Court ruling: Vacant possession

This article discusses the voetstoots clause. Be careful of what you litigate for and against whom, for you might not always get what you ask for. Do not act in the heat of the moment, without the proper consideration of all the facts. Do your homework and choose your attorneys carefully to apply their minds and the law. This case is a classic example of the consequences of the wrong legal advice and strategy.

The Applicants (the purchasers/new owners, in this matter) brought an urgent application in twofold. Firstly, seeking interdictory relief (an order interdicting the first respondent from finalising the estate, pending the outcome of the declaratory relief sought), and secondly declaratory relief (that the first respondent is required to furnish the applicants with a certificate of occupation, prior to the finalisation of the estate). These orders were sought against Ms Paula Barnard, in her capacity as executrix of the estate of the late Aletta Maria Duckitt (the estate).

The triangular facts of this matter are that the purchasers bought a property, which was an asset in a deceased estate. They then took transfer, possession, and occupation thereof. They were afterwards informed by the Msunduzi Municipality that the property was not ready to be occupied due to a number of certificates, including a certificate of occupancy, being outstanding and therefore, the property had to be vacated immediately.  

The new owners relied on section 14(4)(a) of the National Building Regulations and Building Standards Act 103 of 1977 (the Act), to substantiate their application.  First respondent (the executrix) pointed out that the new owners failed to specify and quantify the defects in the property, that section 14(1) of the Act provides that an ‘owner of a building… or any person having an interest therein’ may apply for, and be issued with a certificate of occupancy.  The executrix also alleges that she ceased to be the owner of the property when transfer passed to the new owners, and lacked legal standing to apply for and obtain an occupancy certificate.  She further said there was no contractual duty to provide an occupancy certificate to the new owners.  The second and third respondents (the heirs), alleged that the relief sought by the new owners, was incompetent because they chose not to cancel the agreement, on grounds of the so-called  defect, and that the correct remedy was to claim damages.  The executrix and the heirs relied on the common law voetstoots² clause to substantiate their opposing point.  The new owners replied to the executrix and heirs’, opposing statements but disputed very little of the allegations put forward.  They remained adamant that the executrix must obtain the occupancy certificate, and provide the same to them.  They also made it clear that their case has nothing to do with any patent or latent defects, and they would be enforcing a contractual claim of vacant possession.  

The court (Bezuidenhout J) stated, in its view, that the new owners’ application was ill advised and, in particular, the relief sought was ill considered and not appropriate, dismissing the application with costs.    

Imagine that!  After all, and now even worse off …

So, what did the court consider when coming to the decision to dismiss the applicants’ application?

Arguments of, the new owners

The new owners relied on section 14(4)(a) of the Act³, which relates to occupancy certificates in respect of buildings.  The section reads as follows:

‘(4)(a) The owner of any building or, any person having an interest therein, erected or being erected with the approval of the local authority, who occupies or uses such building or permits the occupation or use of such building-

1. Unless a certificate of occupancy has been issued in terms of subsection (1) (a) in respect of such building;
2. …
3. During any period not being the period in respect of which such local authority has granted permission in writing for the occupation or use of such building or in contravention of any condition on which such permission has been granted; or
4. …

shall be guilty of an offence.’

They further relied on case law⁴ (court judgments) such as Ornelas v Andres Café⁵ and Naidoo v Moodley NO⁶, affirming that the voetstoots clause finds no application because the lack of an occupancy certificate is not a latent defect and therefore, was not covered by the voetstoots clause, and that the requirement of vacant possession must also incorporate lawful possession.

In the Naidoo matter, Van Zyl J on appeal, held at para 19 that:

‘the lack of an occupancy certificate …, are not defects of a physical nature relevant to the property and the defendants could find no protection under the voetstoots provisions … of the agreement of sale.’

In Odendaal v Ferris⁷, however, the court held that the voetstoots clause covered the absence of statutory authorization, which means that the seller (executrix) was protected against liability.

Arguments of, the first respondent (executrix)

The executrix relied on the common law⁸ voetstoots clause in the agreement, common law remedies for breaching, legislation⁹, and case law (court judgments), in opposing the application.

She argued that she, as executrix, does not become the deceased, and does not possess the deceased’s knowledge, based on what was held in Van den Berg v Coetzee¹⁰  that the executor ‘does not step into the shoes of the deceased.’

She further argued that no information on what the defects were was forthcoming from the new owners, and that it was open to them to resile (withdraw) from the contract, and that the transfer took place without any problems.

She also referred to section 14(1) of the Act which provides that:

‘…an owner of a building… or any person having interest therein’,

may apply for, and be issued with, a certificate of occupancy.

Arguments of the second and third respondents (the heirs)

The heirs relied on the common law voetstoots clause in the agreement, common law remedies for breaching, and case law (court judgments) in opposing the application.

The heirs argued that the new owners were given vacant possession, being free and undisturbed possession, as was held in Tshandu v City Council of Johannesburg¹¹ and York & Co Pty Ltd v Jones NO¹². Prior to the registration of the transfer the new owners asked and were allowed, to clear some bush on the property, were provided keys to the property, stored earthmoving equipment on the property, started building a swimming pool and installed CCTV security systems.

The flaw in the heat of the moment

The flaw in the new owners’ case was that they expressly excluded the matter of defects in the property, from their case, and that the executor had no knowledge of the lack of an occupancy certificate at the time when the agreement between the parties was concluded.  

They also did not seek relief against the heirs, save in the event of them opposing the application, in which event a joint contribution towards costs would be sought and did not disclose, in their application, what the actual problems (defects) with the property were.

The legislation (the Act) that they relied upon offered alternatives available to them, as set out in section 14(1A) of the Act, in that they could have requested, in writing, permission to use (occupy) the building before the issue of the certificate of occupancy.  Section 14 consistently also states that:

‘the owner of the building or any other person having an interest therein,’

may apply for certificate of occupancy.

In the case law that they relied upon, the transfer of the property had not yet taken place, in contrast to their matter where transfer had already taken place, and the administration of the deceased estate was finalised.  

Is that it?   No protection and/ or remedy for the purchaser in this (or other related) matter?

No! There is light at the end of the tunnel –  our law is not biased; it is just, fair, and reasonable.

What does our law say?

In terms of the common law, a seller of immovable property is liable for latent defects,¹³ in respect of the property sold by him/her for a period of three years, after the discovery of the defect/s, unless this liability is expressly excluded by mutual agreement between the parties, by including a common law voetstoots clause into the agreement.  The purchaser then would have no claim for damages, due to latent defect/s in the property against the seller.

It is also clear in the present approach by our courts, that even the absence of statutory approval, such as what was at issue in the Odendaal and Haviside¹⁴ matters, constitutes a latent defect, and that the seller of immovable property can rely on the voetstoots clause to escape liability.

The Consumer Protection Act, Act 68 of 2008 (the CPA), provides for a statutory (legal) duty of disclosure, and the seller can therefore, not exclude liability for defects in the property sold, by way of a voetstoots clause in the agreement of sale.  The CPA is, however, not applicable to all transactions, but section 55 of the CPA (warranty of quality), is implied in every contract, whether the transaction falls within the ambit of the CPA or not.  It states that a purchaser (or consumer), is entitled to receive property (goods/services) that are reasonably suitable for the purpose of which it is generally intended, and is of good quality, in good working order and free of defects.  It places an obligation on the seller to disclose, and on the purchaser, to properly inspect.  It also offers remedies of repair, replacement, and refund.  

Our law provides a purchaser, of immovable property, with a remedy to hold the seller of immoveable property, which was subject to a voetstoots clause, liable for latent defects as was the case in the matter of Van der Merwe v Meades¹⁵ where it was held that a seller will be deprived of the protection of the voetstoots clause, where the purchaser can prove that the seller (a), was aware of the defect in the property at the time of entering into the agreement; and (b), intentionally concealed its existence from the purchaser with the purpose to defraud him/her.  It was also held, in the matters of Odendaal and Ellis and Another v Cilliers NO¹⁶, that it may also amount to fraud when a seller recklessly tells a half-truth, or knows the facts but does not reveal it, because he/she considers it insignificant.  

It should also be noted that the voetstoots clause can be contractually omitted or deleted from the agreement (by mutual agreement), or the seller could be required to provide a warranty in the agreement, to the effect that the building was erected in accordance with duly approved plans, and in accordance with the requirements of the national building regulations.

¹ Werner and Werner v Paula Barnard N.O. and Others, High Court of KwaZulu-Natal, Pietermaritzburg (8903/2021P)
² Goods are sold as is or in its present order and condition.
³ National Building Regulations and Building Standards Act 103 of 1977
⁴ Law that is based on decisions that judges have made in past cases.
⁵ Ornelas v Andrews Café and another 1980 (1) SA 378 (W) at 388G to 390C.
⁶ Naidoo v Moodley NO and others [2008] ZAKZHC 95.
⁷ Odendaal v Ferris 2009 (4) SA 313 (SCA)
⁸ South African common law is mainly the 17th and 18th century Roman-Dutch law that was transplanted to the Cape, and was also influenced by English law. This forms the basis of modern South African law and has binding authority. Common law still applies, if and when legislation does not.
⁹ Legislation is the process or result of making laws by a legislature, parliament, or analogous governing body.
¹⁰ Van den Berg v Coetzee 2001 (4) SA 93 (T) at 95H
¹¹ Tshandu v City of Johannesburg 1947 (1) SA 949 (W) at 497
¹² York & Co Pty Ltd v Jones NO 1962 (1) SA 65 (SR)
¹³ An abnormal quality or attribute which destroys or substantially impairs the utility or effectiveness of the property, for the purpose for which it has been sold or for which it is commonly used and is not visible or discoverable upon an inspection of the property vide Holmdene Brickworks v Roberts Construction Co (Pty) Ltd 1977 (3) SA 670 (A)
¹⁴ Haviside v Heydricks and Another 2014 (1) SA 235 (KZN)
¹⁵ Van der Merwe v Meades 1991 (2) SA 1 (A)
¹⁶ Ellis and Another v Cilliers NO and Others 2016 (1) SA 293 (WCC)

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Written by Anna Hattingh

Moderated and approved by Wessel de Kock