Leppan N.O and Others v King (2471/2020) [2021] ZAECGHC 67 (20 July 2021)

IN

THE HIGH COURT OF SOUTH AFRICA

(EASTERN CAPE DIVISION, GRAHAMSTOWN)

CASE NO: 2471/2020

Reportable

Date heard: 29 April 2021

Date delivered: 20 July 2021

In the matter between

DAVID NOEL LEPPAN N.O First Applicant

JASON KYLE LEPPAN N.O Second Applicant

AIDEN RYAN LEPPAN N.O Third Applicant

FAY WATSON N.O. Fourth Applicant

YELLOW SANDS CARAVAN PARK CC Fifth Applicant

and

TREVOR KING Respondent

JUDGMENT

Krüger AJ

[1] The Yellow Sands Caravan Park (the 'Caravan Park') has been in operation for more than 40 years in Kwelera, north of East London.[1] Since 24 January 2004 the respondent's chalet van has been stationed on camp site 47 in the Park based on an agreement between himself and the fifth applicant. The agreement permitted the respondent to use the camp site exclusively in exchange for certain payments. The parties are in dispute about the continued use of the camp site.

[2] The first four applicants are trustees of the Yellow Sands Property Trust which owns the land on which the Caravan Park is situated. The fifth respondent, of which the first respondent is the sole member, operates the Caravan Park with the permission of the Trust on its land.[2]

[3] The applicants approached the court with an application to order the respondent to vacate camp site 47 which he occupies in the Caravan Park, and to remove the chalet van and related structures from the site within 30 days of the order sought being granted. The applicants further requested the court to engage the assistance of the sheriff of the court should the respondent fail to comply with the order and for the costs of such removal and storage of the removed structures to be for the account of the respondent. The applicants also requested a costs order in the event of an unsuccessful opposition of this application.

[4] Initially, the respondent contended that the provisions of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 are applicable and that the applicants did not comply with the notice requirements of the legislation. This line of argument was correctly not pursued, as it is common cause that this application does not concern the primary residence of the respondent.[3]

[5] The applicants based their request for the ejectment order on a number of grounds. These include reasons based on

a. the termination of the agreement on notice on various occasions for different reasons with extended notice periods, and

b. the illegality of the structure and non-compliance with building regulations.

[6] The respondent opposed the application and asked for its dismissal with costs. The respondent maintained that his contractual right to use the camp site arising from the agreement he concluded with the fifth respondent in January 2004 remains in place. On the version of the respondent, the contract allowing for his use of the camp site is of indefinite duration, and that it could only be cancelled validly in accordance with the specific terms thereof. The respondent thus argued that the applicants' purported cancellation of the agreement on notice, and their other attempts to eject him from the campsite are impermissible in terms of the agreement.

[7] It is not contested that the Caravan Park is situated on agricultural land, and that the agreement between the parties in terms whereof the respondent had use of the campsite was concluded in 2004, i.e. more than 17 years ago. The evidence is that camp sites have been demarcated on the land to provide for different 'types of accommodation'. The founding affidavit outlines this as follows:

'18. Apart from the normal holiday visitors that book, pay and utilise the above accommodations, there are a number of persons that either reside permanently or consistently over holidays at Yellow Sands.

19. The latter persons in majority own the actual structures of the chalet vans or park/mobile homes ("the owners"). Though they are owners of these structures, they do not own the camp sites on which the structures are stationed. The camp sites form part of the farm and therefore ownership of the camp sites belong to the Trust.

20. There is an arrangement in place only between Yellow Sands and the Trust. The owners have no relationship with the Trust, only with Yellow Sands to who they pay their entrance fee, site fees and monthly consumption and related charges.'

[8] I asked counsel whether the Subdivision of Agricultural Land Act 70 of 1970 ('the Act') renders the agreement between the parties illegal. The Act stipulates permission requirements for the subdivision and use of portions of agricultural land. Where the permission is absent, the legality of any agreement to use land in contravention of the Act stands to be questioned.[4]

[9] It is permissible for a court to raise the question of legality of an agreement mero motu. In Yannakou v Apollo Club,[5] Trollip JA stated as follows:

'It is true that it is the duty of the court to take the point of illegality mero motu, even if the defendant does not plead or raise it; but it can and will only do so if the illegality appears ex facie the transaction or from the evidence before it, and in the latter event, if it is also satisfied that all the necessary and relevant facts are before it.'[6]

Van Niewenhuizen AJ in City Power Soc Ltd v Combined Private Investigations CC,[7] held that a court is in fact duty-bound to raise the issue of legality of an agreement where it appears to be of concern.

[10] While the applicants' heads of argument contained a reference to the provisions of the Act, Mr Kotzé did not place reliance thereon to contest the validity of the agreement. He referred to the legislation in an argument to demonstrate awareness of its provisions on the part of the applicants, who, he submitted, would not have agreed to a lease of more than ten years in contravention of the Act. Mr Kotzé did not address the specific consequences of a finding of illegality but requested that I order each party to bear its own costs should I find the contract to be of no force and effect.

[11] In response to the applicants' reference to the Act, Mr Brown for the respondent, highlighted that the applicants did not request the court to declare the contract null and void because of illegality, as that would have required the applicants to admit to contravening the Act and committing an offence under oath. He submitted that the respondent accepted that the fifth respondent had the necessary permission to operate the Caravan Park. The respondent did not conclude an agreement for the lease of agricultural land, but concluded an agreement for the exclusive use of a camp site with specific terms regulating cancellation or termination of the agreement. Mr Brown submitted that the applicants should not be allowed to benefit from a finding that the agreement is in breach of the Act. In this regard, he referred me to the par delictum rule, and specifically the judgment of the Supreme Court of Appeal in Afrisure v Watson.[8]

Lastly, on the issue of legality, Mr Brown submitted that the court had insufficient evidence to make a finding as required by precedent.

[12] A finding that the agreement was concluded in contravention of the Act will affect the determination of the dispute between the parties. It is thus an appropriate starting point in considering the agreement between the parties.

[13] In order to assess whether the evidence before the court is sufficient to make a determination regarding the application of the Act to the agreement, it is necessary to consider the purpose and provisions of the Act, properly interpreted, and to consider the agreement between the parties in relation to the provisions of the Act.

[14] Section 3 contains a set of prohibitions in relation to the use of agricultural land. It provides:

'3 Prohibition of certain actions regarding agricultural land —

Subject to the provisions of section 2—

(a) agricultural land shall not be subdivided;

(b) no undivided share in agricultural land not already held by any person, shall vest in any person;

(c) no part of any undivided share in agricultural land shall vest in any person, if such part is not already held by any person;

(d) no lease in respect of a portion of agricultural land of which the period is 10 years or longer, or is the natural life of the lessee or any other person mentioned in the lease, or which is renewable from time to time at the will of the lessee, either by the continuation of the original lease or by entering into a new lease, indefinitely or for periods which together with the first period of the lease amount in all to not less than 10 years, shall be entered into;

(e) (i) no portion of agricultural land, whether surveyed or not, and whether there is any building thereon or not, shall be sold or advertised for sale, except for the purposes of a mine as defined in section 1 of the Mines and Works Act, 1956 (Act No. 27 of 1956); and

(ii) no right to such portion shall be sold or granted for a period of more than 10 years or for the natural life of any person or to the same person for periods aggregating more than 10 years, or advertised for sale or with a view to any such granting, except for the purposes of a mine as defined in section 1 of the Mines and Works Act, 1956;

(f) no area of jurisdiction, local area, development area, peri-urban area or other area referred to in paragraph (a) or (b) of the definition of "agricultural land" in section 1, shall be established on, or enlarged so as to include, any land which is agricultural land;

(g) no public notice to the effect that a scheme relating to agricultural land or any portion thereof has been prepared or submitted under the ordinance in question, shall be given,

unless the Minister has consented in writing.

[15] It has been established that legal interpretation involves more than simply considering the grammatical meaning of words used in any legal document.[9] Unterhalter AJ captured the proper approach to legal interpretation in Betterbridge (Pty) v Masilo and other NNO[10] succinctly:

'As the Supreme Court of Appeal has made clear, the interpretation of language, including statutory language, is a unitary endeavour requiring the consideration of text, context and purpose.'

[16] In Wary Holdings (Pty) Ltd v Stalwo (Pty) Ltd[11], the Constitutional Court set the purpose of the Act out as follows:

'The essential purpose of the Agricultural Land Act has been identified as a measure by which the legislature sought in the national interest to prevent the fragmentation of agricultural land into small uneconomic units. In order to achieve this purpose the legislature curtailed the common-law right of landowners to subdivide their agricultural property. It imposed the requirement of the Minister's written consent as a prerequisite for subdivision, quite evidently to permit the Minister to decline any proposed subdivision which would have the unwanted result of uneconomic fragmentation.'[12]

[17] Cloete JA in Adlem v Arlow,[13] with reference to the dictum in Wary Holdings quoted above, and with reference to Geue v Van der Lith,[14] Tuckers Land and Development Corporation (Pty) Ltd v Wasserman[15] and Tuckers Land and Development Corporation (Pty) Ltd v Truter[16] explained that the 'expanded target zone' of the Act strikes wider than the prohibition of subdivision and alienation of portions of agricultural land, and that the Act serves to prevent the use of uneconomic pieces of agricultural land which threatens the viability of such land as agricultural land.

[18] Thus, Adlem is authority for the view that the Act strikes wide in its prohibition of the fragmentation of agricultural land into uneconomic 'portions'. Not only does the Act prohibit subdivision, sale and lease of portions of agricultural land without ministerial permission, but it also prohibits the use of such portions in a manner that jeopardises the viability of the land as agricultural land without permission.

[19] In Tuckers Land and Development Corp v Wasserman,[17] McEwan J explained the relevance of ministerial consent as

‘...an essential starting point or prerequisite to any of the acts referred to in s 3 of the Act Even if the circumstances of a particular case may be such that consent is unlikely to be refused, that does not reduce the obtaining of the consent to a mere formality'.

[20] Agricultural land may accordingly only be demarcated into smaller sections or portions, made available and used as such with express prior ministerial permission on application by the owner thereof.[18] The minister may or may not grant permission, and may impose and enforce conditions and also withdraw previously determined conditions.[19] A failure to obtain ministerial permission contravenes the Act and constitutes an offence.[20]

[21] A 'portion' of land as referred to in sections 3(d) and 3(e)(i) and 3(e)(ii), the court explained in Adlem[21], is a part of a property as registered in the Deeds Registry. What may not be used, sold or leased without ministerial permission, in terms of the Act, is a segment or a piece of land that forms part of agricultural land held under a title deed.

[22] The agreement between the parties, captured in a document entitled 'New Applicants Questionare' (sic) and in the 'Yellow Sands Caravan Park General Rules and Regulations' allows the respondent to have a park home or a chalet van on camp site 47 as a semi-permanent structure. This agreement came into being after approval of the respondent's application to become a resident, and in exchange for the payment of an 'entrance' or 'park development fee' and the payment of what variously is referred to in the agreement and papers as monthly 'rental' or a 'site fee'[22]

[23] It is common cause that neither party understood their agreement to be one of sale of the camp site.[23]

[24] Their agreement, however, is also not one of lease. A lease agreement must have as its core purpose the use and enjoyment of the property by the lessee, and it must be legally permissible.[24] The property to be leased must be identified or identifiable,[25] and the rental amount must be certain or determinable.[26] It is not permitted for the parties to agree that the rental amount will be fixed by one of them alone in future, as that defies the essence of consensus about the essentialia of a lease contract.[27] The agreement requires the respondent to pay a monthly fee which is an amount determined by the fifth applicant,[28] and is not a lease agreement.

[25] The agreement concluded by the parties is sui generis, and it allowed the respondent the use and enjoyment of the camp site upon becoming the owner of the chalet van which was then stationed on the site, the acceptance of his application to become a member and the payment of the prescribed entrance fee and monthly fees determined by the fifth respondent.

[26] The uncontradicted evidence before the court is as follows:

a. the Caravan Park operates on agricultural land that is owned by the Yellow Sands Property Trust under Deed of Transfer T2421/2001;[29]

b. camp sites have been demarcated on portions of the agricultural land by the fifth respondent with the permission of the Trust which owns the land;[30]

c. for the payment of a fee to the fifth applicant, members of the public have been permitted to park chalet vans on a semi-permanent basis on allocated camp sites, or to pitch a tent or park a caravan on a camp site temporarily;[31]

d. the agreement between the respondent and the fifth applicant is one of several similar contracts that have been concluded between the fifth applicant and members of the public over the years, to allow exclusive semi-permanent use of a particular site or section of the Caravan Park for periods in excess of ten years,[32]

e. the agreement between the respondent and fifth applicant was concluded on 24 January 2004;

f. in terms of the agreement the respondent was permitted exclusive semipermanent use of camp site 47 by stationing a chalet van on the site;[33]

g. the respondent owns the chalet van that is situated on camp site 47;[34]

h. the respondent paid the amounts due in terms of the agreement with the fifth applicant, including the 'entrance fee' of R 8000-00 and monthly fees;[35]

i. the respondent used the camp site until November 2019 when he decided to stop doing so to avoid confrontation between the parties because of the current dispute;[36]

j. the respondent's right to use the camp site arose from the agreement between himself and the fifth applicant, and he does not have any other right to use the camp site;[37]

k. the Trust as owner of the land has not obtained prior ministerial permission to allow semi-permanent or temporary use of portions the agricultural land for any period of time;[38] and

l. as a result of the demarcation of camp sites and use of the land for purposes of running a caravan park, the land is not used or usable as agricultural land.[39]

[27] The only logical conclusion from the evidence summarised above is that the agreement between the parties, in the absence of prior ministerial consent to use a portion of agricultural land for other purposes, was concluded in contravention of the Act.

[28] This leaves the question as to the consequences of this finding for this agreement. In order to make this determination it is necessary to scrutinise the statutory prohibition in the light of purpose of the Act (set out above) and existing precedent.[40]

[29] The Act was enacted to prevent the fragmentation of agricultural land into uneconomic units unsuitable for agricultural purposes and 'furthermore, to prevent the use of uneconomic portions of agricultural land for any length of time'.[41] The legislative prohibition is set out in peremptory language, and it is bolstered by a criminal sanction.[42] A prohibition in such terms strongly indicates that the agreements made in contravention thereof are invalid.[43] Thus such agreements are of no force and effect. This approach in respect of the noncompliance with the peremptory provisions of section 3 of the Act has consistently been applied by the courts.[44]

[30] While I have not been able to find a single judgment in which the courts have given effect to a contract concluded in contravention of section 3 of the Act, it is indeed so that every case must be decided on its own merits. For this reason, I turn to consider whether the par delictum rule, as Mr Brown submitted, finds application in this instance.

[31] In Klowkow v Sullivan,[45] Cachalia AJA (as he then was) stated:

'In Jajbhay v Cassim, the Court, while affirming the principle underlying the par delictum rule — that courts must discourage illegal transactions nevertheless recognised that its strict enforcement may sometimes cause inequitable results between parties to an illegal contract. To prevent inequities, therefore, it thus enunciated the principle that the rule must be relaxed where it is necessary to prevent injustice or promote public policy. One such instance where the rule would be subordinated to the 'overriding consideration of public policy' was where the defendant would be unjustly enriched at the plaintiffs expense. The approach that commended itself in Jajbhay was that

"Where public policy is not foreseeably affected by a grant or a refusal of the relief claimed....a Court of law might well decide in favour of doing justice between the individuals concerned and so prevent unjust enrichment"'

[32] It seems to me what this entails is not giving effect to an illegal contract but, on the basis of unjustified enrichment, ensuring an equitable outcome for the parties to illegal contracts. In other words, a distinction must be drawn between the normal consequences of the nullity of the contract, such as the removal of the chalet van from the land, and the regulation of any unfair windfalls that may be the unforeseen consequences of the nullity of the contract.

[33] The Act was enacted to give statutory effect to public policy to prevent the physical or other fragmentation of agricultural land into uneconomic units without ministerial oversight and permission, upon threat of criminal sanction to those who conclude agreements in contravention of the Act. The illegality of the agreement as a result of the Trust's non-compliance with the Act opens the parties to criminal prosecution in accordance with section 11 of the Act.

[34] The respondent owns the chalet van currently situated on camp site 47. While his subjective intentions may have been to retire to the chalet van while situated on camp site 47,[46] public policy as given effect to by the Act does not allow the agreement between the parties to stand. But does injustice follow from the invalidity of the agreement? The respondent benefited from the agreement for a significant period of time in that he had use of the camp site in exchange for the payment of monthly fees. Furthermore, his chalet van can be removed and placed elsewhere for use. In my view, the evidence does not support a conclusion that he will suffer injustice as a result of the agreement being void for its illegality. The agreement is of no force and effect and is not enforceable on its own terms.

[35] The chalet van must be removed from camp site 47. While the applicants requested the removal to be ordered within 30 days of this judgment, I am of the view that a period of 60 days from the date of this order gives the respondent sufficient time to make the necessary arrangements to remove the van to a suitable alternative site. Should the respondent fail to remove the chalet van and additional structures within 60 days of this judgment, the applicants may engage the assistance of the sheriff of the court to remove the van and structures at the respondent's expense.

[36] Mr Kotzé requested me to order each party to bear their own costs in the event of a finding that the agreement between the parties is illegal. Such an order is appropriate in this instance.

[37] I make the following order:

a. The agreement concluded between the fifth applicant and the respondent for the use of camp site 47, a portion of agricultural land, is illegal as it contravenes section 3(e)(ii) of the Subdivision of Agricultural

Land Act 70 of 1970 and it is of no force and effect;

b. The respondent is ordered to remove the chalet van and associated structures situated on camp site 47 of the Yellow Sands Caravan Park within 60 days of the date of this order;

c. Should the respondent fail to remove the chalet van in accordance with para (b), the applicants may engage the assistance of the sheriff of the court to remove and store the chalet van and other removed structures at the cost of the respondent.

d. The applicants and the respondent are to pay their own costs.

_______

R Krüger AJ

Acting Judge of the High Court of South Africa

Appearing on behalf of the Applicant: Adv. Kotzé

Instructed by: Drake Flemmer & Orsmond Inc, c/o Netteltons, Ms Pienaar

Appearing on behalf of the Respondent: Adv. Brown

Instructed by: McCallum Attorneys, Mr McCallum

[1] Founding affidavit paras 14 and 38.

[2] Founding affidavit para 15.

[3] See Barnett v Minister of Land Affairs 2007 (6) SA 313 (SCA) paras 38-40.

[4] The Subdivision of Agricultural Land Repeal Act 64 of 1998 was assented to in September 1998 to repeal the 1970 legislation, but it is not in operation.

[5] 1974 (1) SA 614 (A) at 623G-H.

[6] See also F & I Advisors (Edms) Bpk v Eerste Nasionale Bank van Suidelike Afrika Bpk 1999(1) SA 515 (SCA) 525G-526E; ABSA Bank Ltd v Kernsig 17 (Pty) Ltd 2011 (4) SA 492 (SCA) paras 23-24.

[7] 2021 (3) SA 202 (GP) at para 12.

[8] [2009] 1 All SA 1 (SCA).

[9] Bastian Financial Services (Pty) Ltd v General Hendrik Schoeman Primary School 2008 (5) SA 1 SCA para 16-19 for authorities tracing development of the approach to interpretation; KPMG Chartered Accountants (SA) v Securifin Ltd 2009 (4) SA 399 (SCA) para 39; Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) para 18; Bothma-Batho Transport v Bothma & Seun Transpon 2014 (2) SA 494 (SCA) para 12.

[10] 2015 (2) 396 (GP) at para 8.

[11] (1) SA 337 (CC).

[12] para 13.

[13] [2013] 1 All SA 1 (SCA) para 9.

[14] [2003] ZASCA 118; 2004 (3) SA 333 (SCA) paras 5 and 15.

[15] 1984 (2) SA 157 (T) 162B-D

[16] 1984 (2) SA 150 (SWA) 153G-H and 154B-C.

[17] 1984 (2) SA 157 (T) at 161G.

[18] Section 4(1).

[19] Section 4(2)-(3).

[20] 11 Offences and penalties— Any person who— (a) in any application for the purposes of this Act makes any statement which is false in any material respect, knowing it to be false, or fails to disclose any information with intent to deceive; (b) hinders or obstructs in the performance of his functions any person acting under an authority in terms of section 7; (c) contravenes or fails to comply with a condition imposed in terms of section 4(2); (CA) contravenes the provisions of section 3(e) with regard to the entering into of a lease contemplated therein; (d) contravenes the provisions of section 3(e), shall be guilty of an offence and on conviction liable to a fine not exceeding RI 000 or to imprisonment for a period not exceeding 2 years, and in addition, in the case of an offence contemplated in paragraph (c) or (d), to a fine not exceeding R50 in respect of each day on which the offence continues.'

[20] 11 Offences and penalties—

Any person who—

(a) in any application for the purposes of this Act makes any statement which is false in any material respect, knowing it to be false, or fails to disclose any information with intent to deceive;

(b) hinders or obstructs in the performance of his functions any person acting under an authority in terms of section 7;

(c) contravenes or fails to comply with a condition imposed in terms of section 4(2);

(CA) contravenes the provisions of section 3(e) with regard to the entering into of a lease contemplated therein;

(d) contravenes the provisions of section 3(e),

shall be guilty of an offence and on conviction liable to a fine not exceeding RI 000 or to imprisonment for a period not exceeding 2 years, and in addition, in the case of an offence contemplated in paragraph (c) or (d), to a fine not exceeding R50 in respect of each day on which the offence continues.'

[21] Para 13.

[22] Founding affidavit paras 24-35; Answering affidavit paras 4-9.

[23] Founding affidavit paras 34 and 54; Answering affidavit paras 13, 37 and 46.

[24] G Glover Kerr's Law of Sale and Lease 4th ed (2014) 342.

[25] Glover 345

[26] Glover 353.

[27] Glover 358 and 86ff, and the authorities cited there. 28 Replying affidavit para 17.

[28] Replying affidavit para 17.

[29] Founding affidavit paras 12-14.

[30] Founding affidavit paras 15 and 20.

[31] Founding affidavit paras 16-19.

[32] Founding affidavit paras 38-39.

[33] Founding affidavit para 24; Answering affidavit para 4.

[34] Founding affidavit para 25; Answering affidavit paras 4 and 10.

[35] Answering affidavit para 8.

[36] Answering affidavit para 32.

[37] Answering affidavit para 14.

[38] Founding affidavit paras 56-57.

[39] See Answering affidavit para 68.2.

[40] Bradfield Christie's Law of Contract 7th ed (2015) 394.

[41] Tuckers Land and Development Corporation (Pty) Ltd v Truter 1984 (2) SA 1 50 (SWA) at 154C.

[42] See Swans v Smuts 1971 (1) SA 819 (A) at 629-630 as relied upon in Tuckers Land and Development Corporation (Pty) Ltd v Wasserman 1984 (2) SA 157 (T) at 159-160.

[43] Tuckers Land and Development Corporation (Pty) Ltd v Wasserman 160D.

[44] Parsons v M C P Bekker Trust (Edms) Bpk 1978 (3) SA 101 (T) at 105G-106B; Tuckers Land and Development Corporation (Pty) Ltd v Truter 1984 ( 2) SA 150 (SWA) at 156C-D; Tuckers Land and Development Corporation (Pty) Ltd v Wasserman 1984 (2) SA 157 (T) at 161-162; Smith v Tuckers Land And Development Corporation (Pty) Ltd; Tuckers Land And Development Corporation (Pty) Ltd v Smith 1984 (2) SA 166 (T) at 170-172; Hamilton-browning v Denis Barker Trust 2001 (4) SA 1 131 (N);

[44] Parsons v M C P Bekker Trust (Edms) Bpk 1978 (3) SA 101 (T) at 105G-106B; Tuckers Land and Development Corporation (Pty) Ltd v Truter 1984 ( 2) SA 150 (SWA) at 156C-D; Tuckers Land and Development Corporation (Pty) Ltd v Wasserman 1984 (2) SA 157 (T) at 161-162; Smith v Tuckers

Land And Development Corporation (Pty) Ltd; Tuckers Land And Development Corporation (Pty) Ltd v

Smith 1984 (2) SA 166 (T) at 170-172; Hamilton-browning v Denis Barker Trust 2001 (4) SA 1 131 (N);

[45] 2006 (1) SA 259 (SCA) at para 18.

[46] Answering affidavit para 66.