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IN THE HIGH COURT OF SOUTH AFRICA

FREE STATE DIVISION, BLOEMFONTEIN

Reportable:                              NO

Of Interest to other Judges:   NO

Circulate to Magistrates:       NO

 

Case No:  A79/2020

In the matter between:

           

ANNELISE SWART                                                                                                 Appellant

 

and

 

H BERGH N.O.                                                                                                          1^st Respondent

 

JOHAN CHARLES BERGH N.O.                                                                           2^nd Respondent

 

JAMES GEORGE AUSTIN N.O.                                                                             3^rd Respondent

(in their capacity as Trustees of the

CHANWILL TRUST)

 

CORAM:                                 JP DAFFUE J et M MATSHAYA AJ

 

HEARD ON:                           31 JANUARY 2022

 

DELIVERED ON:                  25 MARCH 2022

 

This judgment was handed down electronically by circulation to the parties’ representatives by email, and release to SAFLII.  The date and time for hand-down is deemed to be 13h00 on 25 March 2022.

 

I             INTRODUCTION

 

[1]          This is an appeal by the unsuccessful defendant against the judgment dated 8 May 2020 in the Bloemfontein Magistrate’s Court under case number 7343/2015.  Insofar as the appeal has lapsed for the reasons set out later herein, we were also called upon to adjudicate an application for declaratory relief and a counter-application for condonation.

 

II            THE PARTIES

 

[2]          The appellant is Mrs Annelise Swart who was represented before us by Adv R Van der Merwe instructed by Honey attorneys.

 

[3]          The respondents are the three trustees of the Chanwill Trust, to wit Messrs H Bergh, JC Bergh and JG Austin. They have been represented by Adv J Ferreira instructed by Bezuidenhouts Inc.  Henceforth I shall refer to the respondent parties in the singular as “the respondent”. 

 

III           THE ORDERS OF THE COURT A QUO AND A SUMMARY OF THE REASONS FOR JUDGMENT

 

[4]          The respondent, having instituted two separate claims for payment of arrear rental and municipal charges, to wit claim 1 in respect of the period 1 June 2011 – 30 June 2014 in the amount of R76 550.64 and claim 2 in respect of the period from 1 July 2014 – 30 November 2014 in the amount of R70 928.30 together with interest a tempore morae and costs, the court a quo eventually found partially in favour of the respondent in the following words which I quote verbatim:

“1.      In respect of Claim A, the defendant is ordered to pay the outstanding Municipal charges as at 30 June 2014 to the Plaintiff;

2.       In respect of Claim B, the Defendant is ordered to pay R70 928.30 (Seventy thousand nine hundred and twenty-eight rand, thirty cent) to the Plaintiff;

3.       Defendant to pay Plaintiff interest at a rate of 9,00% tempore morae till date of payment hereof;

4.       From the total in respect of claim A and claim B must be deducted Defendants deposit in the amount of R20 520.00 (Twenty thousand five hundred and twenty rand).

5.       Defendant to pay Plaintiff’s taxed or agreed party and party costs, which costs will include increased Advocates fees.”

 

[5]          The court a quo repeated itself several times in the written judgment whilst referring to numerous authorities, several of whom I shall discuss again herein.  In concluding its judgment and having found it was common cause that the rental premises were rented out to be used as a coffee shop, home industry and restaurant contrary to the zoning provisions indicating that the property may only be used for dwelling purposes as it was zoned “Single Residential 2”,[1] the court concluded as follows and I quote verbatim:[2]

              “In respect of claim A:   The court is of the view that the rental in respect of the lease of 3 President Steyn Street, Westdene, Bloemfontein as a Coffee Shop, Home industry and Restaurant for the period 01 June 2011 to 17 June 2014 was illegal and unenforceable as it was contrary to the purpose for which it was zoned.

 

The court is of the view that the Defendant shouldn’t be held liable for the remaining part of the rental from 15 June 2014 to 31 June 2014 to give her ample time to cancel the lease agreement or ding alternate accommodation.

 

But the defendant also utilised the premises as a dwelling house in line with the zoning as Residential 2.  The parties never specified in the contract the amount that would be payable in respect of the lease for residential purposes and the court is not in a position to make an order in that regard, The defendant received municipal services from the Mangaung metro municipality in respect of her being resident of a dwelling House and should be held liable in respect thereof.  The court is of the view that the defendant should be held liable in respect of the outstanding municipal charges for the period 01 June 2011 to 30 June 2014.

 

In respect of claim B the court is of the view that the Defendant should as far back as July 2013 when she applied for a liquor licence have enquired about the zoning of the premises.  The letter from the Mangaung Metro Municipality is dated 17 June 2014 and despite knowing that the property wasn’t zoned for business purposes, the Defendant continued to reside at the premises despite knowing that is wasn’t zoned for business premises.  The defendant still conducted her Coffee Shop, Home Industry and Restaurant from the incorrectly zoned premises and resided at the premises until she vacated the premises in November 2014.  The court is of the view that the Defendant should have vacated the premises on learning about the incorrect zoning.  Due to her not vacating the premises the court is of the view that the Defendant is liable for the arrear rental and municipal costs for the period from 1 July 2014 to 30 November 2014 and rental as she utilized the premises for Residential purposes.

 

The court is of the view that the rental for the period in question is in line with the cost of renting premises for residential purposes in the suburb of Westdene.”

 

IV           GROUNDS OF APPEAL

 

[6]          The appellant’s grounds of appeal consist of no less than 23 paragraphs including several sub-paragraphs.  In my view it was totally unnecessary and appropriately accepted to be the case by the appellant’s counsel who decided to mention only the following four grounds in his heads of argument:

 

6.1    The court a quo erred in finding that the respondent was entitled to any payment in respect of the rental agreement concluded between the parties which was illegal, void ab initio and unenforceable;

 

6.2    The court a quo erred in finding that the property was fit for the purpose for which it was let;

 

6.3    The court a quo erred in finding that the respondent has proven the quantum of its claim insofar as it failed to place admissible evidence before the court in this regard;

 

6.4    The court a quo erred in finding that the respondent was entitled to rely on alleged consequential damages in order to substantiate claim two insofar as this was not the respondent’s pleaded case and evidence in that regard was inadmissible.

 

[7]        It should be mentioned that Mr Van der Merwe, although not conceding the last three grounds of appeal, vehemently argued the first ground of appeal.  Before I refer to the relevant statutory provisions and authorities and thereafter evaluate the submissions of the parties and judgment of the court a quo, it is necessary to consider two intertwined applications which need adjudication.

 

V            THE CONDONATION APPLICATION

 

[8]          On 21 April 2021 the respondent filed a notice of motion indicating that it will seek two declaratory orders on 20 May 2021, firstly that the appeal noted by the appellant on 9 June 2020[3] had lapsed and secondly, that the respondent may execute the judgment of the court a quo dated 8 May 2020.  It also sought costs of the application.  The appellant filed a notice of intention to oppose the application and simultaneously filed a counter-application, seeking condonation for her failure to prosecute the appeal within the time prescribed by the Uniform Rules of Court.  Condonation is also sought for the failure to file the notice of appeal timeously.  Consequently, an order is sought in terms whereof the appeal is reinstated in terms of Uniform Rule 49(5)(b) and that the respondent be ordered to pay the costs of the application only in the event of opposition.  It will soon appear that the references to the Uniform Rules of Court are indeed incorrect.  The appellant made a meal of this counter-application insofar as her affidavit consists of 52 pages and the annexures thereto a further 83 pages.

 

[9]          The two applications were eventually heard by us on the date set down for the appeal.  Mr Van der Merwe made the same mistake in his written heads of argument by referring to the incorrect rules, but he rectified matters during oral argument.  It needs to be clarified that the notice of appeal should have been filed with the clerk of the court a quo and not with the registrar of the High Court.  The notice of appeal was filed with the registrar of this court on 9 June 2020 which was also hopelessly out of time, bearing in mind the provisions of rule 51(3) of the rules issued under the Magistrate’s Court Act.[4]  It appears from the papers that the notice of appeal was filed with the clerk of the court a quo on 29 April 2021 only, and therefore nearly 11 months late. 

 

[10]        The appellant also failed to take the further steps required by the Uniform Rules of Court since noting the appeal and on the basis that it was indeed properly lodged with the clerk of the court a quo which was obviously not the case.  Rule 49 relied upon is not applicable as this rule deals with appeals from and not to the High Court.  The correct rule is rule 50.[5]

 

[11]        Condonation applications in the High Court are dealt with in accordance with rule 27.  Good cause is required and a full and reasonable explanation must be given for the delay.  Furthermore, a bona fide defence must be shown as well as no prejudice to the other side which cannot be rectified by a costs order.[6]

 

[12]        In my view the reasons advanced by the appellant and her attorney fall far short of what is expected in applications for condonation.  The following admonition of Heher JA in Uitenhage Transitional Local Council v South African Revenue Service[7] was clearly not taken seriously:

“[6] One would have hoped that the many admonitions concerning what is required of an applicant in a condonation application would be trite knowledge among practitioners who are entrusted with the preparation of appeals to this Court: condonation is not to be had merely for the asking; a full, detailed and accurate account of the causes of the delay and their effects must be furnished so as to enable the Court to understand clearly the reasons and to assess the responsibility. It must be obvious that, if the non-compliance is time-related then the date, duration and extent of any obstacle on which reliance is placed must be spelled out.”

 

[13]        I am satisfied, notwithstanding a serious degree of non-compliance and an improper explanation therefore, the importance of the case and the interests of both parties to finality, the convenience of the court, the avoidance of further unnecessary delay in the administration of justice and in particular the prospects of success, that the respondent’s application for declaratory relief should be dismissed and the appellant’s application for condonation be granted.[8] 

 

[14]      The appellant, being the successful party in the application for condonation, sought an indulgence and there is no reason why she shall not be ordered to pay the costs of both applications, for declaratory relief and condonation, on an unopposed basis as not much time and effort have been wasted in dealing with the two intertwined applications.

 

 

VI           RELEVANT STATUTORY PROVISIONS AND AUTHORITIES

 

[15]       O’Regan J confirmed the trite principle more than a decade ago in Walele v City of Cape Town and others[9] that zoning schemes not only restrict the rights of owners in an area, but also confer rights on owners, “because owners are entitled to require that neighbouring owners comply with the applicable zoning scheme.  Where an owner seeks to depart from the scheme, the rights of neighbouring owners are affected and they are entitled to be heard on the departure.”

 

[16]       In Emilel Investments (Pty) Ltd v Silvestry and others[10] the Supreme Court of Appeal, having confirmed the unlawful use of the property, refused to suspend an interdict obtained against the unlawful use in order to apply for an amendment of the zoning scheme.  Malan JA held:[11] “Nor can the outcome of such application be predicted with any confidence.  Suspending any order would merely prolong the appellant’s illegal conduct.”

 

[17]        Although we do not deal with an application by a disgruntled neighbour as was the case in several matters that came before different judges of this division over the previous few years, it needs to be pointed out that in most of these cases interdicts were granted to prevent the further unlawful conduct of business in the suburb of Dan Pienaar and in areas zoned for residential purposes.[12] In many of these cases the respondents unsuccessfully relied on the defence that they had applied to the local authority for consent in terms of s 18(3)(b) of the Bloemfontein Town Planning Scheme to conduct business and were awaiting the outcome. 

 

[18]    The appellant pleaded that it was illegal and contrary to the Bloemfontein Town Planning Scheme, 1 of 1954, the Town Planning Ordinance 9 of 1969 (“the Ordinance”), as well as the Spatial Planning Land Use Management Act 16 of 2013 (“SPLUMA”), for the respondent to rent out the premises to the appellant in order to conduct a business.  It was furthermore pleaded that use of the premises for business purposes was illegal in accordance with s 41(1)(a)(iv) of the Ordinance.  Consequently, she pleaded that the rental agreement was illegal and void ab initio.[13]  In order to deal with this defence and the evidence in that regard, it is necessary to deal with some statutory provisions and authorities.

 

[19]        It is common cause that the premises rented out to the appellant is zoned “Single Residential 2” and may only be used for the purpose of a dwelling house.[14]  This is the de facto and de iure position in terms of the approved Bloemfontein Town Planning Scheme.

 

[20]        Section 41(1)(a)(iv) of Ordinance stipulates that a person who contravenes any provision of an approved scheme shall be guilty of an offence and liable on conviction to a fine not exceeding R500.00 or to imprisonment for a period not exceeding 6 months or to both such a fine or imprisonment.

 

[21]        It is accepted in the preamble of SPLUMA that municipal planning is primarily the executive function of a local sphere of government.  Section 26 of SPLUMA deals with the legal effect of a land use scheme and I quote:

              “Legal effect of land use scheme

26. (1) An adopted and approved land use scheme-

(a)  has the force of law, and all land owners and users of land, including a municipality, a state-owned enterprise and organs of state within the municipal area are bound by the provisions of such a land use scheme;

(b)  replaces all existing schemes within the municipal area to which the land use scheme applies; and

(c)   provides for land use and development rights.

(2) Land may be used only for the purposes permitted-

(a)   by a land use scheme;

(b)   by a town planning scheme, until such scheme is replaced by a land use scheme; or

(c)  in terms of subsection (3)

(3) Where no town planning or land use scheme applies to a piece of land, before a land use scheme is approved in terms of this Act such land may be used only for the purposes listed in Schedule 2 to this Act and for which such land was lawfully used or could lawfully have been used immediately before the commencement of this Act.

(4) A permitted land use may, despite any other law to the contrary, be changed with the approval of a Municipal Planning Tribunal in terms of this Act.

(5) A municipality may, after public consultation, amend its land use scheme if the amendment is-

(a)  in the public interest;

(b)  to advance, or is in the interest of, a disadvantaged community; and  

(c)  in order to further the vision and development goals of the municipality.

(6) A land use scheme developed and approved in terms of this Act must address and resolve any conflict with an existing scheme not repealed or replaced by the new land use scheme.”  (emphasis added)

 

[22]     Section 58(1)(b) of SPLUMA stipulates that a person is guilty of an offence if that person uses land contrary to a permitted land use as contemplated in s 26(2).  A person convicted of an offence in terms of ss (1) may be sentenced to a term of imprisonment for a period not exceeding 20 years or to a fine calculated according to a ratio determined for such imprisonment in terms of the Adjustment of Fines Act, or to both a fine and such imprisonment.

 

[23]     The court a quo referred to the letter of the Mangaung Metro Municipality dated 17 June 2014 which stipulates that the premises is zoned “Single Residential 2” and may only be used for a dwelling house.[15]  In all fairness, it is necessary to quote the second last paragraph of this letter:

            “In terms of the approved Westdene Structure Plan, the above mentioned property is earmarked for “Restricted Business 2”.  This implies that if an application for rezoning is submitted approved by the Free State Provisional Government this erf can be used in line with this zoning.” (emphasis added). 

           This will again be dealt with during the evaluation of the submissions later on.

 

[24]        While there are statutes which expressly provide that certain contracts are void, there are many statutes which contain no such express statements.  In the latter case the statute has to be interpreted in order to arrive at the intention of the legislature.[16]  Generally speaking, where certain conduct is penalised, the implication is that the conduct is void even if no declaration of invalidity is attached to the statute.[17]  The court continued as follows:

              “After all, what we have to get at is the intention of the Legislature, and, if we are satisfied in any case that the Legislature did not intend to render the Act invalid the Legislature, we should not be justified in holding that it was.  As Voet (1.3.16) puts it – “but that which is done contrary to law is not ipso jure null and void, where the law is content with a penalty laid down against those who contravene it.” Then after giving some instances in illustration of this principle, he proceeds:  “The reason of all this I take to be that in these and the like cases greater inconveniences and impropriety would result from the rescission of what was done, than would follow the act itself done contrary to the law.”

 

[25]        In Swart v Smuts[18] the former Appeal Court expressed a similar view, inter alia quoting with approval Standard Bank v Estate van Rhyn supra.  The court was of the view that the intention of the legislature must be sought by considering the following issues raised in Pottie v Kotze[19] which it quoted with approval:[20]

“The usual reason for holding a prohibited act to be invalid is not the inference of an intention on the part of the Legislature to impose a deterrent penalty for which it has not expressly provided, but the fact that recognition of the act by the Court will bring about, or give legal sanction to, the very situation which the Legislature wishes to prevent.”

 

[26]        In Metro Western Cape (Pty) Ltd v Ross,[21] the former Appeal Court confirmed that although it is a general rule that a contract impliedly prohibited by statute is void and unenforceable, this rule is not inflexible or inexorable.[22]  In this case the particular section of an ordinance prohibited a general dealer from carrying on business by entering into particular contracts on or from fixed premises without the required certificate of registration and licence.  The court held that the purpose of the ordinance was to provide a system of control and it was not the object of the ordinance of treating all contracts entered into by such unregistered or unlicenced businesses as void.  Consequently, the court held that the purpose of the legislature was sufficiently served by the penalties prescribed for illegal trading and not intended to render contracts entered into between the trader and his customers void.[23]  In arriving at this conclusion the court held that if contracts concluded between a trader and his customers, being innocent members of the public, were held to be void, it would cause grave inconvenience and injustice to such innocent members without furthering the object of the ordinance.

 

[27]        The intention of the legislature must be ascertained from the statute as a whole and no single consideration, however important it may seem to be is necessary conclusive, as held by Boshoff JA in Metro Western Cape (Pty) Ltd v Ross supra.[24]  Nowadays, in our constitutional era, statutory interpretation must be undertaken in accordance with the well-known dictum of Majiedt AJ (as he then was) in Cool Ideas 1186 CC v Hubbard and Another[25] which has been applied with approval in numerous judgments thereafter.  I quote:

“[28]     A fundamental tenet of statutory interpretation is that the words in a statute must be given their ordinary grammatical meaning, unless to do so would result in an absurdity.  There are three important interrelated riders to this general principle, namely:

(a)        that statutory provisions should always be interpreted purposively;

(b)        the relevant statutory provision must be properly contextualised; and

(c)        all statutes must be construed consistently with the Constitution, that is, where reasonably possible, legislative provisions ought to be interpreted to preserve their constitutional validity.  This proviso to the general principle is closely related to the purposive approach referred to in (a).” (footnotes omitted)

 

 

[28]        In Absa Insurance Brokers (Pty) Ltd v Luttig and Another NNO[26] the Supreme Court of Appeal had to consider whether s 20bis of the Insurance Act[27] allowed for an agreement in terms whereof premiums to be paid to the appellant as a broker could be dealt with in a manner contrary to the subsection.  The court held the agreement contravened s 20bis and in order to decide whether contravention of the section necessarily pointed to nullity of the contract the purpose of the section was crucial.  The court explained itself as follows:[28]

“What is clear is that the Act as a whole is designed to regulate the insurance industry. It is an Act which 'has set up elaborate machinery to regulate, mainly for the protection of the public, the management and function of insurers and the conduct of their business'. (D M Davis The South African Law of Insurance 4th ed at 13-14.) The provisions of s 20bis are clearly there to regulate the dealing with and retention of premiums by any agent or broker. The section cannot be said to have been enacted only for the benefit of the insurer. It is plainly there to protect the interests of the public at large and to ensure that premiums paid by policy-holders are not dealt with in an ad hoc manner depending on a particular agreement between an insurer and a broker… The prohibition in s 20bis(b) is peremptory.  The object of the provision is to ensure that the assets of a registered insurance company are kept safe and intact…  If one allowed the illegal contract to be enforceable the effect of this would be to undermine the very purpose of the Act which, as previously stated, is inter alia to regulate the operation of the insurance industry.”

Further on the court held:[29]

“The contract allegedly entered into between the appellant and IGI, strikes at the very heart of this provision. It effectively purports to allow a broker and an insurer to evade contractually the protections afforded by the Act.

The respondents' submission that the alleged agreement relied upon by the appellant was a nullity must succeed.”

 

[29]        In Fedgroup Participation Bond Managers v Trustee of the Capital Property Trust,[30] it was common cause that an incomplete structure which encroached on the respondent’s property had been erected by the appellant’s predecessor in title and that the structure was erected unlawfully insofar as no building plans had been submitted for approval.[31]  The appellant sought registration of transfer of a portion of the respondent’s property on which the illegal structure encroached, but the Supreme Court of Appeal had no difficulty to dismiss the appeal.  It stated the following:[32]

             “A court will not countenance or be party to perpetuating unlawful conduct.”

             The court accepted the reasoning and conclusion of the earlier judgment of the same court in Lester v Ndlambe Municipality.[33]   In that case the landowner erected a luxury home on the Eastern Cape coast contrary to administrative approval.  Several revised building plans were lodged with the municipality, but the plans were found not to comply with the statutory and zoning requirements and consequently these were never approved.  In the process and during expansion of the property, the neighbours’ panoramic views over the ocean had been blocked.  The Supreme Court of Appeal held that as it was common cause that the appellant had erected an unlawful structure, the jurisdictional basis for a demolition order had been established, that the court a quo did not have a discretion in this regard, but simply had to uphold the rule of law and refuse to countenance an ongoing statutory contravention and enforce the provisions of the National Building Regulations and Building Standards Act 103 of 1977.[34]  Majiedt JA, writing for a unanimous court, relying on a judgment of Harms J (as he then was) in United Technical Equipment Company (Pty) v Johannesburg City Council,[35] held as follows:[36]

              “Ndlambe is in exactly the same position as the respondent in the aforementioned case – it was statutorily and morally duty bound to approach the court below for a demolition order in order to uphold the law. The court a quo, in turn, had a concomitant duty to uphold the doctrine of legality, by refusing to countenance an ongoing statutory contravention and criminal offence.”

 

[30]        In United Technical Equipment Company (Pty) v Johannesburg City Council supra, Harms J, writing for the full court in an appeal against the granting of an interdict in terms whereof the appellant company was restrained from using the property which was zoned for residential purposes in terms of the Town Planning Scheme for business purposes, held that the appellant was committing an ongoing offence and consequently held that the interdict could not be suspended pending the final dismissal of the appellant’s application to the administrative authorities for rezoning of the property.  The following dictum is apposite:[37]

               “It follows from an analysis of these cases that discretion can, if at all, only arise under exceptional circumstances. Furthermore, I am not aware of any authority which would entitle the court to suspend the operation of an interdict where the wrong complained of amounts to a crime.”

 

[31]        The next case to be considered is the Constitutional Court judgment in Cool Ideas 1186 CC v Hubbard and Another supra.  In that case the home owner and builder entered into a building contract in circumstances where the builder was not registered in terms of s 10 of the Housing Consumers Protection Measures Act.[38]  Having considered the proper meaning of s 10(1)(b) of the Act by making use of statutory interpretation as explained in paragraph 28, Majiedt AJ (as he then was) held that the purpose of the Act was to protect housing consumers, that the subsection was aimed at achieving a legitimate and important statutory purpose and that there was a rational, proportional connection between the statutory prohibition and its purpose.[39]  Ultimately the Constitutional Court concluded as follows:[40] 

“The underlying building contract remains valid and extant.  This is so even though Cool Ideas is in law precluded from seeking consideration for the work done, due to its failure to register as a home builder prior to the commencement of the building works.”  

 

[32]        It is interesting to note that although Majiedt AJ wrote the majority judgment concurred in by four of his colleagues, Froneman J in his minority judgment, concurred in by three of his colleagues, disagreed for the reasons fully set out in his judgment.[41]  Jafta J agreed with the majority and main judgment with the concurrence of Zondo J (as he then was) in respect of the end result, but was of the view that the building contract should have been declared void, making his point as follows:[42]

              “… When the legislature wants to put an end to a particular conduct, it prohibits it.  As was observed in Pottie, a court cannot give legal sanction to an act prohibited by the legislature.  Therefore, in Taljaard, the Supreme Court of Appeal erred in holding that the contract of mandate concluded contrary to the prohibition in s 34A was valid.  The principle that what is done in breach of a statutory prohibition is invalid may be departed from only if it is clear from the language of the relevant legislation that invalidity was not envisaged.  It is not necessary for the prohibition to say non-compliance with it would lead to invalidity.”

 

[33]        To complicate matters, bearing in mind the authorities already quoted, Majiedt JA had another opportunity to write a judgment in respect of zoning issues.  This time he wrote for a unanimous court in the Supreme Court of Appeal.  I refer to Wierda Road West Properties (Pty) Ltd v Sizwe Ntsaluba Gobodo Inc.[43]  In this case the respondent and former lessee of business premises alleged that the lease agreement entered into with the landlord was void ab initio and that the appellant was precluded from enforcing its rights.  The defence of invalidity was based on three grounds pleaded in the alternative, to wit:

“(a) That the agreement contravened s 14 of the National Building Regulations and Building Standards Act 103 of 1977, (the Act) in that no occupancy certificate had been issued prior to the occupation thereof;

(b)   that the appellant had made a fraudulent misrepresentation by failing to inform the respondent of the fact that no occupancy certificate had been issued; and

(c)   that the property was not suitable for the purposes for which it was let, as it would have constituted an offence for the respondent to have remained in occupation in the absence of an occupancy certificate.”[44]

 

[34]        Mr Naicker, the main witness for the appellant and lessor in Wierda Road was not only a shareholder and director of the appellant, but also a shareholder of the respondent company.  According to his evidence the city council was fully aware that the property was being occupied without an occupancy certificate, that its inspectors came to the property to make an assessment of the situation and there was no objection to occupation.[45]

 

[35]        The respondent in Wierda Road failed to call Messrs Simpson and Prinsloo who featured prominently in the events leading up to conclusion of the lease agreement and after the respondent had vacated the property.  Consequently, the court had no difficulty to find that it was not the respondent’s case that the property was not safe for occupation and that Mr Naicker’s evidence regarding problems about the building plans and occupancy certificate was unchallenged.[46]  The absence of an occupancy certificate was raised pertinently for the first time as a reason for the respondent vacating the property and that non-compliance with s 4 and s 14 of the aforesaid Act rendered the agreement void ab initio only after the respondent had vacated the property.[47]

 

[36]        Majiedt JA, who also wrote the majority judgment in Cool Ideas 1186 CC v Hubbard and Another, made the point that the two cases were plainly distinguishable on the facts and the law insofar as s 10 of the Housing Act expressly prohibits an unregistered builder from receiving any consideration whilst s 14 of Act 103 of 1977 contains no such statutory prohibition.[48]  It was further held that insofar as s 14(4)(a) contained a penalty provision, that strongly suggested that the penalty itself was intended by the legislature to be an adequate sanction without the lease agreement also being void.  Also, the Act was less concerned with private law relationships between for example lessors and lessees, but rather with public law relationships between local authorities and builders, users and occupants.  The court concluded in this regard with the following observation:[49]

“(c) Lastly, one of the factors to be considered in a determination of the legislature’s intention is that the additional sanction may have undesirable and unintended consequences. This case vividly demonstrates the unjust and undesirable consequences which may ensue. Through no fault of its own and utterly oblivious to the absence of any plans, having purchased the property at an auction, the appellant would find itself in the invidious position of having a lease agreement declared invalid where it has fully performed all its obligations and where the tenant was fully conversant with all the facts. In addition, the slow grind of the City Council’s bureaucratic machinery stood in the way of the appellant’s efforts to regularize the situation for five years.”

           

The learned judge of appeal referred with approval to a judgment of Van der Merwe AJ in Friedshelf 113 (Pty) Ltd v Mysty Blue Trading 559 CC[50] where the learned acting judge concluded that there were no valid or compelling considerations indicating that the private lease agreement should be visited with the sanction of voidness and unenforceability by virtue of the fact that it related to premises in respect of which the requirements of the Act had not been complied with.[51]  Despite a thorough search I could not find this judgment.

 

[37]        The court’s final conclusion in Wierda Road needs to be quoted fully in order to consider eventually whether that case is on all fours with the matter under consideration.  I quote:[52]

“[28]   To sum up with regard to this first issue: non-compliance with ss 4(1) and 14(1) does not render the parties’ lease agreement void and unenforceable. There is no basis to justify reading an implied meaning into s 4(1) that the use or occupancy of a building which has no approved plans is prohibited. I discuss next the respondent’s alternative contention that the property was not fit for the purpose for which it had been let, since occupancy would have rendered the respondent liable to criminal prosecution under s 14(4)(a).

[29]    The respondent was at liberty to request the local authority to pursue the remedies available to it in terms of the Act, had the need arisen to do so. The conclusion is compelling that the respondent, with full knowledge of the lack of an occupancy certificate, had consented to use and occupation under the prevailing circumstances. The respondent received exactly what it had bargained for – office accommodation refurbished to its needs, in a building with an outstanding occupancy certificate which, to its knowledge, the owner (the appellant) was in the process of obtaining. The respondent never complained of this alleged unfitness for letting, and only did so after it had vacated the property and to avoid the consequences of being held to a contract it had freely entered into.” (emphasis added and footnote omitted)

 

VII         EVALUATION OF THE EVIDENCE, SUBMISSIONS OF THE PARTIES AND THE JUDGMENT OF THE COURT A QUO

 

[38]        The respondent expressly represented to the appellant that the permitted use of the premises was for a coffee shop, home industry and restaurant.[53]  Ironically, the respondent deemed it necessary to insert clause 12 in the lease agreement which reads as follows:

“Laws and practices:

12.1   The tenant shall comply with every and shall not contravene any

          12.1.1   law or bylaw relating to the use of the lease premises; and

          12.1.2   condition of total relating to the property; and

         12.1.3   provision of the town planning scheme relating to the property; and

          12.1.4   law and regulation relating to the conduct of the tenant’s business.”[54] (emphasis added)

 

              Mr Bergh confirmed in his viva voce evidence that the aforesaid uses were in fact permitted.

 

[39]        It is irrelevant that Westdene, the suburb wherein the premises are situated, which in years gone by was almost exclusively used for residential purposes, is nowadays flooded with business such as attorneys’ offices, restaurants and various other business concerns.  It is also irrelevant that the same premises were previously used to accommodate a law firm.

 

[40]        It is common cause that neither the respondent, nor its predecessors in title ever obtained permission from the Mangaung Metropolitan Municipality to use the premises for the purposes for which it was rented out to the appellant.  The fact that the particular suburb, inclusive of the relevant premises, has been earmarked for restricted business purposes, is irrelevant.  The Bloemfontein Town Planning Scheme was still not amended by the time that the court a quo dealt with the case.

 

[41]        It could not be expected of the appellant to establish from the authorities, before entering into lease agreement, whether the premises could be used for a coffee shop, home industry and restaurant.  Her landlord gave her such rights and there was no reason to question its competency, bearing in mind that similar businesses are conducted in close proximity.  When the appellant started looking for an ideal spot to conduct her business, she noted the premises and the fact that several other restaurants were being run in the same street.  She believed that the premises had “a business licence.”[55]

 

[42]       The respondent trust, through its trustee who testified in the court a quo, Mr Bergh, knew that the premises were not zoned for the purpose that it was rented out.  He testified that an application for rezoning was made in 2006 or 2007 by the previous owners, but that rezoning was never approved.  Mr Bergh made it clear that he rented out the premises on two previous occasions for commercial activities and stated:  “… but I have never, I never had the, a new rezoning of anything.”[56] He never testified that he or any of the previous owners asked for and obtained consent in terms of s 18(3)(b) of the Bloemfontein Town Planning Scheme to use the premises for business purposes.  There is also no evidence on record as to whether consent was asked for in terms of s 18(3)(b) and/or obtained by such other business and/or property owners in the immediate area to conduct business pending amendment of the Bloemfontein Town Planning Scheme.

 

[43]      My first reaction was that this court is bound by the decision in Wierda Road supra based on the stare decisis principle. A closer investigation of that judgment revealed distinguishable features. Unlike the facts in Wierda Road the appellant was lured into the lease agreement on the express understanding that she may conduct the businesses as represented in writing.  When she became aware of the absence of a right to conduct business from the premises in June 2014, she could not pack up immediately and vacate.  It is important to note that the letter of the Mangaung Metropolitan Municipality referred to above pertinently stated that the premises may only be used as a dwelling house.  One should understand that she had to discuss the matter, obtain legal advice and then decide what to do, bearing in mind that she had established a business during the previous three years and that she would suffer a severe future loss of income.  Correspondence ensued between the attorneys as is evident from the record.  It was pointed out by the appellant’s attorneys on 8 October 2014 that the landlord had rented out the premises in contravention of the municipal by-laws.[57]

 

[44]        The respondent trust is as admitted by Mr Bergh in the property industry.  No doubt, neither Mr Bergh, nor the trust can be regarded as an innocent lessor as was the case in Wierda Road.  It was also not necessary to protect the respondent as lessor based on what was found in Metro Western Cape supra insofar as the respondent is not an innocent member of the public.  Also, unlike in Wierda Road, the appellant as lessee was totally unaware of the fact that the premises were not zoned for business purposes when the lease agreement was concluded and for three years thereafter.

 

[45]        The facts in casu are also distinguishable from those in Wierda Road insofar as in that case the municipal officers attended to the premises and had no objection to occupation.  Furthermore, the lessee was well aware from the signing of the lease agreement that no occupancy certificate had been issued, unlike the knowledge of the appellant in casu.  This defence was also raised for the first time after termination of the lease and only when rentals were demanded.  In casu the appellant’s attorneys raised illegality reasonably soon after receipt of the municipality’s letter.  I in particular wish to refer to the dictum of Majiedt JA referred to in paragraph 36 supra.

 

[46]        The court a quo correctly held that the lease agreement was illegal and unenforceable and therefore concluded that claim A could not succeed.  However, because the appellant utilised the property, she was held liable for municipal charges until 30 June 2014.  The court a quo made the point that the parties never specified the amount to be paid in respect of the appellant’s residency and refused to grant a monetary amount for this period.  It was wrong to grant an order in respect of the payment of municipal charges for this period insofar as it has found the lease agreement to be illegal.  Also, the order is not executable as no amount is specified and the parties were in dispute during the trial.  It should be set aside.

 

[47]        Notwithstanding its finding of illegality and unenforceability of the lease agreement, the court a quo incorrectly decided to grant claim B on the basis that the appellant utilised the premises for residential purposes.  I repeat the reasoning:

            “The court is of the view that the rental for the period is in line with the cost of renting premises for residential purposes in the suburb of Westdene.”

 

[48]       The court a quo’s final conclusion is not supported by any evidence whatsoever and insofar as it relied on personal information, it could not take judicial notice of this fact especially when the parties were not given an opportunity to address it on the issue.

 

[49]        The court cannot disregard the judgments quoted above.  I repeat what was said in Walele supra, to wit that zoning schemes not only restrict rights of owners, but also confirm their rights.  Therefore, the court shall bear in mind that illegal conduct by a property owner or his or her lessee may always negatively affect the rights of neighbours, who often do not have the resources to litigate.  On the same basis that courts grant interdicts to

 

 

 

 

prevent illegal conduct this court shall not countenance unlawful conduct by allowing the respondent from benefiting from an illegal contract.

 

 

 

VIII        CONCLUSION

 

[50]    Having correctly found the lease agreement to be illegal, void and enforceable, the court a quo should have dismissed the claims with costs.

 

[51]        It is deemed unnecessary to deal with the other grounds of appeal in view of the finding arrived at, save to mention that I am not satisfied that the respondent has proven, based on reliable and admissible evidence, what was due and payable as municipal charges in respect of the premises.  The alleged unfitness of the premises as a result of electrical or other problems could not reasonably considered as a defence in casu.

 

IX           ORDERS

 

[52]       The following orders are issued:

1.      The application for declaratory relief is dismissed.

2.      The application for condonation is granted.

3.      The appellant shall bear the costs of both these applications on an unopposed basis.

4.      The appeal succeeds with costs.

5.      The order of the court a quo is set aside and substituted with the following: “The plaintiffs’ claims are dismissed with costs.”

 

 

JP DAFFUE J

 

I concur

 

M MATSHAYA AJ

 

On behalf of the Appellant:         Adv R Van Der Merwe

Instructed by:                               Honey Attorneys

                                                     BLOEMFONTEIN

 

On behalf of the Respondents:     Adv J Ferreira

Instructed by:                                Bezuidenhouts Inc

                                                      BLOEMFONTEIN

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