EDUAN HOOGTES (PTY.) LTD. v. CHARIN ELECTRONICS (PTY.)LTD.
(TRANSVAAL PROVINCIAL DIVISION.)

1973. February 14, 15.  MOLL, J.

Landlord and tenant.-Ejectment.-Averment by tenant that he is a bona fide possessor for useful improvements effected to premises.Order granted against security for the amount of the improvements.

The applicant had applied for the ejectment of the respondent. and all persons claiming rights through it from the premises. The respondent had averred that it was a bona fide possessor in respect of certain useful improvements effected to the premises and that, by virtue of its right of retention, it was entitled to remain in possession until it was compensated for the amount by which the value of the premises had been enhanced. The applicant averred that it ought to be restored in possession in the event of its giving a guarantee for any claim in respect of the improvements. This request was not opposed by the respondent.

Held, that an order be granted on the furnishing of security by the applicant to the Registrar in the amount claimed for the improvements..

Application for ejectment. The facts appear from the judgment.

L. T. C. Harms, for applicant.
T. Langley, for the respondent.

Cur. adv. vult.

Postea (February 15th).

MOLL, J. : This . is an application for ejectment of the respondent company and all persons claiming rights through it, from the premises known as 770 Haarhoff Street, Rietfontein, Pretoria.

It is common cause that the applicant company is the registered owner of the said premises on which there are certain buildings. In its replying declaration respondent avers that it has occupied the said property since 2nd·March, 1972, in pursuance of certain agreements entered into in circumstances which place the respondent in the position of a bona fide possessor. This averment is not admitted on the papers.

In addition to the aforegoing it is further averred by the :respondent that it, as bona fide possessor, effected certain improvements and additions to the said premises which had been completed towards the end of May, 1972. It is averred that the improvements are useful and that the value of the said property is at least increased by ·the amount of the building costs of the said improvements. The said building costs are stated in the said declaration to be R4 300. In a letter written prior to the present application such costs where stated by respondent to be R3 551. Respondent, however, gives an explanation for this difference and it is not necessary for the purposes of the present application to consider it.

It is respondent's case that by virtue of its right of retention it is entitled to remain in possession of the said property until it is compensated by the applicant for the amount by which the value of the premises has been enhanced on the basis already indicated by me. From the papers before me it is not only clear that respondent's averment that he is a bona fide possessor is placed in issue, but it is also denied by the applicant that the said improvements can be regarded as useful or that there is an enhancement in the value of the premises to the extent averred by respondent or to any extent.

Mr. Harms, who appeared for the applicant, indicated that, for purposes of his argument, he was prepared to accept that respondent was in fact a bona fide possessor and that at least some of the said improvements can· be regarded as useful improvements. If it is accepted for purposes of argument, Mr. Harms submits that applicant made it clear in his declarations that it is not claiming the said improvements, which may, therefore, be removed by respondent. It is his submission that applicant, as owner, cannot legally be compelled to accept the improvements whether they are useful or necessary.

It is clear from the authority referred to on behalf of applicant that in the case of useful improvements consisting of buildings the bona fide possessor cannot claim compensation in the above-mentioned circumstances where the costs in regard to the said improvements are to high or where the owner himself would never have incurred such costs. In such circumstances the bona fide possessor's only alternative is to remove the said improvements in so far as it is possible. It is, however, accepted that in adjudicating the issue between the parties the Judge must decide what will be right and fair to the parties, while taking into account all the circumstances. These circumstances entail a variety of factors, inter alia, the financial status of the owner, the question whether the owner wants to sell the property or occupy it personally, the feasibility of removal, the question whether the improvements can be separated, whether the owner would himself have incurred the costs, etc.

In the light of the papers before me, it would, in my opinion be very risky for me, to say the least, to endeavour to decide this point, taking into account all relevant factors in the exercise of my discretion.

It follows that I cannot agree with this part of applicant's submission.

Alternatively to the above-mentioned submission it was submitted on behalf of the applicant that in view of all the circumstances of the present case, the appilcant ought to be restored in possession provided it gives a guarantee for any claim in respect of the improvements by the respondent. In this regard reference was made to Thiart v. Kroukamp, 1967 (3) S.A. 219 (T), especially at p. 227. Various factors were referred to, which according to Mr. Harms, should move the Court to make such an order on considerations of equity.

Mr. Langley, for respondent did not oppose this request made on be­ half of applicant. In any event, I am. of opinion, that on the facts of this case it would be right and fair if such an order is made.

The question of costs must, however, be decided. On behalf of applicant it was submitted that in para. 16 of his petition he already offered to furnish security for any claim which the respondent may have in regard to compensation relating to his vacation of the premises. I cannot agree with this. In the context it is, in my opinion, only said that should this Court order it, the applicant would be prepared to furnish security, but Mr. Harms submitted that the offer is in any case clearly stated in para. 18 of the applicant's replying declaration. In this paragraph the following is stated:

"I notice that respondent now avers that the value of the improvements is R4 300 and the applicant offers to furnish security in that amount if respondent vacates the premises.''

In its application the applicant asked the Court for ejectment of respondent and costs. Further it is also clear from the correspondence which preceded the said application, that applicant's attitude was that respondent was in unlawful possession of the property and should vacate the premises without more ado. In these circumstances the respondent was, in my opinion, not only entitled, but indeed also compelled to state its case fully in the replying declaration. Up to and including the replying declaration it could, therefore, in my opinion, not have been expected of the respondent to have acted otherwise than to protect its alleged right of retention. I also do not think that it could have been expected of respondent to foresee a change of attitude on the part of applicant or that, in the light of applicant's attitude, it should have made an offer to vacate the property on condition that applicant furnished security. I can, therefore, not agree with the submission by the applicant that up to and including the filing of the replying declaration, costs should be costs in the main suit.

In my opinion respondent is entitled to these costs.

As regards costs after the filing of the replying declaration it is submitted by applicant that in view of its offer applicant is entitled to these costs. The said offer was, however, not accompanied by an offer to pay respondent's costs up to the date thereof.

The respondent was, therefore, in my opinion, entitled to come to this Court to pray for costs and should it have done that, I would have considered granting it these costs. Respondent, however, opposed the application.

In these circumstances, it appears to me, that it would be right and fair that, as far as costs subsequent to the filing of the replying affidavit are concerned, each party pays its own costs.

The omission to offer costs together with the said offer was not dealt with before me by counsel and I also did not put it to them.

While I, therefore, propose to make an order as to costs as set out above, I will do that subject to the condition that one or the other of the parties will be entitled, if it so desires, to place the case on the roll within seven days, in order to deal with this aspect of the costs with a view to a possible amendment.

In conclusion I make the following order:

(a)	The respondent and all persons exercising rights through it are hereby ordered to restore possession and occupation of the premises known as 770 Haarhof Street, Rietfontein, Pretoria to applicant on or before 30th April, 1973, against security to the Registrar of this Court to the amount of R4 300.

(b)	The nature of the said security to be determined by the Registrar.

(c)	The said security remains of force and effect pending an action which must be instituted by the respondent within four weeks. For the recovery of compensation in respect of alleged useful and/or necessary improvements effected by the respondent to the said property.

(d)	Applicant pays respondent's costs up to and including the filing of applicant's replying declaration.	

(e)	Each party pays its own costs from the date of filing of the said declaration. In regard to this part of the order for costs, leave is granted to the parties, should they so desire, to place the case on the roll within seven days for argument on the point already referred to above.

Applicant's Attorneys: Nathan Bloch & Gross. Respondent's Attorneys: P. G. W. Grobler & Groenewaldt.