[11]
The legal basis advanced by Vrededorp for its claim to the blue portion is again derived from the doctrine
of notice. This time it relies on the application of the doctrine in the sphere of successive sales. The usual operation of the doctrine
in this instance, as explained in our case law, is essentially as follows: if a seller, A, sells a thing – be it movable or
immovable – to B and subsequently sells the same thing to C, ownership is acquired, not by the earlier purchaser, but by the
purchaser who first obtains transfer of the thing sold. If the first purchaser, B, is also the first transferee, his or her right
is unassailable. If the second purchaser, C, is the first transferee, his or her right of ownership is equally unassailable if he
or she had purchased without knowledge of the prior sale to B. But, if C had purchased with such prior knowledge, B is entitled to
claim that the transfer to C be set aside so that ownership of the thing sold can be transferred to B. (See eg Cohen v Shires, McHattie and King (1882) 1 SAR 41 at 46; McGregor v Jordaan 1921 CPD 301 at 308; Tiger-Eye Investments (Pty) Ltd v Riverview Diamond Fields (Pty) Ltd 1971 (1) SA 351 (C) at 358F-G; Kazazis v Georghiades 1979 (3) SA 887 (T) at 894B-D; Cussons v Kroon 2001 (4) SA 833 (SCA) at 839C-E; Badenhorst, Pienaar & Mostert op cit p 89; Gerhard Lubbe 'A doctrine in search of a theory: reflections on the so-called doctrine of notice in South African Law', 1997
Acta Juridica 246 et seq. Again it is unnecessary to enter into the unresolved debate referred to earlier, ie whether knowledge acquired
by C between purchase and transfer would make any difference.)
[12]
It is not denied by the Trust that, in principle, the doctrine of notice affords Vrededorp the right
to claim transfer of the blue portion. Nonetheless the Trust raised a twofold defence against the way in which this claim was brought.
Its first contention was that the doctrine of notice, as applied in the sphere of successive sales, does not allow the first purchaser,
B, to claim transfer directly from the second purchaser, C. Secondly, it raised a defence in the nature of non-joinder which relied on the fact that Stand 160
and Investec had not been joined by Vrededorp as parties to the proceedings.
[13]
In developing its first mentioned contention, the Trust argued that the doctrine of notice only entitles
the first purchaser, B, to set aside the transfer to the second purchaser, C, which then opens the way for B to claim transfer from
the original seller, A. B cannot claim transfer directly from C. To allow B to do so, so the argument went, would amount to admitting
a claim for specific performance of a contract between A and B against a stranger to that contract, which would be irreconcilable
with the basic principles of our law of contract.
[14]
The Trust's argument seems to be supported by what happens in practice when the doctrine of notice is
applied to successive sales. More pertinently, there appears to be no decided case in our law where the first purchaser's claim for
transfer or delivery has been allowed directly against the second purchaser. On the other hand, some academic writers hold the view
that there is no underlying reason of principle why it should not be so allowed. In fact, so they say, the possibility of a claim
by B against C derives support from Roman-Dutch authorities. This appears, for example, from the following exposition by R G McKerron
'Purchaser with Notice' 1935 SA Law Times Vol 4 178 p180:
'It remains to consider the position where transfer has been passed to the second purchaser. If C, when he bought, had knowledge of the prior sale to B, there is no doubt as to the position. The authorities, both ancient and modern, are agreed that in such a case C is not entitled to retain the land as against B. The old authorities allow B to recover the res vendita direct from C by a personal action in factum [as opposed to the rei vindicatio, only available to the owner], and there is no reason why in a suitable case B should not be allowed to adopt this course in the modern law. But in South Africa the usual practice is for B to join A as co-defendant, and claim as against him an order cancelling the transfer, and as against C an order to pass transfer into his (B's) name.'
(See also Voet 6.1.20; J E Scholtens 'Double Sales' 1953 SALJ 22 p 34; Prof Gerhard Lubbe op cit p 247.))
[15]
The notion that B can be allowed to claim performance against C of a contractual undertaking by A is
clearly an anomaly in that it flies in the face of contractual privity. But I do not think that this anomaly can, by itself, constitute
a bar to affording B the right to claim transfer of the thing sold directly from C. For as Prof McKerron puts it (op cit p 180):
'Absence of privity is not a sufficient reason for refusing to allow a remedy founded upon a doctrine such as the doctrine of "purchaser
with notice," which is a purely equitable doctrine running counter to the rule of the strict law that a real right takes preference
over a merely personal right.'
[16]
What is more, the same anomaly reveals itself in the sphere of unregistered servitudes when a purchaser
with knowledge is compelled to cooperate in procuring registration of a servitude previously granted by the seller of immovable property.
The nature of the right granted by the seller in this instance appears from the following statement by Innes CJ in Willoughby's Consolidated Co v Copthall Stores Ltd 1918 AD 1 at 16:
'Now a servitude, like any other real right, may be acquired by agreement. Such an agreement, however, though binding on the contracting
parties, does not by itself vest the legal title to the servitude in the beneficiary, any more than the contract of sale of land
passes the dominium to the buyer. The right of the beneficiary is to claim performance of the contract by delivery of the servitude, which must be effected
coram lege loci by an entry made in the Register and endorsed upon the title deed of the servient property.'
(See also De Jager v Sisana 1930 AD 71 at 84; Cape Explosive Works Ltd v Denel (Pty) Ltd 2001 (3) SA 569 (SCA) at 580B-E).
[17]
The essential quality of the right that the purchaser acquires from a contract of sale is therefore no
different from the right of the beneficiary under a servitude agreement. Both rights are so-called iura in personam ad rem acquirendam, ie personal rights to acquire a real right (see eg Van der Merwe op cit p 86; Badenhorst, Pienaar & Mostert op cit p 70). In the case of a servitude, application of the doctrine of notice does not require that the transfer of the property to the
purchaser be set aside so as to enable the beneficiary under the servitude agreement first to claim registration of the servitude
against the seller before the property is re-transferred to the purchaser subject to a registered servitude. The beneficiary's claim
is allowed directly against the purchaser (see eg Grant v Stonestreet (supra) at 7). That there is no privity of contract between the beneficiary and the purchaser is not seen as an insurmountable hurdle. Why
then, it may in my view rightfully be asked, should the position be any different when the same doctrine is applied in the instance
of double sales?
[18]
My suggestion is not that in the successive purchaser situation B should always be allowed to claim transfer
directly from C. The doctrine of notice is an equitable remedy and its manner of application should be determined largely by what
is considered to be equitable to all concerned in the circumstances of the particular case. Where the whole property is first sold
to B and then to C, the most equitable solution will probably be to restore A and C to their former position – by ordering
cancellation of the transfer and repayment of the purchase price – before A is ordered to transfer the property to B. But in
this case the position is substantially different. Vrededorp claims transfer of the blue portion of the railway siding only. Cancellation
of the successive transfers of the whole property to Investec and the Trust, will therefore require that the remainder of the property
be re-transferred first to Investec and then to the Trust, after the blue portion had been separated and transferred to Vrededorp.
No reason has been suggested, and I can think of none, why this cumbersome and wasteful process would be in anybody's interest. For
these reasons I conclude that the Trust's first defence, based on the application of the doctrine of notice, cannot be sustained.
[19]
This brings me to the second defence of non-joinder. Though this defence was not formally raised by the
Trust in its pleadings, it nevertheless argued that the relief sought and obtained by Vrededorp should not have been granted without
the original seller, Stand 160, and the intermediate second purchaser, Investec, being joined as parties to the proceedings.
[20]
Central to the argument in support of this defence, was the contention that, although Vrededorp's claim
for transfer was brought against the Trust only, it (a) effectively interfered with the contractual relationship between Stand 160
and Investec, on the one hand, and between Investec and the Trust, on the other; and (b) effectively amounted to an enforcement of
Vrededorp's contractual claim against Stand 160. In motivating contention (b) the Trust referred, first, to Vrededorp's formal tender
to pay, against transfer of the blue portion, the purchase price of R50 000 to the liquidator of Stand 160, which obligation
could only arise from the agreement between Vrededorp and Stand 160. Secondly, it referred to the fact that Vrededorp sought and
obtained an order from the court a quo that the Trust 'is to make payment of all costs and expenses pertaining to the transfer of the subdivided portion to Vrededorp'. If
Vrededorp had any right to payment of these expenses, so the Trust argued, this right could only derive from its agreement with Stand
160.
[21]
Though the Trust may well be right in its analysis of the effect of Vrededorp's claim, the enquiry relating
to non-joinder remains one of substance rather than the form of the claim. (See eg Amalgamated Engineering Union v Minister of Labour 1949 (3) SA 637 (A) at 657.) The substantial test is whether the party that is alleged to be a necessary party for purposes of joinder,
has a legal interest in the subject matter of the litigation, which may be affected prejudicially by the judgment of the court in
the proceedings concerned (see eg Aquatur (Pty) Ltd v Sacks 1989 (1) SA 56 (A) at 62A-F; Transvaal Agricultural Union v Minister of Agriculture and Land Affairs 2005 (4) SA 212 (SCA) paras 64-66).
[22]
During argument counsel for the Trust was invited to indicate, with reference to the facts available
to us, how the order sought and obtained by Vrededorp could prejudicially affect the legal interests of either Investec or Stand
160. The only potential prejudice he referred to was that which could result from that part of the court a quo's order which directed the Trust to pay the expenses occasioned by the subdivision of the blue portion and its subsequent transfer
to Vrededorp. This part of the order, so counsel for the Trust contended, may very well lead to an action by the Trust against Investec
for recoupment of these expenses, which the latter may then in turn seek to recover from Stand 160 (in liquidation).
[23]
While conceding the validity of this contention, Vrededorp's counsel responded by abandoning that part
of the relief granted by the court a quo. In the result, counsel for the Trust was not able to contemplate any other prejudicial effect which the order, thus amended, may
have on the legal interests of either Investec or Stand 160. In the absence of any potential prejudice, the Trust's defence based
on non-joinder must also fail.
[24]
In the light of the concession by Vrededorp's counsel, the court a quo's order stands to be amended by deletion of the direction that the Trust should pay the expenses occasioned by subdivision and transfer
of the blue portion. Another amendment I think advisable is to incorporate Vrededorp's tender of R50 000 in favour of Stand
160, in the court's order.
[25]
What remains to be considered is the costs of appeal. Despite the argument to the contrary on behalf
of Vrededorp, I am of the view that the Trust has achieved substantial success on appeal. Though the exact amount of the expenses
for which the Trust will no longer be liable is unknown, I have no reason to think that it will be negligible, nor can I think of
any reason why costs should not follow this event.
[26]
For these reasons it is ordered that:
1.
The appeal is upheld with costs.
2.
The order of the court a quo is amended to read as follows:
'1.
The first defendant is directed to do all things necessary to transfer into the name of the plaintiff
the subdivided portion of the railway siding on the east side of Erf 358 Selby depicted in blue on annexure VP-1 to the plaintiff's
particulars of claim, against payment by the plaintiff of the amount of R50 000 to the liquidator of Stand 160 Selby (Pty) Ltd
(in liquidation).
2.
The plaintiff is to make payment of all costs and expenses pertaining to the subdivision and
transfer of the blue portion referred to in paragraph 1 above.
3.
The first defendant is to do all things necessary to facilitate the registration of the servitude
by the plaintiff over the remaining portion of the remainder of the railway siding, depicted in green on the said annexure VP-1.
4.
The first defendant's counterclaim is dismissed with costs.
5.
The first defendant is to pay the plaintiff's costs of suit.'
........................
F D J BRAND
JUDGE OF APPEAL
Concur:
STREICHER JA
HEHER JA
VAN HEERDEN JA
MAYA JA
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