Minister of Human Settlements, Western Cape Provincial Government v Penhill Residents Small Farmers Co-operative Ltd (429/2015) [2016] ZASCA 99 (3 June 2016) per Lewis JA [Cachalia, Saldulker and Mathopo JJA and Tsoka AJA concurring]

The SCA allowed the appeal against the judgment of WC Division of the High Court, Cape Town (Saldanha J, Cloete J and Nyman AJ concurring, sitting as full court of appeal) and interdicted and restrained certain persons from settling on certain unoccupied areas of land; erecting structures; claiming rights over them; and inciting or encouraging other persons to settle on the unoccupied areas or to erect structures thereon.

Excerpts

Consent

[24] The courts below found that there was actual consent for the Penhill Farmers to occupy the entire property, and that is what the Penhill Farmers argue again on appeal.  It can be seen, however, from the minutes of meetings and the content of correspondence that there were negotiations over the occupation of the portions already farmed.  But there was nothing either express or implicit in any of the discussions that approved the Penhill Farmers’ taking occupation of the entire property.

[25] As I have said, they place store on the plan attached to the draft lease prepared by the Provincial Government and on the valuation done in respect of Penhill Farms as well as on the negotiations to regularize their position over the years.  But does any of this indicate unequivocal conduct that justifies an inference that there was consensus regarding the term of the contract they allege? In Standard Bank of South Africa Ltd & another v Ocean Commodities Inc & others 1983 (1) SA 276 (A) this court said (at 292B-C):

‘In order to establish a tacit contract it is necessary to show, by a preponderance of probabilities, unequivocal conduct which is capable of no other reasonable interpretation than that the parties intended to, and did in fact, contract on the terms alleged.’

[26] In Joel Melamed and Hurwitz v Cleveland Estates (Pty) Ltd [1984] ZASCA 4; 1984 (3) SA 155 (A) Corbett JA, after citing the test in Ocean Commodities, referred to a different and less stringent formulation (at 165B-C):

‘a court may hold that a tacit contract has been established where, by a process of inference, it concludes that the most plausible probable conclusion from all the relevant proved facts and circumstances is that a contract came into existence’.

He did not determine which test was preferable as it was unnecessary for the determination of the case.  The requirement that unequivocal conduct is required before a contract will be held to have come into existence was also confirmed in McDonald v Young [2011] ZASCA 31; 2012 (3) SA 1 (SCA) para 19.

[27] Residents of Joe Slovo Community, Western Cape v Thubelisha Homes & others (Centre on Housing Rights and Evictions & another, Amici Curiae) [2009] ZACC 16; 2010 (3) SA 454 (CC) dealt with consent of an owner to occupy property in determining whether there had been compliance with the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998.  The issue there was whether eviction had been effected lawfully.  There are five different judgments in the matter but the result was agreed.

The only relevance of Residents of Joe Slovo to this matter is that the court made it clear that by ‘consent’ is meant not simply acquiescence, but voluntary agreement.  Consent cannot be conferred unless it is asked for and given (para 55).  The court endorsed the test mooted by Corbett JA (above at 165B-C) as to drawing an inference that all parties agreed on occupation: consent must be the ‘most plausible probable conclusion from all the proved facts and circumstances’ (para 58).

. . . .

Legitimate expectation

[29] The full court held also that the decision by the Provincial Government to use a portion of the property for the Ithemba farmers and for a housing development constituted administrative action – ‘it had a direct effect on the rights and legitimate expectations of the’ Penhill Farmers.  The consequence of the ‘decision’ was that there was less land available to be used when, throughout the negotiation period, they ‘were brought under the impression that the entire property was available for their beneficial occupation’.  Nothing in the factual matrix bears this out.  (See Minister of Environmental Affairs and Tourism & others v Phambili Fisheries (Pty) Ltd [2003] ZASCA 46; 2003 (6) SA 407 (SCA) paras 64-69.) And a decision by an owner of property to use it can hardly amount to administrative action that impacts adversely on a person who has no right to use or occupy it.

[30] The finding that the Penhill Farmers had a right to be consulted about the future use of property to which they had no right is quite astonishing.  And equally astonishing are the following two conclusions, which are at odds with each other:

‘In the result I am satisfied that the respondents had authority to occupy the entire 200ha of the property and that they enjoyed a legitimate expectation to proper notice and consultation with regard to any restriction of such occupation, whether by way of a substantial housing development on the property or the relocation of the Ithemba Farmers onto the property.’

In Vanger v Thomson & Meyer 1915 CPD 752, Juta JP (Kotzé J concurring) said, where inconsistent and mutually exclusive facts had been pleaded by a defendant:

‘I do not think that a defendant can say, “I did not buy,” and “I paid.” Mr Upington has cited cases in our Courts and in the High Court at Kimberley to the effect that it is nothing unusual for a defendant to plead that he did not enter into a contract and that the contract was cancelled, but he has cited no case which says that a defendant may plead that he did not buy and that he paid.  It would be very difficult to conceive of a defendant going into the box and bona fide denying the purchase – especially in the present case in view of the account showing that a large sum has been paid off – and also saying that he had paid.  Having eliminated the possibility of all special pleas, as I already said, I cannot believe that this is a bona fide plea.  The magistrate was therefore quite right in not allowing these two pleas to stand.’

[31] If there was actual consent, the Provincial Government would not have been entitled to an interdict.  How then can the Penhill Farmers honestly allege in the alternative that promises had been made and  expectations arisen which gave rise to a right to notice and consultation? The full court thus erred in finding both that there was both consent and a legitimate expectation that the Penhill Farmers be heard.

[32] The effect of the full court’s decision would be that when government, provincial or local, attempts to negotiate with unlawful occupiers in order to regularize their occupation, it will be precluded from asserting its right to use unoccupied land.  The consequences could be dire.

[33] The Provincial Government is entitled to the interdict that it seeks.  It, and people in the Western Cape, have been severely prejudiced by the delay in the court system.  It is also entitled to the costs in the courts below and on appeal.  Although the Penhill Farmers argued that they were asserting constitutional rights, that is not in fact the case.  They had no right at all to the whole property, and they are commercial farmers.  They were seeking to enhance their commercial positions and they did so very successfully in the period between the launch of the application and the set down of this appeal.”