THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Case no: 28/2010
In the matter between:

MVULAZANA GEORGINA KUZWAYO

Appellant

and

THE REPRESENTATIVE OF THE EXECUTOR
IN THE ESTATE OF THE LATE
MBONGENI JONAS MASILELA

Respondent

Neutral citation:
Kuzwayo v Estate late Masilela (28/10) [2010] ZASCA
167 (1 December 2010)

Coram:
LEWIS, VAN HEERDEN, MAYA and SHONGWE JJA

and K PILLAY AJA

Heard:
16 NOVEMBER 2010

Delivered
1 DECEMBER 2010

Summary:
Holder of a site permit and occupier of site entitled to
apply for order that Registrar of Deeds cancel deed of transfer to wrong
person; also entitled to ask that Director-General of Housing in province hold
an inquiry in terms of s 2 of the Conversion of Certain Rights into Leasehold
or Ownership Act 81 of 1988 in order to determine to whom ownership should
be granted.

______________________________________________________________
ORDER

On appeal from the South Gauteng High Court (Masipa J sitting as court of
first instance):
1 The appeal is dismissed with costs, including those of two counsel.
2 Paragraphs 1 and 2 of the order of the high court are replaced with the
following:
‘(1) The Registrar of Deeds (Johannesburg) is ordered to cancel the title deed
number T020450/2004 in respect of Erf 2000 Vosloorus, Gauteng Province,
and to cancel all the rights accorded to the first respondent by virtue of the
deed.
(2) The Director-General for the Department of Housing, Gauteng Province, is
directed to hold an inquiry in respect of Erf 2000 Vosloorus, Gauteng
Province, in terms of s 2 of the Conversion of Certain Rights into Leasehold or
Ownership Act 81 of 1988, and to declare that the holder of the site permit in
respect of the Erf is the owner thereof.’
______________________________________________________________
JUDGMENT
LEWIS JA (VAN HEERDEN, MAYA AND SHONGWE JJA AND K PILLAY
AJA concurring)
[1] This appeal reveals a sad tale of bureaucratic bungling and an
opportunistic attempt to take advantage of it. The bungling lay in converting a
site permit into ownership in terms of the Conversion of Certain Rights into
Leasehold or Ownership Act 81 of 1988 (the Conversion Act), and transferring
the site to the wrong person. The appellant, Ms M G Kuzwayo (now Peacock),
who was the first respondent in the high court, was the beneficiary of the
clerical error, as I shall show. The respondent in the appeal is the Estate of
the late Mr M J Masilela, which should have been the beneficiary of the
transfer. The representative of the executor of the deceased Estate of
Masilela, Sentinel International Trust Company (Pty) Ltd, in turn represented
by Ms I Van der Merwe, brought an application to cancel the deed of transfer
pursuant to s 6 of the Deeds Registries Act 47 of 1937.

[2] Masipa J granted an order that the Registrar of Deeds, the second
respondent in the court below, cancel the title deed incorrectly issued. She
also ordered the Gauteng Provincial Government (represented in the high
court proceedings by the third respondent, the Director-General for the
Department of Housing, Gauteng and the fourth respondent, the MEC for the
Department of Housing, Gauteng) to transfer the property to the deceased
Estate. It is against these orders that Kuzwayo appeals with the leave of the
high court. The other respondents in the court below have played no role in
this appeal.

[3] The background to the application to the high court is briefly this. On 4
January 1985 a site permit in respect of Erf 2000, Vosloorus, Gauteng, was
granted to Kuzwayo on her application. She had indicated on the application
form that she intended to build a house on the site as soon as her application
was approved. But on 21 January 1987 she was sent a notice asking her to
report to Mr G T Prinsloo of the Vosloorus Town Council because she had not
paid any site rent. She signed the notice, stating that she was unable to pay
the amount required and that she thereby handed the site back to the town
council. (In her answering affidavit Kuzwayo denied that the signature on the
form was hers, a matter to which I shall return.)

[4] On 23 January 1987 Masilela applied for a site permit and was
allocated the site that Kuzwayo had handed back. The application form
indicated that he paid arrears of R221.60 (what Kuzwayo had owed); an
advance of R166.20 and R3 000 for ‘infrastructure’. Masilela subsequently
also paid R380 for water and sewerage connections to the site.

[5] It is not disputed that Masilela built a house on the site, the building
plans having been approved by the town council, and that he and his family
lived in it for 13 years before his death on 31 December 2000. His family
continued to live in the house after his death, and all municipal accounts were
paid by the Masilela family. By the time the high court heard the application

the Masilela family had lived on the property for some 22 years and two of his
children and their children still occupied it.

[6] The Conversion of Certain Rights into Leasehold or Ownership Act 81
of 1988 was amended in 1993 so as to provide, inter alia, for the conversion
of site permits (or other rights in land) into ownership where the affected site
was situate in a formalized township – which Vosloorus was. Section 4 of the
Act provides for the Director-General to declare a person who has met certain
requirements to have been granted ownership of the property concerned, and
s 5 provides for a transfer of property into the name of such a person once a
declaration has been made.

[7] Before a declaration can be made, however, the Director-General is
required, under s 2 of the Act, to conduct an inquiry into the affected site and
as to the identity of the occupier of the relevant site. The section sets out in
detail the inquiries to be made by the Director-General and the steps to be
followed. Essentially what has to be established is the identity of the person
who is entitled to a site and the rights that should be conferred on him or her.
The section requires the Director-General to consider any claims to a site, or
objections to claims, and then to make a determination as to whom to declare
as the owner of the site in question. Such determination, and the fact that it is
subject to appeal in terms of s 3 of the Act, must be published in the
prescribed manner. Section 3 sets out the procedure for appeal by a person
aggrieved at the determination.

[8] Once the period in which an appeal may be prosecuted has elapsed
the Director-General is required, as I have said, to declare that ownership of
the site shall vest in the person in favour of whom the determination has been
made, and transfer follows. It is of the essence of the inquiry that the Director-
General establishes who, according to the records of the local authority, is in
occupation of a site.

[9] There is no evidence that any inquiry was conducted by the Director-
General in respect of the site. But on 3 March 2004, some three years after

Masilela had died, Ms F Visagie, a delegate of the Director-General, issued a
declaration that Kuzwayo had been granted the right of ownership in respect
of the site. On the same day, Visagie certified that the site had been bought
by Kuzwayo. And on 7 April the site was transferred to her. The obvious
inference to be drawn from this is that Visagie looked only at the first
allocation of the site to Kuzwayo, and failed to notice that she had handed the
site back and that it had subsequently been allocated to Masilela who had
paid for it. A serious clerical error was made. And it is quite possible that no
inquiry was held and that there was no decision that would have allowed for
any declaration or transfer at all. Regrettably the Gauteng provincial
government has played no part in the proceedings and the court has not had
the benefit of evidence in this regard.

[10] The Masilela family, the representative of the executor of the deceased
Estate and Kuzwayo were all ignorant of any process in respect of the site. It
was only when municipal accounts for services, addressed to Kuzwayo at the
address of the site occupied by the Masilela family, started being received
sometime in 2005, that the family realized something was amiss. Previous
municipal accounts in Masilel’s name had been sent to him at that address.

[11] The Masilela family informed Sentinel, the representative of the
executor of the Estate, of this development. However, when Sentinel
attempted to have the error rectified, it was advised that the Registrar of
Deeds could not change the deeds register without an order of court. Hence
the application under s 6 of the Deeds Registries Act for an order directing
him to do so.

[12] The application was opposed, Kuzwayo taking numerous points in
limine and raising various defences, some of which I shall deal with, albeit
briefly, and others of which have been abandoned. An extraordinary feature of
her opposition is that she failed altogether to explain what right she had to a
permit in the first place. Despite the fact that Masilela or his family had
occupied the property, in terms of a valid site permit, for nearly 18 years
before the site was transferred to Kuzwayo, and that Masilela had built a

house on it, and paid for municipal services in respect of it, Kuzwayo asserted
that she was entitled to the site and that the deeds register should not be
rectified.

[13] Kuzwayo, in her answering affidavit, apart from dealing with the points
in limine, alleged that she had been allocated a site but that she had not paid
for it on the advice of an official who suggested she pay for her children’s
education rather than the site. She denied that she had signed the document
relinquishing the site, asserting that the signature was not hers. She had, she
said, actively pursued and waited for the property over the years. She did not
substantiate this allegation in any way.

[14] The denial of the signature is not to be given any credence. It is clear
from her conduct over many years that Kuzwayo laid no claim to the property.
It was developed and occupied by Masilela and his family over a long period
and Kuzwayo made no queries about it, let alone claimed any right to it, in that
time. The only evidence that she adduced to show any connection between
herself and the property was a municipal account addressed to her on 13
August 2008 – after the site had been transferred to her. The account was
attached as an annexure to a supplementary answering affidavit.

[15] Kuzwayo’s claim to a right in the site was countered by Prinsloo, who
deposed to an affidavit in support of the application. Prinsloo was the housing
manager in the Vosloorus Town Council when Kuzwayo applied for a site
permit. He said that the site was undeveloped when it was allocated to her.
She was required to pay site rent and to build on it. But she defaulted on her
payments. Several notices were sent to her calling on her to pay the amounts
owed. Copies were attached to Prinsloo’s affidavit.

[16] Prinsloo interviewed Kuzwayo about her failure to pay rent. She said
that she was unable to pay, and agreed to return the site to the council. She
signed the document acknowledging that she was in arrears and was
returning the site in his presence.

[17] Prinsloo was also responsible for the allocation of the site subsequently
to Masilela. He confirmed that Masilela had paid all amounts due to the
council. And he had submitted building plans for approval by the council and
then developed the site accordingly. Prinsloo’s view was that Masilela’s estate
was entitled to be declared the owner of the property and that transfer should
have been effected to it.

[18] Needless to say, Kuzwayo questioned Prinsloo’s authority. She also
denied that she had handed back the site. She added, in a further
supplementary affidavit, that she was informed in 2003 that there had been a
newspaper advertisement that she was to be granted the property. She
thought that the site in question was undeveloped until transfer to her in 2004
when she discovered the truth.  She did not, however, state what she had
done to take possession of the site or exercise any of her rights since then.

[19] It may seem obvious at this stage that the transfer of the site to
Kuzwayo was a mistake. But, as I have said, she raised several issues in
limine and legal defences to which I now turn.

Locus standi
[20] The applicant in the court below was ‘the Representative of the
Executor in the Estate Late Mbongeni Jonas Masilela’. The founding affidavit
was deposed to by Ms van der Merwe, who said that she was duly authorized
to depose to it as the representative of Sentinel International Trust Company
(Pty) Ltd, the company that was administering the Estate of Masilela. Sentinel,
she said, was authorized to administer the Estate by virtue of a power of
attorney granted by the executor on 18 July 2002.

[21] She attached various documents to prove her authority to act. These
included letters of executorship issued by the Master on 26 October 2001,
which had appointed Mr F A Pienaar, in his capacity as a nominee of Old
Mutual Trust, as executor and a Master’s certificate replacing Mr Pienaar with
Mrs A M Pienaar, issued on 12 July 2002. Mrs Pienaar in turn had given a
power of attorney to administer the Estate to Sentinel on 18 July 2002. Van

der Merwe did not, however, attach any document demonstrating her authority
to act for Sentinel. This defect was cured when Van der Merwe deposed to
the replying affidavit and attached a resolution of Sentinel authorizing her to
act on its behalf.

[22] Kuzwayo argued that it was the executor, Mrs Pienaar, who ought to
have represented the Estate, and that Sentinel lacked locus standi. The power
of attorney in favour of Sentinel stated that Sentinel ‘or its duly authorised
representative’ was authorized to do all things necessary to manage and
administer the Estate. The high court found that Sentinel did have locus standi
and dismissed the point in limine.

[23] Nonetheless Kuzwayo persisted with the point on appeal. The
argument was that only the executor had locus standi to bring an application.
Counsel for Kuzwayo could not explain why the executor was not permitted to
authorize Sentinel (which in turn authorized Van der Merwe) to litigate on
behalf of the Estate. It is true that the papers lack clarity: one has to look to
the attachments of Van der Merwe to the founding and replying affidavits to
establish the chain of authority. And while the applicant was cited as ‘The
Representative of the Executor in the Estate of the Late Mbongeni Jonas
Masilela’, Van der Merwe averred that she was ‘duly authorized’ to depose to
the affidavit as the representative not of the Estate but of Sentinel. However,
the authority was established on the papers albeit in a clumsy fashion, and the
point should not have been persisted with on appeal. Unfortunately this
persistence resulted in an application by the executor to join in the appeal. I
shall deal with that application in due course. I consider that Sentinel did have
the authority to bring the application in the high court.

Ownership
[24] Kuzwayo argued that the high court should not have found that the
Estate was the owner of the site. But it did not make any such finding. The
court simply found that the site permit vested in the Estate and that the
transfer to Kuzwayo pursuant to the provisions of the Conversion Act had to
be cancelled. It ordered that the site should revert to the Gauteng Provincial

Government and that the latter should transfer it to the Estate. Whether this
order was permissible is a matter to which I shall revert.

The Estate’s cause of action
[25] The application to the high court was said to be brought in terms of s 6
of the Deeds Registries Act, and the high court made its finding on that basis.
Section 6 is not an empowering provision, however. It provides only that the
Registrar of Deeds may not cancel any deed of transfer except upon an order
of court. Kuzwayo argued that an application could not be brought under s 6:
there must be some other cause of action.

[26] Sections 2, 4 and 5 of the Conversion Act do not directly confer a right
of ownership on a site permit holder and occupier. But s 2 does require the
Director-General to identify the person who is in occupation of the site (in
accordance with the records of the local authority) and after inquiry, declare
that that person has the right to acquire ownership. In my view, the Estate, as
holder of the site permit, was entitled to ask the court for an order cancelling
the transfer to Kuzwayo who was neither a permit holder nor an occupier of
the site. The court has the inherent power, implicit in s 6 of the Deeds Registry
Act, to order cancellation of rights registered in the Deeds Register: Ex parte
Raulstone NO 1959 (4) SA 606 (N) and Indurjith v Naidoo 1973 (1) SA 104
(D).

[27] The Estate was also entitled to ask that the Director-General conduct
the inquiry required in terms of s 2 of the Conversion Act. The two Masilela
children who continued to occupy the site after Masilela’s death could, in my
view, also have brought an application in the same terms, provided that they
were heirs to the Estate.

Administrative Action: Review
[28] Kuzwayo argued that the proper course of action for Van der Merwe to
have followed would have been to review the ‘decision’ in terms of the
Promotion of Administrative Justice Act 3 of 2000 (PAJA). But her counsel
was hard put to explain what decision it was that could be reviewed. He

submitted that it was the ‘decision’ of the official who signed the declaration
and the deed of transfer. That cannot be so. The only administrative decision
that could and should have been made was that of the Director-General or his
delegate, after the inquiry mandated by s 2 of the Conversion Act. And that
was the only decision that could be subject to review. The act of signing the
declaration and the deed of transfer were but clerical acts that would have
followed on a decision. Not every act of an official amounts to administrative
action that is reviewable under PAJA or otherwise.

[29] Unfortunately neither party was aware of any inquiry that may have
been conducted in terms of s 2 nor of any administrative decision made
pursuant to the inquiry. It would undoubtedly have been best for the Estate,
had it been made aware of a decision of the Director-General, and of the
declaration and transfer that would follow, to take the Director-General on
review. But the Masilela family were not informed of any decision, and
apparently Van der Merwe was also not advised of an inquiry or any of the
consequences. The Director-General was cited as a respondent in the high
court but did not participate in the proceedings. This court cannot assume that
an inquiry was held and a decision was made. Thus Kuzwayo’s argument that
Van der Merwe should have applied for a review of a decision is
misconceived, as are all the attendant arguments in respect of such a review.

The application to intervene
[30] Shortly before the hearing of the appeal the Board of Executors Trust
Ltd, as the executor of the Estate (in place of Mrs Pienaar) sought leave to
intervene as the executor. (In fact the application should have been brought in
the name of Old Mutual Trust, and leave was sought to amend the founding
affidavit – something that is not possible. But since the application must be
refused nothing turns on this.) Counsel for the applicant argued that the
executor should be joined if Sentinel did not properly represent the Estate.
The application was sought on the basis that Kuzwayo persisted with the
argument that Sentinel had no locus standi.

[31] Counsel advised that the executor was of the view that Sentinel had
been properly before the high court, but had brought its application ex
abundante cautela.  I have already held that Sentinel had locus standi as the
representative of the executor. Accordingly the executor itself cannot be
joined. The application is refused with costs.

The proper order to be made
[32] The Conversion Act requires an inquiry to be conducted by the
Director-General pursuant to s 2 before a declaration is made that a site
permit be converted to full ownership, and before transfer is effected to the
occupier. The high court erred in directing transfer by the Gauteng Provincial
Government to the Estate in the absence of such an inquiry. In my view,
although the Estate is probably entitled to acquire ownership, an inquiry
should be held. The high court was correct, however, in ordering the
cancellation of transfer to Kuzwayo. She has no right to the property and her
conduct in opposing the application and pursuing this appeal is remarkably
opportunistic.

[33] 1 The appeal is dismissed with costs, including those of two counsel.
2 Paragraphs 1 and 2 of the order of the high court are replaced with
the following:
‘(1) The Registrar of Deeds (Johannesburg) is ordered to cancel the
title deed number T020450/2004 in respect of Erf 2000 Vosloorus and
to cancel all the rights accorded to the first respondent by virtue of the
deed.
(2) The Director-General for the Department of Housing, Gauteng
Province, is directed to hold an inquiry in respect of Erf 2000 Vosloorus
in terms of s 2 of the Conversion of Certain Rights into Leasehold or
Ownership Act 81 of 1988, and to declare that the holder of the site
permit in respect of the Erf is the owner thereof.’

_____________
C H Lewis
Judge of Appeal

APPEARANCES

APPELLANTS:

A M van Wyk

Instructed by Garratt Mbuyisa Neale Inc

Johannesburg

Symintgton & de Kok

Bloemfontein

RESPONDENTS:

M Sikhakhane (with him K Mnyandu)

Instructed by Gcwensa Attorneys

Johannesburg

Webbers Attorneys

Bloemfontein

INTERVENING APPLICANT:
G Malindi SC

Instructed by Webbers Attorneys

Bloemfontein
SUPREME COURT OF APPEAL OF SOUTH AFRICA

PRESS RELEASE
1 December 2010
STATUS: Immediate

Kuzwayo v Esate Late Masilela (27/10) [2010] ZASCA 167 (1 December
2010)

Please note that the media summary is intended for the benefit of the media
and does not form part of the judgment of the Supreme Court of Appeal

The Supreme Court of Appeal today dismissed an appeal against an order of
the South Gauteng High Court that the Registrar of Deeds, Johannesburg
cancel a deed of transfer to Mrs Kuzwayo in respect of a site in Vosloorus,
Gauteng.

The Estate of the late Mr Masilela applied for an order that the deed be
cancelled and that ownership of the site be transferred to it. The Conversion
of Certain Rights into Leasehold or Ownership Act 81 of 1988 provides that a
site permit in a formal township may be converted into ownership after an
investigation has been carried out by the Director-General, Housing: after
ascertaining who the site-holder and occupier is, he must declare that that
person is the owner, and transfer will be effected to the latter.

In this case a delegate of the Director-General had declared that Kuzwayo
was the owner and had transferred the property to her.  But this was an error.
Although Kuzwayo had applied for a site some 20 years before the transfer
was effected, she had not paid for it and had relinquished it in 1987. Mr
Masilela had been allocated the site in 1987, and had built a house on it. He
had paid for the site, had paid for municipal services and had lived in the
house with his family. After his death his family had continued to occupy the
property and pay for all the services.

When they discovered that the property had been transferred to Kuzwayo the
Estate brought an application for the cancellation of the transfer and for
transfer to the estate. Kuzwayo, in a remarkably opportunistic fashion,
opposed the application, alleging in the face of all the evidence of the Estate’s
right in the property, that she had always intended to assert her rights in it.
She proved no right but raised numerous legal defences. However, the high
court ordered the Registrar of Deeds to cancel the transfer to Kuzwayo and
also ordered the Gauteng Provincial Government to transfer the property to
the estate.

On appeal the SCA held that the estate was entitled to the property. But as no
inquiry appeared to have been conducted in terms of the Conversion Act, it
ordered that one be conducted and that the Director-General declare that the
holder of the site permit be declared the owner of it.

-------------------