THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case no: 199/2016
In the matter between:
SABLE HILLS WATERFRONT ESTATE CC
APPELLANT
and
SABLE HILLS WATERFRONT ESTATE HOME
OWNERS’ ASSOCIATION NPC

RESPONDENT

Neutral citation: Sable Hills Waterfront Estate v Sable Hills Waterfront
Estate Home Owners’ Association (199/2016) 2016
ZASCA 170 (24 November 2016)
Coram:
WALLIS and PETSE JJA, DLODLO, MAKGOKA and
SCHIPPERS AJJA
Heard:
14 November 2016
Delivered: 24 November 2016
Summary: Property development – obligation of members of home
owners’ association to pay levies – clause in articles of association
providing that levies be apportioned equally between owners of stands
and units in estate – whether a reference to stands and units as reflected in
the survey diagram attached to the township plan or to stands and units as
registered in the Deeds Registry – question of construction of articles of
association.

ORDER

On appeal from: Gauteng Division, Pretoria of High Court (Fabricius J
at first instance):
The appeal is dismissed with costs.

JUDGMENT

Wallis JA (Petse JA and Dlodlo, Makgoka and Schippers AJJA
concurring)

[1] This is a dispute between the developer of a residential estate
called Sable Hills (the estate) and the estate’s home owners’ association
regarding the developer’s liability to pay levies imposed on members of
the home owners’ association by its board of directors. The respondent,
Sable Hills Waterfront Estate Home Owners’ Association NPC (the
Association) sued the developer, Sable Hills Waterfront Estate CC (Sable
Hills), in the Gauteng Division, Pretoria of the High Court to recover
levies for the period from 1 March to 3 October 2012. The parties agreed
that the outcome of this litigation would serve to determine Sable Hills’
liability to pay levies for the period after 3 October 2012. Fabricius J held
that Sable Hills was liable to pay the levies claimed by the Association.
This appeal by Sable Hills is with his leave.

[2] The facts are pleasantly uncomplicated and were set out in a
special case. Sable Hills acquired the estate on 2 March 2006 in terms of

Certificate of Consolidated Title T022523/06, issued in terms of s 40 of
the Deeds Registries Act 47 of 1937 (the Act). At that stage it had already
been laid out as a township in terms of a General Plan SG No 6889/2005
and on 15 March 2006 the local authority declared it an approved
township. In accordance with the provisions of s 46(1) of the Act the
Registrar of Deeds opened a separate register for the estate reflecting
each of the erven shown on the general plan. One sectional title unit had
been transferred to a third party, so it must also be the case that a
sectional title register had been opened in terms of s 12(1)(b) of the
Sectional Titles Act 95 of 1986 in respect of at least one erf. Between 1
March 2012 and 3 October 2012 certain erven and a sectional title unit in
the estate were transferred by Sable Hills to third parties. Sable Hills
remained the owner of the remainder of what had become on
consolidation Portion 133 of the farm SABLE HILLS no 741,
Registration Division J. R., Province of Gauteng (the remainder).

[3] In 2012 the Board of Directors fixed the levies for the estate in an
amount of R1 750 per stand. Sable Hills adopted the approach that it was
not obliged to pay any levies at all, but, if it was, that the remainder of the
consolidated property constituted a single stand for the purpose of
charging levies. The Association took the view that Sable Hills was
obliged to pay a separate levy in respect of each erf or stand reflected on
the general plan and forming part of the remainder. These divergent
contentions were debated by way of a special case before Fabricius J. In
this court Sable Hills accepts that it is liable to pay levies on a single erf
constituted by the remainder, but disputes its liability to pay a separate
levy in respect of each erf or stand shown on the general plan and falling
within the remainder.

[4] The liability of members of the Association to pay levies arises
under its articles of association. The following clauses are of particular
relevance to this issue. Clause 5.1 provides that the income of the
Association ‘consists mainly of the compulsory monthly levies payable
by members’. The members of the Association are identified in clause
4.1, which provides that the members consist of the developer – a term
defined in clause 1 to mean Sable Hills – and all other persons, including
legal entities, who are registered owners of residential property in the
estate.  Clause 5.2.1 provides that:
‘The Directors will from time to time determine the levies payable as provided for in
5.1. All levy payments will be apportioned equally between the owners of Property (ie
between stands and units in the estate) …’
The expression ‘Property’ is defined in clause 1.6 as meaning ‘erven in
the Township and units in the schemes’. Finally, Clause 5.3 provides that:
‘The Directors may enter into an agreement to exempt or partially exempt the
Developer from the payment of levies in respect of any property owned by him and
not yet developed/alienated by him.’

[5] Sable Hills contends that it owns a single stand in the estate, being
the remainder after transfer to individual owners of individual erven. It
argues that the remainder is the only erf recognised as a separate property
for the purposes of the Act and therefore the reference in clause 5.2.1 to a
stand must be understood as referring to the single erf that it owns. While
that erf is shown on the general plan as having been sub-divided into
smaller erven for the purposes of the proposed development, these
smaller erven do not as yet have any separate existence1 and until they do
they should not be taken into account for the purpose of assessing their
liability to pay levies. The Association, for its part, says that the clauses

1 Tshwane City v Uniqon Wonings (Pty) Ltd [2015] ZASCA 162; 2016 (2) SA 247 (SCA) para 10.

in the articles do not refer to pieces of land as reflected separately in the
Deeds Registry, but to the pieces of land shown on the general plan of the
township, which for the purposes of determining the obligation to pay
levies are to be treated separately.

[6] It is correct that it is only when a sub-division of the remainder is
transferred to someone other than the developer that the sub-division has
an existence separate from the remainder, but that does not in my view
dictate the answer to the problem of identifying the stands and units
referred to in clause 5.2.1. The answer lies in the proper interpretation of
that clause in accordance with the established rules for the construction of
documents.2 I start, as one must, with the language of the relevant
provisions.

[7] The articles do not contain definitions of the expressions ‘erven’,
‘stands’ or units’ appearing in the provisions quoted in [4]. When the
township was proclaimed the proclamation occurred in terms of the
General Plan approved by the Surveyor-General and showing the division
of the township into erven.  When opening the township register the
Registrar of Deeds did so in accordance with that general plan, as
required by s 46(1) of the Act, which imposes the duty to open a separate
register ‘if land has been sub-divided into lots or erven shown on a
general plan’. The stark difference between the parties is whether the
reference to ‘stands’ in article 5.2.1 is a reference to erven enjoying
separate title in the Deeds Registry, or erven as reflected on the general
plan and in the township register. As regards ‘units’ the articles

2 Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; 2012 (4) SA 593
(SCA) para 18.

contemplate that sectional title schemes known as Sable Hills 3 and Sable
Hills 4 would be established as part of the overall development. Logically
therefore the references to ‘units’ refers to units in these sectional title
schemes.

[8] Linguistically clause 5.2.1 is open to both possible constructions.
One looks therefore for indications in the articles as a whole that point in
favour of one or the other. One that strikes one immediately is that in
clause 5.2.1 the word ‘stands’ is used and not ‘erven’. The word appears
to have come into South African legal parlance via the Gold Laws, where
it had particular relevance to rights to prospect for and mine gold, but it
has a broad popular meaning3 and is capable of referring to any defined
piece of land, whether or not having a separate legal existence in the
Deeds Registry. In the context of township development one frequently
sees advertisements for the sale of stands in a township and, given the
manner in which township land is registered in the Deeds Registry, that is
usually a reference to the properties reflected on the general plan of the
township, not to existing separate erven.

[9] It is true that in many contexts the words ‘erf’ and ‘stand’ may be
virtually synonymous,4 but whether they are to be treated as such depends
on the context. Here the word ‘stands’ is used to explain or clarify the
meaning of ‘erven’ where it appears in the definition of ‘Property’ in
clause 1.6 of the articles. That follows from the fact that, after saying that
levies are to be apportioned between owners of Property, the clause goes

3 Greathead v Transvaal Government and Randfontein Estate and Gold Mining Co. Ltd 1910 TS 276 at
301; Levy v Phillips 1915 AD 139 at 143.
4 Hull v Rand Township’s Registrar 1913 WLD 221 at 227 and see the definition of ‘erf’ in s 102 of the
Act as including ‘an erf, lot, plot or stand’.

on in parentheses to say ‘ie between stands and units in the estate’. If the
strict meaning of erven as legally separate properties were intended, there
would have been no need for further definition. Accordingly, I think that
the use of ‘stands’ is directed at indicating a broader meaning, that erven
are those shown on the general plan notwithstanding that they do not yet
have a separate existence.

[10] A second pointer in the language of clause 5.2.1 is to be found in
the words ‘in the estate’ in that explanatory phrase. Clearly that
comprehends the whole of the estate. The units in the estate must be the
units identified in the sectional title register or registers existing in respect
of identifiable pieces of land in the estate. That is so whether they are
owned by the developer or by a third party. So, if the developer is also the
developer of the sectional title schemes, in which at least one unit has
been sold, it will be the owner of the other units in that scheme and liable
to pay levies in respect of them on the plain language of clause 5.2.1.  If
the reference to units refers to what is reflected in the sectional title
register or registers, there seems to be no reason why the reference to
stands should not be a reference to the stands in the township register.
After all the development of the township provides the context for the
existence of the articles and therefore their interpretation.

[11] These pointers in favour of the Association’s construction of clause
5.2.1 are strongly reinforced by reference to clause 5.3 of the articles.
This provides for the directors to conclude an agreement with the
developer for the total or partial exemption of the latter from the
obligation to pay ‘levies in respect of any property owned by him and not
yet developed/alienated by him’. If Sable Hills’ contentions were correct
it would only be liable to pay one levy in respect of one property owned

by it, namely, the remainder. But the use of the plural ‘levies’ and the
reference to ‘any property’ suggests that the developer, in its capacity as
such, will be the owner of more than one property and incur liability to
pay more than one levy. That will only be the case if the stands shown on
the general plan are the basis for apportioning the levies among owners.

[12] The grounds upon which such an agreement may be concluded are
also instructive. It is only permissible in relation to any property that has
not yet been developed or alienated by the developer. But in the course of
developing a township the developer may develop or build upon some
stands as shown on the general plan and leave others to lie fallow until a
later stage of the development.  If the developer is only liable for one levy
in relation to the remainder, and not individual levies in respect of the
stands on the general plan, any development undertaken on any part of
the remainder would exclude the application of clause 5.3. Indeed it
would become largely academic unless the developer abandoned the
township.

[13] The clause is, however, easy to apply if one is dealing with the
apportionment of levies to owners on the basis that they own the land on
which individual stands are laid out in the general plan and each stand is
separate for the purpose of charging the levy. A developer who was intent
on developing say 30 out of 300 stands could legitimately say that the
expenses falling to be discharged from the levies paid by owners were
largely incurred in respect of those stands and the other stands already in
separate ownership, and that it would be fair therefore to exclude the
payment of levies in respect of the 270 stands not yet developed.

[14] Turning from linguistic analysis to the purpose of this provision,
levies are to be raised by the Association to discharge the expenses
incurred by it in respect of the management of the township. The levies
are to be applied to the furtherance of the main objective of the
Association. According to the Memorandum of Association, that is the
maintenance, upkeep and development of the services and facilities of the
estate. This objective enures to the benefit of all members of the
Association, both Sable Hills as the developer and the individual owners
of stands or units. It is for that reason that the obligation to pay levies is
to be apportioned equally among the owners on the basis of their
ownership of the stands shown on the general plan.  In the ordinary
course equal apportionment of levies among all owners on the basis
shown on the general plan is a fair result.

[15] I appreciate that the benefit derived by owners of individual erven in
the estate from the expenditure by the Association, may be proportionally
greater than that derived by Sable Hills. That is particularly so where the
township is still in the process of development and many of the stands
constituting the remainder are as yet undeveloped. Thus a security
presence at the entrance to the estate may provide greater benefits to
individual owners than to the developer who may have few security
concerns in relation to undeveloped land. The provision of landscaping
and garden services is likely to be disproportionately directed at existing
residential development rather than still vacant sites. Although they will
be of some benefit to the developer in that they may be attractive to
prospective purchasers of stands in the township, the direct benefit is
more likely to accrue to other owners.

[16] All of this, however, merely shows why clause 5.3 is part of the
articles. It is intended to enable the developer and the Association to
arrive at a situation where the apportionment of levies is fair to all owners
of residential stands or units.  The fact that the other stands that are to be
developed as commercial properties, private open space or special use as
a clubhouse, gymnasium, restaurant or boathouse, are excluded for levy
purposes, reinforces the Association’s contentions.

[17] In the heads of argument and the judgment of the court below there
was considerable debate concerning the judgment in Heritage Hill.5 It is
unnecessary to deal with that judgment save to note that the articles of
association of the home owners’ association in that case were
substantially different from those in the present case. For example the
word ‘owner’ was defined as meaning the registered owner and clause 2
provided that any word or expression not otherwise defined would bear
the meaning given to that word in the Deeds Registries Act. That dictated
the extensive references to the Act in the judgments and was perceived to
require consideration of the rating cases.6

[18] The different context of the present case obviates the need to analyse
those judgments or the judgments in the rating cases. As far as Heritage
Hill is concerned the articles being considered were different from those
in this case. As far as the rating cases are concerned the wording of the
relevant ordinances made it clear that they were dealing with registered
ownership in the Deeds Registry and the context is so remote from the

5 Heritage Hill Home Owners’ Association v Heritage Hill Devco (Pty) Ltd 2013 (3) SA 447 (GNP)
and on appeal Heritage Hill Devco (Pty) Ltd v Heritage Hill Home Owners’ Association 2016 (2) SA
387 (GP).
6 Discussed fully in paras 9 to 11 of Tshwane City v Uniqon Wonings, fn 1, supra.

present case as to provide, on its own, grounds for distinguishing the two
situations. It is seldom that a judgment interpreting an ordinary word in
one context is of assistance in illustrating its meaning in a wholly
different context. As Fagan CJ said in the Consolidated Diamonds case:7
‘When we find in a judgment statements which attach meanings to particular words or
phrases, we must remember that the Judge is dealing with those words or phrases in
the context in which they occur and with reference to the subject matter to which they
relate. Beyond that, a statement as to the meaning of a word or phrase would merely
be obiter dictum. I should be loth to read a Judge's elucidation of a word with no
specialised legal meaning as intending to lay down as a matter of law what that word
means independently of the context in which he is dealing with it, for defining the
meaning of words as such is not a Judge's function, but that of a philologist.’

[19] In the result the appeal must fail. It is dismissed with costs.

M J D WALLIS
JUDGE OF APPEAL

7 Consolidated Diamond Mines of South West Africa Ltd v Administrator, SWA & another 1958 (4) SA
572 (A) at 599C-E.

Appearances

For appellant:
W J Vermeulen SC (Heads of argument prepared by
A B Rossouw SC and M Riley)
Instructed by:
Van Zyl Le Roux Inc, Pretoria;

McIntryre & Van der Post, Bloemfontein
For respondent:
A  F Arnoldi SC (Heads of argument prepared by S D
Wagener SC)

Instructed by:
Kotzé & Roux Attorneys, Pretoria;

Honey Attorneys, Bloemfontein.
Supreme Court of Appeal of South Africa

MEDIA SUMMARY– JUDGMENT DELIVERED IN THE SUPREME
COURT OF APPEAL
From:
The Registrar, Supreme Court of Appeal
Date:
24 November 2016
Status:
Immediate
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.
Sable Hills Waterfront Estate CC v Sable Hills Waterfront Estate
Home Owners’ Association NPC
The SCA today dismissed the appeal by the developer of the Sable
Hills Waterfront Estate against a judgment of the Gauteng Division,
Pretoria of the High Court holding it liable to pay levies on each of the
erven laid out and shown on the general plan of the estate,
notwithstanding that they were not yet registered under separate title in
the Deeds Registry.
The developer contended that it was the owner of a single property
in the estate, namely, the remainder after certain sales of stands and units
had taken place and been registered. As such it argued that in the
apportionment of levies it should only pay a single levy in respect of that
one property. The home owners’ association contended that it had to pay
a levy in respect of each stand shown on the general plan.
The SCA held that the issue was to be determined on a proper
interpretation of the articles of association of the home owners’
association under which the power to raise levies was given to the board
of directors. The articles provided that levies should be apportioned
equally between the owners of stands and units in the estate. The SCA

held that having regard to the wording of the relevant article when
viewed in context that meant that the levies had to be apportioned among
the stands shown on the general plan and not the stands as they existed as
separate entities registered in the Deeds Registry. Accordingly the appeal
was dismissed with costs.