THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Not Reportable
Case No: 1196/2015

In the matter between:

MATTHYS PIETER RUBEN DE VILLIERS

APPELLANT

and
ELSPIEK BOERDERY (PTY) LTD

FIRST RESPONDENT
REGISTRAR OF DEEDS, CAPE TOWN

SECOND RESPONDENT

Neutral citation:
De Villiers v Elspiek Boerdery (Pty) Ltd [2017] ZASCA 4
(1196/2015) (9 March 2017)
Coram:
Shongwe, Majiedt and Mocumie JJA and Fourie and Schippers
AJJA
Heard:
24 February 2017
Delivered:

9 March 2017
Summary:
Validity of a notarially executed 99 year lease : whether agent had the
necessary authority to bind her principal : held that power of attorney with draft lease
attached thereto duly authorised the agent to execute the lease on behalf of her
principal : whether the provisions of s 3(d) or 3(e)(ii) of the Subdivision of Agricultural
Land Act 70 of 1970 prohibited the conclusion of the lease : held that these
provisions of Act did not find application : lease held to be valid.

___________________________________________________________________
ORDER
___________________________________________________________________
On appeal from: Western Cape Division of the High Court, Cape Town (Binns-
Ward J sitting as court of first instance):
The appeal is dismissed with costs, including the costs consequent upon the
employment of two counsel.

_________________________________________________________________
JUDGMENT
_________________________________________________________________
Fourie AJA (Shongwe, Majiedt and Mocumie JJA and Schippers AJA
concurring):

[1] This appeal concerns the validity of a lease that was notarially executed on 25
January 2010 (the lease) and registered against the title deed of the farm Elspiek
(the property) situated in the Hex River Valley of the Western Cape Province. The
appellant, Mr M P R de Villiers (De Villiers), was at all relevant times the registered
owner of the property and in terms of the lease he let the property to the first
respondent, Elspiek Boerdery (Pty) Ltd (Elspiek), represented by Mr G H de Kock
(De Kock), for a period of 99 years commencing on 15 April 2009.

[2] However, on 20 August 2012, De Villiers instituted action in the Western Cape
Division of the High Court, Cape Town, claiming that the lease was void; that the
registrar of deeds should deregister the lease as well as a subsequent notarial
cession thereof; and that Elspiek be evicted from the property. Elspiek opposed the
action and raised a contingent claim in reconvention. In the event, the trial
proceeded before Binns-Ward J, who ordered, by agreement between the parties,
that the claim in convention be heard first, with the counterclaim to stand over for
later determination, if necessary.

[3] De Villiers presented no oral evidence at the trial, while De Kock gave
evidence on behalf of Elspiek. Two main contentions were advanced at the trial on
behalf of De Villiers in support of his claim, first that the agent who purportedly acted

on his behalf to conclude the lease lacked authority and, second, that the lease was
void by virtue of the prohibitions contained in s 3(d) and s 3(e)(ii) of the Subdivision
of Agricultural Land Act 70 of 1970 (the Act). The court a quo dismissed the claim
with costs, but granted De Villiers leave to appeal only in respect of the second
contention above. This court on petition subsequently extended the ambit of the
appeal to include the rest of the findings of the court a quo in regard to the issue of
the validity of the lease, namely the agent’s alleged lack of authority.

[4] In its judgment the trial court dealt at length with the relevant background facts
and circumstances giving rise to the litigation between the parties. These facts and
circumstances are largely common cause and the correctness of the summary of the
trial judge is accepted by both parties. There is accordingly no need to repeat this
laborious exercise. Where necessary, in dealing with specific issues, I will succinctly
refer to the relevant facts or circumstances.

[5] Before dealing with the grounds relied upon by De Villiers to have the lease
and its subsequent cession voided, it is necessary to record the following crucial
finding made by the trial court in analysing the evidence that led to the conclusion of
the lease:
‘There is no doubting on the evidence that was adduced that the registered contract [the
lease], with the plaintiff [De Villiers] as lessor, reflects the common intention of the parties.’
Differently put, the court a quo held that, on the evidence, the common intention of
the parties was that De Villiers, as owner, would let the property to Elspiek, as
lessee, for 99 years on the terms and conditions set out in the lease. De Kock’s
evidence unequivocally demonstrated this. He testified that De Villiers was willing to
sign any document to achieve this goal. There is simply no evidence to gainsay the
evidence of De Kock, with the result that there is no basis for attacking the above
conclusion of the trial judge. As submitted on behalf of Elspiek, De Villiers’ failure to
testify is a clear indication that he could not dispute De Kock’s evidence.

[6] In his original particulars of claim, De Villiers firstly attacked the validity of the
lease on the basis that the power of attorney of Ms Ronelle Miller (the agent), who
appeared before the notary public for purposes of the notarial execution of the lease,
mandated her to conclude a lease with a trust as lessor, and not with him personally

as lessor. This cause of action was abandoned after Elspiek had closed its case.
The particulars of claim were then amended to record that the first attack of De
Villiers on the validity of the lease was that the agent was not authorised by him to
conclude the lease on his behalf, as:
(a) The special power of attorney granted by him authorising her to notarially execute
a deed, did not have the lease as an annexure thereto.
(b) The power of attorney related to a notarial deed referred to therein, which was
not the lease and could not have been the lease.

[7] In order to appreciate the case of De Villiers regarding this first ground of
attack upon the validity of the lease, it is necessary to record the events preceding
and following the creation of the relevant documents: For a period of at least ten
years immediately prior to the notarial execution and registration of the lease, De
Kock had leased the property from De Villiers and farmed same, either personally or
through a legal entity controlled by him. At all relevant times during this period and
thereafter, De Villiers and his family were and still are in occupation of the dwelling
on the property. During 2006, De Villiers and De Kock decided that De Villiers would
sell the property to a company in order to serve as de facto security for the
repayment of loans which De Kock and various entities controlled by him had
granted to De Villiers. As part of this transaction, De Villiers and De Kock established
the M P R de Villiers Trust (the trust), which it was envisaged would hold the majority
share in the company, representing De Villiers’ interest in the property, while the
remainder of the shares would be held by a company representing De Kock’s
interests. Elspiek was acquired for the purpose of purchasing and holding the
property.

[8] To facilitate this transaction, a special power of attorney was executed by De
Villiers on 13 October 2008 (the power of attorney), for the purpose of registering
rights of pre-emption in favour of his two brothers, who had testamentary rights of
pre-emption over the property. The rights of pre-emption that would be registered in
favour of the two brothers, would replace the testamentary rights of pre-emption that
they enjoyed in the property against De Villiers. The power of attorney read as
follows:
‘SPESIALE VOLMAG OM NOTARIëLE AKTE TE VERLY

Ek, die ondergetekende,

Matthys Pieter Ruben de Villiers

Identiteitsnommer 591023 5044 08 3

Getroud buite gemeenskap van goed
nomineer, konstitueer en stel hiermee aan Ronelle Miller met mag van substitusie om
my/ons wettige Agent te wees om voor ‘n Notaris Publiek in die Provinsie van die Kaap die
Goeie Hoop te verskyn en dan en daar as my/ons gemagtigde ‘n Notariële Akte te teken
volgens die konsep hierby aangeheg welke konsep deur my/ons geparafeer is vir die
doeleindes van identifikasie, en om sodanige formele wysigings op die gemelde Notariële
Akte aan te bring as wat nodig mag wees vir die doeleindes van die registrasie daarvan,
en in die algemeen, ten einde voorgenoemde doeleindes uit te voer, te doen of te laat doen
al wat nodig is, net so volmaak en doeltreffend asof ek/ons self teenwoordig was en hierin
gehandel het, en ek/ons bekragtig hiermee alles wat my/ons genoemde Prokureur en Agent
uit krag hiervan wettiglik doen of laat doen.
Geteken te De Doorns op 13 Oktober 2008.’1

[9] However, the sale of the property to Elspiek could not be concluded as one
brother of De Villiers refused to waive his testamentary pre-emptive right. In view of
the failure of the contemplated sale, De Villiers and De Kock then decided to
conclude a 99-year lease of the property by Elspiek, which would afford De Kock and
his entities the security required for the repayment of the amounts that they had
advanced to De Villiers. The parties further intended that De Villiers and his family
should not lack for a roof over their heads and that, notwithstanding the conclusion of
the 99-year lease agreement, they should have the right to continue living in the
house on the property for as long as they might wish.

1 The trial judge provided an accurate translation of the document as follows:
‘SPECIAL POWER OF ATTORNEY TO EXECUTE NOTARIAL DEED
I the undersigned
Matthys Pieter Ruben de Villiers
etc. . . .
nominate, constitute and appoint Ronelle Miller, with power of substitution, to be my/our lawful Agent
to appear before a Notary Public . . . and then and there as my authorised representative to sign a
Notarial Deed in accordance with the draft attached hereto which has been initialled by me/us for
purposes of identification, and to make such formal amendments thereto as might be necessary for
the purposes of the registration thereof, and in general, for the achievement of the aforementioned
purposes, to do or permit to be done everything as completely and effectively as if I/we were
personally present and dealing with the matter, and I/we hereby ratify everything that our nominated
Attorney and Agent lawfully does or permits to be done in terms hereof.
Signed at De Doorns on 13 October 2008.’

[10] To facilitate the registration of the 99-year lease, a draft notarial contract of
lease (the draft) was executed in May 2009 and annexed to the power of attorney
which had by then not yet been utilised due to the failure of the contemplated sale of
the property. The draft identified the trust, represented by its trustees, as the lessor
and Elspiek as the lessee. It was plainly a mistake to identify the trust as the lessor
as it had never been the registered owner of the property and the parties never
contemplated that it would become the owner. Nor did the trust have any right to
encumber the property by means of a lease. The uncontroverted evidence of De
Kock was that the description of the trust as lessor in the draft was a common
mistake. The evidence further showed that the trust had only featured in the plans of
the parties in 2006, when the sale of the property had been contemplated. Once that
plan fell through, the trust had no purpose; did not feature in any further plans;
became dormant and continued in existence only in name.

[11] In the event, the lease was notarially executed and registered after the draft
annexed to the power of attorney had been amended, to reflect De Villiers and not
the trust as lessor. As recorded earlier, the common intention of the parties was that
De Villiers, as owner, would let the property to Elspiek as lessee – therefore the draft
had to be amended to give effect to the common intention of the parties. In this
regard it should be borne in mind that the lease was susceptible to rectification as it
was a common mistake that led to the trust and not De Villiers being described as
the lessor.

[12] As recorded above, the first line of attack of De Villiers was that, in terms of
the power of attorney, he did not authorise the agent to conclude the lease on his
behalf. The power of attorney was the source of the agent’s authority to perform
juristic acts on behalf of De Villiers and it is accordingly necessary to turn to the
document itself to determine the ambit and extent of the authority granted to the
agent. As stated in 1 Lawsa 3 ed para 141, the power of attorney constitutes written
authority to the agent to perform the acts set out in that document on behalf of the
principal. Where the words of the power of attorney are clear they are to be followed
and no question of interpretation arises (see A J Kerr Law of Agency 4 ed at 66).

[13] The words of the power of attorney are clear and unambiguous. In terms
thereof the agent was mandated to appear before a notary public as the authorised
representative of De Villiers and there to sign a notarial deed in accordance with the
draft attached to the power of attorney, which had been initialed by De Villiers for
purposes of identification, and to make such formal amendments thereto as might be
necessary for the purpose of the registration thereof.

[14] What the evidence shows, is that the draft attached to the power of attorney
was the lease as initialed by De Villiers, expressly confirming that the agent was
authorised by him in terms of the power of attorney granted by him at De Doorns on
13 October 2008. There was no evidence of any other power of attorney executed
on 13 October 2008, with the result that, when De Villiers initialed the draft attached
to the power of attorney, he was aware that he was granting the agent the authority
to execute the lease before the notary public in terms of the power of attorney. This
is borne out by the uncontroverted evidence of De Kock as to the circumstances
surrounding the execution of the lease in accordance with their common intention.
As alluded to earlier, De Villiers, who bore the onus, failed to place evidence before
the trial court to gainsay the objective evidence and the evidence of De Kock. This
failure constituted a clear indication that he could not dispute this evidence or, at
least, that he and his legal advisers were satisfied that, although he was able to give
material evidence in this regard, he could not benefit and might well, because of the
facts known to himself, damage his case by giving evidence and subjecting himself
to cross-examination. (See Galante v Dickinson 1950 (2) SA 460 (A) at 465.)

[15] It was submitted on behalf of De Villiers, that as the power of attorney had
initially been executed for another purpose, which had not materialised, namely the
registration of rights of pre-emption pursuant to the contemplated sale of the property
to Elspiek, it had lapsed and could not thereafter serve as authority for the agent to
execute the lease. I agree with the finding of the trial court, that there was no bar to
using the power of attorney for a different purpose after it had become clear that the
sale of the property would not be concluded. As held by Binns-Ward J, from a
practical point of view there was nothing exceptional about such ‘economy of
documentation’. In any event, it is clear from the wording of the power of attorney

that its use was not limited to the initial purpose contemplated by the parties, or
indeed to a sole purpose.

[16] Finally, in regard to this line of attack, the proof of the pudding is in the eating.
The conduct of De Villiers subsequent to the execution and registration of the lease,
unequivocally shows that the registration of the lease was authorised by him
personally and that it reflected the parties’ common intention. On 28 April 2010, De
Villiers executed a special power of attorney authorising his agent to act on his
behalf to execute a notarial deed of cession of the lease and to obtain the
registration thereof. The draft deed attached to that power of attorney unambiguously
described De Villiers as the lessor of the property and, as in the case of the draft
lease which he executed in May 2009, set forth a declaration that he was the owner
of the property that had been let. As held by the court a quo, this conduct in respect
of the cession was wholly irreconcilable with the case that De Villiers subsequently
sought to advance, ie that the lease had been notarially executed and registered
without his authority.

[17] Furthermore, two years later, in April 2011, De Villiers acknowledged that the
property had lawfully been let to Elspiek, when approaching an attorney to assist him
to sell the farm to his brothers, stating that he ‘stel geensins belang dat die grond
enigsins verder verhuur word nie’.2 What is striking, is that De Villiers at this late
stage made no mention of the fact that the lease had been executed and registered
without his authority. Had that been the case, one would have expected him to have
advised the attorney that, for this reason, the lease was invalid. In view of the above,
I conclude that there is no merit in this first cause of action relied upon by De Villiers
and that the trial court correctly rejected same.

[18] The second ground upon which De Villiers sought to have the lease declared
void, was that it fell foul of the provisions of s 3(d) of the Act,3 which prohibit the
letting of only a portion of agricultural land for an effective period of 10 years or
longer, without the prior consent of the Minister of Agriculture (the Minister). It is

2 ‘was not interested in the continued letting of the property.’
3 It is to be noted that the commencement of the Subdivision of Agricultural Land Act Repeal Act 64 of
1998, that repeals the whole of the Subdivision of Agricultural Land Act 70 of 1970, has not yet been
promulgated.

common cause that the property constituted agricultural land as defined in s 1 of the
Act and that the consent of the Minister was not sought or obtained for the
conclusion of the lease. De Villiers contended that, upon a proper construction of the
lease, and in particular clauses 2.1 and 16 thereof, Elspiek leased only part of the
property and absent the prior consent of the Minister, the lease is void.

[19] It is clear from clause 2.1 of the lease, read with the definition of ‘eiendomme’
in clause 1 thereof, that the four registered land units that make up the entire
property, constitute the subject of the lease. However, De Villiers contended that
clause 16, which provides that he has the right to reside in the house on the property
for as long as he wishes and to use the outbuildings in the yard to the extent that
they are not required for Elspiek’s farming operations, resulted in Elspiek leasing
only part of the property – therefore the prohibition in s 3(d) of the Act finds
application.

[20] I agree with the trial court that this argument of De Villiers finds no support
upon a proper construction of the lease. The court a quo duly rejected this line of
attack, with reference to the relevant jurisprudence, in particular the decision of this
court in Adlem & another v Arlow 2013 (3) SA 1 (SCA); [2012] ZASCA 164.

[21] It is clear from Adlem at para 13 that, to succeed with this cause of action
based on s 3(d) of the Act, De Villiers had to establish that the right reserved to him
to live in the house on the property, resulted in the lease being in respect of only part
of the property with reference to its registration in the deeds registry, rather than the
whole of the property. This was simply not the case. The lease expressly provides
that the property, consisting of the four registered land units which make up the
entire property, constitutes the subject of the lease. The whole of the property was
leased by Elspiek as a single economic unit for farming purposes. This included that
part of the property upon which the dwelling house and its yard is situated.

[22] Clause 16 of the lease merely constituted a temporary and limited restriction
of Elspiek’s right of use of the property as a whole in terms of the lease. As
emphasised by the court a quo, the limited nature of the right conferred upon De
Villiers in terms of clause 16, is demonstrated by the fact that he has no right to use

or deal with the house if he vacates it. This limitation on his ability to deal with the
house during the currency of the lease, stems from the fact that De Villiers had let
the whole property to Elspiek in terms of the lease.

[23] Furthermore, the limited right granted to De Villiers to reside in the dwelling,
does not detract from the kind of ‘use and enjoyment’ conferred upon Elspiek by the
lease, ie to utilise the property as a whole for its farming enterprise. This ‘use and
enjoyment’ of the property as a farming enterprise constituted the subject and
substance of the lease, and is not in any way curtailed by the limited right conferred
upon De Villiers to reside in the house. See Oatorian Properties (Pty) Ltd v Maroun
1973 (3) SA 779 (A) at 785G-H.

[24] The above construction accords with the object of the Act, as appears from its
long title, namely:
‘To control the subdivision and, in connection therewith, the use of agricultural land.’
In Adlem at para 12 Cloete JA emphasised that ‘. . . what is sought to be controlled
is not both the subdivision and also the use of agricultural land, but the subdivision
and, in connection therewith, the use of such land’. Therefore, what s 3(d) of the Act
seeks to prevent, is the ‘subdivision’ of agricultural land by means of a lease in
respect of a portion of agricultural land for a period of 10 years or longer and the use
thereof as an uneconomic portion of agricultural land. As recorded above, in terms of
the lease the whole property was let to Elspiek and its enjoyment of the property as a
whole for purposes of its farming enterprise was not in any way curtailed by the
limited right of residence afforded to De Villiers. Neither does the right of residence in
any way result in uneconomical fragmentation of agricultural land. There is
accordingly no basis upon which s 3(d) of the Act finds application.

[25] During argument in the court a quo, De Villiers added a second string to his
bow, namely that the lease was in any event void by virtue of the provisions of
s 3(e)(ii) of the Act. This cause of action had not been pleaded, but the trial court
allowed De Villiers to raise it as it would not have caused prejudice to Elspiek in the
conduct of its case.

[26] Section 3(e)(ii) of the Act, inter alia, provides that no right to a portion of
agricultural land shall be granted for a period of more than 10 years, except for the
purposes of a mine as defined in s 1 of the Mines and Works Act 27 of 1956, unless
the Minister consents in writing. De Villiers contended that, if it is found that Elspiek
had leased the whole of the property (which it did, as recorded above), then the
granting of the right to De Villiers to live on a portion thereof, constituted a
contravention of s 3(e)(ii) of the Act, as it was effected without the prior written
consent of the Minister.

[27] The court a quo rightly gave this alternative submission short shrift. The
granting of the right to use the farm house for dwelling purposes did not derogate
from the character of the farm as a unit of agricultural enterprise. Bearing in mind the
object of the Act, the granting of the right had no subdivisional effect on the property
and no effect on the use of the property as a notional single unit for farming
purposes.

[28] The absurd consequences which would result from De Villiers’ construction of
the subsection were highlighted thus by the trial court:
‘Taken to its extreme the plaintiff’s contention would mean that if a right were to be granted
to a farm worker to occupy a single room in a cottage on a farm for his lifetime or for periods
which taken together . . . might amount to more than 10 years, that could competently be
done only with the prior written consent of the Minister of Agriculture. That postulate would
seem to give rise to a function for the Minister which bears no relationship whatever with the
recognised objectives of the Act.’
It follows that the reliance on s 3(e)(ii) of the Act is clearly misplaced.

[29] For all the above reasons the appeal falls to be dismissed. The matter justified
the employment of two counsel and the following order is made:
The appeal is dismissed with costs, including the costs consequent upon the
employment of two counsel.

____________________
P B Fourie
Acting Judge of Appeal

APPEARANCES:
For Appellant:

J W Olivier SC (with him P S Bothma)

Instructed by:
Muller Terblanche & Beyers c/o Van der Spuy Attorneys,
Cape Town

Symington & De Kok Attorneys, Bloemfontein

For Respondents:
T D Potgieter SC (with him H C Jansen van Rensburg)

Instructed by:

Chris Fick & Associates, Cape Town

Rosendorff Reitz Barry, Bloemfontein