C & S Properties (Pty) Ltd v Khaketla and Others (C of A (CIV) 63 of 2011) [2012] LSCA 26 (27 April 2012)

IN THE COUR T OF AP P E AL OF LE S OTH O In t h e m a t ter b et ween : C OF A (CIV) 6 3 / 2 0 1 1 C & S P R OP E R TIE S (P TY) LTD AP P E LLANT a n d DR . ‘MAMP HONO KHAKE TLA 1 S T R E S PONDE NT E S TATE LATE B M KHAKETLA 2 ND R E S P ONDE NT MOHLABANI P R OP E R TY CO. (P TY) LTD 3 R D R E S P ONDENT COR AM: S MALBE RGE R, J A HOWIE , J A FARLAM, J A HE AR D DE LIVE R E D : : 1 9 APRIL 2 0 1 2 2 7 APRIL 2 0 1 2 S UMMAR Y La n d Act 1 9 7 9 – lea s e a n d s u b s equ en t s u b -lea s es – m in is ter ia l con s en t – wh eth er va lid ity of tr a n s a ction r equ ires con s en t p r ior to con tr a ctin g – ces s ion of s u b - les s or ’s r igh ts – wh eth er ces s ion r egis tered in term s of th e Deed s Regis try Act 1 9 6 7 . J UDGME NT HOWIE , J A: [1 ] Th e a p p ella n t , C a n d S Pr op er t ies (Pt y) Lt d (“C a n d S ”), is a com p a n y r egis ter ed in Les ot h o a n d ca r r yin g on t h e b u s in es s of s u b -lett in g com m er cia l p r op er t ies in t h is k in gd om . [2 ] Th e r es p on d en t s a r e r es p ectively Dr . ‘Ma m p h on o Kh a k et la (fir s t r es p on d en t ), t h e es t a te of th e la te Ben n et t Ma k a lo Kh a k et la (s econ d r es p on d en t ) t o wh om I s h a ll r efer a s “t h e d ecea s ed ”, a n d Moh la b a n i Pr op er t y Com p a n y (Pt y) Lt d (t h ir d r es p on d en t ) (“t h e com p a n y”). [3 ] Th e d ecea s ed es t a b lis h ed t h e com p a n y s o t h a t it cou ld a cqu ir e h is r igh t a s t itleh old er in r es p ect of p lot 1 3 2 8 3 -4 4 6 , Ma s er u (“t h e p r op er t y”) in ter m s of a r egis ter ed lea s e b ea r in g t h a t n u m b er . He a cqu ir ed t h e lea s e in 1 9 8 7 . It is n ot in d is p u t e t h a t th e lea s e wa s va lid in a ll r es p ect s . [4 ] A s er ies of wr it ten t r a n s a ct ion s followed in 1 9 8 8 . Th e s equ en ce wa s a s follows . In Ma r ch t h e d ecea s ed s u b let t h e p r op er t y t o C a n d S (“t h e s u b lea s e”). In Ap r il h e ced ed t h e s u b lea s e t o t h e com p a n y (“t h e ces s ion ”). In J u ly h e tr a n s fer r ed t h e lea s e t o th e com p a n y. By r ea s on of t h e ces s ion a n d t r a n s fer (if b ot h wer e va lid ) t h e com p a n y a cqu ir ed t h e s u b les s or r igh t s in r es p ect of t h e s u b lea s e t o C a n d S . [5 ] C a n d S in t h e en s u in g yea r s en ter ed in t o a n u m b er of t r a n s a ct ion s in volvin g t h e p r op er t y in clu d in g m or t ga gin g it t o Fir s t r a n d Ba n k Lim it ed (“t h e Ba n k ”) in 2 0 0 1 . [6 ] In Sep tem b er 2 0 0 9 t h e r es p on d en t s a p p lied t o t h e High Cou r t for a n or d er d ecla r in g t h e d ecea s ed ’s s u b lea s e wit h C a n d S a n d t h e s u b s equ en t ces s ion b y h im t o t h e com p a n y t o h a ve b een in va lid for wa n t of com p lia n ce wit h t h e La n d Act 1 9 7 9 a n d t h e Deed s Regis t r y Act 1 9 6 7 . (By t h is t im e t h e d ecea s ed h a d d ied a n d t h e fir s t r es p on d en t wa s execu t r ix of t h e s econ d r es p on d en t .) [7 ] In t h e even t of t h e gr a n t of t h e d ecla r a t ion of in va lid it y, va r iou s con s equ en t ia l or d e r s of in va lid it y wer e s ou gh t in r es p ect of t r a n s a ct ion s en ter ed in t o b y C a n d S in clu d in g t h e m or t ga ge t o th e Ba n k . Fu r t h er r elief s ou gh t in clu d ed a n or d er t h a t t h e lea s e b e “r elea s ed ” t o t h e fir s t r es p on d en t s u b ject t o p a ym en t of cer t a in d eb t s owed b y t h e ot h er r es p on d en t s . It wa s a ls o s ou gh t t o r es t r a in C a n d S fr om en ter in g in t o fu r t h er a gr eem en t s in r es p ect of t h e p r op er t y. [8 ] It will b e a p p a r en t t h a t th e gr a n t of a ll t h e con s equ en t ia l or d er s d ep en d ed on t h e s u cces s of t h e in va lid it y p oin t s con cer n in g th e d ecea s ed ’s s u b lea s e t o C a n d S a n d t h e ces s ion . If t h os e p oin t s s h ou ld h a ve fa iled t h en t h e a p p lica t ion for t h e con s equ en t ia l or d er s h a d t o fa il a s well. [9 ] It wou ld s eem t h a t b y 2 0 0 9 t h e r es p on d en t s con s id er ed t h a t va r iou s of t h e t r a n s a ct ion s a ft er th e ces s ion wer e im p a ct in g n ega tively u p on on e or ot h er of t h em in va r iou s wa ys a n d t h a t t h is wa s t h e m ot iva t ion for t h e a p p lica t ion . Of cou r s e, t h os e con s id er a t ion s a r e n ot r eleva n t for p r es en t p u r p os es . Th e cr u cia l is s u e is wh et h er t h e s u b lea s e a n d ces s ion wer e in d eed in va lid . [1 0 ] Th e a p p lica t ion wa s h ea r d b y Ma h a s e J wh o h eld t h a t t h e s u b lea s e a n d ces s ion wer e in va lid b eca u s e t h e p r ovis ion s of s s 3 5 a n d 3 6 of t h e La n d Act r equ ir ed t h a t Min is t er ia l con s en t for a la n d t r a n s a ct ion p r eced e t h e tr a n s a c t ion a n d s u ch con s en t in t h is ca s e wa s on ly gr a n ted on 1 3 J u n e 1 9 8 5 . In con s t r u in g t h e s ect ion s a s r equ ir in g p r ior con s en t t h e lea r n ed J u d ge r elied on t h is Cou r t ’s ju d gm en t s in S e a La k e (Pty ) Ltd v s Ch u n g Hw a Tra d in g En te rp ris e s Co (Pty ) Ltd a n d An oth er LAC (2 0 0 0 -2 0 0 4 ) 1 9 0 a t 1 9 3 a n d Moth ob i v S eb ots a LAC (2 0 0 7 -2 0 0 8 ) 4 3 9 a t 4 4 1 H-4 4 2 B. [1 1 ] As r ega r d s t h e ces s ion , Ma h a s e J c on s id er ed t h a t t h e p a p er s s h owed t h a t it wa s r egis ter ed on 9 Sep tem b er 1 9 8 8 u n d er n u m b er 2 0 9 8 3 b u t t h a t it wa s , a s I h a ve m en t ion ed , in va lid b y r ea s on of t h e p r ior con s en t p oin t . [1 2 ] Th e J u d ge a ccor d in gly gr a n t ed t h e a p p lica t ion a s p r a yed . C a n d S h a s a p p ea led . [1 3 ] In t h is Cou r t cou n s el for C a n d S a r gu ed t h a t t h e ter m s of s s 3 5 a n d 3 6 d id n ot r equ ir e p r ior Min is t er ia l con s en t a n d t h a t a t r a n s a ct ion in va lid for wa n t of p r ior con s en t wou ld b ecom e va lid if con s en t wer e given s u b s equ en t ly. As for t h e ces s ion , even if it wa s n ot r egis ter ed , t h e d ecea s ed ’s lea s e r igh t s wer e va lid ly t r a n s fer r ed t o th e com p a n y a n d t h a t t r a n s fer a ls o con veyed h is s u b lea s e r igh t s . In ot h er wor d s t h e t r a n s fer a n d t h e ces s ion wer e s ep a r a te a n d equ a lly effect ive wa ys of m a k in g t h e com p a n y s u b les s or in r es p ect of t h e s u b lea s e wit h C a n d S . [1 4 ] Cou n s el for th e r es p on d en ts s u p p or t ed th e High Cou r t ’s ju d gm en t in r ega r d t o t h e in va lid it y a r gu m en t b a s ed on p r ior con s en t a n d a ls o p er s is ted in t h e con t en t ion a d va n ced in t h a t cou r t t h a t t h e ces s ion h a d n ot b een r egis ter ed . Cou n s el a ls o a d va n ced s u b m is s ion s con cer n in g t h e m or tga ge t o t h e Ba n k a n d cer t a in ot h er h yp ot h eca t ion s b u t t h os e s u b m is s ion s h a d n o r eleva n t b ea r in g on t h e r elief s ou gh t in t h e cou r t b elow or t h a t cou r t ’s r ea s on s for h old in g t h a t t h e s u b lea s e a n d ces s ion wer e in va lid . S u ch s u b m is s ion s t h er efor e h a d n ot h in g t o d o wit h t h e is s u es on a p p ea l. [1 5 ] Tu r n in g t o t h e p r ovis ion s of t h e La n d Act , s 3 5 (1 ) p r ovid es (wh er e r eleva n t ): “A les s ee s h a ll b e en titled – (a )................ (b ) s u b ject to ob ta in in g th e con s en t of th e Min is ter – (i) to d is p os e of h is in teres t; (ii) ............ (iii) to s u b -let th e la n d lea s ed .” [1 6 ] Sect ion 3 6 (5 ) s t a tes (wh er e r eleva n t ) t h a t : “An y tr a n s a ction con d u cted b y a les s ee with ou t th e con s en t of th e Min is ter ...... s h a ll b e of n o effect.” [1 7 ] Clea r ly t h er e is n o exp r es s r equ ir em en t t h a t Min is t er ia l con s en t m u s t p r eced e t h e tr a n s a ct ion . Th e en qu ir y th en is wh et h er s u ch r equ ir em en t , u p on a p r op er con s t r u ct ion , is n eces s a r ily im p lied . [1 8 ] Sect ion 2 4 of t h e Deed s Regis t r y Act d ea ls wit h r egis t r a t ion of lea s es a n d s u b lea s es in r es p ect of im m ova b le p r op er t y a n d con veys in s u b s ect ion s (2 ) a n d (3 ) t h a t r egis t r a t ion s h a ll on ly b e effected a fter m in is t er ia l con s en t . Th is m ea n s t h a t s u ch con s en t m u s t p r eced e r egis t r a t ion . As s u b lett in g in volves b ot h a n a gr eem en t wh ich con fer s r igh t s a n d r egis t r a t ion in or d er t o t r a n s fer t h os e r igh t s , s 3 5 (1 ) (b ) (iii) of t h e La n d Act a ls o m ea n s n o m or e t h a n t h a t con s en t m u s t p r eced e r egis t r a t ion . In ot h er wor d s n eit h er Act im p lies t h a t con s en t m u s t p r eced e t h e s u b lea s e t r a n s a ct ion . [1 9 ] As fa r a s s 3 6 (5 ) of t h e La n d Act is con cer n ed it s ter m s a r e a m b igu ou s . A t r a n s a ct ion con clu d ed (“con d u ct ed ” m u s t b e s o u n d er s t ood ) “wit h ou t .... con s en t ” cou ld m ea n t h a t con s en t is a b s en t wh en t h e t r a n s a ct ion is con clu d ed or , equ a lly, it cou ld m ea n a con clu d ed t r a n s a ct ion t h a t is n ever con s en ted t o. [2 0 ] Th e over r id in g p u r p os e of t h e La n d Act is clea r . In ter m s of s s 1 0 7 a n d 1 0 8 of t h e Con s t it u t ion a ll la n d is ves ted in t h e Ba s ot h o Na t ion a n d t h e p ower t o a lloca t e it ves ts in t h e Kin g, wh o m u s t exer cis e t h e p ower in ter m s of t h e Con s t it u t ion or a n y ot h er la w. Th e La n d Act is s u ch a la w. S ect ion 3 s t a t es t h a t t h e la n d ves t in g in t h e Na t ion is h eld b y t h e S t a te a n d n o on e ot h er t h a n t h e S t a te s h a ll h old t it le t o la n d excep t a s p r ovid ed b y cu s t om a r y la w or t h e Act . Th e Act ’s p u r p os e is t h er efor e t o con t r ol, n o d ou b t wit h a n xiou s officia l ca r e, t h e con fer m en t of t it le t o la n d . [2 1 ] It is n ot p os s ib le t o d is cer n h ow t h a t p u r p os e wou ld , or even m igh t, b e d efea ted or im p ed ed wer e con s en t t o follow con clu s ion of t h e tr a n s a ct ion . Nor wer e we p r es en ted wit h a n y s u b m is s ion in t h is r ega r d wh ich a d va n ces t h e ca s e for t h e n eed for p r ior con s en t . [2 2 ] Pla in ly, in for m ed con s en t wou ld b e b et ter a ch ieved b y t h e Min is t er ’s fir s t s eein g t h e en t ir e wr it ten t r a n s a ct ion r a t h er t h a n a fter ob t a in in g on ly a n in com p lete p ictu r e fr om a s u m m a r y of t h e p r op os ed t r a n s a ct ion t h e d et a ils of wh ich (p er h a p s im p or t a n t on es ) m igh t on ly b e fin a lis ed a fter t h e gr a n t of con s en t . In for m ed con s en t s u b s equ en t t o a p er u s a l of t h e con clu d ed t r a n s a ct ion clea r ly s er ves t h e Act ’s p u r p os e b et ter t h a n p r ior con s en t . An d if p r ior con s en t wa s t r u ly t h e legis la t u r e’s in ten d ed r equ ir em en t , th e b es t wa y t o a ch ieve t h e Act ’s p u r p os e wou ld n eces s it a te p r ovid in g t h e Min is t er wit h a n u n s ign ed cop y of th e com p lete p r op os ed t r a n s a ct ion a n d t h en a fter t h e gr a n t of con s en t m er ely h a vin g t h e p a r t ies s ign it . Th a t s t ilted , ir r a t ion a l s equ en ce d oes n ot com m en d it s elf a s in a n y wa y con d u cive t o a ch ievin g t h e s t a t u t or y p u r p os e com p a r ed wit h p r es en t a t ion t o t h e Min is t er of t h e con clu d e d t r a n s a ct ion in or d er t o ob t a in con s en t . [2 3 ] In m y view, t h er efor e, p r ior con s en t is n ot im p lied a n d s 3 6 (5 ) of t h e La n d Act b u r d en s wit h in va lid it y on ly a t r a n s a ct ion t h a t is n ever con s en ted t o. [2 4 ] Th e d ecis ion s of t h is Cou r t p r ovid e s u p p or t n eit h er for t h e ju d gm en t a qu o n or t h e r es p on d en ts ’ ca s e. In Vice n te v Le s oth o B a n k LAC (2 0 0 0 -2 0 0 4 ) 8 3 t h er e n ever wa s a n y con s en t . Ra m od ib ed i J A (a s h e t h en wa s ) s a id (a t 8 6 I) t h a t t h e t r a n s a ct ion con cer n ed t h er e wa s n u ll a n d void for a s lon g a s t h e Min is ter ’s con s en t wa s n ot ob t a in ed . By clea r im p lica t ion con s en t s u b s equ en t t o it s con clu s ion wou ld h a ve va lid a t ed it. Th a t d ecis ion wa s given in Ap r il 2 0 0 0 . [2 5 ] In t h e S e a La k e ca s e (s u p ra ) (t h e ju d gm en t wa s d eliver ed in Oct ob er 2 0 0 0 ) t h e u n s u cces s fu l a p p ella n t h a d a p p lied in t h e High Cou r t for a n or d er com p ellin g t h e ot h er p a r t y t o a s a le of r igh t s in la n d t o s ign t h e d eed of s a le in r es p ect of wh ich s a le n o Min is t er ia l con s en t h a d b een given . Ha vin g r efer r ed t o t h e p a r t ies ’ in ten t ion t h a t th e d eed wou ld n ot b e b in d in g u n t il s ign ed , Va n d en Heever J A wen t on t o s t a te (a t 1 9 3 G-H): a n d ocu m en t a p p r op r ia te “No regis tr a tion of th e r igh ts in qu es tion is p os s ib le u n les s b een com p leted in ord er for th a t to h a p p en ; m oreover p r ior m in is ter ia l con s en t is requ ir ed in ter m s of s 3 5 of th e La n d Act of 1 9 7 9 ..... Min is ter ia l con s en t is r equ ired b efore t h e fir s t r es p on d en t wa s en titled to d is p os e of its in teres t (s 3 5 (1 ) (b ) (i) of th e La n d Act....). A tr a n s a ction with ou t th a t, is in va lid .” h a s [2 6 ] It is clea r t h a t t h e lea r n ed J u d ge of Ap p ea l in r efer r in g t o p r ior con s en t m ea n t con s en t p r ior t o r egis t r a t ion . An d h er r efer en ce t o con s en t b efor e d is p os a l is con s is t en t wit h wh a t h a s b een s a id a b ove in r ela t ion t o s 3 5 (1 ) (b ) (iii) a n d s u b let t in g. Bot h d is p os a l a n d s u b lett in g r equ ir e, a p a r t fr om a n a p p r op r ia t e tr a n s a ct ion , r egis t r a t ion in t h e Deed s Regis t r y a n d it is r egis t r a t ion th a t m u s t b e p r eced ed b y m in is t er ia l con s en t . At t h e r is k of r ep et it ion , n o p r ovis ion r equ ir es t h a t con s en t m u s t p r eced e t h e r eleva n t t r a n s a ct ion . [2 7 ] Th e Moth ob i ca s e (s u p ra ) (d ecid ed in 2 0 0 8 ) wa s yet a n ot h er ca s e of a t r a n s a ct ion for wh ich con s en t h a d n ot b een gr a n ted a n d wh er e a n or d er wa s s ou gh t com p ellin g s ign a t u r e of t h e r eleva n t d ocu m en t . Th is Cou r t em p h a s is ed t h a t wit h ou t con s en t h a vin g b een given t h er e wa s n o va lid con t r a ct u a l p r ovis ion wh ich cou ld b e en for ced a n d ca lled in a id in or d er t o com p el s ign a t u r e. If Min is t er ia l con s en t s u b s equ en t t o con clu s ion of a n in va lid t r a n s a ct ion wa s t o b e a ch ieved b ot h p a r t ies h a d t o a gr ee t o t h a t p r oces s . [2 8 ] It follows t h a t t h e cou r t b elow er r ed in h old in g t h a t t h e s u b lea s e a n d t h e ces s ion wer e in va lid for wa n t of p r ior Min is t er ia l con s en t . [2 9 ] As fa r a s r egis tr a t ion of t h e ces s ion is con cer n ed t h e a n n exu r es t o t h e fou n d in g a ffid a vit in clu d e, a s t h e J u d ge p oin t ed ou t , a d ocu m en t en t it led “Agr eem en t of S u b lea s e a n d Deed of Ces s ion ” (t h e t wo t r a n s a ct ion s in is s u e h er e) wh ich b ea r s t h e s ign ed s t a m p of t h e Regis t r a r of Deed s d a t ed 9 S ep tem b er 1 9 8 8 con t a in in g t h e in s cr ip t ion t h a t t h e r egis t r a t ion wa s a lloca t ed th e n u m b er 2 0 9 8 3 . Th is wa s p rim a facie p r oof of t h e r egis t r a t ion of t h e ces s ion . [3 0 ] However , t h is is n ot a ll t h a t t h e r ecor d con t a in s . Th er e is a ls o a s ign ed Regis t r a r ’s s t a m p on t h e Deed of Tr a n s fer of t h e Lea s e fr om t h e d ecea s ed t o t h e com p a n y (a n ot h er of t h e a n n exu r es t o t h e fou n d in g a ffid a vit ) wh ich r ea d s : “S u b lea s e en tered in to Between B. M. KHAKETLA a n d C&S PROPE RTIE S to Moh la b a n i Pr op erties Co. (Pty)Ltd p er d eed 2 0 9 8 3 .” (PTY) LTD ced ed Th is p r ovid es con fir m a t ion t h a t t h e s u b lea s e a n d t h e ces s ion wer e r egis ter ed t oget h er . [3 1 ] Fin a lly t h er e is a n a n n exu r e (K1 2 ) t o t h e fou n d in g a ffid a vit wh ich is a p a ge fr om s om e r egis ter ed t r a n s a ct ion (it is n ot clea r wh ich ) b e a r in g a clu s t er of s ign ed s t a m p s of t h e Regis t r a r . On e of t h em ob viou s ly r efer s t o t h e t r a n s fer of t h e lea s e fr om t h e d ecea s ed t o t h e com p a n y u n d er n u m b er 2 0 9 8 1 wh er e r egis t r a t ion wa s effected on 9 S ep tem b er 1 9 8 8 . An ot h er s t a m p , a ls o b ea r in g t h e r egis t r a t ion n u m b er 2 0 9 8 1 h a s t h is in s cr ip t ion : “S u b lea s e ced ed to Moh la b a n i Co (PTY) LTD p er d eed 2 0 9 8 1 ”. Th er e wa s on ly on e s u b lea s e ced ed t o t h e com p a n y a n d t h a t wa s t h e s u b lea s e fr om t h e d ecea s ed t o C a n d S . In ot h er wor d s t h is s t a m p r efer s t o t h e s u b lea s e a n d ces s ion in is s u e in t h is a p p ea l a n d is fu r t h er p r oof, a lb eit u n d er a n ot h er n u m b er , of th e r egis t r a t ion of th e ces s ion . Th e ces s ion h a vin g b een given t wo n u m b er s wou ld a p p ea r t o in d ica t e t h a t th e Regis t r a r con s id er ed t h a t t h e ces s ion wa s lin k ed t o b ot h t h e t r a n s fer of t h e lea s e a s well a s t h e d ecea s ed ’s s u b lea s e t o C a n d S . Th is is con s is t en t wit h t h e a p p ella n t ’s s u b m is s ion t h a t t h e ces s ion wa s effected a s a “b elt a n d b r a ces ” m ea s u r e, in ot h er wor d s t o em p h a s is e t h a t t h e d ecea s ed ’s r igh t s in r es p ect of b ot h t h e lea s e a n d t h e s u b lea s e wer e t r a n s fer r ed t o th e com p a n y. [3 2 ] Th e effect of a ll t h es e in s cr ip tion s b y t h e Regis t r a r , u n ch a llen ged a s t h ey wer e, a n d t h ey wer e a ll p a r t of t h e r es p on d en ts ’ own ca s e, is t h a t t h e ces s ion wa s r egis ter ed . On e m igh t a d d t h a t it goes wit h ou t s a yin g t h a t t h e s u b lea s e a n d ces s ion , in or d er t o b e r egis ter ed , m u s t h a ve b een con s en ted t o b y t h e Min is t er . Th eir va lid it y wa s t h er efor e a d equ a tely p r oved . [3 3 ] It follows t h a t t h e a p p ea l m u s t s u cceed . Th e followin g or d er is a ccor d in gly m a d e: 1 . 2 . Th e a p p ea l is a llowed , wit h cos t s . Th e or d er of t h e cou r t b elow is s et a s id e a n d in it s s tea d t h e followin g or d er is s u b s t it u t ed : “Th e a p p lica t ion is d is m is s ed wit h cos t s ” __________________________ C. T. H OWIE J US TICE OF AP P E AL I con cu r : I con cu r : ___________________________ J . W. S MALBE R GE R J US TICE OF AP P E AL ____________________________ I. G. F AR LAM J US TICE OF AP P E AL F o r t h e Ap p e lla n t : Ad v. K. J . Kem p S C F o r t h e R e s p o n d e n t s : Mr s . T. Sello-Ma fa t le