Purpose of the Law of Property

Definition of “property”

- right of ownership in a legal object;

- property may refer to legal object/’thing’ to which this right relates;

- variety of legal relationships qualifying for protection as such under the Constitution

although they might not resort so under either previously mentioned descriptions

‘Property’ is no more than a convenient expression to denote the existence of some

types of legal relationships between specific persons and legal objects, which in many

instances could be classified as things.

Law of Property (LOP) focuses mainly but not exclusively on real rights, things &

‘patrimonial rights serving as the object of limited real rights’

Function and Substance

LOP refers to the wide variety of assets that make up a person’s estate or belongings &

which serve as objects of rights that such a person exercises in respect thereof.

It incorporates more legal regulations within its protective & regulative ambit.

Since the new constitutional order, this protective ambit includes, where relevant,

proprietary regulations under the Constitution.

The formal function of the LOP must be viewed in conjunction with its social function in

order to achieve an effective application of the legal norms involved.

Individual freedom, economic need and the substance of the law of property

Law of property is primarily concerned with regulating and protecting the acquisition and

enjoyment of such objects with economic value. This is illustrated by RD ‘dominium’,

which expresses more vividly that the essence of ownership is the legal ability to control

the use of a thing and that owners’ entitlements to determine the use to which their

things may be put will almost invariably affect the satisfaction of the needs and wants of

others.

E.g. owners may

- use things for the satisfaction of their own & their family’s immediate wants & needs

- use things for their own benefit but use them as a means of production

- make things they own temporarily available to others

- alienate their things

- diminish their dominium and renounce some of entitlements in favour of others

- hoard their things and decline to make them available for others

Social function and substance of the law of property

Social function precipitates that the acquisition & enjoyment of wealth occurs not in

isolation, but in a context in which a plurality of people with competing interests have to

live in physical proximity.

Therefore, a multitude of restrictions on the freedom of property is acknowledged by law,

e.g.

- an owner’s ability to erect buildings on his/her land is regulated by building

regulations

- the ability to alienate or acquire property may be limited by legislative anti-pollution

or nature conservation mechanisms, factory regulations & limitations imposed by

private law in the interests of neighbours etc

The constitutional property clause sets the parameters within which the state may

lawfully interfere with private property.

Simultaneously, it also provides an indication as to the kind of protection of property that

may be expected. The law of property thus becomes the means for defining the limits

within which a person is free to deal with their property, how & to whom they may

transfer it and whether or not a person has the right to acquire any particular kind of

property. The limits of property may be ascertained wrt positive law, but the

determination of the justifiability of these limits is an issue to be resolved within the

domain of constitutional law.

Property as a bundle of rights that make up ownership over both corporeal (tangible) and non-corporeal (non-tangible) thingsThe "Three Sticks"

1. Use Disponendia. The right to do with one's own property as one pleasesb. Right to do as one pleases with their propertyc. Discussed in Gien v Gien 1979 (2) SA

a. The freedom of use is subject to the rights of others and, as such, use disponendi is, to a certain degree, limited

“Where the unlimited right of one owner to use property conflicts with the right of another owner to the free enjoyment of his property, the rights are limited by the imposition of mutual obligations. An owner's rights of ownership then extend only so far as there rests an obligation on his neighbour to endure the exercise of that right. That involves an obligation on the one owner so to exercise his right that he does not exceed that limit. If it is exceeded, he no longer acts according to the right which his right of ownership accords to him and he infringes the right of his neighbour. That is unlawful conduct which the law does not tolerate and which can form the basis of an interdict.” Speolstra J

i. Under the common law was universal, but now, subject to several limitations:

1. Subject to the rights of others2. Constitutional limitations3. Legislative limitations

2. Right to Excludea. The exclusion of any person from one's own propertyb. Rei vindicatio

i. Lawful recovery of property from anyone without having to explain oneself

c. Interdicti. To prevent such an exclusion

1. FNB v SARS and Others2. Diepsloot Case

assuming for the purposes of the appeal that the likely consequences of the establishment of the proposed settlement were such as to induce a reasonable apprehension that a nuisance which would interfere with the rights of the Diepsloot residents would be created, the crucial issue was whether such interference would be D unlawful and constitute an actionable wrong (the other two requirements for an interdict, namely a clear right and the absence of any other remedy, not being in issue). (At 345B/C-C/D, read with 344I.)

Held , further, that that would depend upon whether statutory authority for

such interference existed because, where a statute authorises the infringement of legal rights, subject to certain qualifications there can be no wrongful conduct, and hence no liability for such infringement. (At 345C/D-D.)

Held , further, there being no provisions in the Act expressly authorising E interference with the rights of the Diepsloot residents to the enjoyment of their properties, that the following were among the guidelines which had to be applied in deciding whether such interference could be inferred: (a) an intention to interfere with private rights could not be presumed where no provision was made for compensation, subject to the caveat that the aforesaid principle lost much of its force when applied to public undertakings; (b) where the nature of the work authorised to be done is F defined and localised, so as to leave no doubt that the Legislature intended to sanction a specific operation, then in such a case, especially if the work was required in the public interest, an intention that it should be constructed in spite of interference with common-law rights might fairly be inferred; and (c) if the act which a statute definitely authorises to be done is one which must necessarily interfere with common-law rights, the Court will infer a legislative intention that such rights should be infringed. (At 345G-H/I, I-J and 345J-346A.) Smalberger JA

d. Discussed at length in Chetty v Naidoo 1974 (3) SA (B)

Although a plaintiff who claims possession by virtue of his ownership must, ex facie his statement of claim, prove the termination of any right to hold which he concedes the defendant would have had but for the termination, the necessity C of this proof falls away if the defendant does not invoke the right conceded by the plaintiff but denies that it existed. Then the concession becomes mere surplusage as it no longer bears upon the real issues then revealed. If, however, the defendant relies on the right conceded by the plaintiff, the latter must prove its termination. This is so, not only if the concession is made in the statement of claim, but at any stage. Jansen JA

3. Derive an Income a. Lease

Ownership, although the most complete real right, is not absoluteSee Port Elizabeth Municipality Case for this

“The Constitution and PIE confirm that we are not islands unto ourselves. The spirit of Ubuntu, part of the deep cultural heritage of the majority f the population, suffuses the whole constitutional order. It combines individual rights with a communitarian philosophy…" Sachs J

The Changing Face of the Law of Property

Recent developments support the idea of a functionalisation/socialisation of property

wherein it is not regarded as autonomous or existing apart & independent of society, but is

considered against the background of its social functions. In this context, s25 of the

Constitution, as a fundamental right, must receive specific attention, although other

constitutional provisions, like the right to access to housing & the protection against eviction

other than by authorisation of a court order [s26 (3)] may be equally important.

Emergence of a new property law framework

Legal rules which were originally developed to meet particular economic or social needs

are subsequently applied under entirely different conditions, to bring about results which

weren't originally intended or contemplated upon the initial introduction of such rules,

e.g. law of purchase & sale, hire-purchase concept.

These developments resulted from changes in the socio-econ structure of our consumer

society, in which rights to use of property are becoming increasingly NB to address highly

sophisticated commercial needs on one hand & a wide array of needs arising from

enormous discrepancies of wealth & poverty in SA on the other.

This tendency is confirmed by the so-called ‘new patterns of landownership’ such as

sectional title ownership, property time-sharing etc ‘as well as by the very broad land

reforms initiative’ espoused by the new constitutional order, all of which brought about

substantial modifications to the common law principles of the LOP.

In the LOP, in particular, the necessity for a reconsideration of existing principles is

becoming progressively clearer, as the legal framework is increasingly placed under

scrutiny for its lack of reflective measures to deal with the needs & demands of modern

SA.

E.g. traditional hierarchical approach to ownership & other rights to property, ito

which ownership is regard as the most encompassing & most extensively

enforceable right that may be held wrt property, whereas other rights are ranked on

the basis of whether they bind successors in title, or only specific persons.

Wrt immoveable property, recent years have witnessed increased academic & legislative

support for a concept of divided ownership (duplex dominium) or diversification or

fragmentation of rights, which allow for different kinds of rights to property that afford

optimal security of title.

Furthermore, the LOP, which has always been regarded as the pith & essence of private

law, is increasingly becoming the concern of public law.

A striking result of developments like this is the disappearance of highly personal &

individual character that until recently was an acknowledged feature of ownership &

property in general.

The ‘depersonalisation’ of property inevitably involves a socialisation of the concept &

may result in the loss of an adequate degree of control over property to enable effective &

efficient application of the rules of the LOP, since these rules were developed against a

socio-economic background that no longer resemble that of the society in which they are

to be applied. Even where de facto control is maintained, it’s not always effective. Industry

& commerce depend too highly on a labour force of such magnitude that without it, the

LOP can no longer fulfil its essential function of regulating & satisfying economic needs &

wants.

Sources of the Law of PropertySouth Africa has a hybrid system, containing both Common Law & Civil Law features. As

such, legislation & precedent serve as the basic sources of law. These are supplemented &

informed by uncodified SA Common Law, which has been influenced to varying extents by

Roman Dutch, Germanic and English Law.

Common Law Principles

Roman LawRoman Law was incepted into South African Law with very little change

Notion of dominium Which served as the most comprehensive right in the Law of

Propertyo traditional view of ownership as a pinnacle in a

hierarchy of rights, with the definition of limited real rights being drawn from the definition of ownership

Distinction between Ownership and Possession Principle of abstraction, which dictates that a distinction be drawn

between contract & delivery in the context of transfer of property Various forms of real security

Germanic Common LawSystem of Land Registration almost completely received into SA Law

Discussed in Land Title pp45-46"Our system of land registration follows from the practice which prevailed in the Netherlands C16 & C17By the law of Holland, the dominium or ius in re of immovable property can only be conveyed by transfer made corum legi loci, and this species of transfer is essential to diverse the seller off, and invest the buyer with dominium or ius in re of the immovable property"

There is a distinction in the transfer of ownership of imovables and movablesDelivery__________

The Transfer of Ownership Act is a qualification of the Germanic system of land registration

English LawPrinciple of attornment derived from English Law

Form of fictitious delivery recognized in English LawIncepted into SA law in Standard Bank v Connor

Various forms of land tenure in e.g. perpetual quitrent and 99-year-long leaseholds originate in English Law

Legislation

Expropriation ActDeeds Registration act

Forms the core of Conveyancing lawESTA

Chpt 3 s5Considered in Nkosi v Buurman and NhlabathiStrengthened the rights of lawful occupiers

Chpt 2 s5Security, Dignity, Freedom of movement and Religion

Chpt 3 s6Security of tenure

PIEAffected the Constitutional Court's remedy of rei vindicatioApplies particularly to unlawful occupiersSeeks to regulate the system of evictions as applied to unlawful occupiers by requiring authorization of such by an Order issued by the High CourtSachs J in P.E. Municipality held that s25 of PIE is to be read in conjunction with the Constitution

Case Law

Growing body of Case LawP.E. MunicipalityCity of Johannesburg

Constitution of the Republic of South Africa

The law to be interpreted and applied to promote the spirit, purport and object of the Bill of Rights

Advent of new constitutional order resulted in an expansion & rearrangement of the

existing sources of LOP. S2 affords Constitutional supremacy in law & determines

that law conflicting with it is invalid & obligations imposed by it must be fulfilled.

o Of particular importance is s8(1) read with s9(2), which envisage the

development of existing common law, statutory law & precedents on the

basis of the spirit, purport & objects of the BOR. These provisions effectively

afford primary importance to the Constitution & BOR in a consideration of

the sources of law in general, & the LOP in particular.

o Moreover, the constitutional order & the land reform initiative espoused by it

require that existing common law & statutory provisions on property need to

be rethought in order to bring them in line with the establishment of a new

equitable property regime, which gives effect to basic constitutional

principles & values such as democracy, & the rule of law, social justice,

individual liberty, equality & human dignity, as well as non-racism & non-

sexism.

The emerging property framework requires, therefore, that existing sources of the

LOP must be treated in accordance with the constitutional provisions.

It also necessitates that a more serious consideration be given to property in

customary law, so as to recognise the variety of land rights, which would otherwise

be overlooked.

Constitutionalization of the Law of Property

Constitutionalization v.d. Walt p11"Property is a constitutional right" means:

Constitutional protection can only be obtained and should only be given on the basis of the Constitution itself, taking into account the purpose of the Constitution as well as the BoR and the property clause in particular.

The test for this can be assessed in, inter alia, the following cases:FNB v Commissioner at of SAR; PE Municipality v Various Occupants; ModderklipMkontwana

In FNB v Commissioner of SARS at pars 46-51

"The Constitutional Court in dealing with alleged infringements on property rights has always begun by examining

a. The preamble of the Constitutionb. Its historical context and purpose"

A two-step approach is adopted in dealing with such matters [See Land Title in SA pp294-296]

Stage 1Proof of existence of a constitutional right as well as an infringement on that right must be presentedFNB par 46

"Does that which is taken away from FNB by the operation of s114 of the Customs and Excise Act amount to property for the purposes of s25?""Has there been a deprivation of such property by the Commissioner?"

If the answer to these questions is in the affirmative, then we progress to the second stage

Stage 2Justification InquiryEssentially, the requirements of the general limitations clause [s36(1)] must be satisfied for the infringement of that right to be justified.

The general rule, particularly in constitutionalism, is that a party who relies on a the validity of a statute to limit any right must show compliance with the general limitations clause.

Wrt Property, this applies to both deprivation and expropriation

S28 of the Interim Constitution is worded such that it expresses an aspirational and positive affirmation wrt property rights. It does not, however, refer to property but rights to property

This was intentionally done so as to protect not only Western notions of property, but also communal property in terms of Customary Law.

See Land Title in SA p289

How far does the notion of property extend?

Transkei Public Servants' Association CaseAttack on constitutional validity of Public Servants' Code 1994 which would effectively result in a reduction in the housing subsidy enjoyed by public servants in Transkei

Applicant argued that the new code was unconstitutional in thati. The public services commission sought o deprive members of a

significant portion of their income without prior approval or consultation

ii. This action would conflict with s24(b), (c) and (d) as well as s26 and s28 of the Constitution

iii. The effect of the new chapter in the code was to deprive the Transkei public servants of their vested rights

iv. Employment benefits constitute a fundamental property right protected by s28(1) of the Constitution

The Court Held thati. The concept of property has now broadened, particularly in light of

Charles Reich's article in the 1964 Yale Law Journal Articleii. The Meaning of property may sufficiently be wide enough to

encompass state housing subsidyHOWEVER

In this particular case, the Court held that it was not in the position to decide the matter and referred it to a court of higher jurisdiction

BUTThe effect of this judgment wasi. An implicit acceptance of Reich's concept of "New Property"

1. Welfare2. Licenses3. Subsidies etc.

i.e. Property should not be limited to corporeal things, but should extend to state largesse as Constitutional Property

S28 of the Constitution is markedly couched in negative termsIntention was to protect persons from the arbitrary deprivation of propertyAckerman J in FNB para 51 highlighted the impracticality of explicitly defining property

Impact of the Constitutional Order

The inclusion of the property clause & the right to housing as fundamental rights in the

Constitution challenges the natural theoretical boundaries usually drawn between the

regulation of the acquisition, protection & transfer of property in private law, & the

regulation of liberty & equality in public law. Two basic considerations should inform a

discussion of this topic:

(i) scope of the property concept under the Const

(ii) the range of permissible limitations on property ito the Const

It’s necessary to provide an init framework within which the significance of constitutional

protection & regulation of property must be regarded.

Broadly speaking, the constitutional property clause influences both the ambit of the

property concept & the permissibility of restrictions upon private property due to its

function as a protective measure against impermissible impositions on private property. The

envisages a 2-stage procedure with which private property is protected & simultaneously

regulated. Thus any imposition on property may be tested on the basis of its

constitutionality. The applicants must bear the onus of proving that an infringement of a

property right has taken place. As such, they would have to affirm

(a) that the interest under discussion qualifies protection under s25; and

(b) that an infringement of this interest has taken place

Once these issues have been established the state/party has the onus of proving that the

infringement is justified, either ito s25 or ito s36 or both.

Constitutional terminology of the property concept

In the wake of the constitutional right [s26 (3)] not to be evicted from one’s home, recent

decisions of the SCA may result in the creation of new rights of property in the broad

sense. Constitution further intro new terminology via s28 (rights in property) and s25

(uses term ‘property’) without defining these terms.

Moreover, Constitution includes negative clause, by excluding deprivations of property in

a manner not complying with the specifications of Const, rather than by explicitly

guaranteeing the right to property.

Negative guarantee of property as ‘holding’ and ‘regime’: s25 of Constitution provides

that no-one may be deprived of property except in laws of gen application & that no

law may permit arbitrary deprivation of property.

Prima facie, provision seems not to provide individuals with positive claims against

state for provision of property.

Furthermore, wording of s25 raises doubts as to whether both individual properties as

well as institution of property are protected.

Thus considerations could give rise to argument that s25 protects something less than

property, namely the right not to be deprived of property & in s25 (2) right not to be

expropriated accepted as provided 4 in property clause itself. First Certification: CC

indicated a preference for interpretation of s25 (1) upholding idea of an individual property

guarantee. It must therefore be accepted that the full content of property—and not

something ‘less than property’—is protected by s25. The Court remarked that the right to hold

property is implicit in s25 (1).

The negative formulation of the property guarantee makes it more difficult to assume

that the institution of property is guaranteed. Moreover, the commitment to land

reform, access to resources, restitution of land & security of tenure reflect the duty

upon the state to safeguard the institution of property, because they support the

creation of a mixed economy in which the economy-deprived section of the SA soc can

benefit from an institutional guarantee.

No constitutional definition of property: although s25 (4) functions as a definition clause

within the property guarantee, it doesn’t address all problems of interpretation, &

simply specifies that property isn't limited to land.

The proprietary interests that deserve protection aren't listed exhaustively. Its left to

the judiciary & legislature to give content & meaning to the property concept in the

constitutional sense.

The min requirement for an interest to qualify as constitutional property seems to be

that it must have vested-or rather accrued according to the relevant principles of

common or statutory law—in the claimant. Further, the interest must have some kind

of patrimonial value.

First National Bank of SA Ltd t/a Westbank v Commissioner for the SA Revenue

Services: CC expressed its reservations concerning possible judicial attempt to furnish a

comprehensive definition of property for the purposes of s25,

Despite those reservations, interests that may possibly qualify for constitutional

protection as property could be divided into three categories.

First, rights originating from private LOP (e.g. rights to movable or immovable

corporeal things & real rights) would obviously qualify for protection as

constitutional property. The judiciary has already acknowledged (Nkosi v

Bürhmann) that use rights (as opposed to ownership) wrt immovable property

also qualify 4 protection, even though such rights are usually derived from

contract/legislation & therefore strictly aren't protected in the traditional

(private law) property concept.

Second, immaterial property rights (e.g. copyrights, patent, TM etc) as well as

established & known commercial rights based on contract (e.g. debts, claims,

goodwill etc) could also qualify as property for the purposes of constitutional

protection , although as yet no SA precedents exists to this effect. 3rd, interests

related to debts & claims against the state not based on contract, namely

incorporeal participation rights (e.g. right to receive pension & social security)

& rights connected to land may qualify for protection.

Recall: Reich’s “New Property” and

o Transkei Public Servants Assoc v Government of RSA: incorporate

participation rights including a variety of claims emanating from what’s usually

understood to be the field of public law. Licences, permits & quotas issued by

the state would probably be re: as property & protected if they have vested in

the claimant & if they’re re: as valuable assets.

o Richtersveld v Alexkor 2000: beneficial occupation of land was regarded as

a protectable interest. In this case, the constitutional objectives were

embodied in s2 of the Restitution of Land Rights Act of 1994, which had to be

interpreted by the court.

Constitutionality of the Impositions Upon Property

The main purpose of the constitutional property guarantee isn't to guarantee & insulate the

status quo & the existing position of the individual property holder against any interference,

but rather to establish & maintain a balance between the individual’s existing position & the

public interests. This often means that the individual’s interest has to be subject without

compensation to controls, regulations, restrictions, levies & other measures that advance or

protect the public interest.

The presence of specific limitations & internal modifying components in certain

fundamental guarantees supports idea that impact of general limitations clause is varied—

wrt s25, internal modifying components help define the contents of property whereas

specific limitations help determine the justifiability of limitation on constitutionally

protected property rights.

The provisions of s25(1-2) that deprivation & expropriation of property

may occur only ito law of general application

that deprivations may not be arbitrary

that expropriations must be for a public purpose or in the public interest & subject to

compensation, amount to specific limitations rather than internal modifying

components.

They determine the requirements for limitation of property, rather than define the right

that is to be protected.

The starting point in determining the rational connection between the property clause &

general limitation clause is, therefore, s36 itself, rendering the provisions of s36 applicable,

for instance, in attempts to determine whether an interference with property is arbitrary or

not. As such, s36 read in conjunction with s25 would determine the constitutional limits of

property.

Upon this view, impositions on property will pass the constitutional scrutiny if they are

effected ito a law, which must be of general application, & which may not permit arbitrary

limitation of the right to property. Impositions amounting to expropriation must be for a

public purpose or in the public interest, & are subject to the payment of compensation, the

amount of which should be either agreed upon by the affected parties, or determined by a

court, in which case it has to be just & equitable.

As far as constitutional property protection & regulation is concerned, ‘interest-balancing’

may overlap with the question as to arbitrariness of a particular imposition on property.

A cumulative reading of s25 & s36 would require that arbitrariness of an infringement is

tested not only when the general applicability of the infringing measure is considered, but

also within the proportionality test, in the consideration of the rational connection between

the limitation & its purported object, & in the means-end analysis.

Hence, non-arbitrariness of an encroachment on property can be tested at various stages of

the constitutional scrutiny inquiry of limitations on property.

Meaning of the Constitution for private law in the property context

Property has a distinct individual function in that it is the means through which the

individual can secure their material existence, & assert their independence & freedom.

Property furthermore has a distinct social function in that it is a pre-requisite for promoting

private initiatives under the conditionitions of a decentralised economy.

It is, however, also in the interest of society at large that the state exercises its power of

control against dangers & disadvantages arising for private, autonomous use of property &

allocation of things.

For a private law perspective, property rights are restricted on a ‘horizontal’ level by the

rights & interests of 3rd parties.

For a constitutional public interest (‘vertical’ level), as against state authority

Private law concept of ownership may influence the constitutional concept of property

insofar as it provides a point of departure for an investigation about the scope of protection

under the Constitution, but the constitutional property concept necessarily must be a

protective shield to a broader variety of interests.

In turn, the introduction of a more encompassing property concept in the constitutional

context obviously will bring about some changes to the property law order in general &

private property regulations in particular.

E.g. it’s already possible to identify a tendency in post-1996 legisl to move away from

the traditional approach in private law which places ownership at pinnacle of a

hierarchy of rights, & which rates ownership higher than any other types of rights, as

far as security of title & enforceability of these rights are concerned.

However, more diversified range of rights e.g. land reform & in land law, indicate

that private law ownership doesn’t have same prominent pos in constitutional law as

in private law.

Since property isn't a legal institution exclusively dealt with in private law, the imbalances

that might occur through an emphasis of private autonomy & individual freedom in the

private LOP as it stands at present; will have to be corrected through the operation of basic

constitutional principles.

Legal Concept of Property

Property as rights

Property in the sense of ‘rights’ is traditionally seen as either ownership or real rights, but

may also be perceived in a wider sense, so as to include patrimonial rights

e.g. personal rights & immaterial property rights.

Patrimonial rights are those having patrimonial value & are rights to patrimonial objects

(which have econ or material value). Things, immaterial property & performances can be

patrimonial objects & rights to these are respectively called real rights, personal rights &

immaterial property rights.

Under the property clause contained in BOR, ‘property’ in the sense of ‘rights’ may include

patrimonial rights such as real rights, personal rights, & immaterial property rights, but also

statutory claims (not based on contract) against the state to certain resources or

performances such as state pensions, medical aid schemes, subsidies, state jobs & state

contracts. These rights are frequently referred to as new property. [Recall Charles Reich]

For a right to be protected as ‘property’ under the Constitution, it generally must bear

patrimonial value & it must be vested & not merely contingent upon a future happening.

A ‘vested right’ means that the right has accrued to the holder according to the relevant

principles of the common law (in case of a common law right) or a stature (if it is a statutory

right).

Constitutional protection of property is generally dependent on a balancing of competing

interests of individuals & the public at large, but also of individuals mutually.

This might mean that under particular circumstances protection of a right generally

acknowledged as property could succumb to protection of another constantly protected

interest, or even another type of property right.

The Constitution, therefore, doesn’t protect property in the sense of guaranteeing all

existing property interests absolutely against any interference or invasion not authorised or

consented to by the owner.

Property as objects of Rights

Property in the sense of objects of rights is generally limited to corporeal things, but may

also include patrimonial objects such as immaterial property & performances. As will be

indicated, patrimonial rights at times serve the function of patrimonial objects by being the

object of other rights. In this regard the common law recognises the notion of incorporeal

things.

Concept of a Thing

Roman jurists divided private law into 3 categories: persons, things & actions. For this

division it is clear that everything of which private law took cognisance, other than persons

& actions, is classified as ‘res’ or ‘things’.

Consequently, not only physical but also incorporeal objects, including rights, are also

regarded as things in the legal sense. The former are corporeal things (res corporales) & the

latter are incorporeal things (res incorporales).

Characteristics of Things

A thing (res) is defined in modern SA property law wrt the following characteristics:

(i) corporeality

(ii) impersonality [Externality to human beings]

(iii) Independent existence

(iv) Succeptibility to juridical control

(v) Utility to Legal Subject

i) Corporeality

1. Objects external to human beingsa. Existing as independent legal entitiesb. Susceptible to private ownershipc. Valuable and useful to human beings

2. Roman Dutch Law makes a distinction between corporeal and non-corporeal objectsa. Corporeal: Any perceptible object occupying spaceb. Non-corporeal: Anything that is not ^

i. Silberberg and Schoeman"If it were included, it would be difficult to distinguish between real rights to things as objects"Personal and creditors' right in performance of object and"Immaterial property rights with immaterial things as objects"Although in principle, a real right cannot be an object of another real right, legal practice has, however, recognized feral instances of real rights with other real rights and even with other rights as their objects"

Ex Parte: Elloff 1953 (1) SA 617 (T)Usufruct ito communal mineral rightsRights of personal security over leases Session of personal rights in security of debtS60 and s77 of Deeds Registrars Act 47 of 1937

The wide interpretation initially given to things which inevitably implies the recognition

of real rights wrt incorporeal is hard to reconcile with the way in which the doctrine of

private law (“subjective”) rights is fairly generally upheld in SA & is therefore rejected

by many authors on dogmatic grounds.

This particular perception of the doctrine dictates that rights should be distinguished

for each other according to their objects, so that the nature of the object is decisive for

the classification of the particular right.

Thus 4 classes of legal objects are distinguished, namely:

1. Things

2. Interests of personality (e.g. reputation)

3. Immaterial property (patent & objects of copyright)

4. Performances.

The respective rights relating to these objects are

1. Real rights

2. Personality rights

3. Immaterial property rights

4. Personal rights.

SA legal practice has recognised the existence of incorporeal things & real rights

relating to them, therefore confirming the notion of a right being the object of another

right. Usually it’s real rights & personal rights that function as such.

Ex Parte Eloff: the creation of usufruct IRO mineral rights is taken for granted. The DRA

mentions in general the mortgaging of real rights to land (ss56 (1), 60, 64(2) read with

64(1)] & the rights of real security over leases [s56 (1), 60, 81], personal servitudes

[ss68 (2), 69(4)], mineral rights [s71 (5-6)], & mineral leases [ss71 (5-6), 77(1)] are

specifically recognised. In a number of cases, the AD has held that a cession of personal

rights for the security of a debt (in securitatem debiti) may take the form of a pledge1.

The courts have also recognised possession of incorporeals & its protection by the

mandament van spolie2.

It’s submitted that a personality right can’t function as the object of a real right. The

object of a personality right is inseparable from the legal subject's person & doesn’t

exist external to a person as is the case with patrimonial rights, that is, real rights,

personal rights & immaterial property rights. Therefore, the personality right isn't

susceptible to exchange & is thus non-transferable.

In recent times, the doctrine of rights in general has been subject to scrutiny &

criticism. Without denying the existence of incorporeal in practice, trying to explain

them as exception to the doctrine of private law rights or attempting to reconcile the

notion of incorporeals with the doctrine of private law rights, a compromise is

achievable. Insofar as in the majority of instances the object of a real right is a

corporeal thing, it’s submitted that the characteristic of corporeality should be

maintained for the purposes of a concept of a thing. The notion of a thing shouldn't be

confused or equated with other objects or rights having a patrimonial value.

Incorporeal things in the sense of other rights3 should be recognition for what they

really are, namely, patrimonial rights. If patrimonial rights in practice serve the function

of the object of limited real rights, such patrimonial rights should be regarded as

patrimonial objects.1 National Bank of SA v Cohen’s Trustee; Bank of Lisbon v the Master; Sasfin (Pty) Ltd v Beukes; 2 Nienaber v Sturkey 1055-56; Shoprite Checkers Ltd v Pangbourne Properties Ltd 619J-20E, 622B-C, 623F-G; Tigon v Best Yet Investments 641J; Xsinet (Pty) Ltd v Telkom SA 636A-B, 637E-F;

3 Tigon v Best Yet Investments 641J, 642C-D

ii) Impersonal Nature

1. A thing is of an impersonal nature2. Ito Roman Dutch Law, a human being can only be a bearer of rights and cannot be

an object of rightsa. This extends to human tissue

Within the modern paradigm of rights, it can be said that, general speaking, a human

being is a legal subject who can be the holder of a right wrt some object, but that a

human can never be the object of a right.

In the case of a real right, the object is a thing & it exists external to a human as holder

of that right in the sense that the object doesn’t form part of a human’s body. It is,

however, not only the object of a real right that’s external to a human, being the holder

of the right, but also the object of an immaterial property right. The object of a

personality right isn't external to a human butt consists of aspects of the holder of the

right’s personality.

It must be noted that in accordance with the development & progress of medical &

dental science, a human’s body has become objectified to some extent. The Human

Tissue Act 65 of 1983 provides for the donation of a person’s body or specific tissue

after death, the donation of tissue, blood & gametes by living persons as well as for the

import, export & remuneration for bodies or parts thereof. The Act further provides

that any person who acquires the body of a deceased person or any tissue or blood or

gamete ito the Act, acquires “exclusive rights” in respect thereof.

iii) Independence

1. The thing must have its own separate existencee.g. Fruits, before their separation from the tree, cannot yet be things

The air in the atmosphere cannot be an object but can be appropriated by pressurising some of it into a gas container etc.

2. Juridical indivisibility does not necessarily correspond with physical individualitye.g. Demarcation of a piece of land by means of a diagram approved by a surveyor general will constitute a new legal entity although, in the physical sense, it still forms part of the general earth.

In order for an object to qualify as a thing, it has to constitute an independent entity in

law. Thus a building will not, as a general rule, be regarded as a thing separate &

independent of the land to which it has been firmly attached. Likewise the different

parts of a composite (complex) thing (universitas rerum cohaerentium) or fruits prior to

separation aren't regarded as things. Question is whether certain object is judicially

considered to be independent e.g. piece of land by means of a diagram or general plan

approved by surveyor-general and by provisions of Sectional Titles Act new thing

being constitutional in law although it still is physically part of a much larger entity.

Incorporeals in the form of other rights only meet the requirement of independent if

the requirement is widely interpreted as stating that the needs of legal practice

determine what the law regarded as independent. Incorporeals in the form of other

rights or natural forces strictly speaking don’t meet requirements of independence.

iv) Susceptibility to Juridical Control

Thing must also be capable of being subject to human control. If the characteristic of

control is widely construed as the possibility to enforce & protect the right wrt the

thing, corporeals as well as incorporeals can be legally controlled in this manner.

v) Use and value

The fact that certain objects are of use & value to humans is the main cause for human

desire to appropriate objects for themselves. An object with no use or value doesn’t

constitute a thing.

Value implies not only econ but sentimental value. Objects with negative value e.g.

chemical waste also qualify as things.

Classification of Things NB! NB! NB!Roman Dutch writers classified things in accordance with their

Roles in commerceRes in commercium

Nature Res extra commercium

Common things according to their natural availabilityAlso

Ito s2 Act 22 of 1925*Res Publicae

State property intended for both direct and indirect public use [Territorial Seas etc.]

National Water ActState invested as public trustee of all national water bodies

The state may assume control over all these things for public interest

Religious things

Temples and churchesGraves etc

Things owned by private persons Res Alicuius

Nuilus Wild Animals etc.Derelictae Tings that have been thrown away [derelicts]

It is important that we are able to distinguish between public and common things

Definition of a thing

A thing may be defined (ito its characteristics) as an independent, corporeal object which is

susceptible to legal control & which is valuable & useful to a person. Incorporeals in the

sense of other rights don’t meet some of the characteristics of a thing & should be

recognition as patrimonial rights serving the function of the object of limited real rights.

Patrimonial Rights and Patrimonial Objects

The following patrimonial rights with corresponding legal object may be distinguished:

(a) Real = right to a thing

(b) personal right = right to performance (act in the form of delivering something,

doing/not doing something (dare, facere or non facere) which 1 person can require a

particular other person 2 perform)

(c) immaterial property right = right to immaterial property (intangible expressions of

human skills, or inventions of the human mind, embodied in a tangible agent &

which are by law allotted to their author)

(d) statutory rights against the state to certain resources or performances (not based on

contract)—following rights = distinguished:

a. welfare rights against the state & not based on contract (e.g. pensions,

medical benefits & subsidies)

b. licences, permits & quotas issued by the state; and

c. other rights against state & based on legislation (especially land use rights &

water use rights ito land reform & similar initiatives undertaken ito s25 of

Const)

Patrimonial object can be divided into:

(a) things

(b) immaterial property

(c) performances, and

(d) patrimonial rights serving as the object of ltd real rights

Classification of things

Acc 2 Grotius, things are classified according to their relation to man or according to their

nature. Wrt their relation to persons, things may be classified either as out of commerce

(res extra commercium), namely things which can’t be privately owned, or in commerce (res

in commercio), namely things which can be privately owned or can be the object of other

real rights.

Classification of things according to their relation to a person

In a certain sense, public things (res publicae) can be said to be owned by the state (or ppl of

the state) although not susceptible to private ownership. accordingly it’s possible to

distinguish between things which = capable of being owned, either public or private, &

things which aren't capable of being owned @ all. On other hand, its possible 2 restrict

ownership to private ownership & other private property rights in making this distinction.

Re: classification according to relation, it’s suggested that the latter approach should be

adopted. After all, only those things which can be the object of private real rights can be

commercially dealt with. The proper distinction, if to be made, must be between things

which can function as object of private property rights & things which can't.

1) Things out of Commerce

a) Common things: things which by natural law are common 2 all men but belong 2 no-

one, e.g. air, running water, the sea & seashore. Surveyor-General (Cape) v Estate

De Villiers: supports POV that seashore = included in the crown property of emperors, thus

having been public rather than common to all. In modern SA law, both sea & seashore

belong to state pres & may be classified as public things.

The classification of a thing as a common thing results in the use thereof in principle being

available to all ppl. In RL any interference with a person’s enjoyment of a common thing cld

be remedied with actio iniuriarum. In SA law, it’s been suggested that if a person is to use

that ground, they must have been physically prevented from enjoyment in such a way as to

have amounted to an infringement of one of their rights of personality.

b) Public things: things which belong to an entire civil community & are also referred 2

as state property. When using latter, distinction should be made between things

intended 4 public use e.g. public roads & things which only indirectly benefit

individual members of the community, e.g. building used 4 admin purposes. Things

intended 4 pub use = out of commerce.

In SA, public roads, national parks, sea & seashore = e.g. of things intended 4 pub

use. S v Dillon: nature & extent of the rights acquired by the expropriator upon declaration

of a road depends on the statute ito which the declaration of a road takes place. A servitude

or ownership of the road may be acquired upon declaration of the road.

The interests of the pub are safeguarded also wrt rivers. Ito National Water Act,

public trusteeship of nation’s water resources = vested in state.

Statements to the effect that the use of public things is common 2 all must not be

interpreted to mean that such use is necessarily without any restrictions. The state

assumes ctrl of pub things & imposition of restrictions on use thereof, even by

members of the community concerned, has been a familiar practice in common law.

E.g. R v Carelse at 246.

c) Things belonging to corporate bodies: e.g. theatres, race courses & anything else

which is the common property of a city. Grotius distinguishes between things

belonging to an entire civil community & things belonging to a smaller community,

the former being pub things & the latter being things that belong to corporate

bodies.

Its submitted that a distinction should be made between juristic persons recognise as

such by pub law (e.g. municipalities) on the one hand, & juristic persons of private

law (e.g. companies, close corporations, banks & associations not for gain having

legal personality) on the other. There’s no reason why things belonging to the latter

shouldn't be re: as falling within the sphere of public law,

d) Religious things: in RL religious things (res divini iuris) = things dedicated to the gods,

e.g. temples, graves & city gates. The classification of things as divini iuris is now

obsolete. Nkosi v Bührmann at 384I-J, 387I-J: ownership of a gravesite & tombstone

vests in the owner of the land. An occupier of land doesn’t have the right to choose & take a

grave site without the consent of the owner of land.

Any person has the right to visit graves on land which belongs to another person. As

confirmed by Nkosi, a right of way is imposed over land which entitles family of the

buried deceased to maintain graves indefinitely, including tombstones & railings. The

owner of land or person in charge of the land may impose

2) Things in commerce

a) Things owned by a person: things in commerce which are privately owned by a legal

subject (being either a natural or juristic person). They may be divided in2 things

owned by an individual (res singulorum) & things belonging to corporate bodies (res

universitas).

b) Things not owned by a person: un-owned things (res nullius) which although

susceptible to private ownership, don’t belong to any1 at a particular point in time:

i) things in commerce which have never been privately owned e.g. birds, wild

animals, etc, b4 they are captured. State exercises ctrl in this connection but

doesn’t assert ownership over them. Accordingly, while they = wild, they

aren't re: as being a thing being owned

ii) birds, wild animals etc regaining their freedom. Any of these, having been

acquired by appropriation, cease to be so owned when regaining their

natural freedom. Re: as having acquired freedom when they’ve escaped out

of sight of owner or where pursuit is difficult.

Iii) things abandoned by their owned. The mere physical loss of a thing isn't

sufficient to render it an unowned thing. Physical loss must be accompanied

by the intention to relinquish ownership. Such things are re: to as abandoned

or derelict things & constit unowned things.

Classification of things according to their nature

1. Corporeal & Incorporeal things

i. Corporeal and Incorporeali. Division based in Roman Dutch Law

1. Material objects or anything perceivable by any of the senses: Corporeal2. Abstract conceptions with no physical existence: Incorporeal

ii. Transfer1. Corporeal: By delivery2. Incorporeal: Transfer occurs by means of session and/or registration

(particular wrt immovable property)

Corporeal is considered to be an object which occupies space & is capable of sensory

perception by any of the 5 senses e.g. houses, land, books & clothing. Rights such as

real rights, personal rights & immaterial property = e.g. of incorporeal. In gen, the

classification of a thing as corporeal or incorporeal will depend on the convictions of

the community rather than on strict adherence to the principles of natural science.

2. Movable & immovable things

In common law & practice corporeal things & incorporeal things in the form of rights

have been classified as movables or immoveables.

a) Movable and immovable corporeal things: Immovable = land & everything

that’s attached to land by natural or artificial means. A corporeal thing is

movable if its condition is such that it can be readily moved from 1 place to

another without being damaged & without losing its ID, having re: to its size,

nature & composition. Conversely, a movable may be fixed to an immovable by

natural or artificial means in such a manner that it loses its ID & becomes an

integral part of the immovable thing.

b) Moveable & immovable incorporeal things: Voet is of the opinion that

incorporeal things in the form of rights should be re: as a category separate

from movable & immovable things & should be classified as

movable/immovable only when necessity demands it.

Ito this approach, a ref to movable/immovable things in a statute, will or

agreement won’t necessarily embrace incorporeal things, but only if

necessitated by wording of statute, will or agreement.

Logically, it might be expected that whether a right = movable/immovable would depend upon the nature of the object to which it pertains. Ito this approach, a distinction should in the 1st instance be made between real & personal rights, all personal rights being movable (even if performance concerned consists e.g. of transfer of immovable property). As re: real rights, a further distinction should be made between real rights having immovable & movable things as object respectively, the former being immovable & the latter being movable. Thus mineral rights & praedial servitudes should be classified as immovable while personal servitudes are movable or immovable depending on the nature of their objects.Tigon v Best Yet Investments 642J-643B: a distinction = drawn between a share itself, which = held to be an incorporeal movable entity & the bundle of personal rights to which it gives rise.Perumal v Messenger of Court 736, 738: where a purchaser’s interest in an agreement by which he’d bought land on instalments, but wasn't entitled to transfer until he’d paid the price in full, was held to be a movable coz it rep only a claim against the seller, i.e. a personal right. Registrar of Deeds v Banham 368: Innes CJ re: a fiduciary interest in land as immovable, but ‘fiduciary interest’ of course ref to right of the fiduciary which = real right & not to the ‘right’ of the fidei commissary.

Some cases need further consideration:i) Originally mortgage bonds = movables b/c their essential characteristic =

personal obligation, whilst right to security of the land which is mortgaged is merely an accessory to the principal debt. This however, fails to take in2 acct real right which bond confers on mortgagee over mortgaged land & which distinguishes it from other forms of security. Position = classified in Lief NO v Dettman where Wessels JA said that “the determining factor in classifying a mortgage bond either as immovable or movable for any particular person may gen speaking be said to depend on whether the purpose in question relates more particularly to the bond as constituting an acknowledgement of debut or as an instrument of title to a real right in the land hypothecated thereby.

ii) S102 of DRA defines immovable property as including any registered lease of rights to minerals, any registered long lease of land, a registered right of leasehold & a registered right of init ownership. This seems to imply that an

unregistered long lease of land as well as a short lease of land are to be re: as movable for the purposes of the Act. Difficulties have also risen from time to time wrt trading & similar rights attached to land. Aquatur v Sacks 64-65: a liquor license is always issued to a particular person iro a particular premises only & can't be transferred by the licensee at will.Samuel v Pagadia: land together with sugar quota had been sold in pursuance of a writ of execution issued out of a MC. The judgment debtor applied to the then SC for the sale to be set aside on the ground that the messenger of the court had no power to attach an incorporeal movable such as he alleged the sugar quota represented. Henning J accepted the classification that ‘the quota allocation doesn’t constitute a jus in rem, but confers a personal right upon the allottee, a right which should be classed as an incorporeal movable.’ However, he dismissed the application inter alia because the situation could no longer be unscrambled in a manner which would do justice to all concerned.Secretary for Inland Revenue v Sturrock Sugar Farms: the legal nature of a sugar quota = considered for transfer duty purposes when it’d been sold in the course of an ordinary commercial transaction. It was argued that the quota = right conferred upon a particular person, such quota having a value separate from & independently of its correlated quota land, and that it ought not, therefore, to be taken into acct for the calculation of transfer duty. The court held that the quota went with the land from which it couldn’t exist independently. Admittedly, it might be transferred & b/c attached to another piece of land, but the respondent’s submissions based on this fact = rejected b/c they ‘pay insufficient regard to the real issue in this case which...is to determine, for the purpose of transfer duty, the value of the land’. However, for the purpose of determining the value of a piece of land which has been expropriated, a sugar quota was to be ‘a right which, though granted iro the land in question, is purely personal to the allottee’ & doesn’t, therefore, affect the amt of compensation payable by the state to the owner of that land.

The classification of incorporeals as either movables or immoveables has been criticised as being illogical since the criterion of mobility = inapplicable to incorporeals which can by no means be moved.

c) Importance of distinction: division in2 movable & immoveables = NP insofar as

the law applicable to these 2 classes of things oft differs substantially e.g.:

(a) Ito s2 of Alienation of Land Act, no contract of sale of land = valid unless it’s

reduced to writing & signed by parties thereto or by their agents acting on

their written authority. Sale of movables need not be written contract.

(b) For valid transfer of ownership, delivery suffices in case of movables whilst

registration in a deeds registry is required iro immovable things.

(c) Hypothecation of immovables takes place by registration of a mortgage

bond in the deeds office, whilst movables are pledged by delivery or

registration of a notarial bond.

(d) Unless a judgment debtor’s immovable property has been specifically

declared executable, his/her immovable property may be sold in execution

only if the movable property is insufficient to satisfy the judgment.

Furthermore, the formalities which have to be complied with in connection

with the attachment & sale in execution of immovable things differ

considerably for those applying to the attachment & sale in execution of

movables.

(e) According 2 SA international private law, the law applicable to immovable

things is the law of the place where the immovables are situated (lex loci rei

sitae) while the law of the place where the owner of movables is domiciled

(lex loci domicilii) applies to movables.

3. Divisibility & indivisible things

A thing is divisible only if nature & function of each of the smaller parts correspond

with that of thing as it was before division & the total value of such parts isn't

substantially less than the value of the undivided thing.

This classification is of legal significance in court proceedings as regards the

termination of things held in joint ownership. If a particular thing = legally indivisible,

division thereof won’t be ordered even if physical divisions should be divisible. The

court may then, e.g. order that the thing be sold and that proceeds be divided among

joint owners, or may award thing to one of joint owners subject to payment of

compensation to other joint owners as in Bennett NO v Le Roux

4. Consumable and inconsumable things

Things are consumable when they are usually destroyed as a result of being used in

accordance with their normal destiny. Classification becomes less certain when dealing

with things that aren't totally destroyed when used 4 first time, but which becomes

worn or less efficient as a result of being ordinarily used over a longer period, e.g.

clothing or car. It’s suggested that reduction in value caused by ordinary use should be

decisive, i.e. if reduction = substantial, then thing concerned should be re: as

consumable.

Only consumable things may be the object of a loan for consumption & only

inconsumable things the object of a loan for use. A usufruct can be created only iro

inconsumable things b/c a usufructuary has a duty to preserve the substance of the

object of usufruct.

Cooper v Boyes NO and another 1994: If a non-consumable thing has, with the

consent of the ultimate beneficiary, been converted into a consumable thing such as

money, a true usufruct of the non-consumable thing is converted into a quasi-

usufruct of such money. The ownership of the money then passes to the ’quasi-

usufructuary’ who is obliged to furnish security that an equivalent sum of money will

be paid to the ultimate beneficiary on termination of the quasi-usufruct. Held that

there was no reason why shares can't be bequeathed by way of usufruct. The

usufructuary will have the right to receive dividends accruing to the share, subject

thereto that, on termination of the usufruct, the shares themselves must devolve

upon the heir as ultimate beneficiary.

5. Fungible and non-fungible things

Things = non-fungible when they = individual determined e.g. ERF 831 Fairmead

Township or car owned by S. Fungibles are things which haven't been individual

determined, but are def merely wrt their weight, number or dimensions e.g. 50kg of

fertiliser, 100 Merino sheep etc. Fungible things can be replaced with identical things

whilst non-fungibles aren't interchangeable. Intention of parties to contract is usually

determining factor in whether or not thing = fungible.

This classification finds application in law of contract & succession/ E.g. if non-fungible

to be delivered ito contract of sale is destroyed, it won’t be permissible to replace it

with identical thing without co-op of both parties. Similarly, if non-fungible thing =

bequeathed to person, but no longer exists at death of testator, then legatee won’t be

entitled to receive anything out of deceased estate in lieu thereof.

6. Single & Complex things

i. Single1. Things existing independently as separate entities and have maintained their

individualityii. Composite

1. Things consisting of several components which form a unit2. Each can have a separate existence e.g. house on Land3. 3 Elements

a. PrincipalExist independently and can form the object of a real rightKhan v Minister"The component of a composite thing which provides the overall composite thing with an identity constitutes the principal thing"

e.g. Land when speaking about homesCourts Stated

"Where one moveable is joined to another in such a manner as to form an entity, the owner of the principal thing is also the owner of the accessory"

b. AccessoryThings which can exist independently but have been combined with the principal thing to such a degree that they have lost their identity and independenceJL Cohe Motors v Alberts"All attachments which do not have ______________________ the composite thing's identity ______________________________________________________"The Court held that tyres did not constitute accessories [ERROR]

c. AuxiliaryThings existing separately and independently of the principal thing but, because of its economic value, __________________- or use is no longer regarded as independent for the purposes of the Law of Property

Senekal v RoodtFalch v Wessels

Both tried by Ackerman J, similar ratio decidendi Crucial Question:

Whether, because of the close connection with the principal, the auxiliary should be treated judicially as part of the principal for part or all purposes? SenekalAppellant buys house along with certain furnitureWith reference to McDonald v Radin, Ackerman J:

Test to be applied to determine whether the auxiliaries qualified as immoveable several elements had to be considered:

Nature of the articles in question Degree/manner of the annexing attachment Intention of persons annexing the attachment

Test applied consistently and Ackerman j held: Since the objects taken were light and not physically connected to the house, the articles could never be considered as part of the houseThe Auxiliary things could become part of the sale by means of terms (ex legit) if it was determined to be of permanent use like immoveable thing, or if it was essential to the use of the principal Thus, since the bar stools were necessary for the use of the bar, those had to be returned.

Things can be classified as single (res singulares) or complex (res universales). A single

thing denotes an individual thing which hasn't been the subject matter of accession &

which therefore exists independently e.g. wooden beam. Single things can either be

corporeal or incorporeal.

In gen terms, a complex thing can be described as consisting of different parts or

components that are, for all or only 4 some purpose, treated by law as a unit. In this

regard, composite things, aggregates or collections of similar things, and universalities

of rights & things can be distinguished.

A composite thing is a combo of mostly single, corporeal things that consists of a

principal thing, accessory things and/or auxiliary things. A principal thing =

independent entity that can in itself be the object of a real right e.g. car, house, ship.

Accessories are things that are physically attached to a principal thing in such a way

that where they once existed independently, they have now lost their ID thru the

combo e.g. car engine, windows of a house. Khan v Minister of Law and Order:

Whether or not a thing is attached to another thing in such a way that it indeed

became an accessory must be judged in light of the principles of accession. Once the

accessory things becomes detached, they can exist as independent things. Auxiliary

things, whether attached to principal or not, don’t lose their ID in such a way that they

b/c part of the principal thing for all purposes. They remain independent as distinct

entities & only follow the destination of the principal thing for some purpose e.g.

removable wooden coverings for a house, padlocks, vessels for drawing water, and

ladders for lofts. A thing qualifies as an auxiliary if it’s destined to be of permanent use

to the principal thing & if it’s necessary for the effective use of the principal thing.

Whether the auxiliary does indeed follow the destination of the principal depends on

principles of common law, trade usage, custom, statute or the intention of the parties

involved, and each case should be judged on its own merits (see Alfred McAlpine &

Sons v Transvaal Provincial Administration 1974 at 531).

Khan v Minister of Law & Order 1991: Applicant purchased 1985 model BMW wreck &

contracted with a panel beater to fix it & make it look like a 1988 model. Panel beater

cut off part of wreck & joined it to front end of 1988 BMW model, then put in a new

engine, gear box, and other mechanical parts & painted it. From inspection, showed

that rear portion came from 1988 model & inner front portion came from 1985 wreck.

Several parts came from the 1988 model & other sources. The 1988 model used had

been stolen & police seized rebuilt car. Applicant claims vehicle became his through

accession. Held that the new car didn't belong to the owner of the 1985 wreck but to

the owner of the 1988 stolen model.

An aggregate of similar things consists of a collection of similar individual corporeal

things, subsumed under one designation. The individual things don’t lose their ID by

being part of the collection—collected re: as entity & dealt with accordingly only for

some purposes. Geldenhuys v Commissioner for Inland Revenue: owner may institute

rei vindicatio for recovery of herd of livestock, & such a herd may also, as a whole, be

subject to usufruct or pledge. Authority (Geldenhuys) exists to the effect that

acquisitive prescription has no application iro herd of livestock as a whole & that,

irrespective of the method by which ownership = acquired, a person b/c owner of the

individual things composing the collection, & not of the collection as such.

A universality of rights & things = collection of incorporeals (rights) & corporeals, such

as the whole estate of a person. The separate components exist independently as

things. This collection, as an entity on its own, is of more importance for the purposes

of the law of succession than for property.

7. Fruits

Fruits are prod by a principal thing & are destined 2 be separated (either naturally or

by human aid) from that thing. B4 separation, fruits are accessories of the principal

thing but after separation they exists as separate legal entities. Fruits are things which

= prod without damage to principal thing therefore e.g. minerals aren't fruits because

they damage land.

Two main categories of fruits: natural fruits (fructus naturals) & civil fruits (fructus

civiles). Natural fruits are either brought forth by nature along e.g. offspring of animals,

or by nature & human care e.g. standing crops. Civil fruits = income prod by principal

thing e.g. dividends, interest on capital, royalties & rentals. As a gen rule, the owner of

the principal thing is also the owner of the fruits, but sometimes the entitlement of

enjoyment of the fruit (ius fruendi) rests in someone else, e.g. lessee or usufructuary.

For this purpose, natural fruits are also classified as hanging fruits (fruits still attached

to principal thing), separated fruits, collected fruits, existing fruits, consumed fruits &

fruits that ought to have been collected.

Property Rights

Property in non-legal terminology refers to a person’s possession. It includes the rights in

corporeal things & immaterial property & rights deriving from obligations such as contract

or delict.

The LOP traditionally only refers to these rights when referring to corporeal things & in

exceptional circumstances, incorporates things. After the introduction of the Constitution,

the restriction of the scope of LOP has become impossible to determine.

Types of Property Rights

Real right: the right in a corporeal or incorporeal thing belonging to a person. A right in

those things which belong to someone else are known as a limited real right.

Creditor’s right: a right against a person & is aka a personal right.

Only dealt wrt corporeal things in LOP as other creditor’s rights are

dealt with in law of contract & delict.

It entails someone being obliged to perform or refrain from

performing for or against you.

It may pertain to corporeal or incorporeal things.

REAL RIGHTS

Legal Nature of a Real Right

Distinction between real & personal rights forms basis for division of LOP in2 law of things &

law of obligations.

Classical Theory

According to classical theory, real rights are concerned with relationship between person &

a thing, whereas personal rights are concerned with relationship between 2 persons.

The thing itself is bound to holder of right.

A real right consequently establishes a direct legal connection between a person & a thing,

the holder of the right being entitled to control that thing within the limits of his/her right

‘without necessary relation to another man’.

A personal right doesn’t provide a person with a direct legal connection to a thing, iro which

a performance has to be rendered. Ito personal right, a person becomes bound to the

holder of the right to render a particular performance, that is, to do or not to do something.

Criticism of theory is that on one hand it ignores fact that real rights also constitute legal

relationship between legal subjects mutually & on the other hand that certain personal

rights (e.g. lease of movable) also affect control over a thing to some extent.

The value of this theory lies in the fact that real rights are characterised by a direct bond

between subject & thing, without any reference to any other person.

Personalist Theory

Distinguishes between real rights & personal rights wrt the persons against whom the rights

are enforceable.

The holder of a real right has a right to a thing which, as a general rule, is enforceable

against all other persons.

A personal right is usually said to be only enforceable against a particular person or assoc of

individual on the basis of a special legal relationship, e.g. contract, delict or some other good

& sufficient cause. Consequently, personal rights are often referred to as being relative

rights.

Thus, according to the personalist theory, a real right is absolute in the sense that it prevails

against the whole world, whereas the personal right is relative in the sense that it’s only

enforceable against a particular person, namely the other party to the obligation.

Criticisms:

- Dual relationship of a right ito the doctrine of rights overlooked.

o Ito doctrine of rights, a right consists of a dual relationship:

Firstly, that between holder of right & object of the right

Secondly, that between holder of the right & person against whom it

lies.

o The subject – subject relationship in the instance of a real right is erroneously

compared with the subject – object relationship in the instance of a personal

right, instead of comparing enforceability of a right on the subject - object

level.

- No real right is absolute in the sense that it operates against all other legal subject

under all circumstances.

o To the general rule that owner of thing/holder of limited real right may claim

control over object of his/her right insofar as such control is necessary to

enable him to exercise that right effectively, there are several exceptions. E.g.

exclusion of rei vindicatio by operation of doctrine of estoppel & exceptions

to rule nemo dat qui non habet (nobody gives smthn that he doesn’t have).

- A personal right also operates absolutely to a certain extent and is illustrated by fact

that an intentional infringement thereof usually constitutes an actionable wrong

entitling the injured party to redress.

o Such intentional infringement may e.g. take the form of the wrongdoer

inducing a party to contract to commit a breach thereof.

In comparing person rights with real rights, the absoluteness of a personal right

becomes even more apparent when we realised that as a result of the operation of

the doctrine of notice, no-one will be permitted to defeat, for his own benefit,

another person’s personal right envisaging the creation of a real right by delivery or

registration, if he knows of its existence.

On the other hand, personal rights in certain material respects fall short of what one

would generally regard as essential for a right to be classified as absolute. This is

illustrated by fact that a negligent infringement of a personal right will, as a general

rule, not constitute an actionable wrong in our law.

o Isaacman v Miller: per Mason J—there doesn’t seem to be any reason in

justice why an intentional & successful attempt to injure personal rights ex

contractu shouldn't entitle injured party to redress where the party

responsible can shown no just cause or excuse for his/her action.

o Solomon v Du Preez: per Kotzé J—an interference with or a violation of the

legal right of another, knowingly committed without justification, tending to

injure the plaintiff, is an actionable wrong by our law.

o Dun v SA Merchants Combined Credit Bureau: per Corbett J—incorporeal

property, such as a personal right flowing from contract, also enjoys a

measure of protection in that a delictual remedy is available to a party to a

contract who complains that a 3rd party has intentionally & without lawful

justification invaded his enjoyment of such property by inducing the other

party to the contract to commit a breach thereof.

o Jansen v Pienaar: plaintiff succeeded with a claim for damages which is

based upon the intentional infringement of his personal right to the services

of his employee, the defendant having induced the said employee to depart

from plaintiff’s service & to enter in2 his employment instead.

Test in terms of the Doctrine of Rights

According to doctrine of rights, the nature of the object is decisive for the classification of a

particular right.

Ito this doctrine, the object of a real right is thing, whilst the object of a personal

right is performance.

The doctrine has been criticised for:

- Its problem in accommodating the concept of incorporeals & in distinguishing the

object of new forms of statutory ownership of land.

- 2nd, doubt has been expressed as to whether the doctrine of rights means that all

rights that relate to a thing are inevitably & automatically real rights.

The value of the doctrine lies in its distinction between diff aspects of all rights, namely the

subject - object relationship & the subject - subject relationship, which distinction is useful,

in avoiding some of the pitfalls concerned with the relative or absolute enforcement of

personal & real rights on the one hand and the absolute protection of both types of rights

against interference from outside on the other.

Categories of Real Rights

It suffices to say that of all real rights the right of ownership in its unrestricted form confers

the most comprehensive control over a thing. A right wrt a thing which belongs to another

person is a limited real right in the sense that it is a real right ‘less than ownership’ in a thing

owned by a person other than the holder of such a right.

In SA law, there is no closed system of real rights & new rights can develop (Denel v Cape

Explosive Works 1999 at 434). Besides ownership, the categories of real rights which are

most frequently encountered in practice include servitudes, mortgage, pledge, mineral

rights & lease.

Characteristics of Real Rights

When the range of potential real rights are extended, it becomes essential to determine the

basis on which a new real right out to be recognised.

Difficulties are therefore bound to arise when it has to be decided whether or not a right

which doesn’t fit into any of the recognised categories of real rights is real.

Ito s3 (1) of the DRA, the Registrar of Deeds has the duty to register specific categories of

real rights, as well as any real right not specifically mentioned in the ss (1). Ito s63 (1) of

DRA, personal rights may, subject to a few exceptions, not be registered.

In formulating the test(s) which have to be applied to determine whether or not a particular

right is real, our courts often refer to a right as being real if it’s correlative obligation

constitute a burden upon the servient thing.

Ex parte Geldenhuys 1926 at 162: One has to look not so much to the right, but to the

correlative obligation. If that obligation is a burden upon the land, a subtraction from the

dominium, the corresponding right is real and registrable; if it’s not such an obligation, but

merely an obligation binding on some person or other, the corresponding right is a

personal right, or a right in personam, and it can't be a as a rule be registered.

Fine Wool Products of SA Ltd v Director of Valuations 1950 at 509: personal obligations

binding upon a particular owner while he is owner, as distinct from real rights...cannot

affect the land. They only affect the owner and are binding on him. They do not ‘run with

the land’ or affect it, but are attached to the owner.

Our courts consequently formulated the so-called ‘subtraction from the dominium test’,

which is based on reasoning that a ltd real right diminishes the owner’s ownership

(dominium) over his/her thing in the sense that it either

(i) confers on its holder certain entitlements inherent in the universal right of

ownership; or

(ii) to some extent prevents the owner from exercising his/her right of ownership

This means that a limited real right must amount to a ‘diminution’ of or a ‘subtraction from’

the owner’s dominium over the thing to which the limited real right relates. To this extent,

the basic rule which governs the formation of a right to the thing of another (ius in re aliena)

is clear.

The dif between the limitation imposed upon an owner’s right of ownership in the form of a

limited real right & of a personal right is one of degree only. In both cases the owner may,

depending on the nature of a particular right, be restricted from performing a certain act iro

his thing or be obliged to suffer the holder of such right performing certain entitlements

inherent in his right of ownership. However, a personal right restricting an owner in the

exercise of his right of ownership has a performance, to be rendered by such owner, as its

object; performance can't be claimed from his successors in title. A limited real right has a

thing itself as its object.

The correlative obligation remains, as it were, attached to the thing concerned until the

right is terminated, & irrespective of any change in the person of the owner.

Consequently, courts also require that parties should have intended the correlative

obligation to be binding not only on the present owner of the thing concerned, but on all

successors in title.

Fact that parties have made it clear that not only present owner/transferee but also

successors in title would be bound to give effect to an obligation to refrain from exercising a

certain entitlement inherent in the right of ownership or to suffer something being done iro

his thing, is indicative of an intention to create an obligation which would be a burden upon

the thing. Approach of courts illustrated by following:

a) Ex parte Geldenhuys: court is concerned with a will ito which a testator had left a farm

to his minor children to be held by them in equal undivided shares until the eldest child

came of age, when it is to be subdivided & the diff portions distributed among the

children by drawing lots. The child who would then receive the portion on which the

family homestead stood was to pay to the other children an amt of £200 within a

specified time.

De Villiers JP regarded the provisions as to the time & method of subdivision as

constituting limitations on the common law entitlement of a joint owner to claim a

partition at any time & furthermore, to claim that such partition be effected either by

agreement or by the court.

Consequently, they constituted subtraction from the dominium of each child.

Furthermore, he is of opinion that these limitations ‘form a real burden...on each

undivided share, & not merely an obligation on the person of each child’, that is, he is of

opinion that limitations are attached to the respective undivided shares themselves &

would accordingly pass with such undivided shares, if alienated, binding successors in

title.

On the other hand, he regarded provision wrt to payment of money by child who

received homestead as creating a mere personal right because ‘the obligation to pay

money can't easily be held to form a jus in re, unless it takes the form of a duly

constituted hypothec’. It’s submitted that the court is correct in holding that the said

condition didn't confer a real right—the right concerned couldn’t be said to confer on its

holder any entitlements inherent in the right of ownership, nor did it prevent the owner

from exercising any entitlements inherent in his right of ownership. The subtraction

from the dominium test could, therefore, but be said to have been complied with.

b) Odendaalsrus Gold, General Investments & Extensions Ltd v Registrar of Deeds 1953:

an owner sold & transferred his land after it had been proclaimed a pub digging for

precious metals. He reserved for himself & his successors in title the ‘owner’s share’ in

revenue which the state receives for the issue of licenses to 3rd parties authorising them

to dig for precious metals on such land.

Both Horwitz AJP & Smit J is of opinion that besides the personal right of the transferor

& his successors in title as against the state to claim a share of the licence fees, they had

also acquired a real right to the transferred land. Both judges pointed out that the

transferor had acquired a right to claim that the transferee & his successors in title

refrain from exercising an entitlement which they would otherwise have had, namely to

claim a share of the licence moneys from the state.

This latter right restricted the owner of the land in the exercise of his right of ownership.

Consequently the subtraction from the dominium test is complied with. If the judgments

are read as a whole it furthermore becomes clear that the 2nd requirement, namely that

the correlative obligation should bind not only the transferee but also his successors in

title, was also regarded as being complied with.

There are some statements which prima facie seem to point a recognition of the

subtraction from the dominium test as the one & only test to be complied with.

Thus Horwitz AJP remarked: “The reservation would therefore...constit A subtraction

from their dominium in the land & the corresponding right of the party reserving such

right must, therefore, be real & registrable.’

However, if this statement is analysed, it appears that ref is made to subtraction from

their dominium, the word ‘their’ in the context referring to the transferee & his

successors in title. In effect, Horwitz AJP therefore said that the corresponding right

would be real if the reservation constituted a subtraction from the dominium of the

transferee & his successors in title.

c) Fine Wool Products of SA Ltd v Director of Valuations 1950: a municipality had sold

land to an Industry concern subject, inter alia, to the condition that if the transferee

should “at any time sell any portion of the...land to any assoc or Industry concern [ref to

in another clause of the deed] the price thereof shall not exceed the price paid by the

transferee” when the land was 1st acquired.

This restriction is disregarded in the assessment of the value of the land for rating

purposes & the assessment is based on value of land in open market which exceeded

price paid for it.

The court upheld the assessment inter alia on the basis that the restriction didn't amt to

a ‘perpetual burden’ on the land as the language of the deed indicated that it is imposed

only on the original purchaser & wouldn't bind a subsequent owner of the land. Its

submitted that this is clear e.g. of case where the right concerned would have passed

the subtraction from the dominium test but nevertheless is held to be personal because

the correlative obligation wasn't intended to ‘run with’ the land, binding successors in

title of the transferee.

d) Lorenz v Melle 1978: app approached court for a declaratory order that the right of the

owner of land to share in half of the net profits from a township development on

neighbouring land, created personal rights to the original to co-owners & didn't bind

subsequent owners of the land.

In deciding that a real right wasn't established, because the “conditional obligation to

pay attaches of necessity not to the land but merely to the owner thereof”, Nestadt J

seems to have applied the subtraction from the dominium test.

However, the court also held that the “mere fact that the profits clause amounts to a

subtraction from the dominium doesn’t make it, even on registration, a real servitude’.

The court seemed to have accepted that the attachment of a right to land & an

enhancement in value thereof doesn’t make it a real right.

In the same breath Nestadt J concluded that it’s obviously a factor to be taken into

account in determining the nature of the right. To qualify as a burden upon land (for

purposes of the subtraction from the dominium test) the court required that the

curtailment has to be “irt the enjoyment of the land in the physical sense”.

By requiring curtailment of the enjoyment of the land in the physical sense the court

narrowed the test as set out in Geldenhuys decision.

The court also resorted to other tests to determine the nature of the right. The court

held that the condition conferred only personal rights which, even on incorrect

registration, weren't capable of becoming & didn't become a real right.

e) Pearly Beach Trust v Registrar of Deeds 1990: applicant applied for a court order

declaring that a certain condition embodied in a deed of sale is registrable ito s3 (1) (r) of

the DRA as the registrar refused to register the condition. The condition provided that a

3rd party would be entitled to receive from the transferee & its successors in title 1/3 of

the consideration received from the grantee of any option or rights to prospect for

minerals on the property & 1/3 of the compensation in the event of the property being

expropriated or sold to an authority who is empowered to expropriate.

The registrar declined to register the condition on the ground that it wasn't a condition

which restricts the right of ownership in property as contemplated by s63 (1) of the DRA

in that it failed the subtraction from the dominium test. In this instance, the registrar

pointed out that the condition didn't prevent the right of the owner or successors in title

to grant mineral rights or to sell the land; there was merely an obligation to pay a share

in the proceeds of such grant, sale or expropriation.

The court pointed out that the subtraction from the dominium test which is referred to

as the restriction of the exercise of a right of ownership criterion, was introduced by way

of amendment of s 63 of the DRA, by which amendment the legislature accepted past

decisions in this respect.

The court held: “In my view one of the rights of ownership is the ius disponendi or right

of alienation and if this right is ltd in the sense that the owner is precluded from

obtaining the full fruits of the disposition it could be said that 1 of his rights of

ownership is restricted.”

The court thus granted the application since it is satisfied that the condition ltd the

entitlement of disposal of the owner & that it is binding upon successive owners & is

terminable at will.

This case wasn't followed in Denel v Cape Explosive Works because it is found to be

irreconcilable with Lorentz v Mille.

Hartzenberg J regarded Lorentz as correct & binding upon him & pointed out that the

rights in question in Pearly is personal obligations of the owner of the property because

“there was no restriction in the physical sense of the owner’s right to deal with the

property.

f) Kain v Khan: Kain (applicant) sold immovable property to Khan but reserved the right in

the deed of sale to remain in occupation of 1 room of the main building situated on

property for the rest of her lifetime at a monthly rental of R10. Kain sought an order for

the registration of the right of occupation of the room against the title deed of the

property. Neither the registrar nor the respondent opposed the application. The

registrar, however, submitted a report to the court in which he pointed out that this

right wasn't registrable because it only reserved a right to occupy a portion of a building

& as such didn't restrict the exercise of the right of ownership in the property as

contemplated by s63 of DRA.

In essence, the court found that the reservation contained all the elements of a lease &

that it is therefore registrable as a lease. It further found the right of a lessee to claim

occupation of the premises to be a personal right by virtue of which a thing is claimed

from someone (ius in personam ad rem acquirendam) which right is converted into a

real right on date of occupation. The right of occupation also complied with the

subtraction from dominium test as it’s a right to the thing of another abstracted from

the otherwise plenary ownership of the resp.

The court thus found the right of occupation to be registrable as such within the

meaning of s63 (1) of the DRA. It submitted that the court erred in that it didn't take

cognisance of the fact that the object relating to a registrable right in land should be

delineated by means of a diagram to make it registrable in the deeds registry. In

particular, a right pertaining to a section or part of a building should be individualised as

a gen rule by means of a sectional plan ito the Sectional Titles Act to make registration

possible.

g) Denel (Pty) Ltd v Cape Explosive Works Ltd 1999 & Cape Explosive Works v Denel 2001:

Capex sold 2 immovable properties to Armscor subject to 2 conditions: clause 6

restricted the use of properties to the dev & manufacture of armaments by Armscor or

the government & clause 7 granted Capex the right to repurchase the property at a price

to be determined in the event of the land no longer being required for the restricted

use. The properties are transferred to Armscor subject to conditions 1 & 2 respectively.

The conditions are expressly stated to be binding on Armscor’s successors in title. The

properties are subdivided, consolidated & transferred, amongst others, to Denel.

Condition 2 is omitted from title deeds & condition 1 was only made applicable to a

small subdivision. A dispute arose between Capex & Denel as to whether Capex would

be entitled to repurchase an ERF which formed part of the properties in the event of its

no longer being used for the dev & manufacture of armaments. Denel applied for an

order declaring that its ownership of the ERF wasn't subject to condition 2. Capex, in a

counter-application, applied for an order directing the Registrar of Deeds to rectify the

respective deeds to include conditions 1 & 2 and for an order compelling Denel to

comply w. the condition.

The court a quo suggested the application of the following 2-stage test to determine

whether a right is real. The 1st leg of the exercise is to determine whether the right is

capable of being a real right. In order to determine this, the subtraction from the

dominium is applied. Acc, the right in ?* is compared to the correlative obligation to see

whether the obligation is a burden upon the land itself, or whether it is something to be

performed by the owner personally. If it’s the former, the right is capable of being a real

right. If it’s the latter, it can't be a real right. In order for an obligation to be a burden

upon land, 1 of the following requirements must be met:

(i) owner’s rights must be curtailed irt the enjoyment of the land in the physical

sense; or

(ii) the obligation must “affect the land” or “run with the land”

If it’s clear that the right in ? is a personal right, the whole exercise is complete & right

isn't registrable. Neither intention nor erroneous registration in the deeds office can

change a personal right in2 a real right. If it’s found that the right is capable of being a

real right, it has a 2nd leg to be established: whether or not the creator thereof intended

it to be a real right or not. If the parties agreed that the right is personal, then it’s also

not registrable. If the parties agreed that the right is a real one, then it’s registrable.

In applying the 2-stage, Hartzenberg J found that clause 6 was registrable ito s63 (1) of

DRA in that it curtailed Armscor’s right to use the properties. The parties didn't,

however, intend to create a real right but merely an agreement inter partes which

wasn't to be recorded in the deed of the transfer. Clause 7 wasn't registrable because it

didn't affect the property or curtailed the owner’s right of enjoyment to the property in

the physical sense. The court found that the 2 clauses were independent clauses dealing

with diff matters. On the strength of these findings the court a quo dismissed the

counter-application & granted an order declaring that Denel’s right of ownership was in

no way encumbered by condition 2. The court decided that an option or a right of

repurchase (unless created in a will) isn't registrable, even though it curtails the owner’s

entitlement of disposal.

On appeal, Streicher JA held that to “determine whether a particular right or condition

iro land is real, 2 requirements must be satisfied:

(1) the intention of the person who creates the real right must be to bind not only the

present owner but also his successors in title; &

(2) the nature of the right or condition must be such that the registration of it results

in a ‘subtraction from the dominium’ of the land against which its registered

The court found that the matter had to be decided on the basis that Capex & Armscor

intended to pass & receive transfer of the properties subject to conditions1 & 2. The

court also found that the 2 conditions weren't independent of one another & they

couldn’t be separated—they formed a composite whole.

According to Streicher JA, the right embodied in conditions 1 & 2, read together,

constituted a real right which could be registered ito DRA because “they were

specifically stated to be binding on the transferee, being Armscor, & its successors in

title.

Furthermore, they constitute a burden upon the land or a subtraction from the

dominium of the land in that the use of the property by the owner thereof is restricted.”

The court held that the real right reserved by Capex in the terms set out in conditions 1

& 2 hadn't been extinguished.

The court therefore found that Denel’s application should have been dismissed &

conditions & 2 should have been carried forward in subsequent title deeds.

Its submitted the SCA, by not referring to curtailments irt the enjoyment of land in the

physical sense, doesn’t seem to sanction the narrow formulation of the subtraction from

the dominium test. It’s further submitted that the decision of the SCA is the only

authority or the proposition that a land-use restriction coupled with a right of

repurchase in the event of the property no longer being required for the restricted land

use, is capable of being registered.

The classification of pre-emptive rights, rights involving a prohibition against the alienation

of land & options remains a problematical area. These are rights, the nature of which is such

that though they involve a restriction on the exercise by an owner of an entitlement, the

possibility of successors in title being bound would seldom be contemplated by the parties.

An option has already been held to confer a personal right only & consequently registration

isn't allowed. Registration of prohibitions against the alienation of land & of pre-emptive

rights iro land has been allowed, whilst a right of repurchase on its own has been held to not

be registrable.

Registration of Real Rights

A real right is adequately protected by registration in Deeds Office. DRA provides that

ownership in land must be conveyed from 1 person to another by a process of publicising &

recording the transfer at the deeds registry. Ltd real rights to land are ito the existing

registration sys the only other kinds of rights (with few exceptions) capable of being

registered. Registration of land rights serves a dual function:

(i) it indicates the act of delivery iro derivative acquisition of immovables; &

(ii) it provides a public record of real rights in land

Once a real right had been created, it is “maintainable against the whole world”.

The DRA’s registrability & transfer requirements clearly support a so-called hierarchy of

rights within the SA legal framework for land.

The Registrar of Deeds is statutorily required to register servitudes & real rights, but

restrained from registering any personal right iro immovable property or any condition that

doesn’t restrict the exercise of a right of ownership.

Other rights are understood as being in stages of inferiority to ownership as far as their

protection in property law & publicising thereof are concerned.

Registration of Personal Rights [Rights in Personam]

Ito s63 (1) of DRA, personal rights may not be registered in the deeds registry, subject to

exceptions.

Registration is usually required for the creation of real right to an immovable thing, but this

doesn’t mean that any existing right, if registered, will automatically be converted into a real

right.

A right, the nature of which is inconsistent with the fundamental character of a real right as

known to our law, can't be converted into a real right by the mere fact of registration.

A personal right, which is registered by mistake, will therefore return to its personal

character.

Personal rights being ancillary to registrable real rights

As mentioned, the court in Ex parte Geldenhuys held that the right to demand payment in

due course from the child who happened to receive the portion of land with the homestead

is purely a personal one. Nevertheless it is held to be registrable because it is intimately

connected with a registrable real right. The practice of registering personal rights which is

intimately connected with registrable rights amendment of s63(1) of DRA, which now

makes provision for the registration of a deed embodying a personal right which, in the

opinion of the Registrar of Deeds, is complementary or otherwise ancillary to a registrable

right contained or conferred in such deed.

The proviso to s63 (1) doesn’t allow the registration of personal rights per se. It merely

authorises the registration of the deed even though it contains personal conditions or rights,

provided that the personal rights or conditions are complementary or otherwise ancillary to

a registrable condition or right contained or conferred in the deed. A personal right which is

registered n the strength of the proviso to s63 (1) will therefore remain personal despite

registration.

Conditions of a registrable agreement

The prohibition in s63 (1) doesn’t apply to conditions in a mortgage bond, lease,

government grant of ownership or mineral rights, mineral lease or prospecting contract. In

principle personal rights embodied in such agreements won’t, by registration of the

agreement, become real.

Personal rights by virtue of which a thing is claimed from someone

Registrar of Deeds (Transvaal) v The Ferreira Deep Ltd 1930: De Villiers CJ (obiter)

—“personal rights, jura in personam, aren't capable of registration is a truism. The def of

such rights excl their registration. but that doesn’t apply to the class of personal rights which

are known as jura in personam ad rem acquirendam...This class of right...is a personal right

until registration, when it’s converted in2 a real right by such registration. The expression

iura in personam ad rem acquirendam ref to personal rights by virtue of which a thing is

claimed from sm1 or “personal rights iro registrable real rights” This obiter dictum

presumably accts for the def of a real right in the DRA s102 as incl any right which b/c a real

right upon registration.

The view that “its now trite law that rights of the class jura in personam ad rem

acquirendam become real right upon registration” (Ex parte Menzies et Uxor 1993) & the

statement that such rights constitute an exception to the gen rule that personal rights may

not be registered, should, however, be stigmatised as wrong. If A & B enter into a deed of

sale iro B’s land, & ito agreement A acquires right to claim transfer of land, this right being

personal & more particularly, a ius in personam ad rem acquirendam.

The moment registration takes place, A’s personal right to transfer terminates & he

becomes owner because B’s right of ownership has been transferred to him. In these type of

cases, there is no question of a personal right being registered being registered or being

converted into a real right by registration, but a ius in personam ad rem acquirendam is

terminated & a real right as such is transferred or created.

The same reasoning applies mutatis mutandis to the creation of a (real) pre-emptive right by

registration, if the view that it can be construed as a real right proves acceptable. If the

nature of a pre-emptive right is regarded as irreconcilable with that of a real right, &

registration nevertheless takes place, as is indeed the position, it amounts to the

registration of a personal right & more specifically, according to some authorities, a ius in

personam ad rem acquirendam.

The question arises what the effect of such a registration is. It has been suggested that

though such rights remain personal despite registration, they do constitute real burdens on

the land once registered, the effect of registration being to give notice of the existence of

such burdens to the whole world.

Ex parte Menzies et Uxor 1993: it was held (obiter) that registration of a personal right by

mistake or in conjunction with a real right (as allowed by proviso to s63 (1) of DRA) is

obviously effective only in prov a public record.

Frye’s (Pty) Ltd v Ries 1957: Hoexter JA said “its quite clear...that registration is intended to

protect the real rights of those persons in whose names such rights are registered in the

Deeds Office. Its obvious that the Deeds Office is a source of info concerning such rights, but

the real function of registration is the protection of the persons in whose names real rights

have been registered. Such rights are maintainable against the whole world, but that

doesn’t mean that every person in the world must be deemed to know the ownership of

every right registered at the Deeds Office.

It is, therefore, not registration per se which causes a right to acquire real effect, but the

fact that a real right has been created; registration having been one of the requirements for

the creation of such real right. It is consequently doubtful whether registration of a personal

right can, as a general rule, have the effect of constituting a real burden on the land

concerned. Furthermore, a personal right with real effect is unknown phenomenon both in

Roman Law & in our common law.

Registration isn't without any consequences.

First, Registrar won’t be prepared to perform an act of registration which is inconsistent

with such registered personal right.

Thus, if a (personal) right pre-emptive right has been registered against the title deed of the

land concerned, the Registrar won’t allow a subsequent transfer of the land to any person

other than the pre-emptor unless a written consent by the pre-emptor has been lodged.

Furthermore, 3rd parties will more easily acquire actual knowledge of the existence of a

personal right once its been registered and, no-one will be permitted to defeat another

person’s personal right envisaging the creation or transfer of real right by delivery or

registration, for his own benefit if he/she knows of its existence.

RECALL ALSO:

Reversionary Rights : Where land acquired from the state, subject to specific conditions of

use, reverts back to the state if used for anything but the stipulated use.

Recording of instalment sale contracts

The legislator intro the principle to record (not register) an instalment sale contract against

the title deed of land which is used or intended to be used mainly for residential purposes.

After such recording, the purchaser of the land enjoys preferential treatment in the event of

the land being sold in execution or the seller becoming insolvent, in that he obtains a

statutory right to claim transfer of the land, provided that he pays a certain amt, or if the

land is sold, he enjoys a preferential claim iro payments he has already made.

Registrability of rights and the changing face of property law

Land reform laws increasingly tend to move away from a hierarchy-based model of rights

a more diversified sys of land control. The legislature seems to realise increasingly that

reform attempts remaining within the paradigm of the hierarchy model of land control can't

effectively break down the structures within which existing imbalances in the land regime

were created & upheld. The dev of a new model of land use & control through reform

legislation is apparent to varying extents in different laws.

Some (e.g. Housing Act 107 of 1997) contain policy statements for promotion of gr8r

varieties of land rights, without actual implementation thereof. Other laws create

alternative frameworks for land control, e.g. where restitution of land rights are coupled

with creation of communal property assoc, or the new form of land control espouses by

Transformation of Certain Rural Areas Act 94 of 1998. Further, some laws create altogether

new land rights or provide new kinds of protection for existing, precarious rights, with the

aim of addressing reform-driven needs not fitting in2 the classical hierarchy model of land

control.

The Development Facilitation Act 67 of 1995 mechanism of ‘initial ownership’ & the

statutory protection of insecure rights in the Extension of Security of Tenure Act 62 of 1997

are examples. The emerging model of land control may be described as a more open

approach to diversification of control & use relations (fragmented use) wrt land.

The new model of diversified land use assumes that land-use rights deserve strong

protection because they address real needs, not because they happen to be in privileged

position within a hierarchy of rights. Security of title is established mainly by legislation,

which absorbs regulation & restrictions imposed by the pub interest. Constitutional reliance

on registration of rights under a new model of diversified use rights is but one way to ensure

adequate protection of rights, generation of wealth & developmental support. The same

results may be achieved by extensive legislative regulation of new rights, coupled with the

creation of structures outside the registration system, ensuring sufficient publicity.

ACQUISITION OF REAL RIGHTS: GENERAL PRINCIPLES

Publicity

B/c real rights belong to the category of rights known as “absolute” rights, the holder of a

real right may, as a gen rule, claim control over the thing which is the object of his/her right,

insofar as its necessary for the effective exercise of the right. Its therefore desirable that the

existence of a real right as well as its contents & the ID of its holder should be made known

to the world at large. The existence of a real right may, as a gen rule, be presumed, for if A

sees a thing to which he has no real right, he must assume that somebody else has such a

right to it, unless its obvious from the surrounding circumstances that its an unowned thing

(res nullis). This means that the existence of a real right, & as far as possible, its extent & the

ID of its holder must be ‘advertised’ to the world at large. In the case of real rights relating

to land, this publicity is norm achieved by means of their registration in a register to which

the pub has access.

S7 DRA 47 of 1937: “each registrar shall on conditions prescribed & upon payment of the

prescribed fees, permit any persn to inspect the public registers and other public records

in his registry, other than the index to such registers or records, and to make copies of

those records or extracts from those registers and to obtain such other information

concerning deeds of other docs registered or filed in the registry as prior to the

commencement of this Act cld, customarily, be made or obtained. The provision that a

search or inspection may only be made against payment of a prescribed fee, is made

subject to several exceptions listed in s7. This section must be read in conjuction with

r80 of the regulations issued ito s10 of DRA: “(1) where in any Registry access into strong

rooms by any member of the public for the purpose of conducting any search is

permitted, a Registrar shall have power to regulate during which hours such access may

be allowed. A Registrar shall have power to refuse admission to any member of the

public without assigning a reason for such refusal. (2) where access to strong rooms is

permitted, attorneys, notaries, conveyancers, surveyors, sheriffs or messengers of MC,

or such of their clerks as have received the approval of the Registrar, may inspect the

records & registers, but other members of the public shall not be permitted such

inspection unless under the personal supervision of a responsible officer: Provided that

any document filed of record in the form of a microfilm reproduction of the original shall

be made available for inspection only under the personal supervision of a responsible

officer designated by the Registrar, and where information is required from any record

stored in a computer, the Registrar shall as soon as conveniently possible furnish such

information.

There is a tendency to work with a so-called doctrine of constructive notice. Ito this

approach, every person is deemed to have notice of real rights registered in the deeds

registry as a result whereof it b/c “enforceable against the world at large”. The holder is

protected not b/c of registration per se, but b/c a real right has been created, registration

simply having been one of the requirements for the creation thereof. The protection given

to the holder of a registered real right doesn’t normally differ from that granted to the

holder of an unregistered real right. It doesn’t exempt a defendant from liability, e.g. for

breach of contract, on the basis that the claimant should have been aware of the fact that

the defendant wasn't the holder or sole holder of any particular registered real right.

Frye’s (Pty) Ltd v Ries 1957: def is co-owner of land which is registered jointly in her name

& the name of her 2 daughters. She entered in2 a contract with plaintiff co ito which

latter leased part of a building on that land & also obtained an option to buy the whole of

the property. This contract required the authority & consent of the other 2 owners,

which defendant had failed to obtain & who subsequently refused to ratify her actions.

The plaintiff is therefore unable to enforce either lease or its option & sued defendant for

damages arising out of breach. Defendant relied on doctrine of constructive notice &

argued that the plaintiff is deemed to have knowledge of her ltd authority as the deeds

register showed that she is co-owner who required other co-owners’ consent. This

argument is rejected & defendant held liable. Per Hoexter JA: “Its quite clear...that

registration is intended to protect the real rights of those persons in whose names such

rights are registered in the Deeds Office. Its obvious that the Deeds Office is source of

info concerning such rights, but the real function of registration is the protection of the

persons in whose names real rights have been registered. Such rights are maintainable

against the whole world, but that doesn’t mean that every person in the world must be

deemed to known the ownership of every real right registered at the Deeds Office.”

The same result could have been achieved by applying the principle that “no1 may speak

against his own act” (contra factum proprium nemo venire potest). The defendant had

actual knowledge of the restriction placed on her real right of ownership & failed to drawn

attn to it & it would have been inconsistent with the gen principles of good faith if she’d

been permitted to rely on doctrine of constructive notice.

Registration isn't required for acquisition of a real right in the case of movables, as

registration would oft be too cumbersome, & altho attempts have been made to intro it iro

certain real rights in movable things, its not sufficiently viable to meet the requirements of

commercial intercourse. In the case of movables, the possession of a thing is gen re: as a

sufficient indication of the existence of a real right, thoughits at least debatable whether

possession still fulfils this function of publicity meaningfully.

For the acquisition of a real right, registration is normally required in the case of immovables

& a manifestation of possession in the case of movables. but this isn't an invariable rule, e.g.

registration isn't requirement for acquisition of real right to land by original means

(occupation or prescription); no registration is required in case of lessee who obtains a real

right when he’s in possession of land or building which he’s leased. There is one essential

requirement in every case, & that’s some manifestation of the fact that a real right in a thing

has been created, transferred or extinguished. This manifestation is objective element for

acquisition, transfer & extinguishment of real rights.

Imposition of a positive duty

In the 1st instance, it must be remembered that every ltd real right s, in a sense, a fragment

of the universal right of ownership which doesn’t entitle an owner to impose any active or

positive duties to assist him in the exercise of his right. All that the owner can demand is

that the other person not interfere with his property. Its not therefore, an arbitrary decision

which has extension of this principle to ltd real rights. The logical “interlock” & cohesion

of a legal sys isn't by itself sufficient reason for the preservation of a rule & it has in fact

been suggested that “to conform with modern dev the registration of conditions requiring

an owner to do smthn on his land should be permitted. The suggestion is confined to ltd real

rights in land & building b/c the modern sys of registration of such rights is well-nigh perfect

so that every person interested in, or affected by, them would only have to consult the

registrar of deeds to ascertain the extent to which the owner of land/building might be

required to co-op with holder of ltd real right. Thus it may be argued that to permit the

more or less fragmentation of the right of ownership in immovable property might

disintegration of concept of ownership & destroy freedom of property which it purports to

extend. In addition, the intro of a variety of ltd real rights which could oblige owner “to do

smthn on his land” could well prejudice its commercial viability. Further, such conditions

might difficulties in the law of neighbour rns as it will oft be impossible to reinforce them

in practice. Finally, law is likely to b/c more uncertain if type restrictions on ltd real rights are

lifted or relaxed beyond a certain point.

Schwedhelm v Hauman 1947: it was decided on authority of the maxim “a holder of a

servitude cannot impose a positive duty on the owner of the servient tenement”

(servitus in faciendo consistere non potest) that a right imposing a positive obligation on

an owner of a servient tenement didn't constit real burdens upon the land & wasn't of a

servitudal character.

Van der Merwe v Wiese 1948: Fagan J found himself unable to agree with finding in

Schwedhelm that a term in an agreement is invalid merely b/c it contains a positive

obligation.

Low Water Properties v Wahloo Sand CC 1999: Liebenberg J held that he is bound to follow

decision of full bench in Schwedhelm.

A deed containing a personal duty may be registered in the deeds office if, in the opinion of

the registrar, the personal right is complementary or otherwise ancillary to a registrable real

right contained in the deed. (see s 63(1) of DRA).

Modes of acquisition of real rights

Depending on whether a real right is (a) newly created without co-op of predecessor in title;

or (b) already in existence & merely transferred from one person to another, or created with

co-op of predecessor, a distinction is made between original & derivative acquisition of

rights.

Unimark Distributors (Pty) Ltd v ERF 94 Silvertondale (Pty) Ltd 1999: e.g. the creation of a

servitude with the co-op of the owner of the thing in ?. For the sake of convenience, the

term “transfer” is hereinafter used also in this connection. When a ltd real right is created w.

the co-op of the owner, there isn't yet an indep right of e.g. “servitude” which can be

transferred in the ordinary sense. H/ever, in a sense certain entitlements inherent in the

right of ownership are in fact transferred to the owner. In obiter, it is remarked that “the

rigid distinction between original & derivative ways of acquisition of property might well be

questionable, in spite of its usefulness for the purpose of basic classifications & explanations

in textbooks.”

Original acquisition of real rights

Original methods of acquiring real rights incl occupation in the case of an unowned thing,

accession, specification, mingling, mixing & prescription. As a gen rule, the original

acquisition of a real right is constit by a unilateral act or series of such acts by person who

acquires it. The title of acquirer isn't derived from that of any predecessor & is,

consequently, not affected by infirmities in the title of a predecessor.

Derivative acquisition of real rights

This is always result of bilateral transaction as it involves co-op of predecessor in title, or a

person acting in his stead. As an acquirer ito derivative method of transfer derives his title

from that of the predecessor, his title will be subject to any infirmities in the predecessor’s

title.

1) Dichotomy between contract and delivery

Transfer of a real right constit the performance of a contract. In RD law, the transfer of

a real right is always re: as a separate legal transaction. As the contract only creates

personal rights & obligations, an additional transaction is required for the transfer of a

real right from the one party to the other, Transfer doesn’t complete the contract, but

gives effect to it. Consequently, we’re dealing with 2 separate legal acts.

2) Essential elements in the transfer of real rights

The essential elements which must be present bfor the delivery of a thing or

registration has the effect of transferring ownership, or some other real right, in it:

a) thing to which real right relates must obviously be a thing in commerce (res in

commercio) i.e. thing iro which real rights can be created & transferred from one

person to another

b) transferor of a real right must be “legally competent” to transfer it, this a minor is

subject to same disabilities irt actual transfer of a real right as he is irt making of a

contract ito which he undertakes obligation to transfer such right

c) transfer must be effected by holder of real right or duly authorised agent on his b½.

Therefore, altho a person may validly & legally contract to sell a thing which doesn’t

belong to him & undertake obligation to transfer ownership, only owner of that

thing can actually transfer the right of ownership in it. Thus seller of thing he

doesn’t own must either 1st acquire it for himself & then transfer it, or induce the

owner to transfer the real right of ownership direct to the buyer, & same applies

mutatis mutandis to any other real right: “nobody gives something which he doesn’t

have” (nemo dat qui non habet). Rule is based on RL maxim “no1 can transfer more

rights to another than he himself has” (nemo plus iuris transferre potest quam ipse

habet) [a golden of property]

d) as far as transferee is concerned, corresponding requirements must be fulfilled.

Transferee too must be legally competent to acquire particular real right in the

thing which is delivered to him or which is registered in his name

e) only transferee or his agent can accept the transfer

f) transfer can only be effected by means of one of the recog forms of delivery in the

case of movables or registration in the case of immovables

g) mere physical delivery/registration is never sufficient to transfer a real right to a

thing. A mental element must be added, consisting of the intention of the transferor

to transfer a particular real right & intention of transferee to acquire that right.

Every transaction involving the transfer of a real right has an objective & a

subjective element. The first gives notice to the world at large that some real right

in a thing is being transferred, whilst the 2nd gives colour to the delivery &

determines the nature & character of real right that’s transferred in each case.

Greenshields v Chisolm (1884) 227-8: De Villiers CJ—‘the mere delivery isn't

enough; there must be an acceptance by the purchaser, in order that thus, to use

the language of Voet, the minds of both contracting parties may concur and consent

to the transfer of property.’

The real agreement which has to be pres at the time when delivery/registration

takes place, therefore requires a definite meeting of the minds between the parties

& forms part of the act of transfer & not of the preceding contract. Principles

applicable to agreement s in gen irt capacity to act & error, also apply to real

agreements.

h) If ownership is transferred ito contract of sale, it will pass to the purchaser only on

payment of the purchase price or if credit has been given

i) Transfer has to be based on a just cause (iusta causa) which gives rise to transfer

3) Abstract and causal theories of transfer

Klerck NO v Van Zyl & Maritz 1989: The causal theory lays down that, if the cause for

the transfer of a real right is defective, the real rightwon’t pass, notwithstanding that

there has been delivery or registration of a thing. Ito abstract theory, provided that the

agreement to transfer a real right is valid, the real right will, in gen, pass in the

pursuance & on implementation thereof, notwithstanding that the cause (underlying

contract) is defective.

Commissioner of Customs & Excise v Randles, Brothers & Hudson Ltd 1941: AD is of

opinion that the effectiveness of an act of transfer must be determined separately from

any preceding cause (abstract theory). Issue is whether importers of cloth had validly

transferred the ownership in that cloth to a firm of manufacturers when the sole object

of the arrangement is to avoid payment of customs duty on import of cloth in2 SA.

Transaction is descr as a sale but since no attempt had been made to disguise its true

nature or conceal its object, the court took the view that if the parties openly &

honestly devise a transaction to avoid the prohibitions of a statute or tax liability, it’ll be

interp accordingto its tenor & then the only question is whether, so interp, it falls

within or without the prohibition or the tax. Here the crux of the matter is whether the

manufacturers had effectively acquired ownership of the cloth. If they had done so,

then no import duty is due; if not duty had to be paid. H/ever, commissioner of

customs argued that, even thoughparties hadn't acted to evade law (in fraudem legis),

the arrangement between them wasn't sufficient to support their claims that

ownership had passed. Per Watermeyer JA: “if the parties desire to transfer ownership

& contemplate that ownership will pass as a result of the delivery, then they in fact

have the necessary intention & ownership passes by delivery. It is contended on b½ of

app that delivery accompanied by the necessary intention on the part of the parties to

the delivery isn't enuf to pass ownership; that some recog form of contract (a causa

habilis) is required in addition...I dnt agree with that contention. The habilis causa ref to

by Voet means merely an appropriate causa, i.e. either an appropriate reason for the

transfer or a serious & deliberate agreement showing an intention to transfer.”

The formulation of a just cause/suitable cause by Centlivres JA also strongly implied

application of abstract sys. He stressed that a wide meaning must be given to these

concepts: “The legal transaction preceding the traditio may be evidence of intention to

pass & acquire ownership, but there may also be direct evidence of an intention to pass

& acquire ownership, and, if there is, there’s no need to rely on a preceding legal

transaction...To put it more briefly it seems to me that the question whether ownership

passed depends on the intention of the parties.

As far as transfer of ownership of movables is concerned, any uncertainty has been

classified via case law.

Trust Bank van Afrika Bpk v Western Bank Bpk 1978: according to our law, ownership

in a movable thing passes to another where the owner thereof delivers it to another,

with the intention of transferring ownership to him, & the other takes the thing with

the intention of acquiring ownership thereof. The validity of the transfer of ownership

is indep of the validity of the underlying contract.

Air-Kel h/a Merkel Motors v Bodenstein 1980: Jansen JA explicitly accepted the

abstract sys of transfer of ownership as part of our law, altho in this case court is only

concerned with transfer of movable.

4) Just cause giving rise to transfer (iusta causa traditionis) and the theories of

transfer

The question arises whether a putative cause should nevertheless be required for

the effectiveness of such a transfer. Altho the transfer is abstract & thus forms a

separate legal act, its norm blt on & dev from an underlying cause.

Commissioner of Customs & Excise v Randles, Brothers & Hudson Ltd: per Centlivres

JA—There may be direct evidence of an intention to pass & acquire ownership and, if

there is, there’s no need to rely on a preceding legal transaction in order to show

that ownership has, as a fact, passed...Such intention may be proved in various ways,

In some cases after Randles, there still seemed to be tendency to favour causal sys.

In these cases, distinction is made between void & voidable contacts, which is

irrelevant ito abstract sys. Ito causal theory, voidness or voidability of the underlying

contract is decisive for the passing of a real right. If the underlying contract is void ab

initio, no real right will pass to the transferee on delivery. but as voidable contract is

valid until & unless its been set aside, delivery pursuant to such a contract will result

in passing of real right to transferee, who can then transfer that right.

Ito abstract sys, underlying contract & act of transfer is completely separated. Econ,

these to transactions can be re: as components of 1 act, but legally form to indep

acts. Looking at transaction as a whole, deficiency of the underlying contract is not

altogether irrelevant. The person who transfers without a valid cause has to be

protected in appropriate circumstances, as transfer is never an end in itself.

Consequently the transferor will in appropriate circumstances be granted a personal

action in the form of a condictio as against the transferee for the return of the

delivered thing. Remedy is personal action only b/c real right has already passed to

acquirer on transfer despite deficiency of underlying contract.

Prov all requirements for one of condictiones are present, a party who has made

performance ito an inchoate agreement, is therefore, as a gen rule, entitled to claim

that which he has performed. Exception to this rule incl:

1. Where performance has been made ito an illegal contract & plaintiff had himself

acted disgracefully by making that performance. Jajbhay v Cassim 1939: Public

pol should properly take in2 acct the doing of simple justice between man & man...The

rule expressed in the maxim in pari delicto potior est conditio defendentis (where both

parties are equally guilty, the def is in the stronger pos) isn't one that can or ought to be

applied in all cases....Its subject to exceptions which in each case must be found to exist

only by re: to principle of public pol.

Since this case, this rule is no longer applied rigidly, the question in each case

being whether a relaxation of the gen rule is necessary “to prevent injustice or to

promote public policy”.

2. In the case of contract which are void b/c of non-compliance with formal

requirements the Transvaal courts have laid down a series of decisions that a

plaintiff is barred from recovering his performance if both parties had fully

performed or if the defendant is willing & able to make performance. A plaintiff

must allege in his pleadings that defendant is unwilling or unable to perform,

otherwise claim would be excipiable. The rule that recovery is barred where

defendant is willing & able to perform is not applied in the case of hire-purchase

& credit agreements. As far as formal defects in contracts for the sale of land are

concerned, the pos is gov by Alienation of Land Act. The Transvaal approach is

maintained only insofar as recovery of performance is barred if both parties have

already performed.

Inter partes the main diff in the protection granted to transferor ito abstract & causal

sys respectively is basis on which transferor may act against transferee. Ito causal

sys, the remedy depends on whether underlying contract is void/voidable. In the

former case, no real right would have passed to transferee & remedy would be real

action ito which transferor may claim control over the thing which is object of right

insofar as its necessary for the effective exercise of the right. IN the latter case, the

act of transfer would have resulted in passing of real right provided the contract

hadn't been yet set aside transferor would be ltd to a personal action against

acquirer.

Ito abstract sys, transferor has a personal action only. Consequently if transferee has

delivered thing to 3rd party, the original transferor would have no remedy against 3rd

party. The cause underlying the 1st transfer has b/c entirely irrelevant once 3rd parties

have appeared & only question that can & should be asked is whether the transferor

& transferee had intention that ownership/real right should pass when delivery is

made & accepted.

The main reason for accepting the abstract sys Is the gr8r certainty it brings in legal

traffic. This is esp the case in SA where bona fide acquisition of ownership by 3rd

party isn't recog.

5) Real agreement—vitiating circumstances

Ito abstract theory, a defect to underlying contractwon’t necessarily attach to the

real agreement. Klerck v Van Zyl: if the real agreement is defective, transfer of the

real right take place.

(a) Contracts which have an illegal obj, e.g. illicit diamond dealings. Such agreements

are unenforceable b/c they is aimed at achieving an illegal object & performance

ito such agreements are void b/c object itself is illegal. If object is legal & no

other defect attches to real agreement, there’s nothing which prevents passing

of real right on transfer.

(b) Contracts which aren't in themselves illegal, but which the law doesn’t re: as

sufficiently NB to insist on the parties carrying out their promises, e.g. wagers or

agreements which parties themselves have decl to be binding “in honour only”.

In such cases courts will merely decline to compel performance of agreement,

but have no objection to it being carried in2 effect.

(c) Contracts which are unenforceable b/c common law or statute requires that

parties must comply with another cond. E.g. it may be necessary for an

agreement to be in writing or that official permission be obtained bfor parties

enter in2 it, or a certain manner is prescribed for the achievements of the

objects.

(d) Contracts which are gen lawful & enforceable, but which I individual cases are

void or voidable as a result of mistake, misrep, duress or undue influence. In

these cases a valid real agreement will be lacking & no real right will pass on

delivery.

Good faith or the doctrine of notice

The gen principle that “nobody will be allowed to derive a benefit or adv f/his own bad

faith” (nemo ex suo delicto meliorem suam conditionem facere potest) operates in LOP to

same extent as it governs every other sphere of law. Under doctrine of notice, sm1 who

acquires a real right arising from a counter-balancing consideration with notice of an earlier

personal right to which his/her predecessor in title has granted to another, may not be

permitted to defeat the other person’s personal right for his individual benefit.

Application of the Doctrine of Notice

Doctrine has been applied if a purchaser acquires ownership of a thing sold knowing:

(i) that it has prev been sold to another person (Cussons v Kroon 2001 at 839)

(ii) of the undertaking of a predecessor in title to grant a servitude to the owner of a

dominant tenement;

(iii) that the acquisition is in conflict with a holder’s right of option or pre-emption, or

with a duty imposed on seller not to sell without consent of another person wrt

the thing

(iv) of right of lessee to occupy thing sold; or

(v) of an earlier undertaking by the predecessor in title to constitute a mortgage

over property or pledge over a movable thing sold

1) Successive sales

In case of successive sales, a seller sells a thing to P1 & then sells same thing to P2 &

gives him delivery or transfer thereof. P1 would be entitled to claim cancellation of

2nd sale & delivery or transfer to P2 if latter had knowledge of prior sale to P1

(Cussons v Kroon). In such cases, gen rule seems to be that purchaser’s bona or mala

fides must be determined as at the time he takes delivery, or at the time he takes

transfer

2) Unregistered servitudes

Suppose A & B enter in2 agreement ito which A b/c entitled to have a servitude

registered over land of B. A nw has personal right to claim that B should co-op in

procuring registration & once registration is completed any subsequent purchaser of

the land will as a gen rule auto be bound by servitude as its object is land itself & not

merely performance to be rendered by original grantor. If B should sell & transfer

right of ownership bfor registration of servitude, C’s knowledge/ignorance of A’s

potential real right would b/c relevant. If C had no knowledge, he wouldn't be

obliged to have servitude registered over his land but if did have knowledge at time

of contract of sale, he’ll be bound by it notwithstanding the absence of registration.

3) Leases where the “huur gaat voor koop” rule doesn’t apply

A lessee iro land acquires real right in circumstances where rule applies. Op of this

rule is that in the case of a long lease of land, a lessee is protected by said rule once

his leas has been registered in accordance with provision s of DRA, or in absence of

registration, for the first 10yrs of the lease when the lessee has taken possession of

the land as well as in a short lease, where lessee is protected by said rule when he

has taken possession. However, until rule finds application, lessee has personalright

only, the object whereof is performance to be rendered by lessor, & not land itself.

Consequently, if land should be sold & transferred, transferee will as a gen rule

acquire land free from lease. but if transferee is aware of lease at time of contract of

sale, he’ll be bound thereby notwithstanding the absence of possession and/or

registration. In the case of a long lease, the transferee will be bound to co-op in

having it registered.

4) Sale in conflict with an option, pre-emotion or duty not to sell without prior

consent

A contract of sale which is in conflict with any of above wrt thing will be decl void &

entitle the holder of the prior personalright to claim transfer or delivery of the thing

5) Sale in conflict with a right of security

Acquirer of ownership of a thing that’s aware of a prior personalright of security

granted by the predecessor will be bound to perfect theright of real security to a

thing to which a creditor is entitled.

Foundation and Requirements of the Doctrine of Notice

Fraud is trad re: as theoretical basis for doctrine. This construction is rejected by recog that

fraud merely provides a starting-point in the legal sys to provision doctrine with theoretical

support. Mvusi v Mvusi 1995: where transfer of ownership of land with prior knowledge of

the personal rights of the heirs are cancelled on the basis of fraud without any ref to the

doctrine of notice.

Mere knowledge of prior personal right is re: as sufficient basis for doctrine & fraud is

construed from such mere knowledge.

Requirements for doctrine:

(a) Existence of a prior personal right against the holder of a real right

(b) Infringement of a personal right by a subsequent acquirer of the real right, which

real right was acquired after establishment of the personal right; and

(c) Knowledge of the existence of a prior personal right by the acquirer of the real right

Agreement giving rise to prior personal right must meet requirements for validity of

contract. courts have decided that doctrine of notice isn't applicable to rights which are of a

purely personal nature but only to personal rights by virtue of which a thing is claimed from

sm1 (iura in personam ad rem acquirendam)4. It is further held that doctrine has been

extended only to a right of pre-emption & an option to purchase land. In Cussons v Kroon

2001 at 840: SCA held, by applying doctrine of notice to mere personal rights, rejected that

distinction.

Infringement of personal right by acquirer of real right is perceived as unlawful conduct.

Criteria for determination of wrongfulness in delict should be applied. Application of

doctrine is triggered by acquisition of real right with required knowledge. Wahloo Sand BK v

Trustees, Hambly Parker Trust 2002 at 782-3: it is accepted that the doctrine of notice

doesn’t apply to competing personal rights in the same property if acquisition of ownership

of the property hasn't yet taken place. The Court decided that the problem of competing

personal rights (whether similar or not) in the same property (where personal right is

acquired without knowledge of earlier personal right) prior to registration of ownership of

property, is resolved by application of the maxim “priority in time gives priority in law” (qui

prior est tempore potior est jure).

The acquirer of the real right has to have actual knowledge of the prior personal right. The

negligent disregard of a prior personal right doesn’t bring doctrine of notice in2 operation.

A successor who acquires a real right gratuitously (ex titutlo lucrative) has to observe

undertakings of his predecessor wrt the thing even in the absence of knowledge on his part.

4 Willoughby’s Consolidated v Copthall Stores 1913 at 280; Willoughby’s Consolidated v Copthall 1918 at 15-19; Low Water Properties v Wahloo Sand CC 1999 at 663

ACQUISITION OF REAL RIGHTS: GENERAL PRINCIPLES

Publicity

Because real rights belong 2 the category of rights known as “absolute” rights, the holder of

a real right may, as a gen rule, claim ctrl over the thing which is the object of his/her right,

insofar as its necessary for the effective exercise of the right. It’s therefore desirable that the

existence of a real right as well as its contents & the ID of its holder should be made known

to the world @ large. The existence of a real right may, as a gen rule, be presumed, for if A

sees a thing to which he has no real right, he must assume that somebody else has such a

right to it, unless its obvious from the surrounding circumstances that its an unowned thing

(res nullis). This means that the existence of a real right & as far as possible, its extent & the

ID of its holder must be ‘advertised’ to the world at large. In the case of real rights relating

to land, this publicity = norm achieved by means of their registration in a register to which

the pub has access.

S7 DRA 47 of 1937: “each registrar shall on conditions prescribed & upon payment of the

prescribed fees, permit any person to inspect the public registers and other public

records in his registry, other than the index to such registers or records, and to make

copies of those records or extracts from those registers and to obtain such other

information concerning deeds of other docs registered or filed in the registry as prior to

the commencement of this Act could, customarily, be made or obtained. The provision

that a search or inspection may only be made against payment of a prescribed fee, is

made subject to several exceptions listed in s7. This section must be read in conjunction

with r80 of the regulations issued ito s10 of DRA: “(1) where in any Registry access into

strong rooms by any member of the public for the purpose of conducting any search is

permitted, a Registrar shall have power to regulate during which hours such access may

be allowed. A Registrar shall have power to refuse admission to any member of the

public without assigning a reason for such refusal. (2) where access to strong rooms is

permitted, attorneys, notaries, conveyancers, surveyors, sheriffs or messengers of MC,

or such of their clerks as have received the approval of the Registrar, may inspect the

records & registers, but other members of the public shall not be permitted such

inspection unless under the personal supervision of a responsible officer: Provided that

any document filed of record in the form of a microfilm reproduction of the original shall

be made available for inspection only under the personal supervision of a responsible

officer designated by the Registrar, and where information is required from any record

stored in a computer, the Registrar shall as soon as conveniently possible furnish such

information.

There is a tendency to work with a so-called doctrine of constructive notice. Ito this

approach, every person is deemed to have notice of real rights registered in the deeds

registry as a result whereof it because “enforceable against the world at large”. The holder

is protected not because of registration per se, but because a real right has been created,

registration simply having been one of the requirements for the creation thereof. The

protection given to the holder of a registered real right doesn’t normally differ from that

granted to the holder of an unregistered real right. It doesn’t exempt a defendant from

liability, e.g. for breach of contract, on the basis that the claimant should have been aware

of the fact that the defendant wasn't the holder or sole holder of any particular registered

real right.

Frye’s (Pty) Ltd v Ries 1957: def = co-owner of land which = registered jointly in her name &

the name of her 2 daughters. She entered in2 a contract with plaintiff co ito which latter

leased part of a building on that land & also obtained an option 2 buy the whole of the

property. This contract required the authority & consent of the other 2 owners, which

defendant had failed to obtain & who subsequently refused 2 ratify her actions. The

plaintiff = therefore unable to enforce either lease or its option & sued defendant 4

damages arising out of breach. Defendant relied on doctrine of constructive notice &

argued that the plaintiff = deemed to have knowledge of her ltd authority as the deeds

register showed that she = co-owner who required other co-owners’ consent. This

argument = rejected & defendant held liable. Per Hoexter JA: “Its quite clear...that

registration is intended to protect the real rights of those persons in whose names such

rights are registered in the Deeds Office. It’s obvious that the Deeds Office = source of

info concerning such rights, but the real function of registration is the protection of the

persons in whose names real rights have been registered. Such rights are maintainable

against the whole world, but that doesn’t mean that every person in the world must be

deemed to known the ownership of every real right registered at the Deeds Office.”

The same result could have been achieved by applying the principle that “no1 may speak

against his own act” (contra factum proprium nemo venire potest). The defendant had

actual knowledge of the restriction placed on her real right of ownership & failed 2 drawn

attn 2 it & it would have been inconsistent with the gen principles of good faith if she’d been

permitted 2 rely on doctrine of constructive notice.

Registration isn't required for acquisition of a real right in the case of movables, as

registration would oft be too cumbersome, & although attempts have been made to intro it

IRO certain real rights in movable things, its not sufficiently viable to meet the requirements

of commercial intercourse. In the case of movables, the possession of a thing is gen re: as a

sufficient indication of the existence of a real right, though it's at least debatable whether

possession still fulfils this function of publicity meaningfully.

For the acquisition of a real right, registration is normally required in the case of immovables

& a manifestation of possession in the case of movables. But this isn't an invariable rule, e.g.

registration isn't requirement for acquisition of real right to land by original means

(occupation or prescription); no registration is required in case of lessee who obtains a real

right when he’s in possession of land or building which he’s leased. There is one essential

requirement in every case, & that’s some manifestation of the fact that a real right in a thing

has been created, transferred or extinguished. This manifestation = objective element for

acquisition, transfer & extinguishment of real rights.

Imposition of a positive duty

In the 1st instance, it must be remembered that every ltd real right s, in a sense, a fragment

of the universal right of ownership which doesn’t entitle an owner to impose any active or

positive duties to assist him in the exercise of his right. All that the owner can demand is

that the other person not interfere with his property.

It is, therefore, not an arbitrary decision which has extension of this principle to ltd real

rights. The logical “interlock” & cohesion of a legal sys isn't by itself sufficient reason 4 the

preservation of a rule & it has in fact been suggested that “to conform with modern dev the

registration of conditions requiring an owner to do something on his land should be

permitted. The suggestion = confined to ltd real rights in land & building because the

modern sys of registration of such rights is well-nigh perfect so that every person interested

in, or affected by, them would only have to consult the registrar of deeds to ascertain the

extent to which the owner of land/building might be required to co-op with holder of ltd

real right. Thus it may be argued that 2 permit the more or less fragmentation of the right of

ownership in immovable property might disintegration of concept of ownership &

destroy freedom of property which it purports to extend. In addition, the intro of a variety

of ltd real rights which could oblige owner “to do something on his land” could well

prejudice its commercial viability. Further, such conditions might difficulties in the law of

neighbour rns as it will oft be impossible to reinforce them in practice. Finally, law is likely to

because more uncertain if type restrictions on ltd real rights are lifted or relaxed beyond a

certain point.

Schwedhelm v Hauman 1947: it was decided on authority of the maxim “a holder of a

servitude cannot impose a positive duty on the owner of the servient tenement”

(servitus in faciendo consistere non potest) that a right imposing a positive obligation on

an owner of a servient tenement didn't constitute real burdens upon the land & wasn't

of a servitudal character.

Van der Merwe v Wiese 1948: Fagan J found himself unable to agree with finding in

Schwedhelm that a term in an agreement is invalid merely because it contains a positive

obligation.

Low Water Properties v Wahloo Sand CC 1999: Liebenberg J held that he = bound to follow

decision of full bench in Schwedhelm.

A deed containing a personal duty may be registered in the deeds office if, in the opinion of

the registrar, the personal right is complementary or otherwise ancillary to a registrable real

right contained in the deed. (See s 63(1) of DRA).

Modes of acquisition of real rights

Depending on whether a real right is (a) newly created w/o co-op of predecessor in title; or

(b) already in existence & merely transferred from one person to another, or created with

co-op of predecessor, a distinction = made b/w original & derivative acquisition of rights.

Unimark Distributors (Pty) Ltd v Erf 94 Silvertondale (Pty) Ltd 1999: e.g. the creation of a

servitude with the co-op of the owner of the thing in? For the sake of convenience, the term

“transfer” is hereinafter used also in this connection. When a limited real right is created w.

the co-op of the owner, there isn't yet an independent right of e.g. “servitude” which can be

transferred in the ordinary sense. However, in a sense certain entitlements inherent in the

right of ownership are in fact transferred to the owner. In obiter, it = remarked that “the

rigid distinction b/w original & derivative ways of acquisition of property might well be

questionable, in spite of its usefulness for the purpose of basic classifications & explanations

in textbooks.”

Original acquisition of real rights

Original methods of acquiring real rights include occupation in the case of an unowned

thing, accession, specification, mingling, mixing & prescription. As a gen rule, the original

acquisition of a real right = constituted by a unilateral act or series of such acts by person

who acquires it. The title of acquirer isn't derived from that of any predecessor & is,

consequently, not affected by infirmities in the title of a predecessor.

Derivative acquisition of real rights

This = always result of bilateral transaction as it involves co-op of predecessor in title, or a

person acting in his stead. As an acquirer ito derivative method of transfer derives his title

from that of the predecessor, his title will be subject 2 any infirmities in the predecessor’s

title.

6) Dichotomy between contract and delivery

Transfer of a real right constitutes the performance of a contract. In RD law, the

transfer of a real right is always re: as a separate legal transaction. As the contract only

creates personal rights & obligations, an additional transaction = required 4 the transfer

of a real right from the one party to the other, Transfer doesn’t complete the contract,

but gives effect to it. Consequently, we’re dealing with 2 separate legal acts.

7) Essential elements in the transfer of real rights

The essential elements which must be present b4 the delivery of a thing or registration

has the effect of transferring ownership, or some other real right, in it:

j) thing to which real right relates must obviously be a thing in commerce (res in

commercio) i.e. thing iro which real rights can be created & transferred from one

person 2 another

k) transferor of a real right must be “legally competent” to transfer it, this a minor is

subject to same disabilities irt actual transfer of a real right as he is irt making of a

contract ito which he undertakes obligation to transfer such right

l) Transfer must be effected by holder of real right or duly authorised agent on his

behalf. Therefore, although a person may validly & legally contract 2 sell a thing

which doesn’t belong to him & undertake obligation to transfer ownership, only

owner of that thing can actually transfer the right of ownership in it. Thus seller of

thing he doesn’t own must either 1st acquire it 4 himself & then transfer it, or

induce the owner 2 transfer the real right of ownership direct to the buyer, & same

applies mutatis mutandis 2 any other real right: “nobody gives something which he

doesn’t have” (nemo dat qui non habet). Rule = based on RL maxim “no1 can

transfer more rights to another than he himself has” (nemo plus iuris transferre

potest quam ipse habet) [a golden of property]

m) as far as transferee is concerned, corresponding requirements must be fulfilled.

Transferee too must be legally competent 2 acquire particular real right in the thing

which is delivered to him or which is registered in his name

n) only transferee or his agent can accept the transfer

o) transfer can only be effected by means of one of the recog forms of delivery in the

case of movables or registration in the case of immovables

p) mere physical delivery/registration is never sufficient 2 transfer a real right to a

thing. A mental element must be added, consisting of the intention of the transferor

to transfer a particular real right & intention of transferee 2 acquire that right. Every

transaction involving the transfer of a real right has an objective & a subjective

element. The first gives notice to the world @ large that some real right in a thing is

being transferred, whilst the 2nd gives colour to the delivery & determines the

nature & character of real right that’s transferred in each case. Greenshields v

Chisolm (1884) 227-8: De Villiers CJ—‘the mere delivery isn't enough; there must be

an acceptance by the purchaser, in order that thus, to use the language of Voet, the

minds of both contracting parties may concur and consent to the transfer of

property.’

The real agreement which has to be pres @ the time when delivery/registration

takes place, therefore requires a definite meeting of the minds b/w the parties &

forms part of the act of transfer & not of the preceding contract. Principles

applicable 2 agreement s in gen irt capacity 2 act & error, also apply 2 real

agreements.

q) If ownership = transferred ito contract of sale, it will pass to the purchaser only on

payment of the purchase price or if credit has been given

r) Transfer has to be based on a just cause (iusta causa) which gives rise to transfer

8) Abstract and causal theories of transfer

Klerck NO v Van Zyl & Maritz 1989: The causal theory lays down that, if the cause 4 the

transfer of a real right = defective, the real right wont pass, notwithstanding that there

has been delivery or registration of a thing. Ito abstract theory, provides that the

agreement 2 transfer a real right is valid, the real right will, in gen, pass in the

pursuance & on implementation thereof, notwithstanding that the cause (underlying

contract) = defective.

Commissioner of Customs & Excise v Randles, Brothers & Hudson Ltd 1941: AD = of

opinion that the effectiveness of an act of transfer must be determined separately from

any preceding cause (abstract theory). Issue = whether importers of cloth had validly

transferred the ownership in that cloth to a firm of manufacturers when the sole object

of the arrangement = to avoid payment of customs duty on import of cloth in2 SA.

Transaction = descr as a sale but since no attempt had been made 2 disguise its true

nature or conceal its object, the court took the view that if the parties openly &

honestly devise a transaction 2 avoid the prohibitions of a statute or tax liability, it’ll be

interp acc 2 its tenor & then the only question is whether, so interp, it falls within or

without the prohibition or the tax. Here the crux of the matter = whether the

manufacturers had effectively acquired ownership of the cloth. If they had done so,

then no import duty = due; if nt, duty had to be paid. However, commissioner of

customs argued that, even though parties hadn't acted 2 evade law (in fraudem legis),

the arrangement b/w them wasn't sufficient 2 support their claims that ownership had

passed. Per Watermeyer JA: “if the parties desire 2 transfer ownership & contemplate

that ownership will pass as a result of the delivery, then they in fact have the necessary

intention & ownership passes by delivery. It = contended on behalf of app that delivery

accompanied by the necessary intention on the part of the parties to the delivery isn't

enuf to pass ownership; that some recog form of contract (a causa habilis) is required

in addition...I dnt agree with that contention. The habilis causa ref 2 by Voet means

merely an appropriate causa, i.e. either an appropriate reason 4 the transfer or a

serious & deliberate agreement showing an intention to transfer.”

The formulation of a just cause/suitable cause by Centlivres JA also strongly implied

application of abstract sys. He stressed that a wide meaning must be given to these

concepts: “The legal transaction preceding the traditio may be evidence of intention to

pass & acquire ownership, but there may also be direct evidence of an intention 2 pass

& acquire ownership, and, if there is, there’s no need to rely on a preceding legal

transaction...To put it more briefly it seems to me that the question whether ownership

passed depends on the intention of the parties.

As far as transfer of ownership of movables is concerned, any uncertainty has been

classified via case law.

Trust Bank van Afrika Bpk v Western Bank Bpk 1978: acc 2 our law, ownership in a

movable thing passes 2 another where the owner thereof delivers it to another, with

the intention of transferring ownership to him, & the other takes the thing with the

intention of acquiring ownership thereof. The validity of the transfer of ownership is

independentof the validity of the underlying contract.

Air-Kel h/a Merkel Motors v Bodenstein 1980: Jansen JA explicitly accepted the

abstract sys of transfer of ownership as part of our law, although in this case court =

only concerned with transfer of movable.

9) Just cause giving rise to transfer (iusta causa traditionis) and the theories of

transfer

The question arises whether a putative cause should nevertheless be required 4 the

effectiveness of such a transfer. Although the transfer is abstract & thus forms a

separate legal act, its norm built on & dev from an underlying cause.

Commissioner of Customs & Excise v Randles, Brothers & Hudson Ltd: per Centlivres

JA—There may be direct evidence of an intention 2 pass & acquire ownership and, if

there is, there’s no need to rely on a preceding legal transaction in order 2 show that

ownership has, as a fact, passed...Such intention may be proved in various ways,

In some cases after Randles, there still seemed 2 be tendency 2 favour causal sys. In

these cases, distinction = made b/w void & voidable contacts, which = irrelevant ito

abstract sys. Ito causal theory, voidness or voidability of the underlying contract =

decisive for the passing of a real right. If the underlying contract = void ab initio, no

real right will pass 2 the transferee on delivery. but as voidable contract = valid until

& unless its been set aside, delivery pursuant 2 such a contract will result in passing

of real right to transferee, who can then transfer that right.

Ito abstract sys, underlying contract & act of transfer = completely separated. Econ,

these 2 transactions can be re: as components of 1 act, but legally form 2

independent acts. Looking @ transaction as a whole, deficiency of the underlying

contract is not altogether irrelevant. The person who transfers w/o a valid cause has

2 be protected in appropriate circumstances, as transfer is never an end in itself.

Consequently the transferor will in appropriate circumstances be granted a personal

action in the form of a condictio as vs the transferee for the return of the delivered

thing. Remedy = personal action only because real right has already passed 2

acquirer on transfer despite deficiency of underlying contract.

Provided all requirements 4 one of condictiones = present, a party who has made

performance ito an inchoate agreement, is therefore, as a gen rule, entitled 2 claim

that which he has performed. Exception to this rule incl:

3. Where performance has been made ito an illegal contract & plaintiff had himself

acted disgracefully by making that performance. Jajbhay v Cassim 1939: Public

policy should properly take in2 acct the doing of simple justice b/w man & man...The

rule expressed in the maxim in pari delicto potior est conditio defendentis (where both

parties are equally guilty, the def is in the stronger pos) isn't one that can or ought to be

applied in all cases....Its subject to exceptions which in each case must be found to exist

only by re: to principle of public pol.

Since this case, this rule is no longer applied rigidly, the question in each case

being whether a relaxation of the gen rule is necessary “to prevent injustice or to

promote public policy”.

4. In the case of contract which are void because of non-compliance with formal

requirements the Transvaal courts have laid down a series of decisions that a

plaintiff = barred from recovering his performance if both parties had fully

performed or if the defendant is willing & able to make performance. A plaintiff

must allege in his pleadings that defendant = unwilling or unable 2 perform,

otherwise claim would be excipiable. The rule that recovery = barred where

defendant is willing & able 2 perform is not applied in the case of hire-purchase

& credit agreements. As far as formal defects in contracts 4 the sale of land are

concerned, the pos is governed by Alienation of Land Act. The Transvaal

approach is maintained only insofar as recovery of performance is barred if both

parties have already performed.

Inter partes the main diff in the protection granted 2 transferor ito abstract & causal

sys respectively = basis on which transferor may act vs transferee. Ito causal sys, the

remedy depends on whether underlying contract = void/voidable.

In the former case, no real right would have passed 2 transferee & remedy would be

real action ito which transferor may claim ctrl over the thing which = object of right

insofar as its necessary 4 the effective exercise of the right. IN the latter case, the act

of transfer would have resulted in passing of real right provided the contract hadn't

been yet set aside transferor would be ltd to a personal action vs acquirer.

Ito abstract sys, transferor has a personal action only. Consequently if transferee has

delivered thing 2 3rd party, the original transferor would have no remedy vs 3rd party.

The cause underlying the 1st transfer has because entirely irrelevant once 3rd parties

have appeared & only question that can & should be asked is whether the transferor

& transferee had intention that ownership/real right should pass when delivery =

made & accepted.

The main reason 4 accepting the abstract sys Is the gr8r certainty it brings in legal

traffic. This is especially the case in SA where bona fide acquisition of ownership by

3rd party isn't recognised.

10) Real agreement—vitiating circumstances

Ito abstract theory, a defect to underlying contract wont necessarily attach to the

real agreement. Klerck v Van Zyl: if the real agreement is defective, transfer of the

real right wont take place.

(e) Contracts which have an illegal object e.g. illicit diamond dealings. Such

agreements = unenforceable because they = aimed at achieving an illegal object

& performance ito such agreements = void because object itself is illegal. If

object = legal & no other defect attaches 2 real agreement, there’s nothing which

prevents passing of real right on transfer.

(f) Contracts which aren't in themselves illegal, but which the law doesn’t re: as

sufficiently NB to insist on the parties carrying out their promises, e.g. wagers or

agreements which parties themselves have declared 2 be binding “in honour

only”. In such cases courts will merely decline 2 compel performance of

agreement, but have no objection to it being carried in2 effect.

(g) Contracts which are unenforceable because common law or statute requires that

parties must comply with another cond. E.g. it may be necessary for an

agreement to be in writing or that official permission be obtained b4 parties

enter in2 it, or a certain manner is prescribed for the achievements of the

objects.

(h) Contracts which are gen lawful & enforceable, but which I individual cases are

void or voidable as a result of mistake, misrepresentation, duress or undue

influence. In these cases a valid real agreement will be lacking & no real right will

pass on delivery.

Good faith or the doctrine of notice

The gen principle that “nobody will be allowed to derive a benefit or adv f/his own bad

faith” (nemo ex suo delicto meliorem suam conditionem facere potest) operates in LOP to

same extent as it governs every other sphere of law. Under doctrine of notice, sm1 who

acquires a real right arising from a counter-balancing consideration with notice of an earlier

personal right to which his/her predecessor in title has granted 2 another, may not be

permitted to defeat the other person’s personal right for his individual benefit.

Application of the Doctrine of Notice

Doctrine has been applied if a purchaser acquires ownership of a thing sold knowing:

(vi) that it has previously been sold to another person (Cussons v Kroon 2001 at 839)

(vii) of the undertaking of a predecessor in title to grant a servitude to the owner of a

dominant tenement;

(viii) that the acquisition is in conflict with a holder’s right of option or pre-emption, or

with a duty imposed on seller not to sell w/o consent of another person wrt the

thing

(ix) of right of lessee 2 occupy thing sold; or

(x) of an earlier undertaking by the predecessor in title to constitute a mortgage

over property or pledge over a movable thing sold

6) Successive sales

In case of successive sales, a seller sells a thing to P1 & then sells same thing to P2 &

gives him delivery or transfer thereof. P1 would be entitled 2 claim cancellation of

2nd sale & delivery or transfer to P2 if latter had knowledge of prior sale to P1

(Cussons v Kroon). In such cases, gen rule seems to be that purchaser’s bona or mala

fides must be determined as at the time he takes delivery, or at the time he takes

transfer

7) Unregistered servitudes

Suppose A & B enter in2 agreement ito which A because entitled to have a servitude

registered over land of B. A nw has personal right to claim that B should co-op in

procuring registration & once registration = completed any subsequent purchaser of

the land will as a gen rule auto be bound by servitude as its object = land itself & not

merely performance to be rendered by original grantor. If B should sell & transfer

right of ownership b4 registration of servitude, C’s knowledge/ignorance of A’s

potential real right would because relevant. If C had no knowledge, he wouldn't be

obliged to have servitude registered over his land but if did have knowledge @ time

of contract of sale, he’ll be bound by it notwithstanding the absence of registration.

8) Leases where the “huur gaat voor koop” rule doesn’t apply

A lessee iro land acquires real right in circumstances where rule applies. Op of this

rule = that in the case of a long lease of land, a lessee = protected by said rule once

his leas has been registered in acc with provisions of DRA, or in absence of

registration, for the first 10yrs of the lease when the lessee has taken possession of

the land as well as in a short lease, where lessee = protected by said rule when he

has taken possession. However, until rule finds application, lessee has personal right

only, the object whereof = performance to be rendered by lessor, & not land itself.

Consequently, if land should be sold & transferred, transferee will as a gen rule

acquire land free from lease. but if transferee = aware of lease @ time of contract of

sale, he’ll be bound thereby notwithstanding the absence of possession and/or

registration. In the case of a long lease, the transferee will be bound to co-op in

having it registered.

9) Sale in conflict with an option, pre-emotion or duty not to sell w/o prior consent

A contract of sale which is in conflict with any of above wrt thing will be declared

void & entitle the holder of the prior personal right to claim transfer or delivery of

the thing

10) Sale in conflict with a right of security

Acquirer of ownership of a thing that’s aware of a prior personal right of security

granted by the predecessor will be bound to perfect the right of real security to a

thing to which a creditor = entitled.

Foundation and Requirements of the Doctrine of Notice

Fraud = trad re: as theoretical basis 4 doctrine. This construction = rejected by recog that

fraud merely providesa starting-point in the legal sys 2 provide a doctrine with theoretical

support. Mvusi v Mvusi 1995: where transfer of ownership of land with prior knowledge of

the personal rights of the heirs = cancelled on the basis of fraud w/o any ref 2 the doctrine

of notice.

Mere knowledge of prior personal right = re: as sufficient basis 4 doctrine & fraud is

construed from such mere knowledge.

Requirements for doctrine:

(d) Existence of a prior personal right against the holder of a real right

(e) Infringement of a personal right by a subsequent acquirer of the real right, which

real right was acquired after establishment of the personal right; and

(f) Knowledge of the existence of a prior personal right by the acquirer of the real right

Agreement giving rise 2 prior personal right must meet requirements 4 validity of contract.

courts have decided that doctrine of notice isn't applicable to rights which are of a purely

personal nature but only to personal rights by virtue of which a thing = claimed from sm1

(iura in personam ad rem acquirendam)5. It = further held that doctrine has been extended

only to a right of pre-emption & an option to purchase land. In Cussons v Kroon 2001 at

840: SCA held, by applying doctrine of notice to mere personal rights, rejected that

distinction.

Infringement of personal right by acquirer of real right = perceived as unlawful conduct.

Criteria 4 determination of wrongfulness in delict should be applied. Application of doctrine

= triggered by acquisition of real right with required knowledge. Wahloo Sand BK v

Trustees, Hambly Parker Trust 2002 at 782-3: it = accepted that the doctrine of notice

doesn’t apply 2 competing personal rights in the same property if acquisition of ownership

of the property hasn't yet taken place. court decided that prob of competing personal rights

(whether similar or not) in the same property (where personal right = acquired w/o

knowledge of earlier personal right) prior to registration of ownership of property, is

resolved by application of the maxim “priority in time gives priority in law” (qui prior est

tempore potior est jure).

The acquirer of the real right has 2 have actual knowledge of the prior personal right. The

negligent disregard of a prior personal right doesn’t bring doctrine of notice in2 operation.

A successor who acquires a real right gratuitously (ex titutlo lucrative) has 2 observe

undertakings of his predecessor wrt the thing even in the absence of knowledge on his part.

5 Willoughby’s Consolidated v Copthall Stores 1913 at 280; Willoughby’s Consolidated v Copthall 1918 at 15-19; Low Water Properties v Wahloo Sand CC 1999 at 663