Pillay and Others (LCC1/99) [2004] ZALCC 16 (13 September 2004)

IN

THE LAND CLAIMS COURT OF SOUTH AFRICA

CASE NUMBER: LCC 1/99

Held at DURBAN on 25 August 2004

before Moloto J and Stephenson (Assessor)

Decided on: 13 September 2004

In the case of

K PILLAY & OTHERS Claimants

Concerning

A claim for restitution of land rights on a portion of the property known as Sub 9 of Lot 2369 of Westville, commonly known as “the Pavilion” (formerly Subdivision d of 2 of Lot H of Cato Manor), situated in the borough of the city of Durban, Administrative District of KwaZulu Natal, in terms of the Restitution of Land rights Act, 22 of 1994 (as amended)

JUDGMENT

MOLOTO J:

Introduction

This is an action in terms of the Restitution of Land Rights Act1 (“the Act”), for the restitution of a right in land in the form of a right in alternative state-owned land as envisaged in the definition of “equitable redress” in section 1 of the Act. The claimants are the descendants of the late Mr N G Pillay (“Mr Pillay”) who, at some time in his lifetime, was the registered owner of the property formerly known as Subdivision D of Subdivision 2 of Lot H of Cato Manor No 812 and now known as Sub 9 of Lot 2369 of Westville, commonly known as the “Pavilion”. I shall refer to it as “the property”. The property was 8 acres in extent. Mr Pillay sold the property in 1958. The claimants are descendants of Mr Pillay. They are divided into three groups each having its own legal representatives. In view of the fact that the claimants claim equitable redress, the current owner of , and other parties having an interest in the property are not participating in the proceedings. The only parties opposing the claim are the Department of Land Affairs (“DLA”) and the Commission on Restitution of Land Rights (“RLCC”). The Court was called upon to determine, in limine, whether the sale of the property in 1958 by Mr Pillay amounted to a dispossession as a result of past racially discriminatory laws or practices. Common Cause Facts

The following facts, inter alia, are common cause: Mr Pillay was the owner of the property and sold it in 1958; the claimants have locus standi to bring this action; the property was in a designated Indian area until 1960 when the area was declared a white group area; other Indian properties in Cato Manor and adjoining the property were declared white group areas in June 1958; the property was, from March 1951, in an area where inter-racial change of ownership was not permitted unless the purchaser had a permit in terms of the Group Areas Act2; the sale was subject to the suspensive condition that the purchaser, one Muller, a member of the white group, be legally entitled to obtain ownership of the property in terms of the Group Areas Act; the purchaser obtained the requisite permit to enable him to take transfer of the property; the policy with regard to permits was that a permit would not ordinarily be granted unless the area was intended to be ultimately occupied by the group of which the purchaser was a member; whites were generally given permits to purchase land in Cato Manor; Mr Pillay lived on the property with his family and conducted a dairy and motor repairs businesses from the property which had to be discontinued on the sale of the property; the property was sold for ₤1000,00, while transfer duty was charged on ₤1570,00, the municipal valuation of the property. Whether the sale of the property amounted to a dispossession:

Section 2(1) of the Act provides, amongst others, that-

“(1) A person shall be entitled to restitution of a right in land if – he or she is a person dispossessed of a right in land after 19 June 1913 as a result of past racially discriminatory laws or practices; or

. . .

he or she is the direct descendant of a person referred to in paragraph (a) who has died without lodging a claim and has no ascendant who- is a direct descendant of a person referred to in paragraph (a); and

has lodged a claim for restitution of a right in land;” The claimants, are persons contemplated in section 2(1)(c). What has to be determined is whether Mr Pillay is a person envisaged in section 2(1)(a), that is, whether he was dispossessed of the property as a result of past racially discriminatory laws or practices. It was contended on behalf of the claimant that the designation of Cato Manor for white occupation, the restrictions on transfer of ownership and the requirement that a purchaser of a different race obtain a permit, the objective of achieving racial homogeneity in residential areas and the subsequent proclamation of the area as a white group area are racially discriminatory laws and practices as contemplated in the Act. If these factors induced Mr Pillay to sell the property, so it was further contended, then he was indeed dispossessed. From the reports and recommendations of the Technical Committee of the Durban City Council tasked with investigating the implementation of racially segregated residential areas in Durban at the time, it is clear that Cato Manor, including the property, was earmarked to be declared a white group area. It is also clear that residents were encouraged to sell their properties by private treaty3 instead of waiting to have their properties either bought or expropriated by the Council. These intentions of the City Council were widely

reported in the media and aroused a lot of uncertainty and anxiety in the community. It was submitted that Mr Pillay would have been aware of these reports and was induced by them to sell the property. Mr Pillay is since deceased and cannot testify to this. However, in support of this submission an affidavit by one Jugjivan Choonilal Rana was put up. The affidavit reads, in part: - “I know that Mr Gungaloo’s property was due to be expropriated and that he sold his property only to avoid the expropriation. Mr Gungaloo was very bitter about the fact that he was forced to sell his land. I know that he received less than its true market value.” The term “dispossession” is not defined in the Act. However, this Court has held in Ndebele-Ndzundza Community v Farm Kafferskraal N.O. 181 JS 2003(5) SA 375 (LCC)4, that – “[21] The cumulative effect of these racially discriminatory laws and practices, which over a period of time eroded the rights of the claimant to the farm, directly or indirectly induced the claimant to vacate the farm. Forceful removal is not a prerequisite for dispossession.” The Supreme Court of Appeal held in Abrams v Allie N.O. and Others 2004 (4) SA 534 (SCA) that – “[11] Against this background I turn to the first question in issue which is whether Mahatey was ‘dispossessed’ of the property, within the meaning of section 2(1) of the Act. ‘

Dispossessed’ is not defined in the Act. The Shorter Oxford English Dictionary gives the following meanings of ‘dispossess’: ‘to put out of possession; to deprive of the possession of; to dislodge; oust’. The ordinary meaning of ‘dispossessed’ in the context of the section makes it clear, I think, that what is contemplated is a deprivation of possession in consequence of some outside agency. It need not be physical force. But a sale freely and voluntarily entered into followed by transfer would clearly not result in dispossession within the meaning of the section. There would have to be an element of compulsion which induced the alienation of the property. It follows that merely because the purchaser is the Community Development Board exercising its preferent right, as opposed to some other purchaser, would not be enough. What is required, therefore, is an element of compulsion of such a nature that without it there would have been no sale. (Compare Dulabh and Another v Department of Land affairs 1997 (4) SA 1108 (LCC) at 1118B – 1120E). There was no disagreement between counsel as to the test to be applied. The question debated before us was whether on the facts there had been such an element of compulsion.” It is quite clear that in casu, there was “some outside agency” or some “element of compulsion” in the form of the factors referred to above at

paragraph (5), and some of the common cause facts. Further more, the corollary to the statement that the mere fact that “the purchaser is the Community Development Board exercising its preferent right, . . ., would not be enough”, is that it does not matter who the purchaser is; if there is no external inducement to sell, there can be no dispossession, but if there is some external inducement, there will be a dispossession, even if the purchaser is a private person as opposed to a Government body. Therefore, it cannot be inferred that, because Mr Pillay sold to a private person, there was no compulsion to sell, hence dispossession. The correct inquiry is, what prompted him to sell? If it was the factors referred to above, which are racially discriminatory, then he was dispossessed within the meaning of that term in section 2(1) of the Act. Put differently, if, but for the said factors, he would not have sold, then he was induced to sell. The Constitutional Court expressed itself on the concept of dispossession in Alexkor Ltd and Another v The Richtersveld Community and Others5 as follows: “The concept of dispossession in section 25(7) of the Constitution and in section 2 of the Act is not concerned with the technical question of the transfer of ownership from one entity to another. It is a much broader concept than that, given the wide definition of a ‘right in land’

in the Act. Whether there was dispossession in this case must be determined by adopting a substantive approach, . . . ” The technical question of whether transfer was from the transferor to a Government body or private person is not the issue. The issue is the substantive question whether possession was lost as a result of outside pressure and if so, was the pressure brought about by a racially discriminatory law or practice. It was argued on behalf of the Department of Land affairs and the Commission on Restitution of Land Rights that fear of expropriation was not the only probable reason that Mr Pillay sold the property. It was argued that it was possibly the prevalence of crime and squalid conditions in the area. Support for this proposition was sought in the fact that Mr Pillay first disposed of his movable property before disposing of the property. Mr Pillay acquired the property and held it under Title Deed No 1823 of 1935. It can safely be assumed that he lived on the property since 1935. Assuming, without accepting, that he sold because of crime and squalor, the question would be, “why did he wait that long before relocating”. It could also be asked, “why did Mr Muller buy”, again assuming that Mr Muller also did not like crime and squalor. I find these factors to be too remote to be the cause of Mr Pillay’s removal. I am satisfied that he sold the property

as a result of the racially discriminatory laws or practices referred to in paragraph (5) above. Cost The claimants prayed for costs of action. On behalf of Mr Kanabaran Pillay it was argued that such costs should include the costs of two counsel. I am not persuaded that the matter justified the engagement of two counsel. Besides, the practice of this Court is not to award costs because it deals with social legislation in which most litigants are impecunious. It would not be just that they be deterred from enforcing their rights for fear of being mulcted with a cost order. In this case, however, I am of the view that the defendants had no real defence and that their opposition of the application was not justified, particularly viewed against the RLCC’s report and recommendation that the claim is valid. The following order is made : The sale by N G Pillay of the property formerly known as Subdivision D of Subdivision 2 of Lot H of Cato Manor No 812 and now known as sub 9 Lot 2369 of Westville in 1958 amounted to a dispossession within the meaning of that term in section 2(1) of the Restitution of Land Rights Act, 22 of 1994, as amended. The Department of Land Affairs and the Commission on Restitution of Land rights are ordered to pay the costs of suit. _______

JUDGE J MOLOTO I agree, _______ A STEPHENSON (ASSESSOR) For the claimants: Adv H K Naidu SC and Adv S Yacoob instructed by Vassist Sewpal Attorney, Durban.. On behalf of N Pillay : Adv G R Thatcher instructed by Sanan & Watts Inc. Durban On behalf of S Moodley, V Dorasamy (aka V Pillay), S Vandiar, M Gungaloo (a k a M Pillay) and S Gungaloo: Mr A S Dorosamy of Anand Dorasamy & Associates, Durban For the Department of Land Affairs and the Regional Land Claims Commissioner: Adv T G Madonsela instructed by the State Attorney, Durban.

This is an action in terms of the Restitution of Land Rights Act1 (“the Act”), for the restitution of a right in land in the form of a right in alternative state-owned land as envisaged in the definition of “equitable redress” in section 1 of the Act. The claimants are the descendants of the late Mr N G Pillay (“Mr Pillay”) who, at some time in his lifetime, was the registered owner of the property formerly known as Subdivision D of Subdivision 2 of Lot H of Cato Manor No 812 and now known as Sub 9 of Lot 2369 of Westville, commonly known as the “Pavilion”. I shall refer to it as “the property”. The property was 8 acres in extent. Mr Pillay sold the property in 1958.

The claimants are descendants of Mr Pillay. They are divided into three groups each having its own legal representatives. In view of the fact that the claimants claim equitable redress, the current owner of , and other parties having an interest in the property are not participating in the proceedings. The only parties opposing the claim are the Department of Land Affairs (“DLA”) and the Commission on Restitution of Land Rights (“RLCC”).

The Court was called upon to determine, in limine, whether the sale of the property in 1958 by Mr Pillay amounted to a dispossession as a result of past racially discriminatory laws or practices.

Common Cause Facts

The following facts, inter alia, are common cause:

Mr Pillay was the owner of the property and sold it in 1958;

the claimants have locus standi to bring this action;

the property was in a designated Indian area until 1960 when the area was declared a white group area;

other Indian properties in Cato Manor and adjoining the property were declared white group areas in June 1958;

the property was, from March 1951, in an area where inter-racial change of ownership was not permitted unless the purchaser had a permit in terms of the Group Areas Act2;

the sale was subject to the suspensive condition that the purchaser, one Muller, a member of the white group, be legally entitled to obtain ownership of the property in terms of the Group Areas Act;

the purchaser obtained the requisite permit to enable him to take transfer of the property;

the policy with regard to permits was that a permit would not ordinarily be granted unless the area was intended to be ultimately occupied by the group of which the purchaser was a member;

whites were generally given permits to purchase land in Cato Manor;

Mr Pillay lived on the property with his family and conducted a dairy and motor repairs businesses from the property which had to be discontinued on the sale of the property;

the property was sold for ₤1000,00, while transfer duty was charged on ₤1570,00, the municipal valuation of the property.

Whether the sale of the property amounted to a dispossession:

Section 2(1) of the Act provides, amongst others, that-

“(1) A person shall be entitled to restitution of a right in land if –

he or she is a person dispossessed of a right in land after 19 June 1913 as a result of past racially discriminatory laws or practices; or

. . .

he or she is the direct descendant of a person referred to in paragraph (a) who has died without lodging a claim and has no ascendant who-

is a direct descendant of a person referred to in paragraph (a); and

has lodged a claim for restitution of a right in land;”

The claimants, are persons contemplated in section 2(1)(c). What has to be determined is whether Mr Pillay is a person envisaged in section 2(1)(a), that is, whether he was dispossessed of the property as a result of past racially discriminatory laws or practices.

It was contended on behalf of the claimant that the designation of Cato Manor for white occupation, the restrictions on transfer of ownership and the requirement that a purchaser of a different race obtain a permit, the objective of achieving racial homogeneity in residential areas and the subsequent proclamation of the area as a white group area are racially discriminatory laws and practices as contemplated in the Act. If these factors induced Mr Pillay to sell the property, so it was further contended, then he was indeed dispossessed.

From the reports and recommendations of the Technical Committee of the Durban City Council tasked with investigating the implementation of racially segregated residential areas in Durban at the time, it is clear that Cato Manor, including the property, was earmarked to be declared a white group area. It is also clear that residents were encouraged to sell their properties by private treaty3 instead of waiting to have their properties either bought or expropriated by the Council. These intentions of the City Council were widely reported in the media and aroused a lot of uncertainty and anxiety in the community. It was submitted that Mr Pillay would have been aware of these reports and was induced by them to sell the property. Mr Pillay is since deceased and cannot testify to this. However, in support of this submission an affidavit by one Jugjivan Choonilal Rana was put up. The affidavit reads, in part: -

“I know that Mr Gungaloo’s property was due to be expropriated and that he sold his property only to avoid the expropriation. Mr Gungaloo was very bitter about the fact that he was forced to sell his land. I know that he received less than its true market value.”

The term “dispossession” is not defined in the Act. However, this Court has held in Ndebele-Ndzundza Community v Farm Kafferskraal N.O. 181 JS 2003(5) SA 375 (LCC)4, that –

“[21] The cumulative effect of these racially discriminatory laws and practices, which over a period of time eroded the rights of the claimant to the farm, directly or indirectly induced the claimant to vacate the farm. Forceful removal is not a prerequisite for dispossession.”

The Supreme Court of Appeal held in Abrams v Allie N.O. and Others 2004 (4) SA 534 (SCA) that –

“[11] Against this background I turn to the first question in issue which is whether Mahatey was ‘dispossessed’ of the property, within the meaning of section 2(1) of the Act. ‘ Dispossessed’ is not defined in the Act. The Shorter Oxford English Dictionary gives the following meanings of ‘dispossess’: ‘to put out of possession; to deprive of the possession of; to dislodge; oust’. The ordinary meaning of ‘dispossessed’ in the context of the section makes it clear, I think, that what is contemplated is a deprivation of possession in consequence of some outside agency. It need not be physical force. But a sale freely and voluntarily entered into followed by transfer would clearly not result in dispossession within the meaning of the section. There would have to be an element of compulsion which induced the alienation of the property. It follows that merely because the purchaser is the Community Development Board exercising its preferent right, as opposed to some other purchaser, would not be enough. What is required, therefore, is an element of compulsion of such a nature that without it there would have been no sale. (Compare Dulabh and Another v Department of Land affairs 1997 (4) SA 1108 (LCC) at 1118B – 1120E). There was no disagreement between counsel as to the test to be applied. The question debated before us was whether on the facts there had been such an element of compulsion.”

It is quite clear that in casu, there was “some outside agency” or some “element of compulsion” in the form of the factors referred to above at paragraph (5), and some of the common cause facts. Further more, the corollary to the statement that the mere fact that “the purchaser is the Community Development Board exercising its preferent right, . . ., would not be enough”, is that it does not matter who the purchaser is; if there is no external inducement to sell, there can be no dispossession, but if there is some external inducement, there will be a dispossession, even if the purchaser is a private person as opposed to a Government body. Therefore, it cannot be inferred that, because Mr Pillay sold to a private person, there was no compulsion to sell, hence dispossession. The correct inquiry is, what prompted him to sell? If it was the factors referred to above, which are racially discriminatory, then he was dispossessed within the meaning of that term in section 2(1) of the Act. Put differently, if, but for the said factors, he would not have sold, then he was induced to sell.

The Constitutional Court expressed itself on the concept of dispossession in Alexkor Ltd and Another v The Richtersveld Community and Others5 as follows:

“The concept of dispossession in section 25(7) of the Constitution and in section 2 of the Act is not concerned with the technical question of the transfer of ownership from one entity to another. It is a much broader concept than that, given the wide definition of a ‘right in land’ in the Act. Whether there was dispossession in this case must be determined by adopting a substantive approach, . . . ”

The technical question of whether transfer was from the transferor to a Government body or private person is not the issue. The issue is the substantive question whether possession was lost as a result of outside pressure and if so, was the pressure brought about by a racially discriminatory law or practice.

It was argued on behalf of the Department of Land affairs and the Commission on Restitution of Land Rights that fear of expropriation was not the only probable reason that Mr Pillay sold the property. It was argued that it was possibly the prevalence of crime and squalid conditions in the area. Support for this proposition was sought in the fact that Mr Pillay first disposed of his movable property before disposing of the property.

Mr Pillay acquired the property and held it under Title Deed No 1823 of 1935. It can safely be assumed that he lived on the property since 1935. Assuming, without accepting, that he sold because of crime and squalor, the question would be, “why did he wait that long before relocating”. It could also be asked, “why did Mr Muller buy”, again assuming that Mr Muller also did not like crime and squalor. I find these factors to be too remote to be the cause of Mr Pillay’s removal.

I am satisfied that he sold the property as a result of the racially discriminatory laws or practices referred to in paragraph (5) above.

Cost

The claimants prayed for costs of action. On behalf of Mr Kanabaran Pillay it was argued that such costs should include the costs of two counsel. I am not persuaded that the matter justified the engagement of two counsel. Besides, the practice of this Court is not to award costs because it deals with social legislation in which most litigants are impecunious. It would not be just that they be deterred from enforcing their rights for fear of being mulcted with a cost order. In this case, however, I am of the view that the defendants had no real defence and that their opposition of the application was not justified, particularly viewed against the RLCC’s report and recommendation that the claim is valid. The following order is made :

The sale by N G Pillay of the property formerly known as Subdivision D of Subdivision 2 of Lot H of Cato Manor No 812 and now known as sub 9 Lot 2369 of Westville in 1958 amounted to a dispossession within the meaning of that term in section 2(1) of the Restitution of Land Rights Act, 22 of 1994, as amended.

The Department of Land Affairs and the Commission on Restitution of Land rights are ordered to pay the costs of suit.

_______

JUDGE J MOLOTO

I agree,

_______

A STEPHENSON (ASSESSOR)

For the claimants:

Adv H K Naidu SC and Adv S Yacoob instructed by Vassist Sewpal Attorney, Durban..

On behalf of N Pillay :

Adv G R Thatcher instructed by Sanan & Watts Inc. Durban

On behalf of S Moodley, V Dorasamy (aka V Pillay), S Vandiar, M Gungaloo (a k a M Pillay) and S Gungaloo:

Mr A S Dorosamy of Anand Dorasamy & Associates, Durban

For the Department of Land Affairs and the Regional Land Claims Commissioner:

Adv T G Madonsela instructed by the State Attorney, Durban.

1Act 22 of 1994, as amended.

2 Act 77 of 1957, as amended.

3 See p 245 of the papers.

4 This case is incorrectly cited in the Law Reports. Correct citation is Ndebele-Ndzundza Community : Concerning the farm Kafferskraal, No 181 JS.

5 Unreported judgment of the Constitutional Court, CCT19/03, 14 October 2003.