qwertyuiopasdfghjklzxcvbnmqwe rtyuiopasdfghjklzxcvbnmqwertyui opasdfghjklzxcvbnmqwertyuiopa sdfghjklzxcvbnmqwertyuiopasdfg Samm V. hjklzxcvbnmqwertyuiopasdfghjklz Niingungo xcvbnmqwertyuiopasdfghjklzxcv 200917757 bnmqwertyuiopasdfghjklzxcvbnm Commercial Law qwertyuiopasdfghjklzxcvbnmqwe huur gaat voor koop rtyuiopasdfghjklzxcvbnmqwertyui Assignment One opasdfghjklzxcvbnmqwertyuiopa Lecturer: Ms sdfghjklzxcvbnmqwertyuiopasdfg Groenewalt hjklzxcvbnmqwertyuiopasdfghjklz Due 2 May 2010 xcvbnmqwertyuiopasdfghjklzxcv bnmqwertyuiopasdfghjklzxcvbnm qwertyuiopasdfghjklzxcvbnmqwe rtyuiopasdfghjklzxcvbnmrtyuiopa

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Table of Contents1. Origin 2 2. Development 3 3. The impact of doctrine huur gaat voor koop in our modern law of landlord and tenant 3.1. The lessees real right in the property 5 3.2. Substitution of the lessor with the purchaser 5 4

3.3. The effect of prior and subsequent verbal or written alterations of material and collateral terms 7

3.4. The application of the maxim in a case of a sale in execution 8 3.5. The application of the maxim in a case where there is a mortgage on the property 8

3.6. The application of the maxim in the case of sequestration of the estate of the lessor 3.7. The application of the maxim in the case of an unregistered long lease 9 9

3.8. The inherent application of the maxim in the Namibian law of landlord and tenant 3.9. Situations where the maxim does not apply 4. Requirements for the maxim huur gaat voor koop 10 10 11

3

5. Conclusion

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4

According to Silbeberg & Schoemam1 in the case of a short lease the lessee has only a personal right against the lessor in terms of which he or she may demand possession of the property to which the lease relates. If the tenant takes possession of the property, thus acquiring a limited real right to the property of another for the duration of the lease, such tenant will henceforth be protected by the rule huur gaat voor koop. However Kerr2 states that recognition of the doctrine has the effect that a lessee under a short lease who is not in occupation, and a lease under a long lease which is not registered, and who is not in occupation or, if he is in occupation, whose lease has run its first ten years, has a right which is more extensive that an ordinary contractual one. (It should be noted from the onslaught that the use any statutory provision(s) of a foreign jurisdiction is merely for comparative purposes) 1. Origin In De Jager v Sisana3 WESSELS AJ took the opportunity to discuss the origin of the doctrine of huur gaat voor koop under Roman law and in that regard the learned judge said:Now the rule of the Civil law is quite clear. There is by Civil law no legal bond whatever between the purchaser of land and persons who occupy the land either as lessees or by the leave and license of the seller. When the lessor sells the thing, and on the sale the continuation if the letting is not agreed on with the vendee he is not bound by the contract concluded between the lessor and the lessee but can evict the latter; but for this the latter can claim damages from his lessor. On the other hand the lessee need not continue the contract with the vendee of the thing.4

1

Kleyn DG, Boraine A, Du Plessis W. Silbeberg and Schoemans The Law of Property. 3rd ed (1997) Butterworths.2

Kerr AJ. The Law of Sale and Lease (1991) Butterworths. 1930 AD 71, 82 ibid

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2. Development In Ebrahim & Sons v Hoosen Cassim5 Dove-Wilson JP remarks on the rule that hire goes before sale as follows: The rule was introduced into Roman-Dutch law in favour of the tenant. It was not so under Roman law, by which the purchaser of land was not bound by a lease by a former owner in the absence of special stipulation. That was felt to be inequitable, and, accordingly, by the RomanDutch law a tenant is permitted to insist, as against a purchaser, on remaining in occupation for the whole term of the lease made by the former owner, provided, of course, he is prepared to pay the purchaser the rent accruing during the unexpired period of the lease. In other words, his lease give him a right according to its terms the to the use and occupation of the property preferent to that of the purchaser; and I know of no authority for saying that the right is dependent to any extent on the purchasers knowledge of the terms of the lease, or, indeed, of the existence of a lease at all. That being so, it is idle for the purchaser to say, as in the present case, that the tenant cannot relay upon one term of the lease merely because the purchaser was unaware of it; and it adds nothing to the purchasers position that the terms which he seeks to exclude as against himself has not been reduced to writing, provided that it is an undoubted term of a bona fide lease. What may be the position between the purchaser and the seller we are not concerned with. In Boshoff v Theron6 Greenburg JP states that in Roman-Dutch law, in terms of several codes in the Netherlands, it was provided that the purchaser must acknowledge the lease entered into by his predecessor in title, viz. the vendor, according to the maxim huur gaat voor koop. In De Jager v Sisana7 Wessels JA, after referring to the Roman law principle said: This principle however was modified by the Roman-Dutch law and that system adopted the rule that the sale does not break the lease but the purchaser becomes the seller. The words becomes the landlord of the tenant may be used loosely, but in their ordinary significance they mean that the relationship of landlord and tenant which existed between seller and tenant before the sale has given place to a relationship of this kind of relationship between the purchaser and tenant.5

1920 NPD 73 para 22 1940 TPD 299, 302 Note 3 above, 82

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7

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It is apparent that the doctrine of huur gaat voor koop was an equitable doctrine imposed upon the rigid and logical Roman Law rule that the lease terminated with the termination of the rights of the landlord and the doctrine was intended to prevent an owner who had already parted with certain rights to a tenant from thereafter transferring, inter alia, the same rights to a purchaser 3. The impact of doctrine huur gaat voor koop in our modern law of landlord and tenant In Gennae-Wae Properties (Pty) Ltd v Medio-Tronics (Natal) (Pty)8 Corbett CJ states the following about the rule huur gaat voor koop: I hold that in terms of our law the alienation of leased property consisting of land or buildings in pursuance of a contract of sale does not bring the lease too an end. The purchaser (new owner) is substituted ex lege for the original lessor and the latter falls out of the picture. On being so substituted the new owner acquires by operation of law all the rights of the original lessor under the lease. At the same time the new owner is obliged to recognise the lessee and to permit him to continue to occupy the leased premises in terms of the lease, provide that he (the lessee) continues to pay the rent and otherwise to observe his obligations under the lease. The lessee, in turn, is also bound by the lease and, provided that the new owner recognises his rights, does not have any option, or right of election, to resile from the contract. This is the impact of huur gaat voor koop in our modern law. However, with regards to the words provided that the new owner recognises his right, which mislead one to conclude that the new owner also has a the freedom to not recognise such right, in One Nought Three Craighall Park (Pty) Ltd,9 Heher J concluded that the law is not stated in Genna-Wae Properties (Pty)Ltd v Medio-Tronics (Natal) (Pty) Ltd (infra),10 and that a lessee of property transferred from his lessor to a new owner is bound to recognise and observe the terms of the lease after transfer. 3.1. The lessees real right in the property

8

1995 (2) SA 926 (A), 939C 1994 (4) SA 320 (W), 327 C-D Note 8 above

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10

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In Shell Rhodesia (Pvt) Ltd v Eliasov11 Gubbay J stated that if the notarial deed of the lease had had been for a duration of less than ten years in all, then, as it was accompanied by occupation, the petitioner (the lessee) would have acquired a real right in the property, that is, one good against all comers. In effect, every successor of the lessor is bound by the lease as soon as the transfer of the leased property to him or her has been registered, irrespective of whether or not he or she is aware of its existence.12 3.2. Substitution of the lessor with the purchaser In Boshoff v Theron13 it was held that where property is sold subject to a lease, the seller is divested both of his rights and his obligations as landlord when the property is transferred to the purchaser. Greenburg JP states that in the ordinary obligations owed by a lessor, qua lessor, it can make little difference to the lessee who his lessor is, in so far as his legal rights are concerned. In Creeser v Smit14 a lessee, S, entered into a contract of lease with H, and ran a boarding-house on the property. Twenty-one years later H sold the property to C who applied for an interdict stopping S from continuing business on the property. It was held that on transfer to C, C had stepped into Hs shoes as landlord and was bound by all the material terms of the lease. Furthermore, even if, being aware of it, he or she took the precaution of making him or her familiar with the terms of the written lease, the successor will also be bound by alterations, whether verbal or in writing, which have not been brought to his notice. 15 This approach was also followed in Kruger v Pizzicanella.16 In effect, the new landlord steps into the shoes of his or her predecessor who, in turn, is relieved of his or her obligations towards the tenant.11

1979 (3) SA 915 (R), 918 B-C Ibid Note 6 above, 304 1948 (4) SA 302 (T) para 30 Potgieter v Van der Merwe 1949 (1) SA 361 (A) 1966 (1) SA 450 (C)

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In Mignoel Properties (Pty) Ltd v Kneebon17 the court held that the huur gaat voor koop rule is sui generis and, therefore, not subject to a strict application of the principles of the law of contract. It concluded that the effect of the rule is that a purchaser of leased property steps ex lege into the shoes of his seller without the need for cession of rights or assignment of obligations. On being substituted, the purchaser acquires all the rights which the seller has under the lease except collateral rights unconnected with the lease, including rights against a surety for the lessees obligations. In Scoopy v Gordan & Co18 a case concerned with the question as to whether a claim by a lessee for compensations for improvements lay against the original lessor or a purchaser who was the owner of the property at the time when the lease terminated, Mason J states the following: Now when the owner of land which has been leased sells it to someone else the purchaser takes the land subject to the lease, so that he is bound to the tenant and the tenant is bound to him in the relation of lessor and lessee. However, in Mazie v Peel and Murphy19 the purchaser wanted to take advantage of a clause entitling the original lessor to terminate the lease if he should sell the property. The purchasers claim was rejected on the basis that the clause had been inserted for the benefit of the seller. But presumably, a provision that a purchaser shall have the right to terminate the lease within a certain period after he or she has acquired the property would be enforceable as a contract for the benefit of a third party.

3.3. The effect of prior and subsequent verbal or written alterations of material and collateral terms In De Wet v Union Government20 the lessee had lent the lessor prior to the lease a sum of money. The lease provided in effect that the monthly rental should be set off against the loan unless the17

1989 (4) SA 1049 1904 TS 937, 945 1920 NPD 120 1934 AD 59

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lessor repaid the balance outstanding from time to time. The court held that the provision was an integral part of the lease and therefore, that maxim huur gaat voor koop applied. In effect, according to Silbeberg and Schoeman,21 such provision is either an original term or a subsequent variation of the lease. The courts have introduced the distinction between material terms of a lease, that is terms incident to the relation of landlord and tenant and collateral terms which are independent of that relationship. In Doll House Refreshments (Pty) Ltd v OShea22 it was held that where the relocation of a lease which has expired is tacit, there is a presumption that the property is relet at the same rent and that those provisions that are incident to the relation of landlord and tenant are renewed. But provisions that are collateral, independent of and not incident to that relation are not presumed to be incorporated in the new letting. The maxim huur gaat voor koop is said to apply only to material terms and on the basis of distinction it has been held that an option to renew the lease is covered by it, but that an onerous successor is not bound by an option to purchase a right of pre-emption. 23In Van der Pol v Symington24 it was held that an option to purchase does bind a gratuitous successor who has acquired the property otherwise than value. In addition, in Shell Rhodesia (Pty) Ltd v Eliasov25 it was said that the terms of the lease, including an option of renew or a right of pre-emption, are binding upon the purchaser. Furthermore, according to Silbeberg and Schoeman 26 as long as the new owner of the property recognises the lessees right in the property the maxim huur gaat voor koop will continue to be bilateral in the operation holding the lessee and the lease.

21

ibid 1957 (1) SA 345 (T) 351 Uys v Sam Friedman Ltd 1935 AD 165 1971 (4) SA 472 (T) Note 11 above Ibid

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23

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Furthermore, In Ginsberg v Nefdt,27 applying the rule huur gaat voor koop, the court held that an option to purchase was binding on a purchaser with notice and that transfer to the purchaser should be interdicted unless and until it was made subject to the option right. However, According to Cooper28 its is thought that the correct approach to enquire whether the option to purchase was an integral part of the of the original lease or not; if it was, as for example where it was an inducement to contract, or its presence had a bearing on the rent agreed upon, then it is protected by the rule huur gaat voor koop; if it was not, as for example when it is clearly supplementary to the main agreement, then it is not protected. 3.4. The application of the maxim in a case of a sale in execution In Tim v Kay and Another29 it was held that the maxim huur gaat voor koop also applies to a purchaser who has acquired the property at a sale in execution, unless it has been specifically sold free of the lease. 3.5. The application of the maxim in a case where there is a mortgage on the property In Lubbe v Volkskas30 it was held that according to the principle qui prior est tempore potior est iure (first in time is stronger in law), a lease later in time, whether registered against the property or not, cannot diminish the mortgagees security. In the earlier case of United Building Society v Du Plessis31 it was held that in such a case, upon execution it will first be sold subject to the lease and only if the highest bid is insufficient to cover the mortgage debt, will the property be sold free of the lease, resulting in the lessees right in the property coming to an end. 3.6. The application of the maxim in the case of sequestration of the estate of the lessor

27

1908 25 SC 680 Cooper WE. The South African law of landlord and tenant (1973) Juta 1954 (4) SA 585 1992 (3) SA 868 (A) 868 C-D 1990 (3) SA 75 (W) 80 H

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According to Sibeberg and Schoeman,32 the sequestration of the lessors estate has no effect on the lease whatsoever, and similarly, the sequestration of the estate of the lessee does not in itself terminate the lease, but the trustee is entitled to terminate it. Again this must be qualified by the use of case law. In Boshiff v South Africa Mutual Life Assurance Society33 it was held that section 37 of the Insolvency Act of South Africa Act 24 of 1936 which provides for the rent after sequestration of the lessee until termination of the lease to be included in costs of sequestration does not transform the nature of the lessees original obligation to pay rent, but merely confers a huge degree of preference for the payment of such rental. 3.7. The application of the maxim in the case of an unregistered long lease According to Silbeberg and Schoeman34 in the case of an unregistered long lease the lessee is protected by the rule huur gaat voor koop for a period of ten years, but in every case a provision may be inserted that the landlord will have the right to terminate the lease if he or she should wish to sell the property free of the lease. The common law principles formulated by our courts were lucidly summarised by OHagan J in Hitzeroth v Brooks35 as follows: A long lease to be binding upon onerous successors and creditors of the lessor must be registered against the title of the leased property, unless the successor has had notice of the lease. An unregistered long lease is always binding as between the immediate parties thereto and upon gratuitous successors of the lessor, and is binding upon a purchaser who had no notice of the lease, for a period of not more than ten years, if the lessee was in occupation of the property when it was sold. 3.8. The inherent application of the maxim in the Namibian law of landlord and tenant

32

ibid 2000 (3) SA 597 (C) ibid 1964 (4) SA 443 (E), 447 F-H

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34

35

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One may can, indeed argue that the maxim is inherently applicable in Namibian law, when one reads Article 14436 of the Namibian Constitution which makes the general rules of public international law and international agreements binding upon Namibia. Again this must be qualified by referring to the International Convention on Civil and Political Rights (ICCPR) to which Namibia is a member State, and which explicitly provides for the right to adequate housing. It is on this basis that one can argue that maxim is inherent in the Namibian law of landlord and tenant. 3.9. Situations where the maxim does not apply The maxim does not apply, however, if the property has been expropriated. Again, this can be qualified by the use of an illustration derived from Roman-Dutch authority, if a usufructuary lets a property and during the operation of the tenancy the usufruct ceases, the tenancy likewise then terminates. Voet37 states the general proposition that when the right of the locator is at an end, so also necessarily is the right of the conductor. In Stellenbosch Divisional Council v Shapiro38 the Divisional Council applied for the ejectment of respondent lessee (Shapiro) from certain premises which applicant had expropriated for roadwidening purposes, by the service on the owner of notice under section 198 of Ordinance 13 of 1917(C). The owner had signed consent to the expropriation and had been paid compensation. The court came to the conclusion that the doctrine of huur gaat voor koop does not protect respondent (Shapiro) from ejectment. Furthermore, in Wireolums SA (Pty) Ltd v Greenblat39 it was held that the doctrine huur gaat voor koop does not cover the case where ownership is transferred not in terms of any contract but by operation of the provisions of a statute. The situation is the same if the landlord had only limited right to the property and that right expires, for instance, on the death of a usufructuary that has let the property to which his limited36

The Constitution of the Republic of Namibia Act 1 of 1990 Article 144-International Law: Unless otherwise provided by this Constitution or Act of Parliament, the general rules of public international law and international agreements binding upon Namibia under this Constitution shall form part of the law of Namibia.37

19.2.16 1953 (3) SA 418 (C), 424-425 1959 (3) SA 909 (C), 911

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right relates, a sublease expires at the same time as the head lease. In Thipa v Subramany40 it was held that the maxim has no application to an illegal lease so that an occupier whom the owner cannot eject because the in pari delicto potior est condicto defendentis rule (in case of equal wrong by both parties the defendant is in a stronger position) applies can be ejected by a subsequent owner who has acquired the property in good faith. In the subsequent case Dorklerk Investment (Pty) Ltd v Bhyats Departmental Store (Pty) Ltd41 the court came to the same conclusions. Furthermore, in Shall and Another v Gleb42 Thompson J, with whom Steyn J concurred, said obiter: The maxim huur gaat voor koop has no application as between competitors for dominium. When the innocent purchaser has acquired transfer, his right to the dominium of the property is clearly preferential to the personal right of the tenant (as against the landlord) to obtain dominium by exercising his option to buy. 4. Requirements for the maxim huur gaat voor koop In Glathaar v Hussan43 G owned a piece of a farm which he sold to C. C took possession of the land after which C entered into a lease agreement with H of the said property. After H took occupation it turned out later that C failed to pay the purchase price, though H was paying his duly rent properly. H paid the rent for 4(four) years in advance. G cancelled and wanted to evict H. When litigation ensued H raised the doctrine of huur gaat voor koop. In this case Wessels J says the following on a requirement of the maxim: [T]hat bundle of rights which [since the introduction of the rule huur gaat voor koop] enabled the lessee to turn off from the land the owner himself he must have acquired from the owner and from him alone. It is true that I may let you anothers land, and if I do so you cannot question my title nor can I deny you the right to hold the land against me, but this will in no way prejudice the rights of the true owner.

40

1954 (4) SA 126 (N) 1974 (1) SA 483 (T) 1950 (1) SA 851 (C) 865 1912 TPD 322

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42

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The court held that the doctrine will not apply because of the following points: The doctrine will only apply if the lessee got the right of occupation from the true owner (thus H should have gotten the right of occupation from G). The doctrine only applies if the sale is preceded by the lease agreement. When balancing the interests of the true owner and the lessee, it is very likely that the court will be more inclined to respect the interest of the true owner. 5. Conclusion Finally, the maxim huur gaat voor koop, may be stated as one which was made to apply to the Roman law situation in which a lessee, whose lessor had sold the property which was leased, was not protected. Thus it primarily originates in Roman law, but was developed in Roman-Dutch law. It forms part of our modern law of landlord and tenant, in situations where the lessees right comes from the true owner, and thus in the process of transfer of ownership, the rights and obligations of the seller is transferred to the purchaser. Simply put, the lessor is replaced by the purchaser and therefore the purchaser is bound by the lease.

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Reference list Books Kleyn DG, Boraine A, Du Plessis W. Silbeberg and Schoemans The Law of Property. 3rd ed (1997) Butterworths Kerr AJ. The Law of Sale and Lease (1991) Butterworths. Cooper WE. The South African law of landlord and tenant (1973) Juta Statutes Insolvency Act of South Africa Act 24 of 1936 International Convention on Civil and Political Rights (ICCPR)The Constitution of the Republic of Namibia Act 1 of 1990

Cases Boshiff v. South Africa Mutual Life Assurance Society 2000 (3) SA 597 (C) Boshoff v. Theron 1940 TPD 299 302-304 Creeser v. Smit 1948 (4) SA 302 (T) 311 De Jager v. Sisana 1930 AD 71 De Wet v. Union Government 193 AD 59 63 Doll House Refreshments (Pty) Ltd v. Oshea 1957 (1) SA 345 (T) 351 Dorklerk Investment (Pty) Ltd v. Bhyats Departmental Store (Pty) Ltd 1974 (1) SA 483 (T) Ebrahim & Sons v. Hoosen Cassim 1920 NPD 73 Gennae-Wae Properties (Pty) Ltd v. Medio-Tronics (Natal) (Pty) Ltd 1995 (2) SA 926 (A) 939 C Hitzeroth v. Brooks 1964 (4) SA 443 (E) at 447F-H In Mignoel Properties (Pty) Ltd v. Kneebone 1989 (4) SA 1042 (A) 1049B-F, 1049F-1050D, 1051A-B Kruger v. Pizzicanella 1966 (1) SA 450 (C). Lubbe v. Volkskas 1992 (3) SA 868(A) 868C-D16

Mazie v. Peel and Murphy 1920 NPD 120 One Nought Three Craighall Park (Pty) Ltd 1994 (4) SA 320 (W) 327 C-D Potgieter v. Van der Merwe 1949 (1) SA 361 (A)] Scoopy v. Gordan & Co 1904 TS 937 Shalala v. Gelb 1950 (1) SA 851 (C) Shell Rhodesia (Pvt) Ltd v. Eliasov 1979 (3) SA 915 (R) 918B-C Stellenbosch Divisional Council v. Shapiro 1953 (3) SA 418 (C) 424-425 Thipa v. Subramany 1954 (4) SA 126 (N) Tim v. Kay and Another 1954 (4) SA 585 United Building Society v. Du Plessis 1990 (3) SA 75 (W) 80 H Uys v. Sam Friedman Ltd 1935 AD 165) Van der Pol v. Symington 1971 (4) SA 472 (T) Wireolums SA (Pty) Ltd v. Greenblat 1959 (3) SA 909 (C) 911

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