order for them to move to town so as to be closer to health care facilities.

[88] He has also indicated that he is conducting an estate agency business De-Huizemark (countrywide) from the same property. He is in the business of selling houses.

[89] He has employees who are working in his estate agency business as well as domestic helpers.

[90] It has been held by our courts that PIE was not intended to extend and protect cases of holding over of dwellings and the like. See Ndlovu v Nqcobo 2003 (1) SA 113 (SCA) at par. [23].

[91] Furthermore, our courts hold the view that PIE is not aimed at protecting affluent occupiers. I refer with approval, the remarks of Tshiqi J to the effect that, the provisions of PIE should not be used by affluent property owners who deliberately placed themselves in unlawful occupation of their property. See Andries Van Der Schyff en Seuns (Pty)Ltd t/a Complete Construction v. Webstrade INV No .45 (Pty) Ltd and Others 2006(5) SA 319 (SCA) at par.[10]; Wolmard NO and others v. Kambule 2006(3) SA 562 (SCA); and Webstradev. Van Der Schyff 2007 SCA 104(RSA). The Respondent in the present case, took occupation of State property without its permission and benefited from it and is running business therefrom.

[92] PIE was intended and its main objective was to facilitate the “displacement and relocation of poor and landless Black people for ideological purposes (and) was replaced by acknowledgement of the necessities quest for homes of victims of the past racist policies. While awaiting access to new housing development programmes, such homeless people had to be treated with dignity and respect”. Per Sachs J in Port Elizabeth Municipality v. Various Occupiers [2004] ZACC 7; 2005 (1) SA 217 [CC] at paras. [12] and [13].

[93] It is therefore absurd that the Respondent would expect the Applicant’s Department to provide him with alternative accommodation whilst he occupied its property for a long period without paying rental for such occupation.

[94] The Respondent has also stated as a reason for refusing to vacate the property that he has effected improvements on the property thereon, which money is owed to him by the Applicant’s Department. In other words, he claims that he has a right to possess or occupy the property and will continue to do so until compensated by the Applicant’s Department as the owners of the property at issue. Ms Zwiegelaar referred to the case of Nortje v Pool 1966 (3) SA 96 (A) in support of this submission.

[95] The right to retention for improvements effected to the property is not available to a person who occupies the property unlawfully. See Brooklyn House Ltd v. Knoetze & Sons 1970(3) SA (A) at 275 A – B where Botha JA stated the following:

“Die benadering van die Howe in genoemde sake is in ooreenstemming met wat deur ons gemeenregtelike skrywers as vereiste vir die totstandkoming van ’n bewaringsretensiereg, of ’n retensiereg vir verbeterings, gestel word. Daarvolgens is enige besitter van iemand anders se saak, mits hy maar net nie op onregmatige wyse besit gekry het nie, soos bv. ’n dief, wat die saak teen beskadiging bewaar of ’n retensiereg vir die verbeterings, om in besit of beheer van die saak te bly totdat hy vir sy noodsaaklike of nuttige uitgawes behoorlik verged is. (Sien bv. Hymens, Romeinsch Zakenrecht, 2de druk, op bl. 166- 7; Dig. 5.3.38 en 12.6.14; Cod. 3.32.5;Donellus, DeJure civili, 20.8.7; Voet, 6.1.31 en 36, en 20.2.28; Kersteman, s.v. ,,retentie’’; Van Leeuwen, Censura Forensis, 1.4.37.1 en 6; Huber, H.R., 2.8.17, en Spurrier v.Coxwell, N.o., 1914 C.P.D. 83 op bl. 88). Nie een van die skrywers wat ek geraadpleeg het, ontse ’n besitter ’n retensiereg teenoor die eienaar waar die verbeterings aan, of bewaring van die saak, in die uitvoering van ’n kontraktuele of ander verpligting teenoor ’n ander persoon as die eienaar van die saak plaasgevind het nie. Die vraag word trouens deur nie een van hulle genome nie”.

[96] He further claims to have effected renovation to the property during March and May 1995 when he took occupation of the house. He has attached a document dated 15 March 2006 signed by one Dan Ngobeni of an entity known as Dan’s Plumbing and Maintenance Services. This document or statement simply enumerates the repairs which were done almost ten years ago. He states, in this statement, that he is unable to provide receipts for the work done but that the total cost thereof was between R36 000-00 and R37 000-00.

[97] I consequently find that the Applicant is entitled to evict the Respondent from the property and further find that the Respondent is in unlawful occupation of the property for the reasons mentioned above. The Respondent cannot succeed in his counter-application against the Applicant. This is a case where the costs must follow the result.

[98] I accordingly make the following order:

(a) The Respondent is ordered to vacate the Erf No: 1231, Jupiter Street, Riviera Park, Mafikeng within thirty (30) days of the date of this order;

(b) Failing which the Sheriff of the Mafikeng/Mmabatho district is authorized to remove the Respondent and all other persons unlawfully occupying the property together with their possessions from the property on the expiry of the thirty (30) days of this order;

4. The Respondent’s counterclaim is dismissed; and

4. Respondent is ordered to pay the costs of this application.

________________________

M M LEEUW

JUDGE OF THE HIGH COURT

APPEARANCES:

Date of hearing : 03 August 2007

Date of judgement : 04 October 2007

For the Applicant : Adv RAMOLEFE

For the Respondent : Adv ZWIEGELAAR

Applicant’s Attorneys : State Attorneys

Ref No: 423/05/P8

Respondent’s Attorneys: Herman Scholtz Attorneys

Re: SCHOLTZ/NATASHA/N.1020

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